Document:

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                                                                  Exhibit 10-22

                          COBRA ELECTRONICS CORPORATION

              2002 DEFERRED COMPENSATION PLAN FOR SELECT EXECUTIVES

            1.    TITLE AND PURPOSE. The arrangement set forth by the terms of
this document, as the same shall be amended from time to time, shall be called
"Cobra Electronics Corporation 2002 Deferred Compensation Plan for Select
Executives." Such arrangement (the "Plan") is established by Cobra Electronics
Corporation to provide deferred compensation for the select group of management
and highly compensated employees of Cobra Electronics Corporation identified as
Participants on Exhibit A hereto. The Plan shall not be a funded plan, and Cobra
Electronics Corporation shall be under no obligation to set aside any funds for
the purpose of making payments under the Plan. Any payments hereunder shall be
made out of the general assets of Cobra Electronics Corporation.

            2.    DEFINITIONS. As used herein the following words and phrases
shall have the following respective meanings when capitalized:

            (a)   Annual Compensation. The amount of salary received from the
          Company by the Participant during the calendar year during which the
          Participant terminates employment with the Company; provided, however,
          that if the Participant terminates employment on a day other than a
          December 31, the Participant's salary for the calendar year in which
          he terminates employment with the Company shall be determined as if
          the Participant had remained employed by the Company through December
          31 of such calendar year and the Participant's annual salary remained
          the same as of the date of the Participant's termination of
          employment.

            (b)   Cause. Embezzlement, misappropriation, theft or other criminal
          conduct, of which the Participant is convicted, related to the
          property and assets of the Company or willful refusal to perform or
          substantial disregard of the Participant's duties as assigned to the
          Participant by the Company's chief executive officer or board of
          directors, unless the Participant commences immediate corrective
          actions within 15 days after notice by the Company's chief executive
          officer or the chairman of the board of directors of the Company's
          objection to the Participant's refusal to perform or disregard of the
          Participant's duties.

            (c)   Change of Control. (1) Any person, including a group within
          the meaning of Section 13(d)(3) of the Securities Exchange Act of
          1934, as amended, acquires the beneficial ownership of, and the right
          to vote, shares having at least 50% of the aggregate voting power of
          the class or classes of capital stock of the Company having the
          ordinary and sufficient voting power (not depending upon the happening
          of a contingency) to elect at least a majority of the directors of the
          board of directors of the Company (the "Outstanding Voting
          Securities"); (2) as the result of any tender or exchange offer,
          substantial purchase of the equity securities, merger, consolidation,
          sale of assets or contested election, or any combination of the
          foregoing transactions, the persons who

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         were directors of the Company immediately prior to such transaction or
         transactions do not constitute a majority of the board of directors of
         the Company (or of the board of directors of any successor to or assign
         of the Company) immediately after the next meeting of stockholders of
         the Company (or such successor or assign) following such transaction;
         (3) there is consummated a reorganization, merger or consolidation of
         the Company or sale or other disposition of all or substantially all of
         the assets of the Company (a "Corporate Transaction"), excluding any
         Corporate Transaction pursuant to which (i) all or substantially all of
         the individuals or entities who are the beneficial owners,
         respectively, of the Outstanding Voting Securities immediately prior to
         such Corporate Transaction will beneficially own, directly or
         indirectly, more than 50% of the combined voting power of the
         outstanding securities entitled to vote generally in the election of
         directors of the corporation resulting from such Corporate Transaction
         (including, without limitation, a corporation which as a result of such
         transaction owns the Company or all or substantially all of the
         Company's assets either directly or indirectly) in substantially the
         same proportions relative to each other as their ownership, immediately
         prior to such Corporate Transaction, of the Outstanding Voting
         Securities; (ii) no person (other than the Company, any employee
         benefit plan (or related trust) sponsored or maintained by the Company
         or any corporation controlled by the Company) will beneficially own,
         directly or indirectly, 50% or more of the combined voting power of the
         outstanding securities of the corporation resulting from such Corporate
         Transaction entitled to vote generally in the election of directors and
         (iii) the persons who were directors of the Company immediately prior
         to such Corporate Transaction will constitute at least a majority of
         the board of directors of the corporation resulting from such Corporate
         Transaction.

            (d)   Company. Cobra Electronics Corporation and any corporation
         which succeeds to the business of Cobra Electronics Corporation.

            (e)   Compensation Committee. The Compensation Committee of the
         board of directors of the Company.

            (f)   Disability. The Participant is physically or mentally unable
         to perform his duties for a period of 180 consecutive days.

            (g)   Participant. Each individual selected by the Company to
          participate in the Plan and identified on Exhibit A hereto. If at any
          time the Company amends Exhibit A hereto to add an individual to
          Exhibit A hereto, such individual shall become a Participant as of the
          day identified in such amendment. Such individuals shall be limited to
          a select group of management or highly compensated employees of the
          Company.

            (h)   Plan Year. The 2002 calendar year and each calendar year
         thereafter.

            (i)   Valuation Date. December 31, 2002, each December 31
         thereafter, and each other day selected by the Compensation Committee
         in its sole discretion.

            (j)   Years of Service. The number of complete consecutive twelve-
         month periods occurring during the period beginning on January 1, 2002
         or, if later, the

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         Participant's first day of employment by the Company, and ending on the
         day the Participant's employment with the Company terminates.

            3.    MAINTANENCE OF ACCOUNTS. (a) An account shall be maintained
for each Participant. The account maintained for a Participant (i) shall as of
each Valuation Date be credited or charged with amounts pursuant to Sections
3(b) and each 3(c), and (ii) shall as of the day any payment is made pursuant to
Section 4 or 5 with respect to the Participant be charged with the amount of
such payment. Such accounts shall be solely for accounting purposes. The books
of accounts, forms and accounting methods used in the administration of
Participants' accounts shall be the responsibility of, and shall be subject to
the supervision, control and discretion of, the Compensation Committee. The
balance of a Participant's account, from time to time, shall be the only amount
to which the Participant may be entitled pursuant to the Plan.

            (b)   As of December 31, 2002, and as of each subsequent December
31, there shall be credited to the account of each Participant who is a
Participant and employed by the Company on such Valuation Date the amount
identified with respect to such Participant on Exhibit A hereto. If a
Participant's employment with the Company terminates on or after the Participant
attains age 65 or a Change of Control occurring on or after January 1, 2002 or
due to the Participant's Disability or death, or if the Company terminates the
Participant's employment at any time for reasons other than for Cause, and if
such termination occurs on a day other than a December 31, there shall be
credited to the account of such Participant as of the December 31 of the
calendar year during which the Participant's employment terminates the amount
identified with respect to such Participant on Exhibit A multiplied by a
fraction the numerator of which is the number of days during such year during
which the Participant was employed by the Company and the denominator of which
is 365.

            (c)   Until the vested percentage of a Participant's account balance
is paid in full pursuant to Section 4, 5(a) or 5(b) or any payment required by
Section 5(c) is made, an amount described in this paragraph (c) shall be
credited or charged to such account as of each Valuation Date with respect to
the investment period ending on such Valuation Date and beginning on the first
day following the immediately preceding Valuation Date (a "Valuation Period").
Prior to the beginning of each Valuation Period, the Company shall select in its
sole discretion investment media in which the Participant's account balance is
to be considered, for bookkeeping purposes only, as invested during such
Valuation Period. The Company shall prior to the beginning of the Valuation
Period inform the Participant of such selection. The Company shall not be
required to actually invest the Participant's account balance in such media nor
to even set assets aside in an amount equal to such account balance. As of the
Valuation Date ending such Valuation Period, the Participant's account as of the
immediately preceding Valuation Date shall be credited with the earnings or
gains (including realized and unrealized appreciation) or charged with the
losses (including expenses and realized and unrealized depreciation) which are
or would be realized by the Company during such Valuation Period as if the
Participant's account balance as of the immediately preceding Valuation Date,
minus any charges for payments made during such Valuation Period, had actually
been invested in such media during such Valuation Period. If any such investment
media consists of life insurance policies on the Participant's life, such
expenses shall include, but not be limited to, policy fees and charges and fund
expenses which are or would be realized by the Company during such Valuation
Period.

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            (d)   If it comes to the attention of the Compensation Committee
that an error has been made in crediting or charging a Participant's account
with any of the amounts prescribed by this Section 3, an appropriate adjustment
shall be made to such account.

            4.    DEFERRED COMPENSATION PAYMENTS. Subject to Sections 6 and 11,
if a Participant's employment with the Company terminates for any reason other
than his death or for Cause, the Participant shall be entitled to receive ten
payments, with the first such payment being made as soon as administratively
practicable after the first January 1 following the later of the date of the
Participant's termination of employment and the date on which the Participant
attains age 65 and the second through tenth payments being made as soon as
administratively practicable after the immediately following nine anniversaries
of such January 1; provided however, that if the Participant terminates
employment due to a Disability, or after a Change in Control, occurring on or
after January 1, 2002 and elects no later than the January 1 following such
termination, the first such payment shall be made as soon as administratively
practicable after the first January 1 following the date of the Participant's
termination of employment and the second through tenth payments shall be made as
soon as administratively practicable after the immediately following nine
anniversaries of such January 1. The amount of each payment shall equal the
product of (i) the balance of the Participant's account as of the Valuation Date
immediately preceding such payment minus any charges for any payments made
subsequent to such Valuation Date, multiplied by (ii) a fraction (no greater
than one) the numerator of which is one and the denominator of which is ten
minus the number of payments previously made to the Participant pursuant to the
Plan. Notwithstanding the foregoing provisions of this Section, if, upon the
termination of the Participant's employment with the Company, the Participant
has less than ten Years of Service, the balance of the Participant's account
shall, as of the first Valuation Date immediately preceding the Participant's
receipt of any payment pursuant to the Plan and prior to the calculation of any
such payment amount, be reduced by multiplying the balance of the Participant's
account as of such date by the vested percentage based upon the Participant's
Years of Service and determined in accordance with the following table and the
following sentence:

            Years of Service               Participant's Vested
                                                Percentage
            Less than 4 full years                    0%
               4 full years                          10%
               5 full years                          20%
               6 full years                          30%
               7 full years                          40%
               8 full years                          60%
               9 full years                          80%
              10 full years or more                 100%

In the event of a Participant's Disability, or in the event of a Change in
Control, occurring on or after January 1, 2002 and while the Participant is
employed by the Company, the Participant shall be deemed to have completed ten
full Years of Service for purposes of determining his vested percentage under
the table above. Notwithstanding the foregoing, neither any Participant nor any
other individual or person including, but not limited to, a Participant's
estate, shall be

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entitled to receive any further payments pursuant to this Section 4 subsequent
to the Participant's death or if the Participant's employment terminates for
reasons for Cause, and any benefits payable after the Participant's death shall
be determined in accordance with Section 5.

            5.    PAYMENTS FOLLOWING DEATH. (a) Subject to Sections 6 and 11, in
the event that a Participant dies after he begins to receive payments under
Section 4, the Participant's designated beneficiary shall be entitled to receive
the remaining payments that would have been received by the Participant (i.e.,
if the Participant had not died). Notwithstanding the foregoing, the
Participant's designated beneficiary may no later than the January 1 following
the Participant's death elect to instead receive a single lump sum payment as
soon as administratively practicable after such January 1 of an amount equal to
the balance of the Participant's account as of the December 31 preceding such
January 1 and determined as if the Participant had not died.

            (b)   Subject to Sections 6 and 11, in the event that a
Participant's employment with the Company terminates for any reason other than
his death or for Cause and the Participant subsequently dies before he begins to
receive payments under Section 4, the Participant's designated beneficiary shall
be entitled to receive the payments that would have been received by the
Participant (i.e., if the Participant had not died). Notwithstanding the
foregoing, the Participant's designated beneficiary may no later than the
January 1 following the Participant's death elect to instead receive a single
lump sum payment as soon as administratively practicable after such January 1 of
an amount equal to the vested percentage (determined pursuant to Section 4) of
the balance of the Participant's account as of the December 31 preceding such
January 1 and determined as if the Participant had not died.

            (c)   Subject to Sections 6 and 11, in the event that a Participant
dies while employed by the Company and before he begins to receive payments
under Section 4, the Participant's designated beneficiary shall be entitled to
receive a payment every two weeks for a five-year period, with the first such
payment being made on the first regular Company pay day following the
Participant's death. The amount of each payment shall equal one-twentysixth
(1/26) of 50% of the Participant's Annual Compensation for the calendar year
during which the Participant's death occurs. Notwithstanding the foregoing, the
Participant's designated beneficiary may no later than the January 1 following
the Participant's death elect to instead receive a single lump sum payment as
soon as administratively practicable after such January 1 of an amount equal to
the present value, as determined by the certified public accounting firm that
prepares the Company's audited financial statements at the time of the
Participant's death, of the aggregate amount of such remaining bi-weekly
payments using a discount rate equal to the annual interest rate of 10-year
Treasury securities for the month containing the Participant's date of death
plus one percent.

            (d)   A Participant's designated beneficiary shall be the person or
entity designated by the Participant in a writing delivered to the Compensation
Committee. If no such designation has been made, or if the designated
beneficiary predeceases the Participant, the Participant's designated
beneficiary shall be (i) the surviving spouse of such Participant, (ii) if there
is no surviving spouse, the surviving children of the Participant, in equal
shares, (iii) if

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there is no surviving spouse and no surviving children, the executor or
administrator of the estate of the Participant or (iv) if there is no surviving
spouse and no surviving children and if no executor or administrator has been
appointed for the estate of the Participant within six months following the date
of the Participant's death, the person or persons who would be entitled under
the intestate succession laws of the state of the Participant's domicile to
receive the Participant's personal estate, in equal shares.

            6.    NONCOMPETITION; NONSOLICITATION; CONFIDENTIALITY.

            (a) As a condition of participation in the Plan and of being
eligible to receive any payment pursuant to the Plan, a Participant, while
employed by the Company and for a period of two years thereafter (the
"Noncompetition Period"), shall not in any manner, directly or indirectly,
through any person, firm, corporation or enterprise, alone or as a member of a
partnership or as an officer, director, stockholder, investor or employee of or
advisor or consultant to any person, firm, corporation or enterprise or
otherwise, engage or be engaged, or assist any other person, firm, corporation
or enterprise in engaging or being engaged, in any business being conducted by
the Company or any of its subsidiaries or affiliates as of the effective date of
the Participant's termination of employment in any geographic area in which the
Company or any of its subsidiaries or affiliates is then conducting such
business.

            (b) Also as a condition of participation in the Plan and of being
eligible to receive any payment pursuant to the Plan, a Participant shall not
during the Noncompetition Period (i) in any manner, directly or indirectly,
induce or attempt to induce any employee of or advisor or consultant to the
Company or any of its subsidiaries or affiliates to terminate or abandon his or
her or its employment or relationship for any purpose whatsoever, or (ii) in
connection with any business to which Section 6(a) applies, call on, service,
solicit or otherwise do business with any customer of the Company or any of its
subsidiaries or affiliates; provided, however, that the restriction contained in
this Section 6(b) shall not apply to, or interfere with, the proper performance
by the Participant of his duties as an employee of the Company.

            (c)   Nothing in this Section 6 shall deny participation in the
Plan or any benefit payment pursuant to the Plan due to a Participant being (i)
a stockholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than two percent of the outstanding common stock,
capital stock and equity of any firm, corporation or enterprise so long as the
Participant has no active participation in the business of such firm,
corporation or enterprise.

            (d) Also as a condition of participation in the Plan and of
being eligible to receive any payment pursuant to the Plan, a Participant shall
not, at any time while employed by the Company or thereafter, make use of or
disclose, directly or indirectly, to any person any (i) trade secret or other
confidential or secret information of the Company or of any of its subsidiaries,
affiliates or customers or (ii) other technical, business, proprietary or
financial information of the Company or of any of its subsidiaries, affiliates
or customers not available to the public generally or the competitors of the
Company or the competitors of any of its subsidiaries or affiliates, in each
case that the Participant obtained as a result of his employment by the Company
or any of its subsidiaries ("Confidential Information"), except to the extent
that such Confidential Information (i) is used by the Participant in the proper
performance of his duties as an employee

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of the Company, (ii) is disclosed by the Participant to his legal counsel in
connection with legal services performed by such counsel for the Participant,
provided that such disclosure is made on a confidential basis, (iii) becomes a
matter of public record or is published in a newspaper, magazine or other
periodical available to the general public, other than as a result of any act or
omission of the Participant outside the proper performance of his duties as an
employee of the Company, or (iv) is required to be disclosed by any law,
regulation or order of any court or regulatory commission, department or agency.
Also as a condition of participation in the Plan and of being eligible to
receive any payment pursuant to the Plan, a Participant shall, promptly
following the termination of his employment with Company, surrender to the
Company all records, memoranda, notes, plans, reports, computer tapes and
software and other documents and data which constitute Confidential Information
which he may then possess or have under his control (together with all copies
thereof); provided, however, that the Participant may retain copies of such
documents as are necessary for the preparation of his federal or state income
tax returns.

            (e)   Upon any failure of a Participant to satisfy any of the
conditions described in this Section 6, the Participant and any and all
beneficiaries and other persons, including the Participant's estate, shall no
longer be entitled to any payments or have any rights under the Plan with
respect to the Participant.

            7.    THE COMPENSATION COMMITTEE. The Compensation Committee of the
board of directors of the Company shall be responsible for the administration of
the Plan. The Compensation Committee shall have the duty and authority to
interpret and construe the Plan in regard to all questions of eligibility and
benefits under the Plan.

            8.    CLAIMS PROCEDURE. If a Participant or his beneficiary believes
he is entitled to benefits pursuant to the Plan in an amount greater than those
which he is receiving or has received, he may file a claim with the Compensation
Committee. Such a claim shall be in writing and state the nature of the claim,
the facts supporting the claim, the amount claimed, and the address of the
claimant. The Compensation Committee shall review the claim and, unless special
circumstances require an extension of time, within 90 days after receipt of the
claim, give written notice by registered or certified mail to the claimant of
its decision with respect to the claim. If special circumstances require an
extension of time, the claimant shall be so advised in writing within the
initial 90-day period and in no event shall such an extension exceed 90 days.
The notice of the Compensation Committee's decision with respect to the claim
shall be written in a manner calculated to be understood by the claimant and, if
the claim is wholly or partially denied, shall set forth the specific reasons
for the denial, specific references to the pertinent Plan provisions on which
the denial is based, a description of any additional material or information
necessary for the claimant to perfect the claim, an explanation of why such
material or information is necessary, and an explanation of the claim review
procedure under the Plan. The Compensation Committee shall also advise the
claimant that he or his duly authorized representative may request a review by
the Compensation Committee of the denial by filing with the Compensation
Committee, within 65 days after notice of the denial has been received by the
claimant, a written request of such review. The claimant shall be informed that
he may have reasonable access to pertinent documents and submit comments in
writing to the Compensation Committee within the same 65-day period. If a
request is so filed, review of the denial shall be

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made by the Compensation Committee within, unless special circumstances require
an extension of time, 60 days after receipt of such request, and the claimant
shall be given written notice of the final decision. If special circumstances
require an extension of time, the claimant shall be so advised in writing within
the initial 60-day period and in no event shall such an extension exceed 60
days. The notice of the final decision shall include specific reasons for the
decision and specific references to the pertinent Plan provisions on which the
decision is based and shall be written in a manner calculated to be understood
by the claimant.

            9.    NO EMPLOYMENT CONTRACT. The establishment of the Plan shall
not be construed as conferring any legal rights on a Participant for a
continuation of employment; nor shall it interfere with the rights of the
Company to discharge him without regard to the effect such discharge might have
under the Plan.

            10.   RIGHTS NOT SECURED. Rights of a Participant under the terms of
the Plan shall not require the Company to segregate any of its assets in order
to provide for the satisfaction of the obligations hereunder or to make any
investment of assets; provided, however, that the Company may satisfy its
obligations hereunder through any means it desires. A Participant shall not have
any rights to, or with respect to, any specific assets of the Company. All
rights of a Participant under the terms of the Plan are the unsecured rights of
the Participant against the general assets of the Company.

            11.   SPENDTHRIFT CLAUSE. It shall be a condition of the payment of
the benefits under the Plan that neither such benefits nor any portion thereof
shall be assigned, alienated or transferred to any person voluntarily or by
operation of any law, including any assignment, division or awarding of property
under state domestic relations law (including community property law). If any
person endeavors or purports to make any such assignment, alienation or
transfer, the amount otherwise provided hereunder which is the subject of such
assignment, alienation or transfer shall cease to be payable to any person.

            12.   WITHHOLDING, ETC. Any payment or delivery required under the
Plan shall be subject to all requirements of the law with regard to withholding
taxes, filings, and making of reports, and the Company and a Participant shall
each use its or his best efforts to satisfy promptly all such requirements,  as
applicable.

            13.   AMENDMENT AND TERMINATION. The Company may amend, terminate,
cancel or rescind the Plan in whole or in part at any time provided that  no
amendment, termination, cancellation or rescission of the Plan shall result
in the reduction of any amount to be paid to any Participant or any beneficiary
of a Participant or delay the date or dates on which any such payment shall be
made. Notwithstanding the foregoing,

            (i)   The Company may amend the Plan to reduce or terminate any
         credits that would otherwise be made pursuant to Section 3(b) effective
         on or after the second December 31 immediately following the date of
         such Company action, in which case the amount to be paid to any
         Participant or any beneficiary shall be reduced accordingly.

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            (ii)  The Company may pursuant to any amendment, termination or
         cancellation of the Plan provide that the vested percentage (determined
         pursuant to Section 4) of a Participant's account shall, in full
         satisfaction of all the Company's obligations under the Plan with
         respect to such Participant, be paid to the Participant in lump sum as
         soon as administratively practicable as of any Valuation Date following
         the date of such Company action provided that (A) such account shall
         first be credited with any amount that would otherwise be credited
         pursuant to Section 3(b) as of the first December 31 immediately
         following the date of such action (such amount to be credited no later
         than the earlier of such Valuation Date or such December 31), (B)
         amounts described in Section 3(c) continue to be credited or charged to
         such account up to and including such Valuation Date, and (C) such
         Participant be deemed to have completed ten full Years of Service for
         purposes of determining his vested percentage if he is still employed
         by the Company as of the date of such Company action.

            (iii) The Company may pursuant to an amendment, termination or
         cancellation of the Plan provide that, for purposes of determing any
         benefit pursuant to Section 5(c), a Participant's Annual Compensation
         shall be determined as if the Participant dies and terminates
         employment with the Company on December 31 of the calendar year during
         which such Company action occurs.

            14.   SUCCESSORS. The Plan shall be binding upon and inure to the
benefit of each Participant and his estate, and the Company and any successors
of the Company.

            15.   GOVERNING LAW. The Plan shall be governed by and construed and
 enforced in accordance with the laws of the State of Illinois, except to the
extent preempted by the Employee Retirement Income Security Act of 1974, as
amended.

            IN WITNESS WHEREOF, and as evidence of the adoption of the Plan,
the Company has caused this instrument to be signed by its duly authorized
officer and attested as of the 15th day of April, 2002.

                                                  COBRA ELECTRONICS CORPORATION

                                                  By /s/  James R. Bazet
                                                     ---------------------------
                                                  Title  President and Chief
                                                          Executive Officer

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                                    EXHIBIT A

<TABLE>
<S>                                               <C>                                            <C>

                                     Section 3(b) Credit Amount for                Section 3(b) Credit Amount for
                                     each December 31 up to and                    each December 31 Following the
                                     Including the First December 31               First December 31 Following
PLAN PARTICIPANTS                    Following Attainment of Age 65                Attainment of Age 65
----------------                     -------------------------------               ------------------------------
William Chamberlain                               $14,080                                        $0
Lucy Erikson                                      $27,013                                        $0
James Flaherty                                    $25,190                                        $0
Bruce Legris                                      $19,617                                        $0
John Pohl                                         $21,957                                        $0
Daniel Schiff                                     $13,433                                        $0
</TABLE>

                                       10<PAGE>

                                                                 EXHIBIT 10.8.7

           Arthur J. Gallagher & Co. and AJG Financial Services, Inc.
                      Seventh Amendment to Credit Agreement

Harris Trust and Savings Bank                Citibank, N.A.
Chicago, Illinois                            New York, New York

Bank of America, N.A.                        LaSalle Bank National Association
Chicago, Illinois                            Chicago, Illinois

The Northern Trust Company
Chicago, Illinois

Ladies and Gentlemen:

     This Seventh Amendment to Credit Agreement dated as of August 9, 2002 but
effective as of June 30, 2002 (herein, the "Amendment"), is entered into by and
between the undersigned, Arthur J. Gallagher & Co, a Delaware corporation
("Gallagher"), AJG Financial Services, Inc., a Delaware corporation ("AJG";
Gallagher and AJG being referred to herein collectively as the "Borrowers" and
individually as a "Borrower"), Citibank, N.A., Bank of America, N.A., LaSalle
Bank National Association, The Northern Trust Company and Harris Trust and
Savings Bank, individually and as Agent (the "Agent"). Reference is hereby made
to that certain Credit Agreement dated as of September 11, 2000, as amended,
between the Borrowers, the Banks and the Agent (the "Credit Agreement"). All
capitalized terms used herein without definition shall have the same meanings
herein as such terms have in the Credit Agreement.

     The Borrowers desire to modify certain financial covenants and make certain
other amendments to the Credit Agreement, and the Banks are willing to do so
under the terms and conditions set forth in this Amendment.

Section 1.  Amendments.

     Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement shall be and hereby is amended (effective
as of June 30, 2002) as follows:

          1.1. Section 6.1 of the Credit Agreement shall be amended by inserting
     the following new definition in the appropriate alphabetical order:

          ""Avia Cargo" means Avia Cargo LLC, an Irish limited liability
          company."

          1.2. The last sentence of Section 9.5 of the Credit Agreement shall be
     amended and restated in its entirety to read as follows:

<PAGE>

          "Such Compliance Certificate shall also (i) set forth the calculations
          supporting such statements in respect of Sections 9.7, 9.8, 9.9 and
          9.12 of this Agreement and (ii) contain a "deconsolidating" balance
          sheet and income statement (in a form reasonably acceptable to the
          Agent) detailing the impact on Gallagher of removing the equity
          investments in Birchwood, Two Pierce and Avia Cargo from the
          consolidated financial statements of Gallagher as of the applicable
          compliance reporting date and also detailing the net effect of such
          removal on the calculation of the financial covenants set forth in
          Sections 9.7, 9.8 and 9.9 hereof."

          1.3. The second sentence of Section 9.8 of the Credit Agreement shall
     be amended and restated in its entirety to read as follows:

          "For purposes of determining Gallagher's compliance with this Section,
          Funded Debt shall be deemed to exclude any Indebtedness for Borrowed
          Money which is not a legal obligation of Gallagher and which is
          associated with Gallagher's equity investments in Birchwood, Two
          Pierce or Avia Cargo as shown on Gallagher's most recent quarterly
          financial statements."

          1.4. The second sentence of Section 9.9 of the Credit Agreement shall
     be amended and restated in its entirety to read as follows:

          "For purposes of determining Gallagher's compliance with this Section,
          the figures used to calculate the Fixed Charge Coverage Ratio will be
          adjusted to exclude from EBITDAR, Capital Expenditures, Restricted
          Payments, or Indebtedness for Borrowed Money, as appropriate, any
          portion of those respective consolidated totals which are associated
          with Birchwood, Two Pierce or Avia Cargo, provided that the
          Indebtedness for Borrowed Money associated with Gallagher's
          investments in Birchwood, Two Pierce and Avia Cargo and which is part
          of this consolidation is not a legal obligation of Gallagher."

          1.5. Section 9.10(c) of the Credit Agreement shall be amended and
     restated in its entirety to read as follows:

               " (c) Indebtedness for Borrowed Money which is not a legal
          obligation of Gallagher and which is associated with Gallagher's
          equity investments in Birchwood, Two Pierce and Avia Cargo as shown on
          Gallagher's most recent quarterly financial statements; and"

                                       -2-

<PAGE>

Section 2.  Conditions Precedent.

     The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:

          2.1. The Borrowers and the Required Banks shall have executed and
     delivered this Amendment.

          2.2. Legal matters incident to the execution and delivery of this
     Amendment shall be satisfactory to the Agent and its counsel.

Section 3.  Representations.

     In order to induce the Agent and the Banks to execute and deliver this
Amendment, the Borrowers hereby represent to the Agent and the Banks that as of
the date hereof the representations and warranties set forth in Section 7 of the
Credit Agreement are and shall be and remain true and correct (except that the
representations contained in Section 7.5 shall be deemed to refer to the most
recent financial statements of the Borrowers delivered to the Agent and the
Banks) and the Borrowers are in compliance with the terms and conditions of the
Credit Agreement and no Default or Event of Default has occurred and is
continuing under the Credit Agreement or shall result after giving effect to
this Amendment.

Section 4.  Miscellaneous.

     4.1. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.

     4.2. The Borrowers agree to pay on demand all costs and expenses of or
incurred by the Agent in connection with the negotiation, preparation, execution
and delivery of this Amendment, including the fees and expenses of counsel for
the Agent.

     4.3. This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.

                                       -3-

<PAGE>

         This Seventh Amendment to Credit Agreement is entered into as of the
date and year first above written.

                             Arthur J. Gallagher & Co.

                             By /s/ Jack H. Lazzaro
                                -------------------
                                Name:  Jack H. Lazzaro
                                       ---------------
                                Title: Vice President - Treasurer
                                       --------------------------

                             AJG Financial Services, Inc.

                             By /s/ Jack H. Lazzaro
                                -------------------
                                Name:  Jack H. Lazzaro
                                       ---------------
                                Title: CFO
                                       ---

                                       -4-

<PAGE>

     Accepted and agreed to.

                                           Harris Trust and Savings Bank,
                                             individually and as Agent

                                           By /s/ Len E. Meyer
                                              ----------------
                                              Name Len E. Meyer
                                                   ------------
                                              Title Vice President
                                              --------------------

                                           Citibank, N.A.

                                           By /s/ Peter C. Bickford
                                              ---------------------
                                              Name Peter C. Bickford
                                                   -----------------
                                              Title Vice President
                                                    --------------

                                           Bank of America, N.A.

                                           By /s/ Mehul D. Mehta
                                              ------------------
                                              Name Mehul D. Mehta
                                                   --------------
                                              Title Principal
                                                    ---------

                                           LaSalle Bank National Association

                                           By /s/ Kyle Freimuth
                                              -----------------
                                              Name Kyle Freimuth
                                                   -------------
                                              Title Vice President
                                                    --------------

                                           The Northern Trust Company

                                           By /s/ Eric Dybing
                                              ---------------
                                              Name Eric Dybing
                                                   -----------
                                              Title Second Vice President
                                                    ---------------------

                                       -5-

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