EXHIBIT 10.16
AMENDED AND RESTATED PENSKE AUTOMOTIVE GROUP, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
February 14, 2011

I.  
Introduction and Definitions

  A.  
Purpose. The purpose of this Plan is to promote the interests of Penske
Automotive Group, Inc. and its stockholders by helping to attract and retain
highly qualified non-employee directors. This Plan, previously known as the
“Amended and Restated United Auto Group, Inc. Non-Employee Director Compensation
Plan”, was originally adopted on December 10, 2003, and was subsequently amended
and restated effective as of as of October 20, 2004, and as of October 25, 2007.
The Company now amends and restates the Plan on the date provided above, and
such amended and restated Plan shall apply to Fees earned after December 31,
2010, and any payment or deferral of such Fees as otherwise provided for under
the Plan.
    B.  
Definitions. Unless the context clearly indicates otherwise, the following
terms, when used in the Plan, shall have the meanings set forth in this section:

  1.  
“Board” shall mean the Board of Directors of the Company or its Compensation and
Management Development Committee.
    2.  
“Code” shall mean the Internal Revenue Code of 1986, as amended.
    3.  
“Company” shall mean Penske Automotive Group, Inc., a Delaware corporation, and
any successor corporation.
    4.  
“Director” shall mean a member of the Board.
    5.  
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
    6.  
“Non-Employee Director” shall mean a Director who is not also a salaried
employee of the Company or any of its subsidiaries. Only Non-Employee Directors
may participate in the Plan.
    7.  
“Payment Date” shall mean a date selected by the Board which falls within the
first quarter of the calendar year following the calendar year in which a
Non-Employee Director served on the Board.
    8.  
“Plan” shall mean this Amended and Restated Penske Automotive Group, Inc.
Non-Employee Director Compensation Plan as effective on the date as provided for
above, as set forth herein, and as it thereafter may be amended from time to
time.
    9.  
“Stock” shall mean shares of the Voting Common Stock of the Company, par value
$0.0001 per share.
    10.  
“Termination of Service”, and any similar term used in the Plan, means a
Non-Employee Director’s separation from service as defined under Section 409A of
the Code.

 

 

--------------------------------------------------------------------------------

 

II.  
Non-Employee Director Fees

  A.  
Fee. Each Non-Employee Director shall be paid for each calendar year of service
a fee of $40,000 or, in the event the Director is a member of the Audit
Committee of the Board or is a Committee Chairperson, such amount shall be
increased by $5,000 for each such additional position (the “Fee”); provided,
however, that the Fee shall be prorated for any partial calendar year of service
as a Non-Employee Director. The Fee may be reduced, increased or otherwise
amended from time to time by the Board and all references to the Fee shall
include such amounts as so amended.
    B.  
Manner of Payment. The Non-Employee Director must elect in advance and in
writing whether all or a portion of such Fee shall be deferred according to
Section III. This election must be received by the Company on or before
December 31 (the “Election Date”) of the preceding calendar year. Once made,
this election is irrevocable for the subsequent calendar year and will remain in
effect for Fees earned for all future calendar year periods until the
Non-Employee Director makes a valid subsequent written election. The
Non-Employee Director shall also elect in advance of the Payment Date to receive
all or a part of the Fee in the form of cash or Stock.
    C.  
Payment Date. That portion of the Fee not deferred shall be paid in full on the
Payment Date. If a Non-Employee Director fails to elect the manner of payment of
the Fee by the Election Date, or if a Non-Employee Director’s election to
receive the Fee in Stock has not been previously approved by the Board, then
that Non-Employee Director’s Fee shall be paid in cash.
    D.  
Election to Receive Fee in Stock.

  1.  
A Non-Employee Director’s election to receive the Fee in Stock must be approved
by the Board prior to the Payment Date.
    2.  
If a Non-Employee Director’s election is approved by the Board, then the
Non-Employee Director’s Fee, if not deferred, shall be paid in shares of Stock
determined by dividing the Fee by the closing market price of the Stock as
reported on the New York Stock Exchange on the Payment Date or, if deferred,
then allocated in Units to the Non-Employee Director’s Deferred Fees Account
using the same method of determination.
    3.  
Such shares of Stock shall not be subject to any transfer or resale restrictions
other than those applicable under federal and state securities laws.
    4.  
If a Non-Employee Director becomes a member of the Board after the Election
Date, then such Director may elect to receive the Fee in the form of Stock on
the Payment Date by making such election within 30 days after becoming a
Director, provided that such election shall be subject to approval by the Board.

 

2

--------------------------------------------------------------------------------

 

III.  
Deferral of Non-Employee Director Fee

  A.  
Introduction. Non-Employee Directors, on an individual basis, may defer all or
part of their Fee until such time as their service on the Board terminates.
    B.  
Manner of Deferral. On or before the Election Date, a Non-Employee Director may
elect to defer all or a portion of the Fee (the “Deferred Fee”); provided, that
a Non-Employee Director who first commences service on the Board during the
course of a calendar year, rather than prior to such year, may make such
election to defer with respect to such year not later than the 30th day
following the date on which the Non-Employee Director first commences service,
and such deferral election shall be effective with regard to Fees earned during
such calendar year. Such election shall be irrevocable for the period of service
for which the Fee is payable and will remain for all future calendar year
periods until the Director makes a valid subsequent election. The Deferred Fee
will be credited to a notional account maintained by the Company to record the
Non-Employee Director’s Deferred Fee (the “Deferred Fees Account”) as of the
Payment Date and accounted for pursuant to the manner of payment elected by the
Non-Employee Director until fully paid.
    C.  
Deferral of Stock. If a Non-Employee Director elects to receive the Fee in
Stock, the payment of which has been deferred in whole or in part, then the
Non-Employee Director’s Deferred Fees Account will be credited with the number
of Stock units (“Units”), calculated to the nearest thousandths of a Unit,
determined by dividing the amount of the Deferred Fee by the closing market
price of the Stock as reported on the New York Stock Exchange on the Payment
Date. The Non-Employee Director’s Deferred Fees Account will also be credited
with the number of Units determined by multiplying the number of Units in the
Non-Employee Director’s Deferred Fees Account by any per share cash dividends
declared by the Company on its Stock and dividing the product by the closing
market price of the Stock as reported on the New York Stock Exchange on the
related dividend payment date, and also by multiplying the number of Units in
the Non-Employee Director’s Deferred Fees Account by any stock dividends
declared by the Company on its Stock.
    D.  
Deferral of Cash. If a Non-Employee Director elects to receive the Fee in cash,
the payment of which has been deferred in whole or in part, then the
Non-Employee Director’s Deferred Fees Account (a) will be credited on the
Payment Date in an amount equal to the Deferred Fee, and (b) will be credited as
of the end of each calendar quarter with an additional amount equal to the
interest on the amounts credited to such Deferred Fees Account from the date
credited (or the end of the preceding quarter, if later) to the end of such
quarter at the rate of interest payable on the last issue of U.S. 90-day
Treasury Bills made prior to the end of such quarter, as published in the Wall
Street Journal.
    E.  
Recapitalization. If, as a result of a recapitalization of the Company
(including stock splits), the Company’s outstanding shares of Stock shall be
changed into a greater or smaller number of shares, the number of Units credited
to a Non-Employee Director’s Deferred Fees Account shall be appropriately
adjusted on the same basis.

 

3

--------------------------------------------------------------------------------

 

  F.  
Distribution of Deferred Fees.

  1.  
Upon a Non-Employee Director’s Termination of Service, the Non-Employee Director
shall receive the amount credited to his Deferred Fees Account in five
substantially equal annual installments commencing on the first Payment Date
following the Non-Employee Director’s Termination of Service (the “Installment
Payment Date”), unless prior to the time specified in Section III.B., the
Non-Employee Director elects a different time or form of payment. The
installment payments provided for in this Section III.F.1. shall be treated as a
right by the Non-Employee Director to a series of separate annual installment
payments.
    2.  
Survivor Payout Elections. In the event of a Non-Employee Director’s death prior
to receiving all entitled deferred payments, the value of the Deferred Fees
Account on the date of the Non-Employee Director’s death shall be determined and
paid to the beneficiary(ies) designated by the Non-Employee Director (or,
failing such designation, to the Non-Employee Director’s estate) in accordance
with the installment schedule set forth in Section III.F.1. above, unless the
Non-Employee Director, prior to time specified in Section III.B. above, has
elected to have the remaining payments made in a single lump sum upon his death,
in which case a lump sum payment will be made to the designated beneficiaries or
the Non-Employee Director’s estate as soon as practicable after the Non-Employee
Director’s death.
    3.  
Form of Payment Elections.

  a.  
All installment payments from the Non-Employee Director’s Deferred Fees Account
shall be in the form of cash.
    b.  
Notwithstanding the preceding paragraph, upon request of the Non-Employee
Director, and subject to the Board’s approval, a Non-Employee Director, former
Non-Employee Director, or deceased Non-Employee Director’s beneficiary or legal
representative may elect at any time to have any or all payouts, or remaining
payouts, of the Non-Employee Director’s Deferred Fees Account paid out in cash
or in shares of the Stock.

  4.  
Determination of Amount of Cash Installment Payments.

  a.  
The amount of the first cash installment payment shall be a fraction of the cash
and/or Units in the Non-Employee Director’s Deferred Fees Account on the first
Installment Payment Date, the numerator of which is one and the denominator of
which is the total number of installments elected. Each subsequent installment
shall be calculated in the same manner as of each subsequent Installment Payment
Date except that the denominator shall be reduced by the number of installments
which have been previously paid.

 

4

--------------------------------------------------------------------------------

 

  b.  
The amount of cash payable for deferred fees accounted for as Units based on the
Company’s Stock value will be paid as described above, based on the number of
Units in the Non-Employee Director’s Deferred Fees Account on the Installment
Payment Date multiplied by the closing market price of the Company’s Stock as
reported on the New York Stock Exchange on the last trading day preceding the
Installment Payment Date.

  5.  
Determination of Amount of Installment Payments in Shares of Stock.

  a.  
The amount of the first installment payment payable in shares of the Stock for
deferred fees shall be a fraction of the value of the cash and/or Units in the
Non-Employee Director’s Deferred Fees Account on the date of the first
Installment Payment Date, the numerator of which is one and the denominator of
which is the total number of installments elected. Each subsequent installment
shall be calculated in the same manner as of each subsequent Installment Payment
Date except that the denominator shall be reduced by the number of installments
which have been previously paid.
    b.  
If a payout to be made in shares of the Stock is based on deferred fees
accounted for as cash, the number of shares payable shall be determined by
dividing the amount of cash that would otherwise be payable by the closing
market price of the Stock as reported on the New York Stock Exchange on the last
trading day preceding the Installment Payment Date.
    c.  
Except for the final installment payment, only whole shares shall be payable,
and the value of any fractional share payable shall be retained in the
Non-Employee Director’s Deferred Fees Account until the final installment
payment, at which time the value of any fractional share payable shall be paid
in cash, based on the fractional share multiplied by the closing market price of
Stock as reported on the New York Stock Exchange on the last trading day
preceding the Installment Payment Date.

  6.  
Six-Month Delay In Certain Payments. Notwithstanding the provisions of
Section III.F.1. above, if a Non-Employee Director is a specified employee
(within the meaning of the default provisions for determining specified
employees under Section 409A of the Code) with respect to the Company at the
time of his or her Termination of Service, all payments that would have been due
during the six-month period following the Non-Employee Director’s Termination of
Service shall be paid on the date that is six months and one day after the
Non-Employee Director’s Termination of Service (or, if earlier, as soon as
practicable after the date of the Non-Employee Director’s death).

IV.  
General Terms

  A.  
Unfunded Plan. The Plan constitutes an unfunded plan for deferred compensation.
No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase Units or place any cash,
Stock or Units in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records, or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes.

 

5

--------------------------------------------------------------------------------

 

  B.  
Effective Date. The amended and restated Plan shall be effective on the date it
is approved by the Board.
    C.  
Amendment and Termination of the Plan. The Board in its discretion may terminate
the Plan or alter or amend the Plan or any part thereof from time to time.
    D.  
Rule 16b-3. The terms and conditions of each grant of a Stock or Units under the
Plan shall be approved in advance by the Board for purposes of the exemption
from Section 16(b) of the Exchange Act available under Rule 16b-3(d)(1) and
other applicable rules promulgated under Section 16 the Exchange Act.
    E.  
Nonassignability. It shall be a condition of this Plan (and all rights of each
Non-Employee Director and beneficiary shall be subject thereto) that no amount
payable hereunder shall be assignable in whole or in part, either directly or by
operation of law except by will or the laws of descent or distribution. Further,
no right or interest of each Non-Employee Director or beneficiary under the Plan
shall be liable for, or subject to, any obligation or liability of such director
or beneficiary, including claims for alimony or the support of any spouse.
    F.  
Section 409A of the Code. To the extent applicable, it is intended that this
Plan comply with the provisions of Section 409A of the Code. The Plan shall be
interpreted and administered in a manner consistent with this intent.

 

6

--------------------------------------------------------------------------------

 

2012 PAG DIRECTOR COMPENSATION ELECTION FORM
To:
1. Election for Annual Fee
Pursuant to the Penske Automotive Group (“PAG”) Non-Employee Director
Compensation Plan, as amended (“Plan”), for the cash annual fee payable to me as
a Director of PAG for the year ending December 31, 2012, I hereby irrevocably
elect to receive:

o  
A cash payment of $40,000 (plus $5,000 for Audit Committee members and Committee
Chairpersons) in 2013; or
  o  
An equivalent amount of shares of PAG common stock in 2013; or
  o  
An equivalent amount of PAG deferred stock units, payable after termination of
my Board membership; or
  o  
An equivalent cash payment deferred and payable after termination of my Board
membership.
     
(You may elect a percentage of each)

This election will remain your election for future years until you make a valid
subsequent election in writing and deliver it to the Company pursuant to the
Plan. Please note that any change in your elections must be received by
December 31st of the year preceding the intended change.
2. Option to Defer 4,000 Shares of Stock
I hereby irrevocably elect to defer the award of 4,000 Shares of Stock to be
received in 2013 by receiving instead deferred stock units payable after
termination of my Board membership:

         
o     No
  o     Yes   o     Only defer                     % of the 4,000 shares

This election will remain your election for future years until you make a valid
subsequent election in writing and deliver it to the Company pursuant to the
Plan. Please note that any change in your elections must be received by
December 31st of the year preceding the intended change.
3. Beneficiary
If you have elected to defer any amounts, please complete the following:

A.  
If my membership on the Board of Directors is terminated by death, or if I shall
die after I cease to serve as a Director but before complete distribution of my
Deferred Fees Account, I direct the balance in such account to be paid to:

             
 
Name of Designated Beneficiary:        
 
  Address:  
 
   
 
     
 
   
 
  Relationship to Me:  
 
   
 
     
 
   

B.  
I direct my Deferred Fees to be paid:

     
o
  In one lump sum upon my departure or    
o
  In accordance with the Plan’s installment payment schedule over five years.

4. Special Instructions
 
 

         
5. Signature
      For Company Use Only
 
       
Director Signature:
      Date Rec’d:                      
 
       
Date:
      Rec’d By:                          
 
       

 

7