DEF 14A: Definitive proxy statements
Published on April 16, 2001
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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[ ] Preliminary Proxy Statement [ ] Confidential, for Use of
[x] Definitive Proxy Statement the Commission Only (as
[ ] Definitive Additional Materials permitted by
[ ] Soliciting Material Pursuant to Rule 14a-6(e)(2))
Section 240.14a-11(c)
or Section 240.14a-12
Barrett Business Services, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
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BARRETT BUSINESS SERVICES, INC.
April 13, 2001
Dear Stockholder:
You are cordially invited to attend the annual meeting of
stockholders of Barrett Business Services, Inc., to be held at 2:00 p.m. on
Thursday, May 17, 2001, at the Multnomah Athletic Club, 1849 S.W. Salmon
Street, Portland, Oregon.
Matters to be presented for action at the meeting include the
election of directors and ratification of the selection of independent
accountants.
We look forward to conversing with those of you who are able to
attend the meeting in person. Whether or not you can attend, it is important
that you sign, date, and return your proxy as soon as possible. If you do attend
the meeting and wish to vote in person, you may withdraw your proxy and vote
personally.
Sincerely,
/s/ William W. Sherertz
William W. Sherertz
President and Chief
Executive Officer
BARRETT BUSINESS SERVICES, INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2001
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You are invited to attend the annual meeting of stockholders of Barrett
Business Services, Inc., to be held at the Multnomah Athletic Club, 1849 S.W.
Salmon Street, Portland, Oregon, on Thursday, May 17, 2001, at 2:00 p.m.,
Pacific Time.
Only stockholders of record at the close of business on March 30, 2001,
will be entitled to vote at the meeting.
The meeting is being held to consider and act upon the following matters:
1. Election of directors.
2. Approval of the appointment of PricewaterhouseCoopers LLP as independent
accountants for the current fiscal year ending December 31, 2001.
3. Such other business as may properly come before the meeting or any
adjournments thereof.
Please sign and date the accompanying proxy and return it promptly in the
enclosed postage-paid envelope to avoid the expense of further solicitation. If
you attend the meeting, you may withdraw your proxy and vote your shares in
person.
By Order of the Board of Directors
/s/ Michael D. Mulholland
Michael D. Mulholland
Secretary
Portland, Oregon
April 13, 2001
BARRETT BUSINESS SERVICES, INC.
4724 S.W. MACADAM AVENUE
PORTLAND, OREGON 97201
(503) 220-0988
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PROXY STATEMENT
2001 ANNUAL MEETING OF STOCKHOLDERS
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This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Barrett Business Services,
Inc. (the "Company"), to be voted at the annual meeting of stockholders to be
held on May 17, 2001, and any adjournments thereof. The proxy statement and
accompanying form of proxy were first mailed to stockholders on approximately
April 13, 2001.
VOTING, REVOCATION AND SOLICITATION OF PROXIES
When a proxy in the accompanying form is properly executed and returned,
the shares represented will be voted at the meeting in accordance with the
instructions specified in the spaces provided in the proxy. If no instructions
are specified, the shares will be voted FOR Items 1 and 2 in the accompanying
Notice of Annual Meeting of Stockholders.
Stockholders may expressly abstain from voting on Item 2 by so
indicating on the proxy. Abstentions and shares represented by duly executed and
returned proxies of brokers or other nominees which are expressly not voted on
Item 2 will have no effect on the required vote.
Any proxy given pursuant to this solicitation may be revoked by the
person giving the proxy at any time prior to its exercise by written notice to
the Secretary of the Company of such revocation, by a later-dated proxy received
by the Company, or by attending the meeting and voting in person. The mailing
address of the Company's principal executive offices is 4724 S.W. Macadam
Avenue, Portland, Oregon 97201.
The solicitation of proxies will be made primarily by mail, but
proxies may also be solicited personally or by telephone or facsimile by
directors and officers of the Company without additional compensation for such
services. Brokers and other persons holding shares in their names, or in the
names of nominees, will be reimbursed for their reasonable expenses in
forwarding soliciting materials to their principals and in obtaining
authorization for the execution of proxies. All costs of solicitation of proxies
will be borne by the Company.
OUTSTANDING VOTING SECURITIES
The close of business on March 30, 2001, has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
annual meeting. On the record date, the Company had outstanding 6,320,898 shares
of Common Stock, $.01 par value ("Common Stock"), each share of which is
entitled to one vote at the meeting. Common Stock is the only outstanding voting
security of the Company.
ELECTION OF DIRECTORS
The directors of the Company are elected at the annual meeting of
stockholders in May to serve until the next annual meeting and until their
successors are elected and qualified. The Board has set
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the number of positions on the Board at seven. All of the nominees for election
as directors are members of the present Board.
A nominee will be elected if the nominee receives a plurality of the votes
cast by the shares entitled to vote in the election, provided that a quorum is
present at the meeting. Unless authority to vote for a director or directors is
withheld, the accompanying proxy will be voted FOR the election of the nominees
named below. If for some unforeseen reason a nominee should become unavailable
for election, the number of directors constituting the Board may be reduced
prior to the annual meeting or the proxy may be voted for the election of such
substitute nominee as may be designated by the Board.
Any recommendations as to nominees for election at the 2002 annual meeting
should be submitted in writing by December 14, 2001, to the Secretary of the
Company at its principal executive offices and should include the name, address,
and qualifications of each proposed nominee.
The following table sets forth information with respect to each person
nominated for election as a director, including their ages as of February 28,
2001, business experience during the past five years, and directorships in other
corporations.
DIRECTOR
NAME PRINCIPAL OCCUPATION(1) AGE SINCE
- ---- --------------------------------- --- ---------
Robert R. Ames Retired Vice Chairman of First Interstate
Bank of Oregon, N.A. 60 1993
Thomas J. Carley Private investor 42 2000
Richard W. Godard Area Vice President of the Company 38 2000
James B. Hicks, Ph.D. Partner, TekSTART Consulting Group 54 2001
Anthony Meeker Director of Key Asset Management, Inc.,
New York, New York, an investment
management firm 61 1993
Nancy B. Sherertz Private investor 51 1998
William W. Sherertz President and Chief Executive Officer of
the Company 55 1980
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(1) During the past five years, the principal occupation and employment of
each nominee for director has been in the capacity set forth above except
as follows:
(a) Mr. Ames currently is actively engaged in numerous real estate
development ventures. From 1992 to 1995, he was the Vice Chairman of
the Board of Directors of First Interstate Bank of Oregon, N.A. From
1983 to 1991, Mr. Ames served as President of the Bank.
(b) Mr. Carley was President and Chief Financial Officer of Jensen
Securities, a securities and investment banking firm in Portland,
Oregon, for eight years until February 1998, when the company was
sold to D.A. Davidson & Co. Thereafter, he was a research analyst
covering technology companies and financial institutions at D.A.
Davidson & Co. until December 1999.
(c) Mr. Godard has been Area Vice President of the Company in its
Northern California region since April 1998 and has been a member of
the Company's senior management since 1994.
(d) Mr. Hicks is a partner in TekSTART Consulting Group, which provides
advice to early stage technology companies regarding management and
operational issues, and has been a director of AVI BioPharma, Inc.
since 1997. He previously was co-founder and Chief Science Officer
of Activated Cell Systems, LLC, a biotechnology company, beginning
in 1999. From 1995 to 1999, he was co-founder and technical
consultant for Sapient Health Network, and also served
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as Chief Executive Officer, Chief Scientist and a director of Hedral
Therapeutics, Inc., a biotechnology company, from 1994 to 1998.
(e) Mr. Meeker was Treasurer of the State of Oregon from 1987 to 1993.
(f) Ms. Sherertz was President and a director of the Company from 1975
to March 1993.
(g) Mr. Sherertz also serves as Chairman of the Board of Directors.
Ms. Sherertz and Mr. Sherertz were married to each other until 1994.
DIRECTORS' MEETINGS AND STANDING COMMITTEES
The standing committees of the Board include an audit committee and a
compensation committee. During 2000, the Board held eight meetings, the audit
committee held six meetings and the compensation committee held one meeting.
Each director attended more than 75 percent of the aggregate of the total number
of meetings of the Board and the total number of meetings held by all committees
of the Board on which he or she served during 2000. Herbert L. Hochberg served
as a director of the Company and as a member of the audit committee and the
compensation committee during 2000 until his retirement effective August 31,
2000.
The audit committee reviews services provided by the independent
accountants, makes recommendations concerning their engagement or discharge, and
reviews with management and the independent accountants the results of their
audit, the adequacy of internal accounting controls and the quality of financial
reporting. The current members of the audit committee are Mr. Ames, chairman,
Mr. Carley and Mr. Meeker.
The compensation committee reviews the compensation of executive officers
of the Company and makes recommendations to the Board regarding salary levels
and other forms of compensation to be paid to executive officers, including
decisions as to grants of options and other stock-based awards. The current
members of the compensation committee are Mr. Meeker, chairman, Ms. Sherertz,
who does not participate in the committee's deliberations regarding stock
options, and, effective April 1, 2001, Mr. Hicks.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the compensation committee of the Board during 2000 were
Herbert L. Hochberg, Anthony Meeker and Nancy B. Sherertz. Ms. Sherertz was
President of the Company from 1975 to March 1993.
AUDIT COMMITTEE REPORT
The audit committee of the Board (the "Committee") reports to the Board and
is responsible for monitoring the integrity of the Company's financial
statements, the compliance by the Company with legal and regulatory requirements
relating to its status as a public company, and the independence and performance
of the Company's independent accountants. The Committee is comprised of three
directors, each of whom meets the financial literacy and independence
requirements specified in current National Association of Securities Dealers
corporate governance standards. The Committee's activities are governed by a
written charter adopted by the Board, a copy of which is attached to this proxy
statement as Appendix A.
In discharging its responsibilities, the Committee and its individual
members have met with management and with the Company's independent auditors,
PricewaterhouseCoopers LLP, to review the Company's accounting functions and the
audit process. The Committee discussed and reviewed with its independent
auditors all matters that the independent auditors were required to communicate
and discuss with the Committee under applicable auditing standards, including
those described in Statement
3
on Auditing Standards No. 61, as amended, regarding communications with audit
committees. Committee members also discussed and reviewed the results of the
independent auditors' examination of the financial statements, the quality and
adequacy of the Company's internal controls, and issues relating to auditor
independence. The Committee has obtained a formal written statement relating to
independence consistent with Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," and discussed with the
auditors any relationships that may impact their objectivity and independence.
Based on its review and discussions with management and the Company's
independent auditors, the Committee recommended to the Board that the audited
financial statements for the fiscal year ended December 31, 2000, be included in
the Company's Annual Report on Form 10-K for filing with the Securities and
Exchange Commission.
AUDIT COMMITTEE
Robert R. Ames, Chair
Thomas J. Carley
Anthony Meeker
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STOCK OWNERSHIP BY PRINCIPAL STOCKHOLDERS
AND MANAGEMENT
BENEFICIAL OWNERSHIP TABLE
The following table gives information regarding the beneficial ownership of
Common Stock as of March 30, 2001, by each director and nominee for director and
certain named executive officers and by all directors and executive officers of
the Company as a group. In addition, it gives information about each person or
group known to the Company to own beneficially more than 5 percent of the
outstanding shares of Common Stock. Information as to beneficial stock ownership
is based on data furnished by the persons concerning whom such information is
given. Unless otherwise indicated, all shares listed as beneficially owned are
held with sole voting and dispositive powers.
AMOUNT OF NATURE PERCENT
OF BENEFICIAL OF
NAME OF BENEFICIAL OWNER OWNERSHIP(2) CLASS
- ------------------------ ------------ -----
Heartland Advisors, Inc.(1).................... 988,600(3) 15.6%
Wynnefield Group (1)........................... 675,000(4) 10.7%
Dimension Fund Advisors, Inc.(1)............... 361,500(5) 5.7%
Robert R. Ames................................. 9,500 *
Thomas J. Carley............................... 22,000(6) *
Richard W. Godard.............................. 54,281 *
James B. Hicks, Ph.D........................... - *
Anthony Meeker................................. 8,950 *
Michael D. Mulholland.......................... 111,323 1.7%
Nancy B. Sherertz(1)........................... 1,416,500(7) 22.4%
William W. Sherertz(1)......................... 2,395,900(8) 36.7%
Gregory R. Vaughn ............................. 49,735 *
All directors and executive officers as a group
(10 persons)................................... 4,091,815 60.2%
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*Less than 1 percent of the outstanding shares of Common Stock.
(1) The addresses of persons owning beneficially more than 5 percent of the
outstanding Common Stock are as follows: Heartland Advisors, Inc., 789
North Water Street, Milwaukee, Wisconsin 53202; Wynnefield Group, One Penn
Plaza, Suite 4720, New York, New York 10119; Dimension Fund Advisors,
Inc., 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401; Nancy B.
Sherertz, 401 Goldsborough Street, Easton, Maryland 21601; and William W.
Sherertz, 4724 S.W. Macadam Avenue, Portland, Oregon 97201.
(2) Includes options to purchase Common Stock which are presently exercisable
or will become exercisable by May 29, 2001, as follows: Mr. Ames, 8,500
shares; Mr. Godard, 53,056 shares; Mr. Meeker, 8,500 shares; Mr.
Mulholland, 111,323 shares; Ms. Sherertz, 1,500 shares; Mr. Sherertz,
214,943 shares; Mr. Vaughn, 49,735 shares; and all directors and executive
officers as a group, 471,183 shares.
(3) Heartland Advisors, Inc., a registered investment advisor, filed an
amendment to Schedule 13G on January 9, 2001, reporting sole voting power
as to 575,800 shares and sole dispositive power as to 988,600 shares.
(4) Wynnefield Group is a combination of Wynnefield Partners Small Cap Value,
L.P., Wynnefield Small Cap Value Offshore Fund, Ltd., and Wynnefield
Partners Small Cap Value, L.P. I. Although these entities are each a
separate and distinct entity with different beneficial owners (whether
designated as limited partners or stockholders), for the convenience of
reporting their holdings they are referred to collectively as the
"Wynnefield Group". The Wynnefield Group filed an
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amendment to Schedule 13D on October 24, 2000, reporting sole voting and
dispositive power as to a total of 675,000 shares.
(5) Dimension Fund Advisors, Inc., a registered investment advisor, filed a
Schedule 13G on February 2, 2001, reporting sole voting and dispositive
power as to 361,500 shares.
(6) Includes 4,000 shares owned by Mr. Carley's wife.
(7) Ms. Sherertz disclaims beneficial ownership of 3,310 shares held by her
minor children.
(8) Includes 13,833 shares owned by Mr. Sherertz's wife and 44,321 shares held
by his minor children, as to which he shares voting and dispositive
powers.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934 ("Section 16") requires
that reports of beneficial ownership of Common Stock and changes in such
ownership be filed with the Securities and Exchange Commission ("SEC") by
Section 16 "reporting persons," including directors, executive officers, and
certain holders of more than 10 percent of the outstanding Common Stock. To the
Company's knowledge, all Section 16 reporting requirements applicable to known
reporting persons were complied with for transactions and stock holdings during
2000.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth for the years indicated the compensation
awarded or paid to, or earned by, the Company's chief executive officer and the
Company's other executive officers whose salary level and bonus in 2000 exceeded
$100,000.
SUMMARY COMPENSATION TABLE
STOCK OPTION DATA
The following table provides information as to options to purchase
Common Stock granted under the Company's 1993 Stock Incentive Plan to the named
executive officers during 2000.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
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- ---------------------------
(1) Options generally become exercisable cumulatively in four equal annual
installments beginning one year after the date of grant; provided that the
option will become exercisable in full upon the officer's death,
disability or retirement, or in the event of a change in control of the
Company. A change in control is defined in the option agreements to
include (i) any occurrence which would be required to be reported as such
by the proxy disclosure rules of the SEC, (ii) the acquisition by a person
or group (other than the Company or one of its employee benefit plans) of
30 percent or more of the combined voting power of its voting securities,
(iii) with certain exceptions, the existing directors' ceasing to
constitute a majority of the Board, (iv) certain transactions involving
the merger, sale, or transfer of a majority of the assets of the Company,
or (v) approval by the
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stockholders of a plan of liquidation or dissolution of the Company. The
options include a feature which entitles an optionee who tenders
previously-acquired shares of Common Stock to pay all or part of the
exercise price of the option, to be granted a replacement option (a
"reload option") to purchase a number of shares equal to the number of
shares tendered with an exercise price equal to the fair market value of
the Common Stock on the date of grant. No SARs were granted by the Company
during 2000.
(2) The values shown have been calculated based on the Black-Scholes option
pricing model and do not reflect the effect of restrictions on
transferability or vesting. The values were calculated based on the
following assumptions: (i) expectations regarding volatility of 50 percent
were based on monthly stock price data for the Company; (ii) the risk-free
rate of return (6.20 percent) was assumed to be the Treasury Bond rate
whose maturity corresponds to the expected term (7.0 years) of the option
granted; and (iii) no dividends on the Common Stock will be paid during
the option term. The values which may ultimately be realized will depend
on the market value of the Common Stock during the periods during which
the options are exercisable, which may vary significantly from the
assumptions underlying the Black-Scholes model.
Information concerning exercises of stock options during 2000 and the
value of unexercised options held by the named executive officers at December
31, 2000, is summarized in the table below.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES(1)
- ----------------------------------------
(1) The named executive officers did not exercise any options or SARs during
2000 and did not hold any SARs at December 31, 2000.
(2) No options were "in-the-money" on December 31, 2000, because the market
value of the Common Stock, based on the mean of the reported high and low
sale prices on The Nasdaq Stock Market(TM) on December 29, 2000, the last
trading day of the year, $3.41, was below the option exercise price.
DIRECTORS' COMPENSATION
Under the standard arrangement in effect at the end of 2000, directors
(other than directors who are full-time employees of the Company, who do not
receive directors' fees) are entitled to receive a fee of $500 for each Board
meeting attended and each meeting of a committee of the Board attended other
than a committee meeting held on the same day as a Board meeting.
A nonqualified option for 1,000 shares of Common Stock is granted
automatically to each non-employee director whose term begins on or continues
after the date of each annual meeting of stockholders at an exercise price equal
to the fair market value of the Common Stock on the date of the meeting.
Accordingly, on May 16, 2000, each then non-employee director received an option
for 1,000 shares at an exercise price of $5.69 per share.
Payment of the exercise price of options granted to non-employee directors
may be in cash or in previously-acquired shares of Common Stock. Each option
includes a reload option feature to the
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extent that previously-acquired shares are used to pay the exercise price.
Non-employee director options (other than reload options) become exercisable in
four equal annual installments beginning one year after the date of grant.
Reload options become exercisable six months following the date of grant. All
options granted to a non-employee director will be exercisable in full upon the
director's death, disability or retirement, or in the event of a change in
control of the Company. The option term will expire three months following the
date upon which the holder ceases to be a director other than by reason of
death, disability or retirement; in the event of death or disability, the option
will expire one year thereafter, while non-employee director options will expire
five years after retirement.
EMPLOYMENT AGREEMENT
In January 1999, the Company entered into an employment agreement with
Michael D. Mulholland, Vice President-Finance and Secretary of the Company. The
term of the agreement will expire on January 26, 2002, subject to automatic
extension for an additional year annually unless either party notifies the other
of an election to terminate the agreement by December 27 of the prior year, such
that the effective term of the agreement will always have at least two years
remaining. In the event of a change in control of the Company, the agreement
will be renewed automatically for a two-year period beginning with the day
immediately preceding the change in control. The employment agreement provides
for an annual salary of $155,000, subject to annual review by the Board,
together with other compensation and benefits provided for in the Company's
compensation policy for executive officers adopted in 1995.
Pursuant to the employment agreement, if Mr. Mulholland's employment is
terminated by the Company following a change in control of the Company other
than by reason of death or disability or for cause, or by Mr. Mulholland within
90 days following a change in duties related to a change in control of the
Company, he will be entitled to receive a lump sum payment of an amount equal to
two times his then-current annual base salary, subject to reduction to the
extent that such amount would be subject to the excise tax imposed on benefits
that constitute excess parachute payments under Section 280G of the Internal
Revenue Code of 1986, as amended.
A change in control of the Company for purposes of the employment
agreement is defined as summarized in the notes to the first table under "Stock
Option Data" above, except for a business combination transaction in which the
Company becomes a privately-held company and William W. Sherertz continues as
President and Chief Executive Officer. A change in duties includes a significant
change in the nature or scope of Mr. Mulholland's position, responsibilities,
authorities or duties, a significant diminution in his eligibility to
participate in compensation plans or benefits, a change in the location of his
employment by more than 30 miles, or a significant violation of the Company's
obligations under the agreement.
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REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The compensation committee (the "Committee") of the Board acts as an
independent resource to the Board in recommending executive salary levels and
analyzing other proposed forms of executive compensation and was composed of two
outside directors during 2000. The Committee, except for Ms. Sherertz, also
provides disinterested administration of the Company's 1993 Stock Incentive
Plan. Mr. Hicks was appointed as a member of the Committee concurrent with his
appointment to the Board on April 1, 2001.
The Committee's goal is to serve the interests of the Company's
stockholders by enabling the Company to attract, motivate, and retain the
caliber of management expertise necessary for the successful implementation of
the Company's strategic goals.
The Company's overall approach to executive compensation is based on a
philosophy that combines a goal-driven annual cash compensation package with
equity incentives designed to build stock ownership among key employees. These
two key principles serve to align executives effectively with stockholder
interests by focusing management on financial goals necessary to enhance
stockholder value, as well as long-term growth, by strongly encouraging
significant ownership in the Company's stock.
Salaries. Base salaries for the Company's executive officers are initially
determined by evaluating the responsibilities of the position and the experience
of the individual, and by reference to the competitive marketplace for
management talent. Annual salary adjustments are determined by evaluating the
competitive marketplace, the performance of the Company, the performance of the
executive, particularly with respect to the individual's specific contribution
to the Company's success, and any increased responsibilities assumed by the
executive.
Annual Cash Incentive Bonuses. The Committee has implemented a policy to
guide its compensation decisions with respect to the executive officers of the
Company below the level of president. It is the Committee's belief that the
stewardship provided by the executive officers is best measured by the Company's
return on equity. Accordingly, recommendations for annual awards of cash
incentive bonuses for 2000 were based upon a formula with reference to the
Company's return on stockholders' equity for the year ended December 31, 2000,
and the executive's total salary for the year.
Long-Term Incentive Compensation. The Company strives to align executive
officer financial interests with long-term stockholder value. See "Option Grants
in Last Fiscal Year" above for details of options granted to the named executive
officers in 2000.
Chief Executive Officer Compensation As Mr. Sherertz's salary level had
remained unchanged for several years, the Committee increased his salary to
$200,000 per year, effective January 1, 2000, and awarded Mr. Sherertz a cash
incentive bonus for 2000 based upon the same formula used for other executive
officers of the Company. In addition, the Company awarded Mr. Sherertz an option
for 50,000 shares of Company common stock based upon the Company's performance
and in recognition that his total compensation is significantly below the median
of the Company's peer group described under "Stock Performance Graph" below. The
Committee recognizes that Mr. Sherertz is a significant stockholder in the
Company and, to the extent his performance as chief executive officer results in
an increase in the value of the Company's stock, all stockholders, including
him, share the benefits.
COMPENSATION COMMITTEE
Anthony Meeker, Chair
Nancy B. Sherertz
10
STOCK PERFORMANCE GRAPH
The following graph shows the cumulative total return at the dates
indicated for the period from December 31, 1995, until December 31, 2000, for
the Common Stock, the Standard & Poor's 500 Stock Index (the "S&P 500"), and for
a group of the Company's peers in the staffing industry. The staffing industry
peer group (the "2001 Peer Group") is comprised of four companies included in
the peer group used to prepare the performance graph set forth in the Company's
proxy statement for its annual meeting in May 2000 (the "2000 Peer Group"), CDI
Corp., Kelly Services, Inc., Manpower Inc., and Robert Half International Inc.,
together with four companies that were not in the 2000 Peer Group, RemedyTemp,
Inc., SOS Staffing Services, Inc., TeamStaff, Inc., and Westaff, Inc. Stock
price information for four other companies included in the 2000 Peer Group, Adia
Services, Inc., Olsten Corporation, Staff Builders, Inc., and Uniforce Services,
Inc., is either no longer available or no longer meaningful as a result of the
merger of three of the companies into much larger and, in two cases, foreign
firms and, with respect to Staff Builders, Inc., the spin-off and sale of two of
its business divisions. The four companies added to the 2001 Peer Group are
believed by management to be comparable to the Company in terms of types of
services offered, revenue levels and market capitalization. The Company believes
that the performance of the members of the 2001 Peer Group will provide a more
meaningful basis for comparison with the Company's performance and presently
intends to include the 2001 Peer Group for comparison purposes in future proxy
statements as well.
The following graph has been prepared assuming that $100 was invested on
December 31, 1995, in the Common Stock, the S&P 500, and the 2001 Peer Group and
that dividends are reinvested. In accordance with the SEC's proxy rules, the
shareholder return for each company in the 2001 Peer Group index has been
weighted on the basis of market capitalization as of the beginning of each
annual period shown. The stock price performance reflected in the graph may not
be indicative of future price performance.
11
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
Performance Graph for
Barrett Business Services, Inc.
Produced on 04/06/2001 including data to 12/29/2000
[GRAPHIC OMITTED]
LEGEND
Companies in the Self-Determined Peer Group
CDI CORP KELLY SERVICES INC.
MANPOWER INC. WIS REMEDYTEMP INC.
ROBERT HALF INTERNATIONAL INC. SOS STAFFING SERVICES INC.
TEAMSTAFF INC. WESTAFF INC.
Notes:
A. The lines represent monthly index levels derived from compounded
daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization
on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/29/1995.
Prepared by CRSP (www.crsp.uchicago.edu), Center for Research in Security
Prices, Graduate School of Business, The University of Chicago. Used with
permission. All rights reserved.
12
APPROVAL OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board has selected PricewaterhouseCoopers LLP as independent
accountants to examine the financial statements of the Company for the fiscal
year ending December 31, 2001. Although the appointment of accountants is not
required to be submitted to a vote of the stockholders, the Board has decided to
ask the stockholders to approve the appointment and recommends that you vote FOR
approval. If a majority of the shares of Common Stock represented at the annual
meeting does not vote to approve the appointment, the Board will reconsider the
appointment.
PricewaterhouseCoopers LLP were the independent accountants for the year
ended December 31, 2000. The Company expects representatives of
PricewaterhouseCoopers LLP to be present at the 2001 annual stockholders'
meeting and to be available to respond to appropriate questions. The accountants
will have the opportunity to make a statement at the annual meeting if they
desire to do so.
AUDIT FEES
The aggregate fees billed by PricewaterhouseCoopers LLP for professional
services rendered for the audit of the Company's annual financial statements for
the year ended December 31, 2000, and their review of the financial statements
included in its quarterly reports on Form 10-Q for that fiscal year were
$94,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During 2000, PricewaterhouseCoopers LLP did not provide any professional
services to the Company with regard to financial information systems design and
implementation.
ALL OTHER FEES
Fees billed for services provided to the Company by PricewaterhouseCoopers
LLP during 2000, other than the services described above under "Audit Fees,"
were $164,700. Such fees were for services rendered in connection with income
tax consulting, planning and return preparation and various other consulting
matters. The audit committee of the Board has considered whether the provision
of these services to the Company is compatible with maintaining the independence
of the Company's independent public accountants.
OTHER MATTERS
Management knows of no matters to be brought before the annual meeting
other than the election of directors and ratification of the selection of
accountants. However, if any other business properly comes before the meeting,
the persons named in the accompanying form of proxy will vote or refrain from
voting thereon in accordance with their judgment pursuant to the discretionary
authority given them in the proxy.
13
STOCKHOLDER PROPOSALS FOR ANNUAL MEETING IN 2002
Stockholder proposals submitted for inclusion in the proxy materials for
the annual meeting of stockholders to be held in 2002 must be received by the
Company by December 14, 2001. Any such proposal should comply with the SEC's
rules governing stockholder proposals submitted for inclusion in proxy
materials. Proposals should be addressed to Michael D. Mulholland, Secretary,
Barrett Business Services, Inc., 4724 S.W. Macadam Avenue, Portland, Oregon
97201.
For any proposal that is not submitted for inclusion in next year's proxy
materials, but instead is sought to be presented directly at the 2002 annual
meeting, management will be able to vote proxies in its discretion if the
Company: (1) receives notice of the proposal before the close of business on
February 27, 2002, and advises stockholders in the 2002 proxy materials about
the nature of the matter and how management intends to vote on such matter; or
(2) has not received notice of the proposal by the close of business on February
27, 2002. Notices of intention to present proposals at the 2002 annual meeting
should be forwarded to the address listed above.
April 13, 2001 BARRETT BUSINESS SERVICES, INC.
14
APPENDIX A
BARRETT BUSINESS SERVICES, INC.
Charter for the Audit Committee
of the Board of Directors
As Adopted by the Board of Directors on May 16, 2000
OBJECTIVES
The Audit Committee is appointed by the Board of Directors to assist the
Board in monitoring (1) the integrity of the financial statements of the
Company, (2) the compliance by the Company with legal and regulatory
requirements relating to its status as a public company and (3) the independence
and performance of the Company's independent accountants.
AUTHORITY
The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Committee. The Audit Committee may
request any officer or employee of the Company or the Company's outside counsel
or independent accountants to attend a meeting of the Committee or to meet with
any members of, or consultants to, the Committee.
ORGANIZATION
The Audit Committee shall be comprised of three qualified directors. The
members of the Audit Committee shall be appointed by the Board to a one-year
term. The members of the Audit Committee shall meet the independence and
experience requirements of the Nasdaq Stock Market, Inc. The Committee's Chair
shall be appointed by the Board to serve a one-year term. Successive one-year
terms on the Committee are permissible, in view of the regulatory experience
requirements for Committee membership.
ROLES AND RESPONSIBILITIES
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
2. Review the annual audited financial statements with management and the
independent accountants, including major issues regarding accounting and
auditing principles, standards and practices, as well as the adequacy of
internal controls that could significantly affect the Company's financial
statements.
3. Review an analysis prepared by management and the independent
accountants of significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial statements.
4. Review with management and the independent accountants the Company's
quarterly and annual financial reports, including specifically the "MD&A"
section, prior to the filing of the Quarterly Report on Form 10-Q and Annual
Report on Form 10-K.
5. Review with management compliance by the Company with the terms of loan
agreements or other debt instruments, including indentures, as applicable.
A-1
6. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor and
control such exposures.
7. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent accountants or
management.
8. Recommend to the Board the appointment of the independent accountants,
which firm is ultimately accountable to the Audit Committee and the Board.
9. Approve the fees to be paid to the independent accountants.
10. Receive periodic reports from the independent accountants regarding
the accountants' independence consistent with Independence Standards Board
Standard 1, discuss such reports with the accountants, and, if so determined by
the Audit Committee, take or recommend that the full Board take appropriate
action to oversee the independence of the accountants.
11. Evaluate, together with the Board, the performance of the independent
accountants and, if so determined by the Audit Committee, recommend that the
Board replace the independent accountants.
12. Meet with the independent accountants prior to the audit to review the
planning and staffing of the audit.
13. Obtain assurance from the independent accountants that no action or
disclosure is required with respect to the Company's financial statements under
Section 10A of the Securities Exchange Act of 1934.
14. Discuss with the independent accountants the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the conduct of
the audit.
15. Review with the independent accountants any problems or difficulties
the accountants may have encountered and any management letter provided by the
independent accountants and the Company's response to that letter. Such review
should include:
a. Any difficulties encountered in the course of the audit work, including
any restrictions on the scope of activities or access to required information.
b. Any changes required in the planned scope of the audit performed by the
independent accountants.
16. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy statement.
17. Advise the Board with respect to the Company's policies and procedures
regarding compliance with applicable laws and regulations relating to its status
as a public company.
18. Review with the Company's General Counsel legal matters that may have
a material impact on the financial statements, the Company's compliance policies
and any material reports or inquiries received from regulators or government
agencies.
19. Meet at least annually with the chief financial officer and the
independent accountants in separate executive sessions.
While the Audit Committee has the responsibility and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles in
the United States. This is the responsibility of management and the independent
accountants. It is also not the duty of the Audit Committee to conduct
investigations, to resolve disagreements, if any, between management and the
independent accountants or to assure compliance with laws and regulations
relating to its status as a public company.
A-2
PROXY
BARRETT BUSINESS SERVICES, INC.
2001 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William W. Sherertz and Anthony Meeker as
proxies, each with power to act alone and with power of substitution, and hereby
authorizes them to represent and to vote all the shares of common stock of
Barrett Business Services, Inc., which the undersigned may be entitled to vote
at the Annual Meeting of Stockholders to be held on Thursday, May 17, 2001, at
2:00 p.m., or at any adjournment thereof.
(Continued and to be signed on reverse)
- -------------------------------------------------------------------------------
/FOLD AND DETACH HERE/
1. ELECTION OF DIRECTORS: FOR all nominees listed WITHHOLD AUTHORITY
Robert R. Ames below (except as marked to vote for all nominees
Thomas J. Carley to the contrary below) listed below
Richard W. Godard / / / /
James B. Hicks
Anthony Meeker
Nancy B. Sherertz
William W. Sherertz
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below)
- --------------------------------------------------------------
3. In their discretion, upon any other matter
which may properly come before the
meeting.
The shares represented by this proxy when properly executed will be voted
in the manner directed herein by the undersigned stockholder. If no direction is
made, this proxy will be voted FOR Items 1 and 2. If any other matters properly
come before the meeting, the persons named as proxies will vote in accordance
with their best judgment.
The undersigned acknowledge receipt of the 2001 Notice of Annual Meeting
and accompanying Proxy Statement and revokes all prior proxies for said meeting.
Please sign exactly as your name appears hereon. If the shares are jointly
held, each joint owner named should sign. When signing as attorney, personal
representative, administrator, or other fiduciary, please give full title. If a
corporation, please sign in full corporate name by authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Signature(s)---------------------------------------------- Date:----------, 2001
/ FOLD AND DETACH HERE /
MEMORANDUM:
- ----------
DATE: April 17, 2001
TO: Participants in the Barrett Business Services, Inc.
Employees' Savings Plan (the "401(k) Plan")
FROM: Michael Mulholland
SUBJECT: Proxy solicitation in connection with May 17, 2001
Annual Meeting of Stockholders
- --------------------------------------------------------------------------------
The enclosed material, which consists of:
-- 2000 Annual Report
-- Proxy statement
-- Proxy card
-- Return envelope
is being provided to you as a participant of Barrett's 401(k) plan, which owns
shares of the Company's common stock. Pursuant to the Plan Document and Trust
Agreement, you are entitled to vote the shares held for your account in the Plan
on the proposals outlined in the accompanying proxy statement.
After you have considered the enclosed information, please mark your votes on
the proxy card, sign the card, fold it and return it in the postage-paid
envelope. Your vote will be compiled with those of other Plan participants and
conveyed to the Company's stock transfer agent, Mellon Investor Services, by the
Plan's trustee, Smith Barney Trust Company.
Enclosures
cc: Mary Ann Frantz