EXHIBIT 10.7.2


 


LITHIA MOTORS, INC.


RESTRICTED STOCK AGREEMENT


 


This Restricted Stock Agreement is made and entered
into pursuant to the terms of the 2003 Stock Incentive Plan (the “Plan”)
adopted by the Board of Directors and Shareholders of Lithia Motors, Inc., an
Oregon corporation (the “Company”). 
Unless otherwise defined herein, capitalized terms defined in this Restricted
Stock Agreement shall have the meanings as defined in the Plan.


 


	
  The
  “Grantee”

  	
                                                               

  	
   

  
	
   

  	
   

  	
   

  
	
  Number
  of Shares of the Company’s

  	
                                                               

  	
   

  
	
  Common
  Stock Awarded

  	
  (the
  “Grant Shares”)

  	
   

  
	
   

  	
   

  	
   

  
	
  “Date
  of Award”

  	
                                                              

  	
   

  
	
   

  	
   

  	
   

  
	
  Price
  Paid by Grantee per Share

  	
  $

  	
  0

  	
   

  	
   

  
	
   

  	
   

  
	
  Fair
  Market Value per Share of Date of Award

  	
  $

  	
                          

  	
   

  
	
   

  	
   

  
	
  Repurchase
  Price per Share

  	
  $

  	
  0.001

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Grantee’s
  Current Job Grade or Manager Level

  	
                                                              

  	
   

  
	
   

  	
   

  	
   

  
	
  “Vesting
  Schedule”

  	
  Per
  the attached Schedule A

  	
   

  



 


1.             AWARD OF RESTRICTED STOCK GRANT


 


The Company hereby awards to the Grantee and the
Grantee accepts the award of a Restricted Stock Grant of the number of shares
of Common Stock of the Company specified above as the Grant Shares.  This
Restricted Stock Grant is being made as part of the Grantee’s compensation
package without the payment of any consideration other than the Grantee’s
services to the Company and payment by the Grantee of the Price Paid per Share
specified above, if any.  The Award is being made pursuant to the Plan and
is subject to and conditioned upon the terms and conditions of the Plan and the
terms and conditions set forth in this Agreement.  Any inconsistency
between this Agreement and the terms and conditions of the Plan will be
resolved in accordance with the Plan.


 


2.             REPRESENTATIONS OF THE GRANTEE


 


2.1          No Representations by or on Behalf of the
Company.  The Grantee is not relying on any representation, warranty
or statement made by the Company or any agent, employee or officer, director,
shareholder or other controlling person of the Company regarding the Grant
Shares or this Restricted Stock Grant.


 


2.2          Tax Election.  The Company has
advised the Grantee to seek the Grantee’s own tax and financial advice with
regard to the federal and state tax considerations resulting from the Grantee’s
receipt of the Grant Shares pursuant to the Award.  The Grantee is making
the Grantee’s own determination as to the advisability of making a Section 83(b)
election with respect to the Grant Shares covered by the Award and this
Agreement.  The Grantee understands that the Company will report to
appropriate taxing authorities the payment to the Grantee of compensation
income either (i) upon the vesting of Shares or (ii) if the Grantee makes
a timely Section 83(b) election, as of the Date of the Award.  The
Grantee understands that he or she is solely responsible for the payment of all
federal and state taxes resulting from this Restricted Stock Grant.  With
respect to Tax Withholding Amounts, the Company has all of the rights specified
in Section 5 of this Agreement and has no obligations to the Grantee except as
expressly stated in Section 5 of this Agreement.


 


2.3          Agreement to Enter into Lock-Up Agreement
with an Underwriter.  If the Grantee is then an executive officer of
the Company, the Grantee, by accepting the Award represented by this Agreement,
understands and agrees that whenever the Company undertakes a firmly
underwritten public offering of its securities, the Grantee will, if requested
to do so by the managing underwriter in such offering, enter into an agreement
not to sell or dispose of any securities of the Company owned or controlled by
the Grantee provided that such restriction will not extend beyond 12 months
from the effective date of the registration statement filed in connection with
such offering.


 

















 


3.             GENERAL RESTRICTIONS OF TRANSFERS OF
UNVESTED SHARES


 


3.1          No Transfers of Unvested Shares. 
The Grantee agrees for himself or herself, his or her executors, administrators
and other successors in interest that none of the Unvested Shares, nor any
interest therein, may be voluntarily or involuntarily sold, transferred,
assigned, donated, pledged, hypothecated or otherwise disposed of, gratuitously
or for consideration prior to their vesting in accordance with the Vesting
Schedule set forth in Schedule A.


 


3.2          Stock Distributions.  If the Company
makes any distribution of stock with respect to the Grant Shares by way of a
stock dividend or stock split, or pursuant to any recapitalization,
reorganization, consolidation, merger or otherwise, and the Grantee receives
any additional shares of stock in the Company (or other shares of stock in
another corporation) as a result thereof, such additional (or other) shares
shall be deemed Grant Shares hereunder and shall be subject to the same
restrictions and obligations imposed by this Agreement.


 


3.3          Invalid Transfers.  Any disposition
of the Grant Shares other than in strict compliance with the provisions of this
Agreement shall be void.  The Company shall not be required (i) to
transfer on its books any Grant Shares which have been sold or transferred in
violation of the provisions of this Section 3 or (ii) to treat as the owner of
the Grant Shares, or otherwise to accord voting, dividend or any other rights
to, any person or entity to whom Grantee transferred or attempted to transfer
the Grant Shares in contravention of this Agreement.


 


3.4          Status of Repurchased Grant Shares. 
Any of the Grant Shares repurchased by the Company pursuant to this Agreement
shall return to the status of authorized, but unissued, shares of the Company.


 


4.             REPURCHASE
OF UNVESTED GRANT SHARES


 


4.1          Repurchase Right.  Unless the
Company gives notice to the Grantee within a period of ninety days (90) after
the occurrence of any of the foregoing events (each a “Repurchase Event”) of
its intent to waive its repurchase right, the Company will repurchase the Grant
Shares from the Grantee to the extent that they were Unvested on the date of
the Repurchase Event:


 


(i)            upon the
death of the Grantee;


 


(ii)           upon the
Grantee becoming Disabled, as such term is defined in the Plan; and


 


(iii)          upon
the Grantee ceasing, for any reason, to be an Employee, as such term is defined
in the Plan, except that a leave of absence in accordance with the Company’s
sick leave, family leave or military leave policies or that is otherwise
approved by the Committee that administers the Plan shall not constitute
cessation of Employment provided unless the Grantee fails to return to
employment with the Company at the end of such leave in accordance with such
policies or approval.


 


Notwithstanding the
foregoing, if the Company was not aware of the occurrence of the Repurchase
Event, the ninety-day period shall not begin to run until such time as the
Company actually becomes aware of such occurrence.  If the Company gives
notice of its election not to repurchase the Unvested Grant Shares, this shall
not bar or waive the Company’s obligation or option to exercise its repurchase
right in connection with any subsequent Repurchase Event.


 


4.2          Purchase Price and Payment.  The
Repurchase Price of the Grant Shares under this Section 4 is as specified
on the first page of this Agreement and shall be paid by the Company at the
closing by check.


 


4.3          Closing of the Repurchase.  Any
shares repurchased pursuant to this Section 4 shall be transferred at a closing
to be held at the principal office of the Company no later than ten (10) days
after the expiration of the ninety (90) day period specified in Section
4.1.  Failure to timely remit the Repurchase Price to the Grantee shall
not invalidate the Company’s repurchase obligation and right as set forth in
Section 4.1.


 


4.4          Safekeeping of Stock Certificate Until the
Expiration of the Repurchase Right.  Until Grant Shares are vested in
accordance with the vesting schedule set forth in Schedule A, the stock
certificate representing the Grant Shares may be retained by the Company or its
transfer agent.  Upon the closing of any repurchase pursuant to this
Section 4, Grantee hereby authorizes and irrevocably appoints the Secretary of
the Company (with full power of substitution) Grantee’s attorney-in-fact to
transfer the Grant Shares on the books of the Company and to cancel or reissue
a new certificate representing the Grant Shares in accordance with this Section
4.  Upon the written request of the Grantee, the Company will deliver or
cause to be delivered to the Grantee a stock certificate representing the Grant
Shares that have vested in accordance with the vesting schedule set forth in
Schedule A to the extent that stock


 

















 


certificates for such vested shares have not previously been delivered
to the Grantee.  The power of attorney contained in this Section 4.4 shall
become null and void as to Grant Shares that have vested in accordance with the
vesting schedule set forth in Schedule A.


 


4.5          Assignment of Rights by the Company. 
The Company may, in its sole discretion, assign its repurchase obligation with
respect to any Unvested Grant Shares to any one or more persons without notice
to, or the prior consent of, the Grantee.


 


5.             PROVISION FOR PAYMENT OF TAX WITHHOLDING
AMOUNTS


 


5.1          Payment of Tax Withholding Amounts. 
Upon the vesting of the Grant Shares or upon the Grantee making a valid
election under Section 83(b) of the Internal Revenue Code, the Grantee
must pay to the Company or make adequate provision for the payment of all Tax
Withholding as such term is defined in the Plan.  By accepting the Award
represented by this Agreement, the Grantee shall be deemed to have consented to
the Company withholding the amount of any Tax Withholding from any amounts
payable by the Company to the Grantee.  No shares of Common Stock will be
released from the restrictions on their transfer under Section 3 of this
Agreement unless and until payment or adequate provision for payment of the Tax
Withholding has been made.  If the Company later determines that
additional Tax Withholding was or has become required beyond any amount paid or
provided for by the Grantee, the Grantee will pay such additional amount to the
Company immediately upon demand by the Company.  If the Grantee fails to
pay the amount demanded, the Company may withhold that amount from other
amounts payable by the Company to the Grantee, including salary or any bonus.


 


5.2          Alternative Provisions for the Payment of Tax
Withholding Amounts.  The Grantee may elect to pay all or any portion
of the Tax Withholding (i) by surrender of shares of Common Stock
(including vested Grant Shares) valued at their Fair Market Value as such term
is defined in the Plan, (ii) by authorizing a duly registered and licensed
broker-dealer to sell shares of Common Stock that are vested or vesting under
this Agreement (or, at least a sufficient portion thereof) and instructing such
broker-dealer to immediately remit to the Company a sufficient portion of the
proceeds from such sale to pay the Tax Withholding (iii) by the surrender of
other securities of the Company in the manner specified in Section 8.4 of
the Plan, or (iv) any combination of the foregoing.


 


6.             MISCELLANEOUS PROVISIONS


 


6.1           Specific Performance.  The parties
hereby acknowledge and agree that it is impossible to measure in money the
damages which will be suffered by a party hereto by reason of any breach by
another party of any term of this Agreement, that the Company and its common
stock are unique and that a non-breaching party will suffer irreparable injury
if this Agreement is not specifically performed.  Accordingly, the parties
hereto acknowledge that a non-breaching party shall, in addition to all other
remedies available hereunder or at law, be entitled to equitable relief
(including without limitation preliminary and permanent injunctive relief) to
enforce the terms of this Agreement.


 


6.2          No Rights to Continued Employment. 
Nothing contained herein shall confer upon Grantee any right to continue in the
employ of the Company or continue in their current job grade or manager level,
and the Company reserves all rights to discharge or demote Grantee for any
reason whatsoever, with or without cause, as an at-will employee, subject to
the terms of any other written agreement that may exist between the Company and
Grantee.


 


6.3          Amendment and Modification.  This
Agreement may be amended, modified and supplemented only by written agreement
of all of the parties hereto.


 


6.4          Assignment.  This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by the Grantee without the prior written consent of
the Company.


 


6.5          Governing Law.  This Agreement and
the rights and obligations of the parties hereunder shall be governed by and
construed in accordance with the internal laws of the State of Oregon
applicable to the construction and enforcement of contracts wholly executed in
Oregon by residents of Oregon and wholly performed in Oregon.  Any action
or proceeding brought by any party hereto shall be brought only in a state or
federal court of competent jurisdiction located in the County of Multnomah in
the State of Oregon and all parties hereto hereby submit to the in personal
jurisdiction of such court for purposes of any such action or procedure.


 


6.6          Arbitration.  The parties agree to
submit any dispute arising under this Agreement to final, binding, private
arbitration in Portland, Oregon.  This includes not only disputes about
the meaning or performance of the Agreement, but disputes about its
negotiation, drafting, or execution.  The dispute will be determined by a
single arbitrator in accordance with the then-existing rules of arbitration
procedure of Multnomah County, Oregon Circuit Court, except that there shall be
no right of de novo review in Circuit Court and the


 

















 


arbitrator may charge his or her standard arbitration fees rather than
the fees prescribed in the Multnomah County Circuit Court arbitration
procedures.  The proceeding will be commenced by the filing of a civil
complaint in Multnomah County Circuit Court and a simultaneous request for
transfer to arbitration. The parties expressly agree that they may choose an
arbitrator who is not on the list provided by the Multnomah County Circuit
Court Arbitration Department, but if they are unable to agree upon the single
arbitrator within ten days of receipt of the Arbitration Department list, they
will ask the Arbitration Department to make the selection for them.  The
arbitrator will have full authority to determine all issues, including
arbitrability, to award any remedy, including permanent injunctive relief, and
to determine any request for costs and expenses in accordance with Section 6.7
of this Agreement.  The arbitrator’s award may be reduced to final
judgment in Multnomah County Circuit Court.  The complaining party shall
bear the arbitration expenses and may seek their recovery if it prevails.
 Notwithstanding any other provision of this Agreement, an aggrieved party
may seek a temporary restraining order or preliminary injunction in Multnomah
County Circuit Court to preserve the status quo during the arbitration
proceeding.


 


6.7          Attorney Fees.  If any suit, action,
or proceeding is instituted in connection with any controversy arising out of
this Agreement or the enforcement of any right hereunder, the prevailing party
will be entitled to recover, in addition to costs, such sums as the court or
arbitrator may adjudge reasonable as attorney fees, including fees on any
appeal.


 


6.8          Headings.  The headings of the
sections and subsections of this Agreement are inserted for convenience only
and shall not constitute a part hereof.


 


6.9          Entire Agreement.  This Agreement
and the Plan embody the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein and supersedes all
prior written or oral communications or agreements all of which are merged
herein.  There are no restrictions, promises, warranties, covenants, or
undertakings, other than those expressly set forth or referred to herein.


 


6.10        No Waiver.  No waiver of any provision
of this Agreement or any rights or obligations of any party hereunder shall be
effective, except pursuant to a written instrument signed by the party or
parties waiving compliance, and any such waiver shall be effective only in the
specific instance and for the specific purpose stated in such writing.


 


6.11        Severability of Provisions.  In the
event that any provision hereof is found invalid or unenforceable pursuant to
judicial decree or decision, the remainder of this Agreement shall remain valid
and enforceable according to its terms.


 


6.12        Notices.  All notices or other
communications pursuant to this Agreement shall be in writing and shall be
deemed duly given if delivered personally or by courier service, or if mailed
by certified mail, return receipt requested, prepaid and addressed to the
Company executive offices to the attention of the Corporate Secretary, or if to
the Grantee, to the address maintained by the personnel department, or such
other address as such party shall have furnished to the other party in writing.


 


IN WITNESS WHEREOF, the Grantee and the Company have
executed this Agreement effective as of the Date of Award.


 


 


	
  The GRANTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Type or Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Social Security Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY

  	
   

  	
    LITHIA
  MOTORS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Sidney B. DeBoer, Chief
  Executive Officer

  
									



 

















 


RESTRICTED
STOCK AGREEMENT


 


Schedule A –
Vesting Schedule


 


Grant Shares awarded under the Restricted Stock Agreement
to which this Schedule A is attached shall vest in accordance with the
following schedule.  Grant Shares that have not yet vested in accordance
with the vesting schedule set forth herein, are referred to in the Restricted
Stock Agreement as “Unvested Shares.”


 


A.            Upon the following vesting dates:


 


	
  Vesting Date

  	
   

  	
  Number of Grant Shares Vesting on that Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


B.            Upon
the consummation of a Change of Control Transaction, as such term is defined in
the Plan, all of the Grant Shares that remain unvested shall become vested.


 


Notwithstanding the
foregoing:


 


(i)        no
additional Grant Shares will vest after the occurrence of any Repurchase Event;


 


(ii)       no
additional Grant Shares will vest while the Grantee is on leave;


 


(iii)      any
vesting dates referred to above shall automatically be extended by the duration
of any leave of absence that is without pay; and


 


(iv)     the
number of Grant Shares vesting above shall automatically be adjusted as
appropriate to reflect any stock dividend, stock-split, combination of shares
or other similar event as referred to in Section 10.1 of the Plan.