FIRST WESTERN BANCORP INC, DEF 14A, 1996-03-15

FIRST WESTERN BANCORP INC
DEF 14A, 1996-03-15
NATIONAL COMMERCIAL BANKS

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

<TABLE>
<S> <C> <C>
Filed by the Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box: [ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as
permitted by Rule 14a-6(e)(2))
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c)
or sec. 240.14a-12
</TABLE>

First Western Bancorp, Inc.
-----------------------------------------------------
(Name of Registrant as Specified in its Charter)

First Western Bancorp, Inc.
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (check the appropriate box):

<TABLE>
<S> <C> <C>
[ x ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
5) Total fee paid:
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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date
of its filing:
1) Amount Previously Paid:
--------------------------------------------------------------------------------
2) Form, Schedule or Registration No.:
--------------------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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</TABLE>
<PAGE> 2

101 EAST WASHINGTON STREET
P.O. BOX 1488
NEW CASTLE, PA 16103-1488
TELEPHONE: (412) 652-8550
FAX: (412) 652-0246
LOGO

March 15, 1996

To Our Shareholders:

You are cordially invited to attend the 1996 Annual Meeting of Shareholders of
First Western Bancorp, Inc., to be held on Tuesday, April 16, 1996, beginning at
10:30 a.m., local time, at the New Englander, 3009 Wilmington Road, New Castle,
Pennsylvania. In the back of this Proxy are directions to the New Englander; if
you need additional assistance, please contact the corporate office at (800)
696-2572.

In addition to our regular business, we will present summary performance
information for 1995, and discuss our recently developed strategy for retail
banking and our vision of the future of branch offices as well as new banking
technologies such as the Internet, PC-based banking, telephone banking and other
enhancements to customer service. We will also highlight the new shared
leadership culture being implemented throughout our organization with all of our
associates. Following the meeting, a light lunch will be served to all attending
shareholders to provide an opportunity to meet informally with the directors and
management of First Western and its subsidiaries. Please accept this invitation
to attend the meeting and join us for the luncheon afterwards.

The formal Notice of Annual Meeting and Proxy Statement, which follow, include a
listing and discussion of the matters upon which you will act.

Whether or not you plan to attend the meeting, we urge you to mark, sign, date
and return the enclosed Proxy Card in the accompanying postage-paid envelope so
that as many shares as possible may be represented at the meeting. Your vote is
important and your cooperation in executing and returning the Proxy Card
promptly will be appreciated.

Sincerely,
LOGO
John R. McKinley
Chairman of the Board
LOGO
Thomas J. O'Shane
President and Chief Executive Officer

SUBSIDIARIES: FIRST WESTERN BANK, N.A. - FIRST WESTERN BANK, F.S.B. - FIRST
WESTERN TRUST SERVICES COMPANY
<PAGE> 3

101 EAST WASHINGTON STREET
P.O. BOX 1488
NEW CASTLE, PA 16103-1488
TELEPHONE: (412) 652-8550
FAX: (412) 652-0246
LOGO

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO OUR SHAREHOLDERS:

Notice is hereby given that the Annual Meeting of Shareholders of First Western
Bancorp, Inc. ("First Western") will be held at the New Englander, 3009
Wilmington Road, New Castle, Pennsylvania 16101, on Tuesday, April 16, 1996 at
10:30 a.m., local time, for the purpose of considering and voting upon the
following:

1. The election of four directors whose terms will expire in 1999 and one
director whose term will expire in 1997; and

2. Such other business as may properly be brought before the meeting and any
adjournment or adjournments thereof.

Only shareholders of record of First Western at the close of business on March
8, 1996 are entitled to notice of and to vote at the Annual Meeting.

Enclosed herewith are a Proxy Statement and form of Proxy. We urge you to mark,
date, sign and return the Proxy as promptly as possible whether or not you plan
to attend the meeting in person. If you do attend the meeting, you may, if you
wish, withdraw your Proxy and vote in person. In any event, you may revoke your
Proxy prior to its exercise.

By Order of the Board of Directors,

LOGO
Robert H. Young
Senior Vice President - Finance,
Secretary and Treasurer

New Castle, Pennsylvania
March 15, 1996

-1-

SUBSIDIARIES: FIRST WESTERN BANK, N.A. - FIRST WESTERN BANK, F.S.B. - FIRST
WESTERN TRUST SERVICES COMPANY
<PAGE> 4

[THIS PAGE INTENTIONALLY LEFT BLANK]

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<PAGE> 5

PROXY STATEMENT

FOR
ANNUAL MEETING OF SHAREHOLDERS

FIRST WESTERN BANCORP, INC.

GENERAL INFORMATION

The accompanying Proxy is being solicited by the Board of Directors of First
Western Bancorp, Inc. ("First Western") for use at the Annual Meeting of
Shareholders of First Western to be held April 16, 1996, 10:30 a.m., local time,
at the New Englander, 3009 Wilmington Road, New Castle, Pennsylvania and for use
at any adjournment or adjournments thereof.

The Proxy may be revoked at any time prior to its exercise by written notice of
revocation or by a later dated Proxy sent to the Secretary of First Western at
its principal executive offices, provided such notice is received prior to
exercise. Shareholders who attend the meeting may, if they wish, withdraw their
Proxy and vote in person.

The Board of Directors has fixed the close of business on March 8, 1996, as the
record date for the determination of shareholders entitled to notice of and to
vote at the Annual Meeting. As of that date First Western had outstanding
7,727,588 shares of its common stock, par value $5.00 per share ("Common
Stock"). First Western's authorized capital consists of 20,000,000 shares of
Common Stock and 4,000,000 shares of preferred stock, without par value
("Preferred Stock"). No shares of preferred stock have been issued. Holders of
Common Stock are entitled to one vote for each share of Common Stock held on all
matters, except with respect to the election of directors, for which
shareholders have the right to cumulate their votes.

First Western is a Pennsylvania business corporation and is registered with the
Federal Reserve Board as a bank holding company and with the Office of Thrift
Supervision as a savings association holding company. Its wholly-owned banking
subsidiaries are First Western Bank, National Association ("FW Bank") and First
Western Bank, Federal Savings Bank ("FW Savings") (FW Bank and FW Savings are
sometimes referred to herein as the "Banks"). First Western's wholly-owned
non-banking subsidiary, First Western Trust Services Company ("Trust Services"),
provides trust, estate management and financial services to customers in the
market areas of the Banks. Residential Mortgage Company of America ("RMC"), a
mortgage banking subsidiary of First Western, was merged into First Western on
December 31, 1995.

The principal executive offices of First Western are located at 101 East
Washington Street, New Castle, Pennsylvania 16101 (mailing address: P. O. Box
1488, New Castle, Pennsylvania, 16103-1488). This Proxy Statement and the
accompanying Notice of Meeting and Proxy Card are first being mailed to
shareholders on or about March 15, 1996. A copy of First Western's Annual Report
for the fiscal year ended December 31, 1995, which includes First Western's
consolidated financial statements, accompanies this mailing.

All expenses of this solicitation, including the cost of mailing, will be borne
by First Western. First Western will not pay any compensation for the
solicitation of proxies, but upon request will reimburse banks, brokers, and
other nominees, fiduciaries and custodians for their reasonable expenses
incurred in sending these proxy materials to beneficial owners and obtaining
their instructions. In addition, proxies may be solicited by directors, officers
and management personnel of First Western and its subsidiaries. Solicitations
may be made by mail, telephone, facsimile or in person.

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<PAGE> 6

ELECTION OF DIRECTORS

The Bylaws of First Western provide that the Board of Directors shall consist of
not fewer than five persons, the exact number to be fixed and determined from
time to time by a resolution of the Board or of the shareholders. The Board's
size is set at fourteen members. Pursuant to First Western's Bylaws, as amended,
nominations for directors other than those made by the Board must be in writing
and delivered or mailed to the Chairman of First Western no later than January
31 for an election to be held at the annual meeting of shareholders that year
and no later than 45 days prior to any other meeting of shareholders called for
the election of directors; provided, however, that if less than 21 days notice
of such other meeting is given to shareholders, then nominations for directors
shall be mailed or delivered to the Chairman of First Western no later than the
close of business on the seventh day following the day on which such notice of
meeting was mailed. Nominations by shareholders shall contain the following
information to the extent known by the nominating shareholder: (i) the name and
address of the proposed nominee; (ii) the principal occupation of the proposed
nominee; (iii) the total number of shares of Common Stock to be voted for the
proposed nominee; (iv) the name and resident address of the nominating
shareholder; and (v) the number of shares of Common Stock held by the nominating
shareholder.

The Board, prior to the 1996 Annual Meeting, is currently divided into two
classes of five members each (1996 and 1998) and one class of four members
(1997). The term of office of one class expires each year. Nominees to the class
of directors whose term expires at each Annual Meeting are generally elected for
a three-year term. However, in the event the number of directors is changed, any
increase or decrease is to be so apportioned among the classes so as to maintain
the classes as nearly equal in number as possible. Any additional director of a
class shall hold office for a term which shall coincide with the term of such
class.

In February 1995, the Board adopted an amendment to the Bylaws which permits a
former President or Chairman to be nominated to the Board for a one-year term
without regard to any age limitation in the Bylaws. Section 2.3 of the Bylaws
generally requires retirement from the Board at the expiration of a director's
term after reaching age 70. In adopting the amendment, the Board recognizes that
a former President or Chairman of First Western would provide the experience,
expertise and historical continuity to First Western and would provide
significant and substantial value in continuing to be represented on the Board,
subject to election at each Annual Meeting of Shareholders that such person
continues to be nominated. John W. Sant, age 75, former Chairman, President and
Chief Executive Officer, is being nominated by the Board for an additional
one-year term to expire in 1997. At last year's Annual Meeting, Mr. Sant was
nominated for and reelected to the Board for a one-year term expiring in 1996.

The class whose term will expire as of the date of the 1996 Annual Meeting of
Shareholders consists of five directors, all of whom are nominees for
reelection. The Board has nominated four persons for election as directors for a
three-year term expiring in 1999--John W. Lehman, M.D., Thomas S. Mansell,
Richard C. McGill and Harold F. Reed, Jr. as continuing directors, and John W.
Sant as a continuing director for a one-year term expiring in 1997. Assuming the
election of these four nominees to the 1999 class, and Mr. Sant to the 1997
class, the 1997 and 1998 classes of directors will each consist of five members
and the 1999 class of directors will consist of four members.

Each nominee has advised First Western of his willingness and ability to serve
if elected. If however, prior to the election of directors at the 1996 Annual
Meeting, any of the nominees becomes unavailable or proves unable to serve for
any reason, proxies will be voted for the election of such other person or
persons as the Board of Directors may select to replace such nominee. MANAGEMENT
AND THE BOARD RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTORS.

The Articles of Incorporation of First Western provide that in all elections of
directors, each shareholder has the right to vote the number of shares owned by
him for as many persons as there are directors to be elected, or to cumulate
such votes and give one candidate as many votes as equals the number of
directors multiplied by the number of shares, or to distribute his total votes
among as many candidates as desired. Unless otherwise specified, execution of
the Proxy Card will confer discretionary authority to the persons named therein
as proxies to cumulate votes.

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<PAGE> 7

First Western is organized under the laws of the Commonwealth of Pennsylvania.
Pursuant to the provisions of the Pennsylvania Business Corporation Law of 1988,
as amended, the affirmative vote of a plurality of the votes cast by the
shareholders at an annual meeting of a corporation is required to elect the
directors of that corporation. Accordingly, abstentions and broker non-votes
have no effect on the outcome of the election of directors. Proxies solicited by
the Board of Directors will be voted in favor of the nominees for directors
unless otherwise indicated thereon.

The following tables set forth certain information about the nominees for
election as directors and about the continuing directors of First Western. The
information includes the number of shares of Common Stock which each of them
owned beneficially as of January 31, 1996, and the percentage which those shares
represented of the total outstanding Common Stock in any instance where the
percentage equaled or exceeded one percent. Each nominee or director has been
engaged in the principal occupation listed for five years or more, except as
otherwise indicated in the table. Except as noted below, there are no family
relationships among current directors, nominees for directors, executive
officers or nominees for executive officers of either First Western or its
subsidiaries.

NOMINEES FOR DIRECTORS WHOSE TERMS WILL EXPIRE IN 1999

<TABLE>
<CAPTION>
SHARES OF PERCENT
COMMON STOCK OWNED
NAME, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE BENEFICIALLY (IF 1%
DURING PAST FIVE YEARS AND DIRECTORSHIPS (1) AGE (1) OWNED(2) OR MORE)
- -------------------------------------------------- ---------- ------------ --------
<S> <C> <C> <C>
John W. Lehman, M.D. 63 44,680 --
Physician, Beaver Valley Orthopedics
Association; Director, FW Bank; Member of the
Audit Committee of First Western; Director of
First Western since 1986(3)
Thomas S. Mansell 56 62,872(4)(5) --
Senior Vice President, Assistant Secretary and
Legal Counsel of First Western; Director, Trust
Services; Director of First Western since 1990
Richard C. McGill 59 37,567 --
Managing Partner, McGill, Power, Bell and Co.,
Certified Public Accountants; Director, FW
Savings; Member of the Audit and Loan Review
Committees of First Western; Director of First
Western since 1990(3)
Harold F. Reed, Jr. 68 31,308 --
Partner, Reed, Luce, Tosh, McGregor and Wolford
(law firm); Director, Tuscarora Incorporated
(manufacturer of custom molded products);
Chairman, Trust Services and Director, FW Bank;
Member of the Executive, Compensation and
Asset/Liability Committees of First Western;
Director of First Western since 1986(3)
</TABLE>

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<PAGE> 8

NOMINEE FOR DIRECTOR WHOSE TERM WILL EXPIRE IN 1997

CONTINUING DIRECTORS WHOSE TERMS WILL EXPIRE IN 1997

<TABLE>
<CAPTION>
SHARES OF PERCENT
COMMON STOCK OWNED
NAME, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE BENEFICIALLY (IF 1%
DURING PAST FIVE YEARS AND DIRECTORSHIPS (1) AGE (1) OWNED(2) OR MORE)
- ------------------------------------------------- ---------- ------------ --------
<S> <C> <C> <C>
James M. Campbell 52 33,276(7) --
President, Shenango Steel Buildings, Inc.
(steel fabrication company); Director, FW
Savings; Member of the Executive and
Compensation Committees of First Western;
Director of First Western since 1990(3)
Floyd H. McElwain 49 5,582 --
President, McElwain Oldsmobile-Cadillac, Inc.;
Chairman of the Audit Committee of First
Western; Director of First Western since 1990
John R. McKinley 44 67,086 --
President, Remington's Restaurant Group
(restaurant company); Chairman, First Western
since April 1995; Vice Chairman, 1992 through
1995; Chairman, FW Bank, and Director, FW
Savings and Trust Services; Chairman of the
Executive, Compensation and Loan Review
Committees and Member of the Asset/Liability
Committee of First Western; Director of First
Western since 1986
Thomas J. O'Shane 48 121,858(8) 1.53%
President and Chief Executive Officer, First
Western; Director, Nobel Insurance Limited;
Director, Federal Reserve Bank of
Cleveland-Pittsburgh Branch; Chairman, FW
Savings and Director, FW Bank and Trust
Services; Chairman, Asset/Liability Committee
and Member of the Executive Committee of First
Western; Director of First Western since 1988
</TABLE>

-6-
<PAGE> 9

CONTINUING DIRECTORS WHOSE TERMS WILL EXPIRE IN 1998

<TABLE>
<CAPTION>
SHARES OF PERCENT
COMMON STOCK OWNED
NAME, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE BENEFICIALLY (IF 1%
DURING PAST FIVE YEARS AND DIRECTORSHIPS (1) AGE (1) OWNED(2) OR MORE)
- ------------------------------------------------- ---------- ------------ --------
<S> <C> <C> <C>
Wendell H. Boyd 56 6,838 --
Partner, D.M. Boyd Co. (manufacturer of
modified soils for golf course industry);
Member of the Audit Committee of First Western;
Director of First Western since 1995
Robert N. Chambers 69 38,328 --
Retired; Director, FW Bank; Member of the
Executive, Compensation and Asset/Liability
Committees of First Western; Director of First
Western since 1962(3)
Robert C. Duvall 53 15,984(9) --
Vice President of Finance, Wampum Hardware Co.
(explosives distributor for the blasting
industry); Director, Nobel Insurance Limited;
Officer and Director of IRECO Midwest, Inc.
(affiliated with Wampum Hardware Co.); Member
of the Asset/Liability Committee of First
Western; Director of First Western since 1995
Louis J. Kasing, Jr. 67 5,748 --
President, Kasing Auto Sales, Inc.; Member of
the Asset/Liability Committee of First Western;
Director of First Western since 1990
John P. O'Leary, Jr. 49 3,991 --
President and Chief Executive Officer,
Tuscarora Incorporated (manufacturer of custom
molded products); Director, Matthews
International; Member of the Executive and
Compensation Committees of First Western;
Director of First Western since 1992
</TABLE>

- ---------

<TABLE>
<C> <S>
(1) As of January 31, 1996.
(2) Includes shares owned by immediate families (spouses, minor children and relatives sharing
the same home) of the respective persons and shares held in the First Western Bancorp, Inc.
401(k) Profit-Sharing and Stock Bonus Plan or the First Western Bancorp, Inc. Deferred
Compensation Plan for Directors.
(3) Years served as a director of First Western include years served as director of FW Bank or
its predecessor. Years served as a director of banks acquired by First Western are included
from the dates such institutions were acquired by First Western.
(4) Thomas S. Mansell disclaims beneficial ownership of 2,114 shares owned by his spouse and
his children which are included in the total shares indicated.
(5) Includes options to purchase 19,903 shares of Common Stock which are exercisable within 60
days of January 31, 1996.
(6) John W. Sant is the uncle of Stephen R. Sant, President and Chief Executive Officer of FW
Bank and Senior Vice President-Retail Banking of First Western.
(7) Includes 658 shares held beneficially in the name of Shenango Steel Buildings, Inc., with
authority to vote such shares.
</TABLE>

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<PAGE> 10

<TABLE>
<C> <S>
(8) Includes options to purchase 69,806 shares of Common Stock which are exercisable within 60
days of January 31, 1996.
(9) Includes 13,620 shares held beneficially in the name of Wampum Hardware Co., with authority
to vote such shares.
</TABLE>

All directors and officers of First Western as a group (25 persons) owned
beneficially 740,949 shares of Common Stock of First Western (including options
to acquire 213,437 shares which are exercisable within 60 days of January 31,
1996), or 9.30% of the 7,964,704 shares outstanding and options which are
exercisable within 60 days of January 31, 1996.

MEETINGS AND COMMITTEES

The Board of Directors of First Western met 7 times in 1995. All incumbent
directors named above attended 75% or more of the aggregate number of Board of
Directors meetings and, if applicable to their service, committee meetings held
in 1995, except for Harold F. Reed, Jr., John P. O'Leary, Jr., and John W.
Lehman, M.D. The Board of Directors has an Executive Committee, a Compensation
Committee and an Audit Committee. The Board has no Nominating Committee, but
either the Executive Committee or the full Board serves in such capacity. The
Executive and Compensation Committees met three times in 1995. The Compensation
Committee is comprised of John R. McKinley (Chairman), James M. Campbell, Robert
N. Chambers, John P. O'Leary, Jr., Harold F. Reed, Jr., and John W. Sant. The
members of the Compensation Committee plus Mr. O'Shane constitute the Executive
Committee, with Mr. McKinley serving as Chairman.

The Audit Committee is comprised solely of independent directors, and for 1995,
included Floyd H. McElwain (Chairman), Wendell H. Boyd, John W. Lehman, and
Richard C. McGill. The Audit Committee's duties include, but are not limited to,
engaging and terminating independent auditors and approving fees charged,
reviewing the audit plan, the results of the auditing engagement, any
disagreements with management, their letter of recommendations and the adequacy
of internal accounting controls for First Western, and supervising the internal
audit function. First Western's internal audit department reports to the Audit
Committee. The Audit Committee met five times in 1995.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS

Mr. John R. McKinley, Chairman of First Western is also Chairman of the
Executive and Compensation Committees. Mr. John W. Sant was formerly Chairman,
President and Chief Executive Officer of First Western and is a member of the
Executive and Compensation Committees. Messrs. Sant and McKinley previously
entered into consulting arrangements with First Western, which were discontinued
in September 1995. Mr. Harold F. Reed, Jr., a member of the Executive and
Compensation Committees, is Chairman of Trust Services. Mr. Reed is also a
director of Tuscarora Incorporated and is a member of the Compensation Committee
of Tuscarora Incorporated. Mr. Reed was previously party to an agreement with
Trust Services which is described below under "--Directors Compensation." Mr.
John P. O'Leary, Jr. is a director of First Western and a member of the
Compensation Committee and is President and Chief Executive Officer and a
director of Tuscarora Incorporated. Mr. Thomas J. O'Shane, President and Chief
Executive Officer of First Western, is a director and a member of the
Compensation Committee of Nobel Insurance Limited. Mr. Robert C. Duvall, a
director of Nobel Insurance Limited, is also a director of First Western.

DIRECTORS' COMPENSATION

Directors of First Western who are not employees of First Western or its
subsidiaries receive $750 for each meeting of the Board of Directors attended
and $350 for each committee meeting attended, with the chairperson of each
committee receiving $700 for each committee meeting attended. An annual retainer
of $3,000 is currently paid to all Board members.

Directors of FW Bank and FW Savings who are not employees of First Western or
its subsidiaries receive $400 for each Board meeting attended and $350 for each
committee meeting attended, with the chairperson of each committee receiving
$700 for each committee meeting attended. An annual retainer of $2,400 per
member is also paid. The law firm of Reed, Luce, Tosh, McGregor and Wolford, of
which Harold F. Reed, Jr., a director, is

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<PAGE> 11

a partner, served as an outside legal counsel for FW Bank, for which such firm
received a retainer of $20,000 plus fees for special legal work on an as-billed
basis in 1995.

Directors of Trust Services who are not employees of First Western or its
subsidiaries receive $300 for each Board meeting attended and $250 for each
committee meeting attended, with the chairperson of each committee receiving
$500 for each committee meeting attended. An annual retainer of $2,400 per
member is also paid. Harold F. Reed, Jr. received fees totalling $20,000 in
1995, under a renewable annual agreement as Chairman of Trust Services, in lieu
of any other Trust Services director fees. As of January 1, 1996, this
arrangement was discontinued and Mr. Reed will receive normal director fees,
including a fee as Chairman of the Trust Services Executive Committee of $500
per meeting and the annual board retainer of $2,400.

All Directors of First Western and/or its subsidiaries may defer the receipt of
their fees, according to the terms of the First Western Bancorp, Inc. Deferred
Compensation Plan for Directors, until the earlier of their retirement from
First Western and/or a subsidiary board or their death. The director may choose
to have deferred fees accrued with interest credited at market rates, or to have
such fees, plus prior plan balances, funded through a grantor trust agreement,
with Trust Services serving as trustee, and invested in First Western Common
Stock.

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<PAGE> 12

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION

The following table sets forth the compensation for services rendered during the
years ended December 31, 1995, 1994 and 1993 paid by First Western or its
subsidiaries to the Chief Executive Officer and the four other most highly
compensated executive officers of First Western whose annual salary and bonus
exceeded $100,000 for the year ended December 31, 1995.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------- OTHER
YEAR ENDED ANNUAL ALL OTHER COMMON STOCK
DECEMBER SALARY BONUS COMPENSATION COMPENSATION OWNERSHIP
NAME, AGE AND PRINCIPAL POSITION (1) 31 (2) (3) (4) (5) (1), (6), (7)
- -------------------------------------- ---------- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas J. O'Shane (48)
President and Chief Executive 1995 $266,500 $119,925 $ -- $12,724 121,858
Officer, First Western 1994 260,000 122,850 -- 14,952
1993 225,000 89,424 35,862 21,006
Robert H. Young (39)
Senior Vice President-Finance, 1995 130,800 41,312 -- 12,724 21,080
Secretary and Treasurer, 1994 128,000 39,375 -- 14,952
First Western 1993 101,380 30,229 -- 14,002
Stephen R. Sant (49)
President and Chief 1995 128,100 40,659 -- 12,724 41,608
Executive Officer, 1994 125,000 37,500 -- 14,952
FW Bank and Senior Vice 1993 116,532 33,911 -- 15,920
President-Retail Banking, First
Western
Robert E. Cimini (49)
Senior Vice President-Consumer 1995 122,000 37,515 -- 12,724 40,431
Lending and Marketing, First Western 1994 119,000 37,485 -- 14,952
1993 109,650 31,908 -- 14,997
John A. Zercher (43)
Senior Vice President-Operations and 1995 99,600 32,868 -- 11,192 36,135
Information Systems, First Western 1994 97,200 30,618 -- 12,679
1993 90,000 27,540 -- 12,190
</TABLE>

- ---------

(1) As of January 31, 1996.

(2) Includes salary only. Officers who are also Directors received no
compensation for acting as Directors or for attendance at Committee
meetings in 1995.

(3) Includes payments under the Incentive Compensation Plan, which are made in
cash as soon as practicable after the close of the fiscal year. Payments to
executive officers listed in the table above for 1995 included the amount
of bonus accrued for 1995 as determined in January 1996, and excluded the
bonus paid in January 1995 for 1994.

(4) Noncash compensation, which in the case of each individual for each of the
three years in the table, other than Mr. O'Shane for the year ended
December 31, 1993, did not exceed the lesser of $50,000 or 10% of total
compensation. For the year ended December 31, 1993, Mr. O'Shane received
reimbursement of country club membership fees in the amount of $33,679 and
was provided with an automobile at a value of $2,183.

(5) Includes 401(k) Profit-Sharing and Stock Bonus Plan contributions only,
which includes a total of 148 shares (including forfeitures) of Common
Stock with a market value of $4,070 as of December 31, 1995. Each
individual noted above received 37 shares, except Mr. Zercher, who received
33 shares.

(6) Includes shares owned by immediate families (spouses, minor children and
relatives sharing the same home) of the respective persons and shares held
in the 401(k) Profit-Sharing and Stock Bonus Plan.

(7) Includes options to purchase shares of Common Stock which are presently
exercisable or exercisable within 60 days of January 31, 1996 as follows:
69,806 shares, Mr. O'Shane; 14,856 shares, Mr. Young; 31,166 shares, Mr.
Sant; 21,058 shares, Mr. Cimini; and 12,896 shares, Mr. Zercher.

-10-
<PAGE> 13

INCENTIVE COMPENSATION PLAN

The Incentive Compensation Plan (the "Incentive Plan") is administered by the
Compensation Committee of the Board of Directors and provides for annual cash
bonus payments to all First Western and subsidiary officers generally at the
assistant vice president or branch officer level and above. Cash bonus payments
are based on the achievement of predetermined corporate, departmental, and
individual performance goals. For a description of the Incentive Plan, see
"Compensation Committee Report on Executive Compensation."

401(K) PROFIT-SHARING AND STOCK BONUS PLAN

The First Western Bancorp, Inc. 401(k) Profit-Sharing and Stock Bonus Plan has
the following features: (1) First Western or its subsidiaries makes
profit-sharing type (discretionary) contributions for the benefit of its
employees, (2) there is a cash or deferred (401(k)) arrangement which permits
contributions to be made by employees on an elective, pre-tax basis, (3) First
Western or its subsidiaries matches the 401(k) contributions for its employees
at the rate of $.50 for each $1.00 contributed by an employee, up to a maximum
of 4% of an employee's salary, and (4) there are employee stock ownership plan
("ESOP") provisions which enable the plan to borrow money in order to acquire
stock of First Western.

Any full-time employee of First Western or its subsidiaries who is at least 19
years old and who completes at least 1,000 hours of service within his first
twelve months of employment is eligible to participate. Profit-sharing type and
ESOP contributions are subject to a vesting schedule. Employees are 100% vested
after attaining five years of service. Employee 401(k) and matching
contributions are 100% vested immediately.

Profit-sharing type contributions are made by First Western and each subsidiary
and are allocated to all participating employees based upon the ratio of each
employee's compensation to the total compensation of all participants eligible
to share in the allocation. Contributions, including the cost of ESOP
contributions and 401(k) matching contributions, were determined for all
employees based on a percentage of First Western's pre-tax net income for 1995.

A total of 2,739 shares (excluding forfeitures) were allocated under the ESOP to
participating employees for 1995 based upon the ratio of each employee's
earnings to the total earnings of all participating employees of First Western.
There are no remaining unallocated shares held by the ESOP as of December 31,
1995.

PENSION PLAN

The First Western Bancorp, Inc. Pension Plan (the "Pension Plan") covers all
full-time employees of First Western and its subsidiaries who have completed
1,000 hours of service within one calendar year and who have attained the age of
21. The Pension Plan provides for normal retirement at age 65, and early
retirement at age 55. Retirement benefits for normal retirement are 1% of the
employee's average monthly earnings (5 highest years divided by 60) times the
years of credited service. Monthly earnings are defined as current earnings
including any elective employee deferrals. Employees who terminate their
employment with 5 or more years of credited service have a vested right to
receive a pension upon normal retirement at age 65. Employees who terminate
their employment with 10 or more years of credited service may also elect to
receive their pension upon early retirement at age 55. The Pension Plan provides
for one-time early retirement benefits for certain eligible employees. These
one-time benefits included adding years of service, eliminating the normal early
retirement penalty and providing an additional supplemental benefit for a
limited period of time. Certain highly compensated employees have similar
one-time early retirement benefits provided to them under a special
non-qualified plan. None of the officers named in the summary compensation table
are participants in this early retirement program. Benefits which accrued to
qualified employees of companies previously acquired by First Western have been
grandfathered through the dates at which such pension plans were merged with the
Pension Plan and may result in higher benefits than those reported in the
following table for certain individuals who have years of service with such
companies. Directors who are not also employees do not receive retirement
benefits. Retirement benefits under the Pension Plan are payable to participants
in the form of a joint and survivor annuity for married participants who do not
elect otherwise and in the form of a single annuity for all other participants.

The following table shows annual pension benefits payable upon retirement at age
65, in various remuneration and years-of-service classifications, assuming the
election of a retirement allowance payable as a straight life

-11-
<PAGE> 14

annuity with retirement on January 1, 1996. Remuneration for these purposes is
the same as the total of salary and bonus as disclosed in the Summary
Compensation Table. Annual benefits payable are not subject to any deduction for
Social Security or other offset amounts.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------------
REMUNERATION(1)(2) 15 20 25 30 35
- ------------------------------------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000............................. $18,750 $25,000 $ 31,250 $ 37,500 $ 43,750
150,000............................. 22,500 30,000 37,500 45,000 52,500
175,000............................. 26,250 35,000 43,750 52,500 61,250
200,000............................. 30,000 40,000 50,000 60,000 70,000
225,000............................. 33,750 45,000 56,250 67,500 78,750
250,000............................. 37,500 50,000 62,500 75,000 87,500
300,000............................. 45,000 60,000 75,000 90,000 105,000
350,000............................. 52,500 70,000 87,500 105,000 122,500
400,000............................. 60,000 80,000 100,000 120,000 140,000
450,000............................. 67,500 90,000 112,500 135,000 157,500
500,000............................. 75,000 100,000 125,000 150,000 175,000
</TABLE>

- ---------

(1) Section 401(a)(17) of the Internal Revenue Code contains an annual limit on
the amount of compensation covered for purposes of accruing benefits under
the Pension Plan. For 1995, this limit was $150,000. Since such limit is
subject to future adjustments, the benefit amounts shown in the table have
been calculated without regard to this limit.

(2) Thomas J. O'Shane, Robert H. Young, Stephen R. Sant, Robert E. Cimini and
John A. Zercher have 23, 9, 5, 21 and 23 whole years of service under the
plan, respectively, as of January 31, 1996. All such persons are fully
vested in their accrued benefits as of January 31, 1996.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Effective January 1, 1996, First Western adopted a Supplemental Executive
Retirement Plan (the "SERP"), which is a nonqualified defined contribution plan.
The SERP is intended to provide deferred compensation for certain highly
compensated employees as described in Section 401(a)(1) of the Employment
Retirement Income Security Act of 1974, as amended.

The Compensation Committee administers the SERP, determines eligible
participants, the amount of any contribution to be made on an annual basis to a
grantor trust established for the benefit of the participant, the occurrence of
an event giving rise to the payment of benefits and such other matters as are
necessary to interpret the SERP and related trust.

As of January 1996, the Committee determined that First Western would make a
contribution on behalf of Thomas J. O'Shane in the amount of $36,600 in
accordance with a formula intended to reflect pension benefits in excess of
current legislative limits which Mr. O'Shane could have accrued except for such
limits under First Western's qualified retirement plan. Such amount is not
included in the Summary Compensation Table for 1995. The Committee has not yet
established contributions for other eligible participants under the SERP. There
is no guaranteed benefit provided by the SERP, and the ultimate benefit provided
by the SERP will depend on the Committee's annual determination of First
Western's discretionary contribution and actual earnings of the participant's
individual account as determined under the relative trust agreement.

OPTION PLAN

The Option Plan authorizes the granting of stock options to purchase up to
566,335 (including an additional 225,000 shares authorized under the Plan
amendment approved April 18, 1995) shares of Common Stock (as adjusted for stock
dividends and splits) to eligible officers or key employees at an exercise price
of not less

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<PAGE> 15

than the fair market value on the date the options are granted (or 110% of fair
market value for a ten percent or greater shareholder).

Unless otherwise designated by the Board of Directors, the Option Plan is
administered by the Compensation Committee of the Board of Directors (the
"Committee"). The Committee has the sole discretion to grant options, to set the
price to be paid for the Common Stock subject to the option, to prescribe the
terms of and conditions upon any such award of options, to determine the
exercise period, to adopt, amend and rescind the rules and regulations of the
Option Plan, to interpret the Option Plan and option agreements with
participants, and to make all other determinations and take all other actions
necessary or advisable for the implementation and administration of the Option
Plan. In determining the amount, form, limitations and other terms and
conditions of an award, the Committee will consider the functions and
responsibility of the awardee, his or her potential contributions to
profitability, sound growth and shareholder value, and such other facts as the
Committee may deem relevant. No more than 75,000 shares can be subject to
options granted to any one employee during any calendar year. The Committee may
grant options under the Option Plan to any officer or key employee of First
Western or any subsidiary of First Western.

In the discretion of the Committee, options granted under the Option Plan may be
intended to qualify as incentive stock options within the meaning of Section 422
of the Internal Revenue Code or may be intended to be options which do not so
qualify (i.e., nonqualified stock options). Unless the Committee determines
otherwise, no option may be exercised prior to six months following the date on
which such option was granted. The option price may be paid either in cash,
whole shares of Common Stock already owned by the optionee (valued at fair
market value on the day immediately preceding the exercise date), a combination
of cash and Common Stock or other consideration deemed acceptable by the
Committee.

If an optionee ceases to be employed by First Western for any reason other than
retirement, disability or death, unless such termination is with permission of
First Western or follows a "change in control" event described below, such
optionee's options automatically terminate on such date unless the Committee
determines otherwise. Options will become immediately exercisable upon the
occurrence of a change in control, and options will remain exercisable for at
least three months following termination of employment if such termination
occurs after a change in control. The Committee may include in a stock option
agreement such terms as it deems advisable with respect to retirement,
termination or disability; provided, however, that the exercise period after (i)
retirement or termination with consent of First Western may not exceed three
months from the date of such event and (ii) disability may not exceed twelve
months. In no event, however, may an option be exercised after the expiration
date of such option fixed in the applicable option agreement. If an optionee
engages in competition with First Western, the Committee may terminate all of
such optionee's outstanding options.

The Board of Directors may, without further shareholder approval, terminate or
amend the Option Plan in any way; however, any amendment that would materially
increase the rights of a grantee of an option must be approved by the
shareholders. Termination or amendment of the Option Plan may not adversely
affect an optionee's rights under an award previously granted.

In 1991, options to purchase an aggregate of 99,224 shares of Common Stock (as
adjusted for stock dividends and splits) were granted to eligible officers which
remain outstanding as of January 31, 1996. On January 16, 1995, options to
purchase an aggregate of 150,000 shares of Common Stock were granted to current
eligible officers which also remain outstanding as of January 31, 1996. Options
to purchase 105,430 shares of Common Stock (as adjusted for stock dividends and
splits) have been exercised or cancelled as of January 31, 1996. All of the 1991
option grants and 105,000 of the 1995 option grants are incentive stock options.
The option period may not exceed five years from the date of grant for a ten
percent or greater shareholder and ten years from the date of grant for all
other shareholders.

OPTION GRANTS

The following table sets forth as to persons named in the Summary Compensation
Table additional information with respect to stock options granted during 1995,
including the potential realizable value from the stock options assuming the
options are exercised at the end of the option term and assuming 5% and 10%
annual rates of stock price appreciation during the option term:

-13-
<PAGE> 16

<TABLE>
<CAPTION>
OPTION GRANTS IN 1995 POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE OF ASSUMED
------------------------------------------------------- ANNUAL
NUMBER OF % OF TOTAL EXERCISE RATES OF STOCK PRICE
SECURITIES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO PER OPTION TERM
OPTIONS GRANTED EMPLOYEES SHARE EXPIRATION ----------------------
NAME (1), (2) IN 1995 ($/SHARE) DATE 5%(3) 10%(3)
- ----------------------- --------------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Thomas J. O'Shane 45,000 30.0% $20.00 1/16/05 $566,100 $1,434,150
Robert H. Young 15,000 10.0% 20.00 1/16/05 188,700 478,050
Stephen R. Sant 15,000 10.0% 20.00 1/16/05 188,700 478,050
Robert E. Cimini 15,000 10.0% 20.00 1/16/05 188,700 478,050
John A. Zercher 11,250 7.5% 20.00 1/16/05 141,525 358,538
</TABLE>

- ---------

(1) As adjusted for November 17, 1995 three-for-two stock split, effected in the
form of a 50% stock dividend.

(2) The stock options for Mr. O'Shane were granted on January 16, 1995 and
became exercisable on July 16, 1995, and are intended to be nonqualified
stock options. For the other named officers, options began vesting on July
16, 1995 and will be fully vested within three years. These options are
intended to be incentive stock options. The exercise price per share, as
adjusted for the November 17, 1995 stock split, is $20.00 per share, which
was greater than the fair market value of the Common Stock at the date of
grant of $18.25 per share. Fair market value was the average of the high and
low sales prices of the Common Stock on the date of grant on the Nasdaq
Stock Market, as adjusted for the recent stock split. The exercise price may
be paid in cash, in shares of Common Stock, or a combination of cash and
such shares.

(3) The 5% and 10% assumed annual rates of stock price appreciation do not
reflect actual changes in the fair market value of the Common Stock since
the date of grant. The information in the table is provided in accordance
with the rules of the Securities and Exchange Commission regarding the
disclosure of compensation of executive officers, and is not intended to
forecast possible future stock price appreciation, if any.

AGGREGATED OPTION EXERCISES IN 1995 AND YEAR-END OPTION VALUES

The following table sets forth the aggregated option exercises during the year
ended December 31, 1995, and the year-end value of options held by each of the
named executive officers of First Western in the Summary Compensation Table.

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT YEAR-END AT YEAR-END
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED (1) UNEXERCISABLE (#) UNEXERCISABLE ($)(2)
- ----------------------------------------- ------------ ------------------- ----------------------
<S> <C> <C> <C> <C>
Thomas J. O'Shane 15,857 $295,799 69,806/12,402 $ 852,225/$257,342
Robert H. Young -- -- 14,856/ 6,345 193,584/ 47,588
Stephen R. Sant -- -- 31,166/ 8,640 562,425/ 64,800
Robert E. Cimini -- -- 21,058/ 6,345 322,275/ 47,588
John A. Zercher -- -- 12,896/ 1,455 137,809/ 10,913
</TABLE>

- ---------

(1) Value realized for options exercised but not sold was determined based on
the average of the high and low price of the Common Stock on the day prior
to exercise minus the exercise price, multiplied by the number of shares
acquired. If shares were sold simultaneously upon exercise, value realized
was determined based upon the sales price.

(2) The value of unexercised in-the-money options is calculated by determining
the difference between the fair market value of the securities underlying
the options at year-end ($27.50 per share based on the closing price of the
Common Stock at year-end) and the exercise price of the options ($6.75 per
share

-14-
<PAGE> 17

for 1991-granted options and $20.00 per share for 1995-granted options),
multiplied by the number of underlying securities.

CONSULTING ARRANGEMENTS

Consulting agreements previously entered into by First Western with John R.
McKinley and John W. Sant were terminated in September 1995. Under these
agreements, prior to their termination, Mr. McKinley received an annual
consulting fee of $41,000 plus director fees, and Mr. Sant received an annual
consulting fee of $20,000 plus director fees. During 1995 Mr. McKinley received
$20,500 and Mr. Sant received $22,900 under these arrangements (not including
normal director fees).

CHANGE IN CONTROL AGREEMENTS

Certain executive officers of the Company, including those named in the Summary
Compensation Table (Messrs. O'Shane, Young and Sant), have entered into change
in control agreements with the Company (the "Agreements"). The Agreements
operate only upon the occurrence of a "change in control" as described below.
Absent a "change in control," the Agreements do not require the Company to
retain the executives in its employ or to pay them any specified level of
compensation or benefits.

Each Agreement provides that if a change in control of the Company or any of its
bank subsidiaries (collectively, the "Subsidiary") occurs, the Company and the
Subsidiary will be obligated to continue to employ the executive during the time
period starting upon the occurrence of a change in control and ending three
years thereafter (or, if earlier, at the executive's early retirement date or
attainment of age 65) (the "Term of Employment"). The Agreement specifies the
compensation and benefits required to be provided to the executive during the
Term of Employment.

If, during the Term of Employment, the executive is discharged by the Company or
the Subsidiary without cause or resigns for good reason, then the executive
shall receive within 30 days of the date of termination a lump sum payment equal
to the present value of monthly payments, calculated using an appropriate
discount rate, from the date of termination until the earlier of (a) the date
that is 36 months after the change in control and (b) the executive's attainment
of age 65 (the "Calculation Period"), of (i) salary at a rate equal to the
highest salary in effect during the 12 months immediately preceding the change
in control or the date of termination and (ii) bonus at a rate equal to the
greater of the annual bonuses received during the three calendar years
immediately preceding the change in control or the date of termination.

If the executive is terminated during the Term of Employment for any reason
other than cause, then until the executive reaches or would have reached normal
retirement age, (a) the executive and/or his spouse will continue to receive
insurance and health care benefits equivalent to those in effect immediately
prior to the date of termination or the date of the change in control (whichever
is more favorable), subject to reduction to avoid duplication with benefits of a
subsequent employer, (b) at and after normal retirement age, health and life
insurance benefits equivalent to those afforded retired executives under
programs in effect immediately prior to the date of termination or the date of
the change in control (whichever is more favorable) and (c) the executive will
also receive supplemental retirement benefits equal to the extra pension
benefits he would have earned had employment been continued for the entire
Calculation Period.

Generally, and subject to certain exceptions, a "change in control" shall be
deemed to have occurred if (a) final regulatory approval is obtained for any
party to acquire securities of the Company and/or the Subsidiary representing
20% or more of the combined voting power of the Company's or the Subsidiary's
then outstanding securities; (b) there is a significant change in the Company's
or the Subsidiary's board of directors not approved by the incumbent board; or
(c) final regulatory approval is obtained for a plan of complete liquidation or
dissolution or sale of all or substantially all of the Company's or the
Subsidiary's assets or certain significant reorganizations, mergers and similar
transactions involving the Company or the Subsidiary.

-15-
<PAGE> 18

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors of First Western (the
"Committee") determines the specific forms and levels of compensation for the
executive and other officers of First Western and administers the compensation
plans of First Western, subject to the approval of the Board of Directors. The
Committee is comprised of six members, all of whom are non-employee directors.

COMPENSATION POLICIES

The compensation policies established and administered by the Committee are
intended to provide compensation to First Western's executive officers at
competitive levels in order to attract and retain qualified executive officers,
to award executive officers based on First Western's annual and long-term
performance, and to enhance shareholder value. Executive compensation is
generally set at levels that the Committee believes to be within the mid-range
for executive compensation for bank holding companies which are comparable in
size, geographic location and performance to First Western. The Committee views
stock options and stock ownership by executive officers as important components
of performance-based compensation as the value of stock options directly relates
to the price of the Common Stock of First Western and provides executive
officers with an additional incentive to enhance shareholder value. In January
1995 the Committee adopted a policy with respect to executive compensation under
Section 162(m) of the Internal Revenue Code. The policy states that, in general,
First Western will not adopt plans or pay compensation to its key executives in
excess of the deductible limits to First Western specified under Section 162(m);
however, it is recognized there may be circumstances in which it is necessary or
appropriate to pay compensation in excess of such limits and First Western
expressly reserves the right to compensate executives in a manner it deems
appropriate.

ELEMENTS OF EXECUTIVE COMPENSATION

Compensation of the executive officers of First Western and its subsidiaries
consists of the following three elements: base salary, cash payments under the
Incentive Plan and stock option awards under the Option Plan.

Base Salary. The Committee establishes base salaries for executive and other
officers of First Western by utilizing salary data obtained from a variety of
sources, including outside consultants and publicly available information. The
Committee undertakes an annual review of the base salary level of each executive
officer of First Western, including the Chief Executive Officer. It is the
intention of the Committee that the executive officers of First Western be paid
base salaries that are approximately in the mid-range of base salaries for
executive officers at bank holding companies comparable in size, geographic
location and performance to First Western. The Committee considers a variety of
factors in determining base salaries for individual executive officers,
including among others, the level of duties and responsibilities inherent in
each individual's position with First Western and the individual's performance
of these duties, First Western's financial performance, general economic
conditions and compensation trends in bank holding companies.

Incentive Plan. The Incentive Plan is intended to provide executive and other
officers of First Western and its subsidiaries with compensation tied to the
achievement of certain corporate, departmental and individual performance goals,
as approved by the Committee at the beginning of the year. If the goals
established by the Committee are achieved, the incentive award added to the base
salary paid is intended to provide to each executive officer total cash
compensation that year in approximately the mid-range of the upper half of total
cash compensation paid to executive officers at bank holding companies
comparable to First Western. If the goals established by the Committee are not
achieved, the incentive award may be reduced.

Corporate earnings goals, as measured by earnings per share, constitute a
significant component of each incentive award so that incentive awards are
directly dependent upon the achievement of corporate goals. The corporate
earnings component of an incentive award will be increased or reduced at a rate
equal to two and one-half times the percentage increase or shortfall, as the
case may be, in such goal. In addition to the corporate earnings goals,
individual goals for a particular year vary for each officer participating in
the Incentive Plan and are mainly based on the achievement of certain
predetermined departmental and individual goals for the particular fiscal year,
including among others, goals related to the following: the department's
operating budget; goals of the business unit in which the individual participant
is performing the majority of his duties;

-16-
<PAGE> 19

specific job-related goals; and individual performance. Past performance, peer
group performance and perceived future opportunities are considered when
establishing departmental and individual goals.

Incentive awards for each individual executive or other officer are determined
as a percentage of that individual's base salary. Such percentages vary with the
officer's position and responsibilities and range in amount from 10% to 45% of
base salary. The actual amount of each individual incentive award may be
modified by the Committee to recognize outstanding performance or additional
effort when certain goals may not have been achieved due to changing business
priorities or conditions, and also may be modified to reflect an unsatisfactory
performance by an individual despite the achievement of certain goals. No
payouts will be made to any participant if one or more of the following
conditions exist: (a) earnings of the Corporation are less than 60% of budgeted
earnings, (b) cash dividends are not at least equal to non-special cash
dividends paid in the prior year, or (c) the ratio of the allowance for possible
loan losses to nonaccrual loans is less than 85%. To further protect shareholder
interests, the aggregate amount of awards to all Plan Participants for a Plan
Year may not exceed 8% of First Western's pre-tax earnings. Incentive awards
earned, if any, are paid annually in cash as soon as practicable after the end
of each fiscal year.

Options. The grant of stock options is intended to provide long-term
performance-based compensation to the executive officers of First Western.
Options also are intended to provide executive officers with an incentive to
increase and promote shareholder value. Options have previously been granted to
individual executive officers of First Western based on the performance of each
individual and their contributions to First Western's long-term growth and
profitability. Options to purchase an aggregate of 155,042 shares of Common
Stock of First Western (as adjusted for stock dividends and splits) were granted
in 1991 to certain current executive officers of First Western. Options to
purchase 99,224 shares remain outstanding as of January 31, 1996. Additional
options to purchase 150,000 shares of Common Stock (as adjusted for stock
dividends and splits) have been granted under the Option Plan as of January 16,
1995 to certain key executives who are primarily responsible for earnings
performance and shareholder value. These options were granted with an option
price of $20.00 per share (as adjusted), which was higher than the fair market
value per share as of such date of $18.25 (as adjusted), with vesting terms of
six months to three years and a term of ten years. Options for 105,000 shares
are intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code and options for 45,000 shares are considered nonqualified
and are not meant to qualify as incentive stock options. The Committee will
continue to review compensation through stock options.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

The compensation of Thomas J. O'Shane, Chief Executive Officer of First Western,
is determined by the Committee based on the same criteria and elements of
compensation as the other executive officers of First Western. The Committee
believes that Mr. O'Shane's base salary of $266,500 for 1995 is consistent with
First Western's general compensation policies. The Committee believes that Mr.
O'Shane's current base salary is approximately at the mid-range of base salaries
for bank holding companies comparable to First Western, based on independent
compensation studies made available throughout the year to the Committee.

Incentive compensation is provided to Mr. O'Shane through his participation in
the Incentive Plan and is based on the achievement of specific performance goals
for a particular fiscal year as described above under "Incentive Plan." The
Committee may also modify an award under the Incentive Plan for Mr. O'Shane (or
any other executive officer) by considering additional factors believed to be
relevant in determining the incentive compensation of the Chief Executive
Officer for a particular fiscal year, such as the performance of other duties
that enhanced First Western's overall financial performance for a given year. A
significant portion of Mr. O'Shane's total compensation is dependent upon the
achievement of the various corporate and individual performance goals set under
the Incentive Plan, and thus, a significant portion of his total compensation is
at risk. Corporate and individual performance goals under the Incentive Plan for
fiscal 1995 were determined in February 1995. In January 1996, based on the
achievement of the goals under the Incentive Plan, the Committee determined that
Mr. O'Shane should receive an incentive award of $119,925 for fiscal 1995.

Mr. O'Shane participates in the Option Plan described above and was granted
options to purchase an aggregate of 74,418 shares of Common Stock of First
Western (as adjusted for stock dividends and splits) in 1991, of which 37,208
remain outstanding. On January 16, 1995, he was granted options to purchase an

-17-
<PAGE> 20

additional 45,000 shares of Common Stock, all of which are nonqualified and
which are exercisable after six months for any time up to ten years from the
date of grant at an exercise price of $20.00 per share. These options are
included in the total grant of 150,000 options to all executives noted above.
The grant of these options, along with the options granted to other executive
officers of First Western, is intended to provide Mr. O'Shane with a long-term
incentive to enhance and improve shareholder value.

The foregoing report has been furnished by the members of the Compensation
Committee of the Board of Directors.
John R. McKinley, Chairman
James M. Campbell
Robert N. Chambers
John P. O'Leary, Jr.
Harold F. Reed, Jr.
John W. Sant

SHAREHOLDER RETURN PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the cumulative
total shareholder return on the Common Stock against the cumulative total return
of the NASDAQ Composite Market (U.S. Companies) and NASDAQ Bank Stocks for the
period of five years from December 31, 1990 through December 29, 1995.

LOGO

<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
First Western Bancorp, Inc........... 100.0 158.5 313.1 321.7 312.9 477.6
NASDAQ Stock Market (US Companies)... 100.0 160.6 186.9 214.5 209.7 296.3
NASDAQ Bank Stocks................... 100.0 164.1 238.9 272.4 271.4 404.4
</TABLE>

The information in the graph was provided by The University of Chicago Graduate
School of Business--Center for Research in Security Prices. It assumes an
initial investment of $100 and reinvestment of dividends during the period
presented in the graph.

-18-
<PAGE> 21

TRANSACTIONS WITH DIRECTORS,
NOMINEES, OFFICERS AND ASSOCIATES

The following table lists the only known entity to the knowledge of the
management of First Western which owns of record or beneficially 5% or more of
the outstanding Common Stock (7,751,267 shares) as of January 31, 1996:

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
CLASS OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------- ------------------------------------ ---------- -------
<C> <S> <C> <C>
Common First Western Trust Services Company 722,688(1) 9.32%
101 East Washington Street
New Castle, Pennsylvania 16101
</TABLE>

- ---------

(1) Trust Services has sole voting power with respect to 155,115 shares and
shared voting power with respect to 2,835 shares and no voting power with
respect to 564,738 shares. Trust Services has sole investment power with
respect to 269,699 shares, shared investment power with respect to 40,408
shares, and no investment power with respect to 412,581 shares.

Certain directors, nominees and officers of First Western and its subsidiaries
and their associates were customers of the Banks during 1995. Transactions which
involved loans or commitments by the Banks were made in the ordinary course of
business and with substantially similar terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons, and did not involve more than normal risk of collectibility or
present other unfavorable features. Wilder Agriculture Products Co., Inc. has a
$350,000 line of credit and a $60,000 term loan with FW Bank, which were past
due as of March 8, 1996. Mr. Thomas S. Mansell, an officer and director of First
Western, is a minority shareholder of that company and has guaranteed its
indebtedness to FW Bank in an amount up to $85,000.

Under the federal securities laws, First Western's directors, its executive
officers, and any persons holding more than ten percent of the Common Stock are
required to report their initial ownership of the Common Stock and any
subsequent changes in that ownership to the Securities and Exchange Commission
and NASDAQ. Specific due dates for these reports have been established and First
Western is required to disclose in this proxy statement any failure to file by
those dates during or for 1995. All of these filing requirements were satisfied
during 1995, except that one report on Form 4 for each of Thomas J. O'Shane
(director and executive officer), Kathleen L. Lewis, Dean M. Gouin, Richard L.
Rausch, Kenneth J. Romig and Stephen R. Sant, all of whom are executive
officers, was filed one day late. In making the foregoing disclosure, First
Western has relied solely on representations of its directors and executive
officers and copies of the reports that they have filed with the Commission.

INDEPENDENT PUBLIC ACCOUNTANTS

Deloitte & Touche LLP served as independent public accountants for First Western
and its subsidiaries for the year ended December 31, 1995. The Board of
Directors, at its February 20, 1996 meeting, based upon an Audit Committee
recommendation, appointed Deloitte & Touche LLP, independent public accountants
to audit the consolidated financial statements of First Western and its
subsidiaries for the year ending December 31, 1996. Representatives of Deloitte
& Touche LLP will be present at the Annual Meeting and will be available to
respond to appropriate shareholder questions, and to make a statement if they
desire to do so.

ANNUAL REPORT ON FORM 10-K

UPON WRITTEN REQUEST TO ROBERT H. YOUNG, SECRETARY OF FIRST WESTERN (AT THE
ADDRESS SPECIFIED BELOW), BY ANY SHAREHOLDER WHOSE PROXY IS SOLICITED HEREBY,
FIRST WESTERN WILL FURNISH TO SUCH SHAREHOLDER WITHOUT CHARGE A COPY OF ITS 1995
ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
TOGETHER WITH CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES THERETO.

-19-
<PAGE> 22

SHAREHOLDER PROPOSALS

If any shareholder wishes to present a proposal at the 1997 Annual Meeting of
Shareholders, the proposal will be considered for inclusion in the Proxy
material only if received no later than November 16, 1996. Any such proposal
should be addressed to Robert H. Young, Secretary, P. O. Box 1488, New Castle,
PA 16103-1488.

ADDITIONAL INFORMATION

First Western knows of no other business to be presented at this time. If any
matters come before the meeting, the persons named in the Proxy will vote in
accordance with the recommendations of the Board. WE URGE YOU TO SIGN AND RETURN
THE ENCLOSED PROXY AS SOON AS POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING IN PERSON. If you do attend the meeting, you may then withdraw your
Proxy. In any event, you may revoke your Proxy prior to its exercise. The
revocation of a proxy will not be effective, however, until written notice of
the revocation has been given to the Secretary of First Western.

LOGO
Robert H. Young
Senior Vice President -
Finance,
Secretary and Treasurer

-20-
<PAGE> 23

DIRECTIONS TO THE NEW ENGLANDER
3009 WILMINGTON ROAD, NEW CASTLE, PA

South of New Castle

North on Route 60. Take the Mitchell Road exit. Proceed to stop light at Route
18. Turn right heading south on Route 18. Proceed approximately one mile and the
New Englander is on the right.

North of New Castle

South on Route 60. Take the Mitchell Road exit. Proceed to stop light at Route
18. Turn right heading south on Route 18. Proceed approximately one mile and the
New Englander is on the right.

East of New Castle

West on Route 422. Take the Route 422 bypass around New Castle. Proceed on Route
422 west bypass as it becomes Route 60 north. Take the Mitchell Road exit.
Proceed to stop light at Route 18. Turn right heading south on Route 18. Proceed
approximately one mile and the New Englander is on the right.

West of New Castle

Route 80 east to Route 60 south. Take the Mitchell Road exit. Proceed to stop
light at Route 18. Turn right heading south on Route 18. Proceed approximately
one mile and the New Englander is on the right.

East on Route 422 to Route 60 north. Take the Mitchell Road exit. Proceed to
stop light at Route 18. Turn right heading south on Route 18. Proceed
approximately one mile and the New Englander is on the right.

-21-
<PAGE> 24

APPENDIX A

FIRST WESTERN BANCORP, INC.
INCENTIVE STOCK OPTION PLAN FOR KEY OFFICERS
(AS AMENDED EFFECTIVE FEBRUARY 21, 1995)

<TABLE>
<S> <C>
I. PURPOSE
The purpose of this Incentive Stock Option Plan for Key Officers ("Plan") is to promote the
long range growth and profitability of First Western Bancorp, Inc. (the "Company") and to
enhance shareholder value by encouraging diligence, loyalty, and competence among key
employees and officers of the Company through offering to such employees the opportunity to
acquire shares of the Company's Common Stock and thus participate in the enhanced value
generated by their efforts.
II. DEFINITIONS
The following terms shall have the meaning shown unless the context clearly indicates
otherwise:
2.1 "Board of Directors" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as the same shall be amended from time
to time.
2.3 "Committee" means the plan administrator provided for in paragraph 3.1 of this Plan.
2.4 "Common Stock" means the common stock, currently of par value $5 per share, of the
Company, except as otherwise provided in paragraph 8.8 of the Plan.
"Fair Market Value" as of any date means the fair market value of one share of Common
2.5 Stock, as determined by the Committee in good faith based on (a) the average between
the high and the low prices of actual sales of Common Stock on such date as reported on
any stock exchange on which the Common Stock is then listed or any quotation system
approved by the National Association of Securities Dealers then reporting sales of
Common Stock, or if no actual sales of Common Stock are reported on such date then (b)
the average of the bid and asked prices for Common Stock as reported as of such date on
any stock exchange on which the Common Stock is then listed or any quotation system
approved by the National Association of Securities Dealers then reporting such bid and
asked prices or, of there be no recent bid or asked prices then (c) as determined by
the Committee in good faith pursuant to the principles of Section 422 of the Code and
Regulations issued thereunder based on trading information, appraisals, or other
financial data as the Committee deems to be relevant.
2.6 "ISOs" means stock options granted by the Committee, which at the time granted, are
intended to qualify as incentive stock options under Section 422 of the Code.
2.7 "Non-Statutory Options" means stock options granted by the Committee, which at the time
granted, are not intended to qualify as ISOs.
2.8 "Options" means any rights to purchase shares of Common Stock granted pursuant to
Article V of this Plan including both ISOs and Non-Statutory Options.
2.9 "Performance Options" means ISOs and/or Non-Statutory Options that become exercisable
only upon the attainment of performance goals or that are otherwise designed to relate
to the attainment of such goals.
2.10 "Plan" means this Incentive Stock Option Plan for Key Officers, as the same shall be
amended from time to time.
</TABLE>

A-1
<PAGE> 25

<TABLE>
<S> <C>
2.11 "Subsidiaries" means any corporation which, on the date of determination, qualifies as
a subsidiary corporation of the Company under Section 424(f) of the Code (or any
similar provision hereinafter enacted).
2.12 "Ten Percent Stockholder" means any stockholder who at the time an ISO is granted owns
(within the meaning of section 424(d) of the Code) more than ten percent of the voting
power of all classes of stock of the Company or any Subsidiary of the Company, or of
any parent of the Company as parent is defined in Section 424(e) of the Code (or any
similar provision hereafter enacted).
III. ADMINISTRATION
3.1 PLAN COMMITTEE. The Plan shall be administered by a Committee designated by the Board
of Directors of the Company and consisting of not fewer than three members of the Board
of Directors who are "disinterested directors" within the meaning of Securities and
Exchange Commission Rule 16b-3 (or any successor rule or regulation of the Securities
and Exchange Commission), who are "outside directors" within the meaning of Section
162(m) of the Code and who are non-employees of the Company or any of its Subsidiaries.
Unless the Board of Directors specifically designates otherwise, the Compensation
Committee of the Board of Directors shall constitute the Committee.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have the authority, in its sole
discretion, from time to time:
(a) Subject to Article V, to grant Options provided for in this Plan and set the
price to be paid for the Common Stock subject to the Option;
(b) To prescribe such limitations, restrictions, terms, and conditions upon any such
award of Options as the Committee deems to be appropriate in granting such award;
(c) To determine the periods during which Options may be exercised and to accelerate
the exercisability of outstanding Options as it may deem to be appropriate;
(d) To adopt, amend, and rescind rules and regulations relating to this Plan and to
interpret the Plan and to interpret agreements entered into granting Options
pursuant to this Plan; and
(e) To make other determinations and to take all other actions necessary or advisable
for the implementation and administration of the Plan.
3.3 FINALITY OF COMMITTEE ACTION. All actions of the Committee taken in good faith shall
be final, conclusive,and binding upon all persons affected by the action or decision of
the Committee. No member of the Committee shall be liable for any such action taken or
any decision made or any award granted pursuant to the Plan provided such action,
decision, or award was made in good faith.
IV. PARTICIPATION
4.1 PERSONS ELIGIBLE. The Committee may grant options under this Plan to any officer or
key employee of the Company or of any Subsidiary of the Company. In granting such
Options and determining the amount, form, limitations, restriction, terms, and
conditions of such award, the Committee shall give consideration to the functions and
responsibility of the awardee, his or her potential contributions to the profitability,
sound growth, and shareholder value of the Company along with such other factors as the
Committee may, in its discretion, deem to be relevant.
4.2 MAXIMUM LIMITS. The aggregate Fair Market Value of the shares of Common Stock
(determined at the time an ISO is granted) with respect to which ISOs first become
exercisable by one individual optionee during any calendar year, under this Plan and
all other stock option plans of the Company and its Subsidiaries, if any, shall not
exceed $100,000. Any Options otherwise exercisable that because of the previous
sentence cannot be fully exercised as ISOs shall be considered Non-Statutory Options.
Options in respect of no more than 75,000 shares of Common Stock may be granted to any
eligible employee in any calendar year.
</TABLE>

A-2
<PAGE> 26

<TABLE>
<S> <C>
V. GRANT OF OPTIONS
5.1 TERMS AND CONDITIONS. The grant of an Option pursuant to this Plan shall be evidenced
by a written agreement entered into by the Committee on behalf of the Company and
accepted in writing by the awardee of the Option. All Options granted pursuant to this
Plan shall be subject to the terms and conditions set forth in this Article V and to
such other terms and conditions which the Committee may deem to be appropriate, not
inconsistent with the Plan:
(a) EXERCISE PERIOD. The term of each Option shall be for such time period as the
Committee shall determine, but for not more than ten years from the date of the
grant of the Option; provided however, that in the case of an ISO granted to an
individual who at the time of the grant is a Ten Percent Stockholder, such period
shall not exceed five years from the date of the grant. In granting an Option,
the Committee shall determine whether the Option will be a Performance Option and
when and under what circumstances each portion of that Option shall become
exercisable and shall set forth in the agreement a schedule describing the
exercisability of such Option in such manner as the Committee deems to be
appropriate. Unless the Committee specifically determines otherwise, no Option
shall become exercisable prior to the date which is six months following the date
on which the Option was granted.
(b) OPTION PRICE. The option price per share for Common Stock covered by any Option
granted by the Committee ("Option price") shall be determined by the Committee at
the time of the grant thereof but in no event shall such option price be less
than the Fair Market Value of the shares of Common Stock subject to such Option
on the date the Option is granted; provided, however, that in the case of an
Option granted to a Ten Percent Stockholder the Option price shall not be less
than 110% of the Fair Market Value of the shares of Common Stock subject to such
Option on the date granted.
(c) EXERCISE OF OPTIONS. An Option may be exercised from time to time by written
notice from the holder of the Option to the Company of such holder's intent to
exercise the Option with respect to a specified number of shares. The specified
number of shares will be issued and transferred to the Option holder upon receipt
by the Company of both such notice and payment in full for such shares.
As an alternate to the procedures set forth in the paragraph immediately
preceding, the Company may provide that an Option holder may exercise the Option
by delivery of an irrevocable notice of exercise executed by the Option holder
and accompanied by payment in full of the Option price by the broker of the
Option holder containing an irrevocable instruction to the Company to deliver the
shares of Common Stock issuable upon exercise of the Option promptly to the
Option holder's broker for the Option holder's account, provided that such
exercise would not subject the Option holder to liability under Section 16(b)of
the Securities Exchange Act of 1934 (the "Exchange Act").
(d) PAYMENT OF OPTION PRICE UPON EXERCISE. Each stock option agreement shall provide
that the Option price of the shares with respect to which an Option shall be
exercised shall be paid to the Company at the time of exercise (except as
otherwise provided in subparagraph (c) above in (i) cash, (ii) whole shares of
Common Stock already owned by the option holder, valued at their Fair Market
Value on the day immediately preceding the date of exercise, (iii) a combination
of such cash and Common Stock, or (iv) such other form of consideration as the
Committee may, in its sole discretion, determine to be acceptable.
</TABLE>

A-3
<PAGE> 27

<TABLE>
<S> <C>
(e) EXERCISE OF THE OPTION IN THE EVENT OF TERMINATION OF EMPLOYMENT, RETIREMENT,
DISABILITY, OR DEATH.
(i) If an Option holder ceases to be employed by the Company or by any of its
Subsidiaries for any reason other than retirement, disability, or death, unless
such termination is with permission of the Company or follows a "change of
control" event described in Article VII below, such person's Options whether
or not exercisable at the time of termination of employment, shall
automatically terminate on such date unless the Committee has, in its sole
discretion, either provided in the stock option agreement that Options
exercisable at termination of employment shall continue to be exercisable for
a stated period of time, or determined in its sole discretion at the time of
termination of employment that Options exercisable at such time may continue
to be exercised, provided, however, that in no event shall any Option be
exercisable after the expiration of the exercise period set forth in
paragraph 5.1(a) above.
(ii) The Committee may, in its sole discretion, in granting Options pursuant to
this Plan, include in the stock option agreement granting such Options, such
provisions as the Committee may deem to be advisable with respect to the
Option holder's right to exercise Options subsequent to retirement with the
consent of the Company, termination of employment with the consent of the
Company, or subsequent to the Option holder's termination of employment by
reason of disability (within the meaning of Section 22(e)(3) of the Code);
provided, however, that the period by which an Option may be exercised after
such termination due to retirement or termination with the consent of the
Company shall not exceed three months from the date of termination; and
provided further that the time to exercise any Options in the event of
termination due to disability shall not exceed 12 months; and provided
further that in no event shall any Option be exercisable after the fixed
termination date set forth in the stock option agreement pursuant to
paragraph 5.1(a) of this Plan.
(iii) Unless the Committee provides otherwise in the stock option agreement, if
a "change of control" event described in Article VII should occur, all Options
exercisable by the Option holder who was at the time of the "change of
control" event an employee of the Company or of any of its Subsidiaries,
parent or affiliates shall remain exercisable by the holder (or by his
estate, as the case may be) for three months following termination of
employment with the Company or any of its Subsidiaries, parent or
affiliates, unless a longer exercisable period is available under other
provisions of this paragraph 5.1, but in no event for a period extending
beyond the fixed termination date set pursuant to paragraph 5.1(a) of this
Plan.
(iv) The Committee may provide in the stock option agreement pursuant to which
Options are granted that, in the event the Option holder should die either while
in the employment of the Company or any of its Subsidiaries, or while such
Option holder has the right to exercise Options under the preceding
paragraphs (i) and (ii), such Options may be exercised by the personal
representative of the Option holder's estate to the extent such Options
would have been exercisable at the time of the holder's death, and such
personal representative may exercise such Options for a period set forth in
the agreement (or granted by the Committee following the holder's death) but
in no event for a period exceeding the shorter of one year following the
Option holder's death or the period for exercise as set forth in the stock
option agreement pursuant to paragraph 5.1(a) above, whichever period first
expires. To the extent a person would otherwise be a transferee of the
Option through the Option holder's estate under his will or laws of descent
and distribution, such person, in lieu of the exercise by the personal
representative, may exercise such Options.
(f) If a person holding an Option should engage in competition with the Company or
with any of its Subsidiaries, the Committee, in its discretion may terminate all
outstanding Options held by such person, whether or not such Options are then
exercisable.
</TABLE>

A-4
<PAGE> 28
<TABLE>
<S> <C>
5.2 DESIGNATION OF OPTIONS. Each stock option agreement shall designate whether the
Options granted thereunder are ISOs or Non-Statutory Options. Except as otherwise
expressly provided in the applicable stock option agreement, each provision of this
Plan and of each stock option agreement relating to an Option designated as an ISO,
shall be construed so that such Option qualifies as an ISO, and any provision that
cannot be so construed shall be disregarded.
VI. AGGREGATE LIMITATION ON SHARES OF COMMON STOCK
6.1 NUMBER OF SHARES OF COMMON STOCK.
(a) The number of shares of Common Stock that can be purchased pursuant to Options
issued under this Plan shall not exceed 397,277 shares, subject to such
adjustments as may be made pursuant to paragraph 8.8. Shares of Common Stock
which may be issued pursuant to Options granted under this Plan may be either
authorized and unissued shares of Common Stock or authorized and issued shares of
Common Stock held by the Company as treasury shares.
(b) Any shares of Common Stock subject to an Option which for any reason either
terminates unexercised or expires shall again be available for issuance under
this Plan during the life of the Plan.
(c) Any shares of Common Stock surrendered to the Company by an Option holder in
connection with the exercise of an Option shall be cancelled and shall not be
available for use in connection with the Plan or otherwise by the Company.
VII. CHANGE IN CONTROL. For purposes of the Plan, regardless of any schedule as to when Options
to purchase shares can be exercised, such Options shall become fully and immediately
exercisable upon any of the following events for holders of Options who have not ceased to be
employed by the Company or by any of its Subsidiaries at the time of such event:
(a) Upon the Board of Directors learning that an outside party, or group of persons acting
together in concert, has acquired 25% or more of the Common Stock.
(b) Upon the commencement of a tender offer to acquire 50% or more of the Common Stock of
the Company.
(c) Upon the approval of the Board of Directors of a reorganization plan under which the
Company is to be merged, consolidated, or otherwise combined (or its assets purchased)
so that shareholders of the Company following such reorganization shall own less than a
majority of the shares carrying voting rights in such surviving or acquiring
corporation.
(d) The Board of Directors approves any liquidation of substantially all assets or any
distribution of assets of the Company or of a subsidiary of the Company when such
assets being distributed have a value equaling or exceeding 30% of the value of the
assets of the Company prior to such distribution.
(e) One-third or more of the membership of the Board of Directors consists of members not
recommended for membership by the Company or the Board of Directors.
VIII. MISCELLANEOUS
8.1 GENERAL RESTRICTIONS. Any Options granted under this Plan shall be subject to the
requirement that, if at any time the Committee shall determine that any listing or
registration of the shares of Common Stock, or any consent or approval of any
governmental body or agency, or any other agreement or consent is necessary or
desirable as a condition of the granting of an award or issuance of Common Stock in
satisfaction thereof, such award or such issuance may not be consummated unless such
requirement is satisfied in a manner acceptable to the Committee.
8.2 NON-ASSIGNABILITY. No Option granted under this Plan shall be assignable or
transferable by the holder of such Option except by will or laws of descent and
distribution and then only to the extent provided for under paragraph 5.1(e)(iii).
During the life of the holder of an Option, any Option shall be exercisable only by
such holder.
</TABLE>

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<PAGE> 29

<TABLE>
<S> <C>
8.3 WITHHOLDING TAXES
(a) The Committee shall have the right to require an Option holder to remit to the
Company an amount sufficient to satisfy any federal, state, and local withholding
tax requirements. The Committee's determination of when tax withholding is due
and the amount of such withholding shall be conclusive. The Company may delay the
issuance of shares of Common Stock otherwise issuable hereunder pending the
satisfaction of the withholding obligation by an Option holder. If an Option
holder should sell, transfer, assign, or otherwise dispose of shares of Common
Stock acquired by him upon the exercise of an ISO within two years after the date
on which the ISO was granted or within one year after the receipt of the shares
of Common Stock by such person, such person, even if not then an employee of the
Company, shall promptly notify the Company of such disposition and the Company
shall have the right to require such person to remit to the Company the amount
necessary to satisfy any federal, state, and local tax withholding requirements
imposed by reason of such disposition.
(b) Amounts to which the Company is entitled pursuant to paragraph 8.3(a) may be
paid, at the election of the Option holder and with the approval of the
Committee, either (i) in cash, withheld from the Option holder's salary or other
compensation paid by the Company or any Subsidiary of the Company, or (ii) by
electing to have withheld from the shares of Common Stock otherwise issuable to
such person upon exercise of an Option that number of shares having a Fair Market
Value on the exercise date equal to the amount of tax the Company is entitled to
withhold, provided, however, that such withholding of shares would not subject
the option holder to liability under Section 16 of the Exchange Act. An option
holder's election to have withheld shares of Common Stock that are otherwise
issuable shall be in writing, shall be irrevocable upon approval by the
Committee, and shall be delivered to the Committee prior to the Option exercise
date.
8.4 INVESTMENT REPRESENTATION. Upon demand by the Committee, the holder of an Option shall
deliver to the Company at the time of any exercise of any Option a written
representation that the shares to be acquired are to be acquired for investment and not
for resale or with the view to the distribution thereof. Upon such demand, delivery of
such representation prior to the delivery of any shares shall be a condition precedent
to the right of the option holder (or such other person qualified to purchase shares)
to purchase such shares.
8.5 NO RIGHT TO EMPLOYMENT. Nothing in this Plan or in any agreement entered into pursuant
to this Plan shall confer upon any person the right to continue in the employment of
the Company or any Subsidiary thereof nor affect any right which the Company or any
Subsidiary thereof may have to terminate the employment of such person.
8.6 NON-UNIFORM DETERMINATIONS. The Committee's determinations under this Plan (including
without limitation the Committee's determinations of the persons to receive Options,
the form, amount, and time of such awards of Options, and the terms and provisions of
such awards) need not be uniform as to the same person and need not be uniform among
different persons and the awards may be made by the Committee selectively among persons
who receive or who are eligible to receive awards of Options under this Plan, whether
or not such persons are similarly situated.
8.7 NO RIGHTS AS STOCKHOLDERS. Persons granted Options under this Plan shall have no
rights as stockholders of the Company with respect to such Options unless and until
certificates for shares of Common Stock are issued to such persons.
</TABLE>

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<PAGE> 30

<TABLE>
<S> <C>
ADJUSTMENTS OF STOCK. In the event of any change or changes in the outstanding Common
8.8 Stock of the Company by reason of any dividend, recapitalization, reorganization,
merger, consolidation, split-up, combination or any other transaction which the
Committee determines would substantially dilute or enlarge the rights of Option
holders, the Committee shall appropriately adjust the number of shares of Common Stock
which may be issued under the Plan, the number of shares of Common Stock subject to
Options theretofore granted under this Plan, the Option price of such Options, and any
and all other adjustments deemed appropriate by the Committee to prevent dilution or
enlargement of the rights granted to holders of Options. New option rights may be
substituted for Options granted under the Plan or the Company's duties as to Options
outstanding under the Plan may be assumed by a parent or by another corporation in
connection with any merger, consolidation, acquisition, separation, reorganization,
liquidation, or like occurrence in which the Company is involved. In the event of such
substitution or assumption, the term Common Stock, as defined in paragraph 2.4 of this
Plan, shall thereafter include the stock of the corporation granting such new option
rights or assuming the Company's duties as to such Options.
8.9 AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors, without further approval
of the stockholders, may at any time terminate this Plan or any part thereof and may
from time to time amend this Plan in any way as the Board of Directors may deem
advisable; provided, however, that any amendment to the Plan that would materially
increase the rights of the grantee of an Option must be approved by the Company's
stockholders before the grantee of an Option may exercise any such increased rights.
The termination or amendment of this Plan shall not, without the consent of an Option
holder, adversely effect such option holder's rights under an award previously granted.
8.10 TERM OF THE PLAN. Unless previously terminated pursuant to paragraph 8.9 above, this
Plan shall terminate on the tenth anniversary of the date on which the Plan became
effective, i.e., will terminate on January 20, 2001, and no Options may be granted on
or after such date.
8.11 ISSUING SHARES. The obligation of the Company to issue or transfer and deliver shares
for Options exercised under the Plan shall be subject to:
(a) The effectiveness of a registration statement under the Securities Act of 1933,
as amended, with respect to such issue or transfer, if deemed necessary or
appropriate by counsel for the Company;
(b) The condition that the shares of Common Stock authorized to be issued hereunder
shall have been listed (or authorized for listing upon official notice of
issuance) upon each stock exchange on which outstanding shares of Common Stock
may then be listed, and
(c) All other applicable laws, regulations, rules and orders which shall then be in
effect.
</TABLE>

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<PAGE> 31

DIRECTIONS

SOUTH OF NEW CASTLE:

North on Route 18 into New Castle. Prior to approaching the downtown area turn
right onto Route 108 East at the light by the Penn Power Service Center
Building. Follow Route 108 East through town, four traffic signals. At the
fourth traffic signal turn left (NAPA Auto Parts on right). Once making the left
cross the bridge and The Centre is on your left.

NORTH OF NEW CASTLE:

South on Route 60. Take exit for East Sampson Street. Continue on Sampson Street
following the Business District signs. At the four way stop sign follow Route
422 (Business) East into New Castle. Proceed through four traffic signals
staying on Falls Street. After passing Dunkin Donuts on your right, the street
will come to a "T." Turn right at stop sign onto East Street. At first traffic
signal on East Street make a left. The Centre is on the right.

EAST OF NEW CASTLE:

West on Route 422. Stay on Route 422 (Business) West through New Castle (Do not
take bypass). Proceed on Route 422 (Business) West through three traffic
signals. At third traffic signal turn right onto East Washington Street at the
Sunoco gas station. Follow East Washington Street to next traffic signal
(Junction Routes 168/108). Turn right at traffic signal at Troutman Building.
Turn left at first traffic signal (NAPA Auto parts on right). Once making the
left cross the bridge and The Centre is on your left.

WEST OF NEW CASTLE:

East on Route 422. Continue on Route 422 (Business) following the Business
District signs. At the four way stop sign follow Route 422 (Business) East into
New Castle. Proceed through four traffic signals staying on Falls Street. After
passing Dunkin Donuts on your right, the street will come to a "T." Turn right
at stop sign onto East Street. At first traffic signal on East Street make a
left. The Centre is on the right.

East on Route 224. After passing Westgate Plaza (Ladbrokes) on the left,
continue through traffic signal heading east following the Business District
signs at foot of hill. Proceed through four traffic signals staying on Falls
Street. After passing Dunkin Donuts on your right, the street will come to a
"T." Turn right at stop sign onto East Street. At first traffic signal on East
Street make a left. The Centre is on the right.
<PAGE> 32

FIRST WESTERN BANCORP, INC.
NEW CASTLE, PENNSYLVANIA

PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 16, 1996

The undersigned hereby appoints Floyd H. McElwain, Robert C. Duvall and
John P. O'Leary, Jr. and each of them, with full power of substitution in
each, as proxies to represent the undersigned and to vote all shares of
Common Stock of First Western which the undersigned would be entitled to
vote if personally present and voting at the Annual Meeting of First
Western's shareholders to be held on April 16, 1996 at 10:30 a.m. (local
time), at the New Englander, 3009 Wilmington Road, New Castle,
Pennsylvania 16101, and at any adjournment or adjournments thereof, upon
all matters coming before the meeting. Said proxies are directed to vote
as set forth below and, in their discretion, upon such other matters as
may properly come before the meeting.

1. ELECTION OF DIRECTORS.Nominees for three-year term: John W. Lehman,
M.D., Thomas S. Mansell, Richard C. McGill, and
Harold F. Reed, Jr.

Nominee for one-year term: John W. Sant.

/ / VOTE FOR all nominees; except authority to vote is withheld from
the following individual nominees (if any):

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

/ / VOTE WITHHELD from all nominees.

2. OTHER BUSINESS. The proxies shall vote on any other business properly
brought before the meeting and any adjournment thereof in accordance
with the recommendations of management of First Western.

(over)

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST
WESTERN. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR ALL NOMINEES AND FOR ANY OTHER BUSINESS IN
ACCORDANCE WITH THE RECOMMENDATIONS OF MANAGEMENT.

Dated , 1996

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

---------------------------------
Signatures

Please sign EXACTLY as your
name appears hereon. When
signing as executor, trustee,
etc., or as officer of a
corporation, give full title as
such. For joint accounts,
please obtain both signatures.

NOTE: IF THE ADDRESS AS NOTED HEREON IS NOT CORRECT, KINDLY NOTE ANY CHANGE
NECESSARY. PLEASE CHECK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING / /
TOTAL NUMBER ATTENDING. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED POSTAGE-PAID ENVELOPE.