<PAGE> 1
PROXY STATEMENT
PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
GUNDLE/SLT ENVIRONMENTAL, INC.
(Name of Registrant as specified in its Charter)
GUNDLE/SLT ENVIRONMENTAL, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / 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 the transaction applies:
-------------------------------------------------------------------
(2) Aggregate number of securities to which the transaction applies:
-------------------------------------------------------------------
(3) Per unit price or other underlying value of the 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.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[GUNDLE/SLT ENVIRONMENTAL, INC. LOGO]
GUNDLE/SLT ENVIRONMENTAL, INC.
19103 GUNDLE ROAD
HOUSTON, TEXAS 77073
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1996
---------------------
Notice is hereby given that the annual meeting of the stockholders of
Gundle/SLT Environmental, Inc. (the "Company") will be held at the Houston
Marriott North at Greenspoint, 255 North Sam Houston Parkway East, Houston,
Texas 77060, on Thursday, May 2, 1996, at 11:00 a.m., Houston Time, for the
following purposes:
1. To elect a board of six directors to serve until the next annual
meeting of stockholders or until their successors are elected and qualify;
2. To consider and act upon a proposal to approve the 1996
Nonqualified Stock Option Plan for Non-Employee Directors (the "Director
Plan");
3. To consider and act upon a proposal to approve the Amended and
Restated 1995 Incentive Stock Plan (the "Restated Plan"); and
4. To consider and act upon such other business as may properly be
presented to the meeting.
A record of stockholders has been taken as of the close of business on
March 15, 1996, and only those stockholders of record on that date will be
entitled to notice of and to vote at the meeting. A list of stockholders will be
available at the offices of the Company commencing April 22, 1996, and may be
inspected during normal business hours before the annual meeting.
If you do not expect to be present at the meeting, please sign and date the
enclosed proxy and return it promptly in the enclosed stamped envelope which has
been provided for your convenience. The prompt return of proxies will ensure a
quorum and save the Company the expense of further solicitation.
By Order of the Board of Directors
/s/ ROGER J.KLATT
ROGER J. KLATT,
Secretary
April 1, 1996
<PAGE> 3
GUNDLE/SLT ENVIRONMENTAL, INC.
19103 GUNDLE ROAD
HOUSTON, TEXAS 77073
PROXY STATEMENT
This Proxy Statement is being mailed to stockholders commencing on or about
April 1, 1996, in connection with the solicitation by the board of directors of
Gundle/SLT Environmental, Inc. (the "Company") of proxies to be voted at the
annual meeting of stockholders to be held in Houston, Texas on May 2, 1996, and
any adjournment thereof, for the purposes set forth in the accompanying notice.
Proxies will be voted in accordance with the directions specified thereon and
otherwise in accordance with the judgment of the persons designated as the
holders of the proxies. Proxies marked as abstaining on any matter to be acted
on by the stockholders will be treated as present at the annual meeting for
purposes of determining a quorum but will not be counted as votes cast on such
matters. Any proxy on which no direction is specified will be voted: (i) for the
election of each of the directors nominated by the Company named herein; (ii)
for approval of the Director Plan; and (iii) for approval of the Restated Plan,
or otherwise in accordance with the judgment of the person specified thereon. A
stockholder may revoke a proxy by delivering to the Company written notice of
revocation, delivering to the Company a proxy signed on a later date or voting
in person at the annual meeting.
As of March 15, 1996, the record date for the determination of stockholders
entitled to vote at the annual meeting, there were 17,699,999 shares of the
common stock outstanding. Each share of common stock entitles the holder to one
vote on all matters presented at the meeting.
ELECTION OF DIRECTORS
At the meeting six nominees are to be elected, each director to hold office
until the next annual meeting of stockholders or until his successor is elected
and qualified. The persons named in the accompanying proxy have been designated
by the board of directors and, unless authority is withheld, they intend to vote
for the election of the nominees named below to the board of directors. Each of
the nominees has previously been elected by the stockholders. If any nominee
should become unavailable for election, the proxy may be voted for a substitute
nominee selected by the persons named in the proxy, or the board may be reduced
accordingly; however, the board of directors is not aware of any circumstances
likely to render any nominee unavailable.
NOMINEES
Certain information concerning the nominees is set forth below:
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
DECEMBER 31,
1995(1)
-------------------
DIRECTOR PERCENT
NAME POSITION AGE SINCE SHARES(2) OF CLASS
- ------------------------------ ----------------------------------- --- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Samir T. Badawi(3)(4)(5)(6)... Director and chairman of the board 56 1995 7,007,500 39.6%
Ahmed Y. Khalawi(4)........... Director 59 1995 5,000 *
T. William Porter(5).......... Director 54 1988 17,500 *
William P. Reid(6)............ Director, president and chief 46 1995 245,000 1.4%
executive officer
Hugh L. Rice(4)............... Director 49 1990 10,000 *
Brian D. Young(3)(5)(6)....... Director 41 1986 2,071,656 11.7%
</TABLE>
(Footnotes on following page)
<PAGE> 4
- ---------------
* Less than 1% of outstanding shares.
(1) Each person has sole voting and investment power with respect to the shares
listed, except as otherwise specified.
(2) Includes shares underlying outstanding stock options, as follows: Mr.
Badawi -- 5,000; Mr. Khalawi -- 5,000; Mr. Porter -- 12,500; Mr.
Reid -- 237,500; and Mr. Rice -- 10,000.
(3) As representatives of Wembley, Ltd. ("Wembley") and Odyssey Partners, L.P.,
("Odyssey") Messrs. Badawi and Young may be deemed to beneficially own the
7,000,000 and 2,071,656 shares owned by Wembley and Odyssey, respectively.
Each disclaims any beneficial ownership in such shares beyond his
proportionate ownership interest, if any, in Wembley and Odyssey.
(4) Member, audit committee of the board of directors.
(5) Member, compensation committee of the board of directors.
(6) Member, executive committee of the board of directors.
Samir T. Badawi was chairman of the board of SLT Environmental, Inc.
("SLT") prior to SLT's merger with the Company in July 1995 and is president of
Wembley Ltd., the Company's largest stockholder. Prior to October 1993, Mr.
Badawi served as a managing partner of Ernst & Young's professional practice in
the Middle East.
Ahmed Y. Khalawi has been a legal advisor and attorney in Saudi Arabia
since 1968 and is a director of Wembley. Mr. Khalawi also served as Vice
President, Legal Affairs for Saudi Arabian Airlines from 1975 to 1982.
T. William Porter has been a partner of Porter & Hedges, L.L.P., a Houston
law firm that serves as the Company's principal outside counsel, for more than
10 years. Mr. Porter is also a director of Air-Cure Technologies, Inc.
William P. Reid became president of the Company in July 1995 after having
served as president and chief executive officer of SLT for the previous six
years. Prior to joining SLT, he was President of Sperry Sun Drilling Services, a
Division of Baroid Corp.
Hugh L. Rice is senior vice president of FMI Corporation, a consulting firm
which provides services to the construction industry relating to corporate stock
valuation, business planning and mergers and acquisitions.
Brian D. Young is a general partner and co-founder of Eos Partners, L.P., a
New York based investment concern ("Eos"). Before co-founding Eos in January
1994, he served as a general partner of Odyssey for eight years. Mr. Young is
also a director of Archer Resources Ltd., The Caldor Corporation, MICOM and
Black Box Corporation.
BOARD AND COMMITTEE ACTIVITY, STRUCTURE AND COMPENSATION
During 1995, the board of directors convened on three regularly scheduled
occasions and ten special occasions. Committees of the board held meetings as
follows: audit committee -- three meetings and compensation committee -- one
meeting. Each director attended at least 75% of all meetings of the board and
all committees on which he served during the year, except for Mr. Khalawi who
attended one board meeting.
The Company's operations are managed under the broad supervision and
direction of the board of directors, which has the ultimate responsibility for
the establishment and implementation of the Company's general operating
philosophy, objectives, goals and policies. Pursuant to delegated authority,
certain board functions are discharged by the standing committees of the board.
The executive committee is authorized to exercise, to the extent permitted by
law, the power of the full board of directors when a meeting of the full board
is not practicable or necessary. The compensation committee is responsible for
the formulation and adoption of all executive compensation, benefit and
insurance programs, subject to full board approval where legally required or in
those instances where the underlying benefit philosophy might be at variance
with preexisting board policies, and supervises the administration of all
executive compensation and benefit
2
<PAGE> 5
programs, including the establishment of specific criteria against which all
annual performance based benefits are to be measured. The audit committee
assists the board in assuring that the accounting and reporting practices of the
Company are in accordance with all applicable requirements. The board of
directors does not presently maintain a nominating committee; stockholders who
may wish to suggest individuals for possible future consideration for board
positions should direct recommendations to the board of directors at the
Company's principal offices.
Directors not employed by the Company receive an annual retainer of $16,000
in quarterly installments, fees of $1,000 per board meeting and $500 per
committee meeting. The chairman of the board and committee chairmen receive an
additional $500 in fees for each meeting at which they preside. Compensation
paid to all non-employee directors during 1995 for service in all board
capacities aggregated $111,250.
EXECUTIVE OFFICER TENURE AND IDENTIFICATION
The executive officers serve at the pleasure of the board of directors and
are subject to annual appointment by the board at its first meeting following
the annual meeting of stockholders. Certain information concerning those
executive officers of the Company who are not also members of the board of
directors is set forth below:
Roger J. Klatt, age 57, has served as senior vice president and chief
financial officer of the Company since March 1994. During the preceding four
years, Mr. Klatt served as vice president and chief financial officer of Cabot
Oil and Gas Corp.
Friedrich Struve, age 53, has served as a vice president of the Company
since 1986. He is the executive with primary responsibility for engineering and
research.
MANAGEMENT STOCKHOLDINGS
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock at December 31, 1995, by (i) all
directors, (ii) the chief executive officer and other executive officers
(collectively, the "Named Executives") and (iii) all directors and executive
officers as a group.
<TABLE>
<CAPTION>
NAME OF PERSON NUMBER OF PERCENT
OR IDENTITY OF GROUP SHARES(1) OF CLASS
---------------------------------------------------------------- --------- --------
<S> <C> <C>
Samir T. Badawi(2).............................................. 7,007,500 39.6%
Ahmed Y. Khalawi................................................ 5,000 *
T. William Porter............................................... 17,500 *
William P. Reid................................................. 245,000 1.4%
Hugh L. Rice.................................................... 10,000 *
Brian D. Young.................................................. 2,071,656 11.7%
Roger J. Klatt.................................................. 64,500 *
Friedrich Struve................................................ 64,551 *
All directors and executive officers as a group (8
persons)(3)................................................... 9,485,707 53.6%
</TABLE>
- ---------------
* Less than 1% of outstanding shares.
(1) Includes shares underlying outstanding stock options, as follows: Mr.
Badawi -- 5,000; Mr. Khalawi -- 5,000; Mr. Porter -- 12,500; Mr.
Reid -- 237,500; Mr. Rice -- 10,000; Mr. Klatt -- 64,500; and Mr.
Struve -- 58,000.
(2) As representatives of Wembley and Odyssey, Messrs. Badawi and Young may be
deemed to beneficially own the 7,000,000 and 2,071,656 shares owned by
Wembley and Odyssey, respectively. Each disclaims any beneficial ownership
in such shares beyond his proportionate ownership interest, if any, in
Wembley and Odyssey.
(3) Includes (without duplication) all shares referred to in notes 1 and 2
above.
3
<PAGE> 6
EMPLOYMENT AGREEMENT
Mr. Reid is employed under an agreement which was originally entered into
with SLT and pursuant to which he receives (i) annual base compensation of
$275,000 and (ii) a bonus of up to 50% of base compensation if certain financial
goals and objectives are attained. The employment agreement expires in 1998, and
is cancelable without further compensation before expiration of the three-year
term only for cause. In connection with the Gundle/SLT merger, Mr. Reid also
received a 10-year, nonqualified stock option to purchase 200,000 shares of the
Company's common stock at an exercise price of $5.375. The option vests as to
one-third of the shares covered on the first, second and third anniversaries of
the date of grant and is exercisable (to the extent vested) following one year
from the date of grant.
VOTE REQUIRED FOR ELECTION
The six nominees for election as directors at the annual meeting who
receive the greatest number of votes cast for election by the holders of common
stock of record shall be the duly elected directors upon completion of the vote
tabulation at the annual meeting, provided a majority of the outstanding shares
as of the record date are present in person or by proxy at the meeting. Votes
will be tabulated by Chemical Mellon Shareholder Services, L.L.C., the transfer
agent and registrar for the common stock, and the results will be certified by
election inspectors who are required to resolve impartially any interpretive
questions as to the conduct of the vote. Under applicable provisions of the
Company's bylaws, any proxy containing an abstention from voting for any nominee
will be sufficient to represent the shares at the meeting for purposes of
determining whether a quorum is present, but will count neither as a vote for
nor against any nominee with respect to whom the holder has abstained from
voting. In tabulating votes, a record will be made of the number of shares voted
for each nominee, the number of shares with respect to which authority to vote
for that nominee has been withheld, and the number of shares held of record by
broker-dealers and present at the meeting but not voting.
PROPOSAL TO APPROVE THE
1996 NONQUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
At the meeting, stockholders will be asked to approve the 1996 Nonqualified
Stock Option Plan for Non-Employee Directors (the "Director Plan"). The Director
Plan provides for the automatic annual grant to each non-employee director of a
five-year option to purchase 2,000 shares of common stock at an exercise price
equal to the market price on the date of grant. Under a similar prior plan which
was terminated in December 1995, directors were granted ten-year options to
purchase 5,000 shares (i) upon their initial election to the board and (ii) on
the second anniversary of service on the board. The board believes that the
grant of options to non-employee directors continues to be a valuable incentive
for attracting and retaining qualified directors, and that annual grants of
options covering fewer shares than would have been the case under the recently
terminated plan is, in any event, more in keeping with the Company's overall
compensation strategy than was the previous plan.
If approved by stockholders, the Director Plan will authorize an aggregate
of 100,000 shares to be issued pursuant to nonqualified stock options granted to
non-employee directors of the Company. Each eligible director is to be
automatically granted a five-year option to purchase 2,000 shares of common
stock immediately following each annual meeting of stockholders, with each
option to vest and become exercisable in its entirety one year from the date of
grant. The board may terminate the Director Plan, but without the approval of
stockholders, the board may not change the number of shares to be granted to
eligible directors, or the date or exercise price of any grant. Except as
described above, the provisions of the Director Plan are comparable to those in
the previous plan.
VOTE REQUIRED FOR APPROVAL
Approval of the Director Plan requires the affirmative vote of a majority
of the outstanding shares voted at the annual meeting. The board of directors
recommends a vote FOR approval of the Director Plan.
4
<PAGE> 7
PROPOSAL TO AMEND AND RESTATE THE
1995 INCENTIVE STOCK PLAN
At the meeting, stockholders will be asked to approve the Company's Amended
and Restated 1995 Incentive Stock Plan (the "Restated Plan") which would (i)
increase the number of shares available for use in connection with stock based
employee benefit programs to 1,750,000 from the 1,250,000 shares presently
authorized and (ii) adopt various other amendments, primarily to insure that any
benefits under the Restated Plan would continue to be deductible under the
Internal Revenue Code. If approved by stockholders, the Restated Plan would then
incorporate the 1995 Incentive Stock Plan ("1995 Plan") and all such amendments
into a single document.
Although some 475,689 shares are presently available for stock based
benefits under the 1995 Plan, the board of directors is of the view that this is
likely to be an insufficient number to satisfy the Company's anticipated need
for stock-based benefit availability over the five-year life of the 1995 Plan,
particularly in view of the board's resolve to rely increasingly upon
performance-based compensation for senior executives in the form of stock
options and other benefits covered by the 1995 Plan in future years.
Accordingly, based upon an independent compensation survey, the board is seeking
a 500,000 share increase in the number of shares available for use in
stock-based employee benefit programs.
In general, the Internal Revenue Code limits the deductibility of
individual senior executive officer compensation to $1,000,000 in any one year,
unless (in the case of stock-based benefits) certain restrictive provisions have
been incorporated into the program under which the employee benefit has been
provided. While the board is of the view it is likely that no present benefit
would exceed the statutory limit for the foreseeable future, the required
restrictions would be incorporated into the Restated Plan if approved by
stockholders, thus insuring the continuing deductibility of all benefits
currently provided under the 1995 Plan. The proposed amendments to be
incorporated into the Restated Plan include (i) the requirement that
compensation committee members be exclusively "outside directors" (i.e., those
having no other present or past affiliation with the Company) rather than
"disinterested directors" (i.e., those with no direct interest in Plan
benefits), as presently required, (ii) the requirement that any options granted
under the Restated Plan must be granted at not less than 100% of fair market
value, (iii) a limitation on the number of shares which may be subjected to
options granted to any individual during a year to 50,000, (iv) a limitation on
the number of shares that may be subjected to restricted stock or performance
share issuances to any individual during a year to 100,000, (v) the
establishment of specific vesting criteria for restricted stock grants or
performance share issuances based upon the Company's annual net income,
operating profit as a percentage of sales, and the ratio of working capital to
sales, (vi) the provision for an annual "gross-up" of executive cash bonuses to
cover federal income tax payable on income recognized upon the vesting of
restricted stock or performance shares under the fixed vesting criteria, and
(vii) a limitation on the period during which benefits may be granted under the
Restated Plan to the five years from its adoption. In all other respects, the
1995 Plan provisions would remain unchanged if the Restated Plan is approved by
stockholders.
VOTE REQUIRED FOR APPROVAL
Approval of the Plan requires the affirmative vote of a majority of the
outstanding shares voted at the annual meeting. The board of directors
recommends a vote FOR approval of the Restated Plan.
5
<PAGE> 8
OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock at December 31, 1995, by each
stockholder who is known by the Company to own beneficially more than 5% of the
outstanding common stock.
<TABLE>
<CAPTION>
NAME OF PERSON NUMBER OF PERCENT OF
OR IDENTITY OF GROUP SHARES CLASS
--------------------------------------------------------------- --------- ----------
<S> <C> <C>
Wembley, Ltd................................................... 7,000,000 39.6%
Columbus Centre Building
Road Town, Tortola
British Virgin Islands
Odyssey Partners, L.P.......................................... 2,071,656 11.7%
31 West 52nd Street
New York, New York 10019
</TABLE>
EXECUTIVE COMPENSATION
The following table reflects all forms of compensation for services to the
Company for the periods indicated of each individual who was (i) the chief
executive officer at any time during the period or (ii) an executive officer at
December 31, 1995 (collectively, the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION STOCK
-------------------------------- OPTION AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER(1) (SHARES) COMPENSATION(2)
- --------------------------- ---- -------- -------- -------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
William P. Reid............ 1995 $104,500 $110,000 -- 237,500 $13,900
President and chief
executive officer(3)
Roger J. Klatt(4).......... 1995 $165,000 $ 43,000 -- 19,500 $ 2,250
Senior vice president 1994 $137,500 $ 22,500 -- 45,000 $ 1,700
and chief financial
officer
Friedrich Struve........... 1995 $157,300 $ 7,500 -- -- $ 1,440
Vice president 1994 $156,100 $ 5,850 -- 10,000 $ 1,440
1993 $148,900 17,550 -- 5,000 $ 1,440
Thomas L. Caltrider(5)..... 1995 $131,250 -- -- -- $ 870
President and chief 1994 $225,000 $ 25,000 -- -- $ 510
executive officer 1993 $112,500 $ 80,000 -- 100,000 $ 255
</TABLE>
- ---------------
(1) Because the value of benefits did not exceed 10% of annual compensation for
any individual, amounts are omitted.
(2) Represents life insurance premium cost.
(3) Effective July 27, 1995.
(4) Commenced employment in March 1994.
(5) Through July 27, 1995.
6
<PAGE> 9
OPTION GRANTS
The following table sets forth certain information with respect to stock
options granted to the Named Executives during 1995 under the Company's 1995
Incentive Stock Plan.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT
----------------------------------------------------- ASSUMED ANNUAL RATES OF STOCK
PERCENT OF TOTAL PRICE
OPTIONS GRANTED APPRECIATION FOR OPTION TERM(2)
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION -------------------------------
NAME GRANTED(1) YEAR PRICE DATE 0% 5% 10%
- ----------------------- ---------- ---------------- -------- ---------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
William P. Reid........ 200,000 69% $5.375 07/27/05 $37,500 $676,100 $1,713,300
37,500 13% $5.500 12/15/02 -- $ 84,000 $ 195,700
Roger J. Klatt......... 19,500 7% $5.500 12/15/02 -- $ 43,700 $ 101,800
</TABLE>
- ---------------
(1) If a "change of control" were to occur prior to exercise or expiration of
the option, the entire option would automatically be converted into an
amount of cash equal to any unrealized appreciation in the option.
(2) Potential values stated are the result of using the SEC method of
calculations of 5% and 10% appreciation in value from the date of grant to
the end of the option term and, in the case of options granted at less than
fair market value, 0%. Such assumed rates of appreciation and potential
realizable values are not necessarily indicative of the appreciation, if
any, which may be realized in future periods.
OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth information with respect to the unexercised
options to purchase shares of common stock for each of the Named Executives held
by them at December 31, 1995. None of the Named Executives exercised any stock
options during 1995.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1995 DECEMBER 31, 1995(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William P. Reid....................... -- 237,500 -- $39,844
Thomas L. Caltrider(2)................ 66,667 33,333 -- --
Roger J. Klatt........................ 7,000 57,500 -- $ 4,344
Friedrich Struve...................... 38,000 20,000 $12,117 $ 3,125
</TABLE>
- ---------------
(1) Represents the difference between the closing price for the common stock on
the American Stock Exchange on December 31, 1995 ($5.5625 per share), and
any lesser exercise price.
(2) Served as chief executive officer through July 27, 1995.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the board of directors (as it was constituted
on January 1, 1995) has furnished the following report on executive compensation
for 1995. The 1995 compensation program for executive officers who were
incumbent at the beginning of the year was approved by the compensation
committee and ratified without change by the board of directors prior to the
beginning of the year. The 1995 compensation package for Mr. Reid, who became
the Company's chief executive officer upon consummation of the merger with SLT,
was contractually established by the board of SLT and was approved by the
Company's board of directors without change pursuant to the terms of the merger.
Under the supervision of the compensation committee, the Company has sought
to maintain and enhance its profitability, and thus the value of its common
stock, by relating executive compensation and stock-based benefits to the
Company's financial performance. In general, executive financial rewards may be
segregated into the following significant components: base compensation, bonus
and stock-based benefits.
7
<PAGE> 10
Base compensation for senior executives (including the chief executive
officer and the other Named Executives) is intended to be competitive with that
paid in comparably situated industries, with a reasonable degree of financial
security and flexibility afforded to those individuals who are regarded by the
board of directors as acceptably discharging the levels and types of
responsibility implicit in the various senior executive positions. In the course
of considering annual executive salary increases, appropriate consideration is
given to the credentials, age and experience of the individual senior
executives, as viewed in the compensation committee's collective best judgment,
which necessarily involves subjective as well as objective elements. Should the
committee be persuaded that an executive has not met expectations for a
protracted period, a recommendation to the board of directors that the executive
be terminated would be a more likely eventuality than a reduction in his base
compensation. Using the criteria set forth above, no pay increase for executive
officers was authorized by the compensation committee during 1995.
Annual bonuses are intended to reflect a policy of requiring a minimum
level of Company financial performance for the year before any bonuses are
earned by senior executives, with bonuses for achieving higher levels of
performance directly related to the level achieved. In setting such performance
criteria, the committee considers the total compensation payable or potentially
available to the chief executive officer and other Named Executives. While the
development of any business involves factors other than profitability, the
emphasis of the committee in recent years (with board concurrence) has been on
encouraging management to maintain the Company's profitability. For 1995,
however, bonuses were based entirely upon subjective criteria or were
individually negotiated with the affected executives, since previously existing
bonus criteria were no longer applicable following the merger with SLT. On this
basis, the following bonuses have been paid to senior executives in respect of
1995: Mr. Reid -- $110,000; Mr. Caltrider -- $100,000; Mr. Klatt -- $43,000; and
Mr. Struve -- $7,500.
The board of directors is of the view that properly designed and
administered stock-based incentives for senior executives closely align the
executives' economic interests with those of stockholders and provide a direct
and continuing focus upon the goal of constantly striving to increase long-term
stockholder value. For several years, the Company sought to encourage such value
building for stockholders through the annual award of nonqualified stock options
to senior executives. However, no options were awarded to the Named Executives
during 1995, except for (i) a contractually agreed 200,000 share option granted
to Mr. Reid upon his acceptance of employment in July 1995 and (ii) subsequent
grants of 37,500 and 19,500 share options to Messrs. Reid and Klatt.
The compensation committee intends, with any necessary concurrence of the
board of directors, to continue to consider alternate forms of stock-based
incentives with a view to affording the maximum possible long-term performance
based benefits to senior executives at the least possible cost and the greatest
attainable economic efficiency to the Company, with such benefits designed as
nearly as practicable to directly align the economic interests of professional
managers with those of the Company's stockholders. Pursuant to applicable rules
of the Securities and Exchange Commission, non-management members of the
compensation committee and the board are deemed to own beneficially (without
duplication for any "shared" ownership) an aggregate of 2,099,156 shares, or
11.9%, of the Company's outstanding common stock.
The Compensation Committee
T. William Porter
Hugh L. Rice
Brian D. Young
8
<PAGE> 11
COMMON STOCK PERFORMANCE GRAPH
The following graph illustrates the yearly percentage change in the
cumulative total shareholder return on the Company's common stock, compared with
the cumulative total return on (i) the Standard & Poor's 500 Stock Index (the
"S&P 500 Index") and (ii) the Smith Barney Solid Waste Pollution Control Index
(the "Smith Barney Index"), for the five years ended December 31, 1995:
<TABLE>
<CAPTION>
Measurement Period Smith Barney S&P 500
(Fiscal Year Covered) Gundle/SLT Index Index
<S> <C> <C> <C>
12/31/90 100.00 100.00 100.00
12/31/91 111.65 115.90 130.50
12/31/92 69.90 114.31 140.54
12/31/93 57.28 85.49 154.83
12/31/94 40.78 89.07 156.76
12/31/95 43.20 101.79 215.44
</TABLE>
In all cases, the cumulative total return assumes, as contemplated by the
Securities and Exchange Commission (the "Commission") rules, that any cash
dividends on the common stock of each entity included in the data presented
above were reinvested in that security.
CERTAIN TRANSACTIONS
In connection with the July 1995 merger of the Company with SLT, the board
of directors awarded Brian D. Young a special bonus of $50,000 as compensation
for time and expense incurred in negotiating the merger.
Under arrangements negotiated in connection with the merger with SLT, it
was agreed that William P. Reid replace Thomas L. Caltrider as the Company's
president and chief executive officer. Mr. Caltrider was retained to provide
consulting services to the Company for 18 months following the merger at a
salary of $12,500 per month and received a bonus of $100,000 upon consummation
of the merger.
AUDITORS
Ernst & Young LLP ("Ernst & Young") is the independent auditor of the
Company. While management anticipates that this relationship will continue to be
maintained during 1996 and subsequent years, no formal action is proposed to be
taken at the annual meeting with respect to the continued employment of Ernst &
Young LLP inasmuch as no such action is legally required. Representatives of
Ernst & Young LLP plan to attend the annual meeting and will be available to
answer appropriate questions. Its representatives also will have an opportunity
to make a statement at the meeting if they so desire, although it is not
expected that any statement will be made.
9
<PAGE> 12
Prior to September 1995, Arthur Andersen LLP ("Arthur Andersen") served as
independent auditors for the Company. During 1995, the audit committee of the
board of directors considered several independent public accounting firms,
including Arthur Andersen, for possible selection as the Company's auditors for
1995, but after considerable review, Ernst & Young was selected. Management had
no disagreement with Arthur Andersen on any material matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure. Arthur Andersen's report on the financial statements for the year
ended March 31, 1995 did not contain an adverse opinion or a disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope or
accounting principles. It is not anticipated that representatives of Arthur
Andersen will be in attendance at the meeting.
The audit committee of the board of directors assists the board in assuring
that the accounting and reporting practices of the Company are in accordance
with all applicable requirements. The committee reviews with the auditors the
scope of the proposed audit work and meets with the auditors to discuss matters
pertaining to the audit and any other matter which the committee or the auditors
may wish to discuss. In addition, the audit committee would recommend the
appointment of new auditors to the board of directors if future circumstances
were to indicate that such action is desirable.
LIMITATION ON INCORPORATION BY REFERENCE
Notwithstanding any reference in prior or future filings of the Company
with the Securities and Exchange Commission which purports to incorporate this
proxy statement by reference into another filing, such incorporation does not
include any material included herein under the captions "Other Information --
Compensation Committee Report on Executive Compensation" or "Other
Information -- Common Stock Performance Graph."
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and persons who own more than 10% of a registered class of
the Company's equity securities, to file reports of ownership and changes of
ownership with the Commission. Executive officers, directors and greater than
10% shareholders are required to furnish the Company with copies of all Section
16(a) reports they file. Based solely on its review of the forms received by it,
the Company believes that during the year ended December 31, 1995, all filing
requirements applicable to the Company's executive officers, directors and 10%
shareholders were met.
OTHER MATTERS
The annual report to stockholders covering the year ended December 31, 1995
either has been mailed to each stockholder entitled to vote at the annual
meeting or accompanies this proxy statement.
Any stockholder who wishes to submit a proposal for action to be included
in the proxy statement and form of proxy relating to the Company's 1997 annual
meeting of stockholders is required to submit such proposal to the Company on or
before December 12, 1996.
The cost of soliciting proxies in the accompanying form will be borne by
the Company. In addition to solicitations by mail, several regular employees of
the Company may, if necessary to assure the presence of a quorum, solicit
proxies in person or by telephone.
10
<PAGE> 13
The persons designated as to proxies to vote shares at the meeting intend
to exercise their judgment in voting such shares on other matters that may
properly come before the meeting. Management does not expect that any matters
other than those referred to in this proxy statement will be presented for
action at the meeting.
By Order of the Board of Directors
/s/ ROGER J.KLATT
ROGER J. KLATT,
Secretary
April 1, 1996
11
<PAGE> 14
GUNDLE/SLT ENVIRONMENTAL, INC.
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE
ANNUAL MEETING OF MAY 2, 1996
The undersigned stockholder of Gundle/SLT Environmental, Inc. (the
"Company") hereby appoints William P. Reid and Roger J. Klatt, or either of
them, attorneys and proxies of the undersigned, each with full power of
substitution, to vote on behalf of the undersigned at the Annual Meeting of
Stockholders of the Company to be held at the Houston Marriott North at
Greenspoint, 255 North Sam Houston Parkway East, Houston, Texas 77060, on
Thursday, May 2, 1996, at 11:00 a.m., Houston Time, and at any adjournment of
said meeting, all of the shares of common stock in the name of the undersinged
or which the undersigned may be entitled to vote.
The board of directors recommends a vote FOR the nominees and if no
specification is made, the shares will be voted for such nominees.
The board of directors recommends a vote FOR the approval of the 1996
Nonqualified Stock Option Plan for Non-Employee Directors.
The board of directors recommends a vote FOR the approval of the
Amended and Restated 1995 Incentive Stock Plan.
(PLEASE SIGN ON REVERSE SIDE)
o FOLD AND DETACH HERE o
<PAGE> 15
<TABLE>
<S> <C>
___ ___
(CONTINUED FROM OTHER SIDE) Please mark | |
your votes as | X |
indicated in | |
this example |__ __|
</TABLE>
<TABLE>
<S> <C>
1. Election of Directors Samir T. Badawi, Ahmed Y. Khalawi, T. William Porter, William P. Reid, Hugh L. Rice and
Brian D. Young
FOR all WIHHOLD
nominees listed AUTHORITY Instruction: To withhold authority to vote for any individual nominee, write that nominee's
to the right to vote for name on the line provided below:
(except as all nominees
marked to listed to --------------------------------------------------------------------------------------------
the contrary) the right
[ ] [ ]
</TABLE>
<TABLE>
<S> <C>
2. Approval of the 1996 Nonqualified 3. Approval of the Amended and Restated 4. In their discretion, upon such other matters as
Stock Option Plan for Non-Employee 1995 Incentive Stock Plan. may properly come before the meeting; hereby
Directors. revoking any proxy or proxies heretofore given
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN by the undersigned.
[ ] [ ] [ ] [ ] [ ] [ ]
The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting of Stockholders and Proxy
Statement furnished herewith.
Dated ______________________________________, 1996
__________________________________________________
Stockholders Signature
__________________________________________________
Stockholders Signature
Signature should agree with name printed hereon.
If Stock is held in the name of more than one
person, EACH joint owner should sign. Executors,
administrators, trustees, guardians and attorneys
should indicate the capacity in which they sign.
Attorneys should submit powers of attorney.
PLEASE SIGN AND RETURN IN THE ENCLOSED ENVELOPE
</TABLE>
o FOLD AND DETACH HERE o
