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Incentive Compensation Plan | 12 Months Ended
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Dec. 31, 2012
Incentive Compensation Plan | Note 25—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, 4,507,841 shares are still eligible for awards. Restricted Stock The following provides detail on the restricted stock awards which were issued in 2012 and 2011 in order to retain and attract key employees. The grant date fair value of the restricted stock awards is equal to the price of the Corporation’s common stock on grant date. On February 24, 2012, we issued 34,000 shares of our common stock to executive officers as part of our Long-Term Incentive Plan adopted by the Company as part of the Incentive Compensation Plan. The shares were issued pursuant to a Restricted Stock Agreement dated February 24, 2012 with a fair value of $5.96 per share based on the closing price of our common stock on the grant date. The restricted stock fully vests on December 31, 2014. On February 24, 2012, we issued 90,000 shares of our common stock to certain employees as part of our Annual Incentive Plan adopted by the Company as part of the Incentive Compensation Plan. The shares were issued pursuant to a Restricted Stock Agreement dated February 24, 2012 with a fair value of $5.96 per share based on the closing price of our common stock on the grant date. The restricted stock fully vests at the end of a two year period on February 24, 2015. On January 1, 2012, we issued 100,000 shares of our common stock to an executive of the Bank as an inducement to his employment which was issued under the Incentive Compensation Plan adopted by the Company. The shares were issued pursuant to a Restricted Stock Agreement dated January 1, 2012. The restricted stock was determined to have a fair value of $5.26 per share and was based on the closing price of our common stock on the grant date. The restricted stock fully vests equally over a four year period ending January 1, 2016. On November 21, 2011, we issued 10,000 shares of our common stock to an executive of the Company as an inducement for her employment which was issued under the Incentive Compensation Plan adopted by the Company. The shares were issued pursuant to a Restricted Stock Agreement dated November 21, 2011. The restricted stock was determined to have a fair value of $4.41 per share and was based on the closing price of our common stock on the grant date. The restricted stock fully vests at the end of a three year period on November 21, 2014. On April 1, 2011, we issued 25,000 shares of our common stock to an executive of the Bank as an inducement to his employment which was issued under the Incentive Compensation Plan adopted by the Company. The shares were issued pursuant to a Restricted Stock Agreement dated April 1, 2011. The restricted stock was determined to have a fair value of $6.82 per share and was based on the closing price of our common stock on the grant date. The restricted stock fully vests at the end of a five year period on April 1, 2016. On January 22, 2010, we issued 30,120 shares of our common stock to an executive of the Company as an inducement for his employment which was issued under the Incentive Compensation Plan adopted by the Company. The shares were issued pursuant to a Restricted Stock Agreement dated January 22, 2010. The restricted stock was determined to have a fair value of $5.70 per share and was based on the closing price of our common stock on the grant date. The restricted stock vested equally over a two year period ending January 22, 2012. On April 1, 2008, we issued 12,654 shares of our common stock to an executive of the Bank as an inducement for his continued employment and not under any stock incentive plan adopted by the Company. The shares were issued pursuant to a Restricted Stock Agreement dated April 1, 2008. The restricted stock was determined to have a fair value of $12.35 per share and was based on the closing price of our common stock on the grant date. The restricted stock vested equally over a three year period ending April 1, 2011. On November 12, 2007, we issued 35,000 shares of our common stock to an executive of the Bank as an inducement for his employment and not under any stock incentive plan adopted by the Company. The shares were issued pursuant to a Restricted Stock Agreement dated October 19, 2007. The restricted stock was determined to have a fair value of $10.95 per share and was based on the closing price of our common stock on the grant date. The restricted stock vested equally over a three year period, and the final vesting occurred on November 12, 2010. Compensation expense related to restricted stock was $395 thousand, $249 thousand and $244 thousand in 2012, 2011 and 2010, respectively. As of December 31, 2012, there was $1.6 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:
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | 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 |  |  | 50,060 |  |  | $ | 6.00 |  |  |  | 34,338 |  |  | $ | 6.52 |  |  |  | 20,103 |  |  | $ | 11.53 |
Granted |  |  | 224,000 |  |  |  | 5.65 |  |  |  | 35,000 |  |  |  | 6.13 |  |  |  | 30,120 |  |  |  | 5.70 |
Vested |  |  | (17,060 | ) |  |  | 5.73 |  |  |  | (19,278 | ) |  |  | 7.16 |  |  |  | (15,885 | ) |  |  | 11.32 |
Forfeited |  |  | (4,000 | ) |  |  | 5.96 |  |  |  | 0 |  |  |  | 0.00 |  |  |  | 0 |  |  |  | 0.00 |
Outstanding, end of the year |  |  | 253,000 |  |  |  | 5.71 |  |  |  | 50,060 |  |  |  | 6.00 |  |  |  | 34,338 |  |  |  | 6.52 |
On January 17, 2011, the Board of Directors approved the 2011—2013 Long-Term Incentive Plan (the “Plan”). The Plan stipulates restricted stock awards based on future performance of the Company over a three-year performance period. If performance thresholds are met, participants will receive 40% of the target award; if performance targets are met, participants will receive 100% of the target award; if performance targets are exceeded at a superior level, participants will receive 200% of the target award. If the performance thresholds are not achieved, participants will not receive an award. If awards are received, the restricted shares will vest over a one-year period after the performance period, with final vesting occurring on January 17, 2014. On February 24, 2012, the Board of Directors approved the 2012—2014 Long-Term Incentive Plan (the “Plan”). The Plan stipulates restricted stock awards based on future performance of the Company over a three-year performance period. If performance thresholds are met, participants will receive 40% of the target award; if performance targets are met, participants will receive 100% of the target award; if performance targets are exceeded at a superior level, participants will receive 200% of the target award. If the performance thresholds are not achieved, participants will not receive an award. If awards are received, the restricted shares will vest over a one-year period after the performance period, with final vesting occurring on December 31, 2015. The following table summarizes the unvested target awards for the Plans as of December 31:
|  | 2012 |  |  | 2011 |
|  | Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Shares |  |  | Weighted Average Grant Date Fair Value |
Outstanding, beginning of the year |  |  | 93,333 |  |  | $ | 7.03 |  |  |  | 0 |  |  | $ | 0.00 |
Granted |  |  | 74,000 |  |  |  | 5.96 |  |  |  | 126,000 |  |  |  | 7.03 |
Vested |  |  | 0 |  |  |  | 0.00 |  |  |  | 0 |  |  |  | 0.00 |
Forfeited |  |  | (16,000 | ) |  |  | 6.63 |  |  |  | (32,667 | ) |  |  | 7.03 |
Outstanding, end of the year |  |  | 151,333 |  |  |  | 6.55 |  |  |  | 93,333 |  |  |  | 7.03 |
Stock Option Plan First Commonwealth’s stock based compensation plan expired on October 15, 2005, and is described below. 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:
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Shares |  |  | Weighted Average Exercise Price |  |  | Shares |  |  | Weighted Average Exercise Price |
Outstanding, beginning of the year |  |  | 496,863 |  |  | $ | 10.03 |  |  |  | 640,866 |  |  | $ | 10.05 |  |  |  | 728,552 |  |  | $ | 10.18 |
Granted |  |  | 0 |  |  |  | 0.00 |  |  |  | 0 |  |  |  | 0.00 |  |  |  | 0 |  |  |  | 0.00 |
Exercised |  |  | (130,672 | ) |  |  | 6.76 |  |  |  | (13,760 | ) |  |  | 5.29 |  |  |  | 0 |  |  |  | 0.00 |
Forfeited |  |  | (169,869 | ) |  |  | 10.68 |  |  |  | (130,243 | ) |  |  | 10.61 |  |  |  | (87,686 | ) |  |  | 11.19 |
Balance, end of the year |  |  | 196,322 |  |  |  | 11.64 |  |  |  | 496,863 |  |  |  | 10.03 |  |  |  | 640,866 |  |  |  | 10.05 |
Exercisable at the end of the year |  |  | 196,322 |  |  |  | 11.64 |  |  |  | 496,863 |  |  |  | 10.03 |  |  |  | 640,866 |  |  |  | 10.05 |
The intrinsic value of stock options exercised during the years ended December 31, 2012 and 2011 was $1.41 per share and $1.17 per share, respectively. There were no options exercised during the year ended December 31, 2010. The following table summarizes information about the stock options outstanding at December 31, 2012:
|  | Options Outstanding |  |  | Options Exercisable |
Range of Exercise Prices |  | Number Outstanding |  |  | Weighted Average Remaining Contract Life |  |  | Weighted Average Exercise Price |  |  | Number Exercisable |  |  | Weighted Average Exercise Price |
$9.00 - $9.99 |  |  | 50,087 |  |  |  | 0.4 |  |  | $ | 9.27 |  |  |  | 50,087 |  |  | $ | 9.27 |
$10.00 - $10.99 |  |  | 4,954 |  |  |  | 0.9 |  |  |  | 10.46 |  |  |  | 4,954 |  |  |  | 10.46 |
$12.00 - $15.00 |  |  | 141,281 |  |  |  | 0.3 |  |  |  | 12.52 |  |  |  | 141,281 |  |  |  | 12.52 |
Total |  |  | 196,322 |  |  |  | 0.3 |  |  |  | 11.64 |  |  |  | 196,322 |  |  |  | 11.64 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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