FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTESTO CONSOLIDATED FINANCIAL STATEMENTS (Dollar Amounts in Thousands) NOTE 22— Retirement Plans All employees with at least one year of service are eligible to  participate in the employee stock ownership plan (“ESOP”).  Contributions to the plan are determined by the Board of  Directors, and are based upon a prescribed percentage of  the annual compensation of all participants. During a prior  period, the ESOP acquired shares of the Corporation’s  common stock in a transaction, whereby the Corporation  borrowed the required funds and concurrently loaned this  amount to the ESOP. The borrowed amount represents  leveraged and unallocated shares, and accordingly has been  recorded as long-term debt and the offset as a reduction of  common shareholders’ equity. Compensation costs related to  the plan were $938 in 2003, $940 in 2002 and $1,173 in 2001  (See NOTE 24). The employees of PFC were covered by a leveraged ESOP  plan. The PFC ESOP had unallocated ESOP shares of 43,174  at the merger date. The plan has been terminated effective  December 5, 2003, pending liquidation of unallocated ESOP  shares with a fair value of $620 to be utilized to pay off the  outstanding PFC ESOP loan payable. Remaining shares will  be allocated to the participants of the PFC ESOP plan. No  compensation cost for the PFC ESOP plan is required to be  recognized in the Consolidated Statements of Income. The Corporation also has a savings plan pursuant to the  provisions of section 401(k) of the Internal Revenue code.  Under the terms of the plan, each participant will receive an  automatic employer contribution to the plan in an amount  equal to 3% of compensation. Each participating employee  may contribute up to 80% of compensation to the plan  of which up to 4% is matched 100% by the employer’s  contribution. The 401(k) plan expense was $2,606 in  2003, $2,616 in 2002 and $2,583 in 2001. Prior to the plan  amendment effective February 1, 2002, the Corporation’s  401(k) plan permitted each participating employee to  contribute 10% of compensation to the plan of which up to  4% was matched 100% by the employer’s contribution. The 401(k) plan of PFC was merged into the Corporation’s  401(k) plan effective January 1, 2004, whereby all eligible PFC  employees began to participate in the Corporation’s plan with  no lapse in credited service. During the period from the merger  date of December 5, 2003, until December 31, 2003, the PFC  employees continued to participate in the PFC plan and to  receive employer contributions under the terms of the plan. Upon shareholder approval at the regular 1998 meeting,  the Corporation established a “Supplemental Executive  Retirement Plan” (“SERP”) to provide deferred  compensation for a select group of management. The purpose  of this plan is to restore some of the benefits lost to the highly  compensated employees compared to other employees due  to limits and restrictions incorporated into the Corporation’s  401(k) and ESOP plans. The Corporation’s 401(k) and  ESOP plans include restrictions on maximum compensation,  actual deferral percentage, actual contribution, maximum  contribution and maximum salary reduction which are  required in order to meet specific legal requirements. Participants in the SERP may elect to contribute up to  25% of compensation (compensation in excess of limits  of the Corporation’s 401(k) and ESOP plans) into the  SERP, through salary reduction. The Corporation will  make an elective contribution to the SERP equal to the  elective deferred compensation of the participant for the  plan year. Each participant of the SERP will also receive  a matching contribution equal to 100% of the employee’s  elective contribution up to 4%, and an additional non- elective contribution from the employer equal to 8% of plan  compensation. In addition, the Corporation may make an  extra non-elective contribution for plan participants. The SERP will continue to supplement the Corporation’s  401(k) and ESOP plans and will therefore be modified at  the same time and in the same respect as the basic plans are  modified in future periods. The SERP plan expense was $235  in 2003, $133 in 2002 and $150 in 2001. Pension Plans of Acquired Subsidiaries The noncontributory defined benefit pension plan of  Southwest Bank covered all eligible employees and provided  benefits based on each employee’s years of service and  compensation. On December 31, 1998, the participant’s  accrued benefit was frozen and participation in the First  Commonwealth Financial Corporation ESOP plan with no  lapse in credited service began. The Southwest Bank Pension  Plan was terminated effective December 31, 2001. As the  result of the plan termination, an asset reversion of $1,271 and  a gain, net of applicable excise tax, of $277 were recognized. Net periodic pension cost of this plan for each of the last  three years was as follows: Due to the termination of the plan, there were no benefit  obligations and no assets held as of December 31, 2003  and 2002. PFC participated in a multi-employer defined benefit pension  plan that covered all eligible employees and provided  benefits based on each employee’s years of service and  compensation. No contributions were made to the plan and  no compensation cost was recognized in the Consolidated  Statements of Income. The estimated withdrawal liability at  December 31, 2003 is $374. 2003 2002 2001 Service cost $ -0- $ -0- $ -0- Interest cost on projected benefit obligation 346 Expected return on plan assets  -0- -0- (438) Net amortization and deferral  (33) Net periodic pension cost (benefit) $ -0- $ -0- $ (125) 34