<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 sec. 240.14a-11(c) or sec. 240.14a-12
GUNDLE/SLT ENVIRONMENTAL, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than 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 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:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(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 1, 1997
---------------------------------------
Notice is hereby given that the annual meeting of the stockholders of
Gundle/SLT Environmental, Inc. (the "Company") will be held at the Wyndham Hotel
at Greenspoint, 12400 Greenspoint Drive, Houston, Texas 77060, on Thursday, May
1, 1997, at 11:00 a.m., Houston Time, for the following purposes:
1. To elect a board of seven directors to serve until the next annual
meeting of stockholders or until their successors are elected and qualify;
and
2. 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 14, 1997, 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, 1997, 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, 1997
<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, 1997, 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 1, 1997, 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 for the
election of each of the directors nominated by the Company named herein, 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 14, 1997, the record date for the determination of stockholders
entitled to vote at the annual meeting, there were 15,472,405 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, seven 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, except James R. Burke, 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, 1996(1)
--------------------
DIRECTOR PERCENT
NAME POSITION AGE SINCE SHARES(2) OF CLASS
---- -------- --- -------- --------- --------
<S> <C> <C> <C> <C> <C>
Samir T. Badawi(3)(5)(6)...... Director and chairman of the board 57 1995 7,010,500 40.4%
James R. Burke(4)............. Director 59 1996 2,000 *
Ahmed Y. Khalawi.............. Director 60 1995 7,000 *
T. William Porter(5).......... Director 55 1988 19,500 *
William P. Reid(6)............ Director, president and chief 47 1995 360,400 2.1%
executive officer
Hugh L. Rice(4)............... Director 50 1990 12,000 *
Brian D. Young(5)(6)(7)....... Director 42 1986 2,073,656 11.9%
</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 -- 7,000; Mr. Burke -- 2,000; Mr. Khalawi -- 7,000; Mr.
Porter -- 14,500; Mr. Reid -- 277,500; Mr. Rice -- 12,000; and Mr. Young --
2,000.
(3) As a representative of Wembley, Ltd. ("Wembley"), Mr. Badawi may be deemed
to own beneficially the 7,000,000 shares owned by Wembley. He disclaims any
beneficial ownership in such shares beyond his proportionate ownership
interest, if any, in Wembley.
(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.
(7) Mr. Young, as a representative of Odyssey Partners, L.P. ("Odyssey"), may be
deemed to own beneficially the 2,071,656 shares owned by Odyssey. He
disclaims any beneficial ownership in such shares beyond his ownership
interest, if any, in Odyssey. On January 23, 1997, the Company purchased the
2,071,656 shares from Odyssey.
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, the Company's largest stockholder. Prior to October 1993, Mr. Badawi
served as a managing partner of Ernst & Young LLP's ("Ernst & Young")
professional practice in the Middle East.
James R. Burke has been president of the Products and Equipment Division of
Weatherford Enterra, Inc. since January 1, 1996. He served as senior vice
president of Weatherford Enterra, Inc. from January, 1992 until January, 1996.
Mr. Burke was an independent consultant from 1989 to 1991.
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, since 1981. Mr.
Porter is also a director of ITEQ, Inc.
William P. Reid became president and chief executive officer 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 has been senior vice president of FMI Corporation, a
consulting firm that provides services to the construction industry relating to
corporate stock valuation, business planning and mergers and acquisitions, for
over five years.
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. and Black Box Corporation.
BOARD AND COMMITTEE ACTIVITY, STRUCTURE AND COMPENSATION
During 1996, the board of directors convened on four regularly scheduled
occasions. Committees of the board held meetings as follows: audit
committee -- four meetings and compensation committee -- three meetings. 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 two
board meetings.
2
<PAGE> 5
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 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
paid 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 1996 for service in all board
capacities aggregated $109,500.
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 58, has served as senior vice president, secretary,
treasurer 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.
Michael C. Mathieson, age 49, has served as managing director of GSE Lining
Technology GmbH since November 1995. He previously served in various capacities
for the Company since 1982.
MANAGEMENT STOCKHOLDINGS
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock at December 31, 1996, by (i) all
directors, (ii) the chief executive officer and other executive officers 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).......................................... 7,010,500 40.4%
James R. Burke.............................................. 2,000 *
Ahmed Y. Khalawi............................................ 7,000 *
T. William Porter........................................... 19,500 *
William P. Reid............................................. 360,400 2.1%
Hugh L. Rice................................................ 12,000 *
Brian D. Young(2)........................................... 2,073,656 11.9%
Roger J. Klatt.............................................. 106,000 *
Michael C. Mathieson........................................ 71,750 *
All directors and executive officers as a group (9
persons).................................................. 9,661,706(3) 55.6%
</TABLE>
(Footnotes on following page)
3
<PAGE> 6
- ---------------
* Less than 1% of outstanding shares.
(1) Includes shares underlying outstanding stock options, as follows: Mr.
Badawi -- 7,000; Mr. Burke -- 2,000; Mr. Khalawi -- 7,000; Mr.
Porter -- 14,500; Mr. Reid -- 277,500; Mr. Rice -- 12,000; Mr. Young --
2,000; Mr. Klatt -- 80,500; and Mr. Mathieson -- 61,375.
(2) Messrs. Badawi and Young, as representatives of Wembley and Odyssey,
respectively, may be deemed to own beneficially 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. On January 23, 1997, the Company
purchased the 2,071,656 shares owned by Odyssey.
(3) Includes (without duplication) all shares referred to in notes 1 and 2
above.
EMPLOYMENT AGREEMENT
Mr. Reid is employed under an agreement that was originally entered into
with SLT. As subsequently amended, the agreement provides for (i) annual base
compensation of $325,000 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 primary term only for cause.
VOTE REQUIRED FOR ELECTION
The seven nominees for election as directors 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 ChaseMellon 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.
4
<PAGE> 7
OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock at December 31, 1996, 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 40.3%
Columbus Centre Building
Road Town, Tortola
British Virgin Islands
Odyssey Partners, L.P....................................... 2,071,656(1) 11.9%
31 West 52nd Street
New York, New York 10019
The TCW Group, Inc.......................................... 1,021,900 5.9%
865 S. Figueroa Avenue
Los Angeles, California 90017
Dimensional Fund Advisors, Inc.............................. 1,008,412(2) 5.8%
1299 Ocean Avenue
Santa Monica, California 90401
</TABLE>
- ---------------
(1) The Company purchased all of Odyssey's shares on January 23, 1997.
(2) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 1,008,412 shares of the
Company's common stock as of December 31, 1996. Such shares are held in
portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFS Group Trust and DFA Participation Group
Trust (collectively, the "Trusts"). Dimensional serves as investment manager
to the Trusts, which are investment vehicles for qualified employee benefit
plans. Dimensional disclaims beneficial ownership of all such shares.
5
<PAGE> 8
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, 1996 (collectively, the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------------------
ANNUAL COMPENSATION STOCK
NAME AND ------------------------------ RESTRICTED OPTION AWARDS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OTHER(1) STOCK(2) (SHARES) COMPENSATION(3)
------------------ ---- -------- -------- -------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
William P. Reid.............. 1996 $295,833 $195,000 -- $407,000 40,000 $56,000
President and chief 1995 $104,500 $110,000 -- -- 237,500 $18,800
executive officer(4)
Roger J. Klatt(5)............ 1996 $175,000 $ 85,000 -- $139,700 16,000 $15,900
Senior vice president, 1995 $165,000 $ 43,000 -- -- 19,500 $ 7,000
secretary, treasurer and 1994 $137,500 $ 22,500 -- -- 45,000 $ 6,200
chief financial officer
Michael C. Mathieson......... 1996 $150,000(6) $ 25,000 -- $ 27,500 6,000 $10,400
Managing director-GSE 1995 $142,000(6) $ 7,500 -- -- 2,500 $ 4,800
Lining Technology GmbH 1994 $136,000 $ 23,400 -- -- 10,000 $ 4,200
</TABLE>
- ---------------
(1) Because the value of any additional benefits did not exceed 10% of annual
compensation for any individual, amounts are omitted.
(2) Restricted stock was not granted to Messrs. Reid, Klatt and Mathieson in
1994 or 1995. The value of restricted shares stated in this column is based
on the closing price on the date of grant. As of December 31, 1996, Messrs.
Reid, Klatt and Mathieson held 74,000, 25,400 and 5,000 restricted shares,
respectively, valued (based on the December 31, 1996 closing price of
$6.625) at $490,250, $168,275 and $33,125, respectively. For three years
following the date of grant, up to one-third of the restricted shares
granted to each individual in 1996 (the "Maximum Eligible Shares") will
become eligible for vesting at the end of each year following the grant of
such shares depending upon the degree to which certain specified performance
goals are met. Any restricted shares out of the Maximum Eligible Shares that
do not become eligible for vesting because the performance goals for such
year were not fully met will lapse. Restricted shares that become eligible
for vesting will fully vest upon completion by the individual of three years
of continuous employment from the date the restricted shares were granted
(the "Required Employment Period"). If the individual's employment is
terminated by the Company without cause or he involuntarily resigns prior to
completing the Required Employment Period, restricted shares held by him
that have become eligible for vesting will vest.
(3) The Company paid life and disability insurance premiums on behalf of Mr.
Reid in the amounts of $41,750 in 1996 and $16,925 in 1995 and made
contributions to his 401(k) and Executive Retirement Plans totaling $14,250
in 1996 and $1,875 in 1995. The Company paid life and disability insurance
premiums on behalf of Mr. Klatt in the amounts of $7,800 in 1996, $7,000 in
1995, and $6,200 in 1994, and made contributions to his 401(k) and Executive
Retirement Plans in 1996 only totaling $8,100. The Company paid life and
disability insurance premiums on behalf of Mr. Mathieson in the amounts of
$4,400 in 1996, $4,300 in 1995 and $4,200 in 1994 and made contributions to
his 401(k) Plan in 1996 and 1995 only totaling $6,000 and $500,
respectively.
(4) Effective July 27, 1995.
(5) Commenced employment in March 1994.
(6) Excludes foreign service payments of $50,000 and $8,300 in 1996 and 1995,
respectively.
6
<PAGE> 9
OPTION GRANTS
The following table sets forth certain information with respect to stock
options granted to the Named Executives during 1996 under the Company's 1995
Incentive Stock Plan.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(2)
----------------------------------------------------- -----------------------
PERCENT OF TOTAL
OPTIONS GRANTED
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION
NAME GRANTED(1) IN YEAR PRICE DATE 5% 10%
---- ---------- ---------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
William P. Reid.................. 40,000 30% $6.50 12/16/03 $105,800 $246,700
Roger J. Klatt................... 16,000 12% $6.50 12/16/03 $ 42,300 $ 98,700
Michael C. Mathieson............. 6,000 4% $6.50 12/16/03 $ 15,900 $ 37,000
</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 Securities and Exchange
Commission (the "Commission") method of calculation of 5% and 10%
appreciation in value from the date of grant to the end of the option term.
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 exercised
and unexercised options to purchase shares of common stock for each of the Named
Executives held by them at December 31, 1996. Of the Named Executives, only Mr.
Mathieson exercised any stock options during 1996.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1996 DECEMBER 31, 1996(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William P. Reid............... -- -- 85,417 192,083 $104,400 $192,700
Roger J. Klatt................ -- -- 23,760 56,750 11,000 26,700
Michael C. Mathieson.......... 5,375 $14,674 40,791 20,584 1,400 15,900
</TABLE>
- ---------------
(1) Represents the difference between the closing price for the common stock on
the New York Stock Exchange on December 31, 1996 ($6.625 per share) and any
lesser exercise price.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the board of directors has furnished the
following report on executive compensation for 1996. The 1996 compensation
package 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. Mr. Reid's initial
compensation package, under which he was paid through July 1996 at the annual
rate of $275,000, was contractually established prior to the merger of the
Company and SLT and subsequently approved by the Company's board of directors
without change. During 1996, the board approved a base pay increase to $325,000
upon recommendation of the compensation committee, based upon a comprehensive
salary survey conducted by an independent consulting firm.
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, pay increases for executive
officers were authorized by the compensation committee during 1996.
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 1996,
bonuses were based solely upon objective criteria. On this basis, the following
bonuses have been paid to senior executives in respect of 1996: Mr.
Reid--$195,000; Mr. Klatt -- $85,000; and Mr. Mathieson -- $25,000.
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 has sought to encourage such
value building for stockholders through the annual award of nonqualified stock
options to senior executives. Options were awarded to the Named Executives
during 1996, as follows: Mr. Reid -- 40,000; Mr. Klatt -- 16,000; and Mr.
Mathieson -- 6,000.
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 align directly the economic interests of professional
managers with those of the Company's stockholders. Pursuant to applicable rules
of the 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 9,103,656 shares, or 52.4%, of the Company's
outstanding common stock as of December 31, 1996.
The Compensation Committee
T. William Porter
Samir T. Badawi
Brian D. Young
8
<PAGE> 11
CERTAIN TRANSACTIONS
On January 23, 1997, the Company purchased 2,071,656 shares of common stock
of the Company from Odyssey for a purchase price of $7.00 per share, which was
the low price of the stock on the New York Stock Exchange on the date the board
of directors agreed to offer to purchase the shares. The closing price of the
stock on that date was $7.375. The closing price of the stock on January 23,
1997 was $8.625 per share. Brian Young is a former general partner of Odyssey
and may have been deemed to own beneficially the purchased shares. Mr. Young did
not participate in any Company deliberations regarding the purchase.
COMMON STOCK PERFORMANCE GRAPH
The following graph illustrates the yearly percentage change in the
cumulative total stockholder return on the Company's common stock, compared with
the cumulative total return on (i) the Standard & Poor's 500 Stock Index ("S&P
500") and (ii) the Smith Barney Solid Waste Pollution Control Index ("Solid
Waste"), for the five years ended December 31, 1996:
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P 500 SOLID WASTE COMPANY
<S> <C> <C> <C>
12/31/91 100 100 100
12/31/92 108 99 63
12/31/93 119 74 51
12/31/94 120 77 37
12/31/95 165 88 39
12/31/96 203 114 46
</TABLE>
In all cases, the cumulative total return assumes, as contemplated by
Commission rules, that any cash dividends on the common stock of each entity
included in the data presented above were reinvested in that security.
AUDITORS
Ernst & Young is the independent auditor of the Company. While management
anticipates that this relationship will continue to be maintained during 1997,
no formal action is proposed to be taken at the annual meeting with respect to
the continued employment of Ernst & Young inasmuch as no such action is legally
required. Representatives of Ernst & Young 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.
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 that the committee or the auditors
may wish to discuss. In
9
<PAGE> 12
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 Commission that 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."
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, 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. With respect to the year
ended December 31, 1996, the Company believes that all filing requirements
applicable to the Company's executive officers, directors and 10% shareholders
have been met.
OTHER MATTERS
The annual report to stockholders covering the year ended December 31, 1996
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 1998 annual
meeting of stockholders is required to submit such proposal to the Company on or
before December 1, 1997.
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.
The persons designated as 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
10
<PAGE> 13
GUNDLE/SLT ENVIRONMENTAL, INC.
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE
ANNUAL MEETING OF MAY 1, 1997
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 Wyndham Hotel at Greenspoint,
12400 Greenspoint Drive, Houston, Texas 77060, on Thursday, May 1, 1997, 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 undersigned 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.
(PLEASE SIGN ON REVERSE SIDE)
o FOLD AND DETACH HERE o
<PAGE> 14
<TABLE>
<S> <C> <C> <C>
___ ___
(CONTINUED FROM OTHER SIDE) Please mark | |
your votes as | X |
indicated in | |
this example |__ __|
1. Election of Directors Samir T. Badawi, James R. Burke, Ahmed Y. Khalawi, T. William Porter, William P. Reid,
Hugh L. Rice and Brian D. Young
FOR all WITHHOLD
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
[ ] [ ]
2. In their discretion, upon such other matters as
may properly come before the meeting; hereby
revoking any proxy or proxies heretofore given
by the undersigned.
The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting of Stockholders and Proxy
Statement furnished herewith.
Dated ______________________________________, 1997
__________________________________________________
Stockholder's Signature
__________________________________________________
Stockholder's 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
