LITHIA MOTORS, INC.
EXECUTIVE MANAGEMENT NON-QUALIFIED
DEFERRED COMPENSATION AND LONG-TERM INCENTIVE PLAN
NOTICE OF DISCRETIONARY CONTRIBUTION AWARD
|TO:||[Name of Executive] (Participant)|
|DATE: , 20|
This Notice of Discretionary Contribution Award (Notice) is to inform you that the Companys Compensation Committee has awarded you a Discretionary Contribution of [$ ] under the Lithia Motors, Inc. Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan (the Plan). This Discretionary Contribution will be credited to your 2011 Discretionary Contribution Account under the Plan and will be governed by and subject to the Plans rules, as supplemented by the additional terms and conditions provided in this Notice.
|I.||Vesting. Your 2011 Discretionary Contribution Account will vest as follows:|
a. Service-Based Vesting Schedule. Except as provided below, your 2011 Discretionary Contribution Account will vest according to the following schedule provided you remain employed with us on the following Vesting Date(s):
b. Age-Based Vesting Schedule. Your 2011 Discretionary Contribution Account vesting percentage will be the greater of the Service-Based vesting percentage above or the schedule below assuming you remain employed with us on the date(s) you attain the following ages:
c. Vesting Acceleration Events. To the extent you are not already 100% vested in your 2011 Discretionary Contribution Account under the above Service- or Age-Based schedules, you will become 100% vested in your 2011 Discretionary Contribution Account assuming you remain employed with us at the time any of the following events occur:
|(1)||The Company undergoes a Change in Control;|
|(2)||You die; or|
|(3)||You become Disabled.|
Payment of the vested portion of your 2011 Discretionary Contribution Account shall commence between the January 1 and March 15 of the calendar year following the calendar year in which you Separate from Service.
Note: If at the time your vested 2011 Discretionary Contribution Account becomes payable you are considered a specified employee under Section 409A of the Internal Revenue Code of 1986, as amended, your distribution commencement date may be subject to a six (6) month delay.
* * * * *
The Plan document governs the payment, vesting and forfeiture of your 2011 Discretionary Contribution Account. Capitalized items used in this Notice that are not herein defined shall have the meanings prescribed to such terms in the Plan document.
This Notice reflects your 2011 Discretionary Contribution that was awarded to you by the Compensation Committee on , 2011.
|LITHIA MOTORS, INC.|
NOTICE OF DISCRETIONARY CONTRIBUTION AWARD FOR 2011 [NAME OF EXECUTIVE]
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