UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
Commission file number 0-20797
RUSH ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-1733016
(State or other jurisdiction of (I.R. S. Employer
incorporation or organization) Identification No.)
555 IH 35 SOUTH, NEW BRAUNFELS, TX 78130
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (830) 626-5200
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
(Title of Class)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIODS THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [ ]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT
TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE
CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR
INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K
OR ANY AMENDMENT TO THIS FORM 10-K.
The aggregate market value of voting stock held by non-affiliates of
the registrant as of May 9, 2001 was approximately $19,461,266, based upon the
last sales price on March 21, 2001 on the NASDAQ National Market for the
Company's common stock. The registrant had 7,002,044 shares of Common Stock
outstanding on May 9, 2001.
1
RUSH ENTERPRISES, INC.
INDEX TO FORM 10-K/A
YEAR ENDED DECEMBER 31, 2000
PAGE NO.
PART III
Item 10. Directors and Executive Officers of the Registrant 3
Item 11. Executive Compensation 6
Item 12. Security Ownership of Certain Beneficial Owners and
Management 12
Item 13. Certain Relationships and Related Transactions 13
2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is information with respect to each director, executive
officer and nominees for directors of the Company as of May 10, 2001. The
executive officers are elected by the Board of Directors and serve at the
discretion of the Board.
NAME AGE POSITION
- ---- --------
W. Marvin Rush 62 Chairman of the Board, Chief Executive Officer and
Director
W. M. "Rusty" Rush 42 President and Director
Robin M. Rush 41 President, Executive Vice President, Secretary,
Treasurer and Director
J. M. "Spike" Lowe 57 Senior Vice President-- Corporate Development
David C. Orf 51 Senior Vice President-- Sales and Marketing
Brent Hughes 58 Senior Vice President-- Financial Services
Daryl J. Gorup 52 Senior Vice President-- Dealership Operations
Ernie Bendele 57 Vice President-- Used Trucks
Louis Liles 58 Vice President-- Corporate Administration
John Hiltabiddle 56 Controller
Ralph West 54 Vice President-- Leasing and Rental Operations
Martin A. Naegelin, Jr. 37 Vice President-- Chief Financial Officer
Randolph F. Goss 48 Vice President - Construction Equipment Division
Ronald J. Krause 73 Director(1)(2)
John D. Rock 65 Director(1)(2)
Harold D. Marshall 65 Director(1)(2)
- ------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
W. MARVIN RUSH founded the Company in 1965. He served as President from
inception until November 1995, and has served as Chairman of the Board and Chief
Executive Officer since November 1995. He also served on the Peterbilt dealer
council from 1984-1987 and was elected its Chairman in 1987. He was also active
on the PacLease Executive Committee from 1989-1992 and was Chairman in 1992.
Other honors include the Peterbilt Dealer of the Year in 1986, 1987 and 1988, as
well as the Midranger Dealer of the Year in 1989. His highest Peterbilt honor
was being named North American Peterbilt Dealer of the Year for the 1993-1994
and the 2000-2001 years.
W. M. "RUSTY" RUSH served as Vice President and Executive Vice President
of the Company from 1990 until November 1995 and has served as President of the
Company since November 1995. For the past several years he has overseen the
sales and finance departments. He is responsible for the total operations of the
Company's heavy duty truck segment.
3
ROBIN M. RUSH has been with the Company since 1991, and served as Vice
President and general manager of the Company from 1993 until November 1995. Mr.
Rush has served as Secretary and Treasurer of the Company since October 1995 and
as Executive Vice President of the Company since November 1995. He is presently
the President of Rush Equipment Centers, and is responsible for the operations
of the Company's construction equipment segment and the Company's retail
division.
DAVID C. ORF has served as Vice President of Sales and Marketing of the
Company since 1993 and in October 1996 Mr. Orf was promoted to Senior Vice
President of Sales and Marketing. Mr. Orf was the general manager of the
Company's Houston, Texas facilities until January 1996. Prior to joining the
Company, Mr. Orf served as the Southeast region manager of Peterbilt Motors
Company, a division of PACCAR.
DARYL J. GORUP has served as Senior Vice President of Dealership
Operations of the Company since January 1997. Prior to joining the Company, Mr.
Gorup had served for 15 years in various executive positions with Peterbilt
Motors Company, including General Sales Manager.
MARTIN A. NAEGELIN, JR. has served as Vice President and Chief Financial
Officer since January 1997. Prior to joining the Company, Mr. Naegelin served as
Vice President of Investor Relations and Corporate Development of Norwood
Promotional Products, Inc. Mr. Naegelin had seven years of public accounting
experience prior to joining Norwood in 1993.
LOUIS LILES has been with the Company since December 1995 and has served
as vice president of the Company since September 1997. Prior to joining the
Company, Mr. Liles was employed for 17 years, most recently serving as the
Senior Vice President of Operations, of Kerr Consolidated, Inc., which operated
two Peterbilt dealerships and was acquired by the Company in December 1995. In
his current capacity, Mr. Liles is responsible for the corporate administration
function, which includes human resources and legal oversight.
BRENT HUGHES served as Vice President of Financial Services since 1993 and
in September 1997 Mr. Hughes was promoted to Senior Vice President. He is in
charge of all secured financing for the Company. Mr. Hughes was with Associates
Commercial Corporation for 22 years, was Branch Manager in New York City, and
later in San Antonio, and was Senior Vice President of the Western Region when
he left to join the Company in 1992.
J. M. "SPIKE" LOWE has been with the Company since 1968, and has served
as a Vice President of the Company since 1994 and was promoted to Senior Vice
President in 1999. Currently he is responsible for acquisitions and all open
account and unsecured lending for the Company.
ERNIE BENDELE has been with the Company since 1984 and has served as a
Vice President of the Company since October 1996. Mr. Bendele is responsible for
procurement, inventory control and marketing of used trucks nationwide.
RALPH WEST has been with the Company since 1994 and has served as a Vice
President of the Company responsible for all leasing and rental operations since
that time. Prior to joining the Company, Mr. West had been with Ryder Truck
Rentals. During his 28 years at Ryder Truck Rentals, Mr. West served in various
executive positions, with the last 14 years as Vice President.
JOHN HILTABIDDLE, CPA has served as the Controller of the Company since
December 1993. Mr. Hiltabiddle served as the Controller of two large
automobile dealerships from 1989 until December 1993, and from 1984 until
1989, respectively. Mr. Hiltabiddle had 12 years of public accounting
experience prior to joining the automobile dealership in 1984.
RANDOLPH F. GOSS, has served as the Vice President and Chief Operating
Officer of the Company's construction equipment division since April 1999. Prior
to joining the Company, Mr. Goss worked for RDO, Inc., serving as the Senior
Vice President of their Texas division and later, as Executive Vice President of
their construction equipment division.
4
HAROLD D. MARSHALL has served as a director of the Company since February
1999. Mr. Marshall served as President and Chief Operating Officer of Associates
First Capital Corporation ("The Associates") from May 1996 to January 1999, and
has served as a Director of the Associates. Mr. Marshall joined The Associates
in 1961 and organized their Transportation Division in 1974. Mr. Marshall serves
as Vice Chairman of the American Trucking Association Foundation Board of
Directors, as a Member of the American Trucking Association Foundation Executive
Committee, as Trustee Emeritus of the Hudson Institute, and on the Board of
Trustees of the Dallas Museum of Art.
RONALD J. KRAUSE has served as a director of the Company since June 1996.
Mr. Krause served as President of Associates Commercial Corporation from 1976
until 1981 and President and Chief Operating Officer of Associates Corporation
of North America from 1981 until 1989. Mr. Krause also was Vice Chairman of the
Board of Directors of Associates of North America from 1988 until his retirement
in 1989.
JOHN D. ROCK has served as a director of the Company since April 1997. Mr.
Rock served as a Vice President of General Motors Corporation from 1991 until
his retirement from General Motors Corporation after over 36 years of service.
While at General Motors Corporation, Mr. Rock held various executive positions
in sales, service and marketing. Mr. Rock has also served as a member of the
Board of Directors of Volvo - GM Heavy Truck Corporation.
W. M. "Rusty" Rush and Robin M. Rush are brothers and the sons of W.
Marvin Rush. There are no other family relationships among the executive
officers and directors of the Company.
All directors of the Company hold office until the next annual meeting of
shareholders and the election and qualification of their successors. Each
officer of the Company was chosen by the Board of Directors and serves at the
pleasure of the Board of Directors until his or her successor is appointed or
until his or her earlier resignation or removal in accordance with applicable
law.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's directors,
executive officers and persons who own more than 10 percent of a registered
class of the Company's equity securities file with the Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Directors, executive officers and
greater than 10 percent shareholders are required by Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of the
Section 16(a) reports furnished to the Company and written representations that
no other reports were required, during the fiscal year ended December 31, 2000,
all Section 16(a) filing requirements applicable to its directors, executive
officers and greater than 10 percent beneficial owners were complied with: J. M.
"Spike" Lowe filed a late Form 4 reporting a single transaction, and Robin M.
Rush filed a late Form 4 reporting three transactions.
5
ITEM 11. EXECUTIVE COMPENSATION
The following table summarizes all compensation awarded to, earned by or
paid for services rendered to the Company in all capacities during the years
ended December 31, 1998, 1999 and 2000 by the Company's Chief Executive Officer
and the Company's four other most highly compensated executive officers during
2000 (the "named executive officers").
SUMMARY COMPENSATION TABLE
----------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------- -------------
SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS (#) COMPENSATION(2)
- --------------------------- ------ ---------- --------- ---------------- ------------ ---------------
W. Marvin Rush 2000 $684,166(3) $240,000 -- 28,000 $ 5,250
Chairman of the Board and 1999 $616,708(4) $600,000 -- 13,850 $ 5,000
Chief Executive Officer 1998 $577,152(5) $500,000 -- 20,470 $ 2,500
2000 $259,292 $ 88,000 -- 10,050 $ 5,250
W. M. "Rusty" Rush 1999 $236,944 $220,000 -- 5,000 $ 5,000
President 1998 $189,000 $200,000 -- 11,570 $ 3,210
2000 $215,797 $ 66,000 -- 7,650 $ 5,250
Robin M. Rush 1999 $195,983 $165,000 -- 3,800 $ 5,000
Executive Vice President 1998 $146,000 $150,000 -- 8,010 $ 3,597
2000 $185,181 $ 87,500 -- 4,750 $ 5,250
David C. Orf 1999 $169,181 $194,000 -- 4,225 $ 5,000
Senior Vice President 1998 $159,960 $176,000 -- 11,125 $ 2,790
2000 $201,847 $ 61,000 -- 4,500 $ 2,625
Daryl J. Gorup 1999 $197,047 $148,250 -- 4,000 $ 2,500
Senior Vice President 1998 $189,177 $130,000 -- 10,000 $ 2,500
- ---------------------
(1) Consists of prerequisites which aggregate less than the lesser of $50,000
or 10% of the salary and bonus for the named executive officer.
(2) Consists of matching contributions to the Company's 401(k) plan.
(3) Of such amount, $109,903 represents amounts paid with respect to salary
and benefits of employees of the Company performing personal services
exclusively for Mr. Rush.
(4) Of such amount, $103,221 represents amounts paid with respect to salary
and benefits of employees of the Company performing personal services
exclusively for Mr. Rush. Does not include $93,988 distributed to Mr. Rush
in connection with an error discovered, in 1999, in the calculation in the
distribution due from the Company to Mr. Rush on undistributed,
accumulated income of the Company prior to the initial public offering of
the Company in 1996.
(5) Of such amount, $83,604 represents amounts paid with respect to salary and
benefits of employees of the Company performing personal services
exclusively for Mr. Rush.
6
STOCK OPTION GRANTS IN FISCAL 2000
The following table provides certain information related to options
granted by the Company to the named executive officers during fiscal 2000.
INDIVIDUAL GRANTS
---------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
% OF TOTAL APPRECIATION FOR
OPTIONS GRANTED OPTION TERM(1)
NUMBER OF SECURITIES TO EXERCISE OR ----------------------
UNDERLYING OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL 2000 ($/SH) DATE 5% ($) 10% ($)
- ---- ---------------------- --------------- ------------- ------------ ---------- -----------
W. Marvin Rush 28,000 8.81 7.00 3/15/10 123,263 312,374
W. M. "Rusty" Rush 10,050 3.16 7.00 3/15/10 44,243 112,140
Robin M. Rush 7,650 2.41 7.00 3/15/10 33,677 85,345
David C. Orf 4,750 1.49 7.00 3/15/10 20,911 52,992
Daryl J. Gorup 4,500 1.42 7.00 3/15/10 19,810 50,203
- ----------------
(1) The potential realizable value is calculated based on the term of the option
and is calculated by assuming that the fair market value of Common Stock on the
date of the grant as determined by the Board appreciates at the indicated annual
rate compounded annually for the entire term of the option and that the option
is exercised and the Common Stock received therefor is sold on the last day of
the term of the option for the appreciated price. The 5% and 10% rates of
appreciation are derived from the rules of the Commission and do not reflect the
Company's estimate of future stock price appreciation. The actual value realized
may be greater than or less than the potential realizable values set forth in
the table.
AGGREGATED OPTION EXERCISES IN FISCAL 2000 AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to options exercised by
the named executive officers of the Company during fiscal 2000 and the number
and value of options held at fiscal year end.
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT
OPTIONS AT FY-END (#) FY-END($)(1)
----------------------------- -----------------------------
SHARES ACQUIRED
UPON OPTION VALUE
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------- ---------------- -------------- ------------- -------------- -------------- --------------
W. Marvin Rush 0 0 6,244 74,826 0 0
W. M. "Rusty" Rush 0 0 3,649 33,928 0 0
David C. Orf 0 0 3,649 27,408 0 0
Robin M. Rush 0 0 1,265 23,742 0 0
Daryl J. Gorup 0 0 0 18,500 0 0
- --------------
(1) The closing price of the Company's common stock on December 31, 2000 was
$3.50.
7
EMPLOYMENT AGREEMENTS AND CHANGE-OF-CONTROL ARRANGEMENTS
The Company has entered into employment agreements with W. Marvin Rush, W.
M. "Rusty" Rush and Robin M. Rush which each provides a four-year term, subject
to automatic extension for an additional one year on each anniversary of the
agreements. These employment agreements are subject to early termination as
provided therein, including termination by the Company for "cause" (as defined
in the employment agreements) or termination by W. Marvin Rush, W. M. "Rusty"
Rush or Robin M. Rush, as applicable, for "good reason" (as defined in the
employment agreements). The employment agreements provide for minimum annual
base salaries as follows: W. Marvin Rush-- $525,000, W. M. "Rusty" Rush--
$150,000 and Robin M. Rush-- $108,000. In 2000, W.M. "Rusty" Rush and Robin M.
Rush received a base salary of $259,292 and $215,797, respectively. The
employment agreements also provide for bonuses at the discretion of the
Compensation Committee of the Board.
The employment agreements with W. Marvin Rush, W. M. "Rusty" Rush and
Robin M. Rush provide that if the Company terminates their employment without
cause (including the Company's election to not extend the employment agreements
at any renewal date) or within two years of a change in control, or if they
resign their employment for "good reason" (as defined in the employment
agreements), they will be entitled to receive, at their election, either a
lump-sum payment in the amount equal to their base salary for the unexpired term
of their agreements or continuation of their base salary and benefits through
the unexpired term of their agreements. A change of control is deemed to have
occurred if (i) more than 30% of the combined voting power of the Company's then
outstanding securities is acquired, directly or indirectly, or (ii) at any time
during the 24-month period after a tender offer, merger, consolidation, sale of
assets or contested election, or any combination of such transactions, at least
a majority of the Company's Board of Directors shall cease to consist of
"continuing directors" (meaning directors of the Company who either were
directors prior to such transaction or who subsequently became directors and
whose election, or nomination for election by the Company's shareholders, was
approved by a vote of at least two-thirds of the directors then still in office
who were directors prior to such transaction), or (iii) the shareholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 60% of the total voting
power represented by the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or (iv) the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement of sale or disposition by the Company of all of the
Company's assets.
The Company has also entered into employment agreements with David C. Orf
and Daryl Gorup, which provide for minimum annual base salaries as follows:
David C. Orf -- $129,000, and Daryl Gorup -- $180,000. In 2000, Mr. Orf and Mr.
Gorup received a base salary of $185,181 and $201,847, respectively. The
employment agreements also provide for incentive bonuses at the discretion of
the Compensation Committee of the Company. The employment agreements are
terminable by the Company upon 12 months' prior written notice or, in lieu
thereof, immediately terminable upon the payment to the employee of 12 months of
his then effective base salary and an amount equal to a percentage of the bonus
received by the employee during the preceding year, with such percentage
determined according to the number of years of service of the employee.
COMPENSATION OF DIRECTORS
In 1997, the Company adopted and the shareholders approved the 1997
Non-Employee Director Stock Option Plan (the "Plan"). Pursuant to the Plan, each
person who is elected or re-elected as a non-employee director receives an
option to purchase 10,000 shares of Common Stock as of the date such director is
elected or re-elected as a director of the Company, if such election takes place
at an annual meeting of shareholders, or as of the date of the first annual
meeting of shareholders subsequent to such director's election, if such election
does not occur at an annual meeting of shareholders. The aggregate number of
shares with respect to which options may be granted under the Plan shall not, in
any event, exceed 300,000 shares. Each option is granted at the closing price of
the Common Stock as reported by The Nasdaq Stock Market on the date of grant and
fully vests on the date of grant.
For fiscal 2000, each non-employee member of the Board of Directors
received options pursuant to the terms of the Plan, $1,000 per day in which a
director renders services on behalf of the Company and reimbursement for travel
expenses to and from the meetings.
8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 2000 were John D. Rock,
Ronald J. Krause and Harold D. Marshall.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for making all compensation
decisions for the named executives including determining base salary and annual
incentive compensation amounts and granting stock options and other stock-based
compensation under the Company's Long-Term Incentive Plan (the "Incentive
Plan").
OVERALL OBJECTIVES OF THE EXECUTIVE COMPENSATION PROGRAM
The purpose of the Company's compensation plan is to attract, retain and
motivate key management employees. It is the philosophy of the Company to pay
its executives at levels commensurate with both Company and individual
performance. A primary consideration in developing the Company's executive
compensation programs is to link the long-term financial interests of executives
with those of the Company and its shareholders. The Compensation Committee
reviews compensation for comparable organizations in order to establish the
Company's total compensation program and determine awards under the Incentive
Plan.
In 2000, the total compensation program for the Company's top executives,
approved by the Company's Board of Directors, consisted of a base salary and
bonus for each of such executives.
BASE SALARY PROGRAM
It is the Company's policy to establish salaries at a level approximating
the average of the competitive levels in comparable organizations and to provide
annual salary increases reflective of the executive's performance, level of
responsibility and position with the Company. In 2000, W. Marvin Rush received a
base salary of $684,166.
ANNUAL INCENTIVE
Each year, the Compensation Committee evaluates the performance of the
Company as a whole, as well as the performance of each individual executive.
Factors considered include revenue growth, net profitability and cost control.
The Compensation Committee does not utilize formalized mathematical formulae,
nor does it assign weightings to these factors. The Compensation Committee, in
its sole discretion, determines the amount, if any, of incentive payments to
each executive. The Compensation Committee believes that the Company's growth in
revenue and profitability requires subjectivity on the part of the Committee
when determining incentive payments. The Compensation Committee believes that
specific formulae restrict flexibility. W. Marvin Rush received a $240,000 bonus
from the Company for services performed on behalf of the Company during 2000.
LONG-TERM INCENTIVE PLAN
The Company adopted its Incentive Plan in 1996 prior to its initial public
offering, and the shareholders of the Company approved the Incentive Plan at the
1998 Annual Meeting of Shareholders. The Incentive Plan permits the Company to
make grants of stock options, restricted stock, performance shares and other
awards to employees as part of the Company's overall incentive compensation
program. The Incentive Plan is intended to attract, retain and motivate key
management personnel and to align the interest of the executives with those of
shareholders. The overall long-term incentive grant levels are established by
reviewing the number of shares reserved for such plans by comparable
organizations. Individual long-term incentive grants are based on the employee's
position in the Company and responsibility level. In 2000, W. Marvin Rush was
granted an option for 28,000 shares under the Incentive Plan.
9
SECTION 162(M)
Section 162(m) of the Code currently imposes a $1 million limitation on
the deductibility of certain compensation paid to each of the Company's five
highest paid executives. Excluded from this limitation is compensation that is
"performance based." For compensation to be performance based it must meet
certain criteria, including being based on predetermined objective standards
approved by shareholders. In general, the Company believes that compensation
relating to options granted under the Incentive Plan should be excluded from the
$1 million limitation calculation. Compensation relating to the Company's
incentive compensation awards do not currently qualify for exclusion from the
limitation, given the discretion that is provided to the Committee in
establishing the performance goals for such awards. The Committee believes that
maintaining the discretion to evaluate the performance of the Company's
management is an important part of its responsibilities and inures to the
benefit of the Company's shareholders. The Committee, however, intends to take
into account the potential application of Section 162(m) with respect to
incentive compensation awards and other compensation decisions made by it in the
future.
CONCLUSION
The Compensation Committee believes these executive compensation policies
serve the interests of the shareholders and the Company effectively. The
Committee believes that the various pay vehicles offered are appropriately
balanced to provide increased motivation for executives to contribute to the
Company's overall future successes, thereby enhancing the value of the Company
for the shareholders' benefit.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Harold D. Marshall
Ronald J. Krause
John D. Rock
10
PERFORMANCE GRAPH
The Company's Common Stock has been traded publicly since June 6, 1996.
Prior to such date, there was no established market for its Common Stock. The
following Performance Graph compares the Company's cumulative total shareholder
return on its Common Stock from June 7, 1996, through December 31, 2000, to the
Standard Poor's 500 Stock Index and to a Peer Group of other public companies
over the same period. The Peer Group is comprised of the following companies:
Cross Continent Auto Retailers, Inc., Holiday RV Superstores, Inc., Lithia
Motors, Inc., Paccar, Inc., Travis Boats & Motors, Inc., United Auto Group, Inc.
and Werner Enterprises, Inc.
COMPARISON OF CUMULATIVE TOTAL RETURN
12/1996 12/1997 12/1998 12/1999 12/2000
--------- --------- --------- --------- ---------
Rush Enterprises, Inc. 85.7 57.1 78.6 103.6 25.0
S&P 500 Stocks 111.5 148.7 191.9 232.4 211.7
Self-Determined Peer Group 122.6 111.7 79.1 62.8 59.8
The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Commission or subject to
Regulations 14A and 14C under the Exchange Act or to the liabilities of Section
18 under the Exchange Act.
11
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
OWNERSHIP OF COMMON STOCK
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth as of May 9, 2001, certain information with
respect to the Company's Common Stock beneficially owned by each shareholder
known by the Company to be the beneficial owner of more than 5% of the Company's
Common Stock, each of its directors and nominees for director, each executive
officer named in the Summary Compensation Table and by all its directors and
executive officers as a group. Such persons have sole voting power and sole
dispositive power with respect to all shares set forth in the table unless
otherwise specified in the footnotes to the table.
AMOUNT AND NATURE
OF BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP PERCENT(2)
---------------------------------------- ------------------- -------------
W. Marvin Rush ......................................... 2,771,156(3) 39.5%
PACCAR Inc. ............................................ 1,000,000 14.3%
Dimensional Fund Advisors Inc.(4) ...................... 435,300 6.2%
William D. Witter, Inc.(5) ............................. 396,700 5.7%
Edward Donahue Sr.(6) ................................ 355,556 5.1%
John D. Rock ........................................... 61,000(7) *
Ronald J. Krause ....................................... 60,000(7) *
Harold D. Marshall ..................................... 45,000(8) *
Robin M. Rush .......................................... 12,600(9) *
W. M. "Rusty" Rush ..................................... 12,202(10) *
David C. Orf ........................................... 11,013(11) *
Daryl J. Gorup ......................................... 4,605(12) *
All executive officers and directors as a group
(fifteen persons, including the executive officers
and directors listed above) ......................... 3,020,357 41.9%
* Represents less than 1% of the issued and outstanding shares of Common
Stock.
(1) Except as otherwise noted, the street address of the named beneficial
owner is 555 IH 35 South, New Braunfels, Texas 78130.
(2) Based on a total of 7,002,044 shares of Common Stock issued and
outstanding on April 4, 2001, plus vested options issuable under the
Company's 1997 Non-Employee Director Stock Option Plans and the Company's
Long-term Incentive Plan.
(3) Includes 2,001,833 shares of Common Stock held by 3MR Partners LP, of
which W. Marvin Rush is the general partner, and 19,323 shares issuable
upon the exercise of options granted pursuant to the Company's Long-term
Incentive Plan.
(4) The address for Dimensional Fund Advisors Inc. is 1299 Ocean Avenue,
11th Floor, Santa Monica, CA 90401.
(5) The address for William D. Witter, Inc. is One Citicorp Center, 153 East
53rd Street, New York, New York, 10022.
(6) Represents 273,779 shares, 28,444 shares, and 53,333 shares of Common
Stock held by Southwest Peterbilt, Inc., Southwest Truck Center, Inc.,
and New Mexico Peterbilt, Inc., respectively. Edward Donahue Sr. is the
majority shareholder and chairman of the board of these companies and
therefore has voting power of the shares. The address for Edward
Donahue Sr. is 2600 W. McDowell Rd, Phoenix, Arizona 85009.
(7) Includes 40,000 shares issuable upon the exercise of options granted
pursuant to the Company's 1997 Non-Employee Director Stock Option Plan.
(8) Includes 20,000 shares issuable upon the exercise of options granted
pursuant to the Company's 1997 Non-Employee Director Stock Option Plan.
(9) Includes 11,161 shares issuable upon the exercise of options granted
pursuant to the Company's Long-term Incentive Plan.
(10) Includes 6,950 shares issuable upon the exercise of options granted
pursuant to the Company's Long-term Incentive Plan.
(11) Includes 11,013 shares issuable upon the exercise of options granted
pursuant to the Company's Long-term Incentive Plan.
(12) Includes 3,333 shares issuable upon the exercise of options granted
pursuant to the Company's Long-term Incentive Plan.
12
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN TRANSACTIONS
Under Article 21.14 of the Texas Insurance Code ("TIC"), every officer,
director and shareholder of a corporation licensed to act as a local recording
agent must be individually licensed to act as an insurance agent. An insurance
agent is required to be a resident of the State of Texas and pass an examination
for a local recording insurance agent's license. W. Marvin Rush, Chairman of the
Board and Chief Executive Officer of the Company, is licensed to act as an
insurance agent in the State of Texas and is therefore qualified to act as the
shareholder, director and officer of Associated Acceptance, Inc. ("AA"), the
corporation currently affiliated with the Company that is licensed to act as a
local recording agent. The Company has acquired as a wholly-owned subsidiary, a
managing general agent (the "MGA") licensed under Article 21.07-3 of the TIC to
manage all of the operations of AA. In addition to managing AA, the MGA is
qualified to receive any and all commission income which is otherwise payable to
AA. The MGA, Mr. Rush and AA have entered into agreements pursuant to which (i)
the MGA manages all operations of AA, (ii) all of the income of AA is paid to
MGA, (iii) the Company transfers such funds to AA as are necessary for its
operation, and (iv) Mr. Rush has granted the MGA the right to transfer legal
ownership of the shares of capital stock of AA at any time to anyone designated
by MGA. Mr. Rush continues to own all of the outstanding stock of AA, subject to
his agreements with MGA prohibiting the transfer of such capital stock.
Pursuant to the terms of an agreement between the Company and General
Motors Acceptance Corporation ("GMAC"), the Company may deposit with GMAC, as
overnight funds, an amount no greater than 50.0% of the Company's wholesale
floor plan financing debt to GMAC. The Company has a policy whereby if the
Company is unable to deposit with GMAC the full amount for which it is eligible,
the executive officers and directors of the Company may loan funds to the
Company, which then deposits such funds with GMAC. The Company receives interest
from GMAC, and pays to such officer or director interest on the funds at the
rate the Company receives from GMAC less .25%. During 2000, W. Marvin Rush,
Chairman of the Board and Chief Executive Officer of the Company, loaned
$20,900,000 to the Company pursuant to this policy. The Company deposited such
funds with GMAC. The Company received $838,937 in interest from GMAC on such
funds, and paid $836,840 to Mr. Rush as interest.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RUSH ENTERPRISES, INC.
BY: /s/ W. MARVIN RUSH Date: May 7, 2001
----------------------------
W. Marvin Rush
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities on the dates indicated:
SIGNATURE CAPACITY DATE
- --------- ----------- -----------
/s/ W. MARVIN RUSH Chairman and Chief Executive Officer, May 9, 2001
- ------------------ Director (Principal Executive Officer)
W. Marvin Rush
/s/ W. M. "RUSTY" RUSH President, Director May 9, 2001
- ----------------------
W. M. "Rusty" Rush
/s/ ROBIN M. RUSH Executive Vice President, Secretary, May 9, 2001
- ----------------- Treasurer and Director
Robin M. Rush
/s/ RONALD J. KRAUSE Director May 9, 2001
- --------------------
Ronald J. Krause
/s/ JOHN D. ROCK Director May 9, 2001
- ---------------
John D. Rock
/s/ HAROLD D. MARSHALL Director May 9, 2001
- ---------------------
Harold D. Marshall
/s/ MARTIN A. NAEGELIN, JR. Vice President and May 9, 2001
- ------------------------- Chief Financial Officer
Martin A. Naegelin, Jr. (Principal Financial and
Accounting Officer)
14