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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