Incentive Compensation Plan

On January 20, 2009, the Board of Directors of the Company adopted, with shareholder approval, the First Commonwealth Financial Corporation Incentive Compensation Plan. This plan allows for shares of common stock to be issued to employees, directors, and consultants of the Company and its subsidiaries as an incentive to aid in the financial success of the Company. The shares can be issued as options, stock appreciation rights, performance share or unit awards, dividend or dividend equivalent rights, stock awards, restricted stock awards, or other annual incentive awards. Up to 5,000,000 shares of stock can be awarded under this plan, of which 4,169,742 shares were still eligible for awards as of December 31, 2014.

Restricted Stock

The following provides detail on the restricted stock awards which were issued and outstanding in 2014, 2013 and 2012 in order to retain and attract key employees. The grant date fair value of the restricted stock awards is equal to the price of First Commonwealth’s common stock on grant date.



Grant Date	Shares issued	Grant Price		Vesting Date	Number of Equal Vesting Periods

November 17, 2014	3,500	$	9.26	November 17, 2017	1
April 8, 2014	27,500	8.89		April 8, 2017	3
March 24, 2014	46,000	9.18		March 24, 2017	1
March 4, 2014	5,000	8.75		March 4, 2017	1
January 1, 2014	12,626	8.82		December 31, 2014	1
August 16, 2013	3,000	7.57		August 16, 2016	1
May 31, 2013	45,000	7.21		May 31, 2016	3
March 1, 2013	10,000	7.35		March 1, 2016	1
February 24, 2012	34,000	5.96		December 31, 2014	1
February 24, 2012	90,000	5.96		February 24, 2015	1
January 1, 2012	100,000	5.26		January 1, 2016	4
November 21, 2011	10,000	4.41		November 21, 2014	1
April 1, 2011	25,000	6.82		April 1, 2016	1
January 22, 2010	30,120	5.70		January 22, 2012	2

Compensation expense related to restricted stock was $1.0 million, $0.5 million and $0.4 million in 2014, 2013 and 2012, respectively. As of December 31, 2014, there was $2.3 million of unrecognized compensation cost related to unvested restricted stock awards granted.

A summary of the status of First Commonwealth’s unvested service-based restricted stock awards as of December 31 and changes for the years ended on those dates is presented below:



	2014				2013				2012
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Outstanding, beginning of the year	271,000		$	6.07	253,000		$	5.71	50,060		$	6.00
Granted	94,626		9.03		58,000		7.25		224,000		5.65
Vested	(98,487	)	6.18		(35,000	)	5.46		(17,060	)	5.73
Forfeited	(2,139	)	5.96		(5,000	)	5.96		(4,000	)	5.96
Outstanding, end of the year	265,000		7.08		271,000		6.07		253,000		5.71

The following provides detail on restricted stock awards estimated to be granted on a performance award basis during 2014, 2013 and 2012. These plans were previously approved by the Board of Directors.



Grant Date	Target Share Award	Performance Period (years)	Award if threshold met		Award if targets are met		Award if targets exceeded		Award if threshold not achieved		Vesting After Performance Period (years)	Final vesting
January 17, 2011	54,166	3	40	%	100	%	200	%	—	%	1	January 17, 2014
February 24, 2012	68,000	3	40	%	100	%	200	%	—	%	1	December 31, 2015
January 28, 2013	128,611	3	40	%	100	%	200	%	—	%	1	December 31, 2016
January 27, 2014	125,000	3	40	%	100	%	200	%	—	%	0	December 31, 2016

The following table summarizes the estimated unvested target share awards for the Plans as of December 31:



	2014		2013		2012
Outstanding, beginning of the year	250,777		151,333		93,333
Granted	126,389		138,611		74,000
Issued	(12,626	)	—		—
Forfeited	(80,540	)	(39,167	)	(16,000	)
Outstanding, end of the year	284,000		250,777		151,333

The estimated unvested target awards for the Plans have an estimated fair value of $9.22 per share for each year based on the closing price of Company stock as of December 31, 2014.

Stock Option Plan

First Commonwealth’s stock based compensation plan expired on October 15, 2005, and is described below. Although the plan currently has outstanding awards, it has expired. All of the exercise prices and related number of shares have been adjusted to reflect historical stock splits. The plan permitted the Executive Compensation Committee to grant options for up to 4.5 million shares of First Commonwealth’s common stock through October 15, 2005.

The vesting requirements and terms of options granted were at the discretion of the Executive Compensation Committee. Options granted in 2005 vested in the year granted. All options expire ten years from the grant date. All equity compensation plans were approved by security holders.

A summary of the status of First Commonwealth’s outstanding stock options as of December 31 and changes for the years ended on those dates is presented below:



	12/31/2014				12/31/2013				12/31/2012
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding, beginning of the year	27,000		$	14.49	196,322		$	11.64	496,863		$	10.03
Granted	—		—		—		—		—		—
Exercised	—		—		—		—		(130,672	)	6.76
Forfeited	(12,000	)	14.41		(169,322	)	11.19		(169,869	)	10.68
Balance, end of the year	15,000		14.55		27,000		14.49		196,322		11.64
Exercisable at the end of the year	15,000		14.55		27,000		14.49		196,322		11.64

The intrinsic value of stock options exercised during the years ended December 31, 2012 was $1.41 per share. There were no options exercised during the years ended December 31, 2014 and 2013.

The following table summarizes information about the stock options outstanding at December 31, 2014:



	Options Outstanding				Options Exercisable
Exercise Price	Number Outstanding	Weighted Average Remaining Contract Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$14.55	15,000	0.0	$	14.55	15,000	$	14.55