EX-10.1






Exhibit 10.1




PENSKE AUTOMOTIVE GROUP, INC.

2015 EQUITY INCENTIVE PLAN




1. Purpose. The purpose of this 2015 Equity Incentive Plan (the “Plan”) is to further the long term
stability and financial success of Penske Automotive Group, Inc. (the “Company”) by (a) attracting
and retaining key employees, members of the Board of Directors and other contributors to the
Company through the use of equity and cash incentives and (b) encouraging equity ownership in the
Company by members of the Company’s Board of Directors and management. It is believed that
ownership of Company Stock will stimulate the efforts of those Participants upon whose judgment and
interest the Company is and will be dependent for the successful conduct of its business. It is
also believed that awards granted under this Plan will strengthen their desire to remain with the
Company and will further align those Participants’ interests with those of the Company’s
shareholders.



2. Definitions. As used in the Plan, the following terms have the meanings indicated:




	(a)	 	“Act” means the Securities Exchange Act of 1934, as amended.






	(b)	 	“Applicable Withholding Taxes” means the minimum aggregate amount of federal, state and local
income and payroll taxes that the Company is required by applicable law to withhold in
connection with any Award.






	(c)	 	“Award” means individually or collectively, the award of an Option, Stock Appreciation Right,
Company Stock Award, Incentive Award, Restricted Award or any of the foregoing that is
designated as a Performance Compensation Award under the Plan.






	(d)	 	“Award Agreement” means the written or electronic document that sets forth the terms of a
Participant’s Award and may include a separate written or electronic employment agreement
between the Company or a Subsidiary and a Participant, to the extent such agreement provides
for any type of Award permitted to be granted under the Plan and is granted in accordance with
the terms of the Plan.






	(e)	 	“Board” means the Board of Directors of the Company.






	(f)	 	“Change of Control” means the occurrence of the following event: any individual, entity or
group (as defined in Section 13(d)(3) of the Act) other than the Permitted Holders becomes the
beneficial owner (as defined in Rule 13(d)(3) under the Act) of Company securities that
constitute more than 50% of the combined voting power of the then outstanding securities of
the Company that may be cast for the election of directors to the Board of the Company (other
than as a result of an issuance of securities initiated by the Company in the ordinary course
of business).






	(g)	 	“Code” means the Internal Revenue Code of 1986, as amended. A reference to any provision of
the Code shall include reference to any successor or replacement provision of the Code.






	(h)	 	“Committee” means the Plan administrator, as described under Section 15.






	(i)	 	“Company” means Penske Automotive Group, Inc., a Delaware corporation.






	(j)	 	“Company Contributor” means a consultant, advisor or other individual (except a member of the
Board or an employee of the Company, a Parent or a Subsidiary of the Company), who renders
bona fide services that are not in connection with the offer and sale of the Company’s
securities in a capital-raising transaction; and (ii) does not promote or maintain a market
for the Company’s securities.






	(k)	 	“Company Stock” means the common stock of the Company. In the event of a change in the
capital structure of the Company, the shares resulting from such a change shall be deemed to
be Company Stock within the meaning of the Plan.






	(l)	 	“Company Stock Award” means an award of Company Stock made without any restrictions.






	(m)	 	“Date of Grant” means the date on which the Committee (or its delegate pursuant to authority
granted in Section 15(c)) authorizes an Award, or such later date as shall be designated by
the Committee.






	(n)	 	“Disability” or “Disabled” means, as to an Incentive Stock Option, a disability within the
meaning of Code Section 22(e)(3), and, as to a Restricted Stock Unit and any Award determined
to be subject to Code Section 409A, a disability within the meaning of Code Section
409A(a)(2)(C). As to all other forms of Awards, the Committee shall determine whether a
disability exists and such determination shall be conclusive.






	(o)	 	“Fair Market Value” means, for purposes of determining the value of Company Stock on the Date
of Grant, the Stock Exchange closing price of Company Stock on the Date of Grant. If there
are no Company Stock transactions on such date, Fair Market Value shall be determined as of
the immediately preceding date on which there were Company Stock transactions. Unless
otherwise specified in the Plan, Fair Market Value for purposes of valuing Company Stock on
the date of exercise means the Stock Exchange closing price of Company Stock on the last day
immediately preceding the exercise date on which there were Company Stock transactions. If
Company Stock is not listed on a national or regional Stock Exchange or market system, Fair
Market Value shall be determined by the Committee in good faith, subject to compliance with
Code Section 409A.






	(p)	 	“Incentive Award” means a long or short-term incentive award with payment in the form of
cash, Company Stock or a combination of both, as designated by the Committee and conditioned
on the attainment of specified performance objectives.






	(q)	 	“Incentive Stock Option” means an Option intended to meet the requirements of, and qualify
for favorable federal income tax treatment under, Code Section 422.






	(r)	 	“Maturity Date” means, with respect to a Restricted Stock Unit, the date upon which all
restrictions set forth in Section 6(b) with respect to such Restricted Stock Unit have lapsed
or been removed pursuant to Section 6(g) or Section 6(h).






	(s)	 	“Negative Discretion” means the discretion authorized by the Plan to be applied by the
Committee to eliminate or reduce the size of a Performance Compensation Award in accordance
with Section 10(d)(iv) of the Plan; provided that the exercise of such discretion would not
cause the Performance Compensation Award to fail to qualify as “performance-based
compensation” under Section 162(m) of the Code.






	(t)	 	“Nonstatutory Stock Option” means an Option that does not meet the requirements of Code
Section 422 or, even if meeting the requirements of Code Section 422, is not intended to be an
Incentive Stock Option and is so designated.






	(u)	 	“Officer” means a person who is an officer of the Company within the meaning of Section 16 of
the Act.






	(v)	 	“Option” means a right to purchase Company Stock granted under Section 7 of the Plan, at a
price determined in accordance with the Plan.






	(w)	 	“Parent” means, with respect to any corporation, a parent of that corporation within the
meaning of Code Section 424(e).






	(x)	 	“Participant” means any employee, director or other Company Contributor who receives an Award
under the Plan.






	(y)	 	“Performance Compensation Award” means any Award designated by the Committee as a Performance
Compensation Award pursuant to Section 10 of the Plan.






	(z)	 	“Performance Criteria” means the criterion or criteria that the Committee shall select for
purposes of establishing the Performance Goal(s) for a Performance Period with respect to any
Performance Compensation Award under the Plan. The Performance Criteria that will be used to
establish the Performance Goal(s) shall be based on the attainment of specific levels of
performance and shall be limited to the following: specified levels of or increases or
decreases in revenue, return on equity, earnings per share, total earnings, earnings growth,
earnings from continuing operations, EBITDA, EBITDAR, return on capital/equity, return on
assets, gross profit, earnings before interest and taxes, sales, sales growth, gross or
operating margin, cost reduction goals, fixed cost coverage measurements (including the ratio
of service and parts revenues to operating costs), return on investment, increase in the fair
market value of the Common Stock, share price (including growth measures and total stockholder
return), market capitalization, operating profit, profit margin, net income, cash flow
(including operating cash flow and free cash flow), financial return ratios, expense ratios,
total return to shareholders, market share, earnings measures/ratios, balance sheet
measurements (including debt to equity ratios, maintenance of specified credit availability
levels, compliance with credit covenants, inventory measurements and receivables/payables
metrics), human resources measurements (including measurements of employee turnover, workers’
compensation costs and employee satisfaction), internal rate of return, unit sales, same store
sales, specified levels of acquisitions/acquired revenue, customer satisfaction and
productivity and compliance objectives (including lack of material weakness in internal
controls, each as determined in accordance with the relevant AICPA or PCAOB principles), or
where applicable, as adjusted to the extent permitted under Section 162(m) of the Code, to
omit the effects of extraordinary items, acquisitions or dispositions, the gain or loss on the
disposal of a business segment, unusual or infrequently occurring events and transactions,
accruals for Awards under the Plan and/or cumulative effects of changes in accounting
principles. The foregoing criteria may relate to the Company, one or more of its Subsidiaries
or one or more of its or their divisions or units, or any combination of the foregoing, and
may be applied on an absolute basis and/or be relative to one or more peer group companies or
indices, or any combination thereof, all as the Committee shall determine.






	(aa)	 	“Performance Formula” means, for a Performance Period, the one or more objective formulas
applied against the relevant Performance Goal to determine, with regard to the Performance
Compensation Award of a particular Participant, whether all, some portion but less than all,
or none of the Performance Compensation Award has been earned for the Performance Period.






	(bb)	 	“Performance Goals” means, for a Performance Period, the one or more goals established by the
Committee for the Performance Period based upon the Performance Criteria. The Committee is
authorized at any time during the first 90 days of a Performance Period (or, if longer or
shorter, within the maximum period allowed under Section 162(m) of the Code), or at any time
thereafter (but only to the extent the exercise of such authority after such period would not
cause the Performance Compensation Awards granted to any Participant for the Performance
Period to fail to qualify as “performance-based compensation” under Section 162(m) of the
Code), in its sole discretion, to adjust or modify the calculation of a Performance Goal for
such Performance Period to the extent permitted under Section 162(m) of the Code.






	(cc)	 	“Performance Period” means the one or more periods of time, as the Committee may select, over
which the attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to and the payment of a Performance Compensation Award.






	(dd)	 	“Permitted Holder” means (i) Mr. Roger S. Penske, his estate, guardians, conservators,
administrators, committees or personal representatives; (ii) immediate family members and
lineal descendants of Mr. Roger S. Penske and their respective guardians, conservators,
administrators, committees or personal representatives; (iii) trusts or other entities created
for the benefit of any of the Persons listed in (i) or (ii) above or for the benefit of a
trust covered by this clause (iii); and (iv) any of Penske Capital Partners LLC, International
Motor Car Group I LLC, International Motor Car Group II LLC, Penske Corporation, Penske
Automotive Holdings Corp., Transportation Resource Partners, LP, Transportation Resource
Partners III, LP, Penske Truck Leasing Co., L.P., LJ VP Holdings LLC and their respective
Subsidiaries, in each case so long as the Persons or entities covered by clauses (i), (ii) or
(iii), directly or indirectly, control such entities; For purposes of this definition,
“control” when used with respect to any entity means the power to direct the management and
policies of such entity, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.






	(ee)	 	“Restricted Award” means, collectively, the award of Restricted Stock or Restricted Stock
Units.






	(ff)	 	“Restricted Stock” means Company Stock awarded upon the terms and subject to the restrictions
set forth in Section 6.






	(gg)	 	“Restricted Stock Unit” means an award granted upon the terms and subject to the restrictions
and limitations set forth in Section 6 that entitles the holder to receive a payment equal to
the Fair Market Value of a share of Company Stock on the Maturity Date.






	(hh)	 	“Rule 16b-3” means Rule 16b-3 adopted pursuant to Section 16(b) of the Act. A reference in
the Plan to Rule 16b-3 shall include a reference to any corresponding rule (or number
redesignation) of any amendments to Rule 16b-3 adopted after the effective date of the Plan’s
adoption.






	(ii)	 	“Stock Appreciation Right” means a right to receive amounts from the Company awarded upon the
terms and subject to the restrictions set forth in Section 8.






	(jj)	 	“Stock Exchange” means the principal national securities exchange on which Company Stock is
listed for trading, or, if Company Stock is not listed for trading on a national securities
exchange, such other recognized trading market or quotation system upon which the largest
number of shares of Company Stock has been traded in the aggregate during the last 20 days
before a Date of Grant, or date on which an Option is exercised, whichever is applicable.






	(kk)	 	“Subsidiary” means any business entity (including, but not limited to, a corporation,
partnership or limited liability company) of which a company directly or indirectly owns 50%
of the voting interests of the entity unless the Committee determines that the entity should
not be considered a Subsidiary for purposes of the Plan. If a company owns less than 50% of
the voting interests of the entity, the entity will be considered a Subsidiary for purposes of
the Plan only if the Committee determines that the entity should be so considered. For
purposes of Incentive Stock Options, Subsidiary shall be limited to a subsidiary within the
meaning of Code Section 424(f).






	(ll)	 	“Substitute Awards” means Awards granted or shares of Company Stock issued by the Company in
assumption of, or in substitution or exchange for, awards previously granted, or the right or
obligation to make future awards, in each case, by a company acquired by the Company or any
Subsidiary or with which the Company or any Subsidiary combines.






	(mm)	 	“10% Shareholder” means a person who owns, directly or indirectly, stock possessing more than
10% of the total combined voting power of all classes of stock of the Company or any Parent or
Subsidiary of the Company. Indirect ownership of stock shall be determined in accordance with
Code Section 424(d).





3. General. Awards may be granted under the Plan in the form of Options, Stock Appreciation Rights,
Company Stock Awards, Incentive Awards and Restricted Awards, with any of the foregoing being
designated as Performance Compensation Awards. Options granted under the Plan may be Incentive
Stock Options or Nonstatutory Stock Options. The provisions of the Plan referring to Rule 16b-3
shall apply only to Participants who are subject to Section 16 of the Act.



4. Number of Shares of Company Stock and Cash Compensation Cap.




	(a)	 	Subject to Section 14 of the Plan, there shall be reserved for issuance under the Plan an
aggregate of 4,000,000 shares of Company Stock, which shall be authorized, but unissued
            shares.






	(b)	 	Subject to Section 14 of the Plan, no more than 1,000,000 shares of Company Stock may be
allocated to the Awards that are granted to any one Participant during any single calendar
year, of which no more than 1,000,000 shares of Company Common Stock may be awarded to any one
Participant in the form of Incentive Stock Options during any single calendar year.






	(c)	 	Shares of Company Stock that have not been issued under the Plan and that are allocable to
Awards or portions thereof that expire or otherwise terminate unexercised may again be
subjected to an Award under the Plan. Similarly, if any shares of Restricted Stock issued
pursuant to the Plan are reacquired by the Company as a result of a forfeiture of such shares
pursuant to the Plan, such shares may again be subjected to an Award under the Plan.






	(d)	 	For purposes of determining the number of shares of Company Stock that are available for
Awards under the Plan, such number shall include the number of shares of Company Stock under
an Award tendered by a Participant (either by actual delivery or attestation) or retained by
the Company in payment of the exercise price of an Option or SAR, or Applicable Withholding
Taxes.






	(e)	 	Awards shall reduce the number of shares of Company Stock available for Awards under the Plan
only to the extent such Awards are paid in shares of Company Stock, as opposed to payment in
cash or other consideration.






	(f)	 	Substitute Awards shall not reduce the shares of Company Stock authorized for grant under the
Plan or the applicable limitations for grant to a Participant under Section 4(b).
Additionally, in the event that a company acquired by the Company or any Subsidiary or with
which the Company or any Subsidiary combines has shares available under a pre-existing plan
approved by shareholders and not adopted in contemplation of such acquisition or combination,
the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted,
to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition or combination) may be used
for Awards under the Plan and shall not reduce the shares of Company Stock authorized for
grant under the Plan; provided that Awards using such available shares shall not be made after
the date awards or grants could have been made under the terms of the pre-existing plan,
absent the acquisition or combination, and shall only be made to individuals who were not
Participants prior to such acquisition or combination.






	(g)	 	The maximum dollar amount payable to any Employee Participant in any one calendar year
pursuant to a cash Incentive Award that is designated as a Performance Compensation Award
shall not exceed the lesser of $10.0 million or (x) ten times the Participant’s base salary
for the calendar year.





5. Eligibility.




	(a)	 	All present and future employees, directors and other Company Contributors (or any Parent or
Subsidiary of the Company, whether now existing or hereafter created or acquired) shall be
eligible to receive Awards under the Plan. The Committee shall have the power and discretion,
as provided in Section 15, to select which employees, directors and Company Contributors shall
receive Awards and to determine for each such Participant the terms and conditions, the nature
of the award and the number of shares or units to be allocated to each Participant as part of
each Award.






	(b)	 	The grant of an Award shall not obligate the Company or any Parent or Subsidiary of the
Company to pay a Participant any particular amount of remuneration, to continue the employment
of the Participant after the grant or to make further grants to the Participant at any time
thereafter.





6. Company Stock Awards, Incentive Awards and Restricted Awards.




	(a)	 	Whenever the Committee deems it appropriate to grant a Company Stock Award, notice shall be
given to the Participant stating the number of shares of Company Stock for which the Company
Stock Award is granted. This notice may be given in writing or in electronic form and shall
constitute the Award Agreement between the Company and the Participant. A Company Stock Award
may be made by the Committee in its discretion without cash consideration.






	(b)	 	Whenever the Company deems it appropriate to grant an Incentive Award based on the attainment
of specified levels of Company or Subsidiary performance over a designated period of one or
more years, payable in the form of cash or Company Stock, or a combination of both, notice
shall be given to the Participant stating the terms and conditions on which the Inventive
Award is granted. This notice may be given in writing or in electronic form and shall
constitute the Award Agreement between the Company and the Participant. An Incentive Award
may be made by the Committee in its discretion with or without cash consideration. Whenever
the Committee deems it appropriate to grant a Restricted Award, notice shall be given to the
Participant stating the number of shares of Restricted Stock or number of Restricted Stock
Units for which the Restricted Award is granted and the terms and conditions to which the
Restricted Award is subject. This notice may be given in writing or in electronic form and
shall constitute the Award Agreement between the Company and the Participant. A Restricted
Award may be made by the Committee in its discretion without cash consideration.






	(c)	 	A Restricted Award issued pursuant to the Plan shall be subject to the following
restrictions:






	 	(i)	 	None of such shares or units may be sold, assigned, transferred, pledged,
hypothecated, or otherwise encumbered or disposed of until the restrictions on such
            shares or units shall have lapsed or shall have been removed pursuant to paragraph (h)
or (i) below.






	 	(ii)	 	Unless specified otherwise in a Participant’s Restricted Award Agreement, the
restrictions on such shares or units must remain in effect for a period of no less than
one year from the Date of Grant, except as provided under paragraph (h) or (i) in the
case of Disability, death or a Change in Control.






	 	(iii)	 	Unless specified otherwise in a Participant’s Restricted Award Agreement, if a
Participant ceases to be employed by the Company or a Parent or Subsidiary of the
Company, or otherwise ceases employment with or otherwise ceases to be a Company
Contributor, as applicable, the Participant shall forfeit to the Company any Restricted
Awards, the restrictions on which shall not have lapsed or shall not have been removed
pursuant to paragraph (h) or (i) below, on the date such Participant shall cease to be
so employed, etc.






	 	(iv)	 	The Committee may establish such other restrictions on such shares or units
that the Committee deems appropriate, including, without limitation, events of
forfeiture and performance requirements for the vesting of awards.






	(d)	 	Upon the acceptance by a Participant of an award of Restricted Stock, such Participant shall,
subject to the restrictions set forth in paragraph (c) above, have all the rights of a
shareholder with respect to the shares of Restricted Stock subject to such award of Restricted
Stock, including, but not limited to, the right to vote such shares of Restricted Stock and
the right to receive all dividends and other distributions paid thereon. Certificates, if any,
representing Restricted Stock shall bear a legend referring to the restrictions set forth in
the Plan and the Participant’s Award Agreement. If shares of Restricted Stock are issued
without certificates, notice of the restrictions set forth in the Plan and the Participant’s
Award Agreement must be given to the shareholder in the manner required by law.






	(e)	 	Each Restricted Stock Unit shall entitle the Participant, on the Maturity Date, to receive
from the Company an amount equal to the Fair Market Value on the Maturity Date of one share of
Company Stock subject to any limitations or enhancements on such value as the Committee may
set forth in the notice of the Restricted Stock Unit Award.






	(f)	 	The manner in which the Company’s obligation arising on the Maturity Date of a Restricted
Stock Unit shall be paid and date of payment shall be determined by the Committee and shall be
set forth in the Participant’s Restricted Stock Unit Award Agreement. The Committee may
provide for payment in Company Stock or cash or a fixed combination of Company Stock and cash,
or the Committee may reserve the right to determine the manner of payment at the time the
payment is made. Shares of Company Stock issued as payment for a Restricted Stock Unit shall
be valued at Fair Market Value on the Maturity Date subject to any limitations or enhancements
on such value as the Committee may set forth in the notice of the Restricted Stock Unit award.






	(g)	 	A Participant receiving an award of Restricted Stock Units shall not possess any rights of a
shareholder with respect to the Restricted Stock Units and shall be entitled to receive
payments equivalent to dividends and other distributions paid on shares of Company Stock only
to the extent set forth in the Restricted Stock Unit Award Agreement.






	(h)	 	The Committee shall establish as to each Restricted Award the terms and conditions upon which
the restrictions set forth in paragraph (c) above shall lapse. Such terms and conditions may
include, without limitation, the lapsing of such restrictions as a result of the Disability,
or death of the Participant or the occurrence of a Change of Control.






	(i)	 	Notwithstanding the forfeiture provisions of paragraph (c)(iii) above, and subject to Code
Section 162(m) if applicable, the Committee may at any time, in its sole discretion,
accelerate the time at which any or all restrictions will lapse or remove any and all such
restrictions.






	(j)	 	Each Participant shall agree at the time his Company Stock Award, Incentive Award and/or
Restricted Award is granted, and as a condition thereof, to pay to the Company or make
arrangements satisfactory to the Company regarding the payment to the Company of, Applicable
Withholding Taxes. Until such amount has been paid or arrangements satisfactory to the Company
have been made, no stock certificates free of a legend reflecting the restrictions set forth
in paragraph (c) above shall be issued to such Participant for Restricted Stock. If Restricted
Stock is being issued to a Participant without the use of a stock certificate, the
restrictions set forth in paragraph (c) shall be communicated to the shareholder in the manner
required by law. As an alternative to making a cash payment to the Company to satisfy
Applicable Withholding Taxes for an Award of Company Stock or Restricted Stock, if the grant
so provides, or the Committee by separate action so permits, the Participant may elect to (i)
deliver shares of Company Stock or (ii) have the Company retain that number of shares of
Company Stock that would satisfy all or a specified portion of the Applicable Withholding
Taxes. Any such election shall be made only in accordance with procedures established by the
Committee. The Committee has the express authority to change any election procedure it
establishes at any time. Applicable Withholding Taxes attributable to Restricted Stock Units
may be withheld from the payment by the Company to the Participant for such Restricted Stock
Units.





7. Options.




	(a)	 	Whenever the Committee deems it appropriate to grant Options, notice shall be given to the
Participant stating the number of shares for which Options are granted, the exercise price per
share, whether the Options are Incentive Stock Options or Nonstatutory Stock Options, the
extent, if any, to which Stock Appreciation Rights are granted, and the conditions to which
the grant and exercise of the Options are subject, including any performance-based vesting
conditions, as the Committee acting in its complete discretion deems consistent with the terms
of the Plan. This notice may be given in writing or in electronic form and shall constitute
the stock option Award Agreement between the Company and the Participant. Incentive Stock
options only may be granted to employees of the Company, the Parent or a Subsidiary of the
Company.






	(b)	 	The exercise price of shares of Company Stock covered by an Incentive Stock Option shall be
not less than 100% of the Fair Market Value of such shares on the Date of Grant; provided that
if an Incentive Stock Option is granted to an employee who, at the time of the grant, is a 10%
Shareholder, then the exercise price of the shares covered by the Incentive Stock Option shall
be not less than 110% of the Fair Market Value of such shares on the Date of Grant.






	(c)	 	The exercise price of shares of Company Stock covered by a Nonstatutory Stock Option shall be
not less than 100% of the Fair Market Value of such shares on the Date of Grant. No
Nonstatutory Stock Option may be exercised after ten years from the Date of Grant.






	(d)	 	Options may be exercised in whole or in part at such times as may be specified by the
Committee in the Participant’s stock option Award Agreement; provided that the exercise
provisions for Incentive Stock Options shall in all events not be more liberal than the
following provisions:






	 	(i)	 	No Incentive Stock Option may be exercised after the first to occur of:






	 	(x)	 	Ten years (or, in the case of an Incentive Stock Option granted
to a 10% Shareholder, five years) from the Date of Grant,






	 	(y)	 	Three months after the date of the Participant’s termination of
employment with the Company and any Parent or Subsidiary of the Company for
reasons other than death or Disability; or






	 	(z)	 	One year following the date of the Participant’s termination of
employment by reason of death or Disability.






	 	(ii)	 	Except as otherwise provided in this Section, no Incentive Stock Option may be
exercised unless the Participant is employed by the Company or a Parent or Subsidiary
of the Company at the time of the exercise and has been so employed at all times since
the Date of Grant. If a Participant’s employment is terminated other than by reason of
death or Disability at a time when the Participant holds an Incentive Stock Option that
is exercisable (in whole or in part), the Participant may exercise any or all of the
then exercisable portion of the Incentive Stock Option (to the extent exercisable on
the date of termination) within three months after the Participant’s employment. If a
Participant’s employment is terminated by reason of Disability at a time when the
Participant holds an Incentive Stock Option that is exercisable (in whole or in part),
the Participant may exercise any or all of the then exercisable portion of the
Incentive Stock Option (to the extent exercisable on the date of Disability) within one
year after the Participant’s termination of employment. If a Participant’s employment
is terminated by reason of death at a time when the Participant holds an Incentive
Stock Option that is exercisable (in whole or in part), the then exercisable portion of
the Incentive Stock Option may be exercised (to the extent exercisable on the date of
death) within one year after the Participant’s death by the person to whom the
Participant’s rights under the Incentive Stock Option shall have passed by will or by
the laws of descent and distribution.






	 	(iii)	 	An Incentive Stock Option, by its terms, shall be exercisable in any calendar
year only to the extent that the aggregate Fair Market Value (determined at the Date of
Grant) of the Company Stock with respect to which Incentive Stock Options are
exercisable for the first time during the calendar year does not exceed $100,000 (the
“Limitation Amount”). Incentive Stock Options granted under the Plan and all other
plans of the Company and any Parent or Subsidiary of the Company shall be aggregated
for purposes of determining whether the Limitation Amount has been exceeded. The
Committee may impose such conditions as it deems appropriate on an Incentive Stock
Option to ensure that the foregoing requirement is met. If Incentive Stock Options that
first become exercisable in a calendar year exceed the Limitation Amount, the excess
Options will be treated as Nonstatutory Stock Options to the extent permitted by law.






	(e)	 	Unless otherwise specified in a Participant’s Option Award Agreement, the same exercise terms
as set forth in Section 7(d)(i) through 7(d)(ii) for Incentive Stock Options shall apply to
Nonstatutory Options, except that (i) separation from services shall replace employment
termination for directors and Company Contributors, and (ii) the five-year exercise
restriction on 10% Shareholders shall not apply.






	(f)	 	The Committee may, in its discretion, grant Options that by their terms become fully
exercisable upon a Change of Control notwithstanding other conditions on exercisability in the
stock option Award Agreement.






	(g)	 	Notwithstanding the foregoing, an Option Award Agreement may provide that if on the last day
of the term of an Option the Fair Market Value of one share of Company Stock exceeds the
exercise price of the Option, the Participant has not exercised the Option and the Option has
not expired, the Option shall be deemed to have been exercised by the Participant on such day
with payment made by withholding shares of Company Stock otherwise issuable in connection with
the exercise of the Option. In such event, the Company shall deliver to the Participant the
number of shares of Company Stock for which the Option was deemed exercised, less the number
of shares of Company Stock required to be withheld for the payment of the total purchase price
and Applicable Withholding Taxes; any fractional share of Company Stock shall be settled in
cash.





8. Stock Appreciation Rights.




	(a)	 	Whenever the Committee deems it appropriate, Stock Appreciation Rights may be granted in
connection with all or any part of an Option, either concurrently with the grant of the Option
or, if the Option is a Nonstatutory Stock Option, by an amendment to the Option at any time
thereafter during the term of the Option. Stock Appreciation Rights may be exercised in whole
or in part at such times and under such conditions as may be specified by the Committee in the
Participant’s stock option Award Agreement. The following provisions apply to all Stock
Appreciation Rights that are granted in connection with Options:






	 	(i)	 	Stock Appreciation Rights shall entitle the Participant, upon exercise of all
or any part of the Stock Appreciation Rights, to surrender to the Company unexercised
that portion of the underlying Option relating to the same number of shares of Company
Stock as is covered by the Stock Appreciation Rights (or the portion of the Stock
Appreciation Rights so exercised) and to receive in exchange from the Company an amount
equal to the excess of (x) the Fair Market Value on the date of exercise of the Company
Stock covered by the surrendered portion of the underlying Option over (y) the exercise
price of the Company Stock covered by the surrendered portion of the underlying Option,
which shall be no less than 100% of Fair Market Value of the covered Company Stock on
the Date of Grant. The Committee may limit the amount that the Participant will be
entitled to receive upon exercise of the Stock Appreciation Right.






	 	(ii)	 	Upon the exercise of a Stock Appreciation Right and surrender of the related
portion of the underlying Option, the Option, to the extent surrendered, shall not
thereafter be exercisable.






	 	(iii)	 	The Committee may, in its discretion, grant Stock Appreciation Rights in
connection with Options which by their terms become fully exercisable upon a Change of
Control, which Stock Appreciation Rights shall only be exercisable following a Change
of Control. The underlying Option may provide that such Stock Appreciation Rights shall
be payable solely in cash. The terms of the underlying Option shall provide that the
value of the Company Stock shall be calculated based on the Fair Market Value of the
Company Stock on the day of exercise.






	 	(iv)	 	Subject to any further conditions upon exercise imposed by the Committee, a
Stock Appreciation Right shall be exercisable only to the extent that the related
Option is exercisable, and shall expire no later than the date on which the related
Option expires.






	 	(v)	 	A Stock Appreciation Right may only be exercised at a time when the Fair Market
Value of the Company Stock covered by the Stock Appreciation Right exceeds the exercise
price of the Company Stock covered by the underlying Option.






	(b)	 	Whenever the Committee deems it appropriate, Stock Appreciation Rights may be granted without
related Options. The terms and conditions of the award shall be set forth in a Stock
Appreciation Rights Award Agreement between the Company and the Participant in written or
electronic form and may include performance-based vesting conditions, as the Committee deems
appropriate. The following provisions apply to all Stock Appreciation Rights that are granted
without related Options:






	 	(i)	 	Stock Appreciation Rights shall entitle the Participant, upon the exercise of
all or any part of the Stock Appreciation Rights, to receive from the Company an amount
equal to the excess of (x) the Fair Market Value on the date of exercise of the Company
Stock covered by the surrendered Stock Appreciation Rights over (y) the Fair Market
Value on the Date of Grant of the Company Stock covered by the Stock Appreciation
Rights. The Committee may limit the amount that the Participant may be entitled to
receive upon exercise of the Stock Appreciation Right.






	 	(ii)	 	Stock Appreciation Rights shall be exercisable, in whole or in part, at such
times as the Committee shall specify in the Participant’s Stock Appreciation Rights
Award Agreement.






	(c)	 	The manner in which the Company’s obligation arising upon the exercise of a Stock
Appreciation Right shall be paid shall be determined by the Committee and shall be set forth
in the Participant’s stock option Award Agreement (if the Stock Appreciation Rights are
related to an Option) or Stock Appreciation Rights Award Agreement. The Committee may provide
for payment in Company Stock or cash, or a fixed combination of Company Stock or cash, or the
Committee may reserve the right to determine the manner of payment at the time the Stock
Appreciation Right is exercised. Shares of Company Stock issued upon the exercise of a Stock
Appreciation Right shall be valued at their Fair Market Value on the date of exercise.





9. Method of Exercise of Options and Stock Appreciation Rights.




	(a)	 	Options and Stock Appreciation Rights may be exercised by the Participant by giving notice of
the exercise to the Company, stating the number of shares the Participant has elected to
purchase under the Option or the number of Stock Appreciation Rights he has elected to
exercise. In the case of a purchase of shares under an Option, such notice shall be effective
only if accompanied by the exercise price in full paid in cash; provided that, if the terms of
an Option so permit, or the Committee by separate action so permits, the Participant may
(i) deliver shares of Company Stock (valued at their Fair Market Value on the date of
exercise) in satisfaction of all or any part of the exercise price (either by actual delivery
or attestation), (ii) to the extent permitted under applicable laws and regulations, deliver a
properly executed exercise notice together with irrevocable instructions to a broker to
exercise all or part of the Option, sell a sufficient number of shares of Company Stock to
cover the exercise price, Applicable Withholding Taxes (if required by the Committee) and
other costs and expenses associated with such sale and deliver promptly the amount necessary
to pay the exercise price and any Applicable Withholding Taxes or (iii) request that the
Company reduce the number of shares of Company Stock issued by the number of shares having an
aggregate Fair Market Value equal to the aggregate exercise price. The Participant shall not
be entitled to make payment of the exercise price other than in cash unless provisions for an
alternative payment method are included in the Participant’s stock option Award Agreement or
are agreed to in writing by the Company with the approval of the Committee prior to exercise
of the Option.






	(b)	 	The Company may place on any certificate representing Company Stock issued upon the exercise
of an Option or a Stock Appreciation Right any legend deemed desirable by the Company’s
counsel to comply with federal or state securities laws, and the Company may require of the
participant a customary written indication of his investment intent. Until the Participant has
made any required payment, including any Applicable Withholding Taxes, and has had issued to
him a certificate for the shares of Company Stock acquired, he shall possess no shareholder
rights with respect to the shares.






	(c)	 	Each Participant shall agree as a condition of the exercise of an Option or a Stock
Appreciation Right to pay to the Company Applicable Withholding Taxes, or make arrangements
satisfactory to the Company regarding the payment to the Company of such amounts. Until
Applicable Withholding Taxes have been paid or arrangements satisfactory to the Company have
been made, no stock certificate shall be issued upon the exercise of an Option or a Stock
Appreciation Right.






As an alternative to making a cash payment to the Company to satisfy Applicable Withholding
Taxes if the Option or Stock Appreciation Rights Award Agreement so provides, or the
Committee by separate action so provides, a Participant may elect to (i) deliver shares of
Company Stock or (ii) have the Company retain that number of shares of Company Stock that
would satisfy all or a specified portion of the Applicable Withholding Taxes. Any such
election shall be made only in accordance with procedures established by the Committee.




	(d)	 	Notwithstanding anything herein to the contrary, if the Company is subject to Section 16 of
the Act, Options and Stock Appreciation Rights shall always be granted and exercised in such a
manner as to conform to the provisions of Rule 16b-3.





10. Performance Compensation Awards.




	(a)	 	The Committee shall have the authority, at the time of grant of any Award described in this
Plan to designate such Award as a Performance Compensation Award in order to qualify such
Award as “performance-based compensation” under Section 162(m) of the Code. Unless otherwise
provided in a Participant’s Option or Stock Appreciation Rights Award Agreement, Options and
Stock Appreciation Rights granted under the Plan are intended to automatically satisfy the
requirements of the exemption for performance-based compensation under Code Section 162(m), to
the extent applicable, and to the extent intended to satisfy such exemption, Options and Stock
Appreciation Rights are subject to the limit set forth in Section 4(b) of the Plan but are not
otherwise considered Code Section 162(m) Awards subject to Article 10.






	(b)	 	The Committee will, in its sole discretion, designate within the first 90 days of a
Performance Period (or, if longer or shorter, within the maximum period allowed under Section
162(m) of the Code) which Participants will be eligible to receive Performance Compensation
Awards for such Performance Period. However, the designation of Participant eligibility to
receive an Award for a Performance Period shall not in any manner entitle the Participant to
receive payment for any Performance Compensation Award for such Performance Period. The
determination as to whether or not such Participant becomes entitled to payment for any
Performance Compensation Award shall be decided solely in accordance with the provisions of
this Section 10. Designation of Participant eligibility to receive an Award for a particular
Performance Period shall not require designation of Participant eligibility to receive an
Award in any subsequent Performance Period and designation of one person as a Participant
eligible to receive an Award shall not require designation of any other person as a
Participant eligible to receive an Award in such period or in any other period.






	(c)	 	With regard to a particular Performance Period, the Committee shall have sole discretion to
select the length of such Performance Period, the type(s) of Performance Compensation Awards
to be issued, the Performance Criteria that will be used to establish the Performance Goal(s),
the kind(s) and/or level(s) of the Performance Goal(s) that is (are) to apply and the
Performance Formula. Within the first 90 days of a Performance Period (or, if longer or
shorter, within the maximum period allowed under Section 162(m) of the Code), the Committee
shall, with regard to the Performance Compensation Awards to be issued for such Performance
Period, exercise its discretion with respect to each of the matters enumerated in the
immediately preceding sentence of this Section 10(c) and record the same in writing.






	(d)	 	Payment of Performance Compensation Awards






	 	(i)	 	Condition to Receipt of Payment. Unless otherwise provided in the
applicable Award Agreement, a Participant must be employed by the Company or Parent, or
remain an employee of or otherwise be a Company Contributor, as applicable, on the last
day of a Performance Period to be eligible for payment related to a Performance
Compensation Award for such Performance Period.






	 	(ii)	 	Limitation. A Participant shall be eligible to receive payment related
to a Performance Compensation Award only to the extent that: (A) the Performance Goals
for such period are achieved; and (B) the Performance Formula as applied against such
Performance Goals determines that all or some portion of such Participant’s Performance
Compensation Award has been earned for the Performance Period.






	 	(iii)	 	Certification. Following the completion of a Performance Period, the
Committee shall review and approve whether, and to what extent, the Performance Goals
for the Performance Period have been achieved and, if so, calculate and approve the
amount of the Performance Compensation Awards earned for the period based upon the
Performance Formula. The Committee shall then determine the actual size of each
Participant’s Performance Compensation Award for the Performance Period and, in so
doing, may apply Negative Discretion in accordance with Section 10(d)(iv) hereof, if
and when it deems appropriate.






	 	(iv)	 	Use of Discretion. In determining the actual size of an individual
Performance Compensation Award for a Performance Period, the Committee may reduce or
eliminate the amount of the Performance Compensation Award earned under the Performance
Formula in the Performance Period through the use of Negative Discretion if, in its
sole discretion, such reduction or elimination is appropriate. The Committee shall not
have the discretion to (A) grant or provide payment related to a Performance
Compensation Award for a Performance Period if the Performance Goals for such
Performance Period have not been attained or (B) increase a Performance Compensation
Award above the maximum amount payable under Section 10(d)(vi) of the Plan.






	 	(v)	 	Timing of Award Payments. Unless otherwise provided in a Performance
Compensation Award Agreement or pursuant to an irrevocable deferral election made in
compliance with Code Section 409A, Performance Compensation Awards granted for a
Performance Period shall be paid to Participants as soon as administratively
practicable following completion of the approvals required by this Section 10 but in no
event later than the fifteenth day of the third month following the last day of the
applicable Performance Period.






	 	(vi)	 	Maximum Award Payable. Notwithstanding any provision contained in this
Plan to the contrary, the maximum Performance Compensation Award payable to any one
Participant under the Plan for a single calendar year is subject to the limits in
Sections 4(b) and 4(g).





11. Nontransferability of Awards. Except as described below or as otherwise determined by the
Committee in a Participant’s Award agreement, no Award shall be transferable by a Participant
except by will or the laws of descent and distribution, and an Option or Stock Appreciation Right
shall be exercised only by a Participant during the lifetime of the Participant. Notwithstanding
the foregoing, a Participant may assign or transfer an Award that is not an Incentive Stock Option
with the consent of the Committee to a family member (or trust or other entity for the benefit of
the Participant or the Participant’s family members), without consideration (each transferee
thereof, a “Permitted Assignee”); provided that any such Permitted Assignee shall be bound by and
subject to all of the terms and conditions of the Plan and transferred Award and shall execute an
Award Agreement satisfactory to the Company evidencing such obligations. Notwithstanding the
foregoing, a Participant who transfers an Award also shall remain bound by the terms and conditions
of the Plan.



12. Effective Date of the Plan. This Plan shall become effective as of May 5th, 2015,
subject to the approval of the holders of a majority of the shares present or represented by proxy
at a duly held meeting of shareholders of the Company.



13. Termination, Modification, Change. If not sooner terminated by the Board, this Plan shall
terminate at the close of business on May 5th, 2020. No Awards shall be granted under the Plan
after its termination. The Board may terminate the Plan or may amend the Plan in such respects as
it shall deem advisable; provided that, if and to the extent required by the Code or Rule 16b-3, no
change shall be made that increases the total number of shares of Company Stock reserved for
issuance pursuant to Awards granted under the Plan (except pursuant to Section 14), expands the
class of persons eligible to receive Awards, or materially increases the benefits accruing to
Participants under the Plan unless such change is authorized by the shareholders of the Company.
Notwithstanding the foregoing, the Board may unilaterally amend the Plan and Awards as it deems
appropriate to ensure compliance with Rule 16b-3 and to cause Awards to meet the requirements of
the Code, including Code Sections 162(m), 422, 409A and regulations thereunder. Except as provided
in the preceding sentence, a termination or amendment of the Plan shall not, without the consent of
the Participant, adversely affect a Participant’s rights under an Award previously granted to such
Participant.



14. Change in Capital Structure.




	(a)	 	In the event of a stock dividend, stock split or combination of shares, recapitalization,
merger in which the Company is the surviving corporation, reorganization, reincorporation,
consolidation, special dividend, spin-off or other change in the Company’s capital stock
without the receipt of consideration by the Company (including, but not limited to, the
creation or issuance to shareholders generally of rights, options or warrants for the purchase
of common stock or preferred stock of the Company), the number and kind of shares of stock or
securities of the Company to be subject to the Plan and to Awards then outstanding or to be
granted thereunder, the aggregate and individual maximum number of shares or securities which
may be delivered under the Plan pursuant to Section 4, and the exercise price and other terms
and relevant provisions of Awards shall be appropriately adjusted by the Committee, whose
determination shall be binding on all persons; provided, however, that no adjustment of an
outstanding Option or Stock Appreciation Right may be made that would create a deferral of
income or a modification, extension or renewal of such Option or Stock Appreciation Right
under Code Section 409A except as may be permitted in applicable Treasury Regulations. If the
adjustment would produce fractional shares with respect to any Incentive Award, Restricted
Award or unexercised Option or Stock Appreciation Right, the Committee may adjust
appropriately the number of shares covered by the Award so as to eliminate the fractional
            shares.






	(b)	 	If the Company is a party to a consolidation or merger in which the Company is not the
surviving corporation, a transaction that results in the acquisition of substantially all of
the Company’s outstanding stock by a single person or entity, or a sale or transfer of
substantially all of the Company’s assets, the Committee may take such actions with respect to
outstanding Awards as the Committee deems appropriate, including, without limitation,
approving the assumption of some or all outstanding Awards by the Company’s successor, the
full vesting or lapse of all restrictions on some or all outstanding Awards, or the cash-out
of some or all outstanding Awards, subject to any specific provisions in outstanding Award
Agreements and applicable requirements under Code Section 409A.






	(c)	 	Any determination made or action taken under this Section 14 by the Committee shall be final
and conclusive and may be made or taken without the consent of any Participant.





15. Administration of the Plan. The Plan shall be administered by the Committee, which shall be the
full Board or a committee appointed by the Board, consisting of not less than two members of the
Board. Subject to paragraph (f) below, a committee appointed by the Board shall be the Compensation
and Management Development Committee of the Board unless the Board shall appoint another committee
to administer the Plan. The Committee shall have general authority to impose any limitation or
condition upon an Award that the Committee deems appropriate to achieve the objectives of the Award
and the Plan and, without limitation and in addition to powers set forth elsewhere in the Plan,
shall have the following specific authority:




	(a)	 	The Committee shall have the power and complete discretion to determine (i) which eligible
employees, directors and other Company Contributors shall receive an Award and the nature of
the Award, (ii) the number of shares of Company Stock to be covered by each Award, (iii)
whether Options shall be Incentive Stock Options or Nonstatutory Stock Options, (iv) when,
whether and to what extent Stock Appreciation Rights shall be granted in connection with
Options, (v) the Fair Market Value of Company Stock, subject to Section 2(m), (vi) the time or
times when an Award shall be granted, (vii) whether an Award shall become vested over a period
of time, upon the achievement of a performance-based vesting condition, and when it shall be
fully vested, (viii) when Options or Stock Appreciation Rights may be exercised, (ix) whether
a Disability exists, subject to Section 2.2(l), (x) the manner in which payment will be made
upon the exercise of Options or Stock Appreciation Rights, (xi) conditions relating to the
length of time before disposition of Company Stock received upon the exercise of Options or
Stock Appreciation Rights is permitted, (xii) whether to approve a Participant’s election (A)
to deliver Company Stock to satisfy Applicable Withholding Taxes or (B) to have the Company
withhold from the shares to be issued upon the exercise of a Nonstatutory Stock Option or a
Stock Appreciation Right the number of shares necessary to satisfy Applicable Withholding
Taxes, (xiii) the terms and conditions applicable to Restricted Awards, (xiv) the terms and
conditions on which restrictions upon Restricted Awards shall lapse, (xv) whether an Award
shall be deemed to be a Performance Compensation Award; (xvi) the Performance Criteria that
will be used to establish Performance Goals; (xvii) whether to accelerate the time at which
any or all restrictions with respect to Restricted Awards will lapse or be removed, (xviii)
notice provisions relating to the sale of Company Stock acquired under the Plan, and (xix) any
additional requirements relating to Awards that the Committee deems appropriate.
Notwithstanding the foregoing, no “tandem stock options” (where two stock options are issued
together and the exercise of one option affects the right to exercise the other option) may be
issued in connection with Incentive Stock Options. The Committee shall have the power to amend
the terms of previously granted Awards so long as the terms as amended are consistent with the
terms of the Plan and provided that the consent of the Participant is obtained with respect to
any amendment that would be detrimental to the Participant, except that such consent will not
be required if such amendment is for the purpose of complying with Rule 16b-3 or any
requirement of Code Sections 422 or 409A applicable to the Award.






	(b)	 	The Committee may adopt rules and regulations for carrying out the Plan. The interpretation
and construction of any provision of the Plan by the Committee shall be final and conclusive.
The Committee may consult with counsel, who may be counsel to the Company, and shall not incur
any liability for any action taken in good faith in reliance upon the advice of counsel.






	(c)	 	A majority of the members of the Committee shall constitute a quorum although at least two
members must be present for a quorum), and all actions of the Committee shall be taken by a
majority of the members present (or in the event of two members, a unanimous decision). Any
action may be taken by a written instrument signed by all of the members, and any action so
taken shall be fully effective as if it had been taken at a meeting.






	(d)	 	The Board from time to time may appoint members previously appointed and may fill vacancies,
however caused, in the Committee. If a Committee of the Board is appointed to serve as the
Committee, such Committee shall have, in connection with the administration of the Plan, the
powers possessed by the Board, including the power to delegate a subcommittee of the
administrative powers the Committee is authorized to exercise, subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board.






	(e)	 	To the extent permitted by applicable law, the Committee may delegate to one or more Officers
the authority to do one or both of the following: (i) designate Participants who are not
Officers to be recipients of Awards, and (ii) determine the number of shares of Company Stock
or units to be subject to such Awards granted to such Participants; provided, however, that
the Committee’s delegation of this authority shall specify the total number of shares of
Company Stock or units subject to such delegation, and that, in no event, shall such Officer
grant an Award to himself or herself. All other terms and conditions of any Award made
pursuant to this delegation of authority shall be determined by the Committee.






	(f)	 	Each member of the Committee with respect to the grant of Awards that are intended to
constitute Performance Compensation Awards shall be “outside directors” as described in Code
Section 162(m); provided, however, that the failure to satisfy such requirement shall not
affect the validity of any Award otherwise validly granted. As to Awards that that are
authorized by the Committee and intended to be exempt under Rule 16b-3 of the Exchange Act,
the requirements of Rule 16b-3(d)(1) under the Exchange Act with respect to committee action
also are intended to be satisfied. With respect to Awards granted pursuant to Section 15(e),
the designated Officer(s) granting Awards shall be deemed to constitute the Committee. To the
extent applicable, Committee members shall meet the requirements of the rules and regulations
of the Stock Exchange.






	(g)	 	Except in connection with a corporate transaction involving the Company (including, without
limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares),
the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding
Options or SARs or cancel outstanding Options or SARs in exchange for cash, other Awards or
Options or SARs with an exercise price that is less than the exercise price of the original
Options or SARs.





16. Notice. All notices and other communications required or permitted to be given under this Plan
shall be in writing and shall be deemed to have been duly given if delivered personally or mailed
first class, postage prepaid, as follows:




	(a)	 	If to the Company – at its principal business address to the attention of the Secretary;






	(b)	 	If to any Participant – at the last address of the Participant known to the sender at the
time the notice or other communication is sent.






	(c)	 	In either event, notice may also be delivered via email as long as the email account is one
used in the regular course of business of the Participant or Company representative.





17. Shareholder Rights. No Participant shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares of Company Stock subject to an Award unless
otherwise stated herein or until such Participation has satisfied all requirements under the terms
of the Award.



18. No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Award
granted under the Plan shall confer upon any Participant any right to continue to serve the Company
(or a Parent or Subsidiary of the Company) in the capacity in effect at the time the Award was
granted or shall affect the right of the Company (or a Parent or Subsidiary of the Company) to
terminate the employment or services of a Participant with or without notice and with or without
cause.



19. Interpretation. The terms of the Plan shall be governed by the laws of the State of Delaware,
without regard to conflict of law provisions at any jurisdiction. The terms of this Plan are
subject to all present and future regulations and rulings of the Secretary of the Treasury or his
or her delegate relating to the qualification of Incentive Stock Options under the Code. If any
provision of the Plan conflicts with any such regulation or ruling, then that provision of the Plan
shall be void and of no effect. As to all Incentive Stock Options and all Nonstatutory Stock
Options with an exercise price of at least 100% of Fair Market Value of the Company Stock on the
Date of Grant, this Plan shall be interpreted for such Options to be excluded from applicable
employee remuneration for purposes of Code Section 162(m).



20. Compliance with Code Section 409A.




	(a)	 	To the extent that amounts payable under this Plan are subject to Code Section 409A, the Plan
and Awards are intended to comply with such Code Section 409A and official guidance issued
thereunder. Otherwise, the Plan and Awards are intended to be exempt from Code Section 409A.
Notwithstanding anything to the contrary, the Plan and Awards shall be interpreted, operated
and administered in a manner consistent with these intentions.






	(b)	 	For purposes of the Plan, all references to “employment termination,” “termination from
employment,” “termination from service,” “separation from service” or like phrases are
intended to constitute a “separation from service” as defined by Code Section 409A and
regulations thereunder.






	(c)	 	Notwithstanding anything in the Plan to the contrary, if a Participant 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
employment termination or separation from service, all payments that are not then exempt from
Code Section 409A and would have been due during the six-month period following the
Participant’s employment termination or separation from service shall be aggregated and paid
on the date that is six months and one day after the Participant’s employment termination or
separation from service (or, if earlier, as soon as practicable after the date of the
Participant’s death).





21. Compliance with Code Section 162(m). To the extent the Committee issues any Award that is
intended to be exempt from the deduction limitation of Section 162(m) of the Code, the Committee
may, without shareholder or grantee approval, amend the Plan or the relevant Award Agreement
retroactively or prospectively to the extent it determines necessary in order to comply with any
subsequent clarification of Section 162(m) of the Code required to preserve the Company’s federal
income tax deduction for compensation paid pursuant to any such Award.



22. Clawback. Notwithstanding any other provisions in this Plan, any Award that is subject to
recovery under any law, government regulation or Stock Exchange listing requirement, will be
subject to such deductions and clawback as may be required to be made pursuant to such law,
government regulation or stock exchange listing requirement (or any policy adopted by the Company
pursuant to any such law, government regulation or Stock Exchange listing requirement) and in
compliance with Code Section 409A.



23. Indemnification. In addition to such other rights of indemnification as they may have, the
members of the Committee shall be indemnified by the Company against the reasonable expenses,
including attorneys’ fees, actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which they or any of them
may be a party by reason of any action taken or failure to act under or in connection with the Plan
or any Award granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by the Board) or paid by the Board in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters as to which it shall
be determined in such action, suit or proceeding that such Committee member has acted in bad faith;
provided, however, that within sixty (60) days after receipt of notice of institution of any such
action, suit or proceeding, a Committee member shall offer the Company in writing the opportunity,
at its own cost, to handle and defend the same.



IN WITNESS HEREOF, this instrument has been executed as of the 5th day of May 2015.



	 	 	 
	PENSKE AUTOMOTIVE GROUP, INC
	By:
	 	/s/ Calvin Sharp

	 	 	 

	 	 	Executive Vice President – Human Resources