**Exhibit 10.3**

 

**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”). Unlessotherwise defined herein, the terms defined in the amended and restated 1993Stock 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 avalue equal to the Fair Market of a Share on the date that it vests. Prior toactual payment of any vested Restricted Stock Units, such Restricted Stock Unitwill represent an unsecured obligation of the Company, payable (if at all) onlyfrom the general assets of the Company.

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# 2.             **Obligationto Pay**. Subject to anyacceleration provisions set forth herein or in the Plan, one hundred percent(100%) of the Restricted Stock Units will vest on the third anniversary of theDate of Grant, subject to Participant continuing to be a Director through suchdate. Notwithstanding the foregoing vesting schedule, in the event Participantceases to be a Director as the result of Participant’s Death, Disability orRetirement, 100% of the Restricted Stock Units will immediately vest in full. Inaddition, if on or following a Change of Control Participant’s status as aDirector or a director of the successor corporation, as applicable, isterminated other than upon a voluntary resignation by the Participant, then100% of the Restricted Stock Units will immediately vest in full.

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For purposes of this Section 2, Participant will be considered to haveceased to be a Director as a result of his or her “Retirement” if Participanthas provided five (5) or more years of continual service as a Director throughthe date of such termination.

 

# 3.             **Paymentafter Vesting**. Any RestrictedStock 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 asset forth in Section 8. Notwithstanding the foregoing sentence, to the extentnecessary to avoid the imposition of any additional tax or income recognitionunder Section 409A of the Code prior to or upon the actual payment of Sharespursuant to this Award of Restricted Stock Units, any Restricted Stock Unitsthat vest in accordance with Section 2 will be paid to Participant (or in theevent 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 ofemployment with the Company (or any Affiliate), subject to Section 8. TheParticipant will not be required to make any additional monetary payment (otherthan applicable tax withholding, if any) upon settlement of the Award.

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# 4.             **Payments after Death**. Any distribution or delivery to be made toParticipant under this Agreement will, if Participant is then deceased, be madeto Participant’s designated beneficiary, or if no beneficiary survivesParticipant, the administrator or executor of Participant’s estate. Any suchtransferee must furnish the Company with (a) written notice of his

 

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# orher status as transferee, and (b) evidence satisfactory to the Company toestablish the validity of the transfer and compliance with any laws orregulations pertaining to said transfer.

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# 5.             **Rights asStockholder**. Except as set forth in Section 4, neither Participant nor any personclaiming under or through Participant will have any of the rights or privilegesof 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.

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# 6.             **Dividend Equivalent Rights****.**In the event cashdividends are paid with respect to Common Stock on and after the Date of Grantand before the settlement of the Award pursuant to Section 3, on the date thisAward 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 amountof cash dividends so paid on or after the Date of Grant and before settlementmultiplied by the number of Shares actually deliverable upon settlement of thisAward.

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# 7.             **Effect on Service**. Participant acknowledgesand agrees that the vesting of the Restricted Stock Units pursuant to Section 2hereof is earned only by Participant continuing to be a Director through theapplicable vesting dates. Participant further acknowledges and agrees that thisAgreement, the transactions contemplated hereunder and the vesting schedule setforth herein do not constitute an express or implied promise of Participantcontinuing to be a Director for the vesting period, for any period, or at all.

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# 8.             **TaxWithholding**. 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 Share 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,

 

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# consent or approval will have been effected or obtainedfree of any conditions not acceptable to the Company. Where the Companydetermines that the delivery of the payment of any Shares will violate federalsecurities laws or other applicable laws, the Company will defer delivery untilthe earliest date at which the Company reasonably anticipates that the deliveryof Shares will no longer cause such violation. The Company will make allreasonable efforts to meet the requirements of any such state or federal law orsecurities exchange and to obtain any such consent or approval of any suchgovernmental 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 its’ Secretary at Monaco Coach Corporation, 91320 CoburgIndustrial Way, Coburg, Oregon 97408, or at such other address as the Companymay 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 to the contrary in the Plan or thisAgreement, the Company reserves the right to revise this Agreement as it deemsnecessary or advisable, in its sole discretion and without the consent ofParticipant, to comply with Section 409A of the Code or to otherwise avoidimposition of any additional tax or income recognition under Section 409A ofthe 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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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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