[LOGO]
GUNDLE/SLT ENVIRONMENTAL, INC.
19103 GUNDLE ROAD
HOUSTON, TEXAS 77073
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, MAY 6, 1999
10:00 A.M.
WYNDHAM HOTEL AT GREENSPOINT
12400 GREENSPOINT DRIVE
HOUSTON, TEXAS 77060
---------------------
Dear Stockholder:
You are invited to the Annual Meeting of Stockholders of Gundle/SLT
Environmental, Inc. We will hold the meeting at the time and place noted above.
At the meeting, we will ask you to:
o re-elect seven directors: Samir T. Badawi, James R. Burke, Ahmed Y.
Khalawi, T. William Porter, Hugh L. Rice, Edward T. Sheehan, and
Brian D. Young, each for a term of one year
o vote on any other business properly before the meeting
MANAGEMENT RECOMMENDS A VOTE FOR ALL DIRECTORS STANDING FOR RE-ELECTION.
Your vote is important. To be sure your vote counts and assure a quorum,
please vote, sign, date, and return the enclosed proxy card whether or not you
plan to attend the meeting.
By order of the Board of
Directors
C. WAYNE CASE
SECRETARY
March 31, 1999
<PAGE>
I. INFORMATION ABOUT VOTING
Solicitation of Proxies. The Board of Directors of Gundle/SLT
Environmental, Inc. ("GSE") is soliciting proxies for use at the 1999 Annual
Meeting of GSE and any adjournments of that meeting. GSE first sent this proxy
statement, the accompanying form of proxy, and the GSE Annual Report for 1998 on
March 31, 1999.
AGENDA ITEMS. The agenda for the Annual Meeting is to:
1. Re-elect seven directors
2. Conduct other business properly before the meeting
WHO CAN VOTE. You can vote at the Annual Meeting if you are a holder of
GSE's common stock, ("Common Stock") on the record date. The record date is
the close of business on March 12, 1999. You will have one vote for each share
of Common Stock. As of March 12, 1999, there were 13,021,365 shares of Common
Stock outstanding and entitled to vote.
HOW TO VOTE. You may vote in two ways:
o You can come to the Annual Meeting and cast your vote there.
o You can vote by signing and returning the enclosed proxy card. If
you do, the individuals named on the card will vote your shares in
the way you indicate.
USE OF PROXIES. Unless you tell us on the proxy card to vote differently,
we plan to vote signed and returned proxies FOR the Board nominees for director.
We do not now know of any other matters to come before the Annual Meeting. If
they do, proxy holders will vote the proxies according to their best judgment.
REVOKING A PROXY. You may revoke your proxy at any time before it is
exercised. You can revoke a proxy by:
o sending a written notice to the Secretary of GSE
o delivering a properly executed, later-dated proxy
o attending the Annual Meeting and voting in person
THE QUORUM REQUIREMENT. We need a quorum of stockholders to hold a valid
Annual Meeting. A quorum will exist if the holders of at least a majority of the
outstanding Common Stock entitled to vote either attend the Annual Meeting in
person or are represented by proxy. Abstentions and broker non-votes are counted
as present for the purpose of establishing a quorum. A broker non-vote occurs
when a broker votes on some matters on the proxy card but not on others because
the broker does not have the authority to do so.
VOTE REQUIRED FOR ACTION. Directors are elected who receive the greatest
number of votes cast by stockholders present in person or by proxy at the
meeting. Other actions require the affirmative vote of the majority of the
holders of the outstanding Common Stock entitled to vote by attendance at the
Annual Meeting in person, or are represented by proxy. Abstentions and broker
non-votes have the effect of a no vote on matters other than director elections.
Votes are tabulated by ChaseMellon Shareholder Services, L.L.C., the transfer
agent and registrar for the common stock.
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<PAGE>
II. THE PROPOSALS TO BE VOTED ON
THE ELECTION OF DIRECTORS
GSE has one class of directors. The term for each director is one year. The
term for each director expires at the 2000 Annual Meeting.
III. BOARD OF DIRECTORS
NOMINEES FOR DIRECTOR
The nominees for director this year are: Samir T. Badawi, James R. Burke,
Ahmed Y. Khalawi, T. William Porter, Hugh L. Rice, Edward T. Sheehan, and Brian
D. Young.
The Board of Directors expects that all of the nominees will be able and
willing to serve as directors. If any nominee is not available, the proxies may
be voted for another person nominated by the current Board of Directors to fill
the vacancy, or the size of the board may be reduced. Information about the
nominees is contained in the next section of this proxy statement.
Samir T. Badawi was chairman of the board of SLT Environmental, Inc. prior
to its 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
managing partner of Ernst & Young LLP's professional practice in the Middle
East. On April 27, 1998, he became Acting President and CEO of the Company after
the resignation of William P. Reid from those positions.
James R. Burke has been an independent consultant since July 1998. Mr.
Burke was president of Products and Equipment Division of Weatherford Enterra,
Inc. from January 1996 until July 1998. He served as senior vice president of
Weatherford Enterra, Inc. from January 1992 until January 1996.
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.
Hugh L. Rice has been senior vice president of FMI Corporation, a
consulting firm that provides services to the construction industry related to
corporate stock valuation, business planning, and mergers and acquisitions, for
over six 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 of United Waste Systems, Inc. from December 1992 to August 1997, and
chief operating officer of United Waste Systems, Inc. from 1994 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. Mr. Young is also a director of Black Box
Corporation.
2
<PAGE>
IV. INFORMATION ABOUT THE BOARD OF DIRECTORS
MEETINGS
During 1998, the Board of Directors held five regular meetings. All
incumbent directors attended 100% of all of the meeting of the board, except Mr.
Khalawi who attended two meetings.
COMMITTEES
The Board has three standing committees: an Audit Committee, an Executive
Committee, and a Compensation Committee. The Audit Committee had two meetings in
1998, and the Compensation Committee had three meetings in 1998. Each director
attended 100% of all meetings of the committees on which he served during the
year.
AUDIT COMMITTEE
DUTIES:
o Review the effectiveness and adequacy of GSE's financial
organization and internal controls.
o Review the annual report, proxy and other financial
representations.
o Review the effectiveness and the scope of activities of the
independent accountants.
o Recommend the selection of independent public accountants.
o Review Federal Income Tax issues and related reserves.
Members: Mr. James R. Burke, Hugh L. Rice (Chair), and Edward T.
Sheehan -- all outside directors
COMPENSATION COMMITTEE
DUTIES:
o Formulate and adopt executive compensation, benefit and insurance
programs.
o Supervise the administration of all executive compensation and
benefit programs.
o Establish specific criteria against which all annual, performance
based benefits are measured.
o Establish the total compensation for the Chief Executive Officer.
Members: Samir T. Badawi, T. William Porter (Chair), and Brian D. Young
EXECUTIVE COMMITTEE
DUTIES:
o Acts in place of the Board when the full Board is not in session.
Members: Samir T. Badawi (Chair) and Brian D. Young
BOARD COMPENSATION AND RELATIONSHIPS
RETAINER AND FEES. We do not pay directors who are also officers of the
Company additional compensation for their service as directors. In 1998,
compensation for non-employee directors included the following:
o an annual retainer of $16,000 paid in quarterly installments
o $1,000 for each Board meeting
o $500 per committee meeting attended
o $500 for each meeting at which they preside
o Compensation paid to all non-employee directors during 1998 for
service in all Board capacities aggregated $148,500
OPTIONS. In May of each year, GSE grants each director an option to
purchase 2,000 shares of Common Stock. The exercise price equals the fair market
value of the shares at the date of grant. The options will have a 5-year life
and vest one year after the date of grant.
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<PAGE>
V. SECURITY OWNERSHIP OF GSE
DIRECTOR OWNERSHIP
The following table shows as of December 31, 1998, the number of shares of
Common Stock beneficially owned by each director and nominee. Each director
named in the summary table beneficially owns less than 1 percent of the Common
Stock, except Mr. Badawi. As a representative of Wembley Ltd., Mr. Badawi may be
deemed to own beneficially 4,657,143 shares owned by Wembley. He disclaims any
beneficial ownership in such shares beyond his proportionate ownership interest,
if any, in Wembley.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
DECEMBER 31, 1998
----------------------
DIRECTOR PERCENT
NAME POSITION AGE SINCE SHARES OF CLASS
- ---------------------------------------- --------------------------- --- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
Samir T. Badawi......................... Director, chairman, Acting 59 1995 4,673,643 35.5%
President and CEO
James R. Burke.......................... Director 61 1996 6,000 *
Ahmed Y. Khalawi........................ Director 62 1995 11,000 *
T. William Porter....................... Director 57 1988 16,000 *
Hugh L. Rice............................ Director 52 1990 16,000 *
Edward T. Sheehan....................... Director 56 1998 4,000 *
Brian D. Young.......................... Director 44 1986 6,000 *
All directors as a group................ 4,722,643 35.5%
</TABLE>
MANAGEMENT OWNERSHIP
The following table shows, as of December 31, 1998, the number of shares of
Common Stock beneficially owned by executive officers and the executive officers
as a group, excluding in each case for Mr. Badawi who is referenced above. Each
executive officer named in the table owns less than 1 percent of the Common
Stock, except for Roger J. Klatt.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP ON
DECEMBER 31, 1998
NAME COMMON STOCK OF GSE PERCENT
- ---------------------------------------- ----------------------- -------
<S> <C> <C>
Roger J. Klatt -- Executive Vice
President, treasurer, and chief
financial officer..................... 215,400 1.6%
Michael C. Mathieson.................... 107,825 *
Kurt Weber.............................. 17,500 *
All executive officers as a group....... 340,725 3.0%
</TABLE>
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<PAGE>
OTHER SECURITY OWNERSHIP
The following table shows the name and address of each person known to GSE
to own more than 5% of GSE's Common Stock as of December 31, 1998.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF PERCENT OF
BENEFICIAL OWNERS AMOUNT OWNED CLASS
- ------------------------------------- ------------ ------------
<S> <C> <C>
Wembley Ltd.......................... 4,657,143 35.4%
Columbus Centre Building
Road Town, Tortola
British Virgin Islands
Dimensional Fund Advisors, Inc(1).... 1,257,912 9.3%
1299 Ocean Avenue
Santa Monica, California 90401
Heartland Advisors, Inc.............. 793,700 6.0%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Grace & White........................ 1,664,614 12.7%
515 Madison Ave., Suite 1700
New York, NT 10022
</TABLE>
- ---------------
(1)Dimensional Fund Advisors, Inc., a registered investment advisor, is deemed
to have beneficial ownership of 1,257,912 shares of Common Stock of GSE as of
December 31, 1998, all of which shares are held in portfolios of DFFA Investment
Dimensions Group, Inc., a registered open-end investment company, or in series
of DFA Investment Trust Company, a Delaware business trust, or the DFA Group
Trust or 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.
VI. EXECUTIVE COMPENSATION
The following tables, charts, and narrative show all compensation awarded,
paid to or earned by the individuals who were chief executive officer at any
time during the period, and the other highly compensated executive officers at
December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION STOCK
NAME AND ------------------------------------------ RESTRICTED OPTION AWARDS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OTHER(2) STOCK(3) (SHARES) COMPENSATION(4)
- ------------------------------------- --------- --------- --------- -------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Samir T. Badawi...................... 1998 $ 205,769(1)$ 65,000 -0- -0- -0- $ 23,770
Acting CEO & President
Roger J. Klatt....................... 1998 $ 200,000 $ 50,000 -0- -0- 50,000 $ 18,285
Executive Vice President, 1997 $ 186,667 $ 30,000 -0- $146,250 35,000 $ 16,124
Treasurer, and Chief 1996 $ 175,000 $ 85,000 -0- $139,700 16,000 $ 15,900
Financial Officer
Michael C. Mathieson................. 1998 $ 160,000(5)$ 25,000 -0- -0- 17,500 $ 7,855
Vice President Marketing 1997 $ 150,000(5)$ 22,500 -0- $ 41,925 17,500 $ 9,755
and Business Development 1996 $ 150,000(5)$ 25,000 -0- $ 27,500 6,000 $ 10,400
Kurt Weber........................... 1998 $ 90,000(6)$ 11,600 -0- -0- 17,500 -0-
Managing Director, GSE
Lining Technology GmbH
William P. Reid...................... 1998 $ 113,333(7) -0- $138,203 -0- -0- $1,091,841
Ex-Director, President 1997 $ 325,000 $ 75,000 -0- $435,500 75,000 $ 62,564
and CEO 1996 $ 295,833 $ 195,000 -0- $407,000 40,000 $ 56,000
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
5
<PAGE>
- ---------------
(1)On April 27, 1998, Mr. Badawi assumed the positions of Acting President and
CEO of the Company after the resignation of William P. Reid. He continues to
hold the position of chairman of the Board of Directors.
(2)Because the value of any additional benefits did not exceed 10% of annual
compensation to any individual, amounts are omitted, except for Mr. Reid who
received $138,203 towards his income tax associated with vesting of his
restricted stock as provided for by the plan.
(3) The value of restricted shares stated in this column is based on the closing
price on the date of grant. No shares of restricted stock were awarded in 1998
under the Company's 1995 Incentive Stock Plan. At the end of 1998, the aggregate
restricted stock holdings eligible for vesting consisted of 66,376 shares worth
$266,504 at the then current market value of $4.00 (the closing price of the
Company's Common Stock on December 31, 1998, without giving effect to the
diminution of value attributable to the restriction on such stock. Such amounts
includes $107,268 for Mr. Klatt (26,817 shares); and $25,428 for Mr. Mathieson
(6,357 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 1998, 34,941
shares in the 1996 Plan vested. For the 1997 Plan, 30% of the Maximum Eligible
Shares became eligible for vesting in 1997 and 1998. Restricted shares that
became 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 by involuntary resignation prior to
completing the Required Employment Period, the restricted shares that have
become eligible for vesting will vest. The company is required to grant a cash
bonus to each individual restricted share 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 cash bonus is to compensate for the resulting income taxes.
(4)The Company paid life and disability insurance premiums for 1998, 1997, and
1996 for Mr. Reid in the amounts of $36,733, $42,149, and $41,750 respectively;
Mr. Klatt in the amounts of $9,805, $8,227, and $7,800; Mr. Mathieson in the
amounts of $5,055, $4,945 and $4,400. The Company also made contributions to
401(k) and Executive Retirement Plans for 1998, 1997, and 1996 for Mr. Reid in
the amounts of $7,533; $21,633, and $14,250; for Mr. Klatt in the amounts of
$9,200, $10,867, and $8,100; for Mr. Mathieson in the amounts of $2,800, $6,250
and $6,000; and for Mr. Badawi in the amounts of $2,000, 0 and 0. The Company
paid for housing for Mr. Badawi in the amount of $20,245. Mr. Reid received the
sum of $1,047,575 under the terms and conditions of his March 10, 1997
employment security agreement.
(5)Excludes foreign service payments of $37,500, $50,000 and $50,000 in 1998,
1997 and 1996.
(6)Effective June 1998.
(7)Mr. Reid resigned his positions as President and Chief Executive Officer of
the Company on April 27, 1998.
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<PAGE>
OPTIONS GRANTED IN 1998
The table below shows information on grants of stock options in 1998. GSE
made these grants under the Company's 1995 Incentive Stock Plan to the officers
named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZED
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------- ANNUAL RATE OF STOCK
% OF TOTAL PRICE APPRECIATION
OPTION GRANTED FOR OPTION TERM(2)
OPTION TO EMPLOYEE EXERCISE EXPIRATION ---------------------
NAME GRANT(1) IN YEAR PRICE DATE 5% 10%
- ------------------------------------- -------- --------------- --------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Roger J. Klatt....................... 50,000 18% $4.00 12/16/05 $ 81,400 $ 189,700
Michael C. Mathieson................. 17,500 6% $4.00 12/16/05 $ 28,500 $ 66,400
Kurt Weber........................... 17,500 6% $4.00 12/16/05 $ 28,500 $ 66,400
William P. Reid...................... -0- -0- -0- -0- -0- -0-
Samir T. Badawi...................... -0- -0- -0- -0- -0- -0-
</TABLE>
- ---------------
(1)If a "change of control" event were to occur prior to exercise or expiration
of the option, the entire option would automatically be converted to 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 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 contains information with respect to the exercised and
unexercised options to purchase shares of Common Stock for each of the
executives held by them at December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED
AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1998 DECEMBER 31, 1998 (1)
ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------- ------------ ---------- ------------ -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Samir T. Badawi...................... -0- -0- 5,666 5,334 -0- -0-
Roger J. Klatt....................... -0- -0- 87,666 77,804 -0- -0-
Michael C. Mathieson................. -0- -0- 49,916 29,584 -0- -0-
Kurt Weber........................... -0- -0- -0- 17,500 -0- -0-
William P. Reid...................... -0- -0- 352,500 -0- -0- -0-
</TABLE>
- ---------------
(1)Represents the difference between the closing price for common stock on the
New York Stock Exchange on December 31, 1998 ($4.00 per share) and any lesser
exercise price.
7
<PAGE>
EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL ARRANGEMENTS
EMPLOYMENT SECURITY AGREEMENTS. Two executive officers of the Company have
the benefits of employment security agreements. Mr. Klatt, the Company's
Executive Vice President and Chief Financial Officer is employed under an
employment security agreement entered into on March 10, 1997, as amended on June
1, 1998. In general, in the event of Mr. Klatt's discharge without cause, or
resignation for good reason after a change in control, he is entitled to
benefits of:
o a lump sum payment, cash amount equal to the sum of 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
o three times the greater of (A) the maximum award he would have been
eligible to receive under the Bonus Plan in the year of
termination, (B) the largest award earned under the Bonus Plan in
any of the three years preceding the Termination Date, (C) 40% of
his base salary at the Termination Date, or (D) $100,000.
The agreement provides for severance protection benefits and change of
control benefits, including:
o the right of Mr. Klatt for a period of 12 months following the
appointment of a new president and chief executive officer to
determine his compatibility or ability to maintain (in his sole
discretion) a good working relationship with the new president and
chief executive office (excluding Mr. Badawi).
In general, in the event that this latter employment security provision is
exercised by Mr. Klatt, he is entitled to benefits of:
o a lump sum, cash amount equal to the sum of one and one-half times
the highest annual rate of base salary in effect during the current
year or any of the two years preceding the Termination Date, and
o one and one-half times the greater of (A) the largest award earned
under the Bonus Plan in any of the three years preceding the
Termination Date or (B) the target award he would have been
entitled to receive under the Bonus Plan in the current year
regardless of any limitation otherwise applicable to the Bonus
Plan.
The term of the agreement expires on December 31, 2000, and will be
automatically extended on each December 31st for a one-year period from such
date unless the Company gives notice of termination pursuant to the Agreement.
Mr. Weber, the Company's Managing Director of GSE Lining Technology GmbH in
Germany, is employed under an agreement of employment entered into April 1,
1998. The agreement provides in general for:
o a minimum annual base compensation of DM265,000;
o an annual bonus;
o contributions towards Mr. Weber's private health insurance and a
company car, and
o termination and severance benefits. In the event that Mr. Weber is
discharged, he is entitled to nine month's of prior notice of
termination.
8
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
GOALS. GSE's executive compensation program is designed to align total
compensation with shareholder interests. The program:
o incents and awards executives for sound business management and
improvement in shareholder value
o balances its components so that both short and longer-term
operating and strategic objectives are recognized
o attracts, motivates, and retains executives necessary for the
long-term success of GSE
The program consists of three different compensation components: base
salary; variable cash bonuses; and long-term incentive awards (stock options).
BASE SALARY. GSE uses external surveys to set competitive compensation
levels (salary ranges) for its executives. Salary ranges for GSE executives are
established based on similar positions in other comparably situated companies of
comparable size and complexity. In the course of considering annual executive
salary increases, appropriate consideration is given to the credentials and
experience of the individual senior executives. 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, the compensation committee authorized pay
increases for executive officers for 1998.
During 1998, the Board approved a $300,000 base salary for Mr. Badawi while
serving as acting president and chief executive officer. The base salary was
based on recommendations of the committee without Mr. Badawi's participation.
The Company compensates Mr. Badawi further by paying for housing and a leased
vehicle.
ANNUAL BONUSES. GSE's 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. Bonuses for achieving higher levels
of performance are directly related to the level achieved. While 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 1998, bonuses were based
upon a combination of objective and subjective criteria with the following
bonuses paid to senior officers:
o Mr. Badawi -- $65,000
o Mr. Klatt -- $50,000
o Mr. Mathieson -- $25,000
o Mr. Weber -- $11,600 (DM20,000)
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<PAGE>
STOCK OPTION AWARDS. This plan is designed to link closely the long-term
reward of executives with increases in stockholder value. For several years, the
Company has sought to encourage such value building for stockholders through the
annual reward of nonqualified stock options to senior executives. Options were
awarded to the following named executives in 1998:
o Mr. Klatt -- 50,000
o Mr. Mathieson -- 17,500
o Mr. Weber -- 17,500
The compensation committee intends, with the concurrence of the board, to
continue to consider alternate forms of stock-based incentives. The committee
will focus on affording senior executives the maximum possible long-term
performance based benefits at the least possible cost to the Company.
The following members of the Compensation Committee have furnished the
preceding report:
T. William Porter
Samir T. Badawi
Brian D. Young
10
<PAGE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
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 and Poor's 500 Stock Index
("S&P 500") for the five years ended December 31, 1998, and (ii) the Salomon
Smith Barney-Solid Waste Pollution Control Index ("Solid Waste") for the four
years ended December 31, 1997, as this index has been discontinued by Salomon
Smith Barney as of 1998. The Company has selected the Manufacturing Diversified
Index total return for the five years ended December 31, 1998.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
- --------------------------------------------------------------------------------
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- --------------------------------------------------------------------------------
S&P 100 101 139 171 229 294
- --------------------------------------------------------------------------------
Solid Waste 100 101 113 125 138 --
- --------------------------------------------------------------------------------
Manufacturing
Diversified 100 104 146 201 239 277
- --------------------------------------------------------------------------------
Company 100 71 75 90 71 54
- --------------------------------------------------------------------------------
In all cases, the cumulative total return assumes, as contemplated by 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.
VII. OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Act requires the Company's executive
officers and directors who own more than 10% of the Company's Common Stock to
file reports of ownership and change of ownership with the Commission. GSE
believes that all Section 16(a) reporting requirements were fully met during the
1998-reporting year.
PROPOSALS FOR THE 2000 ANNUAL MEETING
Stockholders may make proposals to be considered at the 2000 Annual
Meeting. To be included in the proxy statement and form of proxy for the 2000
Annual Meeting, stockholder proposals for the 2000
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<PAGE>
Annual Meeting must be received not later than December 2, 1999, at GSE's
principle executive offices, 19103 Gundle Road, Houston, Texas 77073.
INDEPENDENT ACCOUNTANTS
The firm of Ernst & Young LLP served as the Company's independent auditors
for 1998. This firm has advised the Company that it has no direct or indirect
financial interest in the Company. Representatives of Ernst & Young LLP are
expected to attend the Annual Meeting, with the opportunity to respond to
appropriate questions from the stockholders. They will have the opportunity to
make a statement, although it is not expected that any statement will be made.
EXPENSES RELATING TO PROXY SOLICITATION
GSE will pay all expenses relating to this proxy solicitation. In addition
to this solicitation by mail, GSE officers, directors, and employees may solicit
proxies by telephone or personal call without extra compensation for that
activity.
By Order of
the Board
of
Directors
C. Wayne Case
SECRETARY
12
<PAGE>
GUNDLE/SLT ENVIRONMENTAL, INC.
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE
MAY 6, 1999 ANNUAL MEETING
The undersigned stockholder of Gundle/SLT Environmental, Inc. (the
"Company") hereby appoints Samir T. Badawi 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 6, 1999, at
10:00 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.
1. Election of Directors: Samir T. Badawi, James R. Burke, Ahmed Y.
Khalawi, T. William Porter, Hugh L. Rice,
Edward T. Sheehan and Brian D. Young
[ ] FOR all nominees listed to the right
(except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all
nominees listed to the right
Instruction: To withhold authority to vote
for any individual nominee,
write that nominee's name on
the line provided below:
----------------------------------------------------------------
(PLEASE SIGN ON REVERSE SIDE)
(CONTINUED FROM OTHER SIDE)
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 _____________________ , 1999
___________________________________
Stockholder's Signature
___________________________________
Stockholder's Signature
Signature should agree with printed
name. If Common 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.
