PEOPLES FIRST CORP, DEF 14A, 1994-03-22

PEOPLES FIRST CORP
DEF 14A, 1994-03-22
STATE COMMERCIAL BANKS

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SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

PEOPLES FIRST CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

PEOPLES FIRST CORPORATION
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(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and
0-11(1).

(1) Title of each class of securities to which transactions applies:

- --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

(3) Per unit price of other underlying value of transaction computer
pursuant to Exchange Act Rule 0-11:(1)
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(4) Proposed maximum aggregate value of transaction:
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[X] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:
$125.00
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(2) Form, schedule or registration statement no.:
Schedule 14A - preliminary proxy statement
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(3) Filing party:
Peoples First Corporation
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(4) Date filed:
March 10, 1994
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(1)Set forth the amount on which the filing fee is calculated and state how
it was determined.
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March 24, 1994

Dear Shareholder:

We are enclosing the 1993 Annual Report, Notice of the 1994 Annual
Meeting of Shareholders, Proxy Statement, and Proxy Form. For shareholders
participating in the Corporation's Share Owner Dividend Reinvestment and Stock
Purchase Plan, the enclosed Proxy Form will also represent shares held in the
dividend reinvestment plan.

PLEASE NOTE THAT THE ANNUAL MEETING WILL BE HELD AT THE EXECUTIVE INN IN
INTERNATIONAL ROOM D ON TUESDAY, APRIL 26, 1994 AT 4:00 P.M.

We would appreciate your signing the enclosed Proxy Form and returning it
to Peoples First in the enclosed self-addressed envelope even if you plan to
attend the meeting. You may revoke the proxy at the meeting should you desire
to vote your shares in person.

Very truly yours,

Aubrey W. Lippert
Chairman of the Board and President

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PEOPLES FIRST CORPORATION
100 South 4th Street
Post Office Box 2200
Paducah, Kentucky 42002-2200

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1994

The Annual Meeting of Shareholders of Peoples First Corporation (the
"Corporation") will be held at the Executive Inn, International Room D, One
Executive Boulevard, Paducah, Kentucky, at 4:00 p.m. (local time), on April 26,
1994, for the following purposes:

1. ELECTION OF DIRECTORS. To elect seven directors.

2. AMENDMENT TO ARTICLES OF INCORPORATION. To act upon a proposal to
amend the Corporation's articles of incorporation to (a) increase the
number of authorized shares of common stock from 10,000,000 to
30,000,000 shares and (b) authorize 6,000,000 shares of preferred
stock, with such preferences, limitations and relative rights as may
be determined by the Board of Directors.

3. AMENDMENTS TO 1986 STOCK OPTION PLAN. To act upon a proposal to
approve amendments to the Corporation's 1986 Stock Option Plan.

4. RATIFICATION OF APPOINTMENTS TO AUDIT COMMITTEE. To act upon a
proposal to ratify the appointment of directors to the Audit Committee
of the Corporation's Board of Directors.

5. OTHER BUSINESS. To act upon such other matters as may properly be
brought before the Annual Meeting or any adjournment thereof.

Information regarding the matters to be acted upon at the Annual Meeting is
contained in the Proxy Statement accompanying this Notice.

Only those holders of record of the Corporation's common stock at the close
of business on March 18, 1994, are entitled to notice of and to vote at the
Annual Meeting and any adjournment thereof.

BY ORDER OF THE BOARD OF DIRECTORS

A. Howard Arant
Secretary

Paducah, Kentucky
March 24, 1994

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YOUR VOTE IS IMPORTANT

PLEASE DATE, SIGN, AND PROMPTLY RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING POSTAGE PAID ENVELOPE.
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PEOPLES FIRST CORPORATION
100 South 4th Street
Post Office Box 2200
Paducah, Kentucky 42002-2200

PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD APRIL 26, 1994

The Board of Directors of Peoples First Corporation (the "Corporation") is
soliciting the accompanying proxy form for use at the 1994 Annual Meeting of
Shareholders to be held at 4:00 p.m. (local time) on Tuesday, April 26, 1994, at
the Executive Inn, One Executive Boulevard, Paducah, Kentucky.

Only holders of record of the Corporation's common stock of no par value
(the "Common Stock") at the close of business on March 18, 1994 (the "Record
Date"), are entitled to notice of and to vote at the 1994 Annual Meeting. On
March 18, 1994, there were 7,103,546 shares of Common Stock issued, outstanding,
and entitled to vote at the 1994 Annual Meeting. Numbers of shares of Common
Stock contained herein have been adjusted to reflect a 2-for-1 stock split
effected in the form of a 100% stock dividend on January 4, 1994.

Each holder of Common Stock has one vote per share in all matters coming
before the Annual Meeting, except for the election of directors, for which each
shareholder is entitled to vote the number of shares held on the Record Date
multiplied by the number of directors to be elected, and may cast all of those
votes for a single nominee or may distribute the votes among as many nominees as
desired. The Board of Directors is soliciting authority for the proxies to vote
shares in this fashion at their discretion. Proxy forms may be revoked at any
time before the taking of the vote at the 1994 Annual Meeting by delivering
written notice of revocation to the Corporation's Secretary.

This Proxy Statement and the accompanying proxy form are first being sent
or given to shareholders on or about March 24, 1994.

PRINCIPAL SHAREHOLDERS

The following table sets forth, as of March 18, 1994, certain information
with respect to each person known to the Corporation to beneficially own five
percent or more of the outstanding Common Stock, as well as the aggregate number
of shares of Common Stock beneficially owned by all of the directors and
officers of the Corporation and executive officers of the Corporation's
subsidiary banks (the "Banks") as a group.

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Number of Shares
and Nature of Percentage
Name and Address Beneficial Ownership of Class
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<S> <C> <C>
Peoples First National 799,668(1) 11.3%
Bank and Trust Company ("PFNB")
100 S. 4th Street
P. O. Box 1920
Paducah, Kentucky 42001

All Directors and Officers
of the Corporation and Executive
Officers of the Banks as a
Group (29 persons) 1,079,267(2) 14.9%(3)

<FN>
________________________________

(1) Includes 589,198 shares PFNB holds in a fiduciary capacity, as trustee,
executor or otherwise, including 497,040 shares held with sole voting and
dispositive power, and 92,158 shares held with shared voting and
dispositive power. In addition, PFNB holds 210,470 shares as Trustee for
the Corporation's Employee Stock Ownership Plan (the "ESOP"), with
respect to which PFNB has sole dispositive power. PFNB must vote 210,470
shares as specifically directed by each ESOP member with respect to the
shares allocated to that member's account.

(2) The number of shares owned by individual directors of the Corporation and
the nature of their beneficial ownership are set forth in the table under
"ELECTION OF DIRECTORS." Other officers of the Corporation and executive
officers of the Banks beneficially own 196,690 shares.

(3) Shares of Common Stock subject to options that are or will become
exercisable within 60 days have been deemed outstanding for computing the
percentage of class of the group, whose members hold the options, but are
not deemed outstanding for computing the percentage of class of any other
person.

</TABLE>

ELECTION OF DIRECTORS

The Corporation's Board of Directors consists of 17 members in three
classes. Directors are elected to three-year terms, and ordinarily one class of
directors is elected at each annual meeting of shareholders.

The Corporation will elect seven directors at the 1994 Annual Meeting.
Walter L. Apperson, William R. Dibert, R. E. Fairhurst, Jr., Dennis W. Kirtley,
Aubrey W. Lippert, and Allan Rhodes, Jr. have been nominated for election as
directors for terms expiring at the 1997 Annual Meeting. Gathiel D. Baker has
been nominated for election as a director for a term expiring at the 1995 Annual
Meeting. Messrs. Apperson, Dibert, Fairhurst, Lippert and Rhodes currently
serve on the Board of Directors. In accordance with the terms of the Merger
Agreement and Plan of Reorganization among the Corporation, First Kentucky
Bancorp, Inc., and First Kentucky Federal Savings Bank, and as permitted by the
Corporation's Articles of Incorporation, the Board of Directors has increased
the number of directors from 15 to 17 and has nominated Dennis W. Kirtley and
Gathiel D. Baker for election to the two new directorships.

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The Corporation's Articles of Incorporation provide that the number of
its directors will be fixed from time to time by the Board of Directors.
Between meetings of shareholders held for the election of directors, the Board
of Directors may increase or decrease the number of directors last approved by
the shareholders by thirty percent (30%) or less. Any vacant directorship,
whether resulting from an increase in the number of directors or otherwise, may
be filled by the affirmative vote of the majority of the Directors then in
office, whether or not a quorum of the Board of Directors exists at the time of
the vote, for a term of office continuing only until the next election of
directors by the shareholders. A decrease in the number of directors, however,
will not have the effect of shortening the term of any incumbent director.

If any named nominee should refuse or be unable to serve, the Board of
Directors believes the persons designated as proxies will vote the shares
represented by the enclosed proxy form for the substitute nominee, if any,
proposed by the Board of Directors. No circumstances are now known, however,
that would prevent any of the nominees from serving. In the election of
directors, the designated proxies may cumulatively cast the votes authorized by
each proxy form received if such action is deemed by them to be appropriate.
Proxy forms cannot be voted for a greater number of persons than the number of
nominees named.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" THE ELECTION OF EACH OF THE BOARD'S NOMINEES.

The following information is furnished as of March 18, 1994, with respect
to each person nominated for election as a director at the 1994 Annual Meeting,
each director whose term will continue after the 1994 Annual Meeting, and each
nondirector executive officer of the Corporation included in the summary
compensation table on page 11. Unless otherwise indicated, each person has been
engaged in the listed occupation for the past five years.

Shares of
Director Common Stock
Name, Age, Principal Occupation or Position, or Executive Beneficially Percentage of
Other Directorships Officer Since Owned (1) Class (2)
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NOMINEES FOR A TERM ENDING IN 1997

<S> <C> <C> <C>
WALTER L. APPERSON, 60 . . . . . . . . . . . . . . . . . . . 1992 1,284 *
President and Operations Officer,
Murray Ledger and Times,
a daily newspaper

WILLIAM R. DIBERT, 56. . . . . . . . . . . . . . . . . . . . 1989 7,372 *
President and CEO of Crounse Corporation,
a river transportation company

R. E. FAIRHURST, JR., 47 . . . . . . . . . . . . . . . . . . 1987 109,550(3) 1.5%
Owner of Fairhurst Realty, real estate brokers

DENNIS W. KIRTLEY, 50. . . . . . . . . . . . . . . . . . . . 1994 77,608(4) 1.1%
President and Chief Executive Officer
of First Kentucky Federal Savings Bank

</TABLE>
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<S> <C> <C> <C>
AUBREY W. LIPPERT, 53. . . . . . . . . . . . . . . . . . . . 1983 159,642(5) 2.2%
Chairman of the Board, President, and Chief
Executive Officer of the Corporation;
Chairman of the Board and Chief Executive
Officer of PFNB

ALLAN RHODES, JR. 43 . . . . . . . . . . . . . . . . . . . . 1991 15,627(6) *
President of Allan Rhodes, Inc., an
automobile dealership
NOMINEE FOR A TERM ENDING IN 1995

GATHIEL D. BAKER, 68 . . . . . . . . . . . . . . . . . . . . 1994 35,782(7) *
President of Tri-City Auto Parts

TO CONTINUE IN OFFICE UNTIL 1995

JOE DICK, 66 . . . . . . . . . . . . . . . . . . . . . . . . 1992 27,006 *
Vice Chairman of the Corporation and
Consultant to Bank of Murray
Formerly Chairman and Chief Executive
Officer of Bank of Murray

WILLIAM ROWLAND HANCOCK, 46. . . . . . . . . . . . . . . . . 1989 24,938(8) *
President of Hancock Fabrics, Inc., a
fabrics retailer

ROBERT P. MERIWETHER, 47 . . . . . . . . . . . . . . . . . . 1987 123,228(9) 1.7%
Neurosurgeon

JOE HARRY METZGER, 64. . . . . . . . . . . . . . . . . . . . 1983 22,638(10) *
Vice President of R & M Grocery Co. since
1991
Former President of Metzger Packing Co., Inc.,
a meat packing company

JERRY L. PAGE, 60. . . . . . . . . . . . . . . . . . . . . . 1983 112,962(11) 1.6%
Business Consultant

TO CONTINUE IN OFFICE UNTIL 1996

ALLAN B. KLEET, 45 . . . . . . . . . . . . . . . . . . . . .
Chief Financial Officer and Treasurer
of the Corporation. . . . . . . . . . . . . . . . . . 1986 45,312(12) *

RUFUS E. PUGH, 59. . . . . . . . . . . . . . . . . . . . . . 1987 6,498(13) *
President of Golden Eagle Distributing, Inc.,
a wholesale beer distributor

MARY WARREN SANDERS, 45. . . . . . . . . . . . . . . . . . . 1992 48,038(14) *
Certified Public Accountant with
Michael D. Pierce, CPA since 1992
Formerly with Richardson, Howe,
and Wilson, CPAs

</TABLE>
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<S> <C> <C> <C>
VICTOR F. SPECK, JR., 58 . . . . . . . . . . . . . . . . . . 1987 32,294(15) *
President of Welders Supply Company, Inc.,
a supplier of welding products and
equipment

NEAL H. RAMAGE, 55 . . . . . . . . . . . . . . . . . . . . . 1989 32,798(16) *
President and Chief Executive Officer
of Salem Bank, Inc.

CERTAIN EXECUTIVE OFFICERS

STEPHEN B. KIGHT, 42 . . . . . . . . . . . . . . . . . . . . 1983 88,894(17) 1.2%
Executive Vice President of the
Corporation since 1993
Former President and Chief Operating
Officer of PFNB

GEORGE B. SHAW, 48 . . . . . . . . . . . . . . . . . . . . . 1993 200 *
President and Chief Operating
Officer of PFNB since 1993
Former President and Chief
Executive Officer of Bowling
Green Bank & Trust Co.

<FN>
________________________________

(*) Represents 1% or less of the outstanding Common Stock.

(1) In the table above, the named person has sole voting and dispositive
power with respect to the reported shares unless otherwise indicated.
When joint ownership is noted, the joint owners share voting and
dispositive power with respect to the shares. When holdings of a
family member are included but are noted as being held "individually,"
the family member has sole voting and investment powers with respect
to the indicated shares.

(2) Shares of Common Stock subject to currently exercisable options are
deemed outstanding for computing the percentage of class of the person
holding such options but are not deemed outstanding for computing the
percentage of class of any other person.

(3) Of the listed shares, Mr. Fairhurst's wife holds 4,800 shares
individually, and Mr. Fairhurst's sons hold 1,920 shares. In
addition, Mr. Fairhurst holds 64,000 shares as trustee for two trusts
created by his father's estate, with respect to which he has sole
voting and investment power.

(4) Includes 62,360 shares held jointly by Mr. Kirtley and his wife, 1,135
shares held individually by Mr. Kirtley's wife and 1,126 shares held
in Mr. Kirtley's First Kentucky Federal ESOP account for which he has
voting but no investment power.

(5) Includes 84,900 shares subject to currently exercisable stock options
and 19,120 shares held in Mr. Lippert's ESOP account for which he has
voting but no investment power.

(6) Includes 15,227 shares held jointly by Mr. Rhodes and his wife.

</TABLE>

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<TABLE>

<S> <C>

(7) Includes 9,450 shares held by Mr. Baker's wife.

(8) Includes 2,007 shares held jointly by Mr. Hancock and his wife and 357
shares owned by Mr. Hancock's minor children.

(9) Includes 78,746 shares held by Dr. Meriwether as trustee for the
Meriwether PSC Pension Plan, for which he holds sole voting and
investment power.

(10) Includes 20,638 shares held individually by Mr. Metzger's wife.

(11) Includes 50,000 shares held individually by Mr. Page's wife.

(12) Includes 40,840 shares subject to currently exercisable stock options,
631 shares held individually by Mr. Kleet's wife, and 2,480 shares
held in Mr. Kleet's ESOP account for which he has voting but no
investment power. Mr. Kleet disclaims beneficial ownership of the
shares held by his wife.

(13) Includes 1,762 shares held jointly by Mr. Pugh and his wife.

(14) Includes 1,260 shares held individually by Ms. Sanders' husband and
32,286 held in trust of which Ms. Sanders is beneficial owner with
voting and dispositive rights. Also includes 13,662 shares in another
trust for which Ms. Sanders is beneficial owner without voting and
investment rights.

(15) Includes 4,500 shares held individually by Mr. Speck's wife.

(16) Includes 10,800 shares subject to currently exercisable stock options,
448 shares held in Mr. Ramage's ESOP account for which he has voting
but no investment power, and 21,386 shares held jointly by Mr. Ramage
and his wife.

(17) Includes 15,248 shares held jointly by Mr. Kight and his wife, 68,000
shares subject to currently exercisable stock options, and 5,646
shares held in Mr. Kight's ESOP account for which he has voting but no
investment power.

</TABLE>
________________________________

The Corporation's subsidiary Banks have had, and expect to have in the
future, banking transactions in the ordinary course of business with various
directors and officers of the Corporation and the Banks and with many of their
associates on substantially the same terms (including interest rates and
collateral) as those prevailing at the time for comparable transactions with
others. In the opinion of management, such loans did not involve more than
normal risk of collectability or present other unfavorable features. The
aggregate balance of outstanding loans to directors and officers of the
Corporation and the Banks and certain corporations and individuals related to
such persons totalled $19,066,777 or 24.5% of the Corporation's stockholders'
equity as of December 31, 1993.

COMMITTEES OF THE BOARD OF DIRECTORS

The Corporation's Executive Compensation Committee reviews and recommends
to its Board of Directors the compensation of the principal officers of the
Corporation and the Banks. The Executive Compensation Committee met two times
during 1993. The present members of the Executive Compensation Committee are
Messrs. Apperson, Dibert, Fairhurst, Hancock, Metzger, Page, Pugh, and

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Speck. The Executive Compensation Committee will be discontinued immediately
following the 1994 Annual Meeting and its duties will be assumed by the newly
formed Executive Committee at that time.

The Corporation's Executive Committee was established on December 15,
1993. The Executive Committee may exercise all the authority of the Board of
Directors between regular quarterly Board meetings except with respect to
actions specifically excluded by Section 2.11 of the Corporation's Bylaws.
Beginning immediately after the 1994 Annual Meeting, the Executive Committee
will assume responsibility for reviewing and recommending to the Board of
Directors the compensation of the principal officers of the Corporation and the
Banks. The present members of the Executive Committee are Messrs. Apperson,
Dick, Hancock, Meriwether, Page, Pugh, and Speck.

The Corporation's Audit Committee, which is composed entirely of
non-management directors, reviews the audit plans and the results of audits of
the Corporation and the Banks performed by the Corporation's internal audit
department and independent certified public accountants. Messrs. Dibert,
Hancock, Rhodes, Sanders and Speck were approved as members of the Audit
Committee at the 1993 Annual Meeting. The Audit Committee met four times during
the year.

The Corporation's Loan Review Committee monitors the quality and
composition of the Corporation's loan portfolio and reviews reports of the
Corporation's loan review officers. The Loan Review Committee met four times
during 1993. The present members of the Loan Committee are Messrs. Apperson,
Dibert, Dick, Page, Pugh, and Rhodes and Ms. Sanders.

The Corporation's Nominating Committee recommends persons to fill
vacancies existing on the Board of Directors from time to time. The Nominating
Committee did not meet during 1993. The present members of the Nominating
Committee are Messrs. Apperson, Dibert, Dick, Hancock, Meriwether, Metzger,
Pugh, Page and Speck.

The following is the provision of the Corporation's Bylaws regarding the
nomination of directors by shareholders.

SECTION 2.13 NOMINATION OF DIRECTORS.

(a) Nominations for election to the Board of Directors
may be made by the Board of Directors or by any shareholder. Any
shareholder who intends to nominate or to cause to have nominated
any candidate for election to the Board of Directors (other than a
candidate nominated by the Board of Directors) shall deliver or
mail written notification of the nomination to the President not
less than fourteen days nor more than fifty days before any
meeting of shareholders called for the election of directors;
provided, however, that if less than twenty-one days' notice of
the meeting is given to shareholders, such notification shall be
delivered or mailed to the President not later than the close of
business on the seventh day following the notice of meeting was
mailed. Any such notification shall contain the following
information to the extent known to the notifying shareholder or
shareholders:

(1) The name and address of each proposed nominee;

(2) The principal occupation of each proposed nominee;

(3) The total number of shares that, to the knowledge of the
notifying shareholder or shareholders, will be voted for
each proposed nominee;

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(4) The name and residence address of each notifying
shareholder; and

(5) The number of shares owned by each notifying shareholder.

(b) The chairman of any meeting of shareholders held
for the election of directors may disregard any nomination for
director not made in accordance with the provisions of this
Section, and upon the instruction of the chairman, the inspectors
of election shall disregard all votes cast for any nominee whose
nomination was not made in accordance with the provisions of this
Section.

DIRECTOR COMPENSATION

The Board of Directors held a total of ten regularly scheduled and
special meetings during 1993. Directors who are not employees of the
Corporation generally receive an annual fee of $3,400 for their services.
Directors who are employees of the Corporation generally do not receive a fee
for their services, with the exception of Mr. Ramage who received a fee of
$3,400. In 1993 all Directors attended at least 75 percent of the total number
of meetings of the Board of Directors and committees on which they served as
members.

Joe Dick, Vice Chairman and a director of the Corporation and the former
President, Chief Executive Officer and Chairman of Bank of Murray, currently
serves as a consultant to Bank of Murray following his retirement as of January
1, 1993. Under the terms of a consulting and non-competition agreement between
Mr. Dick and the Corporation, Mr. Dick will provide consulting services to Bank
of Murray, including advisory services with respect to marketing, business
development, and operations, for a term through December 31, 1997. For his
consulting services, Mr. Dick is paid $100,000 per year.

Dennis W. Kirtley, a nominee for election as a director of the
Corporation and President of First Kentucky Federal Savings Bank, entered into
an employment agreement with First Kentucky as of March 10, 1994. The
employment agreement provides for Mr. Kirtley's continued employment as
President and Chief Executive Officer of First Kentucky for three years from
that date at a base salary of $105,000 per year. Mr. Kirtley has the right to
compensation or other benefits after termination of employment only when such
termination is without "just cause" (as defined). If employment is terminated
without just cause, Mr. Kirtley is entitled to receive his salary up to the date
of termination of his employment agreement plus an additional twelve-month
period, but in no event more than three years' salary, and the cost of his
obtaining all health, life and disability benefits for a period of one year from
the date of termination, unless he obtains comparable benefits elsewhere through
other employment prior to the end of the twelve-month period.

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<PAGE>

REPORT OF EXECUTIVE COMPENSATION COMMITTEE

The Corporation's Executive Compensation Committee and Executive
Committee are comprised entirely of independent, nonemployee directors. The
Executive Compensation Committee reviewed and recommended to the Board of
Directors the compensation paid to the executive officers of the Corporation in
1993. The Executive Compensation Committee will be discontinued immediately
following the 1994 Annual Meeting and its duties will be assumed by the
Executive Committee at that time.

The Corporation's executive compensation program is structured to help
the Corporation achieve its business objectives by:

- Setting levels of compensation designed to attract talented
executives in a highly competitive banking environment;

- Providing annual cash incentive compensation based on the
Corporation's attainment of a targeted return on equity; and

- Providing long-term incentive compensation in the form of stock
options designed to align executives' interests with the interests
of the Corporation's shareholders.

BASE SALARIES

The Compensation Committee recommends salary levels for the Corporation's
executive officers that are intended to be consistent with industry practice and
level of responsibility, with salary increases reflecting competitive trends,
the overall financial performance of the Corporation, and the performance of the
individual executive. The Committee has engaged independent consultants from
time to time to assist with compensation policy issues. The Committee's
recommendations for 1993 base salaries for executive officers approximated the
median base salaries paid to executives having similar responsibilities with
banks or bank holding companies of comparable asset size to Peoples First
National Bank or the Corporation, based on data compiled by the Committee's
consultant.

ANNUAL BONUS

To insure that a significant portion of compensation is based on
performance, the annual bonus payable to each executive officer of the
Corporation is based upon the attainment of a targeted return on equity
percentage by the subsidiary Bank by which the executive officer is employed.
At the beginning of each fiscal year, the Committee establishes the return on
equity target and budgets a certain amount for the bonus based on a percentage
of salary for participants based on levels of responsibility. The percentage of
salary payable as a bonus for all levels of responsibility increases or
decreases in proportion to the amount by which actual return on equity
percentage exceeds or falls short of the target.

STOCK OPTION GRANTS

To link a portion of incentive compensation to the market performance of
the Common Stock, the Corporation has periodically granted key employees stock
options under its 1986 Stock Option Plan (the "Option Plan"). In addition to
providing key employees an incentive to put forth maximum effort for the
Corporation's success, the Committee believes option grants appropriately give
key employees a common interest with its shareholders in the Corporation's long-
term share performance. In setting the number of shares subject to options and
other terms and conditions of an individual grant, the Committee considers the
individual's responsibilities and contribution to the success of the Corporation
and the

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<PAGE>

individual Bank. Consistent with the long-term incentive purpose of option
grants, each grant generally provides that each year options become exercisable
with respect to 20% of the underlying shares.

At the end of 1992, the Committee recommended awards for options for
29,000 shares to the named executive officers. Because few shares remained
available for issuance under the Option Plan, no options were awarded during
1993 except for an initial grant to an executive officer who joined the
Corporation during the year.

To insure that a portion of each executive officer's compensation can
continue to be linked directly to stock performance, the Board of Directors is
proposing an amendment to the Option Plan that would, among other things, make a
number of shares equal to 10% of the total number of shares of Common Stock
issued and outstanding available for grants of options and other stock-based
incentive awards. See PROPOSAL TO AMEND 1986 STOCK OPTION PLAN.

1993 COMPENSATION

The Committee increased Mr. Lippert's base salary for 1993 by 10.5% over
the 1992 level based on its consideration of Mr. Lippert's contribution to the
1992 performance of the Corporation and PFNB, and a 36.8% increase in the market
price of the Common Stock in 1992. Mr. Lippert's bonus was set at 10% of
salary, which percentage increased to 11.1% when PFNB's return on equity for
1993 exceeded the targeted percentage. He also was granted options for 13,000
shares of Common Stock at the end of 1992. During 1993, the Corporation and the
Banks continued their strong earnings performance. The Corporation's earnings
per share increased by 14.6% to $1.49 from $1.30 in 1992. Return on equity for
1993 and 1992 was 12.99% and 12.57% respectively. The market price per share of
the Common Stock increased by 56.9% in 1993, to $25.50 from $16.25 at the end of
1992. The foregoing per share amounts have been adjusted to reflect a 2-for-1
stock split in the form of a 100% stock dividend on January 4, 1994.

EXECUTIVE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS

Walter L. Apperson William R. Dibert
R. E. Fairhurst, Jr. William Rowland Hancock
Joe Harry Metzger Jerry L. Page
Rufus E. Pugh Victor F. Speck, Jr.

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<PAGE>

SUMMARY COMPENSATION TABLE

The following table sets forth information with respect to the compensation
of the Corporation's Chief Executive Officer and its most highly compensated
executive officers whose total annual salary and bonus for 1993 exceeded
$100,000.

ANNUAL COMPENSATION

Other Long-Term All
Name and Principal Annual Compensation Other Com-
Position Year Salary Bonus Compensation(1) Options (#)(2) pensation(3)
- ------------------ ---- ------ ----- --------------- -------------- ------------

<S> <C> <C> <C> <C> <C> <C>
AUBREY W. LIPPERT 1993 $200,000 $22,280 $0 0 $11,608
Chairman of the Board, 1992 181,000 20,515 0 13,000 10,730
President and Chief 1991 165,000 19,291 0 15,000
Executive Officer
of the Corporation,
Chairman of the Board
and Chief Executive
Officer of PFNB

STEPHEN B. KIGHT 1993 $123,000 $13,702 $0 0 $7,187
Executive Vice President of 1992 115,000 13,035 0 8,000 6,824
the Corporation; 1991 100,000 11,691 0 10,000
President and Chief
Operating Officer of
PFNB(4)

ALLAN B. KLEET 1993 $110,000 $12,254 $0 0 $6,427
Chief Financial Officer 1992 103,000 11,674 0 8,000 6,112
and Treasurer 1991 97,200 11,364 0 12,000
of the Corporation

GEORGE B. SHAW 1993 $69,231 $58,000 $0 10,000 $218
President and Chief
Operating Officer of
PFNB(4)

<FN>
___________________
(1) Does not include perquisites, the value of which in all cases did not
exceed 10% of the total of the named individual's salary and bonus.

(2) Options with respect to each fiscal year are awarded in January of the
following fiscal year. The number of shares underlying options has been
adjusted to reflect the Corporation's 2-for-1 stock split in the form of a
100% stock dividend on January 4, 1994.

(3) The following amounts are included in the above table. Contributions made
under the Employee Stock Ownership Plan in fiscal 1993 were Mr. Lippert
$5,062; Mr. Kight $3,113; Mr. Kleet $2,784; Mr. Shaw $0. Contributions
made under the 401(k) Plan in fiscal 1993 were: Mr. Lippert $6,000; Mr.
Kight $3,690; Mr. Kleet $3,300; Mr. Shaw $0. Life insurance premiums paid
in fiscal 1993 were Mr. Lippert $546; Mr. Kight $384; Mr. Kleet $343; Mr.
Shaw $218.

(4) Mr. Kight served as President and Chief Operating Officer of PFNB until
May 7, 1993, when Mr. Kight assumed his current position, and Mr. Shaw
joined the Corporation as President and Chief Operating Officer of PFNB.

</TABLE>

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<PAGE>

OPTION/SAR GRANTS IN LAST FISCAL YEAR

Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option/SAR Term(1)
- -----------------------------------------------------------------------------------------------------------------------------------

Number of Securities % of Total Options/ Exercise or
Underlying Options/ SARs Granted to Base Price Expiration
Name SARs Granted Employees in 1993 ($/sh) Date 5% 10%
- ---- -------------------- ------------------- ----------- ---------- -- ---

<S> <C> <C> <C> <C> <C> <C>
George B. Shaw 10,000 100% $16.88 6/1/2003 $106,157 $269,024

<FN>
____________________

(1) If the market price of the Common Stock increased by 5% per year and 10%
per year for the ten years after the date of grant, the total increase in
shareholder value would be $67,015,476 and $169,830,375, respectively.

</TABLE>

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES

Number of Securities
Underlying Unexercised Value of Unexercised In-the-Money
Options at Year End(#) Options at Year End ($)
Shares Acquired Value ---------------------- ---------------------------------
Name on Exercise (#) Realized($) Exercisable(1) Unexercisable Exercisable(1) Unexercisable
- ---- --------------- ----------- -------------- ------------- -------------- -------------

<S> <C> <C> <C> <C> <C> <C>
Aubrey W.
Lippert 0 $0 84,900 30,600 $1,457,151 $402,524

Stephen B. Kight 0 0 68,000 19,200 1,223,012 252,016

Allan B. Kleet 4,000 71,140 40,840 20,960 683,399 276,787

George B. Shaw 0 0 0 10,000 0 86,200

<FN>
__________________________________________

(1) Includes options that became exercisable on or before January 10, 1994.

</TABLE>

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<PAGE>

COMMON STOCK PERFORMANCE VERSUS NASDAQ STOCK MARKET (U.S.)
AND NASDAQ BANK STOCKS INDICES

[Insert Performance Graph]

The graph above assumes $100 invested on December 31, 1988 in the
Corporation's Common Stock, the NASDAQ Stock Market (U.S.) Index, and the NASDAQ
Bank Stocks Index, and assumes reinvestment of dividends.

1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C> <C>
The Corporation $100 $105.94 $131.74 $172.04 $241.08 $386.73

NASDAQ Stock
Market (U.S.) 100 121.25 102.96 165.21 192.11 219.22

NASDAQ Bank
Stocks 100 111.15 81.40 133.57 194.19 221.32

</TABLE>

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<PAGE>

PROPOSED AMENDMENT TO
ARTICLES OF INCORPORATION

PROPOSED ARTICLES 4 AND 5

The Board of Directors has unanimously adopted a proposed amendment to
Article 4 and a new Article 5. Proposed Article 4 would (a) increase the number
of shares of Common Stock the Corporation is authorized to issue from 10,000,000
to 30,000,000 shares and (b) authorize the Corporation to issue 6,000,000 shares
of preferred stock ("Preferred Stock"), with such preferences, limitations, and
relative rights as may be determined by the Board of Directors. Proposed
Article 5 would authorize the Board of Directors to fix the preferences,
limitations and relative rights of one or more series of Preferred Stock,
including preferences, limitations, and rights with respect to voting,
dividends, conversion into other shares or securities of the Corporation, any
liquidation of the Corporation, or other matters. In addition, current Articles
5 through 15 would be renumbered as Articles 6 through 16. The texts of
Proposed Articles 4 and 5 are set forth in Appendix A.

As of the Record Date, there were 7,103,546 shares of Common Stock issued
and outstanding, including shares issued to former stockholders of First
Kentucky Bancorp, Inc. upon completion of the Corporation's acquisition of First
Kentucky Bancorp, Inc. on March 10, 1994. The Corporation's Board of Directors
has reserved (i) 31,820 shares of Common Stock for issuance upon the exercise of
options under the 1986 Stock Option Plan; (ii) 814,089 shares of Common Stock
for issuance to shareholders who participate in the Corporation's Share Holder
Dividend Reinvestment and Share Purchase Plan; and (iii) 1,118,000 shares of
Common Stock for issuance to shareholders of Libsab Bancorp, Inc. under the
terms of an Affiliation Agreement pursuant to which Liberty Bank & Trust Company
in Mayfield, Kentucky would become a wholly owned subsidiary of the Corporation.
In addition, if the proposed amendment to the 1986 Stock Option Plan is approved
by the Corporation's shareholders, the number of shares of Common Stock subject
to issuance upon the exercise of options would increase to 10% of the number of
shares of Common Stock issued and outstanding. See "PROPOSED AMENDMENTS TO 1986
STOCK OPTION PLAN."

REASONS FOR AND INTENDED EFFECT OF THE PROPOSED AMENDMENT

The Board of Directors believes that the ability to issue additional
shares of Common Stock and a second class of stock in one or more series with a
range of potential economic and voting rights will provide the Corporation with
valuable flexibility in connection with future acquisitions, combinations,
equity financings, stock distributions, stock splits, stock dividends, employee
benefit plans and other corporate purposes.

The specific terms of any series of Preferred Stock will depend primarily
upon market conditions and other factors existing at the time of issuance. The
Board of Directors does not intend to issue any Common Stock or Preferred Stock
except on terms deemed to be in the best interests of the Corporation and its
shareholders. Apart from its employee benefit plans, its dividend reinvestment
plan and the proposed affiliation with Libsab Bancorp, Inc., the Corporation has
no arrangements, agreements, understandings or plans at the present time for the
issuance of shares of either the Preferred Stock or Common Stock.

The additional authorized shares of Common Stock and Preferred Stock
would be issuable by the Corporation without further authorization by
shareholders on such terms as the Corporation's Board of Directors may lawfully
determine. The effect of authorization and issuance of additional shares of

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<PAGE>

Common Stock (other than on a pro rata basis among holders of Common Stock) will
be to dilute the present voting power of some or all holders of Common Stock.
In some circumstances, issuance of additional shares of Common Stock could
result in the dilution of the net income per share, net book value per share,
and voting rights of Common Stock currently outstanding. Holders Common Stock
have no preemptive rights.

Issuance of shares of Preferred Stock could create a class of securities
outstanding that would have certain preferences with respect to dividends and in
liquidation over Common Stock, and could enjoy certain voting rights, contingent
or otherwise, in addition to those of Common Stock currently outstanding. In
some circumstances, issuance of shares of Preferred Stock could result in the
dilution of net income per share, net book value per share and voting rights of
Common Stock currently outstanding.

EFFECT OF THE PROPOSED AMENDMENT AS TO TAKEOVERS

The Board of Directors considers that its evaluation of any takeover bid
should be based primarily on a determination of what is in the best interests of
the Corporation and all of its shareholders. Factors influencing that
determination may include the resultant effect of the takeover upon the
Corporation's then remaining minority shareholders, its employees, its
customers, and the communities that it serves. If a third party acquired
control of the Corporation by purchasing less than all of the Corporation's
outstanding stock, the value of the then minority shareholders' stock would be
directly influenced by the effect of the takeover. For example, if the takeover
has an adverse impact on the Corporation's employees and customers (or they
perceive an adverse impact), the Corporation's business operations may also be
adversely affected, thus diminishing the value of the shares held by the then
minority shareholders.

Proposed Articles 4 and 5 are not being recommended in response to any
effort of which the Board of Directors is aware to obtain control of the
Corporation, but rather are being recommended for the corporate reasons outlined
above, as well as to increase the Board's flexibility to ensure fair treatment
of the Corporation's shareholders in take-over situations generally.

In takeover situations, the proposed Articles are intended to encourage
persons seeking to acquire control of the Corporation to initiate such an
acquisition through arms' length negotiations with the Corporation's management
and Board of Directors. If adopted, the proposed Articles could also have the
effect of discouraging a third party from making a tender offer or otherwise
attempting to obtain control of the Corporation, even though such an attempt
might, in some cases, be beneficial to the Corporation and its shareholders.
Issuance of additional Common Stock or Preferred Stock could serve to discourage
the accumulation of substantial common stock positions as a prelude to an
attempted takeover of significant corporate restructuring, proxy fights and
partial tender offers with the use of "two-tiered pricing." This would serve to
increase management's stability, and thereby give it the necessary security to
make long range corporate plans, as well as to respond to attempted
acquisitions. It could also serve to prevent acquisitions resulting in
dissimilar and possibly unfair treatment of the Corporation's shareholders. In
addition, adoption of the Amendments could tend to reduce temporary fluctuations
in the market price of the Corporation's stock that may be caused by
accumulations of large blocks of the Corporation's stock. Accordingly,
shareholders could be deprived of certain opportunities to sell their stock at a
temporarily higher market price.

Although the Board of Directors currently has no intention of doing so,
shares of authorized, unissued and unreserved Preferred Stock or Common Stock
could (within the limits imposed by applicable law) be issued to a holder who
might thereby obtain sufficient voting power to ensure that any proposal to
remove directors, or any alteration, amendment or repeal of the provisions to
the Articles of

-15-

<PAGE>

Incorporation described below, would not receive the shareholder vote required
therefor. Accordingly, the power to issue new Preferred Stock or Common Stock
could enable the Board of Directors to make it more difficult to replace
incumbent directors or accomplish certain business combinations opposed by the
incumbent Board of Directors.

It would also be possible for the Corporation to issue shares of Common
Stock or Preferred Stock to one party involved in a tender offer to equalize
that party's position with respect to a competing tender offeror. This could
enable management to ensure that shareholders receive a price for their shares
that would be determined by competitive bidding. Authorized but unissued shares
could be used, without further shareholder approval, to hinder the consummation
of certain takeover attempts by diluting the ownership interest of a substantial
shareholder or increasing the total amount of consideration necessary for an
acquirer to obtain control through the implementation of a shareholder rights
plan (or "poison pill") or by direct issuances of shares.

The Proposed Articles will not prevent a takeover that is approved by
Directors of the Corporation unaffiliated with the shareholder attempting to
acquire control of the Corporation. The Proposed Articles will, however, make
it more difficult for shareholders to remove directors and change the management
of the Corporation. The Proposed Articles could have the effect of rendering
more difficult or discouraging a merger, tender offer or proxy contest, the
assumption of control by a holder of a large block of the Corporation's
securities, or the removal of incumbent management, and accordingly would have
an adverse impact on shareholders who would want to participate in such a tender
offer or takeover bid.

CURRENT ARTICLES

The Corporation's Articles contain other provisions that could be deemed
to have an "anti-takeover" use. For instance, the Corporation has a classified
Board. The term of office of each class of directors varies, so that in any
year shareholders elect approximately one-third of the Board of Directors. The
vote of 80% of the shares entitled to vote in the election of directors is
needed to remove any or all of the directors. The Corporation's Articles
require the affirmative vote of the holders of at least 80% of the outstanding
shares of the Corporation's voting stock to approve mergers and certain other
"Business Combinations" (as defined in the Articles) with an entity controlled
by a beneficial owner of more than 20% of the Corporation's voting stock (an
"Interested Shareholder"). The supermajority voting provision does not apply if
the transaction is either approved by a majority of the members of the Board of
Directors who are unaffiliated with the Interested Shareholder and were
directors before the Interested Shareholder became an Interested Shareholder
(the "Disinterested Directors") or certain minimum price and procedural
requirements are met.

The 80% voting requirement subjects the approval of Business Combinations
to supermajority voting requirements that would not otherwise apply. This
provision, frequently called a "fair price" provision, is designed to help
ensure fair treatment of all share-holders in the event of a takeover.

The Articles also contain provisions that specifically permit the
Corporation's Board of Directors to consider in its evaluation of any
acquisition proposal received from another entity, in addition to the
consideration being offered, factors such as (i) the Board of Directors'
estimate of the current or future value of the Corporation in a freely
negotiated transaction and as an independent entity, (ii) the competence,
experience and integrity of the acquiring party, and (iii) the social, legal and
economic effects upon the Corporation's various constituents and the communities
in which it does business.

-16-

<PAGE>

Unless approved by a majority of the Disinterested Directors, none of the
provisions of the Articles discussed above may be amended, repealed or otherwise
changed without the affirmative vote of a supermajority proportion of the
outstanding shares of voting stock. This proportion changes depending upon the
number of shares owned by an Interested Shareholder, if any, but the required
vote is the total of (i) the number of shares owned by an Interested
Shareholder, and (ii) a majority of the shares not owned by an Interested
Shareholder among its shareholders of record.

* * * * *

Articles 4 and 5 will be approved if the number of votes cast for the
amendment exceeds the number of votes cast against it at a shareholders' meeting
at which a majority of the shares of Common Stock outstanding are represented.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" ADOPTION OF THE AMENDMENT.

PROPOSED AMENDMENT TO 1986
STOCK OPTION PLAN

The Corporation's shareholders originally adopted the Option Plan at the
1986 Annual Meeting. The Option Plan was amended and restated most recently as
of February 16, 1994, subject to shareholder approval of the amendment at the
1994 Annual Meeting. The following summary of the Option Plan and the proposed
amendments to it is qualified in its entirety by reference to the text of the
Option Plan, as most recently amended and restated, which is included as
Appendix B to this Proxy Statement.

The purposes of the Option Plan are to promote the long-term success of
the Corporation and to attract, retain and motivate key employees while creating
a long-term mutuality of interest between such key employees and the
Corporation's shareholders. The Option Plan currently provides for grants of
stock options to certain key employees of the Corporation or any of its direct
or indirect wholly owned subsidiaries.

The Board of Directors has adopted unanimously a resolution proposing to
amend and restate the Option Plan (the "Plan Amendment") to (1) extend the term
of the Option Plan to February 16, 2004; (2) provide that the number of shares
of Common Stock reserved for issuance under the Option Plan will increase
automatically upon increases in the number of shares outstanding to equal 10% of
the shares of Common Stock outstanding from time to time, provided that no more
than 300,000 shares may be covered by incentive stock options ("ISOs") granted
under the Option Plan; (3) authorize the Executive Committee, at its discretion,
to grant stock appreciation rights exercisable solely for cash ("SARs") and
options at an option exercise price less than the market price of the Common
Stock at the date of grant, if the option recipient agrees to forgo income equal
to the total amount of the discount ("Prepaid Options"); (4) authorize the
Executive Committee, at its discretion, to grant rights to receive a specified
number of shares over a specified period ("Restricted Stock") and contingent
rights to receive a specified number of shares based upon the achievement of
specified performance objectives over a specified time ("Performance Stock");
and (5) revise the description of the criteria for selection to the Executive
Committee to correspond to Rule 16b-3 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Amendment is intended to allow the
Corporation to continue to include stock-based incentive awards as a component
of executive compensation and to increase the flexibility of the Executive
Committee in structuring incentive compensation awards to eligible employees
consistent with the purposes of the Option Plan. See "Plan Amendment," below.

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<PAGE>

SUMMARY OF THE OPTION PLAN

The Option Plan currently provides for awards of two types of options.
One type of option is the Incentive Stock Option ("ISO"), as defined in Section
422A of the Internal Revenue Code of 1986, as amended (the "Code"). The second
type of Option is the Non-qualified Stock Option ("NQSO"), which does not
constitute an "incentive stock option" as defined in Section 422A of the Code.

Effective immediately after the Annual Meeting the Corporation's
Executive Committee, currently consisting of five non-management directors, will
assume responsibility for administering the Option Plan. See COMMITTEES OF THE
BOARD OF DIRECTORS. The Option Plan authorizes the Executive Committee to
designate key employees of the Corporation or any wholly owned subsidiary to
receive options under the Option Plan.

The maximum number of shares of Common Stock that may be issued upon the
exercise of options granted under the Option Plan currently is 600,000 shares,
which may be adjusted for stock splits and certain other changes in
capitalization. If options are for any reason cancelled, or expire or terminate
unexercised, the shares covered by such options become available again for the
grant of options. Currently, only 31,820 shares remain available for future
option grants under the Option Plan. The Amendment would increase the number of
shares authorized for issuance under the Option Plan immediately by
approximately 103,000 shares and thereafter automatically in proportion to
future increases in the number of shares of Common Stock outstanding. See "Plan
Amendment," below.

The Executive Committee determines whether an option is an ISO or a NQSO.
The Executive Committee also determines the expiration date of each option, but
no option may expire later than ten years from the date of grant.

For ISOs granted after December 31, 1986, the aggregate fair market
value, determined at the time the option is granted, of the stock with respect
to which ISOs are exercisable for the first time by any eligible employee during
any calendar year (under all such plans of the Corporation and its subsidiaries)
cannot exceed $100,000. The fair market value of any grant is determined by
multiplying the number of shares granted by the option exercise price, which
cannot be less than the fair market value of the Common Stock on the date of the
grant of the option. Fair market value is generally the last sale price for the
Common Stock reported by the NASDAQ Market System on the date fair market values
are to be determined. No ISO may be granted pursuant to the Option Plan to an
individual who at the time such option is granted owns, directly or indirectly,
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Corporation.

For an ISO granted before January 1, 1987, the recipient may not exercise
any part of the option until all portions of previously granted ISOs have been
exercised full or have expired. However, a recipient may exercise an ISO
granted after December 31, 1986, or a NQSO of any grant date, even though a
previously granted NQSO or ISO is still outstanding. No ISO may be exercised
later than the tenth anniversary of its date of grant.

In the event of a recipient's death or disability or a "change in
control" of the Corporation, all options previously granted but not exercisable
will immediately become fully exercisable. In general, the Option Plan provides
that a "change in control" occurs when such a change would be required to be
reported under certain federal securities laws, and specifically includes (a) a
shareholder or group acquiring 20% of the Corporation's voting stock, (b) a
substantial turnover among the members of the Board of Directors, (c) a
substantial transfer of the Corporation's assets, (d) a change in control being

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<PAGE>

contemplated by agreement, or (e) the Board of Directors adopting a resolution
to the effect that a potential change in control has occurred.

The option price may be paid in cash or Common Stock (including by
withholding from stock that would otherwise be issued upon exercise, if the
Executive Committee so allows), or a combination of both.

No option granted under the Option Plan may be transferred except by will
or the laws of descent and distribution.

The Board of Directors may discontinue the Option Plan at any time and
may amend the Option Plan as may be permitted by law, except the Board may not
revoke or alter, in a manner unfavorable to the holders, any options then
outstanding, or amend the Option Plan without the approval of the Corporation's
shareholders so as to materially (i) increase the benefits accruing to the
participants under the Option Plan; (ii) increase the number of securities that
may be issued under the Option Plan (except for those relating to certain
changes in capital structure, as discussed above); (iii) modify the requirements
as to eligibility for participation in the Option Plan; or (iv) increase the
cost of the Option Plan to the Corporation. This provision of the Option Plan
is proposed for amendment. See "Plan Amendment," below.

PLAN AMENDMENT

The Plan Amendment is intended to allow the Corporation to continue to
include stock-based incentive awards as a component of executive compensation
and to increase the flexibility of the Executive Committee, in structuring
incentive compensation awards to eligible employees consistent with the purposes
of the Option Plan.

The Plan Amendment would extend the expiration date of the Option Plan
from August 19, 1996 to February 16, 2004 and would change the number of shares
authorized for issuance under the Option Plan from a fixed number of shares to a
number based on a percentage of the number of shares of Common Stock outstanding
from time to time. Thus, if the total number of shares of Common Stock
outstanding were to increase, the number of shares issuable under the Option
Plan would automatically increase to equal 10% of the total shares of Common
Stock outstanding. The Plan Amendment sets this percentage at 10% to reflect
the approximate ratio of the number of shares authorized for issuance when the
Option Plan was originally adopted in 1986 to the number of shares of Common
Stock then outstanding. Based on the 7,103,755 shares of Common Stock
outstanding as of March 18, 1994, the Plan Amendment would increase the number
of shares available for issuance under the Option Plan as of that date to
710,375 shares and, in accordance with the Code, would fix at 300,000 the number
of shares issuable upon the exercise of ISO's granted under the Option Plan.
The number of shares authorized for issuance under the Option Plan, however,
would not decrease if the number of shares of Common Stock outstanding decreased
in the future. The Plan Amendment would significantly reduce the need to amend
the Option Plan (or add new plans) in the future because insufficient shares
were available for issuance in connection with stock-based incentive grants.

The Plan also would authorize the Executive Committee to grant any
eligible employee an award of SARs, Prepaid Options, Restricted Stock or
Performance Stock as well as stock options. The ability to issue these other
types of awards would give the Executive Committee the ability to structure more
flexible stock-based incentive awards, awards exercisable for cash, as well as
stock grants under the Option Plan.

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<PAGE>

The grant of an SAR would be in tandem with a grant of a stock option and
the exercise of the SAR would be in lieu of any simultaneous or subsequent
exercise of such option. An SAR would entitle the recipient to receive a cash
payment from the Corporation equal to the difference between (i) the fair market
value of the Common Stock with respect to which the option and SAR are granted
and unexercised, and (ii) the aggregate option price of such Common Stock. SARs
granted under the Option Plan could be exercised solely for cash. A person
subject to the short-swing profit provisions of the Exchange Act could exercise
an SAR for cash only during the period beginning on the third business day and
ending on the twelfth business day following the date of public release of the
Corporation's quarterly financial report. The grant of SARs under the Option
Plan otherwise is subject to all conditions applicable to options granted under
the Option Plan.

Prepaid Options are NQSOs granted at an exercise price up to 25% less
than the market value of the Common Stock on the date of grant. The Option Plan
authorizes the Executive Committee, at its discretion, to grant Prepaid Options
to an employee who agrees to forgo income equal to the amount option price is
discounted from market value of the Common Stock. Thus, Prepaid Options provide
a useful means of deferring income.

Restricted Stock may be granted in such form as the Committee approves
from time to time. Shares awarded pursuant to restricted stock awards are
subject to such conditions, terms, restrictions against transfer, substantial
risks or forfeiture and attainment of performance objectives and for such
periods as the Committee determines. The recipient of a Restricted Stock award
will have all the other rights of a shareholder with respect to shares of
Restricted Stock, including, but not limited to the right to receive dividends
and the right to vote the shares.

Performance Stock awards entitle a recipient to receive Common Stock in
the future based on the degree of attainment by the Corporation of pre-
established performance targets over a specified performance period. The
performance targets may relate to corporate, division or unit performance of the
Corporation, or any subsidiary, division or unit thereof, over the performance
period and may be established in terms of growth in revenue, earnings per share,
ratio of earnings to shareholders' equity or to total assets, or other
performance targets as determined by the Committee in its discretion.

The Plan Amendments also would revise the description of the criteria for
selecting members of the Executive Committee who administer the Plan. Rule 16b-
3 under the Exchange Act currently requires that stock-based incentive plans be
administered by disinterested persons if grants under such plans are to be
exempt from short-swing profit liability. The Securities and Exchange
Commission amended the definition of "disinterested persons" in 1991. By
amending the selection criteria for the Executive Committee to require that
members be "disinterested persons" as defined by Rule 16b-3 under the Exchange
Act, the Plan Amendment would reduce the need to amend the Option Plan when
there is a change in applicable law.

FEDERAL INCOME TAX CONSEQUENCES

The holder of a NQSO does not recognize taxable income as a result of the
grant of a NQSO. However, upon the exercise of a NQSO (whether the purchase
price is paid in cash or partly or entirely with shares of Common Stock already
owned by the optionee), an optionee recognizes ordinary income in an amount
equal to the difference between the fair market value on the date of exercise of
the shares received on exercise and the option exercise price. Such amount is
subject to applicable withholding requirements and is deductible for tax
purposes by the Corporation.

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<PAGE>

The tax basis of shares purchased is the fair market value of the shares
on the date of exercise, except that to the extent already owned shares are
tendered as part of the purchase price, a like number of shares received upon
exercise will have the same tax basis and holding period as the shares tendered.
If the shares purchased pursuant to the exercise of a NQSO are held as a capital
asset for more than one year (including in the holding period of any shares
received in exchange for shares surrendered, the holding period of the
surrendered shares), any gain or loss recognized upon the sale of the shares
will be taxed as a long-term capital gain or loss.

When an officer or director who is subject to Section 16(b) of the
Exchange Act exercises a NQSO, the optionee will recognize ordinary income for
federal income tax purposes on the first date that sale of such shares would not
be subject to potential liability under Section 16(b) of the Exchange Act. The
optionee may make an appropriate election within thirty days after the date of
exercise, in which case the optionee is taxed at the date of exercise as if he
were not an insider. The ordinary income recognized will be the excess, if
any, of the fair market value of the Common Stock on such later date over the
option price, and the Corporation's deduction also will be deferred until such
later date.

The holder of an ISO does not recognize taxable income as a result of the
grant of an ISO. Further, upon the exercise of an ISO, assuming certain
conditions are met and the holder is not subject to the alternative minimum tax
rules (for which purpose income is deemed to have been recognized), the holder
will not recognize any taxable income. If shares of Common Stock acquired
pursuant to the exercise of any ISO are held for two years after the date of
grant of the option and one year after the date of exercise of the option, then
any gain or loss recognized on disposition of the shares will be taxed as a
long-term capital gain or loss.

In connection with the grant or exercise of an ISO the Corporation will
not withhold for payment of income taxes and, in usual circumstances, the
Corporation will not be entitled to any income tax deduction in connection with
the grant or exercise of any ISO. However, if a holder of Common Stock acquired
under an ISO makes a "disqualifying disposition" of such shares (in other words,
disposition within one year from the date the shares were acquired or within two
years of the date of grant of the option), then ordinary income will be
recognized by the optionee and the Corporation will be entitled to a
commensurate income tax deduction measured by the lesser of (1) the excess of
the fair market value of the shares on the date of exercise over the option
price or (ii) the excess of the fair market value of the shares on the date of
the disqualifying disposition over the option price. Also, any excess of the
fair market value of such shares on the date of exercise will, if the shares
have been held as a capital asset by the optionee, be a long-term or short-term
capital gain depending upon the optionee's holding period for such shares.

Upon the exercise of SARs or the receipt of a Performance or Restricted
Stock grant that is not subject to a risk of forfeiture, the grantee recognizes
ordinary income and the Corporation is entitled to a deduction measured by the
amount of cash or the fair market value of the shares received. Income tax
withholding is required.

Absent an election under Section 83(b) of the Code, dividends paid on
Restricted Stock while it remains subject to substantial restrictions are
treated as compensation for federal income tax purposes. Again, absent a
Section 83(b) election, the grantee of a Restricted or Performance Stock award
that is subject to a risk of forfeiture recognizes ordinary income and the
Corporation is entitled to a deduction at the time the restrictions lapse or at
the time the stock becomes transferable. The amount of income is measured by
the fair market value of the shares at the time of lapse. Income tax
withholding is required, and such income is subject to all applicable payroll
taxes.

-21-

<PAGE>

NEW PLAN BENEFITS

The table below sets forth the amounts received under the Option Plan in
1993 by the executive officers named in the summary compensation table on page
11 and the Corporation's executive officers, non-executive directors, and non-
executive officers, in each case taken as a group. Future awards under the
Option Plan will be at the discretion of the Executive Committee and therefore
cannot currently be determined.

NEW PLAN BENEFITS

1986 Stock Option Plan

- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Dollar Number of
Name and Position Value ($)(1) Units (2)
- ----------------- ------------ -------------

<S> <C> <C>
Aubrey W. Lippert, Chairman
of the Board, President and
Chief Executive Officer $ 0 0

Stephen B. Kight, Executive
Vice President 0 0

Alan B. Kleet, Chief
Financial Officer and
Treasurer 0 0

George B. Shaw, President
and Chief Operating
Officer of PFNB 86,200 10,000

Executive Group 86,200 10,000

Non-Executive Director Group 0 0

Non-Executive Officer Employee
Group 0 0

<FN>
______________________________

(1) Based on the closing market of the Common Stock on December 31, 1993.

(2) Represents number of shares underlying stock options.

</TABLE>

-22-

<PAGE>

The Plan Amendment will be approved if the number of votes cast for the
Plan Amendment exceeds the number of votes cast against it at a shareholders
meeting at which a majority of the shares of Common Stock outstanding are
represented.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" AMENDMENT OF THE 1986 STOCK OPTION PLAN.

RATIFICATION OF APPOINTMENTS TO AUDIT COMMITTEE

The Board of Directors has appointed Messrs. Dibert, Fairhurst, Hancock,
and Rhodes and Ms. Sanders to serve on the Audit Committee, subject to
ratification by the Corporation's shareholders at the Annual Meeting. The
ratification of the appointments to the Audit Committee by the shareholders is
not required by law or by the Corporation's Bylaws. The Board of Directors is
submitting this matter to the shareholders in the belief that it is a good
practice to do so.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS RATIFY THE
APPOINTMENTS OF THE MEMBERS OF THE AUDIT COMMITTEE.

In the absence of instruction to the contrary, shares represented by
proxy forms will be voted in favor of the ratification of the members of the
Audit Committee. If a majority of the votes cast on this matter is not cast in
favor of the ratification of the appointments, the appointees will decline to
serve, and the Board of Directors will appoint other non-management directors to
serve on the Audit Committee, whose appointment will be subject to ratification
by the shareholders at the 1995 Annual Meeting.

INFORMATION CONCERNING INDEPENDENT AUDITORS

The firm of KPMG Peat Marwick, Certified Public Accountants, has served
as independent auditors for the Corporation since its commencement of operations
in 1983. Representatives of KPMG Peat Marwick will be present at the 1994
Annual Meeting and will have the opportunity to make a statement, if they desire
to do so, and to respond to appropriate questions.

GENERAL

All expenses of preparing, printing, mailing and delivering the Proxy
Statement and all materials used in the solicitation of proxy forms will be
borne by the Corporation. In addition to the use of the mails, proxy forms may
be solicited by personal interview, telephone, and telegraph by directors,
officers, and other employees of the Corporation, none of whom will receive
additional compensation for such services. The Corporation will also request
brokerage houses, custodians, and nominees to forward soliciting materials to
the beneficial owners of the Common Stock held of record by them and will pay
reasonable expenses of such persons for forwarding these materials.

SHAREHOLDER PROPOSALS

Any proposals by shareholders to be presented at the 1995 Annual Meeting
must be received by the Secretary of the Corporation prior to November 24, 1994,
to be included in the Proxy Statement for the 1995 Annual Meeting.

-23-

<PAGE>

SECTION 16(a) REPORTS

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires directors and officers of the Corporation and persons who beneficially
own ten percent or more of the Common Stock to file reports with the Securities
and Exchange Commission and the Corporation with respect to their beneficial
ownership of the Corporation's equity securities. Based on its review of the
reports furnished to the Corporation during and with respect to 1993, the
Corporation believes that its directors, officers, and beneficial owners have
filed all required reports in a timely manner, except for Joe Dick, a director,
who filed one report with respect to one transaction after the report was due.

OTHER MATTERS

The directors and officers of the Corporation do not know of any matters
to be presented for shareholder approval at the meeting other than those
described in the Proxy Statement. If any other matters should come before the
meeting, the Board of Directors intends that the persons designated on the
enclosed proxy form, or their substitutes, will vote the shares represented by
the proxy form in accordance with their best judgment on such matters.

A copy of the Corporation's Annual Report on Form 10-K as filed with the
Securities and Exchange Commission is available without charge by calling or
writing Allan B. Kleet, Chief Financial Officer, Peoples First Corporation, P.O.
Box 2200, Paducah, Kentucky 42002.

By Order of the Board of Directors.

A. Howard Arant
Secretary
PEOPLES FIRST CORPORATION

Paducah, Kentucky
March 24, 1994

<PAGE>

APPENDIX A

PROPOSED ARTICLES 4 AND 5
TO ARTICLES OF INCORPORATION

4. AUTHORIZED CAPITAL STOCK. The aggregate number of shares the
Corporation shall have authority to issue shall be 36,000,000 shares divided
into (a) 6,000,000 shares of preferred stock ("Preferred Stock") with such
preferences, limitations and relative rights as may be determined by the Board
of Directors pursuant to Article 5 and which may be divided into and issued in
series; and (b) 30,000,000 shares of common stock ("Common Stock").

5. RELATIVE RIGHTS AND PREFERENCES. The preferences, limitations and
relative rights in respect of the shares of Preferred Stock and shares of Common
Stock shall be as follows:

(a) PREFERRED STOCK. The Board of Directors may determine, in whole
or in part, the preferences, limitations, and relative rights of the Preferred
Stock, or one or more series of Preferred Stock, before the issuance of any such
shares, which preferences, limitations and relative rights shall be specified in
a subsequent amendment to these Articles of Incorporation adopted by the Board
of Directors and may include, without limitation;

(1) Special, conditional, or limited voting rights, or no rights
to vote (except to the extent prohibited by law);

(2) That the shares be redeemable or convertible (i) at the
option of the Corporation, the shareholder or another person or upon the
occurrence of a designated event; (ii) for cash, indebtedness, securities, or
other property; (iii) in a designated amount or in an amount determined in
accordance with a designated formula or by reference to extrinsic data or
events.

(3) Rights entitling the holders to distributions calculated in
any manner, including dividends that may be cumulative, noncumulative, or
partially cumulative;

(4) Preferences over any other class of shares with respect to
distributions, including dividends and distributions upon the dissolution of the
corporation; and

(5) Other preferences, limitations, or relative rights not
prohibited by law.

(b) COMMON STOCK. Each outstanding share of Common Stock shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. The Common Stock shall be subject to the provisions of Article 4
and the provisions of any resolution or resolutions validly adopted by the Board
of Directors in exercise of the authority vested in the Board of Directors by
this Article 5.

<PAGE>
APPENDIX B

PEOPLES FIRST CORPORATION
1986 STOCK OPTION PLAN

As Amended and Restated as of February 16, 1994

I. PURPOSE

The purposes of this Peoples First Corporation 1986 Stock Option Plan
(the "Plan") are to promote the long term success of Peoples First Corporation
(the "Corporation") and to attract, retain, and motivate key employees while
creating a long-term mutuality of interest between such key employees and the
Corporation's shareholders. Pursuant to this Plan, the Corporation may grant
key employees options to purchase shares ("Options") of the Corporation's common
stock ("Common Stock"), Stock Appreciation Rights ("SARs"), and grants of Common
Stock ("Stock Grants").

II. ADMINISTRATION

The Executive Committee (the "Committee") of the Board of Directors of
the Corporation (the "Board") shall administer the Plan. All powers and
functions of the Committee may, however, at any time and from time to time be
exercised by the Board; provided, that decisions under the Plan relating to
employees who are members of the Board shall be made solely by the Committee.
Members of the Committee shall be chosen from members of the Board who are
"disinterested persons," as defined by Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). The Committee shall have full
power to construe or interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to it and to make all other determinations necessary or
advisable to administer the Plan.

III. ELIGIBILITY FOR AWARD

The Committee shall designate key employees of the Corporation or any
direct or indirect subsidiary of the Corporation to receive awards under the
Plan.

IV. ALLOTMENT OF SHARES

Shares of Common Stock to be issued under the Plan shall be made
available from authorized but unissued shares. The aggregate number of shares
of Common Stock that may be issued under the Plan shall be increased
automatically upon increases in the number of shares outstanding to equal 10% of
the number of shares of Common Stock outstanding from time to time, provided
that the number of shares covered by "Incentive Stock Options," as contemplated
by and defined in Section 422A of the Internal Revenue Code of 1986 (the
"Code"), granted under the Plan shall not exceed 300,000 shares, subject to
adjustment pursuant to Section IX of the Plan. If any Option or SAR for any
reason expires or terminates before its exercise in full, or any Stock Grant is
forfeited for any reason, the shares covered by such awards shall again be
available for the grant of awards within the limits provided by the preceding
sentence. Awards may be granted to such eligible employees, and in such amounts
as the Committee, in its sole discretion, may from time to time determine;
provided, however, in the case of "Incentive Stock Options", (i) such eligible
employee, at the time the Option is granted, does not own Common Stock
possessing more than 10% of the total combined voting power of all classes of
stock of the

<PAGE>

Corporation; (ii) for Options granted after December 31, 1986, the aggregate
Fair Market Value (as defined in Section VIII hereof), determined at the time
the Option is granted, of the shares with respect to which Incentive Stock
Options are exercisable for the first time by any eligible employee during any
calendar year (under this Plan and any other stock option plan of the
Corporation and its subsidiaries) shall not exceed $100,000; and (iii) for
Options granted before January 1, 1987, the aggregate Fair Market Value of the
Common Stock for which any eligible employee may be granted Incentive Stock
Options in any calendar year shall not exceed $100,000 plus any Unused Limit
Carryover to such year. "Unused Limit Carryover" as to any calendar year shall
have the meaning assigned to such term by Section 422A(c)(4) of the Internal
Revenue Code of 1954, as amended (the "1954 Code").

V. GRANTING OF OPTIONS AND STOCK APPRECIATION RIGHTS

All Options granted under the Plan shall be in such form as the
Committee may from time to time approve. It is intended that some of the
Options granted under this Plan will be Incentive Stock Options and that other
Options granted under the Plan will be "Nonqualified Stock Options" governed by
Section 83 of the Code. All Options granted under the Plan shall be subject to
the following terms and conditions:

(a) Option Price. The option price per share with respect to
each Option shall be determined by the Committee. The option price shall not be
less than 100% of the Fair Market Value of the Common Stock on the date the
Option is granted. Notwithstanding the immediately preceding sentence, the
Committee shall have the discretion to authorize the grant of an Option that is
not an Incentive Stock Option (a "Nonqualified Stock Option") with, or the
modification of an outstanding Option to provide for, an option price not less
than 75% of the Fair Market Value of the Common Stock on the date the Option is
granted or modified in consideration of the Optionee's agreement to defer salary
or bonus pay in an amount equal to the difference between the aggregate option
price of the Option and the aggregate Fair Market Value of the shares of Common
Stock subject to the Option.

(b) Term of Option. The term of each Option shall be fixed
by the Committee, but shall in no case exceed ten years.

(c) Payment. The option price shall be payable (i) in cash;
(ii) by tender to the Corporation of shares of Common Stock (including
"restricted stock", as defined in Rule 144 under the Securities Act of 1933,
which shall be valued as if it were not subject to restrictions on transfer or
possibilities of forfeiture) owned by the Optionee; or (iii) by any combination
thereof. If permitted by the Committee, at its sole discretion, an Optionee may
satisfy the option price for an Option by electing to have the Corporation
retain that number of shares subject to such Option having an aggregate Fair
Market Value equal to the aggregate option price of the Option, subject to any
limitations imposed by Section 16 of the Exchange Act and any rule thereunder.
If shares of "restricted stock" are tendered as consideration for the exercise
of an Option, a number of shares issued upon the exercise of such Option, equal
to the number of shares of "restricted stock" tendered as consideration thereof,
shall be subject to the same restrictions as the "restricted stock" so tendered
and any additional restrictions that may be imposed by the Committee. No shares
shall be issued until full payment has been made, at which time the Optionee
shall acquire the rights of a shareholder.

(d) Exercise of Options. Except as otherwise provided in
this Plan or established by the Committee, each Optionee shall earn the right to
purchase 25% of the total shares of Common Stock available to that Optionee
under the applicable Option Agreement ("Option Stock") during each of the first
four successive 12-month periods following the Option Grant. The Optionee's
right to purchase shares

-2-

<PAGE>

of Option Stock shall cumulate and carry over to subsequent 12-month periods
with respect to unpurchased shares of Option Stock. After the fourth year
following an Option Grant, the Optionee may purchase any or all Option Stock not
previously acquired under the applicable Option Agreement.

The Committee may, in its sole discretion, prescribe shorter or longer
time periods and additional requirements with respect to exercise of an Option.

In no event shall any Option be exercisable after the expiration of ten
years from the date upon which the Option was granted. No Incentive Stock
Option granted before January 1, 1987, may be exercised by an optionee while
there are outstanding (within the meaning of Section 422(c)(7) of the 1954 Code)
any Incentive Stock Options previously granted to that optionee by the
Corporation; Incentive Stock Options granted after December 31, 1986, may be
exercised in any sequence.

Notwithstanding the foregoing, upon a Change of Control of the
Corporation as defined in Section VII, the Optionee may purchase all Option
Stock not previously acquired by the Optionee under the applicable Option
Agreement.

(e) Termination of Employment. Upon the termination of an
Optionee's employment (for any reason other than retirement, disability, death
or termination for deliberate, willful or gross misconduct), option privileges
shall be limited to the shares which were immediately purchasable at the date of
such termination and such option privileges shall expire unless exercised within
three months after the date of such termination. If an Optionee's employment is
terminated for deliberate, willful or gross misconduct, as determined by the
Committee, all rights under the Option shall expire upon receipt of the notice
of such termination.

(f) Retirement, Preretirement Disability or Preretirement
Death of an Optionee. In the event of an optionee's retirement, preretirement
disability (within the meaning of Section 105(d)(4) of the Code) or
preretirement death, option privileges shall apply to all options granted prior
to such event without regard to whether such options were otherwise exercisable
under Section V(d). Option privileges shall expire unless exercised (by legal
representatives or beneficiaries in the event of death) within one year after an
optionee's death or termination of employment due to disability or within three
months after termination of employment due to retirement.

(g) Stock Appreciation Rights. The Committee, in its
discretion, may grant to any eligible employee an SAR in tandem with an Option,
provided that the SAR shall be in lieu of any simultaneous or subsequent
exercise of such Option. An SAR shall entitle the Optionee to receive from the
Corporation a cash payment equal to the difference between (i) the Fair Market
Value of the Common Stock with respect to which the Option and SAR are granted
and unexercised and (ii) the aggregate option price of such shares. Any
election by an Optionee who is subject to the short-swing profit rules of
Section 16 of the Exchange Act to exercise all or a portion of an SAR for cash
shall be made during the period beginning on the third business day and ending
on the twelfth business day following the date of public release of the
Corporation's quarterly summary of sales and earnings. The grant of SARs under
the Plan shall otherwise be subject to all of the terms and conditions
applicable to the grant of Options under the Plan.

VI. STOCK GRANTS

(a) Terms and Conditions. The Committee, in its discretion,
may award a Stock Grant to any eligible employee. Each Stock Grant confers upon
the recipient thereof either (i) the

-3-

<PAGE>

unconditional right to receive a specified number of shares of Common Stock at
one time or over a specified period ("Restricted Stock"); or, (ii) in the
discretion of the Committee, the contingent right, upon the achievement of
specified performance objectives within a specified period, to receive a
specified number of shares of Common Stock ("Performance Stock"). The period
for a Restricted Stock Grant or the performance objectives and the period of
duration of any Performance Stock Grant, and any other terms and conditions
applicable to the Stock Grant, shall be set forth in a Stock Grant Agreement at
the time the Stock Grant is made.

(b) Restricted Stock. Shares of Common Stock awarded under a
Restricted Stock Grant, and the right to vote and to receive dividends on such
shares, may not be sold, assigned, transferred, exchanged, pledged, hypothecated
or otherwise incumbered except as herein provided during the restriction period
applicable to such shares. Notwithstanding the foregoing, and except as
otherwise provided in the Plan, the recipient of a Restricted Stock Grant shall
have all the other rights of a shareholder with respect to shares of Restricted
Stock, including but not limited to, the right to receive dividends and the
right to vote such shares. Each certificate issued in respect of shares issued
pursuant to a Restricted Stock Grant shall be deposited with the Corporation or
its designee, and shall bear the following legend:

This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture and
restrictions against transfer) contained in the Peoples First
Corporation 1986 Stock Option Plan and an agreement entered into
between the registered owner and Peoples First Corporation.
Such terms and conditions shall be released only in accordance
with the provisions of the Plan and the agreement, which are on
file with the Secretary of Peoples First Corporation.

Upon the lapse the restrictions set forth in Restricted Stock Agreement, the
Corporation shall promptly deliver to the recipient stock certificates
representing shares of Common Stock formerly subject to the Restricted Stock
Grant without the legend set forth above.

(i) Performance Targets. The Committee shall
establish maximum and minimum performance targets to be achieved with respect to
each Performance Stock Grant during the performance period, which target shall
be set forth in the Performance Stock Agreement. The Recipient shall be
entitled to delivery of all Performance Stock if the maximum targets are
achieved during the performance cycle, but shall be entitled to delivery of a
portion of the Performance Stock according to the level of achievement of
performance targets, as specified by the Committee, for performance during the
performance period that meets or exceeds the minimum target but fails to meet
the maximum target. The performance targets established shall relate to
performance of the Corporation, or any subsidiary thereof, and may be
established in terms of growth and gross revenue, earnings per share, ratio of
earnings to stockholders' equity or to total assets, or such other performance
targets as may be determined by the Committee in its discretion. Multiple
targets may be used and may have the same or different weight, and they may
relate to absolute performance, or relative performance as measured against
other time periods or corporations or banks. At any time before delivery of
Performance Stock, the Committee may adjust previously established performance
targets and other terms and conditions, including the Corporation's or other
corporations' financial performance for Plan purposes, to reflect major
unforeseen events such as changes in laws, regulations or accounting practices,
mergers, acquisitions or divestitures, or extraordinary, unusual or nonrecurring
items or events.

-4-

<PAGE>

(ii) Delivery. Following the conclusion of each
performance period, the Committee shall determine the extent to which
performance targets have been attained for such period as well as the extent to
which the other terms and conditions established by the Committee have been met.
The Committee shall determine what, if any, shares are due on a Performance
Stock Grant.

(d) Termination of Employment. If the recipient of a
Restricted Stock Grant ceases to be an employee of the Corporation or its
subsidiaries for any reason before the lapse of restrictions applicable to any
Restricted Stock, all Restricted Stock as to which there still remain unlapsed
restrictions shall be forfeited by the recipient without payment of any
consideration by Corporation, and the recipient shall not thereafter have any
further rights or interest in such shares. If a recipient of a Performance
Stock Grant ceases to be an employee of the Corporation or its subsidiaries
before the end of the applicable performance period by reason of death,
disability, retirement (including early retirement with the consent of the
Corporation) or involuntary separation without cause, the recipient's
Performance Stock, to the extent earned under applicable performance targets
shall be deliverable or payable at the end of the performance period in
proportion to the active service of the recipient during the performance period,
as determined by the Committee. Upon any other termination of employment, all
outstanding Performance Stock Awards held by the recipient shall be cancelled
unless the Committee determines otherwise.

VII. ACCELERATION OF EXERCISABILITY ON CHANGE OF CONTROL

Upon a Change of Control of the Corporation: (i) Options and SARs
theretofore granted and not previously exercisable shall become fully
exercisable to the same extent and in the same manner as if they had become
exercisable by passage of time in accordance with the provisions of the Plan
relating to periods of exercisability and to termination of employment; (ii)
each Stock Grant still subject to forfeiture in accordance with the provisions
of the Stock Grant Agreement under which it was originally issued shall no
longer be forfeitable; and (iii) each Performance Stock Grant subject to
satisfaction of performance criteria shall become issuable to the same extent
and in the same manner as if the performance criteria had satisfied the maximum
performance targets set forth in the Stock Grant Agreement.

For purposes of the Plan, a "Change of Control" of the Corporation shall
mean a change of control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A under the Exchange Act; provided that,
without limitation, such a change of control shall be deemed to have occurred
if: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting power of the
Corporation's then outstanding stock; (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board
cease for any reason to constitute a majority thereof, unless the election, or
the nomination for election by the Corporation's shareholders, of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period; or (iii) the
business of the Corporation for which the optionee's services are principally
performed is disposed of by the Corporation pursuant to a partial or complete
liquidation of the Corporation, a sale of assets of the Corporation, or
otherwise.

A Change of Control shall also be deemed to occur if (iv) the
Corporation enters into an agreement, the consummation of which would result in
the occurrence of a Change of Control of the Corporation; (v) any person
(including the Corporation) publicly announces an intention to take or to
consider taking actions which if consummated would constitute a Change of
Control of the Corporation;

-5-

<PAGE>

or (vi) the Board adopts a resolution to the effect that a potential Change in
Control of the Corporation for purposes of this Plan has occurred.

VIII. FAIR MARKET VALUE

"Fair Market Value" shall mean the value of a share of Common Stock on a
particular date, determined as follows: (i) if the Common Stock is not listed on
such date on any national securities exchange, the last sales price (or, if none
on that date, on the most recent date on which there was a last sales price
quotation), as reported by the National Association of Securities Dealers
Automated Quotation System, the National Quotation Bureau, Incorporated, or
other similar service selected by the Committee; (ii) if the common stock is
neither listed on such date on a national securities exchange nor traded in the
over-the-counter market, the fair market value of a share on such date as
determined in good faith by the Committee; or (iii) if the Common Stock is
listed on such date on one or more national securities exchanges, the last
reported sale price of a share on such date as recorded on the composite tape
system or, if such system does not cover the Common Stock, the last reported
sale price of a share on such date on the principal national securities exchange
on which the Common Stock is listed or, if no sale of Common Stock took place on
such date, the last reported sale price of a share on the most recent day on
which a sale of a share took place as recorded by such system or on such
exchange, as the case may be.

IX. ADJUSTMENT IN THE EVENT OF RECAPITALIZATION
OF THE CORPORATION

In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights offering, or any
other change in the corporate structure of the Corporation, the Committee shall
make such adjustments, if any, subject to approval by the Board, as are
appropriate in the number and kind of shares authorized by the Plan, in the
number and kind of shares covered by Options, SARs or Stock Grants and in the
option price or any performance criteria related to Common Stock.

X. NONTRANSFERABILITY OF AWARDS

Awards granted under the Plan (other than Stock Grants no longer subject
to risk of forfeiture) may not be transferred except by will or the laws of
descent and distribution or pursuant to a "qualified domestic relations order"
(as defined by the Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder) and, during the lifetime of the employee to whom
granted, may be exercised only by such employee or the employee's guardian or
legal representative.

XI. TAX WITHHOLDING

Any Optionee of a Nonqualified Stock Option or recipient of a Stock
Grant shall make arrangements satisfactory to the Committee to pay to the
Corporation, either (i) at the time of exercise of the Option or receipt of the
Stock Grant, or (ii), if the Optionee or Stock Grant recipient does not make the
Section 83 election although subject to a risk of forfeiture with respect to
stock received at exercise of an option or at receipt of a Stock Grant, no later
than the date as of which the difference between the Fair Market Value of the
Common Stock subject to an Option and the option price, or the Fair Market Value
of the Common Stock subject to a Stock Grant, first becomes includable in the
gross income of the Optionee for income tax purposes, any federal, state or
local taxes required to be withheld with respect to such shares.

-6-

<PAGE>

XII. AMENDMENTS AND DISCONTINUANCE

The Board may discontinue the Plan at any time and may from time to time
amend or revise the terms of the Plan without shareholder approval to the extent
permitted or required by federal income tax or other applicable statutes or
regulations; provided, however, that the Board may not revoke or alter, in a
manner unfavorable to then existing optionees.

XIII. EFFECTIVE DATE AND TERM OF THE PLAN

The Plan became effective upon approval of the Plan by the
Corporation's shareholders on August 19, 1986 (the "Effective Date"), and it has
been amended and restated as of March 2, 1987 and February 16, 1994. No option
shall be granted pursuant to this Plan later than February 16, 2004, but Options
theretofore granted may extend beyond that date in accordance with their terms
and the provisions of the Plan.

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<PAGE>

THIS PROXY FORM IS SOLICITED BY THE BOARD OF DIRECTORS

(PLEASE DATE, MARK, SIGN AND RETURN IMMEDIATELY)

PEOPLES FIRST CORPORATION
Paducah, Kentucky

The undersigned hereby appoints A. Howard Arant and Stephen B. Kight, or
either one of them (with full power to act alone), my proxy, each with the power
to appoint his substitute, to represent me to vote all of the Corporation's
Common Stock which I held of record or am otherwise entitled to vote, at the
close of business on March 18, 1994, at the 1994 Annual Meeting of Shareholders
to be held on April 26, 1994, at 4:00 p.m., and at any adjournments thereof,
with all powers the undersigned would possess if personally present, as follows:

I. ELECTION OF DIRECTORS.

___ FOR all nominees listed below (except as otherwise indicated below)

___ AGAINST all nominees listed below

Walter L. Apperson, Gathiel D. Baker William R. Dibert,
R.E. Fairhurst, Jr., Dennis W. Kirtley, Aubrey W. Lippert, Allan
Rhodes, Jr.

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name on the line.)

________________________________________________________

II. AMENDMENT TO ARTICLES OF INCORPORATION.

_____ FOR _____ AGAINST _____ ABSTAIN

III. AMENDMENT TO 1986 STOCK OPTION PLAN.

_____ FOR _____ AGAINST _____ ABSTAIN

IV. RATIFICATION OF APPOINTMENTS TO AUDIT COMMITTEE.

_____ FOR _____ AGAINST _____ ABSTAIN

V. OTHER BUSINESS. In their discretion, the Proxies are authorized to act
upon such other matters as may properly be brought before the Annual
Meeting or any adjournment thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES LISTED
IN ITEM 1 AND "FOR" ITEMS 2, 3 AND 4.

[PLEASE SIGN AND DATE ON BACK]

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This proxy form relates to ALL shares owned by the undersigned, including
any shares of Common Stock held in the undersigned's account under the
Corporation's Share Owner Dividend Reinvestment and Stock Purchase Plan.

This proxy form is solicited by the Board of Directors and will be voted as
specified and in accordance with the accompanying proxy statement. If no
instruction is indicated, this proxy form will be voted "FOR" all of the
nominees listed in Item 1 and "FOR" Items 2, 3 and 4.

Please sign exactly as name appears. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign full corporate name by President or other authorized
officer. If a partnership, please sign partnership name by authorized person.

Date _______________, 1994
Signature
Please check one of the following:

___ I will attend the Annual Meeting.
___ I will not attend the Annual Meeting. Signature if held jointly

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ESOP PARTICIPANT DIRECTION

(PLEASE DATE, MARK, SIGN AND RETURN IMMEDIATELY)

PEOPLES FIRST CORPORATION
Paducah, Kentucky

The undersigned hereby directs Peoples First National Bank, as Trustee
under the People First Employee Stock Ownership Plan (the "Plan") to appoint
A. Howard Arant and Stephen B. Kight, or either one of them (with full power to
act alone), my proxy, each with the power to appoint his substitute, to
represent me to vote all of the Corporation's Common Stock held by the Plan for
my account at the close of business on March 18, 1994, which I am entitled to
vote, at the 1994 Annual Meeting of Shareholders to be held on April 26, 1994,
at 4:00 p.m., and at any adjournments thereof, with all powers the undersigned
would possess if personally present, as follows:

1. ELECTION OF DIRECTORS.

___ FOR all nominees listed below (except as otherwise indicated
below)

___ AGAINST all nominees listed below

Walter L. Apperson, Gathiel D. Baker, William R. Dibert,
R.E. Fairhurst, Jr., Dennis W. Kirtley, Aubrey W. Lippert,
Allan Rhodes, Jr.

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name on the line below.)

________________________________________________________

2. AMENDMENT TO ARTICLES OF INCORPORATION.

___ FOR ___ AGAINST ___ ABSTAIN

3. AMENDMENT TO 1986 STOCK OPTION PLAN.

___ FOR ___ AGAINST ___ ABSTAIN

4. RATIFICATION OF APPOINTMENTS TO AUDIT COMMITTEE.

___ FOR ___ AGAINST ___ ABSTAIN

5. OTHER BUSINESS. In their discretion, the Proxies are authorized to
act upon such other matters as may properly be brought before the
Annual Meeting or any adjournment thereof.

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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES LISTED
IN ITEM 1 AND "FOR" ITEMS 2, 3 AND 4.

Date _______________, 1994 ____________________________________________
Signature