SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
BARRETT RESOURCES CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Consent Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)1 and 0-11.
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY COPY
[BARRETT RESOURCES CORPORATION LETTERHEAD]
, 2001
Dear Fellow Barrett Stockholder:
On March 12, 2001, Shell Oil Company, acting through its indirect wholly-
owned subsidiary SRM Acquisition Company, commenced an unsolicited tender offer
to purchase all of the outstanding shares of common stock of Barrett Resources
Corporation for $55.00 per share in cash. In connection with its offer, Shell
commenced a consent solicitation process through which Shell is attempting to
remove, without cause, all of the current members of the Board of Directors and
replace them with Shell's nominees. Shell's stated intention in removing and
replacing the current members of the Board of Directors is to facilitate
Shell's acquisition of Barrett.
I am writing on behalf of the Board of Directors to request your help in
defeating Shell's consent solicitation. If Shell's nominees are elected to
replace your current Board of Directors, Barrett may be sold to Shell at a
price and on terms that are advantageous to Shell.
The Board of Directors is acting aggressively to maximize the value of your
investment. As part of this process, the Board of Directors directed Barrett's
management to promptly begin soliciting proposals from qualified parties. Shell
was invited to participate in this process, but Shell rejected our invitation
and instead commenced its hostile tender offer to attempt to acquire our
company for $55.00 per share.
Because we believe that your current Board of Directors is in the best
position to evaluate the Shell tender offer and the alternative transactions
available to Barrett and to decide on the courses of action that will maximize
stockholder value, we are urging you not to grant the consents being sought by
Shell. If you have already consented to Shell's proposals, we urge you to
revoke that consent.
If you have previously signed Shell's Consent Card, you have every right to
revoke your consent. Simply sign, date and mail the enclosed BLUE Consent
Revocation Card today. Instructions for doing so can be found in the attached
Consent Revocation Statement. You can also contact Bob Howard of Barrett at
(303) 572-3900 or Innisfree M&A Incorporated, the firm assisting us in the
revocation of consents, toll free at (800) 750-5834, for assistance.
If your shares are held for your benefit by a broker or bank in "street
name," only your broker or banker can execute a consent representing your
shares. Please contact the person responsible for your account and instruct him
or her to execute a BLUE Consent Revocation Card on your behalf today.
Thank you for your continuing support and encouragement.
Very truly yours,
/s/ Peter A. Dea
Peter A. Dea
Chairman of the Board and CEO
PRELIMINARY COPY
BARRETT RESOURCES CORPORATION
1515 Arapahoe Street
Tower 3, Suite 1000
Denver, Colorado 80202
(303) 572-3900
Consent Revocation Statement
by the Board of Directors of Barrett Resources Corporation
in Opposition to the Solicitation of Consents
by Shell Oil Company and SRM Acquisition Company
The Board of Directors (the "Barrett Board," the "Board" or the "Board of
Directors") of Barrett Resources Corporation, a Delaware corporation (the
"Company" or "Barrett"), is furnishing this Consent Revocation Statement and
the accompanying BLUE Consent Revocation Card to the holders of the outstanding
shares of Barrett common stock, par value $.01 per share (the "Common Stock"),
in opposition to the solicitation by Shell Oil Company, a Delaware corporation
("Shell"), acting through its indirect wholly owned subsidiary SRM Acquisition
Company, a Delaware corporation ("Sub"), of written consents from the
stockholders of Barrett (the "Shell Consent Solicitation").
Shell, acting through Sub, commenced the Shell Consent Solicitation in an
effort to remove, without cause, every member of the Barrett Board and to
replace your duly elected directors with a slate of nominees and
representatives selected by Shell. This action by Shell was taken in
conjunction with the commencement by Shell, through Sub, of an unsolicited
tender offer (the "Shell Offer") to purchase all of the outstanding shares of
Common Stock, including the associated preferred stock purchase rights (the
"Rights") issued pursuant to the Rights Agreement dated as of August 5, 1997,
as amended (as amended, the "Rights Agreement"), between Barrett and
BankBoston, N.A., as Rights Agent (the Common Stock, together with the Rights,
are hereinafter referred to as the "Shares"), for $55.00 per Share in cash (the
"Shell Offer Price").
Prior to the commencement of the Shell Offer, Shell contacted Barrett to
express its interest in acquiring the Company for $55.00 per Share in cash (the
"Shell Preliminary Offer"). Shell warned that if we rejected its proposal,
Shell was prepared to commence a tender offer for $55.00 per Share in cash (the
"Shell Offer"). On March 8, 2001, after careful consideration, the Board
unanimously rejected the Shell Preliminary Offer and determined, in light of
the Shell Preliminary Offer and relevant industry conditions, to take all
necessary steps to maximize stockholder value. Accordingly, we promptly began
to pursue strategic alternatives, including seeking proposals from a number of
qualified parties, including Shell, rather than commencing exclusive
negotiations with Shell under artificial deadlines that serve only Shell's
interests. The process, which we have already initiated, is designed to ensure
that our stockholders receive the full value of Barrett's assets and to create
a competitive situation. Shell has rejected our invitation to participate in
this orderly process designed to maximize stockholder value. Instead, Shell
commenced the Shell Offer along with the related Shell Consent Solicitation.
As required by law, the Barrett Board will formally consider the Shell Offer
in due course and will determine whether to recommend acceptance or rejection
of the tender offer or to remain neutral towards the tender offer. In
accordance with the federal tender offer rules, on or prior to March 23, 2001,
the Barrett Board will communicate its determination and the reasons behind
that determination. Until then, the Board urges you to take no action with
respect to your holdings in Barrett until the Board's determination has been
made. This Consent Revocation Statement and accompanying BLUE Consent
Revocation Card are being filed in preliminary form only and are not being
mailed to stockholders. This Consent Revocation Statement and BLUE Consent
Revocation Card should not be construed as a recommendation in any manner
regarding the Shell Offer. [This Consent Revocation Statement will be updated
to reflect the Barrett Board determination once Barrett has filed its Schedule
14D-9.]
The definitive Consent Revocation Statement and the enclosed BLUE Consent
Revocation Card will be first mailed to stockholders on or about ,
2001.
A consent in favor of Shell's proposals is a consent to replace your duly
elected directors with Shell's nominees, who would then comprise the entire
Barrett Board. Shell's nominees, which include Shell's current Treasurer, would
then control Barrett and, although they would be subject to their fiduciary
duties, the Shell nominees would be in a position to ensure that Shell could
acquire Barrett at a price and on terms determined by Shell.
We believe that a Barrett Board composed of Shell's nominees would have
substantial conflicts of interest in evaluating the Shell Offer and other
potential transactions and would attempt to complete a transaction with Shell.
We believe that your interests will be best served if Barrett's current
directors, acting independently of Shell, evaluate the alternatives available
to Barrett.
Because we believe your current Barrett Board is in the best position to
evaluate the Shell Offer and the strategic alternatives available to Barrett
and to decide on the courses of action that are in the best interests of
Barrett's stockholders, we are seeking the revocation of any consents that may
have been given in response to Shell's solicitation.
Your Board unanimously opposes the Shell Consent Solicitation and urges you
not to sign any white consent card sent to you by Shell.
Even if you previously signed and returned Shell's white consent card, you
have every right to revoke your consent. We urge you to sign, date and mail the
enclosed BLUE Consent Revocation Card in the postage-paid envelope. Your prompt
action is important. Please return the BLUE Consent Revocation Card today.
If your shares are held for you by a broker or a banker in "street name,"
only your broker or banker can execute a consent representing your shares.
Please contact the person responsible for your account and instruct him or her
to execute a BLUE Consent Revocation Card on your behalf today.
If you have any questions about giving your revocation of consent or require
assistance, please call Innisfree M&A Incorporated ("Innisfree"), the firm
assisting us in this solicitation, at the phone numbers shown below:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
CALL TOLL-FREE: (888) 750-5834
BANKS & BROKERS CALL COLLECT: (212) 750-5833
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SHELL'S PROPOSALS
Shell is soliciting consents in favor of two separate proposals (the "Shell
Proposals"), designed to enable Shell to take control of your Barrett Board.
The Shell Proposals are set forth below.
Shell's Proposal 1:
Remove without cause all members of the Barrett Board who are in office
immediately prior to the effectiveness of that removal action, including, but
not limited to, the following duly elected and serving directors: Peter A. Dea,
C. Robert Buford, Derrill Cody, James M. Fitzgibbons, Hennie L.J.M. Gieskes,
William W. Grant, III and Philippe S.E. Schreiber.
Shell's Proposal 2:
Elect Francis L. Durand, R. W. Leftwich and J. Hugh Roff, Jr. (together, the
"Shell Nominees") as members of the Barrett Board.
According to Shell, the effectiveness of Proposal 1 is not subject to, or
conditioned on, Proposal 2 also having become effective. The effectiveness of
Shell's Proposal 2 is subject to, and conditioned on, all members of the
Company's board, immediately prior to the election of the Shell Nominees,
having been removed in accordance with Proposal 1 or otherwise having ceased to
be directors of Barrett.
THE SHELL OFFER
On March 12, 2001, Shell, through Sub, commenced the Shell Offer to purchase
all of the Shares for $55.00 per Share in cash. As required by law, the Barrett
Board will formally consider the unsolicited Shell tender offer in due course
and will determine whether to recommend acceptance or rejection of the tender
offer or to remain neutral towards the tender offer. As required by the federal
tender offer rules, on or prior to March 23, 2001, the Barrett Board will
communicate its determination and the reasons behind that determination. Until
then, the Board urges you to take no action with respect to your holdings in
Barrett until the Board's determination has been made. This Consent Revocation
Statement and accompanying BLUE Consent Revocation Card are being filed in
preliminary form only and are not being mailed to stockholders. This Consent
Revocation Statement and BLUE Consent Revocation Card should not be construed
as a recommendation in any manner regarding the Shell Offer. [This Consent
Revocation Statement will be updated to reflect the Barrett Board determination
once Barrett has filed its Schedule 14D-9.]
REASONS YOUR BOARD OF DIRECTORS
OPPOSES THE SHELL CONSENT SOLICITATION
The Shell Proposals, taken together, are designed to enable Shell to take
control of the Barrett Board and expedite the prompt consummation of Shell's
proposed acquisition of Barrett without having to negotiate with the current
Barrett Board. We believe that the Shell Consent Solicitation is an attempt to
pressure us to accept Shell's unsolicited offer for $55.00 per share without
the current Barrett Board first having the opportunity to fully consider the
Shell Offer and all of Barrett's strategic alternatives, including proposals
from other qualified parties. We believe that such undue pressure by Shell is
not in your best interest.
Shell's acknowledged purpose in pursuing the Shell Consent Solicitation is
to replace the duly elected Barrett Board with Shell's own nominees. Shell also
acknowledges that it intends, as soon as practicable after the Shell Nominees
have become members of the Company's Board, to request that the newly installed
Barrett Board take all necessary actions to allow Shell to promptly consummate
the Shell Offer.
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While we recognize that the Shell Nominees, if elected, would have certain
fiduciary obligations under Delaware law to Barrett and its stockholders, we
expect that the Shell Nominees would act in furtherance of the interests of
Shell. In particular, if the Shell Nominees are elected as your directors,
conflicts of interests are inevitable and would be detrimental to the interests
of Barrett and its stockholders. Given that it is in Shell's financial interest
to acquire Barrett at the lowest possible cost to Shell by paying the lowest
possible price for the Shares, do you believe that the Shell Nominees would
objectively evaluate the Shell Offer, make a determined effort to seek
proposals from other parties or negotiate aggressively against Shell to obtain
the best value for Barrett stockholders? During the period while Shell is
trying to acquire Barrett, it is clearly contrary to the short-term interests
of Shell to take any steps to enhance the value of Barrett.
Moreover, Sub has disclosed that each of the Shell Nominees is being
indemnified by Shell to the fullest extent permitted by applicable law, from
and against any and all expenses, liabilities or losses of any kind arising out
of any threatened or filed claim, action, suit or proceeding, whether civil,
criminal, administrative or investigative, asserted against or incurred by the
Shell Nominee in his capacity as a nominee for election as a director of
Barrett, or arising out of his status in that capacity.
Shell has disclosed that it intends to pay each Shell Nominee a fee of
$25,000 for agreeing to stand for election as a director of Barrett. In
addition, it is anticipated that each Shell Nominee, if elected, would be
entitled to receive director's fees paid in accordance with Barrett's past
practice.
It is vital that Barrett continue to have in place a board of directors that
will act solely in the best interests of Barrett and its stockholders and not
be influenced by Shell's goals or possibly be financially protected by Shell's
indemnification commitments. We believe that your duly elected Board of
Directors, not Shell's proposed slate of nominees, is in the best position to
evaluate Shell's Offer and Barrett's strategic alternatives, to decide on the
courses of action that are in the best interests of Barrett's stockholders and
to implement those decisions.
Your Board unanimously opposes the Shell Consent Solicitation and urges you
not to sign any white consent card sent to you by Shell.
If you have previously signed and returned Shell's white consent card, you
can change your mind and revoke your consent. We urge you to sign, date and
mail the enclosed BLUE Consent Revocation Card in the enclosed postage-paid
envelope.
If your shares are held for you by a broker or banker in "street name," only
your broker or banker can execute a consent representing your shares. Please
contact the person responsible for your account and instruct him or her to
execute a BLUE Consent Revocation Card on your behalf today.
If you have any questions, please call Innisfree toll-free at (888) 750-
5834. Banks and brokers should call collect at (212) 750-5833.
THE CONSENT PROCEDURE
Under Delaware corporate law, unless otherwise provided in a corporation's
certificate of incorporation, stockholders may act without a meeting, without
prior notice and without a vote if consents in writing setting forth the action
to be taken are signed by holders of outstanding shares having not less than
the minimum number of votes that would be necessary to authorize or take the
action at a meeting at which all shares entitled to vote were present and
voted.
Barrett's certificate of incorporation does not prohibit stockholder action
by written consent. The unrevoked consent of the holders of at least a majority
of the outstanding Shares entitled to vote on the record date, once
established, must be obtained within the time limits specified below to adopt
the Shell Proposals.
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Article II, Section 4(b) of Barrett's Bylaws establishes orderly procedures
for the setting of a record date for actions taken by written consent of
stockholders, including the Shell Consent Solicitation. This section of the
Bylaws provides that any stockholder of record of Barrett seeking to have
Barrett's stockholders authorize or take corporate action by written consent
shall, by written notice to Barrett's corporate secretary, request the Barrett
Board to fix a record date. The Barrett Board is required, within 10 business
days after the date on which Barrett receives the request, to adopt a
resolution fixing a record date not more than 10 calendar days after the date
on which the resolution was adopted.
On , 2001, Shell furnished Barrett with a letter requesting, pursuant
to Article II, Section 4(b) of Barrett's Bylaws, that the Barrett Board set a
record date for the Shell Consent Solicitation. On , 2001, the Barrett
Board set , 2001 as the record date.
A stockholder may revoke any previously signed consent granted to Shell by
signing, dating and returning a BLUE Consent Revocation Card included with this
Consent Revocation Statement. If no direction is made on the Consent Revocation
Card with respect to one or more of the Shell Proposals, or if a stockholder
marks either the "revoke consent" box or the "abstain" box on the Consent
Revocation Card with respect to one or more of the Shell Proposals, all
previously executed consents with respect to such Shell Proposals will be
revoked. A consent granted to Shell may also be revoked by delivery of a
written consent revocation directly to Barrett or Shell. Stockholders are
urged, however, to deliver all Consent Revocation Cards to Barrett in care of
Innisfree M&A Incorporated, the firm assisting Barrett in this solicitation, at
501 Madison Avenue, 20th floor, New York, New York 10022. Barrett requests that
if a consent revocation is instead delivered to Shell, a copy of the revocation
also be delivered to Barrett in care of Innisfree at the address set forth
above, so that Barrett will be aware of all revocations. Any consent revocation
may itself be revoked at any time by signing, dating and returning to Shell a
subsequently dated white consent card sent to you by Shell, or by delivery of a
written revocation of such consent revocation to Barrett or Shell.
If any shares of Common Stock that you own are held for you in an account
with a stock brokerage firm, bank nominee or other similar "street name"
holder, you are not entitled to execute a consent representing such shares
directly, but rather must give instructions to the stock brokerage firm, bank
nominee or other "street name" holder to grant or revoke consent for the shares
held in your name. Accordingly, you should contact the person responsible for
your account and direct him or her to execute the enclosed BLUE Consent
Revocation Card on your behalf. You are urged to confirm in writing your
instructions to the person responsible for your account and provide a copy of
those instructions to Barrett in care of Innisfree, at the address set forth
above, so that Barrett will be aware of your instructions and can attempt to
ensure that those instructions are followed.
You have the right to revoke any consent you may have previously given to
Shell. To do so, you need only sign, date and return in the enclosed postage-
paid envelope the BLUE Consent Revocation Card which accompanies this Consent
Revocation Statement. If you do not indicate a specific vote on the BLUE
Consent Revocation Card with respect to one or more of the Shell Proposals, the
Consent Revocation Card will be used in accordance with the recommendation of
the Barrett Board to revoke any consent with respect to the Shell Proposals.
Please do not return any white consent cards sent to you by Shell, even in
protest. If you do not support the Shell Proposals and have not signed Shell's
white consent card, you may show your opposition to the Shell Proposals by
signing, dating and returning the enclosed BLUE Consent Revocation Card. This
will better enable Barrett to keep track of how many stockholders oppose the
Shell Proposals.
Barrett has retained Innisfree to assist in communicating with stockholders
in connection with the Shell Consent Solicitation and to assist in our efforts
to obtain consent revocations. If you have any questions about
5
how to complete or submit your BLUE Consent Revocation Card or any other
questions, Innisfree will be pleased to assist you. You may call Innisfree
toll-free at (888) 750-5834. Banks and brokers should call collect at (212)
750-5833.
INFORMATION ABOUT THE BOARD OF DIRECTORS OF BARRETT
The names of the current members of the Barrett Board, their ages and
certain biographical information about each of them are set forth below.
Initial
Expiration of Term Date as
Name Age Position with Barrett as Director Director
---- --- ----------------------- ------------------- --------
C. Robert Buford (1)(2)(3)(4)(5)......... 67 Director 2001 Annual Meeting 1983
Derrill Cody (1)(2)(3)(4)(5)............. 62 Director 2001 Annual Meeting 1995
Peter A. Dea (1)......................... 47 Chairman of the Board, 2001 Annual Meeting 1999
Chief Executive Officer
and a Director
James M. Fitzgibbons (3)(4)(5)(6)........ 66 Director 2001 Annual Meeting 1987
Hennie L.J.M. Gieskes (3)(4)(7).......... 62 Director 2001 Annual Meeting 2000
William W. Grant, III (3)(4)(5).......... 68 Director 2001 Annual Meeting 1995
Philippe S.E. Schreiber (1)(2)(3)(4)(5).. 60 Director 2001 Annual Meeting 1985
- --------
(1) Member of the Executive Committee of the Board of Directors.
(2) Member of the Board Planning and Nominating Committee of the Board of
Directors.
(3) Member of the Audit Committee of the Board of Directors.
(4) Member of the Compensation Committee of the Board of Directors.
(5) Member of the Succession Planning Committee of the Board of Directors until
this Committee was discontinued on May 4, 2000.
(6) Mr. Fitzgibbons served as a director of Barrett from July 1987 until
October 1992. He was re-elected to the Board of Directors in January 1994.
(7) Mr. Gieskes served as a director of Barrett from November 1985 through
September 1997. He was re-elected to the Board of Directors on May 4, 2000.
C. Robert Buford has been a director of Barrett since December 1983 and
served as Chairman of the Board of Directors from December 1983 through March
1994. Mr. Buford has been President, Chairman of the Board and controlling
shareholder of Zenith Drilling Corporation, Wichita, Kansas, since February
1966. Zenith owns approximately 1.6 percent of Barrett's common stock. Since
1993, Mr. Buford has served as a director of Encore Energy, Inc., a wholly-
owned subsidiary of Zenith engaged in the marketing of natural gas. Mr. Buford
is also a member of the Board of Directors of Intrust Financial Corporation, a
bank holding company.
Derrill Cody has been a director of Barrett since July 1995. From May 1990
until July 1995, Mr. Cody served as a director of Plains Petroleum Company,
which merged with a subsidiary of Barrett on July 18, 1995. Since January 1990,
Mr. Cody has been an attorney in private practice in Oklahoma City, Oklahoma.
From 1986 to 1990, he was Executive Vice President of Texas Eastern
Corporation, and from 1987 to 1990 he was the Chief Executive Officer of Texas
Eastern Pipeline Company. Since 1990, he has been a director of the General
Partner of TEPPCO Partners, L.P., an operator of transportation systems for
liquid hydrocarbons.
Peter A. Dea has served as Chairman of the Board since April 1, 2000, and
has served as Chief Executive Officer and a director since November 1999. He
previously served as Vice Chairman from November 1999 until April 1, 2000 and
as Executive Vice President--Exploration from December 1998 until November
1999. He served as Senior Vice President--Exploration of Barrett from June 1996
until December 1998. He held various exploration geologist positions with
Barrett from February 1994 through June 1996. Mr. Dea served as President of
Nautilus Oil and Gas Company from 1992 through 1993.
6
James M. Fitzgibbons has been a director of Barrett since January 1994, and
previously served as a director of Barrett from July 1987 until October 1992.
Since January 1998, Mr. Fitzgibbons has been the Chairman of the Board of
Davidson Cotton Company. From October 1990 through December 1997,
Mr. Fitzgibbons was Chairman of the Board and Chief Executive Officer of
Fieldcrest Cannon, Inc. Mr. Fitzgibbons also is a Director/Trustee of Dreyfus
Laurel Funds, a series of mutual funds.
Hennie L.J.M. Gieskes was elected as a director in May 2000. He previously
served as a director of Barrett from November 1985 until September 1997. Mr.
Gieskes has served as the Managing Director of Spaarne Compagnie N.V., a
Netherlands company engaged in the investment business, since January 1991.
From before 1976 until December 1990, Mr. Gieskes was a Managing Director of
Vitol Beheer B.V., a Netherlands trading company engaged primarily in energy
related commodities.
William W. Grant, III has served as a director of Barrett since July 1995.
From May 1987 until July 1995, Mr. Grant served as a director of Plains
Petroleum Company. He was an advisory director of Colorado National Bank from
1993 through 1999. He was a director of Colorado National Bankshares, Inc. from
1982 to 1993 and the Chairman of the Board of Colorado National Bank of Denver
from 1986 to 1993.
Philippe S.E. Schreiber has been a director of Barrett since November 1985.
Mr. Schreiber is an independent lawyer and business consultant. From August
1985 through December 1998, he was a partner of, or of counsel to, the law firm
of Walter, Conston, Alexander & Green, P.C. in New York, New York. Mr.
Schreiber has served as a director of the United States principal affiliate of
The Mayflower Corporation plc. since 1991. Mr. Schreiber also serves as a
director of other private companies.
BOARD MEETINGS AND COMMITTEES
The Board of Directors has an Audit Committee, a Compensation Committee, an
Executive Committee, and a Board Planning and Nominating Committee. The Board
discontinued the Succession Planning Committee on May 4, 2000.
The Audit Committee consists of Messrs. Buford (Chairman), Cody,
Fitzgibbons, Gieskes, Grant and Schreiber. The primary function of the Audit
Committee is to oversee Barrett's financial reporting process on behalf of the
Board. During the year ended December 31, 2000, the Board examined the
composition of the Audit Committee in light of the adoption by the New York
Stock Exchange of new rules governing audit committees. Based upon this
examination, the Board confirmed that all members of the Audit Committee are
"independent" within the meaning of the Exchange's new rules. The Proxy
Statement for the 2001 Annual Meeting of Stockholders will also include a copy
of the Audit Committee's newly adopted charter.
The primary responsibility of the Executive Committee is to exercise the
authority of the Board, to the extent permitted by Delaware law and Barrett's
Bylaws, during intervals between regular meetings of the Board. The Executive
Committee, consisting of Messrs. Buford, Cody, Dea and Schreiber, met once
during 2000.
The Compensation Committee has the authority to establish policies
concerning compensation and employee benefits for employees of Barrett. The
Compensation Committee reviews Barrett's compensation policies and the
implementation of those policies and determines compensation and benefits for
executive officers. During 2000, the Compensation Committee, consisting of
Messrs. Buford, Cody, Fitzgibbons, Gieskes, Grant and Schreiber (Chairman), met
four times.
The primary responsibilities of the Board Planning and Nominating Committee
are to review the role, structure and procedures of the Board of Directors and
its committees and to consider and recommend candidates for election to the
Board. The Board Planning and Nominating Committee will consider suggestions
from stockholders regarding possible director candidates. These suggestions,
together with appropriate
7
biographical information, should be submitted to the Secretary of Barrett. The
Committee, consisting of Messrs. Buford (Chairman), Cody and Schreiber, met
three times during 2000.
During 2000, the Succession Planning Committee consisted of Messrs. Buford,
Cody, Fitzgibbons, Grant and Schreiber (Chairman). The Committee reviewed
management succession issues. During 2000, the Committee met once before it was
discontinued on May 4, 2000.
During 2000, the Board of Directors met seven times. Each director
participated in at least 75 percent of the aggregate of the total number of
meetings of the Board and of all committees of the Board on which that director
served during 2000.
DIRECTOR COMPENSATION
Standard Arrangements. Pursuant to Barrett's standard arrangement for
compensating directors, no compensation for serving as a director is paid to
directors who also are employees of Barrett, and those directors who are not
also employees of Barrett ("Outside Directors") receive an annual retainer of
$20,000 paid in equal quarterly installments. In addition, during the first
quarter of 2000, for each Board of Directors or committee meeting attended in
person, each Outside Director received a $1,000 meeting attendance fee. Each
Outside Director also received $300 for each telephone meeting lasting more
than 15 minutes. The Chairmen of the Compensation and Audit Committees
received, however, a $1,500 meeting attendance fee for each committee meeting.
Beginning on April 1, 2000, the meeting attendance fee increased to $1,100, the
Chairman's fees for Committee meetings increased to $1,600, and the fee for
telephone meetings increased to $500. All directors are reimbursed for out-of-
pocket expenses incurred in connection with attending Board and Committee
meetings.
For each Board of Directors or committee meeting attended, options to
purchase 1,000 shares of Common Stock will become exercisable for each Outside
Director. Although these options become exercisable only at the rate of 1,000
for each meeting attended, each director will be granted options to purchase
10,000 shares of Common Stock at the time the individual initially becomes a
director. Any options that have not become exercisable at the time of
termination of a director's service will expire at that time. At such time as
the options to purchase all 10,000 shares of Common Stock have become
exercisable, options to purchase an additional 10,000 shares of Common Stock
will be granted to the director and will be subject to the same restrictions on
exercise as the previously received options. The options are granted to the
Outside Directors pursuant to Barrett's Non-Discretionary Stock Option Plan,
and the exercise price for those options is equal to the closing sales price
for the Common Stock on the date of grant. The options expire upon the later to
occur of five years after the date of grant or two years after the date those
options first became exercisable.
Other Arrangements. During the year ended December 31, 2000, no compensation
was paid to directors of Barrett other than pursuant to the standard
compensation arrangements described in the previous section.
Compensation Committee Interlocks and Insider Participation
During the year ended December 31, 2000, each of Messrs. Buford, Cody,
Fitzgibbons, Gieskes, Grant and Schreiber served as members of the Compensation
Committee of the Board of Directors. Mr. Schreiber served as the President of
Excel Energy Corporation ("Excel") prior to the 1985 merger of Excel with and
into Barrett, and Mr. Gieskes served as Chairman of the Board of Excel at the
time of the merger. No other person who served as a member of the Compensation
Committee during the year ended December 31, 2000 was, during that year, an
officer or employee of Barrett or of any of its subsidiaries, or was formerly
an officer of Barrett or of any of its subsidiaries, except Mr. Buford who
served as the Chairman of the Board from December 1983 through March 1994.
However, Mr. Buford was never a salaried employee of Barrett.
8
Certain Transactions
Except as otherwise disclosed in this Consent Revocation Statement and Annex
A and Annex B hereto, during 2000, there were no transactions between the
Company and its directors or executive officers, associates of participants in
the solicitation of consent revocations (as associates and participants are
defined in applicable regulations of the SEC), or known holders of greater than
five percent of the Company's common stock in which the amount involved
exceeded $60,000 and in which any of the foregoing persons had or will have a
material interest.
9
EXECUTIVE OFFICERS OF BARRETT
The names of the executive officers who are not also directors of Barrett,
their ages and certain information about them are set forth below:
Positions and Offices with Principal Occupations and
Name Age Barrett Employment During Past 5 Years
---- --- ---------------------------- -------------------------------
Joseph P. Barrett....... 47 Senior Vice President--Land Since March 1999, Mr. Barrett
has served as Barrett's Senior
Vice President--Land. From
March 1995 through February
1999, Mr. Barrett served as
Vice President--Land.
Mr. Barrett has held various
positions in Barrett's Land
Department since 1982.
Dean J. Gallacher....... 36 Senior Vice President-- Mr. Gallacher joined Barrett as
Marketing its Vice President--Marketing
in November 2000. Before
joining Barrett, Mr. Gallacher
was employed by Avista Energy
Inc. as a manager in its
trading division from April
1997 to November 2000. From
January 1997 to March 1997, Mr.
Gallacher served as a principal
for Potential Energy, Inc.,
which provided consulting
services and negotiation
assistance concerning gas
supply and transportation
contracts and related matters.
In addition, Mr. Gallacher was
employed as a marketing manager
by Inland Pacific Energy
Services from April 1993 to
December 1996 where he provided
consulting services to large
industrial customers on gas
supply and power contracts,
energy trading activities and
power requirements.
Robert W. Howard........ 46 Senior Vice President-- Mr. Howard has held his current
Investor Relations, position of Senior Vice
Corporate Development and President--Investor Relations
Treasurer since February 25, 1999. Mr.
Howard previously served as
Barrett's Senior Vice President
since March 1992.
Joseph N. Jaggers....... 47 President and Chief Mr. Jaggers joined Barrett in
Operating Officer July 2000 as its President and
Chief Operating Officer. Prior
to joining Barrett, Mr. Jaggers
was employed by BP Amoco as a
Business Unit Leader from
November 1998 to June 2000.
From July 1995 to August 1998,
Mr. Jaggers served as District
Manager--Cairo for Amoco. He
also
10
Positions and Offices with Principal Occupations and
Name Age Barrett Employment During Past 5 Years
---- --- ---------------------------- -------------------------------
held the position of District
Manager--Denver for Amoco from
November 1991 to June 1995. In
his capacities at BP Amoco and
Amoco, Mr. Jaggers served as a
senior petroleum engineer and
manager of production
operations.
J. Frank Keller......... 57 Executive Vice President and Mr. Keller has served as
Chief Financial Officer Barrett's Executive Vice
President since 1983 and Chief
Financial Officer since 1995.
Mr. Keller served as a director
from 1983 until 2000 and as
Secretary from 1983 until 1997.
Eugene A. Lang, Jr...... 47 Executive Vice President, Since May 1999, Mr. Lang has
General held the position of Executive
Counsel and Secretary Vice President and General
Counsel. Mr. Lang served as
Barrett's Senior Vice President
and General Counsel from
September 1995 to May 1999. He
has also served as Secretary
since June 1997.
Logan Magruder, III..... 44 Vice President--Operations Since April 1998, Mr. Magruder
has held his current position
as Vice President--Operations.
From October 1997 to April
1998, Mr. Magruder served as
Barrett's Vice President--
Corporate Relations and
Development. In December 1996,
Mr. Magruder joined Barrett as
its Manager of Operations--Gulf
of Mexico and held that
position until October 1997.
Mr. Magruder was employed as
Director of Engineering and
Operations for Scana Petroleum
from November 1995 through
December 1996.
Steven G. Natali........ 46 Vice President--Exploration Mr. Natali has served as
Barrett's Vice President--
Exploration since December
1999. From March 1999 until
December 16, 1999, Mr. Natali
served as Barrett's Exploration
Manager. Mr. Natali held the
position of Chief Geophysicist
for Barrett from December 1995
to March 1999.
Executive Officer Compensation
Summary information with respect to the compensation of Barrett's chief
executive officer and certain other executive officers is set forth in Annex A.
11
SECURITY OWNERSHIP OF NAMED EXECUTIVE OFFICERS,
DIRECTORS AND PRINCIPAL STOCKHOLDERS
On March 9, 2001, there were 33,455,488 shares of Common Stock outstanding.
According to information furnished to Barrett as of March 9, 2001, the
directors of Barrett, Barrett's "named executive officers" (the "Named
Executive Officers") within the meaning of Item 402(a)(3) of Regulation S-K,
all directors and executive officers as a group, and each other person known by
Barrett to be a beneficial owner of more than five percent of the Common Stock,
beneficially owned shares of Common Stock as set forth below. Beneficial
ownership has been determined for purposes herein in accordance with Rule 13d-3
of the Exchange Act under which a person is deemed to be the beneficial owner
of securities if such person has or shares voting power or investment power in
respect of such securities or has the right to acquire beneficial ownership
within 60 days of March 9, 2001.
Amount/Nature of Percent of Class
Name of Beneficial Owner Beneficial Ownership Beneficially Owned
------------------------ -------------------- ------------------
C. Robert Buford..................... 644,866(1) 1.9%
Derrill Cody......................... 34,160(2) *
Peter A. Dea......................... 80,799(2) *
James M. Fitzgibbons................. 42,000(2) *
Hennie L.J.M. Gieskes................ 909,214(2) 2.7%
William W. Grant, III................ 40,350(2) *
Joseph N. Jaggers.................... 255(2) *
J. Frank Keller...................... 117,060(2) *
Eugene A. Lang, Jr................... 96,791(2) *
Philippe S.E. Schreiber.............. 37,106(2) *
All Directors and Executive Officers
as a Group (15 Persons)............. 2,124,312(3) 6.3%
State Farm Mutual Automobile
Insurance Company and affiliates.... 2,938,638(4)(5) 8.8%
One State Farm Plaza
Bloomington, IL 61710
Franklin Resources, Inc. ............ 2,467,215(4)(6) 7.4%
777 Mariners Island Boulevard
San Mateo, CA 94403
Scudder Kemper Investments, Inc. .... 1,906,100(4) 5.7%
345 Park Avenue
New York, NY 10154
T. Rowe Price Associates, Inc. ...... 1,753,936(4)(7) 5.2%
100 East Pratt Street
Baltimore, MD 21202
- --------
* Less than 1% of the Common Stock outstanding.
(1) C. Robert Buford is considered a beneficial owner of the 523,210 Shares
of which Zenith is the record owner. Mr. Buford owns approximately 89
percent of the outstanding common stock of Zenith. The number of Shares
indicated for Mr. Buford also includes 10,000 Shares that are owned by
Aguilla Corporation, which is owned by Mr. Buford's wife and adult
children. Mr. Buford disclaims beneficial ownership of the Shares held by
Aguilla Corporation pursuant to Rule 16a-1(a)(4) under the Exchange Act.
The number of Shares indicated also includes 30,000 Shares underlying
stock options that currently are exercisable or that may become
exercisable within 60 days following March 9, 2001.
12
(2) The number of Shares indicated consists of or includes the following
number of shares underlying options that currently are exercisable or
that may become exercisable within 60 days following March 9, 2001:
Derrill Cody, 20,000; Peter A. Dea, 66,518; James M. Fitzgibbons, 30,000;
Hennie L.J.M. Gieskes, 10,000; William W. Grant, III, 20,000; J. Frank
Keller, 64,038; Eugene A. Lang, Jr., 84,767; and Philippe S.E. Schreiber,
30,000.
(3) The number of Shares indicated consists of or includes 355,323 Shares
underlying options held by the directors and executive officers shown in
the table, and an additional 92,006 Shares underlying options held by
other officers that currently are exercisable or that may become
exercisable within 60 days following March 9, 2001.
(4) Based solely on information included in a Schedule 13G filed with the SEC
by each of the named stockholders.
(5) The number of Shares indicated includes the Shares owned by entities
related to State Farm Mutual Automobile Insurance Company ("SFMAI").
Those entities and SFMAI may be deemed to constitute a "group" with
regard to the ownership of Shares reported on a Schedule 13G. In their
reports on Schedule 13G, the entities indicated that they disclaim
membership in a group for the purposes of reporting on Schedule 13G or
did not affirm the existence of a group.
(6) The number of Shares indicated includes the Shares owned by Franklin
Resources, Inc. ("Franklin") and an individual and entity related to
Franklin. Franklin, the individual and the additional entity may be
deemed to constitute a "group" with regard to the ownership of Shares
reported on a Schedule 13G. In their reports on Schedule 13G, Franklin,
the individual and the other entity indicated that they disclaim
membership in a group for the purposes of reporting on Schedule 13G or
did not affirm the existence of a group.
(7) The Shares indicated are owned by various individuals and institutional
investors which T. Rowe Price Associates, Inc. ("Price Associates")
serves as investment adviser with power to direct investments and/or sole
power to vote the Shares. For purposes of the reporting requirements of
the Exchange Act, Price Associates is deemed to be a beneficial owner of
such securities; however, Price Associates expressly disclaims that it
is, in fact, the beneficial owner of such securities.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Barrett's executive officers and
directors, and persons who own more than ten percent of the Common Stock to
file reports of ownership and changes in ownership with the SEC and the
exchange on which the Common Stock is listed for trading. Executive officers,
directors and more than ten percent stockholders are required by regulations
promulgated under the Exchange Act to furnish Barrett with copies of all
Section 16(a) reports filed. Based solely on Barrett's review of copies of the
Section 16(a) reports filed for the fiscal year 2000, Barrett believes that all
reporting requirements applicable to its executive officers, directors, and
more than ten percent stockholders were complied with for the fiscal year 2000.
SOLICITATION OF CONSENT REVOCATIONS
Consent revocations may be solicited by mail, telephone, facsimile
transmission, other electronic media or in person. Solicitation of consent
revocations may be made by directors, officers and regular employees of Barrett
for which they will receive no additional compensation.
In addition, we have retained Innisfree to assist in the solicitation of the
consent revocations, for which Innisfree will receive a fee of $250,000 plus
reasonable out-of-pocket expenses. We have also agreed to indemnify Innisfree
for certain liabilities in connection with this solicitation. Approximately 100
persons will be employed by Innisfree to solicit stockholders.
13
Banks, brokers, custodians, nominees and fiduciaries will be requested to
forward solicitation material to beneficial owners of shares of Common Stock.
We will reimburse banks, brokers, custodians, nominees and fiduciaries for
their reasonable expenses for sending solicitation material to the beneficial
owners.
The entire cost of soliciting the consent revocations, including, without
limitation, costs, if any, relating to advertising, printing, fees of
attorneys, financial advisors, proxy solicitors, accountants, public relations,
transportation, litigation and related expenses and filing fees, will be borne
by Barrett. We estimate that total expenditures relating to our solicitation of
the consent revocations will be approximately $ . These costs do not include
the amount normally expended for a solicitation for an uncontested election of
directors or costs represented by salaries and wages of regular employees and
officers. These costs do not include the fees payable to our financial advisors
Goldman, Sachs & Co. and Petrie Parkman & Co., which fees are described in
Annex B hereto. To date, no fees have been paid by Barrett in connection with
its solicitation of revocations of consents.
CERTAIN LITIGATION
On March 7, 2001, Shell filed a complaint in the Delaware Court of Chancery
against Barrett. The Shell complaint sought an order declaring Article III,
Section 3 of the Barrett Bylaws to be in violation of Section 228 of the
Delaware corporate law. Article III, Section 3 provides that nominations by
stockholders for directors to be elected by written consent must be delivered
in writing to the Barrett Corporate Secretary not less than 60 days nor more
than 90 days prior to the first solicitation of any written consents for the
election of those nominees. In addition, Shell asked the Court to enjoin
Barrett, or anyone acting on Barrett's behalf or in concert with Barrett, from
enforcing Article III, Section 3. The Shell complaint also seeks an order
declaring Article IX, Section 4 of the Barrett Bylaws to be in violation of
Section 228 of the Delaware corporate law and again asks the Court to enjoin
Barrett, or anyone acting on Barrett's behalf or in concert with Barrett, from
enforcing that Bylaw. Article IX, Section 4 provides that the Barrett Bylaws
may be amended at a meeting of stockholders, but not by their written consent,
and includes certain requirements of advance notice of the proposed amendment
to Barrett and the Barrett Board. On March 12, 2001, Shell filed an amended
complaint adding Sub as a plaintiff and the individual directors of Barrett as
defendants. Shell alleges that the Barrett directors have breached their
fiduciary duties by failing to amend the Bylaws which allegedly violate state
law. On March 12, 2001, Shell also filed a motion with the Court seeking an
expedited proceeding for matters asserted in its complaint. On March 14, 2001,
Barrett amended the Bylaws to delete the two provisions that are the subject of
this litigation.
On March 12, 2001, Shell and Sub filed a complaint in the United States
District Court for the District of Delaware against Barrett. The complaint
seeks an order declaring that the Shell Consent Solicitation, the Shell tender
offer documents and other documents filed with the SEC comply with all federal
laws. In addition, the complaint asks the Court to enjoin Barrett, or anyone
acting on Barrett's behalf or in concert with Barrett, from commencing in any
other forum litigation that relates to the Shell Consent Solicitation or the
Shell Offer or any matters concerning them.
Several actions have been filed in Delaware Court of Chancery on behalf of a
purported class of Barrett stockholders against Barrett and the Barrett Board.
These actions all allege that the Board is violating its fiduciary duties to
stockholders by failing to properly consider the Shell Offer. All of the
actions ask the Court to enjoin the Board from violating its fiduciary duties
and to require the Board to properly consider alternatives in order to maximize
the value to the stockholders.
Two actions have been filed in the District Court for the City and County of
Denver, Colorado on behalf of a purported class of Barrett stockholders against
Barrett and the Barrett Board. These actions allege that the Board will violate
its fiduciary duties to stockholders if it allows Barrett to consummate the
Shell Offer. The actions ask the Court to enjoin the Board from agreeing to the
Shell Offer and to require the Board to implement a fair process in order to
sell the Company in a way that maximizes value to stockholders.
14
ABSENCE OF APPRAISAL RIGHTS
Under Delaware law, the stockholders of Barrett are not entitled to
appraisal rights in connection with the solicitation of consents or revocations
of consents with respect to the Shell Proposals.
PARTICIPANTS IN THE SOLICITATION
Each member of the Barrett Board, certain executive officers and other
employees of Barrett and certain other persons may be deemed to be a
"participant" (as defined in the applicable regulations of the SEC) in our
solicitation of consent revocations. The principal occupations and business
addresses of each director and executive officer are set forth in Annex B.
Information about the present ownership by directors and executive officers of
Common Stock is provided in this Consent Revocation Statement and the present
ownership of Common Stock by other persons who may be deemed to be participants
is listed on Annex B.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in Barrett's proxy statement and
form of proxy relating to Barrett's annual meeting of stockholders to be held
in 2001, proposals by individual stockholders must have been received by
Barrett no later than November 23, 2000. Stockholder proposals also must have
complied with certain SEC rules and regulations.
In addition, the proxy to be solicited by the Board of Directors for the
2001 Annual Meeting of Stockholders will confer discretionary authority on any
stockholder proposal presented at that meeting, unless Barrett had been
provided with notice of such proposal no later than February 7, 2001.
Barrett Resources Corporation
, 2001
15
ANNEX A
EXECUTIVE COMPENSATION
The following summary compensation table sets forth certain information
concerning the compensation of the Named Executive Officers for each of the
three fiscal years during the period ended December 31, 2000.
Summary Compensation Table
Long Term Compensation
-------------------------------
Awards Payouts
------------------ ------------
Other
Annual Restricted Securities
Compen- Stock Underlying LTIP All Other
Name and Principal Fiscal Salary Bonus sation Award(s) Options/SARs Payouts Compensation
Position Year ($) ($)(1) ($) ($) (2) ($) ($)(3)
- ------------------ ------ -------- -------- ------- ---------- ------------ ------- ------------
Peter A. Dea............ 2000 $350,016 $200,000 -0- -0- -0- -0- $10,200
Chief Executive Officer, 1999 $218,752 $175,000 -0- -0- 100,000 -0- $ 9,600
Chairman, and a director 1998 $167,708 -0- -0- -0- 142,375 -0- $ 9,600
Joseph N. Jaggers....... 2000 $119,391 $150,000 -0- -0- 75,000 -0- $75,886
President; and Chief 1999 -- -- -- -- -- -- --
Operating Officer (4) 1998 -- -- -- -- -- -- --
A. Ralph Reed (5)....... 2000 $285,000 -0- -0- -0- -0- -0- $10,200
Former President, former 1999 $285,000 $130,000 -0- -0- 52,500 -0- $ 9,600
Chief Operating Officer, 1998 $272,250 -0- -0- -0- 60,000 -0- $ 9,600
and former director
J. Frank Keller (6)..... 2000 $206,250 $ 55,000 -0- -0- 25,000 -0- $10,200
Executive Vice
President, 1999 $180,000 $ 85,000 -0- -0- 34,350 -0- $ 9,600
Chief Financial Officer, 1998 $177,131 -0- -0- -0- 35,000 -0- $ 9,600
and former director
Eugene A. Lang, Jr...... 2000 $178,750 $111,000 -0- -0- 12,000 -0- $10,200
Executive Vice
President-- 1999 $160,000 $ 60,000 -0- -0- 11,200 -0- $ 9,600
General Counsel, and 1998 $157,500 -0- -0- -0- 25,000 -0- $ 9,450
Secretary
- --------
(1) The dollar value of cash bonuses earned during the year indicated. The
cash bonuses earned for 2000 were determined by the Compensation Committee
on March 7, 2001. See, "Compensation Committee Report on Executive
Compensation--Cash Bonus Awards".
(2) The sum of the number of shares of Common Stock to be received upon the
exercise of all stock options granted.
(3) Represents Barrett's matching contribution under Barrett's 401(k) Plan for
each Named Executive Officer and a $75,000 relocation expense allowance
paid to Mr. Jaggers upon his joining the Company as President and Chief
Operating Officer on July 10, 2000.
(4) Mr. Jaggers joined the Company as President and Chief Operating Officer on
July 10, 2000.
(5) On May 4, 2000, Mr. Reed stepped down as President and Chief Operating
Officer. His membership on the Board also ended on May 4, 2000. Mr. Reed's
employment ceased on January 4, 2001, when he retired. In recognition of
Mr. Reed's contributions to Barrett during his 11-year employment, he
received a payment of $405,000 on January 4, 2001.
(6) Mr. Keller's membership on the Board ended on May 4, 2000.
A-1
The following table provides certain summary information concerning
individual grants of stock options made to Named Executive Officers during the
fiscal year ended December 31, 2000 under Barrett's incentive plans. Except as
set forth in the table below, during fiscal year 2000, Barrett did not grant
any stock options under Barrett's Incentive Plans to any of the Named Executive
Officers.
Option Grants in Last Fiscal Year
% of Total Potential Realizable Value
Number of Options at Assumed Annual Rates of
Securities Granted to Stock Price Appreciation for
Underlying Employees Exercise Option Term
Options in Fiscal Price Expiration -----------------------------
Name Granted (#) Year ($/Share) Date 5% 10%
---- ----------- ---------- --------- ---------- ------------- ---------------
Peter A. Dea............ -0- (1) 0% N/A N/A N/A N/A
Joseph N. Jaggers....... 75,000 (2) 25.8% $ 28.75 7-10-2007 $ 877,500 $ 2,045,250
A. Ralph Reed........... -0- (3) 0% N/A N/A N/A N/A
J. Frank Keller......... 25,000 (4) 8.6% $25.8125 2-25-2007 $ 262,750 $ 612,250
Eugene A. Lang, Jr...... 12,000 (4) 4.1% $25.8125 2-25-2007 $ 126,120 $ 293,880
- --------
(1) Mr. Dea was granted no stock options in 2000 in light of the options he
received in November 1999 when he was elected Chief Executive Officer.
(2) Mr. Jaggers was granted options to purchase 75,000 shares effective upon
his joining the Company as President and Chief Operating Officer on July
10, 2000. One-fourth of these options will become exercisable on each of
July 10, 2001, 2002, 2003, and 2004 and all the options expire on July 10,
2007. These options become exercisable immediately upon a change in
control of the Company.
(3) In light of his then anticipated retirement, Mr. Reed was granted no stock
options in 2000.
(4) One-fourth of these options became exercisable on February 25, 2001, and
one-fourth become exercisable on each of February 25, 2002, February 25,
2003 and February 25, 2004. These options become exercisable immediately
upon a change in control of the Company.
A-2
Aggregated Option Exercises and Fiscal Year-End Option Values
The following table provides certain summary information concerning stock
option exercises during the fiscal year ended December 31, 2000 by the Named
Executive Officers and the value of unexercised stock options held by the Named
Executive Officers as of December 31, 2000.
Aggregated Option Exercises
For Fiscal Year Ended December 31, 2000
and Year-End Option Values (1)
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Value Year-End (#) (4) Fiscal Year-End ($) (5)
Shares Acquired Realized ------------------------- -------------------------
Name on Exercise (2) ($) (3) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ---------- ----------- ------------- ----------- -------------
Peter A. Dea............ 56,858 $1,136,327 59,643 147,563 $1,537,569 $4,182,530
Joseph N. Jaggers....... 0 $ 0 -0- 75,000 $ 0 $2,104,500
A. Ralph Reed........... 75,000 $1,039,273 13,125 67,375 $ 529,889 $2,169,292
J. Frank Keller......... 32,787 $ 756,151 35,025 72,438 $ 827,073 $2,322,595
Eugene A. Lang, Jr...... 1,762 $ 48,790 68,808 41,100 $2,080,134 $1,220,304
- --------
(1) No stock appreciation rights are held by any of the Named Executive
Officers.
(2) The number of shares received upon exercise of options during the year
ended December 31, 2000.
(3) With respect to options exercised during the year ended December 31,
2000, the dollar value of the difference between the option exercise
price and the market value of the option shares purchased on the date of
the exercise of the options.
(4) The total number of unexercised options held as of December 31, 2000,
separated between those options that were exercisable and those options
that were not exercisable on that date.
(5) For all unexercised options held as of December 31, 2000, the aggregate
dollar value of the excess of the market value of the stock underlying
those options over the exercise price of those unexercised options. These
values are shown separately for those options that were exercisable, and
those options that were not yet exercisable, on December 31, 2000. As
required, the price used to calculate these figures was the closing sale
price of the common stock at year's end, which was $56.81 per share on
December 29, 2000.
Compensation Committee Report on Executive Compensation
None of the members of the Compensation Committee of the Board of Directors
is an employee of Barrett. The Compensation Committee sets and administers the
policies that govern the annual and long-term compensation of executive
officers of Barrett. The Compensation Committee makes all decisions concerning
compensation of executive officers and awards of stock options under Barrett's
stock option plans, except for awards under the Non-Discretionary Stock Option
Plan for non-employee directors.
Compensation Policies Toward Executive Officers. The Compensation
Committee's executive compensation policies are designed to provide competitive
levels of compensation that relate compensation to Barrett's annual and long-
term performance, reward above average corporate performance compared to other
companies in the oil and gas industry, recognize individual initiative and
achievements, and assist Barrett in retaining and attracting qualified
executive officers. The Compensation Committee strives to achieve these
objectives through a combination of base salary, stock options and cash bonus
awards. In determining compensation, the Compensation Committee considers the
matters discussed in this report as well as the recommendations of the Chief
Executive Officer concerning other executive officers and employees. The
Compensation Committee held its regularly scheduled meeting beginning on March
7, 2001 to consider executive salaries for 2001, stock option grants and cash
bonuses for 2000. This report is based on that meeting and, with respect to the
discussion of executive salaries for 2000, the meeting of the Committee held on
February 25, 2000.
A-3
Executive Salaries. Executive salaries are reviewed by the Compensation
Committee on a yearly basis and are set for individual executive officers based
on subjective evaluations of each individual officer's performance and
contributions to Barrett, Barrett's past performance, Barrett's future
prospects and long-term growth potential and a comparison to salaries for nine
specific companies, including three of the five companies in the peer group
included in the performance graph below in "--Performance Graph", and salary
ranges for executives of approximately 60 other companies in the oil and gas
industry. Through consideration of these criteria, the Compensation Committee
believes that salaries may be set in a manner that is both competitive and
reasonable within Barrett's industry.
The consideration of Barrett's performance for the year ended December 31,
1999 included a review of Barrett's net income of $20.8 million for 1999
compared to a net loss of $97.3 million for 1998, including an increase in net
revenues from trading and hedging activities, and the 71% decrease in finding
and development costs in 1999 compared to 1998. The consideration of Barrett's
future prospects and potential for long term growth at the February 25, 2000
Compensation Committee meeting included a review of Barrett's 17% increase in
proven reserves during 1999, the acquisition of additional acreage in Barrett's
core area in the Piceance Basin and the advances in the development of
Barrett's Powder River Basin prospect.
After completing its review of the existing base salaries of the Named
Executive Officers other than Mr. Jaggers and the factors described in this
subsection, at its February 25, 2000 meeting, the Committee increased the
annual base salaries to the following levels effective as of April 1, 2000:
Peter Dea, $350,000; J. Frank Keller, $215,000; and Eugene A. Lang, Jr.,
$185,000. The annual base salary of A. Ralph Reed remained at $285,000 due to
his planned retirement. At a meeting on May 4, 2000, the Compensation Committee
authorized the terms of Mr. Jaggers' compensation as President and Chief
Operating Officer effective upon his joining Barrett in July 2000. The
Committee based his annual base salary of $250,000 and his $75,000 one-time
relocation expense allowance on the factors described in this section,
negotiations with Mr. Jaggers and consideration of Mr. Jaggers' background as a
senior petroleum engineer and manager of production operations at Amoco and BP
Amoco, the responsibilities he would be assuming as Barrett's President and
Chief Operating Officer and the level of compensation necessary to attract a
candidate with Mr. Jaggers' experience and credentials to Barrett.
The consideration of Barrett's performance for the year ended December 31,
2000 included a review of Barrett's increased recurring net income of $68.1
million for 2000 compared to $20.0 million for 1999 and the 18% increase in
production over the prior year compared to more modest production increases for
other oil and gas companies, tempered by losses related to trading and hedging
activities. The consideration of Barrett's future prospects and potential for
long-term growth included a review of Barrett's addition of a new core
development area in the Raton Basin, the increase in net drilling inventory in
the Piceance Basin due to 20-acre spacing approval obtained by Barrett and the
acquisition of additional leasehold, the increase in net leasehold in the
Powder River Basin and the generation of several new high potential exploration
prospects.
After completing its review of the existing base salaries of the Named
Executive Officers and the factors described in this subsection, at its March
7-8, 2001 meeting, the Committee increased the annual base salaries to the
following levels effective as of March 16, 2001: Mr. Dea, $425,000; Mr.
Jaggers, $325,000; Mr. Keller, $222,500; and Mr. Lang, $200,000. The Committee
did not consider Mr. Reed due to his retirement in January of 2001.
Stock Options. Stock options are granted to executive officers and other
employees of Barrett by the Compensation Committee as a means of providing
long-term incentive to Barrett's employees. The Compensation Committee believes
that stock options encourage increased performance by Barrett's employees and
align the interests of Barrett's employees with the interests of Barrett's
stockholders. Decisions concerning the granting of stock options to a
particular executive officer are made after reviewing the number of options
previously granted to that officer, the number of options granted to other
executive officers (with higher ranking
A-4
officers generally receiving more options in the aggregate) and a subjective
evaluation of that officer's performance and contributions to Barrett as
described above under "Executive Salaries" and anticipated involvement in
Barrett's future prospects. While stock options are viewed by the Committee on
a more forward- looking basis than cash bonus awards based on prior
performance, an executive officer's prior performance will impact the number of
options that may be granted. In the case of Mr. Keller, the Committee
considered that Mr. Keller agreed to postpone his previously announced
retirement because of the recently announced bid of Shell Oil Company to
acquire Barrett.
At its March 7, 2001 meeting, following its consideration of the matters
described in the preceding paragraph, the Compensation Committee granted
options to purchase the following number of shares of common stock to the Named
Executive Officers other than Mr. Reed: Mr. Dea, 100,000; Mr. Jaggers, 75,000;
Mr. Keller, 15,000; and Mr. Lang, 30,000. One-fourth of the options become
exercisable on each of March 7, 2002, 2003, 2004 and 2005 and all the options
expire on March 7, 2008. All the options become exercisable upon a change in
control of the Company. The options are exercisable at $61.11 per share, which
was the closing price for the common stock on March 7, 2001.
Cash Bonus Awards. The Compensation Committee considers on an annual basis
whether to pay cash bonuses to some or all of Barrett's employees, including
Barrett's executive officers. The Compensation Committee considers the granting
of bonuses with the objective that Barrett will remain competitive in its
compensation practices and be able to retain highly qualified executive
officers. In determining the amounts of bonuses, the Compensation Committee
considers the performance of Barrett and each executive officer in the past
year as described above under "--Executive Salaries". The Committee's review of
Barrett's performance considers Barrett's net revenues and reserve and
production increases for the year and the subjective determination of the
Committee as to each executive officer's contributions to achieving those
results. Although specific net revenue targets and percentages of net revenue
available for bonuses are not utilized, the amount of funds available for
bonuses generally increases as net revenues increase. Based on the foregoing,
the Committee awarded a bonus of $200,000 to Mr. Dea, a bonus of $150,000 to
Mr. Jaggers, a bonus of $55,000 to Mr. Keller, and a bonus of $111,000 to Mr.
Lang. Separately, in recognition of his contributions to Barrett during his 11-
year tenure, Mr. Reed received a payment of $405,000 on January 4, 2001 upon
his retirement.
Chief Executive Officer Compensation. Generally, the compensation of the
Company's Chief Executive Officer is determined in the same manner as the
compensation for other executive officers of the Company as described above. In
addition to the factors described above under "--Executive Salaries", with
respect to Mr. Dea's 2000 base salary as determined at the February 25, 2000
Committee meeting, the Committee considered that Mr. Dea had recently begun
serving as Chief Executive Officer and was adjusting well to his new role. The
Committee also considered Mr. Dea's performance and contributions to the
Company prior to becoming Chief Executive Officer. In addition, with respect to
Mr. Dea's base salary for 2001, the Committee considered Mr. Dea's leadership
abilities in his first full year as Chief Executive Officer, his ability to
maintain what the Committee believed to be a beneficial corporate culture
within the Company and his positive presentations to and relationships with the
industry and investment communities. The consideration of Mr. Dea's 2001 salary
based on the Company's 2000 performance also included Mr. Dea's role in guiding
the Company to the achievement of the increased performance levels described
above under "--Executive Salaries", tempered by losses related to trading and
hedging activities.
A-5
The Committee considered Mr. Dea's compensation after determining the base
salaries and bonuses of the other executive officers and the Committee's
decisions concerning Mr. Dea's compensation included consideration of the
relative amounts paid to these officers and the added responsibilities of Mr.
Dea as Chief Executive Officer. As a result of these considerations as well as
the compensation being paid to chief executive officers by other relatively
comparable companies in the oil and gas industry, the Committee increased Mr.
Dea's base salary and paid Mr. Dea the bonus as described above.
Compensation Committee of the Board
of Directors:
C. Robert Buford
Derrill Cody
James M. Fitzgibbons
Hennie L.J.M. Gieskes
William W. Grant, III
Philippe S.E. Schreiber, Chairman
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
Barrett has entered into severance agreements with each of the Named
Executive Officers as well as Barrett's other officers identified in this
Consent Revocation Statement and certain other employees. Generally, the
agreements provide, among other things, that if, within three years after a
Change-in-Control (as defined in the severance agreement), the employee's
employment is terminated by the employee for "Good Reason" or by Barrett other
than for "Cause" (as such terms are defined in the severance agreement), the
employee will be entitled to a lump sum cash payment equal to three times for
Messrs. Dea, Jaggers, Reed and Keller (two times in the case of other officers
and employees) the employee's annual compensation (based on annual salary and
past annual bonus) in addition to continuation of certain benefits for three
years for Messrs. Dea, Jaggers, Reed and Keller (two years in the case of other
officers and employees) from the date of termination. Mr. Reed's agreement
terminated upon his retirement on January 4, 2001.
In addition, Barrett's stock option plans and option agreements under the
plans provide for the acceleration of option exercisability in the event of a
Change-in-Control.
Employee Retirement Plans, Long-Term Incentive Plans, and Pension Plans
Barrett has an employee retirement plan (the "401(k) Plan") that qualifies
under Section 401(k) of the Internal Revenue Code of 1986, as amended (the
"Code"). Employees of Barrett are entitled to contribute to the 401(k) Plan up
to 15 percent of their respective salaries. In addition, Barrett currently
contributes on behalf of each participating employee 100 percent of that
employee's contribution, up to a maximum contribution by Barrett of six percent
of that employee's gross salary for that pay period, with one-half of the
matching contribution paid in cash and one-half paid in Barrett's common stock.
Barrett's matching contribution is subject to a vesting schedule. Benefits
payable to employees upon retirement are based on the contributions made by the
employee under the 401(k) Plan, Barrett's matching contributions, and the
performance of the 401(k) Plan's investments. Therefore, Barrett cannot
estimate the annual benefits that will be payable to participants in the 401(k)
Plan upon retirement at normal retirement age. Excluding the 401(k) Plan,
Barrett has no defined benefit or actuarial or pension plans or other
retirement plans.
Excluding Barrett's stock option plans, Barrett has no long-term incentive
plan to serve as incentive for performance to occur over a period longer than
one fiscal year.
A-6
Performance Graph
The following line graph compares the yearly percentage change in the
cumulative total stockholder return, assuming reinvestment of dividends (for
shares other than the Common Stock, on which no dividends have been paid) for
(1) the Common Stock, (2) a peer group (the "Peer Group") of companies selected
by Barrett that are predominantly independent exploration and production
companies with properties predominantly located in the United States, and (3)
the Standard & Poors 500 Stock Index. The companies in the Peer Group are Cabot
Oil & Gas Corporation, Devon Energy Corporation, Louis Dreyfus Natural Gas
Corporation, Parker & Parsley Petroleum Company, Pogo Producing Company,
Seagull Energy Corporation, United Meridian Corporation and Vintage Petroleum,
Inc. Parker & Parsley Petroleum Company is included in the Peer Group until
August 8, 1997 when it ceased to exist after it merged with and into Mesa
Operating Co., a subsidiary of Pioneer Natural Resources Company. United
Meridian Corporation is included in the Peer Group until March 27, 1998 when it
merged with and into Ocean Energy Corporation. Seagull Energy Corporation is
included in the Peer Group until March 30, 1999 when it merged with Ocean
Energy Corporation. The comparison shown in the graph is for the years ended
December 31, 1996, 1997, 1998, 1999 and 2000. The cumulative total stockholder
return on Barrett's Common Stock was measured by dividing the difference
between Barrett's share price at both the end and at the beginning of the
measurement period by the share price at the beginning of the measurement
period.
[PERFORMANCE GRAPH]
12/29/95 12/31/96 12/31/97 12/31/98 12/31/99 12/29/00
-------- -------- -------- -------- -------- --------
Barrett Resources..... $100 $145.11 $102.98 $ 81.71 $100.22 $193.40
Peer Group............ $100 $160.53 $139.19 $104.89 $131.37 $254.58
S&P 500............... $100 $122.98 $163.94 $210.78 $255.13 $231.89
A-7
ANNEX B
INFORMATION CONCERNING THE DIRECTORS AND
CERTAIN EXECUTIVE OFFICERS AND EMPLOYEES
OF BARRETT AND OTHER PERSONS WHO MAY
ALSO SOLICIT REVOCATIONS OF CONSENTS
In connection with our solicitation of revocations of consents from its
stockholders, Barrett's directors and executive officers may be deemed to be
participants in the solicitation.
Directors and Executive Officers of Barrett
The following table sets forth the name and principal business address of
the directors and executive officers of Barrett who may be deemed to be
participants in the solicitation of revocations of consents. The table also
sets forth the name and address of any corporation or other organization in
which each director's and executive officer's employment is carried on. The
present employment or other principal occupation of each director, the
principal business of any corporation in which each director's and executive
officer's employment is carried on and the principal occupation of the
executive officers (each person's position with Barrett) are set forth
elsewhere in this Consent Revocation Statement. Unless otherwise indicated
below, the principal business address of each person is c/o Barrett Resources
Corporation, 1515 Arapahoe Street, Tower 3, Suite 1000, Denver, Colorado 80202.
Directors are indicated with a single asterisk.
Name Business Address
- ---- ----------------
Peter A. Dea*
C. Robert Buford*.................................. Zenith Drilling Corporation
1861 North Rock Road
Wichita, KS 67206
Derrill Cody*...................................... McKinney & Stringer, P.C.
101 N. Robinson
Suite 1300
Oklahoma City, OK 73102
James M. Fitzgibbons*.............................. Davidson Cotton Company
3005G Crosspoint Center Lane
Charlotte, NC 28269
Hennie L.J.M. Gieskes*............................. Spaarne Compagnie N.V.
van der Oudermeulenlaan, 1
2240 AE Wassenaar
The Netherlands
William W. Grant, III*............................. 545 Race Street
Denver, CO 80206
Phillippe S.E. Schreiber*.......................... P.O. Box 3087
26 Sheep Pond Road
Nantucket, MA 02584
Joseph N. Jaggers
J. Frank Keller
Robert W. Howard
Eugene A. Lang
Logan Magruder
Joseph P. Barrett
Dean J. Gallacher
Steven G. Natali
B-1
Information Regarding Ownership of Barrett's Securities by Participants
Except as set forth below and otherwise provided in this Consent Revocation
Statement, none of the persons listed in this Annex B owns any of Barrett's
securities of record but not beneficially. The number of shares of Common Stock
held by directors and the Named Executive Officers of Barrett is set forth
under the caption "Security Ownership" in this Consent Revocation Statement.
The following executive officers own the following shares of Common Stock as
of March 9, 2001:
Name of Amount/Nature of Percent of Class
Beneficial Owner Beneficial Ownership Beneficially Owned
---------------- -------------------- ------------------
Joseph P. Barrett..................... 49,315(1) *
Dean J. Gallacher..................... 3,118(1) *
Robert W. Howard...................... 47,831(1)(2) *
Logan Magruder, III................... 12,312(1) *
Steven G. Natali...................... 9,107(1) *
- --------
* Less than 1% of the Common Stock outstanding.
(1) The number of shares indicated consists of or includes the following number
of shares underlying options that currently are exercisable or that may
become exercisable within 60 days following March 9, 2001: Joseph P.
Barrett, 37,805; Dean J. Gallacher, 3,000; Robert W. Howard, 30,950; Logan
Magruder, III, 11,813; and Steven G. Natali, 8,438.
(2) The number of shares indicated includes 16,000 shares held jointly with Mr.
Howard's spouse.
B-2
Information Regarding Transactions in Barrett's Common Stock by Participants
The following table sets forth purchases and sales of Common Stock by the
participants listed below during the past two years. Unless otherwise
indicated, all transactions were consummated in the public market.
Number of
Shares
Name Date of Transaction Acquired/(Sold) Footnote
- ---- ------------------- --------------- --------
Joseph P. Barrett................ 1/1/2001 - 2/28/2001 15 (1)
1/1/2000 - 12/31/2000 139 (2)
1/1/1999 - 12/31/1999 147 (3)
8/19/1999 4,200 (4)
8/19/1999 (4,200)
C. Robert Buford................. 7/5/2000 10,000
7/3/2000 4,300
7/3/2000 700
7/3/2000 2,500
5/12/2000 (25,000) (5)
9/2/1999 (50,000)
8/27/1999 5,000
2/24/1999 10,000
Derrill Cody..................... 5/3/2000 3,900 (4)
5/3/2000 10,000 (4)
Peter A. Dea..................... 1/1/2001 - 2/28/2001 27 (1)
1/1/2000 - 12/31/2000 169 (2)
12/26/2000 2,500 (4)
12/26/2000 (2,500)
12/22/2000 2,500 (4)
12/22/2000 (2,500)
12/17/2000 (14) (5)
12/17/2000 (68) (5)
12/17/2000 (98) (5)
12/15/2000 9,700 (4)
12/15/2000 (9,700)
12/14/2000 2,300 (4)
12/14/2000 (2,300)
12/8/2000 (4,723) (6)
12/8/2000 8,782
12/8/2000 (1,962) (6)
12/8/2000 2,576 (4)
12/6/2000 3,650 (4)
12/6/2000 3,500 (4)
12/6/2000 (2,600)
12/6/2000 (3,650)
12/6/2000 (3,500)
12/5/2000 (13,250)
12/5/2000 (5,000)
12/5/2000 (500)
11/28/2000 21,350 (4)
1/1/1999 - 12/31/1999 187 (3)
9/8/1999 10,000 (4)
9/8/1999 (10,000)
9/7/1999 1,218 (4)
9/7/1999 3,593 (4)
9/7/1999 (4,811)
B-3
Number of
Shares
Name Date of Transaction Acquired/(Sold) Footnote
- ---- ------------------- --------------- --------
James M. Fitzgibbons............. Not Applicable Not Applicable
Dean J. Gallacher................ 1/1/2001 - 2/28/2001 16 (1)
1/1/2000 - 12/31/2000 96 (2)
Hennie L.J.M. Gieskes............ Not Applicable Not Applicable
William W. Grant, III............ 7/12/2000 8,000 (4)
Robert W. Howard................. 1/1/2001 - 2/28/2001 15 (1)
1/1/2000 - 12/31/2000 133 (2)
12/18/2000 2,500 (4)
12/18/2000 33 (4)
12/18/2000 1,092 (4)
12/18/2000 (1,600)
12/18/2000 (4,200)
1/1/1999 - 12/31/1999 140 (3)
3/30/1999 (3,911) (6)
3/30/1999 8,000 (4)
Joseph N. Jaggers................ 1/1/2001 - 2/28/2001 22 (1)
1/1/2000 - 12/31/2000 26 (2)
J. Frank Keller.................. 1/1/2001 - 2/28/2001 16 (1)
1/1/2000 - 12/31/2000 160 (2)
12/26/2000 (5,000)
12/19/2000 (5,000)
12/18/2000 (10,000)
12/15/2000 4,139 (4)
12/15/2000 (5,000)
12/15/2000 (5,000)
12/12/2000 861 (4)
12/12/2000 9,139 (4)
12/12/2000 (10,000)
12/8/2000 1,413 (4)
12/8/2000 8,587 (4)
11/20/2000 (6,700)
10/13/2000 (4,532) (6)
10/13/2000 8,648 (4)
12/17/2000 (745) (5)
1/1/1999 - 12/31/1999 171 (3)
9/9/1999 20,600 (4)
9/9/1999 (9,100)
5/28/1999 (6,000)
5/27/1999 (5,000)
5/20/1999 (5,000)
3/30/1999 34,400 (4)
Eugene A. Lang, Jr. ............. 1/1/2001 - 2/28/2001 14 (1)
2/20/2001 (1,275) (6)
2/20/2001 3,041 (4)
1/1/2000 - 12/31/2000 163 (2)
12/21/2000 (756) (6)
12/21/2000 1,762 (4)
1/1/1999 - 12/31/1999 172 (3)
12/30/1999 (4,033) (6)
B-4
Number of
Shares
Name Date of Transaction Acquired/(Sold) Footnote
- ---- ------------------- --------------- --------
Eugene A. Lang,
Jr. (continued)............... 12/30/1999 3,984 (4)
12/30/1999 772 (4)
5/19/1999 11,000 (4)
5/19/1999 (11,000)
Logan Magruder, III............ 1/1/2001 - 2/28/2001 17 (1)
1/1/2000 - 12/31/2000 156 (2)
12/27/2000 2,500 (4)
12/27/2000 (2,500)
12/26/2000 16,875 (4)
12/26/2000 2,500 (4)
12/26/2000 2,500 (4)
12/26/2000 (5,000)
12/26/2000 (9,837)
12/26/2000 (7,038)
12/18/2000 2,500 (4)
12/18/2000 (2,500)
11/9/2000 2,500 (4)
11/9/2000 (1,250)
11/9/2000 (1,250)
8/17/2000 2,187 (4)
8/17/2000 (2,187)
1/1/1999 - 12/31/1999 167 (3)
9/8/1999 200 (4)
9/8/1999 (200)
9/7/1999 2,500 (4)
9/7/1999 (4,800)
8/20/1999 2,500 (4)
8/20/1999 (2,500)
Steven G. Natali............... 1/1/2001 - 2/28/2001 16 (1)
1/1/2000 - 12/31/2000 135 (2)
12/21/2000 (2,187)
12/20/2000 7,500 (4)
12/20/2000 2,500 (4)
12/20/2000 7,500 (4)
12/20/2000 6,250 (4)
12/20/2000 20,037 (4)
12/20/2000 (5,900)
Philippe S.E. Schreiber........ 12/14/2000 (2,000)
3/31/2000 (3,000)
6/11/1999 10,000 (4)
6/11/1999 (4,900)
- --------
(1) Indicates the number of shares purchased through Barrett's 401(k) plan by
the 401(k) trustee and allocated to the individual's account from 1/1/2001
to 2/28/2001. The Barrett 401(k) plan involves a contribution made by the
individual on a twice-monthly basis on usual payroll dates that is
deducted directly from the individual's paycheck.
(2) Indicates the number of shares purchased through Barrett's 401(k) plan by
the 401(k) trustee and allocated to the individual's account from 1/1/2000
to 12/31/2000.
B-5
(3) Indicates the number of shares purchased through Barrett's 401(k) plan by
the 401(k) trustee and allocated to the individual's account from 1/1/1999
to 12/31/1999.
(4) Indicates the number of shares purchased through the exercise of stock
options previously granted pursuant to one of Barrett's stock option
plans.
(5) Indicates a gift.
(6) Indicates shares previously held by the named individual that were
delivered to Barrett as payment of the exercise price of options exercised
on the same date.
Except as described in this Annex B or in the Consent Revocation Statement
or in Annex A thereto, none of the directors or executive officers of Barrett
who may be deemed "participants" as defined in Schedule 14A promulgated under
the Exchange Act nor, to the best knowledge of the Company, any of their
respective affiliates or associates (together, the "Company Participant
Affiliates"), (1) directly or indirectly beneficially or of record owns any
shares of Common Stock or any securities of any subsidiary of Barrett, (2) has
purchased or sold any shares of Common Stock within the past two years or (3)
has had any relationship with Barrett in any capacity other than as a
stockholder, employee, officer or director. Furthermore, except as described in
this Annex B or in the Consent Revocation Statement or in Annex A thereto, no
Company Participant Affiliate is either a party to any transaction or series of
transactions since January 1, 2000, or has knowledge of any currently proposed
transaction or series of transactions, (1) to which Barrett or any of its
subsidiaries was or is to be a party, (2) in which the amount involved exceeds
$60,000, and (3) in which any Company Participant Affiliate had, or will have,
a direct or indirect material interest.
Except for the employment agreements described in the Consent Revocation
Statement or as otherwise described therein or in Annex A thereto or in this
Annex B, no Company Participant Affiliate has entered into any agreement or
understanding with any person respecting any future employment by Barrett or
its affiliates or any future transactions to which Barrett or any of its
affiliates will or may be a party. Except as described in this Annex B or in
the Consent Revocation Statement or in Annex A thereto, there are no contracts,
arrangements or understandings by any Company Participant Affiliate within the
past year with any person with respect to Barrett's securities.
Other than as disclosed in this Annex B or in the Consent Revocation
Statement or in Annex A thereto, to the knowledge of the Company, none of the
Company, any of its directors or executive officers has any substantial
interest, direct or indirect, by security holdings or otherwise, in any matter
to be acted upon pursuant to the Shell Consent Solicitation Statement or the
Consent Revocation Statement.
Information Regarding Other Persons that may be Deemed to be Participants
We have retained Goldman, Sachs & Co. ("Goldman Sachs") and Petrie Parkman &
Co. ("Petrie Parkman") to act as our financial advisors in connection with the
Shell Offer. Neither Goldman Sachs nor Petrie Parkman admits that it or any of
its directors, officers, employees, affiliates or controlling persons, if any,
is a "participant" as defined in Schedule 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in the solicitation of
consent revocations, or that Schedule 14A requires the disclosure of certain
information concerning Goldman Sachs or Petrie Parkman. Additional information
concerning the foregoing persons who may be deemed to be participants in our
solicitation of revocations of consents, including the number of Shares
beneficially owned by such persons, is set forth below.
Goldman Sachs
Pursuant to a letter agreement (the "Goldman Sachs Letter Agreement") dated
March 3, 2001, Barrett has engaged Goldman Sachs to act as its financial
advisor in connection with the Shell Offer and certain other possible
transactions, and agreed to pay Goldman Sachs (X) a fee of $500,000 payable on
the date of the Goldman Sachs Letter Agreement, (Y) a fee equal to 0.55% of the
aggregate value of any transaction in which a holder of Barrett shares receives
up to $55.00 per share, and, if the holder receives more than $55.00 per share
in any such transaction, a fee equal to the fee payable assuming that the
holder received $55.00 per share
B-6
plus 1.5% of the amount per share received by such holder in excess of $55.00
per share multiplied by the full diluted number of shares outstanding, in the
event (i) at least 15% of the outstanding stock of Barrett is acquired by a
third party, (ii) all or substantially all of the assets of Barrett are sold or
(iii) a recapitalization transaction involving Barrett occurs, and (Z) $2.0
million on each of four successive quarterly dates if certain transactions
involving Barrett have not then occurred. The amounts paid in connection with
clause (X) and (Y) are creditable against the amount payable under Clause (Z),
and vice versa.
Barrett has agreed to reimburse Goldman Sachs periodically for their
reasonable out-of-pocket expenses. In addition, Barrett has agreed to indemnify
Goldman Sachs against certain liabilities, including liabilities under federal
securities laws.
In connection with the engagement of Goldman Sachs as financial advisor,
Barrett anticipates that employees of Goldman Sachs may communicate in person,
by telephone or otherwise with certain institutions, brokers or other persons
who are shareholders for the purpose of assisting in the solicitation of
consent revocations. Although Goldman Sachs does not admit that it or any of
its directors, officers, employees or affiliates is a "participant," as defined
in Schedule 14A promulgated under the Securities Exchange Act of 1934, as
amended, by the SEC, or that Schedule 14A requires the disclosure of certain
information concerning them, Peter Brundage (Managing Director), Chansoo Joung
(Managing Director) and John Vaske (Managing Director), in each case of Goldman
Sachs (collectively, the "Financial Advisor Participants"), may assist Barrett
in the solicitation of consent revocations. The principal business address of
Messrs. Brundage, Joung and Vaske is 85 Broad Street, New York, NY 10004.
Goldman Sachs has provided financial advisory and investment banking
services to Barrett from time to time for which they have received customary
compensation. In addition, certain affiliates of Goldman Sachs, in the ordinary
course of business, are a party to certain of Barrett's commodity hedging
transactions. Goldman Sachs engages in a full range of investment banking,
securities trading, market-making and brokerage services for institutional and
individual clients. In the ordinary course of its business, Goldman Sachs may
actively trade securities of Barrett for its own account and the account of its
customers and, accordingly, may at any time hold a long or short position in
such securities. Goldman Sachs has advised Barrett that as of March 13, 2001,
Goldman Sachs held a net short position of approximately 10,319 shares of
Barrett Common Stock.
Except as set forth above, to Barrett's knowledge, none of Goldman Sachs, or
any of the Financial Advisor Participants, has any interest, direct or
indirect, by security holdings or otherwise, in Barrett. None of the Financial
Advisor Participants have purchased or sold for their account Barrett Common
Stock within the past two years. In the normal course of their business,
Goldman Sachs finance the securities positions of Goldman Sachs by bank and
other borrowings and repurchase and securities borrowing transactions. To the
knowledge of Barrett, none of such borrowings were intended specifically for
the purpose of purchasing securities of Barrett.
Petrie Parkman
Pursuant to the terms of a letter agreement (the "Petrie Parkman Letter
Agreement") dated as of March 7, 2001, Barrett has engaged Petrie Parkman to
act as its financial advisor in connection with the Shell Offer and certain
other possible transactions, and agreed to pay Petrie Parkman the following
compensation:
a. a fee of $1,000,000 in cash, payable promptly following the Company's
execution of the Petrie Parkman Letter Agreement; plus
b. a one-time advisory fee of $1,000,000 in cash payable promptly upon the
earlier of (i) the substantial completion by Petrie Parkman of the work
deemed sufficient by Petrie Parkman to render an opinion as to the
fairness or adequacy, from a financial point of view, to the Company or
its stockholders of the consideration to be paid or received by the
Company or its stockholders in any Transaction (as that term is defined
below), or (ii) consummation of a Transaction; plus
c. an incremental fee of $400,000 in cash for each $1.00 per share of
consideration (both cash and non-cash) above $55.00 per share received
by Barrett stockholders upon consummation of a Transaction.
B-7
The term "Transaction" in the Petrie Parkman Letter Agreement means a
possible merger or business combination to which Barrett is a party or an
acquisition of a majority of the shares of Common Stock through a tender offer
or exchange offer, or a sale of, or joint venture transaction involving, all or
substantially all of Barrett's assets with, of, or to one or more other
parties.
Barrett has agreed to reimburse Petrie Parkman for its reasonable out-of-
pocket expenses related to the Petrie Parkman Letter Agreement, including the
reasonable fees and expenses of its counsel. In addition, Barrett has agreed to
indemnify Petrie Parkman against certain liabilities, including, but not
limited to, liabilities under federal securities laws.
Petrie Parkman has agreed, to use all non-public information concerning
Barrett given to Petrie Parkman by Barrett or any of Barrett's directors,
officers, employees, agents or advisors solely in the course of the performance
of services under the Petrie Parkman Letter Agreement.
In connection with the engagement of Petrie Parkman as financial advisor,
Barrett anticipates that employees of Petrie Parkman may communicate in person,
by telephone or otherwise with certain institutions, brokers or other persons
who are shareholders for the purpose of assisting in the solicitation of
consent revocations. Although Petrie Parkman does not admit that it or any of
its directors, officers, employees or affiliates is a "participant," as defined
in Schedule 14A promulgated under the Securities Exchange Act of 1934, as
amended, by the SEC, or that Schedule 14A requires the disclosure of certain
information concerning them, Tom Petrie (Chairman and Chief Executive Officer),
Paul Liebman (Principal and Director of Research) and John Hughes [Principal],
in each case of Petrie Parkman (collectively, the "Petrie Parkman Financial
Advisor Participants"), may assist Barrett in the solicitation of consent
revocations. The principal business address of Messrs. Petrie and Lieberman is
475 Seventeenth Street, Suite 1100, Denver, Colorado 80202. The principal
business address of Mr. Hughes is 600 Travis Street, Suite 7400, Houston,
Texas, 77002.
Petrie Parkman has provided financial advisory and investment banking
services to Barrett from time to time for which they have received customary
compensation. Petrie Parkman engages in a full range of investment banking,
securities trading, and brokerage services for institutional clients. In the
ordinary course of its business, Petrie Parkman may actively trade securities
of Barrett for its own account and the account of its customers, and,
accordingly, may at any time hold a long or short position in such securities.
Petrie Parkman has advised Barrett that as of March 15, 2001, Petrie Parkman
held a net position of zero (0) shares of Common Stock.
Except as set forth above, to Barrett's knowledge, none of Petrie Parkman,
or any of the Petrie Parkman Financial Advisory Participants, has any interest,
direct or indirect, by security holdings or otherwise in Barrett. None of the
Petrie Parkman Financial Advisory Participants have purchased or sold for their
account Common Stock within the past two years.
B-8
IMPORTANT
1. If your shares are registered in your name, please sign, date and mail the
enclosed BLUE Consent Revocation Card to Innisfree in the postage-paid
envelope provided.
2. If you have previously signed and returned a white consent card to Shell,
you have every right to change your mind and revoke that consent. Only your
latest dated card will count. You may revoke any white consent card already
sent to Shell by signing, dating and mailing the enclosed BLUE Consent
Revocation Card in the postage-paid envelope provided.
3. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only that firm or institution can sign a BLUE Consent
Revocation Card with respect to your shares and only after receiving your
specific instructions. Accordingly, please sign, date and mail the enclosed
BLUE Consent Revocation Card to the brokerage firm, bank nominee or other
institution in the postage-paid envelope provided. To ensure that your
shares are not voted by Shell, you should also contact the person
responsible for your account and give instructions for a BLUE Consent
Revocation Card to be signed and delivered to Barrett in care of Innisfree
representing your shares.
4. After signing the enclosed BLUE Consent Revocation Card, do not sign or
return any white consent card sent to you by Shell. Do not even use Shell's
white consent card to indicate your opposition to the Shell Proposals.
If you have any questions above giving your revocation of consent or require
assistance, please call:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
CALL TOLL FREE: (888) 750-5834
BANKS & BROKERS CALL COLLECT: (212) 750-5833
B-9