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Filed Pursuant To Rule 424(b)(3)
Registration Statement No: 333-89277
FIRST COMMONWEALTH CAPITAL TRUST I
Offer to exchange
Series B 9.50% capital securities
for any and all of its outstanding
Series A 9.50% capital securities
(liquidation amount $1,000 per capital security)
Fully and unconditionally guaranteed as described in this prospectus by
First Commonwealth Financial Corporation
First Commonwealth Capital Trust I, a Delaware statutory business trust, is
offering to exchange up to $35,000,000 aggregate liquidation amount of its
Series B 9.50% capital securities for its outstanding Series A 9.50% capital
securities, of which $35,000,000 are outstanding. We refer to the Series B
capital securities in this prospectus as the exchange capital securities, and
we refer to the Series A capital securities as the original capital securities.
As part of this exchange offer, First Commonwealth Financial Corporation is
also offering to exchange its guarantee of First Commonwealth Capital Trust I's
obligations under the original capital securities for a similar guarantee of
First Commonwealth Capital Trust I's obligations under the exchange capital
securities. We refer to the guarantee of First Commonwealth Financial
Corporation under the original capital securities in this prospectus as the
original guarantee; and we refer to the guarantee of the exchange capital
securities in this prospectus as the exchange guarantee. Also as part of this
exchange offer, First Commonwealth Financial Corporation is offering to
exchange up to $35,000,000 of its Series B 9.50% junior subordinated deferrable
interest debentures for a similar amount of its Series A 9.50% junior
subordinated deferrable interest debentures. We refer to the Series B
debentures in this prospectus as the exchange debentures, and we refer to the
Series A debentures as the original debentures.
The terms of the exchange capital securities, debentures and guarantee are
the same as the terms of the original capital securities, debentures and
guarantee except that:
. the exchange capital securities, exchange debentures and exchange
guarantee are registered under the Securities Act and do not have the
same restrictions on transfer as the original securities;
. the distribution rate on the exchange capital securities will not have
the potential to increase; and
. the interest rate on the exchange debentures will not have the potential
to increase.
This prospectus and a transmittal letter describing the procedures for
exchanging original capital securities for the exchange capital securities are
first being mailed to all of the holders of the original capital securities on
October 28, 1999. The offer expires at 5:00 p.m., New York City time, on
November 29, 1999, unless extended.
There has been no public market for the exchange capital securities before
this exchange offer. We do not intend to apply for listing for the exchange
capital securities on any national securities exchange or for quotation through
the Nasdaq National Market.
You should carefully consider the "Risk Factors" beginning on page 7
before deciding whether to exchange your original capital securities for
exchange capital securities.
These securities are not deposits or other obligations of a bank and are not
insured by the Federal Deposit Insurance Corporation or any other governmental
agency.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The date of this prospectus is October 28, 1999.
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SUMMARY INFORMATION--Q&A
This summary includes questions and answers that highlight selected
information from the prospectus to help you understand the exchange offer. You
should carefully read the prospectus in its entirety to understand fully the
terms of the exchange offer, as well as the tax and other considerations that
are important to you in making a decision about whether to exchange your
original capital securities. You should pay special attention to the "Risk
Factors" section beginning on page 7 of this prospectus to determine whether an
investment in the exchange capital securities is appropriate for you. The
prospectus and the letter of transmittal that accompanies it together
constitute the exchange offer.
For your convenience, we make reference to specific page numbers in this
prospectus for more detailed information regarding some of the terms and
concepts used throughout this prospectus.
Throughout this prospectus, unless we indicate otherwise, references to
capital securities include both the original and exchange capital securities,
references to debentures include both the original and exchange debentures, and
references to the capital securities guarantee include both the original and
exchange capital securities guarantee. The terms "we," "us," "our" and "First
Commonwealth" refer to First Commonwealth Financial Corporation. The term "the
Trust" refers to First Commonwealth Capital Trust I.
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere, or incorporated by
reference, in this prospectus.
What is First Commonwealth Financial Corporation?
We are a Pennsylvania corporation registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended. We operate two banks, First
Commonwealth Bank and Southwest Bank. We also provide personal financial
planning and other financial services and insurance products through First
Commonwealth Trust Company and First Commonwealth Insurance Agency. We also
operate Commonwealth Systems Corporation, a data processing subsidiary. At June
30, 1999, we had consolidated total assets of $4.2 billion, total deposits of
$3.0 billion and stockholders' equity of $339 million. Our principal executive
offices are located at 22 North Sixth Street, Indiana, Pennsylvania 15701. Our
telephone number is (724) 349-7220. Our common stock is listed as "FCF" on the
New York Stock Exchange.
For more information about us, please see the section entitled "First
Commonwealth" in this prospectus. You should also read the other documents we
have filed with the SEC, which you can find by referring to the section
entitled "Where You Can Find More Information" in this prospectus.
What is First Commonwealth Capital Trust I?
First Commonwealth Capital Trust I is a Delaware business trust. The Trust
sold its original capital securities to investors and its common securities to
us. The Trust used the proceeds from these sales to buy from us the original
debentures with the same economic terms as its original capital securities.
What are the capital securities?
Each capital security represents an undivided beneficial interest in the
assets of the Trust. The Trust has issued $35,000,000 in aggregate liquidation
amount of original capital securities.
What are the common securities?
The common securities and the capital securities are the same in all
material respects, except that:
. the common securities are non-transferable;
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. the holder of the common securities has, until the occurrence of an
Event of Default (as defined on page 52), the sole right to remove or
increase or decrease the number of trustees of the Trust; and
. the capital securities will have a preference over the common securities
with respect to cash distributions and amounts payable on liquidation,
redemption or otherwise under the circumstances described in
"Description of Capital Securities--Subordination of Common Securities."
What are the exchange capital securities?
We and the Trust have registered up to $35,000,000 aggregate liquidation
amount of exchange capital securities under the Securities Act. The terms of
the exchange capital securities are the same as the terms of the original
capital securities, except that the exchange capital securities:
. have been registered under the Securities Act;
. will not be subject to certain transfer restrictions applicable to your
original capital securities; and
. will not provide for any increase in the distribution rate.
. the exchange debentures will not provide for any increase in the
interest rate.
See "Description of Capital Securities" for more information on the capital
securities.
What is the exchange offer?
We and the Trust are offering to exchange up to $35,000,000 aggregate
liquidation amount of exchange capital securities for an equal aggregate
liquidation amount of original capital securities. We are making this exchange
offer in order to satisfy our obligations under a registration rights agreement
relating to your original capital securities. See "The Exchange Offer" for a
description of the procedures for tendering your original capital securities.
When does the exchange offer expire?
The exchange offer will expire at 5:00 p.m., New York City time, on November
29, 1999, unless we and the Trust extend it. See "The Exchange Offer--
Expiration Date; Extension; Amendments."
What are the conditions to the exchange offer?
The exchange offer is subject to certain conditions, which we may waive at
our discretion. The exchange offer is not conditioned upon the tender of any
minimum liquidation amount of original capital securities. See "The Exchange
Offer--Conditions to the Exchange Offer."
What are the terms of the exchange offer?
We reserve the right at any time and from time to time:
. to delay accepting the original capital securities for exchange;
. to end the exchange offer if specified conditions are not satisfied;
. to extend the exchange offer and keep the original capital securities
tendered under the exchange offer, subject to your right to withdraw
your tendered original capital securities; or
. to waive any condition or otherwise change the terms of the exchange
offer in any way.
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See "The Exchange Offer--Terms of the Exchange Offer."
If you wish to exchange your original capital securities for exchange
capital securities, you will be required to represent that:
. you are not an affiliate of First Commonwealth Financial Corporation or
the Trust;
. you are acquiring exchange capital securities in the ordinary course of
your business;
. you have no arrangement or understanding with any person to participate
in a "distribution" within the meaning of the Securities Act of such
exchange capital securities; and
. you are not engaged in, and do not intend to engage in, a "distribution"
within the meaning of the Securities Act of such exchange capital
securities.
See "The Exchange Offer--Resales of Exchange Capital Securities."
If I tender my original capital securities, will I be allowed to withdraw my
tender?
You may withdraw your tender of original capital securities at any time
before the expiration date by delivering written notice of your withdrawal to
the exchange agent as described below under the caption "The Exchange Offer--
Withdrawal Rights." If you withdraw your tender, your original capital
securities will remain subject to transfer restrictions.
How do I tender my original capital securities?
You must complete and sign a letter of transmittal and mail, send by
facsimile or hand deliver it, together with any other documents required by the
letter of transmittal, to the exchange agent, either with your original capital
securities or in compliance with the specified procedures for guaranteed
delivery of original capital securities. Certain brokers, dealers, commercial
banks, trust companies and other nominees may also effect tenders by book-entry
transfer. If your original capital securities are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee, you should
contact such person promptly if you wish to tender your original capital
securities in the exchange offer. See "The Exchange Offer--Procedures for
Tendering Original Capital Securities."
Will exchange capital securities be freely transferable?
In making the exchange offer, we are relying on the position of the staff of
the Securities and Exchange Commission's Division of Corporation Finance
contained in certain interpretive letters addressed to third parties in other
transactions. However, we have not sought our own interpretive letter.
Therefore, there is no guarantee that the staff of the Securities and Exchange
Commission's Division of Corporation Finance would make a similar determination
regarding the exchange offer as it has in the interpretive letters to third
parties.
Unless you are a broker-dealer or an affiliate of either First Commonwealth
Financial Corporation or the Trust, we believe, based on those interpretive
letters, that you may sell or otherwise transfer exchange capital securities
issued to you in this exchange offer in exchange for your original capital
securities without further compliance with the registration and prospectus
delivery requirements of the Securities Act.
If you are a broker-dealer or an affiliate of either First Commonwealth
Financial Corporation or the Trust, then you will be subject to further
restrictions described in "The Exchange Offer--Resales of Exchange Capital
Securities."
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Subject to the limitations described in "The Exchange Offer--Resales of
Exchange Capital Securities," we have agreed that this prospectus, as it may be
changed or supplemented from time to time, may be used by participating broker-
dealers in connection with the resales of exchange capital securities. See
"Certain Resales."
Who is the exchange agent?
The exchange agent for the exchange offer is The Chase Manhattan Bank. The
address, telephone number and facsimile number of the exchange agent are listed
in "The Exchange Offer--Exchange Agent" and in the letter of transmittal.
Will there be any proceeds of this offering?
Neither we nor the Trust will receive any cash proceeds from the issuance of
the exchange capital securities. The original capital securities acquired by
the Trust will be retired.
What are the tax and ERISA consequences of this offer?
You should review carefully the information contained under the caption
"Federal Income Tax Consequences" and "ERISA Considerations" before tendering
your original capital securities in the exchange offer.
What distributions will you receive on the capital securities?
As a holder of capital securities, you will be entitled to receive
cumulative cash distributions at an annual rate of 9.50% of the liquidation
amount of $1,000 per capital security. Distributions accumulate from September
8, 1999 and will be payable semi-annually in arrears on March 1 and September 1
of each year, beginning March 1, 2000 to the holders of the capital securities
on the relevant record dates which will be the fifteenth day of the month which
precedes the month in which the distribution date falls.
We will withhold the Pennsylvania Corporate Loans Tax from interest payments
on the portion of the debentures that are held by the Trust for the benefit of
holders of capital securities who are subject to the tax, principally
individuals, partnerships and unincorporated associations resident in
Pennsylvania. Any amounts so withheld will reduce, to the extent of the
withholding, distributions payable to holders of capital securities.
When can payment of your distributions be deferred?
We may, on one or more occasions, defer interest payments on the debentures
for up to 10 consecutive semi-annual periods with respect to each deferral
period unless an event of default under the debentures has occurred and is
continuing. See page 52 for a description of the events of default under the
debentures. A deferral of interest payments cannot extend beyond the stated
maturity date of the debentures (which is September 1, 2029).
If we defer interest payments on the debentures, the Trust will also defer
its distributions on the capital securities. During this deferral period,
distributions will continue to accumulate on the capital securities at an
annual rate of 9.50% of the liquidation amount of $1,000 per capital security.
Also, the deferred distributions will themselves accumulate distributions at an
annual rate of 9.50% (to the extent permitted by law). Once we make all
deferred interest payments on the debentures, with accrued interest, we may
again defer interest payments on the debentures if no event of default under
the debentures has then occurred and is continuing.
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During any period in which we defer interest payments on the debentures, we
will not be permitted to (with certain exceptions described on page 47):
. pay a dividend or make any other payment or distribution on our capital
stock;
. redeem, purchase or make a liquidation payment on any of our capital
stock;
. make a principal, premium or interest payment, or repurchase or redeem,
any of our debt securities that rank equal with or junior to the
debentures; or
. make any guarantee payments with respect to any guarantee by us of any
securities of any of our subsidiaries if the guarantee ranks equal to or
junior in right of payment to the debentures.
If we defer interest payments on the debentures, you will be required to
accrue interest income for United States federal income tax purposes before you
receive cash distributions. See "Federal Income Tax Consequences" on page 64
and "Risk Factors--Our ability to defer distributions has tax consequences for
you and may affect the trading price of the capital securities" on page 8.
When can the Trust redeem the capital securities?
The Trust will redeem all of the outstanding capital securities when the
debentures are paid at maturity on September 1, 2029.
Subject to receiving the approval of the Board of Governors of the Federal
Reserve System, we may redeem the debentures, in whole or in part, at any time
on or after September 1, 2009, at a redemption price equal to 104.750% of the
principal amount of the debentures on September 1, 2009, declining ratably on
each September 1 thereafter to 100% on or after September 1, 2019, plus accrued
and unpaid interest to the date of redemption.
In addition, again subject to receiving prior approval of the Federal
Reserve, prior to September 1, 2009, we may redeem the debentures, in whole but
not in part, upon the occurrence of certain events affecting (1) the tax status
of the Trust or the tax treatment of interest on the debentures or (2) whether
the capital securities constitute Tier 1 Capital under applicable capital
guidelines of the Federal Reserve. The redemption price in these circumstances
would be equal to the greater of (a) 100% of the principal amount of the
debentures or (b) the sum, as determined by a quotation agent, of the present
values of the principal amount and premium payable as part of the redemption
price with respect to an optional redemption of the debentures on September 1,
2009, together with scheduled payments of interest from the redemption date to
September 1, 2009, in each case discounted to the redemption date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day months) at an
adjusted treasury rate, plus in either case accrued and unpaid interest thereon
to the date of redemption.
If we redeem any debentures before their maturity, the Trust will use the
cash it receives on the redemption of the debentures to redeem, on a pro rata
basis, capital securities and common securities having an aggregate liquidation
amount equal to the aggregate principal amount of the debentures redeemed.
However, if an event of default under the amended and restated declaration of
trust of the Trust has occurred and is continuing, the capital securities will
be redeemed before any common securities. See page 36 for a description of an
event of default under the declaration.
What is the nature of our guarantee of the capital securities?
We fully and unconditionally guaranteed the original capital securities and,
when issued, will guarantee the exchange capital securities on the same terms
based on:
. our obligations to make payments on the debentures;
. our obligations under our capital securities guarantee; and
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. our obligations under the declaration and our junior subordinated
debentures indenture.
If we do not make a required payment on the debentures, the Trust will not
have sufficient funds to make the related payment on the capital securities.
The capital securities guarantee does not cover payments on the capital
securities when the Trust does not have sufficient funds to make such payments.
Our obligations under the debentures are junior to our obligations to make
payments on our senior indebtedness, as this term is described on page 55,
while our obligations under the capital securities guarantee are junior to our
obligations to make payments on all of our other liabilities, except as
discussed elsewhere in this prospectus. See "Risk Factors--Our obligations
under the debentures and the capital securities guarantee are subordinated" on
page 7.
Will there be a public market for the exchange capital securities?
We do not plan to list the exchange capital securities on the New York Stock
Exchange or any other exchange. No one has made a binding agreement to make a
market for the exchange capital securities. We offer no assurance that a market
for the exchange capital securities will develop or provide meaningful
liquidity to investors.
When can the debentures be distributed to you?
As the sponsor of the Trust, we have the right to dissolve the Trust at any
time if the dissolution and any distribution of the debentures would not result
in a taxable event to holders of the capital securities. If we exercise this
right to dissolve the Trust, the Trust will be liquidated by distribution of
the debentures to holders of the capital securities and the common securities.
What happens if the Trust is dissolved and the debentures are not distributed?
The Trust may also be dissolved in circumstances where the debentures will
not be distributed to you. In those situations, after satisfaction of creditors
of the Trust, if any, the Trust will be obligated to pay in cash the
liquidation amount of $1,000 for each capital security plus accumulated
distributions to the date such payment is made. The Trust will be able to make
this liquidation distribution only if we redeem the debentures.
Do I have voting rights?
Generally, holders of capital securities do not have any voting rights,
except under the limited circumstances described below. The holders of a
majority of the capital securities, however, have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
property trustee of the Trust, or direct the exercise of any trust or other
power conferred upon the property trustee of the Trust.
What other rights do I have as a holder of the capital securities?
As a holder of the capital securities, you have the right to bring a direct
action against us if we do not:
. pay the principal of or premium, if any, or interest on the debentures
in accordance with their terms; or
. perform our obligations under our guarantees.
You also have the right as a holder of the capital securities to bring a
direct action against the Trust if it does not fulfill its obligations under
the declaration in accordance with its terms. For a description of these other
rights, see "Description of Capital Securities."
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RISK FACTORS
Your investment in the capital securities will involve certain risks. You
should carefully consider the following discussion of risks, and the other
information included or incorporated by reference in this prospectus, before
deciding whether to participate in the exchange offer. Some of the information
presented in this prospectus, or incorporated by reference in this prospectus
may contain forward-looking statements. You can identify forward-looking
statements by our use of terminology such as "may," "will," "expect,"
"anticipate," "estimate," "continue" or other similar words. Although we
believe that our plans, intentions and expectations reflected in or suggested
by such statements are reasonable, we cannot assure you that such plans,
intentions or expectations will be achieved. Important factors that could cause
actual results to differ materially from the forward-looking statements we make
in this prospectus are set forth in this section and elsewhere in this
prospectus and in the documents incorporated by reference. All forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by such cautionary statements.
Risk Factors Relating to the Capital Securities
Our obligations under the debentures and the capital securities guarantee are
subordinated.
Our obligations under the debentures are unsecured and will rank junior in
priority of payment to our senior indebtedness. This means that we cannot make
any payments of principal, including redemption payments, or interest, on the
debentures if we default on a payment on our senior indebtedness. In addition,
if the maturity of the debentures is accelerated, then holders of senior
indebtedness will be entitled to be paid in full before we make any payment on
the debentures. In the event of our bankruptcy, termination or dissolution, our
assets would be available to pay obligations under the debentures only after
all payments had been made on our senior indebtedness. At June 30, 1999, the
total amount of our aggregate senior indebtedness was approximately $862.4
million. See "Capitalization" on page 14 and "Use of Proceeds" on page 13.
Our obligations under the capital securities guarantee are unsecured and
rank in priority of payment:
. junior to all of our other liabilities, except those liabilities which,
by their terms, are equal with or junior to the capital securities
guarantee; and
. senior to all of our capital stock now outstanding or issued in the
future, including our common stock, and to any guarantee we issue now or
in the future in respect of our capital stock or the capital stock of
any of our affiliates, including other business trusts like the Trust.
This means that we cannot make any payments on the capital securities guarantee
if we default on a payment of any of our other liabilities, except those
liabilities which are equal with or junior to the capital securities guarantee
by their terms. In the event of bankruptcy, termination or dissolution, our
assets would be available to pay obligations under the capital securities
guarantee only after all payments had been made on our other liabilities,
except those liabilities made equal with or junior to the capital securities
guarantee by their terms.
Neither the debentures nor the capital securities guarantee will limit our
ability or our subsidiaries' abilities to incur additional indebtedness,
including indebtedness that ranks senior in priority of payment to the
debentures and the capital securities guarantee.
For more information, see "Description of Junior Subordinated Debentures--
Subordination of the Debentures" on page 54 and "Description of the Capital
Securities Guarantee--Status of the Capital Securities Guarantee;
Subordination" on page 58.
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The ability of the Trust to pay amounts due on the capital securities is
dependent upon our payments on the debentures.
The ability of the Trust to pay distributions on the capital securities, the
redemption price of the capital securities and the liquidation amount of each
capital security is solely dependent upon whether we make the related payments
on the debentures when due. If we default on our obligation to pay principal
(including redemption payments) or interest on the debentures, the Trust will
not have sufficient funds to pay distributions, or the redemption price or the
liquidation amount of each capital security. In those circumstances, you will
not be able to rely upon the capital securities guarantee for payment of these
amounts because the capital securities guarantee covers such payment only when
the Trust has sufficient funds on hand but fails to make such payment.
Instead, you may:
. seek legal redress against us directly or seek other remedies to collect
your pro rata share of payments owed; or
. rely on the property trustee to enforce the Trust's rights under the
debentures.
Holders of capital securities who are subject to the Pennsylvania Corporate
Loans Tax will receive their distributions on the capital securities net of
amounts withheld to pay such tax.
We will be required to withhold the Pennsylvania Corporate Loans Tax from
interest payments on the portion of debentures which are held by the Trust for
the benefit of owners of capital securities who are subject to the tax. These
owners are principally individuals, partnerships and unincorporated
associations resident in Pennsylvania. Any amounts so withheld will reduce, to
the extent of such withholding, distributions payable to such owners of capital
securities. See "Pennsylvania Corporate Loans Tax."
Our ability to defer distributions has tax consequences for you and may affect
the trading price of the capital securities.
So long as no event of default under the debentures has occurred and is
continuing, we may, on one or more occasions, defer interest payments to the
Trust on the debentures as described in this prospectus. See "Description of
Junior Subordinated Debentures--First Commonwealth's Option to Extend Interest
Payment Date" on page 47. If we defer interest payments on the debentures, the
Trust will defer distributions on the capital securities to you during any
deferral period.
If we defer interest payments on the debentures, you will be required to
accrue interest income, as original issue discount in respect of the deferred
stated interest allocable to your share of the capital securities for United
States federal income tax purposes. As a result, you will include such income
in gross income for United States federal income tax purposes prior to the
receipt of any cash distributions. In addition, you will not receive cash from
the Trust related to such income if you dispose of your capital securities
prior to the record date on which distributions of such amounts are made.
We have no current intention of deferring interest payments on the
debentures. However, if we exercise our right to do so in the future, the
capital securities may trade at a price that does not fully reflect the value
of accrued but unpaid interest on the debentures. If you sell the capital
securities during an interest deferral period, you may not receive the same
return on investment as someone else who continues to hold the capital
securities. In addition, the existence of our right to defer payments of
interest on the debentures may mean that the market price for the capital
securities may be more volatile than would otherwise be the case.
See "Federal Income Tax Consequences" beginning on page 64 for more
information regarding United States federal income tax consequences.
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Your return on the capital securities may be lower than the return on other
investments if the capital securities are redeemed, and you may be required to
reinvest the redemption proceeds at a lower interest rate.
Subject to receiving prior approval of the Federal Reserve, under certain
circumstances prior to September 1, 2009 and at any time after September 1,
2009, we may redeem the debentures before their maturity. The Trust will use
the cash it receives on any such redemption of the debentures to redeem an
equivalent liquidation amount of the capital securities and the common
securities on a pro rata basis, unless an event of default under the
declaration of trust has occurred and is continuing, in which case the capital
securities will be redeemed before any common securities. If the Trust redeems
your capital securities, there is a risk that the redemption amount paid to you
may be less than the return you could earn on other investments for the same
holding period. If redeemed, your investment in the capital securities may not
reflect the full opportunity cost to you when you take into account factors
that affect the time value of money. Moreover, you should assume that we will
exercise our redemption option when prevailing interest rates at the time are
lower than the interest rate on the debentures, so that the redemption proceeds
generally will not be able to be reinvested in a comparable security at as high
a rate. See "Description of Capital Securities--Redemption of the Junior
Subordinated Debentures" on page 33 for more information.
Distribution of debentures may have a possible adverse effect on trading price.
We have the right to dissolve the Trust at any time if such dissolution and
any distribution of the debentures would not result in a taxable event to the
holders of the capital securities. If we dissolve the Trust, the Trust will be
liquidated by distribution of the debentures to holders of the capital
securities and the common securities. Under current United States federal
income tax laws, a distribution of debentures to you on the dissolution of the
Trust would not be a taxable event to you.
We cannot predict the market prices for the debentures that may be
distributed. Accordingly, the debentures that you receive on a distribution, or
the capital securities you hold pending such a distribution, may trade at a
discount to the price that you paid to purchase the capital securities.
Because you may receive debentures under these circumstances, you should
make an investment decision with regard to the debentures in addition to the
capital securities. You should carefully review all the information regarding
the debentures contained in this prospectus. See "Federal Income Tax
Consequences--Receipt of Debentures or Cash Upon Liquidation of the Trust" on
page 65 for more information.
You will have limited voting rights.
In general, unless an event of default under the declaration has occurred
and is continuing, only we may elect or remove any of the trustees, and in no
event may holders of the capital securities remove the administrative trustees.
See "The Trust" on page 17 and "Description of Capital Securities--Limited
Voting Rights of Capital Security Holders; Modification and Amendment of the
Declaration" on page 38 for more information.
Enforcement of certain rights, including the right to payment, by you or on
your behalf is limited.
Holders of capital securities will not be able, in most cases, to exercise
directly remedies available to the holders of the debentures or to assert any
other rights in respect of the debentures. The Chase Manhattan Bank acts as the
guarantee trustee under the capital securities guarantee. Its ability to take
action on your behalf as guarantee trustee is limited. This is because our
capital securities guarantee guarantees distributions on the capital securities
only to the extent the Trust receives payments on the debentures and, upon
liquidation of the Trust, other assets to which holders of the capital
securities are entitled. See "Description of Junior Subordinated Debentures--
Enforcement of Certain Rights by Holders of Capital Securities" on page 52, "--
Debenture Events of Default" on page 52 and "Description of the Capital
Securities Guarantee" on page 57.
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The capital securities are not insured.
Neither the Federal Deposit Insurance Corporation nor any other governmental
agency or other person has insured the capital securities or any other of the
other securities offered by this prospectus.
Holders of capital securities will not be protected from our participation in
potentially highly leveraged transactions.
The indenture provides that we may merge or consolidate with, or sell all or
substantially all of our assets to another person or entity so long as the
successor person or entity expressly assumes our obligations under the
indenture, there is no event of default under the indenture and certain other
conditions are met. The indenture provisions do not afford holders of the
debentures protection in the event of a highly leveraged or other transaction
involving us that may adversely affect holders of the debentures.
There is no public market for the capital securities.
There is no public market for the original capital securities and there can
be no assurance as to the liquidity of any markets that may develop for the
exchange capital securities. We do not intend to apply for listing of the
exchange capital securities on any national securities exchange or for
quotation through the Nasdaq National Market. The lack of an existing market
may limit your ability to sell the capital securities and will affect the price
you receive. Future trading prices of the capital securities will depend on
many factors, including, among other things, prevailing interest rates, our
operating results, and the market for similar securities.
There is no public market for the debentures.
There is no existing market for the debentures, and the lack of an existing
market may limit your ability to sell the debentures and will affect the price
you receive. Future trading prices of the debentures will depend on many
factors, including, among other things, prevailing interest rates, our
operating results and the market for similar securities. We do not intend to
apply for listing of the exchange debentures on any national securities
exchange or for quotation through the Nasdaq National Market.
Risk Factors Relating to First Commonwealth Financial Corporation
Because we are a bank holding company, we may have limited sources of funds.
Because we are a bank holding company, our operations are conducted by our
subsidiaries, including First Commonwealth Bank and Southwest Bank, which are
subject to significant federal and state regulation. As a result, our ability
to receive dividends and loans from our subsidiaries is restricted. At January
1, 1999, $56.2 million of the retained earnings of First Commonwealth Bank and
Southwest Bank were available to pay dividends to us without regulatory
approval. Dividend payments by First Commonwealth Bank and Southwest Bank to us
in the future will require generation of future earnings by First Commonwealth
Bank and Southwest Bank and may require regulatory approval. Further, our right
to participate in the distribution of the assets of any bank subsidiary upon
its liquidation, reorganization or otherwise, and the resulting ability of the
holders of the capital securities to benefit indirectly from any participation,
will be subject to the claims of the bank subsidiaries' creditors, which will
take priority except to the extent to which we may be a creditor with a
reorganized claim. Accordingly, the debentures will be subordinated to all
existing and future liabilities of our subsidiaries, including the deposit
liabilities of First Commonwealth Bank and Southwest Bank, and you should look
only to our assets for payments on the debentures. As of June 30, 1999, our
subsidiaries had deposits and other liabilities of approximately $3.9 billion.
10
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy any document we file at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549. For further information on the
Public Reference Rooms, please call the SEC at 1-800-SEC-0330. Our SEC filings
are also available to the public from the SEC's web site at http://www.sec.gov.
We incorporate by reference into this prospectus the documents listed below
and any future filings (including filings made after the date of this
prospectus but prior to the termination of this offering) we make with the SEC
under Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
. Our Annual Report on Form 10-K for the year ended December 31, 1998;
. Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999
and June 30, 1999; and
. Our Current Report on Form 8-K dated December 31, 1998 (filed January
15, 1999), as amended by a Form 8-K/A filed March 16, 1999.
. Our Current Report on Form 8-K dated September 8, 1999 (filed September
23, 1999).
You may obtain a copy of these filings, at no cost, by writing or
telephoning us at:
First Commonwealth Financial Corporation
22 North Sixth Street
Indiana, Pennsylvania 15701
(724) 349-7220
To obtain timely delivery, security holders must request the information by
November 19, 1999.
Any statement contained in this prospectus or in a document incorporated or
deemed to be incorporated by reference in this prospectus shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or a document incorporated by reference
into this prospectus, or in any other subsequently filed document that also is
or is deemed to be incorporated herein or therein by reference, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this prospectus except as so modified or
superseded.
No separate financial statements of the Trust have been included in this
prospectus. Neither we nor the Trust consider that such financial statements
would be material to holders of the capital securities because (i) we own all
of the voting securities of the Trust, directly or indirectly, and we are a
reporting company under the Exchange Act, (ii) the Trust has no independent
operations but exists for the sole purpose of issuing securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in debentures we issue and (iii) our obligations described
herein to provide certain indemnities in respect of, and be responsible for,
certain costs, expenses, debts and liabilities of the Trust under the indenture
described herein and any supplemental indenture thereto and pursuant to the
declaration of the Trust, the capital securities guarantee issued with respect
to capital securities issued by the Trust, the debentures purchased by the
Trust and the related indenture, taken together, constitute a full and
unconditional guarantee of payments due on the capital securities as described
herein. See "Description of Junior Subordinated Debentures" and "Description of
the Capital Securities Guarantee." In addition, we do not expect that the Trust
will file reports, proxy statements and other information under the Exchange
Act with the SEC.
11
<PAGE>
FIRST COMMONWEALTH
General
First Commonwealth was incorporated as a Pennsylvania business corporation
on November 15, 1982 and is registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended. First Commonwealth and its
subsidiaries employ approximately 1,500 people.
First Commonwealth operates two chartered banks, First Commonwealth Bank and
Southwest Bank. Personal financial planning and other financial services and
insurance products are also provided through First Commonwealth Trust Company
and First Commonwealth Insurance Agency. First Commonwealth also operates
Commonwealth Systems Corporation, a data processing subsidiary. First
Commonwealth Bank, a Pennsylvania-chartered federally insured commercial bank
headquartered in Indiana, Pennsylvania operates through divisions doing
business under the following names: NBOC Bank, Deposit Bank, Cenwest Bank,
First Bank of Leechburg, Peoples Bank, Central Bank, Peoples Bank of Western
Pennsylvania, Unitas Bank and Reliable Bank.
On December 31, 1998, First Commonwealth merged with Southwest National
Corporation , a Pennsylvania-chartered bank holding company headquartered in
Greensburg, Pennsylvania. Upon merger, Southwest National Bank, which had been
a subsidiary of Southwest National Corporation, became a subsidiary of First
Commonwealth. In addition, Southwest National Bank changed its name to
Southwest Bank. Southwest Bank is a Pennsylvania-chartered, federally insured
commercial bank also headquartered in Greensburg, Pennsylvania, which traces
its origin to 1900.
Through First Commonwealth Bank, First Commonwealth traces its banking
origins to 1866. First Commonwealth Bank and Southwest Bank conduct business
through 96 community banking offices. First Commonwealth Bank and Southwest
Bank engage in general banking business and offer a full range of financial
services including such general retail banking services as demand, savings and
time deposits and mortgage, consumer installment and commercial loans.
First Commonwealth Bank and Southwest Bank operate a network of 79 automated
teller machines that permit customers to conduct routine banking transactions
24 hours a day. Of the automated teller machines, 60 are located on the
premises of their main or branch offices and 19 are in remote locations. All
the automated teller machines are part of the MAC network, which consists of
over 23,000 automated teller machines owned by numerous banks, savings and loan
associations and credit unions located throughout 45 states. The automated
teller system is also part of the global MasterCard/Cirrus network which is
comprised of more than 300,000 automated teller machines located in the United
States, Canada and 58 other countries and territories, which services over 365
million card holders. Such networks allow First Commonwealth Bank's and
Southwest Bank's customers to withdraw cash and in certain cases conduct other
banking transactions from automated teller machines of all participating
financial institutions.
In addition to funds access through the use of automated teller machines,
the MAC debit card offered to First Commonwealth Bank's and Southwest Bank's
deposit customers may be used at 300,000 point of sale terminals on the MAC
system as well as being used on the global MasterCard system for the purchase
of goods and services. The MAC debit card provides customers with the almost
universal acceptability of a credit card combined with the convenience of
direct debit to the customers' checking account.
As a registered bank holding company, First Commonwealth is required to file
with the Federal Reserve Board an annual report and other information. The
Federal Reserve Board also has the right to make examinations and inspections
of First Commonwealth and its subsidiaries.
The principal executive offices of First Commonwealth are located at 22
North Sixth Street, Indiana, Pennsylvania 15701, and its telephone number is
(724) 349-7220.
12
<PAGE>
Recent Events
On July 13, 1999, First Commonwealth announced that the Board of Directors
authorized a repurchase of up to 2,000,000 shares of its outstanding common
stock. On August 31, 1999, First Commonwealth commenced a "modified Dutch
auction" tender offer to purchase up to 2,000,000 shares of its outstanding
common stock. It offered to purchase each share in the tender offer at a price
of not less than $23.00 nor in excess of $26.00 per share, net to the seller.
The offer expired on September 29, 1999. First Commonwealth repurchased
1,909,710 shares of its common stock in the offer at a purchase price of $26.00
per share, net to the seller. The aggregate amount paid by First Commonwealth
in connection with the repurchase was $49,652,460. The repurchase reduced the
number of First Commonwealth's outstanding shares of common stock by
approximately 6.1%.
On October 19, 1999, the board of directors of First Commonwealth approved a
two for one stock split in the form of a 100% stock dividend. Shareholders of
record at November 4, 1999 will receive one additional share for every share
held. The additional shares will be distributed on November 18, 1999. In
addition, the board approved an increase from 5% to 10% in the discount on
dividend reinvestment purchases. The discount is offered on shares purchased
with reinvested dividends.
USE OF PROCEEDS
Neither we nor the Trust will receive any cash proceeds from the issuance of
the exchange capital securities. The original capital securities surrendered in
exchange for the exchange capital securities will be retired and canceled. The
net proceeds to the Trust from the offering of the original capital securities
were approximately $34,225,000 after deducting commissions and expenses of the
offering. All of the proceeds from the sale of original capital securities were
invested by the Trust in the debentures. We used the proceeds from the issuance
of the debentures to finance the purchase of shares of our common stock
pursuant to the tender offer described above. See "First Commonwealth--Recent
Events."
The capital securities qualify as Tier 1 Capital under the capital
guidelines of the Federal Reserve, provided that under current Federal Reserve
guidelines no more than 25% of First Commonwealth's Tier 1 Capital may be
composed of such securities. The capital securities constitute 10.24% of First
Commonwealth Tier 1 Capital as of June 30, 1999.
RATIO OF EARNINGS TO FIXED CHARGES
The following are the First Commonwealth's consolidated ratios of earnings
to fixed charges for each of the periods indicated:
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------- Six Months Ended
1994 1995 1996 1997 1998 June 30, 1999
----- ----- ----- ----- ----- ----------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges (1)................... 1.64 1.49 1.49 1.46 1.31 1.50
</TABLE>
- --------
(1) The ratio of earnings to combined fixed charges and preferred stock
dividends for the identified periods are the same as to the ratios of
earnings to fixed charges in the table because the Company had no issued
and outstanding preferred stock in any of such periods.
For the purpose of computing the ratio of earnings to fixed charges,
earnings represent net income before extraordinary items plus applicable income
taxes and fixed charges. Fixed charges include gross interest expense and the
portion of rent expense deemed representative of the interest factor.
13
<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust is treated as our subsidiary
and, accordingly, the accounts of the Trust are included in our consolidated
financial statements. The exchange capital securities will be shown as a
liability in our consolidated balance sheets as "Company obligated mandatorily
redeemable capital securities of subsidiary trust," and appropriate disclosures
about the exchange capital securities, the exchange guarantee and the exchange
debentures will be included in the notes to our consolidated financial
statements. For financial reporting purposes, distributions payable on the
exchange capital securities will be recorded as interest expense in our
consolidated statement of income.
CAPITALIZATION
The following table sets forth the actual capitalization of First
Commonwealth at June 30, 1999, and on an as adjusted basis to give effect to
the consummation of the offering of the original capital securities, the
issuance of the original debentures and the consummation of the tender offer
described above and the application of the proceeds as described under "Use of
Proceeds." The table should be read in conjunction with the consolidated
financial statements of First Commonwealth, including the related notes,
included in the documents incorporated herein by reference. See "Selected
Consolidated Financial Data of First Commonwealth" and "Where You Can Find More
Information."
<TABLE>
<CAPTION>
June 30, 1999
-----------------------
Actual As Adjusted
---------- -----------
(Dollars in Thousands)
<S> <C> <C>
Deposits............................................... $2,965,133 $2,965,133
Short-term borrowings.................................. 223,831 223,831
Long-term debt......................................... 638,525 653,177
---------- ----------
Total deposits and borrowings.......................... 3,827,489 3,842,141
---------- ----------
Other liabilities...................................... 36,534 36,534
---------- ----------
Corporation obligated, mandatorily redeemable
securities of subsidiary trust(1)..................... 0 35,000
---------- ----------
Shareholders' Equity:
Preferred stock, par value $1 per share:
3,000,000 shares authorized, none issued............. 0 0
Common stock, par value $1 per share:
100,000,000 shares authorized; 31,262,706 shares
issued.............................................. 31,263 31,263
Additional paid-in capital............................. 99,716 99,716
Retained earnings...................................... 247,283 247,283
Accumulated other comprehensive income (loss).......... (26,715) (26,715)
Treasury stock, at cost................................ (5,213) (54,865)
Unearned ESOP shares................................... (7,154) (7,154)
---------- ----------
Total shareholders' equity............................. 339,180 289,528
---------- ----------
Total liabilities and shareholders' equity............. $4,203,203 $4,203,203
========== ==========
Tier 1 Risk Based Capital Ratio........................ 14.2% 13.6%
Leverage Ratio......................................... 8.4% 8.1%
</TABLE>
- --------
(1) Reflects the original capital securities at their issue price. As described
herein, the sole assets of the Trust, which is a subsidiary of First
Commonwealth, are $36,083,000 aggregate principal amount of the debentures,
including the amounts attributable to the issuance of the common securities
of the Trust, which will mature on September 1, 2029. First Commonwealth
owns all of the common securities issued by the Trust.
14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA OF FIRST COMMONWEALTH
(Dollars in Thousands, Except Per Share Data)
The selected consolidated financial data of First Commonwealth set forth
below should be read in conjunction with, and is qualified in its entirety by,
the management's discussion and analysis of our results of operations and our
consolidated financial statements including the related notes, included in the
documents incorporated herein by reference. Interim unaudited data for the six
months ended June 30, 1999 and 1998 reflect, in the opinion of our management,
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of such data. Results for the year ended December 31, 1998
and the six months ended June 30, 1999 are not necessarily indicative of
results which may be expected for any future interim period or for the 1999
year as a whole. See "Where You Can Find More Information."
Results for the six-month period ended June 30, 1999, as adjusted, reflect
the effects of:
. the repurchase by First Commonwealth on October 5, 1999 of 1,909,710
shares, as part of the modified Dutch auction tender offer described
in "First Commonwealth--Recent Events"; and
. the Trust's issuance of the original capital securities and First
Commonwealth's issuance of the original debentures;
as if both events occurred as of January 1, 1999.
15
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA OF FIRST COMMONWEALTH (continued)
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Six Months Ended Six Months
Years Ended December 31, June 30, Ended June 30,
--------------------------------------------------------------- ------------------------ 1999,
1994 1995 1996 1997 1998 1998 1999 As Adjusted
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Income
Data
Interest income.... $ 207,368 $ 227,182 $ 235,188 $ 254,772 $ 283,421 $ 140,466 $ 145,437 $ 145,437
Interest expense... 86,133 103,019 109,189 124,427 148,282 73,224 73,729 75,937
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net interest
income........... 121,235 124,163 125,999 130,345 135,139 67,242 71,708 69,500
Provision for
credit losses..... 4,456 5,575 6,301 10,152 15,049 5,100 4,550 4,550
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net interest
income after
provision for
credit losses.... 116,779 118,588 119,698 120,193 120,090 62,142 67,158 64,950
Securities gains
(losses).......... 5,536 (603) 1,599 6,825 1,457 982 563 563
Other operating
income............ 15,468 15,996 17,359 18,716 24,881 10,889 17,263 17,263
Merger and related
charges........... 0 0 0 0 7,915 0 0 0
Other operating
expenses.......... 82,680 83,689 85,299 88,857 92,286 45,773 47,681 47,681
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Income before
taxes and
extraordinary
items............ 55,103 50,292 53,357 56,877 46,227 28,240 37,303 35,095
Applicable income
taxes............. 17,761 15,728 16,164 17,338 12,229 7,764 10,472 9,699
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income before
extraordinary
items............ 37,342 34,564 37,193 39,539 33,998 20,476 26,831 25,396
Extraordinary items
(less applicable
taxes of $336).... 0 0 0 0 (624) 0 0 0
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income......... $ 37,342 $ 34,564 $ 37,193 $ 39,539 $ 33,374 $ 20,476 $ 26,831 $ 25,396
=========== =========== =========== =========== =========== =========== =========== ===========
Per Share Data
Net income before
extraordinary
items............ $ 1.18 $ 1.11 $ 1.19 $ 1.28 $ 1.11 $ 0.67 $ 0.88 $ 0.89
Extraordinary
items............ 0.00 0.00 0.00 0.00 (0.02) $ 0.00 $ 0.00 $ 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income........ $ 1.18 $ 1.11 $ 1.19 $ 1.28 $ 1.09 $ 0.67 $ 0.88 0.89
=========== =========== =========== =========== =========== =========== =========== ===========
Dividends
declared......... $ 0.58 $ 0.66 $ 0.74 $ 0.82 $ 0.89 $ 0.44 $ 0.49 $ 0.49
Average shares
outstanding...... 31,689,718 31,236,202 31,155,043 30,835,949 30,666,786 30,788,301 30,589,094 28,679,384
Per Share Data
Assuming Dilution
Net income before
extraordinary
items............ $ 1.18 $ 1.10 $ 1.19 $ 1.28 $ 1.10 $ 0.66 $ 0.87 $ 0.88
Extraordinary
items............ 0.00 0.00 0.00 0.00 (0.02) $ 0.00 $ 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income........ $ 1.18 $ 1.10 $ 1.19 $ 1.28 $ 1.08 $ 0.66 $ 0.87 0.88
=========== =========== =========== =========== =========== =========== =========== ===========
Dividends
declared......... $ 0.58 $ 0.66 $ 0.74 $ 0.82 $ 0.89 $ 0.44 $ 0.49 $ 0.49
Average shares
outstanding...... 31,763,564 31,281,960 31,190,895 30,922,837 30,833,013 30,981,004 30,702,299 28,792,589
At End of Period
Total assets...... $ 3,020,204 $ 3,075,123 $ 3,339,996 $ 3,668,557 $ 4,096,789 $ 4,044,242 $ 4,203,203 $ 4,203,203
Investment
securities....... 1,018,228 960,588 901,411 1,015,798 1,525,332 1,336,532 1,614,569 1,614,569
Loans and leases,
net of unearned
income........... 1,790,684 1,935,938 2,236,523 2,436,337 2,374,850 2,467,764 2,369,905 2,369,905
Allowance for
credit losses.... 22,375 23,803 25,234 25,932 32,304 26,886 33,644 33,644
Deposits.......... 2,493,135 2,586,545 2,756,111 2,884,343 2,931,131 2,925,091 2,965,133 2,965,133
Corporation
obligated,
mandatorily
redeemable
capital
securities of
subsidiary
trust............ 0 0 0 0 0 0 0 35,000
Other long-term
debt............. 9,549 7,168 52,737 193,054 630,850 473,253 638,525 653,177
Total Long-Term
Debt............. 9,549 7,168 52,737 193,054 630,850 473,253 638,525 688,177
Shareholders'
equity........... 293,237 329,486 341,522 354,323 355,405 363,187 339,180 289,528
Key Ratios
Return on average
assets........... 1.25% 1.14% 1.17% 1.15% 0.85% 1.07% 1.29% 1.22%
Return on average
equity........... 12.61% 11.02% 11.07% 11.31% 9.13% 11.41% 14.95% 16.40%
Net loans to
deposit ratio.... 70.93% 73.93% 80.23% 83.57% 79.92% 83.45% 78.79% 78.79%
Dividends per
share as a
percent of net
income per
share............ 49.15% 59.46% 62.18% 64.06% 81.65% 65.67% 55.68% 55.06%
Average equity to
average assets
ratio............ 9.93% 10.38% 10.53% 10.16% 9.28% 9.34% 8.65% 7.47%
Allowance for loan
losses to total
loans............ 1.25% 1.23% 1.13% 1.06% 1.36% 1.09% 1.42% 1.42%
Non-performing
assets to total
loans plus other
real estate...... 1.21% 1.06% 1.14% 1.12% 1.17% 1.09% 1.02% 1.02%
</TABLE>
16
<PAGE>
THE TRUST
The Trust is a statutory business trust formed under Delaware law on August
16, 1999.
The Trust exists for the exclusive purposes of:
. issuing and selling capital securities and common securities, which
represent undivided beneficial interests in the assets of the Trust;
. investing the gross proceeds from the sale of capital securities and
common securities in the debentures; and
. engaging in other activities necessary, advisable or incidental to the
foregoing.
Our debentures are the sole assets of the Trust and payments under the
debentures are the sole revenues of the Trust. All of the common securities are
owned directly by First Commonwealth. The common securities rank equal to, and
payments will be made on them pro rata with the capital securities, except that
upon the occurrence and during the continuance of an event of default under the
declaration the rights of First Commonwealth as holder of the common securities
to payments in respect of distributions and payments upon liquidation,
redemption or otherwise will be subordinated and rank junior to the rights of
the holders of the capital securities. See "Description of Capital Securities--
Subordination of Common Securities." First Commonwealth has acquired common
securities in a liquidation amount equal to at least 3% of the total capital of
the Trust. The Trust has a term of 31 years, but may terminate earlier as
provided in the declaration.
The Trust's business and affairs are conducted by trustees appointed by
First Commonwealth as the direct holder of the common securities. The trustees
are The Chase Manhattan Bank as the property trustee, Chase Manhattan Bank
Delaware as the Delaware trustee and three individual administrative trustees.
The property trustee, the Delaware trustee and the administrative trustees are
sometimes referred to in this prospectus collectively as the "issuer trustees."
The Chase Manhattan Bank, as property trustee, acts as sole indenture trustee
under the declaration. The Chase Manhattan Bank also acts as indenture trustee
under the capital securities guarantee and the indenture. See "Description of
the Capital Securities Guarantee" and "Description of Junior Subordinated
Debentures."
The holder of the common securities or, if an event of default under the
declaration has occurred and is continuing, the holders of not less than a
majority in liquidation amount of the capital securities, are entitled to
appoint, remove or replace the property trustee and/or the Delaware trustee.
The holders of the capital securities will not have the right to vote to
appoint, remove or replace the administrative trustees; such voting rights are
vested exclusively in the holder of the common securities. The duties and
obligations of each trustee are governed by the declaration.
First Commonwealth will pay all fees, expenses, debts and obligations (other
than the common securities and the capital securities) related to the Trust and
the exchange offer, including all ongoing costs, expenses and liabilities of
the Trust.
The principal executive offices of the Trust are located at First
Commonwealth Capital Trust I, c/o First Commonwealth Financial Corporation, 22
North Sixth Street, Indiana, Pennsylvania 15701, Attention: John J. Dolan,
Chief Financial Officer.
17
<PAGE>
THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
In connection with the sale of the original capital securities, First
Commonwealth and the Trust entered into a registration rights agreement with
the initial purchaser, under which First Commonwealth and the Trust agreed to
file and to use their reasonable best efforts to cause to be declared effective
by the SEC a registration statement with respect to the exchange of the
original capital securities for exchange capital securities with terms
identical in all material respects to the terms of the original capital
securities. A copy of the registration rights agreement has been filed as an
exhibit to the registration statement of which this prospectus is a part.
The form and terms of the exchange capital securities are the same as the
form and terms of the original capital securities, except that the exchange
capital securities have been registered under the Securities Act and therefore
will not be subject to certain restrictions on transfer under federal and state
securities laws. In addition, the exchange capital securities will not provide
for any increase in the distribution rate. In that regard, the original capital
securities provide, among other things, that, if a registration statement
relating to the exchange offer has not been filed by February 5, 2000 and
declared effective by March 6, 2000, the distribution rate borne by the
original capital securities will increase by 0.25% per annum until the exchange
offer is consummated. Upon consummation of the exchange offer, holders of
original capital securities will not be entitled to any increase in the
distribution rate thereon or any further registration rights under the
registration rights agreement.
The exchange offer is not being made to, nor will we or the Trust accept
tenders for exchange from, holders of original capital securities in any
jurisdiction in which the exchange offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
exchange offer means any person in whose name the original capital securities
are registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any participant in
The Depository Trust Company system whose name appears on a security position
listing as the holder of such original capital securities and who desires to
deliver such original capital securities by book-entry transfer at The
Depository Trust Company. In addition, the term "person" shall refer to a
natural person or any legally existing entity.
Pursuant to the exchange offer, we will exchange as soon as practicable
after the date hereof, the original guarantee for the exchange guarantee and
the original debentures, in an amount corresponding to the original capital
securities accepted for exchange, for a like aggregate principal amount of the
exchange debentures. The exchange guarantee and the exchange debentures have
been registered under the Securities Act.
Terms of the Exchange Offer
We and the Trust hereby offer, upon the terms and subject to the conditions
set forth in this prospectus and in the accompanying letter of transmittal, to
exchange up to $35,000,000 aggregate liquidation amount of exchange capital
securities for a like aggregate liquidation amount of original capital
securities properly tendered on or before the expiration date and not properly
withdrawn in accordance with the procedures described below. The Trust will
issue, promptly after the expiration date, an aggregate liquidation amount of
up to $35,000,000 of exchange capital securities in exchange for a like
aggregate liquidation amount of outstanding original capital securities
tendered and accepted in connection with the exchange offer. Holders may tender
their original capital securities in whole or in part in a liquidation amount
of not less than $100,000 or any integral multiple of $1,000 liquidation amount
in excess thereof; provided, however, that if any original capital securities
are tendered for exchange in part, the untendered liquidation amount of such
original capital securities must be $100,000 or any integral multiple of $1,000
in excess thereof.
18
<PAGE>
The exchange offer is not conditioned upon any minimum liquidation amount of
original capital securities being tendered. As of the date of this prospectus,
$35,000,000 aggregate liquidation amount of the original capital securities is
outstanding.
Holders of original capital securities do not have any appraisal or
dissenters' rights in connection with the exchange offer. Original capital
securities which are not tendered, or are tendered but not accepted, in
connection with the exchange offer will remain outstanding and be entitled to
the benefits of the declaration of trust, but will not be entitled to any
further registration rights under the registration rights agreement.
If any tendered original capital securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
under "Conditions to the Exchange Offer" or otherwise, certificates for any
such unaccepted original capital securities will be returned, without expense,
to the tendering holder thereof promptly after the expiration date.
Holders who tender original capital securities in connection with the
exchange offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the letter of transmittal, transfer taxes with
respect to the exchange of original capital securities in connection with the
exchange offer. We will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the exchange offer. See
"--Fees and Expenses."
While we have no present plan to acquire or file a registration statement
for any original capital securities that holders do not tender in this exchange
offer, we reserve the right to purchase or make offers for any original capital
securities that remain outstanding after the offer expires or after we
terminate it. We may do this in the open market, in privately negotiated
transactions or otherwise. The terms of any such purchases or offers, including
the consideration offered and paid, could differ from the terms of this
exchange offer.
Expiration Date; Extensions; Amendments
The expiration date is 5:00 p.m., New York City time, on November 29, 1999,
unless we or the Trust extend the exchange offer, in which case the expiration
date will be the latest date and time to which the exchange offer is extended.
We and the Trust expressly reserve the right, in our sole and absolute
discretion, subject to applicable law, at any time and from time to time, to:
. delay the acceptance of the original capital securities for exchange;
. terminate the exchange offer, whether or not any original capital
securities have been accepted for exchange, if we determine that any of
the events or conditions referred to under "--Conditions to the Exchange
Offer" have occurred or exist;
. extend the expiration date of the exchange offer and retain all original
capital securities tendered in the exchange offer, subject, however, to
the right of holders of original capital securities to withdraw their
tendered original capital securities as described under "--Withdrawal
Rights;" and
. waive any condition or otherwise amend the terms of the exchange offer
in any respect.
If the exchange offer is amended in a manner that we or the Trust determine
to constitute a material change, or if we waive a material condition of the
exchange offer, we will promptly disclose such amendment
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by means of a prospectus supplement that will be distributed to the registered
holders of the original capital securities, and we will extend the exchange
offer to the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice to the exchange agent and by making
a public announcement, and such announcement in the case of an extension will
be made no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date. Without limiting the manner in
which we and the Trust may choose to make any public announcement and subject
to applicable law, neither we nor the Trust shall have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a release to an appropriate news agency.
Acceptance for Exchange and Issuance of Exchange Capital Securities
Upon the terms and subject to the conditions of the exchange offer, the
Trust will exchange, and will issue to the exchange agent, exchange capital
securities for original capital securities validly tendered and not withdrawn
promptly after the expiration date.
In all cases, delivery of exchange capital securities in exchange for
original capital securities tendered and accepted for exchange pursuant to the
exchange offer will be made only after timely receipt by the exchange agent of:
. original capital securities or a book-entry confirmation of a book-entry
transfer of original capital securities into the exchange agent's
account at The Depository Trust Company, including an agent's message if
the tendering holder has not delivered a letter of transmittal;
. the letter of transmittal, or a facsimile, properly completed and duly
executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an agent's message; and
. any other documents required by the letter of transmittal.
The term "book-entry confirmation" means a timely confirmation of a book-
entry transfer of original capital securities into the exchange agent's account
at The Depository Trust Company. The term "agent's message" means a message,
transmitted by The Depository Trust Company and received by the exchange agent
and forming a part of a book-entry confirmation, which states that The
Depository Trust Company has received an express acknowledgment from the
tendering participant which states that such participant has received and
agrees to be bound by the letter of transmittal and that we and the Trust may
enforce such letter of transmittal against such participant.
Subject to the terms and conditions of the exchange offer, we and the Trust
will be deemed to have accepted for exchange, and thereby exchanged, original
capital securities validly tendered and not withdrawn as, if and when the Trust
gives oral or written notice to the exchange agent of the acceptance by us and
the Trust of such original capital securities for exchange in the exchange
offer. The exchange agent will act as agent for the Trust for the purpose of
receiving tenders of original capital securities, letters of transmittal and
related documents, and as agent for tendering holders for the purpose of
receiving original capital securities, letters of transmittal and related
documents and transmitting exchange capital securities to validly tendering
holders. Such exchange will be made promptly after the expiration date. If, for
any reason, acceptance for exchange or the exchange of any original capital
securities tendered pursuant to the exchange offer is delayed, whether before
or after the Trust's acceptance for exchange of original capital securities, or
we and the Trust extend the exchange offer or are unable to accept for exchange
or exchange original capital securities tendered in the exchange offer, then,
without prejudice to our rights and the Trust's rights set forth herein, the
exchange agent may, nevertheless, on our behalf and on behalf of the Trust, and
subject to Rule 14e-1(c) under the Exchange Act, retain tendered original
capital securities. Such original capital securities may not be withdrawn
except to the extent tendering holders are entitled to withdrawal rights as
described under "--Withdrawal Rights."
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Pursuant to the letter of transmittal or agent's message, a holder of
original capital securities will warrant and agree in the letter of transmittal
that it has full power and authority to tender, exchange, sell, assign and
transfer original capital securities, that the Trust will acquire good,
marketable and unencumbered title to the tendered original capital securities,
free and clear of all liens, restrictions, charges and encumbrances, and the
original capital securities tendered for exchange are not subject to any
adverse claims or proxies. The holder also will warrant and agree that it will,
upon request, execute and deliver any additional documents we, the Trust or the
exchange agent deem necessary or desirable to complete the exchange, sale,
assignment and transfer of the original capital securities tendered pursuant to
the exchange offer.
Procedures for Tendering Original Capital Securities
Valid Tender
Except as set forth below, in order to validly tender original capital
securities in the exchange offer, you must properly complete and duly execute a
letter of transmittal, or facsimile of such letter, with any required signature
guarantees, or, in the case of a book-entry transfer, an agent's message and
any other required documents, and such letter or agent's message must be
received by the exchange agent at one of its addresses set forth under "--
Exchange Agent." In addition, you must do one of the following:
. you must tender original capital securities to the exchange agent, and
the exchange agent must receive the securities;
. you must tender such original capital securities according to the
procedures for book-entry transfer set forth below and a book-entry
confirmation, including an agent's message if you have not delivered a
letter of transmittal, must be received by the exchange agent, in each
case on or before the expiration date; or
. you must comply with the guaranteed delivery procedures set forth below.
If less than all of your original capital securities are tendered, you
should fill in the amount of original capital securities being tendered in the
appropriate box on the letter of transmittal, or so indicate in an agent's
message. The untendered liquidation amount of the original capital securities
must be $100,000 or any integral multiple of $1,000 in excess thereof. We will
deem the entire amount of original capital securities delivered to the exchange
agent to have been tendered, unless you otherwise indicate.
The method of delivery of certificates, the letter of transmittal and all
other required documents are at your risk, and we will deem delivery as made
only when actually received by the exchange agent. If delivery is by mail, we
recommend registered mail, return-receipt requested, properly insured, or an
overnight delivery service. In all cases, you should allow sufficient time to
ensure a timely delivery. Holders must not send a letter of transmittal or
original capital securities to us or to the Trust. Holders may ask their
respective brokers, dealers, commercial banks, trust companies or nominees to
complete the transaction for them.
Book-Entry Transfer
The exchange agent will establish an account with respect to the original
capital securities at The Depository Trust Company for purposes of the exchange
offer, as described under "Description of Capital Securities--Semi-Annual
Distributions on the Capital Securities," within two business days after the
date of this prospectus. Any financial institution that is a participant in The
Depository Trust Company's book-entry transfer facility system may make a book-
entry delivery of the original capital securities by causing The Depository
Trust Company to transfer such original capital securities into the exchange
agent's account at The Depository Trust Company in accordance with its
procedures for transfers. However, although you may deliver original capital
securities through book-entry transfer into the exchange agent's account at The
Depository Trust Company, you must properly complete, duly execute and deliver
the letter of transmittal, or facsimile of
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such letter, with any required signature guarantees, or an agent's message, and
any other required documents, to the exchange agent at its address set forth
under "--Exchange Agent" on or before the expiration date, or you must comply
with the guaranteed delivery procedure set forth below.
Delivery of documents to The Depository Trust Company in accordance with its
procedures does not constitute delivery to the exchange agent.
Signature Guarantees
If a certificate for the original capital securities is registered in a name
other than yours or you complete the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the letter of transmittal,
such certificate must be endorsed or accompanied by a properly executed bond
power, with the respective endorsement or signature guaranteed by a firm or
other entity identified in Rule 17Ad-15 under the Exchange Act as an "eligible
guarantor institution," including, as such terms are defined in this Rule:
. a bank;
. a broker, dealer, municipal securities broker or dealer or government
securities broker or dealer;
. a credit union;
. a national securities exchange, registered securities association or
clearing agency; or
. an "eligible institution," which is a savings association that is a
participant in a Securities Transfer Association, unless surrendered on
behalf of such eligible institution. See Instruction 1 to the letter of
transmittal.
Guaranteed Delivery
If you desire to tender original capital securities in the exchange offer
and the certificates for your original capital securities are not immediately
available or time will not permit all required documents to reach the exchange
agent on or before the expiration date, or you cannot complete the procedure
for book-entry transfer on a timely basis, your original capital securities may
nevertheless be tendered so long as you comply with all of the following
guaranteed delivery procedures:
. you tender by or through an eligible institution;
. you properly complete and duly execute a notice of guaranteed delivery,
substantially in the form accompanying the letter of transmittal, and
the notice is received by the exchange agent, as provided below, on or
before the expiration date; and
. the certificates, or a book-entry confirmation representing all tendered
original capital securities, in proper form for transfer, together with
a properly completed and duly executed letter of transmittal, or a
facsimile of such letter, or agent's message with any required signature
guarantees and any other documents required by the letter of
transmittal, are received by the exchange agent within three New York
Stock Exchange trading days after the date of execution of such notice
of guaranteed delivery.
The notice of guaranteed delivery may be delivered by hand, or transmitted
by facsimile or mail to the exchange agent and must include a guarantee by an
eligible institution in the form set forth in such notice.
The delivery of exchange capital securities in exchange for original capital
securities tendered and accepted for exchange pursuant to the exchange offer
will in all cases be made only after timely receipt by the exchange agent of
original capital securities, or of a book-entry confirmation with respect to
such original capital securities, and a properly completed and duly executed
letter of transmittal, or facsimile of such letter, or agent's message together
with any required signature guarantees and any other documents required by the
letter of transmittal. Accordingly, the delivery of exchange capital securities
might not be made to all tendering
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holders at the same time, and will depend upon when original capital
securities, book-entry confirmations with respect to original capital
securities and other required documents are received by the exchange agent.
Acceptance by the Trust and us of original capital securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement among you, the Trust and us upon the terms and subject to the
conditions of the exchange offer.
Determination of Validity
We and the Trust will determine all questions as to the form of documents,
validity, eligibility, including time of receipt, and acceptance for exchange
of any tendered original capital securities, in our sole discretion, and our
determination will be final and binding on all parties. We and the Trust
reserve the absolute right, in our sole and absolute discretion, to reject any
and all tenders determined by us not to be in proper form or the acceptance of
which, or exchange for, may, in the opinion of our counsel, be unlawful. We and
the Trust also reserve the absolute right, subject to applicable law, to waive
any of the conditions of the exchange offer as set forth under "--Conditions to
the Exchange Offer" or any condition or irregularity in any tender of original
capital securities of any particular holder whether or not similar conditions
or irregularities are waived in the case of other holders.
The Trust's and our interpretation of the terms and conditions of the
exchange offer, including the letter of transmittal and the instructions
thereto, will be final and binding. We will not deem any tender of original
capital securities to have been validly made until all irregularities with
respect to such tender have been cured or waived by us. None of First
Commonwealth, the Trust, any affiliates or assigns of First Commonwealth or the
Trust, the exchange agent or any other person will be under any duty to give
any notification of any irregularities in tenders or incur any liability for
failure to give any such notification.
If any letter of transmittal, endorsement, bond power, power of attorney or
any other document required by the letter of transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless we and the Trust waive
such requirement, you must submit proper evidence satisfactory to us and the
Trust, in our sole discretion, of such person's authority to so act.
If you are the beneficial owner of original capital securities that are held
by or registered in the name of a broker, dealer, commercial bank, trust
company or other nominee or custodian, we urge you to contact such entity
promptly if you wish to participate in the exchange offer.
Resales of Exchange Capital Securities
We and the Trust are making the exchange offer for the exchange capital
securities in reliance on the position of the staff of the Division of
Corporation Finance of the SEC as set forth in certain interpretive letters
addressed to third parties in other transactions. However, neither we nor the
Trust sought our own interpretive letter and there can be no assurance that the
staff of the Division of Corporation Finance of the SEC would make a similar
determination with respect to this exchange offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance, and subject to the two
immediately following sentences, we and the Trust believe that exchange capital
securities issued in this exchange offer in exchange for original capital
securities may be offered for resale, resold and otherwise transferred by a
holder thereof without further compliance with the registration and prospectus
delivery requirements of the Securities Act; provided, however, that such
exchange capital securities are acquired in the ordinary course of such
holder's business, that such holder is not participating, and has no
arrangement or understanding with any person to participate in, a distribution
as defined in the Securities Act of such exchange capital securities and that
such holder is not a broker-dealer. However, any holder of original capital
securities
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who is an affiliate of First Commonwealth or the Trust or who intends to
participate in the exchange offer for the purpose of distributing exchange
capital securities, or any broker-dealer who purchased original capital
securities from the Trust to resell under Rule 144A or any other available
exemption under the Securities Act:
. will not be able to rely on the interpretations of the staff of the
Division of Corporation Finance of the SEC set forth in the above-
mentioned interpretive letters;
. will not be permitted or entitled to tender such original capital
securities in the exchange offer; and
. must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any sale or other transfer of
such original capital securities, unless such sale is made in an
exemption from such requirements.
In addition, as described below, participating broker-dealers must deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resales of exchange capital securities.
Each holder of original capital securities who wishes to exchange original
capital securities for exchange capital securities in the exchange offer must
represent that:
. it is not an affiliate of First Commonwealth or the Trust;
. any exchange capital securities to be received by it are being acquired
in the ordinary course of its business;
. it has no arrangement or understanding with any person to participate in
a distribution, as defined in the Securities Act, of such exchange
capital securities; and
. if such holder is not a broker-dealer, such holder is not engaged in,
and does not intend to engage in, a distribution of such exchange
capital securities.
The letter of transmittal contains the foregoing representations. In
addition, First Commonwealth and the Trust may require any holder, as a
condition to such holder's eligibility to participate in the exchange offer, to
furnish to First Commonwealth and the Trust in writing information as to the
number of "beneficial owners," as defined in Rule 13d-3 under the Exchange Act,
on behalf of whom such holder holds the capital securities to be exchanged in
the exchange offer.
Each participating broker-dealer will be deemed to have acknowledged by
execution of the letter of transmittal or delivery of an agent's message that
it acquired the original capital securities for its own account as the result
of market-making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such exchange capital securities. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, a
participating broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. Based on the position
taken by the staff of the SEC's Division of Corporation Finance in the
interpretive letters referred to above, First Commonwealth and the Trust
believe that participating broker-dealers who acquired original capital
securities for their own accounts as a result of market-making activities or
other trading activities, may fulfill their prospectus delivery requirements
with respect to the exchange capital securities received upon exchange of such
original capital securities, other than original capital securities which
represent an unsold allotment from the original sale of the original capital
securities, with a prospectus meeting the requirements of the Securities Act.
This prospectus may be the prospectus prepared for this exchange offer so long
as it contains a description of the plan of distribution with respect to the
resale of such exchange capital securities. Accordingly, this prospectus, as it
may be amended or supplemented from time to time, may be used by a
participating broker-dealer during the period referred to below in connection
with resales of exchange capital securities received in exchange for original
capital securities where such original capital securities were acquired by such
participating broker-dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
registration rights agreement, First Commonwealth and
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the Trust have agreed that this prospectus, as it may be amended or
supplemented from time to time, may be used by a participating broker-dealer in
connection with resales of such exchange capital securities for 90 days after
the expiration date, subject to extension under certain limited circumstances
described below, or, if earlier, when all such exchange capital securities have
been disposed of by such participating broker-dealer. See "Certain Resales."
However, a participating broker-dealer who intends to use this prospectus in
connection with the resale of exchange capital securities received in exchange
for original capital securities must notify First Commonwealth or the Trust, or
cause First Commonwealth or the Trust to be notified, on or before the
expiration date, that it is a participating broker-dealer. Such notice may be
given in the space provided for that purpose in the letter of transmittal or
may be delivered to the exchange agent at one of the addresses set forth herein
under "--Exchange Agent."
Any person, including any participating broker-dealer who is an affiliate of
First Commonwealth or the Trust, may not rely on the foregoing interpretive
letters and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
We or the Trust will notify participating broker-dealers if any event occurs
or if we discover any fact that makes any statement contained or incorporated
by reference in this prospectus untrue in any material respect, or which causes
this prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference, in light of the
circumstances under which they were made, not misleading. We or the Trust will
also notify participating broker-dealers if certain other events occur, which
are specified in the registration rights agreement. Each participating broker-
dealer who surrenders original capital securities in the exchange offer will be
deemed to have agreed, by execution of the letter of transmittal or delivery of
an agent's message that, upon receipt of such notice, it will suspend the sale
of exchange capital securities, or the exchange guarantee or the exchange
debentures, as applicable, under the terms of this prospectus until we have
furnished or the Trust has furnished to the participating broker-dealer copies
of a prospectus it has amended or supplemented to correct such misstatement or
omission, or we have given or the Trust has given notice that the sale of the
exchange capital securities, or the exchange guarantee or the exchange
debentures, as applicable, may be resumed. If we give or the Trust gives such
notice to suspend the sale of the exchange capital securities, the exchange
guarantee or the exchange debentures, we shall extend the 90-day period
referred to above during which participating broker-dealers are entitled to use
this prospectus in connection with the resale of exchange capital securities by
a number of days equal to the period from and including the date of the giving
of such notice to and including the date when participating broker-dealers
shall have received copies of the amended or supplemented prospectus or to and
including the date on which we have given or the Trust has given notice that
the sale of exchange capital securities, exchange guarantee or exchange
debentures may be resumed.
Withdrawal Rights
Except as otherwise provided in this prospectus, tenders of original capital
securities may be withdrawn at any time on or before the expiration date. In
order for a withdrawal to be effective a written or facsimile transmission of
such notice of withdrawal must be timely received by the exchange agent at one
of its addresses set forth under "--Exchange Agent" on or before the expiration
date. Any such notice of withdrawal must specify the name of the person who
tendered the original capital securities to be withdrawn, the aggregate
principal amount of original capital securities to be withdrawn, and, if
certificates for such original capital securities have been tendered, the name
of the registered holder of the original capital securities as set forth on the
original capital securities, if different from that of the person who tendered
them. If original capital securities have been delivered or otherwise
identified to the exchange agent, then before their physical release, the
tendering holder must submit the certificate numbers shown on the particular
original capital securities to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case of
original capital securities tendered for the account of an Eligible
Institution.
If original capital securities have been tendered according to the
procedures for book-entry transfer set forth in "--Procedures for Tendering
Original Capital Securities," the notice of withdrawal must specify the
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name and number of the account at The Depository Trust Company to be credited
with the withdrawal of original capital securities, in which case a notice of
withdrawal will be effective if delivered to the exchange agent by written or
facsimile transmission. Withdrawals of tenders of original capital securities
may not be rescinded. Original capital securities properly withdrawn will not
be deemed validly tendered for purposes of the exchange offer, but may be
retendered at any subsequent time on or before the expiration date by following
any of the procedures described above under "--Procedures for Tendering
Original Capital Securities."
All questions as to the validity, form and eligibility, including time of
receipt, of such withdrawal notices will be determined by First Commonwealth
and the Trust, in their sole discretion, whose determination will be final and
binding on all parties. None of First Commonwealth, the Trust, any affiliates
or assigns of First Commonwealth or the Trust, the exchange agent or any other
person, will be under any duty to give any notification of any irregularities
in any notice of withdrawal or incur any liability for failure to give any such
notification. Any original capital securities which have been tendered but
which are withdrawn will be returned to the holder thereof promptly after
withdrawal.
Distributions on Exchange Capital Securities
Distributions on the exchange capital securities are payable semi-annually
in arrears on March 1 and September 1 of each year, beginning March 1, 2000, at
the annual rate of 9.50% of the liquidation amount to the holders of the
exchange capital securities on the relevant record dates. Distributions on the
exchange capital securities will accumulate from September 8, 1999, the date of
the initial issuance of the original capital securities.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the exchange offer, or any extension
of the exchange offer, First Commonwealth and the Trust will not be required to
accept for exchange, or to exchange, any original capital securities for any
exchange capital securities, and, as described below, may terminate the
exchange offer, whether or not any original capital securities have previously
been accepted for exchange, or may waive any conditions to or amend the
exchange offer, if any of the following conditions have occurred or exist:
. there shall occur a change in the current interpretation by the staff of
the SEC that permits the exchange capital securities issued in the
exchange offer to be offered for resale, resold and otherwise
transferred by their holders, other than broker-dealers and any holder
which is an affiliate of First Commonwealth or the Trust, without
compliance with the registration and prospectus delivery provisions of
the Securities Act; provided, however, that such exchange capital
securities are acquired in the ordinary course of the holders' business
and such holders have no arrangement or understanding with any person to
participate in the distribution of such exchange capital securities;
. any law, statute, rule or regulation shall have been adopted or enacted
which, in the judgment of First Commonwealth or the Trust, would
reasonably be expected to impair its ability to proceed with the
exchange offer;
. any action or proceeding shall have been instituted or threatened in any
court or by or before any governmental agency or body with respect to
the exchange offer which, in First Commonwealth's or the Trust's
judgment, would reasonably be expected to impair the ability of the
Trust or First Commonwealth to proceed with the exchange offer;
. a banking moratorium shall have been declared by United States federal
or Pennsylvania or New York state authorities which, in First
Commonwealth' or the Trust's judgment, would reasonably be expected to
impair the ability of the Trust or First Commonwealth to proceed with
the exchange offer;
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. trading on the New York Stock Exchange or generally in the United States
over-the-counter market shall have been suspended by order of the SEC or
any other governmental authority which, in First Commonwealth' or the
Trust's judgment, would reasonably be expected to impair the ability of
the Trust or First Commonwealth to proceed with the exchange offer; or
. a stop order shall have been issued by the SEC or any state securities
authority suspending the effectiveness of the registration statement or
proceedings shall have been initiated or, to the knowledge of First
Commonwealth or the Trust, threatened for that purpose, or any
governmental approval which either First Commonwealth or the Trust
shall, in its sole discretion, deem necessary for the consummation of
the exchange offer as contemplated hereby has not been obtained.
If First Commonwealth or the Trust determine in their sole and absolute
discretion that any of the foregoing events or conditions has occurred or
exists, they may, subject to applicable law, terminate the exchange offer or
waive any such condition or otherwise amend the terms of the exchange offer in
any respect. If such waiver or amendment constitutes a material change to the
exchange offer, First Commonwealth and the Trust will promptly disclose such
waiver or amendment by means of a prospectus supplement that will be
distributed to the registered holders of the original capital securities and
will extend the exchange offer to the extent required by Rule 14e-1 under the
Exchange Act.
Exchange Agent
The Chase Manhattan Bank has been appointed as exchange agent for the
exchange offer. Delivery of the letters of transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this prospectus or of the letter of transmittal should be directed to
the exchange agent as follows:
By Registered or By Hand
Certified Mail or Overnight Delivery
The Chase Manhattan Bank The Chase Manhattan Bank
Money Market Operations Corporate Trust Securities Window
55 Water Street 55 Water Street
Room 234 Room 234
North Building North Building
New York, New York 10041 New York, New York 10041
Attn: Carlos Esteves Attn: Carlos Esteves
Confirm by telephone or for
information call:
(212) 638-0828
Facsimile transmission
(eligible institutions only):
(212) 638-7380 or (212) 638-7381
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
Fees and Expenses
First Commonwealth has agreed to pay the exchange agent reasonable and
customary fees for its services and will reimburse it for its reasonable out-
of-pocket expenses in connection therewith. First Commonwealth will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket
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expenses incurred by them in forwarding copies of this prospectus and related
documents to the beneficial owners of original capital securities, and in
handling or tendering for their customers.
Holders who tender their original capital securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
exchange capital securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the original capital
securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of original capital securities in connection with the exchange
offer, then the amount of any such transfer taxes, whether imposed on the
registered holder or any other persons, will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the letter of transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
Neither First Commonwealth nor the Trust will make any payment to brokers,
dealers or other nominees soliciting acceptances of the exchange offer.
Shelf Registration Statement
If, because of any change in law or in the currently prevailing
interpretations of the staff of the SEC, First Commonwealth and the Trust are
not permitted to effect this exchange offer, or for any reason the exchange
offer registration statement is not declared effective by March 6, 2000, or in
certain other circumstances, then in addition to or in lieu of effecting the
registration of the exchange capital securities in the exchange offer
registration statement, the administrative trustees on behalf of the Trust
will:
. promptly deliver to the holders and the property trustee written notice
of the foregoing; and
. at First Commonwealth's sole expense,
. promptly cause to be filed a shelf registration covering resales of
the capital securities, the capital securities guarantee and the
debentures;
. use their best efforts to cause the shelf registration statement to
be declared effective under the Securities Act; and
. use their best efforts to keep effective the shelf registration
statement until the earlier of two years after the date of issuance
of the original capital securities or such time as all of the
applicable capital securities, the capital securities guarantee and
the debentures have been sold under the registration statement or
otherwise cease to be registrable securities within the meaning of
the registration rights agreement.
First Commonwealth will, in the event that a shelf registration statement is
filed, send to each holder copies of the prospectus that is a part of the shelf
registration statement, notify each such holder when the shelf registration
statement for the capital securities, the capital securities guarantee and the
debentures has become effective and take certain other actions as are required
to permit unrestricted resales of the capital securities, the capital
securities guarantee and the debentures. A holder that sells capital
securities, the capital securities guarantee and the debentures under the shelf
registration statement generally will be required to be named as a selling
security holder in the related prospectus and to deliver a prospectus to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the registration rights agreement that are applicable to such a
holder (including certain indemnification rights and obligations).
Each capital security, the capital securities guarantee and each debenture
contains a legend to the effect that the holder thereof, by its acceptance
thereof, will be deemed to have agreed to be bound by the provisions of the
registration rights agreement. In that regard, each holder will be deemed to
have agreed that, upon receipt of notice from First Commonwealth of the
occurrence of any event which makes such statement in the prospectus which is
part of the shelf registration statement (or, in the case of participating
broker-dealers, the
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prospectus which is a part of the exchange offer registration statement) untrue
in any material respect or which requires the making of any changes in such
prospectus in order to make the statements therein not misleading or of certain
other events specified in the registration rights agreement, such holder (or
participating broker-dealer, as the case may be) will suspend the sale of
capital securities, the capital securities guarantee and the debentures
pursuant to such prospectus until First Commonwealth has amended or
supplemented such prospectus to correct such misstatement or omission and has
furnished copies of the amended or supplemented prospectus to such holder (or
participating broker-dealer, as the case may be) or First Commonwealth has
given notice that the sale of the capital securities, the capital securities
guarantee and the debentures may be resumed, as the case may be.
If First Commonwealth has given notice to suspend the sale of the capital
securities, the capital securities guarantee and the debentures, it must extend
the relevant period referred to above during which First Commonwealth and the
Trust are required to keep effective the shelf registration statement (or the
period during which participating broker-dealers may use the prospectus
included in the exchange offer registration statement in connection with the
resale of exchange capital securities, exchange guarantee, or exchange
debentures, as the case may be) by the number of days during the period from
and including the date of the giving of such notice to and including the date
when holders shall have received copies of the supplemented or amended
prospectus necessary to permit resales of the capital securities, the capital
securities guarantee and the debentures or to and including the date on which
First Commonwealth has given notice that the sale of capital securities may be
resumed, as the case may be.
Additional Distributions/Additional Interest
The occurrence of any of the following events will constitute a registration
default under the registration rights agreement:
. if neither the exchange offer registration statement nor a shelf
registration statement is filed with the SEC on or before the 150th day
after the date of issuance of the original capital securities;
. neither the exchange offer registration statement nor a shelf
registration statement is declared effective by the SEC on or before the
30th day after the applicable required filing date;
. if the Trust has not exchanged exchange capital securities for all of
the original capital securities, or First Commonwealth has not accepted
for exchange the debentures for the exchange debentures or the capital
securities guarantees for the exchange guarantees in accordance with the
terms of the exchange offer on or before the 45th business day after the
date on which the exchange offer registration statement was declared
effective; or
. if applicable, the shelf registration statement is declared effective
but thereafter ceases to be effective at any time before the second
anniversary of the date of issuance of the original capital securities
(other than after such time as all of the capital securities have been
disposed of thereunder, otherwise cease to be registrable securities
within the meaning of the registration rights agreement or an exchange
offer has been consummated).
If a registration default occurs, then:
. additional distributions at the rate of 0.25% per annum will become
payable on the capital securities; and
. additional interest at the rate of 0.25% per annum will become payable
on the debentures;
commencing, in each case, as of the business day after the applicable
registration default.
Notwithstanding the foregoing, the rate of additional distributions on the
liquidation amount of each of the capital securities may not exceed in the
aggregate 0.25% per annum and the rate of additional interest on the principal
amount of the debentures may not exceed in the aggregate 0.25% per annum.
Following the cure of
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all registration defaults, if any, additional distributions on the liquidation
amount of the capital securities and additional interest on the principal
amount of the debentures shall cease to accrue.
Any amounts of additional interest and additional distributions due pursuant
to the foregoing will be payable in cash on March 1 and September 1 of each
year to the holders of record on the fifteenth day of the month which precedes
the month in which the relevant payment date falls.
If First Commonwealth becomes eligible to conduct an exchange offer at a
date after the shelf registration statement has been declared effective, First
Commonwealth may, but is not obligated to, commence an exchange offer on or
after such date whereby the capital securities, capital securities guarantee
and debentures may be exchanged for exchange capital securities, an exchange
guarantee and exchange debentures, having the terms described above. After the
consummation of such an exchange offer, First Commonwealth will no longer be
obligated to maintain a shelf registration statement in respect of any holder
of capital securities or debentures which holder could have received securities
that are freely tradeable without restriction under the Securities Act and
applicable blue sky or state securities laws through its participation in the
exchange offer.
The registration rights agreement provides that it is governed by the laws
of the State of New York. The summary herein of certain provisions of the
registration rights agreement does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, all the provisions of the
registration rights agreement, a form of which is available upon request to
First Commonwealth. See "Where You Can Find More Information." In addition, the
information set forth above concerning certain interpretations of and positions
taken by the Staff is not intended to constitute legal advice, and prospective
investors should consult their own legal advisors with respect to such matters.
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DESCRIPTION OF CAPITAL SECURITIES
The terms of the exchange securities are identical in all material respects
to the terms of the original securities, except that:
. the original securities have not been registered under the Securities
Act, are subject to restrictions on transfer under federal and state
securities laws and are entitled to certain rights under the
registration rights agreement which will terminate upon consummation of
the exchange offer;
. the exchange capital securities will not provide for any increase in the
distribution rate; and
. the exchange debentures will not provide for any increase in the
interest rate.
The exchange capital securities will be issued under the terms of the
declaration. The exchange capital securities represent beneficial ownership
interests in the Trust and holders of the capital securities will be entitled
to a preference over the common securities in certain circumstances with
respect to distributions and amounts payable on redemption of the capital and
common securities, which are sometimes referred to in this prospectus
collectively as the "trust securities," or liquidation of the Trust. See "--
Subordination of Common Securities" below. The declaration will be qualified
under the Trust Indenture Act of 1939, as amended upon effectiveness of the
exchange offer registration statement or the shelf registration statement. The
following description of the material terms and provisions of the capital
securities is not complete and is subject to, and is qualified in its entirety
by reference to, the declaration and the Trust Indenture Act. Certain
capitalized terms used herein are defined in the declaration.
General Description of the Capital Securities
The capital securities are limited to $35,000,000 aggregate liquidation
amount at any one time outstanding, including original capital securities and
exchange capital securities that may be issued from time to time in exchange
for original capital securities in the Exchange Offer. The original capital
securities and the exchange capital securities, will, when issued, rank equal
to, and payments will be made thereon pro rata, with the common securities
except as described under "--Subordination of Common Securities" below. Legal
title to the debentures is held by the Property Trustee in trust for the
benefit of the holders of the capital securities and the common securities. The
original capital securities guarantee and the exchange capital securities
guarantee, when issued, will not guarantee payment of distributions or amounts
payable on redemption of the capital securities or liquidation of the Trust
when the Trust does not have funds on hand legally available for such payments.
See "Description of Securities Guarantee."
Semi-annual Distributions on the Capital Securities
The Trust will make distributions on the capital securities on a cumulative
basis, and distributions will accumulate from September 8, 1999 and be payable
semi-annually in arrears on March 1 and September 1 of each year, commencing
March 1, 2000, at the annual rate of 9.50% of the liquidation amount to the
holders of the capital securities on the relevant record dates. The record
dates will be the fifteenth day of the month which precedes the month in which
the relevant Distribution Date (as defined herein) falls. The amount of
distributions payable to holders for any period will be computed on the basis
of a 360-day year of twelve 30-day months and, for any period of less than a
full calendar month, the number of days elapsed in such month. In the event
that any date on which distributions are payable an the capital securities is
not a Business Day (as defined herein), payment of the distributions payable on
such date will be made on the next succeeding day that
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is a Business Day (without any interest or other payment in respect of the
distribution subject to delay), in each case, with the same force and effect as
if made on the scheduled payment date (each date on which distributions are
payable in accordance with the foregoing, a "Distribution Date").
A "Business Day" shall mean any day other than a Saturday or a Sunday, or a
day on which banking institutions in New York, New York are authorized or
required by law or executive order to close.
So long as no Debenture Event of Default (as defined on page 52) has
occurred and is continuing, First Commonwealth may, pursuant to the indenture,
elect to defer interest payments on the debentures at any time and from time to
time for a period not exceeding 10 consecutive semi-annual periods with respect
to each deferral period (each, an "Extension Period"), provided that no
Extension Period may end on a day other than an interest payment date on the
debentures or extend beyond September 1, 2029, the stated maturity date of the
debentures (the "Stated Maturity Date"). Upon any such election, semi-annual
distributions on the capital securities will be deferred by the Trust during
such Extension Period. Distributions to which holders of the capital securities
are entitled during any such Extension Period will accumulate additional
distributions thereon at the rate per annum of 9.50% thereof, compounded semi-
annually from the relevant Distribution Date. The term "distributions," as used
herein, includes any such additional distributions.
During any Extension Period, First Commonwealth may extend such Extension
Period, provided that the extension does not cause the Extension Period to
exceed 10 consecutive semi-annual periods or to extend beyond the Stated
Maturity Date. Upon the termination of any Extension Period and the payment of
all amounts then due, and subject to the foregoing limitations, First
Commonwealth may elect to begin a new Extension Period. First Commonwealth must
give the Property Trustee, the Administrative Trustees and the Delaware Trustee
under the indenture notice of its election of any Extension Period or any
extension thereof at least five Business Days prior to the earlier of:
. the date the distributions on the capital securities would have been
payable except for the election to begin or extend such Extension
Period; and
. the date the Administrative Trustees are required to give notice of the
record date or the date such distributions are payable, but in any event
not less than five Business Days prior to such record date.
There is no limitation on the number of times that First Commonwealth may
elect to begin an Extension Period. See "Description of Junior Subordinated
Debentures--First Commonwealth's Option to Extend Interest Payment Date" and
"Federal Income Tax Consequences--Interest Income and Original Issue Discount."
During any Extension Period, First Commonwealth may not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of its
capital stock (which includes common and preferred stock);
. make any payment of principal of or premium, if any, or interest on or
repay, repurchase or redeem any of its debt securities (including Other
Debentures as defined on page 45) that rank equal with or junior in
right of payment to the debentures; or
. make any guarantee payments with respect to any guarantee by it of any
securities of any of its subsidiaries (including Other Guarantees as
defined on page 58) if such guarantee ranks equal with or junior in
right of payment to the debentures;
provided, however, that the foregoing limitation does not apply to:
. dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, its common stock;
. any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights under
such a plan;
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. payments under the capital securities guarantee;
. as a direct result of, and only to the extent required in order to avoid
the issuance of fractional shares of capital stock following a
reclassification of its capital stock or the exchange or conversion of
one class, or series of its capital stock for another class or series of
its capital stock;
. the purchase of fractional interests in shares of its capital stock
pursuant to the conversion or exchange of such capital stock or the
security being converted or exchanged; and
. purchases of common stock related to the issuance of common stock or
rights under any of its benefit plans for its directors, officers or
employees or its dividend reinvestment plan.
Although First Commonwealth may in the future exercise its option to defer
payments of interest on the debentures, First Commonwealth has no current
intention to exercise its option.
The revenue of the Trust available for distribution to holders of the
capital securities will be limited to payments under the debentures in which
the Trust will invest the proceeds from the issuance and sale of the trust
securities. See "Description of Junior Subordinated Debentures--General
Description of the Junior Subordinated Debentures." If First Commonwealth does
not make interest payments on the debentures, the Property Trustee will not
have funds available to pay distributions on the capital securities. The
payment of distributions (if and to the extent the Trust has funds on hand
legally available for the payment of such distributions) will be guaranteed by
First Commonwealth on a limited basis as set forth herein under "Description of
the Capital Securities Guarantee."
Redemption of the Junior Subordinated Debentures
Upon First Commonwealth's repayment on the Stated Maturity Date or
redemption in whole or in part prior to the Stated Maturity Date of the
debentures (other than following the distribution of the debentures to the
holders of the trust securities), the proceeds from such redemption or
prepayment shall be applied by the Property Trustee to redeem a Like Amount (as
defined below) of the trust securities, upon not less than 30 nor more than 60
days' notice of a date of redemption (the "Redemption Date") at the applicable
redemption price, which shall be equal to:
. in the case of the repayment of the debentures on the Stated Maturity
Date, the principal of and accrued and unpaid interest on the
debentures;
. in the case of the optional prepayment of the debentures before
September 1, 2009 (the "Initial Optional Prepayment Date") upon the
occurrence and continuation of a Special Event (as defined on page 48),
the Special Event Redemption Price (equal to the Special Event
Prepayment Price in respect of the debentures as such term is defined on
page 48) (the "Special Event Redemption Price"); and
. in the case of the optional prepayment of the debentures after the
Initial Optional Prepayment Date, the Optional Redemption Price (equal
to the Optional Prepayment Price in respect of the debentures as such
term is defined on page 48) (the "Optional Redemption Price").
See "Description of Junior Subordinated Debentures--Optional Redemption" and
"--Optional Redemption Upon the Occurrence of a Special Event." If less than
all of the debentures are to redeemed on a Redemption Date, then the proceeds
of such redemption shall be allocated to the redemption pro rata of the capital
securities and the common securities.
"Like Amount" means:
. with respect to a redemption of the trust securities, trust securities
having a liquidation amount equal to the principal amount of debentures
to be paid in accordance with their terms; and
. with respect to a distribution of debentures upon the liquidation of the
Trust, debentures having a principal amount equal to the liquidation
amount of the trust securities of the holder to whom such debentures are
distributed.
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Subject to receipt of prior approval by the Federal Reserve if then required
under applicable capital guidelines or policies of the Federal Reserve, First
Commonwealth will have the option to prepay the debentures:
. in whole or in part, on or after the Initial Optional Prepayment Date,
at the applicable Optional Prepayment Price; and
. in whole but not in part, at any time before the Initial Optional
Prepayment Date, upon the occurrence of a Special Event, at the Special
Event Prepayment Price.
Liquidation of the Trust and Distribution of Debentures
First Commonwealth will have the right at any time to dissolve the Trust and
cause the debentures to be distributed to the holders of the trust securities
in liquidation of the Trust. Such right is subject to (1) First Commonwealth
having received an opinion of counsel to the effect that the distribution will
not be a taxable event to holders of capital securities, and (2) the receipt of
any required regulatory approval, including the prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve.
Upon liquidation of the Trust and certain other events, the debentures may
be distributed to holders of capital securities. For a description of the tax
consequences under the Internal Revenue Code associated therewith, see "Federal
Income Tax Consequences--Receipt of Debentures or Cash Upon Liquidation of the
Trust."
The Trust shall automatically dissolve upon the first to occur of:
. certain events of bankruptcy, dissolution or liquidation of First
Commonwealth or the Trust;
. the distribution of a Like Amount of the debentures to the holders of
the trust securities, if First Commonwealth, as sponsor of the Trust,
has given written direction to the Property Trustee to terminate the
Trust, which direction is optional and, except as described above,
wholly within the discretion of First Commonwealth;
. the redemption of all of the trust securities as described under "--
Redemption of the Junior Subordinated Debentures" above;
. the expiration of the term of the Trust; or
. the entry of an order for the dissolution of the Trust by a court of
competent jurisdiction.
If a dissolution occurs as described above except through redemption of all
of the trust securities, the Administrative Trustees shall liquidate the Trust
as expeditiously as they determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, to the holders of the trust securities a Like Amount of the debentures. In
such an event, such holders will be entitled to receive out of the assets of
the Trust legally available for distribution to holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to, in the case of the holders of capital securities, the aggregate of
the liquidation amount plus accumulated and unpaid distributions thereon to the
date of payment. We refer to this amount as the "Liquidation Distribution." If
upon the Trust's liquidation, the Liquidation Distribution can be paid only in
part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the capital securities and the common securities shall be paid on a
pro rata basis, except that if a Debenture Event of Default has occurred and is
continuing, the capital securities shall have a priority over the common
securities. See "--Subordination of Common Securities" below.
After the liquidation date is fixed for any distribution of debentures to
holders of the trust securities:
. the trust securities will no longer be deemed to be outstanding;
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. each registered global certificate, if any, representing trust
securities and held by The Depository Trust Company or its nominee will
receive a registered global certificate or certificates representing the
debentures to be delivered upon such distribution; and
. any certificates representing trust securities not held by The
Depository Trust Company or its nominee will be deemed to represent
debentures having a principal amount equal to the liquidation amount of
such trust securities and bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid distributions on such trust
securities until such certificates are presented to the Administrative
Trustees or their agent for cancellation, whereupon First Commonwealth
will issue to such holder, and the Debenture Trustee (as defined on page
45) will authenticate, a certificate representing such debentures.
There can be no assurance as to the market prices for the capital securities
or the debentures that may be distributed in exchange for the trust securities
if a dissolution and liquidation of the Trust were to occur. Accordingly, the
capital securities or the debentures received on dissolution and liquidation of
the Trust, may trade at a discount to the price that the investor paid to
purchase the capital securities.
Redemption Procedures
In the event of redemption, the trust securities shall be redeemed by the
Trust at the applicable redemption price with the proceeds from the
contemporaneous repayment or redemption of the debentures. Any redemption of
trust securities by the Trust shall be made and the applicable redemption price
shall be payable on the Redemption Date only to the extent that the Trust has
funds legally available for the payment of such applicable redemption price.
See also "--Subordination of Common Securities" below.
If the Trust gives a notice of redemption in respect of the capital
securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are legally available, with respect to the capital securities
held by The Depository Trust Company or its nominees, the Property Trustee will
pay or cause the paying agent for the capital securities (the "Paying Agent")
to pay the applicable redemption price to The Depository Trust Company. See "--
Form of Capital Securities " below. With respect to the capital securities held
in certificated form, the Property Trustee, to the extent funds are legally
available, will give irrevocable instructions and authority to the Paying Agent
and will irrevocably deposit with the Paying Agent for the capital securities
funds sufficient to pay or cause the Paying Agent to pay the applicable
redemption price to the holders thereof upon surrender of their certificates
evidencing the capital securities. See "Description of Junior Subordinated
Debentures--Payment and Paying Agents." Distributions payable on or prior to
the Redemption Date shall be payable to the holders of such capital securities
on the relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of deposit, all rights of holders of any capital securities so called for
redemption will cease, except the right of the holders of those capital
securities to receive the applicable redemption price, but without interest,
and such capital securities will cease to be outstanding. In the event that any
Redemption Date is not a Business Day, then payment of the applicable
redemption price payable on such date will be made on the next succeeding day
that is a Business Day, without any interest or other payment in respect of any
such delay. In the event that payment of the applicable redemption price is
improperly withheld or refused and not paid either by the Trust or by First
Commonwealth pursuant to the capital securities guarantee as described under
"Description of the Capital Securities Guarantee,"
. distributions on capital securities called for redemption will
accumulate on the redemption price at the then applicable rate, from the
Redemption Date originally established by the Trust to the date such
applicable redemption price is actually paid; and
. the actual payment date will be the Redemption Date for purposes of
calculating the applicable redemption price.
Subject to applicable law, including, without limitation, United States
federal securities law and the regulations of the Federal Reserve, First
Commonwealth or its subsidiaries may at any time and from time to time purchase
outstanding capital securities by tender, in the open market or by private
agreement.
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Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of trust securities at its
registered address. Unless First Commonwealth defaults in payment of the
applicable prepayment price on, or in the repayment of, the debentures, on and
after the Redemption Date distributions will cease to accrue on the trust
securities called for redemption.
Subordination of Common Securities
Payment of distributions on, and the redemption price of, the capital
securities and the common securities, as applicable, shall be made pro rata
based on the liquidation amount of the capital securities and common
securities. However, if a Debenture Event of Default shall have occurred and be
continuing on any Distribution Date or Redemption Date, no payment of any
distribution on, or applicable redemption price of, any of the common
securities, and no other payment on account of the redemption, liquidation or
other acquisition of the common securities, shall be made unless payment in
full in cash of all accumulated and unpaid distributions on all of the
outstanding capital securities for all Distribution Periods terminating on or
prior thereto or, in the case of capital securities called for redemption on a
Redemption Date on or prior thereto, the full amount of the redemption price
therefor, shall have been made or provided for, and all funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
distributions on, or redemption price of, the capital securities then due and
payable.
If an Event of Default, as defined below, should occur, First Commonwealth,
as holder of the common securities, will be deemed to have waived any right to
act with respect to such Event of Default until the effect of the Event of
Default shall have been cured, waived or otherwise eliminated. Until any such
Event of Default has been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the holders of the capital
securities and not on behalf of First Commonwealth as holder of the common
securities, and only the holders of the capital securities will have the right
to direct the Property Trustee to act on their behalf.
Events of Default; Notice
The occurrence of a Debenture Event of Default constitutes an "Event of
Default" under the declaration. See "Description of Junior Subordinated
Debentures--Debenture Events of Default."
Within ten (10) Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the capital securities, the
Administrative Trustees and First Commonwealth, as sponsor of the Trust, unless
the Event of Default has been cured or waived. First Commonwealth, as sponsor
of the Trust, and the Administrative Trustees are required to file annually
with the Property Trustee a certificate as to whether or not they are in
compliance with all the conditions and covenants applicable to them under the
declaration.
If a Debenture Event of Default has occurred and is continuing, the capital
securities shall have a preference over the common securities as described
under "--Liquidation of the Trust and Distribution of Debentures" and "--
Subordination of Common Securities" above.
Removal of Issuer Trustees
Unless a Debenture Event of Default has occurred and is continuing, First
Commonwealth, as the holder of the common securities may remove any Issuer
Trustee at any time. If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at
such time only by the holders of a majority in liquidation amount of the
outstanding capital securities. In no event will the holders of the capital
securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in First
Commonwealth as the holder of the common securities. No resignation or removal
of an Issuer Trustee and no appointment of a successor trustee shall be
effective until the acceptance of appointment by the successor trustee in
accordance with the provisions of the declaration.
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Merger or Consolidation of Issuer Trustees
Any person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any person succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under the
declaration, provided such person shall be otherwise qualified and eligible.
No Merger, Consolidation or Sale of Assets of the Trust
The Trust may not merge or convert with or into, consolidate, amalgamate or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other person,
except as described below. The Trust may, at the request of First Commonwealth,
as sponsor of the Trust, with the consent of the Administrative Trustees but
without the consent of the holders of the capital securities, merge or convert
with or into, consolidate, amalgamate or be replaced by or convey, transfer or
lease its properties and assets as an entirety or substantially as an entirety
to a trust organized as such under the laws of any state; provided, that:
. such successor entity either:
. expressly assumes all of the obligations of the Trust with respect
to the capital securities; or
. substitutes for the capital securities other securities having
substantially the same terms as the capital securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the capital securities rank with respect to distributions
and payments upon liquidation, redemption and otherwise;
. First Commonwealth expressly appoints a trustee of such successor entity
possessing the same powers and duties as the Property Trustee with
respect to the debentures;
. the capital securities or any Successor Securities are listed or quoted,
or any Successor Securities will be listed or quoted upon notification
of issuance, on any national securities exchange or other organization
on which the capital securities are then listed or quoted, if any;
. any merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the capital securities,
including any Successor Securities, to be downgraded by any nationally-
recognized statistical rating organization;
. any merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the capital securities,
including any Successor Securities, in any material respect, other than
any dilution of such holders' interests in the new entity;
. such successor entity has a purpose substantially identical to that of
the Trust;
. before any merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease, First Commonwealth has received an
opinion from independent counsel to the Trust experienced in such
matters to the effect that:
. any merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the capital securities,
including any Successor Securities, in any material respect, other
than any dilution of such holders' interests in the new entity; and
. following such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor
such successor entity will be required to register as an "investment
company" under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
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. First Commonwealth or any permitted successor or assignee owns all of
the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at
least to the extent provided by the capital securities guarantee.
Notwithstanding the foregoing, the Trust may not, except with the consent of
holders of 100% in liquidation amount of the trust securities, consolidate,
amalgamate, merge or convert with or into, or be replaced by or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge or convert with or into, or replace it, if it would cause the
Trust or the successor entity not to be classified as a grantor trust for
United States federal income tax purposes. In addition, the Property Trustee
will be required pursuant to the indenture to exchange, as a part of the
exchange offer, the debentures for the exchange debentures, which will have
terms identical in all material respects to the debentures, except for the
transfer restrictions under the Securities Act and the provision for an
increase in the interest rate thereon under certain circumstances. See "The
Exchange Offer."
Limited Voting Rights of Capital Security Holders; Modification and Amendment
of the Declaration
Except as provided below and under "--No Merger; Consolidation or Sale of
Assets of the Trust" above and "Description of the Capital Securities
Guarantee--Amendments and Assignment" and as otherwise required by law and the
declaration, the holders of the capital securities will have no voting rights.
The declaration may be amended from time to time by First Commonwealth, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the trust securities:
. to cure any ambiguity, correct or supplement any provisions in the
declaration that may be inconsistent with any other provision, or to
make any other provisions with respect to matters or questions arising
under the declaration, which shall not be inconsistent with the other
provisions of the declaration;
. to modify, eliminate or add to any provisions of the declaration to such
extent as shall be necessary to ensure that the Trust will be classified
for United States federal income tax purposes as a grantor trust at all
times that any trust securities are outstanding or to ensure that the
Trust will not be required to register as an "investment company" under
the Investment Company Act; or
. to modify, eliminate or add any provisions of the declaration to such
extent as shall be necessary to enable the Trust and First Commonwealth
to conduct this exchange offer in the manner contemplated by the
registration rights agreement;
so long as any such amendment does not adversely affect in any material respect
the interests of the holders of the trust securities. Any of these amendments
of the declaration shall become effective when notice thereof is given to the
holders of the trust securities. The declaration may be amended by the Issuer
Trustees and First Commonwealth with the consent of holders representing a
majority, based upon liquidation amount, of the outstanding trust securities if
the Issuer Trustees receive an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not affect the Trust's status as a grantor
trust for United States federal income tax purposes or the Trust's exemption
from status as an "investment company" under the Investment Company Act.
Notwithstanding the foregoing, the declaration may not be amended without
the consent of each holder of trust securities, to (1) change the amount or
timing of any Distribution or other payment on the trust securities or
otherwise adversely affect the amount of any Distribution or other payment
required to be made in respect of the trust securities as of a specified date,
or (2) restrict the right of a holder of trust securities to institute suit for
the enforcement of any such payment on or after such date.
So long as any debentures are held by the Property Trustee, the Issuer
Trustees will not without obtaining the prior approval of the holders of a
majority in liquidation amount of all outstanding capital securities:
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. direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or execute any trust or power
conferred on the Debenture Trustee with respect to the debentures;
. waive certain past defaults under the indenture;
. exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of the debentures; or
. consent to any amendment, modification or termination of the indenture
or the debentures, where such consent is required unless the Trust shall
have received an opinion of an independent tax counsel experienced in
such matters to the effect that such modification will not cause more
than an insubstantial risk that for United States federal income tax
purposes the Trust will not be classified as a grantor trust; provided,
however, that where a consent under the indenture would require the
consent of each holder of debentures affected thereby, no consent shall
be given by the Property Trustee without the prior approval of each
holder of the capital securities.
The Issuer Trustees shall not revoke any action previously authorized or
approved by a vote of the holders of the capital securities except by
subsequent vote of such holders. The Property Trustee will notify each holder
of capital securities of any notice of default with respect to the debentures.
In addition to obtaining the foregoing approvals of holders of the capital
securities, before taking any of the foregoing actions, the Issuer Trustees
will obtain an opinion of counsel experienced in such matters to the effect
that the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes on account of such
action.
Any required approval of holders of capital securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Administrative Trustees will cause a notice of any meeting at
which holders of capital securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each holder of record of capital securities in the manner set forth in the
declaration.
No vote or consent of the holders of capital securities will be required for
the Trust to redeem and cancel the capital securities in accordance with the
declaration.
Notwithstanding that holders of the capital securities are entitled to vote
or consent under any of the circumstances described above, any of the capital
securities that are owned by First Commonwealth or any affiliate of First
Commonwealth will, for purposes of such vote or consent, be treated as if they
were not outstanding.
Form of Capital Securities
The exchange capital securities may be issued in certificated form or as
global capital securities, which will consist of one or more capital securities
in registered, global form.
The global capital securities will be deposited upon issuance with the
Property Trustee as custodian for The Depository Trust Company, in New York,
New York, and registered in the name of The Depository Trust Company or its
nominee, in each case for credit to an account of a direct or indirect
participant in The Depository Trust Company as described below.
Except as set forth below, the global capital securities may be transferred,
in whole and not in part, only to another nominee of The Depository Trust
Company or to a successor of The Depository Trust Company or its
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nominee. Beneficial interests in the global capital securities may not be
exchanged for capital securities in certificated form except in the limited
circumstances described under "--Exchange of Book-Entry Capital Securities for
Certificated Capital Securities" below.
Capital securities that are not issued as global capital securities will be
issued only in registered, certificated (i.e., non-global) form. These
securities may not be exchanged for beneficial interests in any global capital
securities except in the limited circumstances described below. See "--Exchange
of Certificated Capital Securities for Book-Entry Capital Securities" below.
Depositary Procedures
The Depository Trust Company has advised the Trust and First Commonwealth
that it is a limited-purpose trust company organized under the laws of the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depository Trust Company holds securities that its participants (collectively,
the "Participants") deposit with The Depository Trust Company. The Depository
Trust Company also facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates.
Participants in The Depository Trust Company include securities brokers and
dealers, banks, trust companies, clearing corporation and certain other
organizations. The Depository Trust Company is owned by a number of its
participants and by the New York Stock Exchange, the American Stock Exchange,
Inc., and the National Association of Securities Dealers, Inc. Indirect access
to The Depository Trust Company system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to The Depository
Trust Company and its participants are on file with the SEC.
The Depository Trust Company has advised the Trust and First Commonwealth
that, pursuant to procedures established by it:
. upon deposit of the global capital securities representing exchange
capital securities, The Depository Trust Company will credit the
accounts of participants exchanging original capital securities
represented by global capital securities with portions of the
liquidation amount of the global capital securities; and
. ownership of such interests in the global capital securities will be
shown on, and the transfer of ownership thereof will be effected only
through, records maintained by The Depository Trust Company (with
respect to the Participants) or by the Participants and the Indirect
Participants (with respect to other owners of beneficial interests in
the global capital securities).
Purchases of the global capital securities may be made directly through The
Depository Trust Company if they are Participants in such system or indirectly
through organizations, including Euroclear and Cedel, which are Participants in
such system. All interests in a global capital security, including those held
through Euroclear or Cedel will be subject to the procedures and requirements
of The Depository Trust Company. Those interests held through Euroclear or
Cedel also may be subject to the procedures and requirements of such system.
The laws of some states require that certain persons take physical delivery in
certificated form of securities that they own. Consequently, the ability to
transfer beneficial interests in a global capital security to such persons will
be limited to that extent. Because The Depository Trust Company can act only on
behalf of Participants, which in turn act on behalf of Indirect Participants
and certain banks, the ability of a person having beneficial interests in a
global capital security to pledge such interests to persons or entities that do
not participate in The Depository Trust Company system, or otherwise take
actions in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests. For certain other restrictions on the
transferability of the capital
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securities, see "--Exchange of Book-Entry Capital Securities for Certificated
Capital Securities" and "--Exchange of Certificated Capital Securities for
Book-Entry Capital Securities" below.
Except as described below, owners of interests in the global capital
securities will not have capital securities registered in their name, will not
receive physical delivery of capital securities in certificated form and will
not be considered the registered owners or holders thereof under the
declaration for any purpose.
Payments in respect of the global capital security registered in the name of
The Depository Trust Company or its nominee will be payable by the Property
Trustee to The Depository Trust Company in its capacity as the registered
holder under the declaration. Under the terms of the declaration, the Property
Trustee will treat the persons in whose names the capital securities, including
the global capital securities, are registered as the owners thereof for the
purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither the Property Trustee nor any agent thereof
has or will have any responsibility or liability for:
. any aspect of The Depository Trust Company's records or any
Participant's or Indirect Participant's records relating to or payments
made on account of beneficial ownership interests in the global capital
securities, or for maintaining, supervising or reviewing any of The
Depository Trust Company's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in
the global capital securities; or
. any other matter relating to the actions and practices of The Depository
Trust Company or any of its Participants or Indirect Participants.
The Depository Trust Company has advised the Trust and First Commonwealth
that its current practice, upon receipt of any payment in respect of securities
such as the capital securities, is to credit the accounts of the relevant
Participants with the payment on the payment date, in amounts proportionate to
their respective holdings in liquidation amount of beneficial interests in the
relevant security as shown on the records of The Depository Trust Company,
unless it has reason to believe it will not receive payment on such payment
date. Payments by the Participants and the Indirect Participants to the
beneficial owners of capital securities represented by global capital
securities held through such Participants will be governed by standing
instructions and customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the responsibility of
The Depository Trust Company, the Property Trustee, the Trust or First
Commonwealth. None of the Trust, First Commonwealth or the Property Trustee
will be liable for any delay by The Depository Trust Company or any of its
Participants in identifying the beneficial owners of the capital securities,
and the Trust or First Commonwealth and the Property Trustee may conclusively
rely on and will be protected in relying on instructions from The Depository
Trust Company or its nominee for all purposes.
The Depository Trust Company will effect cross-market transfers between the
Participants in The Depository Trust Company, on the one hand, and Euroclear or
Cedel participants, on the other hand, in accordance with The Depository Trust
Company's rules on behalf of Euroclear or Cedel as the case may be, by its
respective depositary subject to compliance with the transfer restrictions
applicable to the capital securities described herein. However, such cross-
market transactions will require delivery of instructions to Euroclear or Cedel
as the case may be, by the counterparts in such system in accordance with the
rules and procedures and within the established deadlines (Brussels time) of
such system. Euroclear or Cedel, as the case may be, will, if the transaction
meets its settlement requirements, deliver instructions to its respective
depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant global capital securities in
The Depository Trust Company, and making or receiving payment in accordance
with normal procedures for same-day funds settlement applicable to The
Depository Trust Company. Euroclear participants and Cedel participants may not
deliver instructions directly to the depositaries for Euroclear or Cedel.
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Because of time zone differences, the securities account of a Euroclear or
Cedel participant purchasing an interest in a global capital security from a
Participant in The Depository Trust Company will be credited, and any such
crediting will be reported to the relevant Euroclear or Cedel participant,
during the securities settlement processing day (which must be a business day
for Euroclear and Cedel) immediately following the settlement date of The
Depository Trust Company. Cash received in Euroclear or Cedel as a result of
sales of interest in a global capital security by or through a Euroclear or
Cedel participant to a Participant in The Depository Trust Company will be
received with value on the settlement date of The Depository Trust Company but
will be available in the relevant Euroclear or Cedel cash account only as of
the business day or Euroclear or Cedel following The Depository Trust Company
settlement date.
The Depository Trust Company has advised the Trust and First Commonwealth
that it will take any action permitted to be taken by a holder of capital
securities, including the presentation of capital securities for exchange as
described below, only at the direction of one or more Participants to whose
account interests in the global capital securities are credited and only in
respect of such portion of the aggregate liquidation amount of the capital
securities as to which such Participant or Participants has or have given the
direction. Also, if there is an Event of Default under the declaration, The
Depository Trust Company reserves the right to exchange the global capital
securities for legended capital securities in certificated form and to
distribute such capital securities to its Participants in accordance with its
customary procedures.
The Depository Trust Company or its nominee, as the case may be, will be
considered the sole owner or holder of the capital securities represented by
the Global Capital Securities for all purposes under the declaration so long as
The Depository Trust Company or its nominee is the registered owner of the
Global Capital Securities.
The information in this section concerning The Depository Trust Company,
Euroclear and Cedel and their book-entry systems has been obtained from sources
that the Trust and First Commonwealth believe to be reliable, but neither the
Trust nor First Commonwealth takes responsibility for the accuracy thereof.
Although The Depository Trust Company, Euroclear and Cedel have agreed to
the foregoing procedures to facilitate transfers of interest in the global
capital securities among participants in The Depository Trust Company,
Euroclear and Cedel, they are under no obligation to perform or to continue to
perform such procedures, and such procedures may be discontinued at any time.
None of the Trust, First Commonwealth or the Property Trustee will have any
responsibility for the performance by The Depository Trust Company, Euroclear
or Cedel or their respective participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
Year 2000 Issues
The Depository Trust Company, management is aware that some computer
applications, systems, and the like for processing data that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter year 2000 problems. The Depository Trust Company has informed its
participants and other members of the financial community that it has developed
and is implementing a program so that its systems, as the same relate to the
timely payment of distributions, including principal and income payments, to
securityholders, book-entry deliveries, and settlement of trades within The
Depository Trust Company, continue to function appropriately. This program
includes a technical assessment and a remediation plan, each of which is
complete. Additionally, The Depository Trust Company's plan includes a testing
phase, which is expected to be completed within appropriate time frames.
The Depository Trust Company's ability to perform properly its services is
also dependent upon other parties, including, but not limited to, issuers and
their agents, as well as The Depository Trust Company's direct participants and
third party vendors from whom The Depository Trust Company licenses software
and hardware. It is also dependent on third party vendors on whom The
Depository Trust Company relies for information or the provision of services,
including telecommunication and electrical utility services providers,
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among others, The Depository Trust Company has informed the industry that it is
contacting, and will continue to contact, third party vendors from whom The
Depository Trust Company acquires services to.
. impress upon them the importance of such services being year 2000 compliant;
and
. determine the extent of their efforts for year 2000 remediation (and, as
appropriate, testing) of their services.
In addition, The Depository Trust Company is in the process of developing
contingency plans as it deems appropriate.
According to The Depository Trust Company, it has given the foregoing
information to the industry for informational purposes only, and this
information is not intended to serve as a representation, warranty or contract
modification of any kind.
Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A global capital security is exchangeable for capital securities in
registered certificated form if:
. The Depository Trust Company:
. notifies the Trust that it is unwilling or unable to continue as
depositary for the global capital security and the Trust thereupon
fails to appoint a successor depositary within 90 days; or
. has ceased to be a clearing agency registered under the Exchange
Act;
. First Commonwealth in its sole discretion elects to cause the issuance
of the capital securities in certificated form; or
. there shall have occurred and be continuing an Event of Default or any
event which after notice or lapse of time or both would be an Event of
Default under the declaration.
In addition, beneficial interests in a Global Capital Security may be
exchanged by or on behalf of The Depository Trust Company for certificated
capital securities upon request by The Depository Trust Company, but only upon
at least 20 days' prior written notice given to the Property Trustee in
accordance with The Depository Trust Company's customary procedures. In all
cases, certificated capital securities delivered in exchange for any global
capital security or beneficial interests therein will be registered in the
names, and issued in any approved denomination, requested by or on behalf of
The Depository Trust Company, in accordance with its customary procedures.
Exchange of Certificated Capital Securities for Book-Entry Capital Securities
Capital securities that will be issued in certificated form, may not be
exchanged for beneficial interests in any global capital security unless the
exchange occurs in connection with a transfer of such capital securities and
the transferor first delivers to the Property Trustee a written certificate, in
the form provided in the declaration, to the effect that such transfer will
comply with the appropriate transfer restrictions applicable to such capital
securities.
Payment on the Capital Securities
Payments in respect of the capital securities held in global form shall be
made to The Depository Trust Company, as the depositary for the Global Capital
Securities, which shall credit the relevant accounts at The Depository Trust
Company, on the applicable Distribution Dates, or in respect of the capital
securities that are not held by The Depository Trust Company, such payments
shall be made by check mailed to the address of the holder entitled thereto as
such address shall appear on the register. The Paying Agent shall initially be
the Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and First Commonwealth. The Paying
Agent shall be permitted to resign as Paying Agent upon 30 days' written notice
to the Property Trustee, the Administrative Trustees and First Commonwealth. If
the
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Property Trustee is no longer the Paying Agent, the Administrative Trustees
shall appoint a successor to act as Paying Agent. A successor must be a bank or
trust company acceptable to the Administrative Trustees and First Commonwealth.
Registrar and Transfer Agent
The Property Trustee will act as registrar, transfer agent and exchange
agent for the capital securities.
The Property Trustee will register transfers of the capital securities
without charge by or on behalf of the Trust, but not before payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to be
registered the transfer of any capital securities after they have been called
for redemption.
Information Concerning the Property Trustee
The Property Trustee, except when an Event of Default has occurred and is
continuing, will perform only those duties that are specifically set forth in
the declaration. During the existence of an Event of Default, the Property
Trustee must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the declaration at the request of any holder of trust
securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
Governing Law
The declaration and the capital securities provide that they will be
governed by the internal laws of the State of Delaware.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association or a publicly-traded
partnership taxable as a corporation for United States federal income tax
purposes. The Administrative Trustees are also authorized and directed to
operate the Trust so that the Trust will be classified as a grantor trust and
the debentures will be treated as indebtedness of First Commonwealth for United
States federal income tax purposes. In this connection, First Commonwealth and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the declaration,
that First Commonwealth and the Administrative Trustees determine in their
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
trust securities.
Holders of the trust securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The original debentures were, and the exchange debentures will be, issued
under the terms of an indenture, as supplemented from time to time, between
First Commonwealth and The Chase Manhattan Bank, as trustee (the "Debenture
Trustee"). The indenture will be qualified under the Trust Indenture Act, upon
effectiveness of the registration statement. See "The Exchange Offer." Upon
effectiveness of the exchange offer registration statement or the shelf
registration statement, the indenture will be subject to and governed by the
Trust Indenture Act. The following description of the material terms and
provisions of the debentures and the indenture is not complete and, where
reference is made to particular provisions of the indenture, such provisions,
including the definitions of certain terms, some of which are not otherwise
defined herein, are qualified in their entirety by reference to all of the
provisions of the indenture and the Trust Indenture Act.
General Description of the Junior Subordinated Debentures
Concurrently with the issuance of the capital securities, the Trust invested
the proceeds thereof, together with the consideration paid by First
Commonwealth for the common securities, in debentures issued by First
Commonwealth. The debentures will bear interest at the annual rate of 9.50% of
the principal amount thereof, payable, subject to the right of First
Commonwealth to defer interest payments on the debentures, semi-annually in
arrears on March 1 and September 1 of each year (each, an "Interest Payment
Date"), commencing March 1, 2000, to the persons in whose name the debentures
are registered at the close of business on the regular record date for the
Interest Payment Date. The regular record date will be the fifteenth day of the
month which precedes the month in which the relevant payment date falls. It is
anticipated that, until the liquidation, if any, of the Trust, each debenture
will be held in the name of the Property Trustee in trust for the benefit of
the holders of the trust securities. The amount of interest payable to holders
for any period will be computed on the basis of a 360-day year of twelve 30-day
months and, for any period of less than a full calendar month, the number of
days elapsed in such month. If any date on which interest is payable on the
debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day which is a Business Day, without
any interest or other payment in respect of the distribution subject to delay,
in each case with the same force and effect as if made on the scheduled payment
date. Accrued interest that is not paid on the applicable Interest Payment Date
will bear additional interest on the amount to the extent permitted by law at
the rate per annum of 9.50% thereof, compounded semi-annually.
The term "interest," as used in this prospectus, includes semi-annual
interest payments, interest on semi-annual interest payments not paid on the
applicable Interest Payment Date and Additional Sums, as defined in this
prospectus, as applicable.
The original debentures were, and the exchange debentures will be, issued in
denominations of $1,000 and integral multiples in excess thereof. The
debentures will mature on September 1, 2029.
The debentures rank equal to all other junior subordinated debentures to be
issued by First Commonwealth pursuant to the indenture with substantially
similar subordination terms ("Other Debentures"), which will be issued and
sold, if at all, to other trusts to be established by First Commonwealth (if
any), in each case similar to the Trust ("Other Trusts") and will be unsecured
and will rank subordinate and junior in right of payment to the extent and in
the manner set forth in the indenture to all Senior Indebtedness of First
Commonwealth. See "--Subordination of the Debentures" below.
First Commonwealth is a non-operating holding company and almost all of the
operating assets of First Commonwealth and its consolidated subsidiaries are
owned by its subsidiaries. First Commonwealth relies primarily on dividends
from such subsidiaries to meet its obligations. First Commonwealth is a legal
entity separate and distinct from its banking and non-banking affiliates. The
principal sources of First Commonwealth's income are dividends, interest and
fees from its banking subsidiaries. The subsidiary banks are subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other
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transactions with, First Commonwealth and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent
First Commonwealth and such other affiliates from borrowing from the subsidiary
banks unless the loans are secured by various types of collateral. Further,
secured loans, other transactions and investments by any of the subsidiary
banks are generally limited in amount as to First Commonwealth and as to each
of such other affiliates to 10% of a subsidiary bank's capital and surplus and
as to First Commonwealth and all of such other affiliates to an aggregate of
20% of the subsidiary bank's capital and surplus. In addition, payment of
dividends to First Commonwealth by the subsidiary banks is subject to ongoing
review by banking regulators and is subject to various statutory limitations
and in certain circumstances requires approval by banking regulatory
authorities. Because First Commonwealth is a holding company, its right to
participate in any distribution of assets of any subsidiary upon the
subsidiary's liquidation or reorganization or otherwise, is subject to the
prior claims of creditors of the subsidiary, except to the extent First
Commonwealth may itself be recognized as a creditor of that subsidiary.
Accordingly, the debentures will be effectively subordinated to all existing
and future liabilities, including deposits, of First Commonwealth's
subsidiaries, and holders of debentures should look only to the assets of First
Commonwealth for payments on the debentures. The indenture does not limit the
incurrence or issuance of other secured or unsecured debt of First
Commonwealth, including Senior Indebtedness. See "--Subordination of the
Debentures" below.
Form, Registration and Transfer
If the debentures are distributed to the holders of the trust securities,
the debentures may be represented by one or more global certificates registered
in the name of Cede & Co. as the nominee of The Depository Trust Company. The
depositary arrangements for such debentures are expected to be substantially
similar to those in effect for the capital securities. For a description of The
Depository Trust Company and the terms of the depositary arrangements relating
to payments, transfers, voting rights, redemptions and other notices and other
matters, see "Description of Capital Securities--Form of Capital Securities."
Payment and Paying Agents
Payment of principal of and premium, if any, and any interest on debentures
will be made at the office of the Debenture Trustee in the City of New York or
at the office of such Paying Agent or Paying Agents as First Commonwealth may
designate from time to time, except that at the option of First Commonwealth
payment of any interest may be made, except in the case of debentures in global
form,
. by check mailed to the address of the person entitled thereto as such
address shall appear in the register for debentures; or
. by transfer to an account maintained by the person entitled thereto as
specified in such register, provided that proper transfer instructions
have been received by the relevant record date.
Payment of any interest on any debenture will be made to the person in whose
name the debenture is registered at the close of business on the record date
for such interest, except in the case of defaulted interest. First Commonwealth
may at any time designate additional Paying Agents or rescind the designation
of any Paying Agent; however, First Commonwealth will at all times be required
to maintain a Paying Agent in each place of payment for the debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by First Commonwealth in trust, for the payment of the principal of and
premium, if any, or interest on any debenture and remaining unclaimed for two
years after such principal and premium, if any, or interest has become due and
payable shall, at the request of First Commonwealth, be repaid to it and the
holder of the debenture shall thereafter look, as a general unsecured creditor,
only to First Commonwealth for payment.
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First Commonwealth's Option to Extend Interest Payment Date
So long as no Debenture Event of Default has occurred and is continuing,
First Commonwealth may under the indenture, defer interest payments on the
debentures at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period. However,
no Extension Period may end on a day other than an interest payment date or
extend beyond the Stated Maturity Date. At the end of an Extension Period,
First Commonwealth must pay all interest then accrued and unpaid together with
interest thereon accrued at the annual rate of 9.50%, compounded semi-annually
from the relevant Interest Payment Date, to the extent permitted by applicable
law. During an Extension Period, interest will continue to accrue and, if the
debentures have been distributed to holders of the trust securities, holders of
debentures, or holders of the trust securities while trust securities are
outstanding, will be required to accrue interest income for United States
federal income tax purposes prior to the receipt of cash attributable to such
income. See "Federal Income Tax Consequences--Interest Income and Original
Issue Discount."
During any Extension Period, First Commonwealth may not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its
capital stock (which includes common and preferred stock);
. make any payment of principal interest or premium, if any, on or repay,
repurchase or redeem any of its debt securities (including any Other
Debentures) that rank equal to or junior in right of payment to the
debentures; or
. make any guarantee payments with respect to any guarantee by it of any
securities of any of its subsidiaries (including Other Guarantees) if
such guarantee ranks equal to or junior in right of payment to the
debentures;
provided, however, that the foregoing restriction does not apply to the
following:
. dividends or distributions in shares of or options, warrants or
rights to subscribe for or purchase shares of its common stock;
. any declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto;
. payments under the capital securities guarantee;
. as a direct result of and only to the extent required in order to
avoid the issuance of fractional shares of capital stock following,
a reclassification of its capital stock or exchange or conversion of
one class or series of its capital stock for another class or series
of its capital stock;
. the purchase of fractional interests in shares of its capital stock
pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged; and
. purchases of common stock related to the issuance of common stock or
rights under any of its benefit plans for its directors, officers or
employees or its dividend reinvestment plan.
Prior to the termination of any Extension Period, First Commonwealth may
extend the period. However, it cannot do so if the extension causes the
Extension Period to exceed 10 consecutive semi-annual periods or to extend
beyond the Stated Maturity Date. Upon the termination of any Extension Period
and the payment of all amounts then due on any Interest Payment Date, First
Commonwealth may elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end of the period. First Commonwealth must give the Property
Trustee, the Administrative Trustees and the Debenture Trustee notice of its
election of any Extension Period, or an extension of the period, at least five
Business Days prior to the earlier of the date the distributions on the trust
securities would have
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been payable except for the election to begin or extend such Extension Period,
or the date the Administrative Trustees are required to give notice to any
securities exchange or to holders of capital securities of the record date or
the date such distributions are payable. However, it must give this notice
under all circumstances not less than five Business Days prior to such record
date.
The Debenture Trustee will give notice of First Commonwealth's election to
begin or extend a new Extension Period to the holders of the capital
securities. There is no limitation on the number of times that First
Commonwealth may elect to begin an Extension Period.
Optional Redemption
The debentures will be redeemable, in whole or in part, at the option of
First Commonwealth, on or after the Initial Optional Prepayment Date, subject
to First Commonwealth having received prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve. The debentures will be redeemable at a prepayment price (the "Optional
Prepayment Price") equal to the percentage of the outstanding principal amount
of the debentures specified below, plus, in each case, accrued interest thereon
to the date of prepayment if redeemed during the 12-month period beginning
September 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2009........................................ 104.750%
2010........................................ 104.275
2011........................................ 103.800
2012........................................ 103.325
2013........................................ 102.850
2014........................................ 102.375
2015........................................ 101.900
2016........................................ 101.425
2017........................................ 100.950
2018........................................ 100.475
2019 and thereafter......................... 100.000%
</TABLE>
Optional Redemption Upon the Occurrence of a Special Event
If a Special Event occurs and is continuing, First Commonwealth may, at any
time prior to the Initial Optional Prepayment Date, within 90 days after the
occurrence of the Special Event, at its option and subject to receipt of prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, prepay the debentures in whole
but not in part, at a prepayment price (the "Special Event Prepayment Price")
equal to the greater of:
. 100% of the principal amount of such debentures, plus accrued and unpaid
interest thereon to the date of prepayment; or
. the sum, as determined by a Quotation Agent, as defined below, of the
present values of the principal amount and premium payable as part of
the Optional Prepayment Price with respect to an optional redemption of
such debentures on the Initial Optional Prepayment Date, together with
scheduled payments of interest from the prepayment date to the Initial
Optional Prepayment Date, in each case discounted to the prepayment date
on a semi-annual basis, assuming a 360-day year consisting of twelve 30-
day months, at the Adjusted Treasury Rate, as defined below, plus
accrued and unpaid interest thereon to the date of prepayment.
"Special Event" means a Tax Event or a Regulatory Capital Event, as the case
may be.
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"Tax Event" means the receipt by First Commonwealth and the Trust of an
opinion of independent counsel experienced in such matters to the effect that,
as a result of any amendment to, or change, including any announced prospective
change, in, the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
pronouncement or decision is announced on or after September 8, 1999, there is
more than an insubstantial risk that:
. the Trust is, or will be within 90 days of the date of such opinion,
subject to United States federal income tax with respect to income
received or accrued on the debentures;
. interest payable by First Commonwealth on the debentures is not, or
within 90 days of the date of such opinion will not be, deductible by
First Commonwealth, in whole or in part, for United States federal
income tax purposes; or
. the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Regulatory Capital Event" means that First Commonwealth shall have received
an opinion of independent bank regulatory counsel experienced in such matters
to the effect that, as a result of any amendment to, or change, including any
announced prospective change in, the laws or any regulations under such laws of
the United States or any rules, guidelines or policies of the Federal Reserve
or any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after September 8, 1999, the
capital securities do not constitute, or within 90 days of the date of such
opinion, will not constitute, Tier 1 Capital or its then equivalent. However,
the distribution of the debentures in connection with a termination of the
Trust by First Commonwealth will not in and of itself constitute a Regulatory
Capital Event.
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to
. the yield, under the heading which represents the average for the
immediately prior week, appearing in the most recently-published Federal
Reserve statistical release designated "H.15(519)" on the Federal
Reserve's website at www.Federalreserve.gov, or any successor
publication which is published weekly by the Federal Reserve, and which
establishes yields on actively-traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity date corresponding to the Initial Optional
Prepayment Date. If no maturity date is within three months before or
after the Initial Optional Prepayment Date, yields for the two published
maturities most closely corresponding to the Initial Optional Prepayment
Date shall be interpolated and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month, or
. if such release, or any successor release, is not published during the
week preceding the calculation date or does not contain such yields, the
rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, as defined below, assuming a price for
the Comparable Treasury Issue, expressed as a percentage of its
principal amount, equal to the Comparable Treasury Issue for such
prepayment date, plus in each case (A) 2.75% if such prepayment date
occurs on or prior to August 31, 2000 and (B) 2.25% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Initial Optional Prepayment Date that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities with a maturity date corresponding to the
Initial Optional Prepayment Date. If no United States Treasury security has a
maturity date which is within three months before or after the Initial Optional
Prepayment Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the calculation
of the Adjusted Treasury Rate shall be interpolated or extrapolated on a
straight-line basis, rounding to the nearest month.
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"Quotation Agent" means the Reference Treasury Dealer appointed by First
Commonwealth.
"Reference Treasury Dealer" means:
. Bear, Stearns & Co., Inc. and its respective successors; provided,
however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury
Dealer"), First Commonwealth shall substitute therefor another Primary
Treasury Dealer, and
. any other Primary Treasury Dealer selected by First Commonwealth.
"Comparable Treasury Price" means, with respect to any prepayment date:
. the average of the bid and asked prices for the Comparable Treasury
Issue, expressed in each case as a percentage of its principal amount,
on the third Business Day preceding such prepayment date, as set forth
in the daily statistical release, or any successor release, published by
the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities"; or
. if such release, or any successor release, is not published or does not
contain such prices on such Business Day;
. the average of five Reference Treasury Dealer Quotations, as defined
below, for such prepayment date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations; or
. if the Debenture Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any prepayment date, the average, as determined by the
Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue, expressed in each case as a percentage of its principal amount, quoted
in writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such prepayment
date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of debentures to be redeemed
at its registered address. Unless First Commonwealth defaults in payment of the
prepayment price, on and after the prepayment date interest ceases to accrue on
such debentures called for prepayment.
Additional Sums
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, First Commonwealth will pay as
additional amounts on the debentures such amounts as shall be necessary in
order that the amount of distributions then due and payable by the Trust on the
outstanding capital securities and common securities shall not be reduced as a
result of any such additional taxes, duties or other governmental charges.
Restrictions on Certain Payments
First Commonwealth will agree that if any of the following events have
occurred:
. a Debenture Event of Default;
. any event of which First Commonwealth has actual knowledge that:
. with the giving of notice or the lapse of time, or both, would be, a
Debenture Event of Default; and
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. in respect of which First Commonwealth shall not have taken
reasonable steps to cure;
. First Commonwealth is in default with respect to its payment of any
obligations under the capital securities guarantee; or
. First Commonwealth has given notice of its election of an Extension
Period, or any extension thereof, and any such extension shall be
continuing;
then First Commonwealth will not
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its
capital stock, which includes common and preferred stock,
. make any payment of principal interest or premium, if any, on or repay
or repurchase or redeem any debt securities of First Commonwealth,
including Other Debentures, that rank equal to or junior in right of
payment to the debentures, or
. make any guarantee payments with respect to any guarantee by First
Commonwealth of any securities of any subsidiary of First Commonwealth,
including Other Guarantees, if such guarantee ranks equal to or junior
in right of payment to the debentures.
However, the foregoing limitation does not apply to:
. dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of common stock of First
Commonwealth;
. any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant thereto;
. payments under the capital securities guarantee;
. as a direct result of, and only to the extent required in order to avoid
the issuance of fractional shares of capital stock following a
reclassification of First Commonwealth's capital stock or the exchange
or conversion of one class or series of its capital stock for another
class or series of its capital stock;
. the purchase of fractional interests in shares of its capital stock
pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged; and
. purchases of common stock related to the issuance of common stock or
rights under any of First Commonwealth's benefit plans for its
directors, officers or employees or any of its dividend reinvestment
plans.
Other Obligations
First Commonwealth also will agree:
. to maintain 100 percent ownership of the common securities; provided,
however, that any permitted successor of First Commonwealth under the
indenture may succeed to First Commonwealth's ownership of the common
securities;
. to use its reasonable efforts to cause the Trust:
. to remain a business trust, except in connection with the
distribution of debentures to the holders of trust securities in
liquidation of the Trust, the redemption of all of the trust
securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the declaration of the Trust;
and
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<PAGE>
. to continue to be treated as a grantor trust and not to be
classified as an association taxable as a corporation or a
partnership for United States federal income tax purposes; and
. to use its reasonable efforts to cause each holder of trust securities
to be treated as owning an undivided beneficial interest in the
debentures.
Debenture Events of Default
The indenture provides that any one or more of the following events with
respect to the debentures constitutes a "Debenture Event of Default," whatever
the reason for such Debenture Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body:
. failure for 30 days to pay any interest on the debentures or any Other
Debentures, when due, subject to the deferral of any due date in the
case of an Extension Period; or
. failure to pay any principal or premium, if any, on the debentures or
any Other Debentures, when due, whether at maturity, upon redemption, by
declaration of acceleration of maturity or otherwise; or
. failure to observe or perform in any material respect certain other
covenants contained in the indenture for 90 days after written notice to
First Commonwealth from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of debentures; or
. certain events in bankruptcy, insolvency or reorganization of First
Commonwealth.
The holders of a majority in aggregate outstanding principal amount of the
debentures have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee. The Debenture
Trustee or the holders of not less than 25% in aggregate outstanding principal
amount of the debentures may declare the principal due and payable immediately
upon a Debenture Event of Default. The holders of a majority in aggregate
outstanding principal amount of the debentures may annul this declaration and
waive the default if the default, other than the nonpayment of the principal of
the debentures which has become due solely by such acceleration, has been cured
and a sum sufficient to pay all matured installments of interest and principal
due otherwise than by acceleration has been deposited with the Debenture
Trustee.
The holders of a majority in aggregate outstanding principal amount of the
debentures affected thereby may, on behalf of the holders of all the
debentures, waive any past default except a default in the payment of principal
of or premium, if any, on or interest, unless the default has been cured and a
sum sufficient to pay all matured installments of interest and premium, if any,
and principal due otherwise than by acceleration has been deposited with the
Debenture Trustee, or a default in respect of a covenant or provision which
under the indenture cannot be modified or amended without the consent of the
holder of each outstanding debenture.
The indenture requires the annual filing by First Commonwealth with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the indenture.
The indenture provides that the Debenture Trustee may withhold notice of a
Debenture Event of Default from the holders of the debentures, except a
Debenture Event of Default in payment of principal of or premium, if any, or
interest on the debentures, if the Debenture Trustee considers it in the
interest of such holders to do so.
Enforcement of Certain Rights by Holders of Capital Securities
If a Debenture Event of Default occurs and is continuing and the event is
attributable to First Commonwealth's failure to pay interest or premium, if
any, on or principal of the debentures on the due date, a holder of capital
securities may directly institute a proceeding against First Commonwealth with
respect to the
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debentures for enforcement of payment. First Commonwealth may not amend the
indenture to remove the foregoing right of a holder of capital securities to
bring a direct action against First Commonwealth without the prior written
consent of the holders of all of the capital securities. Even if First
Commonwealth makes payments to a holder of capital securities in connection
with a direct action, it will remain obligated to pay the principal of or
premium, if any, or interest on the debentures. Moreover, First Commonwealth
will be subrogated to the rights of the holder of such capital securities with
respect to payments on the capital securities to the extent of any payments
made by it to such holder in any direct action.
The holders of the capital securities will not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the debentures unless there shall have been an Event of
Default under the declaration. See "Description of Capital Securities--Events
of Default; Notice."
Consolidation, Merger or Sale of Assets of First Commonwealth
The indenture provides that First Commonwealth shall not consolidate with or
merge into any other person or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any person, and no
person shall consolidate with or merge into First Commonwealth or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to First Commonwealth, unless:
. in case First Commonwealth consolidates with or merges into another
person or conveys or transfers its properties and assets substantially
as an entirety to any person, the successor person is organized under
the laws of the United States or any State or the District of Columbia,
and such successor person expressly assumes First Commonwealth's
obligations on the debentures;
. immediately after giving effect thereto, no Debenture Event of Default,
and no event which, after notice or lapse of time or both, would become
a Debenture Event of Default, shall have occurred and be continuing; and
. certain other conditions as prescribed in the indenture are met.
The general provisions of the indenture do not afford holders of the
debentures protection in the event of a highly leveraged or other transaction
involving First Commonwealth that may adversely affect holders of the
debentures.
Modification of the Indenture
From time to time First Commonwealth and the Debenture Trustee may, without
the consent of the holders of debentures, amend, waive or supplement the
indenture for specified purposes, including, among other things, curing
ambiguities, defects or inconsistencies or enabling First Commonwealth and the
Trust to conduct the Exchange Offer discussed under the caption "The Exchange
Offer." However, First Commonwealth and the Debenture Trustee may only do so if
the action does not materially adversely affect the interest of the holders of
debentures. The indenture contains provisions permitting First Commonwealth and
the Debenture Trustee, with the consent of the holders of a majority in
principal amount of the debentures, to modify the indenture in a manner
affecting the rights of the holders of debentures; provided, however, that no
such modification may, without the consent of the holders of each outstanding
Junior Subordinated Debenture so affected:
. change the Stated Maturity Date;
. reduce the principal amount of the debentures or reduce the rate or
extend the time of payment of interest thereon; or
. reduce the percentage of principal amount of debentures the holders of
which are required to consent to any such modification of the indenture.
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In addition, First Commonwealth and the Debenture Trustee may execute,
without the consent of any holder of debentures, any supplemental indenture for
the purpose of creating any Other Debentures.
Satisfaction and Discharge of the Indenture
The indenture provides that when, among other things, all debentures not
previously delivered to the Debenture Trustee for cancellation:
. have become due and payable; or
. will become due and payable at maturity within one year; and
. First Commonwealth deposits or causes to be deposited with the Debenture
Trustee funds, in trust, for the purpose and in an amount sufficient to
pay and discharge the entire indebtedness on the debentures not
previously delivered to the Debenture Trustee for cancellation, for the
principal and premium, if any, and interest to the date of the deposit
or to the Stated Maturity Date, as the case may be;
then the indenture will cease to be of further effect, except as to First
Commonwealth's obligations to pay all other sums due pursuant to the indenture
and to provide the officers' certificates and opinions of counsel described
therein, and First Commonwealth will be deemed to have satisfied and discharged
the indenture.
Subordination of the Debentures
In the indenture, First Commonwealth covenanted and agreed that any
debentures issued under the indenture will be subordinate and junior in right
of payment to all Senior Indebtedness to the extent provided in the indenture.
If any payment or distribution of assets is made to creditors upon any
termination, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of First Commonwealth, the holders of Senior Indebtedness
will first be entitled to receive payment in full of all Senior Indebtedness
before the holders of debentures will be entitled to receive or retain any
payment under the debentures.
If the maturity of debentures is accelerated, the holders of all Senior
Indebtedness outstanding at the time of the acceleration will first be entitled
to receive payment in full of all Senior Indebtedness before the holders of
debentures will be entitled to receive or retain any payment under the
debentures.
No payments on account of principal or premium, if any, or interest, if any,
in respect of the debentures may be made if any of the following events shall
have occurred and be continuing:
. a default in any payment with respect to Senior Indebtedness;
. an event of default with respect to any Senior Indebtedness resulting in
the acceleration of the maturity thereof; or
. if any judicial proceeding pending with respect to any such default.
"Indebtedness" shall mean:
. every obligation of First Commonwealth for money borrowed;
. every obligation of First Commonwealth evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses;
. every reimbursement obligation of First Commonwealth with respect to
letters of credit, bankers' acceptances or similar facilities issued for
its account;
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. every obligation of First Commonwealth issued or assumed as the deferred
purchase price of property or services, but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of
business;
. every capital lease obligation of First Commonwealth;
. all indebtedness of First Commonwealth whether incurred on or prior to
the date of the indenture or thereafter incurred, for claims in respect
of derivative products including interest rate, foreign exchange rate
and commodity forward contracts, options and swaps and similar
arrangements; and
. every obligation of the type referred to above of another person and all
dividends of another person the payment of which, in either case, First
Commonwealth has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise.
"Indebtedness Ranking on a Parity with the Debentures" shall mean
Indebtedness, whether outstanding on the date of execution of the indenture or
thereafter created, assumed or incurred, which specifically by its terms ranks
equally with and not prior to the debentures in the right of payment upon the
happening of the dissolution or winding-up or termination or reorganization of
First Commonwealth. The securing of any Indebtedness, otherwise constituting
Indebtedness Ranking on a Parity with the Debentures, shall not be deemed to
prevent such Indebtedness from constituting Indebtedness Ranking on a Parity
with the Debentures.
"Indebtedness Ranking Junior to the Debentures" shall mean any Indebtedness,
whether outstanding on the date of execution of the indenture or thereafter
created, assumed or incurred, which specifically by its terms ranks junior to
and not equally with or senior to the debentures, and any other Indebtedness
Ranking on a Parity with the Debentures, in right of payment upon the happening
of the dissolution or winding-up or termination or reorganization of First
Commonwealth. The securing of any Indebtedness, otherwise constituting
Indebtedness Ranking Junior to the Debentures, shall not be deemed to prevent
such Indebtedness from constituting Indebtedness Ranking Junior to the
Debentures.
"Senior Indebtedness" shall mean all Indebtedness whether outstanding on the
date of execution of the indenture or thereafter created, assumed or incurred,
except Indebtedness Ranking on a Parity with the Debentures or Indebtedness
Ranking Junior to the Debentures, and any deferrals, renewals or extensions of
such Senior Indebtedness.
First Commonwealth is a non-operating holding company and almost all of the
operating assets of First Commonwealth are owned by First Commonwealth's
subsidiaries. First Commonwealth relies primarily on dividends from such
subsidiaries to meet its obligations for payment of principal and interest on
its outstanding debt obligations and corporate expenses. First Commonwealth is
a legal entity separate and distinct from its banking and non-banking
affiliates. The principal sources of First Commonwealth's income are dividends,
interest and fees from its subsidiary banks. The subsidiary banks are subject
to certain restrictions imposed by federal law on any extensions of credit to,
and certain other transactions with, First Commonwealth and certain other
affiliates, and on investments in stock or other securities thereof. Such
restrictions prevent First Commonwealth and such other affiliates from
borrowing from its subsidiary banks unless the loans are secured by various
types of collateral. Further, such secured loans, other transactions and
investments by any of First Commonwealth's subsidiary banks are generally
limited in amount as to First Commonwealth and as to each of such other
affiliates to 10% of a banking subsidiary's capital and surplus and as to First
Commonwealth and all of such other affiliates to an aggregate of 20% of a
subsidiary bank's capital and surplus. In addition, payment of dividends to
First Commonwealth by its subsidiary banks is subject to ongoing review by
banking regulators and is subject to various statutory limitations and in
certain circumstances requires approval by banking regulatory authorities.
Accordingly, the debentures will be effectively subordinated to all existing
and future liabilities, including deposits, of First Commonwealth's
subsidiaries. Holders of debentures should look only to the assets of First
Commonwealth for payments of principal of and premium, if any, and interest on
the debentures.
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The indenture places no limitation an the amount of additional Senior
Indebtedness that may be incurred by First Commonwealth. First Commonwealth
expects from time to time to incur additional indebtedness constituting Senior
Indebtedness. At June 30, 1999, the aggregate outstanding Senior Indebtedness
of First Commonwealth was $862.4 million.
Governing Law
The indenture and the debentures provide that they will be governed by the
internal laws of the State of New York.
Information Concerning the Debenture Trustee
Following the exchange offer and the qualification of the indenture under
the Trust Indenture Act, the Debenture Trustee shall have and be subject to all
the duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to such provisions, the Debenture
Trustee is under no obligation to exercise any of the powers vested in it by
the indenture at the request of any holder of debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
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DESCRIPTION OF THE CAPITAL SECURITIES GUARANTEE
Set forth below is a summary of the information concerning the original
capital securities guarantee; which was executed and delivered by First
Commonwealth concurrently with the issuance by the Trust of the original
capital securities for the benefit of the holders from time to time of the
capital original securities. An exchange capital securities guarantee with
terms substantially identical to the original capital securities guarantee will
be executed and delivered by First Commonwealth concurrently with the issuance
of the exchange capital securities. Unless otherwise indicated, the following
description applies to both the exchange and original capital securities
guarantees. The Chase Manhattan Bank acts as indenture trustee ("Guarantee
Trustee") under the capital securities guarantee. The capital securities
guarantee will be qualified under the Trust Indenture Act upon effectiveness of
the registration statement with respect to the capital securities guarantee.
See "The Exchange Offer." The following description of the material provisions
of the capital securities guarantee does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all of the
provisions of the capital securities guarantee, including the definitions
therein of certain terms, and the Trust Indenture Act. The Guarantee Trustee
holds the capital securities guarantee for the benefit of the holders of the
capital securities.
Terms of the Capital Securities Guarantee
Under the capital securities guarantee, First Commonwealth irrevocably
agrees to pay in full on a subordinated basis, to the extent set forth herein,
the Guarantee Payments, as defined below, to the holders of the capital
securities, as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust may have or assert other than the defense of
payment. The following payments with respect to the capital securities, to the
extent not paid by or on behalf of the Trust (the "Guarantee Payments"), are
subject to the capital securities guarantee:
. any accumulated and unpaid distributions required to be paid on capital
securities, to the extent the Trust has funds on hand legally available
for the distributions;
. the redemption price with respect to any capital securities called for
redemption, to the extent that the Trust has funds on hand legally
available for the redemption; and
. upon a voluntary or involuntary dissolution, winding-up or liquidation
of the Trust, other than in connection with the distribution of the
debentures to holders of the capital securities or the redemption of all
of the capital securities, the lesser of:
. the Liquidation Distribution, to the extent the Trust has funds
legally available for the distribution; and
. the amount of assets of the Trust remaining available for
distribution to holders of capital securities upon liquidation of
the Trust after satisfaction of liabilities to creditors of the
Trust as required by applicable law.
First Commonwealth's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by it to the holders of the capital
securities or by causing the Trust to pay such amounts to such holders.
First Commonwealth, through the capital securities guarantee, the
declaration, the debentures and the indenture, taken together, fully,
irrevocably and unconditionally guarantees all of the Trust's obligations under
the capital securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the capital securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debentures and the Capital
Securities Guarantee."
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Status of the Capital Securities Guarantee; Subordination
The capital securities guarantee constitutes an unsecured obligation of
First Commonwealth and will rank subordinate and junior in right of payment to
all Senior Indebtedness in the same manner as the debentures. The capital
securities guarantee ranks equal to all other guarantees, if any, to be issued
by First Commonwealth with respect to capital securities, if any, to be issued
by Other Trusts ("Other Guarantees") and constitutes an unsecured obligation.
Because First Commonwealth is a holding company, its right to participate in
any distribution of assets of any subsidiary upon such subsidiary's liquidation
or reorganization or otherwise is subject to the prior claims of creditors of
that subsidiary, except to the extent it may be recognized as a creditor of
that subsidiary.
Accordingly, First Commonwealth's obligations under the capital securities
guarantee effectively are subordinated to all existing and future liabilities,
including deposits, of its subsidiaries, and claimants should look only to
First Commonwealth's assets for payments under the guarantee. See "Description
of Junior Subordinated Debentures--General Description of the Junior
Subordinated Debentures." The capital securities guarantee does not limit the
incurrence or issuance of other secured or unsecured debt of First
Commonwealth, including Senior Indebtedness, whether under the indenture, any
other indenture that First Commonwealth may enter into in the future or
otherwise. First Commonwealth expects from time to time to incur additional
indebtedness constituting Senior Indebtedness.
The capital securities guarantee constitutes a guarantee of payment and not
of collection. That is, the guaranteed party may institute a legal proceeding
directly against First Commonwealth to enforce its rights under the capital
securities guarantee without first instituting a legal proceeding against any
other person or entity. The capital securities guarantee is being held for the
benefit of the holders of the capital securities. The capital securities
guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Trust or upon distribution to the holders of
the capital securities of the debentures.
Events of Default; Enforcement of the Capital Securities Guarantee
An Event of Default under the capital securities guarantee will occur upon
the failure of First Commonwealth to perform any of its payment or other
obligations thereunder, provided, however, that except with respect to a
default in payment of any Guarantee Payment, First Commonwealth shall have
received notice of default and shall not have cured such default within 60 days
after receipt of such notice. The holders of not less than a majority in
liquidation amount of the capital securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of the capital securities guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under the capital securities guarantee.
Any holder of the capital securities may institute a legal proceeding
directly against First Commonwealth to enforce its rights under the capital
securities guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee or any other person or entity.
First Commonwealth, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not First Commonwealth is in
compliance with all the conditions and covenants applicable to it under the
capital securities guarantee.
Obligations of First Commonwealth
Under the capital securities guarantee, First Commonwealth agrees that, so
long as any capital securities remain outstanding, if there shall have occurred
any event that would constitute an event of default under the capital
securities guarantee or the declaration, then First Commonwealth will not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of its
capital stock, which includes common and preferred stock;
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. make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of its debt securities, including any Other
Debentures, that rank equal to or junior in right of payment to the
debentures; or
. make any guarantee payments with respect to any guarantee by First
Commonwealth of any securities of any of its subsidiaries, including
Other Guarantees, if such guarantee ranks equal to or junior in right of
payment to the debentures.
However, the foregoing limitation does not apply to:
. dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, common stock of First
Commonwealth;
. any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any plan in
the future, or the redemption or repurchase of any such rights under a
plan;
. payments under the capital securities guarantee,
. as a direct result of, and only to the extent required in order to avoid
the issuance of fractional shares of capital stock following, a
reclassification of First Commonwealth's capital stock or the exchange
or conversion of one class or series of First Commonwealth's capital
stock for another class or series of First Commonwealth's capital stock;
. the purchase of fractional interests in shares of First Commonwealth's
capital stock under the conversion or exchange provisions of the capital
stock or the security being converted or exchanged; or
. purchases of common stock related to the issuance of common stock or
rights under any of First Commonwealth's benefit plans for its
directors, officers or employees or First Commonwealth's dividend
reinvestment plan.
Amendments and Assignment
The capital securities guarantee may not be amended without the prior
approval of the holders of a majority of the liquidation amount of such
outstanding capital securities. However, the foregoing will not apply to any
changes that do not materially adversely affect the rights of holders of the
capital securities. In that case, no vote will be required. The manner of
obtaining any such approval will be as set forth under "Description of Capital
Securities--Limited Voting Rights of Capital Security Holders; Modification and
Amendment of the Declaration." All guarantees and agreements contained in the
capital securities guarantee bind the successors, assigns, receivers, trustees
and representatives of First Commonwealth and shall inure to the benefit of the
holders of the capital securities then outstanding.
Termination of the Capital Securities Guarantee
The capital securities guarantee will terminate and be of no further force
and effect upon:
. full payment of the applicable redemption price of the capital
securities;
. upon full payment of the liquidation amount payable upon liquidation of
the Trust; or
. distribution of the debentures to the holders of the capital securities.
The capital securities guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the capital
securities must restore payment of any sums paid under the capital securities
or the capital securities guarantee.
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Information Concerning the Guarantee Trustee
The Guarantee Trustee will perform only duties as are specifically set forth
in the capital securities guarantee. However, after a default with respect to
the capital securities guarantee, the Guarantee Trustee must exercise the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by
the capital securities guarantee at the request of any holder of capital
securities, unless offered reasonable indemnity against the costs, expenses and
liabilities which might be incurred by the Guarantee Trustee.
Governing Law
The capital securities guarantee provides that it will be governed by the
internal laws of the State of New York.
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DESCRIPTION OF COMMON SECURITIES
All of the common securities are owned directly by First Commonwealth. The
common securities rank equal to, and payments will be made on the securities
pro rata with the capital securities. However, if an Event of Default occurs
and is continuing, the rights of First Commonwealth as holder of the common
securities to payments in respect of distributions and payments upon
liquidation, redemption or otherwise will be subordinated and rank junior to
the rights of the holders of the capital securities. See "Description of
Capital Securities--Subordination of Common Securities." First Commonwealth has
acquired common securities in a liquidation amount equal to 3% of the total
capital of the Trust. The Trust has a term of 31 years, but may terminate
earlier as provided in the declaration. The Trust's business and affairs will
be conducted by trustees appointed by First Commonwealth as the direct holder
of the common securities. The holder of the common securities or, if an Event
of Default under the declaration occurs and is continuing, the holders of a
majority in liquidation amount of the capital securities, will be entitled to
appoint, remove or replace the Property Trustee and/or the Delaware Trustee. In
no event will the holders of the capital securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights will
be vested exclusively in the holder of the common securities.
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RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE JUNIOR
SUBORDINATED DEBENTURES AND THE CAPITAL SECURITIES GUARANTEE
Full and Unconditional Guarantee
Payments of distributions and other amounts due on the capital securities,
to the extent the Trust has funds on hand legally available for the payment of
such distributions, are irrevocably guaranteed by First Commonwealth as and to
the extent set forth under "Description of the Capital Securities Guarantee."
Taken together, First Commonwealth's obligations under the debentures, the
indenture, the declaration and the capital securities guarantee provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments of
distributions and other amounts due on the capital securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation
of these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the capital
securities. The Trust will not have sufficient funds to make the related
payments, including distributions, on the capital securities if First
Commonwealth does not make the required payments on the debentures. The capital
securities guarantee does not cover any such payment when the Trust does not
have sufficient funds on hand legally available therefor. The obligations of
First Commonwealth under the capital securities guarantee are subordinate and
junior in right of payment to all Senior Indebtedness.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on the
debentures, such payments will be sufficient to cover distributions and other
payments due on the capital securities, primarily because:
. the aggregate principal amount or prepayment price of the debentures
will be equal to the sum of the liquidation amount or redemption price,
as applicable, of the capital securities and common securities;
. the interest rate and interest and other payment dates on the debentures
will match the distribution rate and distribution and other payment
dates for the capital securities;
. First Commonwealth shall pay for all and any costs, expenses and
liabilities of the Trust except the Trust's obligations to holders of
trust securities under such trust securities; and
. the declaration will provide that the Trust is not authorized to engage
in any activity that is not consistent with the limited purposes of the
Trust.
Enforcement of Rights of Holders of Capital Securities
A holder of any capital security may institute a legal proceeding directly
against First Commonwealth to enforce its rights under the capital securities
guarantee without first instituting a legal proceeding against the capital
securities guarantee Trustee, the Trust or any other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the declaration. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the indenture will provide that no payments may be
made in respect of the debentures until such Senior Indebtedness has been paid
in full or any payment default thereunder has been cured or waived. Failure to
make required payments on debentures would constitute an Event of Default under
the declaration.
Limited Purpose of the Trust
The capital securities will represent beneficial ownership interests in the
Trust, and the Trust exists for the sole purpose of issuing and selling the
trust securities, using the proceeds from the sale of the trust securities to
acquire the debentures and engaging in only those other activities necessary,
advisable or incidental to these activities.
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Rights Upon Termination of the Trust
Unless the debentures are distributed to holders of the trust securities,
upon any voluntary or involuntary termination, winding-up or liquidation of the
Trust, after satisfaction of the liabilities of creditors of the Trust as
required by applicable law, the holders of the trust securities will be
entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of Capital Securities--Liquidation of
the Trust and Distribution of Debentures." Upon any voluntary or involuntary
liquidation or bankruptcy of First Commonwealth, the Property Trustee, as
holder of the debentures, would be a subordinated creditor of First
Commonwealth, subordinated in right of payment to all Senior Indebtedness as
set forth in the indenture, but entitled to receive payment in full of
principal and premium, if any and interest, before any stockholders of First
Commonwealth receive payments or distributions. Since First Commonwealth will
be the guarantor under the capital securities guarantee and will agree to pay
for all costs, expenses and liabilities of the Trust, other than the Trust's
obligations to the holders of its trust securities, the positions of a holder
of capital securities and a holder of debentures relative to other creditors
and to stockholders of First Commonwealth in the event of liquidation or
bankruptcy of First Commonwealth are expected to be substantially the same.
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FEDERAL INCOME TAX CONSEQUENCES
General
In the opinion of Drinker Biddle & Reath LLP, special federal income tax
counsel to First Commonwealth and the Trust, the following are the material
United States federal income tax consequences of the purchase, ownership and
disposition of capital securities of the Trust held as capital assets by an
owner who purchases such capital securities upon initial issuance. It does not
deal with special classes of owners such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, or persons who will hold the
capital securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not
address the tax consequences to persons who have a functional currency other
than the U.S. dollar or the tax consequences to shareholders, partners or
beneficiaries of an owner of capital securities. Further, it does not include
any description of any federal alternative minimum tax consequences or the tax
laws of any state or local government or of any foreign government that may be
applicable to the capital securities. This summary is based on the Code,
Treasury regulations thereunder and the administrative and judicial
interpretations thereof, as of the date hereof, all of which are subject to
change, possibly on a retroactive basis. An opinion of tax counsel is not
binding on the Internal Revenue Service or the courts. No rulings have been or
are expected to be sought from the IRS with respect to any of the transactions
described herein and no assurance can be given that the IRS will not take
contrary positions. Moreover, no assurance can be given that any of the
opinions expressed herein will not be challenged by the IRS and, if challenged,
that such a challenge would not be successful.
Exchange of Capital Securities and Debentures
The exchange of the original capital securities for the exchange capital
securities, and the exchange of the original debentures for the exchange
debentures, should not be taxable events. Because the Trust should constitute a
grantor trust for federal income tax purposes, each owner of capital securities
should, in substance, be treated as owning an undivided interest in the assets
of the Trust. The exchange of the original capital securities for the exchange
capital securities will not change that ownership interest. Moreover, the
exchange of the debentures should not constitute a taxable exchange, because
the exchange debentures will not differ materially in kind or extent from the
original debentures and, even if they did differ, the exchange should qualify
as a recapitalization. Accordingly, an owner of capital securities should not
recognize any gain or loss on the exchanges, the issue price of the exchange
debentures should be the same as the issue price of the original debentures,
and each owner's adjusted tax basis and holding period for the exchange capital
securities should be the same as for the original capital securities
immediately before the exchange.
Classification of the Debentures as Indebtedness
In connection with the issuance of the original debentures, tax counsel
rendered its opinion generally to the effect that, under then current law and
assuming full compliance with the terms of the indenture and certain other
documents, and based on certain facts and assumptions contained in such
opinion, the debentures will be classified for United States federal income tax
purposes as indebtedness of First Commonwealth. First Commonwealth, the Trust
and the owners of the capital securities by acceptance of a beneficial interest
in a capital security will agree to treat the debentures as indebtedness for
all United States federal income tax purposes.
Classification of the Trust as a Grantor Trust
In connection with the issuance of the original capital securities, tax
counsel rendered its opinion generally to the effect that, under then current
law and assuming full compliance with the terms of the declaration and the
indenture and certain other documents, and based on certain facts and
assumptions contained in such opinion, the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an
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association or publicly-traded partnership taxable as a corporation.
Accordingly, for United States federal income tax purposes, each owner of
capital securities generally will be considered the owner of an undivided
interest in the debentures, and each owner will be required to include in its
gross income any interest or original issue discount accrued with respect to
its allocable share of those debentures.
Interest Income and Original Issue Discount
Under applicable Treasury regulations, a "remote" contingency that stated
interest will not be timely paid will be ignored in determining whether a debt
instrument is issued with original issue discount. First Commonwealth believes
that the likelihood of its exercising its option to defer payments of interest
is "remote" because exercising that option would prevent First Commonwealth
from declaring dividends on any class of its equity securities. Accordingly,
First Commonwealth intends to take the position, based on the advice of tax
counsel, that the debentures will not be considered to be issued with original
issue discount and, accordingly, stated interest on the debentures generally
will be taxable to an owner as ordinary income at the time it is paid or
accrued in accordance with such owner's method of tax accounting.
Under the Treasury regulations, if First Commonwealth exercises its option
to defer payments of interest, the debentures will at that time be treated as
issued with original issue discount, and all stated interest on the debentures
will thereafter be treated as original issue discount as long as the debentures
remain outstanding. In that event, all of an owner's taxable interest income
with respect to the debentures will thereafter be accounted for on an economic
accrual basis regardless of the owner's method of tax accounting, and actual
distributions of stated interest will not be reported as taxable income.
Consequently, a holder of capital securities would be required to include in
gross income the original issue discount even though First Commonwealth would
not make actual cash payments during an Extension Period. Moreover, under the
Treasury regulations, if the option to defer the payment of interest were
determined not to be "remote," the debentures would be treated as having been
originally issued with original issue discount. In such event, all of an
owner's taxable interest income with respect to the debentures would be
accounted for on an economic accrual basis regardless of the owner's method of
tax accounting, and actual distributions of stated interest would not be
reported as taxable income.
The Treasury regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to tax counsel's interpretation.
Because income on the capital securities will constitute interest or
original issue discount, corporate owners of the capital securities will not be
entitled to a dividends-received deduction with respect to any income
recognized with respect to the capital securities.
Receipt of Debentures or Cash Upon Liquidation of the Trust
First Commonwealth will have the right under certain circumstances to
liquidate the Trust and cause the debentures to be distributed to the holders
of the trust securities. Under current law, a distribution of debentures, for
United States federal income tax purposes, will generally be treated as a
nontaxable event to each owner of trust securities, and each such owner will
have an aggregate tax basis in the debentures equal to such owner's aggregate
tax basis in its capital securities. An owner's holding period in the
debentures so received in liquidation of the Trust will include the period
during which the capital securities were owned by such owner. If, however, the
Trust were characterized for United States federal income tax purposes as an
association taxable as a corporation at the time of its dissolution, the
distribution of the debentures would constitute a taxable event to owners of
capital securities and an owner's holding period in debentures would begin on
the date such debentures were received.
Under certain circumstances described in "Description of Capital
Securities," the debentures may be redeemed for cash and the proceeds of the
redemption distributed to holders in redemption of their capital securities.
Under current law, such a redemption would, for United States federal income
tax purposes, constitute a taxable disposition of the redeemed capital
securities, and an owner of capital securities would recognize gain or loss as
if it sold such redeemed capital securities for cash. See "--Sales of Capital
Securities" below.
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Sales of Capital Securities
An owner who sells capital securities, including a redemption of the capital
securities either on the stated maturity date or upon an optional redemption of
the debentures by First Commonwealth, will recognize gain or loss equal to the
difference between its adjusted tax basis in the capital securities and the
amount realized on the sale of such capital securities (other than with respect
to accrued and unpaid interest which has not yet been included in income, which
will be treated as ordinary income). An owner's adjusted tax basis in the
capital securities generally will be its initial purchase price increased by
the original issue discount, if any, previously includable in such owner's
gross income to the date of disposition and decreased by payments, if any,
received on the capital securities in respect of the original issue discount.
Gain or loss on a sale of capital securities generally will be a capital gain
or loss and generally will be a long-term capital gain or loss if the capital
securities have been held for more than one year.
The capital securities may trade at a price that does not accurately reflect
the value of accrued but unpaid interest with respect to the underlying
debentures. An owner who uses the accrual method of accounting for tax purposes
(and a cash method owner, if the debentures are deemed to have original issue
discount) who disposes of the owner's capital securities between record dates
for payments of distributions thereon will be required to include accrued but
unpaid interest on the debentures through the date of disposition in income as
ordinary income (i.e., interest or, possibly, original issue discount), and to
add such amount to such owner's adjusted tax basis in such owner's pro rata
share of the underlying debentures deemed disposed of. To the extent the
selling price is less than the owner's adjusted tax basis (which will include
all accrued but unpaid interest), an owner will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes. A "U.S. Holder" is a citizen or
individual resident (or is treated as a citizen or individual resident) of the
United States for federal income tax purposes, a corporation or partnership
created or organized (or treated as created or organized for federal income tax
purposes) in or under the laws of the United States or any State thereof,
including the District of Columbia, an estate the income of which is subject to
United States federal income tax regardless of its source or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the Trust.
Under present United States federal income tax laws:
(i) payments by the Trust or any of its paying agents to any United States
Alien Holder of a capital security will not be subject to United States federal
withholding tax; provided that, (a) the beneficial owner of the capital
security does not actually or constructively own 10 percent or more of the
total combined voting power of all classes of stock of First Commonwealth
entitled to vote, (b) the beneficial owner of the capital security is not a
controlled foreign corporation that is related to First Commonwealth through
stock ownership, and (c) either (A) the beneficial owner of the capital
security certifies to the Trust or its agent on an IRS Form W-8 (or a
substantially similar form), under penalties of perjury, that it is a United
States Alien Holder and provides its name and address or (B) a securities
clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"Financial Institution"), and holds the capital security in such capacity,
certifies to the Trust or its agent, under penalties of perjury, that such
statement has been received from the beneficial owner by it or by a Financial
Institution between it and the beneficial owner and furnishes the Trust or its
agent with a copy thereof; and
(ii) a United States Alien Holder of a capital security will generally not
be subject to United States federal withholding tax on any gain realized upon
the sale or other disposition of a capital security.
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A United States Alien Holder who owns capital securities in connection with
the active conduct of a United States trade or business will be subject to
income tax on all income and gains recognized with respect to its proportionate
share of the debentures.
Information Reporting to Holders
Generally, income on the capital securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of capital securities by
January following each calendar year.
Backup Withholding
Payments made on, and proceeds from the sale of, the capital securities may
be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the necessary information is provided to the IRS.
New Withholding Regulations
On October 6, 1997, the Treasury Department issued new regulations, which
make certain modifications to the withholding, backup withholding and
information reporting rules described above. The new regulations attempt to
unify certification requirements and modify reliance standards. The new
regulations will generally be effective for payments made after December 31,
2000, subject to certain transition rules. Under these new withholding tax
regulations, IRS Forms W-8BEN and W-8ECI are now applicable, rather than IRS
Form W-8, although during 1999 the old forms (IRS Forms W-8, 4224 and 1001) may
continue to be used. If an old form is used during 1999, it will continue to be
effective until December 31, 2000.
The new withholding tax regulations also permit the shifting of primary
responsibility for withholding to certain qualified financial intermediaries
acting on behalf of beneficial owners. Although a beneficial owner will still
be required to submit a From W-8 or its equivalent to such an intermediary, the
intermediary generally will not be required to forward a Form W-8 or its
equivalent received from a beneficial owner to the U.S. withholding agent as
under prior procedures. Instead, the intermediary to the extent that it is a
foreign intermediary will be required to submit Form W-8IMY (Certificate of
Foreign Intermediary, Foreign Partnership, or Certain U.S. Branches for United
States Tax Withholding) to the withholding agent to make representations that
the intermediary is not the beneficial owner of the payments it receives and
about the status of the beneficial owner(s). However, if a foreign intermediary
is a nonqualified intermediary, it will still need to transmit to the ultimate
U.S. withholding agent a copy of the Form W-8 of the beneficial owner or its
equivalent, as under prior procedures.
Holders should also note that the foregoing discussion does not deal with
all aspects of the new withholding tax regulations and other United States
federal tax matters that may be potentially relevant to them. Prospective
investors are urged to consult their own tax advisors regarding the new
regulations.
The United States federal income tax discussion set forth above is included
for general information only and may not be applicable depending upon your
particular situation. You should consult your tax advisors with respect to the
tax consequences to you of the purchase, ownership and disposition of the
capital securities, including the tax consequences under state, local, foreign
and other tax laws and the possible effects of changes in United States federal
or other tax laws.
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PENNSYLVANIA CORPORATE LOANS TAX
First Commonwealth will be required to withhold the Pennsylvania Corporate
Loans Tax from interest payments on the portion of debentures which are held by
the Trust for the benefit of owners of capital securities who are subject to
the tax, principally, individuals, partnerships and unincorporated associations
resident in Pennsylvania. Any amounts so withheld will reduce, to the extent of
such withholding, distributions payable to such holders of capital securities.
The tax, at the current rate of four mills on each dollar of nominal value
($4.00 per $1,000), will be withheld from any such interest payment at the
annual rate of $4.00 per $1,000 principal amount of debentures.
ERISA CONSIDERATIONS
First Commonwealth, the obligor with respect to the debentures held by the
Trust, and its affiliates and the Property Trustee may be considered a "party
in interest," within the meaning of ERISA, or a "disqualified person," within
the meaning of Section 4975 of the Code, with respect to many employee benefit
plans that are subject to ERISA. Any purchaser proposing to acquire capital
securities with assets of any plan should consult with its counsel. The
purchase and/or holding of capital securities by a plan that is subject to the
fiduciary responsibility provisions of ERISA and/or the prohibited transaction
provisions of Section 4975 of the Code, including individual retirement
arrangements and other plans described in Section 4975(e)(1) of the Code, and
with respect to which First Commonwealth, the Property Trustee or any affiliate
is a service provider, or otherwise is a party in interest or a disqualified
person, may constitute or result in a prohibited transaction under ERISA or
Section 4975 of the Code, unless such capital securities are acquired pursuant
to and in accordance with an applicable exemption, such as Prohibited
Transaction Class Exemption ("PTCE") 84-14 (an exemption for certain
transactions determined by an independent qualified professional asset
manager), PTCE 91-38 (an exemption for certain transactions involving bank
collective investment funds), PTCE 90-1 (an exemption for certain transactions
involving insurance company pooled separate accounts), PTCE 95-60 (an exemption
for transactions involving certain insurance company general accounts) or PTCE
96-23 (an exception for certain transactions determined by an in-house asset
manager). In addition, a plan fiduciary considering the purchase of capital
securities should be aware that the assets of the Trust may be considered "plan
assets" for ERISA purposes. In this event, service providers with respect to
the assets of the Trust may become parties in interest or disqualified persons
with respect to investing plans, and any discretionary authority exercised with
respect to the debentures by such persons could be deemed to constitute a
prohibited transaction under ERISA or the Code. In order to avoid such
prohibited transactions, each investing plan, by purchasing the capital
securities, will be deemed to have represented and warranted that its purchase
and holding of the capital securities is not prohibited by either Section 406
of ERISA or Section 4975 of the Code or is exempt from any such prohibition and
to have directed the Trust to invest in the debentures and to have appointed
the Property Trustee.
A plan fiduciary should consider whether the purchase of capital securities
could result in a delegation of fiduciary authority to the Property Trustee,
and, if so, whether such a delegation of authority is permissible under the
plan's governing instrument or any investment management agreement with the
plan. In making such determination, a plan fiduciary should note that the
Property Trustee is a U.S. bank qualified to be an investment manager, within
the meaning of Section 3(38) of ERISA, to which such a delegation of authority
generally would be permissible under ERISA, provided the property trustee
acknowledges in writing that it is a fiduciary with respect to the plan.
Further, prior to an Event of Default with respect to the debentures, the
Property Trustee will have only limited custodial and ministerial authority
with respect to Trust assets.
The sale of investments to plans is in no respect a representation by the
Trust, First Commonwealth, the Property Trustee, the initial purchaser or any
other person associated with the sale of the capital securities that such
securities meet all relevant legal requirements with respect to investments by
plans generally or any particular plan, or that such securities are otherwise
appropriate for plans generally or any particular plan.
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CERTAIN RESALES
Each broker-dealer that receives exchange capital securities for its own
account under the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of the exchange capital securities. A
broker-dealer may use this prospectus, as it may be amended or supplemented, in
connection with the resales of exchange capital securities received in exchange
for original capital securities where the original capital securities were
acquired as a result of market-making activities or other trading activities.
We have agreed that for a period of one year after the date on the cover of
this prospectus, we will make this prospectus, as amended or supplemented,
available to any broker-dealer that requests it in the letter of transmittal
for use in connection with any such resale.
Exchange capital securities received by broker-dealers for their own account
under the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the exchange capital securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any exchange
capital securities. Any broker-dealer that resells exchange capital securities
that were received by it for its own account under the exchange offer and any
broker or dealer that participates in a distribution of exchange capital
securities may be deemed to be an underwriter within the meaning of the
Securities Act and any profit on any resale of exchange capital securities and
any commissions or concessions received by any persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
underwriter within the meaning of the Securities Act.
We have agreed to pay expenses incurred with the exchange offer and the
performance of our other obligations under a registration rights agreement. We
have also agreed to indemnify the holders, including any broker-dealers, and
certain parties related to the holders against certain liabilities, including
liabilities under the Securities Act.
By accepting this exchange offer, each broker-dealer that receives the
exchange capital securities under the exchange offer agrees that, after
receiving notice from us of any event that makes any statement in this
prospectus untrue in any material respect or which requires us to make any
change in this prospectus to make the statements therein not misleading, the
broker will not use this prospectus until we have amended or supplemented it to
correct the misstatement or omission and have furnished copies of the amended
or supplemented prospectus to the broker-dealer.
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LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the exchange
capital securities have been passed upon on behalf of First Commonwealth by
Richards, Layton & Finger, P.A., special Delaware counsel to First
Commonwealth. The validity of the exchange debentures and the exchange capital
securities guarantee and certain matters relating thereto have been passed upon
for First Commonwealth by Drinker Biddle & Reath LLP. Drinker Biddle & Reath
LLP has relied on Akin, Gump, Strauss, Hauer & Feld, L.L.P. as to matters of
New York law.
EXPERTS
The financial statements of First Commonwealth and its consolidated
subsidiaries, except Southwest National Corporation and subsidiary, as of
December 31, 1998 and 1997 and for the years then ended incorporated in this
registration statement by reference from First Commonwealth's 1998 Annual
Report on Form 10-K, have been audited by Deloitte & Touche LLP as stated in
their report appearing therein. The financial statements of Southwest National
Corporation and subsidiary as of December 31, 1998 and 1997 and for each of the
three years in the period ended December 31, 1998 (consolidated with those of
First Commonwealth), have been audited by KPMG LLP, as stated in their report
appearing in First Commonwealth's 1998 Annual Report on Form 10-K. Such
financial statements of First Commonwealth and its consolidated subsidiaries
are incorporated by reference herein in reliance upon the respective reports of
such firms given upon their authority as experts in accounting and auditing.
Both of the foregoing firms are independent auditors and accountants.
The consolidated statements of income, shareholders' equity and cash flows
of First Commonwealth and its subsidiaries for the year ended December 31,
1996, before giving retroactive effect to the pooling of interest as described
in Note 2 to the consolidated financial statements of First Commonwealth
included in its 1998 Annual Report on Form 10-K, have been audited by Grant
Thornton LLP, independent certified public accountants, as stated in their
report appearing therein, and have been so incorporated by reference in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing. The combination of the consolidated statements of
income, shareholders' equity and cash flows for the year ended December 31,
1996 of First Commonwealth and Southwest National Corporation, after
restatement for the 1998 pooling of interest, incorporated by reference in this
registration statement from First Commonwealth's 1998 Annual Report on Form 10-
K, has been audited by Deloitte and Touche LLP, independent auditors, as stated
in their report appearing therein.
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First Commonwealth and the Trust have not authorized any person to make a
statement that differs from what is in this prospectus. If any person makes a
statement that differs from what is in this prospectus, you should not rely on
it. This prospectus is not an offer to sell, nor is it seeking an offer to
buy, the capital securities in any state where such offer or sale is not
permitted. The information in this prospectus is complete and accurate as of
the date on the front of this prospectus but the information may change after
that date.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Summary Information--Q & A............................................... 1
Risk Factors............................................................. 7
Where You Can Find More Information...................................... 11
First Commonwealth....................................................... 12
Use of Proceeds.......................................................... 13
Ratio of Earnings to Fixed Charges....................................... 13
Accounting Treatment..................................................... 14
Capitalization........................................................... 14
Selected Consolidated Financial Data of First Commonwealth............... 15
The Trust................................................................ 17
The Exchange Offer....................................................... 18
Description of Capital Securities........................................ 31
Description of Junior Subordinated
Debentures.............................................................. 45
Description of the Capital Securities
Guarantee............................................................... 57
Description of Common Securities......................................... 61
Relationship Among the Capital Securities, the Junior Subordinated Deben-
tures and the Capital Securities Guarantee.............................. 62
Federal Income Tax Consequences.......................................... 64
Pennsylvania Corporate Loans Tax......................................... 68
ERISA Considerations..................................................... 68
Certain Resales.......................................................... 69
Legal Matters............................................................ 70
Experts.................................................................. 70
</TABLE>
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First Commonwealth Capital Trust I
$35,000,000
9.50% Capital Securities
fully and unconditionally
guaranteed to the extent
described herein by
First Commonwealth Financial Corporation
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PROSPECTUS
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October 28, 1999
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