<PAGE>
FIRST COMMONWEALTH FINANCIAL CORPORATION
Old Courthouse Square, 22 North Sixth Street
Indiana, Pennsylvania 15701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 26, 1999
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of
Shareholders of First Commonwealth Financial Corporation (the
"Corporation") will be held at First Commonwealth Place, 654
Philadelphia Street, Indiana, Pennsylvania on Monday, April 26,
1999, at 3:00 p.m., local time, for the following purposes:
1. To elect eight Directors to serve for terms expiring in
2002.
2. To consider an amendment to the Corporation's 1995
Compensatory Stock Option Plan to allow the
participation of non-employee directors in the Plan.
3. 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 12, 1999 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, 1998, 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,
/S/David R. Tomb, Jr.
Secretary
Indiana, Pennsylvania
March 26, 1999<PAGE>
<PAGE>
FIRST COMMONWEALTH FINANCIAL CORPORATION
Old Courthouse Square, 22 North Sixth Street
Indiana, Pennsylvania 15701
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 26, 1999
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 Monday, April 26, 1999, 3:00 p.m.,
local time, and any adjournments thereof.
If the accompanying proxy is duly executed and returned, the
shares of Common Stock, par value $1.00 per share (the "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 eight nominees listed on pp. 5 and 6, and to vote
in favor of the amendment to the Corporation's 1995 Compensatory
Stock Option Plan to allow the participation of non-employee
directors in the Plan. This proposed amendment to the Plan is
described on page 20.
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 will be
mailed to shareholders of the Corporation is March 26, 1999.
Solicitation of proxies may be made by personal interviews and
telephone by management and regularly engaged employees of the
Corporation. Brokerage houses and other custodians, nominees and
fiduciaries will be requested to forward solicitation material to
the beneficial owners of the stock held of record by such
persons. Expenses for solicitation of all proxies will be paid
by the Corporation.
As of the close of business on March 12, 1999, there were
31,262,706 shares of Common Stock issued and 30,942,973 shares
were outstanding. Three million (3,000,000) shares of Preferred
Stock have been authorized; however, none of the preferred shares
is outstanding. Only shareholders of record as of the close of
business on March 12, 1999 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
1<PAGE>
<PAGE>
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 three banking
subsidiaries: (1) First Commonwealth Bank ("FCB") doing business
as NBOC Bank ("NBOC"), Deposit Bank ("Deposit"), Cenwest Bank
("Cenwest"), First Bank of Leechburg ("Leechburg"), Peoples Bank
("Peoples"), Central Bank ("Central"), Peoples Bank of Western
Pennsylvania ("Peoples of W. PA"), Unitas Bank ("Unitas"),
Reliable Bank ("Reliable"), and First Commonwealth Insurance
Agency ("FCIA") which is a wholly-owned insurance agency
subsidiary of FCB; (2) First Commonwealth Trust Company ("FCTC");
(3) and Southwest Bank ("Southwest"); also through Commonwealth
Systems Corporation ("CSC"), a data processing subsidiary; and
BSI Financial Services Inc. ("BSI"), a mortgage and loan
servicing company. The Corporation also jointly owns
Commonwealth Trust Credit Life Insurance Company ("CTCLIC"), a
reinsurer of credit life and accident and health insurance. FCB,
FCTC, and Southwest are herein collectively called the
"Subsidiary Banks."
COMMON STOCK OWNERSHIP BY MANAGEMENT
The Corporation is not aware of any person who, as of
March 12, 1999, 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 9 (the
"Summary Compensation Table") and by all directors and executive
officers as a group.
<PAGE>
<TABLE>
<CAPTION>
Amount and nature of Percent of
Name Beneficial Ownership(1) Class
<S> <C> <C>
E. H. Brubaker 10,825 (2) *
Sumner E. Brumbaugh 228,757 (2,3,8) *
Ray T. Charley 53,824 (10) *
Edward T. Cote 101,400 (5) *
David S. Dahlmann 3,480 (3,10) *
Thomas L. Delaney 14,980 *
Clayton C. Dovey, Jr. 23,134 *
Ronald C. Geiser 18,873 (3) *
Johnston A. Glass 24,641 (3) *
A. B. Hallstrom 7,979 (3) *
Thomas J. Hanford 24,129 *
H. H. Heilman, Jr. 23,000 *
David F. Irvin 64,015 *
William R. Jarrett 5,299 (3) *
David L. Johnson 13,588 (2) *
Robert F. Koslow 27,409 (2,3) *
Dale P. Latimer 889,892 (3,5) 2.88%
James W. Newill 229,100 (9,10) *
Joseph E. O'Dell 39,383 (2,4) *
Joseph W. Proske 15,283 (2,3) *
John A. Robertshaw, Jr. 22,196 (2,10) *
Laurie Stern Singer 2,500 (10) *
Gerard M. Thomchick 34,301 (2,3,4) *
</TABLE>
2<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
David R. Tomb, Jr. 323,773 (2,3,4,5,6) 1.05%
E. James Trimarchi 368,311 (3,4,5,6,7) 1.19%
Robert C. Williams 14,020 (3) *
All directors and executive
officers as a group (29 persons) 2,071,913 6.70%
*Less than 1%
()denotes footnotes
</TABLE>
(1) Under regulations of the Securities and Exchange
Commission, a person who has or shares voting or
investment power with 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 each 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, 26,385; Mr. Brumbaugh,
132; Mr. Johnson, 983; Mr. Koslow, 2,186; Mr. O'Dell, 2,224;
Mr. Proske, 31,530; Mr. Robertshaw, 2,436; Mr. Thomchick,
3,340; Mr. Tomb, 264; and all directors and executive
officers as a group, 69,480.
(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. Dahlmann, 3,480; Mr.
Geiser, 14,364; Mr. Glass, 12,304; Mr. Hallstrom, 5,237;
Mr. Jarrett, 3,569; Mr. Koslow, 10,539; Mr. Latimer, 22,145;
Mr. Proske, 1,600; Mr. Thomchick, 3,069; Mr. Tomb, 31,846;
Mr. Trimarchi, 37,868; Mr. Williams, 11,215, and all
directors and executive officers as a group 172,636.
(4) Includes 23,836 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 159,438 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 110,070 shares held by a family member over
which Mr. Brumbaugh has been appointed as power of
attorney with respect to voting power only.
3<PAGE>
<PAGE>
(9) Includes 3,480 shares held by a family member over which
Mr. Newill exercises sole voting and investment power.
(10) Directors Charley, Dahlmann, Newill, Robertshaw and Singer
became members of the Board of Directors on the occasion of
the merger of Southwest National Corporation into the
Corporation in December 1998.
As of February 28, 1999, 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 shares
of Common Stock in an aggregate amount of 2,824,237 (9.1% of the
outstanding shares). FCTC has either sole or shared voting and
investment power on these shares as listed below:
- - Total shares on which sole voting power is held: 1,036,680
- - Total shares on which voting power is shared: 1,787,557
- - Total shares on which sole investment power is held 867,539
- - Total shares on which sole investment power is shared: 1,956,699
FCTC votes shares over which it has sole voting power. Where
voting power is shared, shares are voted by FCTC in consultation
with the other persons having voting power.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 in 1998 by William Jarrett, Senior Vice President
of the Corporation. 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
terms of the Agreement and Plan of Merger (the "Agreement") between
Southwest National Corporation ("SWNC") and the Corporation, which
became effective December 31, 1998, required that 5 former
directors of SWNC be appointed to the Corporation's Board of
Directors. In consideration of the Agreement and in accordance
with the Corporation's By-Laws, the Board of Directors has fixed
the number of directors at 24 (three classes of eight directors
each).
As of March 12, 1999, 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 table on page 2-3. The
information in the table and the footnotes thereto are based upon
data furnished to the Corporation by, or on behalf of, the persons
named or referred to in the table.
Eight directors will be elected at the Annual Meeting to serve
for terms of three years expiring with the Annual Meeting of
Shareholders in 2002. Each Director elected will continue in
office until a successor has
4<PAGE>
<PAGE>
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 2002:
Sumner E. Brumbaugh 1992 Chairman of the Board of
Central; President,
Brumbaugh Insurance
Group; Age 70
Ray T. Charley 1998 President, Thomi Co.
(retail grocers); Director
of Southwest; Age 47
Edward T. Cote 1984 Associate, The Wakefield
Group (Investment
Banking); and Director of
New Mexico Banquest
Investors Corp ("NMB");
Age 62
Clayton C. Dovey, Jr. 1985 Retired; formerly
Chairman of the Board of
Cenwest; Age 74
Johnston A. Glass 1986 President and Chief
Executive Officer of FCB;
Formerly President of
NBOC; Director of FCB;
Age 49
Dale P. Latimer 1984 Chairman of the Board and
Chief Executive Officer,
R & L Development Company
(heavy construction);
Director of FCB; and NMB;
Age 68
5<PAGE>
<PAGE>
Joseph E. O'Dell 1994 President and Chief
Executive Officer of the
Corporation; formerly
President and Chief
Executive Officer of FCB;
Director of FCB, FCTC,
Southwest, FCIA, CSC and
BSI; Age 53
David R. Tomb, Jr. 1983 Partner, Tomb and Tomb
(attorneys-at-law);
Senior Vice President,
Secretary and Treasurer
of the Corporation;
Director of FCB, FCTC,
FCIA, CSC, BSI and
CTCLIC; Age 67
Continuing Directors Whose Terms End in 2000:
E. H. Brubaker 1984 Retired; formerly
Chairman of the Board of
Deposit; Age 68
A. B. Hallstrom 1986 Chairman, Hallstrom
Construction Inc.; Age 70
Thomas J. Hanford 1984 Private Investor,
Director of First Admirality
Bancorp ("BANCORP");
Age 60
H. H. Heilman, Jr. 1985 Partner, Heilman &
McClister (attorneys-
at-law); Age 82
James W. Newill 1998 Certified Public Accountant,
formerly President, J.W.
Newill Company (public
accounting); Director of
Southwest; Age 64
John A. Robertshaw, Jr. 1998 Formerly Chairman, Laurel
Vending, Inc. (vending
and food service); Director
of Southwest; Age 72
6<PAGE>
<PAGE>
Laurie Stern Singer 1998 President, Allegheny Valley
Chamber of Commerce and
President, Allegheny Valley
Development Corporation;
Director of Southwest;
Age 47
Robert C. Williams 1994 President of Unitas; Age 55
Continuing Directors Whose Terms End in 2001:
David S. Dahlmann 1998 Vice Chairman of the
Corporation; President
and Chief Executive officer
of Southwest; formerly
President and Chief Executive
Officer of SWNC; Director of
Southwest; Age 49
Thomas L. Delaney 1984 Private Investor; Age 68
Ronald C. Geiser 1985 Retired; formerly President
and Director of Cenwest;
Age 69
David F. Irvin 1984 Sole Owner, The
Irvin/McKelvy Company
(sales and engineering
for mining and industrial
services); Age 80
David L. Johnson 1984 Retired; formerly Vice
President and Corporate
Secretary, Pennsylvania
Manufacturers' Corporation
(insurance holding company);
Age 69
Robert F. Koslow 1993 Chairman of the Board of
Peoples of W. PA; Age 63
Joseph W. Proske 1984 Retired; formerly Vice
President-Engineering,
Kane Magnetics International
(manufacturer of magnetic
components); Director of
CSC; Age 62
E. James Trimarchi 1982 Chairman of the Board of
the Corporation; Director
of FCB, FCTC, FCIA, CSC,
CTCLIC, and NMB; Age 76
7
<PAGE>
<PAGE>
Board Committees
During 1998 there were 5 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 except for Mr. Hallstrom.
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 Directors Trimarchi (Chairman),
Tomb (Secretary), Brubaker, Brumbaugh, Dahlmann, Delaney, Geiser,
Glass, Heilman, Latimer, O'Dell and Robertshaw 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. Messrs.
Dahlmann and Robertshaw were appointed as additional members of the
Executive Committee under the terms of the Agreement between SWNC
and the Corporation, effective December 1998. The Executive
Committee considers major policy matters and makes reports and
recommendations to the Board. The Committee met 4 times in 1998.
The Audit Committee is comprised of Directors Latimer
(Chairman), Cote, Irvin, Newill 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,
CSC and BSI, and the effectiveness of their policies, practices and
controls. The Committee met 4 times in 1998.
The Executive Compensation Committee is comprised of Directors
Cote (Chairman), Irvin, Johnson and Latimer. The Committee met 5
times in 1998.
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 the Corporation's proxy
statement is released to its shareholders in connection with the
previous year's annual meeting of shareholders called for the
election of directors (for the 1999 meeting of shareholders, such
notification must have been received by the Secretary on or before
November 26, 1998). 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 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.
8<PAGE>
<PAGE>
COMPENSATION OF DIRECTORS
Directors who currently serve in a management capacity at FCFC
or serve in an affiliate management capacity are compensated at the
rate of $1,000 per quarterly meeting attended. For 1998, other
Directors were compensated at the rate of $1,500 per quarterly
meeting attended as well as an annual retainer of $10,000.
Committee members received $300 per committee meeting attended. In
view of the increased responsibilities of the directors resulting
from the Corporation's acquisition of SWNC, the Board, on
recommendation of the Executive Compensation Committee and outside
independent consultants, has provided that for 1999, non-management
directors are compensated at the rate of $1,750 per quarterly
meeting attended as well as an annual retainer of $12,000.
Committee members will receive $500 per committee meeting attended.
<TABLE>
<CAPTION>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
Annual Compensation
Long-Term
Compensation:
Securities
Name and All Other Underlying
Principal Position Year Salary1 Bonus Compensation2 Options/SARs3
<S> <C> <C> <C> <C> <C>
Joseph E. O'Dell 1998 $370,706 $ -0- $46,106 14,043
President and Chief 1997 381,000 -0- 16,866 22,297
Executive Officer of 1996 343,200 20,000 20,091 20,306
the Corporation
E. James Trimarchi 1998 $355,000 -0- $17,088 9,532
Chairman of the Board 1997 356,000 -0- 16,866 15,135
of the Corporation 1996 341,120 $ -0- 20,091 15,238
Johnston A. Glass 1998 $252,838 $ -0- $29,047 9,362
President and Chief 1997 256,800 -0- 16,866 14,865
Executive Officer 1996 195,480 11,243 20,091 8,302
of FCB
Gerard M. Thomchick 1998 $229,385 $ -0- $25,218 8,336
Sr. Executive Vice 1997 231,300 -0- 16,866 13,236
President and Chief 1996 217,750 12,500 20,091 12,691
Operating Officer of
the Corporation
William R. Jarrett 1998 $168,200 $ -0- $17,088 4,581
Sr. Vice President 1997 168,200 -0- 16,866 7,274
of the Corporation 1996 160,160 9,625 20,091 6,973
</TABLE>
1 Includes compensation for services on boards and committees of
the Corporation.
9<PAGE>
<PAGE>
2 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, the matching and automatic
contributions by the Corporation to the individual's account
in the Corporation's Supplemental Executive Retirement Plan
("SERP") and the actuarial value of the Corporation's
contribution to the split-dollar life insurance policies. The
SERP is more fully described on page 13.
3 Further information is provided below.
The following tables set forth certain information regarding
stock options granted in 1998 to the Chief Executive Officer and
the remaining four most highly compensated named executive
officers of the Corporation.
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN FISCAL YEAR 1998
% OF EXERCISE POTENTIAL REALIZED VALUE
TOTAL OPTIONS OR AT ASSUMED ANNUAL RATES
OPTIONS GRANTED TO BASE PRICE EXPIRATION OF STOCK PRICE APPRECIATION
NAME GRANTED EMPLOYEES PER SHARE DATE FOR OPTION TERM
5% 10%
<S> <C> <C> <C> <C> <C> <C>
Joseph E. O'Dell 14,043 4.84% $29.375 Mar 1, 2008 $123,401 $405,216
E. James Trimarchi 9,532 3.28 29.375 Mar 1, 2008 83,761 275,049
Johnston A. Glass 9,362 3.23 29.375 Mar 1, 2008 82,268 270,144
Gerard M. Thomchick 8,336 2.87 29.375 Mar 1, 2008 73,252 240,538
William R. Jarrett 4,581 1.58 29.375 Mar 1, 2008 40,255 132,186
</TABLE>
<TABLE>
<CAPTION>
AGGREGATE STOCK OPTION EXERCISES IN FISCAL YEAR 1998
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF NUMBER OF
SECURITIES SECURITIES VALUE OF VALUE OF
UNDERLYING UNDERLYING UNEXERCISED UNEXERCISED &
UNEXERCISED UNEXERCISED & BUT EXERCISABLE UNEXERCISABLE
BUT EXERCISABLE UNEXERCISABLE IN-THE-MONEY IN-THE-MONEY
OPTIONS AT OPTIONS AT OPTIONS AT OPTIONS AT
NAME FISCAL YEAR END FISCAL YEAR END YEAR END YEAR END
<S> <C> <C> <C> <C>
Joseph E. O'Dell 36,340 20,306 $133,872 $124,374
E. James Trimarchi 24,667 15,238 90,810 93,333
Johnston A. Glass 24,227 8,302 89,190 50,850
Gerard M. Thomchick 21,572 12,691 79,416 77,732
William R. Jarrett 11,855 6,973 43,644 42,710
</TABLE>
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.
10<PAGE>
<PAGE>
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 five times in 1998.
The Committee's goal is to maximize shareholder value by
establishing an executive compensation program consisting of
sufficient base compensation to attract and retain the most
highly qualified persons for the executive officer positions and
to supplement that basic compensation with incentive compensation
that puts each executive officer at risk and that provides
financial rewards only where the performance level of the
Corporation justifies such rewards.
Throughout 1998, the Committee followed a formal Executive
Compensation Program which is illustrated, in part, by the
following performed tasks:
1. Researching peer group compensation activities to ensure
both consistency and competitiveness in the composition
of the Corporation's executive compensation program.
2. Evaluating current and proposed components of the
Corporation's executive compensation program to ensure
consistency with its philosophy on executive
compensation.
3. Ensuring that all regulatory requirements pertaining to
executive compensation are met.
4. Refining the executive compensation program on an
ongoing basis as a result of the above as well as
documenting and administering the Corporation's
executive compensation program.
5. Developing a performance based retainer program for the
compensation of non-employee directors, in order to
increase shareholder value on both a short and long term
basis and to reduce transfer costs between directors and
shareholders.
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 Committee, nor do
they have a vote on any issues addressed by the Committee.
Consultants and other independent advisors may also be utilized
by the Committee from time to time in a similar manner.
Each meeting of the Committee is documented in the form of
minutes and submitted to the Board of Directors.
11<PAGE>
<PAGE>
EXECUTIVE COMPENSATION PHILOSOPHY AND POLICY
The backbone of the Executive Compensation Program is the
Executive Compensation Statement of Principles which has been
adopted by the Board of Directors. This Statement of Principles
provides guidance to the deliberations of the Executive
Compensation Committee and is the basis for its decisions. The
Statement of Principles emphasizes the view of the Corporation
that base compensation should be established based upon relevant
peer group comparisons, that wherever possible tax leverage
should be achieved by using plans that are tax advantaged and
that compensation should be designed to maximize the incentive of
the executive officers to increase the Corporation's long-term
performance.
Consistent with this objective, the Executive Compensation
Program is structured to foster decisions and actions which will
have a strong positive impact on the Corporation's long-term
performance. For this reason, participation in the programs
administered by the Executive Compensation Committee is limited
to those executives who have the greatest opportunity to affect
the achievements of the Corporation's long-term strategic
objectives.
The Executive Compensation Committee has established the
following parameters for executive compensation under the 1998
program:
1. An overall program which is not overly complex and may
be readily communicated and easily understood by
participants and shareholders.
2. Base salary that is at the fiftieth to seventy-fifth
percentile of the competitive rate for the position as
defined by selected peer group information.
3. Base salary adjustments which maintain internal equity.
4. An incentive-based compensation system, in which a cash
incentive bonus will be paid if justified on the basis
of the Corporation's financial performance for the year.
5. Utilization of IRS "qualified" plans whenever they are
in the best interests of both the executive officer and
the Corporation.
6. Use of equity-based compensation through the
Corporation's 1995 Compensatory Stock Option Plan to
provide a long-term incentive for the executive officers
of the Corporation to maximize the Corporation's stock
price and increase shareholder value.
7. Use of special plans to equalize benefits between the
principal executive officers of the Corporation and
other officers and employees where, because of dollar
limitation or similar restrictions, benefit levels under
the Corporation's regular plans are restricted in the
amount that can be paid to senior executive officers.
8. Recommend to the shareholders amending the Corporation's
1995 Compensatory Stock Option Plan to include non-
employee directors of the Corporation in order to
provide an incentive based retainer for the
Corporation's directors.
12<PAGE>
<PAGE>
9. Introduce a deferred compensation plan for those
directors who are interested in deferring receipt of
their director's retainer and/or committee fees. A
director who elects to defer his retainer and/or
committee fees will receive interest at FCB's
prime rate, for the period deferred. There is no cost to
the Corporation of making this benefit available to the
Corporation's directors, other than the cost of
administering the program.
The Executive Compensation Committee utilized several
actors to define an appropriate competitive peer group including
the type of company from which executive talent might be
recruited, a logical geographical region, organizational size and
structural complexity, organizational performance, and the
ability to identify and make relevant comparisons of executive
officer positions in terms of responsibilities and performance.
The 1998 peer group was structured 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. With the merger of SWNC into the
Corporation, the assets of the Corporation have increased by over
$1 billion during the year. The Committee has accordingly
carefully reviewed and redesigned its competitive peer group to
reflect banks and bank holding companies more equivalent in size
to the Corporation.
EXECUTIVE COMPENSATION PROGRAMS
The primary components of the Corporation's Executive
Compensation Program are base salaries, benefits, participation
in the Corporation's Stock Option Plan and a cash performance-
based incentive plan. Under the latter program (which will first
pay bonuses in 1999 based upon 1998 performance) a cash incentive
bonus will be paid to the executive officers if the increase in
primary earnings per share as compared with the previous year is
at least eight percent (ten percent in the case of the four
ighest paid executive officers). This move is consistent with
industry and peer group trends regarding greater emphasis being
laced on performance which is incentive based and which is at
risk for the executive. This provides an incentive to the
executives to increase the Corporation's financial performance
and enhances shareholder value.
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 bank and bank holding companies in the Middle
Atlantic and adjacent states. 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.
The Committee was also concerned with the lack of equity
between certain of the executive officers of the Corporation and
the other officers and employees of the Corporation. By law, the
maximum compensation that may be reflected under the
Corporation's 401(k) and ESOP plans is presently $160,000
annually. Similar dollar limits further reflect the maximum
benefits that may be paid under those plans to the Corporation's
senior executives. This amount may increase with cost-of-living
in subsequent years. Thus, the senior executives of the
Corporation and its subsidiaries receive much less benefits from
the Corporation's 401(k) and ESOP plans, as a percent of their
compensation, than do the other employees of the Corporation.
Therefore, at the recommendation of the Committee a Supplemental
Executive Retirement Plan ("SERP") was established by the
Corporation during 1998 to supplement the benefits of certain of
the senior executives who would otherwise be subject to the
dollar limitations described above. Presently, the three highest
paid executives of the Corporation and its subsidiaries who are
under age sixty-five are included within the SERP, although the
Committee reserves the right to include other senior executives
of the Corporation and its subsidiaries within the SERP. The
benefits are substantially identical to that provided under the
Corporation's regular 401(k) and ESOP plans with respect to
compensation up to $160,000 annually. A trust was established
with FCTC to fund the benefits of the SERP. Upon the bankruptcy
or insolvency of the Corporation, or a similar event, the assets
13<PAGE>
<PAGE>
held in trust to fund the SERP will be released from the trust
and will be used to pay the creditors of the Corporation in a
manner approved by the courts. In all other circumstances, the
amount held in trust will be used to fund the benefits of the
SERP. It should also be noted that, unlike the Corporation's
regular 401(k) and ESOP plans, the contributions that the
Corporation makes to the SERP are not tax deductible when
contributed to the trust, but rather become tax deductible only
in the year received by the participant and become taxable income
to him. Finally, the investment earnings of the trust are not
taxable to it, but do constitute taxable earnings to the
Corporation.
Similarly, the Corporation was concerned that since there is
maximum of $400,000 on the death benefit coverage provided for
all employees of the Corporation and its subsidiaries, the death
benefit as a percent of compensation to its senior executives is
substantially less than that provided to all of the other
employees of the Corporation. Accordingly, the Corporation
established a split-dollar program which presently covers the
three most highly compensated employees of the Corporation and
its subsidiaries presently under age sixty-five. The payment of
the annual premium for this life insurance is split between the
Corporation and the insured. The Corporation does not receive a
tax deduction for its share of the premium, but all of the
contributions made by the Corporation are paid back to it either
on the death of the insured, or on the date that the policy is
transferred to the insured (generally age sixty-five). If there
is termination of employment (other than by death) in the first
few years after the policy is established, it is possible that
there will be insufficient cash value to fully repay to the
Corporation the aggregate premiums which it previously paid to
the insurance company.
Also, executive officers are included in the Compensatory
Stock Option Plan which was approved by the Board of Directors in
1995 and the shareholders in 1996. The Executive Compensation
Committee is authorized to grant incentive stock options and non-
qualified stock options to key employees of the Corporation and
its subsidiaries. These stock options enable the optionee to
purchase the Corporation's common stock at its market price on
the day of the grant of the option. To date, three separate
grants have been made, one each in 1996, 1997 and 1998. None of
the options granted in 1996 may be exercised prior to their
vesting date of June 3, 1999 (except in the limited circumstances
of death, disability or change-in-control), nor may they be
exercised after the expiration date of June 3, 2006. Additional
options, which were granted in 1997, vested on December 31, 1997
and may be exercised at any time prior to the expiration date of
February 26, 2007. Additional options were also granted in 1998,
vested on December 31, 1998 and may be exercised at any time
prior to the expiration date of March 1, 2008. The Committee
plans to continue using the granting of such options as a
performance-based incentive program that encourages the long-term
increase of the Corporation's share price and enhances
shareholder value.
In addition, executive officers may also participate in the
Executive Officer Loan/Stock Purchase Plan which provides for
corporate sponsored loans at market rates primarily for the
purchase of the Corporation's common stock.
CHIEF EXECUTIVE OFFICER COMPENSATION
In 1998, Mr. O'Dell completed his fourth year as President
and Chief Executive Officer of the Corporation. He received a
base salary of $375,000 which was within the peer group's range
of compensation for this position.
Mr. O'Dell led the Corporation through a year which saw the
advancement of significant progress in the ongoing implementation
of a strategic plan which will fundamentally expand the size and
scope of the Corporation in future years.
14<PAGE>
<PAGE>
The most significant event in 1998 was Mr. O'Dell's
successful leadership in the Corporation's negotiations and
subsequent merger of the Corporation with SWNC, located in
Greensburg, PA. The merger with SWNC increased the Corporation's
size by almost one-third; thus, placing it among the top one
twenty hundred largest banking institutions in the United States.
The costs associated with the merger came in under budget and the
merger was closed on schedule. Consolidation and streamlining
activities began immediately in the core functions such as trust,
data processing, human resources, audit, asset/liability
management, and investments. In addition, an early retirement
incentive was offered to assist with the streamlining of overall
staffing levels.
The merger with SWNC enabled the Corporation to lay the
groundwork for dramatic improvements in future earnings by taking
a restructuring charge. The charge was comprised of an
organization-wide early retirement incentive which is expected to
be accepted by five percent of the employees; an increase in loan
loss reserves; curtailment of post-retirement medical benefits at
Southwest; and a change in the asset/liability mix that is
anticipated to reduce risk and improve earnings.
Mr. O'Dell's strategic vision from his first three years as
President and Chief Executive Officer continued to show results
in 1998. Mr. O'Dell's technical background has enabled him to
closely work with Rosemary Krolick, Chief Information Officer, to
ensure the Corporation's computing applications are properly
certified as being Year 2000 compliant. The Corporation
continues to be on, or ahead of, schedule with respect to the
certification of its computing applications as being year 2000
compliant.
Another area which is benefiting from Mr. O'Dell's foresight
is First Commonwealth Insurance Agency which in 1998 profitably
completed its first full year of business. The implementation of
plans to expand the scope of FCIA throughout the Corporation have
begun with the ongoing licensing of bank personnel so insurance
needs of customers throughout the expanding market area may be
properly and profitably served. In addition, staffing and
processing consolidation initiatives throughout the year have
enabled the Corporation to redeploy staffing resources to those
positions which are most profitable resulting in a reduction in
the compensation costs per revenue dollar.
Mr. O'Dell's initiative for the integration of the various
sales units is part of the development of a broad-based banking
and financial planning unit which is designed to serve the full-
range of the financial services needs of the Corporation's
current and future customers. Coinciding with this initiative is
the ongoing analysis of product profitability and the
compensation of employees based upon a combination of
organizational and individual performance factors.
Under Mr. O'Dell's leadership, 1998 saw the Corporation's
core earnings increase by 14% prior to the merger with SWNC, or
11% after considering the result of the merger accounted for by
the pooling-of-interest merger. In addition, the Corporation's
stock has proven to be one of the highest yielding bank stocks in
the United States. Furthermore, for the fourteenth straight year
there was an increase in the value of the dividend the
Corporation paid to the shareholders.
In 1998 Mr. O'Dell 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 1998.
15<PAGE>
<PAGE>
1998 OTHER EXECUTIVE COMPENSATION ACTIONS
In addition to that described above, in 1998 the Executive
Compensation Committee made its third set of grants under the
Stock Option Incentive Plan. The Executive officers and other
key members of management, including the affiliate and partner
bank presidents and their respective senior staffs, were awarded
such grants.
In addition, the Committee explored various plan designs for
enhancing shareholder value by increasing performance incentive
compensation.
Submitted by the Executive Compensation Committee:
Edward T. Cote, Chairman David F. Irvin
David L. Johnson Dale P. Latimer
16<PAGE>
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph 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 five billion
dollars, including F.N.B. Corporation, First Western Bancorp
Inc., Fulton Financial Corp., USBANCORP Inc., S&T Bancorp Inc.
and Susquehanna Bancshares Inc., for the five years commencing
January 1, 1994 and ending December 31, 1998.
Cumulative Five Year Total Return
First Commonwealth vs. S&P 500 and Peer Group
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Peer Group Index 100.00 97.18 142.62 166.26 280.69 265.25
First Commonwealth
FinancialCorporation 100.00 79.52 106.71 115.85 229.64 164.89
S&P 500 Index 100.00 99.26 139.31 171.21 228.26 293.36
</TABLE>
Assumes that the value of the investment in FCFC Common Stock
and each index was $100 on January 1, 1994 and that all
dividends were reinvested.
17<PAGE>
<PAGE>
EXECUTIVE COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee consists of Directors Cote,
Johnson, Latimer and Irvin. No member was an officer or employee of
the Corporation during 1998 nor has ever been an officer or employee
of the Corporation or a subsidiary. Further, during 1998, 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 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 of Central Bank
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 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, thereafter he shall
be paid a 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 term of 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.
In anticipation of the merger between FCFC and SWNC the Employer
entered into an employment agreement with the President and Chief
Executive Officer of SWNC and Southwest, David S. Dahlmann. The
terms of the agreement became effective following the completion of
the merger. Mr. Dahlmann's agreement is for five (5) years followed
by successive one (1) year automatic renewals unless either party
gives contrary written notice. The agreement provides Mr. Dahlmann
with employment as both the Vice Chairman of FCFC and the President
and Chief Executive Officer of Southwest. In exchange for his
services Mr. Dahlmann will receive cash compensation equal to three
hundred thousand dollars ($300,000) per year in the form of base pay
which is subject to increases as the Employer may deem appropriate.
In addition, Mr. Dahlmann is eligible to receive all of the same
employee benefits as other employees of the Employer who are at a
similar level and classification. As such he is a participant in the
Cash Incentive Bonus Plan, Supplemental Executive Retirement Plan,
Split-Dollar Life Insurance Plan, Compensatory Stock Option Plan,
401(k), ESOP, and the group health, disability, and life insurance
plans. Should the Employer terminate Mr. Dahlmann's employment
without cause at any time, or should Mr. Dahlmann terminate his
employment for good reason, the Employer shall pay him an amount
equal to twelve (12) month's base salary at his then current rate of
compensation. In addition, the Employer shall continue to pay its
share of Mr. Dahlmann's health insurance premiums for a period of not
more than eighteen (18) months. Should the Employer terminate Mr.
Dahlmann for just cause he shall have no right to compensation or
other benefits for any period after the date of termination. If
during the term of the agreement a change in control of the Employer
occurs as defined by the agreement, Mr. Dahlmann may terminate his
employment for a period of up to (12) months following such a change.
He would then be eligible for a severance payment based upon the
average aggregate annual compensation for a defined period of time
multiplied by three (3). The Employer would assume responsibility
for the full cost of the health insurance premium for eighteen (18)
months plus provide six (6) months of outplacement assistance with an
external provider.
18<PAGE>
<PAGE>
In November 1986, Unitas entered into a Supplemental Executive
Benefit Agreement with Robert C. Williams, President of Unitas, which
provides Mr. Williams with certain benefits in the event of a change
in control. Should Mr. Williams' employment with Unitas be
terminated pursuant to a change in control, Unitas 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 Unitas. The compensation payable upon a change in
control is unfunded and would be paid out of general assets of Unitas
or its successor if they became payable.
At the 1996 Annual Meeting, the shareholders approved and
ratified the Corporation's Change in Control Agreement Program for
the Corporation's executive officers and certain other key employees.
Except as described below, all of the agreements are identical in all
material respects.
If, within one year following the occurrence of a change in
control, the employer involuntarily terminates the employment of the
executive (other than for cause as defined below), substantially
reduces the executive's title, responsibilities, power or authority,
reduces the executive's base compensation, assigns duties which are
inconsistent with previous duties, or undertakes similar actions, a
severance benefit equal to one year's base compensation (payable in
twelve monthly installments) will thereupon be payable to the former
executive. Health insurance and other principal employee benefits
will be continued during that one year period. If the former
executive enters into competitive employment during the one year
period, severance payments will cease. Cause for termination shall
arise if the executive commits a felony resulting in, or intended to
result in, monetary harm to the Corporation, its customers, or
affiliates, or if the executive intentionally fails to perform his
duties for 30 consecutive days following written notice from the
Corporation that such duties are not being performed.
The agreement with Mr. O'Dell, the President and Chief Executive
Officer of the Corporation, provides for severance payments to be
made if the employer involuntarily terminates the employment of the
executive (other than for cause as defined above), or undertakes
similar action as described above, within three years of a change in
control (rather than one year as described above for other
agreements). Furthermore, Mr. O'Dell's agreement provides a
severance benefit equal to three year's compensation (payable in
thirty-six monthly installments) with continuation of health
insurance and other principal employee benefits during that period.
In addition, Mr. O'Dell may also trigger the payment of severance
benefits (in the same amount and under the same conditions described
above) by voluntarily terminating employment within one year
following a change in control. However, the voluntary termination
provision will no longer be available once Mr. O'Dell attains normal
retirement age under any of the Corporation's regular retirement
plans.
Separate agreements with Mr. Thomchick, Senior Executive Vice
President of the Corporation and Mr. Glass, President and CEO of FCB
are identical to Mr. O'Dell's agreement in all material respects
except that severance payments are triggered only if the involuntary
termination of employment or other triggering event occurs within two
years of the change in control and the total severance benefit in his
case is equal to two years compensation (payable in twenty-four
monthly installments).
In December 1998, FCB executed an agreement with Mr. Glass who
serves as President and Chief Executive Officer of FCB. The
agreement defines the severance package Mr. Glass would receive
should his employment be terminated by the Employer for reasons other
than for just cause prior to his sixty-third (63rd) birthday. Should
such a termination occur Mr. Glass would receive compensation
payments for twenty-four (24) months following his separation. The
payments would be based upon the rate of annual compensation he was
receiving at the time of separation. Mr. Glass would be prohibited
from employment with a competitor, directly or indirectly, in the
Employer's market area in the twenty-four (24) months following his
termination
19<PAGE>
<PAGE>
without just cause. The Employer is obligated to continue to pay its
share of the cost of health insurance premiums for Mr. Glass for a
period of twenty-four (24) months following his separation. Mr.
Glass may also elect to invoke the terms of the agreement by
terminating his employment for any reason. The agreement permits the
Employer to terminate Mr. Glass for just cause at any time. The
agreement does not call for the payment of any compensation or
benefit coverage should a just cause termination occur. The
agreement does not diminish the rights of Mr. Glass under any other
existing agreements, including a change of control agreement.
During 1998, 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, FCB, FCTC, CSC, BSI and FCIA. Mr. Tomb
is a director and executive officer of the Corporation. The fees
paid for services during 1998 were $70,000.
APPROVAL OF AMENDMENT TO
THE CORPORATION'S 1995
COMPENSATORY STOCK OPTION PLAN
At the 1996 Annual Meeting, the shareholders approved the
Corporation's 1995 Compensatory Stock Option Plan (the "Option
Plan"). A description of the Option Plan, together with the full text
of the Option Plan, appeared in the proxy dated April 20, 1996 and
the discussion below, to the extent that it relates to the Option
Plan, is qualified in its entirety by the full text of the Option
Plan, as set forth in Exhibit A to the 1996 proxy. A copy of the
1996 proxy statement may be obtained without charge upon written
request to David R. Tomb, Jr., Secretary/Treasurer, Box 400, Indiana,
Pennsylvania 15701. The Corporation's Board of Directors now
recommends that the Option Plan be amended. The Board of Directors
recommends that the shareholders vote "FOR" the amendments to the
Option Plan described herein. The Board recommends that two
amendments be currently made to the Option Plan, as listed below:
1. Non-employee directors be permitted to participate in the
Option Plan to the same extent, and subject to the same
rules and provisions, as employees of the Corporation and of
its subsidiaries and affiliates. This will provide a means
of increasing shareholder equity by encouraging short and
long term increases of the Corporation's share price and
provide a vehicle for fairly compensating directors without
the adverse cash flow impact that may result if directors'
retainer could be paid solely and exclusively in cash.
2. The Committee be given the discretion to vest any option
grant on the date that the option is granted or at any
subsequent time not later than five (5) years after the date
of such grant. Presently, the Committee may vest any option
not earlier than six (6) months after the date of such grant
nor later than five (5) years after such date. The Board of
Directors believes that granting the Committee the
additional flexibility in this respect will enable it to
design option grants that more effectively meet the needs of
the Corporation under varying circumstances and conditions.
The Committee has conditionally decided to grant options for
1,000 shares of the stock of the Corporation to each director who was
so serving as such on December 31, 1998 and to vest that grant from
its grant date. Such option grant is conditional upon the adoption by
the shareholders of these amendments to the Option Plan and shall
have no effect if these amendments are not adopted by the
shareholders.
20<PAGE>
<PAGE>
ACCOUNTANTS
Deloitte & Touche LLP ("Deloitte & Touche") was selected by the
Board of Directors to serve as the Corporation's independent
certified public accountant for its 1998 fiscal year.
The Board of Directors also has selected Deloitte & Touche as
the Corporation's independent certified public accountant for the
1999 fiscal year. A representative of Deloitte & Touche 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, 1998 is enclosed with this Proxy Statement.
A COPY OF THE CORPORATION'S FORM 10-K ANNUAL REPORT FOR 1998 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 Annual Meeting of Shareholders to be held in the year 2000
must be received by the Secretary of the Corporation not later than
November 27, 1999 in order to be considered for inclusion in the
Corporation's proxy statement for that meeting.
In connection with the 2000 Annual Meeting of Shareholders, if the
Corporation does not receive notice of a matter or proposal to be
considered (whether or not the proponent thereof intends to include
such matter or proposal in the proxy statement of the Corporation) on
or before February 11, 2000 (45 days prior to mailing date of this
year's proxy) then the persons appointed by the Board of Directors to
act as the proxies for such annual meeting will be allowed to use
their discretionary voting authority with respect to any such matter
or proposal at such annual meeting, if such matter or proposal is
raised at such annual meeting.
21<PAGE>
<PAGE>
APPENDIX
(PROXY CARD)
(This Section Intentionally Blank)
Detach Proxy Card Here
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
1. Election of the following FOR all WITHHOLD AUTHORITY*EXCEPTIONS
nominees as Directors to nominees to vote for all
serve for terms ending listed nominees listed
in 2002 below below
Nominees: Sumner E. Brumbaugh, Ray T. Charley, Edward T. Cote,
Clayton C. Dovey, Jr., Johnston A. Glass, Dale P. Latimer,
Joseph E. O'Dell and David R. Tomb, Jr.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark the "Exceptions" box and write that nominee's name in
the space provided below.)
*Exceptions
2. Proposal to amend the 1995 Compensatory Stock Option Plan.
FOR AGAINST ABSTAIN
Change of Address
and or Comments
Comments Mark Here
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:________________________________________, 1999
_____________________________________________ (Seal)
Signature
_____________________________________________ (Seal)
Signature if held jointly
Please Sign, Date, and Return the Proxy Promptly Using the Enclosed
Envelope
Votes must be indicated x
(x) in Black or Blue ink.
<PAGE>
<PAGE>
FIRST COMMONWEALTH FINANCIAL CORPORATION
Old Courthouse Square, 22 North Sixth Street
Indiana, Pennsylvania 15701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 26, 1999
The Annual Meeting of Shareholders of First Commonwealth
Financial Corporation will be held at 654 Philadelphia Street,
Indiana, PA on Monday, April 26, 1999 at 3:00 p.m., local time,
for the following purposes:
1. To elect eight Directors to serve for terms expiring in
2002.
2. To consider an amendment to the Corporation's 1995
Compensatory Stock Option Plan.
3. 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 12, 1999
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.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FIRST COMMONWEALTH FINANCIAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 26, 1999
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 Susan McMurdy,
Carson Greene and Marvin R. Mensch, 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 and Proposal 2.
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
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
23
