**EXHIBIT 10.9**

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**MONACOCOACH CORPORATION**

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**DIRECTOROPTION AGREEMENT**

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**SUBSEQUENTGRANT**

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Monaco Coach Corporation,a Delaware corporation (the “Company”), has granted to                                        (the “Optionee”), an option to purchase a total of four thousand (4,000) sharesof the Company’s Common Stock (the “Optioned Stock”), at the price determinedas provided herein, and in all respects subject to the terms, definitions andprovisions of the Company’s Director Stock Plan (as amended May 13, 2003) (the “Plan”)adopted by the Company which is incorporated herein by reference. The termsdefined in the Plan shall have the same defined meanings herein.

 

# 1.             Nature of the Option. This Option is a nonstatutory option and is notintended to qualify for any special tax benefits to the Optionee.

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# 2.             Exercise Price. The exercise price is $               for each share of Common Stock.

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# 3.             Exercise of Option. This Option shall be exercisable during its termin accordance with the provisions of Section 11 of the Plan as follows:

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## (i)            Rightto Exercise.

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### (a)           ThisOption shall become exercisable as to one hundred percent (100%) of theShares subject to this agreement five (5) years from the date of grant if,on such date, Optionee has maintained his Continuous Status as a Director.

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### (b)           ThisOption may not be exercised for a fraction of a share.

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### (c)           Inthe event of Optionee’s death, disability, retirement or other termination ofContinuous Status as a Director, the exercisability of the Option is governedby Section 11 of this Agreement.

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## (ii)           Methodof Exercise. This Option shall be exercisable by written notice, whichshall state the election to exercise the Option and the number of Shares inrespect of which the Option is being exercised. Such written notice, in theform attached hereto as Exhibit A, shall be signed by the Optionee andshall be delivered in person or by certified mail to the Secretary of theCompany. The written notice shall be accompanied by payment of the exerciseprice.

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# 4.             Method of Payment. Payment of the exercise price shall be by any ofthe following, or a combination thereof, at the election of the Optionee:

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## (i)            cash;

 

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## (ii)           check;or

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## (iii)          surrenderof other shares which (x) in the case of Shares acquired upon exercise ofan Option, have been owned by the Optionee for more than six (6) months onthe date of surrender, and (y) have a Fair Market Value on the date ofsurrender equal to the aggregate exercise price of the Shares as to which saidOption shall be exercised; or

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## (iv)          deliveryof a properly executed exercise notice together with such other documentationas the Company and the broker, if applicable, shall require to effect anexercise of the Option and delivery to the Company of the sale or loan proceedsrequired to pay the exercise price.

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# 5.             Restrictions on Exercise. This Option may not be exercised if the issuanceof such Shares upon such exercise or the method of payment of consideration forsuch shares would constitute a violation of any applicable federal or statesecurities or other law or regulations, or if such issuance would not complywith the requirements of any stock exchange upon which the Shares may then belisted. As a condition to the exercise of this Option, the Company may requireOptionee to make any representation and warranty to the Company as may berequired by any applicable law or regulation.

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# 6.             Termination of Continuous Status as a Director. In the event Optionee’s Continuous Status as aDirector terminates (other than upon the Optionee’s death or permanent andtotal disability (as defined in Section 22(e)(3) of the Code)), theOptionee may exercise his or her Option, but only within three (3) monthsfrom the date of such termination, and only to the extent that the Optionee wasentitled to exercise it at the date of such termination (but in no event laterthan the expiration of its ten (10) year term). To the extent that theOptionee was not entitled to exercise this Option at the date of suchtermination, and to the extent that Optionee does not exercise this Option (tothe extent otherwise so entitled) within the time specified herein, the Optionshall terminate.

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# 7.             Disability of Optionee. In the event Optionee’s Continuous Status as aDirector terminates as a result of total and permanent disability (as definedin Section 22(e)(3) of the Code), the Option granted hereunder to such Optioneeshall become vested and exercisable for the full number of Shares covered bythe Option. The Optionee may exercise his or her Option, at any time withintwelve (12) months from the date of such termination (but in no event laterthan the expiration of the term of such Option as set forth in the Notice ofGrant). If, after termination, the Optionee does not exercise his or her Optionwithin the time specified herein, the Option shall terminate, and the Sharescovered by such Option shall revert to the Plan.

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# 8.             Death of Optionee. In the event of the death of an Optionee, theOption shall become vested and exercisable for the full number of Sharescovered by the Option. The Option held by the Optionee at the time of death maybe exercised at any time within twelve (12) months following the date of deathby the Optionee’s estate or by a person who acquired the right to exercise theOption by bequest or inheritance. In no event shall an Option be exercisedlater than the expiration of the term of the Option, as set forth in the Optionagreement. If, after death, the Optionee’s estate or a person who acquired theright to exercise the Option by bequest or inheritance does not exercise theOption within the time specified herein, the Option shall terminate, and theShares covered by such Option shall revert to the Plan.

 

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# 9.             Retirement of Optionee. In the event of an Optionee’s Retirement while aDirector, the Option shall become vested and exercisable for the full number ofShares covered by the Option. The Option held by the Optionee at the time ofRetirement may be exercised at any time within twelve (12) months followingthe date of Retirement (but in no event later than the date of expiration ofits ten (10) year term). If the Option is not exercised within the timespecified herein, the Option shall terminate.

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# 10.           Non-Transferability of Option. This Option may not be transferred in any mannerotherwise than by will or by the laws of descent or distribution and may beexercised during the lifetime of Optionee only by the Optionee. The terms ofthis Option shall be binding upon the executors, administrators, heirs, successorsand assigns of the Optionee.

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# 11.           Term of Option. This Option may not be exercised more than ten (10) years from theVesting Commencement Date of this Option, and may be exercised during suchperiod only in accordance with the Plan and the terms of this Option.

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# 12.           Taxation Upon Exercise of Option. Optionee understands that, upon exercise of thisOption, he will recognize income for tax purposes in an amount equal to theexcess of the then Fair Market Value of the Shares purchased over the exerciseprice paid for such Shares. Since the Optionee is subject to Section 16(b)of the Securities Exchange Act of 1934, as amended, under certain limitedcircumstances the measurement and timing of such income (and the commencementof any capital gain holding period) may be deferred, and the Optionee isadvised to contact a tax advisor concerning the application of Section 83in general and the availability an 83(b) election in particular in connectionwith the exercise of the Option. Upon a resale of such Shares by the Optionee,any difference between the sale price and the Fair Market Value of the Shareson the date of exercise of the Option, to the extent not included in income asdescribed above, will be treated as capital gain or loss.

 
| Dated: |   |                    |   | MONACO COACH CORPORATION, |
|--------|--------|-------------------------|--------|---------------------------|
|   |   | a  Delaware corporation |
|   |   |                    |
|   |   |                    |
|   |   | By:                     |   |

 

Optionee acknowledges receipt of a copy of the Plan, acopy of which is annexed hereto, and represents that he is familiar with theterms and provisions thereof, and hereby accepts this Option subject to all ofthe terms and provisions thereof. Optionee hereby agrees to accept as binding,conclusive and final all decisions or interpretations of the Board upon anyquestions arising under the Plan.

 
| Dated: |   |   |     |
|--------|--------|--------|----------|
|   |   |   | Optionee |

 

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