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**Exhibit 10.3.2**

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**MONACO COACH CORPORATION**

**1993 STOCK PLAN**

**RESTRICTED STOCK UNIT**

**AGREEMENT**

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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 right to receive a Share at thetimes and subject to the terms and conditions as set forth herein.  Prior to actual payment of any vestedRestricted Stock Units, such Restricted Stock Unit will represent an unsecuredobligation of the Company, payable (if at all) only from the general assets ofthe Company.

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# 2.             **Obligation to Pay**.  No Restricted Stock Units will vest hereunderunless and until the Company achieves [either (A) 10% return on equity forthe Company’s fiscal year 2007, or (B) an average of 10% return on equityfor the Company’s fiscal years from 2007 through 2009 (the “PerformanceCondition”)], except that if the Company experiences a Change in Control priorto the commencement of the Company’s 2010 fiscal year, then vesting of theRestricted Stock Units will no longer be conditioned upon the achievement ofeither of the performance objectives set forth in clauses (A) and (B) andthe Performance Condition will be deemed to have been satisfied.

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# Subject to satisfaction of the Performance Condition andany vesting acceleration provisions set forth herein or in the Plan, onehundred percent (100%) of the Restricted Stock Units will vest on the third (3rd) anniversary of the Date of Grant, subject to Participant continuing tobe an Employee through such date.  Notwithstanding thevesting schedule in the previous sentence, in theevent Participant ceases to be an Employee as the result of Participant’sdeath, Disability or Retirement, 100% of the Restricted StockUnits will immediately vest in full;provided, however, that if at the time of such termination the PerformanceCondition has not been satisfied, then the Restricted Stock Units will vest ifand to the extent the Performance Condition is thereafter satisfied, which willbe settled at the time such condition is satisfied (that is, the Award will besettled in the calendar year in which the Company is first able to determinewhether and to what extent the Performance Condition has been satisfied).  In addition, if within twelve (12)months of a Change in Control (i) the Company (or the Affiliate employingParticipant) terminates Participant as an Employee without Cause, or (ii) Participantresigns as an Employee for Good Reason, then 100% of the Restricted Stock Unitswill immediately vest in full.  Subjectto the foregoing provisions of this paragraph and the provisions of the Plan,in the event Participant ceases to be an Employee for any or no reason beforeParticipant vests in the right to receive the Shares to be issued pursuant tothe Restricted Stock Unit or it becomes no longer possible to satisfy thePerformance Condition, the Restricted Stock Units and Participant’s right toreceive any Shares with respect thereto will immediately terminate.

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Forpurposes of this Section 2, “Cause” is defined as (i) an act ofdishonesty made by Participant in connection with Participant’sresponsibilities as an Employee, (ii) Participant’s conviction of, or pleaof nolo contendere to, a felony, (iii) Participant’s grossmisconduct, or (iv) Participant’s continued substantial 

 

 

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violationsof his employment duties after Participant has received a demand forperformance from the Company.

 

Forpurposes of this Section 2, “Change in Control” is defined as:

 

(i)        Any “person” (as suchterm is used in Sections 13(d) and 14(d) of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) becomes the “beneficial owner”(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, ofsecurities of the Company representing more than fifty percent (50%) of thetotal voting power represented by the Company’s then outstanding voting; or

 

(ii)       A change in theownership of a substantial portion of the Company’s assets which occurs on thedate that any one person, or more than one person acting as a group acquires(or has acquired during the twelve (12) month period ending on the date of themost recent acquisition by such person or persons) assets from the Company thathave a total gross fair market value equal to or more than fifty percent (50%)of the total gross fair market value of all of the assets of the Companyimmediately prior to such acquisition; or

 

(iii)      A change in thecomposition of the Company’s Board of Directors (the “Board”) occurring withina twelve (12) month period, as a result of which fewer than a majority of thedirectors are Incumbent Directors.  “IncumbentDirectors” means directors who either (A) are Directors as of the effectivedate of the Plan, or (B) are elected, or nominated for election, to theBoard with the affirmative votes of at least a majority of the IncumbentDirectors at the time of such election or nomination (but will not include anindividual whose election or nomination is in connection with an actual orthreatened proxy contest relating to the election of directors to the Company);or

 

(iv)      Theconsummation of a merger or consolidation of the Company with any othercorporation, other than a merger or consolidation which would result in thevoting securities of the Company outstanding immediately prior theretocontinuing to represent (either by remaining outstanding or by being convertedinto voting securities of the surviving entity or its parent) fifty percent(50%) or more of the total voting power represented by the voting securities ofthe Company or such surviving entity or its parent outstanding immediatelyafter such merger or consolidation.

 

Forpurposes of this Section 2, “Return on Equity” is defined as premanagement-bonus earnings before interest, tax, depreciation and amortizationdivided by beginning equity.

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Forpurposes of this Section 2, “Good Reason” is defined as (i) asignificant reduction of Participant’s duties, position or responsibilities, orthe removal of Participant from such position and responsibilities, unlessParticipant is provided with a comparable position (i.e., a position of equalor greater organizational level, duties, authority and compensation); *provided, however,* that a reduction induties, position or responsibilities solely by virtue of a Change in Controlshall not constitute “Good Reason”, (ii) the reduction of Participant’saggregate base salary and target bonus opportunity (“Base Compensation”) belowParticipant’s Base Compensation immediately prior to such reduction, unless theCompany also similarly reduces the Base Compensation of all other similarlysituated employees of the Company (and its successor) or (iii) arelocation of Participant’s principal place of employment by more than fifty(50) miles.

 

# 3.             **Payment after Vesting**.  Any Restricted Stock Units that vest inaccordance with Section 2 will be paid to Participant (or in the event ofParticipant’s death, to his or her estate) in whole Shares as soon 

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# as administrativelypracticable after vesting, subject to Participantsatisfying any applicable tax withholding obligations as set forth in Section 8.  The Participant will not berequired to make any additional monetary payment (other than applicable tax withholding,if any) upon settlement of the Award.

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Notwithstandinganything in the Plan or this Agreement to the contrary, if the vesting of thebalance, or some lesser portion of the balance, of the Restricted Stock Unitsis accelerated in connection with Participant’s termination as an Employee(provided that such termination is a “ separation from service” within themeaning of Section 409A, as determined by the Company), other than due todeath**,** and if (i) Participantis a “specified employee” within the meaning of Section 409A at the timeof such termination as an Employee, and (ii) the payment of suchaccelerated Restricted Stock Units will result in the imposition of additionaltax under Section 409A if paid to Participant on or within the six (6) monthperiod following Participant’s termination as an Employee, then the payment ofsuch accelerated Restricted Stock Units will not be made until the date six (6) monthsand one (1) day following the date of Participant’s termination as anEmployee, unless the Participant dies following his or her termination as anEmployee, in which case, the Restricted Stock Units will be paid in Shares tothe Participant’s estate as soon as practicable following his or herdeath.  It is the intent of thisAgreement to comply with the requirements of Section 409A so that none ofthe Restricted Stock Units provided under this Agreement or Shares issuablethereunder will be subject to the additional tax imposed under Section 409A,and any ambiguities herein will be interpreted to so comply.  For purposes of this Agreement, “Section 409A”means Section 409A of the Code, and any proposed, temporary or finalTreasury Regulations and Internal Revenue Service guidance thereunder, as eachmay be amended from time to time.

 

# 4.             **Paymentsafter Death**.  Any distributionor delivery to be made to Participant under this Agreement will, if Participantis then deceased, be made to Participant’s designated beneficiary, or if nobeneficiary survives Participant, the administrator or executor of Participant’sestate.  Any such transferee must furnishthe Company with (i) written notice of his or her status as transferee,and (ii) evidence satisfactory to the Company to establish the validity ofthe transfer and compliance with any laws or regulations pertaining to saidtransfer.

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# 5.             **Rights as Stockholder**.  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.             **DividendEquivalent Rights****.** In the event cash dividends are paid with respect to Common Stock on andafter the Date 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 ofGrant and before settlement multiplied by the number of Shares actuallydeliverable upon settlement of this Award.

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# 7.             **Effect on Employment**.  Participant acknowledges and agrees that thevesting of the Restricted Stock Units pursuant to Section 2 hereof isearned only by Participant continuing to be an Employee through the applicablevesting dates (and not through the act of being hired or acquiring Shareshereunder).  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 

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# interfere with the Participant’s right or the right ofthe Company (or the Affiliate employing Participant) to terminate Participantas an Employee at any time, with or without cause.

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# 8.             **Tax Withholding**.  The Company will withhold otherwisedeliverable Shares having a Fair Market Value equal to the minimum amountrequired to be withheld with respect to any income, employment and other taxeswhich the Company determines must be withheld with respect to such Sharesissuable with respect to this Award. Only whole Shares will be withheld to satisfy any tax withholdingobligations pursuant to this Section 8. At the discretion of the Company, the Company will either (i) rounddown the number of Shares so withheld and Participant will pay to theCompany an amount in cash sufficient to satisfy the remaining tax withholdingdue and payable as a result of the Company not retaining fractional Shares, or (ii) thenumber of Shares withheld will be rounded up to the nearest whole Share, with acash refund to Participant for any value of the Shares withheld in excess ofthe tax obligation (pursuant to such procedures as the Company may specify fromtime to time).  Should the Company rounddown the number of Shares withheld and is unable to procure the additional cashamounts from Participant, Participant agrees and acknowledges that Participantis giving the Company permission to withhold from Participant’s paycheck(s) orother compensation or remuneration an amount equal to the remaining taxwithholding due and payable as a result of the Company not retaining fractionalShares.  Byaccepting this Award, Participant expressly consents to the withholding ofShares and to any additional cash withholding as provided for in this Section 8.

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# 9.             **Additional Conditions to Issuance of Stock**.  If at any time the Company will determine, inits discretion, that the listing, registration or qualification of the Sharesupon any securities exchange or under any state or federal law, or the consentor approval of any governmental regulatory authority is necessary or desirableas a condition to the issuance of Shares to Participant (or his estate), suchissuance will not occur unless and until such listing, registration,qualification, consent or approval will have been effected or obtained free ofany conditions not acceptable to the Company. Where the Company determines that the delivery of the payment of anyShares will violate federal securities laws or other applicable laws, theCompany will defer delivery until the earliest date at which the Companyreasonably anticipates that the delivery of Shares will no longer cause suchviolation.  The Company will make all reasonableefforts to meet the requirements of any such state or federal law or securitiesexchange and to obtain any such consent or approval of any such governmentalauthority.

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# 10.           **Restrictions on Sale of Securities**.  Subject to Section 9, the Shares issuedas payment for vested Restricted Stock Units awarded under this Agreement willbe registered under the federal securities laws and will be freely tradableupon receipt.  However, Participant’ssubsequent 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 for Notices**.  Any notice to be given to the Company underthe terms of this Agreement will be addressed to the Company, in care of itSecretary at Monaco Coach Corporation, 91320 Coburg Industrial Way, Coburg,Oregon 97408, or at such other address as the Company may hereafter designatein 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 

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# (whether by operation of law or otherwise) and will notbe subject to sale under execution, attachment or similar process.  Upon any attempt to transfer, assign, pledge,hypothecate or otherwise dispose of this grant, or any right or privilegeconferred hereby, or upon any attempted sale under any execution, attachment orsimilar process, this grant and the rights and privileges conferred herebyimmediately 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.           **Administrator Authority**.  The Administrator will have the power tointerpret the Plan and this Agreement and to adopt such rules for theadministration, interpretation and application of the Plan as are consistent therewithand to interpret or revoke any such rules (including, but not limited to,the determination of whether or not any Restricted Stock Units havevested).  All actions taken and allinterpretations and determinations made by the Administrator in good faith willbe final and binding upon Participant, the Company and all other interestedpersons.  No member of the Administratorwill be personally liable for any action, determination or interpretation madein good faith with respect to the Plan or this Agreement.

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# 16.           **Electronic Delivery**.  The Company may, in its sole discretion,decide to deliver any documents related to Restricted Stock Units awarded underthe Plan or future Restricted Stock Units that may be awarded under the Plan byelectronic means or request Participant’s consent to participate in the Plan byelectronic means.  Participant herebyconsents to receive such documents by electronic delivery and agrees toparticipate in the Plan through an on-line or electronic system established andmaintained by the Company or another third party designated 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.           **Agreement Severable**.  In the event that any provision in thisAgreement 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.           **Entire Agreement**.  This Agreement constitutes the entireunderstanding 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.           **Modifications to the Agreement**.  This Agreement constitutes the entireunderstanding of the parties on the subjects covered.  The Participant expressly warrants that he orshe is not accepting this Agreement in reliance on any promises,representations, or inducements other than those contained herein.  Modifications to this Agreement or the Plancan be made only in an express written contract executed by a duly authorizedofficer of the Company.  Notwithstandinganything to the contrary in the Plan or this Agreement, the Company reservesthe right to revise this Agreement as it deems necessary or advisable, in itssole discretion and without the consent of Participant, to comply with Section 409Aof the Code or to otherwise avoid imposition of any additional tax or incomerecognition under Section 409A of the Code prior to the actual payment ofShares pursuant to this Award of Restricted Stock Units.

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# 21.           **Amendment, Suspension or Termination of the Plan**.  By accepting this Award, the Participantexpressly warrants that he or she has received a right to acquire Shares underthe Plan, and has 

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# received, read and understood a description of thePlan.  The Participant understands thatthe Plan is discretionary in nature and may be modified, suspended orterminated by the Company at any time.

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# 22.           **Governing Law**.  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 litigation shall be conducted in thecourts of Lane County, Oregon, or the federal courts for the United Stateslocated in or around Lane County, Oregon, and no other courts, where this Awardof Restricted Stock Units is made and/or to be performed.

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INWITNESS WHEREOF, the parties have signed this Agreement effective as of thedate and year indicated above.

 
|        | MONACO COACH CORPORATION |
|-------------|--------------------------|
|        |                     |   |
|        |                     |   |
|        | By:                      |   |
|        |                     | Kay L. Toolson, Chairman and |
|        |                     | Chief Executive Officer |
|        |                     |   |
| ACCEPTED:   |                     |   |   |   |
|        | Participant              |   |   |   |
|        |                     |   |   |   |
| PRINT NAME: |                     |   |   |   |
|        |                     |   |   |   |
| DATE:       |                     |   |   |   |

 

 

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