|
UNITED STATES |
OMB APPROVAL |
|
SECURITIES AND EXCHANGE COMMISSION |
OMB Number: 3235-0059 |
|
Washington, D.C. 20549 |
Expires: January 31, 2008 |
|
SCHEDULE 14A |
Estimated average burden hours per response... 14 |
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 o | |
Check the appropriate box: | |
o | Preliminary Proxy Statement |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Pursuant to Rule §240.14a-12 |
Payment of Filing Fee (Check the appropriate box):
x | No fee required. | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
1. | Title of each class of securities to which transaction applies: | |
|
||
2. | Aggregate number of securities to which transaction applies: | |
|
||
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): | |
|
||
4. | Proposed maximum aggregate value of transaction: | |
|
||
5. | Total fee paid: | |
|
||
SEC 1913 (04-05) Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
||
o | Fee paid previously with preliminary materials. | |
o | 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: | |
TIME AND
DATE |
8:30
a.m., Central Time, on Wednesday, May 20, 2009 |
|||||
PLACE |
Embassy Suites 1040 P Street Lincoln, Nebraska 68508 |
|||||
ITEMS OF
BUSINESS |
At
the Annual Meeting, shareholders will be asked to vote on the following items: (1) Elect the nine nominees named in the attached proxy statement to the Board of Directors for a term of one year (2) Ratify the appointment of KPMG LLP as the Companys independent registered public accounting firm for 2009 (3) Approve an amendment to the Restricted Stock Plan to increase the authorized number of shares of Class A common stock that may be issued under the plan from a total of 2,000,000 shares to a total of 4,000,000 shares (4) Other business if properly introduced |
|||||
RECORD
DATE |
You
can vote if you were a shareholder as of the close of business on March 23, 2009. |
|||||
OTHER
INFORMATION |
Our
2008 Annual Report and annual report on Form 10-K, which are not part of the proxy soliciting materials, are enclosed. |
|||||
PROXY
VOTING |
The
Board of Directors solicits your proxy and asks you to vote your proxy at your earliest convenience to be sure your vote is received and counted. The
Board of Directors encourages you to attend the meeting in person. Whether or not you plan to attend the meeting, we ask you to sign, date, and mail
the enclosed proxy as promptly as possible in order to make sure that your shares will be voted in accordance with your wishes at the meeting. A
self-addressed, postage-paid return envelope is enclosed for your convenience. If you attend the meeting, you may vote by proxy or you may revoke your
proxy and cast your vote in person. We recommend you vote by proxy even if you plan to attend the meeting. |
PROXY
STATEMENT |
||||||
General
Information |
1 | |||||
VOTING |
1 | |||||
PROPOSAL 1
ELECTION OF DIRECTORS |
||||||
Nominees |
4 | |||||
CORPORATE
GOVERNANCE |
||||||
Code of
Business Conduct and Ethics for Directors, Officers, and Employees |
5 | |||||
Board
Composition and Director Independence |
5 | |||||
Governance
Guidelines of the Board |
6 | |||||
Board
Committees |
6 | |||||
Meetings of
the Board |
8 | |||||
Attendance at
Annual Meetings of Shareholders |
8 | |||||
Director
Compensation Table for Fiscal Year 2008 |
8 | |||||
Share
Ownership Guidelines for Board Members |
10 | |||||
EXECUTIVE
OFFICERS |
10 | |||||
EXECUTIVE
COMPENSATION |
||||||
Compensation
Discussion and Analysis |
11 | |||||
Compensation
Committee Report |
17 | |||||
Compensation
Committee Interlocks and Insider Participation |
17 | |||||
Summary
Compensation Table For Fiscal Years 2008, 2007, and 2006 |
18 | |||||
Grants of
Plan-Based Awards Table for Fiscal Year 2008 |
21 | |||||
Outstanding
Equity Awards at Fiscal Year-End Table (As of December 31, 2008) |
22 | |||||
Stock Vested
Table for Fiscal Year 2008 |
23 | |||||
Stock Option,
SAR, Long-Term Incentive, and Defined Benefit Plans |
23 | |||||
Potential
Payments Upon Termination |
23 | |||||
Actual
Payments Upon Termination |
24 | |||||
SECURITY
OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS, AND PRINCIPAL SHAREHOLDERS |
||||||
Stock
Ownership |
24 | |||||
Section 16(a)
Beneficial Ownership Reporting Compliance |
28 | |||||
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS |
28 | |||||
AUDIT
COMMITTEE REPORT |
32 | |||||
PROPOSAL 2
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
||||||
Independent
Accountant Fees and Services |
34 | |||||
PROPOSAL 3
APPROVAL OF AMENDMENT TO THE RESTRICTED STOCK PLAN TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF CLASS A COMMON STOCK THAT MAY BE ISSUED UNDER
THE PLAN FROM A TOTAL OF 2,000,000 SHARES TO A TOTAL OF 4,000,000 SHARES |
35 | |||||
OTHER
SHAREHOLDER MATTERS |
||||||
Householding |
39 | |||||
Other
Business |
40 | |||||
Shareholder
Proposals for 2010 Annual Meeting |
40 | |||||
MISCELLANEOUS |
40 | |||||
APPENDIX A -
NELNET, INC. RESTRICTED STOCK PLAN |
A-1 |
|
By mail by completing, signing, dating, and returning the enclosed proxy card |
|
By attending the Annual Meeting and voting your shares in person |
|
Electing the nine nominees named in this proxy statement to the Board of Directors for a term of one year |
|
Ratifying the appointment of KPMG LLP as the Companys independent registered public accounting firm (independent auditor) for 2009 |
|
Approving an amendment to the Restricted Stock Plan to increase the authorized number of shares of Class A common stock that may be issued under the plan from a total of 2,000,000 shares to a total of 4,000,000 shares |
|
FOR each of the nominees to the Board of Directors |
|
FOR ratification of the appointment of KPMG LLP as the Companys independent auditor |
|
FOR approval of the amendment to the Restricted Stock Plan |
Name, Age, and Service as a Director |
Principal Occupation(s) and Other
Directorships |
|||||
---|---|---|---|---|---|---|
Michael S.
Dunlap, 45 Director since January 1996 |
Chairman and Chief Executive Officer, Nelnet, Inc. Chairman, Nelnet, Inc., August 2003 to present; Chief Executive Officer, May 2007 to present and December 2001 August 2003; Co-Chief Executive Officer, August 2003 May 2007; President, December 2001 August 2003; Chairman of the Companys predecessor in interest, January 1996 December 2001 Co-President and Director, Farmers & Merchants Investment Inc. (F&M), the parent of Union Bank and Trust Company (Union Bank), January 2007 present; President and Director, January 1995 January 2007 (F&M is an affiliate of the Company) Director, Union Bank, January 1989 present; Non-Executive Chairman, August 2003 November 2008; Chief Executive Officer, January 2001 August 2003; Executive Vice President, January 1993 January 2001 (Union Bank is an affiliate of the Company) |
|||||
Stephen F.
Butterfield, 56 Director since January 1996 |
Vice-Chairman, Nelnet, Inc. Vice-Chairman, Nelnet, Inc., March 2000 present; Co-Chief Executive Officer, August 2003 May 2007; Vice-Chairman of the Companys predecessor in interest, January 1996 March 2000 President, Student Loan Acquisition Authority of Arizona, January 1989 February 2000 |
|||||
James P. Abel,
58 Director since August 2003 |
Chief Executive Officer, NEBCO, Inc. Chief Executive Officer, NEBCO, Inc., a company with interests in the manufacture of building materials, construction, insurance, mining, railroading, farming, and real estate, 2004 present; President and Chief Executive Officer, 1983 2004 Director, UNIFI Mutual Holding Company, Ameritas Holding Company, and Ameritas Life Insurance Corp. |
|||||
Kathleen A.
Farrell, 45 Director since October 2007 |
Associate Professor of Finance, University of Nebraska-Lincoln Associate Professor of Finance, University of Nebraska-Lincoln, 2002 present Assistant Professor of Finance, University of Nebraska-Lincoln, August 1993 2001 |
Name, Age, and Service as a Director |
Principal Occupation(s) and Other
Directorships |
|||||
---|---|---|---|---|---|---|
Thomas E.
Henning, 56 Director since August 2003 |
President and Chief Executive Officer, Assurity Security Group, Inc. and its subsidiary, Assurity Life Insurance Company President and Chief Executive Officer, Assurity Security Group, Inc. and its subsidiary, Assurity Life Insurance Company, which offers a variety of disability income and critical illness protection, life insurance, and annuity products, 1990 present |
|||||
Brian J.
OConnor, 53 Director since August 2003 |
Senior Vice-President, Hutchinson, Shockey, Erley & Co. Senior Vice-President, Hutchinson, Shockey, Erley & Co., which underwrites and trades securities for various local governments, 1997 present |
|||||
Kimberly K.
Rath, 48 Director since October 2007 |
Managing Director and President, Talent Plus, Inc. Managing Director and President, Talent Plus, Inc., a global human resources consulting firm, July 1989 present |
|||||
Michael D.
Reardon, 56 Director since December 2003 |
Chairman, HyperFlo LLC Chief Executive Officer, Provision Communications, LLC Chairman, HyperFlo LLC, a manufacturer of precision cleaning equipment, 1997 present Chief Executive Officer, Provision Communications, LLC, a telecommunications company, January 2004 present |
|||||
James H. Van
Horn, 56 Director since March 2001 |
President and Chief Executive Officer, InTuition Systems, Inc. President and Chief Executive Officer, InTuition Systems, Inc., a records administration company, June 2003 present (InTuition Systems is not affiliated with Nelnet, Inc.) Executive Director, Nelnet, Inc., October 2002 May 2003; Senior Vice-President, March 2000 October 2002 President, InTuition, Inc., 1998 May 2003 (Nelnet, Inc. purchased InTuition, Inc. in June 2000) |
|
A majority of the members of the Board must be independent directors |
|
All directors stand for re-election every year |
|
The Board undertakes an annual self-review |
|
The Board and each Board Committee has the authority to engage independent or outside counsel, accountants, or other advisors, as it determines to be necessary or appropriate. All related fees and costs of such advisors are paid by the Company |
|
Board members have open communication with all members of management and counsel |
|
Non-Employee Directors meet in executive session, without the presence of management. Mr. OConnor, who is chairman of the Audit Committee, presides at these executive sessions. Anyone who has concern about the Company may communicate that concern directly to these Non-Employee Directors. Such communication may be mailed to the Corporate Secretary at 121 South 13th Street, Suite 201, Lincoln, Nebraska 68508. All such communications will be forwarded to the appropriate Non-Employee Directors for their review. The Non-Employee Directors may take any action deemed appropriate or necessary, including the retention of independent or outside counsel, accountants, or other advisors, with respect to any such communication addressed to them. No adverse action will be taken against any individual making any such communication to the Non-Employee Directors. |
2008 Compensation |
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Director Name |
Fees paid in cash ($) (a) |
Stock Awards ($) (b) |
All other compensation ($) |
Total ($) |
|||||||||||||||
James P.
Abel |
18,000 | 70,569 | (c) | | 88,569 | ||||||||||||||
Stephen F.
Butterfield |
| | 5,500 | (j)(k) | 5,500 | ||||||||||||||
Kathleen A.
Farrell |
19,000 | 70,569 | (d) | | 89,569 | ||||||||||||||
Thomas E.
Henning |
26,000 | 82,332 | (e) | | 108,332 | ||||||||||||||
Brian J.
OConnor |
26,000 | 105,848 | (f) | | 131,848 | ||||||||||||||
Kimberly K.
Rath |
15,000 | 70,569 | (g) | | 85,569 | ||||||||||||||
Michael D.
Reardon |
22,000 | 82,332 | (h) | | 104,332 | ||||||||||||||
James H. Van
Horn |
27,000 | 82,332 | (i) | 25,000 | (j) | 134,332 |
(a) |
Amount represents cash paid to independent Non-Employee Directors for attendance at Board and committee meetings. Independent Non-Employee Directors earn $1,000 for each Board and committee meeting attended. |
(b) |
Prior to the Companys December 2003 initial public offering of its Class A common stock, the Board of Directors adopted, and the shareholders approved, a share-based compensation plan for independent Non-Employee Directors pursuant to which independent Non-Employee Directors can elect to receive their annual retainer fees in the form of cash or the Companys Class A common stock. If an independent Non-Employee Director elects to receive Class A common stock, the number of shares of Class A common stock that will be awarded will be equal to the amount of the annual retainer fee otherwise payable in cash divided by 85% of the fair market value of a share of Class A common stock on the date the fee is payable. Independent Non-Employee Directors who choose to receive Class A common stock may also elect to defer receipt of the Class A common stock until termination of their service on the Board of Directors. Any dividends paid in respect of deferred shares during the deferral period will also be deferred in the form of additional shares and paid out at termination from the Board of Directors. This plan may be amended or terminated by the Board of Directors at any time, but no amendment or termination will adversely affect an independent Non-Employee Directors rights with respect to previously deferred shares without the consent of the independent Non-Employee Director. |
Each of the Non-Employee Directors elected to receive their annual retainer fees for 2008 in the form of the Companys Class A common stock in accordance with the provisions of this plan. As such, the stock awards in the table above represents the fair value of the stock issued on the date of issuance, July 9, 2008, of $10.55. The Company uses the closing market price of the Companys common stock on the date the annual retainer fees are payable to calculate the number of shares to be issued under this plan. |
(c) |
As of December 31, 2008, Mr. Abel had 17,714 vested cumulative shares outstanding which he has earned serving as a member of the Companys Board of Directors and as a Board of Directors committee member. Mr. Abel has elected to defer delivery of 12,610 of these shares, including additional shares received as dividends, pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. |
(d) |
As of December 31, 2008, Ms. Farrell had 6,689 vested shares outstanding which she has earned serving as a member of the Companys Board of Directors and as a Board of Directors committee member. Ms. Farrell has elected to defer delivery of these shares, including additional shares received as dividends, pursuant to the deferral election provision of the Companys Directors Stock Compensation Plan. |
(e) |
As of December 31, 2008, Mr. Henning had 20,714 vested cumulative shares outstanding which he has earned serving as a member of the Companys Board of Directors and as a Board of Directors committee member. Mr. Henning has elected to defer delivery of 16,792 of these shares, including additional shares received as dividends, pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. |
(f) |
As of December 31, 2008, Mr. OConnor had 25,476 vested cumulative shares outstanding which he has earned serving as a member of the Companys Board of Directors and as a Board of Directors committee member. |
(g) |
As of December 31, 2008, Ms. Rath had 6,689 vested shares outstanding which she has earned serving as a member of the Companys Board of Directors and as a Board of Directors committee member. Ms. Rath has elected to defer delivery of these shares, including additional shares received as dividends, pursuant to the deferral election provision of the Companys Directors Stock Compensation Plan. |
(h) |
As of December 31, 2008, Mr. Reardon had 21,476 vested cumulative shares outstanding which he has earned serving as a member of the Companys Board of Directors and as a Board of Directors committee member. |
(i) |
As of December 31, 2008, Mr. Van Horn had 18,761 vested cumulative shares outstanding which he has earned serving as a member of the Companys Board of Directors and as a Board of Directors committee member. Mr. Van Horn has elected to defer delivery of 11,793 of these shares, including additional shares received as dividends, pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. |
(j) |
The Company offers a matching gift program in which all employees with at least six months of service and all members of the Board of Directors are eligible to participate. Under this program, for every dollar that an employee or Board member contributes to an eligible charitable organization or educational institution, the Company will make matching donations of additional funds, subject to terms and conditions applicable in an equal manner to all |
employees and Board members. The total dollar amount payable under the program is $25,000 per director or employee per calendar year. During 2008, the Company matched the following amounts in contributions under the provisions of this program to the following members of the Companys Board of Directors: Mr. Dunlap $600, Mr. Butterfield $500, Mr. Van Horn $25,000. |
(k) |
Mr. Butterfield received $5,000 from the Company in 2008 for his services as a strategic advisor to the Company. |
Name and Age |
Position and Business Experience |
|||||
---|---|---|---|---|---|---|
Todd M.
Eicher, 39 |
Executive Director, Nelnet, Inc., May 2003 present; Executive Director, Nelnet Enrollment Solutions LLC, a subsidiary of Nelnet,
Inc., January 2008 present; Chief Mergers and Acquisitions Officer, May 2005 November 2008; Senior Vice President, July 1997 May
2003 |
|||||
Terry J.
Heimes, 44 |
Executive Director and Chief Financial Officer, Nelnet, Inc., March 2001 present Executive Vice President, National Education Loan Network, Inc., a subsidiary of Nelnet, Inc., March 2001 October 2002; Vice President of Finance, October 1998 March 2001 |
|||||
William J.
Munn, 41 |
Executive Director, Corporate Secretary, Chief Governance Officer, and General Counsel, Nelnet, Inc., September 2006 present;
Deputy General Counsel and Chief Governance Officer, January 2005 September 2006; Senior Counsel, January 2000 December 2004; Legal
Counsel, October 1998 December 1999 |
|||||
Jeffrey R.
Noordhoek, 43 |
President, Nelnet, Inc., January 2006 present; Executive Director and Capital Markets Officer, October 2002 January 2006;
Vice President, January 1996 March 2001 Senior Vice President, National Education Loan Network, Inc., a subsidiary of Nelnet, Inc., March 2001 October 2002 |
|||||
Timothy A.
Tewes, 50 |
Executive Director, Nelnet, Inc., June 2005 present President and Chief Executive Officer, Nelnet Business Solutions, Inc., a subsidiary of Nelnet, Inc., May 2007 present; President, Nelnet Business Solutions K-12 operations, June 2005 May 2007; Executive Vice President, FACTS Management Company, a subsidiary of Nelnet, Inc., September 2000 June 2005. Mr. Tewes responsibilities with Nelnet Business Solutions include oversight of an employee team of approximately 300 focused on tuition management, needs assessment, campus commerce, and enrollment management for K-12 institutions and institutions of higher education. |
|
determining and administering the compensation of the Companys Chief Executive Officer, Chief Financial Officer, President, and other executives of the Company |
|
administering certain compensation plans, including stock and incentive compensation plans |
|
assessing the effectiveness of succession planning relative to the Companys Chief Executive Officer and executives |
|
approving, reviewing, and overseeing certain other benefit plans |
|
the levels of the Companys consolidated net income under generally accepted accounting principles (GAAP) |
|
consolidated base net income1 as reported by the Company in its filings with the Securities and Exchange Commission |
|
financial and operational performance measures, such as levels of operating expenses and diversification and growth of revenue from fee-based businesses |
|
associate engagement and motivation measures |
|
individual achievement |
|
business segment performance, including growth in customer base, gross revenue, and segment profitability |
Position |
Target incentive opportunity as a percentage of base salary |
|||||
---|---|---|---|---|---|---|
President,
Chief Financial Officer, and Business Segment Leaders |
0
50% |
|||||
Other
executives |
0
25% |
|
The Companys long term debt rating was downgraded, which precluded the Chief Executive Officer from receiving an incentive payment for 2008. |
|
Annual performance-based incentive awards were paid in fully vested shares of Class A common stock. This action was taken to improve the Companys cash and liquidity position. |
|
Discretionary restricted stock grants in 2008 (primarily for the purpose of incentive and retention) decreased compared to historical periods. |
|
Unlike prior years, the Company did not make across the board annual merit-based or cost of living salary adjustments for 2009. |
Michael S.
Dunlap |
$ | 600 | ||||
Terry J.
Heimes |
10,100 |
Annual compensation (a) |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name and principal position |
Year |
Salary ($) |
Bonus ($) (b) |
Stock awards ($) |
All other compensation ($) (c) |
Total ($) |
|||||||||||||||||||||
Michael S.
Dunlap |
2008 | 500,000 | | (d) | | 9,740 | 509,740 | ||||||||||||||||||||
Chief
Executive Officer |
2007 | 500,000 | 175,000 | (e) | | 9,540 | 684,540 | ||||||||||||||||||||
2006 | 500,000 | 612,500 | (f) | | 9,340 | 1,121,840 | |||||||||||||||||||||
Terry J.
Heimes |
2008 | 325,000 | 50,001 | | 9,886 | 384,887 | |||||||||||||||||||||
Chief
Financial Officer |
2007 | 325,000 | 100,000 | | 9,540 | 434,540 | |||||||||||||||||||||
2006 | 325,000 | 200,000 | | 9,340 | 534,340 | ||||||||||||||||||||||
Jeffrey R.
Noordhoek |
2008 | 325,000 | 50,001 | | 9,740 | 384,741 | |||||||||||||||||||||
President |
2007 | 275,000 | 100,000 | | 9,540 | 384,540 | |||||||||||||||||||||
2006 | 275,000 | 225,000 | | 9,330 | 509,330 | ||||||||||||||||||||||
John R.Kline
(g) |
2008 | 364,000 | 441,257 | (h) | 16,513 | (i) | 367,667 | 1,189,437 | |||||||||||||||||||
Former
Executive Director, |
|||||||||||||||||||||||||||
Nelnet
Enrollment Solutions LLC, |
|||||||||||||||||||||||||||
a subsidiary
of Nelnet, Inc. |
|||||||||||||||||||||||||||
Timothy A.
Tewes |
2008 | 260,000 | 150,004 | 51,821 | (j) | 26,093 | 487,918 | ||||||||||||||||||||
President and
Chief Executive |
|||||||||||||||||||||||||||
Officer,
Nelnet Business Solutions, |
|||||||||||||||||||||||||||
a subsidiary
of Nelnet, Inc. |
|||||||||||||||||||||||||||
Matthew D.
Hall (k) |
2008 | 164,327 | | 11,763 | (l) | 462,282 | 638,372 | ||||||||||||||||||||
Former Chief
Operating Officer, |
2007 | 275,000 | 65,000 | 49,403 | (l) | 12,483 | 401,886 | ||||||||||||||||||||
Nelnet
Education Services, |
2006 | 275,000 | 130,000 | 4,313 | (l) | 14,770 | 424,083 | ||||||||||||||||||||
a division of
Nelnet, Inc. |
|||||||||||||||||||||||||||
Raymond J.
Ciarvella (m) |
2008 | 136,730 | | | 458,932 | 595,662 | |||||||||||||||||||||
Former
Executive Director |
(a) |
Executive officers may receive perquisites and personal benefits, the dollar amounts of which are below current Securities and Exchange Commission thresholds for reporting requirements. |
(b) |
Amounts represent bonuses paid in 2009, 2008, and 2007 for services rendered during the 2008, 2007, and 2006 calendar years, respectively. All 2008 bonuses (paid in 2009) were paid in fully vested shares of Class A common stock issued pursuant to the Companys Restricted Stock Plan. |
(c) |
All other compensation includes the following: |
All other compensation |
|||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year |
Employer matching contributions under 401(k) Plan ($) |
Premiums on life insurance ($) |
Amounts paid pursuant to separation agreement ($) |
Dividends on restricted stock ($) (1) |
Forgiveness of stock loan |
Automobile allowance ($) |
Gross-up for payment of taxes ($) |
Other ($) |
Total ($) |
||||||||||||||||||||||||||||||||||
Michael S.
Dunlap |
2008 | 9,200 | 540 | | | | | | | 9,740 | |||||||||||||||||||||||||||||||||
2007 | 9,000 | 540 | | | | | | | 9,540 | ||||||||||||||||||||||||||||||||||
2006 | 8,800 | 540 | | | | | | | 9,340 | ||||||||||||||||||||||||||||||||||
Terry J.
Heimes |
2008 | 9,200 | 540 | | | | | | 146 | 9,886 | |||||||||||||||||||||||||||||||||
2007 | 9,000 | 540 | | | | | | | 9,540 | ||||||||||||||||||||||||||||||||||
2006 | 8,800 | 540 | | | | | | | 9,340 | ||||||||||||||||||||||||||||||||||
Jeffrey R.
Noordhoek |
2008 | 9,200 | 540 | | | | | | | 9,740 | |||||||||||||||||||||||||||||||||
2007 | 9,000 | 540 | | | | | | | 9,540 | ||||||||||||||||||||||||||||||||||
2006 | 8,800 | 530 | | | | | | | 9,330 | ||||||||||||||||||||||||||||||||||
John R.
Kline |
2008 | 9,200 | 540 | | | 238,839 | (2) | | 119,088 | (2) | | 367,667 | |||||||||||||||||||||||||||||||
Timothy A.
Tewes |
2008 | 8,976 | 540 | | 529 | | 12,000 | 4,048 | | 26,093 | |||||||||||||||||||||||||||||||||
Matthew D.
Hall |
2008 | 7,823 | 473 | 453,846 | 140 | | | | | 462,282 | |||||||||||||||||||||||||||||||||
2007 | 8,162 | 530 | | 840 | | | | 3,311 | 12,843 | ||||||||||||||||||||||||||||||||||
2006 | 8,800 | 530 | | | | | | 5,440 | 14,770 | ||||||||||||||||||||||||||||||||||
Raymond J.
Ciarvella |
2008 | 8,538 | 394 | 450,000 | | | | | | 458,932 |
(1) |
The Company paid a cash dividend of $0.07 per share on the Companys Class A and Class B common stock, including unvested shares of Class A common stock issued pursuant to the Companys Restricted Stock Plan, for all four fiscal quarters in 2007 and the first fiscal quarter of 2008. Dividends paid to employees on restricted stock are included in the table above. |
(2) |
On February 13, 2008, Mr. Kline was indebted to the Company for $499,988 pursuant to the Companys Employee Stock Purchase Loan Plan. Effective February 15, 2008, Mr. Kline was designated as an executive officer of the Company and obligated under Section 16(a) of the 1934 Act to report his beneficial ownership of the Companys stock to the SEC. As a result of this change in status and pursuant to the Companys Employee Stock Purchase Loan Agreement, the maturity date of the note was automatically accelerated to February 13, 2008. The shares of the Companys stock purchased with the loan proceeds were surrendered effective February 13, 2008; the fair market value of the stock sold to the Company of $269,638 was applied to the principal balance of the note. The remaining $230,350 of principal and $8,489 of accrued interest was forgiven by the Company and was therefore reported as income for Mr. Kline. The Company paid the related taxes of $119,088 associated with this transaction. |
(d) |
Mr. Dunlap is not entitled to any award under the Executive Officers Bonus Plan in any year in which the Company fails to maintain an investment grade rating by both Standard & Poors and Moodys Investor Services. The minimum investment grade rating by Standard & Poors is BBB and the minimum investment grade rating by Moodys Investment Services is Baa3. In October 2008, the Company was downgraded to Ba1 by Moodys Investor Services. Accordingly, Mr. Dunlap was not entitled to any bonus compensation for 2008. |
(e) |
Mr. Dunlaps potential 2007 bonus, as calculated pursuant to the provisions of the Executive Officers Bonus Plan, was $390,000. Mr. Dunlap requested that $215,000 of his 2007 bonus be distributed to certain associates for purposes of recognition and retention. |
(f) |
Mr. Dunlap requested that $375,000 of his 2006 bonus be distributed to certain associates for purposes of recognition and retention. The amounts distributed to these individuals were in the form of unrestricted fully vested shares of Class A common stock issued pursuant to the Companys Restricted Stock Plan. |
(g) |
Mr. Kline resigned from the Company effective April 8, 2009. |
(h) |
Mr. Klines bonus for 2008 was based on the terms of his employment agreement, which provided the amount that Mr. Kline would receive as an annual incentive bonus for 2008. |
(i) |
Amount represents stock compensation expense recognized by the Company related to a stock award of 3,750 shares of restricted Class A common stock issued on January 10, 2008 pursuant to the Companys Restricted Stock Plan. The Company records unearned compensation in shareholders equity (additional paid-in capital) upon issuance of restricted stock in an amount equal to the market price of such shares on the date of issuance and recognizes compensation expense over the vesting period. The closing market price on the date of issuance of these shares was $10.58 per share. The shares were scheduled to vest in 375 share increments on each January 10 beginning in 2009 and ending in 2018. Three-hundred-seventy-five (375) shares of this stock award vested on January 10, 2009. Mr. Klines employment with the Company ended April 8, 2009; accordingly, the remaining 3,375 shares of this award were forfeited before their respective vesting dates. |
Also included in this amount is stock compensation expense recognized by the Company related to a stock award of 1,004 shares of restricted Class A common stock issued on March 14, 2008 pursuant to the Companys Restricted Stock Plan. During 2007, when an associate elected to take their bonus in shares of stock, the Company awarded additional shares equal to 25% of the amount elected to be received in stock. In connection with these elections and awards for all employees, on February 28, 2008 the Company determined the issuance price based on the closing market price of $10.90 for that day, and subsequently issued the shares for elections and awards on March 14, 2008. The 1,004 shares were issued as a result of Mr. Klines election to receive his 2007 bonus payment in shares of stock and represent the additional 25% of the amount elected. One-third (335 shares) of this stock award vested on March 10, 2009 and the remaining shares were scheduled to vest on March 10, 2010 (335 shares) and March 10, 2011 (334 shares). Mr. Klines employment with the Company ended April 8, 2009; accordingly, the remaining 669 shares of this award were forfeited before their respective vesting dates. |
(j) |
Amount represents stock compensation expense recognized by the Company related to a stock award of 3,750 shares of restricted Class A common stock issued on October 1, 2007 pursuant to the Companys Restricted Stock Plan. The Company records unearned compensation in shareholders equity (additional paid-in capital) upon issuance of restricted stock in an amount equal to the market price of such shares on the date of issuance and recognizes compensation expense over the vesting period. The closing market price on the date of issuance of these shares was $18.71 per share. One-tenth (375 shares) of this stock amount vested on each March 15, 2008 and March 15, 2009, respectively, and the remaining 3,000 shares will vest in increments of 375 shares each year on March 15 from 2010 through 2017. |
Also included in this amount is stock compensation expense recognized by the Company related to a stock award of 3,000 shares of restricted Class A common stock issued on August 23, 2007 pursuant to the Companys Restricted Stock Plan. The Company records unearned compensation in shareholders equity (additional paid-in capital) upon issuance of restricted stock in an amount equal to the market price of such shares on the date of issuance and recognizes compensation expense over the vesting period. The closing market price on the date of issuance of these shares was $18.36 per share. One-third (1,000 shares) of these shares vested on April 30, 2008. The remaining 2,000 shares vest in 1,000 share increments each on April 30, 2009 and April 30, 2010. |
In addition, this amount included stock compensation expense recognized by the Company related to a stock award of 1,212 shares of restricted Class A common stock issued on November 22, 2006 pursuant to the Companys Restricted Stock Plan. During 2006, when an associate elected to take their bonus in shares of stock, the Company awarded additional shares equal to 25% of the amount elected to be received in stock. These shares are the additional shares awarded to Mr. Tewes as a result of his election to receive his 2006 performance-based incentive plan payment in shares of stock. The closing market price on the date of issuance of these shares was $25.80 per share. One-third (404 shares) of this amount vested on each November 22, 2007 and November 22, 2008, respectively. The remaining 404 shares will vest on November 22, 2009. |
(k) |
Mr. Hall ceased to be employed by the Company effective July 15, 2008. See Actual Payments Upon Termination for additional information on payments in connection with his termination of employment with the Company. |
(l) |
Amount represents stock compensation expense recognized by the Company related to a stock award of 3,000 shares of Class A common stock issued on December 14, 2006 pursuant to the Companys Restricted Stock Plan. The Company records unearned compensation in shareholders equity (additional paid-in capital) upon issuance of restricted stock in an amount equal to the market price of such shares on the date of issuance and recognizes compensation expense over the vesting period. The closing market price on the date of issuance of these shares was $28.23 per share. One-third (1,000 |
shares) of these shares vested on December 14, 2007. Mr. Halls employment with the Company ended July 15, 2008; accordingly, the remaining 2,000 shares of this award were forfeited before their respective vesting dates. |
(m) |
Mr. Ciarvella ceased to be employed by the Company effective July 15, 2008. See Actual Payments Upon Termination for additional information on payments in connection with his termination of employment with the Company. |
Name |
Grant date |
Approval of grant by Compensation Committee |
Number of restricted shares of stock |
Grant date fair value of stock awards ($) |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Michael S.
Dunlap |
- |
|
| | ||||||||||||||
Terry J.
Heimes |
- |
|
| | ||||||||||||||
Jeffrey R.
Noordhoek |
- |
|
| | ||||||||||||||
John R.
Kline |
January
10, 2008 |
(a) | October 31,
2007 |
3,750 | (a) | 39,675 | (a) | |||||||||||
March
14, 2008 |
(b) | March 10,
2008 |
(c) | 1,004 | (b) | 10,944 | (b) | |||||||||||
Timothy A.
Tewes |
- |
|
| | ||||||||||||||
Matthew D.
Hall |
- |
|
| | ||||||||||||||
Raymond J.
Ciarvella |
- |
|
| |
(a) |
Amount represents 3,750 shares of restricted Class A common stock issued on January 10, 2008 pursuant to the Companys Restricted Stock Plan. Shares of restricted stock are eligible for dividends. The shares were issued as part of the Companys management stock award program offered to all associates above a certain grade level to encourage stock ownership. The closing market price on the date of issuance of these shares was $10.58 per share. The shares were scheduled to vest in 375 share increments on each January 10 beginning in 2009 and ending in 2018. Three-hundred-seventy-five (375) shares of this stock award vested on January 10, 2009. Mr. Klines employment with the Company ended April 8, 2009; accordingly, the remaining 3,375 shares of this award were forfeited before their respective vesting dates. |
(b) |
Amount represents 1,004 shares of restricted Class A common stock issued on March 14, 2008 pursuant to the Companys Restricted Stock Plan. Shares of restricted stock are eligible for dividends. During 2007, when an associate elected to take their bonus in shares of stock, the Company awarded additional shares equal to 25% of the amount elected to be received in stock. In connection with these elections and awards for all employees, on February 28, 2008 the Company determined the issuance price based on the closing market price of $10.90 for that day, and subsequently issued the shares for elections and awards on March 14, 2008. The 1,004 shares were issued as a result of Mr. Klines election to receive his 2007 bonus payment in shares of stock and represent the additional 25% of the amount elected. One-third (335 shares) of this stock award vested on March 10, 2009 and the remaining shares were scheduled to vest on March 10, 2010 (335 shares) and March 10, 2011 (334 shares). Mr. Klines employment with the Company ended April 8, 2009; accordingly, the remaining 669 shares of this award were forfeited before their respective vesting dates |
(c) |
Represents the date the Compensation Committee of the Board of Directors approved the Companys 2007 incentive plan, in which the Company would award associates additional shares of common stock equal to 25% of the incentive amount elected by the associate to be received in stock. |
Stock awards |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Number of shares of stock that have not vested |
Market value of shares of stock that have not vested ($) (a) |
|||||||||
Michael S.
Dunlap |
| | |||||||||
Terry J.
Heimes |
| | |||||||||
Jeffrey R.
Noordhoek |
| | |||||||||
John R.
Kline |
4,754 | (b) | 68,125 | ||||||||
Timothy A.
Tewes |
5,779 | (c) | 82,813 | ||||||||
Matthew D.
Hall |
| | |||||||||
Raymond J.
Ciarvella |
| |
(a) |
The closing market price of the Companys common stock as of December 31, 2008 was $14.33. |
(b) |
Amount represents shares of restricted Class A common stock issued on January 10, 2008 and March 14, 2008 pursuant to the Companys Restricted Stock Plan of which 3,750 shares and 1,004 shares, respectively, remain unvested as of December 31, 2008. On January 10, 2009 and March 15, 2009, 375 shares and 335 shares, respectively, of these shares vested. Mr. Klines employment with the Company ended April 8, 2009; accordingly, the remaining 4,044 shares of these awards were forfeited before their respective vesting dates. |
(c) |
Amount represents shares of restricted Class A common stock issued on November 22, 2006, August 23, 2007, and October 1, 2007 pursuant to the Companys Restricted Stock Plan of which 404 shares, 2,000 shares, and 3,375 shares, respectively, remain unvested as of December 31, 2008. These shares vest as follows: |
Vesting date |
Number of shares |
|||||
---|---|---|---|---|---|---|
March 15,
2009 |
375 | |||||
April 30,
2009 |
1,000 | |||||
November 22,
2009 |
404 | |||||
March 15,
2010 |
375 | |||||
April 30,
2010 |
1,000 | |||||
March 15,
2011 |
375 | |||||
March 15,
2012 |
375 | |||||
March 15,
2013 |
375 | |||||
March 15,
2014 |
375 | |||||
March 15,
2015 |
375 | |||||
March 15,
2016 |
375 | |||||
March 15,
2017 |
375 | |||||
Total |
5,779 |
Stock awards |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Number of shares of stock acquired on vesting |
Market value of shares of stock realized on vesting ($) |
|||||||||
Michael S.
Dunlap |
| | |||||||||
Terry J.
Heimes |
| | |||||||||
Jeffrey R.
Noordhoek |
| | |||||||||
John R.
Kline |
| | |||||||||
Timothy A.
Tewes |
1,779 | (a) | 20,265 | (b) | |||||||
Matthew D.
Hall |
| | |||||||||
Raymond J.
Ciarvella |
| |
(a) |
Amount includes 375 shares, 1,000 shares, and 404 shares of restricted Class A common stock issued on October 1, 2007, August 23, 2007, and November 22, 2006, respectively, pursuant to the Companys Restricted Stock Plan. The closing market price on the date of issuance of these shares was $18.71, $18.36, and $25.80 per share, respectively. These shares vested on March 15, 2008, April 30, 2008, and November 22, 2008, respectively. |
(b) |
The closing market price of the Companys common stock as of March 15, 2008, April 30, 2008, and November 22, 2008 (the vesting dates) was $10.01 per share, $12.79 per share, and $9.21 per share, respectively. |
|
each person, entity, or group known by the Company to beneficially own more than five percent of the outstanding shares of any class of common stock |
|
each of the Named Executive Officers |
|
each incumbent director and each nominee for director |
|
all executive officers and directors as a group |
Number of shares beneficially owned |
Percentage of shares beneficially owned (1) |
|||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Class A |
Class B |
Total |
Class A |
Class B |
Total |
Percentage of combined voting power of all classes of stock (2) |
|||||||||||||||||||||||
Michael S.
Dunlap |
8,474,700 | (3) | 9,542,862 | (4) | 18,017,562 | 22.4 | % | 83.0 | % | 36.5 | % | 68.0 | % | |||||||||||||||||
Stephen F.
Butterfield |
355 | 3,952,364 | (5) | 3,952,719 | * | 34.4 | % | 8.0 | % | 25.9 | % | |||||||||||||||||||
Angela L.
Muhleisen |
8,860,779 | (6) | 1,567,473 | (7) | 10,428,252 | 23.4 | % | 13.6 | % | 21.1 | % | 16.1 | % | |||||||||||||||||
Union Bank and
Trust Company |
5,595,850 | (8) | 1,567,473 | (9) | 7,163,323 | 14.8 | % | 13.6 | % | 14.5 | % | 13.9 | % | |||||||||||||||||
Raymond J.
Ciarvella |
178,462 | (10) | | 178,462 | * | | * | 0.1 | % | |||||||||||||||||||||
Todd M.
Eicher |
463,145 | (11) | | 463,145 | 1.2 | % | | * | 0.3 | % | ||||||||||||||||||||
Matthew D.
Hall |
5,110 | (12) | | 5,110 | * | | * | 0.0 | % | |||||||||||||||||||||
Terry J.
Heimes |
209,409 | (13) | | 209,409 | * | | * | 0.1 | % | |||||||||||||||||||||
John R.
Kline |
16,461 | (14) | | 16,461 | * | | * | 0.0 | % | |||||||||||||||||||||
William J.
Munn |
20,722 | (15) | | 20,722 | * | | * | 0.0 | % | |||||||||||||||||||||
Jeffrey R.
Noordhoek |
1,004,409 | (16) | | 1,004,409 | 2.7 | % | | 2.0 | % | 0.7 | % | |||||||||||||||||||
Timothy A.
Tewes |
28,349 | (17) | | 28,349 | * | | * | 0.0 | % | |||||||||||||||||||||
James P.
Abel |
20,714 | (18) | | 20,714 | * | | * | 0.0 | % | |||||||||||||||||||||
Kathleen A.
Farrell |
6,689 | (19) | | 6,689 | * | | * | 0.0 | % | |||||||||||||||||||||
Thomas E.
Henning |
28,881 | (20) | | 28,881 | * | | * | 0.0 | % | |||||||||||||||||||||
Brian J.
OConnor |
35,476 | | 35,476 | * | | * | 0.0 | % | ||||||||||||||||||||||
Kimberly K.
Rath |
7,889 | (21) | | 7,889 | * | | * | 0.0 | % | |||||||||||||||||||||
Michael D.
Reardon |
23,476 | (22) | | 23,476 | * | | * | 0.0 | % | |||||||||||||||||||||
James H. Van
Horn |
73,445 | (23) | | 73,445 | * | | * | 0.0 | % | |||||||||||||||||||||
Cedar Hill
Capital Partners, LLC |
2,419,011 | (24) | | 2,419,011 | 6.4 | % | | 4.9 | % | 1.6 | % | |||||||||||||||||||
Executive
officers and directors as a group |
10,144,378 | 11,495,377 | 21,639,755 | 26.8 | % | 100.0 | % | 43.9 | % | 81.9 | % |
(1) |
Based on 37,817,495 shares of Class A common stock (which excludes 11,317,364 shares of Class A common stock held by a subsidiary of the Companys subsidiary that are not entitled to vote at the Annual Meeting) and 11,495,377 shares of Class B common stock outstanding as of February 27, 2009. |
(2) |
These percentages reflect the different voting rights of the Companys Class A common stock and Class B common stock. Each share of Class A common stock has one vote and each share of Class B common stock has ten votes on all matters to be voted upon by the Companys shareholders. |
(3) |
Mr. Dunlap is deemed to have sole voting and investment power over 2,474,350 shares of Class A common stock, which includes 1,494 shares of Class A common stock held indirectly by Mr. Dunlap that were issued under the Companys 401(k) plan matching stock program. Mr. Dunlap is deemed to have shared voting and investment power over 6,000,350 shares of Class A common stock, which includes shares of Class A common stock that are owned by entities that Mr. Dunlap may be deemed to control, consisting of: (i) 404,500 shares owned by Farmers & Merchants Investment Inc. (F&M), of which Mr. Dunlap is a director and co-president and owns or controls 38.5% of the outstanding voting stock, and (ii) 5,595,850 shares held for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank and Trust Company (Union Bank), with respect to which Union Bank may be deemed to have or share voting or investment power. Mr. Dunlap controls Union Bank through F&M and is a board member of Union Bank. Mr. Dunlap disclaims beneficial ownership of the shares held for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank, except for his beneficial interest in the shares of Class A common stock issued to him through the Companys 401(k) plan matching stock program. He also disclaims beneficial ownership of the shares held by F&M, except to the extent of his pecuniary interest therein. With respect to the number of shares of Class A common stock beneficially owned by Mr. Dunlap that are held by Union Bank, |
the number of shares set forth in the table reflects the number of shares held by Union Bank as of December 31, 2008, as reported in a Schedule 13G filed by Union Bank with the Securities and Exchange Commission on February 17, 2009. |
(4) |
Mr. Dunlap is deemed to have sole voting and investment power over 6,388,698 shares of Class B common stock, which includes 1,701,000 shares owned by Mr. Dunlaps spouse. Mr. Dunlap is deemed to have shared voting and investment power over 3,154,164 shares of Class B common stock, which includes (i) 1,586,691 shares owned by Union Financial Services, Inc., of which Mr. Dunlap is Chairman and owns 50.0% of the outstanding capital stock, (ii) 1,154,315 shares held by Union Bank as Trustee for a Class B grantor retained annuity trust (GRAT) established by Mr. Dunlap, and (iii) 413,158 shares held by Union Bank as Trustee under a Class B GRAT established by Mr. Butterfield. Mr. Dunlap disclaims beneficial ownership of the shares held by Union Financial Services, Inc., except to the extent of his pecuniary interest therein. Mr. Dunlap also disclaims beneficial ownership of the 413,158 shares held by Union Bank as Trustee under the Class B GRAT. A total of 700,000 shares are pledged as collateral for a line of credit which had not been drawn upon as of February 27, 2009. |
(5) |
Mr. Butterfield is deemed to have sole voting and investment power over 1,952,515 shares of Class B common stock that are held by the Stephen F. Butterfield Revocable Living Trust, of which Mr. Butterfield is a trustee. Mr. Butterfield is deemed to have shared voting and investment power over 1,999,849 shares of Class B common stock, which includes (i) 1,586,691 shares owned by Union Financial Services, Inc., of which Mr. Butterfield is a director and president and owns 50.0% of the outstanding capital stock and (ii) 413,158 shares held by Union Bank as Trustee for a Class B GRAT established by Mr. Butterfield. Mr. Butterfield disclaims beneficial ownership of the shares held by Union Financial Services, Inc., except to the extent of his pecuniary interest therein. A total of 1,904,315 shares are pledged as collateral. |
(6) |
Ms. Muhleisen is deemed to have sole voting and investment power over 2,582,506 shares of Class A common stock. Ms. Muhleisen is deemed to have shared voting and investment power over 6,278,273 shares of Class A common stock, which includes (i) 88,864 shares jointly owned by Ms. Muhleisen and her spouse, (ii) 1,117,576 shares owned by her spouse, (iii) 646,245 shares held by Ms. Muhleisens son, (iv) 646,245 shares held by Ms. Muhleisens daughter, (v) 1,166,848 shares held by Union Bank as Trustee for Class A GRATs established by Ms. Muhleisen and her spouse, and (vi) shares that are owned by entities that Ms. Muhleisen may be deemed to control, consisting of: 404,500 shares owned by F&M, of which Ms. Muhleisen is a director, chairperson, and co-president and owns or controls 36.1% of the outstanding capital stock, and 2,207,995 shares held by Union Bank for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank with respect to which Union Bank may be deemed to have or share voting or investment power. Ms. Muhleisen, the sister of Michael S. Dunlap, is a director, president, and chief executive officer of and controls Union Bank through F&M. Ms. Muhleisen disclaims beneficial ownership of the shares held for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank, except for her retained beneficial interest in 1,166,848 shares of Class A common stock held in trust on her behalf and on behalf of her spouse under two of the Class A GRATs. She also disclaims beneficial ownership of the shares held by F&M, except to the extent of her pecuniary interest therein. The address for Ms. Muhleisen is c/o Union Bank and Trust Company, P.O. Box 82529, Lincoln, Nebraska 68501. With respect to the number of shares of Class A common stock beneficially owned by Ms. Muhleisen that are held by Union Bank, the number of shares set forth in the table reflects the number of shares held by Union Bank as of December 31, 2008, as reported in a Schedule 13G filed by Union Bank with the Securities and Exchange Commission on February 17, 2009. |
(7) |
Ms. Muhleisen is deemed to have shared voting and investment power over 1,567,473 shares of Class B common stock that are held by Union Bank as Trustee under Class B GRATs established by Mr. Dunlap and Mr. Butterfield. Ms. Muhleisen disclaims beneficial ownership of the shares held by Union Bank as Trustee under the Class B GRATs. |
(8) |
Union Bank is deemed to have sole voting and investment power over 45,000 shares of Class A common stock that are held by the Union Bank profit sharing plan. Union Bank is deemed to have shared voting and investment power over 5,550,850 shares of Class A common stock, which includes (i) 235,000 shares held as trustee for the University of Nebraska Foundation, (ii) 269,742 shares held by Union Bank as Trustee under a Class A GRAT and a Class A charitable remainder trust established by Mr. Noordhoek, (iii) 1,166,848 shares held by Union Bank as Trustee under Class A GRATs established by Ms. Muhleisen and her spouse; (iv) 2,221,007 shares of Class A common stock held by Union Bank in individual accounts for Ms. Muhleisen and her spouse, and (v) 1,658,253 shares held for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank with respect to which Union Bank may be deemed to have or share voting or investment power. Union Bank disclaims beneficial ownership of such |
shares except to the extent that Union Bank actually has or shares voting power or investment power with respect to such shares. The address for Union Bank is P.O. Box 82529, Lincoln, Nebraska 68501; Attention: Angela L. Muhleisen, President. The number of shares of Class A common stock set forth in the table for Union Bank reflect the number of shares held by Union Bank as of December 31, 2008, as reported in a Schedule 13G filed by Union Bank with the Securities and Exchange Commission on February 17, 2009. |
(9) |
Union Bank is deemed to have shared voting and investment power over 1,567,473 shares of Class A common stock that are held by Union Bank as Trustee under Class B GRATs established by Mr. Dunlap and Mr. Butterfield. Union Bank disclaims beneficial ownership of such shares except to the extent that Union Bank actually has or shares voting power or investment power with respect to such shares. |
(10) |
Mr. Ciarvella ceased to be employed by the Company effective July 15, 2008. Beneficial ownership information for Mr. Ciarvella is as of October 31, 2008. |
(11) |
Includes 121,835 shares owned by Mr. Eichers spouse. A total of 251,612 Class A shares are pledged as collateral. |
(12) |
Mr. Hall ceased to be employed by the Company effective July 15, 2008. |
(13) |
Includes 50,000 shares owned by Mr. Heimes spouse. A total of 103,109 Class A shares are held in a brokerage firm account, which may under certain circumstances involve a pledge of such shares as collateral. |
(14) |
Includes 3,375 shares issued under the Companys Restricted Stock Plan, which would have vested in equal annual installments of 375 shares from January 2010 through January 2018. Amount also includes 1,004 shares issued under the Companys Restricted Stock Plan of which 335 shares vested on March 10, 2009 and 335 shares and 334 shares would have vested on March 10, 2010 and March 10, 2011, respectively. Mr. Klines employment with the Company ended on April 8, 2009; accordingly, all unvested shares on such date were forfeited before their respective vesting dates. |
(15) |
Includes 1,000 shares issued under the Companys Restricted Stock Plan that will vest on December 14, 2009. Amount also includes 500 shares owned jointly by Mr. Munn and his spouse. |
(16) |
Includes 686,756 shares held by the Jeffrey R. Noordhoek Trust, 243,943 shares held by Union Bank as Trustee under a Class A GRAT established by Mr. Noordhoek, and 25,799 shares held by Union Bank as Trustee under a Class A CRUT established by Mr. Noordhoek. A total of 690,500 Class A shares are pledged as collateral for a line of credit which had not been drawn upon as of February 27, 2009. |
(17) |
Includes (i) 3,375 shares issued under the Companys Restricted Stock Plan, which vest in equal annual installments of 375 shares from March 2009 through March 2017, (ii) 404 shares issued under the Companys Restricted Stock Plan that will vest on November 22, 2009, and (iii) 2,000 shares issued under the Companys Restricted Stock Plan which vest in equal installments of 1,000 shares each on April 30, 2009 and April 30, 2010. |
(18) |
Includes 12,610 shares that Mr. Abel has elected to defer delivery of pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. Also includes 500 shares owned by Mr. Abels spouse. |
(19) |
Includes 6,689 shares that Ms. Farrell has elected to defer delivery of pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. |
(20) |
Includes 16,792 shares that Mr. Henning has elected to defer delivery of pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. Also includes 3,090 shares owned by Mr. Hennings spouse. |
(21) |
Includes 6,689 shares that Ms. Rath has elected to defer delivery of pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. Amount also includes 1,200 shares owned by Ms. Raths husband in an individual retirement account. |
(22) |
Includes 15,672 shares owned jointly by Mr. Reardon and his spouse in a brokerage firm account, which may under certain circumstances involve a pledge of such shares as collateral. |
(23) |
Includes 11,793 shares that Mr. Van Horn has elected to defer delivery of pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. |
(24) |
On February 17, 2009, Cedar Hill Capital Partners, LLC (Cedar Hill), Cedar Hill Capital Partners Onshore, LP (Onshore Fund), Cedar Hill Capital Partners Offshore, Ltd. (Offshore Fund), Cedar Hill Fund Management, LLC (General Partner), Charles Cascarilla, and Emil Woods filed a Schedule 13G with the Securities and Exchange Commission indicating that they beneficially owned 6.37% of the Companys Class A common stock. The amounts set forth in the table reflect the number of shares reported in the Schedule 13G and includes 1,078,001 shares held for the account of the Onshore Fund and 1,341,010 shares held for the account of the Offshore Fund. The General Partner is the general partner of the Onshore Fund. Cedar Hill is the investment manager of the Onshore Fund and the Offshore Fund. Messrs. Cascarilla and Woods are controlling persons of Cedar Hill and the General Partner. The principal business address for each of the Onshore Fund, the General Partner, Cedar Hill, Mr. Cascarilla, and Mr. Woods is 445 Park Avenue, 5th Floor, New York, New York 10022. The principal business address of the Offshore Fund is c/o Goldman Sachs (Cayman) Trust, Limited, P.O. Box 896 GT, Harbour Centre, 2nd Floor, George Town, Grand Cayman Cayman Islands, B.W.I. |
|
Union Bank and Trust Company and Farmers & Merchants Investment Inc. Union Bank is controlled by F&M, which owns 81.4% of Union Banks common stock and 15.4% of Union Banks non-voting preferred stock. Michael S. Dunlap, a significant shareholder, Chief Executive Officer, Chairman, and a member of the Board of Directors of the Company, owns or controls 38.5% of the stock of F&M, while Mr. Dunlaps sister, Angela L. Muhleisen, owns or controls 36.1% of such stock. Mr. Dunlap serves as a director and co-president of F&M and is a member of the board of directors for Union Bank. In 2003, Mr. Dunlap resigned as chief executive officer of Union Bank. Ms. Muhleisen serves as director and co-president of F&M and as a director, chairperson, president, and chief executive officer of Union Bank. At February 27, 2009, Union Bank beneficially owned 14.5% of the Companys common stock. F&M does not own 5% or more of the Companys stock; however, the stock holdings of both Union Bank and F&M are deemed to be beneficially owned by both Mr. Dunlap and Ms. Muhleisen, respectively. At February 27, 2009, Mr. Dunlap beneficially owned 36.5% of the Companys outstanding common stock and Ms. Muhleisen beneficially owned 21.1% of the Companys outstanding common stock. |
|
Union Financial Services, Inc. Union Financial Services Inc. (UFS) is a corporation which is owned 50% by Michael S. Dunlap, a significant shareholder, Chief Executive Officer, Chairman, and a member of the Board of Directors of the Company, and 50% by Stephen F. Butterfield, Vice Chairman and a member of the Board of Directors of the Company. |
|
Reviewed and discussed the Companys earnings releases, Quarterly Reports on form 10-Q, and Annual Report on form 10-K, including the consolidated financial statements |
|
Reviewed and discussed the Companys policies and procedures for risk assessment and risk management and the major risk exposures of the Company and its business units, as appropriate |
|
Reviewed and discussed the annual plan and the scope of the work of the internal auditor for fiscal 2008 and summaries of the reports to management by the internal auditor |
|
Reviewed and discussed the annual plan and scope of the work of the independent auditor |
|
Reviewed and discussed reports from management on the Companys policies regarding applicable legal and regulatory requirements |
|
Met with KPMG LLP, the internal auditor, and Company management in separate executive sessions |
2008 |
2007 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Audit
fees |
$ | 864,795 | 909,200 | |||||||
Audit-related
fees |
1,019,645 | 827,369 | ||||||||
Tax
fees |
393,648 | 354,965 | ||||||||
All other
fees |
1,500 | 1,500 | ||||||||
Total |
$ | 2,279,588 | 2,093,034 |
Year Ended December 31, 2008 |
Quarterly Period Ended March 31, 2009 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dollar Value ($) |
Number of Shares |
Dollar Value ($) |
Number of Shares |
||||||||||||||||
Michael S.
Dunlap Chief Executive Officer |
| | | | |||||||||||||||
Terry J.
Heimes Chief Financial Officer |
| | 50,001 | 10,753 | |||||||||||||||
Jeffrey R.
Noordhoek President |
| | 50,001 | 10,753 | |||||||||||||||
John
R.Kline Former Executive Director, Nelnet Enrollment Solutions LLC, a subsidiary of Nelnet, Inc. |
94,372 | 8,768 | 441,257 | 94,894 | |||||||||||||||
Timothy A.
Tewes President and Chief Executive Officer, Nelnet Business Solutions, a subsidiary of Nelnet, Inc. |
| | 150,004 | 32,259 | |||||||||||||||
Matthew D.
Hall Former Chief Operating Officer, Nelnet Education Services, a division of Nelnet, Inc. |
| | | | |||||||||||||||
Raymond J.
Ciarvella Former Executive Director |
| | | | |||||||||||||||
Executive
Group |
94,372 | 8,768 | 771,762 | 165,965 | |||||||||||||||
Non-Executive
Director Group |
| | | | |||||||||||||||
Non-Executive
Officer Employee Group |
1,042,048 | 84,419 | 2,617,827 | 552,222 |
Plan Category |
Number of shares to be issued upon exercise of outstanding options, warrants, and rights (a) |
Weighted-average exercise price of outstanding options, warrants, and rights (b) |
Number of shares remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity
compensation plans approved by shareholders |
| $ | | 3,337,714 | (1) | |||||||||
Equity
compensation plans not approved by shareholders |
| $ | | | ||||||||||
Total |
| $ | | 3,337,714 | (1) |
(1) |
Includes 1,471,662, 275,135, 730,013, and 860,904 shares of Class A common stock remaining available for future issuance under the Nelnet, Inc. Restricted Stock Plan, Nelnet, Inc. Directors Stock Compensation Plan, Nelnet, Inc. Employee Share Purchase Plan, and Nelnet, Inc. Employee Stock Purchase Loan Plan, respectively. |
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR LISTED IN THIS PROXY AND FOR PROPOSALS 2 AND 3. |
||||
Please mark |
x
|
|||
|
|
|
|
||||||||||
Proposals: Proposals 2 and 3 and the nominees set forth in Proposal 1 have been proposed by the Company. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
1. |
ELECTION OF |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Nominees: |
FOR |
AGAINST |
ABSTAIN |
|
FOR |
AGAINST |
ABSTAIN |
|
|
FOR |
AGAINST |
ABSTAIN |
||||||
1.1 |
James P. |
|
|
|
1.5 Thomas E. |
|
|
|
|
1.9 James H. Van Horn |
|
|
|
||||||
|
|
|
|
If you wish to cumulate votes for Directors, do NOT mark For, Against or Abstain above, but check this box and write your voting instructions on the line below. |
|
||||||||||||||
1.2 |
Stephen F. |
|
|
|
1.6 Brian J. |
|
|
|
|
||||||||||
|
|
|
|
|
FOR |
AGAINST |
ABSTAIN |
||||||||||||
1.3 |
Michael S. |
|
|
|
1.7 Kimberly K. |
|
|
|
2. |
RATIFICATION OF APPOINTMENT OF KPMG LLP AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2009 |
|
|
|
||||||
|
|
|
3. |
APPROVAL OF AN AMENDMENT TO THE RESTRICTED STOCK PLAN
TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF CLASS A COMMON STOCK THAT MAY BE ISSUED UNDER THE PLAN FROM
A TOTAL OF 2,000,000 SHARES TO A TOTAL OF 4,000,000 SHARES |
|||||||||||||||
1.4 |
Kathleen A. |
|
|
|
1.8 Michael D. |
|
|
|
|
|
|
|
|
||
Mark Here for Address Change or Comments SEE REVERSE |
|
|||||||
|
|
|
Signature ____________________________________________ |
Signature ____________________________________________ |
Date ___________________________ |
|
|
NELNET, INC. |
Important notice regarding the availability of proxy materials for the Annual Meeting of Shareholders to be held on May 20, 2009.
|
44658
|
|
|
|
PROXY |
|
|
|
|
|
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
|
|
|
|
|
|
The undersigned hereby appoints Michael S. Dunlap and Stephen F. Butterfield, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Nelnet, Inc. common stock which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Shareholders of Nelnet, Inc., to be held May 20, 2009 at 8:30 a.m. Central Time or at any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the Meeting. |
|
|
|
|
|
THIS PROXY CONFERS DISCRETIONARY AUTHORITY TO THE PROXIES TO VOTE ON ANY OTHER MATTERS THAT MAY PROPERLY BE PRESENTED AT THE MEETING. AS OF THE DATE OF THE ACCOMPANYING PROXY STATEMENT, NELNET MANAGEMENT DID NOT KNOW OF ANY OTHER MATTERS TO BE PRESENTED AT THE MEETING. IF ANY OTHER MATTERS ARE PROPERLY PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF NELNET MANAGEMENT. |
|
|
|
|
|
(Continued and to be marked, dated and signed, on the other side) |
|
|
|
|
|
|
|
BNY MELLON SHAREOWNER SERVICES P.O. BOX 3550 SOUTH HACKENSACK, NJ 07606-9250 |
|
Address
Change/Comments (Mark the corresponding box on the reverse side) |
|
|
Access your BNY Mellon Shareowner Services shareholder/stockholder account online via Investor ServiceDirect® (ISD).
The transfer agent for Nelnet, Inc. now makes it easy and convenient to get current information on your shareholder account.
· |
View account status |
|
· |
View payment history for dividends |
· |
View certificate history |
|
· |
Make address changes |
· |
View book-entry information |
|
· |
Obtain a duplicate 1099 tax form |
|
|
|
· |
Establish/change your PIN |
Visit us on the web at http://www.bnymellon.com/shareowner/isd
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
www.bnymellon.com/shareowner/isd
Investor ServiceDirect®
Available 24 hours per day, 7 days per week
TOLL FREE NUMBER: 1-800-370-1163
Choose MLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor ServiceDirect® at www.bnymellon.com/shareowner/isd where step-by-step instructions will prompt you through enrollment. |
44658