**Exhibit 10.2**

 

**MONACO COACH CORPORATION**

**1993 STOCK PLAN**

**RESTRICTED STOCK UNIT**

**AGREEMENT**

 

THIS RESTRICTEDSTOCK 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 otherwisedefined 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. Each Restricted Stock Unit represents aright to receive a Share at the times and subject to the terms and conditionsas set forth herein. Prior to actual payment of any vested Restricted StockUnits, such Restricted Stock Unit will represent an unsecured obligation of theCompany, payable (if at all) only from the general assets of the Company.

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# 2.             **Obligation to Pay**. No Restricted StockUnits will vest hereunder unless and until the Company achieves either (A) 10%return on equity for the Company’s fiscal year 2007, or (B) an average of10% return on equity for the Company’s fiscal years from 2007 through 2009 (the“Performance Condition”), except that if the Company experiences a Change inControl prior to the commencement of the Company’s 2010 fiscal year, thenvesting of the Restricted Stock Units will no longer be conditioned upon theachievement of either of the performance objectives set forth in clauses (A)and (B) and the Performance Condition will be deemed to have been satisfied. Subjectto satisfaction of the Performance Condition and any vesting accelerationprovisions set forth herein or in the Plan, one hundred percent (100%) of theRestricted Stock Units will vest on the third (3rd) anniversary ofthe Date of Grant, subject to Participant continuing to be an Employee throughsuch date. Notwithstanding thevesting schedule in the previous sentence, in the event Participant ceases to be an Employeeas the result of Participant’s death, Disability or Retirement, 100% of the Restricted Stock Units willimmediately vest in full; provided, however, that if at the time of such termination the Performance Condition has notbeen satisfied, then the Restricted Stock Units will vest if and to the extentthe Performance Condition is thereafter satisfied, which will be settled at thetime such condition is satisfied. In addition, if within twelve (12) months of a Change inControl (i) the Company (or the Affiliate employing Participant)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. Subject to the foregoing provisions of thisparagraph and the provisions of the Plan, in the event Participant ceases to bean Employee for any or no reason before Participant vests in the right toreceive the Shares to be issued pursuant to the Restricted Stock Unit or itbecomes no longer possible to satisfy the Performance Condition, the RestrictedStock Units and Participant’s right to receive any Shares with respect theretowill immediately terminate.

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For purposes of this Section 2, “Cause” is defined as (i) an actof dishonesty made by Participant in connection with Participant’s responsibilitiesas an Employee, (ii) Participant’s conviction of, or plea of nolocontendere to, a felony, (iii) Participant’s gross misconduct, or(iv) Participant’s continued substantial violations of his employmentduties after Participant has received a demand for performance from theCompany.

 

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

 

For purposes 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) a relocation ofParticipant’s principal place of employment by more than fifty (50) miles.

 

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

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# 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 furnish the Company with (a) writtennotice of his or her status as transferee, and (b) evidence satisfactoryto the Company to establish the validity of the transfer and compliance withany laws or regulations pertaining to said transfer.

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# 5.             **Rights as Stockholder**. Except as set forth inSection 4, neither Participant nor any person claiming under or throughParticipant will have any of the rights or privileges of a stockholder of theCompany in respect of any Shares deliverable hereunder, unless and untilcertificates representing such Shares will have been issued, recorded on therecords of the Company or its transfer agents or registrars, and delivered toParticipant.

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# 6.             **DividendEquivalent Rights****.**In the event cash dividends are paid with respectto Common Stock on and after the Date of Grant and before the settlement of theAward pursuant to Section 3, on the date this Award is settled upon vesting ofRestricted Stock Units pursuant to Section 3, Participant will also receive anamount of cash equal to the per Share amount of cash dividends so paid on orafter the Date of Grant and before settlement multiplied by the number ofShares actually deliverable upon settlement of this Award.

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# 7.             **Effect on Employment**. Participantacknowledges and agrees that the vesting of the Restricted Stock Units pursuantto Section 2 hereof is earned only by Participant continuing to be an Employeethrough the applicable vesting dates (and not through the act of being hired oracquiring Shares hereunder). Participant further acknowledges and agrees thatthis Agreement, the transactions contemplated

 

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# hereunder and the vesting schedule set forth herein donot constitute an express or implied promise of Participant continuing to be anEmployee for the vesting period, for any period, or at all, and will notinterfere with the Participant’s right or the right of the Company (or theAffiliate employing Participant) to terminate Participant as an Employee at anytime, with or without cause.

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# 8.             **Tax Withholding**. Notwithstanding any contrary provision of thisAgreement, no certificate representing Shares will be issued to Participant,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. All income, employment and other taxesrelated to the Restricted Stock Unit and any Shares delivered in paymentthereof are the sole responsibility of Participant. The Administrator, in itssole discretion and pursuant to such procedures as it may specify from time totime, may permit Participant to satisfy such tax withholding obligation, inwhole or in part by one or more of the following (without limitation):(a) paying cash or (b)  selling a sufficient number of such Sharesotherwise deliverable to Participant through such means as the Company maydetermine in its sole discretion (whether through a broker or otherwise) equalto the amount required to be withheld. If Participant fails to makesatisfactory arrangements for the payment of any required tax withholdingobligations hereunder at the time this Award is otherwise scheduled to vestpursuant to Section 2, Participant agrees and acknowledges that the Company, inits discretion, shall have the right (but not the obligation) to satisfy anytax withholding obligations by either (i) reducing the number of Sharesotherwise deliverable to Participant havinga Fair Market Value equal to the minimum amount required to be withheld,or (ii) selling a sufficient number of Shares otherwise deliverable toParticipant on Participant’s behalf through such means as the Company maydetermine in its sole discretion (whether through a broker or otherwise) equalto the amount required to be withheld.

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# 9.             **Additional Conditions to Issuance of Stock**. If at any time theCompany will determine, in its discretion, that the listing, registration orqualification of the Shares upon any securities exchange or under any state orfederal law, or the consent or approval of any governmental regulatoryauthority is necessary or desirable as a condition to the issuance of Shares toParticipant (or his estate), such issuance will not occur unless and until suchlisting, registration, qualification, consent or approval will have beeneffected or obtained free of any conditions not acceptable to the Company. Wherethe Company determines that the delivery of the payment of any Shares willviolate federal securities laws or other applicable laws, the Company willdefer delivery until the earliest date at which the Company reasonablyanticipates that the delivery of Shares will no longer cause such violation. TheCompany will make all reasonable efforts to meet the requirements of any suchstate or federal law or securities exchange and to obtain any such consent orapproval 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 underthis Agreement will be registered under the federal securities laws and will befreely tradable upon receipt. However, Participant’s subsequent sale of theShares will be subject to any market blackout-period that may be imposed by theCompany and must comply with the Company’s insider trading policies, and anyother applicable securities laws.

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# 11.           **Successors**. Subject to the limitation on the transferabilityof this grant contained herein, this Agreement will be binding upon and inureto the benefit of the heirs, legatees, legal representatives, successors andassigns of the parties hereto.

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# 12.           **Address for Notices**. Any notice to be givento the Company under the terms of this Agreement will be addressed to theCompany, in care of it Secretary at Monaco Coach Corporation, 91320

 

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# Coburg Industrial Way, Coburg, Oregon 97408, or at suchother address as the Company may hereafter designate in writing.

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# 13.           **Transferability**. Except to the limitedextent provided in Section 4, this grant and the rights and privilegesconferred hereby will not be transferred, assigned, pledged or hypothecated inany way (whether by operation of law or otherwise) and will not be subject tosale under execution, attachment or 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 of a conflict between one or moreprovisions of this Agreement and one or more provisions of the Plan, theprovisions of the Plan will govern.

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# 15.           **Administrator Authority**. The Administrator willhave the power to interpret the Plan and this Agreement and to adopt such rulesfor the administration, interpretation and application of the Plan as areconsistent therewith and to interpret or revoke any such rules (including, butnot limited to, the determination of whether or not any Restricted Stock Unitshave vested). All actions taken and all interpretations and determinations madeby the Administrator in good faith will be final and binding upon Participant,the Company and all other interested persons. 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, inits sole discretion, decide to deliver any documents related to RestrictedStock Units awarded under the Plan or future Restricted Stock Units that may beawarded under the Plan by electronic means or request Participant’s consent toparticipate in the Plan by electronic means. Participant hereby consents toreceive such documents by electronic delivery and agrees to participate in thePlan through an on-line or electronic system established and maintained by theCompany 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 anyprovision in this Agreement will be held invalid or unenforceable, suchprovision will be severable from, and such invalidity or unenforceability willnot be construed to have any effect on, the remaining provisions of thisAgreement.

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# 19.           **Entire Agreement**. This Agreementconstitutes the entire understanding of the parties on the subjects covered. TheParticipant expressly warrants that he or she is not executing this Agreementin reliance on any promises, representations, or inducements other than thosecontained herein.

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# 20.           **Modifications to the Agreement**. This Agreementconstitutes the entire understanding of the parties on the subjects covered. TheParticipant expressly warrants that he or she is not accepting this Agreementin reliance on any promises, representations, or inducements other than thosecontained herein. Modifications to this Agreement or the Plan can be made onlyin an express written contract executed by a duly authorized officer of theCompany. Notwithstanding anything tothe contrary in the Plan or this Agreement, the Company reserves the right torevise this Agreement as it deems necessary or advisable, in its solediscretion and without the consent of Participant, to comply with Section 409Aof the Code or to

 

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# otherwiseavoid imposition of any additional tax or income recognition under Section 409Aof the Code prior to the actual payment of Shares pursuant to this Award ofRestricted Stock Units.

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# 21.           **Amendment, Suspension or Termination of the Plan**. By accepting thisAward, the Participant expressly warrants that he or she has received a rightto acquire Shares under the Plan, and has received, read and understood adescription of the Plan. The Participant understands that the Plan isdiscretionary in nature and may be modified, suspended or terminated by theCompany at any time.

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

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IN WITNESS WHEREOF, the parties have signed this Agreement effective asof the date 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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