(3) |
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined): |
[ ] |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
TIME
AND DATE |
8:30
a.m., Central Time, on Thursday, May 25, 2006 |
|||
PLACE |
Embassy Suites Hotel 1040 P Street Lincoln, Nebraska 68508 |
|||
ITEMS
OF BUSINESS |
At
the Annual Meeting, shareholders will be asked to vote on the following items: |
|||
(1)
Elect the Board of Directors for a term of one year; |
||||
(2)
Ratify the appointment of KPMG LLP as independent auditors for 2006; |
||||
(3)
Approve the Companys Employee Stock Purchase Loan Plan; |
||||
(4)
Approve an amendment to the Companys articles of incorporation to increase the number of authorized shares of Class B common stock to allow for
future stock splits; and, |
||||
(5)
Other business if properly introduced. |
||||
RECORD
DATE |
You
can vote if you were a shareholder as of the close of business on March 27, 2006. |
|||
OTHER
INFORMATION |
Our
2005 Annual Report and annual report on Form 10-K, which are not part of the proxy soliciting materials, are enclosed. |
|||
PROXY
VOTING |
The
Board of Directors solicits your proxy and asks you to vote your proxy at your earliest convenience to be sure your vote is received and counted. The
Board of Directors encourages you to attend the meeting in person. Whether or not you plan to attend the meeting, we ask you to sign, date, and mail
the enclosed proxy as promptly as possible in order to make sure that your shares will be voted in accordance with your wishes at the meeting. A
self-addressed, postage-paid return envelope is enclosed for your convenience. If you attend the meeting, you may vote by proxy or you may revoke your
proxy and cast your vote in person. We recommend you vote by proxy even if you plan to attend the meeting. |
PROXY
STATEMENT |
||||||
General
Information |
1 | |||||
VOTING |
1 | |||||
CORPORATE
PERFORMANCE |
3 | |||||
PROPOSAL
1-ELECTION OF DIRECTORS |
||||||
Nominees |
4 | |||||
CORPORATE
GOVERNANCE |
||||||
Code of
Business Conduct and Ethics for Directors, Officers, and Employees |
6 | |||||
Board
Composition and Director Independence |
6 | |||||
Governance
Guidelines of the Board |
6 | |||||
Board
Committees |
6 | |||||
Meetings of
the Board |
8 | |||||
Compensation
of Directors |
8 | |||||
EXECUTIVE
OFFICERS |
8 | |||||
EXECUTIVE
COMPENSATION |
||||||
Summary
Compensation Table |
10 | |||||
Stock Option,
SAR, Long-Term Incentive, and Defined Benefit Plans |
11 | |||||
Compensation
Committee Interlocks and Insider Participation |
11 | |||||
REPORT OF THE
BOARD COMPENSATION COMMITTEE |
11 | |||||
SECURITY
OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS, AND PRINCIPAL SHAREHOLDERS |
||||||
Stock
Ownership |
14 | |||||
Section 16(a)
Beneficial Ownership Reporting Compliance |
17 | |||||
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS |
17 | |||||
REPORT OF THE
BOARD AUDIT COMMITTEE |
20 | |||||
PROPOSAL
2-APPOINTMENT OF INDEPENDENT AUDITOR |
||||||
Independent
Accountant Fees and Services |
22 | |||||
PROPOSAL
3-APPROVAL OF EMPLOYEE STOCK PURCHASE LOAN PLAN |
22 | |||||
PROPOSAL
4-AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF CLASS B COMMON STOCK FROM 15,000,000 SHARES TO 60,000,000
SHARES TO ALLOW FOR FUTURE STOCK SPLITS |
25 | |||||
OTHER
SHAREHOLDER MATTERS |
||||||
Householding |
28 | |||||
Other
Business |
28 | |||||
Shareholder
Proposals for 2007 Annual Meeting |
28 | |||||
MISCELLANEOUS |
29 | |||||
APPENDIX
A-NELNET, INC. EMPLOYEE STOCK PURCHASE LOAN PLAN |
A-1 | |||||
APPENDIX
B-FORM OF ARTICLES OF AMENDMENT TO SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION OF NELNET, INC. |
B-1 |
|
By mail by completing, signing, dating, and returning the enclosed proxy card; or |
|
By attending the Annual Meeting and voting your shares in person. |
|
Electing nine directors for a term of one year; |
|
Ratifying the appointment of KPMG LLP as the Companys independent auditors for 2006; |
|
Approving the Companys Employee Stock Purchase Loan Plan; and |
|
Approving an amendment to the Companys articles of incorporation to increase the number of authorized shares of Class B common stock to allow for future stock splits. |
|
FOR each of our nominees to the Board of Directors; |
|
FOR ratification of the appointment of KPMG LLP as our independent auditors; |
|
FOR approval of the Companys Employee Stock Purchase Loan Plan; and |
|
FOR approval of an amendment to the Companys articles of incorporation to increase the number of authorized shares of Class B common stock to allow for future stock splits. |
Company/Index |
12/11/2003 |
12/31/2003 |
12/31/2004 |
12/31/2005 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nelnet, Inc. |
$ | 100.00 | $ | 102.75 | $ | 123.53 | $ | 186.61 | ||||||
Dow Jones U.S.
Total Market Index |
$ | 100.00 | $ | 103.71 | $ | 116.17 | $ | 123.52 | ||||||
Dow Jones U.S.
Financial Services Index |
$ | 100.00 | $ | 103.63 | $ | 118.41 | $ | 128.33 |
Name, Age, and Service as a Director |
Principal Occupation(s) and Other
Directorships |
||||
---|---|---|---|---|---|
Michael S. Dunlap, 42 Director since January 1996 |
Chairman and Co-Chief Executive Officer, Nelnet,
Inc.
Chairman and Co-Chief Executive Officer, Nelnet, Inc., August 2003 present; President and sole Chief Executive Officer, December 2001 August 2003; Chairman of the Companys
predecessor in
interest, January 1996 December 2001
President and Director, Farmers & Merchants Investment Inc. (F&M), the parent of Union Bank and Trust Company (Union Bank), January 1995 present (F&M is an
affiliate of the
Company)
Non-Executive Chairman, Union Bank, August 2003 present; Chief Executive Officer, January 2001 August 2003;
Executive Vice President, January 1993 January 2001
(Union Bank is an affiliate of the Company) |
||||
Stephen F.
Butterfield, 53 Director since January 1996 |
Vice-Chairman and Co-Chief Executive Officer, Nelnet, Inc.
Co-Chief Executive Officer, Nelnet, Inc., August 2003 present; Vice-Chairman, March 2000 present; Vice-Chairman of the Companys predecessor in interest,
January 1996 March
2000 President, Student Loan Acquisition Authority of Arizona, January 1989 February 2000 |
||||
James P.
Abel, 55 Director since August 2003 |
Chief Executive Officer, NEBCO, Inc.
Chief Executive Officer, NEBCO, Inc., a company with interests in the manufacture of building materials, construction, insurance, mining, railroading, farming, and real estate,
2004 present; President and Chief
Executive Officer, 1983 2004
Director, UNIFI Mutual Holding Company, Ameritas Holding Company, Ameritas Life Insurance Corp., and
AMAL Corporation |
||||
Don R. Bouc,
59 Director since March 2000 |
President Emeritus, Nelnet, Inc.
President Emeritus, Nelnet, Inc., January 2005 present; President, March 2000 January 2005 President, National Education Loan Network, Inc., a subsidiary of Nelnet, Inc., May 1997 March
2001 |
||||
Thomas E.
Henning, 53 Director since August 2003 |
President and Chief Executive Officer, Assurity Security Group, Inc. and its subsidiaries,
Security Financial Life Insurance Company and
Assurity Life Insurance Company
President and Chief Executive Officer, Assurity Security Group, Inc. and its subsidiaries, Security Financial Life Insurance Company and Assurity Life Insurance Company, 1990 present Director, Pine Lake Advisors, a subsidiary of Security Financial Life Insurance Company |
||||
Arturo R.
Moreno, 59 Director since August 2003 |
Chief Executive Officer, Angels Baseball LP
Chief Executive Officer, Angels Baseball LP, a sports management company, May 2003 present President, Chief Operating Officer, and Director, Outdoor Systems, Inc., an outdoor advertising organization, 1984 1999 |
||||
Brian J.
OConnor, 50 Director since August 2003 |
Senior Vice-President, Hutchinson, Shockey, Erley & Co. Senior Vice-President, Hutchinson, Shockey, Erley & Co., which underwrites and trades securities for various local governments, 1997 present |
||||
Michael D.
Reardon, 53 Director since December 2003 |
Chairman, HyperFlo LLC
Chief Executive Officer, Provision Communications, LLC Chairman, HyperFlo, LLC, a manufacturer of precision cleaning equipment, 1997 present Chief Executive Officer, Provision Communications, LLC, a telecommunications company, January 2004 present |
||||
James H. Van
Horn, 53 Director since March 2001 |
President and Chief Executive Officer, InTuition Development Holdings, LLC
President and Chief Executive Officer, InTuition Development Holdings, LLC, a records administration company, June 2003 present (InTuition Development Holdings, LLC is not affiliated with Nelnet, Inc.)
Executive Director, Nelnet, Inc., October 2002 May 2003; Senior Vice-President, March 2000 October 2002 President, InTuition, Inc., 1998 May 2003 (Nelnet, Inc. purchased InTuition, Inc. in June 2000) |
|
A majority of the members of the Board must be independent directors. |
|
All directors stand for re-election every year. |
|
The Board undertakes an annual self-review. |
|
The Board and each Board Committee has the authority to engage independent or outside counsel, accountants, or other advisors, as it determines to be necessary or appropriate. All related fees and costs of such advisors are paid by the Company. |
|
Board members have open communication with all members of management and counsel. |
|
Non-Employee Directors meet in executive session, without the presence of management. Mr. Reardon, who is chairman of the Nominating and Corporate Governance Committee, presides at these executive sessions. Anyone who has concern about the Company may communicate that concern directly to these Non-Employee Directors. Such communication may be mailed to the Corporate Secretary at 121 South 13th Street, Suite 201, Lincoln, Nebraska 68508. All such communications will be forwarded to the appropriate Non-Employee Directors for their review. The Non-Employee Directors may take any action deemed appropriate or necessary, including the retention of independent or outside counsel, accountants, or other advisors, with respect to any such communication addressed to them. No adverse action will be taken against any individual making any such communication to the Non-Employee Directors. |
Name and Age |
Position and Business Experience |
|||||
---|---|---|---|---|---|---|
David A.
Bottegal, 49 |
Chief Executive Officer, Nelnet Education Services, a division of Nelnet, Inc., January 2006
present Executive Director, Nelnet, Inc., October 2002 present; Chief Marketing Officer, October 2002 January 2006 Senior Vice President, National Education Loan Network, Inc., a subsidiary of Nelnet, Inc., September 2001 October 2002 Vice President of Sales and Marketing, Sallie Mae, Inc., 1998 2001 |
Name and Age |
Position and Business Experience | ||||
---|---|---|---|---|---|
Raymond J.
Ciarvella, 49 |
Executive Director and Chief Technology Officer, Nelnet, Inc., May 2003 present; Executive
Director, March 2000 - May
2003; Chief Operating Officer, September 1993 March 2000 |
||||
Todd M.
Eicher, 36 |
Chief Mergers and Acquisitions Officer, Nelnet, Inc., May 2005 present; Executive Director,
May 2003 present; Senior Vice President, July 1997 May 2003 |
||||
Matthew D.
Hall, 46 |
Chief Operating Officer, Nelnet Education Services, a division of Nelnet, Inc., January 2006
present
Executive Director, Nelnet, Inc., October 2002 present Senior Vice President, National Education Loan Network, Inc., a subsidiary of Nelnet, Inc., 1992 October 2002 |
||||
Terry J.
Heimes, 41 |
Executive Director and Chief Financial Officer, Nelnet, Inc., March 2001 present
Executive Vice President, National Education Loan Network, Inc., a subsidiary of Nelnet, Inc., March 2001 October 2002; Vice President of Finance, October 1998
March 2001 |
||||
Edward P.
Martinez, 52 |
Executive Director, Chief Legal Officer, and Corporate Secretary, Nelnet, Inc.,
August 2003 present; General Counsel, April 1989 present |
||||
Jeffrey R.
Noordhoek, 40 |
President, Nelnet, Inc., January 2006 - present; Executive Director and Capital Markets Officer,
October 2002 January
2006; Vice President, January 1996 March 2001
Senior Vice President, National Education Loan Network, Inc., a subsidiary of Nelnet, Inc., March 2001 October 2002 |
||||
Evan J.
Roth, 44 |
Executive Director and Chief Learning Officer, Nelnet, Inc., October 2005 present; Managing
Director of
Organizational Development, October 2004 October 2005; Managing Director of
Loan Services, April 2003 October
2004
Controller, Latin America, JD Edwards, an international software company, June 2001 April 2003
General Manager and Chief Financial Officer, ASG Safari Solutions, an international business intelligence software and services provider, August 1994
June 2001 |
||||
Cheryl E.
Watson, 45 |
Executive Director and Chief Communications Officer, Nelnet, Inc., September 2004 present;
Executive Director,
October 2002 September 2004
Executive Vice President, National Education Loan Network, Inc., a subsidiary of Nelnet, Inc., April 2002 October 2002 Vice President and Treasurer, Sallie Mae, Inc., August 2000 June 2001 President and Chief Financial Officer, USA Group Secondary Market Services, Inc., January 2000 June 2001; various manager and officer positions, May 1988
December 2000 |
Annual compensation (a) |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name and principal position |
Year |
Salary ($) |
Bonus ($) (b) |
Other ($) (c) |
All other compensation ($) (d) |
|||||||||||||||||
Michael S.
Dunlap |
2005 | 500,559 | 1,142,300 | | 8,940 | |||||||||||||||||
Co-Chief
Executive Officer |
2004 | 323,456 | (e) | 733,831 | 17,687 | 8,890 | ||||||||||||||||
2003 | 713,462 | 297,262 | 101,091 | 8,192 | ||||||||||||||||||
Stephen F.
Butterfield |
2005 | 500,559 | 1,142,300 | | 8,940 | |||||||||||||||||
Co-Chief
Executive Officer |
2004 | 1,000,039 | 733,831 | 32,774 | 8,890 | |||||||||||||||||
2003 | 713,462 | 388,994 | 9,359 | 8,192 | ||||||||||||||||||
Terry J.
Heimes |
2005 | 300,552 | 192,000 | | 8,940 | |||||||||||||||||
Executive
Director and |
2004 | 242,666 | 327,800 | | 8,829 | |||||||||||||||||
Chief
Financial Officer |
2003 | 220,000 | 550,000 | (f) | | 8,360 | ||||||||||||||||
David A.
Bottegal |
2005 | 255,192 | 192,000 | | 8,940 | |||||||||||||||||
Executive
Director and |
2004 | 232,034 | 352,800 | | 8,829 | |||||||||||||||||
Chief
Executive Officer of |
2003 | 220,000 | 142,000 | | 8,576 | |||||||||||||||||
Nelnet
Education Services, |
||||||||||||||||||||||
a division of
Nelnet, Inc. |
||||||||||||||||||||||
Jeffery R.
Noordhoek |
2005 | 230,619 | 192,000 | | 8,931 | |||||||||||||||||
President |
2004 | 213,683 | 352,800 | | 8,744 | |||||||||||||||||
2003 | 190,000 | 142,000 | | 8,360 | ||||||||||||||||||
Matthew D.
Hall |
2005 | 229,929 | 192,000 | | 8,931 | |||||||||||||||||
Executive
Director and |
2004 | 228,442 | 352,800 | | 8,744 | |||||||||||||||||
Chief
Operating Officer of |
2003 | 190,000 | 142,000 | | 8,360 | |||||||||||||||||
Nelnet
Education Services, |
||||||||||||||||||||||
a division of
Nelnet, Inc. |
(a) |
Executive officers may receive perquisites and personal benefits, the dollar amounts of which are below current Securities and Exchange Commission thresholds for reporting requirements. |
(b) |
Amounts represent bonuses paid in 2006, 2005, and 2004 for services rendered during the 2005, 2004, and 2003 calendar years, respectively. |
(c) |
Amounts represent personal use of Company aircraft. |
(d) |
Amounts represent matching contributions under the Companys 401(k) plan and premiums on life insurance. During 2005, 2004, and 2003, all Named Executive Officers received $8,400, $8,200, and $8,000, respectively, in matching 401(k) contributions. |
(e) |
Mr. Dunlap requested that $700,000 of his 2004 authorized base salary of $1,000,000 be distributed to certain senior management individuals for exemplary performance during 2004. |
(f) |
Amount includes a bonus of $408,000 paid to Mr. Heimes in August 2003 in connection with the termination of a consulting agreement. |
a. |
Fiscal (financial and operational) performance measures, such as levels of student loan assets and originations, levels of operating expenses, and diversification/growth of other fee income; |
b. |
Customer engagement and satisfaction measures; and |
c. |
Employee engagement and motivation measures. |
|
each person, entity, or group known by the Company to beneficially own more than five percent of the outstanding shares of any class of common stock; |
|
each of the Named Executive Officers; |
|
each incumbent director and each nominee for director; and |
|
all executive officers and directors as a group. |
Number of shares beneficially owned |
Percentage of shares beneficially owned (1) |
|||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Class A |
Class B |
Total |
Class A |
Class B |
Total |
Percentage of combined voting power of all classes of stock (2) |
|||||||||||||||||||||||
Michael S.
Dunlap |
18,289,102 | (3) | 9,687,203 | (4) | 27,976,305 | 45.6 | % | 69.5 | % | 51.8 | % | 64.2 | % | |||||||||||||||||
Stephen F.
Butterfield |
- | 6,379,941 | (5) | 6,379,941 | - | 45.8 | % | 11.8 | % | 35.5 | % | |||||||||||||||||||
Angela L.
Muhleisen |
18,289,102 | (6) | 1,848,880 | (7) | 20,137,982 | 45.6 | % | 13.3 | % | 37.3 | % | 20.5 | % | |||||||||||||||||
Union Bank
and Trust Company |
7,215,998 | (8) | 1,848,880 | (9) | 9,064,878 | 18.0 | % | 13.3 | % | 16.8 | % | 14.3 | % | |||||||||||||||||
Packers
Service Group, Inc. |
11,068,604 | (10) | - | 11,068,604 | 27.6 | % | - | 20.5 | % | 6.2 | % | |||||||||||||||||||
Don R.
Bouc |
1,345,807 | (11) | - | 1,345,807 | 3.4 | % | - | 2.5 | % | 0.7 | % | |||||||||||||||||||
David A.
Bottegal |
416,887 | - | 416,887 | 1.0 | % | - | * | 0.2 | % | |||||||||||||||||||||
Raymond J.
Ciarvella |
178,462 | - | 178,462 | * | - | * | 0.1 | % | ||||||||||||||||||||||
Todd M.
Eicher |
206,326 | (12) | - | 206,326 | * | - | * | 0.1 | % | |||||||||||||||||||||
Matthew D.
Hall |
122,030 | - | 122,030 | * | - | * | 0.1 | % | ||||||||||||||||||||||
Terry J.
Heimes |
219,363 | - | 219,363 | * | - | * | 0.1 | % | ||||||||||||||||||||||
Edward P.
Martinez |
61,681 | (13) | - | 61,681 | * | - | * | 0.0 | % | |||||||||||||||||||||
Jeffery R.
Noordhoek |
1,001,330 | (14) | - | 1,001,330 | 2.5 | % | - | 1.9 | % | 0.6 | % | |||||||||||||||||||
Evan J.
Roth |
4,675 | - | 4,675 | * | - | * | 0.0 | % | ||||||||||||||||||||||
Cheryl E.
Watson |
77,158 | - | 77,158 | * | - | * | 0.0 | % | ||||||||||||||||||||||
James P.
Abel |
8,603 | (15) | - | 8,603 | * | - | * | 0.0 | % | |||||||||||||||||||||
Thomas E.
Henning |
11,538 | (16) | - | 11,538 | * | - | * | 0.0 | % | |||||||||||||||||||||
Arturo R.
Moreno |
15,603 | - | 15,603 | * | - | * | 0.0 | % | ||||||||||||||||||||||
Brian J.
OConnor |
17,472 | - | 17,472 | * | - | * | 0.0 | % | ||||||||||||||||||||||
Michael D.
Reardon |
9,472 | (17) | - | 9,472 | * | - | * | 0.0 | % | |||||||||||||||||||||
James H. Van
Horn |
68,950 | (18) | - | 68,950 | * | - | * | 0.0 | % | |||||||||||||||||||||
Executive
officers and directors as a group |
20,983,099 | 13,942,954 | 34,926,053 | 52.4 | % | 100.0 | % | 64.7 | % | 89.4 | % | |||||||||||||||||||
Hunter Global
entities and Duke Buchan III |
2,285,700 | (19) | - | 2,285,700 | 5.7 | % | - | 4.2 | % | 1.3 | % |
* |
Less than 1%. |
(1) |
Based on 40,077,949 shares of Class A common stock and 13,942,954 shares of Class B common stock outstanding as of February 17, 2006. |
(2) |
These percentages reflect the different voting rights of the Companys Class A common stock and Class B common stock. Each share of Class A common stock has one vote and each share of Class B common stock has ten votes on all matters to be voted upon by the Companys shareholders. |
(3) |
Includes shares owned by entities which Mr. Dunlap may be deemed to control, consisting of: 11,068,604 shares owned by Packers Service Group, Inc., of which Mr. Dunlap is a director and president and owns 28.3% of the outstanding capital stock, 4,500 shares owned by Farmers & Merchants Investment Inc. (F&M), of which Mr. Dunlap is a director and president and owns or controls 38.4% of the outstanding voting stock, and 7,215,998 shares held by Union Bank and Trust Company (Union Bank) for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank. Mr. Dunlap is non-executive chairman of and controls Union Bank through F&M. Mr. Dunlap disclaims beneficial ownership of the shares held for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank. He also disclaims beneficial ownership of the shares held by Packers Service Group, Inc. and F&M, except to the extent of his pecuniary interest therein. |
(4) |
Includes 1,701,000 shares owned by Mr. Dunlaps spouse, 1,586,691 shares owned by Union Financial Services, Inc., of which Mr. Dunlap is chairman and owns 50.0% of the outstanding capital stock, 1,311,381 shares held by Union Bank as Trustee for a GRAT established by Mr. Dunlap, and 537,499 shares held by Union Bank as Trustee under a GRAT. Mr. Dunlap disclaims beneficial ownership of the shares held by Union Financial Services, Inc., except to the extent of his pecuniary interest therein. Mr. Dunlap also disclaims beneficial ownership of the 537,499 shares held by Union Bank as Trustee under the Class B GRAT. |
(5) |
Includes 1,586,691 shares owned by Union Financial Services, Inc., of which Mr. Butterfield is a director and president and owns 50.0% of the outstanding capital stock and 537,499 shares held by Union Bank as Trustee for a GRAT established by Mr. Butterfield. Mr. Butterfield disclaims beneficial ownership of the shares held by Union Financial Services, Inc., except to the extent of his pecuniary interest therein. |
(6) |
Includes 88,864 shares jointly owned by Ms. Muhleisen and her spouse, 939,976 shares owned by her spouse, 1,522,048 shares held by Union Bank as Trustee for Class A GRATs established by Ms. Muhleisen and her spouse, and shares that are owned by entities that Ms. Muhleisen may be deemed to control, consisting of: 11,068,604 shares owned by Packers Service Group, Inc., of which Ms. Muhleisen is a director and owns or controls 27.0% of the outstanding capital stock, 4,500 shares owned by F&M, of which Ms. Muhleisen is a director and executive vice president and owns or controls 35.9% of the outstanding capital stock, and 3,826,269 shares held by Union Bank for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank. Ms. Muhleisen, the sister of Michael S. Dunlap, is a director, president, and chief executive officer of and controls Union Bank through F&M. Ms. Muhleisen disclaims beneficial ownership of the shares held for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank, except for her retained beneficial interest in 1,522,048 shares of Class A common stock held in trust on her behalf and on behalf of her spouse under two of the Class A GRATs. She also disclaims beneficial ownership of the shares held by Packers Service Group, Inc. and F&M, except to the extent of her pecuniary interest therein. The address for Ms. Muhleisen is c/o Union Bank and Trust Company, P.O. Box 82529, Lincoln, Nebraska 68501. |
(7) |
Includes 1,848,880 shares held by Union Bank as Trustee under two Class B GRATs. Ms. Muhleisen disclaims beneficial ownership of the shares held by Union Bank as Trustee under the Class B GRATs. |
(8) |
Includes 415,000 shares held as trustee for the University of Nebraska Foundation, 61,000 shares held by the Union Bank profit sharing plan, 838,841 shares held for the account of Angela L. Muhleisen, 286,146 shares held as trustee for a Class A GRAT established by Jeffrey R. Noordhoek, a total of 785,214 shares held as trustee for various Class A GRATs established by Don R. Bouc and his spouse, 761,024 shares held as trustee for a Class A GRAT established by Angela L. Muhleisen, 761,024 shares held as trustee for a Class A GRAT established by Ms. Muhleisens spouse, 939,976 shares held for the account of Ms. Muhleisens spouse, 88,864 shares held for the account of Ms. Muhleisen or her spouse, and a total of 2,278,909 shares held for the accounts of miscellaneous trusts, IRAs, and investment accounts at Union Bank. Union Bank disclaims beneficial ownership of such shares except to the extent that Union Bank actually has or shares voting power or investment power with respect to such shares. The address for Union Bank is P.O. Box 82529, Lincoln, Nebraska 68501; Attention: Angela L. Muhleisen, President. |
(9) |
Includes 1,848,880 shares held by Union Bank as Trustee under two Class B GRATs. Union Bank disclaims beneficial ownership of such shares except to the extent that Union Bank actually has or shares voting power or investment power with respect to such shares. |
(10) |
The address for Packers Service Group is c/o Nelnet, Inc., 121 South 13th Street, Lincoln, Nebraska 68508; Attention: Michael S. Dunlap. |
(11) |
Includes 71,394 shares owned by Mr. Boucs spouse, 985,214 shares held by Union Bank as Trustee under Class A GRATs established by Mr. Bouc and his spouse, and 147,566 shares held by Union Bank as Trustee under a Class A Charitable Remainder Unitrust (CRUT) established by Mr. Bouc and his spouse. |
(12) |
Includes 121,835 shares owned by Mr. Eichers spouse. |
(13) |
Includes 250 shares owned by Mr. Martinezs daughter. |
(14) |
Includes 670,295 shares held by the Jeffrey R. Noordhoek Trust, 286,146 shares held by Union Bank as Trustee under a Class A GRAT established by Mr. Noordhoek, and 35,765 shares held by Union Bank as Trustee under a Class A CRUT established by Mr. Noordhoek. |
(15) |
Includes 2,242 shares that Mr. Abel has elected to defer delivery of pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. Also includes 500 shares owned by Mr. Abels spouse. |
(16) |
Includes 2,616 shares that Mr. Henning has elected to defer delivery of pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. |
(17) |
Includes 2,000 shares owned jointly by Mr. Reardon and his spouse. |
(18) |
Includes 1,869 shares that Mr. Van Horn has elected to defer delivery of pursuant to the deferral election provisions of the Companys Directors Stock Compensation Plan. |
(19) |
In a Statement on Schedule 13G (Amendment No. 1) filed with the Securities and Exchange Commission on February 15, 2006 by Hunter Global Associates L.L.C. (Associates), Hunter Global Investors L.P. (Investors), Duke Buchan III, Hunter Global Investors Fund I L.P. (Fund I), and Hunter Global Investors Fund II L.P. (Fund II), Associates reported shared voting and dispositive power with respect to 674,061 shares of Class A common stock, Investors and Mr. Buchan reported shared voting and dispositive power with respect to 2,285,700 shares of Class A common stock, Fund I reported shared voting and dispositive power with respect to 651,206 shares of Class A common stock, and Fund II reported shared voting and dispositive power with respect to 22,855 shares of Class A common stock. Associates is the general partner of Fund I and Fund II, Investors is the investment manager of Fund I and Fund II, and Mr. Buchan is the managing member of Associates and controls Investors. The business address of the Hunter Global entities and Mr. Buchan is 485 Madison Avenue, 22nd Floor, New York, New York 10022. |
Union Bank has issued two letters of credit for the benefit of the Company, each dated February 25, 2005, in the amount of $189,142 and $4,900, respectively. Union Bank charged no fee for providing these letters of credit.
2005 |
2004 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Audit
Fees |
$ | 874,328 | $ | 838,416 | ||||||
Audit-Related
Fees |
606,309 | 594,764 | ||||||||
Tax
Fees |
327,777 | 376,659 | ||||||||
Total |
$ | 1,808,414 | $ | 1,809,839 |
|
the extent to which the risk that the shares will decline in value has been transferred to the employee, and |
|
the likelihood that the purchase price for the shares will be paid. |
Plan category |
Number of shares to be issued upon exercise of outstanding options, warrants, and rights (a) |
Weighted-average exercise price of outstanding options, warrants, and rights (b) |
Number of shares remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity
compensation plans approved by shareholders |
0 | $ | 0 | 1,973,526 | ||||||||||
Equity
compensation plans not approved by shareholders |
0 | $ | 0 | 0 | ||||||||||
Total |
0 | $ | 0 | 1,973,526 | (1) |
(1) |
Includes 965,427, 62,642, and 945,457 shares of Class A Common Stock remaining available for future issuance under the Nelnet, Inc. Restricted Stock Plan, Nelnet, Inc. Directors Stock Compensation Plan, and Nelnet, Inc. Employee Share Purchase Plan, respectively. |
|
increase the number of shares of Class B common stock that the Company has authority to issue from 15,000,000 to 60,000,000; and |
|
prohibit the issuance of additional shares of Class B common stock after May 25, 2006 without shareholder approval, except for shares of Class B common stock issued in connection with stock splits, stock dividends, and other similar distributions. |
|
to any other holder of Class B common stock or an affiliate of a holder of Class B common stock, which holder is a natural person or a business organization, as defined in the articles of incorporation; |
|
to a spouse, sibling, parent, grandparent, or descendant, whether natural or adopted, of a holder of Class B common stock; |
|
to a trust for the sole benefit of: |
|
a holder of Class B common stock who is a natural person; |
|
a spouse, sibling, parent, grandparent, or descendent, whether natural or adopted, of a holder of Class B common stock; and/or |
|
a charitable foundation or other organization qualified under Section 501(c)(3) of the Internal Revenue Code of 1986; |
|
by will to: |
|
a spouse, sibling, parent, grandparent, or descendent, whether natural or adopted, of a holder of Class B common stock; |
|
a charitable foundation or other organization qualified under Section 501(c)(3) of the Internal Revenue Code of 1986; or |
|
to a trust as described above; |
|
pursuant to the laws of descent and distribution to a spouse, sibling, parent, grandparent, or descendant, whether natural or adopted, of a holder of Class B common stock; |
|
to any charitable foundation or other organization qualified under Section 501(c)(3) of the Internal Revenue Code of 1986; or |
|
to the Company. |
a. |
Affiliate means any entity other than the Company and its Subsidiaries that is designated by the Board or the Committee as a participating employer under the Plan; provided, however, that the Company directly or indirectly owns at least 20% of the combined voting power of all classes of equity interests of such entity or at least 20% of the ownership interests in such entity. |
b. |
Award means an award of a stock purchase loan granted to an Eligible Employee under the Plan. |
c. |
Board means the Board of Directors of the Company. |
d. |
Broker means a single stock brokerage institution approved by the Board or the Committee. |
e. |
Committee means the Compensation Committee of the Board, or such other Board committee (which may include the entire Board) as may be designated by the Board to administer the Plan. |
f. |
Company means Nelnet, Inc., a Nebraska corporation, and any successor corporation. |
g. |
Eligible Employee means an employee of the Company, a Subsidiary or an Affiliate; provided, however, that in accordance with Section 402 of the Sarbanes-Oxley Act of 2002 no employee who is an executive officer of the Company, as such term is defined in Rule 3b-7 under the Exchange Act, or a member of the Board shall be eligible to participate in the Plan. |
h. |
Exchange Act means the Securities Exchange Act of 1934, as amended from time to time. References to any provision of the Exchange Act shall be deemed to include successor provisions thereto, and the rules and regulations promulgated thereunder. |
i. |
Libor means the London interbank offered rate for deposits in U.S. dollars with a certain maturity date, as published or quoted from time to time. |
j. |
Loan means an interest-bearing loan by the Company to a Participant for the purchase of Shares, as established by written loan documentation between the Participant and the Company, including a Stock Purchase Loan Agreement, one or more Promissory Notes and a Stock Pledge Agreement. The Company shall demand repayment of each Loan in accordance with the terms of the Related Stock Purchase Loan Agreement and Promissory Notes for such Loan. |
k. |
Participant means an Eligible Employee who is selected by the Committee, in its sole discretion, to receive an Award under the Plan and who has elected to participate in the Plan by executing and delivering a Stock Purchase Loan Agreement. In selecting an Eligible Employee to participate in the Plan, the Committee may take into account the nature of the services rendered by the individual, his or her present and potential contributions to the success of the Company, and such other factors as the Committee, in its sole discretion, may deem relevant. |
l. |
Plan means this Nelnet, Inc. Employee Stock Purchase Loan Plan, as it may be amended from time to time. |
m. |
Prime Rate means the average prime rate of interest per annum of the largest commercial banks as published by the Wall Street Journal from time to time. |
n. |
Promissory Note means a promissory note executed by a Participant in favor of the Company for the full amount of the purchase price of Shares purchased pursuant to a Stock Purchase Loan Agreement, including interest for the term of the Loan. |
o. |
Shares means shares of Class A common stock, $.01 par value per share, of the Company. |
p. |
Stock Pledge Agreement means a stock pledge agreement executed by a Participant in favor of the Company, whereby the Participant pledges the Participants Shares purchased under the Plan as security for repayment of the Loan. |
q. |
Stock Purchase Loan Agreement means a stock purchase loan agreement between a Participant and the Company, whereby the Participant agrees to borrow money from the Company to purchase Shares in accordance with the terms and provisions of the underlying Award as determined by the Committee. |
r. |
Subsidiary means any entity (other than the Company) in an unbroken chain of entities beginning with the Company if each of the entities (other than the last entity in the unbroken chain) owns shares possessing 50% or more of the total combined voting power of all classes of equity interests in one of the other entities in the chain. |
a. |
Authority of the Committee. The Plan shall be administered by the Committee, and the Committee shall have full and final authority to take the following actions, in each case subject to and consistent with the provisions of the Plan: |
i. |
to select Eligible Employees to whom Awards may be granted; |
ii. |
to designate Affiliates; |
iii. |
to determine the number of Awards to be granted, the number of Shares to which an Award may relate, the amounts of Loans to be made pursuant to Awards, the terms and conditions of any Award (based in each case on such considerations as the Committee shall determine in its discretion), and all other matters to be determined in connection with an Award; |
iv. |
to determine whether, to what extent, and under what circumstances an Award may be canceled, forfeited, exchanged, or surrendered; |
v. |
to prescribe the form of each Stock Purchase Loan Agreement, Promissory Note and Stock Pledge Agreement, which need not be identical for each Participant; |
vi. |
to adopt, amend, suspend, waive, and rescind such rules and regulations and appoint such agents as the Committee may deem necessary or advisable to administer the Plan; |
vii. |
to correct any defect or supply any omission or reconcile any inconsistency in the Plan or any other document or agreement hereunder and to construe and interpret the Plan and any Award, rules and regulations, any document agreement or other instrument hereunder, in the manner and to the extent the Committee deems desirable to carry out the administration of the Plan; and |
viii. |
to make all other decisions and determinations as may be required under the terms of the Plan or as the Committee may deem necessary or advisable for the administration of the Plan. |
b. |
Manner of Exercise of Committee Authority. The Committee shall have sole discretion in exercising its authority under the Plan. Any action of the Committee with respect to the Plan shall be final, conclusive, and binding on all persons, including the Company, Subsidiaries, Affiliates, Eligible Employees, any person claiming any rights under the Plan from or through any Eligible Employee and shareholders of any of the foregoing. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to other members of the Board or officers or managers of the Company or any Subsidiary or Affiliate the authority, subject to such terms as the Committee shall determine, to perform administrative functions with respect to the Plan. |
c. |
Limitation of Liability. Each member of the Committee shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or other employee of the Company or any Subsidiary or Affiliate, the Companys independent certified public accountants or other professional retained by the Company to assist in the administration of the Plan. No member of the Committee, and no officer or employee of the Company acting on behalf of the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the |
Committee and any officer or employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action, determination or interpretation. |
4. |
Total Loans Available and Total Shares Reserved for Issuance. |
a. |
Total Loans Available. The total amount of all Loans that may be extended by the Company to Participants under the Plan shall not exceed $40,000,000. The Committee shall in its discretion determine with respect to each Stock Purchase Loan Agreement to be executed under the Plan whether the Shares to be purchased by the Participant under such Stock Purchase Loan Agreement shall be purchased (i) from previously issued and outstanding Shares in the open market through a Broker at prevailing market prices at the time of purchase, subject to any conditions or restrictions on the timing, volume or prices of purchases as determined by the Committee and set forth in the Stock Purchase Loan Agreement; or (ii) directly from the Company from authorized and unissued Shares reserved for issuance under the Plan pursuant to Section 4(b) hereof. |
b. |
Total Shares Reserved for Issuance. Subject to adjustment as provided in Section 4(c) hereof, the total number of Shares reserved for issuance in connection with Stock Purchase Loan Agreements under the Plan shall be 1,000,000. |
c. |
Adjustments in Capitalization. In the event that the Committee shall determine that any dividend in Shares, recapitalization, Share split, reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, or other similar corporate transaction or event, affects the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Eligible Employees and Participants under the Plan, then the Committee shall make such equitable changes or adjustments as it deems appropriate and, in such manner as it may deem equitable, adjust any or all of the number and kind of shares which may thereafter be issued under or otherwise subject to the Plan. In addition, the Committee is authorized to make appropriate and proportionate adjustments in the terms and conditions of any Award, agreement or document under the Plan in recognition of unusual or non-recurring events (including, without limitation, events described in the preceding sentence) affecting the Company or any Subsidiary or Affiliate or the financial statements of the Company or any Subsidiary or Affiliate, or in response to changes in applicable laws, regulations, or accounting principles. The Committee may take the foregoing actions without the consent of any Participant, and the Committees determination in such matters shall be conclusive and binding on all persons for all purposes. |
5. |
Notices of Awards and Election to Participate. |
a. |
Notice of Award. At such times as the Committee shall determine, the Committee may send a written notice of an Award to an Eligible Employee selected by the Committee to participate in the Plan. Such notice shall set forth (i) the Loan amount that the Company will extend to such person and/or the number of Shares which may be purchased pursuant to the Award, and (ii) the other principal terms and conditions of the Award, the Loan and the purchase of Shares in connection therewith as determined by the Committee. |
b. |
Election to Participate. An Eligible Employee who has received a notice of an Award may elect to participate in the Plan by completing, executing and delivering to the Company a Stock Purchase Loan Agreement, one or more Promissory Notes and a Stock Pledge Agreement, in such forms and with such terms and conditions as determined by the Committee, and such other agreements or instruments as may be determined to be necessary or appropriate by the Committee for participation in the Plan. Participation in the Plan by an Eligible Employee selected by the Committee to participate in the Plan shall be voluntary, and such participation shall not be a condition of employment of the Eligible Employee. |
6. |
Specific Terms of Loans and Share Purchases. |
a. |
General. Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award, at the date of grant or thereafter (subject to Section 8(d) hereof), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine. All Stock Purchase Loan Agreements, Promissory Notes, Stock Pledge Agreements and other agreements and documents executed in connection with the Plan shall be in a form approved by the Committee and shall contain such terms and conditions, not inconsistent with the Plan, as the Committee shall determine in its sole discretion; provided, however, that each such agreement or document shall be subject to the terms of the Plan. |
b. |
Non-Recourse Loans. Unless otherwise determined by the Committee with respect to a particular Loan, each Loan may be non-recourse to the Participant with respect to repayment of all or a portion of the principal amount, with the repayment of the principal amount to be secured by a pledge of the Shares purchased by the Participant pursuant to such Loan. The payment of interest on each Loan shall be subject to recourse to the Participant. |
c. |
Interest. Each Loan shall bear interest at a reasonable rate of interest which is intended to reflect the Companys cost of funds. Such rate may be based on LIBOR or the Prime Rate and may be adjusted from time to time pursuant to the terms of the related Promissory Note. |
d. |
Term. Each Loan shall be due and payable as provided in the provisions of the related Promissory Note. The term of a Promissory Note shall not exceed a period of ten years; provided, however, that the Committee, in its discretion, may extend the term of a Promissory Note for up to a total of two years. |
e. |
Purchase of Shares with Loan Proceeds. Each Participant shall use the proceeds from a Loan to purchase Shares pursuant to the terms and conditions of the related Stock Purchase Loan Agreement, and proceeds from the Loan shall be disbursed directly to the Broker or the Company, as the case may be, for the purchase of Shares on behalf of the Participant. Any such purchases effected by a Broker in the open market shall comply with all applicable laws, including all applicable provisions of the Exchange Act, subject to any other conditions or restrictions on the timing, volume or prices of purchases as determined by the Committee or the Company. Any such purchases from the Company shall be for the fair market value of such Shares as determined by the Committee in good faith. Shares purchased by Participants under the Plan may be evidenced in such manner as the Committee shall determine. If certificates are used to evidence Shares purchased by a Participant under the Plan, the Company shall retain physical possession of the certificates in accordance with the terms and conditions of the related Stock Pledge Agreement. |
f. |
Pledge of Shares Purchased. As security for repayment of a Loan, a Participant shall effect a pledge of all Shares purchased by the Participant pursuant to the Loan by delivering to the Company a properly executed Stock Pledge Agreement in such form and with such terms and conditions as approved by the Committee. |
g. |
Restrictions on Shares. In addition to restrictions under the Stock Pledge Agreement, Shares purchased pursuant to a Loan may be subject to such restrictions on transferability and other restrictions, if any, as the Committee may impose in the Stock Purchase Loan Agreement or other agreements or documents executed in connection therewith, which restrictions may lapse separately or in combination at such times, under such circumstances, and in such installments or otherwise, as the Committee may determine. |
h. |
Rights of a Shareholder. Except to the extent restricted under the Stock Purchase Loan Agreement or other agreements or documents executed in connection therewith, a Participant who purchases Shares under the Plan shall have all of the rights of a shareholder with respect to the Shares purchased under the Plan including, without limitation, the right to vote the Shares and the right to receive dividends thereon. |
i. |
Dividends. Any cash dividends paid by the Company on Shares pledged as security for repayment of a Loan shall be immediately applied to repay the Loan. |
7. |
Other Provisions Applicable to Awards. |
a. |
Nontransferability. Unless otherwise set forth by the Committee in a Stock Purchase Loan Agreement, an Award shall not be transferable by a Participant except by will or the laws of descent and distribution (except pursuant to a written beneficiary designation in form and substance acceptable to the Committee). Except as otherwise provided in a Stock Purchase Loan Agreement or Stock Pledge Agreement, a Participants rights under the Plan may not be pledged, mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to claims of the Participants creditors. |
b. |
Noncompetition and Other Restrictions. The Committee may, by way of a Stock Purchase Loan Agreement or otherwise, establish such restrictions and/or limitations, if any, as it shall determine in its discretion with respect to any Award, provided that such restrictions and/or limitations are not inconsistent with the Plan. Such restrictions may include, without limitation, the requirement that the Participant not engage in competition with the Company or any Subsidiary or Affiliate. |
c. |
Provisions for Termination of Employment or Change of Control. The Committee may, by way of a Stock Purchase Loan Agreement or otherwise, establish such terms and conditions as it shall determine in its discretion with respect to the effect on any Award or Loan of the termination of employment of the Participant or the change of control, merger, sale of substantially all assets or similar transaction with respect to the Company. |
8. |
General Provisions. |
a. |
Compliance with Legal and Trading Requirements. The Plan, the granting of Awards by the Company, the making of Loans by the Company, the purchase of Shares by Participants pursuant to Loans, and the other obligations of the Company under the Plan and any Award, shall be subject to all applicable federal, state and foreign laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required. The Company, in its discretion, may postpone the making of any Loan until completion of such stock exchange or market system listing or registration or qualification of the Shares to be purchased with such Loan or |
other required action under any state or federal law, rule or regulation as the Company may consider appropriate, and may require any Participant to make such representations and furnish such information as the Company may consider appropriate in connection with the purchase of Shares by the Participant in compliance with applicable laws, rules and regulations. No provisions of the Plan shall be interpreted or construed to obligate the Company to register any Shares under federal, state or foreign law. The Company shall not be required to make any Loan to a Participant if making such Loan would cause the Company to be in violation of any covenant or other similar provision in any indenture, loan agreement, or other agreement. |
b. |
No Right to Continued Employment. Neither the Plan, nor any document or agreement hereunder, shall be construed as giving any employee the right to be retained in the employ of the Company or any of its Subsidiaries or Affiliates, nor shall it interfere in any way with the right of the Company or any of its Subsidiaries or Affiliates to terminate any employees employment at any time, with or without cause. |
c. |
Taxes. The Company or any Subsidiary or Affiliate is authorized to withhold from any Loan, or any payroll or other payment to a Participant, amounts of withholding and other taxes that may be due in connection with any transaction involving a Loan or the purchase of Shares pursuant to such Loan, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Loan or related transaction. This authority shall include authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of a Participants tax obligations; provided, however, that the amount of tax withholding to be satisfied by withholding Shares shall be limited to the minimum amount of taxes, including employment taxes, required to be withheld under applicable federal, state, local and foreign law. |
d. |
Amendments to the Plan and Awards. The Board may amend, alter, suspend, discontinue or terminate the Plan or the Committees authority to grant Awards under the Plan at any time and for any reason, and without the approval or consent of the shareholders of the Company or Participants, except that any such amendment or alternation shall be subject to the approval of the Companys shareholders to the extent such shareholder approval is required under any applicable law or regulation or under the rules of any stock exchange or automated quotation system on which the Shares may then be listed or quoted; provided, however, that no such action shall materially adversely affect the rights or obligations of a Participant under an outstanding Award or Loan without the consent of the affected Participant or holder or beneficiary thereof. The Committee may waive any conditions or rights under, or amend or alter any terms of, an Award or Loan theretofore granted, prospectively or retrospectively; provided, however, that without the consent of a Participant, no amendment or alteration of any Award or Loan may materially adversely affect the rights of such Participant under such Award or Loan theretofore granted to such Participant. |
e. |
No Rights Until Agreements Executed; No Rights as Shareholders Until Shares Purchased. No Eligible Employee or any other person shall have any right or claim to participate in the Plan or have any other rights under the Plan or any Award unless and until such person is selected by the Committee to become a Participant in the Plan and such person executes and delivers to the Company, and the Company accepts from such person, a Stock Purchase Loan Agreement, one or more Promissory Notes and a Stock Pledge Agreement. There shall be no obligation on the part of the Company for the uniformity of treatment of Eligible Employees or Participants under the Plan. Nothing in the Plan or any document in connection therewith shall confer on any Eligible Employee or Participant any of the rights of a shareholder of the Company unless and until Shares are duly purchased by a Participant in accordance with the terms of a Stock Purchase Loan Agreement. |
f. |
Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its submission to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, and such arrangements may be either applicable generally or only in specific cases. |
g. |
Not Compensation for Benefit Plans. No Award under the Plan shall be deemed salary or compensation for the purpose of computing benefits under any benefit plan or other arrangement of the Company for the benefit of its employees unless the Company shall determine otherwise. |
h. |
No Fractional Shares. Unless otherwise determined by the Committee, no fractional Shares shall be purchased by a Participant pursuant to the Plan or any Award. The Committee may determine in its discretion whether any fractional Shares which might otherwise result from the provisions of the Plan or any rights thereto shall be forfeited or otherwise eliminated. |
i. |
Governing Law. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any agreement, document or other instrument hereunder shall be determined in accordance with the laws of the State of Nebraska, without giving effect to principles of conflict of laws thereof. |
j. |
Severability. If any provision of the Plan is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan under any law deemed applicable by the Committee, such provision shall |
be construed and deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan, such provision shall be stricken as to such jurisdiction, and the remainder of the Plan shall remain in full force and effect. |
k. |
No Trust or Fund Created. Neither the Plan nor any document or agreement hereunder shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company, a Subsidiary or an Affiliate and an Eligible Employee, a Participant or any other person. |
l. |
Effective Date; Termination Date. The Plan was adopted by the Board on March 30, 2006 and shall be submitted to the shareholders of the Company for approval. The Plan shall become effective upon approval of the Plan by the shareholders of the Company. The Plan shall terminate as to future Awards or Loans on the date which is ten years after the date on which the Plan becomes effective. |
m. |
Titles and Headings. The titles and headings of the sections and subsections in the Plan are for convenience of reference only. In the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. |
1. |
The name of the corporation is Nelnet, Inc. |
2. |
The following amendment to the Second Amended and Restated Articles of Incorporation was adopted by the shareholders of the corporation in the manner prescribed by the Nebraska Business Corporation Act: |
3. |
The date that the amendment as set forth above was adopted was May 25, 2006. |
4. |
The number of shares of the corporations capital stock outstanding at the time of adoption of the above amendment was [ ] shares of Class A Common Stock and [ ] shares of Class B Common Stock; the number of votes entitled to be cast by the holders of shares of Class A Common Stock was [ ] and the number of votes entitled to be cast by the holders of shares of Class B Common Stock was [ ]; and the number of votes of each voting group indisputably represented at the meeting of shareholders held on May 25, 2006 to approve the amendment was [ ] with respect to the shares of Class A Common Stock and [ ] with respect to the shares of Class B Common Stock. The total number of undisputed votes cast for the amendment by each voting group was [ ] with respect to shares of Class A Common Stock and [ ] with respect to shares of Class B Common Stock. The number of votes cast for the amendment by each voting group was sufficient for approval by that voting group. |
By: |
Michael S. Dunlap, Co-Chief Executive Officer |
THIS PROXY
WILL BE VOTED AS DIRECTED, OR IN NO DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR LISTED IN THIS
PROXY AND FOR PROPOSALS 2, 3 AND 4. |
Please Mark Here for Address Change or Comments SEE REVERSE SIDE |
[ ] |
Nominees: |
|||||||||||||||||||||||
01 James P Abel 02 Don R. Bouc 03 Stephen E. Butterfield 04 Michael S. Dunlap 05 Thomas E. Henning |
06 Arturo R. Moreno 07 Brian J. OConnor 08 Michael D. Reardon 09 James H. Van Horn |
ITEM 2 RATIFICATION OF APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS |
FOR [ ] |
AGAINST [ ] |
ABSTAIN [ ] |
||||||||||||||||||
FOR ALL [ ] |
WITHHOLD AUTHORITY TO VOTE FOR ALL [ ] |
ITEM 3 APPROVAL OF EMPLOYEE STOCK PURCHASE LOAN PLAN FOR COMPANY LOANS OF UP TO A TOTAL OF $40,000,000 TO SELECTED EMPLOYEES FOR THE PURCHASE OF SHARES OF CLASS A COMMON STOCK EITHER IN THE OPEN MARKET OR DIRECTLY FROM THE COMPANY, UNDER WHICH PLAN A TOTAL OF 1,000,000 SHARES OF CLASS A COMMON STOCK ARE RESERVED FOR ISSUANCE |
FOR [ ] |
AGAINST [ ] |
ABSTAIN [ ] |
||||||||||||||||||
For
all, except withhold authority for the nominees you list below: (Write that nominees name in the space provided below.) |
ITEM 4 AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF CLASS B COMMON STOCK WHICH THE COMPANY MAY ISSUE FROM 15,000,000 SHARES TO 60,000,000 SHARES TO ALLOW FOR FUTURE STOCK SPLITS |
FOR [ ] |
AGAINST [ ] |
ABSTAIN [ ] |
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