Document:

EXHIBIT 10.8

 

MONACO COACH CORPORATION

 

DIRECTOR OPTION AGREEMENT

 

INITIAL GRANT

 

Monaco
Coach Corporation, a Delaware corporation (the “Company”), has granted to                               
(the “Optionee”), an option to purchase a total of eight thousand (8,000)
shares of the Company’s Common Stock (the “Optioned Stock”), at the price
determined as provided herein, and in all respects subject to the terms,
definitions and provisions of the Company’s Director Stock Plan (as amended May
13, 2003) (the “Plan”) adopted by the Company which is incorporated herein by
reference. The terms defined in the Plan shall have the same defined meanings
herein.

 

1.             Nature of the Option. This Option is a nonstatutory option
and is not intended to qualify for any special tax benefits to the Optionee.

 

2.             Exercise
Price. The exercise price is                 
for each share of Common Stock.

 

3.             Exercise
of Option. This Option shall be exercisable during its term in accordance
with the provisions of Section 11 of the Plan as follows:

 

(i)            Right
to Exercise.

 

(a)           This Option shall become exercisable in
installments cumulatively with respect to twenty percent (20%) of the Optioned
Stock one year after May 18, 2005 (the “Vesting Commencement Date”) if Optionee
maintains his Continuous Status as a Director, so that one hundred percent
(100%) of the Optioned Stock shall be exercisable five years after the Vesting
Commencement Date if Optionee maintains his Continuous Status as a Director.

 

(b)       This
Option may not be exercised for a fraction of a share.

 

(c)           In the event of Optionee’s death,
disability, retirement or other termination of Continuous Status as a Director,
the exercisability of the Option is governed by Section 11 of this
Agreement.

 

(ii)           Method
of Exercise. This Option shall be exercisable by written notice which shall
state the election to exercise the Option and the number of Shares in respect
of which the Option is being exercised. Such written notice, in the form
attached hereto as Exhibit A, shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company. The
written notice shall be accompanied by payment of the exercise price.

 

 

4.             Method of Payment. Payment of the exercise price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:

 

(i)            cash;

 

(ii)           check,
or

 

(iii)          surrender
of other shares which (x) in the case of Shares acquired upon exercise of
an Option, have been owned by the Optionee for more than six (6) months on the
date of surrender, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised; or

 

(iv)          delivery
of a properly executed exercise notice together with such other documentation
as the Company and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price.

 

5.             Restrictions on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulations, or if such issuance
would not comply with the requirements of any stock exchange upon which the
Shares may then be listed. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

 

6.             Termination of Continuous Status as a
Director. In the
event Optionee’s Continuous Status as a Director terminates (other than upon
the Optionee’s death or permanent and total disability (as defined in Section
22(e)(3) of the Code)), the Optionee may exercise his or her Option, but only
within three (3) months from the date of such termination, and only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of its ten (10) year
term). To the extent that the Optionee was not entitled to exercise this Option
at the date of such termination, and to the extent that Optionee does not
exercise this Option (to the extent otherwise so entitled) within the time
specified herein, the Option shall terminate.

 

7.             Disability of Optionee. In the event Optionee’s Continuous
Status as a Director terminates as a result of total and permanent disability
(as defined in Section 22(e)(3) of the Code), the Option granted hereunder to
such Optionee shall become vested and exercisable for the full number of Shares
covered by the Option. The Optionee may exercise his or her Option, at any time
within twelve (12) months from the date of such termination (but in no event
later than the expiration of the term of such Option as set forth in the Notice
of Grant). If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

 

8.             Death of Optionee. In the event of the death of an
Optionee, the Option shall become vested and exercisable for the full number of
Shares covered by the Option. The Option held by the Optionee

 

2

 

at the
time of death may be exercised at any time within twelve (12) months following
the date of death by the Optionee’s estate or by a person who acquired the
right to exercise the Option by bequest or inheritance. In no event shall an
Option be exercised later than the expiration of the term of the Option, as set
forth in the Option agreement. If, after death, the Optionee’s estate or a
person who acquired the right to exercise the Option by bequest or inheritance
does not exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

 

9.             Retirement of Optionee. In the event of an Optionee’s
Retirement while a Director, the Option shall become vested and exercisable for
the full number of Shares covered by the Option. The Option held by the
Optionee at the time of Retirement may be exercised at any time within
twelve (12) months following the date of Retirement (but in no event later
than the date of expiration of its ten (10) year term). If the Option is
not exercised within the time specified herein, the Option shall terminate.

 

10.           Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The
terms of this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.

 

11.           Term of Option. This Option may not be exercised more
than ten (10) years from the Vesting Commencement Date of this Option, and
may be exercised during such period only in accordance with the Plan and the
terms of this Option.

 

12.           Taxation Upon Exercise of Option. Optionee understands that, upon
exercise of this Option, he will recognize income for tax purposes in an amount
equal to the excess of the then Fair Market Value of the Shares purchased over
the exercise price paid for such Shares. Since the Optionee is subject to Section 16(b)
of the Securities Exchange Act of 1934, as amended, under certain limited
circumstances the measurement and timing of such income (and the commencement
of any capital gain holding period) may be deferred, and the Optionee is
advised to contact a tax advisor concerning the application of Section 83
in general and the availability an 83(b) election in particular in connection
with the exercise of the Option. Upon a resale of such Shares by the Optionee,
any difference between the sale price and the Fair Market Value of the Shares
on the date of exercise of the Option, to the extent not included in income as
described above, will be treated as capital gain or loss.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
  MONACO COACH CORPORATION,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

3

 

Optionee acknowledges
receipt of a copy of the Plan, a copy of which is annexed hereto, and
represents that he is familiar with the terms and provisions thereof, and
hereby accepts this Option subject to all of the terms and provisions thereof. Optionee
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board upon any questions arising under the Plan.

 

	
  Dated:

  	
   

  	
   

  	
   

  

 

4

 

EXHIBIT A

 

MONACO COACH CORPORATION

 

DIRECTOR STOCK OPTION EXERCISE NOTICE

 

Attention:              Monaco Coach Corporation

Corporate Secretary

 

1.             Exercise of Option. The undersigned (“Optionee”)
hereby elects to exercise Optionee’s option to purchase                 
shares of the Common Stock (the “Shares”) of Monaco Coach Corporation (the “Company”)
under and pursuant to the Company’s Director Stock Plan (as amended May 13,
2003) (the “Plan”) and the Director Option Agreement dated                              
(the “Agreement”).

 

2.             Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Agreement.

 

3.             Federal Restrictions on Transfer. Optionee understands that the Shares
must be held indefinitely unless they are registered under the Securities Act
of 1933, as amended (the “1933 Act”) or unless an exemption from such
registration is available and that the certificate(s) representing the Shares
may bear a legend to that effect. Optionee understands that the Company is
under no obligation to register the Shares and that an exemption may not be
available or may not permit Optionee to transfer Shares in the amounts or at
the times proposed by Optionee.

 

4.             Tax Consequences. Optionee understands that Optionee may
suffer adverse tax consequences as a result of Optionee’s purchase or
disposition of the Shares. Optionee represents that Optionee has consulted with
any tax consultant(s) Optionee deems advisable in connection with the purchase
or disposition of the Shares and that Optionee is not relying on the Company
for any tax advice.

 

5.             Delivery of Payment. Optionee herewith delivers to the
Company the aggregate purchase price for the Shares that Optionee has elected
to purchase and has made provision for the payment of any federal or state
withholding taxes required to be paid or withheld by the Company.

 

1

 

6.             Entire Agreement. The Agreement and the Plan are
incorporated herein by reference. This agreement, the Plan and the Agreement
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Optionee with respect
to the subject matter hereof. This agreement, the Plan and the Agreement are
governed by Delaware law except for that body of law pertaining to conflict of
laws.

 

 

	
  Submitted by:

  	
   

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
   

  	
  MONACO COACH CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
   

  
							

 

2EXHIBIT 10.9

 

MONACO
COACH CORPORATION

 

DIRECTOR
OPTION AGREEMENT

 

SUBSEQUENT
GRANT

 

Monaco Coach Corporation,
a Delaware corporation (the “Company”), has granted to                                        
(the “Optionee”), an option to purchase a total of four thousand (4,000) shares
of the Company’s Common Stock (the “Optioned Stock”), at the price determined
as provided herein, and in all respects subject to the terms, definitions and
provisions of the Company’s Director Stock Plan (as amended May 13, 2003) (the “Plan”)
adopted by the Company which is incorporated herein by reference. The terms
defined in the Plan shall have the same defined meanings herein.

 

1.             Nature of the Option. This Option is a nonstatutory option and is not
intended to qualify for any special tax benefits to the Optionee.

 

2.             Exercise Price. The exercise price is $               
for each share of Common Stock.

 

3.             Exercise of Option. This Option shall be exercisable during its term
in accordance with the provisions of Section 11 of the Plan as follows:

 

(i)            Right
to Exercise.

 

(a)           This
Option shall become exercisable as to one hundred percent (100%) of the
Shares subject to this agreement five (5) years from the date of grant if,
on such date, Optionee has maintained his Continuous Status as a Director.

 

(b)           This
Option may not be exercised for a fraction of a share.

 

(c)           In
the event of Optionee’s death, disability, retirement or other termination of
Continuous Status as a Director, the exercisability of the Option is governed
by Section 11 of this Agreement.

 

(ii)           Method
of Exercise. This Option shall be exercisable by written notice, which
shall state the election to exercise the Option and the number of Shares in
respect of which the Option is being exercised. Such written notice, in the
form attached hereto as Exhibit A, shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company. The written notice shall be accompanied by payment of the exercise
price.

 

4.             Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee:

 

(i)            cash;

 

 

(ii)           check;
or

 

(iii)          surrender
of other shares which (x) in the case of Shares acquired upon exercise of
an Option, have been owned by the Optionee for more than six (6) months on
the date of surrender, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised; or

 

(iv)          delivery
of a properly executed exercise notice together with such other documentation
as the Company and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price.

 

5.             Restrictions on Exercise. This Option may not be exercised if the issuance
of such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulations, or if such issuance would not comply
with the requirements of any stock exchange upon which the Shares may then be
listed. As a condition to the exercise of this Option, the Company may require
Optionee to make any representation and warranty to the Company as may be
required by any applicable law or regulation.

 

6.             Termination of Continuous Status as a Director. In the event Optionee’s Continuous Status as a
Director terminates (other than upon the Optionee’s death or permanent and
total disability (as defined in Section 22(e)(3) of the Code)), the
Optionee may exercise his or her Option, but only within three (3) months
from the date of such termination, and only to the extent that the Optionee was
entitled to exercise it at the date of such termination (but in no event later
than the expiration of its ten (10) year term). To the extent that the
Optionee was not entitled to exercise this Option at the date of such
termination, and to the extent that Optionee does not exercise this Option (to
the extent otherwise so entitled) within the time specified herein, the Option
shall terminate.

 

7.             Disability of Optionee. In the event Optionee’s Continuous Status as a
Director terminates as a result of total and permanent disability (as defined
in Section 22(e)(3) of the Code), the Option granted hereunder to such Optionee
shall become vested and exercisable for the full number of Shares covered by
the Option. The Optionee may exercise his or her Option, at any time within
twelve (12) months from the date of such termination (but in no event later
than the expiration of the term of such Option as set forth in the Notice of
Grant). If, after termination, the Optionee does not exercise his or her Option
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

 

8.             Death of Optionee. In the event of the death of an Optionee, the
Option shall become vested and exercisable for the full number of Shares
covered by the Option. The Option held by the Optionee at the time of death may
be exercised at any time within twelve (12) months following the date of death
by the Optionee’s estate or by a person who acquired the right to exercise the
Option by bequest or inheritance. In no event shall an Option be exercised
later than the expiration of the term of the Option, as set forth in the Option
agreement. If, after death, the Optionee’s estate or a person who acquired the
right to exercise the Option by bequest or inheritance does not exercise the
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

 

2

 

9.             Retirement of Optionee. In the event of an Optionee’s Retirement while a
Director, the Option shall become vested and exercisable for the full number of
Shares covered by the Option. The Option held by the Optionee at the time of
Retirement may be exercised at any time within twelve (12) months following
the date of Retirement (but in no event later than the date of expiration of
its ten (10) year term). If the Option is not exercised within the time
specified herein, the Option shall terminate.

 

10.           Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of Optionee only by the Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.

 

11.           Term of Option. This Option may not be exercised more than ten (10) years from the
Vesting Commencement Date of this Option, and may be exercised during such
period only in accordance with the Plan and the terms of this Option.

 

12.           Taxation Upon Exercise of Option. Optionee understands that, upon exercise of this
Option, he will recognize income for tax purposes in an amount equal to the
excess of the then Fair Market Value of the Shares purchased over the exercise
price paid for such Shares. Since the Optionee is subject to Section 16(b)
of the Securities Exchange Act of 1934, as amended, under certain limited
circumstances the measurement and timing of such income (and the commencement
of any capital gain holding period) may be deferred, and the Optionee is
advised to contact a tax advisor concerning the application of Section 83
in general and the availability an 83(b) election in particular in connection
with the exercise of the Option. Upon a resale of such Shares by the Optionee,
any difference between the sale price and the Fair Market Value of the Shares
on the date of exercise of the Option, to the extent not included in income as
described above, will be treated as capital gain or loss.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
  MONACO COACH CORPORATION,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

Optionee acknowledges receipt of a copy of the Plan, a
copy of which is annexed hereto, and represents that he is familiar with the
terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions thereof. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Plan.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Optionee

  

 

3

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