Document:

exv10w12

Exhibit
10.12

PENSKE AUTOMOTIVE GROUP, INC.

MANAGEMENT INCENTIVE PLAN

(AS AMENDED AND RESTATED AS OF DECEMBER 3, 2009)

	1.	 	PURPOSE. The purpose of the Penske Automotive Group, Inc. Management Incentive Plan is to
advance the interests of Penske Automotive Group, Inc., and its stockholders by motivating key
personnel of the Company to take actions that will promote the Company’s long-term success and
growth.

	2.	 	DEFINITIONS

	 	(a)	 	“Award” means an award entitling a Participant to receive incentive
compensation subject to the terms and conditions of the Plan.

	 	(b)	 	“Board” means the Company’s Board of Directors.

	 	(c)	 	“Code” means the Internal Revenue Code of 1986, as amended.

	 	(d)	 	“Committee” means the Compensation and Management Development Committee of the
Board or any subcommittee thereof delegated by the Compensation and Management
Development Committee to administer the Plan, or any other committee appointed by the
Board to administer the Plan; provided, however, that in any event the Committee shall
be comprised of not less than two directors of the Company, each of whom shall qualify
as an “outside director” for purposes of Section 162(m) of the Code and Section
1.162-27 (e) (3) of the Regulations.

	 	(e)	 	“Common Stock” means shares of common stock, par value $.0001 per share, of the
Company.

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

	 	(g)	 	“Fair Market Value” means the fair market value of a share of Common Stock as
determined by the Committee from time to time. Unless determined otherwise by the
Committee, the fair market value shall be the closing price of the Common Stock on the
New York Stock Exchange on the relevant date or, if no sale occurred on such date, the
closing price on the nearest preceding date on which sales occurred.

	 	(h)	 	“Officer” means a Participant who is an officer of the Company.

	 	(i)	 	“Participant” means a key employee of the Company or a Subsidiary who is
selected by the Committee to participate in the Plan.

	 	(j)	 	“Performance Objectives” means the performance objectives established pursuant
to this Plan for Participants who have received Awards. Performance Objectives may be
described in terms of Company-wide objectives or objectives that are related to the
performance of the individual Participant or the Subsidiary,

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	 	 	 	division, region, product line, department or function in which the Participant is
employed or which is managed by the Participant. Any Performance Objectives
applicable to a Qualified Performance-Based Award shall be limited to specified
levels of or increases or decreases in return on equity, earnings per share, total
earnings, earnings growth, earnings from continuing operations, EBITDA, EBITDAR,
EBIT, 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, net income, cash flow
(including operating cash flow and free cash flow), financial return 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). If the
Committee determines that a change in the business, operations, corporate structure
or capital structure of the Company, or the manner in which it conducts its
business, or other events or circumstances render the Performance Objectives
unsuitable, the Committee may modify such Performance Objectives or the related
minimum acceptable level of achievement, in whole or in part, as the Committee deems
appropriate and equitable; provided however that in the case of a Qualified
Performance-Based Award, such modification is only permitted to the extent
prescribed by Section 162(m) of the Code and the Regulations.

	 	(k)	 	“Performance Period” means a period determined by the Committee which shall be
used for purposes of determining whether Awards are earned by Participants.

	 	(l)	 	“Performance Target” means a target level of performance, based on one or more
Performance Objectives, established for a Performance Period in accordance with Section
4.

	 	(m)	 	“Plan” means the Penske Automotive Group, Inc. Management Incentive Plan, as
stated herein, and as amended from time to time.

	 	(n)	 	“Qualified Performance-Based Award” means an Award or portion of an Award to an
Officer that is intended to satisfy the requirements for “qualified performance-based
compensation” under Code Section 162(m). The Committee shall designate any Qualified
Performance-Based Award as such at the time of grant.

	 	(o)	 	“Regulations” means the Treasury Regulations promulgated under the Code, as
amended from time to time.

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	 	(p)	 	“Retirement” means termination of employment with the Company or a Subsidiary
after completing at least 5 years of continuous employment and attaining age 60.

	 	(q)	 	“Subsidiary” means a corporation or other entity (i) more than fifty percent
(50%) of whose outstanding shares or securities (representing the right to vote for the
election of directors or other managing authority) are, or (ii) which does not have
outstanding shares or securities (as may be the case in a Partnership, joint venture or
unincorporated association), but more than fifty percent (50%) of whose ownership
interest (representing the right generally to make decisions for such other entity) is,
now or hereafter owned or controlled directly or indirectly by the Company.

	3.	 	PARTICIPATION. For each Performance Period, the Committee shall designate those key
employees of the Company and its Subsidiaries who shall receive Awards under the Plan.
Selection for participation for one Performance Period shall not confer on a Participant the
right to participate in the Plan for any other Performance Period.

	4.	 	AWARDS. For each Performance Period, each Participant shall receive an Award entitling the
Participant to receive cash incentive compensation or other incentive compensation (including
common stock or other awards under the Amended and Restated Penske Automotive Group, Inc. 2002
Equity Plan (or similar plan)) upon the attainment of one or more Performance Targets. The
Committee may establish different terms for Awards for different Participants or groups of
Participants. The amount of compensation payable under an Award may be stated as a dollar
amount or as a percentage of the Participant’s base compensation. The Committee may provide
for a threshold level of performance below which no amount of compensation will be paid and a
maximum level of performance above which no additional amount of compensation will be paid,
and it may provide for the payment of differing amounts of compensation for different levels
of performance. Notwithstanding any other provision of the plan to the contrary, the
Committee retains the absolute discretion to reduce the amount of any incentive compensation
that would be otherwise payable to a participant (including a reduction in such amount to
zero).

	5.	 	ESTABLISHMENT OF PERFORMANCE TARGETS. Within the first twenty-five percent (25%) of each
Performance Period, the Committee shall establish one or more Performance Targets for that
Performance Period.

	6.	 	PAYMENT OF AWARDS. Following the end of each Performance Period, the Committee shall
determine whether the Performance Targets for such Performance Period have been satisfied and
shall certify its determination in approved minutes of the Committee meeting held for such
purpose. If the Committee certifies that one or more Performance Targets for a Performance
Period have been achieved, all compensation payable in respect of Awards subject to such
Performance Target shall be paid to Participants as soon as reasonably practicable thereafter
(subject to the limitations set forth in paragraph 3); provided, that such compensation shall
be payable in the calendar year that follows the calendar year which includes the last day of
the Performance Period

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	 	 	and in all events by March 15 of such calendar year and, provided, however, that the
Committee may permit the deferral of such compensation under a deferred compensation plan of
the Company or a Subsidiary. If a Performance Target for a Performance Period is not
achieved, the Committee in its sole discretion may determine that all or a portion of any
Award shall be deemed to be earned based on such criteria as the Committee deems
appropriate, including without limitation individual performance or the performance of the
Subsidiary or business division employing the Participant; provided, however, that the
Committee, under procedures intended to comply with Section 162(m) of the Code, shall not
have such discretion with respect to any Qualified Performance-Based Award. Any Award that
is not considered earned in accordance with this Section shall be forfeited.

	7.	 	PARTIAL PARTICIPATION. Unless the Committee shall determine otherwise, the rules and
procedures for partial participation shall be consistent with the following:

	 	(a)	 	EMPLOYMENT TERMINATION. If a Participant terminates employment with the
Company before payment of Awards are made for a Performance Period for reasons other
than death, disability or Retirement, any Award granted to the Participant in respect
of that Performance Period shall be forfeited and cancelled.
	 
	 	(b)	 	DEATH, DISABILITY OR RETIREMENT. A Participant whose employment terminates
during a Performance Period because of death, disability or Retirement may, under such
rules as the Committee may from time to time prescribe, be eligible for consideration
for a pro-rata Award based on the period of active employment during the Performance
Period, which Award shall be paid at the time specified in Section 5. To the extent any
such pro-rata award is determined to be paid at the Committee’s discretion, such award
shall be determined by multiplying the actual Award that the Participant would have
received had the Participant remained employed to the end of the Performance Period by
a fraction the numerator of which is the number of days that the Participant was
actively employed during the Performance Period and the denominator of which is the
total number of days in the Performance Period.
	 
	 	(c)	 	LEAVE OF ABSENCE. A Participant who is on a leave of absence other than a
personal leave for more than ninety (90) consecutive days during the Performance
Period, or who is on a personal leave of absence for more than thirty (30) consecutive
days, shall forfeit any portion of an Award attributable to said period of leave
pursuant to such rules as the Committee may establish.

	8.	 	MAXIMUM AMOUNT OF QUALIFIED PERFORMANCE-BASED AWARDS. The maximum dollar amount of
compensation that may be paid to any Participant in respect of Qualified Performance-Based
Awards for a single fiscal year shall be $5,000,000.

	9.	 	ADJUSTMENTS. To the extent that a Performance Target is based on an increase in the Fair
Market Value of the Common Stock, in the event of any stock dividend, stock split, combination
of shares, recapitalization or other change in the capital structure of the Company, any
merger, consolidation, spin-off, reorganization, partial or complete

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	 	 	liquidation or other distribution of assets (other than a normal cash dividend), issuance of
rights or warrants to purchase securities or any other corporate transaction having an
effect similar to any of the foregoing, then the Committee may make or provide for such
adjustments in such Performance Target as the Committee in its sole discretion may in good
faith determine to be equitably required in order to prevent dilution or enlargement of the
rights of Participants.

	10.	 	TAX WITHHOLDING. The Company shall be entitled to withhold from any payment made under the
Plan the full amount of any required federal, state or local taxes.

	11.	 	NONTRANSFERABILITY OF BENEFITS. A Participant may not assign or transfer any interest in an
Award. Notwithstanding the foregoing, upon the death of a Participant, the Participant’s
rights and benefits under the Plan shall pass by will or by the laws of descent and
distribution.

	12.	 	ADMINISTRATION AND INTERPRETATION. The Committee shall have complete authority to interpret
the Plan, to prescribe rules and requirements relating to it, and to make all determinations
necessary or advisable in the administration of the Plan, including, without limitation, the
amending or altering of the Plan as may be required to comply with or conform to any federal,
state or local laws or regulations.

	13.	 	AMENDMENT AND TERMINATION OF PLAN. The Committee may at any time terminate the Plan and may
at any time and from time to time amend or modify the Plan in any respect; provided, however,
that no amendment shall be effective without approval of the stockholders of the Company if
the amendment would increase the maximum amount of compensation payable to a Participant in
any Performance Period pursuant to Qualified Performance-Based Awards as specified in Section
7. Neither the termination of the Plan nor any amendment to the Plan shall reduce benefits
accruing under Awards granted prior the date of such termination or amendment.

	14.	 	GOVERNING LAW. The Plan shall be governed and construed in accordance with the laws of the
State of Michigan. As a condition to eligibility to receive an Award under the Plan, each
Participant irrevocably consents to the exclusive jurisdiction of the courts of the State of
Michigan and of any federal court located in the Eastern District of Michigan in connection
with any action or proceeding arising out of or relating to this Plan, any document or
instrument delivered pursuant to or in connection with this Plan, or any alleged breach of
this Plan or any such document or instrument.

	15.	 	EFFECTIVE DATES AND STOCKHOLDER APPROVAL. This Plan shall be effective for periods beginning
on and after July 1, 2003, provided that no Qualified Performance-Based Award issued after
April 30, 2009 shall be effective if the Plan is not approved by a vote of the stockholders of
the Company.

	16.	 	NO RIGHTS TO CONTINUED EMPLOYMENT. Participation in the Plan does not create or constitute
an express or implied employment contract between the Company and the Participant nor limit
the right of the Company to discharge or otherwise deal with a Participant without regard to
the existence of the Plan.

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	17.	 	UNFUNDED PLAN. The Plan shall at all times be an unfunded payroll practice and no provision
shall at any time be made with respect to segregating assets of the Company for payment of any
Award. No Participant or any other person shall have any interest in any particular assets of
the Company by reason of the right to receive an Award under the Plan and any such Participant
or any other person shall have only the rights of a general unsecured creditor of the Company.

	18.	 	SECTION 409A. To the extent applicable, this Plan is intended to comply with the provisions
of Section 409A of the Code. This Plan shall be administered in a manner consistent with the
intent.

6exv10w26

Exhibit
10.26

FIRST AMENDMENT TO THE

PENSKE AUTOMOTIVE GROUP 401(k) SAVINGS AND RETIREMENT PLAN

(As amended and restated effective January 1, 2009)

     WHEREAS, Penske Automotive Group, Inc. (the “Company”) has adopted and maintains the Penske
Automotive Group 401(k) Savings and Retirement Plan, originally effective September 1, 1998, and as
thereafter amended and restated effective January 1, 2009 (the “Plan”); and

     WHEREAS, pursuant to Section 14 of the Plan, the Company has reserved the right to amend the
Plan at any time; and

     WHEREAS, the Company desires to amend the Plan in good faith for compliance with the
provisions of the Pension Protection Act of 2006 and for other interim tax legislation and Internal
Revenue Service guidance.

     NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES, the Plan is amended in the following
respects:

     1. Section 6 (Distributions) of the Plan is amended for good faith compliance with the HEART
Act, effectively immediately, by the addition of a new section 6.2, reading as follows, and the
subsequent sections in Section 6 and the cross-references to them are re-numbered accordingly:

	 	 	“6.2 HEART Act Compliance and Qualified Reservist Distribution.

	 	A.	 	Special Severance From Employment Rule. For years
beginning after December 31, 2008, for purposes of Code Section
401(k)(2)(B)(i)(I), an individual is treated as having been severed
from employment during any period the individual is performing service
in the uniformed services described in Code Section 3401(h)(2)(A). If
an individual elects to receive a distribution by reason of severance
from employment as provided in the preceding sentence of this Section
6.2(A), the individual may not make an elective deferral or employee
contribution during the six-month period beginning on the date of the
distribution.

	 	B.	 	Special Death Benefits Rule. In the case of a death or
disability occurring on or after January 1, 2007, if a Member dies
while performing qualified military service as defined in Code Section
414(u), the survivors of the Member are entitled to any additional
benefits (other than benefit accruals relating to the period of
qualified military service) provided under the Plan as if the Member
had resumed and then terminated employment on account of death.

	 	C.	 	Differential Wage Payments. For years beginning after
December 31, 2008, (i) an individual receiving a differential wage
payment,

 

	 	 	 	as defined by Code Section 3401(h)(2), shall be treated as an
Employee of the Employer making the payment, (ii) the differential
wage payment shall be treated as compensation for Plan purposes, and
(iii) the Plan shall not be treated as failing to meet the
requirements of any provision described in Code Section 414(u)(1)(C)
by reason of any contribution or benefit which is based on the
differential wage payment; provided, however, that clause (iii)
applies only if all employees of the Employer performing service in
the uniformed services described in Code Section 3401(h)(2)(A) are
entitled to receive differential wage payments (as defined in Code
Section 3401(h)(2)) on reasonably equivalent terms and, if eligible
to participate in a retirement plan maintained by the Employer, to
make contributions based on the payments on reasonably equivalent
terms (taking into account Code Sections 410(b)(3), (4), and (5)).

	 	D.	 	Qualified Reservist Distribution. Notwithstanding any
other provision of the Plan, a Member may elect a Qualified Reservist
Distribution. A ‘Qualified Reservist Distribution’ is any distribution
to an individual who is ordered or called to active duty after
September 11, 2001, if: (i) the distribution is from amounts
attributable to Plan Pre-Tax Contributions, i.e., elective deferrals ;
(ii) the individual was (by reason of being a member of a reserve
component, as defined in Section 101 of Title 37, United States Code)
ordered or called to active duty for a period in excess of 179 days or
for an indefinite period; and (iii) the distribution is made during the
period beginning on the date of such order or call, and ending at the
close of the active duty period.”

     2. Section 17.2 (QDRO Exception) of the Plan is amended, effective as of April 6, 2007, by the
addition of a new paragraph D. at the end thereof, reading as follows:

	 	“D.	 	 Effective April 6, 2007, a domestic relations order
that otherwise satisfies the requirements for a qualified domestic
relations order under Code Section 414(p) will not fail to be a
qualified domestic relations order: (i) solely because the order is
issued after, or revises, another domestic relations order or qualified
domestic relations order; or (ii) solely because of the time at which
the order is issued, including issuance after the annuity starting date
or after the Member’s death. Also, a domestic relations order
described in the preceding sentence will be subject to the same
requirements and protections that apply to other types of qualified
domestic relations orders.”

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     3.Section 18 (Minimum Distribution Requirements) of the Plan is amended, effective as of January
1, 2009, by the addition of a new section 18.3 at the end thereof, reading as follows:

	 	 	 	“18.3 Rule for 2009 Required Minimum Distribution Relief. Notwithstanding any other
provision of the Plan, a Member or Beneficiary who would have been required to
receive Required Minimum Distributions for 2009 but for the enactment of Code
Section 401(a)(9)(H) (‘2009 RMDs’), and who would have satisfied that requirement by
receiving distributions that are (A) equal to the 2009 RMDs or (B) one or more
payments in a series of substantially equal distributions (that include the 2009
RMDs) made at least annually and expected to last for the life (or life expectancy)
of the Member, the joint lives (or joint life expectancy) of the Member and the
Member’s designated Beneficiary, or for a period of at least ten years (‘Extended
2009 RMDs’), will not receive those distributions for 2009 unless the Member or
Beneficiary chooses to receive such distributions. Members and Beneficiaries
described in the preceding sentence will be given the opportunity to elect to
receive the distributions described in the preceding sentence. In addition,
notwithstanding any other provision of the Plan, and solely for purposes of applying
the direct rollover provisions of the Plan, 2009 Required Minimum Distributions and
2009 Extended RMDs will be treated as Eligible Rollover Distributions.”

     IN WITNESS WHEREOF, the Company has caused this First Amendment to the Penske Automotive Group
401(k) Savings and Retirement Plan to be executed by its duly authorized representative this
16th day of December, 2009.

	 	 	 	 	 
	 	Penske Automotive Group, Inc.

 	 
	 	By:  	/s/ Calvin C. Sharp
 	 
	 	 	Its:  EVP — Human Resources 	 
	 	 	 	 
	 

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