Exhibit 10.2

First Commonwealth Financial Corporation

2011-2013 LONG-TERM INCENTIVE PLAN

 

1. Purpose; Effective Date.

This 2011-2013 Long-Term Incentive Plan (the “Plan”) of First Commonwealth
Financial Corporation (the “Company”) is designed to provide an incentive for
the executive team to undertake efforts that are ultimately reflected in
superior company performance relative to its Pennsylvania peers. The plan is
intended to be a key part of providing a competitive and attractive pay package
necessary to attract and retain superior executive talent, and to build
executive ownership in the Company. This Plan was approved by the Compensation
and Human Resources Committee (the “Committee”) on January 17, 2011, for the
January 1, 2011 through December 31, 2013 performance period (the “Performance
Period”). Each Award granted under this Plan shall be subject to the terms and
conditions of the First Commonwealth Financial Corporation Incentive
Compensation Plan (the “Master Plan”). Each capitalized term which is not
otherwise defined in this Plan shall have the meaning given to such term in the
Master Plan.

 

2. Administration.

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

 

3. Participants and Performance Goals.

(a) Exhibit A identifies the Employees who have been selected by the Committee
to become Participants in the Plan and the Target Share Award for each
Participant and the Plan Performance Goals.

(b) The Performance Goals shall be calculated from the Company’s publicly
reported financial statements and shall be defined as follows:

i. Return on Equity (ROE) Relative to Peers shall mean the Company’s ROE during
the fiscal years ending December 31, 2012 and December 31, 2013, as publicly
reported, relative to the Company’s Peer Group, as reported through SNL
Financial or other reporting service for each such fiscal year. For purposes of
calculating this Performance Goal, the relative ROE for the fiscal year ending
December 31, 2012 shall be weighted 50% and the relative ROE for the fiscal year
ending December 31, 2013 shall be weighted 50%. ROE is calculated for purposes
of this Plan as the Company’s net income divided by the average daily
shareholders equity.

ii. Total Return to Shareholders (TRS) Relative to Peers is defined as the
Company’s cumulative TRS relative to the Company’s Peer Group, as reported
through SNL Financial or other reporting service. TRS is defined for purposes of
this Plan as the total change in the value of a share of Company stock over the
Performance Period, plus the value of immediately reinvested dividends over the
same period.

 

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(c) The “Peer Group” for purposes of this Plan shall mean the Pennsylvania Peer
Group designated by the Committee as of January 1, 2011 and disclosed in the
Company’s proxy statement for the 2011 annual meeting of shareholders. The
Committee may add or remove members from the Peer Group from time to time during
the Performance Period if a member merges, is acquired or closed or otherwise
ceases to be a meaningful comparator for the Company, in each case, as
determined by the Committee. The Committee shall have discretion to adjust the
relative performance of the Peer Group as necessary to account for changes in
the composition of the Peer Group during the Performance Period.

 

4. Calculation of Share Awards.

A Participant’s Share Award shall be determined according to the following
formula:

(Target Share Award X ROE Payout) + (Target Share Award X TRS Payout)

For purposes of this formula:

“Target Share Award” shall mean the number of shares shown for the Participant
in the “Target Share Award” column of Table 1 on Exhibit A.

“ROE Payout” means the percentage shown in the “ROE Payout” column of Table 2 on
Exhibit A at the performance level for the ROE Relative to Peers Performance
Goal. If the actual performance for ROE Relative to Peers falls between the
Threshold and Target performance levels or between the Target and Superior
performance levels, the ROE Payout shall be interpolated between the percentage
shown for the Threshold and Target performance levels or between the percentage
shown for the Target and Superior performance levels, as the case may be, as
determined by the Committee in its sole discretion.

“TRS Payout” means the percentage shown in the “TRS Payout” column of Table 2 on
Exhibit A at the performance level for the TRS Relative to Peers Performance
Goal. If the actual performance for TRS Relative to Peers falls between the
Threshold and Target performance levels or between the Target and Superior
performance levels, the TRS Payout shall be interpolated between the percentage
shown for the Threshold and Target performance levels or between the percentage
shown for the Target and Superior performance levels, as the case may be, as
determined by the Committee in its sole discretion.

 

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5. Settlement of Share Awards.

(a) Share Awards shall be settled in Restricted Stock as soon as practicable
following the certification by the Committee of results for the Performance
Period.

(b) Any shares of Restricted Stock issued pursuant to this Plan (i) may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until the first to occur of (x) December 31, 2014, (y) the death of the
Participant, or (z) a Change in Control; and (ii) shall be automatically
forfeited and returned to the Company or cancelled if the Participant’s
employment terminates for any reason prior to the occurrence of one of the
events described in clause (i) of this Section 5(b). Notwithstanding the
foregoing, the Committee, in its sole discretion, may cause all or any portion
of a Participant’s shares of Restricted Stock to vest prior to the occurrence of
one of the events described in the preceding sentence.

 

6. Termination of Employment.

Notwithstanding any provision to the contrary in the Master Plan, if the
Participant ceases to be a full-time employee of the Company for any reason
prior to the end of the Performance Period, the Participant will cease to be a
participant in this Plan and will not be eligible to receive any Share Award
pursuant to this Plan.

 

7. 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) Amendment or Termination. Notwithstanding any provision to the contrary in
the Master Plan, the Committee has full power to amend, modify, suspend, or
terminate the Plan or the Awards granted under the Plan to the extent the
Committee deems necessary or advisable, in its sole discretion, to promote the
safety and soundness of the Company or any of its Subsidiaries, to comply with
changes to applicable laws, regulations and regulatory guidance or under other
extraordinary circumstances arising after the effective date of the Plan.

(c) 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.

 

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(d) 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.

(e) 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.

(f) 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. All rights with respect
to an Award granted to a Participant shall be available during his or her
lifetime only to the Participant.

 

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