Exhibit 10.3
THOR INDUSTRIES, INC.
2006 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
     This Stock Option Agreement (the “Agreement”) is made and entered into as
of the date of grant set forth below (the “Date of Grant”) by and between Thor
Industries, Inc., a Delaware corporation (the “Company”), and the participant
named below (“Participant”). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Company’s 2006 Equity Incentive Plan (the
“Plan”).

         
Participant:
       
 
       
Address:
       
 
       
 
       
 
       
Total Option Shares:
       
 
       
Exercise Price Per Share:
       
 
       
Date of Grant:
       
 
       
Expiration Date:
       
 
       

     
Type of Stock Option
   
(Check One):
  o Incentive Stock Option
 
  o Nonstatutory Stock Option

     1. Grant of Option. The Company hereby grants to Participant an option
(this “Option”) to purchase the total number of shares of Common Stock of the
Company set forth above as Total Option Shares (the “Shares”) at the Exercise
Price Per Share set forth above (the “Exercise Price”), subject to all of the
terms and conditions of this Agreement and the Plan. If designated as an
Incentive Stock Option above, the Option is intended to qualify as an “incentive
stock option” (an “ISO”) within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”), although the Company makes no
representation or guarantee that such Option will qualify as an ISO. To the
extent that the aggregate Fair Market Value (determined at the time of grant) of
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by Participant during any calendar year (under all plans of the
Company and its Affiliates) exceeds $100,000, the Options or portions thereof
which exceed such limit (according to the order in which they were granted)
shall be treated as Nonstatutory Stock Options.
     2. Exercise Period; Vesting. Unless expired as provided in Section 3 of
this Agreement, this Option may be exercised from time to time after the Date of
Grant set forth above to the extent the Option has vested in accordance with the
vesting schedule set forth herein. The Shares issued upon exercise of the Option
will be subject to the restrictions on transfer set forth in Section 10 below.
Provided Participant continues to provide Continuous Service to the Company or
any Affiliate, the Option will become vested and exercisable with

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respect to 33 1/3% of the Shares subject thereto on each of the next three
anniversaries of the Date of Grant until the Option is 100% vested.
     A vested Option may not be exercised for less than a full share. If
application of the vesting percentage causes a fractional Share to otherwise
become exercisable, such Share shall be rounded down to the nearest whole Share
for each year except for the last year in such vesting period, at the end of
which vesting period this Option shall become exercisable for the full remainder
of the unexercised Shares subject to the Option. Except as provided in the Plan,
upon the occurrence of a Change in Control, the Option shall become 100% vested
and exercisable.
     3. Expiration. The Option shall expire on the Expiration Date set forth
above or earlier as provided in Section 4 below or under the terms of the Plan.
     4. Termination of Continuous Service.
          4.1 Forfeiture of Unvested Options. If Participant’s Continuous
Service is terminated for any reason other than Cause, the unvested portion of
the Option shall terminate at the close of business on the date of such
termination, and Participant may exercise the vested portion as provided in this
Section 4. If Participant’s Continuous Service terminates for Cause, outstanding
Options (whether or not vested) shall terminate at the beginning of business on
the date of such termination.
          4.2 Termination for Any Reason Except Death, Disability or Cause. If
Participant’s Continuous Service is terminated for any reason, except death,
Disability or Cause, the Option, to the extent (and only to the extent) that it
would have been exercisable by Participant immediately prior to termination of
Continuous Service, may be exercised by Participant until the earlier of the
Expiration Date or, except as set forth in Section 4.4 below, the date that is
three (3) months following the termination of Participant’s Continuous Service
and the Option shall thereafter terminate and cease to be exercisable.
          4.3 Termination Because of Death or Disability. Except as provided in
Section 4.4 below, if Participant’s Continuous Service is terminated because of
death or Disability of Participant, the Option, to the extent that it is
exercisable by Participant on the date of termination, may be exercised by
Participant (by Participant’s estate, by a person who acquired the right to
exercise the Option by bequest or inheritance, or by a person designated to
exercise the Option upon Participant’s death) no later than twelve (12) months
after the date of termination, but in any event no later than the Expiration
Date.
          4.4 Extension of Termination Date. If the exercise of the Option
following the termination of Participant’s Continuous Service would be
prohibited at any time solely because the issuance of Shares of Common Stock
would violate the registration requirements under the Securities Act or any
other state or federal securities law, or the rules of any securities exchange
or interdealer quotation system on which the Company’s shares are listed or
traded, then the Option shall terminate on the earlier of (a) the Expiration
Date or (b) the expiration of a period after termination of Participant’s
Continuous Service that is three (3) months after the end of the period during
which the exercise of the Option would be in violation of such registration or
other securities law requirements or rules. If permitted by this Section 4.4,
any exercise of an ISO

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beyond (a) three (3) months after the date of termination when the termination
is for any reason other than Participant’s death or Disability or (b) twelve
(12) months after the date of termination when the termination is for
Participant’s Disability will cause the Option to be deemed a Nonstatutory Stock
Option and not an ISO.
          4.5 No Obligation to Employ. Nothing in the Plan or this Agreement
shall confer on Participant any right to provide Continuous Service, or limit in
any way the right of the Company or any Affiliate to terminate Participant’s
employment or other relationship at any time, with or without Cause.
     5. Manner of Exercise.
          5.1 Stock Option Exercise Agreement. To exercise this Option,
Participant (or in the case of exercise after Participant’s death or incapacity,
Participant’s executor, administrator, heir or legatee, as the case may be) must
deliver to the Company an executed stock option exercise agreement in the form
attached hereto as Exhibit A, or in such other form as may be approved by the
Administrator from time to time (the “Exercise Agreement”), which shall set
forth, inter alia, (a) Participant’s election to exercise the Option, (b) the
number of Shares being purchased, (c) any restrictions imposed on the Shares and
(d) any representations, warranties and agreements regarding Participant’s
investment intent and access to information as may be required by the Company to
comply with applicable securities laws. If someone other than Participant
exercises the Option, then such person must submit documentation reasonably
acceptable to the Company verifying that such person has the legal right to
exercise the Option. The entire Exercise Price of this Option to purchase Shares
of Common Stock issued under the Plan shall be payable in full, to the extent
permitted by applicable statutes and regulations, in cash or by certified or
bank check at the time of exercise for an amount equal to the aggregate Exercise
Price Per Share for the number of Shares being purchased or any other form of
legal consideration that may be acceptable to the Administrator.
          5.2 Tax Withholding. Prior to the issuance of the Shares upon exercise
of the Option, Participant must pay or provide for any applicable federal, state
and local withholding obligations of the Company. The Company has the right to
withhold from any compensation paid to Participant. If the Administrator
permits, Participant also may provide for payment of withholding taxes upon
exercise of the Option by tendering a cash payment.
          5.3 Issuance of Shares. Provided that the Exercise Agreement and
payment are in form and substance satisfactory to counsel for the Company, the
Company shall issue the Shares registered in the name of Participant,
Participant’s authorized assignee, or Participant’s legal representative, and
shall deliver certificates representing the Shares with the appropriate legends
affixed thereto.
     6. Notice Of Disqualifying Disposition Of ISO Shares. If the Option is an
ISO, and if Participant sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (a) the date two
(2) years after the Date of Grant, and (b) the date one (1) year after transfer
of such Shares to Participant upon exercise of the Option, Participant shall
immediately notify the Company in writing of such disposition. In the event any
such disposition causes the Company to incur additional federal, state, or local
tax withholding

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obligations, Participant will satisfy any such obligations in cash or out of the
current wages or other compensation payable to Participant.
     7. Compliance With Laws And Regulations. The exercise of the Option and the
issuance and transfer of Shares shall be subject to compliance by the Company
and Participant with all applicable requirements of federal and state securities
laws and with all applicable requirements of any stock exchange on which the
Company’s Common Stock may be listed at the time of such issuance or transfer.
Participant understands that the Company is under no obligation to register or
qualify the Shares with the SEC, any state securities commission or any stock
exchange to effect such compliance.
     8. Nontransferability of Option. If the Option is an ISO, the Option may
not be transferred in any manner other than by will or by the laws of descent
and distribution and may be exercised during the lifetime of Participant only by
Participant. If the Option is not an ISO, upon written approval by the
Administrator in its sole discretion, it may be transferred (a) by gift or
domestic relations order to a member of Participant’s immediate family (child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships), any person sharing Participant’s household (other than a tenant
or employee), a trust in which these persons have more than 50% of the
beneficial interest, a foundation in which these persons (or Participant)
control the management of assets, and any other entity in which these persons
(or Participant) own more than 50% of the voting interests; (b) to third parties
designated by the Administrator in connection with a program established and
approved by the Administrator pursuant to which Participants may receive a cash
payment or other consideration in consideration for the transfer of such Option;
or (c) to such other transferee as permitted by the Administrator in its sole
discretion. Notwithstanding the foregoing, Participant may, by delivering
written notice to the Company, in a form satisfactory to the Company, designate
a third party who, in the event of Participant’s death, shall be entitled to
exercise the Option.
     9. Privileges of Stock Ownership. Participant shall not have any of the
rights of a Stockholder with respect to any Shares unless and until the Shares
are issued to Participant.
     10. Securities Law Restrictions on Transfer. Regardless of whether the
offering and sale of Shares under the Plan have been registered under the
Securities Act or have been registered or qualified under the securities laws of
any state, the Company at its discretion may impose restrictions upon the sale,
pledge or other transfer of such Shares (including the placement of appropriate
legends on stock certificates or the imposition of stop-transfer instructions)
if, in the judgment of the Company, such restrictions are necessary or desirable
in order to achieve compliance with the Securities Act, the securities laws of
any state or any other law.
     11. Adjustments Upon Changes in Stock. This Award is subject to the
adjustment provisions set forth in the Plan.

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     12. Restrictive Covenants
          12.1 Confidentiality. In consideration of the Option, Participant
agrees to keep confidential all information of a proprietary or confidential
nature belonging to the Company or any of its Affiliates, including but not
limited to, business plans, files, records, data, documents, plans, research,
development, policies, customer or client lists, price lists, the name and
address of suppliers, customers or representatives, or any other matters of any
kind or description, relating to the products, devices, suppliers, customers,
clientele, sales or business of the Company or any of its Affiliates
(i)  obtained by Participant during Continuous Service and (ii)  not otherwise
public knowledge (other than by reason of an unauthorized act by Participant).
After termination of Continuous Service, Participant shall not, without the
prior written consent of the Company, unless compelled pursuant to an order of a
court or other body having jurisdiction over such matter, communicate or divulge
any such information, knowledge or data to anyone other than the Company and
those designated by it.
          12.2 Non-solicitation and Non-competition. In consideration of the
Option, Participant agrees not to (i) directly or indirectly, solicit or recruit
any individual employed by the Company or its Affiliates for the purpose of
being employed directly or indirectly by Participant or by any competitor of the
Company on whose behalf Participant is acting as an agent, representative or
employee, or convey any confidential information or trade secrets regarding
other employees of the Company or its Affiliates to any other person during
Continuous Service and for a period of eighteen (18) months thereafter; or
(ii) directly or indirectly, influence or attempt to influence customers of the
Company or any of its Affiliates to direct their business to any competitor of
the Company during Continuous Service and for a period of eighteen (18) months
thereafter; or (iii) compete with the Company in the recreational vehicle
business or the bus business while Participant is in Continuous Service and for
a period of eighteen (18) months thereafter.
     13. General.
          13.1 Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the Administrator
for review. The resolution of such a dispute by the Administrator shall be final
and binding on the Company and Participant.
          13.2 Entire Agreement. The Plan is incorporated herein by reference.
This Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof. If any inconsistency should exist between the nondiscretionary
terms and conditions of this Agreement and the Plan, the Plan shall govern and
control.
          13.3 Notices. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to

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such other address as such party may designate in writing from time to time to
the Company. All notices shall be deemed to have been given or delivered upon:
(a) personal delivery; (b) five (5) days after deposit in the United States mail
by certified or registered mail (return receipt requested); (c) two (2) business
days after deposit with any return receipt express courier (prepaid); or (d) one
(1) business day after transmission by facsimile.
          13.4 Successors and Assigns. The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
and shall inure to the benefit of Participant and Participant’s heirs,
executors, administrators, legal representatives, successors and assigns.
          13.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without giving effect to
its conflict of law principles. If any provision of this Agreement is determined
by a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.
     14. Acceptance. Participant hereby acknowledges receipt of a copy of the
Plan and this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of the Option or disposition of
the Shares and that Participant should consult a tax advisor prior to such
exercise or disposition.
     15. Section 409A Limitation. In the event the Administrator determines at
any time that this Option has been granted with an exercise price less than Fair
Market Value of the Shares subject to the Option on the date the Option is
granted (regardless of whether or not such exercise price is intentionally or
unintentionally priced at less than Fair Market Value, or is materially modified
at a time when the Fair Market Value exceeds the exercise price), or is
otherwise determined to constitute “nonqualified deferred compensation” within
the meaning of Section 409A of the Code, notwithstanding any provision of the
Plan or this Agreement to the contrary, the Option shall satisfy the additional
conditions applicable to nonqualified deferred compensation under Section 409A
of the Code, in accordance with Section 8 of the Plan. The specified exercise
date and term shall be the default date and term specified in Section 8 of the
Plan. Notwithstanding the foregoing, the Company shall have no liability to any
Participant or any other person if an Option designated as an Incentive Stock
Option fails to qualify as such at any time or if an Option is determined to
constitute “nonqualified deferred compensation” within the meaning of
Section 409A of the Code and the terms of such Option do not satisfy the
additional conditions applicable to nonqualified deferred compensation under
Section 409A of the Code and Section 8 of the Plan.
[signature page follows]

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized representative and Participant has executed this Agreement,
effective as of the Date of Grant.

              THOR INDUSTRIES, INC.       PARTICIPANT
 
           
By:
           
 
           
 
  Name:       (Signature)
 
  Title:        
 
           
 
           
 
          (Please print name)

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EXHIBIT A
FORM OF STOCK OPTION EXERCISE AGREEMENT

     
o Incentive Stock Option
  Optionee:                                         
 
   
o Nonstatutory Stock Option
  Date:                                         

STOCK OPTION EXERCISE NOTICE
Thor Industries, Inc.
419 W. Pike Street
Jackson Center, Ohio 45334-0629
Attention: Chief Financial Officer
Ladies and Gentlemen:
     1. Option. I was granted an option (the “Option”) to purchase shares of the
common stock (the “Shares”) of Thor Industries, Inc., a Delaware corporation
(the “Company”), pursuant to the Company’s 2006 Equity Incentive Plan (the
“Plan”) and my Stock Option Agreement (the “Stock Option Agreement”) as follows:

         
Date of Option Grant:
                                              
 
       
Number of Option Shares:
                                              
 
       
 
       
Exercise Price per Share:
  $                                             

     2. Exercise of Option. I hereby elect to exercise the Option to purchase
the following number of Shares, all of which are vested Shares in accordance
with the Stock Option Agreement:
     Total Shares Purchased:                     
     Total Exercise Price            (Total Shares X Price per Share) $
                    
     3. Payments. I enclose payment in full of the total exercise price for the
Shares in the following form(s), as authorized by my Stock Option Agreement:
     Cash:           $                                         

 

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     Check:           $                                         
     4. Tax Withholding. I authorize payroll withholding and otherwise will make
adequate provision for the federal, state, local and foreign tax withholding
obligations of the Company, if any, in connection with the Option.
     5. Optionee Information.
     My address is:
                                                                         
                               
                                                                                                         
     My Social Security Number is:
                                                                                                         
     6. Notice of Disqualifying Disposition. If the Option is an Incentive Stock
Option, I agree that I will promptly notify the Treasurer of the Company if I
transfer any of the Shares within one (1) year from the date I exercise all or
part of the Option or within two (2) years of the Date of Option Grant.
     7. Binding Effect. I agree that the Shares are being acquired in accordance
with and subject to the terms, provisions and conditions of the Stock Option
Agreement to all of which I hereby expressly assent. This letter shall inure to
the benefit of and be binding upon my heirs, executors, administrators,
successors and assigns.
     I understand that I am purchasing the Shares pursuant to the terms of the
Plan and my Stock Option Agreement, copies of which I have received and
carefully read and understand.

              Very truly yours,                       (Signature)    

          Receipt of the above is hereby acknowledged.               THOR
INDUSTRIES, INC.               By:                       Name:         Title:  
            Dated: