Document:

Exhibit ___

EXHIBIT 10.2

MODIFICATION PROMISSORY NOTE

(Non-Revolving Term Note)

		
	$7,528,870.98

	January 16, 2009

	BORROWER NAME AND ADDRESS:

	LENDER NAME AND ADDRESS:

	 
	 

	SUN AMERICAN BANCORP.

	SILVERTON BANK, N.A. (Bank)

	a Delaware corporation (Borrower)

	3284 Northside Parkway,

	9293 Glades Road,

	Atlanta, Georgia 30327

	Boca Raton, Florida 33434

	     

WHEREAS, Borrower executed and delivered to Bank a Promissory Note With Revolving Feature dated as of January 16, 2008 in the maximum principal amount of Eight Million and 00/100 Dollars ($8,000,000.00) of which Seven Million Five Hundred Twenty Eight Thousand Eight Hundred Seventy and 98/100 Dollars ($7,528,870.98) remains outstanding (the “Original Note”);

WHEREAS, Borrower and Bank have agreed to modify the Original Note pursuant to the terms set forth herein below.

Borrower promises to pay to the order of Bank, in lawful money of the United States of America, at its office indicated above or wherever else Bank may specify in writing, the sum of Seven Million Five Hundred Twenty Eight Thousand Eight Hundred Seventy and 98/100 Dollars ($7,528,870.98)or such sum as may be advanced and outstanding from time to time, with interest on the unpaid principal balance at the rate and on the terms provided in this Modification Promissory Note (including all renewals, extensions or modifications hereof, this “Note”).

1.  USE OF PROCEEDS.  Borrower shall use the proceeds of the loan(s) evidenced by this Note for the commercial purposes of Borrower in infusing capital into the Subsidiary and for expenses of Borrower.

2.  SECURITY.  This Note is secured by 99.9% of all issued and outstanding shares of capital stock in SUN AMERICAN BANK, a Florida banking corporation/Borrower’s subsidiary (“Subsidiary”).

3.  INTEREST RATE.  The interest rate on this Note is subject to change from time to time. The interest on this Note shall accrue on the unpaid principal balance of this Note from the date hereof at the prime rate (the “Prime Rate”), as the Prime Rate is published from time to time by The Wall Street Journal (as of January 16, 2009, 3.25%), minus 1.00%. The interest rate will be adjusted to reflect a change in the interest rate as the Prime Rate changes. The foregoing is a reference rate for information and use of the Bank herein in establishing the actual rates to be charged to Borrower and does not necessarily constitute its lowest or best rate. In the event the interest rate defined above shall no longer be published, then in such event the Bank shall, in its sole discretion, select a comparable money center bank index and give notice to the Borrower. The change in the interest rate is effective whether or not Bank gives Borrower notice of the change.

4.  DEFAULT RATE.  In addition to all other rights contained in this Note, if a Default (as defined herein) occurs and as long as a Default continues, all outstanding Obligations shall bear interest at the interest rate of 18% per annum (“Default Rate”). The Default Rate shall also apply from acceleration until the Obligations or any judgement thereon is paid in full.

5.  INTEREST AND FEE(S) COMPUTATION (ACTUAL/360).  Interest and fees, if any, shall be computed on the basis of a 360-day year for the actual number of days in the applicable period (“Acutal/360 Computation”). The Actual/360 Computation determines the annual effective yield by taking the stated (nominal) rate for a year’s period and then dividing said rate by 360 to determine the daily periodic rate to be applied for each day in the applicable period. Application of the Actual/350 Computation produces an annualized effective rate exceeding the nominal rate.

NO DOCUMENTARY STAMP TAXES ARE DUE WITH RESPECT TO THE INDEBTEDNESS EVIDENCED HEREBY AS ALL DOCUMENTARY STAMP TAXES IN THE AMOUNT REQUIRED BY LAW WERE PREVIOUSLY PAID UPON SIGNING OF THE NOTE THIS NOTE MODIFIES.

6.  PREPAYMENT COMPENSATION.  Principal may be prepaid in whole or in part at any time. Any prepayment in whole or in part shall include accrued interest and all other sums then due under any of the Loan Documents. No partial prepayment shall affect the obligation of Borrower to make any payment of principal or interest due under this Note on the due dates specified.

7.  EXIT FEE.  If the loan balance and all related fees and costs due Bank are paid in full: a) on or before March 31, 2009, an exit fee equal to sixty five basis points (.65%) of the outstanding balance; b) between April 1, 2009 through and including June 30, 2009, Borrower shall pay Bank an exit fee equal to two hundred fifty five basis points (2.55%) of the outstanding balance; c) between July 1, 2009 through and including July 31, 2009, Borrower shall pay Bank an exit fee equal to three hundred ninety basis points percent (3.90%) of the outstanding balance; d) between August 1, 2009 through and including August 31, 2009, Borrower shall pay Bank an exit fee equal to five hundred twenty basis points (5.20%) of the outstanding balance; and e) between September 1, 2009 through and including the Maturity Date, an exit fee equal to eight hundred basis points (8.00%) of the outstanding balance.

8.  ACCURATE FINANCIAL INFORMATION.  Borrower represents and covenants to Bank that on and after the date of this Note: (i) all financial statements of borrower or Subsidiary furnished to Bank are correct and accurately reflect the financial conditions of Borrower or Subsidiary, as the case may be, as of the respective dates thereof; (ii) Borrower maintains adequate records and books of account in which complete entries are made in accordance with tax method principles, consistently applied reflecting all financial transactions of borrower, and (iii) at such times as Bank requests, Borrower will furnish Bank with such financial information as Bank may request, Notwithstanding the forgoing, Borrower and Subsidiary are to provide updated financial information as more particularly set forth in the Loan Agreement, as defined below.

9.  REPAYMENT TERMS.  Interest only shall be paid in consecutive quarterly installments commencing on the 16th day of April, 2008 and on the same day of each quarter thereafter. On January 16, 2010 (the “Maturity Date”), Borrower shall pay all outstanding principal and accord and unpaid interest, and any and all other amounts due Bank, in full.

Additionally, principal reductions shall be required upon Borrower or Subsidiary’s receipt of private equity investments received according to the following Schedule until the loan evidenced hereby is paid in full, less: a) an amount to be determined and required by Bank to be used as an interest reserve to fully fund the interest payments due through the Maturity Date in the event Borrower fails to make its scheduled payments; and b) Three Hundred Sixty Thousand and 00/100 Dollars ($360,000.00) to be retained by borrower for the sole purpose of paying its expenses not passed through to the Subsidiary.

Schedule of Equity Proceeds to Reduce Loan Principal

(i)

15% - Equity raised between zero ($0) up to and including Five Million and 00/100 Dollars ($5,000,000.00); 15% of that equity will be applied to reduce principal after netting out 9 (a) and 9(b).

(ii)

20% - In addition to the principal reduction calculated in 9(i) equity raised between Five Million One and 00/100 Dollars ($5,000,001.00) up to and including Fifteen Million Dollars ($15,000,000.00); 20% of that equity will be applied to reduce principal.

(iii)

25% - In addition to the principal reduction calculated in 9(i) and 9(ii) equity raised in excess of Fifteen Million One and 00/100 Dollars ($15,000,001.00); 25% of that equity will be applied to reduce principal.

(iv)

Equity as measured in this section 9 is an equity investment or series of investments made into either the Borrower or subsidiary by one or more individuals or entities considered in aggregate regardless of the form the investment takes and is to be measured cumulatively from January 1, 2009 effective upon the date actually received by the Borrower or its subsidiaries.

10.  APPLICATION OF PAYMENTS.  Monies received by Bank from any source for application toward payment of the Obligations shall be applied to accrued interest and then to principal. If a Default occurs, monies may be applied to the Obligations in any manner or order deemed appropriate by Bank.

Page 2

If any payment received by Bank under this Note or other Loan Documents is rescinded, avoided or for any reason returned by Bank because of any adverse claim or threatened action, the returned payment shall remain payable as an obligation of all persons liable under this Note or other Loan Documents as though such payment had not been made.

11.  DEFINITIONS.  Loan Documents.  The term “Loan Documents”, as used in this Note and the other Loan Documents, refers to all documents executed in connection with or related to the loan evidenced by this Note and includes, without limitation, this Note, that certain Loan and Stock Pledge Agreement dated as of January 16, 2008, as modified (the “Loan Agreement”), guaranty agreements, security agreements, security instruments, financing statements, mortgage instruments, any renewals or modifications, whenever any of the foregoing are executed. Obligations. The term “Obligations”, as used in this Note and the other Loan Documents, refers to any and all indebtedness and other obligations under this Note and the other Loan Documents between Borrower and Bank, and any other obligations or agreements between Borrower and Bank. Certain Other Terms. All terms that are used but not otherwise defined in any of the Loan Documents shall have the definitions provided in the Uniform Commercial Code.

12.  LATE CHARGE.  If any payments are not timely made Borrower shall also pay to Bank a late charge equal to 5% of each payment past due for 10 or more days.

Acceptance by Bank of any late payment without an accompanying late charge shall not be deemed a waiver of Bank’s right to collect such late charge or to collect a late charge for any subsequent late payment received.

13.  ATTORNEYS’ FEES AND OTHER COLLECTION COSTS.  Borrower shall pay all of Bank’s reasonable expenses incurred to enforce or collect any of the Obligations including, without limitation, reasonable paralegals, attorneys’ and experts’ fees and expenses, whether incurred without the commencement of a suit, in any trial, arbitration, or administrative proceeding, or in any appellate or bankruptcy proceeding. Should suit be brought because of the breach of any covenants under this Obligation, the non-prevailing party shall pay the prevailing party all expenses of such suit and any appeal thereof, including a reasonable attorney’s fee.

14.  USURY.  If at any time the effective interest rate under this Note would, but for this paragraph, exceed the maximum lawful rate, the effective interest rate under this Note shall be the maximum lawful rate, and any amount received by Bank in excess of such rate shall be applied to principal and then to fees and expenses, or, if no such amounts are owing, returned to Borrower.

15.  DEFAULT.  If any of the following occurs, subject to a fifteen (15) day cure period, a default (“Default”) under this Note shall exist: Nonpayment; Nonperformance. The failure of timely payment or performance of the Obligations or Default under this Note, the Loan Agreement or any other Loan Document or any other indebtedness of Borrower to Bank, by the Borrower or any endorser. FalseWarranty. A warranty or representation made or deemed made in the Loan Documents or furnished to the Bank in connection with the loan evidenced by this Note proves materially false, or if of a continuing nature, becomes materially false. Cessation; Bankruptcy. The death of, appointment of a guardian for, dissolution of, termination of existence of, loss of good standing status by, appointment of a receiver for, assignment for the benefit of creditors of, or commencement of any bankruptcy or insolvency proceeding by or against Borrower, its Subsidiary or affiliates, if any, or any general partner of or the majority ownership interests of Borrower, or any party to the Loan Documents. Material Business Alteration. Without prior written consent of Bank, a material alteration in the kind or type of Borrower’s business. Material Capital Structure or Business Alteration.  Without prior written consent of Bank, (i) a material alteration in the kind or type of Borrower’s business, if any, (ii) the sale of substantially all of the business or assets of Borrower or any Subsidiary, or a material portion (10% or more) of such business or assets if such a sale is outside the ordinary course of business of Borrower or any Subsidiary, or more than 25% of the outstanding stock or voting power of or in Borrower in a single transaction or a series of transactions; (iii) any transfer of corporate stock or membership units/interests directly or indirectly by the Borrower or any shareholder or member of the Borrower, or any Subsidiary, or any issuance of any unused shares of corporate stock or membership units by or in the Borrower of such Subsidiary; (iv) should any Borrower enter into any merger or consolidation or (v) Bank determines in good faith, in its sole discretion, that the prospects for payment or performance of the Obligations are impaired or a material adverse change has occurred in the business or prospects of Borrower, financial or otherwise. Financial Covenants. The failure of meeting any or all Financial Covenants and/or conditions as listed in the Loan Agreement or as otherwise set forth by Bank.

Page 3

16.  REMEDIES UPON DEFAULT.  If a Default occurs under this Note or any of the Loan Documents, Bank may at any time thereafter, take the following actions: Acceleration Upon Default.  Accelerate the maturity of this Note and, at Bank’s option, any or all other Obligations between Borrower and Bank; whereupon this Note and the accelerated Obligations shall be immediately due and payable; provided, however, if the Default is based upon a bankruptcy or insolvency proceeding commenced by or against Borrower or any endorser of this Note, all Obligations shall automatically and immediately be due and payable. Cumulative. Exercise any rights and remedies as provided under the Note, Loan Agreement, and other Loan Documents, or as provided by law or equity.

17.  FINANCIAL AND OTHER INFORMATION.  Borrower shall deliver to Bank such information as Bank may reasonably request from time to time, including without limitation, financial statements and information pertaining to Borrower’s financial condition. Such information shall be true, complete, and accurate.

18.  WAIVERS AND AMENDMENTS.  No waivers, amendments or modifications of this Note and other Loan Documents shall be valid unless in writing and signed by an officer of Bank. No waiver by Bank of any Default shall operate as a waiver of any other Default or the same Default on a future occasion. Neither the failure nor any delay on the part of Bank in exercising any right, power, or remedy under this Note and other Loan Documents shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

Each Borrower or any person liable under this Note waives presentment, protest, notice of dishonor, demand for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, notice of sale and all other notices of any kind. Further, each agrees that Bank may extend, modify or renew this Note or make a novation of the loan evidenced by this Note for any period, and grant any releases, compromises or indulgences with respect to any collateral securing this Note, or with respect to any other Borrower or any other person liable under this Note or other Loan Documents, all without notice to or consent of each Borrower or each person who may be liable under this Note or any other Loan Document and without affecting the liability of Borrower or any person who may be liable under this note or any other Loan Document.

19.  MISCELLANEOUS PROVISIONS.  Assignment.  This Note and the other Loan Documents shall inure to the benefit of and be binding upon the parties and their respective heirs, legal representative, successors and assigns. Bank’s interests in and rights under this Note and the other Loan Documents are freely assignable, in whole or in part, by Bank. In addition, nothing in this Note or any of the other Loan Documents shall prohibit Bank from pledging or assigning this Note or any of the other Loan Documents or any interest therein. Borrower shall not assign its rights and interest hereunder without the prior written consent of Bank, and any attempt by Borrower to assign without Bank’s prior written consent is null and void. Any assignment shall not release Borrower from the Obligations. Applicable law; Conflict Between Documents. This Note and, unless otherwise provided in any other Loan Document, the other Loan Documents shall be governed by and construed under the laws of the state named in Bank’s address shown above (Georgia) without regard to that state’s conflict of laws principles. If the terms of this Note should conflict with the terms of any loan agreement or any commitment letter that survives closing, the terms of this Note shall control. Borrower’s Accounts. Except as prohibited by law, Borrower grants Bank a security interest in all of Borrower’s accounts with Bank and any of its affiliates. Jurisdiction. Borrower irrevocably agrees to non-exclusive personal jurisdiction in the state (Georgia) named in Banks address shown above. Severability. If any provision of this Note or of the other Loan Documents shall be prohibited or invalid under applicable law, such provision shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note or other such document. Notices. Any notices to Borrower shall be sufficiently given, if in writing and mailed or delivered to the Borrower’s address shown above or such other address as Borrower may specify in writing form time to time, and to Bank, if in writing and mailed or delivered to Bank’s office address shown above or such other address as Bank may specify in writing from time to time. Borrower agrees to give all written notices by registered or certified mail, return receipt requested, all charges prepaid. In the event that Borrower changes Borrower’s address at any time prior to the date the Obligations are paid in full, Borrower agrees to promptly give written notice of said change of address by registered or certified mail, return receipt requested, all charges prepaid, Plural; Captions. All references in the Loan Documents to Borrower, Subsidiary, person, document or other nouns of reference mean both the singular and plural form, as the case may be, and the term “person” shall mean any individual, person or entity. The captions contained in the Loan Documents are inserted for convenience only and shall not affect the meaning or interpretation of the Loan Documents. Advances. Bank may, in its sole discretion, make advances for the reasonable costs of collection, maintenance, and protection of the Bank’s liens, which shall be deemed to be advances under this Note, even though the stated principal amount of this Note may be exceeded as a result thereof. Posting of Payments. All payments 

Page 4

received during normal banking hours after 2:00 p.m. local time at the office of Bank first shown above shall be deemed received at the opening of the next banking day. Joint and Several Obligations. Each corporate entity who signs this Note as a Borrower (as defined herein) is jointly and severally obligated. Fees and Taxes. Borrower shall promptly pay all documentary, intangible recordation and/or similar taxes on this transaction whether assessed at closing or arising from time to time. Waiver of Exemplary Damages. The parties agree that they shall not have a remedy of punitive or exemplary damages against other parties in any Dispute and hereby waive any right or claim to punitive or exemplary damages they have now or which may arise in the future in connection with any Dispute.

WAIVER OF JURY TRIAL.   BORROWER AND BANK HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE THE RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTIN WITH THE LOAN DOCUMENTS AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OR ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK ENTERING INTO THIS AGREEMENT. FURTHER, BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR THE BANK’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR AGENT OF neither THE BANK, NOR BANK’S COUNSEL HAS THE AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.

Borrower acknowledges that the above paragraph has been expressly bargained for by the Bank as part of the loan evidenced hereby and that, but for Borrower’s agreement the Bank would not have extended the loan for the term and with the interest rate provide herein.

IN WITNESS WHEREOF, Borrower, as of the day and year first above written, has caused this Note to be executed under seal.

			
	 
	BORROWER:

	 
	 
	 

	 
	SUN AMERICAN BANCORP, a Delaware corporation

	 
	 
	 

	 
	 
	 

	 
	By: 

	/s/ Robert Nichols

	 
	 
	Robert Nichols, CFO

	 
	 
	 

	 
	 
	 

	 
	Taxpayer Identification Number: 65-0325364

(Acknowledgment appears on following page)

Page 5

STATE OF FLORIDA

)

)

COUNTY OF Palm Beach

)

The foregoing instrument was acknowledged before me this 5th day of February, 2009, by Robert Nichols, as CFO of SUN AMERICAN BANCORP, a Delaware corporation, who _____ is personally know to me __X__ or produced ______________ as identification.

			
	(Notary Seal must be affixed)

	                         

	/s/ Carole Jett

	 
	 
	Notary Public (signature)

	 
	 
	 

	My Commission Expires:

	 
	Carole Jett

	 
	 
	Notary Public

	 
	 
	 

Page 6Exhibit 10.26

Exhibit 10.26

PENSKE AUTOMOTIVE GROUP 401(k) SAVINGS AND RETIREMENT PLAN

As Amended and Restated Effective January 1, 2009

 

 

 

Table of Contents

	 	 	 	 	 
	Section Contents	 	Page	 
	 
	 	 	 	 
	1 DEFINITIONS
	 	 	1	 
	1.1 Accrued Benefit
	 	 	1	 
	1.2 Acquired Employee
	 	 	1	 
	1.3 Acquired Company
	 	 	1	 
	1.4 Additional Pre-Tax Contribution
	 	 	1	 
	1.5 Adjustment Factor
	 	 	1	 
	1.6 Affiliated Company
	 	 	2	 
	1.7 Affiliated Employer
	 	 	2	 
	1.8 After-Tax Contribution Account
	 	 	2	 
	1.9 Annual Addition
	 	 	2	 
	1.10 Beneficiary
	 	 	2	 
	1.11 Board
	 	 	2	 
	1.12 Break in Service
	 	 	2	 
	1.13 Business Day
	 	 	3	 
	1.14 Code
	 	 	3	 
	1.15 Company
	 	 	3	 
	1.16 Compensation
	 	 	3	 
	1.17 Disability
	 	 	5	 
	1.18 Eligible Employee
	 	 	5	 
	1.19 Employee
	 	 	5	 
	1.20 Employer
	 	 	6	 
	1.21 Employer Matching Contribution
	 	 	6	 
	1.22 Employer Matching Contribution Account
	 	 	6	 
	1.23 Entry Date
	 	 	6	 
	1.24 ERISA
	 	 	6	 
	1.25 Fiscal Year
	 	 	6	 
	1.26 Fund
	 	 	6	 
	1.27 Highly Compensated Employee
	 	 	6	 
	1.28 Hour of Service
	 	 	7	 
	1.29 Leave of Absence
	 	 	8	 
	1.30 Limitation Year
	 	 	8	 
	1.31 Member
	 	 	8	 
	1.32 Non-Highly Compensated Employee
	 	 	8	 
	1.33 Normal Retirement Date
	 	 	8	 
	1.34 Period of Service
	 	 	8	 
	1.35 Plan
	 	 	8	 
	1.36 Plan Administrator
	 	 	9	 
	1.37 Plan Sponsor
	 	 	9	 
	1.38 Plan Year
	 	 	9	 
	1.39 Pre-Tax Contribution
	 	 	9	 
	1.40 Pre-Tax Contribution Account
	 	 	9	 
	1.41 Prior Plan
	 	 	9	 
	1.42 Retirement
	 	 	9	 

 

i

 

	 	 	 	 	 
	Section Contents	 	Page	 
	 
	 	 	 	 
	1.43 Rollover Contribution
	 	 	9	 
	1.44 Rollover Account
	 	 	9	 
	1.45 Spouse
	 	 	9	 
	1.46 Top-Heavy Contribution
	 	 	9	 
	1.47 Top-Heavy Contribution Account
	 	 	9	 
	1.48 Transfer Pre-Tax Contribution Account
	 	 	9	 
	1.49 Transfer Employer Contribution Account
	 	 	9	 
	1.50 Trust
	 	 	9	 
	1.51 Trustee
	 	 	9	 
	1.52 Valuation Date
	 	 	10	 
	1.53 Year of Service
	 	 	10	 
	 
	 	 	 	 
	2 MEMBERSHIP IN THE PLAN
	 	 	10	 
	2.1 Current Employees
	 	 	10	 
	2.2 New Employees or Re-employed Members
	 	 	10	 
	2.3 Changes in Category
	 	 	10	 
	 
	 	 	 	 
	3 CONTRIBUTIONS
	 	 	11	 
	3.1 Pre-Tax Contributions
	 	 	11	 
	3.2 Employer Matching Contributions
	 	 	11	 
	3.3 Adjustments to Contributions
	 	 	12	 
	3.4 Distribution of “Excess Deferral Amounts”
	 	 	12	 
	3.5 Overall Limits on Contributions
	 	 	14	 
	3.6 Permitted Employer Refunds
	 	 	15	 
	3.7 Timing of Deposits
	 	 	15	 
	 
	 	 	 	 
	4 MEMBER ACCOUNTS
	 	 	15	 
	4.1 Establishment of Accounts
	 	 	15	 
	4.2 Valuation of Accounts
	 	 	15	 
	4.3 Adjustment to Accounts
	 	 	16	 
	4.4 Directed Investments
	 	 	16	 
	4.5 Administration of Investments
	 	 	16	 
	4.6 Investments For Terminated Members
	 	 	16	 
	4.7 Special Rules Applicable to Penske Automotive Common Stock Fund
	 	 	17	 
	4.8 Special Rules Applicable to Investment in Penske Automotive Common Stock Fund
	 	 	18	 
	4.9 Compliance With Employer Securities Diversification Requirements
	 	 	18	 
	 
	 	 	 	 
	5 VESTING
	 	 	19	 
	5.1 Vesting
	 	 	19	 
	5.2 Forfeitures
	 	 	20	 
	5.3 Change in Vesting Schedule
	 	 	21	 
	5.4 Lost Members
	 	 	21	 
	 
	 	 	 	 
	6 DISTRIBUTIONS
	 	 	21	 
	6.1 Distribution of Benefit
	 	 	21	 

 

ii

 

	 	 	 	 	 
	Section Contents	 	Page	 
	 
	 	 	 	 
	6.2 Election of Benefits
	 	 	22	 
	6.3 Rehire Prior To Incurring Five Consecutive Breaks in Service
	 	 	22	 
	6.4 Death Prior to Total Distribution
	 	 	23	 
	6.5 Distribution Limitation
	 	 	23	 
	6.6 Mandatory Distributions
	 	 	23	 
	6.7 Earnings on Undistributed Benefits
	 	 	23	 
	6.8 Rollovers Into the Plan
	 	 	23	 
	6.9 Transfers Into the Plan
	 	 	23	 
	6.10 Evidence in Writing
	 	 	23	 
	6.11 Hardship Withdrawal
	 	 	24	 
	6.12 Withdrawals Permitted After Age 59-1/2
	 	 	25	 
	6.13 Withdrawal of After-Tax Contributions; Rollover Contributions
	 	 	25	 
	6.14 Conditions For Withdrawals
	 	 	26	 
	6.15 Direct Rollover
	 	 	26	 
	6.16 Withholding of Income Tax
	 	 	27	 
	6.17 Manner of Payment of Benefits
	 	 	28	 
	6.18 Assets Transferred From Money Purchase Plans
	 	 	29	 
	6.19 Small Benefit Cash Outs
	 	 	29	 
	 
	 	 	 	 
	7 ACTUAL DEFERRAL AND ACTUAL CONTRIBUTION PERCENTAGE TESTING
	 	 	30	 
	7.1 Limitations on Allocations of Pre-Tax Contributions
	 	 	30	 
	7.2 Limitations on Allocations of Employer Matching Contributions
	 	 	32	 
	7.3 Definitions
	 	 	34	 
	 
	 	 	 	 
	8 TOP-HEAVY PROVISIONS
	 	 	35	 
	8.1 Top-Heavy Pre-emption
	 	 	35	 
	8.2 Determination of Top-Heavy Status
	 	 	35	 
	8.3 Top-Heavy Vesting Schedule
	 	 	37	 
	8.4 Top-Heavy Restrictions
	 	 	38	 
	8.5 Top-Heavy Definitions
	 	 	39	 
	 
	 	 	 	 
	9 DESIGNATION OF BENEFICIARY
	 	 	40	 
	9.1 Named Beneficiary
	 	 	40	 
	9.2 No Named Beneficiary
	 	 	40	 
	 
	 	 	 	 
	10 MANAGEMENT OF THE FUND
	 	 	40	 
	10.1 Contributions Deposited To Trust
	 	 	40	 
	10.2 No Reversion to Employer
	 	 	40	 
	 
	 	 	 	 
	11 DISCONTINUANCE AND LIABILITIES
	 	 	40	 
	11.1 Termination
	 	 	40	 
	11.2 No Liability For Employer
	 	 	41	 
	11.3 Administrative Expenses :
	 	 	41	 
	11.4 Non-forfeitability Due to Termination(s)
	 	 	41	 
	11.5 Exclusive Benefit Rule
	 	 	41	 
	11.6 Mergers
	 	 	41	 

 

iii

 

	 	 	 	 	 
	Section Contents	 	Page	 
	 
	 	 	 	 
	11.7 Non-allocated Trust Assets
	 	 	41	 
	 
	12 ADMINISTRATION
	 	 	42	 
	12.1 Establishment of the Benefits Committee
	 	 	42	 
	12.2 Organization of the Committee
	 	 	42	 
	12.3 Powers of the Committee
	 	 	42	 
	12.4 Reliance on Professionals
	 	 	43	 
	12.5 Liability and Indemnification
	 	 	43	 
	12.6 Fiduciary Insurance
	 	 	43	 
	12.7 Claims Procedure
	 	 	43	 
	12.8 Trustee Has Authority to Invest
	 	 	45	 
	12.9 Removal For Personal Involvement
	 	 	45	 
	 
	 	 	 	 
	13 PARTICIPATION BY EMPLOYERS OTHER THAN COMPANY
	 	 	46	 
	13.1 Adoption by Eligible Employers
	 	 	46	 
	13.2 Rights and Obligations; Agency
	 	 	46	 
	13.3 Termination of the Plan by the Company
	 	 	46	 
	13.4 Withdrawal of an Affiliated Employer
	 	 	46	 
	 
	 	 	 	 
	14 AMENDMENTS
	 	 	46	 
	14.1 Amendment Restrictions
	 	 	46	 
	14.2 Amending the Plan
	 	 	47	 
	14.3 Retroactive Amendments
	 	 	47	 
	 
	 	 	 	 
	15 LOANS
	 	 	47	 
	15.1 Permitted Loans
	 	 	47	 
	15.2 Collateral Required
	 	 	48	 
	15.3 Repayment
	 	 	48	 
	15.4 Interest Charges
	 	 	48	 
	15.5 Failure to Make Timely Payment
	 	 	48	 
	15.6 Termination of Employment
	 	 	49	 
	15.7 Loans to Non-Employees
	 	 	49	 
	15.8 Order of Accounts Reduced
	 	 	49	 
	15.9 Segregated Investment
	 	 	49	 
	15.10 General Administration
	 	 	49	 
	15.11 Termination of Employment Resulting From Corporate Transaction
	 	 	49	 
	 
	 	 	 	 
	16 SPECIAL PROVISIONS APPLICABLE TO PRIOR PLANS
	 	 	49	 
	16.1 Form of Distribution
	 	 	49	 
	16.2 Vesting
	 	 	50	 
	16.3 Loans
	 	 	50	 
	16.4 Elimination of Optional Benefit Forms
	 	 	50	 
	 
	 	 	 	 
	17 MISCELLANEOUS
	 	 	50	 
	17.1 “Spendthrift” Provision
	 	 	50	 
	17.2 QDRO Exception
	 	 	51	 

 

iv

 

	 	 	 	 	 
	Section Contents	 	Page	 
	 
	 	 	 	 
	17.3 No Guarantee of Employment
	 	 	51	 
	17.4 Uniformed Services Employment and Reemployment Rights Act of 1994
	 	 	51	 
	17.5 Controlling Law
	 	 	51	 
	 
	 	 	 	 
	18 MINIMUM DISTRIBUTION REQUIREMENTS
	 	 	52	 
	18.1 Required Minimum Distributions
	 	 	52	 
	18.2 Definitions
	 	 	54	 

 

v

 

PREAMBLE

The Penske Automotive Group 401(k) Savings and Retirement Plan (the “Plan”) was originally
effective as of September 1, 1998. Subsequent to that date, the Plan was amended from time to
time. This document amends and restates the Plan, effective as of January 1, 2009 (or as of such
other dates as may be specified in the Plan).

The purpose of the Plan is to provide employees of Penske Automotive Group, Inc. and certain of its
affiliates with an opportunity to accumulate retirement savings. The Plan is intended to qualify
as a profit sharing plan with a cash or deferred arrangement under sections 401(a) and 401(k) of
the Internal Revenue Code of 1986, as amended.

Employees who terminated their employment before the effective date of this amendment and
restatement will, unless otherwise specified in this document, be subject to the terms of the Plan
as in effect on the date of their Termination of employment.

SECTION 1

DEFINITIONS

The following words and phrases as used herein shall have the following meanings, unless a
different meaning is plainly required by the context; and the following rules of interpretation
shall apply in reading this instrument. Pronouns shall be interpreted so that the masculine pronoun
shall include the feminine and the singular shall include the plural. The words “hereof,” “herein”
and other singular compounds shall refer to the Plan in its entirety and not to any particular
provision or section, unless so limited by the text. All references herein to specific sections
shall mean sections of this document unless otherwise qualified.

	1.1	 	Accrued Benefit means the sum of the balance in the Member’s Pre-Tax Contribution Account,
Top-Heavy Contribution Account, Employer Matching Contribution Account, After-Tax
Contribution Account, Transfer Pre-Tax Contribution Account, Transfer Employer Contribution
Account, and Rollover Account.

	 
	1.2	 	Acquired Employee means any employee of an Acquired Company who is classified as an
Employee.

	 
	1.3	 	Acquired Company means any entity of which the stock, business or assets have been bought by
an Employer or which has become part of an Employer.

	 
	1.4	 	Additional Pre-Tax Contribution means a “qualified nonelective contribution” that consists of
any Employer contributions (other than Employer Matching Contributions) with respect to which
the Member may not elect to receive cash in lieu of such contributions being made to the Plan,
that are nonforfeitable (i.e., vested) when made, and that are subject to all of the
restrictions on distributions applicable to Pre-Tax Contributions.

	 
	1.5	 	Adjustment Factor means the dollar limitation under Code section 402(g) in effect at the
beginning of the taxable year.

 

1

 

	1.6	 	Affiliated Company means

	 	A.	 	any corporation which is a
member of a controlled group of corporations including those within the meaning of Code section 1563(a), determined without regard to Code
sections 1563(a)(4) and (e)(3)(C), including the Employer;

	 
	 	B.	 	any organization under common control with the Employer within the meaning of
Code section 414(c);

	 
	 	C.	 	any organization which is included with the Employer in an affiliated service
group within the meaning of Code section 414(m); or

	 
	 	D.	 	any other entity required to be aggregated with the Employer pursuant to
regulations under Code section 414(o).

	1.7	 	Affiliated Employer means any organization designated by the Committee as eligible to
participate as an Employer in the Plan.

	1.8	 	After-Tax Contribution Account means an account established and maintained by the Employer
on behalf of a Member to which his After-Tax Contributions made under a Prior Plan are held.

	1.9	 	Annual Addition means, with respect to any Participant for any Limitation Year, the sum of:

	 	A.	 	That part of any Employer Contributions, Pre-Tax Contributions or Employer
Matching Contributions allocated to the Member’s Plan account with respect to that
Limitation Year.

	 	B.	 	The forfeitures, if any, allocated to the Member’s Account with respect to
that Limitation Year.

	 	C.	 	The total amount of any employee contributions made by the Member to the Plan
or to any other tax-qualified plan maintained by the group consisting of the Employer
and the Affiliated Companies, except that, for the purposes of this Section, “more
than 50%” shall be substituted for “at least 80%” each place it appears in Code
section 1563(a)(1) (the “Employer Group”), if any, for that Limitation Year.

	 	D.	 	Amounts allocated on behalf of the Member during the Limitation Year to an
individual medical account, within the meaning of Code section 415(l)(2), which is
part of a pension or annuity plan of the Employer Group.

	 	E.	 	If the Member is or ever has been a Key Employee, amounts allocated to any
separate account (within the meaning of Code section 419A(d)(1)) in a welfare benefit
fund (within the meaning of Code section 419(e)) during the Limitation Year for
provision of post-retirement medical benefits for the Member.

	1.10	 	Beneficiary means the person, persons, or trust designated by written, revocable designation
filed with the Plan Administrator by the Member to receive payments in the event of such
Member’s death.

	1.11	 	Board means the Board of Directors of Penske Automotive Group, Inc.

	1.12	 	Break in Service means a Plan Year during which an Employee has not completed more than 500
Hours of Service with the Employer or an Affiliated Company.

 

2

 

	1.13	 	Business Day means each day the New York Stock Exchange is open for business; provided,
however, that for purposes of Section 1.52 only, the term “Business Day” shall not include
any day on which the Plan’s record keeper is closed.

	1.14	 	Code means the Internal Revenue Code of 1986, and the same as may be amended from time
to time.

	 

	1.15	 	Company means Penske Automotive Group, Inc.

	1.16	 	Compensation, except as hereafter specified, means W-2 gross earnings, including the Pre-Tax
Contributions made hereunder during the Plan Year and contributions made by an Employee to a
Code section 125 plan, but excluding nonmonetary awards or benefits and any payments in the
nature of severance pay and any reimbursed moving expenses.

	 	A.	 	For purposes of the nondiscrimination tests set forth in Section 7, and except
as provided in Code section 414(s), Compensation means any income received by the
Employee from the Employer in accordance with Code section 415(c)(3), including
deferrals made pursuant to Code section 414(s)(2), for the Plan Year for which
compliance with the tests is being measured.

	 	B.	 	For purposes of measuring the limits set forth in Code section 415,
Compensation shall mean all amounts paid during the Limitation Year or other relevant
period to an individual by the Employer (as determined for Code section 415 purposes
under the “Annual Addition” definition in Section 1.9), before the individual’s
severance from employment with the group consisting of the Employer and Affiliated
Companies (the “Employer Group”) (except to the extent otherwise provided below), for
services actually performed that includes all wages, salaries, fees for professional
services and other amounts for personal services actually rendered in the course of
employment with any member of the Employer Group (including, but not limited to,
commissions paid salesmen, commissions, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan (as described
in Treasury Regulations section 1.62-2), but excluding:

	 	(1)	 	contributions made by any member of the Employer Group to a plan
of deferred compensation to the extent that, before the application of the
limits of Code section 415, the contributions are not includible in the gross
income of the individual for the taxable year in which contributed;

	 	(2)	 	contributions made by any member of the Employer Group on behalf
of the individual to a simplified employee pension plan described in Code
section 408(k) to the extent the contributions are excludable from the
individual’s gross income;

	 	(3)	 	distributions from a plan of deferred compensation maintained by
any member of the Employer Group regardless of whether the amounts are
includible in the gross income of the individual when distributed (except
amounts received pursuant to an unfunded non-qualified plan to the extent the
amounts are includible in the gross income of the individual);

 

3

 

	 	(4)	 	amounts realized from the exercise of a non-qualified stock
option or when restricted stock (or property) held by the individual either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture;

	 	(5)	 	amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and

	 	(6)	 	other amounts that receive special tax benefits, such as premiums
for group term life insurance (but only to the extent that the premiums are not
includible in the gross income of the individual).

Compensation shall include amounts paid to a terminated Member by the later of two
and one-half months after the Member’s severance from employment or the end of the
Limitation Year in which the termination occurs, provided that such amounts would
have been payable to the Member had he continued in employment with the Employer
Group and are regular compensation for services during the Member’s regular working
hours, compensation for services outside regular working hours (such as overtime or
shift differential), commissions, bonuses, or other similar compensation; are
payments for unused accrued bona fide sick, vacation or other leave, but only if the
Member would have been able to use the leave if employment had continued; or are
received by the Member pursuant to a nonqualified unfunded deferred compensation
plan, but only if the payment would have been made to the Member had he continued in
employment with the Employer Group and only to the extent that the payment is
includible in the Member’s gross income.

Compensation taken into account shall be limited to the amount set forth in Code
section 401(a)(17) ($245,000 for 2009), or such other amount as may be established by
the Commissioner of Internal Revenue as a result of adjustments to account for the
cost of living in accordance with Code section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which Compensation is determined (the “Determination Period”) beginning
with or within such calendar year. If a Determination Period consists of fewer than
12 months, the limit will be multiplied by a fraction, the numerator of which is the
number of months in the Determination Period, and the denominator of which is 12.

	 	C.	 	For purposes of applying the limitations described in Section 3.5 of the Plan,
Compensation paid or made available during such Limitation Years shall include elective
amounts for qualified transportation fringe benefits that are not includible in the
gross income of the Member by reason of Code section 132(f)(4). This amendment shall
also apply to the definition of Compensation for purposes of Section 1.27.G and the
discrimination tests under Section 7 of the Plan for Plan Years.

	 	D.	 	For purposes of the definition of Compensation under this Section 1.16, amounts
under Code section 125 include any amounts not available to a Member in cash in lieu of
group health coverage because the Member is unable to certify that he has other health
coverage. An amount will be treated as an amount under Code section 125 only if the
Employer does not request or collect information regarding the Member’s other health
coverage as part of the enrollment process for the health
plan.

 

4

 

	1.17	 	Disability means that the Member has applied and qualifies for disability benefits under the
Social Security Act of 1935, as amended.

	1.18	 	Eligible Employee means any Employee of the Employer who satisfies all of the following
conditions:

	 	A.	 	he is not a leased employee within the meaning of Code section 414(n)(2);

	 	B.	 	he is not a union employee, other than a union employee for whom benefits under
this Plan are specifically provided for as a result of good faith bargaining;

	 	C.	 	he is not employed by the Employer on a part-time or temporary basis. A
part-time employee is an employee who is not regularly scheduled to complete 1,000
Hours of Service in a Plan Year;

	 	D.	 	he is not an Acquired Employee, unless eligibility to participate in the Plan
is otherwise provided for in an agreement consented to by the Company, such as an
Appendix to the Plan;

	 	E.	 	he is not a non-resident alien who received no earned income (within the
meaning of Code section 911(d)(2)) from the Employer which constitutes income from
sources within the United States (within the meaning of Code section 861(a)(3)); and

	 	F.	 	he is not a person whose status as an Employee is solely the result of a
judicial or administrative determination.

The above notwithstanding, any part-time or temporary Employee who would otherwise be
eligible to participate in the Plan shall become eligible to participate in the Plan if he
is credited with at least 1,000 Hours of Service in the 12 consecutive month period
beginning with such Employee’s date of hire, or is credited with at least 1,000 Hours of
Service in any 12 consecutive month period beginning on the anniversary thereof, as of the
first Entry Date following the end of such 12 consecutive month period.

	1.19	 	Employee means an individual who is a common-law employee of the Employer and shall include
leased employees within the meaning of Code section 414(n)(2), except as provided below. The
term “leased employee” means any person (other than an Employee of the Employer) who pursuant
to an agreement between the Employer and any other person (“leasing organization”) has
performed services for the Employer (or for the Employer and related persons determined in
accordance with Code section 414(n)(6)) on a substantially full time basis for a period of at
least one year, and such services are under the primary direction and control of the Employer.
Contributions or benefits provided a leased employee by the leasing organization which are
attributable to services performed for the Employer shall be treated as provided by the
Employer. The term “Employee” shall not include any individuals classified by the Employer as
independent contractors even if such individuals would be classified as employees of the
Employer under common law.

 

5

 

A leased employee shall not be considered an Employee of the Employer if; (i) such
individual is covered by a money purchase pension plan providing: (1) a non-integrated
employer contribution rate of at least 10 percent of compensation, as defined in Code
section 415(c)(3), but including amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the leased employee’s gross income under Code
sections 125, 402(h)(1)(B) or 403(b), or employer contributions on behalf of the leased
employee to a trust which is part of a qualified cash or deferred arrangement (as defined in
Code section 401(k)(2)); (2) immediate participation; and (3) full and immediate vesting;
and (ii) leased employees do not constitute more than 20% of the Employer’s Non-Highly
Compensated Employee workforce.

Notwithstanding the foregoing, an Acquired Employee of an Acquired Company shall be not
deemed an Employee of an Employer as of the date such Acquired Company was bought by an
Employer, except as otherwise provided in an Appendix applicable to such Acquired Employees.

Notwithstanding the foregoing, an employee of an Affiliated Employer that had adopted the
Plan but ceases being an Affiliated Company shall no longer be considered an Employee as of
the first date the Affiliated Employer is no longer an Affiliated Company.

	1.20	 	Employer means the Company and any other business organization that succeeds to its business
and elects to continue this Plan, and any Affiliated Employer that adopts the Plan in
accordance with Section 13 of the Plan. Notwithstanding the foregoing, an Affiliated Employer
that had adopted the Plan but ceases being an Affiliated Company shall cease to be an Employer
as of the first date the Affiliated Employer is no longer an Affiliated Company.

	1.21	 	Employer Matching Contribution means a contribution made on behalf of a Member pursuant to
Section 3.2 of the Plan.

	1.22	 	Employer Matching Contribution Account means an account established and maintained on behalf
of a Member to which his Employer Matching Contributions are allocated.

	1.23	 	Entry Date means the first Business Day of each month.

	1.24	 	ERISA means the Employee Retirement Income Security Act of 1974, as the same may be amended
from time to time.

	1.25	 	Fiscal Year means the period from January 1 through December 31.

	1.26	 	Fund means all assets of the Trust.

	1.27	 	Highly Compensated Employee means any active or former Employee, who performs service during
the determination year and is described in one or more of the following groups:

	 	A.	 	an Employee who is a 5% owner, as defined in Code section 416(i)(1)(B)(i), at
any time during the determination year or the look-back year; or

	 	B.	 	an Employee who receives Compensation in excess of $105,000 (for 2009 Plan Year
determinations, and as may be adjusted for future years) during the look-back year.

	 	C.	 	The terms “determination year” and “look-back year” shall mean, respectively,
the
Plan Year and the twelve-month period immediately preceding the determination year.

 

6

 

	 	D.	 	The $105,000 amount set forth in paragraph B. shall be indexed for changes in
the cost of living in accordance with Code section 415(d).

	 	E.	 	A Highly Compensated Former Employee includes any Employee who separated or was
deemed to have separated from service prior to the determination year, performs no
service for the Employer during the determination year, and was a Highly Compensated
active Employee for either the separation year or any determination year ending on or
after the Employee’s 55th birthday.

	 	F.	 	The determination of who is a Highly Compensated Employee shall be made in
accordance with Code section 414(q) and the regulations thereunder, except that the top
paid group rule, as defined in Code section 414(q)(3) shall not apply.

	 	G.	 	“Compensation” shall mean, for the purpose of this Section 1.27, Code section
415(c)(3) compensation.

	1.28	 	Hour of Service means each hour for which an Employee is directly or indirectly paid or
entitled to be paid by the Employer or an Affiliated Company regardless of whether employment
duties are performed, and each hour for which back pay, irrespective of mitigation of damages,
has been either awarded or agreed to by the Employer or Affiliated Company. These hours shall
be credited to an Employee for the computation period during which his employment duties were
performed; but in the event a payment is made or due for a reason other than the performance
of duties, hours shall be credited for the computation period during which the absence from
work occurred or to which a back pay agreement or award pertains. However, no Employee shall
be credited with duplicate Hours of Service as a result of a back pay agreement or award.
Hours of Service shall also include each hour (credited on the basis of the Employee’s
customary workday) during which an Employee is on an uncompensated excused Leave of Absence,
provided that such Employee shall be credited with no more than an Hour of Service for each
complete Plan Year during which the uncompensated Leave of Absence is in effect.

	 	A.	 	For purposes of determining the number of Hours of Service completed in any
applicable computation period, the Employer may maintain accurate records of actual
hours completed for all Employees. The number of Hours of Service to be credited to an
Employee for periods during which no employment duties are performed shall be
determined in accordance with Department of Labor Regulations sections 2530.200b-2(b)
and 2530.200b-2(c).

	 	B.	 	In instances where actual Hours of Service are not maintained, an Employee
shall be credited with 45 Hours of Service for each week in which such Employee would
otherwise be credited with at least one Hour of Service.

 

7

 

	 	C.	 	Notwithstanding A. and B. above and solely for the purpose of preventing a
Break in Service, an Employee shall be credited with Hours of Service during an absence
by reason of:

	 	(1)	 	the pregnancy of the Employee;

	 
	 	(2)	 	the birth of a child of the Employee;

	 	(3)	 	the placement of the child with the Employee in connection with
the adoption of such child by the Employee; or

	 	(4)	 	for purposes of caring for the child beginning immediately after
such birth or placement;

provided the Employee shall, during the period of his absence, be credited with the
number of Hours of Service which would have been credited to him at his normal work
rate but for such absence, or, if the number of Hours of Service based on a normal
rate is indeterminable, the Employee shall be credited with 8 Hours of Service per
day of such absence. The “Severance from Service” date of an Employee/Member who is
absent from work due to “maternity or paternity leave” reasons for more than one year
is the second anniversary of the first date of such absence. The period between the
first and second anniversary of the first date of such absence is neither a Period of
Service nor a period of severance.

	 	D.	 	In instances where actual Hours of Service are maintained, the
maternity/paternity leave described in C. above shall be credited to the computation
period in which the absence began if necessary to avoid a Break in Service or, if not
necessary, then to the following computation period.

	 	E.	 	Service with any of the following companies, regardless of whether such company
is an Affiliated Company, shall be taken into account in determining any Employee’s
Hours of Service:

	 	(1)	 	any affiliate of Penske Automotive Group, Inc.; or

	 
	 	(2)	 	Penske Corporation or any affiliate.

	1.29	 	Leave of Absence means any temporary absence from employment authorized by the Employer based
on its normal practices. An Employee’s Period of Service shall continue uninterrupted during
such leave.

	1.30	 	Limitation Year shall be the Plan Year.

	1.31	 	Member means any Eligible Employee included in the membership of the Plan as provided in
Section 2 hereof. A Member shall continue to be a Member as long as he has an Accrued Benefit
hereunder.

	1.32	 	Non-Highly Compensated Employee means any Employee who is not a Highly Compensated Employee.

	1.33	 	Normal Retirement Date means the Member’s 65th birthday.

	1.34	 	Period of Service means the period between an Employee’s date of hire or rehire, as
applicable, and the date on which he ceases to be an Employee.

	1.35	 	Plan means the Penske Automotive Group 401(k) Savings and Retirement Plan.

 

8

 

	1.36	 	Plan Administrator is the Committee provided for in Section 12 hereof; provided, however,
that in the absence of a duly constituted Committee, the Company shall be the Plan
Administrator.

	1.37	 	Plan Sponsor means Penske Automotive Group, Inc. or its successor.

	1.38	 	Plan Year means the period from January 1 through December 31.

	1.39	 	Pre-Tax Contribution means an elective deferral made by a Member pursuant to Section 3.1 of
the Plan.

	1.40	 	Pre-Tax Contribution Account means an account established and maintained on behalf of a
Member to which his Pre-Tax Contributions are allocated.

	1.41	 	Prior Plan means any tax-qualified plan maintained by an Affiliated Employer that has adopted
the Plan, if the assets of such plan have been, or are intended to be, transferred to this
Plan.

	1.42	 	Retirement means the termination of a Member’s employment with the Employer on or after his
Normal Retirement Date.

1.43 Rollover Contribution means the amount contributed to the Plan pursuant to Section 6.8.

	1.44	 	Rollover Account means the account established and maintained pursuant to Section 6.8 of the
Plan.

	1.45	 	Spouse means the husband or wife of a Member on the date benefits under the Plan commence.
However, if the Member should die prior to the date benefits under the Plan would have
commenced to him, then the Spouse shall be the husband or wife to whom the Member had been
married throughout the one-year period preceding the date of his death.

	1.46	 	Top-Heavy Contribution means a contribution made by an Employer pursuant to Section 8 of the
Plan.

	1.47	 	Top-Heavy Contribution Account means an account established and maintained on behalf of a
Member to which Top-Heavy Contributions, if any, are allocated.

	1.49	 	Transfer Pre-Tax Contribution Account means the account established and maintained on behalf
of a member to which his Pre-Tax Contribution to a Prior Plan were allocated, and which are
transferred to this Plan pursuant to Section 6.9.

	1.49	 	Transfer Employer Contribution Account means the account established and maintained on behalf
of a member to which Employer Contributions to a Prior Plan were allocated, and which are
transferred to this Plan pursuant to Section 6.9.

	1.50	 	Trust means a trust, intended to qualify under Code section 501(a), constituting the legal
agreement between the Plan Sponsor and the Trustee, fixing the rights and liabilities with
respect to managing and controlling the Fund for the purposes of the Plan.

	1.51	 	Trustee means the individual or entity designated by the Plan Sponsor as trustee(s) or any
successor trustee(s) of the Trust.

 

9

 

	1.52	 	Valuation Date means every Business Day, unless the Plan Administrator selects another date
or dates for the valuation of Plan assets.

	1.53	 	Year of Service means a Plan Year during which the Employee completes 1,000 Hours of Service.
An Employee’s Years of Service shall include Years of Service for an Employer prior to the
effective date of the Employer’s participation in the Plan. Any Hours of Service with an
Acquired Company or a company listed in Section 1.28.E of the Plan shall be deemed Hours of
Service for an Employer in determining Years of Service for purposes of becoming a member of
the Plan under Section 2 and for purposes of vesting under Section 5.1.

SECTION 2

MEMBERSHIP IN THE PLAN

	2.1	 	Current Employees. Each Employee who is an Eligible Employee and has completed a 60-day
Period of Service shall become a Member of the Plan on the first day of the month thereafter.

	2.2	 	New Employees or Re-employed Members. Each other Employee shall become a Member on the Entry
Date coincident with or next following the date he qualifies as an Eligible Employee and
completes a 60-day Period of Service. A reemployed Eligible Employee shall become a Member on
his date of reemployment if he had been a Member of the Plan during his prior period of
employment. Otherwise, a reemployed Eligible Employee shall become a Member of the Plan as of
the Entry Date following his completion of a 60-day Period of Service (including any Period of
Service prior to his reemployment).

	2.3	 	Changes in Category. If an Employee’s status changes either from a category of ineligibility
to a category of eligibility, or from a category of eligibility to a category of
ineligibility, his Years of Service during the period of ineligibility shall be considered as
Years of Service for vesting purposes hereunder. For purposes of Section 3, only Compensation
earned from the Employer during a period in which the Employee is both an Eligible Employee
and a Member shall be considered in determining the amount of the contribution made to the
Trust on behalf of the Employee.

If a Member’s status changes to a category of ineligibility, he shall become a Member
immediately upon returning to an eligible class of Employees. If an ineligible Employee’s
status changes to an Eligible Employee, he shall become a Member immediately if he has
otherwise satisfied the requirements of Section 2.2.

 

10

 

SECTION 3

CONTRIBUTIONS

	3.1	 	Pre-Tax Contributions.

	 	A.	 	Each Member may authorize the Employer to reduce his Compensation through
regular payroll reductions and to have the Employer make Pre-Tax Contributions to the
Plan in the amount of such payroll reduction. The Pre-Tax Contribution may be any whole
percentage between zero percent (0%) and twenty percent (20%) of such
Compensation, but in no event shall it exceed the appropriate Adjustment Factor plus,
when applicable, the amount provided under Code section 414(v) and permitted under
Section 3.1.B. The Pre-Tax Contribution of a Highly Compensated Employee may not
exceed 7% of his or her Compensation, and in no event shall it exceed the appropriate
Adjustment Factor. Compensation, for purposes of this Section, shall mean the
Compensation earned by an Employee from the Employer for the Plan Year for which the
contributions are being made.

Such amount shall be deposited as Pre-Tax Contributions hereunder to the Member’s
Pre-Tax Contribution Account. Prior to the date that he becomes a Member, each
Eligible Employee shall, by following the administrative procedures established by
the Plan Administrator, consent and agree to payroll reductions, authorize the
Employer to make such reductions, and designate the percentage of such contributions
to be allocated to the available investment funds. The election of the Member shall
become effective for the first pay period following the date the election is received
by the Plan Administrator and will remain in effect until the Member makes a new
election.

	 	B.	 	Notwithstanding the limitations described in Section 3.1.A, Section 7 (relating
to limitations on allocations of Pre-Tax Contributions), and Sections 3.4 and 3.5
(relating to Excess Deferral Amounts and maximum Annual Additions), a Member who, by
the end of the taxable year, will have attained age 50 shall be permitted to make
additional Pre-Tax Contributions (“Catch Up Contributions”), by means of Compensation
reductions pursuant to the payroll reduction procedures set forth in Section 3.2.A, in
an amount not to exceed the limit described in Code section 414(v) ($5,500 for 2009),
as adjusted from time to time in accordance with Code section 414(v). Catch-Up
Contributions that do not exceed the applicable limitation established in Code
section 414(v) for the relevant Plan Year, as adjusted in the manner described in Code
section 414(v) shall not be taken into account for purposes of implementing the
limitations under Code sections 402(g), 415, 401(k)(3), 410(b), and 416.

	3.2	 	Employer Matching Contributions.

	 	A.	 	There is no existing Employer Matching Contribution. Employer Matching
Contributions shall be made for any future period if the Committee or Plan Sponsor
reinstates a discretionary Employer Matching Contribution as provided in paragraph B of
this Section 3.2.

	 	B.	 	The Plan Sponsor or the Committee may, in its discretion, specify that each
Employer contribute a percentage of a Member’s Pre-Tax Contributions to the Employer
Matching Accounts of Eligible Members as an Employer Matching Contribution. The Plan
Sponsor or the Committee shall determine the percentage each year; provided, however,
that the Plan Sponsor or the Committee may, in its discretion, at any time in the year,
modify the previously specified percentage as to any Employer Matching Contribution
that has not yet accrued to Eligible Members. Notwithstanding the preceding provisions
of this paragraph B, no Employer Matching Contribution shall be made with respect to an
Eligible Member’s Pre-Tax Contributions in excess of 4% of such Eligible Member’s
Compensation for the Plan Year, or such other percentage of such Eligible Member’s
Compensation for the Plan Year as the Plan Sponsor or Committee may otherwise specify
for a
prospective measuring period. All Employer Matching Contributions shall be calculated
based on the Member’s Pre-Tax Contributions made during the entire Plan Year, but
shall not include the Member’s contributions, if any, made as catch-up contributions
pursuant to Code section 414(v). Employer Matching Contributions shall be credited to
the Eligible Member’s Employer Matching Contribution Account on a quarterly basis
(unless the Employer elects to make such contributions on a more frequent basis). For
purposes of receiving Employer Matching Contributions under this Section 3.2, an
Eligible Member is each Member who (i) makes any Pre-Tax Contributions during the
Plan Year and (ii) is employed by the Employer on the last day of the calendar
quarter for which contributions are made. Compensation, for purposes of this Section
3.2, shall mean the Compensation earned by an Employee from the Employer for the Plan
Year for which the contributions are being made.

 

11

 

	 	C.	 	Notwithstanding paragraph B of this Section 3.2, Members who are members of
Local 355 of the United Service Workers Union of OCT Partnership (d/b/a Gateway Toyota)
or Local 259 UAW, AFL-CIO of Westbury Superstore, Ltd. (d/b/a Westbury Toyota) shall
not be eligible to receive any Employer Matching Contribution.

	3.3	 	Adjustments to Contributions. A Member may increase or decrease the rate of Pre-Tax
Contributions effective as of any payroll period by notifying the Plan Administrator in
accordance with the administrative procedures established by the Plan Administrator. A Member
may suspend Pre-Tax Contributions at any time by notifying the Plan Administrator in
accordance with the administrative procedures established by the Plan Administrator.
Suspensions during the Plan Year shall be effective as soon as practicable after notification
of the Plan Administrator in accordance with the administrative procedures established by the
Plan Administrator. A Member may recommence Pre-Tax Contributions to the Plan effective as of
any payroll period by submitting a new election to the Plan Administrator in accordance with
administrative procedures established by the Plan Administrator, prior to such payroll period.
Notwithstanding the foregoing, an individual who is on lay off status and returns to the
employ of the Employer may recommence Pre-Tax Contributions to the Plan effective as of the
next payroll period. Additionally, notwithstanding any other provision of this Plan to the
Contrary, the Plan Administrator shall have the discretion to determine, in a uniform
nondiscriminatory manner, when Member elections to commence, modify, or terminate Pre-Tax
Contributions shall take effect.

	3.4	 	Distribution of “Excess Deferral Amounts”. Notwithstanding any other provision of the Plan,
Excess Deferral Amounts as adjusted for income or losses thereon shall be distributed to
Members who claim such Excess Deferral Amounts for the preceding taxable year.

	 	A.	 	For purposes of this Section 3.4, the following definitions shall have the
following meanings:

	 	(1)	 	“Elective Deferrals” shall mean any Employer contributions made
to the Plan at the election of the Member, in lieu of cash compensation, and
shall include contributions made pursuant to a salary reduction agreement or
other deferral mechanism. With respect to any taxable year, a Member’s Elective
Deferral is the sum of all Employer contributions made on behalf of such Member
pursuant to an election to defer under any qualified CODA as described in Code
section 401(k), any simplified employee pension cash or deferred arrangement as
described in Code section 402(h)(1)(B), any eligible deferred compensation plan
under Code section 457, any plan as described
under Code section 501(c)(18), and any Employer contributions made on the
behalf of a Member for the purchase of an annuity contract under Code section
403(b) pursuant to a salary reduction agreement.

 

12

 

	 	(2)	 	“Excess Deferral Amounts” shall mean those Elective Deferrals
that are includible in a Member’s gross income under Code section 402(g), to the
extent such Member’s Elective Deferrals for a taxable year exceed the Adjustment
Factor. Excess Deferral Amounts shall be treated as Annual Additions under the
Plan except to the extent distributed pursuant to this Section 3.4.

	 	B.	 	A Member may assign to the Plan any Excess Deferral Amounts made during the
taxable year of the Member by filing a claim in writing with the Plan Administrator no
later than March 1 following the year in which the Excess Deferral Amounts were made.
Said claim shall specify the Member’s Excess Deferral Amount for the preceding calendar
year; and shall be accompanied by the Member’s written statement that if such amounts
are not distributed, such Excess Deferral Amount, when added to amounts deferred under
other plans or arrangements described in Code sections 401(k), 408(k), 457, 501(c)(18)
or 403(b) shall exceed the appropriate Adjustment Factor for the year in which the
deferral occurred.

	 	C.	 	A Member who has an Excess Deferral Amount during a taxable year may receive a
corrective distribution during the same taxable year. Such a corrective distribution
shall be made if:

	 	(1)	 	the Member designates the distribution as an Excess Deferral
Amount;

	 	(2)	 	the corrective distribution is made after the date on which the
Plan received the Excess Deferral Amount; and

	 	(3)	 	the Plan Administrator designates the distribution as a
distribution of an Excess Deferral Amount.

	 	D.	 	The Excess Deferral Amount distributed to a Member with respect to a taxable
year shall be calculated after giving effect to income and losses pertaining to the
Member’s Pre-Tax Contribution Account allocable to the Excess Deferral Amount.

The income or loss allocable to such Excess Deferral Amount shall be determined by
multiplying the income or loss allocable to the Member’s Pre-Tax Contribution Account
for the taxable year by a fraction, the numerator of which is the Excess Deferral
Amount on behalf of the Member for the preceding taxable year and the denominator of
which is the Member’s Pre-Tax Contribution Account balance on the last day of the
taxable year, minus the income or plus the loss allocable to the Member’s Pre-Tax
Contribution Account for the taxable year.

	 	E.	 	In the alternative, any other methods of allocating income or loss on the
Excess Deferral Amount may be utilized in the manner provided by the Internal Revenue
Service, i.e., the regulations set forth under Treasury Regulations section 1.402(g)-1.

	 	F.	 	Excess Deferral Amounts, as adjusted for income and losses, shall be
distributed to a Member in the year following the taxable year in which such Excess
Deferral was
made, and no later than the April 15 deadline provided for under Code section
402(g)(2)(A).

 

13

 

	 	G.	 	Excess Deferral Amounts are includible in a Member’s gross income under Code
section 402(g) to the extent that the Member’s Pre-Tax Contributions exceed the dollar
limitation under such Code section. Excess Deferral Amounts shall be treated as Annual
Additions under this Plan except to the extent distributed pursuant to this Section
3.4.

	 	H.	 	Effective January 1, 2009, and notwithstanding any other provision of the Plan
to the contrary, no “gap period” (i.e., the period between the end of the taxable year
in which the Excess Deferral Amounts accrued and the date on which the Excess Deferral
Amounts are distributed) income shall be included in the distribution of the Excess
Deferral Amounts, as permitted under Code section 402(g)(2)(A) as modified by section
109(b)(3) of the Workers Retiree and Employer Recovery Act of 2008.

	3.5	 	Overall Limits on Contributions. Contributions made on behalf of any Member during any
Limitation Year shall be subject to the follow rules:

	 	A.	 	Maximum Annual Addition. Except to the extent permitted under Section 3.1,
including Section 3.1’s Catch Up Contributions provisions, the Annual Additions (or for
purposes of applying subparagraph (2) below, the Annual Additions excluding amounts for
provision of post-retirement medical and life insurance benefits) to a Member’s Account
for any Limitation Year shall in no event exceed the lesser of:

	 	(1)	 	$49,000 (for 2009), as adjusted from time to time as provided in
Code section 415(d) for subsequent years, or

	 	(2)	 	100% of the Member’s Compensation received from the group
consisting of the Employer and the Affiliated Companies for that Limitation
Year.

	 	B.	 	Treatment of Excess. Any Annual Additions that exceed the limitations set
forth in Section 3.5.A shall be corrected as set forth in applicable Treasury
Regulations and other correction guidance issued by the Treasury or Internal Revenue
Service.

	 	C.	 	Coordination with Other Defined Contribution Plans. If a Member also
participates in a defined contribution plan (within the meaning of Code section 415(k))
maintained by any member of the group consisting of the Employer and the Affiliated
Companies, other than the Plan, the limitation set forth in Section 3.5.A shall apply
to the aggregate of the Annual Additions to the Plan and to such other plan.

	 	D.	 	Compliance with Applicable Law. The limitations described in this Section 3.5
shall be determined and applied in accordance with the provisions of Code section 415
and regulations promulgated thereunder, which are incorporated into this Plan by this
reference.

 

14

 

	3.6	 	Permitted Employer Refunds. Employer contributions hereunder are made with the understanding
that this Plan shall initially qualify under Code section 401, and that such contributions
shall be deductible under Code section 404.

	 	A.	 	Any contribution that is disallowed as a deduction shall be refunded to the
Employer within one year of such disallowance if the Employer has filed the application
for the determination or qualification of this Plan with the IRS by the time prescribed
by law for filing the Employer’s return for the taxable year in which this Plan was
adopted, or by such later date as the Secretary of the Treasury may prescribe.

	 	B.	 	Any contribution made by the Employer due to a mistake of fact shall be
refunded to the Employer within one year of such contribution.

	 	C.	 	Refunds of contributions due to a disallowance of deduction or mistake of fact
shall be governed by the following requirements:

	 	(1)	 	earnings attributable to the amount being refunded shall remain
in the Plan, but losses thereto must reduce the amount to be refunded; and

	 
	 	(2)	 	in no event may a refund be made that would cause the Accrued
Benefit of any Member to be reduced to less than that which the Member’s
Accrued Benefit would have been had the mistaken amount not been contributed.

	3.7	 	Timing of Deposits. Employer shall make payment of the Pre-Tax Contribution to the Trust
under the terms hereof no later than the time period permitted by applicable law and
regulations. All other Employer contributions under the Plan shall be deposited to the Trust
prior to the due date for filing the Employer’s Federal Income Tax Return for the Fiscal Year
in which the Plan Year ends, including any extension thereto. In no event shall the Employer
Contributions be made in excess of the amount deductible under applicable Federal law now or
hereafter in effect limiting the allowable deduction for contributions to profit sharing
plans. The contributions to this Plan when taken together with all other contributions made by
the Employer to other qualified retirement plans shall not exceed the maximum amount
deductible under Code section 404(a).

SECTION 4

MEMBER ACCOUNTS

	4.1	 	Establishment of Accounts. A Pre-Tax Contribution Account, Top-Heavy Contribution Account,
Employer Matching Contribution Account, After-Tax Contribution Account, Pre-Tax Contribution
Transfer Account and Transfer Employer Contribution Account, and Rollover Account shall be
established for each Member in accordance with Sections 3, 6 and 8. All contributions by or on
behalf of a Member shall be deposited to the appropriate account.

	4.2	 	Valuation of Accounts. As of each Valuation Date, the accounts of each Member shall be
adjusted to reflect any realized and unrealized gains or losses and income or expenses of the
Fund which shall be allocated pro rata to each Member’s account based on the value thereof as
of the preceding Valuation Date, adjusted in accordance with Section 4.3. The fair market
value of the Fund shall be determined by the Trustee and communicated to the Plan
Administrator as of the end of each calendar month in accordance with procedures established
by the Plan Administrator. Each Member shall be furnished with a statement as soon as
practicable after the end of each calendar quarter, setting forth the value of his Accrued
Benefit as of the last Valuation Date in such calendar quarter. It shall represent the fair
market value of all securities or other property held for each respective fund, plus cash
and accrued earnings, less accrued expenses and proper charges against the fund as of such
Valuation Date. The Trustee’s determination shall be final and conclusive for all purposes
of this Plan. The valuation process shall be performed separately for each investment fund.

The Plan Administrator shall, in its discretion, determine and apply in a uniform manner the
method for determining the fair market value, as of any particular date, of any shares of
Common Stock held under the Penske Automotive Common Stock Fund for purposes of the
foregoing paragraph, or for purposes of any other provision of the Plan.

 

15

 

	4.3	 	Adjustment to Accounts. When determining the value of Member accounts, any deposits due which
have not been deposited to the fund on behalf of the Member shall be added to his accounts;
and any withdrawals or distributions made which have not been paid out shall be subtracted
from the accounts. Similarly, adjustment of accounts for appreciation or depreciation of an
investment fund shall be deemed to have been made as of the Valuation Date on which the
adjustment relates, notwithstanding that they are actually made as of a later date.

	4.4	 	Directed Investments. A Member’s Accrued Benefit shall be invested as directed by each Member
in such investment funds as the Plan Administrator shall determine. The investment funds
available under the Plan shall be established pursuant to the Trust and shall be communicated
to each Member. Such investment funds shall at all times include a “stable value fund” (or
similar investment option) and a Penske Automotive Common Stock Fund, which shall invest
primarily in the Common Stock of Penske Automotive Group, Inc. All such shares of Common Stock
held under such fund shall be acquired exclusively through purchases on the open market.
Dividends, if any, shall be used, as soon as practicable, to purchase additional such shares
of Common Stock. A Member shall submit his investment selection to the Plan Administrator in
accordance with the administrative procedures established by the Plan Administrator. The
Member may select one or more investment funds in multiples of 1%.

	4.5	 	Administration of Investments. Contributions made by or on behalf of a Member shall be
invested in the investment fund or funds selected by the Member until the effective date of a
new designation that has been properly submitted to the Plan Administrator.

If any Member fails to make an initial designation, he shall be deemed to have designated
the default investment fund as may be determined from time to time by the Committee. A
designation submitted by a Member changing his investment option shall apply to investment
of future deposits and/or to amounts already accumulated in his accounts. A Member may
change his investment option with respect to the investment of future deposits effective as
of the first Valuation Date in the next succeeding payroll period by submitting his
investment changes in accordance with the procedures established by the Plan Administrator.
A Member may change his investment option with respect to the investment of amounts already
accumulated in his accounts effective as of the next Valuation Date by submitting his
investment changes in accordance with the procedures established by the Plan Administrator.
The Plan Administrator may change or add Investment Funds from time to time. Each Member
shall be notified of a change in Investment Funds at least 30 days prior to the Valuation
Date on which the change is to occur.

	4.6	 	Investments for Terminated Members. Any Member who ceases to be an Employee shall continue to
have the authority to direct the investment of his accounts in accordance with the
provisions of Sections 4.4 and 4.5.

 

16

 

	4.7	 	Special Rules Applicable to Penske Automotive Common Stock Fund. Members that have any
portion of their accounts invested in the Penske Automotive Common Stock Fund shall have the
rights to decide tender offers and vote proxies and all other matters presented for vote as
provided in subsections A and B of this Section 4.7.

	 	A.	 	Proxy Voting

The Trustee is responsible for voting as directed all shares of Common Stock of
Penske Automotive Group, Inc. held under the Penske Automotive Common Stock Fund.
When a decision to vote shares is required, Members who have any portion of their
accounts allocated to the Penske Automotive Common Stock Fund as of the relevant
record date will receive copies of all proxy statements otherwise distributed to
holders of the Common Stock of Penske Automotive Group, Inc. Members’ proxy votes
shall direct the Trustee’s vote. Members shall be considered a fiduciary for purposes
of voting shares of Common Stock allocated to their account. A decision by the Member
to not vote shall be respected by the Trustee so that the Trustee shall not vote any
allocated shares for which no Member direction is received. The Committee shall
direct the Trustee in voting shares of Common Stock that are not allocated to the
account of any Member.

The Trustee shall have no discretion or authority to vote Common Stock held in the
Trust by the Trustee except in accordance with timely directions provided to the
Trustee that are made in accordance with the terms of the Plan and that are not
contrary to ERISA.

	 	B.	 	Tender Offers

The Trustee is responsible for responding as directed to any tender offer with
respect to all shares of Common Stock of Penske Automotive Group, Inc. held under the
Penske Automotive Common Stock Fund. When a decision to tender shares is required,
Members who have any portion of their accounts allocated to the Penske Automotive
Common Stock Fund as of the relevant record date will receive copies of all tender
materials otherwise distributed to holders of the Common Stock of Penske Automotive
Group, Inc. Members’ tender instructions shall direct the Trustee’s decision as to
whether or not to tender. Members shall be considered a fiduciary for purposes of
deciding whether to tender shares of Common Stock allocated to their account. A
decision by the Member to not respond to the tender offer shall be respected by the
Trustee so that the Trustee shall not respond with respect to any allocated shares
for which no Member direction is received. The Committee shall direct the Trustee in
the tender of Common Stock that are not allocated to the account of any Member.

The Trustee shall have no discretion or authority to respond to a tender or exchange
offer concerning Common Stock held in the Trust by the Trustee except in accordance
with timely directions provided to the Trustee that are made in accordance with the
terms of the Plan and that are not contrary to ERISA.

 

17

 

	4.8	 	Special Rules Applicable to Investment in Penske Automotive Common Stock Fund.

	 	A.	 	Notwithstanding any other provision of the Plan to the contrary, during any
period of time when (a) a registration statement covering the Plan, pursuant to the
Securities Act of 1933, as amended, is not then in effect, (b) although in effect,
information in the prospectus forming part of such registration statement does not, in
the judgment of the Plan Administrator, meet the requirements of the Securities Act of
1933, as amended, or is not available for delivery, or (c) in the judgment of the Plan
Administrator, a proceeding by the Securities and Exchange Commission for the issuance
of a stop order suspending the effectiveness of such registration statement is
threatened or contemplated, no future Pre-Tax Contributions or Employer Matching
Contributions may be invested in, and no such prior contributions, or income earned
thereon, may be transferred for investment in the Penske Automotive Common Stock Fund.
In lieu thereof, the Trustee shall, upon written notification from the Plan
Administrator, invest such amounts in such investment fund that shall be so specified
by the Plan Administrator. At such time as (a) such a registration statement covering
the Plan shall become effective, (b) the prospectus forming part of such a registration
statement shall have been amended to meet the requirements of the Securities Act of
1933, as amended, or shall be available for delivery, or (c) no stop order proceedings
shall be threatened or contemplated, such amounts shall be invested as previously
directed or otherwise required under the terms of the Plan.

	 	B.	 	Each Member who is an officer, director or greater than 10% shareholder of
Penske Automotive Group, Inc. may elect to be subject to such optional limitations and
restrictions as may be imposed by the Plan Administrator regarding the extent to which
such person may (a) direct the investment under the Penske Automotive Common Stock Fund
of any portion of his future Pre-Tax Contributions and Employer Matching Contributions
to be made on his behalf, (b) transfer any portion of his existing accounts under the
Plan into or out of the Penske Automotive Common Stock Fund, (c) receive a distribution
or withdrawal from any portion of his accounts invested under the Penske Automotive
Common Stock Fund or (d) receive a loan from the Plan with respect to any portion of
his accounts invested under the Penske Automotive Common Stock Fund. Any such
limitations and restrictions which are so elected by such a person shall apply
notwithstanding any other provision of the Plan to the contrary.

	4.9	 	Compliance With Employer Securities Diversification Requirements. Notwithstanding any other
provision of the Plan to the contrary, the Plan shall comply with the requirements of Code
section 401(a)(35) and ERISA section 204(j) for all Plan Years beginning after December 31,
2006; provided, however, that the transitional relief provided under Internal Revenue Service
Notice 2006-17 and Internal Revenue Service Notice 2008-7 (and any subsequent guidance or
regulations) shall apply. Accordingly, for any period during which any Plan account of a
Member, any beneficiary under the Plan with respect to which the beneficiary is entitled to
exercise the rights of a Member (i.e., the beneficiary of a deceased Member) or any alternate
payee who has a Plan account (the Member or the beneficiary or the alternate payee is an
“Applicable Individual”) holds publicly traded employer securities (as defined under Code
section 401(a)(35)(G)(v)), the following rules shall apply:

	 	A.	 	The Applicable Individual may elect to direct the Plan to invest any such
employer securities and to reinvest an equivalent amount in other investment options
meeting the requirements of Section 4.9(B).

 

18

 

	 	B.	 	The Plan shall:

	 	(1)	 	offer not less than three investment options, other than employer
securities, to which an Applicable Individual may direct the proceeds from the
divestment of employer securities pursuant to this Section 4.9, each of which is
diversified and has materially different risk and return characteristics;

	 	(2)	 	permit the divestment and reinvestment of employer securities by
Applicable Individuals in a periodic (not less than quarterly), reasonable
manner; and

	 	(3)	 	not impose any restrictions or conditions with respect to the
investment of employer securities which are not imposed on the investment of
other assets of the Plan; provided, however, that this rule shall not apply to
any restrictions or conditions imposed by securities laws.

	 	C.	 	For purposes of Section 4.9.B, a restriction or condition with respect to
employer securities includes:

	 	(1)	 	a restriction on an Applicable Individual’s rights to divest an
investment in employer securities that is not imposed on an investment that is
not in employer securities; and

	 	(2)	 	a benefit that is conditioned on investment in employer
securities.

	 	D.	 	The Plan shall also provide Applicable Individuals with the notice required by
ERISA section 101(m) regarding the divestiture rights required under Code section
401(a)(35) and ERISA section 204(j).

SECTION 5

VESTING

	5.1	 	Vesting. Each Member shall have a fully vested, nonforfeitable right to his Pre-Tax.
Contribution Account, After-Tax Contribution Account, Transfer Pre-Tax Contribution Account
and Rollover Account at all times. Each Member shall vest in his or her Employer Matching
Contribution and Transfer Employer Contribution Accounts according to the following schedule:

	 	 	 
	Years of Service	 	Vesting Percentage
	 
	Less than 3	 	0%
	3 or more	 	100%

Notwithstanding the foregoing schedule, a Member shall become vested in his Transfer
Employer Contribution Account in accordance with the vesting schedule in the Prior Plan, if
the vesting schedule in the Prior Plan is more rapid than that set forth above. A Member
who attains his Normal Retirement Date, dies or incurs a Disability shall become 100% vested
in his Employer Matching Contribution Account.

 

19

 

One-Year Breaks in Service for Vesting Purposes. If a Member incurs one or more
consecutive one-year Breaks in Service, then:

	 	A.	 	Years of Service before such one-year Breaks in Service shall not be taken into
account until the Member completes one Year of Service after his return;

	 	B.	 	Years of Service prior to the one-year Breaks in Service shall not be taken
into account if the Member has no vested right in his Pre-Tax Contribution Account, Top
Heavy Contribution Account, Employer Matching Contribution Account, or Transfer
Employer Contribution Account under the Plan and the number of consecutive one-year
Breaks in Service in greater than one and equals or exceeds the greater of (1) the
aggregate number of his Years of Service (excluding Years of Service not required to be
taken into account by reason of any prior one-year Breaks in Service), or (2) five; and

	 	C.	 	If a Member incurs five or more consecutive one-year Breaks in Service, Years
of Service after such one-year Breaks in Service shall not be taken into account in
determining the nonforfeitable percentage of such Member’s benefit derived from
Employer contributions which accrued before such one-year Breaks in Service.

	 	D.	 	Notwithstanding the foregoing, a Member shall vest in the portion of his
Transfer Employer Contribution Account attributable to his matching contribution
account transferred from the Ford of Tulsa 401(k) Plan according to the following
schedule:

	 	 	 	 	 
	Years of Service	 	Vesting Percentage	 
	 
	 	 	 	 
	0
	 	 	0	 
	1
	 	 	20%	 
	2
	 	 	40%	 
	3
	 	 	60%	 
	4
	 	 	80%	 
	5 or more
	 	 	100%	 

	5.2	 	Forfeitures. A Member’s vested Accrued Benefit shall be determined in accordance with Section
5.1 as of the date he terminates employment. The nonvested portion shall be forfeited on the
earlier of the date on which the Member:

	 	A.	 	receives a distribution of his vested Accrued Benefit, if any, provided that
such distribution is made no later than the close of the second Plan Year following the
year in which the Member terminates participation in the Plan; or

	 	B.	 	has five consecutive one-year Breaks in Service measured from the Plan Year in
which the Member’s date of termination occurs.

Said forfeiture shall be used, at the Employer’s discretion, to either (i) reduce future
Employer Matching Contributions, or (ii) pay Plan administrative expenses under Section
11.3.

For purposes of this Section 5.2, if the value of a Member’s vested Accrued Benefit is zero,
the Member shall be deemed to have received a distribution of such vested Accrued Benefit on
termination of employment.

 

20

 

	5.3	 	Change in Vesting Schedule. In the event the Employer adopts an amendment to the Plan that
changes the Plan’s vesting provisions such that the nonforfeitable (i.e., vested) percentage
of any Member, when determined under the Plan as so amended, would at any time be less than
would have been the case absent such amendment, then the following rules shall apply.

	 	A.	 	Election. Each Member who has completed at least three years of service
(within the meaning of Treasury Regulations section 1.411(a)-8T(b)(3)) shall be
permitted to elect, during the election period described in paragraph B below, to have
his nonforfeitable percentage determined without regard to such amendment.

	 	B.	 	Election Period. The election described in paragraph (i) may be made during
the period that begins not later than the date on that the Plan amendment is adopted
and that ends no earlier than the latest of the following dates:

	 	(1)	 	The date that is 60 days after the day the Plan amendment is
adopted.

	 	(2)	 	The date that is 60 days after the day the Plan amendment becomes
effective.

	 	(3)	 	The date that is 60 days after the day the Member is issued
notice of the Plan amendment by the Employer or Plan Administrator.

	5.4	 	Lost Members. If a Member’s vested Accrued Benefit is distributable to such Member, but the
Plan Administrator is unable after a diligent search to find the Member or a Beneficiary to
whom payments may be made, such Member’s vested Accrued Benefit shall be forfeited and applied
to reduce future Employer Matching Contributions or the payment of Plan administrative
expenses (as permitted by the Plan’s rules relating to forfeitures). If, after such
forfeiture, the Member or a Beneficiary makes a claim for the forfeited vested Accrued
Benefit, the Plan shall reinstate such Benefit and distribute it to the Member or Beneficiary
in accordance with the terms of the Plan. The Plan Administrator shall be deemed to have made
a diligent search for the Member if the Plan Administrator has attempted to contact the Member
by first class mail, at the Member’s address on file with the Employer and, if unsuccessful,
has attempted to contact the Member through the Internal Revenue Service participant locator
program and has waited six months for a reply.

SECTION 6

DISTRIBUTIONS

	6.1	 	Distribution of Benefit. A Member who has a severance from employment with the Employer and
all Affiliated Companies for any reason other than death shall be entitled to receive his
vested Accrued Benefit. A Member’s Beneficiary shall be entitled to receive the Member’s
vested Accrued Benefit in the event of the Member’s death. A Member or Beneficiary who is
entitled to payment under this Section 6 may elect to receive his Accrued Benefit in the form
of a lump sum payment as soon as administratively feasible following the date he ceases to be
employed by all Employers and all Affiliated Companies as the
Member (or his Beneficiary) requests, but no later than the April 1 of the calendar year
following the calendar year in which occurs the later of the Member’s Retirement or age
70-1/2 and according to the Code section 401(a)(9) minimum distribution rules and Section
18 of this Plan. The amount payable shall be equal to the Member’s vested Accrued Benefit
determined as of the Valuation Date coincident with the date payment is made.

 

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A Member who participated in a Prior Plan is entitled to receive his or her Accrued Benefit
in an optional form of distribution as set forth in Section 16.

A Member who is employed by an Affiliated Employer that had adopted the Plan but ceases
being an Affiliated Company shall be considered to cease being employed by the Employer and
all Affiliated Companies on the first date the Affiliated Employer is no longer an
Affiliated Company.

	6.2	 	Election of Benefits. The Member shall notify the Plan Administrator in accordance with
administrative procedures established by the Plan Administrator, of the form and timing of
benefit payments. An election may be revoked and a new election may be submitted to the Plan
Administrator any time prior to the commencement of benefits. Payment of benefits shall
commence as soon as practicable under the option the Member has designated; but in no event
later than as provided under Section 6.6 hereof.

	6.3	 	Rehire Prior to Incurring Five Consecutive Breaks in Service. If the Member terminates his
employment and is rehired by the Employer prior to the date that he would incur his fifth
consecutive one-year Break in Service, the following rules shall apply:

	 	A.	 	No Distribution. If the Member has not received a distribution by reason of his
prior termination of employment, any amounts previously forfeited shall no longer be
forfeitable.

	 	B.	 	Prior Distribution. If the Member has received a total or partial distribution
by reason of his prior termination of employment and he repays to the Plan the entire
amount distributed to him from the Plan before five years have elapsed after the date
of his re-employment, any forfeited amount shall be restored and shall no longer be
forfeitable. Any forfeitable amounts that have not been forfeited by the Member’s
re-employment date shall no longer be forfeitable after that date.

	 	C.	 	Partially Vested Members. If a distribution is made to a Member at a time when
he has a vested right to less than 100% of his interest subject to a vesting schedule
under Section 5.1, and the Member does not repay the prior distribution pursuant to
Section 6.3.B, then at any relevant time, the vested portion of his interest shall be
equal to an amount (“X”) determined by the formula X = P(AB + D) — D, where “P” is the
vested percentage at the relevant time under Section 5.1, “AB” is the value of the
Member’s Accrued Benefit at the relevant time, and “D” is the amount of the
distribution.

	 	D.	 	Common Stock. To the extent that the Member has received a distribution in
 shares of Common Stock of Penske Automotive Group, Inc. in accordance with Section
6.17, the amount deemed distributed, for purposes of this Section 6.3 shall be the
amount of the cash distribution that such person would have received had such prior
distribution instead been entirely in cash.

 

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	 	E.	 	Deemed Distribution. For purposes of this Section 6.3, a Member shall be deemed
to have received a distribution of his entire Accrued Benefit if, at the time of his
termination of employment with the Employer, he either has no vested interest in his
Accrued Benefit or he has no interest under the Plan.

	6.4	 	Death Prior to Total Distribution. If a Member dies before the distribution of his interest
has begun, the entire interest shall be distributed in a lump sum as soon as practicable
following his death, and in no event later than five years after the Member’s date of death.

	6.5	 	Distribution Limitation. In accordance with Code section 401(a) and unless he elects
otherwise, a Member shall commence distribution hereunder no later than 60 days after the
close of the Plan Year in which occurs the later of his Normal Retirement Date, the tenth
anniversary of the year in which a Member has commenced participation in the Plan or the date
of the Member’s termination of employment. Notwithstanding the foregoing, the failure of a
Member to consent to a distribution while a benefit is immediately distributable within the
meaning of this Section 6 shall be deemed to be an election to defer commencement of payment
of any benefit sufficient to satisfy this Section 6.

	6.6	 	Mandatory Distributions. The benefits of a Member who is a “five percent owner” shall be
distributed to him not later than April 1 of the calendar year following the calendar year in
which the Member attains age 70-1/2 and shall be made in accordance with the requirements of
Code section 401(a)(9) and Section 18 of this Plan.

	6.7	 	Earnings on Undistributed Benefits. A Member’s Accrued Benefit shall share in investment
experience in accordance with the provisions of Section 4 until the Valuation Date coincident
with distribution.

	6.8	 	Rollovers into the Plan. Subject to approval of the Plan Administrator, an Employee may roll
over to the Trust amounts accumulated for the Employee under any other tax-qualified
retirement plan or plans. The amount rolled over shall become subject to all of the terms and
conditions of this Plan and Trust Agreement after it is rolled over, except that it shall be
fully vested and nonforfeitable at all times. The amounts rolled over shall be deposited in a
separate account herein referred to as an Employee’s Rollover Account and shall be invested as
other accounts. An Employee who makes a rollover contribution to this Plan shall not otherwise
participate in the Plan until he qualifies as an Eligible Employee hereunder.

	6.9	 	Transfers Into the Plan. Subject to approval of the Plan Administrator, the Trustee shall
accept the transfer to the Trust of amounts accumulated for an Employee under a Prior Plan.

	6.10	 	Evidence in Writing. The Plan Administrator may require the Member to furnish a letter or
other evidence in writing from the administrator of the plan from which the rollover or
transfer originates, stating that the acceptance of the transfer or rollover shall not affect
the tax qualified status of the Plan.

 

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	6.11	 	Hardship Withdrawal. A Member may apply in accordance with administrative procedures
established by the Plan Administrator for a hardship withdrawal from his vested Accrued
Benefit at any time. The withdrawal must satisfy the criteria set forth below, and may be
approved or disapproved at the discretion of the Plan Administrator. Hardship withdrawals from
a Member’s Pre-Tax Contribution Account are not permitted from income on a
Member’s Pre-Tax Contributions, except to the extent of earnings on or before December 31,
1988, nor are such withdrawals permitted to include Employer contributions which were
treated as Pre-Tax Contributions as a result of the application of the special
nondiscrimination requirements under rules prescribed by the Secretary of the Treasury for
Employer contributions that are used to meet the vesting and withdrawal restrictions for
Pre-Tax Contributions. The circumstances which may warrant approval of a Member’s
application for a hardship withdrawal are:

	 	A.	 	General Rule. For purposes of this Plan, a hardship distribution must be made
on account of an immediate and heavy financial need of the Member and must be in an
amount not to exceed the sum necessary to satisfy such financial need.

	 	B.	 	Immediate and Heavy Financial Need. The determination of whether a Member has
an immediate and heavy financial need shall be made on the basis of whether a request
satisfies the definition of “Deemed Immediate and Heavy Financial Need” as set forth
below. A financial need shall not fail to qualify as immediate and heavy merely because
such need was reasonably foreseeable or voluntarily incurred by the Member.

	 	C.	 	Deemed Immediate and Heavy Financial Need. A distribution shall be deemed to be
made on account of an immediate and heavy financial need of the Member if the
distribution is on account of:

	 	(1)	 	unreimbursed medical expenses for medical care (as defined in
Code section 213(d)) incurred by the Member, the Member’s spouse, or any
dependents of the Member (as defined in Code section 152), or primary
Beneficiary, or necessary for those persons to obtain medical care described in
Code section 213(d);

	 	(2)	 	costs directly related to the purchase (excluding mortgage
payments) of the principal residence for the Member;

	 	(3)	 	payment of tuition, related educational fees, or room and board
expenses for the next 12 months of post-secondary education for the Member, the
Member’s spouse, children or dependents (as defined in Code section 152, without
regard to Code section 152(b)(1), (b)(2), and (d)(1)(B)), or primary
Beneficiary;

	 	(4)	 	payments necessary to prevent the Member’s eviction from his
principal residence or foreclosure on the mortgage of the Member’s principal
residence;

	 	(5)	 	payments for burial or funeral expenses for the Member’s deceased
parent, Spouse, child, or dependent (as defined in Code section 152 and without
regard to Code section 152(d)(1)(B)), or primary Beneficiary;

	 	(6)	 	payment of expenses for the repair of damage to the Member’s
principal residence that would qualify for the casualty deduction under Code
section 165 (determined without regard to whether the loss exceeds 10% of
adjusted gross income); or

 

24

 

	 	(7)	 	such other circumstances set forth by the Commissioner of the
Internal Revenue Service through the publication of revenue rulings, notices,
and other documents of general applicability that are deemed to constitute
financial hardship.

The amount of the immediate and heavy financial need may include any amounts
necessary to pay any federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution.

	 	D.	 	Distribution Necessary to Satisfy Financial Need. A distribution shall be
treated as necessary to satisfy a financial need only if:

	 	(1)	 	the Member has obtained all distributions, other than
hardship distributions and all nontaxable loans under all plans under all
plans maintained by the Employer;

	 	(2)	 	the Member is prohibited from reducing his Compensation and
from making elective contributions to any tax qualified retirement plan under
Code sections 401(a) or 403(a) or nonqualified plan (including any
nonqualified plan of deferred compensation or employee stock purchase plan or
Code section 403(b) annuity program of the group consisting of the Employer
and the Affiliated Companies for the period beginning on the date of the
distribution and ending on the six month anniversary thereof;

	 	(3)	 	the distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts necessary to pay any
federal, state, or local income taxes or penalties reasonably anticipated to
result from the distribution); and

	 	E.	 	the determination of the existence of financial hardship and the amount
required to be distributed to meet the need created by the hardship must be made in a
uniform and nondiscriminatory manner.

	6.12	 	Withdrawals Permitted After Age 59-1/2. Notwithstanding the foregoing, a Member may apply in
accordance with administrative procedures established by the Plan Administrator for a
withdrawal from all or a portion of his vested Accrued Benefit any time after attaining age
59-1/2. Such withdrawal shall not be subject to the requirements set forth in Section 6.11 but
are subject to the conditions set forth in Section 6.14 below.

	6.13	 	Withdrawal of After-Tax Contributions; Rollover Contributions. A Member who has made
After-Tax Contributions under a Prior Plan may withdraw such contributions in accordance with
the administrative procedures established by the Plan Administrator specifying the amount to
be withdrawn. A Member who has made Rollover Contributions may withdraw such contributions,
and the earnings thereon, by submitting a request to the Plan Administrator in accordance with
administrative procedures established by the Plan Administrator specifying the amount to be
withdrawn.

 

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	6.14	 	Conditions For Withdrawals. The following conditions apply to withdrawals made under Sections
6.11, 6.12 and 6.13:

	 	A.	 	a Member may make only two hardship withdrawals and two withdrawals from his
After-Tax Contribution Account within a Plan Year. A Member may make only one
withdrawal of his Rollover Contributions in any Plan Year, which may not be less than
$1000 of the total value of his Plan accounts available for withdrawal. There is no
restriction in the number of withdrawals a Member may make in a Plan Year after
attaining age 59-1/2.

	 	B.	 	all withdrawals shall be based on the value of the Member’s applicable accounts
as of the Valuation Date coincident with the date payment is made; and

	 	C.	 	any withdrawal made hereunder from a Member’s Transfer Account by a married
Member shall be subject to the conditions, if any, applicable to protected benefits as
set forth in Section 16 hereof; and

	 	D.	 	withdrawals shall be made pro rata from the investment fund(s) in which
designated the Member’s Plan accounts are invested.

	6.15	 	Direct Rollover.

	 	A.	 	With respect to any distribution described in this Section 6 which constitutes
an eligible rollover distribution within the meaning of Code section 401(a)(31)(D), the
distributee thereof shall, in accordance with procedures established by the Plan
Administrator or Committee, be afforded the opportunity to direct that such
distribution be transferred directly to the trustee of an eligible retirement plan (a
“direct rollover”).

	 	B.	 	For purposes of this Section 6.15, “eligible retirement plan” means:

	 	(1)	 	For all distributees (i.e., the Member, a spouse, a surviving
spouse, a spouse who is an alternate payee under a qualified domestic relations
order, or a non-spouse Beneficiary), an individual retirement account described
in Code section 408(a) or an individual retirement annuity described in Code
section 408(b).

	 	(2)	 	For all distributees other than a non-spouse Beneficiary, an
annuity plan described in Code section 403(a), an annuity contract described in
Code section 403(b), an eligible plan under Code section 457(b) that is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and that agrees
to separately account for amounts transferred into such plan from this Plan, or
a tax-qualified plan under Code sections 401(a) or 403(a) that accepts the
distributee’s eligible rollover distribution.

	 	C.	 	Any distribution under this Section 6 which consists of a hardship withdrawal,
as defined in Internal Revenue Code section 401(k)(2)(B)(i)(IV), attributable to the
Member’s elective deferrals (i.e., Pre-Tax Contributions) shall not be an eligible
rollover distribution.

	 	D.	 	Notwithstanding the foregoing, if the distributee elects to have his eligible
rollover distribution paid in part to him and part as a direct rollover:

	 	(1)	 	the direct rollover must be in an amount of $500 or more; and

	 	(2)	 	a direct rollover to two or more eligible retirement plans shall
not be permitted.

 

26

 

	 	E.	 	The Plan Administrator shall, within a reasonable period of time prior to
making an eligible rollover distribution from this Plan, provide a written explanation
to the distributee of the direct rollover option described above, as well as the
provisions under which such distribution will not be subject to tax if transferred to
an eligible retirement plan within 60 days after the date on which the distributee
received the distribution. A distribution may commence less than 30 days after the
notice required by Treasury Regulations section 1.411(a)-11(c) is required to be given,
provided the Plan Administrator informs the Member he has a right to a period of not
less than 30 days to consider the decision of whether or not to elect a distribution,
and the Member, after receiving the notice, affirmatively elects a distribution.

	 	F.	 	Notwithstanding any other provision of the Plan to the contrary, a distributee
may also elect a direct rollover of an eligible rollover distribution to “Roth IRA” as
permitted under Code section 408A(e). For this type of direct rollover, there shall be
included in the distributee’s gross income any amount that would be includible if the
distribution were not rolled over. In addition, for taxable years beginning before
January 1, 2010, a distributee cannot make a direct rollover to a Roth IRA from this
Plan (because this Plan does not provide for “Roth” type elective deferrals) if, for
the year the direct rollover is to be made, the distributee has modified gross income
exceeding $100,000 or is married and files a separate federal income tax return. The
Plan will follow the requirements of Internal Revenue Service Notice 2008-30 (and such
later superseding or additional guidance or regulation that may apply) in administering
this provision.

	6.16	 	Withholding of Income Tax.

	 	A.	 	Notification of Withholding Of Federal Income Tax. All Members and
beneficiaries entitled to receive benefits under the Plan shall be notified of the
Plan’s obligation to withhold federal income tax from any benefits payable pursuant to
the terms of the Plan. Such notice shall be in writing, be given at the times and
contain the information set forth in subsection B of this Section 6.17.

	 	B.	 	Time and Content of Notice. The notice described in subsection A of this
Section 6.17 shall be provided at least 30, but not more than 180, days before the date
that is the Member’s Annuity Starting Date, the Plan Administrator will notify the
Member of the benefits available to him, the optional forms for payment, if any, and,
if the benefit is immediately distributable, his right, if any, to defer receipt of the
distribution (including a description of the consequences of failing to defer receipt).
Such notice will be given in accordance with Treasury Regulations
section 1.411(a)-11(c). The Member’s consent to the distribution may not be made
before the Member receives the notice and may not be made more than 180 days before his
Annuity Starting Date. Such distribution may commence less than 30 days after the
notice required under Treasury Regulations section 1.411(a)-11(c) is given, provided
that:

	 	(1)	 	the Plan Administrator clearly informs the Member that the Member
has a right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option),

 

27

 

	 	(2)	 	the Member, after receiving the notice, affirmatively elects a
distribution, and

	 	(3)	 	the distribution is made at least seven days after the notice is
given.

“Annuity Starting Date” means the first day of the first period for which an amount
is payable as an annuity, or, in the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred that entitle the Member to
that benefit.

	 	C.	 	Effective Date of Election. Any transfer direction, election or revocation of
any election by a payee shall become effective immediately upon receipt by the Plan
Administrator or Committee of the transfer direction, election or revocation.
Thereafter, the Plan Administrator or Committee shall, unless otherwise provided by
applicable law, regulation or other guidance by the Secretary of the Treasure or his
delegate, withhold federal income tax in accordance or consistent with the instructions
filed by the payee.

	 	D.	 	Failure to Make Election.

	 	(1)	 	In the case of an eligible rollover distribution, if the payee
fails to provide the Plan Administrator with a transfer direction, the Plan
Administrator shall withhold an amount equal to 20% of the amount of the
distribution (or such other amount as may be from time to time prescribed by the
Code, or the Secretary of the Treasury or his delegate).

	 	(2)	 	In the case of a distribution which is not an eligible rollover
distribution, if the payee fails to provide the Plan Administrator with a
withholding certificate, the Plan Administrator shall withhold, in the case if
a periodic distribution, the amount which would be required to be withheld from
such payment if such payment were a payment of wages by an employer to an
employee for the appropriate payroll period, determined as if the payee were a
married person claiming three withholding allowances. In the case of a
nonperiodic distribution, 10% of the amount of the distribution shall be
withheld.

	 	E.	 	Coordination with Internal Revenue Code and Regulations. Notwithstanding the
foregoing, the Plan Administrator shall discharge its withholding and notice
obligations in accordance with the Code and regulations and such other guidance with
respect thereto as may be promulgated from time to time by the Secretary of the
Treasury or his delegate.

	6.17	 	Manner of Payment of Benefits. To the extent that any distribution under Section 6.1 is to be
made out of the Penske Automotive Common Stock Fund, such portion of such distribution shall
be paid either (a) entirely in cash or (b) entirely in whole shares of Common Stock of Penske
Automotive Group, Inc. and in cash to the extent of any fractional shares, as the Member or
his Beneficiary, as the case may be, shall elect. Absent such an election, amounts
distributable from the Penske Automotive Group Common Stock Fund in connection with such a
distribution under Section 6.1 shall be paid entirely in cash. The portion of any such
distribution under Section 6.1 made out of all other investment funds under the Plan, as well
as all distributions under all other provisions of this Section 6,
including a lump sum distribution pursuant to the second paragraph of Section 6.2, shall be
entirely in cash.

 

28

 

	6.18	 	Assets Transferred From Money Purchase Plans. Notwithstanding any provision of this Plan to
the contrary, to the extent that any optional form of benefit under this Plan permits a
distribution prior to the Member’s retirement, death, Disability or severance from employment,
and prior to Plan termination, the optional form of benefit shall not be available with
respect to benefits attributable to assets (including post transfer earnings thereon) and
liabilities that are transferred, within the meaning of Code section 414(l), to this Plan from
a money purchase pension plan qualified under Code section 401(a) (other than any portion of
those assets and liabilities attributable to voluntary after-tax employee contributions).

	6.19	 	Small Benefit Cash Outs. Notwithstanding anything in this Section 6 to the contrary, if the
balance in a Member’s distributable Plan account does not exceed, including rollover amounts,
if any, $5,000, then upon the Member becoming entitled to payment of the Member’s benefit as a
result of his retirement or termination of employment, the Plan Administrator shall direct the
Trustee to pay his benefit to him, regardless of whether the Member has applied therefor or
whether the Member or the Member’s Spouse has consented thereto. Such payment shall be made
in a single lump sum payment as soon as administratively feasible thereafter and shall be made
not later than the end of the second Plan Year following the termination of the Member’s
employment with the Employer and all Affiliated Companies (the “Distribution Deadline”). The
Plan Administrator may instruct the Trustee to make payment of the Member’s distributable Plan
account without regard to whether the time of the distribution will occur after the
Distribution Deadline if such distribution would have been made before the Distribution
Deadline but for the fact that the value of his distributable Plan account then exceeded the
cash out limit in effect under Treasury Regulations section 1.411(a)-11. After the Member’s
Annuity Starting Date, however, consent is required for the immediate distribution of the
Member’s distributable Plan account regardless of the amount of its value. In the event a
Member is not entitled to any distributable Plan account upon termination of employment with
the Employer and all Affiliated Companies, the Member shall be deemed to be cashed out under
this Section 6.19 as of the date of his termination of employment with the Employer and all
Affiliated Companies. In the event the Plan Administrator:

	 	A.	 	receives no direction from the Member within 60 days from the date notice was
given to him concerning the disposition of his distributable Plan account under this
Section 6, and

	 	B.	 	the distribution is in excess of $1,000, including rollover amounts, if any,

	 	C.	 	then the Plan Administrator shall transfer such distribution, plus rollover
amounts, if any, to a designated individual retirement account issuer with whom the Plan
has a written agreement that satisfies Department of Labor Regulations
section 2550.404a-2(c). The Plan Administrator may, but is not required to, make such
transfers with respect to distributions under this Section 6.19 of $1,000 or less,
including rollover amounts, if any.

 

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SECTION 7

ACTUAL DEFERRAL AND ACTUAL CONTRIBUTION PERCENTAGE TESTING

	7.1	 	Limitations on Allocations of Pre-Tax Contributions. For purposes of this Section 7.1
Employer Matching Contributions and any amounts designated by the Employer as Additional
Pre-Tax Contributions, that are contributed to the Plan not later than the end of the Plan
Year following the Plan Year to which they relate, may be treated as Pre-Tax Contributions.

	 	A.	 	Limit for Highly Compensated Employees. Allocations of Pre-Tax Contributions
to the Plan accounts of Members who are Highly Compensated Employees shall be limited
to an Average Deferral Percentage for the current Plan Year that does not exceed the
greater of:

	 	(1)	 	The Average Deferral Percentage for the current Plan Year for
Members who are not Highly Compensated Employees times 1.25, or

	 	(2)	 	The lesser of (I) the Average Deferral Percentage for the current
Plan Year for Members who are not Highly Compensated Employees multiplied by
2.00, or (II) the Average Deferral Percentage for the current Plan Year for
Members who are not Highly Compensated Employees plus two percentage points.

	 	B.	 	Aggregation of Deferrals. For purposes of determining a Member’s Actual
Deferral Ratio, the following salary deferrals made by the Member to another plan of
the group consisting of the Employer and the Affiliated Companies (the “Employer
Group”) shall be aggregated with his Pre-Tax Contributions.

	 	(1)	 	If the Plan and one or more other plans maintained by any member
of the Employer Group that include cash or deferred arrangements (as defined in
Code section 401(k)(2)) are considered as one plan for purposes of Code
sections 401(a)(4) and 410(b), all salary deferrals by the Member under such
other plan or plans, if any, during the Plan Year shall be aggregated with his
Pre-Tax Contributions.

	 	(2)	 	If a Member who is a Highly Compensated Employee is also a
participant in one or more plans maintained by any member of the Employer Group,
other than the Plan, that contain cash or deferred arrangements (as defined in
Code section 401(k)(2)), all salary deferrals by the Member under such other
plan or plans, if any, during the Plan Year shall be aggregated with his Pre-Tax
Contributions.

	 	C.	 	Treatment of Excess Pre-Tax Contributions. Excess Pre-Tax Contributions, and
income attributable thereto, shall be returned to the relevant Highly Compensated
Employees and related Employer Matching Contributions shall be forfeited not later than
the end of the Plan Year immediately following the Plan Year in which the Excess
Pre-Tax Contributions are made. The amount of any Excess Pre-Tax Contributions to be
distributed shall be reduced by the amount of any Excess Deferrals previously
distributed to the Employee for the Employee’s taxable year
ending with or within the Plan Year, in accordance with Code section 402(g)(2), and
Excess Deferrals to be distributed for a taxable year shall be reduced by Excess
Pre-Tax Contributions previously distributed for the Plan Year beginning in such
taxable year.

 

30

 

	 	(1)	 	Determination of Excess. Excess Pre-Tax Contributions, with
respect to a Highly Compensated Employee, shall be determined as follows:

	 	(a)	 	Highly Compensated Employees shall be ranked in
descending order according to the dollar amount of their Pre-Tax
Contributions.

	 	(b)	 	The Pre-Tax Contributions of the Highly
Compensated Employees(s) with the highest dollar amount of Pre-Tax
Contributions shall be reduced by the lesser of the aggregate amount of
Excess Pre-Tax Contributions or the amount necessary to cause the dollar
amount of those Highly Compensated Employees’ Pre-Tax Contributions to
equal the dollar amount of the Pre-Tax Contributions of the Highly
Compensated Employee(s) with the next highest dollar amount of Pre-Tax
Contributions. This amount shall be distributed equally to those Highly
Compensated Employees.

	 	(c)	 	If, after completing the process described in
paragraph (b), the total amount distributed is less than the aggregate
Excess Pre-Tax Contributions, the remaining dollar amount of the Excess
Pre-Tax Contributions shall be divided equally to reduce the dollar
amount of the Pre-Tax Contributions of the Highly Compensated
Employee(s) with the next highest dollar amount of Pre-Tax Contributions
by the lesser of the aggregate amount of Excess Pre-Tax Contributions or
the amount necessary to cause those Highly Compensated Employees’
Pre-Tax Contributions to equal the amount of the Pre-Tax Contributions
of the Highly Compensated Employee(s) with the next highest dollar
amount of Pre-Tax Contributions. Those amounts shall be distributed to
the relevant Highly Compensated Employees. This procedure shall be
repeated to the extent necessary to eliminate the remaining Excess
Pre-Tax Contributions.

	 	(d)	 	The amount by which a Highly Compensated
Employee’s Pre-Tax Contributions is reduced under this Section 7.1.C(1),
if any, shall constitute that Highly Compensated Employee’s Excess
Pre-Tax Contributions.

	 	(2)	 	Determination of Income. Income allocable to Excess Pre-Tax
Contributions required to be returned to the Member under this Section 7.1.C(2)
may be calculated as follows (or under any other permissible method):

	 	(a)	 	General Rule. The income allocable to Excess
Pre-Tax Contributions is equal to the sum of the allocable gain or loss
for the Plan Year in which the Excess Pre-Tax Contributions were made.
Income includes all earnings and appreciation, including such items as
interest, dividends, gains from the sale of property, and appreciation
in the value of stock and life insurance contracts, without regard to
whether such appreciation has been realized.

 

31

 

	 	(b)	 	For the Plan Year. The income allocable to
Excess Pre-Tax Contributions for the Plan Year in which the Excess
Pre-Tax Contributions were made is determined by multiplying the income
for that Plan Year by a fraction, the numerator of which is the Member’s
Excess Pre-Tax Contributions and the denominator of which is the
Member’s Plan account balance, reduced by the gain for the Plan Year and
increased by the loss for the Plan Year.

	 	(c)	 	No “Gap Period” Income Used. No income shall be
included in the determination under this Section 7.1.C. for the “gap
period” between the end of the Plan Year in which the Excess Pre-tax
Contributions were made and the date of the actual distribution, as
permitted by Code section 401(k)(8)(A), and, for purposes of the
distributions under Section 7.2, as permitted by Code section
401(m)(g)(A).

	7.2	 	Limitations on Allocations of Employer Matching Contributions.

	 	A.	 	Limit for Highly Compensated Employees. Allocations of ‘Employer Matching
Contributions to the Plan accounts of Members who are Highly Compensated Employees
shall be limited to an Average Contribution Percentage for the current Plan Year that
does not exceed the greater of:

	 	(1)	 	The Average Contribution Percentage for the current Plan Year for
Members who are not Highly Compensated Employees, times 1.25, or

	 	(2)	 	The lesser of (I) the Average Contribution Percentage for the
current Plan Year for Members who are not Highly Compensated Employees
multiplied by 2.00, or (II) the Average Contribution Percentage for the current
Plan Year for Members who are not Highly Compensated Employees plus two
percentage points.

	 	B.	 	Aggregation of Contributions. For purposes of determining a Member’s Actual
Contribution Ratio, the following amounts contributed on behalf of the Member under one
or more other plans maintained by any member of the Employer Group shall be aggregated
with his Employer Matching Contributions under this Plan.

	 	(1)	 	If the Plan, and any other plan maintained by any member of the
Employer Group to which “matching contributions,” “employee contributions,” or
“elective deferrals” (as those terms are defined in Code section 401(m)(4)) are
made, are considered as one plan for purposes of Code sections 401(a)(4)
and 410(b), then such other plan or plans shall be treated with this Plan as a
single plan.

	 	(2)	 	If one or more other plans maintained by any member of the
Employer Group permit “matching contributions” or “employee contributions” (as
those terms are defined in Code section 401(m)(4)) to be allocated to the
account of any Highly Compensated Employee who is a Member in this Plan, then
such contributions under that other plan or plans during the Plan Year shall be
aggregated with his Employer Matching Contributions for the Plan Year.

 

32

 

	 	C.	 	Treatment of Excess Contributions. Excess Contributions and income
attributable thereto (determined in the manner described in Section 7.1.C(2)) shall be
removed from the relevant Highly Compensated Employees’ Plan accounts not later than
the end of the Plan Year immediately following the Plan Year in which the Excess
Contributions are made.

	 	(1)	 	Determination of Excess. Excess Contributions, with respect to a
Highly Compensated Employee, shall be determined as follows:

	 	(a)	 	Highly Compensated Employees shall be ranked in
descending order according to the dollar amount of their Employer
Matching Contributions.

	 	(b)	 	The Employer Matching Contributions of the Highly
Compensated Employee(s) with the highest dollar amount of Employer
Matching Contributions shall be reduced by the lesser of the aggregate
amount of Employer Matching Contributions or the amount necessary to
cause the dollar amount of those Highly Compensated Employees’ Employer
Matching Contributions to equal the amount of the Employer Matching
Contributions of the Highly Compensated Employee(s) with the next
highest dollar amount of Employer Matching Contributions.

	 	(c)	 	If, after completing the process described in
paragraph (b), the total amount distributed is less than the aggregate
Employer Matching Contributions, the remaining dollar amount of the
Employer Matching Contributions shall be divided equally to reduce the
dollar amount of the Employer Matching Contributions of the Highly
Compensated Employee(s) with the next highest dollar amount of Employer
Matching Contributions by the lesser of the aggregate amount of Employer
Matching Contributions or the amount necessary to cause those Highly
Compensated Employees’ Employer Matching Contributions to equal the
amount of the Employer Matching Contributions of the Highly Compensated
Employee(s) with the next highest dollar amount of Employer Matching
Contributions. This procedure shall be repeated to the extent necessary
to eliminate the remaining Employer Matching Contributions.

	 	(d)	 	The amount by which a Highly Compensated
Employee’s Employer Matching Contributions is reduced under this
Section 7.2.C, if any, shall constitute that Highly Compensated
Employee’s Excess Employer Matching Contributions.

	 	(2)	 	Correction of Excess Contributions. Employer Matching
Contributions required to be removed from the Member’s Plan account under this
Section 7.2.C and income allocable to such amounts shall be removed in the
following order, to the extent necessary to ensure compliance with the limits
described in this Section 7.2:

	 	(a)	 	Amounts that are not Nonforfeitable shall be
forfeited.

 

33

 

	 	(b)	 	Amounts that are Nonforfeitable shall be
distributed to the affected Members, with earnings.

Earnings to be refunded shall be determined in the same manner as described
in Section 7.1.C(2).

	 	D.	 	Order of Applying Limits. Notwithstanding anything in this Section 7 or
Section 3.1 to the contrary, the provisions of Section 3.1 shall be applied before
application of the provisions of this Section 7.

	7.3	 	Definitions. As used in this Section 7, the following terms are defined as:

	 	A.	 	“Actual Contribution Ratio” means, for any Member, the amount of Employer
Matching Contributions actually paid to the Plan on his behalf for the Plan Year
expressed as a percentage of his Compensation used for testing under Section for such
Plan Year.

	 	B.	 	“Actual Deferral Ratio” means, for any
Member, the amount of the Pre-tax Contributions actually contributed to the Plan on his
behalf for the Plan Year expressed as a percentage of his Compensation used for testing
under Section 7 for such Plan Year.

	 	C.	 	“Average Contribution Percentage” means, for any Plan Year, the average of the
Actual Contribution Ratios determined separately for the group of Members consisting of
Highly Compensated Employees and for the group consisting of Members who are not Highly
Compensated Employees.

	 	D.	 	“Average Deferral Percentage” means, for any Plan Year, the average of the
Actual Deferral Ratios determined separately for the group of Members consisting of
Highly Compensated Employees and for the group of Members who are not Highly
Compensated Employees.

	 	E.	 	“Excess Contributions” means the sum, for all affected Highly Compensated
Employees, of the amounts, determined for each Highly Compensated Employee, in
accordance with the following procedure:

	 	(1)	 	Determine the amount, if any, (expressed as a percentage of the
relevant Member’s Compensation used for testing under Section 7) by which the
Actual Contribution Ratio of the Highly Compensated Employee with the highest
Actual Contribution Ratio would have to be reduced to satisfy the limit under
Section 7.1.A, or, if less, the amount (expressed as a percentage of the
relevant Member’s Compensation used for Testing under Section 7) that would
cause such Actual Contribution Ratio to equal the Actual Contribution Ratio of
the Highly Compensated Employee with the next highest Actual Contribution Ratio.

	 	(2)	 	Repeat the procedure in (2) above for each Highly Compensated
Employee until the limit under Section 7.1.A would be satisfied.

	 	(3)	 	Multiply the percentage determined for each Highly Compensated
Employee
under (1) and (2) by the relevant Member’s Compensation used for testing
under Section 7.

 

34

 

	 	F.	 	“Excess Deferrals” means any elective contributions made by a Member during a
calendar year in excess of $16,500 (for 2009), as adjusted for cost of living by the
Secretary of the Treasury pursuant to Code section 402(g), as modified by Code
section 414(v) (that constitute excess deferrals within the meaning of Code
section 402(g)(2)).

	 	G.	 	“Excess Pre-Tax Contributions” means the sum, for all affected Highly
Compensated Employees, of the amounts, determined for each Highly Compensated Employee,
in accordance with the following procedure:

	 	(1)	 	Determine the amount, if any, expressed as a percentage of the
relevant Member’s Compensation used for testing under Section 7, by which the
Actual Deferral Ratio of the Highly Compensated Employee with the highest Actual
Deferral Ratio would have to be reduced to satisfy the limit under
Section 7.1.A, or, if less, the amount (expressed as a percentage of the
relevant Member’s Compensation used for testing under Section 7) that would
cause such Actual Deferral Ratio to equal the Actual Deferral Ratio of the
Highly Compensated Employee with the next highest Actual Deferral Ratio.

	 	(2)	 	Repeat the procedure in (1) above for each Highly Compensated
Employee until the limit under Section 7.1.A (Limit for Highly Compensated
Employees) would be satisfied.

	 	(3)	 	Multiply the percentage determined for each Highly Compensated
Employee under (1) and (2) by the relevant Member’s Compensation used for
testing under Section 7.

SECTION 8

TOP-HEAVY PROVISIONS

	8.1	 	Top-Heavy Pre-emption. For each Plan Year in which the Plan is Top Heavy within the meaning
of Section 8.2, the restrictions set forth in Section 8.3 will apply. The provisions of this
Section 8 will not apply in any year, in which the Plan consists solely of a cash or deferred
arrangement that meets the requirements of Code section 401(k)(12) and matching contributions
with respect to which the requirements of Code section 401(m)(11) are met. The provisions of
this Section will not apply to that portion of the Plan that covers employees subject to a
collective bargaining agreement with the Employer.

	8.2	 	Determination of Top Heavy Status. For any Plan Year, the determination as to whether the
Plan is Top Heavy will be made in accordance with the following rules:

	 	A.	 	General Rule. The Plan will be determined to be Top Heavy if, as of the
Determination Date, the sum of the Accrued Benefits of all Members who are Key
Employees exceeds 60% of the sum of the Accrued Benefits of all Key Employees and
Non-Key Employees.

 

35

 

	 	B.	 	Required Aggregation. Notwithstanding Section 8.2.A, there will be aggregated
with the Plan, for purposes of determining the Plan’s Top Heavy status, each other plan
of the Company (and of any Affiliated Company), whether or not terminated:

	 	(1)	 	in which a Key Employee is a participant, or

	 	(2)	 	that enables either the Plan or any plan described in (i) above
to meet the requirements of Code section 401(a)(4) or 410(b).

	 	C.	 	Optional Aggregation. Notwithstanding Section 8.2.A or Section 8.2.B, any plan
of the Employer or of any Affiliated Company, whether or not terminated, other than
those that are described in Section 6.2.B, may, at the election of the Plan
Administrator, be considered with the Plan for the purpose of determining the existence
of Top Heavy status, so long as the aggregated plans, considered as a group, would
satisfy the requirements of Code sections 401(a)(4) and 410(b).

	 	D.	 	Aggregation Rule. In the event any other plan is considered with the Plan for
purposes of determining the existence of Top Heavy status whether pursuant to
Section 8.2.B or 6.2.C, the Plan will be considered Top Heavy only if the sum of (1)
and (2) below exceeds 60% of (3), where

	 	(1)	 	is the sum of the account balances (within the meaning of Code
section 416(g)) of all Key Employees under all of the defined contribution plans
that are being aggregated;

	 	(2)	 	is the sum of the present values of the accrued benefits (within
the meaning of Code section 416(g)(4)(F)) for Key Employees under all of the
defined benefit plans that are being aggregated; and

	 	(3)	 	is the sum of the account balances and present values of accrued
benefits (within the meaning of Code section 416(g)) for all Key Employees and
Non-Key Employees under all plans that are being aggregated.

For purposes of this Section 6.2.D, the values of account balances and present values
of accrued benefits for plans being aggregated with the Plan will be determined as of
the determination date of such plan(s) that falls within the same calendar year as
the Determination Date for the Plan.

	 	E.	 	Special Computation Rules. The following rules will be applied in determining
the Top Heavy status of the Plan under this Section 8.2 and for purposes of aggregating
the Plan with another plan of the Employer (or with any member of the group consisting
of the Affiliated Companies) in order to evaluate the Top Heavy status of such other
plan.

	 	(1)	 	The value of a Plan account for purposes of this Section 8.2 will
mean its balance as of the Valuation Date coincident with or next preceding the
Determination Date, including Employer Contributions, if any, actually made
after the Valuation Date but on or before the Determination Date.

 

36

 

	 	(2)	 	The value of an Employee’s (or former Employee’s) Accrued Benefit
will be increased by the value of all distributions to that Employee (or former
Employee) from the Plan, and from any terminated plan that, had it not been
terminated, would have been required to be aggregated with the Plan under
Section 8.2.B, including any direct transfers to another plan, but excluding
distributions that are rolled over or transferred by the Employee to another
plan maintained by a member of the group consisting of the Employer and the
Affiliated Companies, occurring during the one year period ending on the
Determination Date unless already included in the value of the Accrued
Benefit under paragraph (1). If the distribution occurred for a reason other
than severance from employment, death, or disability, the one year period in
the preceding sentence will be changed to the five year period ending on the
Determination Date.

	 	(3)	 	If an Employee has not performed any services for the group
consisting of the Employer and the Affiliated Companies during the one year
period ending on the Determination Date, his Accrued Benefit will not be
considered.

	 	(4)	 	The value of an Accrued Benefit will include the allocable
portion of any contribution that is required to be made under Code section 412
to any plan that is aggregated with the Plan pursuant to Section 8.2.B or
Section 8.2.C, and that would be allocated as of any date not later than the
Determination Date, whether or not such contribution has been made or is due as
of the date of computation.

	 	(5)	 	Transferred Assets will be excluded in determining the value of
an Employee’s (or former Employee’s) Plan account for purposes of this
Section 8.2 if the transfer occurred at the initiation of the Employee (or
former Employee) and did not include funds distributed from a plan maintained by
any member of the group consisting of the Employer and the Affiliated Companies.

	 	(6)	 	The Accrued Benefit of any individual who is a Non-Key Employee,
but who was a Key Employee for any prior Plan Year, will not be taken into
account.

	 	(7)	 	The accrued benefit of a Member (other than a Key Employee) will
be determined under the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the group consisting of
the Employer and the Affiliated Companies, or, if there is no such uniform
method, as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Code section 411(b)(1)(C).

	8.3	 	Top-Heavy Vesting Schedule. In any Plan Year in which this Plan is Top-Heavy, any Member who
is credited with at least one Hour of Service during such Plan Year shall vest in accordance
with Section 5.1 or the following schedule, whichever produces the greater benefit:

	 	 	 
	Years of Service	 	Vested Percentage
	 
	2 years or less
	 	20%
	After 3 or more years
	 	100%

During any Plan Year in which this Plan is not Top-Heavy, vesting shall be determined
pursuant to Section 5, except that nonforfeitable rights obtained under the Top-Heavy
vesting schedule shall continue as such.

 

37

 

	8.4.	 	Top Heavy Restrictions. For each Plan Year in which the Plan is determined to be Top Heavy,
the following requirements will become effective, superseding, for that Plan Year, any other
provisions of the Plan to the contrary.

	 	A.	 	General. In performing an allocation of contributions for the Plan Year
pursuant to Section 3.1, the Plan Administrator will allocate to the Plan account of
each Member who is a Non-Key Employee, and who, as of the last day of the Plan Year,
has not terminated his Employer employment, whether or not that Member is otherwise
entitled to an allocation pursuant to Section 3.1, an amount equal to 3% of such
Member’s Compensation (“Top Heavy Contributions”). The balance, if any, of
contributions for the Plan Year will then continue to be allocated in accordance with
the provisions of Section 3.1. Employer Matching Contributions will be considered in
determining whether the provisions of this Section 8.3.A have been satisfied.

	 	B.	 	Adjustment for Small Contributions. Notwithstanding the provisions of
Section 8.3.A, the amount which is required to be allocated to the Plan accounts of
Members who are Non-Key Employees need not be greater than the largest allocation to
the Plan account of a Key Employee Member, expressed as a percentage of that Key
Employee’s Compensation, as limited by Code section 401(a)(17). For purposes of
determining the largest allocation to the Plan account of a Key Employee Member,
Pre-Tax Contributions will be included.

	 	C.	 	Alternative Method for Satisfying the Minimum Allocation Requirement. In the
event a Member who is a Non-Key Employee (who is entitled to a minimum allocation
pursuant to Section 8.3.A) participates both in this Plan and another Code section
401(a) tax-qualified plan of the group consisting of the Employer and the Affiliated
Companies, then:

	 	(1)	 	If the other plan is a defined contribution plan, any Employer
contributions made for the Member to the other plan may be considered
contributions made toward the minimum required allocation for the Member under
this Plan.

	 	(2)	 	In the event the other plan is a defined benefit plan, such
Member will receive a minimum annual benefit under the defined benefit plan
equal to the lesser of 20% of the Member’s average Compensation (as described in
(a), below) or 2% of the product of (a) and (b), where

	 	(a)	 	is the Member’s average Compensation for the five
consecutive calendar years which are included in the Member’s Years of
Service, which begin after December 31, 1983, during which the Plan was
Top Heavy, and which produce the highest average, and

	 	(b)	 	is the number of the Member’s Years of Service
(but not more than ten) completed in Plan Years, which begin after
December 31, 1983, during which the Plan was Top Heavy.

 

38

 

	8.5	 	Top-Heavy Definitions. For purposes of this Section, the following definitions shall apply:

	 	A.	 	Determination Date means for any Plan Year, the last day of the preceding Plan
Year.

	 
	 	B.	 	Key Employee means any individual described in (1) or (2) below:

	 	(1)	 	Any Employee or former Employee who, at any time during the Plan
Year containing the Determination Date is or was:

	 	(a)	 	An officer of the Employer or any Affiliated
Company whose Compensation for the Plan Year is greater than $160,000
(in 2009), as adjusted pursuant to Code section 416(i)(1); or

	 	(b)	 	A person owning more than 5% of the outstanding
stock of the Employer or stock that has more than 5% of the combined
voting power of all stock of the Employer; or

	 	(c)	 	A person whose annual Compensation for the Plan
Year is more than $150,000 and who owns more than 1% of the outstanding
stock of the Employer or stock that has more than 5% of the combined
voting power of all stock of the Employer.

For purposes of determining ownership under paragraphs (b) and (c) above, the
constructive ownership provisions of Code section 318 will apply, except that
(I) 5% or 1%, as the case may be, will be substituted for 50% in Code
section 318(a)(2), and (II) the rules of subsections (b), (c) and (m) of Code
section 414 will not apply. The dollar amount referred to in paragraph (a)
above will be adjusted as described in Code section 415(d).

	 	(2)	 	The Beneficiary of a person described in (1).

	 	C.	 	Non-Key Employee means:

	 	(1)	 	a Member or former Member who is not and has never been a Key
Employee; and

	 
	 	(2)	 	the Beneficiary of a person described in (1).

	 	D.	 	Transferred Assets means those funds that constitute rollover amounts within
the meaning of Code section 402(c)(4) transferred from another Code section 401(a)
tax-qualified plan (“Qualified plan”) to this Plan by the other Qualified plan on
behalf of a Member; or distributed from another Qualified plan to a Member and
transferred by the Member to this Plan; or distributed from another Qualified plan to a
Member and transferred by the Member to an individual retirement account or individual
retirement annuity (within the meaning of Code section 408) and then to this Plan,
provided the Member has not made any contributions to such individual retirement
account or individual retirement annuity other than eligible rollover contributions
within the meaning of Code sections 402(c)(4) and 402(c)(5). Transferred Assets will
also include rollover amounts transferred directly to the Plan from a Code
section 403(b) plan or from a Code section 457(b) plan, that is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state, on behalf of a Member, and rollover amounts
distributed by a Code section 403(b) plan or by a Code section 457(b) plan, that is
maintained by a
state, political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state, to a Member and transferred by that Member to
this Plan. Transferred Assets will not include after-tax employee contributions.

 

39

 

SECTION 9

DESIGNATION OF BENEFICIARY

	9.1	 	Named Beneficiary. Each Member may designate in writing, filed with the Plan Administrator,
a Beneficiary to whom, in the event of the Member’s death, all benefits or any unpaid balance
of benefits shall be payable. However, each married Member who designates a Beneficiary other
than his Spouse must provide the Plan Administrator with a spousal consent to the designation
of such other Beneficiary. Such spousal consent shall set forth the effects of such waiver
and must be either notarized or witnessed by a Plan representative. Subject to such spousal
consent, the Beneficiary(ies) so designated may be changed by the Member at any time. The
facts as shown by the records of the Plan Administrator at the time of death shall be
conclusive as to the identity of the proper payee and the amount properly payable, and payment
made in accordance with such facts shall constitute a complete discharge of any and all
obligations hereunder.

	9.2	 	No Named Beneficiary. If no such designation is on file with the Plan Administrator at the
time of death of the Member, or if such designation is not effective for any reason, then such
death benefit shall be payable to the deceased Member’s Spouse, if living. If such Spouse is
not living, payment shall be made to the deceased Member’s estate.

SECTION 10

MANAGEMENT OF THE FUND

	10.1	 	Contributions Deposited To Trust. All contributions to the Plan by the Employer and
Employees shall be committed in trust to the Trustee selected by the Plan Sponsor, to be held,
managed, and disposed of by the Trustee in accordance with the terms of the Trust and this
Plan. The Trustee selected may be changed from time to time by the Plan Sponsor in accordance
with the terms of the Trust.

	10.2	 	No Reversion to Employer. The Trust shall contain such provisions as shall render it
impossible, except as is provided under Sections 3.6 and 11.3, for any part of the corpus of
the Trust or income thereon to be at any time used for, or diverted to, purposes other than
for the exclusive benefit of Members or their Beneficiaries.

SECTION 11

DISCONTINUANCE AND LIABILITIES

	11.1	 	Termination. The Plan may be terminated at any time by the Plan Sponsor, but only upon
condition that such action is taken under the Trust or otherwise, as shall render it
impossible at any time under the Trust for any part of the corpus of the Trust or income
thereon to be at any time used for or diverted to purposes other than for the exclusive
benefit of active and retired employees. If the Plan is terminated without establishment of
an alternative defined contribution plan, the Fund shall be held for distribution by the
Trustee, who shall distribute 

 

40

 

to the Members then participating in the Fund the full amount standing to their credit on the
date of such termination, less the administrative costs to the Trustee for such
distribution, in accordance with the methods specified under Section 6 or Section 16, if
applicable. For purposes of this Section 11.1, the term “alternative defined contribution
plan” means any other defined contribution plan (other than an employee stock ownership
plan) maintained by the Employer that exists at the time the Plan is terminated or within
the period ending 12 months after distribution of the entire Fund. Such other plan shall
not be treated as an alternative defined contribution plan, however, if fewer than 2% of the
employees who are eligible under this Plan at the time of its termination are or were
eligible under the other plan at any time during the 24-month period beginning 12 months
before the time of the termination.

	11.2	 	No Liability for Employer. The Employer shall have no liability with respect to the payment
of benefits or otherwise under the Plan, except to pay over to the Trustee as provided in the
Plan such contributions as are made by the Employer and any and all contributions made by the
Members. Further, the Employer shall have no liability with respect to the administration of
the Trust or of the Fund held by the Trustee, and each Member and/or Beneficiary shall look
solely to the Fund for any payments or benefits under the Plan.

	11.3	 	Administrative Expenses. The Employer may elect to pay all or a portion of the
administrative expenses of the Plan, including compensation of the Trustee, consultants,
auditor, record keepers and counsel, but the Employer shall not be obliged to pay such
expenses. If the Employer does not elect to pay an administrative expense of the Plan, such
expense shall be paid from the Trust, and such expense may be paid from unallocated funds held
in the Trust’s forfeitures account or similar account. Any expenses relating directly to the
investment of the Trust, such as taxes, commissions, and registration charges, shall be paid
from the Trust. To the extent not otherwise provided for in the preceding provisions of this
Section 11.3, plan administrative expenses may be assessed pro rata or, to the extent
permitted by law, in equal amounts, among the Members’ Plan accounts. Any administrative
expenses incurred with special reference to a Member, e.g., a Plan loan fee, will be
separately assessed as to that Member’s Plan account.

	11.4	 	Non-forfeitability Due to Termination(s). Upon termination, partial termination or upon
complete discontinuance of contributions under the Plan, the rights of all affected Employees
to their Accrued Benefits accrued to the date of such termination, partial termination or
discontinuance shall become nonforfeitable.

	11.5	 	Exclusive Benefit Rule. This Plan and Trust are for the exclusive benefit of the Members and
their Beneficiaries. This Plan shall be interpreted in a manner consistent with this intent
and with the intention of the Employer that the Trust satisfy those provisions of the Internal
Revenue Code relating to employees’ trusts.

	11.6	 	Mergers. In the case of any merger or consolidation of the Plan with, or transfer of Plan
assets or liabilities to, any other plan, provisions shall be made so that each Member in the
Plan on the date thereof (if the Plan then terminated) would receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than the benefit he
would have been entitled to receive immediately prior to the merger, consolidation or transfer
(if the Plan had then terminated).

	11.7	 	Non-allocated Trust Assets. Any portion of the Fund which is unallocated at the time of
termination of the Plan shall be allocated among Members of the Plan in a nondiscriminatory
manner selected by the Plan Administrator.

 

41

 

SECTION 12

ADMINISTRATION

	12.1	 	Establishment of the Benefits Committee. The complete authority to control and manage the
operation and administration of the Plan shall be placed in the Penske Automotive Group
Benefits Plan Committee (the “Committee”). The Committee shall consist of at least three
members, appointed from time to time by the Plan Sponsor to serve at the pleasure thereof.
The Committee shall designate one of its members as its Chairman. Any member of the Committee
may resign at any time by delivering his written resignation to the Chairman.

	12.2	 	Organization of the Committee. The Chairman, when present, shall preside at meetings of the
Committee. In his absence, those present shall choose one of their number to act as Chairman.
The Committee may appoint a Secretary, who shall keep the minutes of the meetings and perform
such other duties as may be assigned to him by the Committee, together with such other
officers as it shall deem necessary. Neither the Secretary nor any other officer appointed by
the Committee need be a member of the Committee or a Member in the Plan. The Committee shall
act by the majority of members then in office at all meetings, but it may act upon matters by
unanimous vote in writing without a meeting. The Committee may authorize one or more of its
members and/or its Secretary to sign directives and communications and to execute documents on
behalf of the Committee.

	12.3	 	Powers of the Committee. For purposes of ERISA, the Committee shall be the “Named Fiduciary”
for operation and administration of the Plan, and the “Plan Administrator”. The Committee is
designated as agent for service of legal process against the Plan.

The Committee shall have all powers and duties necessary or appropriate to operate and
administer the Plan, including, but not limited to, the following specific functions:

	 	A.	 	to act on applications for benefits;

	 
	 	B.	 	to determine eligibility, service and other questions;

	 
	 	C.	 	to establish rules for the administration of the Plan;

	 
	 	D.	 	to file all reports and make all disclosures required under ERISA;

	 
	 	E.	 	to appoint other fiduciaries to carry out various specific fiduciary
responsibilities in the administration of the Plan. Such appointment shall be made in
writing;

	 
	 	F.	 	to delegate to one or more investment managers (as defined in ERISA section
3(38)) the authority to manage, acquire, or dispose of Plan assets and to regularly
monitor the performance of any investment managers so selected;

	 
	 	G.	 	to designate one or more investment funds to be available for investment
direction by Members pursuant to Section 4.4, and at any time to change or add
investment funds available for such investment direction by Members; and

 

42

 

	 	H.	 	to develop and communicate to the Trustee and the investment managers the
investment objectives and funding policy for the Plan, and to review annually or more
frequently the implementation of the funding policy.

	 
	 	 	 	The Committee shall have discretionary authority to interpret the Plan and to resolve
ambiguities, inconsistencies and omissions, which findings shall be binding, final
and conclusive.

	 
	 	 	 	The Committee shall also receive and review all reports of the Trustees and the
collective trustees of any separate investment, and shall report thereon to the Plan
Sponsor. Benefits payable under the Plan shall be paid, at the direction of the
Committee from the assets held by a Trustee.

	12.4	 	Reliance on Professionals. The members of the Committee shall be entitled to rely upon all
tables, valuations, certificates and reports furnished by any duly appointed actuary (who
shall be an “enrolled actuary” as defined in Code section 7701(a)(35)), upon all certificates
and reports made by any duly appointed accountant, and upon all opinions given by any duly
appointed legal counsel. The members of the Committee shall be fully protected against any
action or inaction taken or omitted in good faith in reliance upon such tables, valuations,
certificates, reports or opinions and any such action or inaction shall be conclusive upon
each of them and upon all persons having any interest under the Plan.

	12.5	 	Liability and Indemnification. The Committee shall operate and administer the Plan for the
exclusive purpose of providing the benefits under the Plan (and for determining the reasonable
expenses of the Plan) with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent man, acting in a like capacity and familiar with such matters,
would use in the conduct of an enterprise of like character and with like aims. No member of
the Committee shall be personally liable for any action or inaction with respect to any duty
or responsibility imposed upon such person by the terms of the Plan unless such action or
inaction is finally determined by a court, and all time for appeal has lapsed, to be a breach
of the standard of conduct expressed in this Section 12. The Company shall indemnify each
member of the Committee against any expenses which are reasonably incurred in connection with
any legal action to which such person is a party by reason of his duties and responsibilities
with respect to the Plan, excepting only expenses and liabilities arising from his own gross
negligence or willful misconduct, as finally determined by a court, and all time for appeal
has lapsed.

	12.6	 	Fiduciary Insurance. Subject to the approval of the Plan Sponsor, the Committee shall have
the right to purchase such insurance as it deems necessary to protect the Plan and the Trust
from loss due to any breach of fiduciary responsibility by any person. Any premiums due on
such insurance shall be paid by the Company. Nothing in this Section 12.6 shall prevent the
Company, at its own expense, from providing insurance to any person to cover potential
liability of that person as a result of a breach of fiduciary responsibility.

	12.7	 	Claims Procedure.

	 	A.	 	Notice. If a claim for benefits under the Plan is denied in whole or in part,
the claimant shall be notified in writing or electronically of the denial, the specific
reason for the denial, the Plan provisions on which the denial is based, an explanation
of the Plan’s review procedures under Section 12.7.C, including applicable time limits,
a description of any additional materials necessary to perfect the claim, with an
explanation of 

 

43

 

why such material is necessary, and a statement that the claimant has the right to bring a civil action if there is still an adverse determination after
the review. For Disability benefit claims, the notice will also include any rule,
guideline, protocol, or other similar criteria relied on in making the determination,
and should the adverse determination be based on a matter of medical judgment or
necessity, an explanation of the scientific or clinical judgment on which the
determination was based, or a statement that a copy of such rule, guideline,
protocol, or explanation may be obtained upon request at no charge.

	 	B.	 	Timing of Determination. Generally, notice of the claim determination shall be
issued within 90 days after the claim has been filed with the Plan Administrator, but a
notice of the claim determination for a Disability benefit, shall be issued within 45
days. With respect to all claims, except those for a Disability benefit, if special
circumstances require an extension of time for processing the claim, the 90-day period
may be extended up to an additional 90 days, to a total of 180 days, provided that the
claimant is notified of the need for an extension within the original 90-day period,
and the date by which the Plan Administrator expects to render a final decision. With
respect to Disability benefit claims, the time period may be extended for a period of
up to 30 days if due to circumstances beyond the control of the Plan Administrator, and
again, if necessary and due to circumstances beyond the control of the Plan
Administrator, for an additional 30 days; provided that the claimant is notified of the
need for the extension(s) within the original 45-day period or the initial 30-day
extension period, whichever is applicable. Where additional information is required,
the claimant will be informed that he has 45 days to provide the required information.
In such circumstances, the initial 45-day period is tolled and the Plan Administrator
will have 30 days from the receipt of the requested information to make its
determination. If the claimant fails to provide the required information within that
45 day period, the claim may be denied or the claimant may be given additional time of
at least 30 days and a further extension of 30 days may be requested. When additional
time is requested, the time period for making the claim determination is tolled and the
Plan Administrator will have 30 days from the date the information is received to make
its determination.

	 	C.	 	Appeals. In the event a claim for benefits under the Plan is denied, in whole
or in part:

	 	(1)	 	The claimant (or his duly authorized representative) shall be
entitled to request in writing or electronically a review of the denial of his
claim by the Plan Administrator within 60 days (180 days for Disability benefit
claims) after the claimant receives notice of the denial of his claim.

	 	(2)	 	The claimant (or his duly authorized representative) may review
pertinent Plan documents and submit issues and comments to the Plan
Administrator in writing or electronically.

	 	(3)	 	The claimant shall be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits.

	 	(4)	 	Claim reviewers shall grant no deference to the original
determination, but shall assess the information provided as if initially
assessing the claim. The review shall consider all comments, documents,
records, and other
information submitted by the claimant relating to the claim, without regard
to whether such information was submitted in the initial benefit
determination.

 

44

 

	 	(5)	 	Those individuals reviewing claims shall be different from, and
not subordinate to, those who made the initial claim determinations.

	 	(6)	 	The decision of the Plan Administrator on review shall be
rendered within 60 days (45 days for reviews of Disability benefit claims) after
the request for review is received by the Plan Administrator unless special
circumstances require an extension of time for processing the claim, in which
case a decision shall be rendered not later than 120 days (90 days for reviews
of Disability benefit claims) after receipt of a request for review by the Plan
Administrator. The Plan Administrator shall notify the claimant of its benefit
determination as soon as possible, but not later than five days after the
determination is made.

	 	(7)	 	The claimant shall be furnished with written or electronic notice
of any such extension of time prior to the commencement of the extension, which
shall provide a description of the special circumstances that necessitate the
extension and state the date the determination on review is expected.

	 	(8)	 	The decision of the Plan Administrator on review shall be either
written or electronic and shall include specific reasons for the decision and
specific references to the pertinent Plan provisions on which the decision is
based. The decision shall include a statement that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
all documents, records, and other information relevant to the claim for
benefits, shall include a statement describing the Plan’s voluntary appeal
procedures and the claimant’s right to bring an action under Section 502(a) of
the Act. For reviews of Disability benefit claims, the identity of any medical
or vocational expert whose advice was sought will be provided, even if not
relied upon in making the determination, and should the adverse determination be
based on a scientific or clinical assessment or a medical judgment, an
explanation of the basis for the assessment will be provided, or a statement
that a copy of such explanation will be provided upon request at no charge.

	 
	 	(9)	 	The decision of the Plan Administrator on review is final.

	 	D.	 	Seeking Review of a Claim in Court. A claimant must first exhaust his claim
and review rights under this Section 12.7 before seeking review of his claim in court.
If the Plan Administrator does not follow the procedures set for in this Section 12.7,
the claimant shall be entitled to seek review of his claim in court.

	12.8	 	Trustee Has Authority to Invest. All Funds of the Plan shall be invested by the Trustee in
accordance with the provisions of the Plan and Trust, and the Trustee shall have full
authority and liability in this regard. To the extent that individual Members are permitted
to direct investment of their account balances, and to the extent a Member exercises such
right to direct investment, the Trustee shall be relieved from any liability therefore
pursuant to ERISA section 404(c).

	12.9	 	Removal for Personal Involvement. No individual may participate in the consideration of any
matter of or question concerning the Plan that specifically and uniquely relates to him
because of his participation under the Plan.

 

45

 

SECTION 13

PARTICIPATION BY EMPLOYERS OTHER THAN COMPANY

	13.1	 	Adoption by Eligible Employers. Any Affiliated Employer may adopt the Plan if the Plan
Sponsor, acting through the Employee Benefits Committee, authorizes such adoption and such
approved Affiliated Employer adopts the Plan and Trust by resolution.

	13.2	 	Rights and Obligations; Agency. Throughout this Plan a distinction is drawn between the
rights and obligations of the “Company” and its Board of Directors and the rights and
obligations of “Employers”. The rights and obligations as specified as belonging to the
Company and its Board of Directors shall belong only to Penske Automotive Group, Inc. By
adopting this Plan and Trust, an Affiliated Employer shall be deemed thereby to acknowledge
the Company as the Plan Sponsor and to appoint the Company, the Committee (acting as the Plan
Administrator) and the Trustee its exclusive agent to exercise on its behalf all the power and
authority conferred by this Plan or the Trust Agreement upon an Employer. The authority of
the Company, the Committee and the Trustee to act as such agent shall continue until the Plan
is terminated and the relevant Plan assets have been distributed by the Trustee, or until the
Affiliated Employer’s participation in the Plan has terminated pursuant to Section 13.4.

	13.3	 	Termination of the Plan by the Company. If this Plan is terminated by the Company as
permitted in Section 11.1 hereof, an Employer other than the Company may, in its own
discretion, adopt for its Employees alone and independent of this Plan and Trust, its own plan
and trust which shall be considered a continuation of this Plan for its active Members,
retired Members and terminated vested Members.

	13.4	 	Withdrawal of an Affiliated Employer. Any Affiliated Employer which is an Employer may
terminate its participation in the Plan by giving the Committee prior written notice
specifying a termination date which shall be the last day of a month at least 60 days
subsequent to the date such notice is received by the Committee. The Committee may terminate
any Employer’s participation in the Plan, as of any termination date specified by the
Committee, for the failure of the Employer to make contributions or to comply with any other
provision of the Plan, and the Board of Directors may terminate any Employer’s participation
in the Plan, as of any date specified by it, for any reason, in its sole discretion. Upon any
Employer’s termination of participation in the Plan, the Plan accounts of affected Members
will be vested if the termination of participation is a partial termination of the Plan.

SECTION 14

AMENDMENTS

	14.1	 	Amendment Restrictions. The provisions of this Plan may be amended at any time and from time
to time by the Plan Sponsor or the Committee, provided that:

	 	A.	 	no such amendment shall be effective unless this Plan, as so amended, shall be
for the exclusive benefit of persons in, or formerly in, the employ of Employer, or
their
Beneficiaries;

 

46

 

	 	B.	 	no such amendment shall operate to deprive a Member of any rights or benefits
irrevocably vested in him under the Plan prior to such amendment;

	 	C.	 	no such amendment shall be effective to the extent that it decreases a Member’s
Accrued Benefit. For purposes of this Section 14, (1) a Plan amendment which has the
effect of decreasing a Member’s Accrued Benefit or eliminating an optional form of
benefit, with respect to benefits attributable to service before the amendment, shall
be treated as reducing an Accrued Benefit and (2) a Plan amendment which has the effect
of changing future plan options or features only shall not be treated as reducing an
Accrued Benefit.

If any amendment shall be necessary or desirable to conform to the provisions and
requirements of the Code or any amendment thereto, or any regulation issued pursuant
thereto, no such amendment thereto shall be considered prejudicial to the interest of a
Member or his Beneficiary, or a diversion of any part of Fund to a purpose other than for
their exclusive benefit.

	14.2	 	Amending the Plan. The Plan Sponsor may amend the Plan at any time by resolution or by such
other action permitted by the Plan Sponsor’s charter, bylaws, or such other method permitted
by the laws of the State of Delaware. The Committee may amend the Plan by resolution or such
other method as it designates by resolution. A copy of any such amendment shall be provided
to the Trustee.

	14.3	 	Retroactive Amendments. Any modification or amendment of the Plan may be made retroactive if
such retroactivity is deemed to be necessary in order for the Plan to conform to or satisfy
the conditions of any law, governmental regulations or ruling, or to meet the requirements of
applicable sections of the Code, or the corresponding regulations and such retroactive
modification is permissible under such law, regulation or ruling.

SECTION 15

LOANS

	15.1	 	Permitted Loans. A Member may make application to the Plan Administrator to borrow from his
vested Accrued Benefit. That application must be made in accordance with administrative
procedures established by the Plan Administrator, and must specify the amount and term
requested. The Plan Administrator shall determine whether the application for a loan is to be
approved after an evaluation of all necessary documentation. All applications for loans shall
be evaluated in a uniform and nondiscriminatory manner, and loans shall not be made available
to Highly Compensated Employees in an amount greater than that for other Employees. Loans
that are granted shall be based on the value of the Member’s Accrued Benefit as of the last
Valuation Date and shall be subject to the following conditions:

	 	A.	 	the aggregate amount of all such loans to a Member shall not exceed the lesser
of:

	 	(1)	 	$50,000, reduced by the greatest value of any outstanding
loan. balance owed by the Member during the one-year period ending on
the day before the loan is made, or
(2) 50% of his vested Accrued Benefit;

 

47

 

	 	B.	 	the minimum amount of any loan made hereunder shall be $1,000;

	 	C.	 	no more than one loan per twelve month period shall be granted hereunder, and
only one outstanding loan shall be permitted at any time; and

	 	D.	 	a processing fee shall be charged for a loan application in an amount to be
determined by the Committee.

	15.2	 	Collateral Required. All loans will be adequately secured. The Plan Administrator will
require the Member to assign to the Trustee that portion of the vested balance of his Plan
account, but not more than 50% of the vested portion of his Plan account, necessary to secure
the loan

	15.3	 	Repayment. The loan shall be repaid in substantially equal installments consisting of
principal and interest at least quarterly. The term of the loan is not to exceed five years
unless the loan is used to buy or build the Member’s principal residence. The term of a loan
which is used to buy or build the Member’s principal residence is not to exceed 15 years.
Principal residence status shall be determined at the time of the loan. Loan repayments are
to be deducted from the salary paid by the Employer to such Member and shall be allocated to
the investment funds selected by the Member in the same manner as the Member’s Pre-Tax
Contributions are allocated; provided, however, that any loan shall become payable in full
upon a Member’s termination of employment. Notwithstanding the foregoing, a Member who is on
leave for Disability or on leave of absence without pay shall be permitted to suspend loan
repayments for a period of up to one year. Loan payments will be suspended under this Plan as
permitted under Code section 414(u) regarding veteran’s reemployment rights.

	15.4	 	Interest Charges. Interest shall be charged on loans based on a return commensurate with the
prevailing rates charged by other institutions in the business of lending money for loans made
under similar circumstances. Interest shall be charged on loans as follows: the interest rate
for loans made during a calendar quarter shall be the prime rate as published in The Wall
Street Journal on the last business day of the prior calendar quarter, plus 1%.

	15.5	 	Failure To Make Timely Payment. In the event an installment payment is not paid within 30
days following the due date of an installment, the Plan Administrator shall give written
notice to the Member sent to his last known address. If such installment payment is not made
within 15 days thereafter, the Plan Administrator shall have the right to accelerate the loan
and to reduce the Member’s Accrued Benefit to the extent permitted by law by the amount of the
unpaid loan balance including interest then due but not before the time at which the Member
may first receive a distribution, except as permitted in Treasury Regulations section
1.401(a)-13(d). If the Member’s Accrued Benefit must be used to eliminate any Plan loan which
is in default and which is either deemed to be distributed to the Member or is offset against
a distribution to the Member, the Member’s various accounts, including any earnings thereon,
shall be reduced pro rata in the ratio that the total amount of the loan in default bears to
each such account.

 

48

 

	15.6	 	Termination of Employment. In the event of the termination of a Member’s employment before
the loan is repaid in full, the unpaid balance thereof, together with interest
immediately due thereon, shall become due and payable; and the Trustee shall first satisfy
the indebtedness from the amount payable to the Member or to the Member’s Beneficiary before
making any payments to the, Member or to the Member’s Beneficiary.

	15.7	 	Loans to Non-Employees. Any Member who ceases to be an active Employee shall not be eligible
to make a loan hereunder. Notwithstanding the foregoing, however, loans will be made
available to a terminated Employee who is also a “party in interest” as that term is defined
in ERISA section 3(14).

	15.8	 	Order of Accounts Reduced. In determining the origin of any loan proceeds, the Members
various accounts, including any earnings thereon, shall be reduced pro rata in the ratio that
the total amount of the loan bears to each such account.

	15.9	 	Segregated Investment. The loan shall be made proportionately from all Investment Fund(s) in
a Member’s Plan account. The loan shall be considered as a segregated investment of the
Member.

	15.10	 	General Administration. The Trustee and the Plan Administrator shall have the right to
establish such procedures as may be reasonable, necessary or desirable to carry out the
provisions of this Section 15.

	15.11	 	Termination of Employment Resulting From Corporate Transaction. Notwithstanding the
foregoing, in the event of the termination of a Member’s employment due to a corporate
transaction whereby the entity employing the Member ceases being an Affiliated Company, the
Member’s loan will not be accelerated pursuant to Section 15.5 and the Member will have the
maximum cure period provided in Treasury Regulations section 1.72(p)-1(Q&A-10) during which to
repay the entire outstanding balance of the loan, plus interest on any unpaid installment
payments, before the loan is accelerated and considered distributed.

SECTION 16

SPECIAL PROVISIONS APPLICABLE TO PRIOR PLANS

	16.1	 	Form of Distribution. Section 6.1 of this Plan provides that the sole form of distribution
available under the Plan is a lump sum payment. If a Prior Plan provides an optional form or
forms of benefit other than a lump sum, such optional form or forms shall be “protected
benefits” under this Plan, to the extent required under Code section 411(d)(6) and the
regulations thereunder. The Trustee shall maintain in a separate account or accounts funds
transferred to this Plan from a Prior Plan which are subject to any one of the following types
of protected benefits:

	 	A.	 	A right to receive benefit payments in installments.

	 	B.	 	A right to receive benefit payments in the form of a life annuity or a joint
and survivor annuity.

	 	C.	 	A right to receive benefit payments in installments or in the form of a life
annuity or a joint and survivor annuity.

 

49

 

For each Employer that adopts this Plan, provision will be made to appropriately document
whether a Prior Plan provides a “protected benefit” and, if so, which type of protected
benefit specified above shall apply. Before a distribution may be made to a Member whose
account balance transferred to this Plan is subject to a protected benefit, the Plan
Administrator shall notify such Member of his or her right to elect an optional form of
benefit and, in cases in which an annuity is a protected benefit, shall comply with all
provisions governing notices and elections as are contained in the Prior Plan.

	16.2	 	Vesting. If a Prior Plan provides more rapid Vesting, for Employer Contributions than that
set forth in Section 5.1, a Member shall become vested in his Transfer Employer Contribution
Account in accordance with the more rapid schedule, as set forth in the Prior Plan.

	16.3	 	Loans. If a Member obtained a loan under a Prior Plan, such loan may be transferred to this
Plan if the assets of the Prior Plan attributable to such Member are also transferred to this
Plan. The provisions of Section 15 of this Plan shall govern a loan transferred to this Plan
from a Prior Plan.

	16.4	 	Elimination of Optional Benefit Forms.

	 	A.	 	The alternative form of payment available to each Member of a Prior Plan shall
be a single-sum distribution form that is otherwise identical to each optional form of
benefit available under the Prior Plan.

	 	B.	 	For purposes of this Section 16.4, a single-sum distribution form is otherwise
identical to an optional form of benefit that is eliminated pursuant to this Section
16.4 only if the single-sum distribution form is identical in all respects to the
eliminated optional form of benefit (or would be identical except that it provides
greater rights to the Member) except with respect to the timing of payments after
commencement. A single-sum distribution form is not otherwise identical to a specified
installment form of benefit if the single-sum distribution form is not available for
distribution on the date on which the installment form would have been available for
commencement, is not available in the same medium of distribution as the installment
form, or imposes any condition of eligibility that did not apply to the installment
form.

	 	C.	 	This section 16.4 shall not apply to an affected Member with respect to any
distribution with an annuity starting date that is earlier than the earlier of-

	 	(a)	 	The 90th day after the date the Member has been furnished a
summary that reflects the elimination of the optional forms previously available
and that satisfies the requirements of Department of Labor Regulations section
2520.104b-3 (relating to a summary of material modifications), or

	 
	 	(b)	 	January 1, 2003.

SECTION 17

MISCELLANEOUS

	17.1	 	“Spendthrift” Provision. Subject to Section 17.2 below, no benefit under the Plan shall be
subject in any manner to anticipation, pledge, encumbrance, alienation, levy or assignment,
nor to seizure, attachment or other legal process for the debts of any Employee, Member or
Beneficiary, unless required by law. Notwithstanding the foregoing, a Member’s benefit may
be reduced as provided in Code section 401(a)(13)(C).

 

50

 

	17.2	 	QDRO Exception. In the event that a Qualified Domestic Relations Order (“QDRO”) (as defined
by Code section 414(p)) is issued with respect to any Member, the Plan Administrator shall
notify the Member and the alternate payee(s) of the order received and segregate and
conservatively invest the portion of the Member’s Accrued Benefit which would be payable to
the alternate payee(s) as if the order received were a QDRO. Within 18 months of the order,
the Plan Administrator shall proceed with either A. or B. as follows:

	 	A.	 	if the order is determined to be a QDRO, the Plan Administrator shall pay
(notwithstanding the provisions of Section 6 hereof) the alternate payee(s) in
accordance with the terms of such order and with Code section 414(p) and ERISA section
206(d) at the time specified in such order. Payments may be made prior to the Member’s
“earliest retirement age” (as defined in Code section 414(p) and ERISA section 206(d))
pursuant to a QDRO; or

	 	B.	 	if the order is determined not to be a QDRO, or, the issue remains
undetermined, the Plan Administrator shall pay the portions of the Member’s Accrued
Benefit segregated in accordance with the above to the Member or Beneficiary(ies) who
are otherwise entitled to such benefit.

If, 18 months after issuance of the order, a determination is made that the order is
a QDRO, the determination shall be applied prospectively only.

	 	C.	 	Furthermore, any amount that becomes payable to an alternate payee that, with
reference only to that amount, does not exceed $5,000, shall be paid to the alternate
payee as soon as practicable following receipt by the Plan of a qualified domestic
relations order.

	17.3	 	No Guarantee of Employment. Nothing contained in this Plan or the Trust shall be held or
construed to create any liability upon the Employer to retain any Employee in its employ. The
Employer reserves the right to discontinue the services of any Employee without any liability
except for salary or wages that may be due and unpaid whenever, in its judgment, its best
interests so require.

	17.4	 	Uniformed Services Employment and Reemployment Rights Act of 1994. Notwithstanding any
provisions of this Plan to the contrary, contributions, benefits, and service credit with
respect to qualified military service will be provided in accordance with Code section 414(u).

	17.5	 	Controlling Law. The Plan shall be construed, administered and governed in all respects in
accordance with the laws of the State of Delaware to the extent such laws are not superseded
by federal law. If any provision herein is held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions hereof shall continue to be fully
effective.

 

51

 

SECTION 18

MINIMUM DISTRIBUTION REQUIREMENTS

	18.1	 	Required Minimum Distributions.

	 	A.	 	Required Beginning Date. Notwithstanding any other provisions of the Plan to
the contrary, payment of the Plan benefits of any Member who reaches an attained age of
70-1/2, and who is not a 5% owner of the Employer (within the meaning of Code
section 416), shall commence not later than the April 1 following the later of the
calendar year in which he reaches an attained age of 70-1/2 or the calendar year in
which his Employer employment terminates. If the Member is a 5% owner of the Employer
(within the meaning of Code section 416), payment of his Plan benefits shall commence
not later than the April 1 following the calendar year in which he reaches an attained
age of 70-1/2, regardless of whether his Employer employment has terminated. These
rules establish the “Required Beginning Date” that applies to a Member.

	 	B.	 	Time and Manner of Distributions.

	 	(1)	 	Commencement. The Member’s entire interest will be distributed,
or begin to be distributed, to the Member no later than the Member’s Required
Beginning Date.

	 	(2)	 	Death of Member Before Distributions Begin. If the Member dies
before distributions begin, the Member’s entire interest will be distributed no
later than December 31 of the calendar year containing the fifth anniversary of
the Member’s death. If the Member’s surviving Spouse is the Member’s sole
Designated Beneficiary and the surviving Spouse dies after the Member but before
distributions to either the Member or the surviving Spouse begin, this election
will apply as if the surviving Spouse were the Member.

	 	C.	 	Forms of Distribution. Unless the Member’s interest is distributed in the form
of an annuity purchased from an insurance company (if available under the Plan) or in a
single sum on or before the Required Beginning Date, as of the first Distribution
Calendar Year distributions shall be made in accordance with Sections 18.1.D and
18.1.E. If the Member’s interest is distributed in the form of an annuity purchased
from an insurance company, distributions thereunder will be made in accordance with the
requirements of Code section 401(a)(9) and Treasury Regulations issued thereunder.

	 	D.	 	Required Minimum Distributions During Member’s Lifetime.

	 	(1)	 	Amount of Required Minimum Distribution for Each Distribution
Calendar Year. During the Member’s lifetime, the minimum amount that will be
distributed for each Distribution Calendar Year is the lesser of:

	 	(a)	 	the quotient obtained by dividing the Member’s
distributable Plan account by the distribution period in the Uniform
Lifetime Table set forth in Treasury Regulations section 1.401(a)(9)-9,
using the Member’s attained age as of the Member’s birthday in the
Distribution Calendar Year; or

 

52

 

	 	(b)	 	if the Member’s sole Designated Beneficiary for
the Distribution Calendar Year is the Member’s Spouse, the quotient
obtained by dividing the Member’s distributable Plan account by the
number in the Joint and Last Survivor Table set forth in Treasury
Regulations section 1.401(a)(9)-9, using the Member’s and Spouse’s
attained ages as of the Member’s and Spouse’s birthdays in the
Distribution Calendar Year.

	 	(2)	 	Lifetime Required Minimum Distributions Continue Through Year of
Member’s Death. Required Minimum Distributions will be determined under this
Section 18.1.D(2) beginning with the first Distribution Calendar Year and up to
and including the Distribution Calendar Year that includes the Member’s date of
death.

	 	E.	 	Required Minimum Distributions After Member’s Death.

	 	(1)	 	Death On or After Date Distributions Begin.

	 	(a)	 	Member Survived by Designated Beneficiary. If
the Member dies on or after the date distributions begin and there is a
Designated Beneficiary, the minimum amount that will be distributed for
each Distribution Calendar Year after the year of the Member’s death is
the quotient obtained by dividing the Member’s distributable Plan
account by the longer of the remaining Life Expectancy of the Member or
the remaining Life Expectancy of the Member’s Designated Beneficiary,
determined as follows:

	 	(I)	 	The Member’s remaining Life
Expectancy is calculated using the attained age of the Member in
the year of death, reduced by one for each subsequent year.

	 	(II)	 	If the Member’s surviving Spouse is
the Member’s sole Designated Beneficiary, the remaining Life
Expectancy of the surviving Spouse is calculated for each
Distribution Calendar Year after the year of the Member’s death
using the surviving Spouse’s attained age as of the Spouse’s
birthday in that year. For Distribution Calendar Years after the
year of the surviving Spouse’s death, the remaining Life
Expectancy of the surviving Spouse is calculated using the
attained age of the surviving Spouse as of the Spouse’s birthday
in the calendar year of the Spouse’s death, reduced by one for
each
subsequent calendar year.

	 	(III)	 	If the Member’s surviving Spouse
is not the Member’s sole Designated Beneficiary, the Designated
Beneficiary’s remaining Life Expectancy is calculated using the
attained age of the Beneficiary in the year following the year of
the Member’s death, reduced by one for each subsequent year.

 

53

 

	 	(b)	 	No Designated Beneficiary. If the Member dies on
or after the date distributions begin and there is no Designated
Beneficiary as of September 30 of the year after the year of the
Member’s death, the minimum amount that will be distributed for each
Distribution Calendar Year after the year of the Member’s death is the
quotient obtained by dividing the Member’s distributable Plan account by
the Member’s remaining Life Expectancy calculated using the age of the
Member in the year of death, reduced by one for each subsequent year.

	 	(2)	 	Death Before Date Distributions Begin.

	 	(a)	 	Member Survived by Designated Beneficiary. If
the Member dies before the date distributions begin and there is a
Designated Beneficiary, the minimum amount that will be distributed for
each Distribution Calendar Year after the year of the Member’s death is
the quotient obtained by dividing the Member’s distributable Plan
account by the remaining Life Expectancy of the Member’s Designated
Beneficiary, determined as provided in Section 18.1.D.

	 	(b)	 	No Designated Beneficiary. If the Member dies
before the date distributions begin and there is no Designated
Beneficiary as of September 30 of the year following the year of the
Member’s death, distribution of the Member’s entire interest will be
completed by December 31 of the calendar year containing the fifth
anniversary of the Member’s death.

	 	(c)	 	Death of surviving Spouse Before Distributions to
surviving Spouse Are Required to Begin. If the Member dies before the
date distributions begin, the Member’s surviving Spouse is the Member’s
sole Designated Beneficiary, and the surviving Spouse dies before
distributions are required to begin to the surviving Spouse, this
Section 18.1.E(2)(c) will apply as if the surviving Spouse were the
Member.

	18.2	 	Definitions.

	 	A.	 	Designated Beneficiary means the individual who is designated as the
Beneficiary under Section 9.1 of the Plan and is the designated Beneficiary under Code
section 401(a)(9) and Treasury Regulations section 1.401(a)(9)-4, Q&A-1.

	 	B.	 	Distribution Calendar Year means a calendar year for which a minimum
distribution is required. For distributions beginning before the Member’s death, the
first Distribution Calendar Year is the calendar year immediately preceding the
calendar year that contains the Member’s Required Beginning Date. For distributions
beginning after the Member’s death, the first Distribution Calendar Year is the
calendar year in which distributions are required to begin under Section 18.1.D(2).
The Required Minimum Distribution for the Member’s first Distribution Calendar Year
will be made on or before the Member’s Required Beginning Date. The required minimum
distribution for other Distribution Calendar Years, including the required minimum
distribution for the Distribution Calendar Year in which the Member’s Required
Beginning Date occurs, will be made on or before December 31 of that Distribution
Calendar Year.

	 	C.	 	Life Expectancy means life expectancy as computed by use of the Single Life
Table in Treasury Regulations section 1.401(a)(9)-9.

 

54

 

IN WITNESS WHEREOF, Penske Automotive Group, Inc. has caused this Plan to be executed and its
corporate seal affixed this 3rd day of March, 2009.

	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	PENSKE AUTOMOTIVE GROUP, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Maggie Feher
 

Assistant Secretary

	 	 
	 	By:
	 	/s/ Calvin Sharp
 

Executive Vice President — Human Resources
	 	 
	 
	 	 	 	 	 	 	 	 
	[Corporate Seal]
	 	 	 	 	 	 	 	 

 

55

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