Supplemental Executive Retirement Plan

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


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
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