Exhibit 7
INCENTIVE/STAY BONUS AGREEMENT
THIS INCENTIVE/STAY BONUS AGREEMENT ("Agreement"), is made and
entered into as of the 14th day of May, 1999, by and between First Commonwealth,
Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxxx, an
individual resident of the State of Illinois ("Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has approved an
engagement letter with Xxxxxxx Xxxxx & Company pursuant to which such firm has
been engaged to render certain financial advisory and investment banking
services to the Company in connection with a possible business combination of
the Company with another party (a "Possible Transaction");
WHEREAS, the Board of Directors of the Company has also approved an
incentive/stay bonus payment to Executive with the purpose of seeking to
maximize the value of any Possible Transaction and to incent Executive to remain
employed through a 120-day transition period following a Change in Control;
WHEREAS, all capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Amended and Restated Employment
Agreement dated February 12, 1999 between
the Company and Executive (the "Employment Agreement").
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained in this Agreement, the parties agree as follows:
Section 1. Bonus. In the event of a Change in Control, the Company shall
pay to Executive according to the schedule on the attachment hereto (the
"Bonus"). The Bonus shall be paid by the Company to Executive in cash in the
amounts and at the times specified below:
a. 50% of the Bonus shall be paid in cash upon the Change in Control.
b. 50% of the Bonus (the "Deferred Bonus") shall be paid as follows:
i. if the Executive is employed by the Company on the date which
is 120 days after the Change in Control, the Deferred Bonus
shall be paid in cash on such date.
ii. if the Executive ceases to be employed by the Company for any
reason (including death or disability) prior to 120 days after
the Change in Control under circumstances pursuant to which
the
Executive (or any of his beneficiaries) is entitled to a
payment of severance benefits under Section 3.1(b) of the
Employment Agreement, the Deferred Bonus shall be paid in cash
upon such event.
iii. if the Executive terminates employment with the Company prior
to 120 days after the Change in Control under circumstances
pursuant to which the Executive is not entitled to a severance
payment under Section 3.1(b) of the Employment Agreement, no
Deferred Bonus shall be payable by the Company to the
Executive.
Section 2. Headings. The Section, paragraph and subparagraph headings are
for convenience of reference only and shall not define or limit the provisions
hereof.
Section 3. Successors; Binding Agreement.
a. This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the
surviving or resulting corporation or as a result of any transfer of
all or substantially all of the assets of the Company. In the event
of any such merger, consolidation or transfer of assets, the
provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which
such assets are transferred.
b. The Company agrees that concurrently with any merger, consolidation
or transfer of assets referred to in paragraph (a) of this Section
3, it will cause any successor or transferee unconditionally to
assume, by written instrument delivered to Executive (or his
beneficiary or estate), all of the obligations of the Company
hereunder. Failure of the Company to obtain such assumption prior to
the effectiveness of any such merger, consolidation or transfer of
assets shall not reduce the obligations of the Company or its
successor hereunder.
c. This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If Executive shall die while any amounts would be payable
to Executive hereunder had Executive continued to live, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to such person or
persons appointed in writing by Executive to receive such amounts
or, if no person is so appointed, to Executive's estate.
Section 4. Notices.
a. For purposes of this Agreement, all notices and other communications
required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or five days after
deposit in the United States mail, certified and return receipt
requested, postage prepaid, addressed (i) if to Executive, to Xxxxx
X. Xxxxxxxx, and if to the Company, to First Commonwealth, Inc.,
Suite 600, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
attention: Chairman of the Board of Directors, with a copy to the
Secretary, or (ii) to such other address as either party may have
furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon
receipt.
Section 5. Full Settlement; Resolution of Disputes; Expenses.
a. The Company's obligation to make any payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or
other claim, right or action which the Company may have against
Executive or others.
b. If there shall be any dispute between the Company and Executive
regarding any payments to be made hereunder during the term hereof
or in the event of any termination of Executive's employment, then,
unless and until there is a final, nonappealable judgment by a court
of competent jurisdiction declaring that the Company is not
obligated to pay any amount or provide any benefit to Executive and
his dependents or other beneficiaries, as the case may be, under
this Agreement, the Company shall pay all amounts to Executive or
beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to this Agreement as if no
dispute with respect to such payments existed; provided, however,
that the Company shall not be required to pay any disputed amounts
pursuant to this paragraph except upon receipt of an undertaking by
or on behalf of Executive to repay all such amounts to which
Executive is ultimately adjudged by such court not to be entitled.
Section 6. Governing Law; Validity. The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Illinois without regard to
conflicts of laws principle. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which other provisions
shall remain in full force and effect.
Section 7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
Section 8. Miscellaneous. No provision of this Agreement may be modified
or waived unless such modification or waiver is agreed to in writing and signed
by Executive and by a duly authorized officer of the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by Executive
or the Company to insist upon strict compliance with any provision of this
Agreement or to assert any right Executive or the Company may have hereunder
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement. The rights of, and amounts payable to,
Executive, his estate or his beneficiaries pursuant to this Agreement are in
addition to any rights of, or amounts payable to, Executive, his estate or his
beneficiaries under any other agreement, employee benefit plan or compensation
program of the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the date and year first above written.
FIRST COMMONWEALTH, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Chairman
/s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
