EXHIBIT 10.1

 

RUSH ENTERPRISES, INC.
2006 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

 

1.             Purpose. This 2006 Non-Employee Director Stock Option Plan (the
“Plan”) of Rush Enterprises, Inc., a Texas corporation (the “Company”), is
adopted for the benefit of the directors of the Company who at the time of their
service are not employees of the Company or any of its subsidiaries
(“Non-Employee Directors”), and is intended to advance the interests of the
Company by providing the Non-Employee Directors with additional incentive to
serve the Company by increasing their proprietary interest in the success of the
Company.

 

2.             Administration. The Plan shall be administered by the Board of
Directors of the Company (the “Board”) or a committee of the Board which shall
consist solely of two or more directors appointed by the Board who are not
employees of the Company (the Board acting in such capacity or such committee
being referred to as the “Committee”). For the purposes of the Plan, a majority
of the members of the Committee shall constitute a quorum for the transaction of
business, and the vote of a majority of those members present at any meeting
shall decide any question brought before that meeting. In addition, the
Committee may take any action otherwise proper under the Plan by the affirmative
vote, taken without a meeting, of a majority of its members. No member of the
Committee shall be liable for any act or omission of any other member of the
Committee or for any act or omission on his own part, including but not limited
to the exercise of any power or discretion given to him under the Plan, except
those resulting from his own gross negligence or willful misconduct. Except as
otherwise expressly provided for herein, all questions of interpretation and
application of the Plan, or as to options granted hereunder (the “Options”),
shall be subject to the determination, which shall be final and binding, of a
majority of the whole Committee. Notwithstanding the above, the selection of
Non-Employee Directors to whom Options are to be granted, the exercise price of
any Option and the term of any Option shall be as hereinafter provided and the
Committee shall have no discretion as to such matters. The Committee may not
amend or replace outstanding Options in a transaction that constitutes a
repricing without the approval of the shareholders of the Company. For these
purposes, a cancellation, exchange or other modification to an outstanding
Option that occurs in connection with a merger, acquisition, spin-off or other
corporate transaction, including under Paragraph 12 will not be deemed a
repricing.

 

3.             Option Shares. The aggregate number of shares of the Company’s
Class A Common Stock, $.01 par value (or such other par value as may be
designated by act of the Company’s shareholders) (the “Common Stock”) with
respect to which Options may be granted under the Plan shall not exceed
1,000,000 shares; provided, that the class and aggregate number of shares which
may be subject to the Options granted hereunder shall be subject to adjustment
in accordance with the provisions of Paragraph 12 hereof. Such shares may be
treasury shares or authorized but unissued shares. In the event that any
outstanding Option for any reason shall expire or terminate by reason of the
death of the optionee or the fact that the optionee ceases to be a director, the
surrender of any such Option, or any other cause, the shares of Common Stock
allocable to the unexercised portion of such Option may again be subject to an
Option under the Plan.

 

4.             Grant of Options. Subject to the provisions of Paragraphs 13 and
16, there shall be granted the following Options:

 

(a)           To each Non-Employee Director who is appointed by the Board to
serve as a director, an Option to purchase 20,000 shares of Common Stock at a
purchase price per share of Common Stock equal to the fair market value of a
share of the Common Stock as defined in Paragraph 7 hereof (the “Option Price”)
on the date of such appointment by the Board; and

 

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(b)           To each Non-Employee Director who is elected or reelected as a
director of the Company at an Annual Meeting of Shareholders of the Company, an
Option to purchase 20,000 shares of Common Stock at the Option Price on the date
of each such Annual Meeting of Shareholders of the Company.

 

5.             Duration of Options. Each Option granted under the Plan shall be
exercisable for a term of ten years from the date of grant, subject to earlier
termination as provided in Paragraph 9 hereof.

 

6.             Amount Exercisable. Each Option granted pursuant to the Plan
shall be fully exercisable on the date of grant.

 

7.             Exercise of Options. Payment of the purchase price of the shares
of Common Stock subject to an Option granted hereunder may be made (i) in any
combination of cash or whole shares of Common Stock already owned by the
optionee, and/or (ii) in shares of Common Stock withheld by the Company from the
shares of Common Stock otherwise issuable to the optionee as a result of the
exercise of the Option. Subject to the terms and conditions of this Plan, an
Option may be exercised by written notice to the Company at its principal
office, attention of the Secretary. Such notice shall (a) state the election to
exercise such Option, the number of shares in respect of which it is being
exercised and the manner of payment for such shares and (b) be signed by the
person or persons so exercising such Option and, in the event such Option is
being exercised pursuant to Paragraph 9 by any person or persons other than the
optionee, accompanied by appropriate proof of the right of such person or
persons to exercise such Option. If payment of the purchase price of the shares
is being paid in cash or with whole shares of Common Stock already owned by the
optionee, such notice shall be accompanied by payment of the full purchase price
of such shares. Cash payments of such purchase price shall be made by cash or
check payable to the order of the Company. Common Stock payments (valued at fair
market value on the date of exercise, as determined by the Committee), shall be
made by delivery of stock certificates in negotiable form. All cash and Common
Stock payments shall, in either case, be delivered to the Company at its
principal office, attention of the Secretary. If certificates representing
Common Stock are used to pay all or part of the purchase price of an Option
granted hereunder, a replacement certificate shall be delivered by the Company
representing the number of shares delivered but not so used, and an additional
certificate shall be delivered representing the additional shares to which the
holder of such Option is entitled as a result of the exercise of such Option.
The certificate or certificates for the shares as to which such Option shall
have been so exercised shall be registered in the name of the person or persons
so exercising the Option and shall be delivered to or upon the written order of
the person or persons exercising such Option. All shares issued as provided
herein will be fully paid and nonassessable.

 

For purposes of this Paragraph 7, the “fair market value” of a share of Common
Stock as of any particular date shall mean the closing sale price of a share of
Common Stock on that date as reported by the principal national securities
exchange on which the Common Stock is listed if the Common Stock is then listed
on a national securities exchange, or if the Common Stock is not so listed, the
average of the bid and asked price of a share of Common Stock on that date and
reported in the National Association of Securities Dealers Automated Quotation
system (the “Nasdaq System”); provided that if no such closing price or quotes
are so reported on that date or if in the discretion of the Committee another
means of determining the fair market value of a share of stock at such date
shall be necessary or advisable, the Committee may provide for another means for
determining such fair market value.

 

8.             Transferability of Options. Options shall not be transferable by
the optionee other than by will or under the laws of descent and distribution,
and shall be exercisable, during his lifetime, only by the optionee.

 

9.             Termination. Except as may be otherwise expressly provided
herein, each Option, to the extent it shall not previously have been exercised,
shall terminate on the earliest of the following:

 

(a)           On the last day of the thirty day period commencing on the date on
which the optionee ceases to be a member of the Board, for any reason other than
the death or disability of the optionee or his resignation after five years of
service;

 

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(b)           On the last day of the one year period commencing on the date on
which the optionee ceases to be a member of the Board because of permanent
disability;

 

(c)           On the last day of the one year period commencing on the date of
the optionee’s death while serving as a member of the Board (during which period
the executor or administrator of the optionee’s estate or the person or persons
to whom the optionee’s Option shall have been transferred by will or the laws of
descent or distribution, shall be entitled to exercise the Option in respect of
the number of shares that the optionee would have been entitled to purchase had
the optionee exercised the Option on the date of his death);

 

(d)           On the last day of the one year period commencing on the date an
optionee who has had at least five years of service on the Board resigns from
the Board; and

 

(e)           Ten years after the date of grant of such Option.

 

10.           Requirements of Law. The Company shall not be required to sell or
issue any shares under any Option if the issuance of such shares shall
constitute a violation by the optionee or the Company of any provisions of any
law or regulation of any governmental authority. Each Option granted under the
Plan shall be subject to the requirements that, if at any time the Board or the
Committee shall determine that the listing, registration or qualification of the
shares subject thereto upon any securities exchange or under any state or
federal law of the United States or of any other country or governmental
subdivision thereof, or the consent or approval of any governmental regulatory
body, or investment or other representations, are necessary or desirable in
connection with the issue or purchase of shares subject thereto, no such Option
may be exercised in whole or in part unless such listing, registration,
qualification, consent, approval or representation shall have been effected or
obtained free of any conditions not acceptable to the Board. If required at any
time by the Board or the Committee, an Option may not be exercised until the
optionee has delivered an investment letter to the Company. In addition,
specifically in connection with the Securities Act of 1933 (as now in effect or
hereafter amended), upon exercise of any Option, the Company shall not be
required to issue the underlying shares unless the Committee has received
evidence satisfactory to it to the effect that the holder of such Option will
not transfer such shares except pursuant to a registration statement in effect
under such Act or unless an opinion of counsel satisfactory to the Company has
been received by the Committee to the effect that such registration is not
required. Any determination in this connection by the Committee shall be final,
binding and conclusive. In the event the shares issuable on exercise of an
Option are not registered under the Securities Act of 1933, the Company may
imprint on the certificate for such shares the following legend or any other
legend which counsel for the Company considers necessary or advisable to comply
with the Securities Act of 1933:

 

“The shares of stock represented by this certificate have not been registered
under the Securities Act of 1933 or under the securities laws of any state and
may not be sold or transferred except upon such registration or upon receipt by
Rush Enterprises, Inc., a Texas corporation (the “Corporation”) of an opinion of
counsel satisfactory, in form and substance to the Corporation, that
registration is not required for such sale or transfer.”

 

The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) and, in the event any shares are so registered, the Company
may remove any legend on certificates representing such shares. The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of an Option or the issuance of shares pursuant thereto to comply
with any law or regulation of any governmental authority.

 

11.           No Rights as Shareholder. No optionee shall have rights as a
shareholder with respect to shares covered by his Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 12 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date therefor is prior to the date of issuance of
such certificate.

 

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12.           Changes in the Company’s Capital Structure. In the event of any
stock dividends, stock splits, recapitalizations, combinations, exchanges of
shares, mergers, consolidation, liquidations, split-ups, split-offs, spin-offs,
or other similar changes in capitalization, or any distribution to shareholders,
including a rights offering, other than regular cash dividends, changes in the
outstanding stock of the Company by reason of any increase or decrease in the
number of issued shares of Common Stock resulting from a split-up or
consolidation of shares or any similar capital adjustment or the payment of any
stock dividend, any share repurchase at a price in excess of the market price of
the Common Stock at the time such repurchase is announced or other increase or
decrease in the number of such shares, the Committee shall make appropriate
adjustment in the aggregate number and kind of shares authorized by the Plan, in
the number and kind of shares covered by Options subsequently granted under
Paragraph 4 and in the number, kind and price of any outstanding Options granted
under the Plan (or, if deemed appropriate, the Committee may make provision for
a payment of cash or property to the holder in cancellation of an outstanding
Option with respect to which Common Stock has not been previously issued);
provided, however, that no such adjustment shall increase the aggregate value of
any outstanding Option.

 

In the event of any adjustment in the number of shares covered by any Option,
any fractional shares resulting from such adjustment shall be disregarded and
each such Option shall cover only the number of full shares resulting from such
adjustment.

 

13.           Amendment or Termination of Plan. The Board may at any time and
from time to time modify, revise or amend the Plan in such respects as the Board
may deem advisable in order that the Options granted hereunder may conform to
any changes in the law or in any other respect that the Board may deem to be in
the best interests of the Company; provided, however, that without approval by
the shareholders of the Company, no such amendment shall make any change in the
Plan for which shareholder approval is required in order to comply with any
rules for listed companies promulgated by any national securities exchange on
which the Common Stock is traded or any other applicable rule or law. Without
limiting the foregoing, the Board may, in its sole discretion and without
further approval by the shareholders of the Company, amend the Plan to increase
or decrease the number of shares of Common Stock covered by Options subsequently
granted under Paragraph 4. All Options granted under the Plan shall be subject
to the terms and provisions of the Plan and any amendment, modification or
revision of the Plan shall be deemed to amend, modify or revise all Options
outstanding under the Plan at the time of the amendment, modification or
revision. The Board may terminate the Plan at any time. The rights of any
optionee with respect to any Option granted under the Plan that is outstanding
at the time of the termination of the Plan shall not be affected solely by
reason of the termination of the Plan and shall continue in accordance with the
terms of the Option and of the Plan.

 

14.           Written Agreement. Each Option granted hereunder shall be embodied
in a written option agreement, which shall be subject to the terms and
conditions prescribed above, and shall be signed by the optionee and by the
appropriate officer of the Company for and in the name and on behalf of the
Company. Such an option agreement shall contain such other provisions as the
Committee in its discretion shall deem advisable.

 

15.           Indemnification of Committee. The Company shall indemnify each
present and future member of the Committee against, and each member of the
Committee shall be entitled without further act on his part to indemnity from
the Company for, all expenses (including the amount of judgments and the amount
of approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to the Company itself) reasonably incurred
by him in connection with or arising out of any action, suit or proceeding in
which he may be involved by reason of his being or having been a member of the
Committee, whether or not he continues to be such member of the Committee at the
time of incurring such expenses; provided, however, that such indemnity shall
not include any expenses incurred by any such member of the Committee (a) in
respect of matters as to which he shall be finally adjudged in any such action,
suit or proceeding to have been guilty of gross negligence or willful misconduct
in the performance of his duty as such member of the Committee, or (b) in
respect of any matter in which any settlement is effected, to an amount in
excess of the amount approved by the Company on the advice of

 

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its legal counsel; and provided further, that no right of indemnification under
the provisions set forth herein shall be available to or enforceable by any such
member of the Committee unless, within sixty (60) days after institution of any
such action, suit or proceeding, he shall have offered the Company, in writing,
the opportunity to handle and defend same at its own expense. The foregoing
right of indemnification shall inure to the benefit of the heirs, executors or
administrators of each such member of the Committee and shall be in addition to
all other rights to which such member of the Committee may be entitled to as a
matter of law, contract, or otherwise. Nothing in this Paragraph 15 shall be
construed to limit or otherwise affect any right to indemnification, or payment
of expense, or any provisions limiting the liability of any officer or director
of the Company or any member of the Committee, provided by law, the Articles of
Incorporation of the Company or otherwise.

 

16.           Effective Date of Plan. The Plan shall become effective the first
business day following its approval by the shareholders of the Company.

 

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