EXHIBIT10.3CHANGE IN CONTROL AGREEMENT OF THADDEUS J. CLEMENTS

AGREEMENT FOR SEVERANCE PAYMENTSIN THE EVENT OF TERMINATION OF EMPLOYMENTUNDER CERTAIN CIRCUMSTANCES

     THIS AGREEMENT, by and between FirstCommonwealth Financial Corporation, a bank holding company organized andexisting under the laws of the Commonwealth of Pennsylvania and with itsprincipal place of business in Indiana, Pennsylvania (the "Employer")and Thaddeus J. Clements (the "Executive") made this 3rd    day of   May       , 2002;

 

# WITNESSETH

 

     WHEREAS, the Executive is presentlyemployed by the Employer as Senior Vice President/Human Resources;     WHEREAS, the Employer wishes toinduce the Senior Vice President/Human Resources to continue in employment and,accordingly, to provide certain employment security to said Executive in theevent of a "change in control" (as hereinafter defined);     WHEREAS, the Employer believes thatit is in the best interest of its shareholders for the Executive to continue inhis position on an objective and impartial basis and without distraction orconflict of interest as a result of a possible, or actual "change incontrol" (as hereinafter defined); and     WHEREAS, in consideration, *inter alia*, of this Agreement theExecutive is willing to continue as Senior Vice President/Human Resources ofthe Employer;     NOW THEREFORE, IN CONSIDERATION OFTHE EXECUTIVE CONTINUING AS THE SENIOR VICE PRESIDENT/HUMAN RESOURCES OF THEEMPLOYER, AND OF THE MUTUAL PREMISES HEREIN CONTAINED, THE EXECUTIVE AND THEEMPLOYER, INTENDING TO BE LEGALLY BOUND, HEREBY AGREE AS FOLLOWS, TO WIT:

ARTICLE IDEFINITIONS

 

     1.   A"Change in Control" for the purpose of this Agreement, shall bedeemed to have occurred if, at any time, any person or group of persons actingin concert (within the meaning of Section 13(d) of the Securities Exchange Actof 1934, as amended, and the regulations of the Securities and ExchangeCommission promulgated thereunder) shall acquire legal or beneficial ownershipinterest, or voting rights, in twenty-five percent (25%) or more of the commonvoting stock of First Commonwealth Financial Corporation.1

     2.   A"Triggering Event" for the purpose of this Agreement shall be deemedto have occurred if, on or after the occurrence of a Change in Control, any ofthe following shall occur, viz:

 

(a)  Withinone (1) year from the date on which the Change In Control occurred, theEmployer shall     terminate theemployment of the Executive, other     thanin the case of a Termination For Cause, as herein defined;   

 

(b)  Withinone (1) year from the date on which the Change In Control occurred, theEmployer shall     reduce the Executive'stitle, responsibilities, power or authority in comparison with his title,   responsibilities, power or authority at thetime     of the Change In Control;

 

(c)  Withinone (1) year from the date on which the Change In Control occurred, theEmployer shall     assign the Executiveduties which are inconsistent   with theduties assigned to the Executive on the date on which the Change In Controloccurred and which duties the Employer persists in assigning to the Executivedespite the prior written objection of the Executive;

 

(d)  Withinone (1) year from the date in which the Change In Control occurred, theEmployer shall     reduce the Executive'sbase compensation, his   group health,life, disability or other insurance programs(including any such benefits provided to the Executive's family), his pension,retirement or profit-sharing benefits or any benefits provided by theEmployer's Employee Stock Ownership Plan, or any substitute therefor, or shallexclude him from any plan, program or arrangement in which other comparableofficers of the Employer are included.

 

     3.   A"Termination For Cause" for the purpose of this Agreement shall bedeemed to have occurred if:

(a)  TheExecutive shall have committed a felony under the laws of the United States ofAmerica, or of any state or territory thereof, and shall have been convicted ofthe same, or shall have pled guilty or nolo contendere with respect tosaid charge, and the commission of said felony resulted in, or was intended toresult in, a loss (monetary or otherwise) to the Employer or its clients,customers, directors, officers or employees, or

 

(b)  TheExecutive shall have deliberately and intentionally failed and refused toperform his duties to the Employer (other than during such time as theExecutive shall be incapacitated due to accident or illness or during hisregularly scheduled vacation periods) for a period of thirty (30) consecutivedays following the receipt by him of a notice from the Employer sent bycertified mail, return receipt requested, setting forth in detail the factsupon which the Employer

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relies in concluding that the Executive hasdeliberately and intentionally refused to perform his duties and indicatingwith specificity the duties that the Employer demands that the Executiveperform forthwith.

 

ARTICLE IISEVERANCE PAYMENT

     Upon the occurrence of a Triggering Event,the Employer shall pay to the Executive a severance benefit which shall be inaddition to any other compensation or remuneration to which the Executive is,or shall become, entitled to receive from the Employer.  Each severance payment shall be paid by theEmployer to the Executive on the first day of each calendar month commencing onthe first day of the month next following the month in which the TriggeringEvent occurred, and be payable to the Executive or his beneficiary (ashereinafter provided) for eleven (11) consecutive months thereafter, so that atotal of twelve (12) consecutive monthly payments shall be made.  The amount of each such payment shall beequal to one-twelfth (1/12) of the Executive's annual base salary on the dateof the Change In Control.  In additionthereto, the Employer shall, at its expense, provide the Executive, and hisfamily, with life, health, disability and accidental death and dismembermentinsurance in an amount not less than that provided on the date on which theChange In Control occurred, for the period during which the monthly paymentsprovided above are to be made.

 

ARTICLE IIILIMITATION ON PAYMENT OF BENEFITS      

Notwithstanding anything to the contrary hereincontained, in no event shall any amount of severance payments be paid to theextent that such amount constitutes "excess parachute payments" to a"disqualified individual," as such terms defined by Section 280G ofthe Internal Revenue Code of 1986, as amended (26 USC 280G) and the regulationsof the Secretary of the Treasury or his delegate issued pursuant thereto.

 

ARTICLE IVPAYMENTS ON DEATH

     If the Executive shall die after theoccurrence of a Triggering Event, but prior to the payment of all of themonthly severance payments required by Article II hereof, then all remainingseverance payments shall be paid to the beneficiary herein provided at the sametime, and in the same amount, as would have been payable to the Executive (inaccordance with Article II hereof) had he survived.  For this purpose, the Executive's beneficiary shall mean theperson or persons designated by the Executive in a notice to the Employer, 

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provided,however than any such designation shall be revocable during the lifetime of theExecutive, and in the event that the Executive shall have given more than onesuch notice during his lifetime, the beneficiary designated in the last suchnotice shall govern.  If the Executiveshall not have given such a notice prior to his death, the beneficiary shall bedeemed to be the same person that the Executive designated with respect to hisgroup life insurance program maintained by the Employer.

 

ARTICLE VCOMPETITIVE EMPLOYMENT

     If during the period that the Executive isreceiving severance payments as herein provided, he shall become an officer,director, employee or consultant to a bank or bank holding company whichprovides (or whose subsidiaries or affiliates provide) trust, loan or retailbanking facilities in the same county as such facilities are provided by anysubsidiary or affiliate of the Employer, and which is in direct competitionwith the Employer, then the Employer may elect to notify the Executive bycertified mail, return receipt requested, that it considers the employment ofthe Executive as competitive employment in accordance with this Article of thisAgreement.     The Executive may, within thirty (30)days of receipt of such notice from the Employer, terminate such competitiveemployment and certify the same to the Employer by certified mail, returnreceipt requested.  However, if he shallfail to so terminate his employment and certify the same to the Employer withinthirty (30) days of receipt of the notice as herein provided, no subsequentseverance payments shall be due or payable following such thirtieth day,notwithstanding any other provision of this Agreement. However, this provisionshall in no event affect Executive's entitlement to receive all severancepayments due prior to the thirtieth day after receipt by the Executive of suchnotice, nor shall it in any way require Executive not to engage in suchcompetitive employment.

ARTICLE VISETOFF

     No amounts otherwise due or payable underthis Agreement shall be subject to setoff or counterclaim by either partyhereto.

 

ARTICLE VIIATTORNEY'S FEES

     All attorney's fees and related expensesincurred by Executive in connection with or relating to the enforcement by himof his rights under this Agreement shall be paid for by the Employer.4

 

ARTICLE VIIISUCCESSORS AND PARTIESIN INTEREST

     This Agreement shall be binding upon andshall inure to the benefit of the Employer and its successors and assigns,including, without limitation, any corporation which acquires, directly orindirectly, by purchase, merger, consolidation or otherwise, all orsubstantially all of the business or assets of the Employer.  Without limitation of the foregoing, theEmployer shall require any such successor, by agreement in form and substancesatisfactory to the Executive, expressly to assume and agree to perform thisAgreement in the same manner and to the same extent that it is required to beperformed by the Employer.     This Agreement shall be binding uponand shall inure to the benefit of the Executive, his heirs at law and hispersonal representatives.

ARTICLE IXATTACHMENT

     Neither this Agreement nor any benefitspayable hereunder shall be subject to anticipation, alienation, sale, transfer,assignment, pledge, encumbrance or charge or to execution, attachment, levy orsimilar process at law, whether voluntary or involuntary.

 

ARTICLE XEMPLOYMENT CONTRACT

     This Agreement shall not in any wayconstitute an employment agreement between the Employer and the Executive andit shall not oblige the Executive to continue in the employ of Employer, norshall it oblige the Employer to continue to employ the Executive, but it shallmerely require the Employer to pay severance benefits to the Executive undercertain circumstances, as aforesaid.

 

ARTICLE XIRIGHTS UNDER OTHER PLANSAND AGREEMENTS

     The severance benefits herein providedshall be in addition to, and is not intended to reduce, restrict or eliminateany benefit to which the Executive may otherwise be entitled by virtue of histermination of employment or otherwise.5

 

ARTICLE XIINOTICES

     All notices and other communicationsrequired to be given hereunder shall be in writing and shall be deemed to havebeen delivered or made when mailed, by certified mail, return receiptrequested, if to the Executive, to the last address which the Executive shallprovide to the Employer, in writing, for this purpose, but if the Executive hasnot then provided such an address, then to the last address of the Executivethen on file with the Employer; and if to the Employer, then to the lastaddress which the Employer shall provide to the Executive, in writing, for thispurpose, but if the Employer has not then provided the Executive with such anaddress, then to:

President and Chief ExecutiveOfficerFirst Commonwealth Financial CorporationOld Courthouse Square22 North Sixth StreetIndiana, Pennsylvania 15701

 

ARTICLE XIIIGOVERNING LAW ANDJURISDICTION

     This Agreement shall be governed by, andconstrued in accordance with, the laws of the Commonwealth of Pennsylvania,except for the laws governing conflict of laws.  In the event that either party shall institute suit or otherlegal proceeding, whether in law or equity, the Courts of the Commonwealth ofPennsylvania shall have exclusive jurisdiction with respect thereto.

 

ARTICLE XIVENTIRE AGREEMENT

     This Agreement constitutes the entireunderstanding between the Employer and the Executive concerning the subjectmatter hereof and supersedes all prior written or oral agreements orunderstandings between the parties hereto. No term or provision of this Agreement may be changed, waived, amendedor terminated except by a written instrument of equal formality to thisAgreement.6

 

     IN WITNESS WHEREOF, and as conclusiveevidence of the adoption of this Agreement, the parties have hereunto set theirhands and seals as of the date and year first above written.

| (Corporate  Seal)                               | FIRST  COMMONWEALTH  FINANCIAL CORPORATION |
|-------------------------------------------------|--------------------------------------------|
|                                            |                                       |
| Attest:                                         |                                       |
|                                            |                                       |
| /S/DAVID  R. TOMB, JR.                          | By:  /S/JOSEPH E. O'DELL                   |
| Corporate  Secretary                            | Joseph  E. O'Dell                          |
|                                            | President  and Chief                       |
|                                            | Executive  Officer                         |
|                                            |                                       |
|                                            |                                       |
| /S/ROBIN  L. SHAW      | /S/THADDEUS  J. CLEMENTS                   |
| Witness                                         | Thaddeus  J. Clements                      |

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