**EXHIBIT 10.7**

 

**MONACO COACHCORPORATION**

**1993 STOCK PLAN**

**RESTRICTED STOCKUNIT**

**AGREEMENT**

 

THISRESTRICTED STOCK AGREEMENT (the “Agreement”) is effective as of (Date) (the “Dateof Grant”), between MONACO COACH CORPORATION (hereinafter called the “Company”)and (NAME)****(hereinafter called the “Participant”).  Unless otherwise definedherein, the terms defined in the amended and restated 1993 Stock Plan (the “Plan”)will have the same defined meanings in this Agreement.

 

# 1.                                       **Award Grant**.  The Company hereby awards to Participant(   # ) Restricted Stock Units under the Plan. Each Restricted Stock Unit represents a value equal to the Fair Marketof a Share on the date that it vests.  Priorto actual payment of any vested Restricted Stock Units, such Restricted StockUnit will represent an unsecured obligation of the Company, payable (if at all)only from the general assets of the Company.

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# 2.                                       **Obligationto Pay**.  Subject to any accelerationprovisions set forth herein or in the Plan, [INSERT VESTING SCHEDULE].

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# 3.                                       **Paymentafter Vesting**.  Any Restricted Stock Units thatvest in accordance with Section 2 will be paid to Participant (or in theevent of Participant’s death, to his or her estate) in whole Shares, subject toParticipant satisfying any applicable tax withholding obligations as set forthin Section 8.  Notwithstanding the foregoing sentence, to theextent necessary to avoid the imposition of any additional tax or incomerecognition under Section 409A of the Code prior to or upon the actualpayment of Shares pursuant to this Award of Restricted Stock Units, anyRestricted Stock Units that vest in accordance with Section 2 will be paidto Participant (or in the event of Participant’s death, to his or her estate)no earlier than six (6) months and one (1) day following the date ofParticipant’s termination of employment with the Company (or any Affiliate),subject to Section 8.  TheParticipant will not be required to make any additional monetary payment (otherthan applicable tax withholding, if any) upon settlement of the Award.  

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# 4.                                       **Payments after Death**.  Anydistribution or delivery to be made to Participant under this Agreement will,if Participant is then deceased, be made to Participant’s designatedbeneficiary, or if no beneficiary survives Participant, the administrator orexecutor of Participant’s estate.  Anysuch transferee must furnish the Company with (a) written notice of his orher status as transferee, and (b) evidence satisfactory to the Company toestablish the validity of the transfer and compliance with any laws orregulations pertaining to said transfer.

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# 5.                                       **Rights asStockholder**.  Except as set forth in Section 4,neither Participant nor any person claiming under or through Participant willhave any of the rights or privileges of a stockholder of the Company in respectof any Shares deliverable hereunder, unless and until certificates representingsuch Shares will have been issued, recorded on the records of the Company orits transfer agents or registrars, and delivered to Participant.

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# 6.                                       **Dividend Equivalent Rights****.**  In theevent cash dividends are paid with respect to Common Stock on and after theDate of Grant and before the settlement of the Award pursuant to Section 3,on the date this Award is settled upon vesting of Restricted Stock Unitspursuant to Section 3, Participant will also receive an amount of cashequal to the per Share amount of cash dividends so paid on or after the Date of

 

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# Grantand before settlement multiplied by the number of Shares actually deliverable uponsettlement of this Award.

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# 7.                                       **Effect onEmployment**.  Participant acknowledges andagrees that the vesting of the Restricted Stock Units pursuant to Section 2hereof is earned only by Participant continuing to be an Employee through theapplicable vesting dates (and not through the act of being hired or acquiringShares hereunder).  Participant furtheracknowledges and agrees that this Agreement, the transactions contemplatedhereunder and the vesting schedule set forth herein do not constitute anexpress or implied promise of Participant continuing to be an Employee for thevesting period, for any period, or at all, and will not interfere with theParticipant’s right or the right of the Company (or the Affiliate employingParticipant) to terminate Participant as an Employee at any time, with orwithout cause.

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# 8.                                       **Tax Withholding**.  Notwithstandingany contrary provision of this Agreement, no certificate representing theShares will be issued to Participant and no cash will be paid pursuant to Section 6,unless and until satisfactory arrangements (as determined by the Administrator)will have been made by Participant with respect to the payment of income,employment and other taxes which the Company determines must be withheld withrespect to such Shares so issuable and/or cash to be paid.  All income, employment and other taxesrelated to this Restricted Stock Unit Award and any Shares or cash delivered inpayment thereof are the sole responsibility of Participant.  Any cash payments to be made pursuant to Section 6hereof will be reduced to satisfy any applicable tax withholding requirementswith respect to such amounts.  TheAdministrator, in its sole discretion and pursuant to such procedures as it mayspecify from time to time, may permit Participant to satisfy such taxwithholding obligation with respect to Shares issuable hereunder, in whole orin part by one or more of the following (without limitation): (a) payingcash, (b) electing to have the Company withhold otherwise deliverableShares having a Fair Market Value equal to the amount required to be withheld, (c) deliveringto the Company already vested and owned Shares having a Fair Market Value equalto the amount  required to be withheld,or (d) selling a sufficient number of such Shares otherwise deliverable toParticipant through such means as the Company may determine in its solediscretion (whether through a broker or otherwise) equal to the amount requiredto be withheld.  The Company, in its solediscretion, may use any cash amounts that are to be paid pursuant to Section 6to satisfy any tax withholding otherwise due with respect to the issuance ofShares pursuant to the this Restricted Stock Unit Award.  If Participant fails to make satisfactoryarrangements for the payment of any required tax withholding obligationshereunder at the time any applicable Restricted Stock Units otherwise arescheduled to vest pursuant to Section 2, Participant will permanentlyforfeit such Restricted Stock Units and the right to receive any Shares withrespect thereto and such Restricted Stock Units will be returned to the Companyat no cost to the Company.

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# 9.                                       **AdditionalConditions to Issuance of Stock**.  If at anytime the Company will determine, in its discretion, that the listing,registration or qualification of the Shares upon any securities exchange orunder any state or federal law, or the consent or approval of any governmentalregulatory authority is necessary or desirable as a condition to the issuanceof Shares to Participant (or his estate), such issuance will not occur unlessand until such listing, registration, qualification, consent or approval willhave been effected or obtained free of any conditions not acceptable to theCompany.  Where the Company determinesthat the delivery of the payment of any Shares will violate federal securitieslaws or other applicable laws, the Company will defer delivery until theearliest date at which the Company reasonably anticipates that the delivery ofShares will no longer cause such violation. The Company will make all reasonable efforts to meet the requirements ofany such state or federal law or securities exchange and to obtain any suchconsent or approval of any such governmental authority.

 

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# 10.                                 **Restrictionson Sale of Securities**.  Subject to Section 9,the Shares issued as payment for vested Restricted Stock Units awarded underthis Agreement will be registered under the federal securities laws and will befreely tradable upon receipt.  However,Participant’s subsequent sale of the Shares will be subject to any market blackout-periodthat may be imposed by the Company and must comply with the Company’s insidertrading policies, and any other applicable securities laws.

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# 11.                                 **Successors**.  Subject to the limitation on thetransferability of this grant contained herein, this Agreement will be bindingupon and inure to the benefit of the heirs, legatees, legal representatives,successors and assigns of the parties hereto.

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# 12.                                 **Address forNotices**.  Any notice to be given to theCompany under the terms of this Agreement will be addressed to the Company, incare of it Secretary at Monaco Coach Corporation, 91320 Coburg Industrial Way,Coburg, Oregon 97408, or at such other address as the Company may hereafterdesignate in writing.

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# 13.                                 **Transferability**.  Except to the limited extent provided in Section 4,this grant and the rights and privileges conferred hereby will not betransferred, assigned, pledged or hypothecated in any way (whether by operationof law or otherwise) and will not be subject to sale under execution, attachmentor similar process.  Upon any attempt totransfer, assign, pledge, hypothecate or otherwise dispose of this grant, orany right or privilege conferred hereby, or upon any attempted sale under anyexecution, attachment or similar process, this grant and the rights andprivileges conferred hereby immediately will become null and void.

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# 14.                                 **Plan Governs**.  This Agreement is subject to all terms andprovisions of the Plan.  In the event ofa conflict between one or more provisions of this Agreement and one or moreprovisions of the Plan, the provisions of the Plan will govern.

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# 15.                                 **AdministratorAuthority**.  The Administrator will have thepower to interpret the Plan and this Agreement and to adopt such rules forthe administration, interpretation and application of the Plan as areconsistent therewith and to interpret or revoke any such rules (including,but not limited to, the determination of whether or not any Restricted StockUnits have vested).  All actions takenand all interpretations and determinations made by the Administrator in goodfaith will be final and binding upon Participant, the Company and all otherinterested persons.  No member of theAdministrator will be personally liable for any action, determination orinterpretation made in good faith with respect to the Plan or this Agreement.

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# 16.                                 **ElectronicDelivery**.  The Company may, in its solediscretion, decide to deliver any documents related to Restricted Stock Unitsawarded under the Plan or future Restricted Stock Units that may be awardedunder the Plan by electronic means or request Participant’s consent toparticipate in the Plan by electronic means. Participant hereby consents to receive such documents by electronicdelivery and agrees to participate in the Plan through an on-line or electronicsystem established and maintained by the Company or another third partydesignated by the Company.

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# 17.                                 **Captions**.  Captions provided herein are for convenienceonly and are not to serve as a basis for interpretation or construction of thisAgreement.

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# 18.                                 **AgreementSeverable**.  In the event that any provisionin this Agreement will be held invalid or unenforceable, such provision will beseverable from, and such invalidity or unenforceability will not be construedto have any effect on, the remaining provisions of this Agreement.

 

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# 19.                                 **EntireAgreement**.  This Agreement constitutes theentire understanding of the parties on the subjects covered.  The Participant expressly warrants that he orshe is not executing this Agreement in reliance on any promises,representations, or inducements other than those contained herein.

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# 20.                                 **Modificationsto the Agreement**.  This Agreementconstitutes the entire understanding of the parties on the subjectscovered.  The Participant expresslywarrants that he or she is not accepting this Agreement in reliance on anypromises, representations, or inducements other than those containedherein.  Modifications to this Agreementor the Plan can be made only in an express written contract executed by a dulyauthorized officer of the Company.  Notwithstanding anything to the contrary in thePlan or this Agreement, the Company reserves the right to revise this Agreementas it deems necessary or advisable, in its sole discretion and without theconsent of Participant, to comply with Section 409A of the Code or tootherwise avoid imposition of any additional tax or income recognition under Section 409Aof the Code prior to the actual payment of Shares pursuant to this Award of RestrictedStock Units.

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# 21.                                 **Amendment,Suspension or Termination of the Plan**.  Byaccepting this award, the Participant expressly warrants that he or she hasreceived a right to purchase stock under the Plan, and has received, read andunderstood a description of the Plan. The Participant understands that the Plan is discretionary in nature andmay be modified, suspended or terminated by the Company at any time.

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# 22.                                 **GoverningLaw**.  This Agreement shall be governed by the lawsof the State of Oregon, without giving effect to the conflict of law principlesthereof.  For purposes of litigating anydispute that arises under this Award of Restricted Stock Units or thisAgreement, the parties hereby submit to and consent to the jurisdiction of theState of Oregon**,** and agree that such litigationshall be conducted in the courts of Lane County, Oregon, or the federal courtsfor the United States located in or around Lane County, Oregon, and no othercourts, where this Award of Restricted Stock Units is made and/or to beperformed.

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IN WITNESS WHEREOF, the parties have signedthis Agreement effective as of the date and year indicated above.

 
|        | MONACO COACH CORPORATION |
|-------------|--------------------------|
|        |                     |   |
|        |                     |   |
|        | By:                      |   |   |
|        |                     |    Chairman  and Chief Executive Officer |
|        |                     |   |
|        |                     |   |
| ACCEPTED    |                     |   |   |   |
|        | Participant              |   |   |   |
|        |                     |   |   |   |
|        |                     |   |   |   |
| PRINT NAME: |                     |   |   |   |
|        |                     |   |   |   |
|        |                     |   |   |   |
| DATE:       |                     |   |   |   |
|             |                          |  |  |  |  |  |  |

 

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