SCHEDULE 14A INFORMATION
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WERNER ENTERPRISES, INC.
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[LOGO OF WERNER ENTERPRISES]
Post Office Box 45308
Omaha, Nebraska 68145-0308
________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 2002
________________________
Dear Stockholders:
It is a pleasure to invite you to the 2002 Annual Meeting of
Stockholders of Werner Enterprises, Inc. (the "Company") to be held at the
Embassy Suites, 555 South 10 Street, Omaha, Nebraska, on Tuesday, May 14,
2002, at 10:00 a.m. The Embassy Suites is located just a few blocks south
and east of the downtown Omaha business area. The meeting will be held for
the following purposes:
1. To elect directors to serve until the end of their term or until
their successors are elected and qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on March 25, 2002, will
be entitled to vote at the meeting or any adjournment thereof.
At the meeting Clarence L. Werner and members of the Company's
management team will discuss the Company's results of operations and business
plans. Members of the Board of Directors and the Company's management will
be present to answer your questions.
A copy of the Company's Annual Report to Stockholders for the year
ended December 31, 2001, is enclosed.
As stockholders, we encourage you to attend the meeting in person.
Whether or not you plan to attend the meeting, we ask you to sign, date, and
mail the enclosed proxy as promptly as possible in order to make sure that
your shares will be voted in accordance with your wishes at the meeting in
the event that you are unable to attend. A self-addressed, postage-paid
return envelope is enclosed for your convenience. If you attend the meeting,
you may vote by proxy or you may revoke your proxy and cast your vote in
person.
By Order of the Board of Directors
/s/ James L. Johnson
James L. Johnson
Vice President, Controller
and Corporate Secretary
Omaha, Nebraska
April 10, 2002
WERNER ENTERPRISES, INC.
Post Office Box 45308
Omaha, Nebraska 68145-0308
________________
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 2002
________________________
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors for the Annual Meeting of Stockholders
of Werner Enterprises, Inc. (the "Company") to be held on Tuesday, May 14,
2002, at 10:00 a.m. local time, at the Embassy Suites, 555 South 10 Street,
Omaha, Nebraska, and at any adjournments thereof. The meeting will be held
for the purposes set forth in the notice of such meeting on the cover page
hereof. The Proxy Statement, Form of Proxy, and Annual Report to Stockholders
on Form 10-K are being mailed by the Company on or about April 10, 2002.
A Form of Proxy for use at the Annual Meeting of Stockholders is
enclosed together with a self-addressed, postage-paid return envelope. Any
stockholder who executes and delivers a proxy has the right to revoke it at
any time prior to its use at the Annual Meeting. Revocation of a proxy may
be effected by filing a written statement with the Secretary of the Company
revoking the proxy, by executing and delivering to the Company a subsequent
proxy before the meeting, or by voting in person at the meeting. A proxy,
when executed and not revoked, will be voted in accordance with the
authorization contained therein. Unless a stockholder specifies otherwise on
the Form of Proxy, all shares represented will be voted for the election of
all nominees for director.
The cost of soliciting proxies, including the preparation, assembly and
mailing of material, will be paid by the Company. Directors, officers, and
regular employees of the Company may solicit proxies by telephone, electronic
communications, or personal contact, for which they will not receive any
additional compensation in respect of such solicitations. The Company will
also reimburse brokerage firms and others for all reasonable expenses for
forwarding proxy material to beneficial owners of the Company's stock.
As a matter of policy, proxies, ballots, and voting tabulations that
identify individual stockholders are kept private by the Company. Such
documents are available for examination only by certain representatives
associated with processing proxy cards and tabulating the vote. The vote of
any stockholder is not disclosed, except as may be necessary to meet legal
requirements.
OUTSTANDING STOCK AND VOTING RIGHTS
On March 25, 2002, the Company had 63,861,942 shares of its $.01 par
value Common Stock outstanding. At the meeting, each stockholder will be
entitled to one vote, in person or by proxy, for each share of stock owned of
record at the close of business on March 25, 2002. The stock transfer books
of the Company will not be closed.
With respect to the election of directors, stockholders of the Company,
or their proxy if one is appointed, have cumulative voting rights under the
laws of the State of Nebraska. That is, stockholders, or their proxy, may
vote their shares for as many directors as are to be elected, or may cumulate
such shares and give one nominee as many votes as the number of directors to
be elected multiplied by the number of their shares, or may distribute votes
on the same principle among as many nominees as they may desire. If a
stockholder desires to vote cumulatively, he or she must vote in person or
give his or her specific cumulative voting instructions to the designated
proxy that the number of votes represented by his or her shares are to be
cast for one or more designated nominees. A stockholder may also withhold
authority to vote for any nominee (or nominees) by striking through the name
(or names) of such nominees on the accompanying Form of Proxy. Directors
shall be elected by a plurality of the votes cast by the shares entitled to
vote in the election at a meeting at which a quorum is present.
If an executed proxy is returned and the stockholder has abstained from
voting on any matter, the shares represented by such proxy will be considered
present at the meeting for purposes of determining a quorum and for purposes
of calculating the vote, but will not be considered to have been voted in
favor of such matter. If an executed proxy is returned by a broker holding
shares in street name which indicates that the broker does not have
discretionary authority as to certain shares to vote on one or more matters,
such shares will be considered present at the meeting for purposes of
determining a quorum, but will not be considered to be represented at the
meeting for purposes of calculating the vote with respect to such matter.
On the date of mailing this Proxy Statement, the Board of Directors has
no knowledge of any other matter which will come before the Annual Meeting
other than the matters described herein. However, if any such matter is
properly presented at the meeting, the proxy solicited hereby confers
discretionary authority to the proxies to vote in their sole discretion with
respect to such matters, as well as other matters incident to the conduct of
the meeting.
ELECTION OF DIRECTORS AND
INFORMATION REGARDING DIRECTORS
The Articles of Incorporation of the Company provide that there shall
be up to three separate classes of directors, each consisting of not less
than three directors, and as nearly equal in number as possible. The Bylaws
of the Company divide the Board of Directors into three classes each
consisting of three directors. The term of office of the directors in the
second class expires at the 2002 Annual Meeting of Stockholders. Directors
hold office for a term of three years. The term of office of the directors
in the third and first classes will expire at the 2003 and 2004 Annual
Meetings of Stockholders, respectively. Gary L. Werner and Gregory L. Werner,
class II directors whose terms will expire at the 2002 Annual Meeting, and
Michael L. Steinbach have been nominated for election at the meeting for
terms expiring at the 2005 Annual Meeting and until their successors are duly
elected and qualified. Martin F. Thompson, a class II director whose term
expires at the 2002 Annual Meeting, has decided to retire from the Company's
Board of Directors effective upon the expiration of his current term at the
2002 Annual Meeting. Mr. Michael L. Steinbach was nominated for election to
fill this vacancy.
Information concerning the names, ages, terms, positions with the
Company, and/or business experience of each nominee named above and of the
other persons whose terms as directors will continue after the 2002 Annual
Meeting is set forth on the following pages.
Term
Name Position with Company or Principal Occupation Ends
---- --------------------------------------------- ----
Clarence L. Werner Chairman of the Board and Chief Executive Officer (3) 2003
Gary L. Werner Vice Chairman 2002
Curtis G. Werner Vice Chairman - Corporate Development 2004
Gregory L. Werner President and Chief Operating Officer 2002
Irving B. Epstein Partner of Epstein and Epstein, Law Offices (1)(2)(3) 2003
Gerald H. Timmerman President of Timmerman & Sons Feeding Co., Inc. (1)(3) 2004
Donald W. Rogert Chairman and President of Mallard Sand & Gravel Co. (1) 2004
Jeffrey G. Doll President of Western Iowa Wine, Inc. (1)(2)(3) 2003
Michael L. Steinbach Owner of Steinbach Farms and Equipment Sales and
Steinbach Truck and Trailer N/A
__________
(1) Serves on audit committee.
(2) Serves on option committee.
(3) Serves on executive compensation committee.
2
Clarence L. Werner, 64, operated Werner Enterprises as a sole
proprietorship from 1956 until its incorporation in September 1982. He has
been a director of the Company since its incorporation and served as
President until 1984. Since 1984, he has been Chairman of the Board and
Chief Executive Officer of the Company.
Gary L. Werner, 44, has been a director of the Company since its
incorporation. Mr. Werner was General Manager of the Company and its
predecessor from 1980 to 1982. He served as Vice President from 1982 until
1984, when he was named President and Chief Operating Officer of the Company.
Mr. Werner was named Vice Chairman in 1991. From 1993 to April 1997, Mr.
Werner also reassumed the duties of President.
Curtis G. Werner, 37, was elected a director of the Company in 1991. He
began employment with the Company in 1985 and was promoted to Director of
Safety in 1986. He was promoted to Vice President - Safety in 1987. Mr.
Werner was promoted to Vice President in 1990, Executive Vice President in
1993, Executive Vice President and Chief Operating Officer in 1994, and Vice
Chairman - Corporate Development in 1996.
Gregory L. Werner, 42, was elected a director of the Company in 1994.
He was a Vice President of the Company from 1984 to March 1996 and was
Treasurer from 1982 until 1986. He was promoted to Executive Vice President
in March 1996 and became President in April 1997. Mr. Werner has directed
revenue equipment maintenance for the Company and its predecessor since 1981.
He assumed responsibility for the Company's Management Information Systems in
1993, and also assumed the duties of Chief Operating Officer in 1999.
Irving B. Epstein, 74, was elected a director of the Company in 1986.
He has been engaged in the private practice of law since 1949 and was a
partner from 1962 to 1989 in Epstein & Leahy, Omaha, Nebraska. In 1989, the
firm of Epstein & Leahy merged into the law firm of Gross & Welch, a
professional corporation. In 1991, Mr. Epstein joined the firm of Brodkey &
Epstein as a partner. Mr. Epstein formed the firm of Epstein and Epstein in
1993. Mr. Epstein has been outside counsel to the Company and its
predecessor since 1976.
Gerald H. Timmerman, 62, was elected a director of the Company in 1988.
Mr. Timmerman has been President since 1970 of Timmerman & Sons Feeding Co.,
Inc., Springfield, Nebraska, which is a cattle feeding and ranching
partnership with operations in three midwestern states.
Donald W. Rogert, 74, was elected a director of the Company in 1994. He
founded Mallard Sand and Gravel Co. in 1993 and has been Chairman of the
Board and President since that time. In 1965, Mr. Rogert founded Hartford
Sand and Gravel Co. and served as Chairman of the Board and President until
1988. From 1988 to 1993, Mr. Rogert attended to various personal
investments.
Jeffrey G. Doll, 47, was elected a director of the Company in 1997. He
has been President and Chief Executive Officer of Doll Distributing, Inc., a
beer wholesaler located in Council Bluffs, Iowa, since 1980.
Michael L. Steinbach, 47, has been the sole owner of Steinbach Farms
and Equipment Sales, which buys and sells farm ground and equipment and is
located in Valley, Nebraska, since 1980. Mr. Steinbach has also been the
sole owner of Steinbach Truck and Trailer, a semi-tractor and trailer
dealership located in Valley, Nebraska, since 1997. Mr. Steinbach also farms
or custom farms approximately six thousand acres of farmland.
Gary L. Werner, Curtis G. Werner, and Gregory L. Werner are sons of
Clarence L. Werner.
In the event that any nominee becomes unavailable for election for any
reason, the shares represented by the accompanying form of proxy will be
voted for any substitute nominees designated by the Board, unless the proxy
withholds authority to vote for all nominees. The Board of Directors knows
of no reason why any of the persons nominated to be directors might be unable
to serve if elected and each nominee has expressed an intention to serve if
elected. 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF EACH NOMINEE TO THE BOARD OF DIRECTORS.
3
Board of Directors and Committees
The Company has established audit, option, and executive compensation
committees. The audit committee discusses the annual audit and resulting
letter of comments to management, consults with the auditors and management
regarding the adequacy of internal controls, and recommends to the Board the
appointment of independent auditors for the next year. The option committee
administers the Company's Stock Option Plan. It has the authority to
determine the recipients of options and stock appreciation rights, the number
of shares subject to such options and the corresponding stock appreciation
rights, the date on which these options and stock appreciation rights are to
be granted and are exercisable, whether or not such options and stock
appreciation rights may be exercisable in installments, and any other terms
of the options and stock appreciation rights consistent with the terms of the
plan. The executive compensation committee reviews and makes recommendations
to the Board of Directors with respect to the compensation of executives.
The Company does not have a standing nominating committee. Functions
normally attributable to a committee of this type are performed by the Board
of Directors as a whole.
The Board of Directors held five (5) meetings during the year ended
December 31, 2001. There were two (2) meetings of the audit committee, one
(1) meeting of the executive compensation committee, and one (1) meeting of
the option committee during that period. All directors participated in 75%
or more of the aggregate of the total number of Board of Directors meetings
and the total number of meetings held by committees on which they served.
Directors who are not full-time employees of the Company receive a fee
of $2,000 for each meeting of the Board of Directors and for each committee
meeting if not held on a day on which a meeting of the Board of Directors is
held. Directors are also reimbursed for travel expenses incurred to attend
meetings of the Board of Directors and committee meetings.
Executive Officers
The following table sets forth the executive officers of the Company
and the capacities in which they serve.
Name Age Capacities In Which They Serve
---- --- ------------------------------
Clarence L. Werner 64 Chairman of the Board and Chief Executive Officer
Gary L. Werner 44 Vice Chairman
Curtis G. Werner 37 Vice Chairman - Corporate Development
Gregory L. Werner 42 President and Chief Operating Officer
Robert E. Synowicki, Jr. 43 Executive Vice President and Chief Information Officer
Richard S. Reiser 55 Executive Vice President and General Counsel
Daniel H. Cushman 47 Senior Vice President - Marketing and Operations
Alan D. Adams 64 Vice President - Terminal Operations
Duane D. Henn 64 Vice President - Safety
Larry P. Williams 56 Vice President - Value Added Services
John J. Steele 44 Vice President, Treasurer and Chief Financial Officer
Dwayne O. Haug 53 Vice President - Maintenance
H. Marty Nordlund 40 Vice President - Specialized Services
R. Lee Easton 43 Vice President - Management Information Systems
Guy M. Welton 37 Vice President - Operations
James L. Johnson 38 Vice President, Controller and Corporate Secretary
Derek J. Leathers 32 Vice President - International
See "ELECTION OF DIRECTORS AND INFORMATION REGARDING DIRECTORS" for
information regarding the business experience of Clarence L. Werner, Gary L.
Werner, Curtis G. Werner, and Gregory L. Werner.
4
Robert E. Synowicki, Jr. joined the Company in 1987 as a tax and
finance manager. He was appointed Treasurer in 1989, became Vice President,
Treasurer and Chief Financial Officer in 1991, Executive Vice President and
Chief Financial Officer in March 1996, Executive Vice President and Chief
Operating Officer in November 1996, and Executive Vice President and Chief
Information Officer in 1999. Mr. Synowicki is a certified public accountant
and was employed by the firm of Arthur Andersen & Co., independent public
accountants, from 1983 until his employment with the Company.
Richard S. Reiser joined the Company as Vice President and General
Counsel in 1993, and 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 the Company, he was engaged in the private practice of law as a
principal and director of Gross & Welch, a professional corporation, Omaha,
Nebraska.
Daniel H. Cushman joined the Company in 1997 as Director of National
Accounts. He was promoted to Vice President - Sales, Van Division, in April
1999, Senior Vice President - Van Division in December 1999 and Senior Vice
President - Marketing and Operations in January 2001. Mr. Cushman was
President of Triple Crown Services in Fort Wayne, Indiana for four years
prior to joining the Company and held various other management positions at
Triple Crown Services starting in 1988. From 1978 to 1988 Mr. Cushman was
employed by Roadway Express in Akron, Ohio.
Alan D. Adams joined the Company in 1983 as Marketing Director and was
promoted to Director of Operations in 1986. He was named Vice President -
Operations in 1987, and Vice President - Terminal Operations in 1999. Prior
to joining the Company, Mr. Adams was General Manager of Larson Trucks, Inc.
in Bloomington, Minnesota.
Duane D. Henn joined the Company in 1985 as a Driver Recruiter. He was
named National Director of Driver Recruiting in 1986. In 1988 he was
promoted to Director of Safety, and in 1994 was named Vice President -
Safety. Prior to joining the Company, Mr. Henn spent 20 years in State and
County Law Enforcement and six years in the Court System.
Larry P. Williams joined the Company in 1988 as an Account Executive.
In 1991, he was promoted to Director of Regional Fleets. He was named Vice
President - Logistics in 1994 and Vice President - Value Added Services in
2001. Prior to joining the Company, Mr. Williams held various management
positions with United Parcel Service and Federated Department Stores.
John J. Steele joined the Company in 1989 as Controller. He was elected
Corporate Secretary in 1992, Vice President - Controller and Corporate
Secretary in 1994, and Vice President, Treasurer and Chief Financial Officer
in 1996. Mr. Steele is a certified public accountant and was employed by the
firm of Arthur Andersen & Co., independent public accountants, from 1979
until his employment with the Company.
Dwayne O. Haug joined the Company in 1990 as Director of Maintenance.
He was promoted to Vice President - GraGar, Inc. (a wholly owned subsidiary
of the Company) in 1994, and Vice President - Maintenance in 1997. Mr. Haug
was President of Silvey Refrigerated Carriers, Inc. in Council Bluffs, Iowa
from 1988 until his employment with the Company. He held various management
positions with Ellsworth Freight Lines, Inc. in Eagle Grove, Iowa from 1972
to 1987.
H. Marty Nordlund joined the Company in 1994 as an account executive.
He was promoted to Director of Dedicated Fleet Services in 1995, Senior
Director of Dedicated Fleet Services in 1997, Vice President - Dedicated
Fleet Services in 1998, and was named Vice President - Specialized Services
in January 2001. Prior to joining the Company, Mr. Nordlund held various
management positions with Crete Carrier Corporation.
R. Lee Easton joined the Company in 1990 as a Programmer/Analyst. He
was promoted to Management Information Systems (MIS) Project Manager in 1991,
Manager of Systems Design and Development in 1993, Director of MIS in 1996,
Senior Director of MIS in 1997, and was named Vice President - MIS in 1998.
Prior to joining the Company, Mr. Easton was a programmer with Procter
Hospital in Peoria, Illinois, and a consultant with Cap Gemini America.
5
Guy M. Welton joined the Company in 1987 as one of the Company's first
management trainees. He held multiple positions within Operations and
Marketing before being appointed to Manager of Quality in 1992. He was then
promoted to Director of Quality in 1994, Director of Operations in 1995,
Senior Director of Operations in 1997, and Vice President - Operations in
1999.
James L. Johnson joined the Company in 1991 as Manager of Financial
Reporting. He was promoted to Assistant Controller in 1992, Director of
Accounting in 1994, Corporate Secretary and Controller in 1996 and was named
Vice President, Controller and Corporate Secretary in 2000. Mr. Johnson is a
certified public accountant and was employed by the firm of Arthur Andersen &
Co., independent public accountants, from 1985 until his employment with the
Company.
Derek J. Leathers joined the Company in 1999 as Managing Director -
Mexico Division. He was promoted to Vice President - Mexico Division in 2000
and Vice President - International Division in January 2001. Mr. Leathers
was Vice President of Mexico Operations for two years at Schneider National,
a large truckload carrier, prior to joining the Company and held various
other management positions during his eight year career at Schneider
National.
Under the Company's bylaws, each executive officer holds office for a
term of one year or until his successor is elected and qualified. The
executive officers of the Company are elected by the Board of Directors at
its Annual Meeting immediately following the Annual Meeting of Stockholders.
Compliance With Section 16(a) Of The Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
initial reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than ten-percent
stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that, during the year
ended December 31, 2001, all filing requirements applicable to its officers,
directors, and greater than ten-percent beneficial owners were complied with,
except Mr. Epstein and Mr. Timmerman did not timely report two stock
transactions. All transactions were reported on subsequent filings.
SECURITY OWNERSHIP OF DIRECTORS,
EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS
The authorized Common Stock of the Company consists of 200,000,000
shares, $.01 par value.
The following table sets forth certain information as of March 25,
2002, with respect to the beneficial ownership of the Company's Common Stock
by each director and each nominee for director of the Company, by each
executive officer of the Company named in the Summary Compensation Table
herein, by each person known to the Company to be the beneficial owner of
more than 5% of the outstanding Common Stock, and by all executive officers,
directors, and director nominees as a group. On March 25, 2002, the Company
had 63,861,942 shares of Common Stock outstanding.
The number of shares listed in the table below as well as the number of
stock options and the stock option exercise prices listed on the following
pages reflect the four-for-three stock split effected on March 14, 2002, in
the form of a 33 1/3 percent stock dividend.
6
Beneficial Ownership
--------------------
Name of Beneficial Owner Shares Percent
------------------------ ---------- --------
Clarence L. Werner 17,940,199 28.1%
Gary L. Werner (1) 2,210,067 3.5%
Curtis G. Werner 2,326,141 3.6%
Gregory L. Werner (2) 2,746,863 4.3%
Daniel H. Cushman (3) 13,667 *
Irving B. Epstein - *
Martin F. Thompson - *
Gerald H. Timmerman 1,333 *
Donald W. Rogert 8,400 *
Jeffrey G. Doll 1,667 *
Michael L. Steinbach - *
Wellington Management Company, LLP (4) 4,167,667 6.5%
Dimensional Fund Advisors Inc. (5) 3,174,999 5.0%
All executive officers, directors and director 25,471,621 39.7%
nominees as a group (23 persons) (6)
___________
* Indicates less than 1%.
(1) Includes options to purchase 13,333 shares which are exercisable as of
March 25, 2002, or which become exercisable 60 days thereafter.
(2) Includes options to purchase 125,000 shares which are exercisable as of
March 25, 2002, or which become exercisable 60 days thereafter.
(3) Options to purchase 13,667 shares which are exercisable as of March 25,
2002, or which become exercisable 60 days thereafter.
(4) Based on Schedule 13G as of December 31, 2001, as filed with the
Securities and Exchange Commission by Wellington Management Company,
LLP, 75 State Street, Boston, Massachusetts 02109. Wellington
Management Company, LLP claims shared voting power with respect to
4,003,133 shares, shared dispositive power with respect to 4,167,667
shares, and no sole voting or dispositive power with respect to any of
these shares.
(5) Based on Schedule 13G as of December 31, 2001, as filed with the
Securities and Exchange Commission by Dimensional Fund Advisors Inc.,
1299 Ocean Avenue, Santa Monica, California 90401. Dimensional Fund
Advisors Inc. claims sole voting power with respect to 3,174,999
shares, sole dispositive power with respect to 3,174,999 shares, and no
shared voting or dispositive power with respect to any of these shares.
(6) Includes options to purchase 357,608 shares which are exercisable as of
March 25, 2002, or which become exercisable 60 days thereafter.
Percentage determined on the basis of 64,219,550 shares of Common Stock
outstanding.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table summarizes the compensation paid by the Company and
its subsidiaries to the Company's Chief Executive Officer and to the
Company's four most highly compensated executive officers other than the
Chief Executive Officer who were serving as executive officers at December
31, 2001, for services rendered in all capacities to the Company and its
subsidiaries during the three fiscal years ended December 31, 2001.
7
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
--------------------------------- ------------
Securities
Other Annual Underlying All Other
Compensation Options/ Compensation
Name and Principal Position Year Salary($) Bonus($) ($) (1) SAR's(#) ($) (2)
--------------------------- ---- --------- -------- ------------ ----------- ------------
Clarence L. Werner 2001 575,004 250,000 46,000 600,000 -
Chairman and 2000 575,004 250,000 95,032 600,000 -
Chief Executive Officer 1999 575,754 250,000 60,400 - -
Gary L. Werner 2001 300,000 100,000 - 220,000 -
Vice Chairman 2000 230,000 100,000 - 220,000 -
1999 210,750 92,000 - 53,333 -
Curtis G. Werner 2001 300,000 92,000 - 220,000 -
Vice Chairman - 2000 241,539 92,000 - 286,667 -
Corporate Development 1999 186,500 72,000 - - -
Gregory L. Werner 2001 330,000 127,000 - 293,333 -
President and 2000 300,000 127,000 - 293,333 -
Chief Operating Officer 1999 300,750 102,000 - 66,667 -
Daniel H. Cushman 2001 238,205 75,000 - 53,333 1,362
Senior Vice President - 2000 207,734 50,000 - 53,333 1,307
Marketing and Operations 1999 159,795 25,000 - 60,000 759
-------------
(1) Other annual compensation for Mr. Clarence L. Werner during 2001, 2000
and 1999 consists of $40,000 for the value of professional services
received and $6,000, $16,800, and $20,400, respectively, for personal
use of a Company vehicle. Other annual compensation for 2000 also
includes amounts reimbursed for payment of income taxes of $38,232.
(2) All other compensation for 2001 reflects the Company's contribution to
the individual 401(k) retirement savings plan of $1,362 of Mr. Daniel H.
Cushman.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
----------------------------------------------------------------------------
Potential Realizable
Value At Assumed
Number of % of Total Annual Rates of Stock
Securities Options/SAR's Price Appreciation For
Underlying Granted to Exercise Option Term(2)
Options/SAR's Employees in Price Expiration ----------------------
Name Granted (1)(#) Fiscal Year ($/Share) Date 5%($) 10%($)
---- -------------- ------------- --------- ---------- --------- ----------
Clarence L. Werner 600,000 37.5% $12.2175 9/29/11 4,610,112 11,682,929
Gary L. Werner 220,000 13.8% $12.2175 9/29/11 1,690,374 4,283,741
Curtis G. Werner 220,000 13.8% $12.2175 9/29/11 1,690,374 4,283,741
Gregory L. Werner 293,333 18.4% $12.2175 9/29/11 2,253,833 5,711,654
Daniel H. Cushman 53,333 3.3% $12.2175 9/29/11 409,788 1,038,483
-------------
(1) Options become exercisable in installments of 25%, 20%, 20%, 20% and 15%
after the expiration of 24, 36, 48, 60 and 72 months, respectively, from
the date of grant.
(2) The potential realizable values assume 5% and 10% annual rates of stock
price appreciation from the grant date based on the options being
outstanding for ten years (expiration of option term). The actual
realizable value of the options in this table depends upon the actual
performance of the Company's stock during the actual period the options
are outstanding.
8
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Shares Options/SAR's At Options/SAR's At
Acquired December 31, 2001 December 31, 2001(1)
On Value -------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
(#) ($) (#) (#) ($) ($)
--- --- --- --- --- ---
Clarence L. Werner - - - 1,200,000 - 8,745,750
Gary L. Werner - - 13,333 480,000 120,500 3,568,275
Curtis G. Werner - - - 506,667 - 3,771,775
Gregory L. Werner - - 125,000 695,000 816,875 5,086,325
Daniel H. Cushman 12,083 43,029 13,667 149,251 111,263 1,127,642
-------------
(1) Based on the $18.23 closing price per share of the Company's Common
Stock on December 31, 2001.
BOARD EXECUTIVE COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Executive Compensation Committee of the Board of Directors has
furnished the following report on executive compensation:
The Executive Compensation Committee annually reviews and approves the
compensation for the Chairman and Chief Executive Officer ("CEO") of the
Company. In turn, the Chairman and CEO reviews and recommends the
compensation for the Vice Chairman, Vice Chairman - Corporate Development,
and the President and Chief Operating Officer. Compensation for other
executive officers is reviewed and recommended by the Chairman and CEO, Vice
Chairman, Vice Chairman - Corporate Development, and the President and Chief
Operating Officer. The Executive Compensation Committee reviews the total
compensation for the executive officers of the Company, including the
Chairman and CEO.
As with all employees, compensation for the Company's executive
officers, including Clarence L. Werner, Chairman and CEO, is based on
individual performance and the Company's financial performance. The
Company's financial performance is the result of the coordinated efforts of
all employees, including executive officers, through teamwork focused on
meeting the expectations of customers and stockholders. The Company strives
to compensate its executive officers, including the Chairman and CEO, based
upon the following key factors: (1) Salary levels of executives employed by
competitors in the trucking industry and other regional and national
companies, (2) Experience and pay history with the Company, (3) Retention of
key executives of the Company, (4) Relationship of individual and Company
financial performance to compensation increases.
Base salaries and the annual bonus are determined based on the above
factors. The annual bonus plan allows executive officers to earn additional
compensation depending on individual and Company financial performance.
Company financial performance is evaluated by reviewing such factors as the
Company's operating ratio, earnings per share, revenue growth and size and
performance relative to competitors in the trucking industry. Individual
performance is evaluated by reviewing the individual's contribution to these
financial performance goals as well as a review of quantitative and
qualitative factors. Stock options are used as a long-term compensation
incentive and are intended to retain and motivate executives and management
personnel for the purpose of improving the Company's financial performance,
which should, in turn, improve the Company's stock performance. Stock
options are granted periodically to executives and management based on the
individuals' performance and potential contribution. Stock options are
granted with exercise prices equal to the prevailing market price of the
Company's stock on the date of the grant. Therefore, options only have value
if the market price of the Company's stock increases after the grant date.
The Committee compared the total compensation package for Mr. Clarence
L. Werner and the other top four Werner executives to the total compensation
packages of many of the Company's publicly-traded competitors in the
truckload industry, as disclosed on each company's most recently available
proxy statement. Comparisons were made on the basis of total compensation
9
per tractor operated, total compensation as a percentage of net income, and
similar factors. Both the total compensation of the Company's CEO and the
average total compensation of the Company's other executives disclosed in the
summary compensation table were in the middle of the range of compensation
paid by many of the Company's publicly-traded competitors in the truckload
industry, based on total compensation per tractor operated and as a
percentage of net income.
The Executive Compensation Committee has determined it is unlikely that
the Company would pay any amounts in the year ended December 2002 that would
result in a loss of Federal income tax deduction under Section 162(m) of the
Internal Revenue Code of 1986, as amended, and accordingly, has not
recommended that any special actions be taken or that any plans or programs
be revised at this time.
Clarence L. Werner, Committee Chairman
Irving B. Epstein
Martin F. Thompson
Gerald H. Timmerman
Jeffrey G. Doll
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Clarence L. Werner serves as Chairman of the Executive Compensation
Committee and is also the Chairman and Chief Executive Officer of the
Company.
Mr. Epstein serves on the Executive Compensation Committee and is a
partner in the law firm of Epstein and Epstein, which serves as outside
counsel to the Company.
REPORT OF THE AUDIT COMMITTEE
The following report is not deemed to be "soliciting material" or to be
"filed" with the SEC or subject to the liabilities of Section 18 of the 1934
Act and the report shall not be deemed to be incorporated by reference into
any prior or subsequent filing by the Company under the Securities Act of
1933 or the Securities Exchange Act of 1934.
The Audit Committee of the Board of Directors is comprised of Messrs.
Doll, Epstein, Rogert, Thompson, and Timmerman. All of the committee members
qualify as independent members of the Audit Committee under the National
Association of Securities Dealers' listing standards.
In conjunction with the preparation of the Company's 2001 audited
financial statements, the Audit Committee met with both management and the
Company's outside auditors to review and discuss the financial statements
prior to their issuance and to discuss significant accounting issues.
Management advised the Committee that the financial statements were prepared
in accordance with generally accepted accounting principles, and the
Committee discussed the statements with both management and the outside
auditors. The Committee's review included discussion with the outside
auditors of matters required to be discussed pursuant to Statement on
Auditing Standards No. 61 (Communication With Audit Committees).
With respect to the Company's outside auditors, the Committee, among
other things, discussed with KPMG LLP matters relating to its independence,
including written disclosures made to the Committee as required by the
Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees).
Based on the foregoing review and discussions, the Committee has
recommended to the Board of Directors that the audited financial statements
be included in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2001.
Jeffrey G. Doll, Committee Chairman
Irving B. Epstein
Donald W. Rogert
Martin F. Thompson
Gerald H. Timmerman
10
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH APPEARS HERE]
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-------- -------- -------- -------- -------- --------
Werner Enterprises, Inc. (WERN) $100 $113.7 $123.2 $ 98.5 $120.0 $172.5
Standard & Poor's 500 $100 $133.5 $172.2 $208.5 $190.0 $167.6
Nasdaq Trucking Group $100 $129.2 $129.5 $121.8 $134.2 $185.4
(SIC Code 42)
Assuming the investment of $100 on December 31, 1996, and reinvestment
of all dividends, the graph above compares the cumulative total stockholder
return on the Company's Common Stock for the last five fiscal years with the
cumulative total return of the Standard & Poor's 500 Market Index and an
index of other companies that are in the trucking industry (Nasdaq Trucking
Group - Standard Industrial Classification (SIC) Code 42) over the same
period. The Company's stock price, which reflects the four-for-three stock
split, was $18.23 as of December 31, 2001. This was used for purposes of
calculating the total return on the Company's Common Stock for the year ended
December 31, 2001.
CERTAIN TRANSACTIONS
The Company leases certain land from the Clarence L. Werner Revocable
Trust (the "Trust"), a related party. Clarence L. Werner, Chairman of the
Board and Chief Executive Officer, is the sole trustee of the Trust. The
land and related improvements consist of lodging facilities and a sporting
clay range and are used by the Company for business meetings and customer
promotion. The 20 year lease, which began in 1994, did not require the
Company to make rental payments to the Trust in exchange for use of the
property and allowed either party to terminate the lease after 10 years by
providing prior written notification of its intent to do so. The terms of
the lease provided that, should the Trust exercise its right to terminate the
lease after 10 years, the Trust would reimburse the Company for an amount
equal to the original cost of the leasehold improvements, less accumulated
depreciation calculated on a straight-line basis over the term of the lease
(20 years). Prior to 2001, the Company had made total leasehold improvements
to the land of approximately $1.1 million, which were completed in 1995.
During 2001, the Company and the Trust entered into a new 10 year lease
with the term of the lease beginning following completion of construction of
a new lodge facility (expected completion in second quarter 2002). The new
lease provides for termination of the original lease which began in 1994.
The new lease provides the Company with the option to extend the lease for
two additional 5 year periods following the initial term. The Company will
make annual rent payments of one dollar ($1) to the Trust for use of the
property. At any time during the term of the lease or any extensions
thereof, the Company has the option to purchase the land from the Trust at
its current market value, excluding the value of all leasehold improvements
made by the Company. The Company also has right of first refusal to purchase
11
the land or any part thereof if the Trust has an offer from an unrelated
third party to purchase the land. The Trust has the option at any time
during the lease to demand that the Company exercise its option to purchase
the land at its current market value. If the Company elects not to purchase
the land as demanded by the Trust, then the Company's option to purchase the
land at any time during the lease is forfeited; however, the Company will
still have right of first refusal related to a purchase offer from an
unrelated third party. If the Company terminates the lease prior to the
expiration of its 10 year term and elects not to purchase the land 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 (10 years). The Company has made
additional leasehold improvements to the land of approximately $3.0 million.
The Company anticipates completing the improvements during 2002, and
estimates that the cost of completing the remaining improvements will be
approximately $1.2 million.
During 2001, the Company purchased customer promotional items and
services totaling $151,156 from Cigarros, a company owned by Curtis G.
Werner.
On April 17, 2000, the Company entered into an agreement with WRG
Development, L.L.C. to sell 2.746 acres of land near the Company's Dallas,
TX, terminal to WRG Development, L.L.C. or its nominee (WRG Dallas, L.L.C.)
for $361,330. The agreement also includes an option for WRG Dallas, L.L.C.
to purchase an additional .783 acres for a price of $119,376. The closing
date for the 2.746 acres was January 10, 2001. The Clarence L. Werner
Revocable Trust (the "Trust"), a related party, owns a one-third interest in
WRG Development, L.L.C. and WRG Dallas, L.L.C. Clarence L. Werner, Chairman
of the Board and Chief Executive Officer, is the sole trustee of the Trust.
In a separate agreement with WRG Dallas, L.L.C. on September 27, 2000, the
Company committed to rent a guaranteed number of rooms in the lodging
facility to be constructed and operated on the land purchased from the
Company. The terms of the agreement provide that the Company will pay for an
average of 30 rooms per day per week at fixed rates depending on room size
and amenities. The contract provides for an annual 12% increase in the
number of rooms guaranteed by the Company and a 3% annual increase in the
fixed room rates. The agreement became effective September 16, 2001 and ends
on the sixth anniversary of this opening date (i.e., five-year term). WRG
Dallas, L.L.C. billed the Company $145,298 for rooms rented during the year
ended December 31, 2001. The Company believes that these transactions are on
terms no less favorable to the Company than those that could be obtained from
unrelated third parties, on an arm's length basis.
PUBLIC ACCOUNTANTS
The firm of KPMG LLP is the independent public accountants of the
Company. KPMG LLP billed the Company $68,593 for audit fees, $0 for
financial information systems design and implementation fees, and $23,367 for
all other fees (which includes $15,619 for audit related fees) for services
rendered for the year ended December 31, 2001. The Audit Committee has
reviewed the services provided related to the other fees billed by KPMG LLP
and believes that these services are compatible with maintaining KPMG LLP's
independence with regard to the audit of the Company's financial statements.
It is anticipated that the Board of Directors at its Annual Meeting which is
scheduled to occur immediately following the 2002 Annual Meeting of
Stockholders will approve KPMG LLP as independent public accountants for the
Company for the year ending December 31, 2002. Representatives of KPMG LLP
will be present at the Annual Meeting of Stockholders, will have an
opportunity to make a statement if they so desire, and will be available to
respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2003 Annual
Meeting of Stockholders must be received by the Secretary of the Company on
or before December 4, 2002, to be eligible for inclusion in the Company's
2003 proxy materials. The inclusion of any such proposal in such proxy
material shall be subject to the requirements of the proxy rules adopted
under the Securities Exchange Act of 1934, as amended.
Stockholder proposals submitted for presentation at the 2002 Annual
Meeting must be received by the Secretary of the Company at its headquarters
in Omaha, Nebraska no later than April 24, 2002. Such proposals must set
forth (i) a brief description of the business desired to be brought before
12
the Annual Meeting and the reason for conducting such business at the Annual
Meeting, (ii) the name and address of the stockholder proposing such
business, (iii) the class and number of shares of the Company's Common Stock
beneficially owned by such stockholder and (iv) any material interest of such
stockholder in such business. Nominations for directors may be submitted by
stockholders by delivery of such nominations in writing to the Secretary of
the Company by April 20, 2002. Only stockholders of record as of March 25,
2002, are entitled to bring business before the Annual Meeting or make
nominations for directors.
OTHER BUSINESS
Management of the Company knows of no business that will be presented
for consideration at the Annual Meeting of Stockholders other than that
described in the Proxy Statement. As to other business, if any, that may
properly be brought before the meeting, it is intended that proxies solicited
by the Board will be voted in accordance with the best judgment of the person
voting the proxies.
Stockholders are urged to complete, date, sign and return the proxy
enclosed in the envelope provided. Prompt response will greatly facilitate
arrangements for the meeting, and your cooperation will be appreciated.
By Order of the Board of Directors
/s/ James L. Johnson
James L. Johnson
Vice President, Controller
and Corporate Secretary
13
WERNER ENTERPRISES, INC.
Post Office Box 45308
Omaha, Nebraska 68145-0308
_______________________
FORM OF PROXY
_______________________
This Proxy is solicited on behalf of the Board of Directors for the
Annual Meeting of Stockholders to be held May 14, 2002. The undersigned
hereby appoints Clarence L. Werner and Gary L. Werner, and each of them, as
proxy, with full power of substitution in each of them and hereby authorizes
them to represent and vote, as designated below, all the shares of Common
Stock of Werner Enterprises, Inc., held of record by the undersigned as of
March 25, 2002, at the Annual Meeting of Stockholders to be held on May 14,
2002, and any adjournments thereof.
1. Election of Directors.
(Check only one box below. To withhold authority for any
individual nominee, strike through the name of the nominee.)
[ ] To vote for the nominees listed below:
Gary L. Werner
Gregory L. Werner
Michael L. Steinbach
or
--
[ ] To withhold authority to vote for all nominees listed above.
2. In their discretion, the proxy is authorized to vote upon such other
business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner
directed hereon by the undersigned stockholder. If no direction is made, this
Proxy will be voted FOR the election of all nominees for director. Please
sign exactly as your name appears. When shares are held by joint tenants,
both should sign. When signing as an attorney, executor, administrator,
trustee or guardian, please give your full title. If signing as a
corporation, please sign the full corporate name by the President or another
authorized officer. If a partnership, please sign in the partnership name by
an authorized person.
_______________________ ___________ __________________________ __________
Signature Date Signature if held jointly Date
Please mark, sign, date, and promptly return this form of proxy using the
enclosed self-addressed, postage-paid return envelope.