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Schedule 14A
Securities and Exchange Commission
Washington, DC 20549
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use
of the Commission Only
(as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
First Commonwealth Financial Corporation
(Name of Registrant as Specified In Its Charter)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2)or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11.
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.
3) Filing party:
4) Date Filed:<PAGE>
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FIRST COMMONWEALTH FINANCIAL CORPORATION
Old Courthouse Square, 22 North Sixth Street
Indiana, Pennsylvania 15701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 22, 1995
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of
Shareholders of First Commonwealth Financial Corporation (the
"Corporation") will be held at Folger Dining Hall, Indiana
University of Pennsylvania, Indiana, Pennsylvania on Saturday,
April 22, 1995, at 12:00 noon, local time, for the following
purposes:
1. To elect seven Directors to serve for terms expiring
in 1998.
2. To act on such other matters as may properly come
before the meeting.
Only shareholders of record as of the close of business on
March 13, 1995 are entitled to notice of and to vote at the
Annual Meeting and any adjournments thereof. The Annual Report
to Shareholders for the year ended December 31, 1994, which
includes consolidated financial statements of the Corporation, is
enclosed.
YOU ARE URGED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY
CARD AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING IN PERSON. IF YOU ATTEND THE MEETING YOU MAY, IF YOU
WISH, WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors,
David R. Tomb, Jr.
Secretary
Indiana, Pennsylvania
March 27, 1995<PAGE>
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FIRST COMMONWEALTH FINANCIAL CORPORATION
Old Courthouse Square, 22 North Sixth Street
Indiana, Pennsylvania 15701
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 22, 1995
GENERAL INFORMATION
The accompanying proxy is solicited by the Board of
Directors of First Commonwealth Financial Corporation (the
"Corporation" or "FCFC") in connection with its Annual Meeting of
Shareholders to be held on Saturday, April 22, 1995, 12:00 noon,
local time, and any adjournments thereof.
If the accompanying proxy is duly executed and returned, the
shares of Common Stock of the Corporation represented thereby
will be voted and, where a specification is made by the
shareholder as provided therein, will be voted in accordance with
that specification. A proxy may be revoked by the person
executing it at any time before it has been voted by notice of
such revocation to David R. Tomb, Jr., Secretary of the
Corporation.
The three persons named in the enclosed proxy have been
selected by the Board of Directors and will vote shares
represented by valid proxies. They have indicated that, unless
otherwise specified in the proxy, they intend to vote to elect as
Directors the seven nominees listed on page 6.
The Board of Directors has no reason to believe that any of
the nominees will be unable to serve as Directors. In the event,
however, of the death or unavailability of any nominee or
nominees, the proxy to that extent will be voted for such other
person or persons as the Board of Directors may recommend.
The Corporation has no knowledge of any other matters to be
presented at the meeting. In the event other matters do properly
come before the meeting the persons named in the proxy will vote
in accordance with their judgment on such matters.
The approximate date on which this proxy statement is first
to be mailed to the shareholders of the Corporation is March 27,
1995. The cost of the solicitation of proxies will be paid by the
Corporation. In addition to the solicitation of proxies by the
use of the mails, management and regularly engaged employees of
the Corporation may, without additional compensation therefor,
solicit proxies on behalf of the Corporation by personal
interviews, telephone, telegraph or other means, as appropriate.
The Corporation will, upon request, reimburse brokers and others
who are only record holders of the Corporation's Common Stock
("Common Stock") for their reasonable expenses in forwarding
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proxy material to, and obtaining voting instructions from, the
beneficial owners of such stock.
As of the close of business on March 13, 1995, there were
22,436,628 shares of Common Stock issued and outstanding. Three
million (3,000,000) shares of Preferred Stock have been
authorized; however, none of the preferred shares are
outstanding. Only shareholders of record as of the close of
business on March 13, 1995 are entitled to receive notice of and
to vote at the Annual Meeting.
Shareholders are entitled to one vote for each share held on
all matters to be considered and acted upon at the Annual
Meeting. The Articles of Incorporation of the Corporation do not
permit cumulative voting. An affirmative vote of a majority of
the shares present and voting at the meeting is required for
approval of all items being submitted to the shareholders for
their consideration. Abstentions and broker non-votes are each
included in the determination of the number of shares present and
voting, but are not counted for purposes of determining whether a
proposal has been approved.
The Corporation conducts business through ten banking
subsidiaries, National Bank of the Commonwealth ("NBOC"), Deposit
Bank ("Deposit"), Central Bank ("Central"), Cenwest National Bank
("Cenwest"), First National Bank of Leechburg ("Leechburg"),
Peoples Bank and Trust Company ("Peoples"), Peoples Bank of
Western Pennsylvania ("Peoples of W. PA"), Unitas National Bank
("Unitas"), Reliable Savings Banks, PaSA, a sole subsidiary of
Reliable Financial Corporation ("Reliable"), First Commonwealth
Trust Company ("FCTC"), and through Commonwealth Systems
Corporation ("CSC"), a data processing subsidiary. The
Corporation also jointly owns Commonwealth Trust Credit Life
Insurance Company ("CTCLIC"), a reinsurer of credit life and
accident and health insurance. NBOC, Deposit, Central, Cenwest,
Leechburg, Peoples, Peoples of W. PA, Unitas, Reliable and FCTC
are herein collectively called the "Subsidiary Banks."
COMMON STOCK OWNERSHIP BY MANAGEMENT
The Corporation is not aware of any person who, as of
March 13, 1995, was the beneficial owner of more than 5% of the
Common Stock, except FCTC as more fully described below. The
following table sets forth information concerning beneficial
ownership by all directors and nominees, by each of the executive
officers named in the Summary Compensation Table on page 12 (the
"Summary Compensation Table") and by all directors and executive
officers as a group.
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Amount and nature of Percent of
Name Beneficial Ownership(1) Class
E. H. Brubaker 10,570 (2) *
Sumner E. Brumbaugh 146,638 (2) (3) *
Edward T. Cote 101,400 (5) *
Thomas L. Delaney 42,329 (2) *
Clayton C. Dovey, Jr. 23,134 *
Ronald C. Geiser 18,873 (3) *
Johnston A. Glass 20,771 (3) *
A. B. Hallstrom 11,297 (3) *
Thomas J. Hanford 48,258 *
H. H. Heilman, Jr. 22,000 *
David F. Irvin 63,586 *
David L. Johnson 7,630 (2) *
Robert F. Koslow 16,414 (2) (3) (9) *
Dale P. Latimer 646,925 (3) (5) (8) 2.88%
William Miksich 22,499 *
Joseph E. O'Dell 15,482 (2) (4) (10) *
Joseph W. Proske 11,258 (2) *
Charles J. Szewczyk 271,936 1.21%
Gerard M. Thomchick 9,934 (2) (3) (4) *
David R. Tomb, Jr. 299,995 (2) (3) (4) (5) (6) 1.33%
E. James Trimarchi 329,265 (2) (3) (4) (5) (6) (7) 1.54%
Robert C. Williams 5,933 (3) (11) *
All directors and 1,683,963 7.51%
executive officers
as a group (24
persons)
(1) Under regulations of the Securities and Exchange Commission,
a person who has or shares voting or investment power with
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respect to a security is considered a beneficial owner of
the security. Voting power is the power to vote or direct
the voting of shares, and investment power is the power to
dispose of or direct the disposition of shares. Unless
otherwise indicated in the other footnotes below, each
director has sole voting power and sole investment power
over the shares indicated opposite his name in the table,
and a member of a group has sole voting power and sole
investment power over the shares indicated for the group.
(2) Does not include the following shares held by spouses,
either individually or jointly with other persons, as to
which voting and investment power is disclaimed by the
director or officer: Mr. Brubaker, 30,013; Mr. Brumbaugh,
132; Mr. Delaney, 8,616; Mr. Johnson, 830; Mr. Koslow,
1,866; Mr. O'Dell, 1,818; Mr. Proske, 31,530; Mr. Thomchick,
1,763; Mr. Tomb, 264; Mr. Trimarchi, 20,000; and all
Directors and executive officers as a group, 96,832.
(3) Includes the following shares held jointly with spouses, as
to which voting and investment power is shared with the
spouse: Mr. Brumbaugh, 15,400; Mr. Geiser, 14,364; Mr.
Glass, 11,809; Mr. Hallstrom, 9,468; Mr. Koslow, 9,642; Mr.
Latimer, 14,551; Mr. Thomchick, 2,592; Mr. Tomb, 31,846; Mr.
Trimarchi, 8,482; Mr. Williams, 223, and all Directors and
executive officers as a group 118,377.
(4) Includes 2,800 shares held by Atlas Investment Company, of
which Messrs. O'Dell, Thomchick, Tomb and Trimarchi are each
25% owners and as to which they share voting and investment
power.
(5) Includes 101,000 shares owned by Berkshire Securities
Corporation. Berkshire is a Pennsylvania corporation
organized in 1976 for the purpose of acquiring and holding
the securities of Pennsylvania banks. The officers,
directors or stockholders of Berkshire include Messrs. Cote,
Latimer, Tomb and Trimarchi, each of whom is an officer or
director of the Corporation, among others. The shares were
acquired by Berkshire when its shares of Dale National Bank
(now Cenwest) were converted into shares of the Corporation
as a result of the Dale merger in 1985. Each of the
foregoing persons may be deemed to share voting and
investment power of these shares.
(6) Includes 159,448 shares held by County Wide Real Estate,
Inc., of which Messrs. Tomb and Trimarchi are each 50%
owners and as to which they share voting and investment
power.
(7) Includes 29,652 shares held by family interests of which Mr.
Trimarchi exercises sole voting and investment power.
(8) Includes 96,156 shares held by the R&L Development Company
Pension & Profit Sharing Plan of which Mr. Latimer is
Trustee.
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(9) Mr. Koslow became a member of the Board of Directors on the
occasion of the merger of Peoples of W. PA into the
Corporation in December 1993.
(10) Mr. O'Dell became a member of the Board of Directors on
October 17, 1994.
(11) Mr. Williams became a member of the Board of Directors on
the occasion of the merger of Unitas National Bank into the
Corporation in September 1994.
As of February 27, 1995, FCTC, acting in a fiduciary
capacity for various trusts and estates, including the
Corporation Employee Stock Ownership Plan ("ESOP"), and the
Corporation 401(k) Retirement Savings and Investment Plan
("401(k) Plan") held an aggregate of 1,973,999 shares of Common
Stock (8.8% of the outstanding shares). Of these shares, FCTC
had sole voting power with respect to 624,667 shares, shared
voting power with respect to 1,349,333 shares, had sole
investment power with respect to 486,094 shares and shared
investment power with respect to 1,487,906 shares. FCTC votes
the shares over which it has voting power and, where voting power
is shared, shares are voted by FCTC in consultation with the
other persons having voting power.
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporation's directors and executive officers, and
persons who own more than ten percent of a registered class of
the Corporation's equity securities, to file with the Securities
and Exchange Commission (the "Commission") an initial report of
ownership and reports of changes in ownership of Common Stock and
other equity securities of the Corporation. Executive officers,
directors and greater than ten percent shareholders are required
by Commission regulation to furnish the Corporation with copies
of all Section 16(a) forms which they file. The Corporation is
aware of one late filing with respect to one transaction by Mr.
Hallstrom in 1994. In making this disclosure, the Corporation
has relied solely on written and oral representations of its
directors, executive officers and greater than ten percent
shareholders and copies of the reports they have filed with the
Commission.
ELECTION OF DIRECTORS
Article 10 of the By-Laws of the Corporation provides that
the number of Directors shall be not less than 3 nor more than
25. The Board of Directors has, in accordance with the By-Laws,
fixed the number of directors at 21 (three classes of seven
directors each).
A successor for the vacancy in the class of directors whose
terms expire in 1997 occurring on the resignation of John I.
Whalley, Jr. for personal reasons in March 1995 has not been
named.
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As of March 13, 1995, each director and nominee for election
as a director of the Corporation owned beneficially the number of
shares of Common Stock set forth in the preceding table. The
information in the table and the footnotes thereto is based upon
data furnished to the Corporation by, or on behalf of, the
persons named or referred to in the table.
Seven Directors will be elected at the Annual Meeting to
serve for terms of three years expiring with the Annual Meeting
of Shareholders in 1998. Each Director elected will continue in
office until a successor has been elected. If any nominee is
unable to serve, which the Board of Directors has no reason to
expect, the persons named in the accompanying proxy intend to
vote for the balance of those named and, if they deem it
advisable, for a substitute nominee. The names of the nominees
for Directors and the names of Directors whose terms of office
will continue after the Annual Meeting are listed in the
following table.
Information about the nominees, each of whom is presently a
member of the Board of Directors, and about the other directors
whose terms of office will continue after the Annual Meeting, is
set forth in the table below. The nominees and other directors
have held the positions shown for more than five years unless
otherwise indicated.
Principal Occupation or
Director Employment; Other
Name Since Directorships; Age
Nominees for a Term Ending in 1998:
Thomas L. Delaney 1984 Private Investor;
formerly Chairman,
Petrolec,Inc. (petroleum
wholesalers); Director of
Deposit; Director of
First United Bancorp
(BANCORP); Age 64
Ronald C. Geiser 1985 Retired, formerly
President and Director of
Cenwest; Age 65
David F. Irvin 1984 Sole Owner, The
Irvin/McKelvy Company
(sales and engineering
for mining and industrial
services); Director of
NBOC; Age 76
6<PAGE>
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Nominees for a Term Ending in 1998: (continued)
David L. Johnson 1984 Retired; Previously Vice
President and Corporate
Secretary, Pennsylvania
Manufacturers'
Corporation (insurance
holding company);
Director of NBOC; Age 65
Robert F. Koslow 1993 Chairman of the Board,
and Chief Executive
Officer of Peoples of
Western Pennsylvania;
Director, Wheeling Jesuit
College; Former Director,
Pennsylvania Bankers
Association, Pennsylvania
Independent Bankers;
Former Member of the
Advisory Board to the
President of the Federal
Reserve Bank of
Cleveland; Age 59
Joseph W. Proske 1984 Vice President
-Engineering, Stackpole
Magnet Division
(manufacturer of magnetic
components); Director of
Deposit and CSC; Age 58
E. James Trimarchi 1982 Chairman of the Board of
the Corporation; Director
of NBOC, Unitas,
Reliable, FCTC, CSC and
CTCLIC; Director of New
Mexico Banquest Investors
Corp. (NMB); Age 72
7<PAGE>
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Continuing Directors Whose Terms End in 1996:
Sumner E. Brumbaugh 1992 Chairman of the Board and
CEO of Central;
President, Brumbaugh
Insurance Group; Board
Member, Pennsylvania
National Mutual Casualty
Insurance Co., Central
Pennsylvania Health
Systems ("CPHS");
Advisory Board-Penn State
University (Altoona
Campus); Director,
Lexington One and
Lexington Two
(subsidiaries of CPHS);
Age 66
Edward T. Cote 1984 Associate, The Wakefield
Group (Investment
Banking); Formerly
President, Benefits and
Services Company
(insurance holding
company); Director of
NBOC and NMB; Age 58
Clayton C. Dovey, Jr. 1985 Chairman of the Board of
Cenwest; Age 70
Johnston A. Glass 1986 President and Director of
NBOC; Age 45
Dale P. Latimer 1984 President, R & L
Development Company
(heavy construction);
Director of NBOC;
Director of NMB; Age 64
Joseph E. O'Dell 1994 President and Chief
Executive Officer of the
Corporation, Director of
Unitas, Reliable, FCTC
and CSC; Age 49
David R. Tomb, Jr. 1983 Partner, Tomb and Tomb
(attorneys-at-law); Vice
President, Secretary and
Treasurer of the
Corporation; Director of
NBOC, Peoples of Western
PA, FCTC, CSC and CTCLIC;
Age 63
8<PAGE>
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Nominees for a Term Ending in 1997:
E. H. Brubaker 1984 Chairman of the Board and
Director of Deposit; Age
64
A. B. Hallstrom 1986 Chairman, Hallstrom
Construction Inc.;
Director of Deposit; Age
66
Thomas J. Hanford 1984 Investor; formerly
President, Coca-Cola
Bottling Co. of DuBois,
Inc.; Director BANCORP;
Age 56
H. H. Heilman, Jr. 1985 Chairman of the Board and
Director of Leechburg;
Partner, Heilman &
McClister (attorneys-at
-law); Age 78
Charles J. Szewczyk 1990 (pronounced and sometimes
known as Charles J.
Sheftic) Chairman of the
Board of Peoples;
Managing Partner of
County Amusement Co.
(real estate holdings)
and formerly Director of
Westview, Inc. (motion
picture theatre service
company); Age 66
Robert C. Williams 1994 President and Chief
Executive Officer,
Unitas; formerly Vice
Chairman, President and
Chief Executive Officer
of United National
Bancorporation; Director
and President, Unitas
Mortgage; Director,
Chambersburg Area
Development Corporation;
Age 51
9<PAGE>
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Board Committees
During 1994 there were 4 meetings of the Board of Directors
of the Corporation. All directors attended at least 75% of the
total number of meetings of the Board of Directors of the
Corporation and all committees of which they were members.
The Board of Directors of the Corporation has established
three standing committees: Executive, Audit, and Executive
Compensation. The Board has no standing Nominating Committee.
When the Board of Directors is not in session, the Executive
Committee, which is comprised of Messrs. Trimarchi (Chairman),
Tomb (Secretary), Brubaker, Brumbaugh, Delaney, Geiser, Glass,
Heilman, Latimer and Szewczyk possesses and exercises all the
powers of the Board, except for matters which are required by law
to be acted upon by the full Board. The Executive Committee
considers major policy matters and makes reports and
recommendations to the Board. The Committee met 4 times in 1994.
The Audit Committee is comprised of Messrs. Latimer
(Chairman), Hallstrom, Irvin, Cote and Proske and reviews the
internal auditing procedures and controls of the Corporation and
its subsidiaries. The Audit Committee also reviews reports of
examinations of the Subsidiary Banks received from state and
federal regulators, as well as reports from internal and external
auditors. The Audit Committee formally reports to the full Board
of Directors its evaluations, conclusions and recommendations
with respect to the condition of the Corporation, the Subsidiary
Banks and CSC and the effectiveness of their policies, practices
and controls. The Committee met 4 times in 1994.
The Executive Compensation Committee is comprised of Messrs.
Johnson (Chairman), Cote, Irvin and Latimer. The Committee met
four times in 1994. (See Report of the Executive Compensation
Committee.)
The By-Laws of the Corporation require that any shareholder
who intends to nominate or cause to have nominated any candidate
for election to the Board of Directors (other than a candidate
proposed by the Corporation's then existing Board of Directors)
must notify the Secretary of the Corporation in writing not less
than 120 days in advance of the date of the Corporation's proxy
statement released to its shareholders in connection with the
previous year's annual meeting of shareholders called for the
election of directors (for the 1995 meeting of shareholders, such
notification must have been received by the Secretary on or
before November 27, 1994). Such notification must contain (to
the extent known by the notifying shareholder) the name, address,
age, principal occupation and number of shares of the Corporation
owned by each proposed nominee; the name, residence address and
number of shares of the Corporation owned by the notifying
shareholder; the total number of shares that, to the knowledge of
the notifying shareholder, will be voted for each proposed
nominee; a description of all arrangements or understandings
between the shareholder and each nominee and any other person or
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persons pursuant to which the nomination or nominations are to be
made by the shareholder; such other information regarding each
nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had the nominee been
nominated by the Board of Directors; and the written consent of
each nominee, signed by such nominee, to serve as a director of
the Corporation if so elected. The Board of Directors as a whole
would consider nominations submitted by a shareholder if
submitted in accordance with the By-Laws and otherwise in time
for such consideration.
COMPENSATION OF DIRECTORS
Directors who currently serve in a management capacity at
FCFC or serve as an affiliate President are compensated at the
rate of $1,000 per quarterly meeting attended. All other
Directors are compensated at the rate of $1,500 per quarterly
meeting attended as well as payment of an annual retainer of
$5,000. Committee members receive $200 per committee meeting
attended.
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COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain information regarding
compensation received by the Chief Executive Officer and the
remaining four most highly compensated named executive officers
of the Corporation.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and All Other 1
Principal Position Year Salary2 Bonus Compensation
$ $ $
E. James Trimarchi 1994 329,500 20,500 19,481
Chairman of the Board, 1993 311,800 0 21,006
President and Chief 1992 282,000 32,500 28,122
Executive Officer of
First Commonwealth
Financial Corporation
Joseph E. O'Dell 1994 197,000 19,700 15,472
Senior Executive Vice 1993 185,400 0 21,190
President and Chief 1992 150,700 30,000 19,737
Operating Officer of
First Commonwealth
Financial Corporation
Johnston A. Glass 1994 169,706 33,941 19,481
President and Chief 1993 162,500 0 19,120
Executive Officer 1992 149,150 0 18,693
of National Bank of the
Commonwealth
Gerard M. Thomchick 1994 174,700 16,960 19,481
Executive Vice President 1993 161,200 0 17,800
of First Commonwealth 1992 125,000 25,000 18,800
Financial Corporation
William Miksich, 1994 143,736 10,780 18,692
President and Chief 1993 135,200 0 16,339
Executive Officer of 1992 128,320 0 16,253
Deposit Bank
(1) Includes the matching and automatic contribution by the
Corporation to the individual's account in the Corporation's 401(k)
Plan as well as the allocation of shares to the individual's
account in the ESOP.
(2) Includes compensation for services on boards and committees of
the Corporation and/or various subsidiaries.
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Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the Securities Act of 1933,
as amended, or the Securities and Exchange Act of 1934, as
amended, that might incorporate future filings, including this
Proxy Statement in whole or in part, the following report and the
Performance Graph on page 17 shall not be incorporated by
reference into any such filings.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
TO: Board of Directors
The following is a report by the Executive Compensation
Committee of the Board of Directors of First Commonwealth
Financial Corporation. The objectives of the report are to
provide shareholders with an explanation of the overall executive
compensation philosophy, strategies and specific compensation
plans.
EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee is comprised of four
(4) non-employee and independent directors selected from the
Board of Directors of First Commonwealth Financial Corporation.
The Committee met four times in 1994.
The Committee seeks to achieve and maintain a position of
"equity" with respect to balancing the interests of the
shareholder with those of the executive officers.
During 1994, the Executive Compensation Committee followed a
formal Executive Compensation Program which is illustrated in
part by the following performed tasks:
1. Ongoing refinement and documentation of an executive
compensation philosophy.
2. Ongoing review of relevant peer groups; collection and
analysis of comparative executive compensation
information.
3. Refining an executive compensation plan that addresses
base salary and benefits, incentive-based compensation
and supplemental benefits.
4. Ensuring that all regulatory requirements pertaining to
executive compensation are met.
5. Maintaining the Executive Compensation Program on an
ongoing basis.
Executive officers of the Corporation may, at the request of
the Committee, be present at meetings of the Committee for input
and discussion purposes. However, the executive officers have no
direct involvement with the decisions of the Executive
Compensation Committee, nor do they have a vote in any matters
brought before the group. Consultants and other independent
outside advisors may also be utilized by the Committee from time
to time in a similar manner.
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Business conducted by the Executive Compensation Committee
at each meeting is documented in the form of minutes and
submitted to the Board of Directors on a timely basis.
EXECUTIVE COMPENSATION PHILOSOPHY AND POLICY
The written executive compensation philosophy expresses the
attitude of the Board of Directors toward such issues as
participation, relevant peer comparisons and plan design; as
such, it represents an important part of the Executive
Compensation Program. The philosophy provides guidance to the
deliberations of the Executive Compensation Committee and, within
the overall objectives of equity and regulatory compliance, acts
as a standard against which plan performance can be measured.
The Executive Compensation Program is designed to encourage
decisions and actions that have positive impact on the
Corporation's overall performance. For that reason, program
participation is limited to those individuals who have the
greatest opportunity to influence the achievement of strategic
corporate objectives.
As part of the overall Program, the compensation philosophy
defines what the organization will pay for various skills and
abilities based upon criteria such as job worth and competitive
comparisons. The Executive Compensation Committee has
established the following parameters for the pay philosophy under
the current Program:
1) An overall Program that is not particularly complex as
well as one which is readily communicated and easily
understood by participants and shareholders.
2) Base salary that is at least at the fiftieth percentile
of the competitive rate for the position as defined by
selected peer group information.
3) Base salary adjustments that are based upon maintaining
external competitiveness.
4) Performance-based compensation adjustments that are
subjective and discretionary on the part of the
Executive Compensation Committee. These discretionary
adjustments will be made while taking into
consideration factors such as performance versus budget
and return on shareholder equity.
5) Utilization of IRS "qualified" plans whenever they are
in the best interests of both the executive officer and
the Corporation
The Executive Compensation Committee utilized several
factors to define an appropriate competitive peer group including
the type of company from which executive talent might be
recruited, a logical geographic region, organizational size and
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structural complexity, organizational performance, and the
ability to identify and "match" executive officer positions in
terms of responsibilities and performance.
The 1994 peer group was developed utilizing this methodology
and philosophy and, in the opinion of the Committee, represents a
fair and reasonable standard against which executive pay may be
compared. The peer group included Pennsylvania commercial banks
and bank holding companies of asset sizes and characteristics
similar to those of the Corporation and its affiliates.
EXECUTIVE COMPENSATION PROGRAMS
The primary components of the Corporation's Executive
Compensation Programs are base salaries and base benefits. Base
salaries are assessed by taking into account the position
responsibilities and competitive salary data as generally defined
by comparable peer group information from similarly sized banks
and bank holding companies within Pennsylvania. Executive
officer compensation was set to correspond within the overall
range of the peer group data. Program participants are also
eligible to partake in the normal benefit programs available to
employees of the Corporation and its affiliates. In addition,
executive officers of the Corporation may be granted cash bonuses
in recognition of their individual and collective contributions
to the performance of the Corporation. These bonus awards are
subjective and discretionary on the part of the Executive
Compensation Committee.
Executive Officers may participate in the Executive Officer
Loan/Stock Purchase Plan which provides for corporate sponsored
loans at market rate for the purchase of the Corporation's common
stock.
With respect to performance-based compensation, affiliate
Presidents may be eligible to participate in an Affiliate
Presidents Incentive Compensation Plan. The Plan provides
incentives of up to 25% of base pay. The Plan is two-tiered.
The first tier of the Plan provides for half of the incentive to
be awarded when an affiliate President has successfully led the
affiliate to the attainment of its targeted annual budget which
is tied to the Corporation's profitability. The second tier
provides for some or all of the balance of the incentive to be
awarded to an affiliate President based upon individual
contributions of varying nonquantitative Corporate objectives
such as the successful implementation of recommended programs and
products.
CHIEF EXECUTIVE OFFICER COMPENSATION
The base salary of the Corporation's Board Chairman,
President and Chief Executive Officer, E. James Trimarchi, was
increased from $305,000 in 1993 to $329,500 in 1994. This amount
is within the peer group's range of compensation for this
position. This 8% increase was given to recognize Mr.
Trimarchi's ongoing outstanding contributions to First
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Commonwealth Financial Corporation. Under his leadership, the
Corporation had in 1993 its eleventh consecutive year of record
earnings. Furthermore, the Corporation continued to implement
its long-term strategic plan in 1993 which included the execution
of an acquisition plan to expand the Corporation's market area
and growth potential; the introduction and implementation of
technological systems designed to improve organizational
efficiency, effectiveness and to enhance quality service; and
ongoing product development to better attract and retain a
dynamic customer base.
Mr. Trimarchi was also the recipient of a 10% cash bonus in
1994 for various accomplishments in 1993. Those accomplishments
included a 12% increase in the price of FCFC stock; the
announcement of a two-for-one stock split; a dividend increase to
shareholders; and an increase in reported earnings of 13%.
Mr. Trimarchi was an eligible participant in the
Corporation's 401(k) Plan and ESOP. As such, he received
contributions from the Corporation to both plans in 1994.
1994 EXECUTIVE COMPENSATION ACTIONS
As part of the continuing process of maintaining an
equitable Executive Compensation Program, the Executive
Compensation Committee took several actions in 1994, the most
notable of which are:
1. The ongoing gathering and analysis of competitive
information from a selected group of Pennsylvania peer
banks and bank holding companies.
2. Continued to refine the Incentive Compensation Plan for
Affiliate Presidents.
3. Implemented the Executive Officer Loan/Stock Purchase
Plan which had been developed by the Committee in 1993.
Submitted by the Executive Compensation Committee:
David L. Johnson, Chairman David Irvin
Edward T. Cote Dale P. Latimer
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PERFORMANCE GRAPH
Set forth below is a table comparing the yearly percentage
change in the cumulative total shareholder return on the
Corporation's Common Stock against the cumulative total return of
the S&P 500 Index and an Index for Pennsylvania Bank Holding
Companies with assets between one and three billion dollars
including F.N.B. Corporation, First Western Bancorp Inc., Fulton
Financial Corp., US BANCORP Inc., S&T Bancorp Inc. and
Susquehanna Bancshares Inc. for the five years commencing
January 1, 1990 and ending December 31, 1994.
1989 1990 1991 1992 1993 1994
Peer Group Index 100.00 83.03 107.71 154.25 185.45 179.27
First Commonwealth
Financial Corporation 100.00 103.43 107.42 162.44 193.75 153.90
S&P 500 Index 100.00 93.44 118.02 123.29 131.99 129.96
Assumes that the value of the investment in FCFC Common
Stock and each index was $100 on January 1, 1990 and that
all dividends were reinvested.
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EXECUTIVE COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee consists of Messrs.
Johnson, Cote, Latimer and Irvin. No member was an officer or
employee of the Corporation during 1994 nor has ever been a
former officer or employee of the Corporation or a subsidiary
during 1994. Further, during 1994, no executive officer of the
Corporation served on a compensation committee (or other board
committee performing equivalent functions) or Board of Directors
of any entity related to the above named Committee members or of
any entity of one of whose executive officers served as a
director of the Corporation.
INTERESTS OF NOMINEES, DIRECTORS AND OFFICERS IN CERTAIN
TRANSACTIONS
Mr. Brumbaugh serves as Chairman of the Board and Chief
Executive Officer of Central pursuant to an employment agreement
for a period of 7 years, commencing May 1, 1992 and ending April
30, 1999. The agreement provides that Mr. Brumbaugh shall serve
in an executive capacity and shall be the Chairman of the Board
of Directors and Chief Executive Officer of Central and shall
also perform such services for FCFC as from time to time are
requested. As compensation to Mr. Brumbaugh for all services
rendered to Central and to FCFC as an officer, director or member
of any committee of Central or any of FCFC's subsidiaries or
affiliates, FCFC has agreed, in addition to director's fees and
committee meeting fees, to pay or cause Central to pay to Mr.
Brumbaugh a salary at an annual rate of $100,000, which sum shall
be adjusted upward at the annual rate of 5%. Should Mr.
Brumbaugh retire after at least one year of continuous service
under the agreement, thereafter he shall be paid his retirement
compensation for the remaining term of the agreement at an annual
rate of $50,000, adjusted upwards annually for cost of living at
the rate of 5%. Should Mr. Brumbaugh die at any time during the
agreement, in lieu of the foregoing payments, FCFC shall pay his
wife the sum of $25,000 per year if she is living at the time
each payment is made. As a part of the agreement and for a
period of ten years thereafter, Mr. Brumbaugh will not engage in
any competing business within 10 miles of any of the banking
facilities of the Corporation or solicit any of their then-
existing customers.
Mr. Koslow serves as Chairman of the Board, President and
Chief Executive Officer of Peoples Bank of W. PA under an
employment agreement with Peoples extending to July 19, 1998.
The agreement provides that Mr. Koslow will serve in such
executive capacity as may be designated from time to time by the
Board of Directors. As compensation to Mr. Koslow, Peoples
agrees to pay him a minimum annual salary equal to the annual
salary in effect on July 20, 1988, such annual salary to be
subject to annual review for possible increase. If Mr. Koslow's
employment is terminated other than for cause, he is entitled to
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be paid annually in equal monthly amounts, for the greater of two
years or the remaining term of the agreement, the annual salary
and bonus paid to him for the full calendar year immediately
preceding the year in which such termination occurs, plus the
insurance premiums provided in a split dollar life insurance
agreement between Peoples and Mr. Koslow. If there is a change
in control of Peoples, such minimum annual salary shall be
increased on January 1 of each year thereafter by an amount equal
to the percentage increase in the Consumer Price Index for the
preceding calendar year. If there is a change of control of
Peoples and thereafter Mr. Koslow's responsibilities are changed
without his consent, Mr. Koslow is entitled to resign within
twelve months of such change of control, in which case he is
entitled to receive annually in equal monthly amounts, for the
greater of three years or the remaining term of the agreement,
but not beyond his age 65, the annual salary and bonus paid to
him for the full calendar year immediately preceding such
resignation, plus the split dollar life insurance premiums. As
part of the agreement, Mr. Koslow has agreed that during the term
of his employment and for a period of 10 years thereafter, he
will not engage in any business in competition with Peoples or
any of its subsidiaries within 20 miles of any of their banking
facilities or solicit any of their then existing customers.
In November 1986, United and Unitas Bank entered into a
Supplemental Executive Benefit Agreement with Robert C. Williams,
President of each, which provides Mr. Williams with certain
benefits in the event of a change in control. Should Mr.
Williams' employment with Unitas Bank be terminated pursuant to a
change in control, Unitas Bank shall make payment to him for
services in an amount equal to his last full regular monthly
compensation prior to the change in control for a period of 36
months following the change in control. A termination pursuant
to a change in control may occur with a merger, consolidation,
acquisition, reorganization, sale of assets or significant stock
acquisition of United or Unitas Bank. The compensation payable
upon a change in control is unfunded and would be paid out of
general assets of Unitas Bank or its successor if they became
payable.
During 1994, David R. Tomb, Jr. attorney-at-law and the law
firm of Tomb and Tomb of which Mr. Tomb is a partner performed
legal services for the Corporation, NBOC and CSC. Mr. Tomb is a
Director and executive officer of the Corporation. The fees paid
for services during 1994 were $67,400.
One or more of the Subsidiary Banks (Lending Bank or Banks),
have extended credit to several directors and executive officers
of the Corporation, to members of their families and to
corporations or organizations in which such persons have a
beneficial interest or with which such persons are associated as
officers, partners, directors, or trustees. In all cases, except
as described in the following paragraphs, these transactions were
made in the ordinary course of business and on substantially the
same terms, including interest rates and collateral, as those
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prevailing at the time for comparable transactions with other
persons and do not involve more than the normal risk of
collectibility or present other unfavorable features. Total
loans as of December 31, 1994 to the Corporation's or its
subsidiaries' directors, executive officers, principal
shareholders and their related interests whose loan balances
exceeded $60,000 during 1994 were $24,345,000.
Mr. John I. Whalley, Jr. became an FCFC director in December
1986 and was reelected a director in 1990 and 1994. Mr. Whalley
resigned from the Corporation's Board of Directors on March 14,
1995 for personal reasons. Since January 1, 1992 there has been
outstanding from the Lending Banks to Mr. Whalley and his related
interests four loans having an aggregate original principal
balance of $2,223,631, which bear interest rates from the Lending
Bank's prime rate (currently 7%) to 11.5% and are partially
collateralized with real estate, marketable securities and motor
vehicles. These loans were incurred principally to consolidate
outstanding loans from the Lending Banks and other financial
institutions and to strengthen the Lending Banks' collateral
position.
In his examination of the Lending Bank on September 30,
1992, the Comptroller of the Currency ("Comptroller") classified
$621,092 of these loans as Substandard and $209,147 as Doubtful,
leaving an aggregate unclassified balance of $554,164 secured by
the marketable securities. At the Comptroller's instruction
$1,138,291 of these loans was placed in a nonaccrual status by
the Lending Bank. Subsequent reexamination by the Comptroller of
the Currency in 1993 resulted in $1,101,182 being classified
Substandard and with the balance remaining in non-accrual. It is
the opinion of the Lending Bank's management that the Comptroller
has classified this indebtedness as Substandard due to the
cessation of operations of Mr. Whalley's related business and the
fact that loan collateral is being sold by the borrower to repay
the indebtedness. The largest aggregate amount of indebtedness
outstanding at any time from Mr. Whalley and his related
interests since January 1, 1993 was $1,469,895, and the aggregate
amount outstanding was $1,307,576 as of February 28, 1995.
The Corporation has been advised that Mr. Whalley has filed
a voluntary petition under the provisions of Chapter 11 of the
Bankruptcy Code on February 17, 1995 with the U.S. Department of
Justice Office of the United States Trustee, Western District of
Pennsylvania.
In June 1986 the Lending Bank granted credit of $600,000 to
the purchasers of commercial real estate, the proceeds of which
were paid to David F. Irvin, a Director of FCFC. To facilitate
the granting of this credit, Mr. Irvin gave a mortgage to the
Lending Bank on a property and building adjacent to the subject
real estate. In his September 30, 1992 examination, the
Comptroller classified as Substandard $486,279 of the $518,279
balance of this loan. This loan was rewritten on August 31, 1993
at an interest rate of 8%. The loan balance was $474,730 as of
February 28, 1995.
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ACCOUNTANTS
Grant Thornton was selected by the Board of Directors to
serve as the Corporation's independent certified public
accountant for its 1994 fiscal year. Jarrett Stokes & Co. had
served as independent auditor for FCFC or NBOC since 1978. The
Board of Directors also has selected Grant Thornton as the
Corporation's independent certified public accountant for the
1995 fiscal year. A representative of Grant Thornton is expected
to be present at the Annual Meeting and will have an opportunity
to make a statement, if he desires to do so, and to respond to
appropriate questions.
ANNUAL REPORT
A copy of the Corporation's Annual Report for the fiscal
year ended December 31, 1994 is enclosed with this Proxy
Statement.
A COPY OF THE CORPORATION'S FORM 10-K ANNUAL REPORT FOR 1994
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MAY BE
OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO: DAVID R. TOMB,
JR., SECRETARY/TREASURER, BOX 400, INDIANA, PENNSYLVANIA 15701.
SHAREHOLDER PROPOSALS
Proposals of Corporation shareholders intended to be
presented at the 1996 Annual Meeting of Shareholders must be
received by the Secretary of the Corporation not later than
November 28, 1995 in order to be considered for inclusion in the
Corporation's proxy statement for that meeting.
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Appendix A
Proxy Card to Shareholders
FIRST COMMONWEALTH FINANCIAL CORPORATION
Old Courthouse Square, 22 North Sixth Street
Indiana, Pennsylvania 15701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 22, 1995
Dear Shareholder:
The Annual Meeting of Shareholders of First Commonwealth
Financial Corporation will be held at Folger Dining Hall, Indiana
University of Pennsylvania, Indiana, PA on Saturday, April 22,
1995 at 12:00 noon, local time for the following purposes:
1. To elect seven Directors to serve for terms expiring in
1998.
2. To act on such other matters as may properly come
before the meeting.
Only holders of Common Stock of First Commonwealth Financial
Corporation of record at the close of business on March 13, 1995
will be entitled to vote at the meeting or any adjournment
thereof.
To be sure that your vote is counted, we urge you to complete and
sign the proxy/voting instruction card below, detach it from this
letter and return it in the postage paid envelope enclosed in
this package. The giving of such proxy does not affect your
right to vote in person if you attend the meeting. Directions to
Folger Dining Hall are on the reverse side.
Detach Proxy Card Here
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
1. Election of FOR all WITHHOLD AUTHORITY *EXCEPTIONS
the following nominees to vote for all
nominees as listed nominees listed
Directors to below below
to serve for
terms ending
in 1998.
Nominees: Thomas L. Delaney, Ronald C. Geiser, David F. Irvin,
David L. Johnson, Robert F. Koslow, Joseph W. Proske and E. James
Trimarchi.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark the "Exceptions" box and write that nominee's name
on the line below.)
Address Change
and/or Comment Mark Here
PROXY DEPARTMENT
NEW YORK, N.Y. 10203-0003
Please sign exactly as name appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please
give your full title as such. For joint accounts each joint
owner should sign. If a corporation, please sign in full
corporate name by President or other authorized officer, giving
your full title as such. If a partnership, please sign in name
by authorized person, giving your full title as such.
Date:________________________________________, 1995
______________________________________________ (Seal)
Signature
______________________________________________ (Seal)
Please Sign, Date, and Return the Proxy Promptly Using the
Enclosed Envelope Signature if held jointly
Votes must be indicated x
(x) in Black or Blue ink.
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FIRST COMMONWEALTH FINANCIAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 22, 1995
This Proxy is Solicited on Behalf of the Board of Directors of
First Commonwealth Financial Corporation
The undersigned shareholder of First Commonwealth Financial
Corporation ("the Corporation") hereby appoints Alan R. Fairman,
Dorothy J. Jamison, and John J. Prushnok, and each of them, as
proxies of the undersigned to vote at the Annual Meeting of
Shareholders of the Corporation which the undersigned would be
entitled to vote if then personally present on the following
matters and such other matters as may properly come before the
meeting.
This proxy when properly executed will be voted in the
manner directed herein. If no direction is made, this proxy will
be voted FOR Proposal 1.
The undersigned hereby revokes all previous proxies for the
Annual Meeting of Shareholders, hereby acknowledges receipt of
the Notice of Annual Meeting and Proxy Statement furnished
therewith and hereby ratifies all that the said proxies may do by
virtue hereof.
(Continued, and to be signed and dated on the reverse side.)
FIRST COMMONWEALTH FINANCIAL CORPORATION
P.O. BOX 11003
NEW YORK, NY 10203-0003
