XML 29 R18.htm IDEA: XBRL DOCUMENT v2.4.0.6
Share Based Compensation and Employee Benefit Plans
 12 Months Ended
Dec. 31, 2011
Share Based Compensation and Employee Benefit Plans [Abstract]  
SHARE BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS

11. SHARE BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS:

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan that allows eligible employees to contribute up to 10% of their base earnings toward the semi-annual purchase of the Company’s Class A common stock. The employee’s purchase price is 85% of the lesser of the closing price of the Class A common stock on the first business day or the last business day of the semi-annual offering period, as reported by The NASDAQ Global Select MarketSM. Employees may purchase shares having a fair market value of up to $25,000 (measured as of the first day of each semi-annual offering period) for each calendar year. Under the Employee Stock Purchase Plan, there are approximately 465,000 shares remaining of the 900,000 shares of the Company’s Class A common stock that have been reserved for issuance. The Company issued 62,405 shares under the Employee Stock Purchase Plan during the year ended December 31, 2011 and 65,757 shares during the year ended December 31, 2010. Of the 3,865 employees eligible to participate, 443 were participants in the plan as of December 31, 2011.

Non-Employee Director Stock Option Plan

On May 16, 2006, the Board of Directors and shareholders adopted the Rush Enterprises, Inc. 2006 Non-Employee Director Stock Option Plan (the “Director Plan”), reserving 1,500,000 shares of Class A common stock for issuance upon exercise of any awards granted under the plan. This Director Plan was Amended and Restated on May 20, 2008 to expand the type of award that may be granted under the plan to include Class A common stock awards. The Director Plan was also amended on May 18, 2010 to reduce the number of shares reserved for issuance under the plan by 1,000,000 shares of Class A common stock.

 

The Director Plan is designed to attract and retain highly qualified non-employee directors. Prior to 2008, each non-employee director received options to purchase 20,000 shares of the Company’s Class A common stock upon their respective date of appointment and each year on the date that they are elected or reelected by the shareholders to serve on the Board of Directors. Each option has a ten year term from the grant date and vested immediately. Beginning in 2008, each non-employee director received a grant of the Company’s Class A common stock equivalent to a compensation value of $125,000, in 2009 the compensation value was reduced to $100,000, and in 2011 the compensation value was increased back to $125,000. In 2010, two non-employee directors received a grant of 6,527 shares of the Company’s Class A common stock and three non-employee directors received a grant of 4,242 shares of the Company’s Class A common stock and $35,000 cash, for total compensation equivalent to $100,000. In 2011, three non-employee directors received a grant of 6,309 shares of the Company’s Class A common stock and one non-employee directors received a grant of 3,785 shares of the Company’s Class A common stock and $50,000 cash, for total compensation equivalent to $125,000. Under the Director Plan, there are approximately 287,000 shares remaining for issuance of the 500,000 shares of the Company’s Class A common stock that have been reserved for issuance. The Company granted 22,712 shares of Class A common stock under the Director Plan during the year ended December 31, 2011 and 25,780 shares of Class A common stock under the Director Plan during the year ended December 31, 2010.

Employee Incentive Plans

In May 2007, the Board of Directors and shareholders adopted the Rush Enterprises, Inc. 2007 Long-Term Incentive Plan (the “2007 Incentive Plan”). The 2007 Incentive Plan provides for the grant of stock options (which may be nonqualified stock options or incentive stock options for tax purposes), stock appreciation rights issued independent of or in tandem with such options (“SARs”), restricted stock awards and performance awards. The 2007 Incentive Plan replaced the Rush Enterprises, Inc. Long-Term Incentive Plan (“Incentive Plan”) effective May 22, 2007. The 2007 Incentive Plan was Amended and Restated on May 18, 2010 to increase the number of shares available for issuance under the plan to 4,550,000 shares of Class A common stock.

The aggregate number of shares of common stock subject to stock options or SARs that may be granted to any one participant in any year under the 2007 Incentive Plan is 100,000 shares of Class A common stock or 100,000 shares of Class B common stock. Each option, granted pursuant to the 2007 Incentive Plan, has a ten year term from the grant date and vests in three equal annual installments beginning on the third anniversary of the grant date. The Company has 4,550,000 shares of Class A common stock and 450,000 shares of Class B common stock reserved for issuance upon exercise of any awards granted under the Company’s 2007 Incentive Plan. As of December 31, 2011, approximately 1,875,000 shares of Class A common stock and 450,000 shares of Class B common stock are available for issuance upon exercise of any awards granted under the Company’s 2007 Incentive Plan. During the year ended December 31, 2011, the Company granted 647,145 options to purchase Class A common stock and 103,985 restricted Class A common stock units under the 2007 Incentive Plan. During the year ended December 31, 2010, the Company granted 627,045 options to purchase Class A common stock and 99,465 restricted Class A common stock awards under the 2007 Incentive Plan.

Valuation and Expense Information

Stock-based compensation expense related to stock options, restricted stock awards, restricted stock units and employee stock purchases was $5.7 million for the year ended December 31, 2011, $4.5 million for the year ended December 31, 2010, and $3.7 million for the year ended December 31, 2009.

Cash received from options exercised and shares purchased under all share-based payment arrangements was $5.5 million for the year ended December 31, 2011, $2.3 million for the year ended December 31, 2010, and $0.8 million for the year ended December 31, 2009.

 

A summary of the Company’s stock option activity and related information for the year ended December 31, 2011, follows:

 

      September 30,       September 30,       September 30,       September 30,  
                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
          Exercise     Contractual     Intrinsic  

Options

   Shares     Price     Life (in Years)     Value  
         

Balance of Outstanding Options at January 1, 2011

     3,709,877     $ 10.94                  

Granted

     647,145       18.74                  

Exercised

     (508,549 )      9.20                  

Forfeited

     —         —                    
   

 

 

                          
         

Balance of Outstanding Options at December 31, 2011

     3,848,473     $ 12.48       6.23     $ 31,809,360  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Vested and exercisable at December 31, 2011

     1,525,594     $ 11.17       3.89     $ 14,617,587  
   

 

 

    

 

 

    

 

 

    

 

 

  

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the weighted-average of the closing price as of December 31, 2011, of the Company’s Class A common stock and Class B common stock of $20.75. The total intrinsic value of options exercised was $5.2 million during the year ended December 31, 2011, $2.3 million during the year ended December 31, 2010, and $0.2 million during the year ended December 31, 2009.

A summary of the status of the number of shares underlying Company’s non-vested options as of December 31, 2011, and changes during the year ended December 31, 2011, follows:

 

      September 30,       September 30,  
          Weighted  
          Average  
    Number of     Grant Date  

Non-vested Shares

   Shares     Fair Value  
     

Non-vested at January 1, 2011

     2,134,699     $ 4.92  

Granted

     647,145       8.68  

Vested

     (458,965 )      5.37  

Forfeited

     —         —    
   

 

 

          
     

Non-vested at December 31, 2011

     2,322,879     $ 5.88  
   

 

 

          

The total fair value of vested options was $2.5 million during the year ended December 31, 2011, $2.4 million during the year ended December 31, 2010, and $1.8 million during the year ended December 31, 2009. The weighted-average grant date fair value of options granted was $8.68 during the year ended December 31, 2011, $5.80 during the year ended December 31, 2010, and $3.25 during the year ended December 31, 2009.

Stock Awards

The Company granted restricted stock units to its employees under the 2007 Incentive Plan and unrestricted stock awards to its non-employee directors under the Director Plan during the year ended December 31, 2011. The shares granted to employees vest in three equal installments on the first, second and third anniversary of the grant date and are forfeited in the event the recipient’s employment or relationship with the Company is terminated prior to vesting. The fair value of the restricted stock awards and units to the Company’s employees is amortized to expense on a straight-line basis over the restricted stock’s vesting period. The shares granted to non-employee directors are expensed on the grant date.

 

The following table presents a summary of the Company’s non-vested restricted stock awards and non-vested restricted stock units outstanding at December 31, 2011:

 

      September 30,       September 30,  

Non-Vested Stock Awards and Units

   Number of
Shares		     Weighted
Average
Grant Date
Fair Value		  
     

Outstanding, January 1, 2011

     190,559     $ 11.19  

Granted

     126,697       18.93  

Vested

     (113,379 )      13.20  

Forfeited

     —         —    
   

 

 

          
     

Outstanding, December 31, 2011

     203,877     $ 14.89  
   

 

 

          

The total fair value of the shares issued upon the vesting of stock awards during the year ended December 31, 2011 was $1.5 million. The weighted-average grant date fair value of stock awards and units granted was $18.93 during the year ended December 31, 2011, $13.08 during the year ended December 31, 2010, and $8.81 during the year ended December 31, 2009.

As of December 31, 2011, there was $7.5 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Incentive Plan and the 2007 Incentive Plan. That cost is expected to be recognized over a weighted-average period of 3.1 years.

Defined Contribution Plan

The Company has a defined contribution plan (the “Rush 401k Plan”), which is available to all Company employees and the employees of certain affiliates. Each employee who has completed 90 days of continuous service is entitled to enter the Rush 401k Plan on the first day of the following month. Participating employees may contribute from 1% to 50% of total gross compensation. However, certain highly compensated employees are limited to a maximum contribution of 15% of total gross compensation. In March 2009, the Company discontinued its matching contributions to the Rush 401k plan. On April 1, 2010 the Company reinstated its matching contributions. For the first 10% of an employee’s contribution, the Company contributed an amount equal to 5% of the employees’ contributions for those employees with less than five years of service and an amount equal to 10% of the employees’ contributions for those employees with more than five years of service. Effective January 1, 2011, for the first 10% of an employee’s contribution, the Company contributed an amount equal to 15% of the employees’ contributions for those employees with less than five years of service and an amount equal to 30% of the employees’ contributions for those employees with more than five years of service. The Company incurred expenses related to the Rush 401k Plan of approximately $2.2 million during the year ended December 31, 2011, $0.4 million during the year ended December 31, 2010, and $0.6 million during the year ended December 31, 2009.

Deferred Compensation Plan

On November 6, 2010 the Board of Directors of the Company adopted the Rush Enterprises, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) wherein selected employees and directors may elect to defer a portion of their annual compensation. The Deferred Compensation Plan also provides the Company with the discretion to make matching contributions to participants’ accounts. The Company has established a rabbi trust to finance obligations under the Deferred Compensation Plan with corporate-owned variable life insurance contracts. Participants are 100% vested in their respective deferrals and the earnings thereon. The first deferral election period began on January 1, 2011. As of December 31, 2011, the Company recorded deferred compensation liability related to the Deferred Compensation Plan of $0.1 million.

The Company currently does not provide any postretirement benefits nor does it provide any post employment benefits.