SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 30, 2007
FIRST
FINANCIAL BANCORP.
(Exact name of registrant as specified in its charter)
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| Ohio
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0-12379
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31-1042001 |
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| (State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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300 High Street
Hamilton, Ohio
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45011 |
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| (Address of principal executive offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (513) 979-5770
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02
Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(e)
Short-Term Incentive Plan
On April 30, 2007, the Compensation Committee of the Board of Directors (the “Compensation
Committee”) of First Financial Bancorp. (the “Company”) ratified the Short-Term Incentive Plan (the
“Plan”). All of the Company’s employees, including the Company’s named executive officers (the
“Named Executive Officers”), as defined by Item 402(a)(3) of the Securities and Exchange
Commission’s Regulation S-K, will participate in the Plan. The Plan will be in effect beginning
with the current fiscal year, which ends December 31, 2007.
Under the Plan, a target percentage was established for each participant, at the beginning of each
fiscal year, based upon median competitive award levels for short-term incentive compensation
within the financial services industry. The target percentage, after being adjusted for performance
as described below, will be applied to actual base salary paid for the fiscal year. On April 30,
2007, the Compensation Committee ratified the target percentages for the current fiscal year for
each of the Named Executive Officers. Those target percentages are disclosed in the table below
under the column “Short-Term Incentive Target Percentage.”
Two performance measures, return on equity (“ROE”) and growth in earnings per share (“EPS”) will be
used to determine the actual awards under the Plan. For fiscal 2007, the Compensation Committee
established threshold, target and maximum ROE levels based upon the performance of banks of a
comparable asset size. In addition, the Compensation Committee established threshold, target and
maximum EPS growth levels based upon reasonable growth expectations for the Company. At the end of
fiscal 2007, the amount of the target percentage will be multiplied by a factor ranging from zero
times the target percentage (for performance at or below the threshold ROE) up to two times the
target percentage (for performance at or above the maximum ROE). After adjusting the target
percentage based upon ROE performance (the “Adjusted Percentage”), the amount of the Adjusted
Percentage will be further modified based upon EPS growth. The EPS modifier will range from a 20%
reduction to the Adjusted Percentage (for performance at or below the threshold EPS growth rate) to
a 20% increase to the Adjusted Percentage (for performance at or above the maximum EPS growth
rate). After applying the EPS modifier to the Adjusted Percentage, the resulting percentage will be
applied to actual base salary paid for fiscal 2007 to determine the actual award.
Awards under the Plan will be paid in cash to participants as soon as practicable following the
close of each fiscal year; however, no payment will be made until the awards have been determined
and approved by the Compensation Committee. The Plan may be amended or discontinued at any time at
the election of the Compensation Committee, provided that no amendment or discontinuation will
reduce the rights of participants during a current fiscal year.
Named
Executive Officer Compensation/Stock Awards
On April 30, 2007, the Compensation Committee approved base salary increases, short-term incentive
target percentages under the Plan, restricted stock awards and stock option grants for the Named
Executive Officers, as disclosed in the table below.
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Number of |
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Short- |
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Shares |
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Value of |
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Term |
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Number of |
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Value of |
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Underlying |
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Stock |
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Incentive |
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Shares of |
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Shares of |
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Stock |
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Option |
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| Named Executive Officer |
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Base |
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Target |
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Restricted |
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Restricted |
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Option |
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Grant |
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| and Principal Position |
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Salary (1) |
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Percentage |
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Stock (#) |
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Stock ($)(2) |
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Grant (#) |
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($)(3) |
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Claude E. Davis
President and Chief Executive Officer |
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450,000 |
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% |
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26,600 |
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396,340 |
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111,700 |
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269,979 |
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C. Douglas Lefferson
EVP and Chief Operating Officer |
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272,950 |
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% |
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7,200 |
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107,280 |
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28,200 |
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68,160 |
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J. Franklin Hall
SVP and Chief Financial Officer |
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231,750 |
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4,700 |
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70,030 |
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19,200 |
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46,406 |
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Samuel J. Munafo
EVP, Banking Markets |
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236,900 |
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4,500 |
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67,050 |
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19,600 |
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47,373 |
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Gregory A. Gehlmann
SVP, General Counsel & Chief Risk Officer |
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236,900 |
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% |
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4,500 |
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67,050 |
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19,600 |
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47,373 |
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The increases in base salaries (3% from 2006 most recent base) for the
above officers other than Mr. Davis are effective as of February 26,
2007. Mr. Davis’ base salary increase (3% or $13,500) has been
deferred and will only be paid if the Company achieves earnings in the
forecasted range of $1.00 to $1.10 per share. If achieved then the
salary differential that would have been paid from February 26 to
December 31, 2007 will be paid in a year-end supplemental bonus and
the new base amount will become effective as of January 1, 2008. If
the Company does not achieve the published range then the supplemental
bonus will not be paid and Mr. Davis’ base would continue at the
current level and not be adjusted. |
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| (2) |
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The value of the restricted stock awards is based upon the closing
price of the Company’s common stock as of April 30, 2007, which was
$14.90 per share. Restricted shares are subject to a performance
benchmark of 12% Return on Equity that must be achieved in order for
the restricted stock to vest over a four-year vesting schedule
beginning on the first anniversary of grant (April 30, 2008) . |
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The value of the stock options granted was estimated using the
Black-Scholes option valuation model. Options vest 25% per year for
four years beginning on the first anniversary of grant (April 30,
2008). |