**EXHIBIT 10.10**

 

**MONACO COACH CORPORATION****1993 INCENTIVE STOCK OPTION PLAN****STOCK OPTION AGREEMENT**

 

Unless otherwise defined herein, the terms defined in the Plan shallhave the same defined meanings in this Option Agreement.

 

**I.****              NOTICE OF STOCKOPTION GRANT**

 

**«Name»**

**«Address1»**

**«Address2»**

 

Pursuant to the terms and conditions of the Plan and this OptionAgreement, you have been granted **an Incentive Stock Option**topurchase                   shares (the ‘Option’) of stock as outlined below.

 

**Granted To:**

 

**Grant Date:**

 

**Options Granted:****                                                                 TotalCost to Exercise:**

 

**Option Price Per Share:**

 

**Expiration Date:**

 

**Vesting Schedule:**

 

This option may be exercised, in whole or in part, in accordance withthe following schedule:

 

20% per year for 5 years

(vesting schedule)

 

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**Termination Period**:

 

This Option may be exercised for 90 days after termination of youremployment or consulting relationship, or such longer period as may beapplicable upon death or disability of Optionee as provided in the Plan, but inno event later than the Term/Expiration Date as provided above.

 

**II.****            AGREEMENT**

 

1.             Grant of Option.The Plan Administrator of the Company hereby grants to the Optionee named inthe Notice of Grant attached as Part I of this Agreement (the “Optionee”), anoption (the “Option) to purchase a number of Shares, as set forth in the Noticeof Grant, at the exercise price per share set forth in the Notice of Grant (the“Exercise Price”), subject to the terms and conditions of the Plan, which isincorporated herein by reference. Subject to Section 16(c) of the Plan, in theevent of a conflict between the terms and conditions of the Plan and the termsand conditions of the Option Agreement, the terms and conditions of the Planshall prevail.

 

If designated in the Notice of grant as an Incentive Stock Option (“ISO”),this Option is intended to qualify as an Incentive Stock Option under Section422 of the Code. However, if this Option is intended to be an Incentive StockOption, to the extent that it exceeds the $100,000 rule of Code Section 422(d)it shall be treated as a Nonstatutory Stock Option (“NSO”).

 

2.             Exercise of Option.

 

(a)           Right of Exercise.This Option is exercisable during its term in accordance with the VestingSchedule set out in the Notice of Grant and the applicable provisions of thePlan and the Option Agreement. In the event of Optionee’s death, disability orother termination of Optionee’s employment or consulting relationship, theexercisability of the Option is governed by the applicable provisions of thePlan and this Option Agreement.

 

(b)           Method of Exercise.This Option is exercisable by delivery of an exercise notice, in the formattached as Exhibit A (the “Exercise Notice”), which shall state the electionto exercise the Option, the number of shares in respect of which the Option isbeing exercised (the “Exercised Shares”), and such other representations andagreements as may be required by the Company pursuant to the provisions of thePlan. The Exercise Notice shall be accompanied by payment of the aggregateExercise Price as to all Exercised Shares. This Option shall be deemed to beexercised upon receipt by the Company of such fully executed Exercise Noticeaccompanied by such aggregate Exercise Price.

 

No Shares shall be issued pursuant to the exercise of this Optionunless such issuance and exercise complies with all relevant provisions of lawand the requirements of any stock exchange or quotation service upon which theShares are then listed. Assuming such compliance, for income tax purposes theExercised Shares shall be considered transferred to the Optionee on the datethe Option is exercised with respect to such Exercised Shares.

 

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3.             Methodof Payment. Payment of the aggregate Exercise Price shall be by any of thefollowing, or a combination thereof, at the election of the Optionee:

 

(a)           cash; or

 

(b)           check; or

 

(c)           delivery of a properlyexecuted exercise notice together with such other documentation as the Administratorand the broker, if applicable, shall require to effect an exercise of theOption and delivery to the Company of the sale or loan proceeds required to paythe exercise price; or

 

(d)           surrender of otherShares which (i) in the case of Shares acquired upon exercise of an Option,have been owned by the Optionee for more than six (6) months on the date ofsurrender, **and** (ii) have a Fair Market Valueon the date of surrender equal to the aggregate Exercise Price of the ExercisedShares.

 

4.             Non-Transferabilityof Option. This Option may not be transferred in any manner otherwise thanby will or by the Laws of descent or distribution and may be exercised duringthe lifetime of Optionee only by the Optionee. the terms of the Plan and thisOption Agreement shall be binding upon the executors, administrators, heirs,successors and assigns of the Optionee.

 

5.             Term of Option.This Option may be exercised only within the term set out in the Notice ofGrant, and may be exercised during such term only in accordance with the Planand the terms of this Option Agreement.

 

6.             TaxObligations.

 

(a)           Exercising theOption.

 

(i)            Nonqualified StockOption (“NSO”). If this Option does not qualify as an ISO, the Optionee mayincur regular federal income tax liability upon exercise. The Optionee will betreated as having received compensation income (taxable at ordinary income taxrates) equal to the excess, if any, of the fair market value of the ExercisedShares on the date of exercise over their aggregate Exercise Price. If theOptionee is an employee, the Company will be required to withhold from his orher compensation or collect from Optionee and pay to the applicable taxingauthorities and amount equal to a percentage of this compensation income at thetime of exercise.

 

(ii)           Incentive StockOption (“ISO”). If this Option qualifies as an ISO, the Optionee will haveno regular federal income tax liability upon its exercise, although the excess,if any, of the fair market value of the Exercised Shares on the date of exerciseover their aggregate Exercise Price will be treated as an adjustment to thealternative minimum tax for federal tax purposes and may subject the Optioneeto alternative minimum tax in the year of exercise.

 

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(b)           Withholding Taxes.Optionee agrees to make appropriate arrangements with the Company (or theParent or Subsidiary employing or retaining Optionee) for the satisfaction ofall Federal, state, local and foreign income and employment tax withholding requirementsapplicable to the Option exercise. Optionee acknowledges and agrees that theCompany may refuse to honor the exercise and refuse to deliver Shares if suchwithholding amounts are not delivered at the time of exercise.

 

(c)           Disposition of Shares.

 

(i)            NSO. If theOptionee holds NSO Shares for at least one year, any gain realized ondisposition of the Shares will be treated as long-term capital gain for federalincome tax purposes.

 

(ii)           ISO. If theOptionee holds ISO Shares for at least one year after exercise **and** two years after grant date, any gain realized ondisposition of the Shares will be treated as a long-term capital gain forfederal income tax purposes. If the Optionee disposes of ISO Shares within oneyear after exercise or two years after the grant date, any gain realized onsuch disposition will be treated as compensation income (taxable at **lesser of** (A) the difference between the **fair market value of the Shares acquired on the date of exercise**and the aggregate Exercise Price, or (B) the difference between the **sale price** of such Shares and the aggregate Exercise Price.

 

(d)           Notice ofDisqualifying Disposition of ISO Shares. If the Option granted to Optioneeherein is an ISO, and if Optionee sells or otherwise disposes of any of the Sharesacquired pursuant to the ISO on or before the later of (1) the date twoyears after the Date of Grant, or (2) the date one year after the date ofexercise, the Optionee shall immediately notify the Company in writing of suchdisposition. Optionee agrees that Optionee may be subject to income taxwithholding by the Company on the compensation income recognized by theOptionee.

 

7.             Entire Agreement;Governing Law. The Plan is incorporated herein by reference. The Plan andthis Option Agreement constitute the entire agreement of the parties withrespect to the subject matter hereof and supersede in their entirety all priorundertakings and agreements of the Company and Optionee with respect to thesubject matter hereof, and may not be modified adversely to the Optionee’sinterest except by means of a writing signed by the Company and Optionee. Thisagreement is governed by the internal substantive laws, but not the choice oflaw rules, of the State of Delaware.

 

8.             No Guarantee OfContinued Service. Optionee acknowledges and agrees that the vesting ofshares pursuant to the vesting schedule hereof is earned only by continuing asa service provider at the will of the company (and not through the act of beinghired, being granted an option or purchasing shares hereunder). Optioneefurther acknowledges and agrees that this agreement, the transactionscontemplated hereunder and the vesting schedule set forth herein do notconstitute an express or implied promise of continued engagement as a serviceprovider for the vesting period, for any period, or at all, and shall notinterfere with optionee’s right or the company’s right to terminate optionee’srelationship as a service provider at any time, with or without cause.

 

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By Optionee’s signature and the signature of the Company’srepresentative below, Optionee and the Company agree that this Option isgranted under and governed by the terms and conditions of the Plan and thisOption Agreement. Optionee has reviewed the Plan and this Option Agreement intheir entirety, has had an opportunity to obtain the advice of counsel prior toexecuting this Option Agreement and fully understand all provisions of the Planand Option Agreement. Optionee hereby agrees to accept as binding, conclusiveand final all decisions or interpretations of the Administrator upon anyquestion relating to the Plan and Option Agreement. Optionee further agrees tonotify the Company upon any change in the residence address indicated on thefirst page of this Option Agreement.

 

 
| OPTIONEE:  |   | MONACO COACH CORPORATION |
|------------|--------|--------------------------|
|       |   |                     |   |
|       |   |                     |   |
|       |   | By:                      |   |
| Signature  |   |                     |   |
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|       |   |                     |   |
| Print Name |   |                     |   |
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|       |   |                     |
| Date       |   |                     | Date |   |
|            |        |                          |  |  |  |

 

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**EXHIBIT A**

 

**MONACOCOACH CORPORATION**

 

**1993INCENTIVE STOCK OPTION PLAN**

 

**EXERCISENOTICE**

 

Monaco Coach CorporationAttention:  Chief Financial Officer

 

# **I.**                              Exercise of Option. Effective as of today,                            ,200    , the undersigned (“Purchaser”) hereby elects topurchase the following shares (the “Shares”) of the Common Stock of MonacoCoach Corporation (the “Company”) under and pursuant to the Monaco CoachCorporation 1993 Incentive Stock Option Plan (the “Plan”) and the correspondingStock Option Agreements (the “Option Agreement”). The purchase price for theShares shall be as follows, as required by the Option Agreement.

 
| **NUMBER OF SHARES** | ** ** | **DATE OF  OPTION GRANT** | ** ** | **PRICE  PER SHARE** | ** ** | **TOTAL  COST** |
|----------------------|------------|---------------------------|------------|----------------------|------------|-----------------|
|                 |       |                      |       |                 |       |            |
|                 |       |                      |       |                 |       |            |
|                 |       |                      |       |                 |       |            |
|                 |       |                      |       |                 |       |            |

 

# **II.**                            Delivery of Payment. Purchaser herewith deliversto the Company the full purchase price for the Shares together with anyapplicable withholding taxes.

# ** **

# **III.**                           Representations of Purchaser. Purchaser acknowledges thatPurchaser has received, read and understood the Plan and the Option Agreementand agrees to abide by and be bound by their terms and conditions.

# ** **

# **IV.**                           Rights as Stockholder. Until the issuance (asevidenced by the appropriate entry on the books of the Company or of a dulyauthorized transfer agent of the Company) of the Shares, no right to vote orreceive dividends or any other rights as a stockholder shall exist with respectto the Optioned Stock, notwithstanding the exercise of the Option. Shares soacquired shall be issued to the Optionee as soon as practicable after exerciseof the Option. No adjustment will be made for a dividend or other right forwhich the record date is prior to the date of issuance, except as provided inSection 14 of the Plan.

# ** **

# **V.**                            Tax Consultation. Purchaser understands thatPurchaser may suffer adverse tax consequences as a result of Purchaser’spurchase or disposition of the Shares. Purchaser represents that Purchaser hasconsulted with any tax consultants Purchaser deems advisable in connection withthe purchase or disposition of the Shares and that Purchaser is not relying onthe Company for any tax advice.

 

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# **VI.**                           Entire Agreement; Governing Law. The Plan and Option Agreementare incorporated herein by reference. This Agreement, the Plan and the OptionAgreement constitute the entire agreement of the parties and supersede in theirentirety all prior undertakings and agreements of the Company and Purchaserwith respect to the subject matter hereof. This agreement is governed by theinternal substantive laws, but not the choice of law rules, of the State ofDelaware.

 

 
| Submitted by: |   | Accepted by: |
|---------------|--------|--------------|
|          |   |         |   |
| PURCHASER:    |   |         | MONACO COACH CORPORATION |
|          |   |         |   |
|          |   | By:          |   |
| Signature     |   |         |   |
|          |   |         |   |
|          |   | Its:         |   |
| Print Name    |   |         |   |
|          |   |         |   |
| Address:      |   |         |   |
|          |   |         |   |
|          |   |         |   |
|          |   |         |   |
|          |   |         |   |
|               |        |              |  |  |  |

 

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