<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Denison International plc
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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.
<PAGE>
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes: This document is being released to stockholders on April 14, 2000.
<PAGE>
Denison International plc
14249 Industrial Parkway
Marysville, Ohio 43040
937-644-4500
April 14, 2000
To Our Shareholders:
It is our pleasure to invite you to attend the 2000 Annual General Meeting of
Denison International plc, to be held at 10:00 a.m. on May 8, 2000. The Meeting
will be held at The Grand Hyatt Hotel, located at Park Avenue and Grand Central,
New York, N Y, 10017.
The following are currently on the Meeting's agenda: (i) receipt of the 1999
accounts, (ii) re-election of Two (2) Directors, (iii) the approval of the
appointment of Ernst & Young LLP as independent auditors for fiscal year ending
December 31, 2000, and authorizing the directors to fix the auditors
remuneration; and (iv) tht approval authorizing the Company to enter into a
contingent purchase contract to purchase its ordinary shares. Additional
information concerning these matters is included in the Notice of Annual Meeting
and Proxy Statement. I, along with other members of executive management, will
review with you Denison's operations during the past year and will be available
to respond to questions during the Meeting.
We look forward to seeing you at the meeting.
Sincerely,
/s/ J. Colin Keith
J. Colin Keith
Chairman
<PAGE>
ii
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
NOTICE OF ANNUAL MEETING................................................ iii
PROXY STATEMENT......................................................... 1
General Information..................................................... 1
Ownership of Common Stock by Certain Beneficial Owners.................. 2
Security Ownership of Directors and Officers............................ 2
Board of Directors and Committees of the Board.......................... 3
Election of Directors................................................... 4
Incumbent Directors to Continue in Office............................... 4
Executive Compensation.................................................. 5
Section 16(a) Beneficial Ownership Reporting Compliance................. 7
Stockholder Return Performance Presentation............................. 8
Approval of Independent Auditors........................................ 8
Approval of Contingent Purchase Contract................................ 9
Other Business.......................................................... 9
Incorporation by Reference.............................................. 9
Form of Proxy .......................................................... E-1
Contingent Purchase Contract for Re-Purchase of Ordinary Shares......... E-2
</TABLE>
<PAGE>
iii
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ON
May 8, 2000
----------------
NOTICE IS HEREBY GIVEN that the 2000 Annual General Meeting of Shareholders of
DENISON INTERNATIONAL PLC (the "Company") will be held at The Grand Hyatt Hotel,
Park Avenue at Grand Central, New York, NY 10017, on Monday, May 8, 2000 at
10:00 a.m., EDT (the "Meeting"), for the purpose of:
(1) Receiving the audited accounts for the year ended December 31, 1999
together with the directors' and auditors' reports;
(2) Re-electing two (2) Directors to the Board of Directors of the Company;
(3) Approving the appointment of auditors for the fiscal year ending
December 31, 2000, and authorizing the directors to fix such auditors'
remuneration;
(4) As special business, to consider and, if thought fit, pass the
following resolution as a special resolution:
"Resolved, that the terms of the draft contract proposed to be made
between the Company and ING Barings, Inc. under which the Company may
become obligated to purchase certain of its issued ordinary shares of
$US 0.01, each in substantially the form as attached in Exhibit 2.00 (a
copy of which is produced to the meeting and signed for the purpose of
identification by the Chairman) be hereby approved and authorized for
the purposes of section 165 of the Companies Act 1985, such approval to
expire on the date 18 months from the date on which this resolution is
passed"; and
(5) Transacting such other business as may properly come before the
Meeting.
The Board of Directors has fixed the close of business on April 1, 2000, as
the record date for the determination of American depository Receipts holders
entitled to vote at the Meeting. Not withstanding the foregoing, under the
Companies Act 1985,an "A" ordinary shareholder on the register at the date of
the Meeting is entitled to vote at the Meeting.
It is important that your shares be represented at the meeting regardless of
the number of shares that you own. To vote, simply complete and sign the Proxy
Card, which is being solicited by the Board of Directors of the Company, and
return it in the enclosed postage pre-paid envelope as soon as you can.
You are cordially invited to attend the Meeting. If you plan to attend the
Meeting, please use the Proxy Card as your admission ticket. You may, of course,
attend the Meeting without an admission ticket, upon proper identification.
By Order of the Board of Directors,
Denison International plc
/S/ Paul G. Dumond
PAUL G. DUMOND
Company Secretary
April 14, 2000
<PAGE>
1
PROXY STATEMENT
GENERAL INFORMATION
As used herein, references to the "Company" and "Denison" refer to Denison
International plc and its subsidiaries, unless the context indicated otherwise.
References to "shares" herein refer to the Ordinary Shares of Denison $0.01
par value per Share and Denison's American Depository Shares ("ADSs"), each of
which represents one Share. The ADSs are evidenced by American Depository
Receipts ("ADRs").
References to "Shareholders" herein refer to ADR's.
References to "Members" herein refer to holders of the Company's "A" Ordinary
Shares, (pound)8.00 par value per share.
This Proxy Statement is furnished in connection with the solicitation of
proxies to be used at the Company's Annual Meeting of Shareholders to be held on
May 8, 2000, and at any adjournment thereof (the "Meeting"). Denison's Annual
Report to Shareholders, including financial statements, accompanies this Notice
and Proxy Statement, but is not incorporated as part of the Proxy Statement and
is not to be regarded as part of the proxy solicitation material. These
materials are being sent to stockholders on or about April 14, 2000.
SOLICITATION OF PROXIES
Proxies are solicited by the Board of Directors of Denison in order to provide
every shareholder an opportunity to vote on all matters scheduled to come before
the Meeting, whether or not the shareholder attends the Meeting in person. When
the Proxy Card is properly signed and returned, the shares represented thereby
will be voted by the proxy holders named on the card in accordance with the
shareholder's directions. You are urged to specify your choices by marking the
appropriate boxes on the enclosed Proxy Card. If the Proxy Card is signed and
returned without specifying choices, the shares will be voted as recommended by
the Board of Directors. A shareholder giving a proxy may revoke it at any time
before it is voted by filing with the Company Secretary an instrument revoking
it, or by a duly executed and deposited Proxy Card bearing a later date. If you
attend the Meeting, you may vote by ballot, thereby canceling any proxy vote
previously given.
If you wish to give a proxy to someone other than those designated on the
Proxy Card, you may do so by crossing out the names of the designated proxies
and by then inserting the name of another person(s). A copy of the signed Proxy
Card deposited with the Company should be presented at the Meeting by the
person(s) representing you.
Solicitation of proxies is made on behalf of the Board of Directors of
Denison, and the cost of preparing, assembling, and mailing the Notice of Annual
Meeting, Proxy Statement and Proxy Card will be paid by Denison. In addition to
the use of the mail, proxies may be solicited by Directors, Officers and regular
employees of Denison, without additional compensation, in person or by telephone
or telegraph. Denison will reimburse brokerage houses and other nominees for
expenses in forwarding proxy material to beneficial owners of ADR's.
STOCKHOLDER VOTING
On April 1, 2000, there were 11,113,950 shares and 7,015 "A" ordinary shares
of Denison issued and outstanding and entitled to vote. Each share is entitled
to one vote.
Under the Companies Act 1985 two Members must be present in person or by proxy
at the Annual General Meeting in order to constitute a quorum for the purpose of
transacting business. Approval of the proposals presented at the meeting is
governed by Denison's Memorandum and Articles of Association and United Kingdom
law. A majority of the votes cast must approve the re-election of directors and
the appointment of the independent auditors. Holders of 75% of the votes cast
must approve the contingent contract to repurchase shares of the Company.
<PAGE>
2
An abstention occurs when a shareholder is present either in person or by proxy
at the meeting but the shareholder does not vote. Brokers who hold shares in
street name for customers have the authority to vote only on certain routine
matters in the absence of instruction from the beneficial owners. A broker
non-vote occurs when the broker does not have the authority to vote on a
particular proposal. Abstentions and broker non-votes are not included in the
tabulations for re-election of the directors or approval of the auditors.
However, abstentions and broker non-votes are counted in the tabulation for the
votes on the proposal to repurchase shares of the Company, and will have the
effect of a negative vote.
OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS
Listed below are the individuals or entity known to the Board of
Directors and Management to own more than 10% of the issued and outstanding
shares of Common Stock as of April 1, 2000:
(1)
NUMBER OF SHARES PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- ------------------------------------ ------------------ --------
J. Colin Keith (2) 1,400,000 12.6%
Anders C. H. Brag (2) 1,350,000 12.2%
E. F. Gittes 1,200,000 10.8%
(1) For purposes of this table, ownership is determined in accordance with the
beneficial ownership rules of the Securities Exchange Act of 1934, which deems
shares to be beneficially owned by any person who has, or shares, voting or
investment power with respect to the ordinary shares. Unless otherwise
indicated, the Company believes based on information furnished by such persons,
that the persons named in this table have sole voting and sole investment power
with respect to all shares shown as beneficially owned.
(2) Mr. Keith is Chairman of the Board of Directors of the Company; Mr. Brag is
Managing Director of the Company.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth information as of April 1, 2000, regarding
beneficial ownership of Shares of each Director, Denison's four most highly
compensated Officers (the "Named Officers") and the Directors and Officers as a
group.
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
AGGREGATE NUMBER PERCENT OF
OF SHARES OUTSTANDING
NAME BENEFICIALLY OWNED(1) SHARES
---- ----------------------- -----------
Keith, J. C (3) 1,400,000 12.6%
Brag, A. C. H. (3) 1,350,000 12.2%
Weir, D. L. (3) 85,000 .8%
Gittes, E. F. (2) 1,200,000 10.8%
Smith, B. A. (3) 0
All Directors and Officers as a group (8
in all) (4) 4,131,070 37.2%
<PAGE>
3
(1) For purposes of this table, ownership is determined in accordance with
the beneficial ownership rules of the Securities Exchange Act of 1934,
which deems shares to be beneficially owned by any person who has, or
shares, voting or investment power with respect to the ordinary
shares. Unless otherwise indicated, the Company believes based on
information furnished by such persons, that the persons named in this
table have sole voting and sole investment power with respect to all
shares shown as beneficially owned.
(2) Mr. Gittes retired from the Board of Directors in May, 1999.
(3) Mr. Keith is Chairman of the Board of Directors of the Company, Mr.
Brag is Managing Director of the Company, Mr. Weir is the President and
Chief Executive Officer of the Company and Mr. Smith is Chief Financial
Officer of the Company.
(4) Includes an aggregate 74,070 Ordinary Shares held for the account of
Christopher Mills, a director of the Company, and certain members of
his family.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held 8 meetings during fiscal year 1999. The average
attendance for Denison's Directors at these meetings was 96%. All of the
Company's Directors attend at least 75% of the Board of Directors meetings.
All directors of the Company are paid fees for serving on the Board of
Directors. The basic annual fee received by each director is 12,000 British
Pounds. All directors are also reimbursed for reasonable expenses incurred in
attending Board of Directors and Committee meetings.
The directors have power to provide benefits whether by payment of gratuities,
pensions or otherwise to (or to any person in respect of) any Director or
ex-director and for the purpose of providing any such benefits to contribute to
any scheme or fund or to pay premiums.
The Board of Directors has standing Audit, Compensation and Nominating
Committees.
AUDIT COMMITTEE
The Audit Committee reviews the adequacy of Denison's financial reporting,
accounting systems and controls and recommends the independent accountants to
conduct the annual audit of the financial statements of Denison. The Audit
Committee also evaluates Denison's auditing procedures and the security of data
processing systems. The Committee maintains a direct line of communication with
Denison's auditors. The Committee held two meetings during fiscal year 1999. No
member of the Audit Committee is an employee or former employee of the
Corporation.
The Audit Committee currently consists of Messrs. Morton (who also acts as the
Committee's Chairman), and Mills.
COMPENSATION COMMITTEE
The Compensation Committee reviews and recommends actions to the Board of
Directors on such matters as the salary of the Chief Executive Officer and
approves the salary and other compensation of other officers. The Compensation
Committee also has the authority to administer, grant and award stock and stock
options under the Denison International Stock Option Plan. The Committee held
one meeting during fiscal year 1999. No member of the Compensation Committee is
an employee or former employee of Denison. Current members of the Committee are
Messrs. Mills (who also acts as the Committee's Chairman), and Morton.
NOMINATING COMMITTEE
The Committee reviews and recommends to the Board the size, composition and
committee structure of the Board, as well as nominees to the Board of Directors
and its Committees. The Committee met one time during fiscal year 1999. Current
members of the Committee are Messrs. Keith (who also acts as the Committee's
Chairman), Weir, and Morton.
<PAGE>
4
PROPOSAL NO. 1
RE-ELECTION OF DIRECTORS
The Company's Board of Directors consists of six (6) Directors, whose
respective terms expire as outlined below.
Unless otherwise decided by the Company by ordinary resolution, the number of
directors shall be not less than three nor more than twelve. Directors may be
appointed by the Company by ordinary resolution. In addition, the Board of
Directors may appoint directors; any director so appointed retires from office
at the next annual general meeting, but is then eligible for re-appointment.
At each annual general meeting as nearly as possible (but not exceeding)
one-third of those directors subject to retirement by rotation are obliged to
retire by rotation, based principally upon length of time in office, and are
eligible for re-election. Any director appointed by the Board of Directors since
the previous annual general meeting is not subject to retirement by rotation. A
director may be removed by ordinary resolution of the Company in general meeting
or by all the other directors.
Unless otherwise specified by the shareholders, the shares represented by the
proxies will be voted for the re-election of Messrs. Christopher H. B. Mills and
David L. Weir, as Directors who retire by rotation. Each nominee for Director
has consented to be nominated as a Director and will serve as a Director if
re-elected. The names and biographical summaries of the persons who have been
nominated to stand for re-election at the Meeting and the remaining four
directors whose terms are continuing appear below.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RE-ELECTION OF MESSRS.
MILLS and WEIR.
CHRISTOPHER H. B. MILLS, age 47, has served as a director
since 1993. Mr. Mills is managing director of North Atlantic
Smaller Companies Investment Trust and American Opportunities
Trust plc. Mr. Mills is also Chairman of Stanelco plc and a
director of a number of publicly listed companies. From 1986
to present, Mr. Mills has also been Chief Executive Officer of
North Atlantic Small Companies Trust plc. From 1989 to 1997,
Mr. Mills was a director of DS Bancorp.
DAVID L. WEIR, age 46, has served as President, Chief
Executive Officer and a Director of the Company since March
1997. Mr. Weir joined the Company in May 1994 as the Chief
Financial Officer, and in September 1994 he was appointed
Chief Executive Officer of the Company's North American
Operations. Prior to joining Denison, Mr. Weir held senior
management positions, both in the USA and Europe with the
hydraulic braking division of Lucas Industries.
Although the Board of Directors and Management do not contemplate that any of
the nominees will be unable to serve, in the event that prior to the meeting,
any of the nominees becomes unable to serve because of special circumstances,
the shares of stock represented by the proxies may be voted for the election of
a nominee designated by the Board.
INCUMBENT DIRECTORS TO CONTINUE IN OFFICE
The following are the other Directors whose terms continue after this year's
Meeting, as indicated:
J. COLIN KEITH, age 55, has been the Chairman of the Board
since its inception in 1993. Mr. Keith has also served as
Chairman of the Board of Horace Small Apparel plc since 1993
and has been its Chief Executive Officer since March 1996.
From 1992 to 1993 he was Vice Chairman of North American
Mortgage Company, a public company engaged in the mortgage
banking business. From 1987 to May 1997 Mr. Keith was a
director of Scholl plc.
<PAGE>
5
ANDERS C. H. BRAG, age 47, has been a director of the Company
since 1993 and Managing Director since 1993. He is currently a
director of Paymap, Inc. along with several private companies.
Prior to 1990 Mr. Brag was a General Partner of Hambro
International Venture Fund.
R. JAMES P. MORTON, age 46, has been a director of the Company
since 1998. Mr. Morton is an Investment Director of European
American Securities, Inc. From 1991 to 1995 Mr. Morton was the
Managing Director of Chelverton Investments and Chelverton
Investment Management Limited. From 1987 to 1991 Mr. Morton
was the Director of Corporate Finance for Samual Montagu, Inc.
Mr. Morton is also a director of a number of other companies
and writes investment books for the Financial Times.
BRUCE A. SMITH, age 44, has been a director of the Company
since 1999 and Chief Financial Officer since 1998. Prior to
joining Denison, Mr. Smith was employed by Yuasa, Inc. holding
the positions of Vice President - Administration and Treasurer
/ CFO. From 1979 to 1991 Mr. Smith held various positions with
Exide Corporation, last serving as its Corporate Controller.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the compensation
paid by the Company for services rendered during the fiscal years ended December
31, 1999, 1998 and 1997 to Denison's Chief Executive Officer and each of the
other Named Officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM
COMPENSATION
------------------------ ------------
AWARDS
------------
(A) (B) (C) (D) (E) (G) (I)
NAME AND (2) (3)
PRINCIPAL FISCAL ANNUAL OTHER UNDERLYING ALL OTHER
POSITION YEAR SALARY$ BONUS$ COMPENSATION OPTIONS COMPENSATION
- ------------- ------ ------- ------ ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. Colin Keith 1999 130,000 0 19,800 0 0
Chairman 1998 130,000 0 19,800 45,000 0
1997 102,917 0 52,300 30,000 0
David L. Weir 1999 225,000 123,479 19,800 0 4,500
President & 1998 200,166 100,305 19,800 70,000 13,500
CEO 1997 155,120 154,606 14,400 30,000 13,500
Anders C.H.Brag 1999 130,000 0 19,800 0 0
Managing 1998 130,000 0 19,800 45,000 0
Director 1997 102,917 0 52,300 30,000 0
Bruce A. Smith 1999 126,254 6,306 11,600 13,000 3,788
Chief Financial 1998 55,931 11,058 0 12,000 99,308
Officer 1997 0 0 0 0 0
</TABLE>
(1) There are no other "Awards" to report and column (f) has been omitted
pursuant to SEC rules. There are no "Payouts" to report and column (H) has been
omitted pursuant to SEC rules.
(2) Directors are paid annual compensation for director duties at a rate of
12,000 (British Pounds). See the section "BOARD OF DIRECTORS AND COMMITTEES OF
THE BOARD". For purposes of this report all years' compensation has been
converted at a rate of $.606 USD to one British Pound. In 1997 Messrs. Keith and
Brag also received directors fees in connection with their serving on the Board
of Directors of Denison Hydraulics, Inc., the US subsidiary of the Company.
<PAGE>
6
(3) These are amounts contributed by Denison for fiscal 1999, 1998, and 1997 for
the Named Officers under the Savings and Profit Sharing Plan. For fiscal 1998,
these amounts were as follows: Savings Plan: $13,500 and $3,788 respectively for
Messrs. Weir and Smith. Profit Sharing Plan: $18,000 for Mr. Weir. In addition,
in 1998, Mr. Smith received certain employment and relocation compensation.
SAVINGS and PROFIT SHARING PLAN OF DENISON HYDRAULICS INC.
The Savings Plan is a savings and profit sharing plan established pursuant to
Sections 401(a) and 401(k) of the United States Internal Revenue Code. Under
this plan, Denison matches up to 3% of the base pay of each eligible employee,
including officers, to a Trustee for investment into one or more pre-established
investment funds as the participant may choose. Under the profit sharing plan
Denison contributes up to 7% of the base pay of each eligible employee,
including Officers, based on the attainment of certain Company goals, to a
trustee for investment into one or more pre-established investment funds as the
participant may choose.
STOCK OPTION PLAN
In 1994, the Company adopted the Denison International Stock Option Plan (the
"Option Plan") pursuant to which the Board (or a committee thereof) may grant to
certain key employees of the Company or its subsidiaries options to acquire
Ordinary Shares. The price at which Ordinary Shares may be acquired on exercise
of an option must not be less than the market value of the underlying shares on
the date on which the option is granted.
On July 24, 1997, the Company's Board of Directors and shareholders approved
an amendment to the Option Plan. Such amendment included an increase in the
number of Ordinary Shares reserved for issuance under the Option Plan to 850,000
Ordinary Shares.
As of the date hereof, options under the Option Plan for acquisition of
626,000 Ordinary Shares by senior executives of the Company or its subsidiaries
were outstanding. Exercise prices range from $12.75 to $19.53. All options
generally vest over a period of four years following the date of the grant and
lapse between five and ten years after the date of the grant. Options lapse on
dates from August 7, 2002 through March 22, 2009. As of the date hereof, options
under the Option Plan for the purchase of 262,000 Ordinary Shares were held by
all directors and officers of the Company as a group.
STOCK OPTIONS
The following table shows as to the Named Officers, certain information with
respect to stock options granted as of the end of fiscal year 1999.
STOCK OPTION GRANTS IN FISCAL YEAR 1999
INDIVIDUAL GRANTS(/1/)
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E) (F)
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR ($/SH) DATE VALUE(/2/)
---- ---------- ------------ -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
J. Colin Keith 0 -- N/A N/A $ 0
David L Weir 0 -- N/A N/A $ 0
Anders C. H. Brag 0 -- N/A N/A $ 0
Bruce A. Smith 13,000 28.3% $12.88 3/22/2009 $ 70,000
</TABLE>
<PAGE>
7
(1)Options are granted at no less than market value on the date of grant,
generally start to become exercisable after one year of employment following the
date of grant, and will expire no more than ten years after the date of grant.
(2)Based on the Black-Scholes option-pricing model adapted for use in valuing
officer stock options. The actual value, if any, an executive may realize will
depend on the excess of the stock price over the exercise price on the date the
option is exercised, so that there is no assurance the value realized by an
executive will be at or near the value estimated by the Black-Scholes model. The
estimated values under that model are based on certain assumptions for stock
price volatility, risk-free interest rates, and future dividend yield.
Specifically, the Black-Scholes valuation employed the following factors:
risk-free rate of return of 6.0% based upon the five year Treasury rates as of
grant date, no dividend yield, expected life of five years, stock price
volatility of 42.0% based upon the variance in daily stock price changes for the
year preceding the option grant date, and that no adjustments have been made for
transferability or risk of option forfeiture.
STOCK OPTION EXERCISES AND FISCAL YEAR END HOLDINGS
<TABLE>
<CAPTION>
(D) (E)
(A) (B) (C) NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FISCAL YEAR END FISCAL YEAR END(/2/)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED(/1/) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Colin Keith......... 0 $ 0 26,250 48,750 $ 0 $ 0
David L. Weir....... 0 $ 0 32,500 67,500 $ 0 $ 0
Anders C. H. Brag...... 0 $ 0 26,250 48,750 $ 0 $ 0
Bruce A. Smith....... 0 $ 0 3,000 22,000 $ 0 $ 0
</TABLE>
- ------------
(1)Calculated as fair market value at exercise minus exercise price.
(2)Based on December 31, 1999, market closing price of $10.25 per share of
Common Stock. No options were in the money at December 31, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
No persons affiliated with the Company were required to file reports under
section 16(a) for the fiscal year ended December 31, 1999.
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below for the three year period commencing December 31, 1996 and
ending December 31, 1999 is a line graph comparing the yearly change in the
cumulative total stockholder return on the Corporation's Common Stock against
the cumulative total return of the S&P Composite -- 500 Stock Index and the Peer
Group Index.
<PAGE>
8
STOCKHOLDER RETURN PERFORMANCE TABLE
[GRAPH DEPICTING STOCK RETURN PERFORMANCE OF DENISON INTERNATIONAL plc
COMPARED TO S&P 500 & THE PEER GROUP]
COMPARATIVE ANALYSIS
1994 1995 1996 1997 1998 1999
---- ------- ------- ------- ------- -------
Denison International plc. ....... N/A N/A 100 107.813 78.125 64.063
S&P 500........................... N/A N/A 100 133.402 172.138 208.676
Peer Group........................ N/A N/A 100 152.613 107.685 127.684
(1) No market was available for the Company's Common Stock until August 1997.
(2) Assumes that the value of the investment in Denison's Common Stock, and each
index, was $100 on December 31, 1996.
PROPOSAL NO. 2
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
Unless otherwise specified by the stockholders, the shares of stock represented
by the proxies will be voted for the approval of the appointment of Ernst &
Young LLP, a firm of independent accountants, to audit and report upon the
financial statements of Denison for fiscal year 2000, and to authorize the
directors to fix their remuneration. In the opinion of the Board of Directors
and management, Ernst & Young LLP is well qualified to act in this capacity.
Audit services performed by Ernst & Young LLP in fiscal year 1999 included
audits of the financial statements of Denison and its subsidiaries and certain
of the pension and other employee benefit plans of the Company, limited reviews
of quarterly financial statements of the Company and other accounting and
acquisition related matters.
Denison has been advised by Ernst & Young that the firm has no financial
interest, direct or indirect, in Denison, except its providing tax counseling,
acquisition, auditing and independent accounting services during the period
stated.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF
THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS.
<PAGE>
9
PROPOSAL NO. 3
APPROVAL OF CONTINGENT CONTRACT TO AUTHORIZE THE COMPANY
TO RE-PURCHASE ORDINARY SHARES
Unless otherwise specified by the stockholders, the share of stock represented
by the proxies will be voted for the approval and authorization for the purpose
of section 165 of the Companies Act 1985 of the terms of the draft contract
proposed to be made between the Company and ING Barings, Inc., under which the
Company may become obliged to purchase certain of its ordinary shares of $0.01
each, such approval and authority to expire on the date 18 months from the date
on which this resolution is passed. The text of the resolution is as follows:
RESOLVED, as special business, to consider and, if thought fit, pass
the following resolution as a special resolution:
"That the terms of the draft contract proposed to be made between the
Company and ING Barings, Inc. under which the Company may become
obligated to purchase certain of its issued ordinary shares of $US 0.01
each in substantially the form as attached in exhibit 2.00 (a copy of
which is produced to the meeting and signed for the purpose of
identification by the Chairman) be hereby approved and authorized for
the purposes of section 165 of the Companies Act 1985, such approval to
expire on the date 18 months from the date on which this resolution is
passed".
Explanation
The company proposes to enter into a contingent purchase contract whereby,
subject to the satisfaction of certain conditions, the Company would be obliged
to purchase up to 1,111,395 of its ordinary shares (representing approximately
10% of the ordinary shares in issue) following the purchase of ADR's by ING
Barings, Inc. on the NASDAQ National Market in accordance with all applicable US
securities laws including Rule 10(b) -18 of the Securities and Exchange Act of
1934 as amended and Regulation M under that act. However, before the Company is
permitted to enter into this contract, a draft of the contract must be approved
by way of a special resolution of shareholders. A copy of the contingent
purchase contract will be available for inspection at the Company's registered
office from 23 April 2000 until 8 May, 2000 and at the Meeting.
If approved, the authority contained in the contingent purchase contract to
repurchase the Company's shares will only be utilized when the directors believe
that such purchases are in the best interests of stockholders generally and will
result in an increase in earnings per share.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL
OF THE COMPANY TO ENTER INTO THIS CONTRACT AND TO BE AUTHORIZED TO REPURCHASE
SHARES.
OTHER BUSINESS
The Board of Directors and Management know of no matters to be presented at
the meeting other than those set forth in this Proxy Statement.
INCORPORATION BY REFERENCE
The audited financial statements, disclosures about market risks and
Management's discussion and analysis required by Item 13 of Schedule 14A are
incorporated herein by reference to Denison's Annual Report on Form 10-K, which
was filed with the SEC on or about March 31, 2000. The Form 10-K will be
furnished without charge upon written request of any stockholder. Requests
should be directed to the Chief Financial Officer, Denison International plc,
14249 Industrial Parkway, Marysville, Ohio 43040.
By order of the Board of Directors.
Bruce A. Smith
Chief Financial Officer
<PAGE>
E-1
EXHIBIT 1.00
DENISON INTERNATIONAL plc
ANNUAL GENERAL MEETING OF SHAREHOLDERS
FORM OF PROXY
- --------------------------------------------------
(NAME OF ADR HOLDER)
- ---------------------------------------------------
(NUMBER OF ADR'S HELD)
ISSUES PRESENTED FOR CONSIDERATION AT THE ANNUAL
GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 8, 2000
<TABLE>
<CAPTION>
VOTING RESULTS
AFFIRMATIVE NEGATIVE ABSTAINED
<S> <C> <C> <C>
- ------------------------------------------------------------- --------------- --------------- ---------------
1) To re-appoint Christopher H.B. Mills as a director
- ------------------------------------------------------------- --------------- --------------- ---------------
2) To re-appoint David L. Weir as a director
- ------------------------------------------------------------- --------------- --------------- ---------------
3) To re-appoint Ernst & Young LLP as auditors
- ------------------------------------------------------------- --------------- --------------- ---------------
4) Approve a resolution authorizing the Company to enter
into a contingent purchase contract to enable the Company to
buy back its own shares (s 165 Companies Act 1985)
- ------------------------------------------------------------- --------------- --------------- ---------------
</TABLE>
- --------------------------------------------------
(SIGNED)
- ---------------------------------------------------
(DATE)
<PAGE>
E-2
Draft: 21.03.00
EXHIBIT 2.00
DATED 2000
DENISON INTERNATIONAL PLC
and
---------------------------------------
CONTINGENT PURCHASE CONTRACT
FOR THE PURCHASE OF UP TO
SHARES OF US$0.01 EACH IN THE
CAPITAL OF DENISON INTERNATIONAL plc
----------------------------------------
ALLEN & OVERY
LONDON
CO:703948.1
<PAGE>
E-3
THIS AGREEMENT is made on May 8, 2000
BETWEEN:
(1) DENISON INTERNATIONAL PLC (registered number 2798239) whose registered
office is at Masters House, 107 Hammersmith Road, London W14 OQH (the
"COMPANY"); and
(2)
WHEREAS:
(A) The Company is a public company limited by shares having an authorized
share capital of (pound)57,000 divided into 7,125 "A" Ordinary Shares
of (pound)8 each ("Ordinary Shares") and US$150,000 divided into
15,000,000 Ordinary Shares of US$0.01 each ("$ Shares") of which 7,015
Ordinary Shares and 11,113,950 $ Shares have been issued fully paid or
credited as fully paid.
(B) Pursuant to and in accordance with the terms of the Amended and
Restated Restricted Deposit Agreement dated 4th August 1997 between
inter alia the Company and Bankers Trust Company, a bank organized
under the laws of the State of New York (the "Deposit Agreement" and
"Depositary" respectively), the 11,113,950 issued $ Shares (such shares
being referred to in the Deposit Agreement as "Restricted American
Depositary Shares ("ADS's")) are held by the Depositary in the form of
share warrants to bearer, the beneficial ownership of which being
evidenced by the issue by the Depositary of American Depositary
Receipts ("ADR's") on the basis of one ADR for every one ADS held.
(C) Subject to the conditions in clause 1 below, the Company wishes to
purchase, and the Vendor wishes to sell up to 1,111,395 of such $
Shares on the terms and conditions set out below.
(D) The Company is authorized to purchase its own shares pursuant to
article 11 of the Company's articles of association.
(E) A copy of this agreement has been available for inspection by the
members of the Company at its registered office for not less than 15
days ending with 8th May, 2000 and was similarly available at the
annual general meeting of the Company held on that date at which the
terms of this agreement were authorized by special resolution of the
Company in accordance with section 164 of the Companies Act 1985 (the
"Act").
(F) The consideration for the purchase of any of the $ Shares is proposed
to be provided out of the distributable profits of the Company.
IT IS AGREED as follows:
1. CONDITIONS PRECEDENT
Each sale and purchase of any of the $ Shares is conditional on:
(a) the Company having notified the Vendor at any time prior to 31st
October, 2001 by one or more notices (in the form set out in
Appendix 1) that it wishes to purchase up to a specified number of
$ Shares and the price or the range of prices and a maximum price
at or within which the Vendor shall acquire the ADRs representing
such shares; and following receipt by
<PAGE>
E-4
the Vendor of any notice pursuant to paragraph (a) above, the
Vendor having notified the Company at any time prior to 7th
November, 2001 by one or more
(b) notices (in the form set out in Appendix 2) ("Vendor's Notice")
that it has acquired a specified number of ADRs (the "Sale ADRs")
in accordance with paragraph (a) above and that pursuant to and in
accordance with the relevant provisions of the Deposit Agreement,
such ADRs have been surrendered to the Depositary and that the
Vendor is the holder of share warrants to bearer in respect of a
specified number of $ Shares (the "Sale Shares").
2. SALE AND PURCHASE
Subject to the satisfaction of the conditions in clause 1, the Vendor
shall sell, and the Company shall purchase, the Sale Shares at an
aggregate price, payable in cash in US dollars, equal to the aggregate
of (i) the consideration paid by the Vendor for the Sale ADRs and (ii)
[ ] per cent. of such consideration (together, the "Purchase Price")..
3. WARRANTIES AND COVENANTS
(1) The Vendor warrants that as at completion of each purchase of
Sale Shares (as referred to in clause 4 below) it will be the
beneficial owner of the number of Sale Shares specified in the
relevant Vendor's Notice and that such Sale Shares will be
free from any lien, charge or encumbrance.
(2) The Vendor covenants that all purchases of Sale ADRs by it
hereunder shall be made in accordance with all applicable US
securities laws, including but not limited to Rule 10b-18
under the US Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Regulation M under the Exchange Act.
(3) Each party warrants to the other that this Agreement has been
duly authorized, executed and delivered by such Party, and
constitutes the legal, valid and binding obligation of such
Party, enforceable against it in accordance with its terms.
4. COMPLETION
(1) Completion of each sale and purchase of the Sale Shares shall be
effected on the business day next following receipt by the Company of
the relevant Vendor's Notice, at a place to be agreed between the
Company and the Vendor, by:
(a) the Vendor delivering to the Company the share warrants to
bearer representing the Sale Shares referred to in the
Vendor's Notice; and
(b) the Company paying to the Vendor the Purchase Price.
(2) As soon as is reasonably practicable after completion the Company shall
(if applicable) alter its register of members so as to show that the
relevant Sale Shares have been cancelled in accordance with section
160(4) of the Act.
5. COSTS
Each of the Company and the Vendor shall bear all professional costs
and charges relating to this agreement respectively incurred by them
and the Company shall also pay all stamp duties falling due in respect
of the completion of the purchase of the Sale Shares in accordance with
this agreement.
<PAGE>
E-5
6. SERVICE OF NOTICES
Any notice to be served under this agreement shall be validly served if
delivered or if sent by first class post, recorded delivery post or
facsimile process if addressed to the Company at its US Executive
Offices located at 14249 Industrial Parkway, Marysville, Ohio 43040,
Attention: Chief Financial Officer or, if addressed to the vendor to
[ ] at [ ], attention [ ]. Any notice
shall be deemed to have been served:
(a) if delivered, at the time of delivery;
(b) if posted, on the third business day after it was put in the
post; or
(c) if sent by facsimile process at the expiration of two hours
after the time of dispatch.
7. TERMINATION
This agreement shall terminate on 7th November, 2001 (the "Termination
Date") as from which date neither of the parties will have any rights,
liabilities or obligations under this agreement save in respect of any
Vendor's Notice received or deemed received by the Company prior to the
Termination Date.
8. GENERAL
(1) The headings in this agreement are for convenience only and shall not
affect its construction.
(2) This agreement is governed by and shall be construed in accordance with
the laws of England and Wales.
AS WITNESS the hands of the duly authorized representatives of the parties on
the date, which appears first on page 1.
<PAGE>
E-6
APPENDIX 1
To:
Pursuant to clause 1(a) of the Contingent Purchase Contract made between us and
dated ? ? 2000 (the "Contract"), we hereby notify you that:
1. We wish to purchase up to [ ] $ Shares as defined in, and on
the terms and subject to the conditions of, the Contract;
2. [Wording to be inserted re: Rule 10b-18 of US Securities Exchange Act
of 1934]; and
3. The maximum price which you may purchase ADRs representing $ Shares
shall be US$[ ] per ADR.
Dated:
Signed:.....................................
A duly authorized director
for and on behalf of
Denison International plc
<PAGE>
E-7
APPENDIX 2
To: The Directors
Denison International plc
Masters House
107 Hammersmith Road
London W14 0QH
England
Pursuant to clause 1(b) of the Contingent Purchase Contract made between us and
dated 2000 (the "Contract"), we hereby notify you as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. We have acquired [ ] ADRs representing [ ] Sale Shares, as defined in the
Contract at a price or prices and on the dates specified below.
Date(s) ADR(s) Price paid No. of ADRs Total purchase price
Purchased per ADR $ purchased
[ ] [ ] [ ] [ ]
</TABLE>
2. Pursuant to and in accordance with the relevant provisions of the
Deposit Agreement (as so defined) we have surrendered the
above-mentioned ADRs to the Depositary and that we are the holder of a
share warrant to bearer in respect of [ ] $ Shares.
Dated:
Signed:....................................
A duly authorized signatory
for and on behalf of
<PAGE>
E-8
SIGNED by )
for and on behalf of )
DENISON INTERNATIONAL plc )
SIGNED by )
for and on behalf of )
)
