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EXHIBIT 10.26
FIRST AMENDMENT TO THE
AUTOMOTIVE FINANCE CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
WHEREAS, Automotive Finance Corporation, Indianapolis, Indiana (the
"Company") has adopted the Automotive Finance Corporation Supplemental Executive
Retirement Plan (the "Plan") for the benefit of a select group of employees; and
WHEREAS, the Company has authorized and directed certain amendments to the
Plan: (i) to redefine the Plan's eligibility provisions and to provide, in the
event that Employer ceases to be an affiliate of ALLETE, Inc., for the transfer
to the Plan of the account balances under the ALLETE Supplemental Executive
Retirement Plan ("SERP") of those Employees who are participants of the SERP;
(ii) to increase the Employer contribution under the Plan to recompense Plan
Participants for benefits lost due to the imposition of the Internal Revenue
Code Section 401 (a) (17) compensation limit under the Automotive Finance
Corporation Employees' 401(k) Plan; and (iii) to amend Article VII with respect
to subsequent amendments and termination of the Plan, and
WHEREAS, pursuant to Section 7.1 of the Plan the Company has reserved the
right to amend the Plan;
NOW, THEREFORE, pursuant to Section 7.1 of the Plan, the Company, by its
President hereby amends the Plan, effective as of the dates specified herein, in
the following particulars:
1. Any capitalized term not expressly defined herein shall have the meaning
as defined in the Plan.
2. Article II is amended in its entirety, effective December 5, 2003, to
read as follows:
"ARTICLE II
ELIGIBILITY AND PARTICIAPATION
2.1 INITIAL ELIGIBILITY. An Eligible Employee will become a Participant in
the Plan as of the date specified by the Chairman of the Company's Board. For
purposes of this plan, an Eligible Employee is any Employee of the Company or
any of its Subsidiaries who (i) is classified as a Vice-President or above,
and (ii) has been approved for participation in the Plan by the Chairman of
the Company's Board.
2.2 CHANGE IN ELIGIBILITY. A Participant may be removed as an active
Participant by the Chairman of the Company's Board effective as of any date.
Upon such removal, the Participant shall become an inactive Participant. As an
inactive Participant, he or she will not be entitled to make any further
Participant Deferral Contributions to the Plan, nor shall he or she be
entitled to receive any further Employer contributions to the Plan on his or
her behalf. Both the Deferral Account and the Employer Contributions Account
of an inactive
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Participant shall, however, continue to be credited with the investment
earnings of the Trust which are attributable to such accounts as provided in
Section 3.4 The Administrator will maintain such accounts of an inactive
Participant until the occurrence of an event which entitles such Participant
to receive a distribution of such accounts under Section 5.1, at which time
such accounts will be distributed as provided in Article V.
2.3 TRANSFERS FROM SERP. The provisions of this section shall govern the
transfer from the SERP to the Plan of the benefits accrued by Employees who
are eligible participants under the ALLETE SERP.
(a) The provisions of this section shall be applicable only to the
extent that the Plan Administrator has determined, to its
satisfaction, that the SERP has been amended to provide for such
transfers.
(b) In the case of any Employee who is an eligible participant under
both the SERP and the Plan at the time of such transfer, the
amount transferred from the SERP shall be credited by the Plan
Administrator as soon as administratively feasible to such
Employee's Deferred Account or Employer Contribution Account, or
both, as applicable, under the Plan. Thereafter such amounts
shall be invested, re-invested, credited with investment gains
and losses and distributed in accordance with, and shall
otherwise be subject to, the applicable provisions of this Plan,
including any amendments thereto adopted subsequent to such
transfer.
(c) In the case of any Employee who is an eligible participant under
the SERP, but who is not an eligible Participant under the Plan,
at the time of such transfer, the amount transferred from the
SERP shall be credited by the Plan Administrator as soon as
administratively feasible to a Deferral Account which the
Administrator shall establish on behalf of such Employee under
the Plan for the sole purpose of effecting such transfer.
Thereafter such Deferral Account shall be treated as an inactive
Participant account as set forth in, and as limited by, the
provisions of Section 2.2. Thereafter such amounts shall also be
invested, re-invested, credited with investment gains and losses
and distributed in accordance with, and shall otherwise be
subject to, the applicable provisions of the Plan, including any
amendments thereto adopted subsequent to such transfer.
(d) No transfer described in (b) or (c) above may be accepted by the
Plan Administrator until after that portion of the 2003 bonus
which the SERP participant has elected to defer into the SERP has
been credited to his or her deferral account under the SERP.
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(e) In the case of any transfer described in (b) or (c) above, to the
extent that the amount to be transferred from the SERP consists
of mutual fund investments, the administrator of the SERP shall
sell such investments and wire transfer the liquidation proceeds
to the Plan Administrator. Upon receipt of same the Plan
Administrator shall deposit, as soon as administratively
feasible, such funds, in cash into the Plan Trust.
(f) In the case of any transfer described in (b) or (c) above, to the
extent that the amount transferred from the SERP consists of the
balance in the Employee's Company Fixed Fund under the SERP, the
Company shall contribute such balance, including interest
calculated to the date of withdrawal from the SERP at the rate
set forth therein, as soon as administratively feasible in cash
into the Trust.
(g) For purposes of the allocation and subsequent investment of the
contributions described in (e) and (f) above, the Plan
Administrator shall provide the Trustee of the Trust a per
Employee allocation of such contributions. In addition, the Plan
Administrator shall obtain from each such Employee a directed
investment election form, and forward a copy of same to such
Trustee, pursuant to which such contributions shall thereafter be
invested and reinvested by such Trustee at the direction of the
Employee, including all subsequent changes in such investment
direction by the Employee."
3. Section 3.3 is amended in its entirety, effective December 5, 2003, to
read as follows:
"3.3 EMPLOYER CONTRIBUTIONS. For the Plan Year commence on the
Effective Date, an Employer shall make a contribution for each Participant
in its employ on the first day of such Plan Year in an amount equal to
eight percent (8%) of the Participant's Base Salary for such year. For each
Plan Year commencing after the Effective Date, an Employer shall make a
contribution for each Participant in its employ on the first day of the
applicable Plan Year in an amount equal to the sum of five percent (5%) of
the Participant's Base Salary up to the Code Section 401(a)(17)
compensation limit currently in effect for the applicable Plan Year, plus
nine percent (9%) of the Participant's Base Salary in excess of the Code
Section 401(a)(17) compensation limit currently in effect for the
applicable Plan Year; provided, however, commencing with the calendar month
next following the calendar month in which a Participant completes one
hundred and twenty (120) months of combined participation in this Plan and
the predecessor to this Plan (the Insured Security Option Plan, or ISOP,
maintained by the Company between March 6, 1998 and March 5, 2001), the
foregoing five percent (5%) of the Participant's Base Salary up to the Code
Section 401(a)(17) compensation limit currently in effect for the
applicable Plan Year shall be increased to eight percent (8%) and the
foregoing nine percent (9%) of the Participant's Base Salary in excess of
the Code Section 401(a)(17) compensation limit currently in effect for the
applicable Plan Year shall be increased to
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twelve percent (12%) but such increase shall be applied prospectively only.
For example, if a Participant completes 120 months of combined
participation on June 30, 2008, then the employer contribution under this
subsection for the 2008 Plan Year shall be equal to the sum of 5% of his
Base Salary up to the Code Section 401(a)(17) compensation limit currently
in effect for 2008, plus 9% of the Participant's Base Salary in excess of
the Code Section 401(a)(17) compensation limit currently in effect for 2008
from January 1, 2008 to June 30, 2008, and 8% of his Base Salary up to the
Code Section 401(a)(17) compensation limit currently in effect for 2008,
plus 12% of the Participant's Base Salary in excess of the Code Section
401(a)(17) compensation limit currently in effect for 2008 from July 1,
2008 to December 31, 2008."
4. Section 7.1 is amended in its entirety, effective December 31, 2003,
to read as follows:
"ARTICLE VII
AMENDMENT AND TERMINATION OF THE PLAN
7.1 AMENDMENT OF THE PLAN. The Company may, at any time upon prior
Board approval, modify, alter or amend the Plan in whole or in part;
provided, however, no amendment, termination, or other change in the Plan
shall reduce the amount allocated to the account of a participant on the
date of such amendment, termination or other change, which account balance
shall be payable to such participant or such participant's beneficiary as
provided herein.
7.2 TERMINATION OF THE PLAN. The Company may, at any time upon prior
Board approval, terminate the Plan or to reduce or cease benefit accruals
at any time."
The Plan shall remain the same in all other respects.
IN WITNESS WHEREOF, the President of the Company has caused this amendment
to be executed this __________ day of December, 2003, but effective as of the
dates stated herein.
AUTOMOTIVE FINANCE CORPORATION
By: /s/ Bradley A. Todd
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Bradley A. Todd, President
ATTEST:
/s/ Joel G. Garcia
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Joel G. Garcia, Secretary