EXHIBIT 10.3


 


MONACO COACH CORPORATION


1993 STOCK PLAN


RESTRICTED STOCK UNIT


AGREEMENT


 


THIS RESTRICTED
STOCK AGREEMENT (the “Agreement”) is effective as of (Date) (the “Date of Grant”),
between MONACO COACH CORPORATION (hereinafter called the “Company”) and (NAME) (hereinafter called the “Participant”). Unless otherwise
defined herein, 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,
subject to the Company’s stockholders approving the Plan, as amended and
restated, at the Company’s 2006 Annual Stockholder Meeting. In the event the
Company’s stockholders do not approve the Plan, as amended and restated, at the
Company’s 2006 Annual Stockholder Meeting, this Award of Restricted Stock Units
will immediately terminate and Participant will have no further rights to
acquire Shares hereunder. Each Restricted Stock Unit represents a value equal
to the Fair Market of a Share on the date that it vests. Prior to actual
payment of any vested Restricted Stock Units, such Restricted Stock Unit will
represent an unsecured obligation of the Company, payable (if at all) only from
the general assets of the Company.


 


2.             Obligation to Pay. No Restricted
Stock Units will vest hereunder unless and until (i) the Company’s stockholders
approve the Plan, as amended and restated, at the Company’s 2006 Annual
Stockholder Meeting, and (ii) the Company achieves either (A) 6% return on
equity for the Company’s fiscal year 2006, or (B) an average of 6% return
on equity for the Company’s fiscal years from 2006 through 2008. Subject to the
previous sentence and any acceleration provisions set forth herein or in the
Plan, one hundred percent (100%) of the Restricted Stock Units will vest on the
third (3rd) anniversary of the Date
of Grant, subject to Participant continuing to be an Employee through such date.
Notwithstanding the vesting schedule in the previous sentence (but subject to
the conditions to vesting in the first sentence of this paragraph), in the
event Participant ceases to be an Employee as the result of Participant’s
death, Disability or Retirement, 100% of the Restricted Stock Units will
immediately vest in full. In addition, if within twelve (12) months of a Change
in Control (i) the Company (or the Affiliate employing Participant)
terminates Participant as an Employee without Cause, or (ii) Participant
resigns as an Employee for Good Reason, then 100% of the Restricted Stock Units
will immediately vest in full. Subject to the foregoing acceleration provisions
and any such provisions set forth in the Plan, in the event Participant ceases
to be an Employee for any or no reason before Participant vests in the right to
receive the Shares to be issued pursuant to the Restricted Stock Unit, the
Restricted Stock Unit and Participant’s right to receive any Shares hereunder
will immediately terminate.


 


For purposes of this Section 2, “Cause” is defined as (i) an act
of dishonesty made by Participant in connection with Participant’s
responsibilities as an Employee, (ii) Participant’s 


 


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conviction of, or plea of nolo
contendere to, a felony, (iii) Participant’s gross misconduct, or
(iv) Participant’s continued substantial violations of his employment
duties after Participant has received a demand for performance from the
Company.


 


For purposes of this Section 2, “Good Reason” is defined as (i) a
significant reduction of Participant’s duties, position or responsibilities, or
the removal of Participant from such position and responsibilities, unless
Participant is provided with a comparable position (i.e., a position of equal
or greater organizational level, duties, authority and compensation); provided, however, that a reduction in
duties, position or responsibilities solely by virtue of a Change in Control
shall not constitute “Good Reason”, (ii) the reduction of Participant’s
aggregate base salary and target bonus opportunity (“Base Compensation”) below
Participant’s Base Compensation immediately prior to such reduction, unless the
Company also similarly reduces the Base Compensation of all other similarly
situated employees of the Company (and its successor) or (iii) a relocation of
Participant’s principal place of employment by more than fifty (50) miles.


 


3.             Payment
after Vesting. Any Restricted Stock Units that vest in
accordance with Section 2 will be paid to Participant (or in the event of
Participant’s death, to his or her estate) in whole Shares, subject to
Participant satisfying any applicable tax withholding obligations as set forth
in Section 8. Notwithstanding the foregoing sentence, to the extent necessary
to avoid the imposition of any additional tax or income recognition under
Section 409A of the Code prior to or upon the actual payment of Shares pursuant
to this Award of Restricted Stock Units, any Restricted Stock Units that vest
in accordance with Section 2 will be paid to 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 of Participant’s termination of employment with
the Company (or any Affiliate), subject to Section 8. The Participant will not
be required to make any additional monetary payment (other than applicable tax
withholding, if any) upon settlement of the Award.


 


4.             Payments
after Death. Any distribution or delivery to be made to
Participant under this Agreement will, if Participant is then deceased, be made
to Participant’s designated beneficiary, or if no beneficiary survives
Participant, the administrator or executor of Participant’s estate. Any such
transferee must furnish the Company with (a) written notice of his or her
status as transferee, and (b) evidence satisfactory to the Company to
establish the validity of the transfer and compliance with any laws or
regulations pertaining to said transfer.


 


5.             Rights as
Stockholder. Except as set forth in Section 4, neither
Participant nor any person claiming under or through Participant will have any
of the rights or privileges of a stockholder of the Company in respect of any
Shares deliverable hereunder, unless and until certificates representing such
Shares will have been issued, recorded on the records of the Company or its
transfer agents or registrars, and delivered to Participant.


 


6.             Dividend
Equivalent Rights. In the event cash dividends are paid with
respect to Common Stock on and after 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 Units pursuant to Section 3,
Participant will also receive an amount of cash equal to the per Share amount
of cash dividends so paid on or after the Date of Grant and before settlement
multiplied by the number of Shares actually deliverable upon settlement of this
Award.


 


7.             Effect on
Employment. Participant acknowledges and agrees that the vesting
of the Restricted Stock Units pursuant to Section 2 hereof is earned only by
Participant continuing 


 


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to be an Employee through the
applicable vesting dates (and not through the act of being hired or acquiring
Shares hereunder). Participant further acknowledges and agrees that this
Agreement, the transactions contemplated hereunder and the vesting schedule set
forth herein do not constitute an express or implied promise of Participant
continuing to be an Employee for the vesting period, for any period, or at all,
and will not interfere with the Participant’s right or the right of the Company
(or the Affiliate employing Participant) to terminate Participant as an
Employee at any time, with or without cause.


 


8.             Tax Withholding.
Notwithstanding any contrary provision of this Agreement, no certificate
representing the Shares 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 with respect to such Shares so issuable and/or cash
to be paid. All income, employment and other taxes related to this Restricted
Stock Unit Award and any Shares or cash delivered in payment thereof are the
sole responsibility of Participant. Any cash payments to be made pursuant to
Section 6 hereof will be reduced to satisfy any applicable tax withholding
requirements with respect to such amounts. The Administrator, in its sole
discretion and pursuant to such procedures as it may specify from time to time,
may permit Participant to satisfy such tax withholding obligation with respect
to Shares issuable hereunder, in whole or in part by one or more of the
following (without limitation): (a) paying cash, (b) electing to have
the Company withhold otherwise deliverable Shares having a Fair Market Value
equal to the amount required to be withheld, (c) delivering to the Company
already vested and owned Shares having a Fair Market Value equal to the amount
required to be withheld, or (d) selling a sufficient number of such Shares
otherwise deliverable to Participant through such means as the Company may
determine in its sole discretion (whether through a broker or otherwise) equal
to the amount required to be withheld. The Company, in its sole discretion, may
use any cash amounts that are to be paid pursuant to Section 6 to satisfy any
tax withholding otherwise due with respect to the issuance of Shares pursuant
to the this Restricted Stock Unit Award. If Participant fails to make
satisfactory arrangements for the payment of any required tax withholding
obligations hereunder at the time any applicable Restricted
Stock Units otherwise are scheduled to vest pursuant to
Section 2, Participant will permanently forfeit such Restricted
Stock Units and the right to receive any Shares with respect thereto and such
Restricted Stock Units will be returned to the Company at no cost
to the Company.


 


9.             Additional
Conditions to Issuance of Stock. If at any time the Company will
determine, in its discretion, that the listing, registration or qualification
of the Shares upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory authority is
necessary or desirable as a condition to the issuance of Shares to Participant
(or his estate), such issuance will not occur unless and until such listing,
registration, qualification, consent or approval will have been effected or
obtained free of any conditions not acceptable to the Company. Where the
Company determines that the delivery of the payment of any Shares will violate
federal securities laws or other applicable laws, the Company will defer
delivery until the earliest date at which the Company reasonably anticipates
that the delivery of Shares will no longer cause such violation. The Company
will make all reasonable efforts to meet the requirements of any such state or
federal law or securities exchange and to obtain any such consent or approval
of any such governmental authority.


 


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10.           Restrictions on Sale of
Securities. Subject to Section 9, the Shares issued as payment
for vested Restricted Stock Units awarded under this Agreement will be
registered under the federal securities laws and will be freely tradable upon
receipt. However, Participant’s subsequent sale of the Shares will be subject
to any market blackout-period that may be imposed by the Company and must
comply with the Company’s insider trading policies, and any other applicable
securities laws.


 


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


 


12.           Address for Notices.
Any notice to be given to the Company under the terms of this Agreement will be
addressed to the Company, in care of it Secretary at Monaco Coach Corporation, 91320
Coburg Industrial Way, Coburg, Oregon 97408, or at such other address as the
Company may hereafter designate in writing.


 


13.           Transferability.
Except to the limited extent provided in Section 4, this grant and the
rights and privileges conferred hereby will not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and will not be 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 privilege conferred hereby, or upon any
attempted sale under any execution, attachment or similar process, this grant
and the rights and privileges conferred hereby immediately will become null and
void.


 


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


 


15.           Administrator Authority.
The Administrator will have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret or revoke any such
rules (including, but not limited to, the determination of whether or not any
Restricted Stock Units have vested). All actions taken and all interpretations
and determinations made by the Administrator in good faith will be final and
binding upon Participant, the Company and all other interested persons. No
member of the Administrator will be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
this Agreement.


 


16.           Electronic Delivery.
The Company may, in its sole discretion, decide to deliver any documents
related to Restricted Stock Units awarded under the Plan or future Restricted
Stock Units that may be awarded under the Plan by electronic means or request
Participant’s consent to participate in the Plan by electronic means. Participant
hereby consents to receive such documents by electronic delivery and agrees to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the Company.


 


17.           Captions. Captions
provided herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.


 


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18.           Agreement Severable.
In the event that any provision in this Agreement will be held invalid or
unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining
provisions of this Agreement.


 


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


 


20.           Modifications to the
Agreement. This Agreement constitutes the entire understanding
of the parties on the subjects covered. The Participant expressly warrants that
he or she is not accepting this Agreement in reliance on any promises,
representations, or inducements other than those contained herein. Modifications
to this Agreement or the Plan can be made only in an express written contract
executed by a duly authorized officer of the Company. Notwithstanding anything
to the contrary in the Plan or this Agreement, the Company reserves the right
to revise this Agreement as it deems necessary or advisable, in its sole
discretion and without the consent of Participant, to comply with Section 409A
of the Code or to otherwise avoid imposition of any additional tax or income
recognition under Section 409A of the Code prior to the actual payment of
Shares pursuant to this Award of Restricted Stock Units.


 


21.           Amendment, Suspension or
Termination of the Plan. By accepting this Award, the Participant
expressly warrants that he or she has received a right to acquire Shares under
the Plan, and has received, read and understood a description of the Plan. The
Participant understands that the Plan is discretionary in nature and may be
modified, suspended or terminated by the Company at any time.


 


22.           Governing Law.
This Agreement shall be governed by the laws of the State of Oregon, without
giving effect to the conflict of law principles thereof. For purposes of
litigating any dispute that arises under this Award of Restricted Stock Units
or this Agreement, the parties hereby submit to and consent to the jurisdiction
of the State of Oregon, and agree
that such litigation shall be conducted in the courts of Lane County, Oregon,
or the federal courts for the United States located in or around Lane County,
Oregon, and no other courts, where this Award of Restricted Stock Units is made
and/or to be performed.


 


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


 


	
   

  	
  MONACO COACH CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  ACCEPTED:

  	
   

  	
   

  
	
   

  	
  Participant

  
	
   

  
	
   

  
	
  PRINT NAME:

  	
   

  	
   

  
	
   

  
	
  DATE:

  	
   

  	
   

  
											



 


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