Document:

Exhibit 4.1

 

	
  REGISTERED

  	
   

  	
  REGISTERED

  

 

	
  NO.
  FXR- 1

  	
   

  	
  MEDIUM-TERM NOTE, SERIES D

  	
   

  	
  PRINCIPAL AMOUNT:

  
	
   

  	
   

  	
  (Fixed Rate)

  	
   

  	
  U.S.$500,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  CUSIP:
  25468PCK0

  

 

Unless and until
it is exchanged in whole or in part for Notes in definitive form, this Note may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Unless this
certificate is presented by an authorized representative of The Depository
Trust Company, New York, New York (“DTC”), to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC and any payment is made to Cede &
Co. or such other entity as requested by an authorized representative of DTC,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
as interest herein.

 

	
  ORIGINAL ISSUE
  DATE: March 16, 2009

  	
   

  	
  INTEREST RATE:
  5.50% per annum

  
	
  MATURITY DATE:
  March 15, 2019

  	
   

  	
  EARLIEST REDEMPTION
  DATE: March 16, 2009

  
	
  ORIGINAL ISSUE
  PRICE: 99.818%

  	
   

  	
  INTEREST PAYMENT
  DATES: March 15 and September 15, commencing September 15,
  2009

  
	
   

  	
   

  	
  REDEMPTION
  PRICE: See paragraph 10 below 

  ADDITIONAL AMOUNTS: This Note is subject to payment of Additional Amounts. See
  paragraphs 11 and 12 below

  

 

 

Date:

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is one of the
Notes of the series designated herein referred to in the within-mentioned
Indenture.

 

	
  WELLS
  FARGO BANK, N.A., as Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  

 

 

THE WALT DISNEY COMPANY,
a corporation duly organized and existing under the laws of the State of
Delaware (herein referred to as the “Company”), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the Principal
Amount specified above on the Maturity Date specified above and to pay interest
thereon from the Original Issue Date specified above or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually in arrears as specified in the Pricing Supplement, in each year,
commencing with the first Interest Payment Date next succeeding the Original
Issue Date, at the rate per annum set forth above, until the principal hereof
is paid or made available for payment; provided, however,
that if the Original Issue Date of this Note is between a Regular Record Date
and the related Interest Payment Date, the first payment of interest on this
Note will be made on the Interest Payment Date immediately following the next
succeeding Regular Record Date to the registered Holder on such next succeeding
Regular Record Date. Interest payments for this Note will include interest
accrued to but excluding the Interest Payment Date. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture (as defined below), be paid to the Person in whose
name this Note (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date, as specified in the Pricing
Supplement (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date; provided, however,
that interest payable at Maturity shall be payable to the Person to whom
principal shall be payable. If any Interest Payment Date or Maturity with
respect to this Note falls on a day that is not a Business Day, the payment due
on such Interest Payment Date or at Maturity will be made on the following day
that is a Business Day as if it were made on the date such payment was due and
no interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date or Maturity, as the case may be.  Interest on this Note will be computed on the
basis of a 360-day year of twelve 30-day months.  Except as otherwise provided in the
Indenture, any interest not punctually paid or duly provided for on any
Interest Payment Date (herein called “Defaulted Interest”) will forthwith cease
to be payable to the Holder on the Regular Record Date with respect to such
Interest Payment Date and may either be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee (as defined below), notice of which shall be given to
Holders of Notes not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Payment of the principal of and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose, initially designated to be the Corporate Trust Office of the Trustee
in Los Angeles, California, and at such additional offices or agencies as the
Company may designate, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option
of the Company, payments of principal of and interest on this Note may be made
by check mailed to the address of the Person entitled thereto as such address
shall appear in the register of Securities or by wire transfer of immediately
available funds to the account of the Holder of this Note if appropriate wire
transfer instructions have been received in writing by the Trustee not less
than 15 days prior to the applicable payment date. Notwithstanding the
foregoing, the Company will make payments of interest on any Interest Payment
Date other than the Maturity Date to each registered Holder of $10,000,000 (or,
if the payment currency is other than United States dollars, the equivalent
thereof in the particular payment currency) or more in aggregate principal
amount of definitive Notes (whether having identical or different terms and
provisions) by wire transfer of immediately available funds if the applicable
registered Holder has delivered appropriate wire transfer instructions in
writing to the Trustee not less than 15 days prior to the particular Interest
Payment Date.  Any wire transfer
instructions received by the Trustee shall remain in effect until revoked by
the applicable registered Holder.

 

Reference is hereby made to the further provisions of this Note set
forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by
the Trustee or its duly appointed co-authenticating agent by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

 

2

 

This Note is one of a duly authorized issue of securities (herein
called the “Securities”) of the Company (which term includes any successor
corporation under the Indenture hereinafter referred to) issued and to be
issued pursuant to such Indenture. This Security is one of a series designated
by the Company as its Medium-Term Notes, Series D. The Indenture does not
limit the aggregate principal amount of the Securities.

 

The Company issued this Note pursuant to an Indenture, dated as of September 24,
2001 (herein called the “Indenture”), between the Company and Wells Fargo Bank,
N.A., a national banking association, as trustee (herein called the “Trustee,”
which term includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and Holders of the Notes and
of the terms upon which the Notes are, and are to be, authenticated and
delivered.

 

The Notes are issuable as Registered Securities, without coupons, in
denominations of $2,000 and any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, Notes are exchangeable for a like aggregate
principal amount of Notes of like tenor of any authorized denomination, as
requested by the Holder surrendering the same, upon surrender of the Note or
Notes to be exchanged at any office or agency described below where Notes may
be presented for registration of transfer.

 

The
Company may from time to time, without the consent of existing Note Holders,
issue additional Notes having the same terms and conditions (including maturity
and interest payment terms) as previously issued Notes in all respects, except
for issue date, issue price and the first payment of interest.  Additional Notes issued in this manner will
be fungible with the previously issued Notes to the extent specified in the
applicable Pricing Supplement.

 

This Note may not be redeemed prior to the Earliest Redemption Date set
forth above. If no Earliest Redemption Date is so set forth, this Note is not
redeemable prior to the Maturity Date. This Note is redeemable at any time on
or after the Earliest Redemption Date set forth above at the option of the
Company, in whole or from time to time in part, upon not less than 30 nor more
than 60 days’ notice mailed to the registered Holder hereof, at the Redemption
Price equal to the amount set forth below, together in each case with accrued
interest to but excluding the Redemption Date.

 

Notwithstanding the preceding paragraph, installments of interest whose
Stated Maturity is prior to the Redemption Date of any Note will be payable to
the Holder of such Note, or one or more Predecessor Securities, of record at
the close of business on the relevant Regular Record Dates referred to above,
all as provided in the Indenture.

 

The Redemption Price shall be equal to the greater of the following
amounts: (1) 100% of the principal amount of the Notes to be redeemed; or (2) as
determined by the Independent Investment Banker (as defined below), the sum of
the present values of the remaining scheduled payments of principal and
interest on the Notes to be redeemed (not including any portion of any payments
of interest accrued as of the Redemption Date) discounted to the Redemption
Date on a semiannual basis at the Treasury Rate (as defined below) plus 37.5
basis points.  The Redemption Price will
be calculated assuming a 360-day year consisting of twelve 30-day months. For
purposes of calculating the Redemption Price, the terms below shall have the
following meanings:

 

“Treasury Rate” means, with respect to any Redemption Date, the rate
per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.

 

The Treasury Rate will be calculated on the third Business Day
preceding the Redemption Date.

 

3

 

“Comparable Treasury Issue” means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the Notes to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of those Notes.

 

“Comparable Treasury Price” means, with respect to any Redemption Date,
(i) the average of five Reference Treasury Dealer Quotations for that
redemption date, after excluding the highest and lowest of those Reference
Treasury Dealer Quotations, or (ii) if the Independent Investment Banker
obtains fewer than five such Reference Treasury Dealer Quotations, the average
of all of those quotations.

 

“Independent Investment Banker” means one of Deutsche Bank Securities
Inc., HSBC Securities (USA) Inc. or J.P. Morgan Securities Inc., and their
respective successors appointed by the Company to act as the Independent
Investment Banker, from time to time, or if any such firm is unwilling or
unable to serve in that capacity, an independent investment and banking
institution of national standing appointed by the Company.

 

“Reference Treasury Dealer” means: (i) Deutsche Bank Securities
Inc., HSBC Securities (USA) Inc. and 
J.P. Morgan Securities Inc., and their respective successors; provided
that, if any such firm ceases to be a primary U.S. Government securities dealer
in New York City (“Primary Treasury Dealer”), the Company will substitute
another Primary Treasury Dealer; and (ii) up to two other Primary Treasury
Dealers selected by the Company.

 

“Reference Treasury Dealer Quotation” means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined
by the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker by
such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the
third Business Day preceding that Redemption Date.

 

In the event this Note is subject to payment of Additional Amounts (as
defined below) as specified above, the Company will, subject to certain
exceptions and limitations set forth below, pay to the Holder of hereof who is
a United States Alien, as additional interest, such amounts (“Additional
Amounts”) as may be necessary in order that every net payment on this Note
(including payment of the principal of and interest on such this Note) by the
Company or a Paying Agent, after deduction or withholding for or on account of
any present or future tax, assessment or other governmental charge imposed upon
or as a result of such payment by the United States (or any political
subdivision or taxing authority thereof or therein), will not be less than the
amount provided in this Note to be then due and payable; provided, however,
that the foregoing obligation to pay Additional Amounts will not apply to:

 

(a)                                  any tax, assessment or other governmental charge that would not have
been so imposed but for (i) the existence of any present or former
connection between such Holder or beneficial owner of this Note (or between a
fiduciary, settlor or beneficiary of, or a person holding a power over, such
Holder, if such Holder is an estate or a trust, or a member or shareholder of
such Holder, if such Holder is a partnership or corporation) and the United
States or any political subdivision or taxing authority thereof or therein,
including, without limitation, such Holder (or such fiduciary, settlor, beneficiary,
person holding a power, member or shareholder) being or having been a citizen
or resident of the United States or treated as a resident thereof or being or
having been engaged in a trade or business or present therein or having or
having had a permanent establishment therein or (ii) such Holder’s or
beneficial owner’s past or present status, as applicable (under prior or
current law), as a personal holding company, foreign personal holding company,
foreign private foundation or other foreign tax-exempt organization with
respect to the United States, passive foreign investment company or controlled
foreign corporation for United States tax purposes or corporation that
accumulates earnings to avoid United States Federal income tax;

 

4

 

(b)                                 any estate, inheritance, gift, excise, sales, transfer, wealth or
personal property tax or any similar tax, assessment or other governmental
charge;

 

(c)                                  any tax, assessment or other governmental charge that would not have
been imposed but for the presentation by the Holder of this Note for payment
more than 10 days after the date on which such payment became due and
payable or the date on which payment thereof was duly provided for, whichever
occurred later;

 

(d)                                 any tax, assessment or other governmental charge that is payable
otherwise than by withholding from a payment on this Note;

 

(e)                                  any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from a payment on this  Note, if such payment could be made without
such withholding by any other Paying Agent;

 

(f)                                    any tax, assessment or other governmental charge that would not have
been imposed but for a failure to comply with applicable certification,
information, documentation, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the United
States of the Holder or beneficial owner of this Note if such compliance is
required by statute or regulation of the United States or by an applicable tax
treaty to which the United States is a party as a precondition to relief or
exemption from such tax, assessment or other governmental charge;

 

(g)                                 any tax, assessment or other governmental charge imposed on a Holder
that actually or constructively owns 10 percent or more of the combined
voting power of all classes of the Company’s stock or that is a bank receiving
interest on an extension of credit made pursuant to a loan agreement entered
into in the ordinary course of its trade or business;

 

(h)                                 any withholding or deduction imposed on a payment to an individual
where such withholding or deduction is required to be made pursuant to Council
Directive 2003/48/EC or any other European Union Directive implementing the
conclusions of the ECOFIN Council meeting of 26th — 27th November,
2000 on the taxation of savings income or any law implementing or complying
with, or introduced in order to conform to, such Directive; or

 

(i)                                     any combination of items (a), (b), (c), (d), (e), (f), (g) and
(h);

 

nor shall Additional Amounts be paid with respect to a payment on this
Note to a Holder that is a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
would not have been entitled to Additional Amounts (or payment of Additional
Amounts would not have been necessary) had such beneficiary, settlor, member or
beneficial owner been the Holder of this Note.

 

If (a) as a result
of any change in, or amendment to, the laws (or any regulations or rulings
promulgated thereunder) of the United States (or any political subdivision or
taxing authority thereof or therein), or any change in the official application
(including a ruling by a court of competent jurisdiction in the United States)
or interpretation of such laws, regulations or rulings, which change or
amendment is announced or becomes effective on or after the Original Issue Date
specified above, the Company becomes or will become obligated to pay Additional
Amounts as described above, or (b) any act is taken by a taxing authority
of the United States on or after the Original Issue Date specified above,
whether or not such act is taken with respect to the Company or any affiliate,
that results in a substantial likelihood that the Company will or may be
required to pay such Additional Amounts, then the Company may, at its option,
redeem, as a whole, but not in part, the Notes on not less than 30 nor more
than 60 days’ prior notice, at a redemption price equal to 100% of the
principal amount of such Notes, together with interest accrued thereon to the
date fixed for redemption; provided that the Company determines, in its
business judgment, that the obligation to pay such Additional Amounts cannot be
avoided by the use of reasonable measures available to it, not including
substitution of the obligor under the Notes or any action that would entail a
material cost to the Company. No redemption pursuant to (b) above may be
made unless the Company shall have received an opinion of 

 

5

 

independent counsel to the effect that an act taken by a taxing
authority of the United States results in a substantial likelihood that it will
or may be required to pay Additional Amounts described above and the Company
shall have delivered to the Trustee a certificate, signed by a duly authorized
officer, stating that based on such opinion the Company is entitled to redeem
the Notes pursuant to their terms.

 

All notices of redemption shall state the Redemption Date, the
Redemption Price, if fewer than all the outstanding Notes with the same
Original Issue Date, Interest Rate and Stated Maturity are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts)
of Notes to be redeemed, that on the Redemption Date the Redemption Price will
become due and payable upon each Note, or portion thereof, to be redeemed, that
interest on each Note, or portion thereof, called for redemption will cease to
accrue on and including the Redemption Date and the place or places where Notes
may be surrendered for redemption. However, payment of the Redemption Price,
together with accrued interest to but excluding the Redemption Date, for a Note
for which a redemption notice has been delivered is conditioned upon delivery
of such Note (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing) to the office or agency of the Company maintained for
that purpose, initially designated to be the Corporate Trust Office of the
Trustee in Los Angeles, California, and at such additional offices or agencies
as the Company may designate, at any time (whether prior to, on or after the
Redemption Date) after delivery of the redemption notice.  Payment of the Redemption Price for the Note
(or portion thereof to be redeemed), together with accrued interest to the
Redemption Date, will be made on the later of the Redemption Date or promptly
following the time of delivery of the Note. 
If fewer than all of the Notes with the same Original Issue Date,
Interest Rate and Stated Maturity are to be redeemed at any time, selection of
such Notes for redemption will be made by the Trustee by such method as the
Trustee shall deem fair and appropriate.

 

In the event of redemption of this Note in part only, a new Note or
Notes of like tenor for the aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Notes so surrendered will be
issued in the name of the Holder hereof upon the cancellation hereof.

 

For all purposes of this Note and the Indenture, unless the context
otherwise requires, all provisions relating to the redemption by the Company of
Notes shall relate, in the case of any Notes redeemed or to be redeemed by the
Company only in part, to the portion of the principal amount of such Notes which
has been or is to be so redeemed.

 

If an Event of
Default with respect to the Notes shall occur and be continuing, the principal
of the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.

 

The Indenture permits,
in certain circumstances therein specified, the amendment thereof without the
consent of the Holders of the Securities. The Indenture also permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations under the Indenture of the Company
and the rights of Holders of the Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent of
the Holders of a majority in aggregate principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all the Securities of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.

 

No reference
herein to the Indenture and no provision of this Note or, subject to the
provisions for satisfaction and discharge in Article Eight of the
Indenture, of the Indenture, shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.

 

6

 

As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
Notes is registrable in the register of Securities, upon surrender of a Note
for registration of transfer at the office or agency of the Company maintained
for that purpose, initially designated to be the Corporate Trust Office of the
Trustee in Los Angeles, California, and at such additional offices or agencies
as the Company may designate, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

 

No service charge
shall be made by the Company, the Trustee or the Registrar for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in connection
therewith (other than exchanges pursuant to Sections 2.11, 3.6, 9.5 or 10.3 of
the Indenture, not involving any transfer).

 

Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.

 

The Indenture and
the Notes shall be governed by and construed in accordance with the laws of the
State of New York, including without limitation, §§ 5-1401 and 5-1402 of
the New York General Obligations Law and New York Civil Practice Law Rule 327(b).

 

All undefined
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

 

7

 

IN WITNESS
WHEREOF, The Walt Disney Company has caused this Instrument to be signed by the
signature or facsimile signature of its Chairman of the Board, one of its Vice
Chairmen, its President or one of its Vice Presidents, or its Treasurer or any
Assistant Treasurer and attested by its Secretary or one of its Assistant
Secretaries by his or her signature or a facsimile thereof, and its corporate
seal or a facsimile of its corporate seal to be affixed hereunto or imprinted
hereon.

 

	
  (SEAL)

  	
  THE
  WALT DISNEY COMPANY

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Christine M.
  McCarthy

  
	
   

  	
  Title:

  	
  Executive Vice
  President-Corporate Finance and Real Estate and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Marsha L. Reed

  	
   

  
	
  Title:

  	
  Vice
  President-Governance Administration and Assistant Secretary

  	
   

  

 

8

 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

 

	
  TEN COM v as
  tenants in common

  	
  UNIF GIFT MIN ACT
  ______ Custodian _______

  
	
   

  	
   

  	
  (Cust.)
                  
  (Minor)

  
	
  TEN ENT v as tenants by the entireties

  	
   

  
	
   

  	
  Under Uniform
  Gifts to Minors Act

  
	
  JT TEN v as joint tenants with right

  	
   

  
	
  of survivorship and not as tenants 

  	
   

  
	
  in common

  	
  (State)

  

 

Additional
abbreviations may also be used though not in the above list.

 

 

FOR VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

Please Insert
Social Security or Employer

Identification
Number of Assignee

 

	
               -             -             

  	
   

  

 

 

Please Print or
Typewrite Name and Address

Including Postal
Zip Code of Assignee

 

 

the within
Security and all rights thereunder, hereby irrevocably constituting and
appointing                                                                                                
attorney to transfer said Security on the books of the Company, with full power
of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  

 

NOTICE:                                             The
signature to this assignment must correspond with the name as it appears upon
the face of the within Note in every particular, without alteration or
enlargement or any change whatever.EXHIBIT
10.13

 

RUSH
ENTERPRISES, INC.

2007 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT

FOR EMPLOYEES

(Time Vesting - Graded)

 

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made
as of March 14, 2008 by and between Rush Enterprises, Inc.  (the “Company”) and
                                                      
(“Employee”).

 

1.             GRANT OF RESTRICTED SHARES.  Pursuant to the Rush Enterprises, Inc.
2007 Long-Term Incentive Plan (the “Plan”) Employee is hereby awarded
                  
shares (the “Restricted
Shares”) of Common Stock. 
All of the Restricted Shares shall be subject to the prohibition on the
transfer of the Restricted Shares and the obligations to forfeit the Restricted
Shares to the Company as set forth in Section 3 of this Agreement (“Forfeiture
Restrictions”).

 

2.             EFFECT OF THE PLAN. 
The Restricted Shares awarded to Employee are subject to all of the
terms and conditions of the Plan, which terms and conditions are incorporated
herein for all purposes, and of this Agreement together with all rules and
determinations from time to time issued by the Committee and by the Board
pursuant to the Plan.  The Company hereby
reserves the right to amend, modify, restate, supplement or terminate the Plan
without the consent of Employee, so long as such amendment, modification,
restatement or supplement shall not materially reduce the rights and benefits
available to Employee hereunder, and this Award shall be subject, without
further action by the Company or Employee, to such amendment, modification,
restatement or supplement unless provided otherwise therein.  Capitalized terms used but not defined in
this Agreement shall have the meanings ascribed to such terms in the Plan.

 

3.             RESTRICTIONS. 
Employee hereby accepts the Award of the Restricted Shares and agrees
with respect thereto as follows:

 

(a)           No Transfer. 
Unless otherwise determined by the Committee and provided in this
Agreement or the Plan, the Restricted Shares shall not be sold, assigned,
pledged, exchanged, hypothecated or otherwise transferred except by will or the
laws of decent and distribution.  The
Forfeiture Restrictions shall be binding upon and enforceable against any
permitted transferee of the Restricted Shares. 
The Company shall not be required (i) to transfer on its books any
Restricted Shares that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement or the Plan, or (ii) to treat as
owner of such Restricted Shares, or accord the right to vote or pay or deliver
dividends or other distributions to, any purchaser or other transferee to whom
or which such Restricted Shares shall have been so transferred in violation of
any of the provisions of this Agreement or the Plan.

 

(b)           Mandatory Mediation and Arbitration Procedure. By execution of this Agreement and
acceptance of this Award, which is a voluntary benefit provided to the
Employee 

 

by
the Company, the Employee waives the Employee’s right to a jury trial in state
or federal court and agrees that disputes arising under this Agreement must first be submitted for
non-binding mediation before a neutral third party.  Any such mediation shall be conducted and
administered by the American Arbitration Association (“AAA”) pursuant to such procedures as the AAA may from time to time
establish, such procedures being incorporated herein by reference.  If a dispute remains unresolved at the
conclusion of the mediation process, either party may submit the dispute for
resolution by final binding arbitration. 
The arbitration will be conducted under the employment Dispute
Resolution Rules of the AAA, as amended (“Rules”).  These Rules, incorporated by reference
herein, include (but are not limited to) the procedures for the joint selection
of an impartial arbitrator and for the hearing of evidence before the
arbitrator.  The arbitrator shall have
the authority to allow for appropriate discovery and exchange of information
prior to a hearing, including (but not limited to) production of documents,
information requests, depositions, and subpoenas.  By
execution of this Agreement, however, the Employee does not waive the
Employee’s right to any normally available remedies the Employee may have in
connection with any claim the Employee may bring against the Company, as an
arbitrator can award any normal remedies the Employee could get in a court
proceeding. By execution of this Agreement, the Employee represents that to the
extent the Employee considered necessary, the Employee has sought, at the
Employee’s own expense, counsel regarding the terms of this Agreement and
the waiver contemplated in this paragraph (b) of Section 3.   If this arbitration
provision is found inapplicable, then either party may file suit and
each party agrees that any suit, action, or proceeding arising out of or
relating to this Agreement shall be brought in the United States District Court
for the Western District of Texas (or should such court lack
jurisdiction to hear such action, suit or proceeding, in a Texas State
court in Bexar County, Texas) and that the parties shall submit to
the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection a party may have to the
laying of venue for any such suit, action or proceeding brought in such court.  THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR
PROCEEDING.

 

(c)           Forfeiture of Restricted Shares.  If Employee terminates service with the
Company and its Subsidiaries prior to March 14, 2009 (the “Restriction
Lapse Date”) for any reason other than Employee’s death, Disability or a
decision to Retire, or if Employee (or
Employee’s estate) shall initiate a legal proceeding against the Company other
than pursuant to the terms of paragraph (b) of this Section 3,
then Employee (or Employee’s estate, as applicable) shall, for no
consideration, forfeit to the Company all Restricted Shares.  If after the Restriction Lapse Date Employee
terminates service with the Company and its Subsidiaries for any reason other
than Employee’s death, Disability or a decision to Retire, then Employee shall,
for no consideration, forfeit to the Company all Restricted Shares with respect
to which the Forfeiture Restrictions have not lapsed pursuant to paragraph (d) of
this Section 3 as of the effective date of such termination of
service.  Notwithstanding the forgoing,
the Committee or its designee may, in the Committee’s or the designee’s sole
and absolute discretion, as applicable, provide for the acceleration of the
vesting of the Restricted Shares, eliminate or make less restrictive any
restrictions contained in this Agreement, waive any restriction or other
provision of the Plan or this Agreement or otherwise amend or modify this
Agreement in any manner that is either (i) not adverse to Employee, or (ii) consented
to by Employee.

 

(d)           Lapse of Forfeiture Restrictions.  If Employee provides continuous, eligible
service to the Company and its Subsidiaries as determined by the Committee or
its 

 

2

 

designee, in the Committee’s
or the designee’s sole and absolute discretion, as
applicable, the Forfeiture Restrictions will lapse with respect to one-third
(33.33%) of the Restricted Shares on the Restriction Lapse Date; an additional
one-third (33.33%) of the Restricted Shares on the first anniversary of the
Restriction Lapse Date; an additional one-third (33.33%) on the second
anniversary of the Restriction Lapse Date. 
If the number of Restricted Shares with respect to which the Forfeiture
Restrictions would lapse as of any particular anniversary of the Restriction
Lapse Date results in the Forfeiture Restrictions lapsing with respect to a
fractional Restricted Share, such installment will be rounded to the next whole
Restricted Share, as determined by the Company, except the final installment,
which will be for the balance of the Restricted Shares with respect to which
the forfeiture restrictions have lapsed.

 

(e)           Death or Disability or
Retirement.  If Employee shall die or be subject to
Disability (as defined in Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended (the “Code”)) while employed by the Company and its
Subsidiaries or choose to Retire (defined as termination by the Employee of the
Employee’s employment relationship with the Company or any of its subsidiaries
after 10 years of employment with the Company and attaining the age of 60), the
Forfeiture Restrictions of the Restricted Shares granted hereunder (unless
previously terminated pursuant to paragraph (c) of this Section 3)
will lapse pursuant to the following: (i) in the case of death or
Disability while employed by the Company and its Subsidiaries or after Employee
chooses to Retire (so long as Employee does not become employed by a “competitor”
of the Company), the Forfeiture Restrictions will lapse for all of the
Restricted Shares; and (ii) in the case Employee chooses to Retire, for so
long as Employee does not become employed by a “competitor” of the Company, the
Forfeiture Restrictions shall continue to lapse pursuant to paragraph (d) of
this Section 3.  A determination as to whether the Employee has
become employed by a “competitor,” and the definition of “competitor,” shall be
made by the Committee, in its sole discretion.  In the event Employee
becomes employed by a “competitor,” then Employee’s continuous, eligible
service to the Company will be deemed to terminate on the date Employee is
employed by a “competitor” and the provisions of Paragraph (d) of this Section 3
shall apply to determine whether any Forfeiture Restrictions have lapsed.

 

(f)            Change in Control.  If a Change in Control occurs during the term
of this Agreement, the Forfeiture Restrictions will lapse with respect to one
hundred percent (100%) of the Restricted Shares.

 

(g)           Dividend and Voting Rights.  Subject to the Forfeiture Restrictions
contained in this Agreement, Employee
shall have the rights of a stockholder with respect to the Restricted Shares,
including the right to vote all such Restricted Shares, whether or not the
Forfeiture Restrictions have lapsed with respect to such Shares, and to receive
all dividends, cash or stock, paid or delivered thereon, from and after the
date hereof.  Any dividends, cash or
stock, paid or delivered on any of the Restricted Shares shall be credited to
an account for the benefit of Employee. 
In the event of the forfeiture of any Restricted Shares pursuant to this
Section 3, Employee shall have no further rights with respect to such
Restricted Shares, and Employee shall forfeit any dividends, cash or stock,
credited to the account for the benefit of Employee which are related to the
forfeited Restricted Shares.  To the
extent the Forfeiture Restrictions lapse with respect to any of the Restricted
Shares pursuant to this Section 3, all dividends, cash and stock, if any,
credited to the account for the benefit of Employee shall be used, to the
extent necessary, to satisfy any applicable federal, state and local income and
employment tax withholding obligations under Section 6 of this
Agreement.  To the extent any dividends,
cash or stock, are 

 

3

 

not
used to satisfy any applicable federal, state and local income and employment
tax withholding obligations under Section 6 of this Agreement, such
dividends, cash or stock, will be distributed to Employee.  The forfeiture of the Restricted Shares
pursuant to this Section 3 shall not invalidate any votes given by
Employee with respect to such Restricted Shares prior to forfeiture.

 

(h)           Evidence of Ownership.  Evidence of the Award of the Restricted
Shares pursuant to this Agreement may be accomplished in such manner as the
Company or its authorized representatives shall deem appropriate including,
without limitation, electronic registration, book-entry registration or
issuance of a stock certificate or certificates in the name of Employee or in
the name of such other party or parties as the Company and its authorized
representatives shall deem appropriate. 
In the event any stock certificate is issued in respect of the
Restricted Shares, while such shares are still subject to the Forfeiture
Restrictions such certificate shall bear an appropriate legend with respect to
the Forfeiture Restrictions applicable to such Award.  The Company may retain, at its option, the
physical custody of any stock certificate representing any awards of Restricted
Shares during the restriction period or require that the certificates
evidencing Restricted Shares be placed in escrow or trust, along with a stock
power endorsed in blank, until all Forfeiture Restrictions are removed or
expire.  In the event the Award of the
Restricted Shares is documented or recorded electronically, the Company and its
authorized representatives shall ensure that Employee is prohibited from selling,
assigning, pledging, exchanging, hypothecating or otherwise transferring the
Restricted Shares while such shares are still subject to the Forfeiture
Restrictions.

 

Upon the lapse of the
Forfeiture Restrictions pursuant to this Section 3, the Company or, at the
Company’s instruction, its authorized representative shall release those
Restricted Shares with respect to which the Forfeiture Restrictions have
lapsed.  The lapse of the Forfeiture
Restrictions and the release of the Restricted Shares shall be evidenced in
such a manner as the Company and its authorized representatives deem
appropriate under the circumstances.

 

At the Company’s request,
Employee shall execute and deliver, as necessary, a stock power, in blank, with
respect to the Restricted Shares, and the Company may, as necessary, exercise
such stock power in the event of the forfeiture of any Restricted Shares
pursuant to this Agreement, or as may otherwise be required in order for the
Company to withhold the Restricted Shares necessary to satisfy any applicable
federal, state and local income and employment tax withholding obligations
pursuant to Section 6 of this Agreement.

 

4.             COMMUNITY INTEREST OF SPOUSE.  The community interest, if any, of any spouse
of Employee in any of the Restricted Shares shall be subject to all of the terms,
conditions and restrictions of this Agreement and the Plan, and shall be
forfeited and surrendered to the Company upon the occurrence of any of the
events requiring Employee’s interest in such Restricted Shares to be so
forfeited and surrendered pursuant to this Agreement.

 

5.             BINDING EFFECT. 
This Agreement shall be binding upon and inure to the benefit of any
successors to the Company and all persons lawfully claiming under Employee.

 

6.             TAX MATTERS.

 

(a)           The lapsing of the Forfeiture
Restrictions with respect to the Restricted Shares pursuant to Section 3
of this Agreement shall be subject to the satisfaction of all 

 

4

 

applicable federal, state
and local income and employment tax withholding requirements (the “Required
Withholding”).  By execution of this
Agreement, Employee shall be deemed to have authorized the Company, after taking into consideration any
dividends, cash or stock, credited to an account for the benefit of Employee,
as contemplated in paragraph (g) of Section 3, to withhold the
Restricted Shares with respect to which the Forfeiture Restrictions have lapsed
necessary to satisfy Employee’s Required Withholding, if any.  The amount of the Required Withholding and
the number of Restricted Shares required to satisfy Employee’s Required
Withholding, if any, as well as the amount reflected on tax reports filed by
the Company, shall be based on the closing price of the Common Stock on the day
the Forfeiture Restrictions lapse pursuant to Section 3 of this
Agreement.  Notwithstanding the
foregoing, the Company may require that Employee satisfy Employee’s Required
Withholding, if any, by any other means the Company, in its sole discretion,
considers reasonable.  The obligations of
the Company under this Agreement shall be conditioned on such satisfaction of
the Required Withholding.

 

(b)           Employee acknowledges that the tax
consequences associated with the Award are complex and that the Company has
urged Employee to review with Employee’s own tax advisors the federal, state,
and local tax consequences of this Award. 
Employee is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents.  Employee understands that Employee (and not
the Company) shall be responsible for Employee’s own tax liability that may
arise as a result of this Agreement. 
Employee understands further that Section 83 of the Code, taxes as
ordinary income the fair market value of the Restricted Shares with respect to
which the Forfeiture Restrictions lapse pursuant to this Agreement.

 

IN WITNESS WHEREOF, the Company has caused
this Agreement to be duly executed by an authorized officer and Employee has
executed this Agreement, all as of the date first above written.

 

 

5

 

RUSH
ENTERPRISES, INC.

 

W.M. “Rusty” Rush, 

Chief Executive Officer and President

 

EMPLOYEE ACKNOWLEDGES AND
AGREES THAT THE SHARES SUBJECT TO THIS RESTRICTED STOCK AWARD SHALL REMAIN
SUBJECT TO THE FORFEITURE RESTRICTIONS PROVIDED FOR IN THIS AGREEMENT AND THE
FORFEITURE RESTRICTIONS SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF
EMPLOYEE’S SERVICE TO THE COMPANY OR AS OTHERWISE PROVIDED IN THIS AGREEMENT
(NOT THROUGH THE ACT OF BEING GRANTED THE RESTRICTED STOCK AWARD).  EMPLOYEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT OR THE PLAN SHALL CONFER UPON EMPLOYEE ANY RIGHT WITH
RESPECT TO FUTURE AWARDS OR CONTINUATION OF EMPLOYEE’S SERVICE TO THE
COMPANY.  Employee acknowledges receipt
of a copy of the Plan, represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Restricted Stock Award subject to
all of the terms and provisions hereof and thereof.  Employee has reviewed this Agreement and the
Plan in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Agreement, and fully understands all provisions of this
Agreement and the Plan.

 

 

 

DATED:                                                                                 SIGNED:                                                                                                

                                                                                                                        EMPLOYEE

 

 

 

6

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