<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Gundle/SLT Environmental,Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(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:
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(4) Date Filed:
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Notes:
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[GUNDLE/SLT LOGO]
GUNDLE/SLT ENVIRONMENTAL, INC.
19103 GUNDLE ROAD
HOUSTON, TEXAS 77073
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, MAY 4, 2000
11:00 A.M.
WYNDHAM HOTEL AT GREENSPOINT
12400 GREENSPOINT DRIVE
HOUSTON, TEXAS 77060
April 1, 2000
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:
. elect seven directors: Samir T. Badawi, James R. Burke, Bruce Cummings, James
R. Gibbs, Ahmed Y. Khalawi, T. William Porter and Edward T. Sheehan, each for
a term of one year
. vote on any other business properly before the meeting
MANAGEMENT RECOMMENDS A VOTE FOR ALL DIRECTORS STANDING FOR 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
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I. INFORMATION ABOUT VOTING
SOLICITATION OF PROXIES. The board of directors of Gundle/SLT Environmental,
Inc. ("GSE") is soliciting proxies for use at the 2000 annual stockholders
meeting of GSE and any adjournments of that meeting. A copy of the GSE Annual
Report for fiscal year 1999 is also being mailed to stockholders concurrently
with this proxy statement and accompanying form of proxy. It is anticipated
that the mailing to stockholders of this proxy statement and the enclosed proxy
card will commence on or about April 1, 2000.
AGENDA ITEMS. The agenda for the annual meeting is to:
1. Elect seven directors, nominated by the incumbent board of directors;
2. Conduct other business properly before the meeting.
WHO CAN VOTE. You can vote at the annual meeting only if you are a holder of
record of GSE's common stock on the record date. The record date is the close of
business on March 10, 2000. You will have one vote for each share of common
stock. As of March 10, 2000, there were 12,416,633 shares of common stock
outstanding and entitled to vote.
HOW TO VOTE. You may vote in two ways:
. You can come to the annual meeting and cast your vote there; or
. 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 that will 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:
. sending a written notice to the corporate secretary of GSE
. delivering a properly executed, later-dated proxy
. 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.
2
<PAGE>
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.
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 2001 annual stockholders meeting.
III. BOARD OF DIRECTORS
NOMINEES FOR DIRECTOR
The nominees for director this year are: Samir T. Badawi, James R. Burke, Bruce
Cummings, James R. Gibbs, Ahmed Y. Khalawi, T. William Porter and Edward T.
Sheehan. Each of the nominees, other than Messrs. Cummings and Gibbs has
previously been elected to the board by the stockholders.
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 the next section of this proxy statement.
Samir T. Badawi was chairman of the board of SLT Environmental, Inc. prior to
its merger with GSE in July 1995, and is president of Wembley Ltd. ("Wembley"),
GSE'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 May
7, 1999, he became president and chief executive officer of GSE.
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.
Bruce Cummings has been president of Elben L.L.C. since February 1999 a company
that provides corporate finance advisory work for client companies. Mr.
Cummings was managing director of Salomon Smith Barney from 1987 to February
1999. He was senior vice president of E. F. Hutton & Co., Inc. from 1984 to
1987.
3
<PAGE>
James R. Gibbs has been president and chief operating officer of Frontier Oil
Corporation since February 1987. He assumed the position of chief executive
officer in April 1992, and the additional position of chairman in April 1999.
Mr. Gibbs is a member of the board of directors of Smith International, Inc., an
advisory director of Frost National Bank, N.A., a director of Veritas DGC Inc.,
and Talon International.
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 a vice president
of 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 Metals USA, Inc.
Edward T. Sheehan has been a consultant since July 1999. He served as chairman
of the board and chief executive officer of United Road Services, Inc. from
October 1997 to June 1999. 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. 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 he held
several different financial management positions with the General Electric
Company.
IV. INFORMATION ABOUT THE BOARD OF DIRECTORS
MEETINGS
During 1999, the board of directors held five regular meetings. All incumbent
directors attended at least 75% of the meetings, 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 three meetings
in 1999, and the compensation committee had two meetings in 1999. Each director
attended 100% of the meetings of the committees on which he served during the
year, except Mr. Khalawi, who attended none.
AUDIT COMMITTEE
Duties:
. Review with the independent auditors and financial management the scope of the
proposed audit, audit procedures, and at the conclusion then review the audit,
comments or recommendations.
. Review with the independent auditors and accounting personnel, the adequacy
and effectiveness of the accounting and financial controls of GSE.
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. Elicit and review recommendations made by the independent auditors and the
financial and accounting personnel for the improvement of internal control
procedures or new or more detailed controls or procedures.
. Periodically review GSE's policy statements to determine management's
adherence to the Code of Conduct.
. Review the financial statements contained in the annual report to shareholders
with management and the independent auditors to determine that the independent
auditors are satisfied with the disclosure and content of the financial
statements to be presented to the shareholders.
. Provide sufficient opportunity for the independent auditors to meet with the
members of the audit committee without members of management present.
. Review accounting and financial personnel and succession planning within
those areas.
. Submit the minutes of all meetings of the audit committee to, or discuss the
matters discussed at each committee meeting with the board of directors.
. Investigate any matter brought to the audit committee's attention within the
scope of its duties with the power to retain outside counsel for this purpose
if, in its judgment, that is appropriate.
Members: Mr. James R. Burke (Chair), Hugh L. Rice , and Edward T. Sheehan all
outside directors. Following the annual meeting, at least one additional
outside director will be appointed to the audit committee, replacing Mr. Rice,
who is not standing for reelection.
COMPENSATION COMMITTEE
Duties:
. Formulate and adopt executive compensation, benefit and insurance programs.
. Supervise the administration of all executive compensation and benefit
programs.
. Establish specific criteria against which all annual, performance-based
benefits are measured.
. Establish the total compensation for the chief executive officer.
Members: Samir T. Badawi, Ahmed Y. Khalawi, Edward T. Sheehan (Chair), and Brian
D. Young. Following the annual meeting, at least one additional outside director
may be appointed to the compensation committee, replacing Mr. Young, who is not
standing for reelection.
5
<PAGE>
EXECUTIVE COMMITTEE
Duties:
. Acts in place of the board when the full board is not in session.
Members: Samir T. Badawi (Chair), T. William Porter, and Brian D. Young. Mr.
Young is not standing for reelection and at least one additional director may be
appointed to the executive committee following the annual meeting.
BOARD COMPENSATION AND RELATIONSHIPS
RETAINER AND FEES. We do not pay directors who are also officers of GSE
additional compensation for their service as directors. In 1999, compensation
for non-employee directors included the following:
. an annual retainer of $16,000 paid in quarterly installments
. $1,000 for each board meeting attended
. $500 per committee meeting attended
. $500 for each meeting at which they preside
. Compensation paid to all non-employee directors during 1999 for service in
all board capacities aggregated $130,000.
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 have a 5-year life and vest one
year after the date of grant.
V. SECURITY OWNERSHIP OF GSE
DIRECTOR OWNERSHIP
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The following table shows as of December 31, 1999, 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, Mr. Badawi may be
deemed to own beneficially 4,557,143 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, 1999(1)
DIRECTOR PERCENT
NAME POSITION AGE SINCE SHARES(2) OF CLASS
- --------------- ------------------- --------- ------- --------- --------
<S> <C> <C> <C> <C> <C>
Samir T. Badawi Director, chairman, 60 1995 4,743,643 37.2%
president and chief
executive officer
James R. Burke Director 62 1996 8,000 *
Bruce Cummings Director 60 Nominee -0- *
James R. Gibbs Director 54 Nominee -0- *
Ahmed Y. Khalawi Director 63 1995 38,000 *
T. William Porter Director 58 1988 18,000 *
Edward T. Sheehan Director 57 1998 6,000 *
All directors and nominees as a group 4,813,643 37.7%
</TABLE>
- --------
* Less than 1%
(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 156,000; Mr. Burke 8,000; Mr. Khalawi 13,000; Mr. Porter 18,000; and
Mr. Sheehan 6,000.
MANAGEMENT OWNERSHIP
The following table shows, as of December 31, 1999, the number of shares of
common stock beneficially owned by executive officers and the executive officers
as a group, excluding in each case Mr. Badawi who is referenced above.
Beneficial Ownership on
December 31, 1999
Name Common Stock of GSE(1) Percent
- -------- ---------------------- -------
Roger J. Klatt-Executive vice president, 269,817 2.1%
treasurer, and chief financial officer
Kurt Weber-subsidiary officer 35,000 *
All executive officers as a group 304,817 2.4%
- --------
* Less than 1%
(1) Includes shares underlying outstanding stock options, as follows: Mr.
Klatt - 230,500 and Mr. Weber - 35,000.
7
<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, 1999.
Name and Address of Beneficial Owners Amount Owned Percent of Class
- ---------------------------------------- ------------ -----------------
Wembley Ltd. 4,557,143 35.7%
Columbus Centre Building
Road Town, Tortola
British Virgin Islands
Grace & White 1,625,785 12.7%
515 Madison Ave., Suite 1700
New York, NT 10022
Dimensional Fund Advisors, Inc.(1) 1,187,612 9.3%
1299 Ocean Avenue
Santa Monica, California 90401
Heartland Advisors, Inc. 793,700 6.2%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Artisan Investment Corporation 712,800 5.6%
1000 North Water Street
Milwaukee, WI 53202
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Dimensional Fund Advisors, Inc., a registered investment advisor, is deemed to
have beneficial ownership of 1,187,612 shares of common stock of GSE as of
December 31, 1999, 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 each individual who was either the chief executive officer at
any time during the period, or at December 31, 1999 one of the other highly
compensated executive officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
----------------------
Stock
Name and Annual Compensation Restricted Option All other
Principal Position Year Salary Bonus Other(1) Stock(2) Awards (Shares) Comp.(3)
- ------------------ ---- -------- -------- -------- ---------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Samir T. Badawi(4) 1999 $300,000 $125,625 145,000 $49,500
President & CEO 1998 $205,769 $ 65,000 -0- $23,770
Roger J. Klatt 1999 $210,000 $ 63,000 65,000 $56,773
Executive vice president, 1998 $200,000 $ 50,000 50,000 $18,285
treasurer, and chief 1997 $186,667 $ 30,000 $146,250 35,000 $16,124
financial officer
Michael C. Mathieson(5) 1999 $138,256 -0- -0- $10,689
Vice president 1998 $160,000(6) $ 25,000 17,500 $ 7,855
1997 $150,000(6) $ 22,500 $ 41,925 17,500 $ 9,755
Kurt Weber(7) 1999 $147,700 $ 41,200 17,500 -0-
Subsidiary officer 1998 $ 90,000 $ 11,600 17,500 -0-
</TABLE>
- ---------
(1) Because the value of any additional benefits did not exceed 10% of annual
compensation, amounts are omitted.
(2) 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 1999 or 1998 under GSE's 1995 Incentive Stock Plan. At the end
of 1999, the aggregate restricted stock holdings eligible for vesting
consisted of 14,949 shares worth $86,625 at the then current market value
of $3.50 (the closing price of GSE's common stock on December 31, 1999),
without giving effect to the diminution of value attributable to the
restriction on such stock. Such amounts includes $39,114 for Mr. Klatt
(6,750 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 (the "Maximum
Eligible Shares") became 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 were met. Any restricted shares out of
the Maximum Eligible Shares that did not become eligible for vesting
because the performance goals for such year were not fully met lapsed. At
the end of 1999, 4,983 shares in the 1997 Plan vested. For the 1997 Plan,
30% of the Maximum Eligible Shares became eligible for vesting in 1997,
1998 and 1999. Restricted shares that vested became fully vested upon
completion by the individual of three years of continuous employment from
the date the restricted shares were granted ("Required Employment Period").
If an individual's employment was terminated by GSE without cause or by
involuntary resignation prior to completing the Required Employment Period,
the restricted shares that had become eligible for vesting did vest. GSE 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.
(3) GSE paid life and disability insurance premiums for 1999, 1998, and 1997,
for Mr. Badawi in amounts of $2,558, $0, and $0, for Mr. Klatt in the
amounts of $9,337, $9,805, and $8,227 and for Mr. Mathieson in the amounts
of $4,356, $5,055 and $4,945. The Company also made contributions to
401(k) and Executive Retirement Plans for 1999, 1998, and 1997, for Mr.
Badawi in the amounts of $14,600, $2,000, and 0, for Mr. Klatt in the
amounts of $10,400, $9,200, and $10,867, for Mr. Mathieson in the amounts
of $6,333, $2,800 and $6,250. GSE paid for housing for 1999 and 1998 for
Mr. Badawi in the amounts of $32,342 and $20,245. Mr. Klatt received
$37,036 cash bonus in 1999 to compensate for income taxes on the issuance
of stock in connection with the 1996 grant of restricted stock.
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(4) On April 27, 1998, Mr. Badawi assumed the positions of acting president and
chief executive officer of GSE until May 1999, when he became president and
chief executive officer. He continues to hold the position of chairman of
the board of directors.
(5) Mr. Mathieson resigned his position as vice president marketing and
business development of the Company on October 29, 1999.
(6) Excludes foreign service payments of $37,500, and $50,000 in 1998, and
1997.
(7) Mr. Weber was hired effective June 1998 and resigned on February 17, 2000.
Options Granted in 1999
The table below shows information on grants of stock options in 1999. GSE made
these grants under its 1995 Incentive Stock Plan to the officers named in the
Summary Compensation Table.
<TABLE>
<CAPTION>
Potential Realized
Value at Assumed
Annual Rate of Stock
Price Appreciation for
Option Term (2)
_________Individual Grants_________________________ ______________________
%of Total
Option Option Granted
Granted to Employee Exercise Expiration
Name (1) in Year Price Date 5% 10%
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Samir T. Badawi 145,000 34.9% $3.75 12/15/06 $221,361 $515,865
Roger J. Klatt 65,000 15.6% $3.75 12/15/06 $ 99,231 $231,250
Kurt Weber 17,500 4.2% $3.75 12/15/06 $ 26,716 $ 62,260
</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, 1999.
<TABLE>
<CAPTION>
Number of
Unexercised Value of Unexercised
Shares Options at In-The-Money Options at
Acquired Value December 31, 1999 December 31, 1999 (1)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Samir T. Badawi -0- -0- 9,332 146,668 -0- -0-
Roger J. Klatt -0- -0- 140,500 90,000 -0- -0-
Kurt Weber -0- -0- 8,750 26,250 -0- -0-
</TABLE>
(1) Represents the difference between the closing price for common stock on the
New York Stock Exchange on December 31, 1999 ($3.50 per share) and any
lesser exercise price.
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<PAGE>
EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL ARRANGEMENTS
EMPLOYMENT SECURITY AGREEMENTS. One executive officer of GSE, Mr. Klatt, GSE's
executive vice president and chief financial officer, has the benefit of an
employment security agreement.
Mr. Klatt 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:
. 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
. 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:
. 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 officer.
In general, in the event that this latter employment security provision is
exercised by Mr. Klatt, he is entitled to benefits of:
. 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
. one and one-half times the greater of (A) the largest award earned under GSE's
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, 2001, and will be
automatically extended on each December 31 for a one-year period from such date
unless GSE gives notice of termination pursuant to the Agreement.
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<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:
. rewards executives for sound business management and improvement in
shareholder value
. balances its components so that both short and longer-term operating and
strategic objectives are recognized
. 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
similar 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 1999.
During 1999, the board approved a $350,000 base salary for Mr. Badawi while
serving as president and chief executive officer. The base salary was based on
recommendations of the committee without Mr. Badawi's participation.
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 GSE's profitability. For 1999, bonuses were
based upon a combination of objective and subjective criteria with the following
bonuses paid to senior officers:
. Mr. Badawi-$125,625
. Mr. Klatt-$63,000
. Mr. Weber-$41,200 (DM75,633)
STOCK OPTION AWARDS. This plan is designed to link closely the long-term reward
of executives with increases in stockholder value. For several years, GSE 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 1999.
. Mr. Badawi-145,000
. Mr. Klatt-65,000
. Mr. Weber-17,500
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<PAGE>
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 GSE.
The following members of the compensation committee have furnished the preceding
report:
Samir T. Badawi
Ahmed Y. Khalawi
Edward T. Sheehan
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The following graph illustrates the yearly percentage change in the cumulative
total stockholder return on GSE'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, 1999 and (ii) the Salomon Smith Barney-Solid Waste
Pollution Control Index ("Solid Waste") for the three years ended December 31,
1997, as this index has been discontinued by Salomon Smith Barney as of 1998.
GSE has selected the Manufacturing Diversified Index total return for the five
years ended December 31, 1999
[GRAPH]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- --------------------------------------------------------------------------------------------
S&P 100 138 169 226 290 351
- --------------------------------------------------------------------------------------------
Solid Waste 100 112 124 137
- --------------------------------------------------------------------------------------------
Manufacturing Diversified 100 141 194 231 267 329
- --------------------------------------------------------------------------------------------
Company 100 106 126 100 76 67
- --------------------------------------------------------------------------------------------
</TABLE>
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.
13
<PAGE>
VII. OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires GSE's executive officers,
directors and stockholders who own more than 10% of the outstanding 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
1999-reporting year.
PROPOSALS FOR THE 2001 ANNUAL MEETING
Stockholders may make proposals to be considered at the 2001 annual meeting. To
be included in the proxy statement and form of proxy for the 2001 annual
meeting, stockholder proposals for the 2001 annual meeting must be received not
later than December 2, 2000, at GSE's principal executive offices, 19103 Gundle
Road, Houston, Texas 77073.
14
<PAGE>
INDEPENDENT ACCOUNTANTS
The firm of Ernst & Young LLP served as GSE's independent auditors for 1999.
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
15
<PAGE>
(CONTINUED FROM OTHER SIDE)
Please mark
your votes as [X]
indicated in
this example
<TABLE>
<CAPTION>
<S> <C> <C>
1. Election of Directors Samir T. Badawi, James R. Burke, Bruce Cummings, Ahmed Y. Khalawi,
James R. Gibbs, T. William Porter, and Edward T. Sheehan
FOR all nominees WITHHOLD
listed to the right AUTHORITY Instruction: To withhold authority to vote for any individual
(except as marked to the to vote for all nominees nominee, write that nominee's name on the live provided below:
contrary) listed to the right
[_] [_] _________________________________________________________________
2. In their discretion, upon such other matters as may properly The undersigned hereby acknowledges receipt of the
come before the meeting; hereby revoking any proxy or proxies Notice of Annual Meeting of Stockholders and Proxy
heretofore given by the undersigned. Statement furnished herewith.
Dated_______________________________________, 2000
___________________________________________________
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, administra-
tors, 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
- ------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
<PAGE>
GUNDLE/SLT ENVIRONMENTAL, INC.
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE
ANNUAL MEETING OF MAY 4, 2000
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 4, 2000, 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)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
