July 29, 2015

To: Lexus Area General Managers

From: Don Fordiani, National Field and Dealer Operations Manager
Subject: Warranty Enhancement Program - ZLD

Phase 2 & 3 - Part Replacement for Certain Models

2007 - 2008 Model Year ES 350

2003 - 2008 Model Year GX 470

2006 - 2008 Model Year IS 250/350

2007 Model Year LS 460

2004 - 2006 Model Year RX 330

2007 - 2009 Model Year RX 350

2005 - 2008 Model Year RX 400h

Extension of Warranty Coverage for Cracked and/or Sticky/Melting Dashboards
(Instrument Panels) as a Result of Heat or Humidity

In our continuing efforts to ensure the best in customer satisfaction, Lexus announced a Warranty
Enhancement Program (the “Program’). This Program extends the warranty coverage for repairs related to
cracked and/or sticky/melting Dashboards (Instrument Panels) as a result of heat or humidity on 200/-
2008 model year ES 350, 2003-2008 model year GX 470, 2006-2008 model year IS 250/350,
2007 model year LS 460, 2004-2006 model year RX 330, 2007-2009 model year RX 350, and
2005-2008 model year RX 400h vehicles.

NOTE: The same Warranty Enhancement Program coverage described herein is also applicable to
2006 - 2008 Model Year IS 250/350 and 2007 Model Year LS 460 vehicles for cracked and/or

sticky/melting front and rear interior door panels as a result of heat or humidity.

In mid-December, 2014, Lexus announced the reimbursement phase of this Program. Since prior to that
announcement, Lexus has been diligently making parts preparations for the parts replacement phase of this
Program. Due to the age, volume, and breadth of the covered vehicles subject to the Program and the size
and complexity of dashboard manufacturing, Lexus will be launching the part replacement portion of this
Program in several phases; please refer to the table below for part replacement model phasing.

Phase Model Description Current Mailing
Schedule
| All Reimbursement Mid-December, 2014
2 ES 350 Late May, 2015
3 RX 330/350/450h and GX 470 Part Replacement Late July, 2015
4 IS 250/350 and LS 460 August, 2015

Although Lexus is increasing production levels, it is difficult to predict customer demand and where parts need to be
shipped to support customer demand. It is important that dealerships explain to customers that there still may be a
period of time the customer will need to wait before part replacement can be performed. Please be sure to take this into
consideration when performing customer scheduling.

The following important information is provided to advise you and your associates of the program notification
schedule and the degree of your involvement. Additionally, an FAQ covering details of this Warranty
Enhancement Program is enclosed for your reference

Dealer and Owner Notification Letter Mailing Date
Lexus will notify its dealers with regard to Phase 3 of this Program on July 30, 2015.

The first owner notification letter was sent in mid-December, 2014 advising owners that they could seek
reimbursement consideration for previous repair costs for cracked and/or sticky/melting dashboards, and if
applicable front and rear interior door panels, as a result of hear or humidity. A sample copy of the owner
notification letter is enclosed for your reference.

Lexus will now begin notitying owners regarding the part replacement phase of this Program in accordance
with the table below. This mailing schedule is based upon the part build rate and anticipated quantities
required for each model. A sample copy of the owner notification letter is enclosed for your reference.

Phase | Model Tentative Owner Letter Start Planned Duration of Owner Letter Mailing
Timing
2 ES 350 Late May, 2015 2 Month Mailing
RX 6 Month Mailing
a ee bate fay, 2018 4 Month Mailing
4 IS/LS August, 2015 TBD

Please Note: Dashboards and front and rear interior door panels can become cracked and/or sticky/melted
over time for a number of different reasons and under a number of diferent circumstances. If the Dashboard
and/or front or rear interior door panel has become cracked and/or sticky/melted as a result of heat or
humidity, the repair will be performed at no charge as soon as parts become available.

Warranty Enhancement Program Details

This Warranty Enhancement Program provides a Primary and Secondary coverage for a covered vehicle's
"New Vehicle Limited Warranty” as it applies to the Dashboard. The specific condition covered by this
Program is any cracked and/or sticky/melted Dashboard as a result of heat or humidity for any covered

vehicle. If the condition is verified, the repair will be performed in accordance with the applicable TSB under
the terms of this Warranty Enhancement Program.

NOTE: The same Warranty Enhancement Program coverage described herein is also applicable to 2006 -
2008 Mode! Year |S 250/350 and 2007 Model Year LS 460 vehicles for cracked and/or sticky/meking

front and rear interior door panels as a result of heat or humidity.

e The Primary Coverage otters warranty enhancement until May 31, 2017, regardless of mileage or date of
first use of the vehicle.

lo

e Secondary Coverage supplements the Primary Coverage for some owners by offering the warranty
enhancement described herein for 10 years from the date of first use of the vehicle, regardless _of
mileage. For instance, if you own a 2009 RX 350 that was first used on January 1, 2010, you are
entitled to the warranty enhancement through January 1, 2020.

Please note that this coverage is for warranty repair performed at an authorized Lexus dealer only. A
maximum of one dashboard replacement can be performed, if eligible, under this Warranty Enhancement
Program. Likewise, a maximum of one replacement for each front and rear interior door panel for 2006-

2008 Model Year IS 250/350 and 2007 Model Year LS 460 vehicles can be performed, if eligible,

under this Warranty Enhancement Program.

This Warranty Enhancement Program is subject to the same terms, conditions, and limitations set forth in the
New Vehicle Limited Warranty Section of the Owner's Warranty Information booklet, with the exception of
the warranty enhancement coverage for this specific condition. For example, damage form abuse, accident,
theft, and/or vandalism is not covered by the New Vehicle Limited Warranty or this warranty enhancement.
To the extent your New Vehicle Limited Warranty has expired, it is being extended only as to the specific
condition and parts identified above, subject to the terms, conditions, and limitations in that Warranty.

Number of Vehicles Covered

There are approximately 11 million vehicles covered by this Warranty Enhancement Program. Please verify

coverage by confirming through TIS

Please review this entire package with your associates to familiarize them with the proper procedures to
implement this warranty enhancement

Thank you for your continued support and cooperation

Attachments

Cc: Assistant Area General Managers
Customer Satisfaction Managers
Customer Services Field Managers
Customer Services Operations Managers
District Service and Parts Managers
Field Technical Specialists
Field Product Engineers
Pre-Owned Managers
Vehicle Field Sales Managers

July 30, 2015

Subject: Warranty Enhancement Program - ZLD
(Phase 2 & 3 - Part Replacement for Certain Models)

2007 - 2008 Model Year ES 350

2003 - 2008 Model Year GX 470

2006 - 2008 Model Year IS 250/350

2007 Model Year LS 460

2004 - 2006 Model Year RX 330

2007 - 2009 Model Year RX 350

2005 - 2008 Model Year RX 400h

Extension of Warranty Coverage for Cracked and/or Sticky/Melting Dashboards
(Instrument Panels) as a Result of Heat or Humidity

Dear Dealer Principal

In our continuing efforts to ensure the best in customer satisfaction, Lexus announced a Warranty
Enhancement Program (the “Program’"). This Program extends the warranty coverage for repairs related to
cracked and/or sticky/melting Dashboards (instrument Panels) as a result of heat or humidity on 200/-
2008 model year ES 350, 2003-2008 model year GX 470, 2006-2008 model year |S 250/350,
2007 model year LS 460, 2004-2006 model year RX 330, 2007-2009 model year RX 350, and
2005-2008 model year RX 400h vehicles

NOTE: The same Warranty Enhancement Program coverage described herein is also applicable to 2006
- 2008 Model Year IS 250/350 and 2007 Model Year LS 460 vehicles tor cracked and/or

sticky/melting front and rear interior door panels as a result of heat or humidity.

In mid-December, 2014, Lexus announced the reimbursement phase of this Program. Since prior to that
announcement, Lexus has been diligently making parts preparations for the parts replacement phase of this
Program. Due to the age, volume, and breadth of the covered vehicles subject to the Program and the size
and complexity of dashboard manufacturing, Lexus will be launching the part replacement portion of this
Program in several phases; please refer to the table below for part replacement model phasing.

Phase Model Description Current Mailing
Schedule
| All Reimbursement Mid-December, 2014
? E$.350 Late May, 2015
3 RX 330/350/450h and GX 470 Part Replacement Late July, 2015
4 IS 250/350 and LS 460 August, 2015

Although Lexus is increasing production levels, it is difficult to predict customer demand and where parts
need to be shipped to support customer demand. It is important that dealerships explain to customers that
there still may be a period of time the customer will need to wait before part replacement can be performed.
Please be sure to take this into consideration when performing customer scheduling.
The following important information is provided to advise you and your associates of the program notification
schedule and the degree of your involvement. Additionally, an FAQ covering details of this Warranty
Enhancement Program is enclosed for your reference

Owner Notification Letter Mailing Date
The first owner notification letter was sent in mid-December, 2014 advising owners that they could seek
reimbursement consideration for previous repair costs for cracked and/or sticky/melting dashboards, and if
applicable front and rear interior door panels, as a result of hear or humidity. A sample copy of the owner

notification letter is enclosed for your reference.

Lexus will now begin notifying owners regarding the part replacement phase of this Program in accordance
with the table below. This mailing schedule is based upon the part build rate and anticipated quantities
required for each model. A sample copy of the owner notification letter is enclosed for your reference.

Phase | Model | Tentative Owner Letter Start Planned Duration of Owner Letter Mailing
Timing
ES 350 Late May, 2015 2 Month Mailing
RX 6 Month Mailing
GX Late July, 2015 4 Month Mailing
IS/LS August, 2015 TBD

Please Note: Dashboards and front and rear interior door panels can become cracked and/or sticky/meled
over time for a number of diferent reasons and! under a number of different circumstances. If the Dashboard
and/or front or rear interior door panel has become cracked and/or sticky/melted as a result of heat or
humidity, the repair will be performed at no charge as soon as parts become available.

Warranty Enhancement Program Details

This Warranty Enhancement Program provides a Primary and Secondary coverage for your vehicle's "New
Vehicle Limited Warranty’ as it applies to the Dashboard. The specific condition covered by this program is
any cracked and/or sticky/melted Dashboard as a result of heat or humidity for any covered vehicle. If the
condition is verified, the repair will be performed in accordance with the applicable TSB under the terms of
this Warranty Enhancement Program.

NOTE: The same Warranty Enhancement Program coverage described herein is also applicable to
2006 - 2008 Model Year IS 250/350 and 2007 Model Year LS 460 vehicles for cracked and/or

sticky/mekting tront and rear interior door panels as a result of heat or humidity.

e The Primary Coverage offers warranty enhancement until May 31, 2017, regardless of mileage or date of
first use of the vehicle.

e Secondary Coverage supplements the Primary Coverage for some owners by offering the warranty
enhancement described herein for 10 years from the date of first use of the vehicle, regardless of
mileage. For instance, if you own a 2009 RX 350 that was first used on January 1, 2010, you are
entitled to the warranty enhancement through January 1, 2020

Please note that this coverage is for warranty repair performed at an authorized Lexus dealer only. A
maximum of one dashboard replacement can be performed, if eligible, under this Warranty Enhancement
Program. Likewise, a maximum of one replacement for each front and rear interior door panel for 2006-

lo

2008 Model Year |S 250/350 and 2007 Madel Year LS 460 vehicles can be performed, if eligible,

under this Warranty Enhancement Program.

This Warranty Enhancement Program is subject to the same terms, conditions, and limitations set forth in the
New Vehicle Limited Warranty Section of the Owner's Warranty Information booklet, with the exception of
the warranty enhancement coverage for this specitic condition. For example, damage from abuse, accident,
thet, and/or vandalism is not covered by the New Vehicle Limited Warranty or this warranty enhancement.
To the extent your New Vehicle Limited Warranty has expired, it is being extended only as to the specific
condition and parts identified above, subject to the terms, conditions, and limitations in that Warranty.

Number of Vehicles Covered

There are approximately 1.1 million vehicles covered by this Warranty Enhancement Program. Please verify

coverage by confirming through TIS

Please refer to Warranty Policy Bulletin (Bulletin No. POL14-03) for identification of vehicles covered by this
Warranty Enhancement

Warranty Claim Processing Instructions
Please refer to Warranty Policy Bulletin (Bulletin No. POL14-03) for warranty claim processing instructions
All parts replaced are subject to warranty parts recovery,

Technical Instructions (Repair Procedures)
Technical instructions can be found in the applicable Technical Service Bulletin (TSB), please refer to the
table below for additional TSB information

Model TSB Number
ES 350
RX 330/350/400h L-SB-OOTI-15
GX 470
IS 250/350 | TBD
LS 460 | TBD

Technician Training Requirements

The repair quality of covered vehicles is extremely important to Lexus. All dealership technicians performing
this repair are required to successfully complete the most current version of the E-Learning course "Safety
Recall and Service Campaign Essentials’. To ensure that all vehicles have the repair performed correctly;

levels:

° Senior Service Tech
° Senior Diagnostic Specialist
° Master Service Tech
° Master Diagnostic Specialist

It is the dealership s responsibility to select technicians with the above certification level or greater to perform
this repair. Carefully review your resources, the technician skill level, and ability before assigning technicians
to this repair. It is important to consider technician days off and vacation schedules to ensure there are
properly trained technicians available to perform this repair at all times.

Parts Ordering for the Covered Condition
If a customer experiences the condition described, dealers should conduct appropriate diagnosis and order
the applicable parts.

Reter to Warranty Policy Bulletin POL14-O3 for detailed parts ordering information.

Dealers are requested to only order parts tor vehicles experiencing this condition. DO NOT ORDER FOR
STOCK. The parts have been placed on DDMAX and will be systematically released, Please see the
weekly manual allocation (MAC) report for additional details.

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Parts Allocation Report

Due to the logistics challenges associated with these dashboard assemblies, please be advised of the
following parts order processes specific to this program:

For dealers facing out of the Jacksonville or Dallas PDCs:

e Use "N" (holiday) order type for all orders

e Parts orders will be received into the system on Monday and dropped for processing on Tuesdays
For dealers facing out of the Jacksonville PDC, a dedicated attended delivery route will deliver parts
to dealers once a week, Tuesday through Saturday, between 7:00 AM and 5:00 PM. Jacksonville
facing dealers will be notified via e-mail when the deliveries will be scheduled.

e For dealers facing out of the Dallas PDC, orders will be received into the system on the day they are
ordered and shipped with their normal stock order. Dedicated dash deliveries separate from your
daily order may be scheduled in the future as additional part numbers are added for ordering

e Lexus will be unable to accept any requests for additional parts or parts deliveries, NO

EXCEPTIONS.

For dealers facing out of the Los Angeles, San Francisco, Chicago or New York PDCs:
e Use “L" (Lexus Priority) order type for all orders.
e Lexus will be unable to accept any requests for additional parts or parts deliveries, NO

EXCEPTIONS.

Customer Reimbursement Procedures
Please refer to the attached owner letter for reimbursement consideration instructions.