Document:

Exhibit 10.3.1

MONACO COACH CORPORATION

1993 STOCK PLAN

PERFORMANCE SHARE

AGREEMENT

THIS PERFORMANCE
SHARE 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 a target number of Performance Shares
equal to (   #  ) under the Plan.  This Award relates to the Performance Period
for fiscal years 2007-2009.  The number of Performance Shares that a
Participant may earn will depend upon achievement of targets of Total
Shareholder Return and Return on Net Assets for the Performance Period and will
be determined in accordance with the Performance Share Award Program, a copy of
which is attached hereto as Appendix A. 
In accordance with the Performance Share Award Program, the number of
the Performance Shares that Participant may earn will range from zero percent
(0%) of the target number of Performance Shares to two hundred percent (200%)
of the target number of Performance Shares. 
The number of such Shares shall be determined following the end of the
Performance Period, in accordance with the terms and conditions set forth in
the Performance Share Award Program.

2.             Obligation to Pay.  Each Performance Share represents the right to receive one Share to
the extent it is earned.  Unless and
until the Performance Shares are
earned in the manner set forth in Section 1 and the Performance Share
Award Program, Participant will have no right to payment of such Performance
Shares. 
Prior to actual payment of any earned Performance Shares, such Performance Shares will represent an unsecured
obligation.  Payment of any earned
Performance Shares shall be made in whole Shares only.  Notwithstanding the foregoing provisions of
this Section 2, in the event the Company (or the Subsidiary employing
Participant) terminates Participant as an Employee without Cause or Participant
ceases to be an Employee as the result of Participant’s death or Disability,
Participant will be entitled to receive a pro-rated amount of the Performance
Shares that would have actually been earned during the Performance Period had
Participant remained an Employee through the end of the Performance Period
based on the amount of time Participant was an Employee during the Performance
Period, which will be settled at the time they would have otherwise been paid
pursuant to the Performance Share Award Program.  In addition, in the event Participant ceases
to be an Employee as the result of his or her Retirement, Participant will be
entitled to receive 100% of the Performance Shares that would have otherwise
been earned under the Performance Share Award Program had Participant remained
an Employee through the end of the Performance Period, which will be settled at
the time they would have otherwise been paid pursuant to the Performance Share
Award Program.  In addition, in the event
of a Change in Control that occurs during the Performance Period while
Participant is an Employee, a number of Performance Shares will be earned and
paid out as if all performance objectives under the Performance Share Award
Program had been earned at target, which will be settled upon consummation of
the Change in Control.  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 earns the Performance Shares pursuant to this Award, the
Performance Share Award and Participant’s right to acquire 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 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.

3.             Payment after Earning.  Any
Performance Shares that are earned or are deemed earned 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 7.  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 Performance
Shares that are earned 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 7.  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.             Effect on Employment. 
Participant acknowledges and agrees that the vesting of Performance
Shares pursuant to Section 2 hereof is earned only by Participant continuing 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 provisions 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.

7.             Tax Withholding.  Notwithstanding
any contrary provision of this Agreement, 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 with respect to such Shares so issuable.  All income, employment and other taxes
related to the Performance Share Award and any Shares delivered in payment
thereof are the sole responsibility of Participant.  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, 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.  If Participant fails to
make satisfactory arrangements for the payment of any required tax withholding
obligations hereunder at the time this Award is otherwise scheduled to vest
pursuant to Section 2, Participant will permanently forfeit the portion of the
Award that so vests and the right to receive any Shares with respect thereto
and the Award will be returned to the Company at no cost to the Company.

8.                     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.

9.                     Restrictions on Sale of
Securities.  Subject to Section 8, the Shares issued as
payment for vested Performance Shares 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.

10.                  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.

11.                  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.

12.                  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.

13.                  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.

14.                  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
Performance Shares 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.

15.                  Electronic Delivery.  The
Company may, in its sole discretion, decide to deliver any documents related to
Performance Shares awarded under the Plan or future Performance Shares 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.

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

17.                  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.

18.           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.

19.           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 Performance Shares.

20.                  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.

21.                  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 Performance Shares 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 Performance Shares 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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
    Chairman
  and Chief Executive Officer

  
	
   

  	
   

  
	
  ACCEPTED

  	
   

  	
   

  
	
   

  	
    Participant

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  PRINT NAME:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  
							

 

Appendix
A

PERFORMANCE SHARE
AWARD PROGRAM

Monaco Coach Corporation

Performance Share Award Program

Introductory
Note

The following Performance Share
Award Program (the “PSA Program”) was approved by the Board of Directors (the “Board”)
of Monaco Coach Corporation (the “Company”) on March 20, 2006.  Awards under the PSA Program will be granted
under the Company’s 1993 Stock Plan (the “Plan”).  Capitalized terms not otherwise defined
herein will have the meanings given to them under the Plan.

The description provided herein
sets forth the specific terms and conditions of the PSA Program covering
eligibility, performance measures, Performance Period and other key factors not
described in the Plan.  Each year when a
new three-year Performance Period commences, the exhibits detailing the
specific performance goals for a Performance Period under the PSA Program will
be updated.  Each participant in the PSA
Program will receive an agreement that defines the individual terms for
participation in a Performance Period.

Purpose

The purpose of the PSA
Program is to provide a means for rewarding executives for their success in
driving long-term performance results, which increase shareholder value.

Eligibility

All Company executives
are eligible to participate in the PSA Program, unless otherwise specifically
excluded by the Compensation Committee of the Board (the “Committee”).  Each executive participating in the PSA
Program is referred to as a “Participant.” 
To be eligible to receive an Award, an executive must be actively
employed by the Company or a Subsidiary of the Company on the date a
Performance Period commences. 
Participation for less than the full Performance Period under certain
circumstances set forth herein or the occurrence of a Change in Control will
allow a Participant to receive all or portion of his or her Award for a
particular Performance Period.  An
employee who becomes an executive after the commencement of a Performance
Period and within the first ninety (90) days of such Performance Period may
receive a pro-rated Award for such Performance Period, as determined by the
Committee (which employee’s target Award opportunity must be established no
later than the latest possible date that will not jeopardize such employee’s
Award qualification as performance based compensation under Section 162(m) of
the Internal Revenue Code of 1986 as amended).

Termination of Employment and
Change in Control

In the event the Company
(or the Subsidiary employing a Participant) terminates a Participant as an
Employee without Cause or Participant ceases to be an Employee as the result of
Participant’s death or Disability, Participant will be entitled to receive a
pro-rated amount of the Award that would have actually been earned during the
Performance Period had Participant remained an Employee through the end of the
Performance Period based on the amount of time Participant was an Employee
during the Performance Period, which will be settled at the time it would have
otherwise been paid had Participant remained employed through the end of the
Performance Period.  In addition, in the
event a Participant ceases to be an Employee as the result of his or her
Retirement, Participant will be entitled to receive 100% of the Award that 

would have otherwise been
earned had Participant remained employed through the end of the Performance
Period, which will be settled at the time it would have otherwise been paid had
Participant remained employed through the end of the Performance Period.  In addition, in the event of a Change in
Control that occurs during the Performance Period while a Participant is an
Employee, an Award will be deemed earned and paid out as if all performance
objectives under the Performance Share Award Program had been earned at target,
which will be settled upon consummation of the Change in Control.  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
earns any portion of an Award, the Award and Participant’s right to acquire any
Shares thereunder will immediately terminate.

Performance Period

A Performance Period will
coincide with each fiscal year and will continue for a 3 year period, unless
otherwise specified. Each year a new three-year Performance Period will
commence.

Award

Each Participant in the
PSA Program has a target Award opportunity for the Performance Period, which
must be established no later than the latest possible date that will not
jeopardize an Award’s qualification as performance based compensation under
Section 162(m) of the Internal Revenue Code of 1986 as amended.  This target is determined by the
Committee.  The Award opportunity is
established for each executive pay grade level considering competitive
performance share award opportunities for comparable positions.

Performance Goals

Participants will have
their actual Award payment determined based upon the Company’s
performance.  The performance goals
established for a Performance Period and the formula for determining the “Performance
Share Award Factor,” as defined below, will be displayed in Exhibit A.

PSA Program Award Formula

Participants are limited
to a maximum Award equal to 200% of the target Award established for each
Participant by the Committee.  Final
Awards will be distributed in shares of the Company’s Common Stock.  The Performance Share Award Factor is the
combined performance level achieved by the Company against the two target
measures of Total Shareholder Return (“TSR”) and Return on Net Assets (“RONA”).

The Award formula is
provided below:

	
   PSA Factors

  

  (TSR & RONA)

  	
   

  	
  

  X

  	
   

  	
  Participant’s Target Award (Base Pay x Target
  percent ÷ by Stock Price on Award 

  Date)

  	
   

  	
  

  =

  	
   

  	
  Final

  Performance

  Share Award

  

 

Tax Withholding

The full value of the
shares of Common Stock paid pursuant to an Award is considered wages and is
therefore subject to tax withholding at the time of settlement.  To satisfy such tax withholding obligations,
a Participant may request that a sufficient number of Shares be sold to satisfy
such tax withholding obligation, or he or she may provide cash payment to cover
such tax withholding obligation.

Audit and Approval of Awards

The Corporate
Controller will review the financial calculations necessary to determine the
performance against TSR and RONA measures as shown in Exhibit A, as well as
other steps in determining the actual Award for each Participant, before Awards
are settled. The Committee will approve all Awards prior to payout.  Notwithstanding any contrary provision of
this PSA Program, the Committee, in its sole discretion, may eliminate or
reduce an actual Award payable to any Participant below that which otherwise
would be payable under the Award formula.

Payment

Awards will be paid as
soon as practicable following the completion of the Performance Period and
after the Committee has certified in writing that the performance goals and
other material terms are satisfied.

Definitions

“Performance Share Award
Factor” means the measure used to calculate the participants
payout determined by Company performance using Total Shareholder Return (TSR)
and Return on Net Assets (RONA) performance measures – see Exhibit A attached.

“Retirement”
means an Employee who retires on or after age sixty-two (62) and such
individual has been an Employee at least five (5) years at the date of
retirement.

EXHIBIT A

2006 Performance Criteria

Two and Three Year 2006 Performance Periods

Formula
for Calculating the Performance Share Award Factor

The following formula
will be used to determine the PSA Factor at the end of the Performance Periods

	
   

  	
   

  	
  Total
  shareholder

  	
   

  	
   

  	
   

  	
   

  	
  Return on Net
  Asset

  	
   

  	
   

  	
   

  
	
  [ 50%

  	
  x

  	
  Return Component
  ]

  	
  +

  	
   

  	
  [ 50%

  	
  x

  	
  Component Factor
  ]

  	
  =

  	
  PSA Factor

  	
   

  
	
   

  	
   

  	
  Factor

  0 – 200%

  	
   

  	
   

  	
   

  	
   

  	
  0 - 200%

  	
   

  	
   

  	
   

  

 

TSR Component Factor

The following
table represents the amount of the TSR Component Factor earned, based on Total
Shareholder Return versus the peer group.

	
  TSR Percentile

  	
   

  	
   

  	
   

  
	
  Ranking vs. Peers (1) (2)

  	
   

  	
  TSR Payout %

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  90th

  	
   

  	
  200

  	
  %

  
	
  80th

  	
   

  	
  150

  	
  %

  
	
  70th

  	
   

  	
  125

  	
  %

  
	
  60th

  	
   

  	
  100

  	
  %

  
	
  50th

  	
   

  	
  75

  	
  %

  
	
  40th

  	
   

  	
  50

  	
  %

  
	
  30th

  	
   

  	
  25

  	
  %

  
	
  <30

  	
   

  	
  0

  	
  %

  

 

(1)   The TSR Ranking for each
company in the peer group and the Company will be determined as follows:

·      TSR for the term will be calculated by taking the
company’s stock price at the end of the Performance Period and adding the value
of dividends paid during the Performance Period (assuming reinvestment).  This sum is then divided by the company’s
stock price at the beginning of the Performance Period.  Beginning and ending stock prices will be
calculated by taking a 30 day average of the quoted prices immediately
preceding the first and last days of the Performance Period, respectively

·      Peer companies will be ranked from lowest to
highest using the above calculation.

·      The Company’s TSR performance will be compared to
the ranked companies to determine the TSR Component Factor.  For example, if the Company ranked equivalent
to a company that ranked in the 50th percentile, the TSR Component Factor would be
75% of the target Award.

·      If
the Company’s TSR falls between the levels shown, the TSR Factor will be
interpolated.

(2)   The following companies
comprise the peer group:

Peer Group

Coachmen Industries Inc.

Fleetwood Enterprises

National RV Holdings Inc.

Thor Industries Inc.

Winnebago Industries

Dover Corporation

Greenbrier Companies

Oshkosh Truck Corp

Paccar Inc.

Trinity Industries

Artic Cat Inc.

Champion Enterprises Inc.

Baldor Electric

Cummins Inc.

Harley Davidson

Parker Hannifin Corp.

Polaris

Regal-Beloit Corp

Spartan Motors

Return
on Net Assets Factor

The Company must achieve
an annual average rate of Return on Net Assets (“RONA”) of at least 1% for the Performance Period before any Award from the RONA
Component Factor is payable.

	
  RONA Percentile

  	
   

  	
   

  	
   

  
	
  Ranking vs. Peers (1)

  	
   

  	
  RONA Payout %

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  >90th

  	
   

  	
  200

  	
  %

  
	
  80th – 89th

  	
   

  	
  150

  	
  %

  
	
  70th – 79th

  	
   

  	
  125

  	
  %

  
	
  60th-69th

  	
   

  	
  100

  	
  %

  
	
  50th-59th

  	
   

  	
  75

  	
  %

  
	
  40th-49th

  	
   

  	
  50

  	
  %

  
	
  30th-39th

  	
   

  	
  25

  	
  %

  
	
  <30th

  	
   

  	
  0

  	
  %

  

 

(1)   The RONA Ranking for each
company in the peer group and the Company will be determined as follows:

·      RONA for the term will be an average of the RONA
calculated for each year during the Performance Period.  RONA for each year is calculated by taking a
company’s net income for the year and dividing it by the company’s year-end Net
Assets.  Net Assets are defined as the
company’s total assets minus non-interest bearing current liabilities.

·      Peer companies will be ranked from lowest to
highest using the above calculation.

·      The
Company’s RONA performance will be compared to the ranked companies to
determine the RONA Component Factor.  For
example, if the Company ranked equivalent to a company that ranked in the 60th percentile, the RONA Component Factor would be
100% of the target Award.

(2)   The following companies
comprise the peer group:

Peer Group

Coachmen Industries Inc.

Fleetwood Enterprises

National RV Holdings Inc.

Thor Industries Inc.

Winnebago Industries

Dover Corporation

Greenbrier Companies

Oshkosh Truck Corp

Paccar Inc.

Trinity Industries

Artic Cat Inc.

Champion Enterprises Inc.

Baldor Electric

Cummins Inc.

Harley Davidson

Parker Hannifin Corp.

Polaris

Regal-Beloit Corp

Spartan MotorsExhibit 10.3.2

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.  Each Restricted Stock Unit represents a right
to receive a Share at the times and subject to the terms and conditions as set
forth herein.  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 the Company achieves either
(A) 10% return on equity for the Company’s fiscal year 2007, or (B) an average
of 10% return on equity for the Company’s fiscal years from 2007 through 2009
(the “Performance Condition”), except that if the Company experiences a Change
in Control prior to the commencement of the Company’s 2010 fiscal year, then
vesting of the Restricted Stock Units will no longer be conditioned upon the
achievement of either of the performance objectives set forth in clauses (A)
and (B) and the Performance Condition will be deemed to have been
satisfied.  Subject to satisfaction of
the Performance Condition and any vesting 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, 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; provided, however, that if at the
time of such termination the Performance Condition has not been satisfied, then
the Restricted Stock Units will vest if and to the extent the Performance
Condition is thereafter satisfied, which will be settled at the time such
condition is satisfied.  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 provisions of this
paragraph and the provisions of 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 or it
becomes no longer possible to satisfy the Performance Condition, the Restricted
Stock Units and Participant’s right to receive any Shares with respect thereto
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 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, “Return on Equity” is defined as pre
management-bonus earnings before interest, tax, depreciation and amortization
divided by beginning equity.

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 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.

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.

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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  DATE:

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