Exhibit 10.1

First Commonwealth Financial Corporation

2009 ANNUAL INCENTIVE PLAN

 

1. Purpose; Effective Date.

This 2009 Annual Incentive Plan (the “Plan”) of First Commonwealth Financial
Corporation (the “Company”) is designed to enable the Company and its
subsidiaries to attract and retain key employees and to align the interests of
such key employees with those of shareholders by promoting and rewarding the
achievement of annual corporate and individual performance goals. This Plan was
approved by the Committee (as defined in Section 2) on February 9, 2009 and is
effective as of January 1, 2009. Each Award under this Plan shall constitute an
“Annual Incentive Award” within the meaning of the First Commonwealth Financial
Corporation Incentive Compensation Plan (the “Master Plan”) and shall be subject
to all terms and conditions of the Master Plan applicable to Annual Incentive
Awards.

 

2. Definitions.

As used in this Plan, the following capitalized terms will have the meanings set
forth below:

(a) “Actual Award” means the actual award (if any) payable to a Participant for
the Performance Period.

(b) “Award” means, as the context requires, an Actual Award or a Target Award.

(c) “Award Agreement” has the meaning given to such term in the Master Plan.

(d) “Base Salary” means the base salary of a Participant as of the effective
date of the Award Agreement; provided, that if a Participant receives an
increase in base salary after the effective date of the Award Agreement, the
Committee may, in its sole discretion, prorate the Participant’s Base Salary for
purposes of determining the Participant’s Award under this Plan.

(e) “Board” means the Board of Directors of the Company.

(f) “Cause” has the meaning given to such term in the Master Plan.

(g) “Code” has the meaning given to such term in the Master Plan.

(h) “Committee” has the meaning given to such term in the Master Plan.

(i) “Company” has the meaning given to such term in the first paragraph.

 

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(j) “Corporate Performance Goal” means, individually or collectively, the
Performance Goals set forth on Exhibit A.

(k) “Employee” has the meaning given to such term in the Master Plan.

(l) “Individual Performance Goal” means, individually or collectively,
Performance Goals that are specific to a Participant and set forth in the
Participant’s Award Agreement.

(m) “Master Plan” has the meaning given to such term in the first paragraph.

(n) “Participant” has the meaning given to such term in the Master Plan.

(o) “Performance Goals” has the meaning given to such term in the Mater Plan and
shall include, as the context requires, Corporate Performance Goals and/or
Individual Performance Goals.

(p) “Performance Period” means the Company’s fiscal year ending December 31,
2009.

(q) “Plan” has the meaning given in the first paragraph.

(r) “Target Award” means the award that would be paid to a Participant under the
Plan assuming that the “Target” performance level is achieved for each
Performance Goal. Each Target Award shall be expressed as a percentage of the
Participant’s Base Salary. In the case of any employee who becomes a Participant
during the Performance Period as a result of being hired or changing job
positions, the Target Award shall be prorated based on the portion of the
Performance Period in which such person is a Participant.

(s) “Termination of Service” occurs when a Participant shall cease to serve as a
full-time employee of the Company for any reason, whether voluntarily or
involuntarily, by reason of death, Disability (as defined in the Master Plan),
or Retirement (as defined in the Master Plan), with or without cause, for good
reason, or otherwise.

 

3. Administration.

The Plan shall be administered by the Committee in accordance with Article 3 of
the Master Plan.

 

4. Awards.

The Committee shall select Employees to become Participants in the Plan and
establish a Target Award for each Participant. Each Award shall be evidenced by
an Award Agreement which shall be signed by an authorized officer of the Company
but need not be signed by the Participant. The Award Agreement may be modified
at any time without the consent of the Participant, subject to the approval of
the Committee.

 

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5. Performance Goals.

(a) Generally. Awards will be calculated based on the attainment of Corporate
Performance Goals and Individual Performance Goals. The Committee will establish
“Threshold,” “Target” and “Superior” levels of performance for each Performance
Goal. The Committee will assign a weighting to each Performance Goal that is
expressed as a percentage of the total Target Award. The aggregate weighting of
Corporate Performance Goals and Individual Performance Goals shall be as
follows:

 

     CEO     Other Participants  

Corporate Performance Goals

   80 %   70 %

Individual Performance Goals

   20 %   30 %

(b) Corporate Performance Goals. Exhibit A sets forth the Corporate Performance
Goals, including the weighting and Threshold, Target and Superior levels of
performance for each Corporate Performance Goal.

(c) Individual Performance Goals. Each Participant’s Award Agreement will set
forth his or her Individual Performance Goals and the weighting and Threshold,
Target and Superior levels of performance for each such Individual Performance
Goal.

 

6. Calculation and Payment of Actual Awards.

(a) The Actual Award for each Performance Goal shall determined as follows:

(i) Failure to Meet Threshold. If the actual performance for a Performance Goal
fails to achieve the Threshold level for that Performance Goal, the Actual Award
for that Performance Goal shall be $0.

(ii) Performance at Threshold. If the actual performance for a Performance Goal
is equal to the Threshold level for that Performance Goal, the Actual Award for
the Performance Goal shall be equal to the product of (x) the percentage
weighting for that Performance Goal multiplied by (y) fifty percent (50%).

(iii) Performance at Target. If the actual performance for a Performance Goal is
equal to the Target level for that Performance Goal, the Actual Award for the
Performance Goal shall be equal to the product of (x) the percentage weighting
for that Performance Goal multiplied by (y) one hundred percent (100%).

(iv) Performance at or better than Superior. If the actual performance for a
Performance Goal is equal to or better than the Superior level of performance
for the Performance Goal, the Actual Award for the Performance Goal shall be
equal to the product of (x) the percentage weighting for that Performance Goal
multiplied by (y) one hundred fifty percent (150%).

 

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(v) Performance between Benchmarks. If the actual performance for a Corporate
Performance Goal falls between the Threshold and Target levels of performance or
between the Target and Superior levels of performance for that Performance Goal,
the Actual Award for the Performance Goal shall be interpolated between the
Actual Award for Threshold and Target performance or between Target and Superior
performance, as the case may be, as determined by the Committee in its sole
discretion.

(b) Awards will be paid to Participants as soon as practicable following the
determination and certification of actual performance relative to Performance
Goals (generally within 75 days of the end of the Company’s fiscal year).

(c) The Committee may determine that one or more Participants should be eligible
to elect to receive all or a portion of his or her Actual Award in Restricted
Stock or Restricted Stock Units or may determine that some or all of the Actual
Award for one or more Participants shall be paid in Restricted Stock or
Restricted Stock Units, in each case, in the Committee’s sole discretion. Such
Restricted Stock and Restricted Stock Units, if any, shall be issued under the
Master Plan. The number of shares of Restricted Stock or shares issuable
pursuant to Restricted Stock Units shall be determined dividing (x) the portion
the Actual Award to be paid in Restricted Stock or Restricted Stock Units, less
applicable withholdings, by (y) the Fair Market Value of the Common Stock as of
the date when the Committee certifies the Company’s performance for the
Performance Period. The Restricted Stock and Restricted Stock Units shall vest
over such time period as the Committee may determine prior to the payment of the
Actual Award, provided, that all restrictions shall fully expire on the earliest
of (i) the death or Disability of the Participant, (ii) a Change in Control (as
defined in the Master Plan) or (iii) three years after the date of the
Restricted Stock or Restricted Stock Unit award. Notwithstanding the foregoing,
this paragraph (c) shall have no effect unless and until the Master Plan is
approved by shareholders of the Company in accordance with applicable rules of
the New York Stock Exchange.

(d) Payment under the Plan is subject to compliance by the Participant with any
written agreement between the Participant and the Company, including an
employment agreement or any non-competition, non-solicitation or non-disclosure
agreement. If the Participant breaches any such agreement, in addition to any
other remedies that the Company may have under such agreement, the Participant
shall immediately forfeit his/her right to receive any unpaid amounts earned
under the Plan and repay any amounts previously paid under the Plan.

 

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7. Earnings Per Share Threshold.

Notwithstanding any other provision of this Plan, no Actual Award will be paid
under the Plan unless the Company reports earnings per share (calculated in
accordance with Generally Accepted Accounting Principles) for the Performance
Period of $0.68 or greater.

 

8. Termination of Service.

Notwithstanding any provision to the contrary in the Master Plan, upon
Termination of Service of a Participant during the Performance Period, the
participant will cease to be a participant in this Plan and will not be eligible
for any Actual Award, unless the Committee determines, in its sole discretion,
that the Participant will be entitled to receive a pro rata or other portion of
the Actual Award.

 

9. Miscellaneous Provisions.

(a) Claw-Back Rights. The Committee will have the sole and absolute authority to
make retroactive adjustments to any Awards paid to Participants where the
payment was predicated upon the achievement of erroneous financial or strategic
business results or conduct which the Committee determines, in its sole
discretion, created unnecessary or excessive risk to the Company or constituted
dishonest or unethical conduct for the purposes of increasing the amount of the
Participant’s Award. Where applicable, the Company will seek to recover any
amount determined to have been inappropriately received by a Participant under
the Plan.

(b) Regulatory Approvals. The Plan and any Award made hereunder shall be subject
to all applicable federal and state laws, rules and regulations, and to such
approvals by any government or regulatory agency as may be required.

(c) Limitation of Liability; Indemnification. No member of the Board or the
Committee, nor any Employee acting on behalf or at the request of the Board or
the Committee shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan. All members
of the Board and the Committee, and each and any officer or employee of the
Company acting on their behalf or at their request will, to the extent permitted
by law, be fully indemnified and protected by the Company against any losses,
liabilities, costs or damages that they may incur in respect of any such action,
determination, or interpretation.

(d) Tax Withholding. The Company shall withhold all applicable taxes from any
Actual Award, including any federal, state and local taxes.

(e) No Effect on Employment or Service. Nothing in the Plan shall interfere with
or limit in any way the right of the Company to terminate any Participant’s
employment or service at any time, with or without cause. For purposes of the
Plan, transfer of employment of a Participant between the Company and any one of
its subsidiaries shall not be deemed a Termination of Service.

 

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(f) No Right to Participation. No employee or officer of the Company or any
subsidiary shall have the right to be selected to receive an Award under this
Plan, or, having been so selected, have the right to receive a future Award.

(g) Beneficiary Designations. If permitted by the Committee, a Participant under
the Plan may name a beneficiary or beneficiaries to whom any earned but unpaid
Award shall be paid in the event of the Participant’s death. Each such
designation shall revoke all prior designations by the Participant and shall be
effective only if given in a form and manner acceptable to the Committee. In the
absence of any such designation, any vested benefits remaining unpaid at the
Participant’s death shall be paid to the Participant’s estate.

(h) Nontransferability of Awards. No Award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will, by the laws of descent and distribution, or to the limited extent
provided in Section 9(g). All rights with respect to an Award granted to a
Participant shall be available during his or her lifetime only to the
Participant.

(i) Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

(j) Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

(k) Governing Law. The Plan and all Awards shall be construed in accordance with
and governed by the laws of the Commonwealth of Pennsylvania, but without regard
to its conflict of law provisions.

(l) Captions. Captions are provided herein for convenience only, and shall not
serve as a basis for interpretation or construction of the Plan.

 

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