<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:
-------------------------------------------------------------------
[ ] 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 7, 1998
---------------------
Notice is hereby given that the annual meeting of the stockholders of
Gundle/SLT Environmental, Inc. (the "Company") will be held at the Hotel
Sofitel -- Houston, 425 North Sam Houston Parkway East, Houston, Texas 77060, on
Thursday, May 7, 1998, at 11:00 a.m., Houston Time, for the following purposes:
1. To elect a board of eight 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 13, 1998, 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 29, 1998, 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/ C. WAYNE CASE
C. WAYNE CASE,
Secretary
April 1, 1998
<PAGE> 3
GUNDLE/SLT ENVIRONMENTAL, INC.
19103 GUNDLE ROAD
HOUSTON, TEXAS 77073
PROXY STATEMENT
This Proxy Statement is furnished by the board of directors of Gundle/SLT
Environmental, Inc. (the "Company") in connection with the solicitation of
proxies being mailed to stockholders commencing on or about April 1, 1998 for
use at the annual meeting of stockholders to be held in Houston, Texas on May 7,
1998, and any adjournment thereof. Proxies properly signed and returned on time
will be voted at the meeting in accordance with the directions noted on the
proxy. Proxies marked as abstaining on any matter to be acted on by the
stockholders will be treated as present at the annual meeting for the purpose of
determining a quorum, but will not be counted as votes cast on such matters. If
no direction is indicated, they will be voted for the election of the nominees
named in this proxy statement as directors, and on other matters presented for a
vote in accordance with the judgment of the persons acting under the proxies.
Any stockholder giving a proxy has the power to revoke it at any time before it
is voted, either in person at the meeting, by written notice to the secretary of
the Company, or by delivery of a later-dated proxy.
As of March 13, 1998, the record date for the determination of stockholders
entitled to vote at the annual meeting, there were 13,294,880 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, eight 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,
except Edward T. Sheehan, who was elected by the directors in March 1998 to fill
a vacancy created by the expansion of the board of directors. 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, 1997(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 58 1995 4,669,643 35.1%
James R. Burke(4)......... Director 60 1996 4,000 *
Ahmed Y. Khalawi.......... Director 61 1995 9,000 *
T. William Porter(5)...... Director 56 1988 21,500 *
William P. Reid(6)........ Director, president and chief
executive officer 48 1995 502,000 3.8%
Hugh L. Rice(4)........... Director 51 1990 14,000 *
Edward T. Sheehan......... Director 55 1998 -- *
Brian D. Young(5)(6)...... Director 43 1986 4,000 *
</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 -- 9,000; Mr. Burke -- 4,000; Mr. Khalawi -- 9,000; Mr.
Porter -- 16,500; Mr. Reid -- 352,500; Mr. Rice -- 14,000; and Mr.
Young -- 4,000.
(3) As a representative of Wembley, Ltd. ("Wembley"), Mr. Badawi may be deemed
to own beneficially the 4,657,143 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.
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. and Metals USA, 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.
Edward T. Sheehan has served as chairman of the board and chief executive
officer of United Road Services, Inc. since October 1997. Mr. Sheehan was
president and chief operating officer of United Waste Systems, Inc. from
December 1992 to August 1997, when the company was sold to U.S.A. Waste
Services, Inc. He was senior vice president and chief financial officer of Clean
Harbors, Inc., a publicly held environmental services company, from September
1990 to April 1992. From 1966 to 1990 Mr. Sheehan held several financial and
operating positions with General Electric.
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 Partners, L.P. 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 1997, the board of directors convened on five regularly scheduled
occasions. Committees of the board held meetings as follows: audit
committee -- three meetings, and compensation committee -- two meetings. Each
director attended 100% of all meetings of the board and all committees on which
he served during the year, except for Mr. Khalawi who attended three 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 1997 for service in all board
capacities aggregated $138,000.
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 59, has served as senior vice president, 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 50, 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, 1997, 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 OF
OR IDENTITY OF GROUP SHARES(1) CLASS
-------------------- --------- ----------
<S> <C> <C>
Samir T. Badawi(2).......................................... 4,669,643 35.1%
James R. Burke.............................................. 4,000 *
Ahmed Y. Khalawi............................................ 9,000 *
T. William Porter........................................... 21,500 *
William P. Reid............................................. 502,000 3.8%
Hugh L. Rice................................................ 14,000 *
Edward T. Sheehan........................................... -- *
Brian D. Young.............................................. 4,000 *
Roger J. Klatt.............................................. 164,400 1.2%
Michael C. Mathieson........................................ 90,325 *
All directors and executive officers as a group (10
persons).................................................. 5,478,868(3) 41.2%
</TABLE>
3
<PAGE> 6
- ---------------
* Less than 1% of outstanding shares.
(1) Includes shares underlying outstanding stock options, as follows: Mr.
Badawi -- 9,000; Mr. Burke -- 4,000; Mr. Khalawi -- 9,000; Mr.
Porter -- 16,500; Mr. Reid -- 352,500; Mr. Rice -- 14,000; Mr.
Young -- 4,000; Mr. Klatt -- 115,500; and Mr. Mathieson -- 78,875.
(2) Mr. Badawi -- as representative of Wembley, may be deemed to own
beneficially 4,657,143 owned by Wembley. He disclaims any beneficial
ownership in such shares beyond his proportionate ownership interest, if
any, in Wembley.
(3) Includes (without duplication) all shares referred to in notes 1 and 2
above.
EMPLOYMENT AGREEMENT
Mr. Reid, The Company's President and Chief Executive Officer, is employed
under an employment agreement entered into on March 10, 1997, that supersedes
the previous employment agreement dated October 13, 1989 (as amended). The
agreement provides for: (i) a minimum annual base compensation of $325,000, (ii)
participation in annual bonus and LTIP plans generally available to executives
of the Company, (iii) termination and severance protection benefits, and (iv)
change of control protection benefits. In general, in the event of Mr. Reid's
discharge without cause, or resignation for good reason, whether before or after
a change in control, he is entitled to benefits of a lump sum, cash amount equal
to the sum of: (i) three times the highest annual rate of base salary in effect
during the current year or any of the three years preceding the Termination Date
and (ii) three times the greater of (A) the maximum award he would have been
eligible to receive under the Bonus Plan in respect to the current year, or (B)
the largest award earned under the Bonus Plan in respect of any of the three
years preceding the Termination Date , or (C) 50% of the base salary at the
Termination Date, or (D) $100,000. The term of the agreement expires on December
31, 2000, and will be automatically extended on each December 1st for a one year
period from such date unless the Company gives notice of termination pursuant to
the agreement.
Mr. Klatt, the Company's Senior Vice President and Chief Financial Officer,
is employed under an employment agreement entered into on March 10, 1997, that
supersedes the previous letter agreement dated February 11, 1994. The agreement
provides for: (i) a minimum annual base compensation of $180,000, (ii)
participation in annual bonus and LTIP plans generally available to executives
of the Company, (iii) termination and severance protection benefits, and (iv)
change of control protection benefits. In general, in the event of Mr. Klatt's
discharge without cause, or resignation for good reason, whether before or after
a change in control, he is entitled to benefits of a lump sum, cash amount equal
to the sum of: (i) three times the highest rate of base salary in effect during
the current year or any of the three years preceding the Termination Date and
(ii) three times the greater of (A) the maximum award he would have been
eligible to receive under the Bonus Plan in respect of the current year, or (B)
the largest award earned under the Bonus Plan in respect of any of the three
years preceding the Termination Date, (C) 40% of the base salary at the
Termination Date, or (D) $100,000. The term of the agreement expires on December
31, 2000, and will be automatically extended on each December 1st for a one year
period from such date unless the Company gives notice of termination pursuant to
the agreement.
VOTE REQUIRED FOR ELECTION
The eight 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, 1997, 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................................................ 4,657,143 35.0%
Columbus Centre Building
Road Town, Tortola
British Virgin Islands
The TCW Group, Inc.......................................... 767,600 5.8%
865 S. Figueroa Avenue
Los Angeles, California 90017
Dimensional Fund Advisors, Inc.............................. 1,257,912(1) 9.5%
1299 Ocean Avenue
Santa Monica, California 90401
</TABLE>
- ---------------
(1) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 1,257,912 shares of the
Company's outstanding common stock as of December 31, 1997, all of which
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 DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all such
shares.
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, 1997 (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.............. 1997 $325,000 $ 75,000 -- $435,500 75,000 $62,564
President and chief 1996 $295,833 $195,000 -- $407,000 40,000 $56,000
executive officer(4) 1995 $104,500 $110,000 -- -- 237,500 $18,800
Roger J. Klatt............... 1997 $186,667 $ 30,000 -- $146,250 35,000 $16,124
Senior vice president, 1996 $175,000 $ 85,000 -- $139,700 16,000 $15,900
treasurer and chief 1995 $165,000 $ 43,000 -- -- 19,500 $ 7,000
financial officer
Michael C. Mathieson......... 1997 $150,000(5) $ 22,500 -- $ 41,925 17,500 $ 9,755
Managing director-GSE 1996 $150,000(5) $ 25,000 -- $ 27,500 6,000 $10,400
Lining Technology GmbH 1995 $142,000(5) $ 7,500 -- -- 2,500 $ 4,800
</TABLE>
- ---------------
(1) Because the value of any additional benefits did not exceed 10% of annual
compensation for any individual, amounts are omitted.
(2) The values of restricted shares stated in this column are based on the
closing price on the date of grant. A total of 138,840 shares of restricted
stock were awarded at the beginning of 1997 under the Company's
5
<PAGE> 8
1995 Incentive Stock Plan. At the end of 1997, the aggregate restricted
stock holdings eligible for vesting consisted of 199,211 shares worth
$1,045,858 at the then current market value of $5.25 (as represented by the
closing price of the Company's Common Stock on December 31, 1997), without
giving effect to the diminution of value attributable to the restriction on
such stock. Such amount includes $567,525 for Mr. Reid (108,100 shares);
$192,796 for Mr. Klatt (36,723 shares); and $46,086 for Mr. Mathieson (8,778
shares).
For each of the three years following the date of grant, up to one-third of
the restricted shares granted to each individual in 1997 and 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.
At the end of the years 1996 and 1997, 100% and 30% of the Maximum Eligible
Shares, respectively, became eligible for vesting. 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 ("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.
The Company is required to grant a cash bonus to each individual restricted
stock stockholder, payable promptly after the date on which the holder is
required to recognize ordinary compensation income for federal income tax
purposes in connection with the grant. The amount of the cash bonus is to
compensate for the resulting income taxes.
(3) The Company paid life and disability insurance premiums for 1997, 1996 and
1995 for; Mr. Reid in the amounts of $42,149, $41,750 and $16,925
respectively; Mr. Klatt in the amounts of $8,227, $7,800 and $7,000
respectively; and Mr. Mathieson in the amounts of $4,945, $4,400, and $4,300
respectively. The Company also made contributions to 401(k) and Executive
Retirement Plans for 1997, 1996 and 1995; for Mr. Reid in the amounts of
$21,633, $14,250 and $1,875 respectively; for Mr. Klatt in the amounts of
$10,867, $8,100 and none, respectively; and for Mr. Mathieson in the amounts
of $6,250, $6,000 and $500, respectively.
(4) Effective July 27, 1995.
(5) Excludes foreign service payments of $50,000, $50,000 and $8,300 in 1997,
1996 and 1995, respectively.
OPTION GRANTS
The following table sets forth certain information with respect to stock
options granted to the Named Executives during 1997 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.................. 75,000 25% $5.25 12/16/04 $160,300 $373,600
Roger J. Klatt................... 35,000 12% $5.25 12/16/04 $ 74,800 $174,300
Michael C. Mathieson............. 17,500 6% $5.25 12/16/04 $ 37,400 $ 83,200
</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.
6
<PAGE> 9
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, 1997.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1997 DECEMBER 31, 1997(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William P. Reid................ -- -- 190,834 161,666 $ -0- $ -0-
Roger J. Klatt................. -- -- 51,833 63,667 -0- -0-
Michael C. Mathieson........... -- -- 40,665 28,835 -0- -0-
</TABLE>
- ---------------
(1) Represents the difference between the closing price for the common stock on
the New York Stock Exchange on December 31, 1997 ($5.25 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 1997. The 1997 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.
During 1996, the board approved a base pay increase for Mr. Reid 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.
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 1997.
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 1997,
bonuses were based upon a combination of objective and subjective criteria. On
this basis, the following bonuses have been paid to senior executives in respect
of 1997: Mr. Reid -- $75,000; Mr. Klatt -- $30,000; and Mr.
Mathieson -- $22,500.
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 has sought to encourage such
value building for stockholders through the annual
7
<PAGE> 10
award of nonqualified stock options to senior executives. Options were awarded
to the Named Executives during 1997, as follows: Mr. Reid -- 75,000; Mr.
Klatt -- 35,000; and Mr. Mathieson -- 17,500.
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 4,695,143 shares, or 35.3%, of the Company's
outstanding common stock as of December 31, 1997.
The Compensation Committee
T. William Porter
Samir T. Badawi
Brian D. Young
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 Salomon Smith Barney Solid Waste Pollution Control Index
("Solid Waste"), for the five years ended December 31, 1997:
<TABLE>
<CAPTION>
Measurement Period SOLID
(Fiscal Year Covered) S&P 500 WASTE COMPANY
<S> <C> <C> <C>
12/31/92 100 100 100
12/31/93 107 72 82
12/31/94 105 73 58
12/31/95 141 82 62
12/31/96 170 90 74
12/31/97 223 99 58
</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.
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<PAGE> 11
AUDITORS
Ernst & Young is the independent auditor of the Company. While management
anticipates that this relationship will continue to be maintained during 1998,
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 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, 1997, the Company believes that all filing requirements
applicable to the Company's executive officers, directors and 10% stockholders
have been met.
OTHER MATTERS
The annual report to stockholders covering the year ended December 31,
1997, 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 or form of proxy relating to the Company's 1999 annual
meeting of stockholders is required to submit such proposal to the Company on or
before December 1, 1998.
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.
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<PAGE> 12
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/ C. WAYNE CASE
C. WAYNE CASE,
Secretary
10
<PAGE> 13
GUNDLE/SLT ENVIRONMENTAL, INC.
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE
ANNUAL MEETING OF MAY 7, 1998
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 Hotel Sofitel - Houston, 425
North Sam Houston Parkway East, Houston, Texas 77060, on Thursday, May 7,
1998, 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
(CONTINUED FROM OTHER SIDE)
<TABLE>
<S> <C>
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, Edward T. Sheehan and Brian D.
Young
</TABLE>
<TABLE>
<S> <C> <C>
FOR all WITHHOLD Instruction: To withhold authority to vote for any
nominees listed AUTHORITY individual nominee, write that nominee's name on the
to the right to vote for all nominees line provided below:
(except as marked listed to the right
to the contrary)
</TABLE>
<TABLE>
<S> <C> <C>
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 , 1998
--------------------------------------
-------------------------------------------
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
