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
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[ ] 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
________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 9, 2006
________________________
Dear Stockholders:
It is a pleasure to invite you to the 2006 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 9,
2006, at 10:00 a.m. local time. 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 and 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 20, 2006, 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, 2005 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, or vote your shares by telephone or via the
Internet, 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, as well as instructions for alternative means
of voting. 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
Senior Vice President, Controller
and Corporate Secretary
Omaha, Nebraska
April 4, 2006
WERNER ENTERPRISES, INC.
Post Office Box 45308
Omaha, Nebraska 68145-0308
________________
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
MAY 9, 2006
________________________
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") for the Annual Meeting of
Stockholders of Werner Enterprises, Inc. (the "Company") to be held on
Tuesday, May 9, 2006, 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 are being mailed by the Company on or about April 4,
2006.
A Form of Proxy for use at the Annual Meeting of Stockholders is
enclosed together with a self-addressed, postage-paid return envelope.
Alternatively, most stockholders may vote by telephone or via the Internet
instead of returning the enclosed form. Stockholders should refer to the
voting form or other voting instructions included with the proxy materials
for information on the voting methods available.
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 20, 2006, the Company had 79,021,537 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 20, 2006. 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.
A properly executed proxy marked "ABSTAIN" with respect to any such
matter will not be voted, although it will be counted for purposes of
determining whether there is a quorum. Accordingly, an abstention will not
have any effect on the outcome of the proposal for the election of directors.
"Broker non-votes" are shares present by proxy at the Annual Meeting and held
by brokers or nominees as to which instructions to vote have not been
received from the beneficial owners and the broker or nominee does not have
discretionary authority as to certain shares to vote on one or more matters.
Broker non-votes will be counted at the meeting for purposes of determining a
quorum, but will not be counted at the meeting for purposes of calculating
the vote with respect to such matter. Accordingly, a broker non-vote will
not have any effect on the outcome of the voting proposal.
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.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board of Directors has established a process by which stockholders
and other parties who wish to communicate directly with the Lead Outside
Director or with the independent directors as a group may do so by writing to
Lead Outside Director, c/o Corporate Secretary at the address indicated on
the first page of this Proxy Statement. A majority of the Company's
independent directors has approved the process for collecting and organizing
stockholder communications received by the Company's Corporate Secretary on
the Board's behalf.
DIRECTOR NOMINATION PROCESS
The Nominating Committee considers candidates for Board membership
suggested by Board members, as well as management and stockholders. In
accordance with the "Policy Regarding Director Recommendations by
Stockholders", it will consider candidates recommended by one or more
stockholders that have individually or as a group owned beneficially at least
two percent of the Company's issued and outstanding stock for at least one
year. Stockholder recommendations must be submitted in writing with the
required proof of compliance with stock ownership requirements, background
information, and qualifications of the candidate to the Corporate Secretary
not less than 120 days prior to the first anniversary of the date of the
proxy statement relating to the Company's previous annual meeting (by
December 5, 2006 for the 2007 Annual Meeting of Stockholders) in order for
the candidate to be evaluated and considered as a prospective nominee.
Generally, candidates for director positions should possess:
* 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
performance as a director.
2
The Nominating Committee evaluates prospective nominees against certain
minimum standards and qualifications, as listed in the "Nominating Committee
Directorship Guidelines and Selection Policy". These include, but are not
limited to, business experience, skills, talents, and the prospective
nominee's ability to contribute to the success of the Company. The
Nominating Committee also considers other relevant factors, including the
balance of management and independent directors, the need for Audit Committee
expertise, and relevant industry experience. A prospective candidate
nominated by a stockholder in accordance with the "Policy Regarding Director
Recommendations by Stockholders" is evaluated by the Nominating Committee in
the same manner as any other prospective candidate. The Company has not
engaged and has not paid any fees to a third party to assist in the
nomination process.
The full text of the Company's "Policy Regarding Director
Recommendations by Stockholders", including a list of information required to
be submitted with the nomination by the recommending stockholder, and
"Nominating Committee Directorship Guidelines and Selection Policy" may be
found on the Company's website, www.werner.com. Stockholders may also
request a copy of either policy by writing to the Corporate Secretary at the
address indicated on the first page of this Proxy Statement.
ELECTION OF DIRECTORS AND
INFORMATION REGARDING DIRECTORS
The Articles of Incorporation of the Company provide that there shall be
two or three separate classes of directors, each consisting of not less than
two, nor more than five, directors, and as nearly equal in number as
possible. The Bylaws of the Company provide for eight directors, divided
into three classes. The term of office of the directors in the third class
expires at the 2006 Annual Meeting of Stockholders. Directors hold office
for a term of three years. The term of office of the directors in the first
and second classes will expire at the 2007 and 2008 Annual Meetings of
Stockholders, respectively. Clarence L. Werner and Patrick J. Jung, current
class III directors whose terms will expire at the 2006 Annual Meeting, and
Duane K. Sather have been nominated for election at the meeting for terms
expiring at the 2009 Annual Meeting and until their successors are duly
elected and qualified. Jeffrey G. Doll, a class III director whose term
expires at the 2006 Annual Meeting, has decided to not stand for re-election.
Mr. Doll will continue to serve on the Board until the expiration of his
current term at the 2006 Annual Meeting. Mr. Sather was recommended by the
Chief Executive Officer for consideration by the Nominating Committee 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 2006 Annual
Meeting is set forth on the following pages. The Board has determined that
Messrs. Timmerman, Steinbach, Bird, Jung, and Sather are independent as
defined in the National Association of Securities Dealers ("NASD") Rule 4200.
Term
Name Position with Company or Principal Occupation Ends
---- --------------------------------------------- ----
Clarence L. Werner Chairman of the Board and Chief Executive Officer 2006
Gary L. Werner Vice Chairman 2008
Gregory L. Werner President and Chief Operating Officer 2008
Gerald H. Timmerman President of Timmerman & Sons Feeding Co., Inc. (1) 2007
Michael L. Steinbach Owner of Steinbach Farms and Equipment Sales and
Steinbach Truck and Trailer (1) 2008
Kenneth M. Bird Superintendent - Westside Community Schools (1) 2007
Patrick J. Jung Chief Operating Officer of Magnet Retail Advertising, LLC (1) 2006
Duane K. Sather (2) Retired Chairman of Sather Companies N/A
__________
(1) Serves on audit committee, option committee, executive compensation
committee, and nominating committee.
(2) Mr. Sather currently is not a board member and has been nominated for
election at the 2006 Annual Meeting.
3
Clarence L. Werner, 68, 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, 48, 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.
Gregory L. Werner, 46, 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.
Gerald H. Timmerman, 66, 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.
Michael L. Steinbach, 51, was elected a director of the Company in 2002.
He has been the sole owner of Steinbach Farms and Equipment Sales, which buys
and sells farm land 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.
Kenneth M. Bird, 58, was appointed by the Board of Directors in 2002 to
fill a vacant director position. He has been Superintendent of the Westside
Community Schools in Omaha, Nebraska since 1992 and has held various
administrative positions in the Westside School District since 1981. Dr.
Bird was the Nebraska Superintendent of the Year in 1998 and has been
recognized for his technology leadership and vision. Dr. Bird is very active
in professional organizations on the local, state, and national levels, and
also serves on a number of community and civic boards.
Patrick J. Jung, 58, was elected a director of the Company in 2003. He
is currently serving as the Chief Operating Officer of Magnet Retail
Advertising, LLC. Prior to his position with Magnet Retail Advertising, LLC,
Mr. Jung was a practicing certified public accountant with KPMG LLP for
thirty years. Mr. Jung was 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 also currently serves on the Board of
Directors of America First Real Estate Investment Partners, L.P. and the
Board of Directors of Supertel Hospitality, Inc.
Duane K. Sather, 61, is an investor and serves as a director of several
privately-held companies that construct and operate ethanol plants. From
1972 to 1996, Mr. Sather was President of Sather Trucking Company, and from
1988 to 1996, Mr. Sather was Chairman of Sather Companies. In 1996, the
Sather Companies were sold to Favorite Brands International.
Gary L. 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
4
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.
Assuming the presence of a quorum, directors shall be elected by a
plurality of the votes cast by the stockholders of the outstanding shares of
the Common Stock of the Company present in person or represented by proxy at
the 2006 Annual Meeting of Stockholders and entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF EACH NOMINEE TO THE BOARD OF DIRECTORS. PROXIES SOLICITED BY THE
BOARD OF DIRECTORS WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR
DIRECTOR UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.
Board of Directors and Committees
The Board of Directors conducts its business through meetings of the
Board, actions taken by written consent in lieu of meetings, and by the
actions of its Committees. The Company has established audit, option,
executive compensation, and nominating committees. Currently, Messrs.
Timmerman, Steinbach, Bird, Jung, and Doll serve as members of the
committees. Mr. Doll has decided not to stand for re-election as a Board
member, and he will continue to serve on the committees until the 2006 Annual
Meeting.
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, reviews the Company's financial statements
with management and the outside auditors prior to their issuance, discusses
with management the process used to support the Chief Executive Officer and
Chief Financial Officer certifications that accompany the Company's periodic
filings, appoints the independent auditors for the next year, reviews and
approves all audit and non-audit services pursuant to Section 10A of the
Securities Exchange Act of 1934, manages the Company's internal audit
department, and reviews and maintains procedures for the anonymous submission
of complaints concerning accounting and auditing irregularities. The Audit
Committee periodically meets in executive session with the independent
auditors and with the head of the internal audit department, in each case
without the presence of management. All current Audit Committee members are
"independent" as defined in the applicable listing standards of the NASD.
The Board of Directors has determined that each Audit Committee member has
sufficient knowledge in financial and auditing matters to serve on the
Committee and has designated Mr. Jung as an audit committee financial expert
as defined by the Securities and Exchange Commission ("SEC"). The Audit
Committee charter, which has been approved by the Board of Directors, is
posted on the Company's website, www.werner.com, and was previously filed as
an appendix to the Company's 2004 proxy statement. This information is not
deemed to be "soliciting material" or to be "filed" with the SEC or subject
to the liabilities of Section 18 of the Securities Exchange Act of 1934, and
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 except to the extent the Company specifically
requests that such information be incorporated by reference or treated as
soliciting material.
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 approves the
compensation of all executive officers and makes recommendations to the Board
of Directors with respect to the compensation of executives. All current
5
Executive Compensation Committee members are "non-employee directors" as
defined by Rule 16b-3 under the Securities Exchange Act of 1934, are "outside
directors" as defined in Section 162(m) of the Internal Revenue Code of 1986,
as amended, and are "independent" as defined in the applicable listing
standards of the NASD. The Compensation Committee charter is posted on the
Company's website, www.werner.com.
The Nominating Committee assists the Board in identifying, evaluating,
and recruiting qualified candidates for election to the Board and recommends
for the Board's approval the director nominees for any election of directors.
All current Nominating Committee members are "independent" as defined in the
applicable listing standards of the NASD. The Nominating Committee charter
is posted on the Company's website, www.werner.com.
The Board of Directors held four (4) meetings (in addition, three (3)
executive sessions of the independent directors were held without the
presence of management) and acted one (1) time by unanimous written consent
during the year ended December 31, 2005. There were four (4) meetings of the
audit committee (including four (4) executive sessions with the independent
auditors and four (4) executive sessions with the manager of internal audit,
all without the presence of management), three (3) meetings of the executive
compensation committee, three (3) meetings of the option committee, and one
(1) meeting of the nominating 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, and the average attendance was 95%. The Company
encourages directors to attend annual meetings, although it does not have a
formal policy regarding director attendance at these meetings. All directors
attended the Company's Annual Meeting of Stockholders in May 2005, and the
Company anticipates that most, if not all, of its directors will attend the
2006 Annual Meeting of Stockholders.
Directors who are not employees of the Company receive an annual
retainer of $10,000, paid in equal quarterly installments, and the Audit
Committee Chairman receives an additional annual retainer of $10,000, also
paid quarterly. In addition, all non-employee Directors 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. Directors who are
also employees of the Company receive no additional compensation for service
as a Director.
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 68 Chairman of the Board and Chief Executive Officer
Gary L. Werner 48 Vice Chairman
Gregory L. Werner 46 President and Chief Operating Officer
Daniel H. Cushman 51 Senior Executive Vice President and Chief Marketing
Officer
Derek J. Leathers 36 Senior Executive Vice President - Value Added Services
H. Marty Nordlund 44 Senior Executive Vice President - Specialized Services
Robert E. Synowicki, Jr. 47 Executive Vice President and Chief Information Officer
Richard S. Reiser 59 Executive Vice President and General Counsel
John J. Steele 48 Executive Vice President, Treasurer and Chief Financial
Officer
Jim S. Schelble 45 Executive Vice President - Sales and Marketing
See "ELECTION OF DIRECTORS AND INFORMATION REGARDING DIRECTORS" for
information regarding the business experience of Clarence L. Werner, Gary L.
Werner, and Gregory L. Werner.
6
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, Senior Vice
President - Marketing and Operations in 2001, Executive Vice President and
Chief Marketing Officer in 2002, and Senior Executive Vice President and
Chief Marketing Officer in 2004. 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.
Derek J. Leathers joined the Company in 1999 as Managing Director -
Mexico Division. He was promoted to Vice President - Mexico Division in
2000, Vice President - International Division in 2001, Senior Vice President
- International in 2003, Executive Vice President - International in 2004,
and was named Senior Executive Vice President - Value Added Services in
February 2006. 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.
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, Vice President - Specialized Services in 2001, Senior
Vice President - Specialized Services in 2003, Executive Vice President -
Specialized Services in August 2005, and was named Senior Executive Vice
President - Specialized Services in February 2006. Prior to joining the
Company, Mr. Nordlund held various management positions with Crete Carrier
Corporation.
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 in 1987. Mr.
Synowicki also serves on the Board of Directors of Blue Cross and Blue Shield
of Nebraska.
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.
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, Vice President, Treasurer and Chief Financial Officer in
1996, Senior Vice President, Treasurer and Chief Financial Officer in 2004,
and was named Executive Vice President, Treasurer and Chief Financial Officer
in August 2005. 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 in 1989.
Jim S. Schelble joined the Company in 1998 as Manager of New Business
Development. He was promoted to Director of National Accounts in 1999,
Senior Director of Dedicated Services in 2000, Associate Vice President of
Corporate and Dedicated Sales in 2002, Vice President - Sales in 2003, Senior
Vice President - Sales in 2004 and was named Executive Vice President - Sales
and Marketing in August 2005. Prior to joining the Company, Mr. Schelble
spent twelve years with Roadway Express in a variety of management positions
within operations, sales, and marketing.
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.
7
Section 16(a) Beneficial Ownership Reporting Compliance
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 SEC. 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 and amendments
thereto received by it and 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, 2005, all filing requirements
applicable to its officers, directors, and greater than ten percent
beneficial owners were complied with in a timely manner.
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 table below sets forth certain information as of March 20, 2006,
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 named
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 20, 2006, the Company
had 79,021,537 shares of Common Stock outstanding. Except as otherwise
indicated in the footnotes to the following table, the Company believes that
the beneficial owners of the Common Stock listed below have sole voting power
and investment power with respect to such shares, subject to applicable laws.
Unless otherwise noted, the business address of each beneficial owner set
forth below is 14507 Frontier Road, Omaha, Nebraska 68138.
Beneficial Ownership
-------------------------------------------------------
Shares Right to
Name of Beneficial Owner Owned Acquire (1) Total Percent (2)
------------------------ ---------- --------------- --------- ---------------
Clarence L. Werner 22,377,097 875,000 23,252,097 29.1%
Gary L. Werner (3) 1,558,086 364,168 1,922,254 2.4%
Gregory L. Werner 3,277,327 560,002 3,837,329 4.8%
Daniel H. Cushman 416 149,900 150,316 *
Derek J. Leathers 1,195 63,750 64,945 *
Gerald H. Timmerman 13,666 - 13,666 *
Jeffrey G. Doll (4) - - - *
Michael L. Steinbach - - - *
Kenneth M. Bird 500 - 500 *
Patrick J. Jung 2,000 - 2,000 *
Duane K. Sather (4) 6,000 - 6,000 *
Lord, Abbett & Co. LLC (5) 8,507,982 - 8,507,982 10.8%
Wellington Management Company, LLP (6) 5,143,902 - 5,143,902 6.5%
All executive officers, directors
and director nominees as a group
(16 persons) 27,248,666 2,210,741 29,459,407 36.3%
___________
* Indicates less than 1%.
(1) Number of shares underlying stock options which are exercisable as of
March 20, 2006, or which become exercisable 60 days thereafter.
8
(2) The percentages are based upon 79,021,537 shares, which equal the
outstanding shares of the Company as of March 20, 2006. For beneficial
owners who hold options exercisable within 60 days of March 20, 2006,
the number of shares of Common Stock on which the percentage is based
also includes the number of shares underlying such options.
(3) The shares shown for Gary L. Werner do not include (i) 479,497 shares
held by the Gary L. Werner Irrevocable Inter Vivos QTIP Trust II, the
sole trustee of which is Union Bank and Trust Company who has sole
investment and 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 which is Becky K. Werner (Mr. Werner's wife) who has
sole investment and 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.
(4) Mr. Doll has elected not to stand for re-election as a Board member
after the 2006 Annual Meeting of Stockholders. Mr. Sather was nominated
by the Board of Directors, upon the recommendation of the Nominating
Committee, to fill this vacancy.
(5) Based on Schedule 13G as of December 30, 2005, as filed with the
Securities and Exchange Commission by Lord, Abbett & Co. LLC, 90 Hudson
Street, Jersey City, New Jersey 07302. Lord, Abbett & Co. LLC claims
sole voting power and sole dispositive power with respect to these
8,507,982 shares and no shared voting or dispositive power with respect
to any of these shares.
(6) Based on Schedule 13G as of December 30, 2005, 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
3,665,252 shares, shared dispositive power with respect to 5,143,902
shares, and no sole voting or dispositive power with respect to any of
these shares.
9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The table below 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, 2005
for services rendered in all capacities to the Company and its subsidiaries
during the three fiscal years ended December 31, 2005.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
------------------------------------- ------------
Other Annual Securities All Other
Compensation Underlying Compensation
Name and Principal Position Year Salary ($) Bonus ($) ($) Options(#) ($)(1)
--------------------------- ---- ---------- --------- ------------ ---------- ------------
Clarence L. Werner 2005 715,000 350,000 - - -
Chairman and 2004 715,000 300,000 - 100,000 -
Chief Executive Officer 2003 682,668 300,000 - - -
Gary L. Werner 2005 335,862 210,000 - - -
Vice Chairman 2004 334,733 190,000 - 100,000 -
2003 323,208 160,000 - - -
Gregory L. Werner 2005 424,500 300,000 - - -
President and 2004 426,000 250,000 - 100,000 -
Chief Operating Officer 2003 415,862 200,000 - - -
Daniel H. Cushman 2005 310,870 215,000 - 35,000 1,350
Senior Executive Vice 2004 310,870 200,000 - 100,000 1,398
President and Chief 2003 291,277 150,000 - - 1,125
Marketing Officer
Derek J. Leathers 2005 244,503 200,000 - 20,000 1,350
Senior Executive Vice 2004 244,253 140,000 - 35,000 1,398
President - Value Added 2003 230,086 95,000 - - 1,305
Services
_________________
(1) All other compensation for 2005 for Mr. Cushman reflects the Company's
contribution to the individual 401(k) retirement savings plan of $1,057
and the Company's contribution to the employee stock purchase plan of
$293 and for Mr. Leathers reflects the Company's contribution to the
individual 401(k) retirement savings plan of $1,057 and the Company's
contribution to the employee stock purchase plan of $293.
10
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
--------------------------------------------------
Number of Potential Realizable Value
Securities % of Total At Assumed Annual Rates
Underlying Options of Stock Price Appreciation
Options Granted to Exercise For Option Term(2)
Granted Employees in Price Expiration ---------------------------
Name (1)(#) Fiscal Year ($/Share) Date 5%($) 10%($)
---- ---------- ------------ --------- ---------- ------------ -------------
Clarence L. Werner - - - - - -
Gary L. Werner - - - - - -
Gregory L. Werner - - - - - -
Daniel H. Cushman 35,000 8.4% $16.68 10/22/15 367,149 930,427
Derek J. Leathers 20,000 4.8% $16.68 10/22/15 209,799 531,672
_________________
(1) Options become exercisable in installments of 25%, 20%, 20%, 20% and 15%
after the expiration of 24, 36, 48, 60 and 72 months, respectively, from
the date of grant.
(2) The potential realizable values assume 5% and 10% annual rates of stock
price appreciation from the grant date based on the options being
outstanding for ten years (expiration of option term). The actual
realizable value of the options in this table depends upon the actual
performance of the Company's stock during the actual period the options
are outstanding.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Shares Options At Options At
Acquired December 31, 2005 December 31, 2005(1)
On Value -------------------------- ---------------------------
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
---- -------- -------- ----------- ------------- ----------- -------------
Clarence L. Werner 50,000 668,715 950,000 475,000 10,377,411 4,089,789
Gary L. Werner 50,000 657,975 389,168 237,500 4,297,796 1,586,356
Gregory L. Werner 70,000 854,882 635,002 283,335 7,018,376 2,069,493
Daniel H. Cushman - - 124,900 168,335 1,400,511 595,204
Derek J. Leathers - - 55,000 75,418 620,281 329,936
_________________
(1) Based on the $19.70 closing price per share of the Company's Common
Stock on December 30, 2005.
11
BOARD EXECUTIVE COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
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
Securities Exchange Act of 1934, 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
except to the extent the Company specifically requests that such information
be incorporated by reference or treated as soliciting material.
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 and the President and Chief Operating
Officer. Compensation for other executive officers is reviewed and
recommended by the Chairman and CEO, Vice Chairman, and the President and
Chief Operating Officer. The Executive Compensation Committee reviews and
approves 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, and (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 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 in each company's most recently available
proxy statement. Comparisons were made on the basis of total compensation
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 significant amounts in the year ended December 2006
that would result in a loss of Federal income tax deduction under Section
12
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.
Gerald H. Timmerman
Jeffrey G. Doll
Michael L. Steinbach
Kenneth M. Bird
Patrick J. Jung
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee of the Board of Directors is
comprised of Messrs. Timmerman, Doll, Steinbach, Bird, and Jung. None of the
members of the Executive Compensation Committee during 2005 or as of the date
of this proxy statement is or has been an officer or employee of the Company.
There were no transactions between any member of the Executive Compensation
Committee and the Company that occurred during 2005 which would require
disclosure under Item 404 of Regulation S-K.
13
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
Securities Exchange Act of 1934, 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
except to the extent the Company specifically requests that such information
be incorporated by reference or treated as soliciting material.
The Audit Committee of the Board of Directors is comprised of Messrs.
Jung, Doll, Timmerman, Steinbach, and Bird. Mr. Jung is chairman of the
Audit Committee. All of the committee members qualify as independent members
of the Audit Committee under the National Association of Securities Dealers'
listing standards. The primary purpose of the Audit Committee is to assist
the Board of Directors in its general oversight of the Company's financial
reporting process. The Audit Committee conducted its oversight activities
for the Company in accordance with the duties and responsibilities outlined
in the Audit Committee charter.
The Company's management is responsible for the preparation,
consistency, integrity, and fair presentation of the financial statements,
accounting and financial reporting principles, systems of internal and
disclosure controls, and procedures designed to ensure compliance with
accounting standards, applicable laws, and regulations. The Company's
independent auditors, KPMG LLP, are responsible for performing an independent
audit of the financial statements and expressing an opinion on the conformity
of those financial statements with accounting principles generally accepted
in the United States of America.
In conjunction with the preparation of the Company's 2005 audited
financial statements, the Audit Committee met with both management and the
Company's outside auditors to review and discuss the financial statements
included in the Company's Annual Report on Form 10-K prior to their issuance
and to discuss significant accounting issues. Management advised the Audit
Committee that the financial statements were prepared in accordance with
accounting principles generally accepted in the United States of America, and
the Audit Committee discussed the statements with both management and the
outside auditors. The Audit 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 Audit Committee,
among other things, discussed with KPMG LLP matters relating to its
independence, including written disclosures made to the Audit Committee as
required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees).
Based on the foregoing review and discussions, the Audit 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, 2005, for filing with the Securities and Exchange
Commission.
Patrick J. Jung, Committee Chairman
Jeffrey G. Doll
Gerald H. Timmerman
Michael L. Steinbach
Kenneth M. Bird
14
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following graph is not deemed to be "soliciting material" or to be
"filed" with the SEC or subject to the liabilities of Section 18 of the
Securities Exchange Act of 1934, 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
except to the extent the Company specifically requests that such information
be incorporated by reference or treated as soliciting material.
[PERFORMANCE GRAPH APPEARS HERE]
12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
-------- -------- -------- -------- -------- --------
Werner Enterprises, Inc. (WERN) $100.0 $143.8 $170.5 $193.9 $226.5 $198.7
Standard & Poor's 500 $100.0 $ 88.1 $ 68.6 $ 88.3 $ 97.9 $102.8
Nasdaq Trucking Group (SIC Code 42) $100.0 $132.0 $157.3 $203.9 $281.6 $273.0
Assuming the investment of $100 on December 31, 2000, 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 was $19.70 as of December 30, 2005. This
was used for purposes of calculating the total return on the Company's Common
Stock for the year ended December 31, 2005.
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.
15
During 2001, the Company and the Trust entered into a new 10-year lease
with the term of the lease beginning June 1, 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 land. The Company is
responsible for all real estate taxes and maintenance costs related to the
land, which totaled less than $60,000 for 2005. 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 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,
excluding the value of all leasehold improvements made by the Company. 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).
If, at the termination of the initial 10-year lease term, or any of the two
additional 5-year renewal periods, the Company has not exercised its option
to purchase the land at its current market value, the leasehold improvements
shall be the property of the Trust. However, it is the Company's current
intention to exercise its option to purchase the land at its current market
value prior to the completion of the initial 10-year lease period or any of
the two additional 5-year renewal periods. The Company has made leasehold
improvements to the land of approximately $6.1 million since inception of the
original lease in 1994.
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 closing date for the 2.746 acres was January 10, 2001.
The agreement also included an option for WRG Dallas, L.L.C. to purchase
approximately .783 additional acres for an approximate price of $90,000,
which was exercised on June 30, 2005. The Company realized a gain of
approximately $55,000 on the transaction. The Clarence L. Werner Revocable
Trust (the "Trust"), a related party, owned 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. On
February 28, 2005, the Trust assigned its one-third ownership interests in
WRG Dallas, L.L.C. and WRG Development, L.L.C. to the Company for a payment
of ten dollars ($10). The Company assumed one-third ownership in this 71-
room motel that had an appraised value of $2.6 million and outstanding notes
payable of $2.2 million. This motel had positive net income in 2004, after
all expenses, including depreciation and interest expense. The Company
agreed to hold Clarence L. Werner and the Clarence L. Werner Revocable Trust
harmless with respect to any guarantee of debt executed prior to the date of
assignment.
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 constructed and operated on the land purchased from the Company. In
April 2002, the Company and WRG Dallas, L.L.C. signed an addendum to this
agreement. The terms of the addendum provide that the Company will pay for
an average of 40 rooms per day per week at fixed rates depending on room size
and amenities. The contract provides for an annual 10% increase in the
number of rooms guaranteed by the Company and a 3% annual increase in the
fixed room rates. The original room rental agreement became effective
September 16, 2001 and has a six-year term, the duration of which was not
modified by the April 2002 addendum. The Company paid WRG Dallas, L.L.C.
$944,500 during the year ended December 31, 2005 for the rental of rooms.
All amounts paid by the Company in 2005 were for rooms used by the Company's
employees, primarily its drivers. 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.
The Company in the following capacities employs family members of
certain executive officers. Clarence L. Werner's brother, Vern Werner, is
employed as Manager of Owner-Operator Conversions; Clarence L. Werner's
16
sister-in-law, Julie Downing, is employed as Assistant Director of Corporate
Services; Clarence L. Werner's brother-in-law, Eric Downing, is employed as
Director of Specialized Services; Clarence L. Werner's son-in-law, Scott
Robertson, is employed as Director-Aviation; Gary L. Werner's brother-in-law,
Daniel Matthew, is employed with Fleet Truck Sales; Gregory L. Werner's son,
Clint Werner, is employed as Assistant Director of the Omaha body shop; and
Daniel H. Cushman's sister, Nancy Von Esh, is employed as Account Executive.
The Company compensated in excess of $60,000 in total compensation to each of
these seven individuals. The aggregate total compensation paid to these
seven individuals in 2005 was $647,632.
During 2005, the Company paid $6,291,109 to Pegasus Enterprises, LLC
which is owned by Clarence L. Werner's brother, Vern Werner, and sister-in-
law and paid $475,936 to D-W Trucking, in which Vern Werner has a 50%
ownership interest. Pegasus Enterprises, LLC and D-W Trucking lease tractors
and drivers to the Company as owner-operators. At December 31, 2005, the
Company had notes receivable from Pegasus Enterprises, LLC of $1,104,918
related to the sale of 32 used trucks. The payments to Pegasus Enterprises,
LLC and D-W Trucking are based on the same per-mile settlement scale as the
Company's other similar owner-operator contractors. The terms of the note
agreements with and the tractor sales prices to Pegasus Enterprises, LLC are
no less favorable to the Company than those that could be obtained from
unrelated third parties, on an arm's length basis.
Clarence L. Werner utilized the Company's aircraft for non-business
purposes during 2005. Mr. Werner reimbursed the Company $107,733
representing the aggregate incremental cost associated with the personal
flights, which is higher than the imputed income calculated for income tax
purposes in accordance with Internal Revenue Service rules.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of KPMG LLP is the independent registered public accounting
firm of the Company. The following table presents fees for professional
audit services rendered by KPMG LLP for the audit of the Company's annual
financial statements and the Company's internal control over financial
reporting for the years ended December 31, 2005 and 2004, and fees for other
services rendered by KPMG LLP during those periods.
2005 2004
-------- --------
Audit Fees $398,668 $422,040
Audit-Related Fees 6,500 11,111
Tax Fees 0 0
All Other Fees 0 0
-------- --------
Total $405,168 $433,151
======== ========
Audit fees relate to services rendered for the audit of the Company's
annual financial statements and review of financial statements included in
the Company's Form 10-Q. Audit fees also includes fees for services rendered
for the audits of management's assessment of the effectiveness of internal
control over financial reporting and the effectiveness of internal control
over financial reporting. Audit-related fees include fees for SEC
registration statement services and benefit plan audits. Tax fees are
defined as fees for tax compliance, tax advice and tax planning.
The Audit Committee has reviewed the services provided related to the
audit-related 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 Audit
Committee, at its next scheduled meeting, will approve KPMG LLP as the
independent registered public accounting firm for the Company for the year
ending December 31, 2006. 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.
17
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee's policy is to pre-approve all audit and non-audit
services provided by the independent public accountants. Prior to engagement
of the independent public accountants for the next year's audit, management
will submit to the Audit Committee for approval a list of all audit and non-
audit services expected to be rendered during that year and the budgeted fees
for those services. The Audit Committee pre-approves these services by
category of service (audit, audit-related, tax and other) prior to
commencement of the engagement. If circumstances arise where it becomes
necessary to engage the independent public accountants for additional
services not contemplated in the original pre-approval, the Audit Committee
will approve those additional services prior to commencement of the
engagement. The Audit Committee may delegate pre-approval authority to the
Chair of the Audit Committee, provided that the Chair reports any such pre-
approval decisions to the Audit Committee at its next scheduled meeting. The
independent public accountants and management periodically report to the full
Audit Committee regarding the extent of services provided by the independent
public accountants in accordance with this pre-approval, and the fees for the
services performed to date. None of the fees paid to the independent public
accountants during 2005 and 1% of the fees paid to the independent public
accountants during 2004 under the categories Audit-Related, Tax and All Other
fees described above were approved by the Audit Committee after services were
rendered pursuant to the de minimus exception established by the SEC.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2007 Annual
Meeting of Stockholders must be received by the Secretary of the Company on
or before December 5, 2006, to be eligible for inclusion in the Company's
2007 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. Nominations for
directors to be elected at the 2007 Annual Meeting of Stockholders may be
submitted by stockholders by delivery of such nominations in writing to the
Secretary of the Company by December 5, 2006. For a description of the
process for submitting such nominations, see "Director Nomination Process" on
page 2 of this Proxy Statement.
Stockholder proposals submitted for presentation at the 2006 Annual
Meeting but not included in our proxy materials must be received by the
Secretary of the Company at its headquarters in Omaha, Nebraska no later than
April 19, 2006. Such proposals must set forth (i) a brief description of the
business desired to be brought before 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. Only
stockholders of record as of March 20, 2006, are entitled to bring business
before the Annual Meeting.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
The SEC has adopted rules that permit companies and intermediaries such
as brokers to satisfy delivery requirements for proxy statements with respect
to two or more stockholders sharing the same address by delivering a single
proxy statement addressed to those stockholders; provided, that stockholders
are not holding shares in nominee name. This process, which is commonly
referred to as "householding," potentially provides extra convenience for
stockholders and cost savings for companies. After receipt of written
consent, the Company and some brokers household proxy materials, delivering a
single proxy statement to multiple stockholders sharing an address unless
contrary instructions have been received from one or more of the
stockholders. The Company undertakes to deliver promptly upon written or
oral request a separate copy of the annual report or proxy statement, as
18
applicable, to a stockholder at a shared address to which a single copy of
the documents was delivered. A stockholder who wishes to receive a separate
copy of a proxy statement or annual report, or one who is receiving multiple
copies and wishes to receive only one, should provide written notification to
the broker if the shares are held in a brokerage account or the Company if
the stockholder holds registered shares. Stockholders can notify the Company
by sending a written request to Werner Enterprises, Inc., Corporate
Secretary, P.O. Box 45308, Omaha, NE 68145 or by calling (402) 895-6640.
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 or vote their shares by telephone or via
the Internet. 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
Senior Vice President, Controller
and Corporate Secretary
19
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 9, 2006. 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 20,
2006, at the Annual Meeting of Stockholders to be held on May 9, 2006, 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:
Clarence L. Werner
Patrick J. Jung
Duane K. Sather
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.