Document:

Split Dollar Agreement

 EXHIBIT 10.19 
 SPLIT-DOLLAR AGREEMENT 
 THIS AGREEMENT by and between Lithia Motors, Inc., an Oregon
corporation (the “Corporation”), and Sidney B. DeBoer, the Corporation’s Chief Executive Officer (the “Employee”) is dated effective November 7, 2006 (the “Effective Date”). 
 Recitals 
 A. The Corporation is the owner of a term
life insurance policy insuring the life of Employee. 
 B. The Employee wishes to provide life insurance protection for the Employee’s family in the
event of the Employee’s death. 
 C. The Corporation is willing to designate that a portion of the death benefit will be payable to Employee’s
designated beneficiaries in exchange for Employee’s payment of a proportionate amount of the premiums due on the policy. 
 D. Contemporaneously with
the execution of this Agreement, the Corporation will endorse certain rights in and to the policy to the Employee. 
 E. In consideration of the premises and
of the mutual promises contained herein, the parties hereto agree as follows: 
 Agreement 
 1. Life Insurance. The term life insurance policy to which this Agreement pertains is Policy Number 56740061 (the “Policy”) issued by
Manufacturers Life Insurance Company (U.S.A.) (the “Insurer”), on the life of Employee with a face amount of $37,276,000. 
 2.
Ownership of Policy. The Corporation shall be the sole and absolute owner of the Policy, and may exercise all ownership rights granted to the owner thereof by the terms of the Policy, except as may otherwise be provided herein. 
 3. Employee’s Right to Designate Beneficiaries. Employee shall have the right to designate the beneficiary or beneficiaries of the
Policy’s death benefit in an amount equal to Seven Million Dollars ($7,000,000) (the “Employee Portion”) by specifying the same in a written notice to the Corporation. Upon receipt of such notice, the Corporation shall execute and
deliver to the Insurer the form necessary to designate the requested persons as the beneficiaries of the Employee Portion. 
 4.
Endorsement. Contemporaneously with the execution of this Agreement, the Corporation shall execute an endorsement for the benefit of the Employee (the “Endorsement”), endorsing the right to name beneficiaries of the Employee Portion
of the Policy death benefit as provided under this Agreement. Such endorsement shall not be terminated, altered or amended by the Corporation without the express written consent of the Employee. The parties hereto agree to take all action necessary
to cause such endorsement to conform to the provisions of this Agreement. 
 5. Premium Payment. 
 (a) Upon execution of this Agreement, the Employee shall pay an initial pro-rata premium in an amount equal to $51.83 per day for each day
between the Effective Date and January 24, 2007. Thereafter, 60 days prior to each premium due date the Corporation shall give written notice to Employee of the 

  

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amount of the renewal premium and prior to such renewal due date, the Employee shall pay to the Corporation 18.92% of the premium amount due. 
 (b) On or before the due date of the Policy premium, or within the grace period therein, the Corporation shall pay the full amount of each
premium to the Insurer, and shall, upon request, promptly furnish the Employee evidence of timely payment of such premium. 
 6.
Limitation on Corporation’s Rights in Policy. Except as otherwise provided herein, the Corporation shall not sell, assign, transfer, surrender or cancel the Policy during the initial ten years of the Policy ending January 24, 2014
(the “Base Term”), nor change the beneficiary designation provisions thereof, without, in any such case, the express written consent of the Employee. 
 7. Conversion Right. The Corporation may elect to convert the Policy to a permanent plan of policy, in accordance with the terms of the Policy, only with the consent of Employee. If the Corporation and Employee
agree to convert the Policy, unless otherwise agreed by the Corporation and Employee, Employee will continue to have a right to designate beneficiaries to receive the Employee Portion of the Policy death benefit and will be obligated to pay that pro
rata share of the premiums. 
 8. Continuation of Policy. 
 (a) The Corporation and Employee agree to renew the Policy subject to this Agreement, by paying the annual premiums, through the Base
Term, unless the parties agree in writing to not renew the Policy or unless and until (i) the total cessation of the business of the Corporation, (ii) the bankruptcy, receivership or dissolution of the Corporation, or
(iii) termination of Employee’s employment with the Corporation. 
 (b) Following termination of Employee’s
employment, the Corporation may give notice to the Employee of its intent to terminate the Policy. Within 60 days of such notice, the Employee may elect to purchase the Policy by paying the Corporation the amount of any refund that the Corporation
would have received upon termination of the Policy, calculated as of the date of the Employee’s election and payment. Upon payment of such amount, the Corporation shall transfer all of its right, title and interest in and to the Policy to the
Employee or the Employee’s assignee, by the Execution and delivery of an appropriate instrument of transfer. 
 (c) If
the policy is converted to a permanent plan of policy, following termination of Employee’s employment with the Corporation, the Corporation shall give notice to the Employee of its intent to surrender or cancel the Policy for its cash surrender
value. Within 60 days of such notice, the Employee may elect to purchase the Policy by paying the Corporation the greater of (i) the total amount of the premiums paid by the Corporation following the conversion or (ii) 81.08% of the cash
surrender value of the Policy. In the event the Employee does not make such election, the Corporation may surrender the Policy, and the Employee will receive the excess of the cash surrender value above the greater of (i) the total amount of
the premiums paid by the Corporation following the conversion or (ii) 81.08% of the cash surrender value of the Policy. 
 (d) In the event the Employee fails to pay his share of the premium, as specified in Section 5(b), this Agreement shall terminate and the Corporation may remove the endorsement and/or elect not to renew the term policy. 
 9. Collection of Death Proceeds. Upon the death of the Employee, the Corporation shall promptly take all action necessary to obtain the death
benefit provided under the Policy. When such benefit has been collected and paid as provided herein, this Agreement shall thereupon terminate. 
 10. Insurer Not a Party. The Insurer shall be fully discharged from its obligations under the Policy by payment of the Policy’s death benefit to the beneficiary or beneficiaries named in the Policy, subject to the terms and
conditions of the Policy. In no event shall the Insurer be considered a party to this 

  

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Agreement, or any modification or amendment hereof, and none of the provisions herein shall in any way be construed as enlarging, changing, varying or in any
other way affecting the obligations of the Insurer as expressly provided in the Policy, except insofar as the provisions hereof are made a part of the Policy by the beneficiary designation executed by the Corporation and filed with the Insurer in
connection herewith. 
 11. Assignment by Employee. Notwithstanding any provision hereof to the contrary, the Employee shall have the
right to absolutely and irrevocably assign by gift all of the Employee’s right, title and interest in and to this Agreement and under the Endorsement to the Policy to an assignee. The Employee may exercise this right by executing a written
document in the form used by the Insurer for irrevocable gifts, and delivering this form to the Corporation. Upon receipt of such form, executed by the Employee and duly accepted by the assignee thereof, the Corporation shall consent thereto in
writing, and shall thereafter treat the Employee’s assignee as the sole owner of all of the Employee’s right, title and interest in and to this Agreement and in and to the Endorsement to the Policy. Thereafter, the Employee shall have no
right, title or interest in and to this Agreement or the Endorsement to the Policy, all such rights being vested in and exercisable only by such assignee. 
 12. Named Fiduciary, Claims Procedure and Administration. 
 (a) Named
Fiduciary. The Corporation is hereby designated as the named fiduciary under this Agreement. The named fiduciary shall have authority to control and manage the operation and administration of this Agreement, and it shall be responsible for
establishing and carrying out a funding policy and method consistent with the objectives of this Agreement. 
 (b) Claim
Procedure. A person who believes that he or she is being denied a benefit to which he or she is entitled under this Agreement (hereinafter referred to as a “Claimant”) may file a written request for such benefit with the Corporation,
setting forth his or her claim. The request must be addressed to the President of the Corporation at its then principal place of business. 
 (c) Claim Decision. Upon receipt of a claim, the Corporation shall advise the Claimant that a reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period.
The Corporation may, however, extend the reply period for an additional ninety (90) days for reasonable cause. If the claim is denied in whole or in part, the Corporation shall adopt a written opinion, using language calculated to be understood
by the Claimant, setting forth: (1) the specific reason or reasons for such denial; (2) the specific reference to pertinent provisions of this Agreement on which such denial is based; (3) a description of any additional material or
information necessary for the Claimant to perfect his or her claim and an explanation why such material or such information is necessary; (4) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for
review; and (5) the time limits for requesting a review under subsection d. and for review under subsection e. hereof. 
 (d) Request for Review. Within sixty (60) days after the receipt by the Claimant of the written opinion described above, the Claimant may request in writing that the Secretary of the Corporation review the determination of the
Corporation. Such request must be addressed to the Secretary of the Corporation, at its then principal place of business. The Claimant or his or her duly authorized representative may, but need not, review the pertinent documents and submit issues
and comments in writing for consideration by the Secretary. If the Claimant does not request a review of the Corporation’s determination by the Secretary of the Corporation within such sixty (60) day period, he or she shall be barred and
estopped from challenging the Corporation’s determination. 
 (e) Review of Decision. Within sixty (60) days
after the Secretary’s receipt of a request for review, he or she will review the Corporation’s determination. After considering all materials presented by the Claimant, the Secretary will render a written opinion, written in a manner
calculated to be understood by the Claimant, setting forth the specific reasons for the decision and containing specific references to the pertinent provisions of this Agreement on which the decision is based. If special circumstances require that
the sixty (60) day time period be extended, the Secretary will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review. 
  

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 13. Amendment. This Agreement may not be amended, altered or modified, except by a written
instrument signed by the parties hereto, or their respective successors or assigns, and may not be otherwise terminated except as provided herein. 
 14. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Corporation and its successors and assigns, and upon the Employee, the Employee’s successors, assigns, heirs, executors, administrators and
beneficiaries. 
 15. Notices. Any notice, consent or demand required or permitted to be given under the provisions of this Agreement
shall be in writing, and shall be signed by the party giving or making the same. If such notice, consent or demand is mailed to a party hereto, it shall be sent by United States certified mail, postage prepaid, addressed to such party’s last
known address as shown on the records of the Corporation. The date of such mailing shall be deemed the date of notice, consent or demand. 
 16. Governing Law. This Agreement, and the rights of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of Oregon. 
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in duplicate, as of the day and year first above written. 
  

			
	LITHIA MOTORS, INC.
		
	By:	 	/s/ M.L. Dick Heimann
		 	M.L. Dick Heimann, President of Corporate Affairs

  

			
	EMPLOYEE
	
	/s/ Sidney B. DeBoer
	Sidney B. DeBoer

  

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 ENDORSEMENT OF LIFE INSURANCE POLICY 
 PURSUANT TO SPLIT-DOLLAR AGREEMENT 
  

			
	Insured:	  	Sidney B. DeBoer
	Policy Number:	  	56 740 061
	Insurer:	  	The Manufacturers Life Insurance Company (U.S.A.)
	Initial Face Amount:	  	$37,276,000

 § 1 Ownership 
 (a) Lithia Motors, Inc., an Oregon corporation (the “Corporation”) is the owner of the above-captioned life insurance policy (the “Policy”) which is subject to the terms of a Split-Dollar Agreement
adopted by the Corporation effective as of November 7, 2006 (herein the “Split-Dollar Agreement”). Corporation hereby endorses the following rights in and to the Policy to the Insured named above (herein referred to as the
“Employee”), in accordance with the Split-Dollar Plan: 
 (1) In the event of the Employee’s death during the
term of the Split-Dollar Agreement, the Employee’s beneficiaries shall receive a portion of the death benefit payable under the Policy in accordance with § 2 of this Endorsement. 
 (2) The Employee may select the beneficiaries to receive, the portion of the death proceeds of the Policy payable to the Employee’s
beneficiaries in the amount determined under § 2 of this Endorsement, in the event of the Employee’s death to the extent provided for in the Split-Dollar Agreement. 
 (b) The Corporation shall not take any action with respect to the Policy which would impair the interests of the Employee or the Employee’s
beneficiaries or assigns. 
 § 2 Rights upon Death of Employee 
 Upon the death of the Employee, to the extent provided in the Split-Dollar Agreement, 18.92% of the Policy proceeds shall be distributed to the beneficiaries designated by the Employee or if no beneficiary has been
designated, to his estate. 
 § 3 Termination 
 This Endorsement shall terminate upon the termination of the Split-Dollar Agreement. 
 § 4 Insurer 

The Insurer may, in determining the amount of the above mentioned payments to either Corporation or Employee, safely accept, rely and act upon a
written instruction by Corporation or Employee, and the production to the Insurer of a receipt for such payment signed by the Corporation or the Employee shall be a discharge therefor to the Insurer and final and conclusive evidence that such
payment has been duly paid to and received by the party lawfully and rightfully entitled to the same and that all claims and demands whatever against the Insurer in respect thereto have been fully satisfied. The Insurer shall be fully protected (and
shall have no liability from) recognizing (and complying with) any request made by the Corporation or Employee with or without the consent of the other person or entity. 
 This Endorsement is dated effective as of November 7, 2006. 
  

			
	LITHIA MOTORS, INC.
		
	By:	 	/s/ M.L. Dick Heimann
	M.L. Dick Heimann, President of Corporate Affairs

  

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 BENEFICIARY DESIGNATION 
 UNDER SPLIT LIFE INSURANCE AGREEMENT 
 Pursuant to Section 3 and
Section 11 of the Split Dollar Agreement between Lithia Motors, Inc., and myself, dated November 7, 2006, I hereby designate the following beneficiary to receive the Employee Portion of the death benefit under the Policy and as my
assignee: 
  

			
	Sidney B. DeBoer Trust U.T.A.D. January 30, 1997
	
	/s/ Sidney B. DeBoer
	Sidney B. DeBoer

 Date: November 7, 2006 
  

 2Split Dollar Insurance Agreement

 EXHIBIT 10.20 
 SPLIT-DOLLAR INSURANCE AGREEMENT 
 (Endorsement Method) 
 This is an Agreement between Lithia Motors, Inc., an Oregon corporation, (the “Employer”), and Sidney B. DeBoer, (the “Employee”) dated effective
December 20, 2007. 
 RECITALS 
 A.
The Employee is a valued employee of Employer and Employer wants to retain him in its employ. 
 B. The Employer, as an inducement to continue this
employment, wants to assist Employee with his personal life insurance program. 
 THEREFORE, Employer and Employee agree as follows: 
 1. Life Insurance. The life insurance Policy with which this Agreement deals is Policy Number 18-103-860 (the “Policy”) issued by The
Northwestern Mutual Life Insurance Company, of Milwaukee, Wisconsin (the Insurer), on the life of Employee and providing a $12,000,000 death benefit. 
 2. Rights of the Parties 
 (a) Employer shall be the sole and exclusive owner of the Policy. This includes all the rights of
“owner” under the Policy, subject to paragraph 2(b) below. 
 (b) Employee shall have the right to designate the beneficiary of the Policy’s
death benefit in an amount equal to the death benefit minus the greater of the Employer’s cumulative premiums paid or the policy cash value as of the Employee’s death. 
 Employee’s rights and economic benefits, either in this agreement or documented on the Insurer’s records, are limited exclusively to the value of one-year death benefit protection stipulated in this
paragraph (b). 
 3. Premium Payment. The entire premium on the policy shall be paid by Employer as it becomes due. 
 4. Policy Dividends. Policy dividends shall be applied to purchase paid-up additional insurance protection. 
 5. Economic Benefit Tax Treatment. This Agreement shall be interpreted and enforced to comply with the split dollar final regulations so that it is treated
as an economic benefit transaction for tax purposes in which, at all times, the only economic benefit to Employee shall be the value of the current life insurance protection attributable to naming the beneficiary under the Policy. Employee shall not
have any current access to the Policy’s cash values within the meaning of the split dollar final regulations or any other economic benefit other than the cost of current life insurance protection. 
 6. Right to Purchase Policy. Employer shall not sell, surrender, change the insured or transfer ownership of the Policy while this agreement is in effect
without first giving Employee the option to purchase the Policy during a period of 60 days from notice to Employee of such intention. The purchase price of the Policy shall be the sum of the interpolated terminal reserve and any unearned premiums,
plus a pro-rata portion of dividends expected to be paid for that policy year, minus any policy and premium loans and any other indebtedness secured by the Policy. This restriction shall not impair the right of Employer to terminate this Agreement
pursuant to section 7 hereof. The exercise by the Employer of the power to surrender the Policy or to change the insured will terminate the rights of the Employee, other than his right to purchase the Policy pursuant to this paragraph. 

7. Purchase of Insurance Upon Termination. This agreement may be terminated by either party hereto, with or without the consent of the other, by giving
notice of termination in writing to the other party. This Agreement shall terminate automatically upon termination of Employee’s employment with Employer for any 

  

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reason whatsoever other than the Employee’s death. If this Agreement is terminated, Employee shall have the right to purchase the Policy from Employer
under the same terms and conditions as specified in section 6 hereof. 
 8. Insurance Company. Not Liable. The Insurer shall be bound only by
the provisions of and endorsements of the Policy, and any payments made or action taken by it in accordance therewith shall fully discharge it from all claims, suits and demands of all persons whatsoever. It shall in no way be bound by or be deemed
to have notice of the provisions of this Agreement. 
 9. Assignment Rights. The Employee shall have the right to assign any part or all of the
Employee’s interest in the Policy and this Agreement to any person, entity or trust: by execution of a written assignment delivered to the Employer and to the Insurer. 
 10. Amending The Agreement. The Employer and Employee can mutually agree to amend this Agreement and such amendment shall be in writing and signed by the Employer and Employee. 
 11. Binding Effect. This Agreement shall bind Employer and its successors and assigns, Employee and his heirs, executors, administrators and assigns, and
any Policy beneficiary. 
 12. ERISA Requirements. The following provisions are part of this Agreement and are intended to meet the
requirements of the Employee Retirement Income Security Act of 1974 (ERISA): 
 (a) The Named Fiduciary and Claims Manager: The Chief Accounting Officer of
the Employer. 
 (b) The funding policy under this Plan is that all premiums on the Policy be remitted to the Insurer when due. 
 (c) Direct payment by the Insurer is the basis of payment of benefits under this Plan, with those benefits in turn being based on the payment of premiums as provided in
the Plan. 
 (d) Claims procedure: 
 (1) If for
any reason a claim for benefits (other than death benefits) under this Plan is denied by the Employer, the Claims Manager shall deliver to the Claimant a written explanation setting forth the specific reasons for the adverse benefit determination;
specific references to the Plan section on which the adverse benefit determination is based; a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or
information is necessary; and a description of the Plan’s review procedure including a statement of the Claimant’s rights to bring a civil action under Section 502 of ERISA following an adverse determination on review, all written in
a manner calculated to be understood by the Claimant. For this purpose: 
 (A) The Claimant’s claim shall be deemed filed
when presented orally or in writing to the Claims Manager. 
 (B) The Claims Manager’s explanation shall be in writing
delivered to the Claimant within 90 days of the date the claim is filed unless the Claims Manager determines that special circumstances require an extension of time for processing (he claim. If such an extension of time for processing is required,
written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90 day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall
indicate the special circumstances requiring an extension of time and the date by which the Claims Manager expects to render the benefit determination. If the period of time is extended because the Claimant has failed to provide necessary
information to decide the claim, the period for making the benefit determination shall be tolled from the date on which the notification of the extension is sent to the Claimant, until the date on which the Claimant provides the information. Failure
to provide notice of decision in the time specified is the same as denial of the claim and the Claimant is entitled to require a review of the denial under the review procedures. 
 (2) The Claimant (or his or her duly authorized representative) shall have 60 days following the receipt of the denial of the claim to file with the
Claims Manager a written request for review of the denial. For such 

  

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review, Claimant shall have the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits.
Claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits. The review of the claim shall take into account all comments,
documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. 
 (3) In the case of a request for review of an adverse benefit determination, the Claims Manager is designated as the appropriately Named Fiduciary for a
full and fair review. On review, the Claims Manager shall notify the Claimant not later than 60 days after the Employer’s receipt of the request for review, unless the Claims Manager determines that special circumstances require an extension of
time for processing the claim, in which case a decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request for review. If such an extension of time for review is required because of special circumstances,
written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 60 day period. In no event shall any such extension exceed a period of 60 days from the end of the initial period. The extension notice shall
indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review. If the period of time is extended because the Claimant has failed to provide necessary information to
decide the claim, the period for making the benefit determination shall be tolled from the date on which the notification of the extension is sent to the Claimant, until the date on which the Claimant provides the information. The decision on review
shall be in writing and in the case of an adverse benefit determination shall include: (i) the specific reason or reasons for the decision; (ii) references to the specific Plan provisions on which the benefit determination is based; (hi) a
statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant’s claim for benefits; and (iv) a statement of
the Claimant’s right to bring an action under Section 502(a) of ERISA, all written in a manner calculated to be understood by the Claimant. If the decision on review is not furnished within such time, the claim shall be deemed denied on
review. 
 For a death benefit claim: 
 A
claim for a death benefit must follow the procedures established by the Insurer which may include time deadlines. If a participant’s beneficiary makes a written request to the Claims Manager, the Claims Manager will either provide copies of
forms or instructions required by Insurer to make a claim or tell the participant’s beneficiary how to obtain them. Insurer will notify the beneficiary if the claim is denied and will explain the procedures it has for reviewing any claims which
it denies. The time and manner of such review, and the time for a final decision shall correspond to the time and manner of review for claims denied by the Claims Manager. The beneficiary must act in making any claim for a death benefit. 

IN WITNESS WHEREOF the Parties have signed this Agreement, effective as of the date written above. 
  

					
	EMPLOYER:	 		 	EMPLOYEE:
			
	Lithia Motors, Inc.	 		 	/s/ Sidney B. DeBoer
		 		 	Sidney B. DeBoer

  

			
		
	By:	 	/s/ Bryan B. DeBoer
		 	President

  

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