DEF 14A: Definitive proxy statements

BARRETT BUSINESS SERVICES, INC.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 12, 2005

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You are invited to attend the annual meeting of stockholders of
Barrett Business Services, Inc., to be held at the University Club located at
1225 S.W. Sixth Avenue, Portland, Oregon 97204, on Thursday, May 12, 2005, at
2:00 p.m., Pacific Time.

Only stockholders of record at the close of business on March 25,
2005, 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. 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 12, 2005




BARRETT BUSINESS SERVICES, INC.
4724 S.W. Macadam Avenue
Portland, Oregon 97239
(503) 220-0988



PROXY STATEMENT
2005 ANNUAL MEETING OF STOCKHOLDERS



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 12, 2005, and any adjournments thereof. The proxy
statement and accompanying form of proxy were first mailed to stockholders on
approximately April 12, 2005.

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 Item 1 in the
accompanying Notice of Annual Meeting of Stockholders.

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 97239.

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 25, 2005, 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
5,810,254 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. The presence, in person or by proxy,
of stockholders entitled to cast a majority of all votes entitled to be cast at
the meeting is required to constitute a quorum.

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ITEM 1 - 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 Company's Bylaws authorize the Board
to set the number of positions on the Board within a range of three and nine;
the Board has presently established the number of positions at six. Vacancies on
the Board, including vacancies resulting from an increase in the number of
positions, may be filled by the Board for a term ending with the next annual
meeting of stockholders.

All of the nominees for election as directors are members of the
present Board. Mr. Justesen was appointed to the Board effective December 15,
2004, to fill the vacancy created by the resignation of Fores J. Beaudry
effective June 21, 2004. Mr. Justesen was recommended to the Board's Nominating
Committee as a potential candidate for election as a director by the Company's
chief executive officer. He was then evaluated by the Nominating Committee,
which recommended to the Board that he be appointed as a director.

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. A duly executed proxy will be voted FOR the
election of the nominees named below, unless authority to vote for a director is
withheld or a proxy of a broker or other nominee is expressly not voted on this
item. 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.

The following table sets forth information with respect to each
person nominated for election as a director, including their ages as of February
28, 2005, business experience during the past five years, and directorships in
other corporations.

Director
Name Principal Occupation(1) Age Since
- ---- ----------------------- --- -----
Thomas J. Carley Private investor 46 2000

James B. Hicks, Ph.D. Co-founder, director, and Chief Technology 58 2001
Officer of Virogenomics, Inc., a
biotechnology company

Jon L. Justesen Co-owner and Chief Executive Officer of 53 2004
Justesen Ranches located in eastern Oregon

Anthony Meeker Retired Managing Director of Victory Capital 65 1993
Management, Inc., Cleveland, Ohio, an
investment management firm

Nancy B. Sherertz Private investor 55 1998

William W. Sherertz President and Chief Executive Officer of the 59 1980
Company


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- -------

(1) During the past five years, the principal occupation and other business
experience of each nominee has been as follows:

(a) 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.

(b) Dr. Hicks is a co-founder of Virogenomics, Inc., a biotechnology
company, located in the Portland metropolitan area, where he has
been Chief Technology Officer since 2001 and a director since 1997.
He has also been a director of AVI BioPharma, Inc., since 1997. He
is a partner in HHL Consulting LLC, where he has been providing
consulting services to early stage technology companies regarding
management and operational issues since 2000. From 1995 to 1999, he
was co-founder and technical consultant for Sapient Health Network.
He also currently continues to serve as President of Hedral
Therapeutics, Inc., a biotechnology company, where he was Chief
Executive Officer, Chief Scientist and a director from 1994 to 1998.

(c) Mr. Justesen has managed Justesen Ranches in eastern Oregon since
1970. He also serves as President of Buck Hollow Ranch, Inc., and is
a private investor.

(d) Mr. Meeker retired in 2003 as a Managing Director of Victory Capital
Management, Inc. (formerly known as Key Asset Management, Inc.)
where he was employed for ten years. Mr. Meeker is Chairman of the
Board of First Federal Savings and Loan Association of McMinnville
and a director of Oregon Mutual Insurance Company. From 1987 to
1993, he was Treasurer of the State of Oregon.

(e) Ms. Sherertz was President and a director of the Company from 1975
to March 1993.

(f) Mr. Sherertz also serves as Chairman of the Board of Directors.

Ms. Sherertz and Mr. Sherertz were married to each other until 1994.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Board held four meetings in 2004. During 2004, each director
attended at least 75 percent of the total number of the meetings of the Board
and the meetings held by each committee of the Board on which he or she served
during his or her tenure on such committee or the Board.

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The Company does not have a policy regarding directors' attendance
at the Company's annual meeting of stockholders. All Board members, except for
Ms. Sherertz and Dr. Hicks, attended last year's annual meeting.

The Board has determined that Messrs. Carley, Hicks, Justesen, and
Meeker are independent directors as defined in Rule 4200(a)(15) of the listing
standards applicable to companies quoted on The Nasdaq Stock Market.

Audit and Compliance Committee

The Audit and Compliance Committee (the "Audit Committee") reviews
and pre-approves audit and legally-permitted non-audit services provided by the
Company's independent registered public accounting firm (the "independent
auditors"), makes decisions concerning the engagement or discharge of the
independent auditors, and reviews with management and the independent auditors
the results of their audit, the adequacy of internal accounting controls, and
the quality of financial reporting. The Audit Committee also develops and
oversees the Company's corporate governance principles and the Company's Code of
Business Conduct and Code of Ethics for Senior Financial Officers. The Audit
Committee held seven meetings in 2004.

The current members of the Audit Committee are Messrs. Carley
(chair), Hicks, and Meeker. Mr. Beaudry served on the Audit Committee until his
resignation from the Board effective June 21, 2004. The Board has determined
that Thomas J. Carley is qualified to be an "audit committee financial expert"
as defined by the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 (the "Exchange Act"). The Board has also
determined that each member of the Audit Committee, including Mr. Carley, meets
the financial literacy and independence requirements for audit committee
membership specified in applicable rules of the SEC under the Exchange Act and
in listing standards applicable to companies quoted on The Nasdaq Stock Market.
The Audit Committee's activities are governed by a written charter, which was
amended and restated by the Board as of March 19, 2004. A copy of the amended
and restated charter is available on the Company's website at
www.barrettbusiness.com.

Compensation Committee

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 Messrs. Meeker (chair) and
Hicks. Ms. Sherertz served on the Compensation Committee until her resignation
from the committee effective March 18, 2005, but she did not participate in the
Compensation Committee's deliberations regarding stock options. The Compensation
Committee held three meetings in 2004.

Compensation Committee Interlocks and Insider Participation

Messrs. Meeker and Hicks and Ms. Sherertz comprised the Compensation
Committee throughout 2004. Ms. Sherertz was President of the Company from 1975
to March 1993.

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Nominating Committee

The Nominating Committee evaluates and recommends candidates for
nomination by the Board in director elections and otherwise assists the Board in
determining and evaluating the composition of the Board and its committees. The
Nominating Committee also assists in identifying candidates for appointment as
officers of the Corporation. The current members of the Nominating Committee are
Messrs. Carley, Hicks (chair), and Meeker. The Nominating Committee held one
meeting in 2004.

The Board has determined that each current member of the Nominating
Committee is an independent director as defined in Rule 4200(a)(15) of the
listing standards applicable to companies quoted on The Nasdaq Stock Market. The
Nominating Committee is governed by a written charter, which is available on the
Company's website at www.barrettbusiness.com.

The Nominating Committee does not have any specific, minimum
qualifications for director candidates. In evaluating potential director
nominees, the Nominating Committee will consider:

* The candidate's ability to commit sufficient time to the
position;

* Professional and educational background that is relevant to
the financial, regulatory, and business environment in which
the Company operates;

* Demonstration of ethical behavior;

* Whether the candidate contributes to the goal of bringing
diverse perspectives, business experience, and expertise to
the Company's Board; and

* The need to satisfy independence and financial expertise
requirements relating to Board composition.

The Nominating Committee relies on its periodic evaluations of the
Board in determining whether to recommend nomination of current directors for
re-election. In the event the Nominating Committee is required to identify new
director candidates, because of a vacancy or a decision to expand the Board, the
Nominating Committee will poll current directors for suggested candidates. The
Nominating Committee has not hired a third-party search firm to date, but has
the authority to do so if it deems such action to be appropriate.

Once potential candidates are identified, the Nominating Committee
will conduct interviews with the candidates and perform such investigations into
the candidates' background as the Nominating Committee determines appropriate.

The Nominating Committee will consider director candidates suggested
by stockholders for nomination by the Board. Stockholders wishing to suggest a
candidate to the Nominating Committee should do so by sending the candidate's
name, biographical information, and qualifications to: Nominating Committee
Chair c/o Michael D. Mulholland, Secretary, Barrett Business Services, Inc.,
4724 S.W. Macadam Avenue, Portland, Oregon 97239.

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Candidates suggested by stockholders will be evaluated by the same criteria and
process as candidates from other sources.

CODE OF ETHICS

The Company has adopted a Code of Ethics for Senior Financial
Officers ("Code of Ethics"), which is applicable to the Company's Chief
Executive Officer, principal financial officer, and principal accounting
officer. The Code of Ethics focuses on honest and ethical conduct, the adequacy
of disclosure in financial reports of the Company, and compliance with
applicable laws and regulations. The Code of Ethics is included as part of the
Company's Code of Business Conduct, which is generally applicable to all of the
Company's directors, officers, and employees. The Code of Business Conduct and
Code of Ethics for Senior Financial Officers is available on the Company's
website at www.barrettbusiness.com.

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 25, 2005, 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% of the
outstanding shares of Common Stock. Information as to beneficial stock ownership
is based on data furnished by the stockholder. Unless otherwise indicated, all
shares listed as beneficially owned are held with sole voting and dispositive
powers.

Amount and Nature Percent
of Beneficial of
Name of Beneficial Owner Ownership(2) Class
- ------------------------ ------------ -----
Heartland Advisors, Inc.(1)...................... 689,840(3) 11.9%
Thomas J. Carley................................. 25,675 *
James B. Hicks, Ph.D............................. 6,375 *
Jon L. Justesen.................................. 11,100 *
Anthony Meeker................................... 9,325 *
Michael D. Mulholland............................ 2,563 *
Nancy B. Sherertz(1)............................. 1,149,895(4) 19.8%
William W. Sherertz(1)........................... 1,904,139(5) 32.3%
Gregory R. Vaughn ............................... 36,665 *
All directors and executive officers as a group
(9 persons)...................................... 3,156,737 53.0%

- --------
* Less than 1% of the outstanding shares of Common Stock.

(1) The addresses of persons owning beneficially more than 5% of the
outstanding Common Stock are as follows: Heartland Advisors, Inc., 789
North Water Street, Milwaukee,

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Wisconsin 53202; Nancy B. Sherertz, 4724 S.W. Macadam Avenue, Portland,
Oregon 97239; and William W. Sherertz, 4724 S.W. Macadam Avenue, Portland,
Oregon 97239.

(2) Includes options to purchase Common Stock which are presently exercisable
or will become exercisable by May 24, 2005 as follows: Mr. Carley, 2,875
shares; Dr. Hicks, 1,375 shares; Mr. Meeker, 7,875 shares; Mr. Mulholland,
2,063 shares; Ms. Sherertz, 5,875 shares; Mr. Sherertz, 85,134 shares; Mr.
Vaughn, 35,665 shares; and all directors and executive officers as a
group, 140,862 shares.

(3) Heartland Advisors, Inc., a registered investment advisor, and its
President and principal shareholder, William J. Nasgovitz, filed an
amendment to Schedule 13G on January 14, 2005, reporting shared voting
power as to 660,940 shares and shared dispositive power as to 689,840
shares (including the 660,940 shares).

(4) Ms. Sherertz disclaims beneficial ownership of an additional 3,310 shares
held by her minor children.

(5) Includes 9,167 shares held by his wife and 31,300 shares held by Mr.
Sherertz for his minor children, as to which he shares voting and
dispositive powers.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16 of the Exchange Act ("Section 16") requires that reports
of beneficial ownership of Common Stock and changes in such ownership be filed
with the SEC by Section 16 "reporting persons," including directors, executive
officers, and certain holders of more than 10% 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 2004, except as follows: James B. Hicks, director, one late filing
reporting one purchase; Nancy B. Sherertz, director and 10 percent owner, two
late filings reporting a total of three sales; William W. Sherertz, director,
officer and 10 percent owner, one late filing reporting one option grant; and
Michael D. Mulholland and Gregory R. Vaughn, officers, each with one late filing
reporting one option grant.


SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

As of the date of this proxy statement, the Audit Committee had not
yet selected an independent registered public accounting firm to examine the
financial statements of the Company for the fiscal year ending December 31,
2005. The Audit Committee and management are evaluating available alternatives,
including its current independent registered public accounting firm,
PricewaterhouseCoopers LLP.

PricewaterhouseCoopers LLP were the Company's independent registered
public accounting firm for the year ended December 31, 2004. The Company expects
representatives of PricewaterhouseCoopers LLP to be present at the 2005 annual
meeting of stockholders and to be available to respond to appropriate questions.
They will have the opportunity to make a statement at the annual meeting if they
desire to do so.

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MATTERS RELATING TO OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Fees Paid to Principal Independent Registered Public Accounting Firm

The following fees were billed by PricewaterhouseCoopers LLP for
professional services rendered to the Company in fiscal 2003 and 2004:

2003 2004
---- ----
Audit Fees(1) $163,500(4) $179,500
Audit Related -- --
Fees(2)
Tax Fees(3) 54,000 67,000
All Other Fees -- --

- -------------

(1) Consists of fees for professional services rendered for the audit of the
Company's annual financial statements for fiscal 2003 and 2004 and for
review of financial statements included in quarterly reports on Form 10-Q
for those years.

(2) Refers to assurance and related services that are reasonably related to
the audit or review of a company's financial statements and that are not
included in audit fees.

(3) Consists of services rendered in connection with income tax consulting and
income tax return preparation.

(4) Actual audit fees paid for 2003 were $25,500 higher than the $138,000
estimated for that period and reported in the Company's proxy statement
for its 2004 annual meeting.

Pre-Approval Policy

The Company has adopted a policy requiring pre-approval by the Audit
Committee of all fees and services of the Company's independent registered
public accounting firm (the "independent auditors"), including all audit,
audit-related, tax, and other legally-permitted services. Under the policy, a
detailed description of each proposed service is submitted to the Audit
Committee jointly by the independent auditors and the Company's Chief Financial
Officer, together with a statement from the independent auditors that such
services are consistent with the SEC's rules on auditor independence. The policy
permits the Audit Committee to pre-approve lists of audit, audit-related, tax,
and other legally-permitted services. The maximum term of any preapproval is 12
months. Additional pre-approval is required for services not included in the
pre-approved categories and for services exceeding pre-approved fee levels. The
policy allows the Audit Committee to delegate its pre-approval authority to one
or more of its members provided that a full report of any pre-approval decision
is provided to the full Audit Committee at its next scheduled meeting. All audit
and permissible non-audit services provided by PricewaterhouseCoopers LLP in
2004 were pre-approved by the Audit Committee.

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AUDIT COMMITTEE REPORT

In discharging its responsibilities, the Audit Committee and its
individual members have met with management and with the Company's independent
registered public accounting firm (the "independent auditors"),
PricewaterhouseCoopers LLP, to review their audit process and the Company's
accounting functions. The Committee discussed and reviewed with the Company's
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 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 the independent auditors' 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 independent auditors
any relationships that may affect their objectivity and independence.

Based on its review and discussions with management and the
Company's independent auditors, the Audit Committee recommended to the Board
that the audited financial statements for the fiscal year ended December 31,
2004, be included in the Company's Annual Report on Form 10-K for filing with
the SEC.

AUDIT COMMITTEE

Thomas J. Carley, Chair
James B. Hicks, Ph.D.
Anthony Meeker







EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth compensation for the years indicated
to the Company's chief executive officer and the Company's other executive
officers.