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Item 5.03
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Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
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As reported below under Item 5.07 of this report, Nelnet, Inc., a Nebraska corporation (the "Company"), held its 2017 annual meeting of shareholders on May 25, 2017, at which meeting the Company’s shareholders approved an amendment to the Company's articles of incorporation by a majority of the votes cast at the meeting. As a result, on May 25, 2017, the Company filed Articles of Amendment to Second Amended and Restated Articles of Incorporation (the “Articles of Amendment”) with the Nebraska Secretary of State, pursuant to which the Company’s Second Amended and Restated Articles of Incorporation (the “Articles of Incorporation”) were amended to insert a new Section 5.5 under Article V thereof which classifies the Company’s Board of Directors (the “Board”) into three classes, with the directors in each class serving staggered three-year terms of office, and make related revisions to Sections 5.3 and 5.4 of Article V with respect to the filling of vacancies and removal of directors (with such amendment to the Articles of Incorporation referred to herein as the “Classified Board Amendment”).
The Classified Board Amendment classifies the Board into three separate classes designated as Class I, Class II, and Class III, with each class comprised of one-third of the total number of directors, and with the classes to rotate for election each year such that the directors in one class will be subject to election each year to serve three-year terms that are staggered among the classes. Beginning with the election of directors to be held at the 2018 annual meeting of shareholders and each year thereafter, the class of directors to be elected in such year will be elected for a three-year term, and at each successive annual meeting, the class of directors to be elected in such year will be elected for a three-year term, so that the term of office of one class of directors shall expire in each year. The Classified Board Amendment also provides that a director elected by the Board to fill a vacancy will hold office until the next election of the class for which such director has been chosen, subject to election and qualification of a successor and to such director’s earlier death, resignation, or removal.
On May 25, 2017, the Board approved, effective immediately, amendments to and a restatement of the Company’s Seventh Amended and Restated Bylaws (the “Bylaws”). The amendments to the Bylaws (the “Bylaw Amendments”) were to (i) revise the provisions of Article II, Sections 2 through 4 thereof, for the election and terms of directors, the filling of vacancies, and the removal of directors to conform to the corresponding provisions contained in the Classified Board Amendment to the Articles of Incorporation described above; and (ii) update prior references to the Nebraska Business Corporation Act to reflect the new Nebraska Model Business Corporation Act effective January 1, 2017 and make other technical non-substantive wording changes. The previous provisions of Article II, Sections 2 through 4, reflected the prior framework for the annual election of the entire Board whereby each director would serve for a one-year term.
The above descriptions of the Classified Board Amendment and the Bylaw Amendments are qualified in their entirety by reference to the complete text of the Articles of Amendment and the amended provisions contained in the Eighth Amended and Restated Bylaws, respectively, copies of which are filed with this report as Exhibits 3.1 and 3.2, respectively, and are incorporated herein by reference.
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Item 5.07.
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Submission of Matters to a Vote of Security Holders.
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The Company held its 2017 annual shareholders' meeting on May 25, 2017. At the meeting, the following proposals were submitted to a vote of our shareholders, with the voting results indicated below:
Proposal 1: Election of Directors.
Our shareholders elected the following nine directors to hold office, for the terms discussed below under Proposal 5 resulting from our shareholders’ approval of Proposal 5 for an amendment to the Company's Articles of Incorporation to classify the Board into three classes, with the directors in each class serving staggered three-year terms of office as further described under Item 5.03 of this report, and until their successors have been duly elected or appointed.
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For
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Against
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Abstain
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Broker Non-Votes
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Michael S. Dunlap
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140,402,115
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489,962
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1,989
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1,896,786
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Stephen F. Butterfield
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132,067,434
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8,821,957
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4,675
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1,896,786
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James P. Abel
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140,473,837
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412,567
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7,662
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1,896,786
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William R. Cintani
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138,913,145
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1,972,771
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8,150
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1,896,786
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Kathleen A. Farrell
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140,621,201
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268,429
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4,436
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1,896,786
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David S. Graff
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139,054,843
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1,830,537
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8,686
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1,896,786
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Thomas E. Henning
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140,440,430
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446,272
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7,364
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1,896,786
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Kimberly K. Rath
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134,220,633
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6,668,861
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4,572
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1,896,786
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Michael D. Reardon
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140,384,609
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500,310
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9,147
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1,896,786
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Proposal 2: Ratification of the appointment of KPMG LLP.
Our shareholders ratified the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2017.
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For
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Against
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Abstain
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Broker Non-Votes
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142,522,903
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251,341
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16,608
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—
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Proposal 3: Advisory vote on executive compensation.
Our shareholders approved, by an advisory vote, the compensation of our named executive officers as disclosed in the proxy statement for the annual meeting.
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For
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Against
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Abstain
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Broker Non-Votes
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140,840,602
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19,597
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33,867
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1,896,786
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Proposal 4: Advisory vote on the frequency of future advisory votes on executive compensation.
Our shareholders approved, by an advisory vote, an annual advisory vote on the compensation of our named executive officers (as opposed to an advisory vote every two years or every three years).
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1 Year
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2 Year
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3 Year
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Abstain
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137,375,777
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11,183
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3,505,687
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1,419
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Based on these results and consistent with the Board's previous recommendation to the Company's shareholders in connection with such vote, on May 25, 2017, following our annual meeting of shareholders, our Board determined that, until the next shareholder advisory vote on the frequency of holding shareholder advisory votes on executive compensation, the Company will include a shareholder advisory vote on the compensation of executives in its proxy materials every year. Under the Securities Exchange Act of 1934, the Company must hold an advisory vote on the frequency of holding advisory votes on the compensation of its executives at least once every six years.
Proposal 5: Approval of amendment to the Company's articles of incorporation.
Our shareholders approved an amendment to the Company's Articles of Incorporation to classify the Board into three classes, with the directors in each class serving staggered three-year terms of office.
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For
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Against
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Abstain
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Broker Non-Votes
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126,326,058
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14,509,736
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58,272
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1,896,786
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As a result of our shareholders’ approval of the amendment, which amendment is further described under Item 5.03 of this report, the filing of such amendment with the Nebraska Secretary of State, and the shareholders’ election of
directors as described under Proposal 1 above, Michael S. Dunlap, Stephen F. Butterfield, and Michael D. Reardon have been assigned to Class I to serve an initial term of one year until the 2018 annual meeting of shareholders, James P. Abel, William R. Cintani, and Kimberly K. Rath have been assigned to Class II to serve an initial term of two years until the 2019 annual meeting of shareholders, and Kathleen A. Farrell, David S. Graff, and Thomas E. Henning have been assigned to Class III to serve an initial term of three years until the 2020 annual meeting of shareholders. Beginning with the election of directors to be held at the 2018 annual meeting of shareholders and each year thereafter, the class of directors to be elected in such year will be elected for a three-year term, and at each successive annual meeting, the class of directors to be elected in such year will be elected for a three-year term, so that the term of office of one class of directors shall expire in each year.