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EXHIBIT 10.2
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
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CENTRAL FINANCIAL ACCEPTANCE CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP)
1. PURPOSE: The purpose of this Plan is to provide key executives with an
incentive to become or remain long-term employees of the Company. This
Plan is intended to be a "top-hat" plan within the meaning of Sections
201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of the Employee Retirement
Income Security Act of 1974, as amended.
2. DEFINITIONS: As used in this Plan, the following terms shall have the
meanings set forth below, unless the context require otherwise:
(a) "ACCRUED BENEFIT" shall mean a Participant's Target Benefit Level
adjusted by: (I) multiplying it by a fraction not to exceed one,
the numerator of which is the Participant's active Years of
Service and the denominator of which is the Years of Service the
Participant would have had at his Normal Retirement Date if he
continued in employment with the Company until such date; and,
(ii) reducing it by the annuity value (as determined by an
actuary who is elected by the Board of Directors) of the
Participant's Profit Sharing Plan Account.
(b) "ACTUARIAL EQUIVALENT" shall mean equality in value of the
aggregate sums expected to be received under the form of payment
under the Plan, or equality in value of the same form of payment
under the Plan if payments begin as of a different date, or both,
determined in each case by actuarial assumptions determined by an
actuary who is selected by the Board of Directors.
(c) "AFFILIATE" shall mean (i) the Company; (ii) any corporation of
which the Company or any other Affiliate owns more than 50% of
the outstanding shares; or, (iii) any corporation which owns more
than 50% of the outstanding shares of the Company or any other
Affiliate.
(d) "ADJUSTMENT OF NORMAL RETIREMENT BENEFITS" shall mean the amount
of Normal Retirement Benefits of a Participant defined under
Section (5) shall, subsequent to the commencement of payment
thereof, be increased as of January 1, of each calendar year
beginning January 1, 1997 by an amount equal to the change in the
cost of living index, as previously determined by the Board of
Directors, but in no event can exceed 6%.
(e) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.
(f) "COMPANY" shall mean Central Financial Acceptance Corporation, a
Delaware corporation, and any successor thereto.
(g) "COMPENSATION" shall mean the Participant's fixed salary or base
pay which is to the Participant in consideration for his personal
services actually rendered to the Company, including any amount
contributed by the Company pursuant to a salary reduction
agreement which is not includible in the gross income of the
Participant under Section 125 or 402(e)(3) of the Internal
Revenue Code of 1986, as
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amended, and any bonuses accrued or paid by the Company with
respect to such Participant.
(h) "EFFECTIVE DATE" shall mean June 24, 1996.
(i) "EMPLOYEE" shall mean any key employee on the payroll of the
Company whose wages are subject to withholding for Federal income
tax purposes.
(j) "FINAL AVERAGE COMPENSATION" shall mean the average monthly
Compensation earned by a Participant during those 36 consecutive
calendar months out of the last 60 calendar months preceding the
Participant's termination of employment with the Company which
produces the highest monthly average.
(k) "NORMAL RETIREMENT DATE" shall mean the first day of the month
following the date the Participant attains his 60th birthday.
(l) "PARTICIPANT" shall mean each Employee who is eligible to
participate in the Plan in accordance with the provisions of
Section 3.
(m) "PLAN" shall mean the Central Financial Acceptance Corporation
Supplemental Executive Retirement Plan (SERP), as embodied herein
and as amended from time to time.
(n) "POST-EFFECTIVE DATE YEAR OF SERVICE" shall mean each Year of
Service completed after the Effective Date.
(o) "PROFIT SHARING PLAN ACCOUNT" shall mean a Participant's Company
contribution account, including earnings thereon, under the
Banner's, a California corporation, dba Central Electric Profit
Sharing Plan and any successor plan thereto.
(p) "SURVIVING SPOUSE" shall mean the person determined in accordance
with Section 8.
(q) "TARGET BENEFIT LEVEL" shall mean a monthly benefit beginning at
the Participant's Normal Retirement Date, equal to a percentage
designated by the Board of Directors of a Participant's final
Average Compensation, but in no event more than 60% of the
Participant's Final Average Compensation.
(r) "YEAR OF SERVICE" shall mean each twelve consecutive month period
or fraction thereof (to the nearest whole month) beginning with
the date the Participant is hired by the Company or its
Affiliates (whether competed before or after the Effective Date
and before or after the Employee becomes a Participant in this
Plan).
3. ELIGIBILITY: The Board of Directors shall designate, from time to time,
the Employees who are eligible to participate in the Plan. An Employee
shall cease to be a Participant in the Plan upon his termination of
employment.
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4. BENEFIT AGREEMENT: Upon his designation, each Participant shall enter
into a written agreement (the "Agreement") with the Company, which shall
be executed for the Company by the Chairman of the Board of Directors or
the President, and which shall include the Target Benefit Level and such
other terms as the Board of Directors my amend the Agreement to provide
for an increase or decrease of the Target Benefit Level for an eligible
Employee; provided that any decrease shall apply only to Years of
Service after the date of such decrease.
5. NORMAL RETIREMENT BENEFIT: If a Participant terminates his employment
with the Company on or after his Normal Retirement Date and after having
completed at least ten Years of Service (at least five of which are
Post-Effective Date Years of Service), he shall be entitled to receive a
benefit in a monthly amount equal to his Accrued Benefit, or the
Actuarial Equivalent of such Accrued Benefit if the Participant's
termination of employment occurs after his Normal Retirement Date or the
first day of the month following the Participant's termination of
employment.
6. DEATH BENEFITS: In the event a Participant dies after completing at
least ten Years of Service (at least five of which are Post-effective
Date Years of Service), while either an Employee or after having retired
under Section 5 or having terminated employment under Section 7, but
before having received any payment of his Accrued Benefit and he is
survived by a Surviving Spouse, the Company shall pay a death benefit to
his Surviving Souse, in an amount equal to the Actuarial Equivalent of
the Participant's accrued Benefit as of the date of his death determined
on the basis of his Final Average Compensation and Years of Service as
of such date. Such amount shall be paid monthly for the life of the
Participant's Surviving Souse, commencing as of the first day of the
month following the Participant's death.
7. TERMINATION OF EMPLOYMENT: If a Participant's employment with the
company and its Affiliates is involuntarily terminated (other than by
reason of death) prior to his Normal Retirement Date, he will receive a
benefit under the Plan, provided he completed at least ten years of
Service (at least five of which are Post-effective Date Years of
Service). The benefit payable pursuant to this Section 7 shall be a
monthly amount equal to the Participant's Accrued Benefit determined on
the basis of his Final Average Compensation and Years of Service as of
the date of his termination of employment and shall be paid monthly in
the form of a straight life annuity for the Participant's life,
commencing on the Participant's Normal Retirement Date. Notwithstanding
the preceding, a Participant shall not be entitled to any benefits under
the Plan if his employment with the Company and its Affiliates is
terminated for "cause". For purposes of this Plan, a Participant shall
be terminated for "cause" if his employment is terminated because the
Participant is convicted of (i) fraud, misappropriation of funds or
property of the Company or its Affiliates for his own use; or, (ii)
embezzlement of the property of the Company or its Affiliates or a
material and intentional breach by the Participant of the provisions of
his employment.
8. SURVIVING SPOUSE: Any amount payable pursuant to this Plan upon the
death of a Participant shall be payable to the spouse, if any, to whom
the Participant was married at the time of his death.
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9. FUNDING: Benefits under this Plan shall be unfunded, shall be payable
out of the general assets of the Company, and no special or separate
fund shall be established to assure payment of such amounts. No
Participant or Surviving Souse shall have any rights under the terms of
the Plan or a Benefit Agreement greater than the rights of an unsecured
general creditor of the Company.
10. OTHER RETIREMENT BENEFITS: The benefits and payments provided under this
Plan are independent of any and all retirement benefits provided to the
participant from any other source, except that in determining the amount
of the Participant's Accrued Benefit pursuant to Section 2(a), the value
of the Participant's Profit Sharing Plan Account shall be taken into
account as provided in Section 2(a).
11. INCAPACITY: In the event that the Board of Directors determines that the
Participant or his Surviving Spouse is unable to care for his affairs
due to any physical or mental condition, any payment due the Participant
or Surviving Spouse under this Plan may be made to his duly appointed
legal representative. The Board of Directors may, in its discretion,
make such payment to a child, parent or spouse of such Participant or
Surviving Spouse or to any other person with whom he resides or who is
charged with his care. Any such payment so made shall be in complete
discharge of the liability of the Company under this Plan to each every
person with respect to the amount so paid.
12. ASSIGNMENT: The interest in this Plan of a Participant or Surviving
Spouse shall not be subject to assignment or transfer or otherwise be
alienable either by voluntary or involuntary acts of such person, or by
operation of law, nor shall it be subject to attachment, execution,
garnishment, sequestration or other seizure under any legal, equitable
or other process. If any Participant or Surviving Spouse shall attempt
to or shall alienate, sell, transfer, pledge or otherwise encumber any
amount to which he is or might become entitled, or if by reason of the
bankruptcy or insolvency of any such person or the issuance of any
garnishment, writ of execution or other court process, or other event
happening at any time, any amount otherwise payable hereunder to such
person should devolve upon anyone other than him or would not be enjoyed
by him, the Board of Directors, in its absolute discretion, may
terminate such interest and may hold or apply it to or for the benefit
of such Participant, or Surviving Spouse, as the case may be, or the
spouse, children or other dependents of such person, in such manner as
the Board of Directors may deem proper.
13. NO EMPLOYMENT CONTRACT: This Plan shall not be construed as creating any
contract of employment between the Company and the Participant nor shall
it change any rights or obligations under any existing employment
contract between the Company and the Participant nor shall it change any
rights or obligations under any existing employment contract between the
Company and the Participant. The Company shall have the same right with
respect to, and control over, its Employees as though this Plan had
never been executed. Without limitation of the foregoing, any provision
of an employment agreement with Gary M. Cypres that relates to any
provision of this Plan shall be deemed to have precedence and amend any
such provision of this Plan.
14. COVENANT NOT TO COMPETE: If a Participant shall, during the 12 month
period immediately following his voluntary termination of employment
with the Company, engage in "Competition" with the Company (as
hereinafter defined), within the territories
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in which the Company is actively engaged in the conduct of business
during the term of employment hereunder including, without limitation,
the territories in which customers are then being solicited, his benefit
payments shall be suspended, and he shall be required to return the
amount of any previous benefits paid to him under this Plan plus any
interest thereon, as liquidated damages, or if no such payments have
been made, his benefit under the Plan shall be forfeited.
(a) The word "Competition" for purposes of this Section 14 or any
other provision of this Plan shall mean:
(i) Engaging in or carrying on, directly or indirectly, either
for himself or as a member of a partnership or as a stockholder,
investor, lender, officer or director of a corporation (other
than the Company), or as an employee or agent of, or consultant
or advisor to, any person, partnership, corporation, joint
venture or enterprise (other than the Company), or in any
capacity on behalf of any trust or other organization or entity,
any business in competition with (as defined below) any business
then carried on by the Company as long as any like business is
carried on by the Company or by any person, corporation,
partnership, trust or other organization or entity deriving title
to the good will of such business, directly or indirectly, from
the Company; provided, however, that nothing herein contained
shall prevent the Participant from purchasing securities of any
publicly owned company, the securities of which are listed on
national securities exchange or registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, (the "1934 Act")
but the total holding of such security so listed or registered
shall be limited to 10% of the amount of any such security
outstanding. The Participant may make investments, without
restriction on amount, in non-competitive private businesses. For
the purpose of this Section 14(b)(i) the term "any business in
competition with" shall mean any business engaged principally or
in part in the business of the Company as described in its
Registration Statement on Form S-1 (Registration No. 333-3790)
relating to the registration of shares of common stock of the
Company (the "Registration Statement") and in any other filing
made after the Effective Date by the Company with the Securities
and Exchange Commission pursuant to the Securities Act of 1933,
as amended, or the 1934 Act ("Subsequent Filings"); or
(ii) soliciting, raiding, enticing, inducing or attempting to
persuade any person that presently is or is at any time during
the term of the Participant's employment as an Employee (or, in
the case of termination, is at the time of termination or within
the 24-month period thereafter) an employee of the Company to
become employed by any person, firm, partnership, corporation or
other enterprise or entity, and the Participant shall not
approach any such employee for such purposes or authorize the
taking of such actions by any other person, firm, partnership,
corporation or other enterprise or entity in taking such action;
or
(iii) divulging, furnishing or making accessible to any person,
corporation, partnership, trust or other organization or entity,
any information, trade secrets, technical data or know-how
relating to the business, business practices, methods,
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attorney-client communications, pending or contemplated
acquisitions or other transactions, products, processes,
equipment or any confidential or secret aspect of the business of
the Company without the prior written consent of the Company,
unless such information shall have become public knowledge or
shall have become known generally to competitor of the Company
through sources other than the Participant.
15. AMENDMENT AND TERMINATION: The Company may amend, terminate or suspend
this Plan at any time or from time to time by a resolution by the Board
of Directors; provided, however, that no amendment or termination of the
plan shall reduce the Accrued Benefit to which any Participant or
Surviving Spouse is entitled under this Plan by reason of the
Participant's prior Years of Service or the Participant's death, or
other termination of employment.
16. ADMINISTRATION: This Plan shall be administered by the Board of
Directors. The Board of Directors shall be charged with the operation
and administration of the Plan. The Board of Directors shall have
discretionary authority to interpret and construe this Plan and to
determine all questions arising under this Plan, and to adopt and amend
from time to time such by-laws and rules and regulations necessary for
the administration of this plan which are not inconsistent with the
terms and provisions of this Plan.
17. BINDING EFFECT: This Plan shall inure to the benefit of and be binding
upon the Company, its successors and assigns, including without
limitation any corporation which may acquire all its assets or into
which the Company may be consolidated or merged, and any Participant,
his heirs, executors, administrators and legal representatives, provided
that the obligations of the Participant hereunder may not be delegated.
18. GOVERNING LAW: This Plan shall be governed by and construed in
accordance with the laws of the State of California governing contracts
to be made and performed therein without giving effect to principles of
conflicts of law, except to the extent such laws have been superseded by
Federal law.
19. GENDER AND NUMBER: The masculine pronoun whenever used herein shall
include the feminine pronoun and the singular number shall include the
plural number and vice versa unless the context of the Plan requires
otherwise.