UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-12
WERNER ENTERPRISES, INC.
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(Name of Registrant as Specified In Its Charter)
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[LOGO OF WERNER ENTERPRISES, INC.]
Post Office Box 45308
Omaha, Nebraska 68145-0308
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 10, 2010
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Dear Stockholders:
Notice is hereby given that the 2010 Annual Meeting of
Stockholders (the "2010 Annual Meeting") of Werner
Enterprises, Inc., a Nebraska corporation (the "Company"),
will be held at the Embassy Suites Omaha-La Vista Hotel &
Conference Center, 12520 Westport Parkway, La Vista, Nebraska,
on Monday, May 10, 2010, at 10:00 a.m. local Central Daylight
time. This meeting will be held for the following purposes,
which are more fully described in the accompanying Proxy
Statement:
1. To elect two Class I directors to each serve for a
three-year term expiring at the 2013 Annual Meeting of
Stockholders and until their respective successors are
elected and qualified.
2. To ratify the appointment of KPMG LLP as the Company's
independent registered public accounting firm for the
year ending December 31, 2010.
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on March
22, 2010, will be entitled to receive notice of and to vote at
the 2010 Annual Meeting or any adjournment thereof.
Important Notice Regarding the Availability of Proxy Materials
for the Stockholder Meeting To Be Held on May 10, 2010
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This Notice of Annual Meeting of Stockholders is not a form
for voting and presents only an overview of the more complete
enclosed proxy materials: the 2010 Proxy Statement (including
a proxy for voting) relating to the 2010 Annual Meeting and
the Company's Annual Report to Stockholders for the year ended
December 31, 2009 (which includes our Annual Report on Form
10-K for 2009 filed with the SEC on February 26, 2010.) You
may also obtain a copy of the proxy materials, without charge,
on the Company's website (http://www.werner.com under the
"Investor Information" tab) or by contacting the Corporate
Secretary by telephone at (800) 228-2240 or e-mail at
invrelations@werner.com. The enclosed proxy materials contain
important information about the Company and 2010 Annual
Meeting, and you are encouraged to review these documents
before voting.
All stockholders are cordially invited and encouraged to
attend the 2010 Annual Meeting in person. However, regardless
of whether you attend the meeting, we request that you vote
and submit your proxy as promptly as possible in order to
ensure the presence of a quorum and that your shares will be
voted in accordance with your wishes. Voting instructions are
enclosed and provided in the Proxy Statement for your
convenience. If you attend the 2010 Annual Meeting, you may
vote by proxy beforehand or you may revoke your proxy and cast
your vote in person.
By Order of the Board of Directors
/s/ James L. Johnson
James L. Johnson
Omaha, Nebraska Senior Vice President, Controller
April 7, 2010 and Corporate Secretary
TABLE OF CONTENTS
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INTRODUCTION 1
Annual Meeting Information 2
Voting Information and Instructions 2
Record Date 2
Quorum 2
Stockholders Eligible to Vote 2
Stockholder Voting Methods 2
Voting Your Proxy and Designated Proxy Holders 3
Revoking Your Proxy 4
Cumulative Voting in Director Elections 4
Voting Results 4
Stockholder Privacy 4
Expenses of Solicitation 4
Other Matters 4
PROPOSAL 1 - ELECTION OF DIRECTORS 5
Director Nominees 5
Current Director Information 5
Election, Voting Process and Vote Required 8
Recommendation of the Board of Directors - Proposal 1 8
CORPORATE GOVERNANCE 9
Director Independence Determinations 9
Role and Leadership of the Board of Directors 9
Corporate Governance Policies and Materials 10
Committees of the Board of Directors 10
Audit Committee 11
Audit Committee Independence and Financial Expert 12
Compensation Committee 12
Compensation Committee Independence 13
Compensation Committee Interlocks and Insider
Participation 13
Nominating and Corporate Governance Committee 13
Attendance at Board and Committee Meetings and Annual
Meeting 13
Stockholder Communications with the Board of Directors 14
Director Nomination Process 14
Director Compensation and Benefits 16
Director Stock Ownership 17
Compensation of Directors for 2009 17
Report of the Audit Committee 17
EXECUTIVE OFFICERS 19
Current Executive Officer Information 19
BENEFICIAL OWNERSHIP OF COMMON STOCK 20
Stock Ownership of Directors, Executive Officers and
Certain Beneficial Owners 20
Section 16(a) Beneficial Ownership Reporting Compliance 22
EXECUTIVE COMPENSATION 22
Compensation Discussion and Analysis 22
i
Compensation Discussion and Analysis - Continued
Named Executive Officers 23
2009 Executive Compensation Program and Objectives 23
Elements of Executive Compensation 24
Role of the Compensation Consultant 30
Compensation Process and Determination 30
Competitive Peer Group and Benchmarking 32
Risk Management Related to Compensation 33
Other Executive Compensation Policies and
Considerations 34
Employment Arrangements 36
Arrangements and Potential Payments Upon Termination
or Change in Control 36
Termination 36
Change in Control 36
Potential Benefits Payable Under the Equity Plan 37
Report of the Compensation Committee 38
Summary Compensation Table 38
All Other Compensation for 2009 40
Grants of Plan-Based Awards for 2009 41
Outstanding Equity Awards at 2009 Year-End 41
Option Exercises for 2009 44
Nonqualified Deferred Compensation for 2009 44
Deferrals 45
Earnings 45
Distributions and "In Service" Withdrawals 45
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 46
Fees of the Independent Registered Public Accounting Firm 46
Audit Fees 47
Audit-Related Fees 47
Tax Fees 47
Policy of Audit Committee Pre-Approval of Audit and
Non-Audit Services Performed by the Independent
Registered Public Accounting Firm 47
Voting Process and Vote Required 48
Recommendation of the Board of Directors - Proposal 2 48
TRANSACTIONS WITH RELATED PERSONS 48
Review and Approval of Related Person Transactions 48
Related Person Transactions 49
Land Lease Agreement 49
Family Members of Executive Officers and Directors 50
Independent Contractors 50
Personal Use of Corporate Aircraft 50
OTHER BUSINESS 51
STOCKHOLDER PROPOSALS 51
STOCKHOLDERS SHARING THE SAME ADDRESS 51
CONTACTING THE CORPORATE SECRETARY AND EXECUTIVE OFFICES 52
INTERNET WEBSITE AND AVAILABILITY OF MATERIALS 52
ii
WERNER ENTERPRISES, INC.
Post Office Box 45308
Omaha, Nebraska 68145-0308
________________
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
MAY 10, 2010
________________________
INTRODUCTION
We are sending you this Proxy Statement in connection with the
solicitation of proxies by our Board of Directors (the
"Board") for the 2010 Annual Meeting of Stockholders of Werner
Enterprises, Inc. The 2010 Annual Meeting will be held for
the purposes set forth in the Notice of Annual Meeting of
Stockholders on the cover page of this Proxy Statement. We
are mailing the Proxy Statement, proxy and our Annual Report
to Stockholders for the year ended December 31, 2009 (the
"2009 Annual Report") on or about April 7, 2010.
In this Proxy Statement, we also use the following terms and
abbreviations:
* We refer to Werner Enterprises, Inc. as the "Company,"
"we" or "us."
* The 2010 Annual Meeting of Stockholders is referred to
as the "Annual Meeting" or "2010 Annual Meeting."
* References to "2009" and "for the year ended December
31, 2009" mean the Company's fiscal year for the period
beginning January 1, 2009 and ending December 31, 2009.
* The term "executive officers" means those executives
listed in the Current Executive Officer Information
section beginning on page 19 of this Proxy Statement
and on our website.
* "Named Executive Officers" means the five executive
officers identified on page 23 of the Compensation
Discussion and Analysis section of this Proxy
Statement.
* "Proxy Materials" means this Proxy Statement, the proxy
relating to the 2010 Annual Meeting and the 2009 Annual
Report.
* We also refer to our "website," which means the
Internet website available at http://www.werner.com
under the "Investor Information" tab, as provided in
the Internet Website and Availability of Materials
section of this Proxy Statement.
This Proxy Statement and our 2009 Annual Report are available
on our website. In these Proxy Materials, we refer to certain
reports and forms that we have filed with the U.S. Securities
and Exchange Commission (the "SEC"). All of our SEC filings
are available on our website. You may also request copies of
our SEC filings and Proxy Materials from the Corporate
Secretary at the contact information provided in the
Contacting the Corporate Secretary and Executive Offices
section of this Proxy Statement.
1
Annual Meeting Information
The 2010 Annual Meeting of Stockholders will be held at 10:00
a.m. local Central Daylight time on Monday, May 10, 2010, at
the Embassy Suites Omaha-La Vista Hotel & Conference Center,
and at any adjournment(s) thereof. The Embassy Suites Omaha-
La Vista Hotel & Conference Center is located at 12520
Westport Parkway in La Vista, Nebraska, which is situated just
off U.S. Interstate 80 and the Giles Road Exit 442 in La
Vista's Southport development. Should you require additional
directions to attend the meeting and vote in person, you may
contact our Corporate Secretary at the information set forth
in the Contacting the Corporate Secretary and Executive
Offices section on page 52. At the meeting, Clarence L.
("C.L.") Werner, Gregory ("Greg") L. Werner and Gary L. Werner
and other members of our management team will discuss our
results of operations and business plans. Members of our
Board of Directors will also be present to answer your
questions.
Voting Information and Instructions
Record Date. The record date for the Annual Meeting is March
22, 2010. On the record date, 72,068,796 shares of our issued
$0.01 par value common stock were outstanding. At the Annual
Meeting, each stockholder will be entitled to one vote (in
person or by proxy) per share that is owned of record at the
close of business on March 22, 2010. Each share has one vote
on each matter. Our stock transfer books will not be closed.
On March 22, 2010, the closing market price of our common
stock as reported on the NASDAQ Global Select MarketSM was
$22.99 per share.
Quorum. For business to be conducted at the Annual Meeting, a
quorum must be present. The presence at the Annual Meeting,
either in person or by proxy, of a majority of all outstanding
shares of common stock entitled to vote at the Annual Meeting
will constitute a quorum for the transaction of business.
Both abstentions and broker non-votes are counted for the
purpose of determining whether a quorum is present for the
transaction of business. If a quorum is not present, the
Annual Meeting will be adjourned until a quorum is obtained.
("Broker non-votes" are shares held by a broker or other
institution (collectively, a "broker") that are represented by
proxy at the Annual Meeting, but the broker has not received
voting instructions from the beneficial owner of such shares
and does not have discretionary voting power for certain
matters.)
Stockholders Eligible to Vote. Only stockholders of record as
of the close of business on the record date are entitled to
notice of, attend and vote at the Annual Meeting. Shares that
may be voted at the Annual Meeting include shares that are
held by (i) "registered stockholders" and (ii) "beneficial
owners."
(i) If your shares are registered directly in your
name with our transfer agent (Wells Fargo Bank
Minnesota, N.A.), you are considered a
"registered stockholder" and the stockholder of
record with respect to those shares.
(ii) Most stockholders hold their shares through a
broker, rather than holding shares registered
directly in the stockholder's name. In that
case, you are considered a "beneficial owner" of
shares held in street name.
Stockholder Voting Methods. Your type of stock ownership
determines the method by which you may vote your shares.
Registered Stockholders. If you are a registered
stockholder, you may vote your shares by mail using the
enclosed proxy and postage-paid return envelope and by
following the instructions appearing on the proxy. As
a registered stockholder, you may also vote your shares
in person at the Annual Meeting by notifying and
obtaining a ballot from the Corporate Secretary prior
to the occurrence of any votes.
2
Beneficial Owners. If you are a beneficial owner, you
have the right to instruct your broker how to vote the
shares held in your account. Your broker will inform
you as to how your shares may be voted by proxy,
including whether Internet or telephonic voting options
are available. As a beneficial owner of shares, you
may not vote in person at the Annual Meeting unless you
obtain from your broker a legal proxy that gives you
the right to vote the shares.
Certain securities exchange rules govern how brokers
can vote your shares. If your broker does not receive
voting instructions from you, the broker may generally
vote your shares on routine matters but cannot vote
your shares on the election of directors and other non-
routine matters. With respect to the matters described
in this Proxy Statement to be voted on at the 2010
Annual Meeting, the election of directors (Proposal 1)
constitutes a non-routine matter. The ratification of
the appointment of our independent registered public
accounting firm (Proposal 2) is considered a routine
matter.
Regardless of your type of stock ownership, your right to vote
in person at the Annual Meeting is not affected by signing and
returning the proxy by mail (as generally done by registered
stockholders) or by submitting your proxy pursuant to your
broker's instructions (as done by beneficial owners, commonly
by the Internet or telephone).
In this Proxy Statement, when referring to voting matters,
"shares withheld" generally includes the following shares not
voted and cast: (i) broker non-votes (with respect to
director elections and other non-routine matters); (ii) shares
for which abstention is specifically marked on a proxy; and
(iii) shares that are present at the Annual Meeting but
expressly abstain. Shares present at the Annual Meeting (by
proxy or in person) but for which the stockholder does not
give any voting authority or direction will be voted by the
Designated Proxy Holders (identified below and on the enclosed
proxy) as indicated in this Proxy Statement. Broker non-votes
and abstentions do not affect whether a director nominee or
other non-routine proposal has received the required number of
votes of the shares of our outstanding common stock present or
represented by proxy and voting at the Annual Meeting.
Voting Your Proxy and Designated Proxy Holders. When a proxy
is executed and returned (and not revoked) prior to the Annual
Meeting, the proxy will be voted according to the instructions
you made when granting the proxy. Unless you specify
otherwise or no choice is indicated on your proxy, all shares
of our common stock represented by the proxy will be voted:
(i) FOR the election of all nominees for Class I
director ("Proposal 1");
(ii) FOR the ratification of the appointment of KPMG
LLP as our independent registered public
accounting firm for 2010 ("Proposal 2"); and
(iii) In accordance with the best judgment of the
named proxies on any other matters properly
brought before the Annual Meeting or any
adjournment thereof. See Other Matters in this
Proxy Statement.
For purposes of the 2010 Annual Meeting, C.L. Werner and Gary
Werner will act as the appointed and authorized "Designated
Proxy Holders." Your executed proxy appoints each of the
Designated Proxy Holders as your duly authorized attorney-in-
fact and gives the Designated Proxy Holders the power to
represent and vote at the Annual Meeting all shares of our
outstanding common stock that you are entitled to vote. The
Designated Proxy Holders will vote your shares as instructed
by you on your proxy. If you do not provide voting direction
on the proposals discussed in this Proxy Statement, or for any
other matters properly presented at the Annual Meeting, your
proxy also gives the Designated Proxy Holders the
discretionary authority to vote your shares represented
thereby as noted in this Proxy Statement and in accordance
with their best judgment.
3
Revoking Your Proxy. Any stockholder who delivers an executed
proxy has the right to revoke the proxy at any time prior to
the call to vote at the Annual Meeting. You may revoke your
proxy before the Annual Meeting by (i) delivering a written
and executed notice of revocation of the proxy to the
Corporate Secretary at our executive offices prior to the
Annual Meeting or (ii) executing and delivering a subsequent
proxy (dated later than the previously submitted proxy) before
the Annual Meeting. Alternatively, you may revoke your proxy
by attending the Annual Meeting, informing the Corporate
Secretary of your proxy revocation and voting in person.
Attendance at the Annual Meeting, in and of itself, will not
constitute a revocation of a proxy.
Cumulative Voting in Director Elections. With respect to the
election of directors, Company stockholders (or their proxy
holder, if one is appointed) have cumulative voting rights
under the laws of the State of Nebraska. This means that you
(or your proxy holder) may: (i) vote your shares for as many
directors as are to be elected; (ii) cumulate your shares and
give one director nominee an amount of votes equal to the
total number of directors to be elected multiplied by the
total number of your shares; or (iii) distribute an amount of
votes calculated as described in (ii) among as many director
nominees as you desire. If you wish to vote cumulatively, you
must vote in person or give your specific cumulative voting
instructions to the selected proxy, and your instructions must
indicate the number of votes represented by your shares that
are to be cast for one or more of the director nominees. The
solicitation of proxies on behalf of the Board of Directors
includes a solicitation for discretionary authority to
cumulate votes. You may withhold authority to vote for any
nominee(s) by striking through the name(s) of such nominee(s)
on the accompanying proxy.
Voting Results. Our Corporate Secretary has been appointed by
the Board to serve as the inspector of election for the Annual
Meeting. Proxies and ballots will be received and tabulated
by the inspector of election. Preliminary voting results will
be announced at the Annual Meeting, and the inspector of
election will then calculate final voting results. We will
disclose the Annual Meeting voting results on a Current Report
on Form 8-K filed with the SEC in accordance with SEC rules.
Stockholder Privacy. As a matter of Company policy, we keep
all proxies, ballots and voting tabulations that identify
individual stockholders private and confidential. Such
documents are available for examination only by the inspector
of election and certain Company representatives who assist
with processing proxies and tabulating the vote. Stockholder
votes are not otherwise disclosed within the Company, to
members of our Board or to third parties, except as may be
necessary to meet legal requirements.
Expenses of Solicitation
We will bear all costs of this proxy solicitation, including
expenses for the preparation, printing, assembly and mailing
of materials. Some of our directors, officers and employees
may also solicit proxies in person or by the Internet,
telephone or other electronic communications, and they will
not receive any additional compensation for making such
solicitations. We will also reimburse brokerage firms and
other custodians and fiduciaries for all reasonable expenses
incurred for forwarding Proxy Materials to beneficial owners
of our stock in accordance with customary practice. Your
cooperation in promptly voting your shares and submitting your
proxy will help to avoid additional expense.
Other Matters
On the date of mailing this Proxy Statement, the Board of
Directors knows of no other matters to be brought before
stockholders at the Annual Meeting other than the matters
described in this Proxy Statement. If any other matters are
properly presented at the meeting, your signed proxy
authorizes the Designated Proxy Holders to vote the shares
represented thereby in their discretion and according to their
best judgment.
4
Assuming the presence of a quorum, all other matters that
properly come before the Annual Meeting will each require the
affirmative vote of a majority of the outstanding shares of
our common stock, present or represented by proxy, at the
Annual Meeting and entitled to vote thereon. Shares withheld
will not affect the voting results on such matter.
PROPOSAL 1 - ELECTION OF DIRECTORS
Our Articles of Incorporation provide that there shall be two
or three separate classes of directors. Each class must
consist of not less than two, nor more than five, directors,
and the classes should be nearly equal in number as possible.
Our By-Laws provide for eight directors, divided into three
classes (Class I, II and III), and each class should have the
same number of directors to the extent possible. Directors
hold office for a term of three years, and each term expires
at the third succeeding annual meeting of stockholders after
the respective director's election and until a successor is
elected and qualified. The terms of office for each class of
current directors expire at the annual meeting of stockholders
in the following years: Class I, 2010; Class II, 2011; and
Class III, 2012.
Director Nominees
You will be asked to elect two directors in Class I to each
serve for a three-year term expiring at the 2013 Annual
Meeting of Stockholders and until his respective successor is
elected and qualified. The two current Class I directors
whose terms will expire at the 2010 Annual Meeting are:
Gerald H. Timmerman Kenneth M. Bird, Ed.D.
Mr. Timmerman and Dr. Bird have been nominated for re-election
at the 2010 Annual Meeting for terms expiring at the 2013
Annual Meeting of Stockholders and until their respective
successors are duly elected and qualified. The
qualifications, skills and experience of Mr. Timmerman and Dr.
Bird are discussed in their respective biographies in the
following Current Director Information section.
Current Director Information
Identified in the table on page 6 are the director nominees
and the directors whose terms will continue after the 2010
Annual Meeting, all of whom are current members of our Board.
Certain information provided to us by our directors regarding
their qualifications, skills and experience is also set forth
in the biographies following the table. Family relationships
between any directors and executive officers are noted in the
relevant biographies. None of the corporations or other
organizations referenced in the biographies is a parent,
subsidiary or affiliate of the Company.
5
Members of the Board of Directors
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Term
Name Principal Occupation Ends Class
---- -------------------- ---- -----
Clarence L. Werner Chairman of Werner Enterprises, Inc. 2012 III
Gary L. Werner Vice Chairman of Werner Enterprises, Inc. 2011 II
Gregory L. Werner President and Chief Executive Officer 2011 II
of Werner Enterprises, Inc.
Gerald H. Timmerman President of Timmerman & Sons Feeding Co., Inc. 2010 I
and Timmerman Feeding Corporation
Michael L. Steinbach Owner of Steinbach Farms & Equipment Sales 2011 II
and Steinbach Truck & Trailer
Kenneth M. Bird, Ed.D. President and Chief Executive Officer 2010 I
of the Bright Futures Foundation
Patrick J. Jung Chief Operating Officer of Surdell & Partners LLC 2012 III
Duane K. Sather Former President of Sather Trucking Corporation 2012 III
and Former Chairman of Sathers Inc.
CLARENCE L. WERNER, 72, operated Werner Enterprises as a sole
proprietorship from 1956 until the incorporation of Werner
Enterprises, Inc. in September 1982. He has been a Company
director since that time and also served as President until
1984. Since 1984, Mr. Werner has been our Chairman, and he
served as our Chief Executive Officer from 1984 until February
2007. As our founder, Mr. Werner has been actively involved
in the Company's business and operations since its inception
over 50 years ago. As a result of these professional
experiences, Mr. Werner brings to the Board a unique
understanding of our business and operations attributed to his
long-standing commitment to, management of and involvement
with the Company for more than 50 years, as well as his
significant and extensive knowledge of the transportation
industry. Mr. Werner is the father of brothers Gary Werner
and Greg Werner.
GARY L. WERNER, 52, has been a director of the Company since
its incorporation. Mr. Werner was General Manager of Werner
Enterprises, Inc. and its predecessor from 1980 to 1982. He
also served as Vice President from 1982 until 1984, when he
was named our President and Chief Operating Officer. Mr.
Werner was then named Vice Chairman in 1991 and has held such
position since that time. From 1993 to April 1997, Mr. Werner
also reassumed the duties of President. Mr. Werner also
serves on the advisory board of the Eppley Cancer Center of
the University of Nebraska Medical Center. Mr. Werner has a
depth of professional experience acquired during his long-term
service with the Company, and his extensive comprehension of
our business derived from such experience provides a valuable
perspective on the Company's operations and industry. Mr.
Werner is a son of C.L. Werner and a brother of Greg Werner.
GREGORY L. WERNER, 50, was elected as a director of the
Company in 1994. He served as our Treasurer from 1982 to 1986
and was Vice President from 1984 until March 1996. Mr. Werner
was promoted to Executive Vice President in March 1996 and
became President in April 1997. Mr. Werner has also directed
revenue equipment maintenance for Werner Enterprises, Inc. and
its predecessor since 1981. He became responsible for our
management information systems in 1993 and also assumed the
duties of Chief Operating Officer in 1999. Mr. Werner was
then named our Chief Executive Officer in February 2007. Mr.
Werner possesses significant knowledge and a thorough
understanding of our business operations and industry, which
is attributed to his long-term professional experience with
the Company. Because of his position as our President and
6
Chief Executive Officer, Mr. Werner also provides the Board
with an important insider perspective and management's point-
of-view about various aspects of our business operations and
strategies. Mr. Werner is a son of C.L. Werner and a brother
of Gary Werner.
GERALD H. TIMMERMAN, 70, was elected as a Company director in
1988. Since 1970, Mr. Timmerman has been and currently serves
as President of Timmerman & Sons Feeding Co., Inc. He has
also served as the President of Timmerman Feeding Corporation
since 2003. Timmerman & Sons Feeding Co., Inc. and Timmerman
Feeding Corporation, both of which are based in Springfield,
Nebraska, are cattle feeding, ranching and beef production
enterprises with operations in several Midwestern states. Mr.
Timmerman is also a partner in several other privately held
entities that engage in integrated agricultural business
operations. He is currently a member of the board of
directors of McCarthy Group, LLC, a private equity investment
firm based in Omaha, Nebraska. Mr. Timmerman is also active
in and serves on the board of directors of several civic
organizations. As a result of these and other professional
experiences, Mr. Timmerman brings to our Board substantial
business experience, financial acumen and outside board
experience that contributes to the Board's collective
qualifications, skills and experience.
MICHAEL L. STEINBACH, 55, was elected as a director of the
Company in 2002. He has been the sole owner of Steinbach
Farms & Equipment Sales since 1980. Steinbach Farms &
Equipment Sales buys and sells farmland and equipment and is
located in Valley, Nebraska. Mr. Steinbach has also been the
sole owner of Steinbach Truck & Trailer, a semi-tractor and
trailer dealership located in Valley, Nebraska, since 1997.
He also farms or custom farms approximately six thousand acres
of farmland. Mr. Steinbach possesses an extensive
understanding of the semi-tractor and trailer industry
acquired from his experience in the equipment sales business.
His depth of knowledge of our primary equipment (semi-tractors
and trailers) is a valuable resource to the Company as we
assess the age, productivity and other characteristics of our
tractor and trailer fleet. This knowledge, coupled with Mr.
Steinbach's related comprehension of the truckload
transportation industry and successful personal business
experience, contribute to our Board's collective
qualifications, skills and experience.
KENNETH M. BIRD, ED.D., 62, was appointed by our Board of
Directors in 2002 to fill a vacant director position and was
then elected by the stockholders in 2004. Dr. Bird is
currently the President and Chief Executive Officer of the
Bright Futures Foundation, a nonprofit entity that serves
youth education in Omaha, Nebraska. Dr. Bird previously
served as Superintendent of Westside Community Schools in
Omaha, Nebraska from 1992 until May 2008, and he also held
various administrative positions with Westside Community
Schools since 1981. Prior to 1981, he was employed by the
Nebraska Department of Education and as a special education
teacher at Westside Community School. Dr. Bird's broad range
of board experience is also considerable and extensive. He is
active in local, state and national professional organizations
as a member of various advisory councils, committees and task
forces. Dr. Bird serves as a director or trustee on a number
of civic boards, and he has been the recipient of several
professional, leadership and community service awards. Dr.
Bird possesses significant overall board experience,
administrative competence, executive experience and proven
leadership skills that enhance our Board's diversity and
discussions. As a result of these professional and other
experiences, Dr. Bird brings to the Board a broad perspective
of our community and an appreciation of corporate governance
principles that contribute to the collective qualifications,
skills and experience of our Board of Directors.
PATRICK J. JUNG, 62, was elected as a Company director in
2003. He currently serves as the Chief Operating Officer of
Surdell & Partners LLC, an advertising company in Omaha,
Nebraska. Prior to his position with Surdell & Partners LLC,
Mr. Jung was a practicing certified public accountant with
KPMG LLP for thirty years. He was also the audit engagement
partner on the Company's annual audit for the year ended
December 31, 1999 prior to his retirement from KPMG LLP in
2000. Mr. Jung is a member of the board of managers of
Burlington Capital Group LLC (which includes America First Tax
Exempt Investors, L.P., a publicly traded company) and serves
7
on its audit and governance committees. Located in Omaha,
Nebraska, Burlington Capital Group LLC's business involves
real estate, money management and emerging markets. Mr. Jung
is also a member of the board of directors of Supertel
Hospitality, Inc. and serves as its audit committee chair and
as a member of its nominating committee. Supertel
Hospitality, Inc., headquartered in Norfolk, Nebraska, is a
publicly traded real estate investment trust that owns and
acquires limited-service hotels in the United States. He also
works with several civic boards and organizations. Mr. Jung
has significant knowledge and experience in financial
management, accounting processes and corporate governance that
is derived from his professional and other experiences. He
brings to our Board substantial accounting and financial
expertise and sophistication, exceptional administrative
proficiency, overall board experience and comprehension of our
business operations and industry that contribute to the
Board's collective qualifications, skills and experience. Mr.
Jung also qualifies as an audit committee financial expert and
serves as Chair of our Audit Committee and Compensation
Committee.
DUANE K. SATHER, 65, was elected as a Company director in
2006. Mr. Sather's extensive knowledge and experience in our
industry is partially accredited to his service as President
of Sather Trucking Corporation from 1972 to 1996. From 1988
to 1996, he also served as Chairman of Sathers Inc., a
wholesale candy manufacturer and distributor. Sather Trucking
Corporation and Sathers Inc. were sold to Favorite Brands
International, Inc. in 1996. Mr. Sather is an investor and
currently serves as a director of several privately held
companies that construct and operate ethanol plants in the
Midwest. During his tenure with Sather Trucking Corporation
and Sathers Inc., Mr. Sather gained a wide-range of knowledge
about the trucking industry, including managing a large
workforce, overseeing a large business operation, marketing
and logistics. Mr. Sather brings to the Board his diverse
business and executive experience and comprehensive industry
knowledge. This invaluable industry insight contributes to
our Board's collective qualifications, skills and experience.
Election, Voting Process and Vote Required
Assuming the presence of a quorum, directors are elected when
they receive a plurality of affirmative votes cast by holders
of the outstanding shares of our common stock, present or
represented by proxy, at the Annual Meeting and entitled to
vote thereon. This means the two nominees receiving the
highest number of votes at the Annual Meeting, after taking
into account any cumulative voting, will be elected to the
Board. Shares withheld will not impact the election of
directors.
Each of the nominees designated in this Proxy Statement has
indicated his intention to serve as a director if elected, and
the Board does not know of any reason why any nominee will be
unavailable for election. In the event any nominee becomes
unwilling or unable to serve as a director, the shares
represented by your accompanying proxy will be voted for any
substitute nominee designated by the Board, unless you
expressly withhold (whether on your proxy or in person at the
Annual Meeting) authority to vote your shares for the
unavailable nominee or substitute nominee. There are no
arrangements or understandings between any of the nominees and
any other person pursuant to which any of the nominees was
selected as a nominee.
Recommendation of the Board of Directors - Proposal 1
The Board of Directors recommends that stockholders vote FOR
---
the election of each Class I director nominee. The Designated
Proxy Holders of proxies solicited by the Board in this Proxy
Statement will vote the proxies as directed on each proxy, or
if no instruction is made, for the election of all Class I
director nominees.
8
CORPORATE GOVERNANCE
Director Independence Determinations
The Board has affirmatively determined that all members of our
Board of Directors are independent pursuant to SEC rules and
the listing standards adopted by NASDAQ, except for C.L.
Werner, Gary Werner and Greg Werner. The Board has also
determined that each member of the three Board committees
satisfies the applicable independence requirements of NASDAQ
and the SEC.
With the assistance of our legal counsel, our Nominating and
Corporate Governance Committee reviewed the (i) legal and
regulatory standards for assessing Board and Board committee
independence, (ii) criteria for determining a director's
"audit committee financial expert," "non-employee director"
and "outside director" status and (iii) responses to annual
and biannual questionnaires completed by our directors. After
completing its review, the Nominating and Corporate Governance
Committee submitted its independence recommendations to our
Board. Our Board then made its independence determinations
based on the committee's recommendations and after considering
the information available to the committee.
Role and Leadership of the Board of Directors
One of the primary roles of the Board of Directors is to
oversee our senior management in the competent and ethical
operation of our business and to ensure that our stockholders'
interests are being properly served. To achieve these
objectives, the Board establishes and maintains high standards
of responsibility and ethics that, when consistently applied
and followed, contribute to our business's overall success.
The Chairman presides over each Board meeting and is actively
involved in determining agendas for Board meetings and serving
as a liaison between our Board and management. The Board
elects our Chairman each year at its annual meeting.
Currently, C.L. Werner serves as our Chairman, and Greg Werner
serves as our President and Chief Executive Officer ("CEO").
Each individual was elected by our Board at its 2009 annual
meeting to serve in his current position for a one-year term
or until his respective successor is duly elected and
qualified, pursuant to Section 2 of Article III of our By-
Laws.
The positions of Chairman and CEO are held by two individuals
instead of the same person. Although C.L. Werner and Greg
Werner are not independent directors, we believe our current
leadership structure is effective for us. This configuration
demonstrates to our stockholders, employees and customers that
our primary leadership roles are served by two qualified
people who each have an extensive depth of knowledge about the
Company's business and industry, share a long-standing
dedication to and significant ownership interest in the
Company and are equally committed to our development and
success.
Our independent directors regularly meet in executive sessions
without the presence of management. These executive sessions
are typically conducted after each quarterly Audit Committee
meeting and may also be held when deemed appropriate by the
independent directors. Our Audit Committee is comprised
solely of all of our independent directors, each of whom
typically attends each Audit Committee meeting, and this
consistent and routine meeting schedule consequently enables
the independent directors to conduct such executive sessions
on a regular basis. Our independent directors do not formally
select a lead independent director to preside over their
executive sessions. Rather, Mr. Jung, as Chair of the Audit
Committee, presides over the executive sessions of the
independent directors, and he also acts as a liaison between
the independent directors, management and the full Board.
Further information regarding the 2009 executive sessions is
provided under the Attendance at Board and Committee Meetings
and Annual Meeting section.
9
We believe that separating the Chairman and CEO positions,
having the majority of our Board and each Board committee
comprised of independent directors (who meet regularly in
executive sessions) and having independent directors serve as
Chairs of our Board committees provides an effective and
strong leadership structure for the Company. Our Board has
the flexibility to continue or modify our leadership structure
in the future, as the Board deems appropriate or necessary.
Company management is responsible for risk assessment and
mitigation on a Company-wide basis, and our Board oversees and
reviews these risk management efforts. Typically, management
identifies and measures various risks facing the Company and
analyzes the factors associated with such risks, such as the
probability and frequency of occurrence and potential impact
on our cash flow, financial results and overall business and
operations. Diverse types of risk are identified which are
generally competitive, economic, regulatory or technological
in nature. Management then develops response plans to
address, mitigate and monitor identified risks and also
reports and discusses these risks and plans with the Board.
In its risk oversight role, our Board regularly evaluates and
confers with management about the objectives of and risks
involved with each plan. The Board also considers risk when
assessing our business strategies and objectives.
Our Audit Committee has primary oversight responsibility with
respect to risks relating to internal controls over financial
reporting and contingent liabilities and risks that may be
material to the Company. As discussed in the Risk Management
Related to Compensation section, our Compensation Committee
also considers the Company's risks in determining whether our
executive compensation program encourages executive officers
to take unreasonable risks relating to our business. The risk
oversight roles of the Board, Audit Committee and Compensation
Committee did not impact our leadership structure because our
Board is comprised of a majority, and such committees consist
entirely, of independent directors.
Corporate Governance Policies and Materials
The members of our Board of Directors possess a variety of
experience, knowledge and judgment, and the diversity of these
skills complements our corporate governance structure. Our
corporate governance policies are designed to enable effective
and thorough decision-making and to allow proper and
comprehensive monitoring of the Company's performance and
compliance. These policies are also meant to provide our
Board with practical guidelines that are regularly reviewed
and can be appropriately revised and updated in response to
regulatory developments and evolving business and governance
practices. Our fundamental corporate governance principles
and practices are set forth in our Code of Corporate Conduct
and other policies, each of which is available on our website.
Pursuant to SEC rules, we will disclose amendments to or
waivers from our Code of Corporate Conduct, as they relate to
our CEO, Chief Financial Officer ("CFO") and Controller, on
our website or in a Current Report on Form 8-K filed with the
SEC. To date, we have not granted any waivers from our Code
of Corporate Conduct to the CEO, CFO or Controller.
Committees of the Board of Directors
The Board of Directors conducts its business through (i)
meetings of the Board, (ii) actions taken by written consent
in lieu of meetings, (iii) actions of its committees and (iv)
discussions with management, the independent auditors and
other consultants retained from time to time. The Board has
three standing committees: the Audit Committee, the
Compensation Committee and the Nominating and Corporate
Governance Committee (the "Governance Committee"). The
Governance Committee evaluates each committee's composition
and appoints committee members annually. The Board then
approves committee members appointed by the Governance
Committee at the Board's first meeting held thereafter. The
Board may also make further changes to committee assignments
from time to time as the Board deems appropriate or as advised
by the Governance Committee. A majority of full committee
membership elects committee chairs, unless elected by the full
Board. Committee members cannot be removed except by a
majority vote of independent directors in office at the time.
10
The responsibilities and duties of each committee are
discussed below.
Our Board delegates various responsibilities and authority to
the committees to foster the effective governance of the
Company. Each committee also meets periodically or when
appropriate and reports their respective activities and
actions to the full Board. The committees operate pursuant to
written charters (including any amendments thereto) approved
and adopted by the Board. The Audit Committee, Compensation
Committee and Governance Committee charters were not amended
in 2009 or in 2010 prior to the date of this Proxy Statement.
Each of the committee charters is available on our website.
The composition of each committee is as follows:
Board Committee Membership
-----------------------------------------------------------------
Audit Compensation Governance
Name Committee Committee Committee
---- --------- --------- ---------
Kenneth M. Bird, Ed.D. X X
Patrick J. Jung X (Chair) X (Chair)
Duane K. Sather X X
Michael L. Steinbach X X
Gerald H. Timmerman X X X (Chair)
Audit Committee
Our Board of Directors established a separately-designated
standing Audit Committee, in accordance with Section
3(a)(58)(A) of the Securities Exchange Act of 1934 (the
"Exchange Act"), to oversee our accounting and financial
reporting policies and processes (including our internal
control systems) and the quarterly review and annual audit of
our financial statements by our independent registered public
accounting firm. Such oversight is performed in accordance
with the applicable SEC rules and NASDAQ listing standards.
As more fully described in its charter, the Audit Committee's
responsibility for overseeing our accounting and financial
reporting processes includes but is not limited to:
* Discussing the annual audit and resulting letter of
comments with management;
* Consulting with the auditors and management regarding
the adequacy of internal controls;
* Reviewing our financial statements prior to their
release with management and the independent auditors;
* Evaluating with management the process used to support
the CEO and CFO certifications that accompany our
periodic SEC filings;
* Appointing the independent auditors for the next
fiscal year;
* Reviewing and approving all audit and non-audit
services;
* Overseeing the work of our internal audit department
and independent auditors; and
* Assessing and maintaining procedures for the anonymous
submission of complaints concerning accounting and
auditing irregularities.
The Audit Committee periodically meets in executive session
with our independent auditors and also in a separate executive
session with the head of our internal audit department. These
meetings are conducted without the presence of our management.
11
Audit Committee Independence and Financial Expert. Our Board
of Directors has determined that each Audit Committee member
(i) meets the independence criteria for Audit Committee
membership prescribed by Rule 10A-3(b)(1) and Section
10A(m)(3) of the Exchange Act; (ii) is independent under the
NASDAQ listing standards and (iii) has sufficient knowledge
and sophistication in financial and auditing matters under the
NASDAQ rules. The Board also designated Mr. Jung as an "audit
committee financial expert" as defined under the SEC rules
upon determining that Mr. Jung possessed the requisite
qualifications and experience.
We have provided the Report of the Audit Committee for 2009 in
this Proxy Statement on page 17.
Compensation Committee
The Compensation Committee is responsible for determining and
approving the compensation of our Chairman, Vice Chairman and
President and CEO. The Compensation Committee also approves
the compensation of all other executive officers after
considering the recommendations of our Chairman, Vice Chairman
and President and CEO. Prior to making any such compensation
determinations, the committee performs an annual review of all
compensation elements for our executive officers, including
but not limited to base salary, cash bonuses and stock awards.
Our Compensation Committee is tasked with evaluating and
approving our overall executive compensation strategy and
elements to ensure such components align with our business
objectives, stockholder interests and responsible corporate
practices and culture. Additionally, the Compensation
Committee is also responsible for recommending to the Board
the compensation policies for our independent directors and
overall Board members.
The Compensation Committee has responsibility for oversight of
and determining awards of equity compensation pursuant to our
Equity Plan. Our Equity Plan provides for grants of
nonqualified stock options, restricted stock and stock
appreciation rights ("SARs") to employees and non-employee
directors. With respect to the Equity Plan, the Compensation
Committee has authority to determine the terms of granted
awards, including (i) recipients; (ii) the number of shares
subject to each award; (iii) the dates on which awards are
granted, exercisable and become vested; (iv) whether or not
awards may be exercised in installments; (v) the type of
award; (vi) the form of consideration payable upon exercise of
each award; and (vii) any other terms of the awards consistent
with the terms of the Equity Plan.
As explained in more detail under Compensation Process and
Determination within the Compensation Discussion and Analysis
section, the Compensation Committee delegated to our President
and CEO certain authority that allows him to modify the base
salaries of executive officers within ranges established by
the Compensation Committee. The Compensation Committee
annually reviews and approves any such base salary changes at
its year-end meeting. The Compensation Committee also reviews
and determines the compensation of the Chairman, Vice Chairman
and President and CEO independent of each such officer's
participation or consultation. These tasks were performed by
the Compensation Committee in 2009.
During 2009, the Compensation Committee continued to retain
the firm of Towers Watson (formerly known as Towers Perrin) as
its compensation consultant to assist with the continued
development and evaluation of compensation policies and with
the Compensation Committee's determinations of compensation
awards. The Compensation Committee engaged Towers Watson to
provide independent and unbiased external advice and expertise
regarding executive compensation and to provide a competitive
market pay analysis for our Named Executive Officers. This
analysis compared the base salary, annual cash bonus and long-
term incentive components of compensation to both a
competitive peer group and general industry companies with
comparable annual revenues.
We have provided the Report of the Compensation Committee for
2009 in this Proxy Statement on page 38. For more information
about the Compensation Committee's activities and the
retention of Towers Watson in 2009, refer to the Compensation
12
Discussion and Analysis, Role of the Compensation Consultant
and Report of the Compensation Committee sections of this
Proxy Statement. The Compensation Committee's functions are
also described in its charter.
Compensation Committee Independence. Our Board of Directors
has determined that all current Compensation Committee members
satisfy the applicable SEC and NASDAQ independence
requirements. Each Compensation Committee member is also (i)
a "non-employee director" as defined by Rule 16b-3 under the
Exchange Act and (ii) an "outside director" as defined in
Section 162(m) of the Internal Revenue Code and U.S. Treasury
Regulation Section 1.162-27.
Compensation Committee Interlocks and Insider Participation.
No member of the Compensation Committee was an officer or
employee of the Company at any time during 2009 or on the date
of this Proxy Statement. In 2009, no member of the
Compensation Committee had any relationships or transactions
with the Company that would require disclosure as a "related
person transaction" under the SEC rules and regulations and in
the Proxy Statement section entitled Transactions with Related
Persons. During 2009, none of our executive officers served
on the board of directors or compensation committee of any
other entity whose executive officer(s) served as a member of
our Board of Directors or Compensation Committee.
Nominating and Corporate Governance Committee
Our Governance Committee is comprised only of directors whom
the Board has determined satisfy the applicable SEC and NASDAQ
independence requirements. The Governance Committee is
responsible for the director nomination process. These duties
include assisting the Board in identifying, evaluating and
recruiting qualified potential candidates for election to the
Board. The Governance Committee recommends for the Board's
approval the director nominees for any election of directors.
This process is described further in the Director Nomination
Process section.
The Governance Committee is also responsible for various
corporate governance matters, including the development and
oversight of our corporate governance policies, compliance
practices and ethical standards of conduct for our directors,
officers and employees. The committee makes recommendations
to the Board regarding our corporate governance processes and
reviews our Code of Corporate Conduct. The Governance
Committee also monitors the effectiveness, and advises on the
composition, structure and size, of our Board and Board
committees. It also annually assists our Board with its
independence and expertise determinations. The Governance
Committee has oversight of the administration of our policies
regarding "related person transactions" (as discussed under
the Transactions with Related Persons section herein), and the
committee reviews and approves or disapproves any such
transactions when such approval is required by SEC and NASDAQ
rules and regulations. A more complete description of the
Governance Committee's functions is provided in its charter.
Attendance at Board and Committee Meetings and Annual Meeting
During 2009, the following meetings were held and actions were
taken by the Board and Board committees:
Board of Directors:
* The Board held four meetings.
* Four executive sessions of the independent
directors were also held without the presence of
management.
* The Board acted once by unanimous written consent.
13
Audit Committee:
* The Audit Committee held four meetings.
* Four executive sessions without the presence of
management were also conducted with the independent
auditors.
* Four executive sessions without the presence of
management were held with the head of internal
audit.
* Mr. Jung participated in four meetings with
management and the independent auditors for the
purpose of reviewing financial results prior to the
issuance of earnings press releases.
* The Audit Committee did not act by unanimous
written consent.
Compensation Committee:
* The Compensation Committee held two meetings.
* One executive session was held without the presence
of management.
* The Compensation Committee did not act by unanimous
written consent.
Nominating and Corporate Governance Committee:
* The Governance Committee held one meeting.
During 2009, each incumbent director attended and participated
in 100% of all meetings of the Board of Directors and Board
committees on which he served. We encourage directors to
attend annual meetings of stockholders, although we do not
have a formal policy regarding director attendance at these
meetings. All of our directors attended our Annual Meeting of
Stockholders in May 2009, and we anticipate that most, if not
all, of our directors will attend the 2010 Annual Meeting.
Stockholder Communications with the Board of Directors
The Board of Directors established a process by which
stockholders and other parties may communicate directly with
members of the Board and/or the independent directors as a
group. This process is described in our Stockholder
Communications Procedure for Communicating with the Board of
Directors, which is included on our website. You may direct
any matter intended for the Board and/or independent directors
by writing to the intended recipients in care of our Corporate
Secretary at our executive offices. Generally, the Corporate
Secretary will forward any received correspondence according
to the stockholder's instructions. The Corporate Secretary,
however, reserves the right not to forward any abusive,
threatening or otherwise inappropriate materials. All of our
independent directors approved the process for collecting
stockholder communications received by our Corporate Secretary
on the Board's behalf.
Director Nomination Process
Our current Nominating and Corporate Governance Committee
Directorship Guidelines and Selection Policy (the
"Directorship Guidelines Policy") and Policy Regarding
Director Recommendations by Stockholders (the "Stockholder
Recommendation Policy") are available free of charge on our
website. Stockholders may also request a copy of these
policies by contacting our Corporate Secretary at our
executive office address or telephone number provided in this
Proxy Statement. The purpose of these policies is to describe
the process by which nominees for the Board of Directors are
selected. Each policy was approved by the Board of Directors
and is administered by the Governance Committee. The
committee evaluates the policies regularly and may update and
revise the policies from time to time, subject to Board
approval, when appropriate and as legal or listing standards
change.
Generally, the Governance Committee considers director
candidates suggested by Board members, management and
stockholders. With respect to director candidates identified
by stockholders, the Stockholder Recommendation Policy
applies. In accordance with the Stockholder Recommendation
Policy, the Governance Committee will consider candidates
14
recommended by stockholders that have beneficially owned
(individually or as a group), for at least one year, at least
2% of our issued and outstanding common stock entitled to vote
on the recommendation. Such stock ownership is determined as
of the date the stockholder recommendation is submitted. You
must submit stockholder recommendations in writing, and each
recommendation must include all information required and
requested by the Stockholder Recommendation Policy.
In order for a stockholder's candidate to be evaluated and
considered as a prospective nominee, you must submit your
recommendation to our Corporate Secretary not less than 120
days before the one-year anniversary of the release date of
the previous year's proxy statement. (For example, the
release date of the 2009 proxy statement was April 10, 2009.
Stockholder recommendations intended for consideration for the
director elections at the 2010 Annual Meeting had to be
submitted on or before December 11, 2009.) Stockholder
recommendations for director nominees must be submitted no
later than the close of business on December 8, 2010 for the
2011 Annual Meeting of Stockholders.
Generally, candidates for director positions should possess
the following skills and traits:
* Relevant business and financial expertise and
experience, including an understanding of fundamental
financial statements;
* The highest character and integrity and a reputation
for working constructively with others;
* Sufficient time to devote to meetings and consultation
on Board matters; and
* Freedom from conflicts of interest that would
interfere with the candidate's performance as a
director.
The Governance Committee evaluates prospective nominees
against certain minimum standards and qualifications, as
identified in the Directorship Guidelines Policy, and the
committee will strive to recommend director nominees who
satisfy these standards and qualifications in large part. The
basic standards and qualifications set forth in the
Directorship Guidelines Policy include but are not limited to
those skills and traits listed above and as follows:
* Representation of our stockholders as a whole;
* Background that contributes to a Board comprised of
individuals with varied occupational experience and
perspective;
* Leadership experience and ability to exercise sound
business judgment;
* Accomplishments, credentials and recognition in their
respective field;
* Contributions to the Board's skills, competency and
qualifications through expertise in an area of
business significant to us;
* Personal and professional reputation for integrity,
honesty, fairness and other similar traits; and
* Knowledge of issues affecting us and critical aspects
of our business and operations.
The Governance Committee also considers other relevant
factors, such as the balance of management and independent
directors, the need for Audit Committee expertise, relevant
industry experience and the candidate's financial
sophistication and literacy and understanding of financial
matters. Our Governance Committee does not have a formal
policy with respect to diversity; however, the Governance
Committee considers it desirable if potential nominees
contribute to the Board's overall diversity. In this respect,
we broadly construe diversity to mean an array of opinions,
perspectives, skills, personal and professional experiences
and backgrounds and other distinguished attributes. Diversity
is not solely limited to gender, race and ethnicity
distinctions; rather, our interpretation of diversity also
includes one's ability to positively contribute to the
15
chemistry and collaborative nature of our Board and one's
personal and professional expertise and experiences relevant
to our transportation and logistics services industry.
Stockholder recommendations for director candidates must be
accompanied by a description of each candidate's
qualifications in sufficient detail to permit the Governance
Committee to evaluate whether each candidate satisfies the
independence, financial literacy and experience requirements
of the SEC, NASDAQ or other applicable law. Prospective
director candidates nominated by stockholders in accordance
with the Stockholder Recommendation Policy are evaluated by
the Governance Committee in the same manner as any other
prospective candidate. We have not engaged and have not paid
any fees to any third party for assistance with the director
nomination process.
Director Compensation and Benefits
Only independent directors on our Board receive compensation
for their service as one of our directors. The independent
directors receive an annual compensation package that is
designed to attract, motivate and retain highly qualified
independent professionals to represent our stockholders.
Directors who are employees of the Company do not receive any
compensation for their service on our Board of Directors.
Our 2009 annual compensation package for independent directors
is comprised of the annual cash retainers and cash meeting
fees provided in the Independent Director Retainers and Fees
table below. Additional annual retainers are paid to the
Chairs of the Audit Committee and Compensation Committee, but
directors do not receive additional compensation for serving
as the Governance Committee Chair or member of any other Board
committee. We will also reimburse each independent director
at cost for all of their respective reasonable out-of-pocket
travel expenses incurred in connection with their attendance
at Board and Board committee meetings and for other reasonable
out-of-pocket expenses directly related to their Board and
Board committee service.
The Compensation Committee and Board believe the current
independent director retainer levels are appropriate to
attract and retain top independent and outside Board members.
Independent Director Retainers and Fees
-----------------------------------------------------------------------------------
Fee or Retainer Amount Paid in 2009
--------------- -------------------
Annual Board Retainer for Board $15,000
Membership (paid in quarterly installments of $3,750 each)
Annual Retainer for the $10,000
Audit Committee Chair (paid in quarterly installments of $2,500 each)
Annual Retainer for the $5,000
Compensation Committee Chair (paid in quarterly installments of $1,250 each)
Board of Directors Meeting Fee $2,000
(paid for each Board meeting)
Board Committee Meeting Fee $2,000
(paid for each committee meeting not
held on the same day as a Board meeting)
16
Director Stock Ownership. We do not have formal stock
ownership requirements for independent directors. The
individual stock ownership of each independent director is set
forth in the table under Stock Ownership of Directors,
Executive Officers and Certain Beneficial Owners within the
Beneficial Ownership of Common Stock section of this Proxy
Statement.
Compensation of Directors for 2009. The compensation received
by each independent director varies because such compensation
is based on (i) the number of Board and committee meetings
held, (ii) the Board committees on which the independent
director serves and (iii) whether the individual is the Chair
of the Audit Committee or the Compensation Committee.
The Director Compensation for 2009 table below presents the
compensation earned by each individual serving as an
independent director during 2009 for service on our Board and
its committees. This table does not include those directors
who are also employees of the Company because such employee
directors did not receive any compensation in 2009 for their
service on our Board. (The compensation paid by the Company
to our employee directors is discussed in the Executive
Compensation section and provided in the Summary Compensation
Table on page 39.) In 2009, we did not grant any awards of
stock options, SARs or restricted stock to independent
directors. Our independent directors also do not participate
in any benefit, pension or nonqualified deferred compensation
plan of the Company. For these reasons, we have omitted those
columns from the table.
Director Compensation for 2009
---------------------------------------------------------------------------------------
Fees Earned or Non-Equity
Paid in Cash Incentive Plan All Other
Name ($)(1) Compensation ($) Compensation ($) Total ($)
---- ------ ---------------- ---------------- ---------
Kenneth M. Bird, Ed.D. 33,000 - - 33,000
Patrick J. Jung 48,000 - - 48,000
Duane K. Sather 29,000 - - 29,000
Michael L. Steinbach 29,000 - - 29,000
Gerald H. Timmerman 33,000 - - 33,000
----------------
(1) The amounts in this column include fees and retainers
received for Board membership, Board committee
membership and for service as the Audit Committee
Chair and Compensation Committee Chair.
Report of the Audit Committee
The following report of the Audit Committee shall not be
deemed to be "soliciting material" or to otherwise be
considered "filed" with the SEC, nor shall this report be
subject to Regulation 14A (other than as indicated) or to the
liabilities set forth in Section 18 of the Securities Exchange
Act of 1934. This report shall not be deemed to be
incorporated by reference into any prior or subsequent filing
under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent that the Company
specifically incorporates it by reference or treats it as
soliciting material.
The Audit Committee of the Board of Directors is comprised of
Dr. Bird and Messrs. Jung, Sather, Steinbach and Timmerman.
Mr. Jung is the Chair of the Audit Committee. All of the
Audit Committee members are qualified independent directors
under the audit committee structure and membership
requirements of the NASDAQ and SEC rules and regulations. The
primary purpose of the Audit Committee is to assist the Board
17
of Directors in its general oversight of the financial
reporting process of Werner Enterprises, Inc. (the "Company").
The Audit Committee conducts its oversight activities by
exercising the certain responsibilities and powers set forth
in its written charter adopted by the Board. A copy of the
charter is available on the Company's website.
The general duties of the Audit Committee include reviewing
the Company's financial information that will be presented to
stockholders and filed with the SEC; appointing the
independent registered public accounting firm; reviewing
services provided by the Company's independent auditors and
internal audit department; and evaluating the Company's
accounting policies and its system of established internal
controls. In its oversight of the independent public
registered accounting firm, the Audit Committee reviews the
scope of the audit, audit fees, auditor independence matters
and the extent to which the independent auditors are retained
to perform non-audit services for the Company.
The Audit Committee does not prepare financial statements or
perform audits, and its members are not auditors or certifiers
of the Company's financial statements. Rather, the Company's
management is responsible for the preparation, consistency,
integrity and fair presentation of the Company's financial
statements, accounting and financial principles, internal
control and disclosure control systems and procedures designed
to ensure compliance with applicable accounting standards,
laws and regulations. The Company's independent registered
public accounting firm, KPMG LLP, is responsible for
performing independent quarterly reviews and an independent
annual audit of the financial statements and for expressing an
opinion on the conformity of those statements with accounting
principles generally accepted in the United States of America
("GAAP").
In conjunction with the preparation of the Company's 2009
audited financial statements, the Audit Committee met with
both management and the independent auditors of the Company to
review and discuss significant accounting issues and the
financial statements included in the Company's Annual Report
on Form 10-K for 2009 prior to the issuance of such financial
statements. Management advised the Audit Committee that such
financial statements were prepared in accordance with GAAP,
and the Audit Committee discussed such financial statements
with management and the independent auditors. The Audit
Committee's assessment included a discussion with the
Company's independent auditors regarding matters that are
required to be discussed pursuant to (i) Rule 2-07 of SEC
Regulation S-X (Communication with Audit Committees) and (ii)
Statement on Auditing Standards No. 61 (Communication with
Audit Committees), as amended (AICPA, Professional Standards,
Vol. I, AU section 380) and as adopted by the Public Company
Accounting Oversight Board in Rule 3200T, and as superseded by
Statement on Auditing Standards No. 114 (The Auditor's
Communication With Those Charged With Governance) adopted by
the Public Company Accounting Oversight Board.
The Audit Committee also received and reviewed the written
disclosures and letter submitted to the committee by the
Company's independent auditors, KPMG LLP. Such written
disclosures and letter are required by applicable requirements
of the Public Company Accounting Oversight Board regarding
KPMG LLP's communications with the Audit Committee concerning
independence. The Audit Committee and KPMG LLP also discussed
KPMG LLP's independence as the independent auditors of the
Company.
Based on the foregoing reviews and discussions, the Audit
Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's
Annual Report on Form 10-K for 2009, for filing with the SEC.
Patrick J. Jung, Chair
Kenneth M. Bird, Ed.D.
Duane K. Sather
Michael L. Steinbach
Gerald H. Timmerman
18
EXECUTIVE OFFICERS
Our By-Laws provide that each executive officer holds his or
her respective office for a term of one year or until his or
her successor becomes duly elected and qualified, except that
a term may be (i) longer than one year if such service is
specified in an employment contract or (ii) terminated sooner
than one year because of death, resignation or otherwise.
Pursuant to the By-Laws, our Board of Directors elects our
executive officers at the Board's annual organizational
meeting immediately following the annual meeting of
stockholders.
Current Executive Officer Information
The table below identifies our current executive officers and
the capacities in which they now serve. Set forth following
the table is certain biographical information provided to us
by these executive officers regarding their acquired business
skills and experience.
Executive Officers
---------------------------------------------------------------------------------------
Name Position with the Company Age
---- ------------------------- ---
Clarence L. Werner Chairman 72
Gary L. Werner Vice Chairman 52
Gregory L. Werner President and Chief Executive Officer 50
Derek J. Leathers Senior Executive Vice President and Chief Operating 40
Officer; President of Werner Global Logistics
H. Marty Nordlund Senior Executive Vice President-Specialized Services 48
Robert E. Synowicki, Jr. Executive Vice President and Chief Information Officer 51
Richard S. Reiser Executive Vice President and General Counsel 63
John J. Steele Executive Vice President, Treasurer and 52
Chief Financial Officer
Jim S. Schelble Executive Vice President-Sales and Marketing 49
For information regarding the business experience of C.L.
Werner, Gary Werner and Greg Werner, please refer to Current
Director Information under the Proposal 1 - Election of
Directors section of this Proxy Statement.
DEREK J. LEATHERS, joined the Company in 1999 as the Managing
Director-Mexico Division. During his tenure with us, he
received the following promotions: (i) Vice President-Mexico
Division in 2000; (ii) Vice President-International in 2001;
(iii) Senior Vice President-International in April 2003; (iv)
Senior Vice President-Van Division and International in July
2003; and (v) Executive Vice President-Van Division and
International in 2004. In 2006, Mr. Leathers was promoted to
his current position as Senior Executive Vice President and
was named President of Werner Global Logistics. He also
serves as our Chief Operating Officer, a position to which he
was appointed by the Board in May 2008. Prior to joining the
Company, Mr. Leathers was Vice President of Mexico Operations
for two years at Schneider National, a large truckload
carrier, and he held various other management positions during
his eight-year career at Schneider National.
H. MARTY NORDLUND, joined us in 1994 as an account executive.
He then received the following promotions with the Company:
(i) Director of Dedicated Fleet Services in 1995; (ii) Senior
Director of Dedicated Fleet Services in 1997; (iii) Vice
19
President-Dedicated Fleet Services in 1998; (iv) Vice
President-Specialized Services in 2001; (v) Senior Vice
President-Specialized Services in 2003; and (vi) Executive
Vice President-Specialized Services in 2005. In 2006, Mr.
Nordlund was named to his current position as Senior Executive
Vice President-Specialized Services. Prior to joining the
Company, Mr. Nordlund held various management positions with
Crete Carrier Corporation, a large privately held truckload
carrier.
ROBERT E. SYNOWICKI, JR., joined the Company in 1987 as a tax
and finance manager. Since that time, he was appointed to the
following positions: (i) Treasurer in 1989; (ii) Vice
President, Treasurer and Chief Financial Officer in 1991;
(iii) Executive Vice President and Chief Financial Officer in
March 1996; and (iv) Executive Vice President and Chief
Operating Officer in November 1996. He was named to his
current position as Executive Vice President and Chief
Information Officer in 1999. Mr. Synowicki was employed by
the independent public accounting firm of Arthur Andersen &
Co. as a certified public accountant from 1983 until his
employment with us in 1987. Mr. Synowicki also serves on the
board of directors of Blue Cross and Blue Shield of Nebraska
and other professional organizations.
RICHARD S. REISER, joined the Company as Vice President and
General Counsel in 1993. He was promoted to Executive Vice
President and General Counsel in 1996. Mr. Reiser was a
partner in the Omaha office of the law firm of Nelson and
Harding from 1975 to 1984. From 1984 until his employment
with us, he was engaged in the private practice of law as a
principal and director of Gross & Welch, a professional
corporation and law firm, in Omaha, Nebraska. Mr. Reiser is
also active in various professional and civic organizations
and serves on the board of directors or as an officer for
several of these associations.
JOHN J. STEELE, joined the Company in 1989 as Controller.
During his time with us, he was appointed to the following
positions: (i) Corporate Secretary in 1992; (ii) Vice
President-Controller and Corporate Secretary in 1994; (iii)
Vice President, Treasurer and Chief Financial Officer in 1996;
and (iv) Senior Vice President, Treasurer and Chief Financial
Officer in 2004. He was named to his current position as
Executive Vice President, Treasurer and Chief Financial
Officer in 2005. Mr. Steele was employed by the independent
public accounting firm of Arthur Andersen & Co. as a certified
public accountant from 1979 until his employment with the
Company in 1989.
JIM S. SCHELBLE, joined us in 1998 as Manager of New Business
Development. During his tenure with the Company, Mr. Schelble
was promoted to the following positions: (i) Director of
National Accounts in 1999; (ii) Senior Director of Dedicated
Services in 2000; (iii) Associate Vice President of Corporate
and Dedicated Sales in 2002; (iv) Vice President-Sales in
2003; and (v) Senior Vice President-Sales in 2004. In 2005,
he was named to his current position as our Executive Vice
President-Sales and Marketing. Prior to joining the Company,
Mr. Schelble spent twelve years with Roadway Express, a less-
than-truckload carrier, in a variety of management positions
within operations, sales, and marketing.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Stock Ownership of Directors, Executive Officers and Certain
Beneficial Owners
The Beneficial Ownership table on page 21 sets forth certain
information as of March 22, 2010, with respect to the
beneficial ownership of our common stock by:
(i) Each of our directors and director nominees;
(ii) Each of our Named Executive Officers;
20
(iii) Each person known to us to beneficially own more
than 5% of the outstanding shares of our common
stock; and
(iv) All current executive officers, directors and
director nominees as a group.
On March 22, 2010, we had 72,068,796 shares of common stock
outstanding. Except as otherwise indicated in the Beneficial
Ownership table, the persons listed have sole voting power and
sole investment power with respect to such shares of our
common stock indicated as beneficially owned by them. Unless
otherwise noted, the physical business address of each
beneficial owner set forth in the Beneficial Ownership table
is: 14507 Frontier Road, Omaha, Nebraska 68138.
The footnotes to the Beneficial Ownership table are provided
on page 22.
Beneficial Ownership
------------------------------------------------------------------------------------
Amount and Nature
of Beneficial Ownership
-----------------------
Name of Shares Right to Total Percent of Shares
Beneficial Owner Owned Acquire (1) Shares Outstanding (2)
---------------- ----- ----------- ------ ---------------
Clarence L. Werner (3) 23,326,418 100,000 23,426,418 32.5%
Gary L. Werner (4) 1,573,086 320,000 1,893,086 2.6%
Gregory L. Werner 3,303,594 391,668 3,695,262 5.1%
Derek J. Leathers 5,342 85,084 90,426 *
John J. Steele 6,539 44,500 51,039 *
Kenneth M. Bird, Ed.D. 500 - 500 *
Patrick J. Jung 2,000 - 2,000 *
Duane K. Sather 7,000 - 7,000 *
Michael L. Steinbach - - - -
Gerald H. Timmerman - - - -
BlackRock, Inc. (5) 3,830,514 - 3,830,514 5.3%
All executive officers, 28,242,443 1,070,752 29,313,195 40.1%
directors and director
nominees as a group
(14 persons) (3) (4)
*Indicates beneficial ownership of less than 1%.
21
Beneficial Ownership - Continued
--------------------------------------------------------------
(1) This column represents shares of our common stock
that a respective individual may acquire upon
exercising stock options that are vested as of March
22, 2010 or that will vest and become exercisable 60
days thereafter. The shares underlying these
options are not outstanding and may not be voted at
the 2010 Annual Meeting. This column does not
include any shares of restricted stock because all
such shares awarded by the Company will vest more
than 60 days after March 22, 2010.
(2) The percentages are based upon 72,068,796 shares,
which equals our outstanding shares as of March 22,
2010. In accordance with SEC rules, for individuals
who hold options exercisable within 60 days of March
22, 2010, the number of shares of common stock on
which the percentage is based also includes the
number of shares underlying such options.
(3) C.L. Werner has sole voting power with respect to
23,423,418 shares; sole dispositive power for
8,422,168 of these shares; shared voting power for
3,000 shares; and shared dispositive power with
respect to 15,004,250 shares.
(4) The shares shown for Gary Werner do not include:
(i) 479,497 shares held by the Gary L. Werner
Irrevocable Inter Vivos QTIP Trust II (the sole
trustee of this trust is Union Bank and Trust
Company, which has sole investment and sole voting
power over the shares held by the trust); and (ii)
500,000 shares held by the Becky K. Werner Revocable
Trust (the sole trustee of this trust is Becky K.
Werner, Mr. Werner's wife, and she has sole
investment and sole voting power over the shares
held by the trust). Mr. Werner disclaims actual and
beneficial ownership of the shares held by the Gary
L. Werner Irrevocable Inter Vivos QTIP Trust II and
the shares held by the Becky K. Werner Revocable
Trust.
(5) Based on Schedule 13G (Amendment No. 1) as of
December 31, 2009, as filed with the SEC by
BlackRock, Inc. BlackRock, Inc. claims sole voting
power of 3,830,514 shares and sole dispositive power
of 3,830,514 shares, but does not claim any shared
voting power or shared dispositive power with
respect to any of these shares. According to the
Schedule 13G filing, the address of this stockholder
is 40 East 52nd Street, New York, New York 10022.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who own more than 10% of
our registered class of equity securities (common stock), to
file with the SEC reports of beneficial ownership and changes
in such beneficial ownership. Executive officers, directors
and greater than 10% beneficial owners are required by SEC
rules to furnish us copies of all Section 16(a) forms they
file. We file Section 16(a) reports on behalf of our
executive officers and directors to report their initial and
subsequent changes in beneficial ownership of our common
stock.
Based solely upon our review of (i) the reports (including any
amendments thereto) we filed on behalf of our officers and
directors, (ii) copies of such forms furnished to us and (iii)
written representations from certain reporting persons that no
other reports were required for those persons, we believe that
all Section 16(a) filing requirements applicable to our
officers, directors and greater than 10% beneficial owners
were complied with during 2009; except that one Form 4 was
filed for Craig T. Callahan, Vice President-Logistics &
Corporate Sales, on October 26, 2009 with respect to the sale
and disposal of 422 shares of our common stock by Mr.
Callahan's spouse on June 10, 2009.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This section of the Proxy Statement identifies our Named
Executive Officers and explains how our compensation policies
and practices are developed and operate with respect to such
Named Executive Officers. In the Compensation Discussion and
Analysis, we also discuss and analyze our executive
compensation program and the executive compensation amounts
shown in such section. This discussion should be read in
22
conjunction with the Summary Compensation Table (including the
related tabular and narrative disclosures) and the
Compensation Committee section under Corporate Governance in
this Proxy Statement. As indicated in that section, the
Compensation Committee of the Board of Directors is
responsible for establishing our executive compensation
policies and overseeing our executive compensation practices.
Our Compensation Committee is also comprised solely of
independent directors, each of whom is independent pursuant to
SEC rules and NASDAQ listing standards.
Named Executive Officers. Pursuant to the SEC rules, our
Named Executive Officers consist of the CEO, CFO and the three
most highly compensated executive officers (excluding the CEO
and CFO) who were executive officers as of December 31, 2009.
Our five Named Executive Officers are identified in the table
below.
2009 Named Executive Officers
-------------------------------------------------------------------
Name Position with the Company
---- -------------------------
1. Clarence L. Werner Chairman
2. Gary L. Werner Vice Chairman
3. Gregory L. Werner President and Chief Executive Officer
4. Derek J. Leathers Senior Executive Vice President and Chief
Operating Officer; President of Werner
Global Logistics
5. John J. Steele Executive Vice President, Treasurer and
Chief Financial Officer
The Compensation Committee believes the executive compensation
program for our Named Executive Officers has been instrumental
to our business and in helping us accomplish our objectives.
We also regard the program as appropriate and fair in view of
our financial performance relative to our competitive peer
group and given the challenging economic and freight market
conditions that persisted in 2009. We believe these difficult
circumstances resulted in a more competitive market for
executive talent but, even during this tough economic period,
our total compensation mix allowed us to retain qualified
executive officers who possess the necessary experience and
expertise to manage the Company, contribute to our long-
standing success and create value for our stockholders. (The
peer group is identified in the Competitive Peer Group and
Benchmarking section within the Compensation Discussion and
Analysis. Our 2009 financial statements are included in our
Annual Report on Form 10-K for 2009 filed with the SEC on
February 26, 2010.)
2009 Executive Compensation Program and Objectives. Our
executive compensation program is designed to achieve the
following primary objectives:
* Attract, motivate and retain talented high-quality
executives who contribute to the advancement of our
strategic, operational and financial goals and to our
long-term success in today's competitive markets and
industry.
* Reward our executive officers for their individual
performance, leadership and contribution to the
achievement of our overall business objectives.
* Support our Mission Statement, Vision Statement and
guiding corporate principles. (Our Mission and Vision
Statements are included on our website at
http://www.werner.com under the "About Us" tab.)
The Compensation Committee carries out our executive
compensation objectives by applying the following principles:
23
* Provide compensation that is competitive with that
paid by companies in our industry for executive
talent. Our Compensation Committee has the authority
to engage the services of an outside advisor to assist
with determining how our executive compensation
program compares to those of other companies.
* Reward performance by considering factors such as (i)
our financial performance, (ii) the executive
officer's individual performance and contribution to
our overall business goals and (iii) the performance
of the executive officer's business unit when
evaluated in light of overall Company performance and
the year's market, industry and economic conditions.
* Ensure that highly capable and goal-oriented
executives remain motivated and committed to the
Company, even when downturns in the industry and
economy affect Company performance. This principle is
important with respect to encouraging our executives
to remain with the Company for long and productive
careers.
* Encourage our executive team to consider current and
long-term opportunities and risks that result in
positive Company performance and financial growth,
industry innovation, consistent stockholder value and
lasting collaborations with our customers and
partners.
* Encourage executive officers to become stockholders
and facilitate stock ownership in the Company by
offering equity-based compensation. We believe that
stock ownership links our executive officers'
interests with those of our stockholders and supports
strategic decision-making and actions that will serve
our long-term interests.
* Provide limited executive perquisites.
Elements of Executive Compensation. The five elements of our
2009 executive compensation program are: (i) base salary,
(ii) performance-based compensation, (iii) long-term incentive
compensation, (iv) perquisites and (v) benefits. The
following discussion explains these elements and their primary
purposes with respect to our 2009 executive compensation
program.
Base Salary. Base salary is a fixed element of
compensation that we pay to each executive officer for
the performance of his primary duties and
responsibilities. Generally, each respective executive
officer's base salary is commensurate with such
person's responsibility, experience, tenure and job
performance. As discussed in this Executive
Compensation section, base salaries are reviewed on an
annual basis and at the time of hire, promotion or
other change in job function and responsibilities.
Base salaries are not established on the basis of any
specific performance criteria, but a number of factors
are considered when determining individual salary
levels. These factors include but are not limited to
(i) the individual's overall performance and the level
of responsibility and complexity of the executive's
job; (ii) the performance of the business unit(s) or
function(s) under his leadership; (iii) how the
executive officer's salary compares to those of our
other executives; (iv) our overall performance and
achievements; (v) the economic and business conditions
affecting the Company at the time of the review; and
(vi) salaries paid by companies within our competitive
peer group for the same or similar positions. The base
salaries paid to each of our executive officers will
vary due to the application of these factors. Market
adjustments to executive base salaries may be made when
there is a significant change in an officer's position
or responsibilities or if competitive market data
indicates a significant deviation compared to market
salary practices. However, while we may be guided by
such events and data, we do not set compensation levels
at targeted or specific levels relative to that of a
particular peer, competitor or industry group.
The Compensation Committee's determination of Named
Executive Officer compensation packages are primarily
made through the exercise of its particular judgment
and by applying the factors discussed above. The 2009
base salaries of our Named Executive Officers are
disclosed in the Summary Compensation Table. With the
24
exception of Mr. Leathers, base salary levels in 2009
were the same as those in 2008 because we believed the
2008 levels remained competitive and modifications were
not warranted to achieve our executive compensation
program objectives. The base salaries of our Named
Executive Officers for 2009 were calculated by the
Compensation Committee following a thorough review of
each Named Executive Officer's overall compensation and
in light of each person's respective performance, our
financial results and developments in the competitive
transportation and logistics services markets. The
Compensation Committee raised the salary of Mr.
Leathers in recognition of his additional
responsibilities following his May 2008 promotion to
Chief Operating Officer. The Named Executive Officer
base salaries disclosed in the Summary Compensation
Table for 2009 are also slightly higher than those paid
in 2008 because our 2009 payroll calendar included one
additional pay cycle. The 2009 base salaries of our
Named Executive Officers averaged slightly above the
75th percentile when compared to the salaries for
similar positions with companies in our competitive
peer group. During its meeting in December 2009, the
Compensation Committee did not make any changes to
Named Executive Officer base salaries.
Performance-Based Compensation. Performance-based
compensation is typically awarded in the form of annual
cash bonuses. Our annual cash bonus program is a
discretionary program designed to encourage and reward
executives for performance during the fiscal year and
on a more short-term basis. However, we believe the
annual cash bonus program also contributes to our long-
term success because it rewards and drives individual
performance and motivates executive officers to improve
our overall performance. Historically, annual cash
bonus payments to executive officers have been the same
or higher than the previous year's payment. This
practice correlates with our relatively consistent
profitable financial results after considering the
economic and industry conditions that affect our
business.
Performance-based compensation is awarded by our
Compensation Committee. The Compensation Committee
awards performance-based compensation that it considers
appropriate based upon and after assessing: (i) the
financial and economic environment concerning the
Company; (ii) the respective officer's individual
performance and contribution toward achieving our
business objectives; (iii) the amount of the executive
officer's bonus payment awarded in the preceding year;
(iv) the President and CEO's recommendation to the
Compensation Committee; (v) performance-based
compensation data and total cash compensation data
("cash compensation" is inclusive of base salary and
performance-based compensation) for certain officer
positions, including actual bonuses paid in the
marketplace by other transportation and logistics
services companies in our competitive peer group; and
(vi) our overall financial results (including our
revenues, net income, operating ratio (operating
expenses divided by operating revenues), total
stockholder return and return on assets relative to our
competitive peer group). (In this Proxy Statement,
"total stockholder return" refers to the percentage
increase in the value of stockholders' Company shares,
including changes in the stock price and re-investment
of dividends.) Final award amounts approved by the
Compensation Committee for each executive officer are
intended to be competitive for our market and
reflective of each respective executive officer's
performance and contribution to our financial and
business performance and success.
In December 2009, our Compensation Committee approved
and awarded annual cash bonuses to the Named Executive
Officers, excluding C.L. Werner, under our
discretionary annual cash bonus program. In 2009, C.L.
Werner requested that he not be awarded an annual cash
bonus in conjunction with our Company-wide cost-saving
initiatives that were implemented during the year. The
annual cash bonuses of Gary Werner and Greg Werner were
also reduced, at their request, in connection with such
initiatives. The Compensation Committee awarded
Messrs. Leathers and Steele each a slightly increased
25
annual cash bonus for their individual performance in
2009. Messrs. Leathers and Steele were each members of
our leadership team that implemented Company-wide cost-
saving initiatives throughout 2009, which helped us
maintain our profitability during a challenging
economic period. The performance-based compensation
for our Named Executive Officers is slightly below the
75th percentile for similarly positioned executives of
the companies in our competitive peer group.
The Compensation Committee also compared our Named
Executive Officers' total cash compensation to that
of our competitive peer group when determining
performance-based compensation awards. The 2009 total
cash compensation of our Named Executive Officers
averaged slightly above the 75th percentile for
similar positions with the competitive peer group
companies. The competitive peer group information
considered by the Compensation Committee was provided
in the executive compensation survey prepared by
Towers Watson.
In making its 2009 annual cash bonus decisions, the
Compensation Committee compared our performance for the
nine-month period ended September 30, 2009 to the
performance of other publicly traded truckload carrier
competitors. Compared to these truckload competitors,
our earnings per share had the largest increase and our
operating ratio showed the largest improvement from
first quarter 2009 to third quarter 2009. We were also
the only profitable publicly traded truckload carrier
to show operating ratio improvement in third quarter
2009 compared to third quarter 2008. The Compensation
Committee also determined that our overall financial
performance met with management's expectations,
particularly given the challenging business and
economic climate. The annual cash bonuses awarded to
our Named Executive Officers in 2009 are disclosed in
the Summary Compensation Table.
Long-Term Incentive Compensation. Our long-term
incentive program is important to us because it helps
attract a talented executive team, encourages long-term
retention of executive officers and enables us to
recognize efforts put forth by executives who
contribute to our stock price appreciation and Company
development.
Our Equity Plan permits a variety of equity awards
under our ongoing long-term incentive program. We have
historically chosen a stock option long-term incentive
program; and in May 2007, our stockholders approved
amendments to the Equity Plan that authorize us to
award restricted stock to our executive officers, in
addition to stock options or SARs. Since that time,
the Compensation Committee has considered whether to
grant awards other than stock options as part of our
long-term incentive compensation. In 2008, we awarded
restricted stock for the first time under the Equity
Plan. In determining long-term incentive compensation,
our Compensation Committee evaluates which equity award
vehicles achieve the best balance between providing
appropriate long-term incentive compensation and
creating and maintaining long-term stockholder value.
The periodic vesting periods of long-term incentive
compensation directly align executive officer interests
and compensation with our stockholders' interests by
rewarding creation and preservation of long-term
stockholder value. The Compensation Committee also
believes this element of compensation provides equity
ownership opportunities for our executive officers.
Because we do not have a pension plan and some
executives' 401(k) Retirement Savings Plan
contributions are limited under federal income tax
rules (as discussed in the Benefits section on page
29), we believe our executive officers consider
potential wealth accumulation from equity gains when
planning for their retirement.
26
Stock option and restricted stock grants are made at
the discretion of the Compensation Committee and are
not necessarily made on an annual basis. In designing
long-term incentive awards and determining an overall
pool of stock to make available for grant, the
Compensation Committee considers the Board's duty to
our stockholders to limit equity dilution, whether such
awards will help to accomplish our executive
compensation program objectives, how our relative
financial performance compares against the marketplace
and the emphasis placed on equity in the total mix of
compensation. For purposes of allocating the overall
stock pool among executive officers, our Compensation
Committee also evaluates (i) the scope of each
executive's responsibilities, position and experience;
(ii) each executive officer's individual and business
unit performance and contribution to our overall
performance and financial results; (iii) the total mix
of compensation for each executive; (iv) our historical
practice of granting equity awards to executive
officers; and (v) the perceived retention value of the
total compensation package in light of the current
labor and financial markets. The Compensation
Committee will weigh these factors, in addition to
long-term stockholder value and interests, when making
any executive stock award determinations.
Stock options represent a right to purchase a certain
number of shares of our common stock at a particular
exercise price per share after designated vesting
periods occur. The exercise price is equal to the
NASDAQ Global Select MarketSM closing market price of
our common stock on the grant date. Stock option value
depends upon stock price appreciation. We believe this
factor motivates our executive officers to improve and
maintain Company performance because strong financial
results may potentially increase the value of any
unexercised stock options. Please refer to the Stock
Grant Practices section under Other Executive
Compensation Policies and Considerations on page 34 for
additional information regarding stock options.
An award of restricted stock entitles the recipient to
receive a specified number of shares of our common
stock, at no cost to the recipient, if the executive
officer remains employed with us when the restricted
stock vests. The value of the restricted stock is
equal to the NASDAQ Global Select MarketSM closing
market price on any given date after granting.
Consequently, the restricted stock value may increase
or decrease with changes in the stock price during the
period between granting and vesting and on the vesting
date and each subsequent day thereafter. We believe
that restricted stock awards directly link executive
officer interests with those of our stockholders
because restricted stock value is impacted by these
stock price changes, and the Compensation Committee
considers the granting of restricted stock awards to be
a means of increasing executive officer ownership in
Company stock. We also believe that despite the stock
price fluctuations, restricted stock will have value in
the long-term and can potentially deliver greater
share-for-share compensation value at grant than stock
options. By awarding restricted stock, we are able to
offer comparable grant date compensation value with
fewer shares, and we believe the use of restricted
stock accordingly results in less dilution of earnings
per share when compared to stock options.
Vesting of stock options and restricted stock is
subject to continued employment with us. This
condition helps ensure that a portion of an executive
officer's awards will vest after several years, which
is intended to retain the executive officer and cause
them to focus on our long-term business objectives.
When deciding upon the long-term incentive compensation
of our Named Executive Officers in December 2009, the
Compensation Committee considered the information
regarding competitive peer group long-term incentive
compensation that was included in the Towers Watson
executive compensation survey. The survey indicated
that during the past three years, our long-term
27
incentive compensation fell between the 25th percentile
and the median of our competitive peer group. The
Compensation Committee also assessed each Named
Executive Officer's respective contributions to our
performance for the nine-month period ended September
30, 2009 and our performance during that time compared
to other companies within our competitive peer group.
The Compensation Committee also took into account our
overall financial performance given the challenging
business and economic climate, such as our improvement
in total stockholder return in 2008 (15% total
stockholder return) and for the ten-month period ending
October 31, 2009 (8% total stockholder return), both of
which are above the 75th percentile for our competitive
peer group.
We did not grant any stock options or SARs to our Named
Executive Officers in 2009. On December 1, 2009, the
Compensation Committee, in its sole discretion, awarded
Gary Werner, Greg Werner and Derek Leathers each 30,000
shares and John Steele 10,000 shares of restricted
stock in accordance with our Equity Plan. These shares
were awarded to each Named Executive Officer in
acknowledgement of their respective contributions to
our overall success and accomplishments during the
tough 2009 economic climate. Pursuant to the
Restricted Stock Award Agreements with the restricted
stock recipients, the restricted stock is subject to
service-based vesting provisions. Beginning three
years after the grant date of each award, the
restricted stock will vest annually in five increments
of 20% each. The awards will then become fully vested
on December 1, 2016. The Named Executive Officer
recipients do not have any voting or dividend rights
with respect to such stock until it is fully vested,
and there are not any post-vesting sales restrictions
on the shares. (The Form of Restricted Stock Award
Agreement was included as Exhibit 10.1 to our Current
Report on Form 8-K filed with the SEC on December 4,
2009.)
No long-term incentive compensation was granted to C.L.
Werner in 2009. The Compensation Committee recognizes
that C.L. Werner's level of stock ownership
significantly connects his interests with the interests
of our stockholders, and from time to time, our
Compensation Committee considers compensation
arrangements and awards for C.L. Werner given his
continuing contributions and leadership to the Company.
Please refer to the Summary Compensation Table and
Grants of Plan-Based Awards for 2009 table for further
details concerning long-term incentive compensation
awarded to our Named Executive Officers.
Perquisites. Our executive compensation program includes
executive perquisites that we consider an important
element of our total executive reward packages and are
necessary for Named Executive Officers to carry out the
responsibilities of their positions. We believe our
Named Executive Officer perquisites and other benefits
are representative of and competitive with those
offered by companies with whom we compete for executive
talent, and offering these perquisites and benefits
helps us with attracting and retaining valued and
talented executive officers.
The aggregate incremental cost of perquisites and other
benefits provided to the Named Executive Officers is
shown in the "All Other Compensation" column of the
Summary Compensation Table and detailed in the All
Other Compensation for 2009 section of this Proxy
Statement.
The perquisites offered under our 2009 executive
compensation program were as follows:
* Accounting, Legal and Tax Services. Our
Chairman, Vice Chairman and President and CEO
utilize accounting, legal and tax (income tax
preparation) services provided by us. The
Chairman fully reimburses us for such services.
We receive no such reimbursement from the Vice
Chairman and President and CEO. The
reimbursement amounts we receive from the
28
Chairman and the unreimbursed amounts included in
compensation for the Vice Chairman and President
and CEO are based on our estimate of the costs
incurred by the Company for our personnel to
provide these services.
* Country Club Membership. In 2009, we provided
Mr. Leathers with a country club membership. The
membership fees and other business-related and
reasonably incurred expenses were paid by us, and
we received full reimbursement from Mr. Leathers
for any personal expenses he incurred in
connection with the membership. We provide this
membership for our benefit, notwithstanding the
incidental personal benefit to Mr. Leathers.
* Personal Use of Corporate Aircraft and Property.
The Chairman, Vice Chairman and the President and
CEO are permitted personal use of our corporate
aircraft provided they reimburse the Company (we
do not provide non-reimbursed personal use to any
of these three executives). When the Chairman,
Vice Chairman or President and CEO uses our
corporate aircraft for personal business, such
Named Executive Officer reimburses us the higher
of our incremental cost or the taxable amount
calculated pursuant to the Internal Revenue
Service (the "IRS") regulations. Our executive
officers are also permitted limited personal use
of the corporate aircraft with the approval of
the Chairman, Vice Chairman or President and CEO,
and we are not reimbursed for such utilization of
the aircraft by the executive officer. None of
our Named Executive Officers used the corporate
aircraft for personal benefit in 2009 other than
the Chairman, whose reimbursements for such use
are discussed under Transactions with Related
Persons. Our executive officers are also allowed
limited use of our corporate condominiums and
Valley Lodge for personal purposes subject to the
approval of the Chairman, Vice Chairman or
President and CEO. In 2009, none of our Named
Executive Officers used the corporate
condominiums or Valley Lodge for personal
benefit.
* Company Vehicle. We provide each Named Executive
Officer with one Company vehicle for business and
personal use, with the exception of the Chairman
who is provided two Company vehicles. We are
responsible for paying the operating expenses of
these vehicles, which include costs such as fuel,
repairs and maintenance, insurance and licensing
and registration.
Benefits. As discussed above in Perquisites, we believe
our benefits are competitive and standard compared to
those offered by companies in our industry and
competitive peer group and are essential for retaining
exceptional executives. In 2009, we offered the
following benefits:
* Health and Welfare Benefits. Our Named Executive
Officers are eligible to participate in our full
range of health and welfare benefits, and are
covered under the same plans and terms, that are
provided to all of our full-time employees in the
United States. In 2009, we partially paid the
healthcare insurance premiums of Mr. Leathers.
These premiums are disclosed under All Other
Compensation for 2009.
* 401(k) Plan. Our Named Executive Officers are
eligible to participate in our 401(k) Retirement
Savings Plan (the "401(k) Plan"). This plan
allows participants to make pre-tax deferred
salary contributions through payroll deductions,
and the Company matches a certain portion of each
participant's contributions. Earnings on
participant and Company contributions grow tax-
deferred. 401(k) Plan matching contributions are
made to Named Executive Officers on the same
terms as provided to our eligible U.S. employees.
At his respective request, the Vice Chairman and
the President and CEO do not receive a matching
contribution from us for the 401(k) Plan. Our
Chairman does not participate in this plan.
401(k) Plan Company-made matching contributions
for our other Named Executive Officers are
detailed under All Other Compensation for 2009.
29
* Employee Stock Purchase Plan. The Named
Executive Officers may elect to participate in
our Employee Stock Purchase Plan. Generally
under this plan, a participant may acquire shares
of our common stock at market price through
payroll deduction, and the Company will match an
amount equal to a specified percentage of each
participant's contributions. Such matching
amounts are made to Named Executive Officers on
the same terms as provided to our eligible U.S.
employees. The All Other Compensation for 2009
section identifies matching amounts made for
Named Executive Officers who participate in this
plan.
* Executive Nonqualified Excess Plan. We offer
participation in the Executive Nonqualified
Excess Plan (the "nonqualified deferred
compensation plan") to key managerial employees
because their 401(k) Plan contributions are
limited under federal income tax rules applicable
to highly compensated employees. We believe
these executives should have other similar means
of saving for retirement on a tax-deferred basis.
Our nonqualified deferred compensation plan (as
described further under Nonqualified Deferred
Compensation for 2009) enables these highly
compensated employees, including our Named
Executive Officers, to contribute amounts (in
addition to their 401(k) Plan contributions) on a
tax-deferred basis, subject to annual dollar
limits we impose. The nonqualified deferred
compensation plan provisions allow us to make
matching contributions; however, to date, we have
elected not to make any such contribution. Our
nonqualified deferred compensation plan is
described further under Nonqualified Deferred
Compensation for 2009.
Role of the Compensation Consultant. In 2009, our
Compensation Committee directly retained and engaged Towers
Watson as its compensation consultant. Towers Watson is an
independent outside compensation consulting firm that assists
our Compensation Committee, as requested, in fulfilling
certain tasks and responsibilities prescribed in its charter.
Towers Watson reports and provides services only to our
Compensation Committee, although Towers Watson may work in
cooperation with management only as required to carry out its
obligations to the Compensation Committee. Without the
Compensation Committee's prior approval, Towers Watson will
not perform any services for us or our management.
Our Compensation Committee typically seeks market analysis and
information from Towers Watson prior to reviewing and deciding
executive compensation for the upcoming year. This
information includes compensation trends and practices in our
industry, competitive peer companies, historical compensation
statistics and market survey data. Towers Watson also
provides general guidance on our executive compensation
program and awards, but the consultant does not determine or
recommend any amounts or forms of compensation for any of our
executive officers or directors.
In 2009, other than for work completed for the Compensation
Committee, Towers Watson did not provide any services to us,
our management or any of our affiliates.
Compensation Process and Determination. The Compensation
Committee makes all annual compensation decisions for our
Named Executive Officers and executive officers.
Additionally, the President and CEO may also modify
compensation for certain executives within the Compensation
Committee parameters described below.
When determining total compensation, we apply a consistent
approach for all Named Executive Officers and other executive
officers. The structure and levels of our executive
compensation program are determined, in large part, by
considering all elements of compensation, rather than only a
few components in isolation. Our Compensation Committee
evaluates each element individually and also takes into
account the position and current total direct compensation of
the individual being considered. (Direct compensation
30
includes base salary, cash bonuses and long-term incentive
compensation.) The Compensation Committee's determination of
compensation levels for our executive officers therefore
differs depending upon these factors. Our Compensation
Committee also exercises appropriate business judgment in how
it applies these standard approaches to the facts and
circumstances involving each respective executive officer.
The Compensation Committee determines each component of an
executive officer's compensation based on its collective
assessment of the officer's performance, Company's overall
financial performance and recommendations of our President and
CEO. Our Compensation Committee may also request executive
compensation guidance and advice from an independent outside
consultant (such as Towers Watson) when deciding compensation
for our Named Executive Officers and other executive officers.
In addition to the factors and information described above,
our Compensation Committee also considers and determines the
compensation of our executive officers as follows:
Compensation of All Named Executive Officers. Each year,
the Compensation Committee reviews each element of
executive compensation and how such elements relate to
the total direct compensation, executive position and
related responsibilities of each Named Executive
Officer. As part of this annual process, the
Compensation Committee also examines how such elements
are reflected in competitive executive compensation
market data when determining annual pay opportunities.
Generally, the amount of compensation realized or
potentially realizable does not directly impact the
level at which future pay opportunities are set, but
such amount is considered by the Compensation
Committee.
Compensation of Chairman, Vice Chairman and President and
CEO. Our Compensation Committee assesses the executive
compensation information compiled by the independent
outside consultant (Towers Watson) when developing
compensation packages for our Chairman, Vice Chairman
and President and CEO. Upon reviewing such
information, the Compensation Committee then meets in
executive session and determines a compensation package
for each of these particular officers based on how the
elements of executive compensation apply to the
individual and the related factors described above.
These factors generally include each individual's job
performance, responsibilities and the scope of their
position, leadership and our financial and operating
performance. The President and CEO's compensation is
reflective of our overall performance and the
achievement of the President and CEO's goals and
objectives for the Company. Our Chairman, Vice
Chairman and President and CEO are also eligible for
all of the same compensation programs, perquisites and
benefits as our other Named Executive Officers.
Our Chairman, Vice Chairman and President and CEO do
not participate in the Compensation Committee's
deliberations or decisions with regard to his own
respective compensation or the compensation of any
other such Named Executive Officer having the title of
Chairman, Vice Chairman or President and CEO.
Compensation of Other Named Executive Officers and
Executive Officers. At the end of the year, the
Compensation Committee reviews the competitive market
compensation data for our peer group compiled by the
independent outside consultant (Towers Watson). Upon
doing so, our Compensation Committee establishes cash
compensation "pay ranges" (inclusive of base salary and
annual cash bonus) according to job title (such as
Senior Executive Vice President and Executive Vice
President). As explained in the Compensation Committee
section within Corporate Governance, the Compensation
Committee delegated certain authority to our President
and CEO that permits him to adjust the base salaries of
executive officers. The President and CEO does not
31
have authority to modify his own base salary or that of
the Chairman or Vice Chairman. After our Compensation
Committee defines the cash compensation pay ranges, the
President and CEO may then make changes to the
executive officer base salaries during the following
year, provided such changes are within the parameters
of the pay ranges designated by the Compensation
Committee. Our Compensation Committee reviews and
approves these base salary changes at the close of the
year. Any proposed changes that do not fall within the
established pay ranges require the approval of the
Compensation Committee before any such changes become
effective. At the end of the year, the President and
CEO presents to our Compensation Committee his year-end
total cash compensation recommendations for the other
Named Executive Officers and executive officers. Our
Compensation Committee then reviews and approves such
recommendations at its year-end meeting. (For example,
our Compensation Committee established cash
compensation pay ranges in December 2009 for fiscal
year 2010. The President and CEO has delegated
authority to modify base salaries throughout 2010
within these ranges. In November or December 2010, the
Compensation Committee will review the President and
CEO's total cash compensation recommendations for the
executive officers, and such recommendations will
include these base salary changes.) During 2009, our
President and CEO did not make any increases to
executive officer base salaries.
After conducting its review of our peer group's
compensation data, the Compensation Committee also
evaluates and approves the annual cash bonus and long-
term incentive compensation for the other Named
Executive Officers and executive officers. In making
such determinations, the Compensation Committee
considers the relevant factors and compensation
elements, including (i) each executive officer's
position and related responsibilities, (ii) overall
individual and Company performance and (iii)
achievement of corporate goals and objectives. Our
Compensation Committee determines annual cash bonus and
long-term incentive compensation near the end of the
fiscal year.
Our President and CEO participates in the Compensation
Committee's discussions regarding the compensation and
performance of the other Named Executive Officers and
executive officers. The Compensation Committee values
the President and CEO's evaluation of the other
executives because he has direct knowledge of each
person's performance and contributions to the Company.
Prior to the Compensation Committee's discussions, the
President and CEO may seek and consider input from the
Chairman and Vice Chairman. However, other than the
President and CEO, no other Named Executive Officer or
executive officer participates in the executive
compensation discussions and decisions of the
Compensation Committee.
Competitive Peer Group and Benchmarking. The Compensation
Committee refers to a competitive market analysis and market
data provided by Towers Watson when it reviews and prepares
executive compensation for the year. The market analysis
incorporates the market data and reflects compensation levels
and practices for executives holding similar positions at
companies within our peer group, which helps our Compensation
Committee determine executive compensation at competitive
levels. In 2009, Towers Watson prepared such an analysis for
the Compensation Committee. The Compensation Committee then
compares three of our executive compensation elements (base
salary, performance-based compensation and long-term incentive
compensation) to amounts paid for similar executive positions
among (i) those companies in our peer group (which consists of
companies that specifically provide transportation and
logistics services) and (ii) a broader general industry group
comprised of companies with annual revenues comparable to
ours. The Compensation Committee places more significance on
our competitive peer group than the general industry group.
32
Each year, our Compensation Committee reviews the general
criteria and recommendations for the addition or removal of
companies in our competitive peer group. The criteria
includes but is not limited to market capitalization,
revenues, net income and industry of operation. Upon applying
these criteria, the Compensation Committee selected our peer
group, which is comprised of 15 companies in the
transportation and logistics services industry with whom we
compete for executive talent. Although our Compensation
Committee may modify the peer group when appropriate, the
Compensation Committee prefers to keep the group substantially
consistent from year to year to produce more consistent and
useful executive compensation benchmarking.
When the Compensation Committee conducted its annual review of
our peer group in 2009, it determined the peer group should
include the same companies as in 2008 based on our peer group
criteria. Thus, our peer group did not change from 2008 to
2009.
Our competitive peer group for 2009 is shown in the table
below.
2009 Competitive Peer Group
-----------------------------------------------------------------------------------------------------
Arkansas Best Heartland Express Marten Transport
Celadon Group Hub Group Old Dominion Freight Line
C.H. Robinson Worldwide, Inc. J.B. Hunt Transport Services Pacer International
Con-Way Knight Transportation Saia
Covenant Transportation Group, Inc. Landstar System Universal Truckload Services, Inc.
In 2009, our Compensation Committee applied the competitive
peer group criteria to these 15 companies. Upon doing so, we
found that our revenues fell nearest to those revenues in the
top quartile of our competitive peer group; as a result, we
compare total direct compensation against the 75th percentile
of this peer group. The general industry data, on the other
hand, is regressed or size-adjusted according to our annual
revenues. Therefore, we compare total executive compensation
at the median of the general industry group.
The Compensation Committee does not attempt to set
compensation elements for each executive to meet specific
benchmarks based on peer group and general industry data.
Instead, we consider these comparisons as one factor in
determining executive compensation levels. Generally, the
Compensation Committee reviews total compensation levels
annually and makes adjustments when job responsibilities,
individual performance or market data warrants such
modifications. Actual total compensation can vary from year
to year based on Company, operating unit and individual
performance.
Risk Management Related to Compensation. When reviewing and
implementing the executive compensation program, the Company
and our Compensation Committee formulate and adhere to certain
practices that ensure consistent leadership and decision-
making among our executive officers. The Compensation
Committee assesses whether our program and practices are
reasonably likely to have a material adverse effect on the
Company and concluded they do not. The Compensation Committee
does not believe our executive compensation program and
practices are designed to promote or encourage unreasonable
risk for the following reasons:
* Base salaries are fixed amounts determined on an
annual basis and are established after a broad range
of factors (rather than specific performance measures)
are considered.
33
* Performance-based compensation represents a
significant portion of our executive officers' total
cash compensation and is awarded under our
discretionary annual cash bonus program. The
discretionary nature of the program allows for
determinations of executive officer annual cash
bonuses to be based on several factors, as discussed
under Performance-Based Compensation in the Elements
of Executive Compensation section of this Proxy
Statement. While annual cash bonuses generally reward
short-term performance and achievements, this
compensation also contributes to our long-term success
by motivating executive officers to better our overall
results and business.
* We generally consider and apply the same performance
measures and other factors for our annual cash bonus
program for the Named Executive Officers, other
executive and non-executive officers, management and
non-executive employees.
* Long-term incentive compensation is important to
further aligning our executive officers' interests
with those of our stockholders, and it balances short-
and long-term decision-making by our executives. Most
of our stock awards have staggered or long-term
vesting schedules, and the financial opportunity is
realized through appreciation of our stock price over
several years.
* The vesting and exercising of stock awards granted
under our Equity Plan may be prohibited if an
executive officer is terminated for cause or under
other circumstances as provided in the Equity Plan.
* With respect to their stock ownership, our executive
officers could lose significant value if our stock
price was exposed to unreasonable risk.
* Our performance-based and long-term incentive
compensation are not formulaic but are determined on a
discretionary basis by the Compensation Committee.
Awards of these types of compensation are also not
assured each year.
When structuring overall compensation practices for our non-
executive employees, we consider whether our practices
incentivize unreasonable risk-taking behavior and could
consequently impact our risk management and oversight. We
also regard the mix of pay and the elements of our executive
compensation program (including the relative considered
factors) as they apply to employees generally. Our non-
executive employee compensation practices are reviewed in the
context of current and significant risks to determine if the
practices encourage or induce employees to take unreasonable
risks, and we also take into account our other policies and
procedures that operate to monitor and deter unreasonable risk
(such as disciplinary or record-keeping policies). Management
also notifies our Board of significant and across-the-board
modifications to employee compensation practices. We
concluded that our non-executive employee compensation
practices do not encourage risks that are reasonably likely to
have a material adverse effect on us.
Other Executive Compensation Policies and Considerations.
Stock Grant Practices. Under our Equity Plan, the
Compensation Committee may grant stock options, SARs
and restricted stock to our executive officers and non-
employee directors. We do not have an annual equity
program, and the Equity Plan does not require us to
grant equity awards on an annual or otherwise regular
basis. Therefore, our Compensation Committee does not
grant equity awards on any pre-determined grant date.
Instead, the Compensation Committee selects a grant
date after it decides to grant any equity awards. The
Compensation Committee also selects a grant date that
occurs when neither the recipient nor the Compensation
Committee possess material nonpublic information.
Pursuant to our Equity Plan, the purchase price of the
common stock under each stock option is equal to the
closing market price of our common stock on the date
the option is granted. We do not necessarily consider
the realized or unrealized value of prior stock option
awards when determining the target economic value of
34
new stock option awards because each grant is awarded
as an incentive to drive future stockholder return.
For stock options granted prior to the May 2007 Equity
Plan amendments discussed below, the purchase price of
the common stock under each option was equal to the
closing market price of our common stock on the day
prior to the date of grant. Restricted stock is
awarded at no cost to the recipient.
Our Compensation Committee also establishes the vesting
period for each grant. We did not grant any stock
options to Named Executive Officers or our other
executive officers in 2009 or 2008. For that reason,
and to further explain the vesting periods of stock
options awarded under the Equity Plan, we have provided
the Stock Option Vesting Periods table below regarding
stock options granted in prior years for which a
portion of the option award remains outstanding. All
stock options granted to our Named Executive Officers
in 2007 vest over a six-year period based on the
prescribed schedules and expire after ten years.
Stock Option Vesting Periods
-----------------------------------------------------------------
2007 Grant: 1999-2006 Grants:
Years from Grant Date Amount Vested Amount Vested
--------------------- ------------- -------------
2 Years (24 Months) 15% 25%
3 Years (36 Months) 20% 20%
4 Years (48 Months) 20% 20%
5 Years (60 Months) 20% 20%
6 Years (72 Months) 25% 15%
The restricted stock granted in 2009 is subject to a
service-based periodic vesting schedule. Beginning
three years after the December 1, 2009 grant date, the
restricted stock will vest annually in five increments
of 20% each. These 2009 awards will become fully
vested on December 1, 2016 and have no post-vesting
sales restrictions. However, the restricted stock
granted in 2008 is not subject to periodic vesting
periods; rather, the restricted stock will vest five
years after the grant date of the award and has no
post-vesting sales restrictions. The restricted stock
granted in 2009 and 2008 does not give the recipient
any voting or dividend rights until such stock fully
vests.
Our Equity Plan also permits the Compensation Committee
to grant SARs to our executive officers and non-
employee directors. No such awards were granted in
2009, nor have any SARs been granted at any other time.
On May 8, 2007, our stockholders approved amendments to
the Equity Plan. (The Equity Plan was included as
Exhibit 99.1 to our Current Report on Form 8-K filed
with the SEC on May 14, 2007.) Please refer to the
preceding Long-Term Incentive Compensation section for
additional details regarding stock option and
restricted stock determinations. The Summary
Compensation Table and Grants of Plan-Based Awards for
2009 table also provide information regarding stock
options and restricted stock granted to our Named
Executive Officers.
Executive Stock Ownership. Although we do not have
formal stock ownership guidelines or requirements for
our executive officers, our executive officers as a
group hold over 40% of the outstanding shares of our
common stock. As discussed in this Proxy Statement,
our Equity Plan permits us to grant nonqualified stock
options, SARs and restricted stock to executive
officers. Our executive officers may also increase
35
their stock ownership by electing to participate in our
Employee Stock Purchase Plan, as discussed under
Benefits on page 29. Effective January 1, 2010, the
maximum annual contribution level for all employees
increased from $5,000 to $10,000. This increase
enables executive officers and other employees to
purchase a larger number of Company shares through the
Employee Stock Purchase Plan and thereby increase their
stock ownership in the Company. The individual stock
ownership of our Named Executive Officers is provided
in the Beneficial Ownership table on page 21.
Tax Deductibility of Executive Compensation; Accounting
Considerations. The Compensation Committee reviews
estimated tax and accounting (pro forma expense)
projections and implications and how these factors
impact the material elements of our executive
compensation program. Generally, executive salaries
and performance-based compensation are accrued as
expense over the requisite service period related to
the particular compensation element (this period is
typically equal to the performance period of the
executive officer), and we realize a tax deduction upon
the payment of the compensation to the executive.
Section 162(m) of the Internal Revenue Code prevents us
from taking a tax deduction, in any one taxable year,
for non-performance-based compensation in excess of $1
million paid to the CEO and the next four highest
compensated executive officers. We collectively refer
to these executives as the "covered officers." Certain
compensation of the covered officers is specifically
exempt from the deduction limit to the extent that such
compensation does not exceed $1 million during any
fiscal year or is "performance-based" as defined in
Section 162(m). The Compensation Committee carefully
considers and monitors the effect of Section 162(m) on
our executive compensation program and will structure
executive compensation to preserve its tax
deductibility under Section 162(m) while maintaining
our ability to attract, motivate and retain high-
quality executive officers. The Compensation Committee
also believes there are circumstances where the
interests of the Company and our stockholders are best
served by maintaining flexibility in the manner
compensation is provided. In those events, the
Compensation Committee may, at its discretion, approve
payments of nondeductible compensation if the
Compensation Committee believes the circumstances
warrant such payments. All amounts paid to the covered
officers during 2009 qualified as deductible under
Section 162(m), except for $71,744 paid to Greg Werner.
Our aggregate cost of the lost tax deduction that
resulted from exceeding the Section 162(m)
deductibility limit in 2009 was approximately $29,000.
Employment Arrangements
Each of our Named Executive Officers and other executive
officers has been an employee of the Company for at least ten
years, and none has any type of written employment agreement
with us.
Arrangements and Potential Payments Upon Termination or Change
in Control
Termination. None of our Named Executive Officers for 2009
has a severance agreement or severance benefit arrangement
with us. We do not provide for incremental compensation or
special treatment for incentive compensation in the event of a
Named Executive Officer's voluntary termination (such as
resignation or retirement), termination for cause or
termination by death or disability.
Change in Control. None of our Named Executive Officers has a
change in control agreement with us, and we do not currently
provide for incremental compensation or special treatment for
incentive compensation related to a change in control. Under
the stockholder-approved Equity Plan, the Compensation
Committee and the Board have the authority and discretion to
36
take certain actions in the event of a change in control in
the Company, and determinations of such actions are generally
made with respect to all Named Executive Officers or on a
case-by-case basis. These actions include but are not limited
to adjusting outstanding option awards or accelerating the
vesting dates of outstanding awards.
Potential Benefits Payable Under the Equity Plan. As stated
above, we do not have any employment, severance or change in
control agreements with any of our Named Executive Officers.
Our Equity Plan, however, permits the vesting of outstanding
equity awards upon certain termination or resignation actions
following a change in control. The Equity Plan provides that
if a Named Executive Officer is terminated other than for
"cause" or voluntarily resigns for "good reason" within the
period beginning upon a change in control and ending on the
second anniversary of the change in control, then (i) all
outstanding stock options and SARs will become fully
exercisable and (ii) all conditions and restrictions (other
than those imposed by law) on outstanding restricted stock
will be deemed satisfied as of the executive officer's
employment termination date. "Cause," "good reason" and
"change in control" are defined in the current stockholder-
approved version of the Equity Plan. (The Equity Plan was
included as Exhibit 99.1 to the Current Report on Form 8-K
filed with the SEC on May 14, 2007.)
The ensuing Potential Benefits Payable Under the Equity Plan
table shows the potential benefits payable to each Named
Executive Officer due to the occurrence of either the
termination or resignation event described in the Equity Plan.
The amounts of the potential benefits represent the estimated
value of all unvested equity awards that would fully vest upon
either event, assuming such event occurred on December 31,
2009 (the last day of our fiscal year) and a stock price of
$19.80 per share, which was the NASDAQ closing market price of
our common stock on the same date. These amounts are the same
for both events and are reflected in the "Potential Benefit"
column.
Potential Benefits Payable Under the Equity Plan
------------------------------------------------------------------
Number of Unvested Potential
Name Shares Vesting Benefit ($)(1)
---- -------------- --------------
Clarence L. Werner 15,000 (Stock Options) 22,050
Gary L. Werner 15,000 (Stock Options) 616,050
30,000 (Restricted Stock)
Gregory L. Werner 15,000 (Stock Options) 616,050
30,000 (Restricted Stock)
Derek J. Leathers 33,500 (Stock Options) 1,273,233
60,000 (Restricted Stock)
John J. Steele 21,000 (Stock Options) 252,195
10,000 (Restricted Stock)
----------------
(1) The actual exercise prices of the stock options (as
specified in each Named Executive Officer's
respective award agreements) vary from the $19.80
closing market price used to calculate the amounts
in this table. These actual exercise prices range
from a minimum of $16.68 per share to a maximum of
$18.33 per share. Shares of restricted stock do not
have an exercise price, thus the potential benefit
was calculated using only the $19.80 closing market
price.
37
Report of the Compensation Committee
The following report of the Compensation Committee shall not
be deemed to be "soliciting material" or to otherwise be
considered "filed" with the SEC, nor shall this report be
subject to Regulation 14A (other than as indicated) or to the
liabilities set forth in Section 18 of the Securities Exchange
Act of 1934. This report shall not be deemed to be
incorporated by reference into any prior or subsequent filing
under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent that the Company
specifically incorporates it by reference or treats it as
soliciting material.
In conjunction with the preparation of the Company's Annual
Report on Form 10-K for 2009 and this Proxy Statement for the
Annual Meeting of Stockholders to be held May 10, 2010, the
Compensation Committee has reviewed and discussed with
management the foregoing Compensation Discussion and Analysis
section (required by Item 402(b) of SEC Regulation S-K) of
this Proxy Statement.
Based on such review and discussion, the Compensation
Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis section be included in
this Proxy Statement and incorporated by reference into the
Company's Annual Report on Form 10-K for 2009.
Patrick J. Jung, Chair
Kenneth M. Bird, Ed.D.
Gerald H. Timmerman
Summary Compensation Table
The Summary Compensation Table provided on page 39 presents
all elements of compensation for our Named Executive Officers
for 2007, 2008 and 2009 as follows:
* Salary: Refers to Base Salary.
* Bonus: Refers to Performance-Based Compensation.
* Option Awards and Stock Awards: Refers to the
aggregate grant date fair value computed in accordance
with Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") Topic 718
(Compensation - Stock Compensation). Pursuant to SEC
rules, the amounts listed for 2007 and 2008 have been
restated to reflect the aggregate grant date fair
value of restricted stock and stock options awarded
during 2007 and 2008. Previously for these years, we
disclosed the amounts recorded as expense in our 2007
and 2008 financial statements for stock and option
awards granted to our Named Executive Officers.
* All Other Compensation: Represents the aggregate
amount of:
(i) Perquisites and other personal benefits having
an aggregate value in excess of $10,000;
(ii) Matching Company contributions to the 401(k)
Plan;
(iii) Insurance premiums paid by the Company;
(iv) Tax reimbursements; and
(v) Matching Company contributions under the
Employee Stock Purchase Plan.
You should read the Summary Compensation Table in conjunction
with the Compensation Discussion and Analysis section and the
tables and narrative descriptions that follow. Executive
deferrals to our 401(k) Plan and nonqualified deferred
compensation plan are included in the appropriate column
(typically the "Salary and/or Bonus" columns) for which the
compensation was earned.
38
The "Non-Equity Incentive Plan Compensation" column is omitted
from the Summary Compensation Table because we did not make
any non-equity incentive plan awards in 2007, 2008 or 2009.
We have also removed the "Nonqualified Deferred Compensation
Earnings" column from the Summary Compensation Table because
none of the earnings on the nonqualified deferred compensation
balances of our Named Executive Officers were above-market or
preferential earnings.
Summary Compensation Table
----------------------------------------------------------------------------------------------------
Stock Option All Other
Name and Bonus Awards Awards Compensation
Principal Position Year Salary ($)(1) ($)(2)(3) ($)(2)(3) ($)(4) Total ($)
------------------ ---- ------ ------ --------- --------- ------------ ---------
Clarence L. Werner - 2009 715,000 - - - 31,570 746,570
Chairman 2008 715,000 350,000 - - 31,570 1,096,570
2007 715,000 350,000 - - 32,308 1,097,308
Gary L. Werner - 2009 368,654 205,000 543,000 - 23,459 1,140,113
Vice Chairman 2008 356,750 230,000 - - 18,115 604,865
2007 355,000 230,000 - - 18,115 603,115
Gregory L. Werner - 2009 749,442 300,000 543,000 - 22,302 1,614,744
President and CEO 2008 720,000 350,000 - - 36,423 1,106,423
2007 679,615 350,000 - - 36,808 1,066,423
Derek J. Leathers - 2009 380,849 240,000 543,000 - 27,193 1,191,042
Senior Executive Vice 2008 288,234 230,000 686,400 - 26,204 1,230,838
President and COO;
President of Werner
Global Logistics (5)
John J. Steele - 2009 219,077 110,000 181,000 - 16,447 526,524
Executive Vice 2008 210,000 100,000 - - 17,065 327,065
President, Treasurer 2007 210,000 80,000 - 96,668 17,419 404,087
and CFO
----------------
(1) Annual cash bonus awards are made under the annual cash
bonus program. Bonuses reported in this column were
awarded by the Compensation Committee on December 1,
2009; December 2, 2008; and November 29, 2007,
respectively.
(2) The stock and option awards reported in these columns are
also disclosed in the Grants of Plan-Based Awards for
2009 table on page 41 and Outstanding Equity Awards at
December 31, 2009 tables on pages 42 and 43.
(3) We did not grant any option awards in 2009 or 2008. The
aggregate grant date fair value of the stock awards and
option awards, respectively, reported in these columns
are computed in accordance with FASB ASC Topic 718. For
a discussion of the assumptions used in each valuation,
refer to Note 5 of our Consolidated Financial Statements
in our Annual Report on Form 10-K for 2009.
(4) Refer to the All Other Compensation for 2009 table on
page 40 for a more detailed explanation of the
compensation reported in this column.
(5) Mr. Leathers was not a Named Executive Officer in 2007.
39
All Other Compensation for 2009
The table below shows the components of "all other
compensation" provided in 2009 to the Named Executive
Officers, as reported in the preceding Summary Compensation
Table.
All Other Compensation for 2009
---------------------------------------------------------------------------------------------------------------
Company
Contrib-
utions to
Company Employee
Perquisites Tax Contrib- Stock Severance
& Other Reimburse- Insurance utions to Purchase Payments/
Personal ments Premiums 401(k) Plan Accruals
Name Year Benefits ($) ($) (1) ($) (2) Plan ($) ($) (3) ($) (4) Total ($)
---- ---- ------------ ------- ------- -------- ------- ------- ---------
Clarence L. Werner 2009 20,331 (5) 11,239 - - - - 31,570
Gary L. Werner 2009 17,263 (6) 6,196 - - - - 23,459
Gregory L. Werner 2009 16,341 (7) 5,961 - - - - 22,302
Derek J. Leathers 2009 15,631 (8) 4,484 2,306 3,961 811 - 27,193
John J. Steele 2009 8,471 (9) 4,484 - 2,681 811 - 16,447
----------------
(1) The amounts reported in this column are the tax gross-
ups for Company vehicle use for our Named Executive
Officers.
(2) The amount reported in this column represents a
partial payment by the Company of Derek Leathers'
healthcare insurance premiums.
(3) There is a 15% Company match for employee
contributions to the Employee Stock Purchase Plan.
(4) In 2009 we did not, and do not currently, have any
employment, termination or change in control
arrangements with any of the Named Executive Officers.
(5) Perquisites and personal benefits include $20,331 for
use of two Company vehicles.
(6) Perquisites and personal benefits include $11,478 for
use of one Company vehicle and $5,785 for legal and
income tax preparation services.
(7) Perquisites and personal benefits include $11,066 for
use of one Company vehicle and $5,275 for income tax
preparation services.
(8) Perquisites and personal benefits include $8,471 for
use of one Company vehicle and $7,160 for Company-paid
country club membership.
(9) Perquisites and personal benefits include $8,471 for
use of one Company vehicle.
Our contributions on behalf of the Named Executive Officers to
the 401(k) Plan and Employee Stock Purchase Plan are made on
the same terms as provided to all of our eligible employees in
the United States. In addition to the above-mentioned
compensation, the Named Executive Officers also participated
in voluntary health and welfare benefit programs that are
available and comparable to such programs for all eligible
U.S. employees.
40
Grants of Plan-Based Awards for 2009
The following Grants of Plan-Based Awards for 2009 table sets
forth information regarding restricted stock and stock option
awards granted to Named Executive Officers under our Equity
Plan during 2009. Columns required by the SEC regulations are
omitted where there is no amount to report or such column is
inapplicable for all of the Named Executive Officers.
Grants of Plan-Based Awards for 2009
----------------------------------------------------------------------------------------------
All Other All Other Grant Date
Stock Awards: Option Awards: Fair Value
Number of Number of Exercise or of Stock
Shares of Securities Base Price and Option
Grant Stock or Underlying of Option Awards
Name Date Units (#)(1) Options (#)(1) ($/Sh)(2) ($)(3)
---- --------- ------------- -------------- ----------- ----------
Clarence L. Werner - - - - -
Gary L. Werner 12/1/2009 30,000 - - 543,000
Gregory L. Werner 12/1/2009 30,000 - - 543,000
Derek J. Leathers 12/1/2009 30,000 - - 543,000
John J. Steele 12/1/2009 10,000 - - 181,000
----------------
(1) The stock and option awards reported in these columns
are also disclosed in the Summary Compensation Table
and Outstanding Equity Awards at December 31, 2009
tables and therefore do not constitute additional
compensation not otherwise reported in this Proxy
Statement.
(2) Pursuant to our Equity Plan, the exercise price is
equal to the closing market price on the date of grant.
(3) The fair value of the restricted stock is based upon
the market price of the underlying common stock on the
grant date, reduced by the present value of estimated
future dividends because the award is not entitled to
receive dividends prior to vesting. The present value
of estimated future dividends was calculated based on a
$0.05 quarterly dividend amount per share and 2.9%
risk-free interest rate. The fair value of stock
options is estimated using a Black-Scholes valuation
model. Further discussion of the valuation and
assumptions regarding our stock and option awards is
provided in Note 5 of our Consolidated Financial
Statements in our Annual Report on Form 10-K for 2009.
Outstanding Equity Awards at 2009 Year-End
The tables on pages 42 and 43 present information regarding
all outstanding equity awards held by each of the Named
Executive Officers as of December 31, 2009. The stock option
and restricted stock awards disclosed in these tables were
granted under our long-term incentive program.
For the vesting dates of the unvested and unexercisable stock
options disclosed in the Outstanding Equity Awards at December
31, 2009 (Option Awards) table on page 42, please refer to the
Vesting Dates of Unvested and Unexercisable Stock Options at
December 31, 2009 table on page 44.
41
Outstanding Equity Awards at December 31, 2009
------------------------------------------------------------------------------------------------------
Option Awards(1)
----------------
Equity
Incentive
Plan Awards:
Number of Number of Number of
Securities Securities Securities
Underlying Underlying Underlying Option
Unexercised Unexercised Unexercised Exercise Option
Options: Options: Unearned Price Expiration
Name (#) Exercisable (#) Unexercisable(2) Options (#) ($/Sh)(3) Date
---- --------------- -------------------- ------------- --------- ----------
Clarence L. Werner 85,000 15,000 - 18.33 05/20/2014
Gary L. Werner 275,000 (4) - - 9.77 09/29/2011
85,000 15,000 - 18.33 05/20/2014
Gregory L. Werner 366,668 (5) - - 9.77 09/29/2011
85,000 15,000 - 18.33 05/20/2014
Derek J. Leathers 13,334 (6) - - 7.61 09/20/2010
33,334 - - 9.77 09/29/2011
29,750 5,250 - 18.33 05/20/2014
13,000 7,000 - 16.68 10/22/2015
3,750 21,250 - 17.18 11/30/2017
John J. Steele 12,500 - - 9.77 09/29/2011
17,000 3,000 - 18.33 05/20/2014
9,750 5,250 - 16.68 10/22/2015
2,250 12,750 - 17.18 11/30/2017
----------------
(1) We did not grant any stock options to our Named
Executive Officers in 2009 or 2008. The option
awards granted in 2007 and reported in this table
are also disclosed in the Summary Compensation Table
and therefore do not constitute additional
compensation not otherwise reported in this Proxy
Statement.
(2) The vesting dates of unvested and unexercisable
stock options are reported in the Vesting Dates of
Unvested and Unexercisable Stock Options at December
31, 2009 table on page 44.
(3) Pursuant to our Equity Plan, the exercise price is
equal to the closing market price on the date of
grant.
(4) In February 2010, Mr. Werner exercised 55,000 stock
options that were vested and exercisable at December
31, 2009.
(5) In February 2010, Mr. Werner exercised 75,000 stock
options that were vested and exercisable at December
31, 2009.
(6) In March 2010, Mr. Leathers exercised 13,334 stock
options that were vested and exercisable at December
31, 2009. The total number of shares acquired on
exercise and held by Mr. Leathers is 2,500.
42
Outstanding Equity Awards at December 31, 2009
------------------------------------------------------------------------------------------------------
Stock Awards(1)
---------------
Equity Incentive Equity Incentive
Plan Awards: Plan Awards:
Number of Market Value Number of Market or Payout
Shares or of Shares or Unearned Shares, Value of Unearned
Units of Stock Units of Stock Units or Other Shares, Units or
That Have That Have Rights That Have Other Rights That
Name Not Vested (#) Not Vested ($)(2) Not Vested (#) Have Not Vested ($)
---- -------------- ----------------- ---------------- -------------------
Clarence L. Werner - - - -
Gary L. Werner 30,000 (3) 594,000 - -
Gregory L. Werner 30,000 (3) 594,000 - -
Derek J. Leathers 30,000 (3) 594,000
30,000 (4) 594,000 - -
John J. Steele 10,000 (3) 198,000 - -
----------------
(1) The stock awards reported in this table are also
disclosed in the Summary Compensation Table and
therefore do not constitute additional compensation
not otherwise reported in this Proxy Statement.
(2) Market value is calculated by multiplying the number
of restricted stock shares that have not vested by
the closing market price of our common stock ($19.80
per share) on December 31, 2009 (the last trading day
of our fiscal year).
(3) This restricted stock award will vest according to a
staggered vesting schedule. Beginning on December 1,
2012 (three years after the December 1, 2009 grant
date), the restricted stock will vest annually in
five increments of 20% (6,000 shares) each. The
award will then become fully vested on December 1,
2016. The restricted stock award is contingent upon
the recipient's continued employment with the Company
through each vesting date. If the recipient's
employment with us is terminated, each portion of
restricted stock for which the vesting date has not
occurred will be forfeited pursuant to our Equity
Plan and the recipient's Restricted Stock Award
Agreement.
(4) This restricted stock award is scheduled to vest in
its entirety on July 31, 2013 (the fifth anniversary
of the July 31, 2008 grant date), provided Mr.
Leathers continues to be employed with the Company
through the vesting date. If he is not employed with
us at such time, all shares of restricted stock will
be forfeited upon the end of Mr. Leathers' employment
with us.
43
Vesting Dates of Unvested and Unexercisable Stock Options at December 31, 2009
------------------------------------------------------------------------------
Options Options
Name Vesting Vesting Date Vesting Vesting Date
---- ------- ------------ ------- ------------
Clarence L. Werner 15,000 05/19/2010
Gary L. Werner 15,000 05/19/2010
Gregory L. Werner 15,000 05/19/2010
Derek J. Leathers 5,250 05/19/2010 5,000 11/29/2011
4,000 10/21/2010 5,000 11/29/2012
5,000 11/29/2010 6,250 11/29/2013
3,000 10/21/2011
John J. Steele 3,000 05/19/2010 3,000 11/29/2011
3,000 10/21/2010 3,000 11/29/2012
3,000 11/29/2010 3,750 11/29/2013
2,250 10/21/2011
Option Exercises for 2009
The following Option Exercises for 2009 table provides
information regarding stock options that were exercised by our
Named Executive Officers during 2009. The "value realized on
exercise" reflects the total pre-tax value realized by the
Named Executive Officers. This value is calculated by
subtracting the aggregate exercise price of the exercised
options from the aggregate market value of the shares of
common stock acquired on the exercise date. No restricted
stock awards vested during 2009 for any Named Executive
Officers. For that reason, the columns regarding vested stock
awards have been omitted from the table.
Option Exercises for 2009
-----------------------------------------------------------------------
Option Awards
-------------
Number of Shares Value Realized
Name Acquired on Exercise (#) on Exercise ($)
---- ------------------------ ---------------
Clarence L. Werner - -
Gary L. Werner 96,668 1,034,957
Gregory L. Werner 150,001 1,636,527
Derek J. Leathers 20,000 246,372
John J. Steele 13,334 139,983
Nonqualified Deferred Compensation for 2009
We established a nonqualified deferred compensation plan in
2005 for eligible key employees whose 401(k) Plan
contributions were limited by IRS regulations affecting highly
compensated employees. This plan is subject to the
requirements of Section 409A of the Internal Revenue Code and
is administered in good faith compliance with Section 409A.
44
The nonqualified deferred compensation plan also permits us to
make matching contributions to participant accounts. We did
not make any such matches in 2009 and have not done so to
date.
Deferrals. Under the nonqualified deferred compensation plan,
eligible employees are permitted to defer a portion of their
base salary on a pre-tax basis. Beginning on January 1, 2010,
participants were also permitted to defer amounts from
performance-based compensation. Such deferred amounts must be
within the annual dollar limitations we establish. Through
December 31, 2008, the annual dollar limitations were
determined so that the combined sum of a highly compensated
participant's 401(k) Plan contributions and nonqualified
deferred compensation plan contributions would approximate the
maximum contribution amount available to non-highly
compensated employees who participate in the 401(k) Plan.
Beginning January 1, 2009, certain participants were allowed
to defer combined amounts that exceed the maximum 401(k)
Internal Revenue Code deferral limits for non-highly
compensated employees. Prior to the enrollment period for the
next year, management establishes maximum deferral limits that
correspond to participants' job titles (such as Senior Vice
President or Vice President). The maximum deferral limits for
the 2009 nonqualified deferred compensation plan year ranged
from $8,500 to $17,000, and such limits for the 2010 plan year
range from $10,000 to $50,000. The maximum deferral limit for
each of the Named Executive Officers and other executive
officers was $17,000 for the 2009 plan year and is $50,000 for
the 2010 plan year.
Earnings. Each participant in the nonqualified deferred
compensation plan selects one or more investment funds
available under the plan in which their contributed amounts of
deferred compensation are deemed to be invested. Deferred
compensation accounts will then accrue earnings based on the
return of the selected investment funds. The participant may
change how their deferred compensation is allocated to the
investment funds at any time, subject to limitations imposed
by the plan. Changes generally become effective as of the
first trading day following the change. We do not pay
preferential earnings or guarantee above-market earnings on
any investments made under the plan. Any appreciation or
depreciation in a plan participant's account is due solely to
the participant's contributions and the underlying performance
of the investment funds selected by the participant.
Distributions and "In Service" Withdrawals. At the time of
making their deferral election for the year, a participant
elects under his salary deferral agreement whether the
resulting deferred compensation will be distributed to him in
annual installments or a lump sum. Distributions are made
after the executive officer's retirement or termination from
the Company. Beginning January 1, 2010, participants who
separate from service with the Company (as described in the
plan) will generally not receive distributions from the plan
until 12 months after the separation date (the previous
distribution waiting period prescribed by the plan was six
months). Under certain circumstances, participants may also
elect to receive scheduled or hardship "in service"
withdrawals while still employed with us. The specific
distribution options in this case depend upon the plan
provisions. None of our Named Executive Officers received
distributions or "in service" withdrawals during 2009.
The Nonqualified Deferred Compensation for 2009 table on page
46 presents the following information related to our
nonqualified deferred compensation plan and Named Executive
Officer participants:
* Executive Contributions in 2009: Reflects voluntary
executive deferrals of base salary. These deferrals
are included in the "Salary" column of the Summary
Compensation Table.
* Company Contributions in 2009: No such contributions
were made.
* Aggregate Earnings in 2009: Reflects the earnings
and/or losses on account balances. None of the
earnings are above-market or preferential earnings and
were therefore not included in the Summary
Compensation Table.
* Aggregate Withdrawals and Distributions in 2009: No
withdrawals or distributions were made.
45
* Aggregate Balance as of December 31, 2009: Reflects
the total market value of the Named Executive
Officer's nonqualified deferred compensation account,
including such participant's contributions and
earnings to date.
Nonqualified Deferred Compensation for 2009
-------------------------------------------------------------------------------------------------------
Aggregate Aggregate
Executive Company Earnings Aggregate Balance
Contributions Contributions (Losses) Withdrawals/ at End of
Name in 2009 ($)(1) in 2009 ($) in 2009 ($)(2) Distributions($) 2009 ($)(3)
---- -------------- ------------- -------------- ---------------- -----------
Clarence L. Werner - - - - -
Gary L. Werner 16,370 - 8,745 - 46,763
Gregory L. Werner 8,502 - 9,119 - 51,283
Derek J. Leathers 16,250 - 8,562 - 45,659
John J. Steele 16,370 - 10,660 - 55,726
----------------
(1) The amounts disclosed in this column are reported as
compensation and included within the amounts in the
"Salary" column of the Summary Compensation Table on
page 39.
(2) We do not provide above-market or preferential
earnings on nonqualified deferred compensation plan
balances, so we did not report any portion of these
amounts in the Summary Compensation Table pursuant to
SEC rules.
(3) Of these balances, the following executive
contributions were reported in the "Salary" column of
the Summary Compensation Table in our proxy statements
for 2007 and 2008: C.L. Werner, not applicable; Gary
Werner, $18,496; Greg Werner, $18,980; Derek Leathers,
$7,800 (2008 only); and, John Steele, $19,000.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Fees of the Independent Registered Public Accounting Firm
The firm of KPMG LLP ("KPMG") is our independent registered
public accounting firm. The following table sets forth the
aggregate fees billed to us by KPMG for professional audit
services rendered in connection with the audit of our annual
financial statements and internal control over financial
reporting for 2009 and 2008 and for other services provided to
us by KPMG during those periods.
Independent Registered Public
Accounting Firm Fees for 2009 and 2008
------------------------------------------
2009 ($) 2008 ($)
-------- --------
Audit Fees 402,360 422,360
Audit-Related Fees - -
Tax Fees - -
All Other Fees - -
Total 402,360 422,360
46
Audit Fees. Audit fees consist of fees for (i) the audit of
our annual financial statements included in our Annual Reports
on Form 10-K for 2009 and 2008, (ii) review of our financial
statements included in our Quarterly Reports on Form 10-Q
during such periods and (iii) the audit of our internal
control over financial reporting during such periods.
Audit-Related Fees. Audit-related fees consist of fees (i)
for assurance and related services that are reasonably related
to the performance of the audit or the review of our financial
statements and are not reported under Audit Fees and (ii) fees
related to audit and attest services not required by laws or
regulations and consultations concerning financial accounting
and reporting standards.
Tax Fees. Tax fees are defined as fees for professional
services for tax compliance, tax advice and tax planning.
These services may include assistance regarding federal, state
and international tax compliance, tax return preparation, tax
audits and customs and duties.
The Audit Committee has reviewed KPMG's provision of services
and believes that these services are compatible with
maintaining the independence of KPMG. KPMG did not provide
any non-audit services for us in 2009.
The Audit Committee has approved KPMG as our independent
registered public accounting firm for 2010. Representatives
of KPMG will be present at the 2010 Annual Meeting and will
have an opportunity, should they so desire, to make a
statement. The KPMG representatives will also be available to
respond to appropriate questions from stockholders.
Policy of Audit Committee Pre-Approval of Audit and Non-Audit
Services Performed by the Independent Registered Public
Accounting Firm
The Audit Committee is responsible for pre-approving all audit
and non-audit services provided by independent registered
public accounting firms. Prior to the engagement of an
independent registered public accountant for the next year's
audit, our management will submit to the Audit Committee for
approval an itemized list of all audit and non-audit services
expected to be rendered during such year and the budgeted fees
for such services. The Audit Committee then pre-approves
these services according to the categories of service in the
Independent Registered Public Accounting Firm Fees for 2009
and 2008 table on page 46. When determining whether a service
should receive pre-approval, the Audit Committee considers
whether such services are consistent with the SEC rules
regarding auditor independence. In the event circumstances
arise and it becomes necessary to engage the independent
registered public accountants for additional services not
contemplated in the original pre-approval, the Audit Committee
will approve such additional services prior to the
commencement of the engagement and provision of such services.
Pursuant to its charter, the Audit Committee may delegate to
its Chair the pre-approval authority to address any requests
for pre-approval of services between Audit Committee meetings,
and such Chair must report any such pre-approval decisions to
the committee at its next meeting. Our management and
independent registered public accounting firm periodically
report to the full Audit Committee (i) the extent of services
provided by such accounting firm in accordance with this pre-
approval and (ii) the fees for services performed to date.
We did not pay any fees categorized as Audit-Related Fees, Tax
Fees or All Other Fees to KPMG during 2009 and 2008.
Accordingly, the Audit Committee did not approve any fees
during these periods that related to the pre-approval
provisions or the de minimis exception set forth in applicable
SEC rules.
47
Voting Process and Vote Required
Assuming the presence of a quorum, the ratification of the
appointment of KPMG as our independent registered public
accounting firm requires the affirmative vote of a majority of
the outstanding shares of our common stock, present or
represented by proxy, at the Annual Meeting and entitled to
vote thereon. Shares withheld will not have any effect on the
outcome of the vote to ratify KPMG as our independent
registered public accounting firm.
In the event our stockholders do not ratify the appointment of
KPMG, then our Audit Committee and Board of Directors will
reconsider the appointment. Even if our stockholders ratify
the selection of KPMG, the Audit Committee will retain its
authority to, in its discretion and at any time during 2010,
select a different independent registered public accounting
firm or terminate KPMG if the Audit Committee determines that
such a change would be in our best interests and those of our
stockholders.
Recommendation of the Board of Directors - Proposal 2
We are asking stockholders to ratify the appointment of KPMG
as our independent registered public accounting firm for 2010.
Although this stockholder ratification is not required by our
By-Laws, Audit Committee charter or otherwise, the Board of
Directors is submitting the selection of KPMG to our
stockholders for ratification as a matter of corporate
governance.
The Board of Directors recommends that stockholders vote FOR
---
the ratification of the appointment of KPMG LLP as our
independent registered public accounting firm for the year
ending December 31, 2010. The Designated Proxy Holders of
proxies solicited by the Board in this Proxy Statement will
vote the proxies as directed on each proxy, or if no
instruction is made, for the ratification of the appointment
of KPMG LLP.
TRANSACTIONS WITH RELATED PERSONS
Review and Approval of Related Person Transactions
Our Governance Committee charter requires the Governance
Committee (each member of which is independent under
applicable NASDAQ listing standards and SEC rules) to oversee
administration of our policies with respect to related person
transactions and to review and approve all related person
transactions submitted to the Governance Committee when such
approval is required under the NASDAQ and SEC rules and
regulations. All related person transactions that are
required to be disclosed under SEC rules are disclosed in our
applicable SEC filings.
For purposes of Item 404 of SEC Regulation S-K, a "related
person transaction" is generally any effected or proposed
transaction, arrangement or relationship in which:
(i) The Company was or is to be a participant;
(ii) The amount involved exceeds or is expected to
exceed $120,000; and
(iii) Any "related person" has an interest.
Under Item 404, "related person" generally means:
* A director or director nominee of the Company;
* An executive officer of the Company;
48
* A security holder who is known to be the beneficial
owner of more than 5% of our common stock; or
* Any "immediate family member" of a director, director
nominee, executive officer or beneficial owner of more
than 5% of our common stock. "Immediate family
members" include spouse, children, parents, siblings,
in-laws, stepparents and stepchildren and any other
person sharing the related person's household.
* Any firm, corporation or other entity in which any of
the foregoing persons (i) is employed by, a director
of or a partner or principal in such entity or (ii)
has a beneficial ownership interest of 10% or more.
Related Person Transactions
Land Lease Agreement. The Company leases certain land from
the Clarence L. Werner Revocable Trust (the "Trust"), a
related person. C.L. Werner, Chairman of Werner Enterprises,
Inc., is the sole trustee of the Trust. On February 8, 2007,
the Company entered into a revised Lease Agreement, effective
as of May 21, 2002 (the "Lease Agreement"), and a License
Agreement (the "License Agreement") with C.L. Werner in his
capacity as trustee. The Lease Agreement and License
Agreement were approved by the disinterested members of the
Board of Directors at the Board's February 8, 2007 meeting.
The Lease Agreement was originally entered into between the
parties on May 21, 2002 with a 10-year lease term commencing
June 1, 2002 (the "2002 Lease Agreement").
The Lease Agreement covers the lease of land comprising
approximately 35 acres (referred to as the "Lodge Premises"),
with improvements consisting of lodging facilities and a
sporting clay range which the Company uses for business
meetings and customer and vendor promotion. The 2002 Lease
Agreement provided for a non-exclusive license to use for
hunting purposes a contiguous portion of farmland comprising
approximately 580 acres (referred to as the "Farmland
Premises"). These license rights were deleted from the Lease
Agreement and incorporated into the License Agreement.
The Lease Agreement's current ten-year term expires May 31,
2012. The Lease Agreement gives the Company the option to
extend such agreement for two additional five-year periods,
through 2017 and 2022, respectively. Under the Lease
Agreement, the Company also makes annual rental payments of
one Dollar ($1.00) per year, and the Company is responsible
for the real estate taxes and maintenance costs on the Lodge
Premises. These costs totaled approximately $40,000 in 2009.
Under the Lease Agreement, at any time during the lease or any
extension thereof, the Company has the option to purchase the
Lodge Premises from the Trust at its current market value,
excluding the value of all leasehold improvements the Company
made. The Company also has a right of first refusal to
purchase the Lodge Premises, or any part thereof, if the Trust
receives an offer from an unrelated third party to purchase
the Lodge Premises. The Trust has the option at any time
during the lease to demand that the Company exercise its
option to purchase the Lodge Premises. If the Company does
not elect to purchase the Lodge Premises as demanded by the
Trust, then the Company's option to purchase at any time
during the lease is forfeited; however, the Company will
retain the right of first refusal with respect to a purchase
offer from an unrelated third party. If the Company
terminates the Lease Agreement prior to the expiration of the
initial ten-year term and elects not to purchase the Lodge
Premises from the Trust, then the Trust agrees to pay the
Company the cost of all leasehold improvements, less
accumulated depreciation calculated on a straight-line basis
over the term of the Lease Agreement (ten years). If, at the
termination of the initial ten-year term or any of the two
five-year renewal periods, the Company has not exercised its
option to purchase the Lodge Premises accordingly, the
leasehold improvements become the property of the Trust.
However, the Company currently intends to exercise its option
to purchase the Lodge Premises at its current market value
prior to the completion of the initial ten-year lease period
or any of the two five-year renewal periods. The Company has
made leasehold improvements to the Lodge Premises of
49
approximately $6.2 million since the inception of leasehold
arrangements commenced in 1994.
The revisions to the Lease Agreement removed the provisions
relating to the Farmland Premises (including the description
of option to purchase rights described above), as of the
effective date of the 2002 Lease Agreement, and the Company
and the Trust entered into the separate License Agreement
defining the Company's respective rights to the Farmland
Premises. Under the License Agreement, the Company and its
invitees are granted a non-exclusive right to hunt and fish on
the Farmland Premises, for a term of one year, which is
automatically renewable unless either party terminates not
less than 30 days prior to the end of the current annual term.
The Trust agrees to use its best efforts to maintain a
controlled shooting area permit on the Farmland Premises while
the License Agreement is effective and to maintain the land in
a manner to maximize hunting cover for game birds. In
consideration of the license to hunt and fish on the Farmland
Premises, the Company agrees to pay the Trust an amount equal
to the real property taxes and special assessments levied on
the land and the cost of all fertilizer and seed used to
maintain the hunting cover and crops located on the land.
Such costs were approximately $51,000 for 2009.
Family Members of Executive Officers and Directors. The
Company employs the family members of certain executive
officers in the following capacities: (i) Scott Robertson is
employed as the Director-Aviation and is C.L. Werner's son-in-
law and the brother-in-law of Gary Werner and Greg Werner; and
(ii) Clint Werner is employed as Senior Director-Fleet
Maintenance & Gra-Gar and is the son of Greg Werner and
grandson of C.L. Werner. The total compensation in 2009 for
Mr. Robertson was $168,580 (this amount includes the use of
one Company vehicle) and for Clint Werner was $137,366 (this
amount includes the use of one Company vehicle). In 2009, the
Company also employed six other family members of certain
executive officers in various capacities, and each of these
other family members received less than $120,000 in annual
compensation in 2009.
Independent Contractors. During 2009, the Company paid
$6,141,566 to Pegasus Enterprises, LLC, which was owned by
C.L. Werner's brother and former sister-in-law, Vern and Diane
Werner. During 2009, Ms. Diane Werner became the sole owner
of Pegasus Enterprises, LLC. In 2009, the Company also paid
$918,337 to WinRow Farms, which is owned by Vern Werner.
Pegasus Enterprises, LLC and WinRow Farms lease tractors and
drivers to us as independent contractors. During 2009, the
Company sold used tractors to Pegasus Enterprises, LLC at a
total of $218,940 and to WinRow Farms at a total of $61,000.
At December 31, 2009, the Company had notes receivable from
Pegasus Enterprises, LLC of $915,673 related to the sale of 38
used trucks. The largest aggregate amount of principal
outstanding during 2009 was $1,299,105. The amount of
principal paid during 2009 was $549,175, and the amount of
interest paid during 2009 was $132,099. The interest rate
payable on this debt ranges from 10% to 12%. The payments to
Pegasus Enterprises, LLC and WinRow Farms are based on the
same per-mile settlement scale that is applied to the
Company's other similar independent contractors. The Company
believes the terms of the note agreements and the tractor
sales prices are no less favorable to the Company than those
that could be obtained from unrelated third parties, on an
arm's length basis.
Personal Use of Corporate Aircraft. C.L. Werner utilized the
Company's corporate aircraft for non-business purposes during
2009. Mr. Werner reimbursed the Company $213,730 representing
the aggregate incremental cost associated with the personal
flights. This cost is higher than the imputed income
calculated for income tax purposes in accordance with IRS
rules. The incremental cost is computed using the average
hourly variable costs of operating the Company's aircraft,
which primarily consists of fuel and maintenance.
50
OTHER BUSINESS
We do not know of any business that will be presented for
consideration at the 2010 Annual Meeting of Stockholders other
than that described in this Proxy Statement. As to other
business (if any) that may properly be brought before the
meeting, we intend that proxies solicited by the Board will be
voted in accordance with the best judgment of the person
voting the proxies.
STOCKHOLDER PROPOSALS
Only stockholders of record as of March 22, 2010, are entitled
to bring business before the 2010 Annual Meeting. All
stockholder proposals must be in writing and include the
following:
(i) A brief description of the business the
stockholder desires to bring before the Annual
Meeting;
(ii) The reason for conducting such proposed business
at the Annual Meeting;
(iii) The name and address of the stockholder proposing
such business;
(iv) The class and number of shares of our common stock
beneficially owned by such stockholder; and
(v) Any material interest of the stockholder in such
business.
To be eligible for inclusion in our 2011 Proxy Materials:
Stockholder proposals intended to be presented at our 2011
Annual Meeting of Stockholders must be in writing and be
received by the Corporate Secretary at our executive offices
on or before December 8, 2010. The inclusion of any such
stockholder proposal in our 2011 Proxy Materials will be
subject to the applicable proxy rules and regulations under
the Exchange Act and will be considered untimely if received
after December 8, 2010. Stockholders may submit nominations
for directors to be elected at the 2011 Annual Meeting of
Stockholders, and such nominations must be written and
delivered to the Corporate Secretary at our executive offices
by December 8, 2010. Such nominations are also subject to the
rules and regulations prescribed by the Exchange Act. For a
description of the process of submitting stockholder
nominations for director, refer to the Director Nomination
Process section under Corporate Governance in this Proxy
Statement.
Regarding proposals not to be included in our 2010 Proxy
Materials: Stockholders may present proposals for
consideration at the 2010 Annual Meeting of Stockholders that
are not intended for inclusion in the 2010 Proxy Materials.
These proposals must be received in writing by the Corporate
Secretary at our executive offices no later than April 20,
2010 for the 2010 Annual Meeting. Pursuant to our By-Laws,
stockholders may make other proposals at the Annual Meeting to
be discussed and considered; but unless the Corporate
Secretary receives the written proposal at least twenty days
before the Annual Meeting, such proposal will be considered
untimely and will not be acted upon. Instead, the proposal
will be laid over for action at the next stockholder meeting
held thirty days or more later.
STOCKHOLDERS SHARING THE SAME ADDRESS
We have adopted a procedure called "householding" pursuant to
SEC rules and regulations. Under this procedure, we will
deliver only one copy of this Proxy Statement and our 2009
Annual Report to multiple stockholders who share the same
mailing address (if they appear to be members of the same
family), unless we have received contrary instructions from an
affected stockholder. Stockholders who participate in
householding will continue to receive separate Proxies. This
procedure reduces our printing and mailing costs and fees.
51
We will promptly deliver, upon written or oral request, a
separate copy of this Proxy Statement and the 2009 Annual
Report to any stockholder at a shared address to which a
single copy of either of those documents was delivered. To
request a separate copy of this Proxy Statement and/or the
2009 Annual Report, stockholders may write or call our
Corporate Secretary at our executive offices. You will not be
charged for any requested copies. This Proxy Statement and
our 2009 Annual Report are also available on our website.
Householding of proxy materials occurs when you provide us or
your broker with a written householding consent. Stockholders
who would like to revoke their householding consent and
receive a separate copy of our subsequent proxy statements and
annual reports to stockholders should contact their broker (if
the shares are held in a brokerage account) or our Corporate
Secretary (if you hold registered shares). Stockholders who
share a mailing address and receive multiple copies of proxy
materials but would like to participate in householding and
receive a single copy of our proxy materials should contact
their broker or our Corporate Secretary.
CONTACTING THE CORPORATE SECRETARY AND EXECUTIVE OFFICES
Our Corporate Secretary is James L. Johnson. The mailing
address, telephone numbers and e-mail address for our
Corporate Secretary and executive offices are:
Werner Enterprises, Inc.
Attention: Corporate Secretary
Post Office Box 45308
Omaha, Nebraska 68145-0308
Telephone: (402) 895-6640
Toll-Free: (800) 228-2240
E-Mail: invrelations@werner.com
INTERNET WEBSITE AND AVAILABILITY OF MATERIALS
Our Internet website, as referred to in this Proxy Statement,
is: http://www.werner.com, under the "Investor Information"
tab. This Proxy Statement, the Notice of Annual Meeting of
Stockholders and 2009 Annual Report (including our Annual
Report on Form 10-K for 2009) are available on our website.
Our prior proxy statements, annual reports and SEC filings are
also included on the website. You may obtain a copy of these
materials, without charge, on our website or by contacting the
Corporate Secretary.
--------------
By Order of the Board of Directors
/s/ James L. Johnson
James L. Johnson
Senior Vice President, Controller
and Corporate Secretary
Omaha, Nebraska
April 7, 2010
52
WERNER ENTERPRISES, INC.
Post Office Box 45308
Omaha, Nebraska 68145-0308
-------------------
PROXY
-------------------
This Proxy is solicited on behalf of the Board of Directors for the Annual
Meeting of Stockholders to be held Monday, May 10, 2010. The undersigned
stockholder hereby acts by proxy and appoints each of Clarence L. Werner
and Gary L. Werner to act as duly authorized attorneys-in-fact and proxies
(collectively, the "Designated Proxy Holders"), with full power of
substitution, to represent and vote, as the undersigned stockholder
directs herein, all shares of common stock of Werner Enterprises, Inc.,
that such stockholder is entitled to vote as of March 22, 2010 at the
Annual Meeting of Stockholders to be held on Monday, May 10, 2010
(including any adjournments or postponements thereof), and to vote all
such shares on any other business that properly comes before such meeting.
The proposals to be voted on in this Proxy are not related to, and are not
conditioned upon, the approval of other matters. The Board of Directors
of Werner Enterprises, Inc. submits and recommends a vote "for" each of
the following proposals:
1. Proposal 1 - Election of Directors.
Check only one box. To withhold authority to vote for any individual
nominee(s), check "For All Except" and write the number(s) of the
nominee(s) on the line below the box.
For All Withhold All For All Except
Nominees: [ ] [ ] [ ]
1. Kenneth M. Bird, Ed.D.
2. Gerald H. Timmerman
---------------
2. Proposal 2 - To ratify the appointment of KPMG LLP as the independent
registered public accounting firm of Werner Enterprises, Inc. for the
year ending December 31, 2010.
Check only one box.
For Against Abstain
[ ] [ ] [ ]
This Proxy, when properly executed, will be voted as directed by the
undersigned stockholder. If no direction is given with respect to a
proposal, this Proxy will be voted "FOR ALL" director nominees and "FOR"
the other proposal.
Please date, sign and print your name.*
If held jointly:
-------------------- --------- -------------------- ---------
Signature Date Signature Date
-------------------- --------------------
Printed Name Printed Name
*When shares are held by joint tenants, both individuals should sign this
Proxy. When signing as an attorney, executor, administrator, trustee or
guardian, please give your full title. If the stockholder is a
corporation or partnership, provide the full corporate or partnership name
by the name of the authorized officer or person completing this Proxy.
Please mark, sign, date and promptly return this Proxy using the enclosed
postage-paid return envelope.
Important Notice Regarding the Availability of Proxy Materials
for the Stockholder Meeting To Be Held on May 10, 2010:
------------------------------------------------------
The Proxy Statement and 2009 Annual Report of Werner Enterprises, Inc. are
available, without charge, at http://www.werner.com under the "Investor
Information" tab or by contacting the Corporate Secretary by toll free
telephone at (800) 228-2240 or by e-mail at invrelations@werner.com.