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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

First Financial Bancorp.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
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o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
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Notice of Annual
Meeting of Shareholders

Items of Business:

Our Annual Meeting of Shareholders will be held at 10:00 am Eastern Time, Tuesday, May 28, 2019. You can attend the 2019 Annual Meeting online and vote your shares electronically. The Annual Meeting will be completely virtual and conducted through the online means described below. The Annual Meeting of Shareholders is held for the following purposes:

1.  To elect fifteen directors nominated by the Board of Directors to serve until the next annual meeting of shareholders and until their respective successors have been elected;

2.  To ratify the appointment of Crowe LLP as our independent registered public accounting firm for 2019;

3.  To approve, on an advisory basis, the compensation of the Company's executive officers; and

4.  To consider and act upon any other matters that may properly come before the meeting.

Only shareholders of record at the close of business on April 1, 2019 are eligible to participate and entitled to vote at the Annual Meeting or at any adjournment of the Annual Meeting.

      About the Meeting:

Meeting Date: 
May 28, 2019

Time: 
10:00 am Eastern Time

Virtual Shareholder Meeting:
www.virtualshareholdermeeting.com/ffbc19

Record Date: 
April 1, 2019

Mailing Date: 
April 18, 2019

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BY ORDER OF THE BOARD OF DIRECTORS

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Karen B. Woods
Corporate Secretary

Important Notice regarding the Internet availability of Proxy Materials for the Annual Meeting The proxy statement and 2018 Annual Report are available at www.bankatfirst.com/investor. Your vote is very important. We urge all shareholders to vote on the matters listed above and described in the proxy statement as soon as possible, whether or not they attend the online Annual Meeting. For your convenience, you may attend the webcast of the meeting via the Internet at www.virtualshareholdermeeting.com/ffbc19 when you enter your 16-digit control number included with the Notice of Internet Availability or proxy card. Instructions on how to attend and participate in the Annual Meeting via the webcast are posted at www.virtualshareholdermeeting.com/ffbc19. You will be able to vote your shares while attending the Annual Meeting by following the instructions on the website. While our management will address questions from shareholders who have submitted their questions electronically prior to the Annual Meeting, the webcast will not allow you to ask questions of management during the meeting. You may visit www.proxyvote.com at any time prior to the Annual Meeting to ask questions of our executive management that may be addressed in the Annual Meeting and access information about the Company.


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TABLE OF CONTENTS

Proxy and Annual Meeting Summary   1

Voting Matters

 
1

How to Vote

 
1

First Financial Bancorp Board of Directors

 
2

Business Highlights

 
3

Questions and Answers about this Proxy Statement and the Annual Meeting

 

4

Proposal 1—Election of Directors

 

8

Proposal 2—Ratify the Appointment of Crowe LLP as our Independent Registered Public Accounting Firm for 2019

 

17

Independent Registered Public Accounting Firm Fees

 
17

Report of the Audit Committee

 
18

Proposal 3—Non-Binding, Advisory Vote to Approve Executive Officer Compensation

 

19

Share Ownership

 

20

Principal Shareholders

 
20

Shareholdings of Directors, Executive Officers and Nominees for Director

 
21

Section 16(a) Beneficial Ownership Reporting Compliance

 
22

Corporate Governance   23

General

 
23

Our Board's Role in Risk Oversight

 
24

Director Independence

 
25

Board Leadership Structure

 
25

Board Self-Assessment

 
26

Evaluating Nominees and Electing Directors

 
26

Director Education

 
27

Share Ownership Guidelines

 
27

Succession Planning

 
27

Board Meetings

 
27

Board Committees

 
28

2018 Board Compensation

 
30

Review and Approval of Related Person Transactions

 
31

Policy Against Hedging Activities

 
32

Communicating with the Board of Directors

 
32

Executive Compensation (See detailed Executive Compensation Table of Contents)

 

33

Compensation Discussion and Analysis (CD&A)

 
33

Compensation Committee Report

 
49

Compensation Tables

 
50

2020 Annual Meeting Information

 

62

Shareholder Proposals for the 2020 Annual Meeting

 
62

Appendix A

 

A-1

Non-GAAP Reconciliation

 
A-1

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Proxy and Annual Meeting Summary

We are sending this proxy statement and the accompanying proxy card to you as a shareholder of First Financial Bancorp., an Ohio corporation, in connection with the solicitation of proxies for the 2019 Annual Meeting of Shareholders (the "Annual Meeting"). Our Board of Directors is soliciting proxies for use at the Annual Meeting, or at any postponement or adjournment of the Annual Meeting.                LOGO   If you would like to help us reduce our costs incurred in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

Voting Matters

Proposal
  Approval Required
  Board's
Recommendation

  Page
Reference

                 
1.   Election of Directors   Affirmative vote of a plurality   GRAPHIC For Each Nominee   8

2.

 

Ratify the Appointment of Crowe LLP as our Independent Registered Public Accounting Firm for 2019

 

Majority of votes present, in person or by proxy, and entitled to vote

 

GRAPHIC

 

17

3.

 

Approve, on an Advisory Basis, the Compensation of the Company's Executive Officers

 

Majority of votes present, in person or by proxy, and entitled to vote

 

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19

We are not aware of any other matters that will be brought before the shareholders for a vote at the Annual Meeting. If any other matter is properly brought before the meeting, your completed proxy may, if you have so selected, give your proxies the authority to vote on these other matters in their best judgment.

In this proxy statement, the "Company," "First Financial," "First Financial Bancorp," "we," "our," or "us" all refer to First Financial Bancorp. and its subsidiaries, unless the context otherwise requires. We also refer to the Board of Directors of First Financial as the "Board." References in this proxy statement to "common shares" or "shares" refer to the Company's common shares.

Unless otherwise noted, the information in this proxy statement covers our 2018 fiscal year that began January 1, 2018 and ended December 31, 2018.

How to Vote

Review the proxy statement and vote in one of these three ways:

Vote Online   Vote by Phone       Vote by Mail

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Before the Meeting: Go to
www.proxyvote.com
                     

During the Meeting: Go to
www.virtualshareholdermeeting.com/ffbc19

 

           By calling
           1-800-690-6903

     

                     By signing, dating, and returning your
                     proxy card in the enclosed envelope

2019 Proxy Statement    |    Proxy and Annual Meeting Summary        1


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First Financial Bancorp Board of Directors

Director Nominees

The first item of business at the Annual Meeting will be the election of fifteen directors of the Company. The nominees, including their occupation and committee memberships during 2018, are set forth in the table below.


Name

 

Age

 

Occupation

 

Director
Since

 

Audit

 

Compensation

 

Corporate Governance
and Nominating

 

Risk and Compliance

 

Enterprise Risk

 

Compliance and
Community Development

 

Capital Markets
J. Wickliffe Ach   70   Retired as President and Chief Executive Officer of Hixson Inc.   2007           C                
Kathleen L. Bardwell   62   Senior Vice President, Chief Compliance Officer of STERIS Corporation.   2018   VC       VC                
William G. Barron   69   Chairman and President of Wm. G. Barron Enterprises, Inc.   2018           M           M    
Vincent A. Berta   60   President and Managing Director of Covington Capital, LLC   2018                   C       M
Cynthia O. Booth   61   President and Chief Executive Officer of COBCO Enterprises, LLC,   2010                       C   VC
Archie M. Brown, Jr.   58   President and Chief Executive Officer of First Financial Bancorp. and First Financial Bank   2018                            
Claude E. Davis   58   Executive Chairman of First Financial Bancorp and First Financial Bank   2004                            
Corinne R. Finnerty   62   Principal and sole shareholder of the law firm of McConnell Finnerty PC   1998           M       VC        
Erin P. Hoeflinger   53   Senior Vice President, Business Strategy and Execution of Aetna   2018           M       VC        
Susan L. Knust   65   Owner and Manager of several businesses that own, lease and manage industrial and commercial real estate   2005       VC               M    
William J. Kramer   58   Vice President of Operations and director of Valco Companies, Inc.   2005   C   M                    
John T. Neighbours   69   General Counsel and advisor to the board of AmeriQual Group Holdings   2016                   M       M
Thomas M. O'Brien   62   Senior advisor with the Boston Consulting Group   2018   M   C                    
Richard E. Olszewski           69   Owner and operator of two 7-Eleven Food Store franchises in Griffith   2005           M       M        
Maribeth S. Rahe   70   President and Chief Executive Officer of Fort Washington Investment Advisors, Inc.   2010   M                       C

C = Chairperson

VC = Vice Chairman

M = Member

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Board Highlights

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Business Highlights

2018 was a transformational year for the Company. In April 2018, we completed the merger with MainSource Financial Group, an Indiana-based bank holding company. As a result of the merger, the Company grew by $4.4 billion in assets, $2.8 billion in loans and $3.3 billion in deposits. Following the merger, our Board was reconstituted with nine former members of the Company's board and six former members of MainSource's board. We also reorganized our executive team, with our former Chief Executive Officer becoming Executive Chair and MainSource's former President and Chief Executive Officer becoming President and Chief Executive Officer of the Company. Notwithstanding these significant changes, the Company continued its pattern of excellent profitability, as discussed in the business highlights on page 34 of this proxy statement.

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1.
Non-GAAP financial measure which management believes facilitates a better understanding of the Company's financial condition. See Appendix A for Non-GAAP reconciliation.

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Questions and Answers about this Proxy Statement and the Annual Meeting

Why am I receiving this Proxy Statement?

We are making available this Notice of Annual Meeting of Shareholders, proxy statement, and annual report for the year ended December 31, 2018 (the "proxy materials"), either online or by mail, in connection with the 2019 Annual Meeting of Shareholders of First Financial because you are a shareholder of record of the Company as of the close of business on April 1, 2019 (the "record date"). This proxy statement describes the matters on which you are asked to vote and provides information about those matters and about the Company so that you can make an informed decision.

This proxy statement and related materials are being mailed to, or can be accessed online by, shareholders on or about April 18, 2019.

What is Notice and Access and why did First Financial elect to use it?

We are making the proxy materials and annual report available to our shareholders electronically via the Internet under the Notice and Access regulations of the U.S. Securities and Exchange Commission ("SEC"). Many of our shareholders have received a Notice of Internet Availability of Proxy Materials ("Notice of Internet Availability") in lieu of receiving a full set of printed materials in the mail. We are using the Notice and Access method to expedite distribution and reduce the costs associated with printing and mailing these materials.

The Notice of Internet Availability includes information on how to access and review the proxy materials and how to vote online, by phone, or by attending the Annual Meeting virtually via the Internet. The proxy materials and annual report, as well as other reports filed with or furnished to the SEC, can be accessed free of charge at www.bankatfirst.com/investor. You may also access this information by searching "Company Filings" at www.sec.gov.

I received a Notice of Internet Availability of Proxy Materials only. How can I receive printed copies of the proxy statement and annual report?

Shareholders may receive a printed copy of the annual report and proxy materials, free of charge, by following the instructions on the Notice of Internet Availability for receiving such materials:

Who is paying for the cost of this proxy solicitation?

First Financial is paying for the costs associated with preparing, printing and mailing these proxy materials. In addition, we will reimburse banks, brokers and other custodians, nominees and fiduciaries for reasonable expenses incurred in forwarding the proxy materials to beneficial owners of our shares and soliciting their proxies.

In the event the Board hires a third party to solicit proxies, First Financial will pay the costs associated with the third party proxy solicitor. Our directors, officers and associates also may solicit proxies from our shareholders by further mailings, personal contact, phone, or e-mail, but these individuals will not receive additional compensation for this solicitation activity.

Who can vote at the Annual Meeting?

Only shareholders of record at the close of business on April 1, 2019 will be entitled to notice of and to vote at the Annual Meeting. Each common share owned at the close of business on April 1, 2019 entitles its owner to one vote on each proposal being considered at the Annual Meeting.

The common shares are the Company's only voting securities entitled to vote at the Annual Meeting. At the close of business on April 1, 2019, there were 98,611,921 common shares outstanding and entitled to vote.

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How do I vote my shares?

Even if you plan to attend the Annual Meeting virtually via the Internet, as described below, we strongly encourage you to vote prior to the meeting. Shareholders of record may vote using any of the following methods:

If you hold your shares in "street name" at a bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee on how to vote your shares.

What is the difference between holding shares directly as a shareholder of record and holding shares in "street name" at a bank, broker or other nominee?

What happens if I sign, date and return my proxy card, or complete the online or telephonic proxy methods, but do not specify how I want my shares voted on one or more of the proposals?

Your shares will be voted in the manner you specify on each proposal. If you are a shareholder of record and sign, date and return a proxy or submit a proxy online or by telephone, but do not provide voting instructions on one or more proposals, your vote will be counted as a vote "for" all of the Company's nominees for directors and "for" Proposals 2 and 3.

If you hold your shares in "street name" and have not returned voting instructions on one or more proposals, your bank, broker or nominee may vote your shares only on those proposals for which it has discretion to vote. We believe that under applicable rules, your bank, broker or nominee has discretion to vote your shares on the ratification of our independent registered accounting firm (Proposal 2), which is considered a routine matter. However, your bank, broker or nominee does not have discretion to vote your shares on certain other matters considered non-routine such as the election of directors (Proposal 1) or the advisory approval of executive compensation (Proposal 3). If you do not provide voting instructions on a non-routine proposal, your shares will be considered "broker non-votes." The effect of a "broker non-vote" on each proposal is detailed in the questions and answers under the heading "Annual Meeting Information" below.

What if I indicate "Withheld" with respect to the election of one or more directors or "Abstain" with respect to any of the other proposals being considered?

The effect of these voting specifications on each proposal is detailed in the questions and answers under the heading "Annual Meeting Information" below.

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Can I change my proxy vote?

You may revoke your proxy at any time before it is actually exercised at the Annual Meeting by:

If you hold your shares in "street name" and instructed your bank, broker or other nominee to vote your common shares and you would like to revoke or change your vote, you must follow the instructions provided by your bank, broker or other nominee.

What if my shares are held through the First Financial Bancorp 401(k) Savings Plan (applicable to traditional or Roth contribution plans)?

You will receive an electronic Notice of Internet Availability unless you opted to receive paper copies of the proxy materials. The Notice of Internet Availability will contain voting instructions for all shares registered in the exact same name, whether inside or outside of the First Financial Bancorp 401(k) Savings Plan (the "Savings Plan"). If you hold shares outside of the Savings Plan and they are not registered in the same name as those within the Savings Plan, you will receive a separate Notice of Internet Availability or proxy card for the shares held outside of the Savings Plan.

Voting instructions with respect to shares held in the Savings Plan must be received by 11:59 pm Eastern Time on May 23, 2019. All voting instructions you give with respect to these shares will be kept confidential. If you do not timely submit voting instructions for these shares, the shares allocated to you, together with all unallocated shares held in the Savings Plan, will be voted in accordance with the pro-rata vote of participants in the Savings Plan who did provide instructions.

Who should I contact if I have questions about this proxy solicitation and where can I get assistance in voting my shares?

You may contact us at InvestorRelations@bankatfirst.com or call our Investor Relations department toll free at 1-877-322-9530 if you have any questions or need assistance in voting.

How many votes must be present in person or by proxy to hold the Annual Meeting?

A quorum must exist before business can be conducted at the Annual Meeting. Under our Amended and Restated Regulations (the "Amended Regulations"), a quorum will exist if a majority of the common shares outstanding as of the record date are present in person or by proxy. At the close of business on April 1, 2019, there were 98,611,921 common shares outstanding. A majority, or 49,305,962 common shares, present in person or by proxy, will constitute a quorum.

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What proposals are being considered and how many votes are needed for each proposal to be approved by the shareholders?

Proposal   Approval Required   Effect of an Abstention
(or Withheld Vote with
respect to Proposal 1)
  Effect of a Broker
Non-Vote
1.   Election of Directors   Affirmative vote of a plurality   No effect on election voting but see "Policy on Majority Voting" in the Corporate Governance section of this proxy statement   No effect

2.

 

Ratify the Appointment of Crowe LLP as our Independent Registered Accounting Firm for 2019

 

Majority of votes present, in person or by proxy, and entitled to vote

 

Will be treated as a vote AGAINST the proposal

 

Not Applicable

3.

 

Approve, on an Advisory Basis, the compensation of the Company's Executive Officers

 

Majority of votes present, in person or by proxy, and entitled to vote

 

Will be treated as a vote AGAINST the proposal

 

No effect

How can I attend the Annual Meeting?

You can attend our 2019 Annual Meeting via the Internet or by proxy.

Our 2019 Annual Meeting will take place via a webcast at www.virtualshareholdermeeting.com/ffbc19. You may vote while attending the webcast meeting by following the instructions at www.virtualshareholdermeeting.com/ffbc19. You will not be able to submit questions to executive management or the Board via this webcast during the Annual Meeting. To attend the Annual Meeting via www.virtualshareholdermeeting.com/ffbc19, you will need the control number included on the Notice of Internet Availability or proxy card that was mailed to you. Instructions on how to attend and participate in the Annual Meeting via the Internet are posted at www.virtualshareholdermeeting.com/ffbc19.

How do I find out the voting results from the Annual Meeting?

We plan to announce preliminary voting results at the Annual Meeting and will disclose the final voting results in a current report on Form 8-K filed with the SEC within four business days of the Annual Meeting.

Can I elect to only receive First Financial's proxy materials and annual reports electronically?

Shareholders can elect to receive future proxy materials and annual reports electronically instead of receiving print copies of these items in the mail. You can make this election by following the instructions provided on your proxy card or Notice of Internet Availability or by going to www.proxyvote.com and following the instructions provided there.

If you choose to receive future proxy statements and annual reports electronically and you continue to hold shares as of the record date of the next annual meeting, you will receive an e-mail message next year that includes access information for these materials as well as instructions for online voting.

What is "householding?"

If two or more shareholders reside at the same address and appear to be members of the same family, we may send a single copy of the proxy materials, or Notice of Internet Availability, to that address unless one of the shareholders at that address notifies us that they wish to receive individual copies of the material. This procedure reduces our printing and mailing costs. Shareholders who participate in householding will continue to have access to and utilize separate proxy voting instructions for each shareholder account.

How do I stop participating in the householding program?

To stop participating in the householding program, contact Broadridge Householding Department by calling toll free at 1-866-540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. You will be removed from the householding program within 30 days of Broadridge's receipt of your instruction.

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Proposal 1—Election of Directors

Our Board currently consists of fifteen members, thirteen of whom are non-employee directors. Our Amended Regulations provide that the Board shall consist of not less than nine nor more than 25 persons, with the exact number to be fixed and determined from time to time by resolution of the Board or by resolution of the shareholders at any annual or special meeting of shareholders. Any vacancy may be filled by the Board in accordance with law and our Amended Regulations for the remainder of the term of the vacant directorship. The Board has established the number of directors at fifteen.

Our Board has approved the nomination of the following fifteen persons as candidates for election as director, each for a one-year term: J. Wickliffe Ach, Kathleen L. Bardwell, William G. Barron, Vincent A. Berta, Archie M. Brown, Jr., Cynthia O. Booth, Claude E. Davis, Corinne R. Finnerty, Erin P. Hoeflinger, Susan L. Knust, William J. Kramer, John T. Neighbours, Thomas M. O'Brien, Richard E. Olszewski, and Maribeth S. Rahe. Each of the nominees is an incumbent director. The Governance and Nominating Committee ("CGNC") recommended all fifteen nominees to the Board, which in turn unanimously approved the nomination of all fifteen persons.

In the event that any one or more of the nominees becomes unavailable or unable to serve as a director prior to the Annual Meeting, your submitted proxy will be voted to elect the remaining nominees and any substitute nominee or nominees designated by the Board. We have no reason to believe that any nominee will be unable or decline to serve as a director.

The fifteen nominees for director receiving the most votes at the Annual Meeting will be elected as directors. You can find additional information about our Policy on Majority Voting in the Corporate Governance section of this proxy statement. The general considerations and criteria for assessing director candidates are established in the Charter of the Board's Governance and Nominating Committee (available at www.bankatfirst.com/investor). These considerations and criteria are also summarized in the Corporate Governance section of this proxy statement.

Below is information concerning the nominees for directors, including their present and past professional positions, current directorships with other companies or organizations, and key qualifications and attributes qualifying them to serve on our Board. The age indicated for each nominee below is their age as of April 1, 2019. For information regarding ownership of shares of the Company by nominees and directors of the Company, see the Shareholdings of Directors, Executive Officers and Nominees for Director section of this proxy statement. Except as noted, there are no arrangements or understandings between any director or any nominee and any other person pursuant to which such director or nominee is or was nominated to serve as director.

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8        2019 Proxy Statement    |    Proposal 1—Election of Directors


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J. Wickliffe Ach

Mr. Ach recently retired from his role as President and Chief Executive Officer of Hixson Inc.

  Age:

Director Since:

Committees:

  70

2007
Lead Independent Director effective April 1, 2018

Corporate Governance & Nominating (Chair)


QUALIFICATIONS
Mr. Ach recently retired from his role as President and Chief Executive Officer of Hixson Inc., an architectural engineering firm located in Cincinnati, Ohio. He served in this role from 1993 until his retirement on May 31, 2018.

Mr. Ach is presently the Lead Independent Director of the Board of Directors of First Financial Bancorp. He previously served as the Vice Chair of the Board of Directors.

Mr. Ach presently serves on the board of directors of Setzer Corp. (a private corporation located in Dayton, Ohio that is a construction contractor) and on the board of trustees of Grote Enterprises (a private construction company located in Cincinnati, Ohio). Mr. Ach also serves on the board of directors of the CISE Foundation, a Cincinnati not-for-profit organization. He is or has been involved in a number of business and civic organizations, including the Cultural Facilities Task Force of Hamilton County, Ohio, relating primarily to the Cincinnati Museum Center and Music Hall facilities. Mr. Ach is President of the Union Terminal Corporation.

As a seasoned business owner and entrepreneur, Mr. Ach brings valuable insight to the Board in strategic and cultural matters. Mr. Ach's involvement in the Cincinnati business community provides added understanding of our growing Cincinnati market area. Furthermore, his specific background in architectural engineering provides added value in our strategies related to physical banking center locations and design.


Kathleen L. Bardwell

Ms. Bardwell currently serves as Senior Vice President, Chief Compliance Officer of STERIS Corporation.

  Age:

Director Since:

Committees:

  62

2018

Audit (Vice Chair), Corporate Governance & Nominating (Vice Chair)


QUALIFICATIONS
Ms. Bardwell currently serves as Senior Vice President, Chief Compliance Officer of STERIS Corporation. In her role she is responsible for Regulatory Affairs, AST Quality Operations, Global Compliance, Corporate Internal Audit and Security and serves as STERIS' chief compliance officer, chief audit executive and on its ethics committee. She brings over 35 years of audit and accounting experience to the Company's Board of Directors.

Ms. Bardwell is a member of the National Association of Corporate Directors (NACD), the American Institute of Certified Public Accountants (AICPA), the Ohio Society of CPAs (OSCPA), the Institute of Internal Auditors (IIA), the American Society for Quality (ASQ) and AdvaMed. She has been a Certified Public Accountant since 1989 and received a Certification in Risk Management Assurance (CRMA) designation in 2013.

Ms. Bardwell previously served as a director of MainSource Financial Group, Inc. and MainSource Bank, from 2011 until April 1, 2018. Ms. Bardwell's many years of expertise relating to regulatory compliance and financial reporting controls, both of which are vital in the financial services industry, her experience with publicly traded companies, and her qualification as an audit committee financial expert provide valuable insight to the Company.

2019 Proxy Statement    |    Proposal 1—Election of Directors        9


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William G. Barron

He has been Chairman and President of Wm. G. Barron Enterprises, Inc., a commercial real estate broker, manager and developer, since June 1994.

  Age:

Director Since:

Committees:

  69

2018

Compliance and Community Development, Corporate Governance & Nominating


QUALIFICATIONS
Mr. Barron is a commercial-industrial real estate specialist. He has been Chairman and President of Wm. G. Barron Enterprises, Inc., a commercial real estate broker, manager and developer, since June 1994. Since 1997, Mr. Barron has been designated a Certified Commercial Investment Member, which signifies expertise in commercial real estate brokerage, leasing, valuation, asset management and investment analysis.

In addition, Mr. Barron is President of Owensboro Self Bailment, LLC, a self-storage holding company, and Gunston, LLC, a real estate holding company. Prior to these activities, Mr. Barron served as Vice President (1974-81), President (1981-87) and Chairman and CEO (1987-94) of Barron Homes, Inc., a residential home building company.

Mr. Barron previously served as a director of MainSource Financial Group, Inc. beginning in 1989 and as a director of MainSource Bank from 2011 until April 1, 2018, following prior service on the MainSource Bank board from 1983 to 2000.

Mr. Barron is very active in his community in both civic and charitable positions, including Former Chairman of the Board of the Owensboro Family YMCA, YMCA Endowment Fund Committee, Former Board member of Mentor Kids Kentucky, Board Member and past President of the Owensboro Homebuilders Association, and Board member of Owensboro Daviess County Chamber of Commerce. Mr. Barron has served as President of the Owensboro Rotary Club. Mr. Barron is a graduate of Leadership Owensboro and Leadership Kentucky.

Mr. Barron brings extensive experience in the banking, homebuilding and commercial real estate development industries and a deep commitment to community which provide valuable expertise to the Company.


Vincent A. Berta

Mr. Berta currently serves as the President and Managing Director of Covington Capital, LLC.

  Age:

Director Since:

Committees:

  60

2018

Capital Markets, Enterprise Risk (Chair)


QUALIFICATIONS
Mr. Berta currently serves as the President and Managing Director of Covington Capital, LLC, a private investment firm providing specialized investment banking and advisory services primarily to financial, real estate and investment companies.

Mr. Berta has 34 years of experience in the financial services industry, previously serving as the Executive Vice President and Regional Chairman of US Bank Corporation, the Chairman, President and Chief Executive Officer of Trans Financial, Inc., a $2.3 billion bank acquired by US Bank Corporation in 1998, and a partner in Landmark Financial Advisors, Inc., a registered investment advisory company he co-founded in 2002. Mr. Berta also served as a chief financial officer and in various other roles for banking institutions. Mr. Berta is active in various community and civic associations, including work on the Focus 2030 Comprehensive Plan, which was formed to provide a community framework for growth in Bowling Green, Kentucky.

Mr. Berta previously served as a director of MainSource Financial Group, Inc. and MainSource Bank from 2016 until April 1, 2018.

Mr. Berta's significant experience in the financial services industry, including specifically his executive experience as an officer of banking institutions, provides valuable insight and knowledge to the Board.

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Cynthia O. Booth

Ms. Booth is the President and Chief Executive Officer of COBCO Enterprises, LLC.

  Age:

Director Since:

Committees:

  61

2010

Capital Markets (Vice Chair), Compliance and Community Development (Chair)


QUALIFICATIONS
Ms. Booth is the President and Chief Executive Officer of COBCO Enterprises, LLC, the owner and operator of eight McDonald's restaurants in the Cincinnati area. Prior to forming COBCO in 2000, she held various executive positions at Firstar Bank (now U.S. Bank) in Cincinnati, including President, Firstar Bank Foundation, Senior Vice President—Director of Community Development, Vice President of Private Wealth Group, Vice President of Residential Real Estate, Vice President of Human Resources, and before that was President of Diversified Solutions, Inc., a bank consulting firm.

Ms. Booth is active in several civic and community organizations, including serving as a director and the treasurer of the Greater Cincinnati Regional Chamber of Commerce and as a director of the YWCA of Greater Cincinnati.

Ms. Booth brings deep banking experience to the Board, including extensive knowledge in residential real estate lending, regulatory relations, the Community Reinvestment Act and other regulatory compliance, private banking and human resources matters. Furthermore, her experience in the restaurant franchise area provides valuable insight into the specialty area of lending conducted through our subsidiary First Franchise Capital Corporation.


Archie M. Brown, Jr.

Mr. Brown is the President and Chief Executive Officer of First Financial Bancorp. and First Financial Bank.

  Age:

Director Since:

  58

2018


QUALIFICATIONS
Mr. Brown is the President and Chief Executive Officer of First Financial Bancorp. and First Financial Bank, having been appointed to these positions effective April 1, 2018. Previously, he served as the President and Chief Executive Officer of MainSource from August 2008 until April 1, 2018. Mr. Brown also served as the chairman of the board of MainSource from April 2011 until April 1, 2018.

During his 34 years in banking, Mr. Brown has held management positions in branch management, region management, bank operations (both deposit and loan), business development, small business and consumer lending. Mr. Brown has experience in many areas of banking, including enterprise risk management, change management, expense reduction initiatives, process re-engineering, balance sheet management and restructures, loan workout initiatives, business startups within the bank, business consolidation, market selection, branch and bank acquisitions and integration, board communication, investor and shareholder relations and working with bank regulators.

Mr. Brown serves on the board and executive committee of the Cincinnati City Centre Development Corp (3CDC), is a board member of the Cincinnati Regional Business Committee (CRBC), a board member and incoming 2019 Campaign Chair for United Way of Greater Cincinnati and a director at the Indiana Community Business Credit Corporation. He formerly served as a director of the Indiana Bankers Association, the Indiana Chamber of Commerce and Greensburg Decatur County Economic Development Corporation.

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Claude E. Davis

Mr. Davis is the Executive Chairman of First Financial Bancorp and First Financial Bank.

  Age:

Director Since:

  58

2004


QUALIFICATIONS
Mr. Davis is the Executive Chairman of First Financial Bancorp and First Financial Bank effective April 1, 2018. He previously served as the Chief Executive Officer of both First Financial Bancorp and First Financial Bank (2004-2008). Mr. Davis has nearly 30 years of experience in the financial services industry.

Mr. Davis serves as Chairman of the Brixey Capital Investment Committee, and is on the board of directors of City Dash, a Brixey portfolio company and a Cincinnati-based logistics company, and is on the Cincinnati Regional Economic Development Committee (REDI) and the Cincinnati Business Committee. He previously served on the board of directors of the Federal Reserve Bank of Cleveland from 2013 to 2018.

Mr. Davis' years of experience in the banking industry as well as his extensive financial background provide leadership to the Board. He is intimately familiar with all aspects of our business activities. His involvement on other boards and organizations gives him insight on important societal and economic issues relevant to our Company's business and markets.


Corinne R. Finnerty

Ms. Finnerty is the principal and sole shareholder of the law firm of McConnell Finnerty PC.

  Age:

Director Since:

Committees:

  62

1998

Enterprise Risk (Vice Chair), Corporate Governance & Nominating


QUALIFICATIONS
Ms. Finnerty is the principal and sole shareholder of the law firm of McConnell Finnerty PC located in North Vernon, Indiana. She has over 35 years of experience representing financial institutions in a wide variety of legal matters. Ms. Finnerty was previously a director of a former affiliate bank of First Financial from 1987 to 2005 and joined the board of the Company in 1998.

Ms. Finnerty served as a member of the Indiana Supreme Court Disciplinary Commission from 2003 to 2013. She currently serves as a Commissioner on the Indiana State Ethics Commission, having been appointed to a 4 year term by Indiana's Governor beginning in January 2018.

Ms. Finnerty's deep roots in the North Vernon, Indiana area provide representation on the Board for our southeast Indiana market. Her participation for ten years on the Indiana Supreme Court Disciplinary Commission and her current position as a Commissioner on the Indiana State Ethics Commission allow her to provide insight on governance and ethical issues. Furthermore, her years as a practicing attorney, including the representation of financial institutions for over 35 years, give her an enhanced perspective on legal and regulatory issues.

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Erin P. Hoeflinger

Ms. Hoeflinger is a Senior Vice President, Business Strategy and Execution of Aetna.

  Age:

Director Since:

Committees:

  53

2018

Compensation, Compliance and Community Development (Vice Chair)


QUALIFICATIONS
Ms. Hoeflinger is a Senior Vice President, Business Strategy and Execution of Aetna, a national, diversified health care benefits company. She is responsible for leading the implementation of Aetna's strategy and connecting it to the operating plans across the Aetna business. She previously served as Senior Vice President of the Commercial Local Business Division of Anthem.

Ms. Hoeflinger combines her commitment to improving the health of Anthem's members with leadership in civic and business affairs. She currently serves on the Board of Trustees of The Ohio State University and Midmark Corporation. She has an M.B.A. in Business from Xavier University and a B.A. in Communications from Wright State University.

Ms. Hoeflinger previously served as a director of MainSource Financial Group, Inc. and MainSource Bank, from 2015 until April 1, 2018.

Ms. Hoeflinger's extensive experience in executive management of a publicly-traded company in a highly regulated industry is a valuable asset to the Company.


Susan L. Knust

Ms. Knust is the owner and managing partner or president of several businesses engaged in the ownership, leasing and management of commercial real estate.

  Age:

Director Since:

Committees:

  65

2005

Compensation (Vice Chair), Compliance and Community Development


QUALIFICATIONS
Ms. Knust is the owner and managing partner or president of several businesses:

Omega Warehouse Services (since 2002) which is located in Monroe, Ohio and provides public warehousing and manufacturing services;

K.P. Properties of Ohio (since 1986) which is located in Monroe, Ohio and owns, leases and manages industrial and commercial real estate in Ohio;

K.P. Properties of Colorado (since 2010) which is located in Monroe, Ohio and owns, leases and manages commercial real estate in Colorado; and

K.P. Properties of Florida (since 2014) which is located in Monroe, Ohio and owns, leases and manages commercial real estate in Florida.

As a seasoned business owner and entrepreneur for 34 years in the areas of manufacturing, warehousing and industrial real estate, Ms. Knust brings valuable insight to the Board in strategic and other matters. Ms. Knust's business interests are similar in size to our key client base and she also has an understanding of the Cincinnati market. As a female business owner, her perspective and experiences have proven valuable to the Company.

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William J. Kramer

Mr. Kramer is the Vice President of Operations and a member of the board of directors of Valco Companies, Inc.

  Age:

Director Since:

Committees:

  58

2005

Audit (Chair), Compensation


QUALIFICATIONS
Mr. Kramer is the Vice President of Operations and a member of the board of directors of Valco Companies, Inc. which has principal offices in New Holland, Pennsylvania and whose principal activity is the design, manufacture, and sale of equipment used in the animal production industry. He has held his current position with Valco Companies, Inc. since 2008, having previously held other executive positions at Valco Companies, Inc. Mr. Kramer was previously a director of a former affiliate bank of First Financial from 1987 to 2005 and joined the board of First Financial in 2005.

Mr. Kramer has been a CPA since 1984 with both public accounting and private company experience providing experience in financial reporting and accounting controls. He qualifies as an audit committee financial expert. Furthermore, his tenure with our Company or a bank affiliate provides valuable historical perspective on both the Company and the banking industry.


John T. Neighbours

Mr. Neighbours is the General Counsel and an advisor to the board of AmeriQual Group Holdings.

  Age:

Director Since:

Committees:

  69

2016

Capital Markets, Enterprise Risk


QUALIFICATIONS
Mr. Neighbours became the General Counsel and an advisor to the board of AmeriQual Group Holdings, a specialty food processing company, located in Evansville, Indiana on January 1, 2018 following his retirement from the law firm of Faegre Baker Daniels. He has practiced law for over 40 years and has represented employers throughout the country in all aspects of labor and employment law. Additionally, he served as an advisor to business, educational and not for profit executives on a variety of business and legal issues.

Mr. Neighbours is involved in and serves as a director (or in an equivalent position) of a number of non-profit and civic organizations including:

Greater Indianapolis Chamber of Commerce

United Way of Central Indiana

Meadows Community Foundation (Chair)

Charles A. Tindley Accelerated Schools

Indianapolis Public Safety Foundation

Christian Theological Seminary

Indiana University-Purdue University Indianapolis Advisory Board

Indianapolis Zoological Society

In addition, he served as a council member for the American Bar Association—Section on Labor and Employment Law for 12 years, as well as chairman of the Developments Under the National Labor Relations Act Committee from 1997 to 2000. He also served on the Labor Relations Committee for the United States Chamber of Commerce.

Mr. Neighbours serves on the board of Real Estate Corporation of America, a family corporation involved in rehabilitating and managing properties in Indianapolis. Also, for the last 10 years, Mr. Neighbours has chaired the Meadows Community Foundation, which has stimulated $70 million of investment in one of Indianapolis' most challenging low income communities, and coordinated the development of mixed income housing, a health complex which includes a YMCA, a retail center and charter schools.

Mr. Neighbours is a recognized leader in the Indianapolis business community, providing valuable insight to the board on the local business environment. His years as a practicing attorney give him an enhanced perspective on legal and employment matters as well the business climate generally given his national practice.

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Thomas M. O'Brien

Mr. O'Brien is a senior advisor with the Boston Consulting Group.

  Age:

Director Since:

Committees:

  62

2018

Audit, Compensation (Chair)


QUALIFICATIONS
Mr. O'Brien retired from Procter & Gamble in 2010 after 31 years of service, primarily in management positions in the areas of sales, IT and marketing. Most recently, Mr. O'Brien served as Vice President Customer Business Development, Global Business Units and Global eCommerce from 2007 until his retirement. During his time at Procter & Gamble, Mr. O'Brien developed strategies, conceptual innovations and relationships that consistently delivered successful results in revenue, market share and productivity.

Mr. O'Brien is currently a senior advisor with the Boston Consulting Group, working with many top consumer product companies on commercial strategies. Mr. O'Brien also currently serves as Chairman of Simpactful Consulting, is a director of One 80 Place and has served on the National Board of Inroads and the St. Vincent De Paul Cincinnati board of directors.

Mr. O'Brien previously served as a director of MainSource Financial Group, Inc. and MainSource Bank from 2010 until April 1, 2018.

Mr. O'Brien's extensive experience in sales and marketing, his management experience, and his experience interacting with the board of directors of a publicly traded company provides valuable perspective to the Board and the Company.


Richard E. Olszewski

Mr. Olszewski is the owner and operator of two 7-Eleven Food Store franchises in Griffith, Indiana.

  Age:

Director Since:

Committees:

  69

2005

Enterprise Risk, Corporate Governance & Nominating


QUALIFICATIONS
Mr. Olszewski is the owner and operator of two 7-Eleven Food Store franchises in Griffith, Indiana. He was previously a director of a former affiliate bank of First Financial from 1995 to 2005 and joined the board of the Company in 2005.

Mr. Olszewski's 30 plus years of retail experience and several years of service to our Company provides us with a deeper understanding of our important northwest Indiana market. Furthermore his business and retail experience as a small business owner provides our Company with a better understanding of a key client constituency.

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Maribeth S. Rahe

Ms. Rahe is the President and Chief Executive Officer of Fort Washington Investment Advisors, Inc.

  Age:

Director Since:

Committees:

  70

2010

Audit, Capital Markets (Chair)


QUALIFICATIONS
Ms. Rahe is the President and Chief Executive Officer of Fort Washington Investment Advisors, Inc., positions she has held since 2003. Fort Washington Investment Advisors, Inc. is an investment management firm and wholly owned subsidiary of Western & Southern Financial Group located in Cincinnati, Ohio. She also serves on the board of directors of Fort Washington Investment Advisors, Inc. Ms. Rahe has more than 45 years of experience in the banking and financial services industries with more than 30 years of experience in management or executive management positions.

Since 2005, Ms. Rahe has served as a director of Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) which is an integrated communication services company located in Mattoon, Illinois that provides exchange carrier and broadband services. She serves as the chair of the audit committee and also on the compensation committee of the company.

Ms. Rahe is involved in and serves as a director (or in an equivalent position) of several organizations, including:

Cincinnati Arts Association (Vice Chair)

Cincinnati Country Club (Board)

Cintrifuse (Advisory Board)

Commonwealth Club (Executive Committee)

Institutional Real Estate Inc. (Editorial Advisory Board)

New York Landmark Conservancy (Life Trustee)

Rush-Presbyterian-St. Luke's Medical Center (Life Trustee)

Sisters of Notre Dame de Namur (Development Advisory Board)

The Greater Cincinnati Foundation (Board)

United Way of Cincinnati (Investment Committee)

Xavier University Williams College of Business (Board of Executive Advisors)

Ms. Rahe is a recognized leader in the financial services community, both locally and nationally. She brings a seasoned perspective, insight, and financial acumen into issues and strategies relating to the Company's business, including regulatory relationships and enterprise risk management.

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Proposal 2—Ratify the Appointment of Crowe LLP as our Independent Registered Public Accounting Firm for 2019

Our Audit Committee has appointed Crowe LLP ("Crowe") as the Company's independent registered public accounting firm for the Company's 2019 fiscal year. Our Audit Committee is responsible for the appointment, compensation, retention, termination and oversight of the independent registered public accounting firm. The Audit Committee is also responsible for the negotiation of audit fees payable to Crowe. While the Audit Committee is not required to take any action as a result of the outcome of the vote on this proposal, if shareholders do not ratify the appointment, the Audit Committee will consider whether or not to retain Crowe in the future. Even if the appointment is ratified, our Audit Committee, at its discretion, may change the appointment at any time if it determines that doing so would be in the best interests of the Company and its shareholders.

Representatives of Crowe are anticipated to attend the Annual Meeting and will be available for questions from shareholders who have submitted their questions electronically prior to the Annual Meeting. No formal statement by representatives of Crowe is anticipated at the Annual Meeting.

Independent Registered Public Accounting Firm Fees

The following table sets forth the aggregate fees billed for audit services, as well as fees billed with respect to audit-related, tax and all other services, provided by Crowe to the Company and its related entities for the last two fiscal years. Any engagement of the Company's independent registered public accounting firm for permissible audit, audit-related, tax and other services are preapproved by the Audit Committee. The Audit Committee may provide a general preapproval for a particular type of service or require specific preapproval.

Fees by Category

    2018     2017
 

Audit Fees

    $1,070,800     $726,250  

Audit-Related Fees

    $84,000     $54,000  

Tax Fees

    $205,085     $166,860  

All Other Fees

    $87,159     $224,105  

TOTAL

  $1,447,044   $1,171,215  

Description of Services:


 

 

þ

 


 

The Board of Directors unanimously recommends a vote FOR the ratification of the appointment of Crowe LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2019.

 

 
                  
     

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Report of the Audit Committee

In accordance with its written charter, the Audit Committee oversees the Company's financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. The Company's independent registered public accounting firm is responsible for expressing an opinion on the conformity of the Company's audited financial statements to generally accepted accounting principles and on the Company's internal control over financial reporting. In this context, the Audit Committee has reviewed and discussed with management and Crowe the audited financial statements for the year ended December 31, 2018 and Crowe's evaluation of the Company's internal control over financial reporting. The Audit Committee has discussed with Crowe the matters that are required to be discussed by Auditing Standards No. 16 (Communications with Audit Committees) as amended and adopted by the Public Company Accounting Oversight Board ("PCAOB") in Rule 3200T.

Crowe has provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant's communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Crowe that firm's independence. The Audit Committee has concluded that Crowe's provision of audit and non-audit services to First Financial and its affiliates is compatible with Crowe's independence.

The Audit Committee discussed with the Company's internal auditors and Crowe the overall scope and plans for their respective audits. The Audit Committee met with the internal auditors and with Crowe, with and without management present, to discuss the results of their examinations, their evaluations of the Company's internal controls, and the overall quality of the Company's financial reporting.

In reliance on the reviews and discussions referred to above, the Audit Committee, on February 22, 2019, recommended to the Board, and the Board has approved, that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2018, for filing with the SEC.

    Members of the Audit Committee

 

 

William J. Kramer, Chair
Kathleen L. Bardwell, Vice Chair
Thomas M. O'Brien
Maribeth S. Rahe

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Proposal 3—Non-Binding, Advisory Vote to Approve Executive Officer Compensation

As required pursuant to Section 14A of the Securities and Exchange Act of 1934, we are asking our shareholders to approve, on a (non-binding) advisory basis, the compensation of the Company's named executive officers ("named executive officers" or "NEOs") identified in the Summary Compensation Table included in the Executive Compensation portion of this proxy statement beginning at page 33. While this vote is advisory, and not binding on our Company, it will provide information to us regarding shareholder sentiment about our compensation principles and objectives and may be considered in future executive compensation related decisions. As determined by our shareholders at the 2011 Annual Meeting of Shareholders, and reconfirmed at the 2017 Annual Meeting of Shareholders, we request this advisory approval each year.

We strongly encourage you to review the Executive Compensation—Compensation Discussion and Analysis section of this proxy statement as well as the Summary Compensation Table and other related compensation tables for detailed information about the compensation of our NEOs when making your voting decision on this proposal.

We believe our compensation program has contributed to our Company's recent and long-term successes. Our compensation philosophy is based on the following guiding principles and that our executive compensation programs:

We believe information provided in the Executive Compensation portion of this proxy statement demonstrates that our executive compensation program has been designed appropriately to ensure our management's interests are aligned with our shareholders' interest to support long-term value creation and to differentiate pay based on our performance within our peer group.

Your vote is requested on the following resolution:


 

 

þ

 


 

The Board of Directors recommends a vote FOR the approval of the advisory resolution on executive compensation.

 

 
                  
     

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Share Ownership

A beneficial owner of shares is a person who has sole or shared voting power, meaning the power to control voting decisions, or sole or shared investment power, meaning the power to cause a sale or other disposition of the shares. A person is also considered the beneficial owner of shares to which that person has the right to acquire beneficial ownership within 60 days. For this reason, the following table includes stock options that are exercisable and that will become exercisable within 60 days.

Principal Shareholders

The table below identifies all persons known to us to own beneficially more than 5% of our outstanding common shares as of the record date for the Annual Meeting (April 1, 2019).

    Amount and Nature of
Beneficial Ownership of
Common Shares
  Percentage
of Class

BlackRock, Inc.
55 East 52nd Street
New York, NY 10055

    13,576,436 1 13.9%

The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355

    10,030,454 2 10.24%

Dimensional Fund Advisors LP
Building One
6300 Bee Cave Road
Austin, TX 78746

    5,491,650 3 5.61%
1.
Information based upon a Schedule 13G/A filed on January 28, 2019. As of December 31, 2018, BlackRock had sole voting power for 13,344,523 shares and sole dispositive power for 13,576,436 shares.

2.
Information based on a Schedule 13G/A filed on February 11, 2019. As of December 31, 2018, Vanguard had sole power to vote for 94,920 shares; sole dispositive power for 9,933,391 shares; and shared dispositive power for 97,063 shares.

3.
Information based on a Schedule 13/G filed on February 8, 2019. As of December 31, 2018, Dimensional Fund Advisors LP had sole power to vote for 5,369,912 shares and sole dispositive power for 5,491,650 shares.

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Shareholdings of Directors, Executive Officers and Nominees for Director

The following table shows the number of shares of First Financial beneficially owned, as of April 1, 2019, by each director and named executive officer of the Company, and all named executive officers and directors of the Company as a group.

    Amount and Nature of Beneficial
Ownership

Name

    Common Shares
Beneficially
Owned
  Percent of
Class

Non-Employee Directors

         

J. Wickliffe Ach

    22,154   *

Kathleen R. Bardwell

    25,142   *

William G. Barron

    803,441 2 *

Vincent A. Berta

    13,550 3 *

Cynthia O. Booth

    18,209   *

Corinne R. Finnerty

    57,937 4 *

Erin P. Hoeflinger

    7,571   *

Susan L. Knust

    46,631 5 *

William J. Kramer

    29,219   *

John T. Neighbours

    8,434   *

Thomas M. O'Brien

    88,902 6 *

Richard E. Olszewski

    49,840 7 *

Maribeth S. Rahe

    30,119   *

Named Executive Officers

         

Claude E. Davis

    379,618 1,8 *

Archie M. Brown, Jr.

    201,254 1,9 *

James M. Anderson

    67,447 1,10 *

John M. Gavigan

    30,231 1 *

William R. Harrod

    15,398 1 *

Anthony M. Stollings

    57,766 1 *

Karen B. Woods

    23,123 1 *

All named executive officers and directors as a group (20 persons)

  1,975,986   2.0%
*
Less than 1%

1.
Includes unvested performance-based restricted shares (Davis—42,643, Brown—30,590; Anderson—3,222; Gavigan—3,862; Harrod—1,053; Stollings—6,365; Woods—2,691). Executives retain voting and dividend (subject to escrow until vesting) rights on unvested performance-based restricted shares.

2.
Includes 2,750 shares jointly owned with spouse, 74,154 shares owned by spouse, and 656,200 shares owned by family trusts.

3.
Includes 6,549 shares owned by revocable trust.

4.
Includes 20,086 shares jointly owned with spouse.

5.
Includes 12,611 shares jointly owned with spouse in trust.

6.
Includes 36,285 shares owned in revocable trust, and 25,227 shares owned by spouse in revocable trust.

7.
Includes 16,476 shares jointly owned with spouse.

8.
Includes 681 shares held in the Savings Plan.

9.
Includes 86,040 shares jointly owned with spouse, 39,761 shares held in the Savings Plan, and 14,273 options to purchase shares converted from options to purchase MainSource Financial Group, Inc. common stock in the Merger Agreement between the Company and MainSource.

10.
Includes 15,841 shares owned by 401-k plan, 405 shares owned for benefit of daughter, and 592 shares owned for benefit of son.

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires officers, directors and persons who own more than 10 percent of a registered class of First Financial's equity securities to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Officers, directors and greater than 10 percent shareholders are required by SEC regulations to furnish First Financial with copies of all Forms 3, 4 and 5 they file.

Based solely on a review of the copies of these forms received by First Financial and written representations from certain reporting persons that they were not required to file a Form 5 for the specific fiscal year, First Financial believes that all of its officers, directors and greater than 10 percent shareholders complied with all filing requirements applicable to them with respect to transactions completed in 2018.

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Corporate Governance

General

At First Financial we are committed to conducting business in accordance with our Corporate Strategy, which defines why we exist, and our Corporate Strategic Intent, which defines what we believe in.

Why do we exist?

To be woven into the communities we serve. To understand needs and offer financial solutions and resources in order to make lives better.

 

What do we believe in?
            
 

 

 

Our Company We are confident in our collective abilities and believe that lives are made better by our existence.

 

 
            
 
            

 

 

Whole-life Balance Our associates should be successful at work and at home.

 

 
            
 
            

 

 

Being in-it Together Our team-based approach means we are all in it together.

 

 
            
 
            

 

 

Mutual Respect We seek out, value and respect differences—in opinions, expertise and experiences.

 

 
            
 
            

 

 

Doing the Right Thing We do the right thing for each other, our clients, communities and shareholders.

 

 
            
 

Our Corporate Strategy and our Code of Conduct guide us in managing our business in line with high standards of business practices and in the best interest of our shareholders, clients, associates and stakeholders.

Code of Conduct

Our Board has adopted a Code of Conduct that applies to everyone at First Financial: our directors, officers and associates. The Code of Conduct identifies our commitment to our values and our responsibilities to our stakeholders, including our clients, our shareholders, our fellow associates, our regulators, and our communities. The Code of Conduct provides guidance on compliance with laws and regulations, non-discrimination, diversity and equal opportunity, protecting Company assets and confidential information, conflicts of interest, accuracy of records and information reporting, and our responsibilities to the communities in which we conduct business. The Code of Conduct also encourages associates to report any illegal or unethical behavior. All newly hired associates are required to certify that they have reviewed and understand the Code of Conduct. In addition, each year all other associates receive training and are asked to affirmatively acknowledge their obligation to follow the Code of Conduct.

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Code of Ethics for the CEO and Senior Financial Officers

Our Board has also adopted a Code of Ethics for our chief executive officer and senior financial officers that provides further guidance about their responsibilities for full, fair, accurate, timely and understandable disclosure in the periodic reports we file with the SEC.

Corporate Governance Principles

We believe that effective corporate governance is built on adherence to a number of "best practices." These practices are consistent with the Board's responsibilities to effectively oversee the Company's strategy, evaluate and compensate Company executives, and plan for management succession. Most importantly, these practices are believed to strengthen the Company and protect our shareholders' interests. Accordingly, the Board has developed and follows our Corporate Governance Principles to set forth common procedures and standards relating to corporate governance. The Corporate Governance Principles cover, among other things, executive sessions of the Board, director qualifications, director responsibilities, director independence, voting for directors, limitations on membership on other boards, continuing education for members of the Board, and Board performance evaluations.

Policies and Procedures Relating to Complaints

The Audit Committee has approved procedures for the receipt, retention and treatment of reports or complaints to the Audit Committee regarding accounting, internal accounting controls, auditing matters and legal or regulatory matters. These procedures also provide for the submission by associates of confidential, anonymous reports to the Audit Committee of concerns regarding questionable accounting or auditing matters.

Please visit the Corporate Governance portion of our investor relations website (at www.bankatfirst.com/investor) to learn more about our corporate governance practices and access the following documents:

Code of Conduct

 

Code of Ethics for the CEO and Senior Financial Officers

Corporate Governance Principles

 

Charters for our Board Committees

Our Board's Role in Risk Oversight

Assessing and managing risk is the responsibility of management of First Financial. Our Board, with the assistance of the Enterprise Risk Committee and other Board committees as discussed below, reviews and oversees our Enterprise Risk Management ("ERM") program, which is designed to enable effective and efficient identification and management of critical enterprise risks and to facilitate the incorporation of risk consideration into decision-making. The ERM program was established to clearly define risk management roles and responsibilities, bring together senior management to discuss risk and promote visibility and constructive dialogue around risk at all levels of the organization.

The Company's risk governance structure starts with each line of business being responsible for managing its own risks. In addition, the Board and executive management have appointed a Chief Risk Officer to support the risk-oversight responsibilities of the Board and its committees.

An Enterprise Risk Management Committee ("ERMC") comprised of senior management is the senior most focal point within our Company to monitor, evaluate, and recommend comprehensive policies and solutions to deal with all aspects of risk and to assess the adequacy of any risk remediation plans in the Company's businesses. Various risk-related committees whose members are comprised of representatives from the lines of business, risk management, and senior management report to the ERMC.

The Chief Risk Officer provides the Board with a quarterly risk profile of the Company, as well as a report on the risk exposure of the Company from the viewpoint of the ERMC. Under the ERM program, management develops a holistic portfolio of Company enterprise risks by facilitating business and function risk assessments, performing targeted risk assessments and incorporating information regarding specific categories of risk gathered from various internal Company operations. Management then develops risk response plans for risks categorized as needing management focus and response and monitors other identified risk focus areas. Management provides regular reports on the risk portfolio and risk response and monitoring efforts to the ERMC and to the Compliance and Community Development and Risk Committees of our Board.

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Our Board assumes a significant oversight role in risk management both through its actions as a whole and through its committees. Additional information concerning each of the following committees may be found in the "Corporate Governance—Board Committees" section of this proxy statement.

The Audit Committee reviews our internal control systems to manage and monitor financial reporting and accounting risk with management and our internal audit department.

The Capital Markets Committee oversees the Company's capital markets, treasury and capital planning activities.

The Compliance and Community Development Committee oversees the regulatory compliance programs and community development activities of the Company.

 

The Compensation Committee evaluates, with our senior officers, risks posed by our incentive compensation programs and seeks to limit any unnecessary or excessive risks these programs may pose to us, in order to avoid programs that might encourage such risks.

The Enterprise Risk Committee assists the Board in overseeing enterprise-wide risks, including credit, market, operational, technology, regulatory, legal, strategic, and reputation risks.

The Governance and Nominating Committee ("CGNC") oversees our corporate governance functions.

While each of these committees is responsible for evaluating certain risks and overseeing the management of these risks, the entire Board is regularly informed through committee reports about such risks. Select members of management attend our Board and Board committee meetings (other than executive sessions) and are available for questions regarding particular areas of risk.

Director Independence

Our Board has determined that all of our directors, except our Executive Chairman and our CEO, are independent directors as that term is defined in the Nasdaq Stock Market Marketplace Rules (the "Nasdaq Rules"). In addition, our Board has determined that each member of the Audit, Compensation, and Governance and Nominating Committees is independent under such definition and that the members of the Audit Committee are independent under the additional, more stringent requirements of the Nasdaq Stock Market applicable to audit committee members. These determinations are made annually, most recently in February 2019.

Under the Nasdaq Rules and our Corporate Governance Principles, independent directors must not have a relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of being a director. In making this determination, our Board reviews and evaluates transactions and relationships with Board members to determine the independence of each of the members. In making the independence determinations for each of the directors, the Board took into consideration the transactions and relationships disclosed in this proxy statement under "Review and Approval of Related Person Transactions" below.

Board Leadership Structure

Beginning in 2018, our Board leadership structure changed to include an Executive Chair (Claude Davis) and an independent Lead Director (J. Wickliffe Ach). The Executive Chair presides over each board meeting and performs such other duties as may be incident to the office as determined by the Board. The Lead Director has responsibility for consulting with the Executive Chair regarding Board meetings and meeting agendas, acting as a liaison between the Executive Chair and the independent directors with respect to various matters, and leading executive sessions of the independent directors. Although our corporate documents would allow our chair to also hold the position of chief executive officer, our Corporate Governance Principles provide that these two positions must be separate.

The Board believes that the existing structure with an independent lead director has worked effectively, particularly with respect to the Lead Director's role as liaison between the Executive Chair and the independent directors. The Executive Chair, Mr. Davis, is best situated to serve as chair of the board because of his extensive experience in the banking industry and his history as former President and CEO of the Company, and the Company and the shareholders are well served by having his industry expertise, knowledge and visibility in the role. The Board intends to continue to consider the appropriate structure of the Board from time to time.

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Board Self-Assessment

Our Board conducts a self-assessment annually, which our CGNC reviews and discusses with the Board. In addition, each of the committees of the Board is expected to conduct periodic self-assessments.

Evaluating Nominees and Electing Directors


Evaluating Nominees

The CGNC evaluates director candidates based upon criteria established by the committee and applies the same evaluation process to all director nominees regardless of whether the nominee is recommended by a shareholder or by the Company. The criteria evaluated by the committee may include, among other things, the candidate's judgment, integrity, leadership ability, business experience, industry knowledge, public company experience, professional reputation, and ability to contribute to board member diversity (including, but not limited to gender, race, and ethnicity, as well as experience, geography, qualifications, attributes, and skills). The CGNC recognizes that diversity of the Board is an important part of its analysis as to whether the Board constitutes a body that possesses a variety of complementary skills and experiences. The committee also considers whether the candidate meets independence standards, is "financially literate" or a "financial expert" if appropriate for governance needs, is available to serve, and is not subject to any disqualifying factor. No single individual trait is given particular weight in the decision process.


Policy on Majority Voting

Although our Articles of Incorporation and Amended Regulations provide that director nominees who receive the greatest number of shareholder votes are automatically elected to the Board, our Board has adopted a policy on majority voting for the election of directors which is included in our Corporate Governance Principles. The majority voting policy requires nominees who receive a greater number of votes "withheld" from his or her election than votes "for" his or her election to tender his or her written resignation to the CGNC for consideration by the committee following the certification of the shareholder vote. This requirement applies only in an uncontested election of directors, which is an election in which the only nominees are persons nominated by the Board.

Upon its receipt of a resignation from a director who has not received the requisite shareholder vote, the CGNC will then consider the resignation and make a recommendation to the Board concerning whether to accept or reject such resignation. In making its recommendation to the Board, the committee will consider all factors deemed relevant by members of the committee, including the stated reason or reasons why shareholders who cast "withhold" votes for the director did so, the qualifications of the director (including, for example, whether the director serves on the Audit Committee of the Board as an "audit committee financial expert" and whether there are one or more other directors qualified, eligible, and available to serve on such committee in such capacity), and whether the director's resignation from the Board would be in the best interest of First Financial and its shareholders.

The CGNC also will consider a range of possible alternatives concerning the director's tendered resignation, including acceptance of the resignation, rejection of the resignation, or rejection of the resignation coupled with a commitment to seek to address and cure the underlying reasons reasonably believed by the committee to have substantially resulted in the "withheld" votes. The Board will take formal action on the committee's recommendation no later than 90 days following the certification of the shareholder vote. In considering the committee's recommendation, the Board will consider the information, factors and alternatives raised by the committee and such additional information, factors and alternatives as the Board deems relevant. We will publicly disclose, in a Form 8-K filed with the SEC, the Board's decision, together with an explanation of the process by which the Board made its decision and, if applicable, the Board's reason or reasons for rejecting the tendered resignation within four business days after the Board makes its decision.


Shareholder Nominations for Election to the Board

The CGNC will consider director candidates recommended by shareholders in accordance with the procedures outlined in the Amended Regulations. In order to be recommended for a position on the Board by the committee, a proposed nominee must, at a minimum, (i) be able to comply with the Company's Corporate Governance Principles, and (ii) through a combination of experience and education, have the skills necessary to make an effective contribution to the Board.

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In connection with next year's Annual Meeting of Shareholders, the CGNC will consider director nominees recommended by shareholders provided that notice of a proposed nomination is received by the Company no later than February 27, 2020, as provided in the Amended Regulations. Notice of a proposed nomination must include the information outlined in the Amended Regulations and should be sent to First Financial Bancorp, Attention: Karen B. Woods, Corporate Secretary, 255 E. Fifth Street, Suite 2900, Cincinnati, OH 45202.

Director Education

We recognize the importance of our directors keeping current on Company and industry issues and their responsibilities as directors. All new directors attend orientation training soon after being elected to the Board. The Board also encourages attendance at continuing education programs for Board members, which may include internal strategy or topical meetings, third-party presentations, and externally-offered programs.

Share Ownership Guidelines

All directors are required to own First Financial shares equal to the lesser of five times the director's annual retainer or 10,000 shares. All current directors must comply with this requirement before April 1, 2022. Future directors will be required to satisfy this requirement within four years of first becoming a director of the Company. We have also implemented stock ownership and retention guidelines for our named executive officers described further in the Executive Compensation portion of this proxy statement.

Succession Planning

In light of the critical importance of executive leadership to our success, we have instituted an annual succession planning process which is guided by the CGNC.

The succession planning process addresses

our chief executive officer position,

 

senior-level managers enterprise-wide.

the positions directly reporting to the chief executive officer, and

 

 


Management regularly identifies high-potential executives for

additional responsibilities,

new positions,

promotions,

 

or similar assignments to expose them to diverse operations within the Company, with the goal of developing well-rounded and experienced senior leaders.


The CGNC reports to the full Board on its findings and the Board deliberates in executive session on the CEO succession plan.

Board Meetings

During 2018, the Board held seven scheduled meetings. We believe it is important for our directors to participate in board and committee meetings. A director who participates in fewer than 75% of scheduled meetings of the board and committees of which the director is a member, or who does not attend the annual meeting of shareholders, unless excused by the Board, is subject to not being re-nominated to the Board. In 2018, all of the directors attended more than 75% of the scheduled meetings. All directors attended the 2018 Annual Meeting of Shareholders.

The Board also held seven executive sessions in 2018 where only independent directors were present.

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Board Committees

Through March 31, 2019, our Board had established the following standing committees: Audit Committee, Capital Markets Committee, Compensation Committee, Corporate Governance Nominating Committee, Enterprise Risk Management Committee, and Compliance and Community Development Committee. Each committee operates pursuant to a committee charter that is approved by the Board, which is the case for the CGNC Charter, or by the CGNC to whom the Board has delegated the authority to approve other committee charters. Each Board committee serves as a joint board committee of First Financial Bank in addition to being a Board committee of First Financial Bancorp.

The charters of the Audit, Compensation, Governance and Nominating, Enterprise Risk Management, and Compliance and Community Development Committees each comply with current Nasdaq Rules relating to charters and corporate governance. Each of these charters is available under the Corporate Governance portion of our investor relations website (at www.bankatfirst.com/investor).

Audit Committee

   Members: William J. Kramer, Chair, Kathleen L. Bardwell, Vice Chair, Thomas M. O'Brien, Maribeth S. Rahe

Number of Meetings in 2018: 10

 
Committee Primary Responsibilities:    

Monitor the integrity of the consolidated financial statements of the Company.

 

Monitor compliance with the Company's Code of Conduct and Code of Ethics for the CEO and Senior Financial Officers.

Evaluate and monitor the qualifications and independence of the Company's independent auditors.

 

Evaluate and monitor the performance of the Company's internal audit function and independent auditors, with respect to First Financial and its subsidiaries

All members of the Audit Committee were determined to meet the independence and financial literacy standards of the Nasdaq Rules. Directors Kramer, Rahe, and Bardwell are "audit committee financial experts" for purposes of SEC regulations.

Compensation Committee

   Members: Thomas M. O'Brien, Chair, Susan L. Knust, Vice Chair, Erin P. Hoeflinger, William J. Kramer

Number of Meetings in 2018: 5

 
Committee Primary Responsibilities:    

Determine and approve the compensation of the CEO and each executive officer of the Company.

 

Evaluate the performance of the Company's CEO for all elements of compensation and all other executive officers with respect to incentive goals and compensation.

Review and evaluate all equity and benefit plans of the Company.

 

Oversee the preparation of the compensation discussion and analysis and recommend to the full Board its inclusion in the annual proxy statement.

Annually review the incentive compensation arrangements to see that such arrangements do not encourage unnecessary and excessive risks that threaten the value of the Company.

 

Recommend to the Board compensation for non-employee directors.

All members of the Compensation Committee were determined to meet the independence standards of the Nasdaq Rules.

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Corporate Governance and Nominating Committee

   Members: J. Wickliffe Ach, Chair, Kathleen L. Bardwell, Vice Chair, William G. Barron, Corinne R. Finnerty, Richard E.
                       Olszewski

Number of Meetings in 2018: 3

 
Committee Primary Responsibilities:    

Develop and periodically review the effectiveness of the Company's Corporate Governance Principles.

 

Monitor and protect the Board's independence.

Consult with the Chairman of the Board concerning the appropriate Board committee structures and appointment of members to each committee of the Board.

 

Establish procedures for the director nomination process and recommend nominees for election to the Board.

Oversee the formal evaluation of the Board and all Board committees, including any formal assessment of individual directors.

 

Review shareholder proposals and proposed responses.

Promote the quality of directors through continuing education experiences.

 

Annually delegate to the respective committees of the Board or to management, the authority and responsibility for reviewing and approving policies and procedures of the Board (including the board of directors of First Financial Bank) in connection with the Company's ERM program.

All members of the CGNC were determined to meet the independence standards of the Nasdaq Rules.

Enterprise Risk Management Committee

   Members: Vincent A. Berta, Chair, Corinne R. Finnerty, Vice Chair, John T. Neighbours, Richard E. Olszewski

Number of Meetings in 2018: 3

 
Committee Primary Responsibilities:    

Review with management the Company's procedures and techniques to measure the Company's risk exposures and for identifying, evaluating and managing the significant risks to which the Company is exposed and approve related policies.

 

Monitor the Company's risk management performance and ensure that the Company's risk management policies for significant risks are being adhered to.

Consider and provide advice to the Board on the risk impact of any strategic decision that the Board may be contemplating.

 

Periodically examine the risk culture of the Company.

Periodically set the risk appetite for the Company and monitor compliance with the risk appetite statement including development of risk tolerances, targets and limits.

 

Review the Company's credit portfolio.

Review disclosures regarding risk in annual and, if necessary, quarterly SEC filings.

 

 

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Compliance and Community Development Committee

   Members: Cynthia O. Booth, Chair, Erin P. Hoeflinger, Vice Chair, William G. Barron, Susan L. Knust

Number of Meetings in 2018: 3

 
Committee Primary Responsibilities:    

Review the structure, operations and effectiveness of the Compliance Department.

 

Review the Compliance Department resource plan.

Ensure the Company is taking appropriate measures to address all existing regulatory requirements as well as new requirements as they are enacted and become effective.

 

Review the structure, operations and effectiveness of the Community Development, Community Reinvestment Act and Fair Lending/Banking initiatives of the Company and ensure the Company has adequate resources concerning these programs.

Capital Markets Committee

   Members: Maribeth S. Rahe, Chair, Cynthia O. Booth, Vice Chair, Vincent A. Berta, John T. Neighbours

Number of Meetings in 2018: 4

 
Committee Primary Responsibilities:    

Monitor the management of the purchase, sale, exchange, and other disposition of the investments of the Company, including review of management reports concerning current equity debt security investment positions.

 

Monitor the investment activities of the Company to ensure compliance with external regulations and the Company's applicable policies including requirements relating to composition, diversification, credit risk, and yield.

Monitor the capital position of the Company and the capital management activities undertaken by the Company to ensure that capital levels are maintained in accordance with regulatory requirements and management directives.

 

Monitor and oversee interest rate risk, capital market activities, the investment portfolio, and capital planning of First Financial Bank.

2018 Board Compensation

Board members are compensated with a combination of cash and stock-based compensation. The goal of the compensation package is to attract and retain qualified candidates to serve on the Board of Directors, and to align the interests of the Board with those of the shareholders of the Company. In setting compensation, the Board considers primarily the fees paid by the Company's compensation peer group, which is made up of financial institutions of similar size located primarily in the four-state region of Indiana, Ohio, Kentucky and Illinois.

Compensation Consultant.    Prior to the closing of the merger with MainSource, the Board engaged Willis Towers Watson ("Willis") as its consultant with respect to the Company's director compensation. Willis reviewed the amount of the Board's compensation as well as the breakdown between cash and equity compensation in comparison to the Company's peers, taking into account the size of the combined institution. The Executive Compensation Committee considered Willis' findings in establishing 2018 director compensation.

Board/Committee Fees.    In 2018, non-employee directors of the Company received annual retainers of $100,000, of which $50,000 was paid in cash on a quarterly basis and $50,000 was awarded in restricted stock with a one year vesting period on the date of the 2018 Annual Meeting of shareholders. Directors did not receive any fees for service on the board of directors of First Financial Bank. The lead director of the board was paid an additional annual retainer of $25,000 and each committee chair was paid an additional annual retainer of $10,000 in order to recognize the extensive time that is devoted to lead director and committee matters including meetings with management, auditors, attorneys and consultants, and preparing committee agendas. Director fees are paid quarterly.

Election to Purchase Stock with Cash Retainer.    Each year, pursuant to the Director Fee Stock Plan, directors are given the opportunity to elect to use all or a portion of their board fees to purchase the Company's common shares. Shares are purchased on the open market by an independent broker dealer after the payment of the quarterly Board fees.

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Director Compensation Table

During the fiscal year ended December 31, 2018, we provided the following compensation to our non-employee directors. Claude E. Davis and Archie M. Brown, who are also employees of the Company, did not receive any additional fees for serving on the Board and therefore have been omitted from the table. For a discussion of Mr. Davis and Mr. Brown's compensation, see "Executive Compensation" below.

Name

   
Fees Earned
or Paid in Cash1
($)
   
Stock Awards2
($)
   
All Other
Compensation3
($)
   
Total
($)
 

J. Wickliffe Ach

    72,625     50,000     740     123,365  

Kathleen L. Bardwell

    37,500     50,000         87,500  

David S. Barker4

    12,000         740     12,740  

William G. Barron

    37,500     50,000         87,500  

Vincent A. Berta

    45,000     50,000         95,000  

Cynthia O. Booth

    58,000     50,000     740     108,740  

Corinne R. Finnerty

    48,000     50,000     740     98,740  

Erin P. Hoeflinger

    37,500     50,000         87,500  

Murph Knapke4

    19,750         848     20,598  

Susan L. Knust

    48,000     50,000     740     98,740  

William J. Kramer

    60,250     50,000     740     110,990  

Jeffrey D. Meyer4

    10,500         740     11,240  

John T. Neighbours

    48,000     50,000     740     98,740  

Thomas M. O'Brien

    45,000     50,000         95,000  

Richard E. Olszewski

    48,000     50,000     740     98,740  

Maribeth S. Rahe

    61,250     50,000     740     111,990  
1.
Includes board retainer and additional retainers for lead director and committee chairs.

2.
Based on the closing price of First Financial's common shares as of the date of grant (May 22, 2018) of $32.30 per share. These shares were issued as restricted stock which vests on May 22, 2019. Dividends on unvested restricted stock are held in escrow and paid upon vesting of the shares.

3.
Includes accrued dividends paid on restricted stock that vested in 2018.

4.
Retired from Board of Directors effective March 31, 2018.

Review and Approval of Related Person Transactions

Each year, our directors and executive officers complete annual questionnaires designed to elicit information about potential related person transactions and transactions that may otherwise affect the independence of an independent director. The responses to these questionnaires are reviewed by the General Counsel and Corporate Secretary of the Company, and outside counsel if appropriate, to determine if there are related person transactions. Related person transactions will originally be submitted to the Audit Committee of the Board for approval as well as to the CGNC for its consideration when making independence determinations.

Pursuant to the Corporate Governance Principles, no director shall perform professional services for the Company or its affiliates in a manner that interferes with that director's independence under the Nasdaq Rules. This prohibition applies to services provided (1) directly by the director (or an immediate family member) or (2) where the director (or an immediate family member) is affiliated with the organization that provides the professional services to the Company. This prohibition does not apply to professional services that are provided by the director to clients of the Company (or its affiliates) where the Company (or its affiliates) has not given instruction that the service be provided by the director and the Company (or its affiliates) is not the party responsible for payment for the professional services. Professional services can be characterized as advisory in nature, generally involve access to sensitive company information or to strategic decision-making, and typically have a commission- or fee-based payment structure. Professional services may include services such as investment services, insurance services, accounting/auditing services, consulting services, marketing services, legal services, property management services, realtor services, lobbying services, executive search services, and IT consulting services.

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First Financial Bank has, and expects to have in the future, banking relationships in the ordinary course of business with directors, executive officers, principal shareholders, and their affiliates on the same terms, including interest rates and collateral on loans, as those prevailing at the same time for comparable transactions with others. Normal, arms-length banking relationships entered into in the ordinary course of business, and consistent with applicable federal banking regulations, are not considered to interfere with a director's independence. Service specialization, rate concessions, fee concessions, or other service or product modifications may similarly be offered to directors and executive officers, and their affiliates, if the same would be offered to other similarly situated clients on a non-discriminatory basis in the ordinary course of business. All loans or extensions of credit to a director or officer, or their affiliates, (i) were made in compliance with Federal Reserve Board Regulation O, (ii) were made in the ordinary course of business, (iii) were made on substantially the same terms, including interest rates and nature of collateral, as those prevailing at the time for comparable transactions with other persons not related to the Company, and iv) did not involve more than the normal risk of collectability or present other unfavorable features. In addition, the Company or its subsidiaries from time to time may pay immaterial amounts for such items as event sponsorships and contributions to not-for-profit entities with which our directors have relationships and which payments are in furtherance of our Company's business interests.

Transactions with Related Parties

During 2018, no related person transactions involving our directors or executive officers (or members of their immediate family) requiring disclosure in this proxy statement were identified nor are any such related person transactions currently proposed.

Compensation Committee Interlocks and Insider Participation

During 2018, no member of the Compensation Committee was an employee, officer or former officer of the Company. None of our executive officers served in 2018 on the board of directors or compensation committee (or other committee serving an equivalent function) of any entity that had an executive officer serving as a member of our Board or the Compensation Committee. All banking or financial services transactions between the Compensation Committee members and First Financial Bank were entered into in the ordinary course of business. No other relationships required to be reported under the rules promulgated by the SEC exist with respect to members of the Company's Compensation Committee.

Policy Against Hedging Activities

Our Insider Trading Policy prohibits our directors, officers and associates from engaging in any hedging transactions with respect to First Financial shares, including prepaid variable forward contracts, equity swaps, collars and exchange funds, and trading in any derivative security relating to First Financial shares.

Communicating with the Board of Directors

Shareholders may send communications to the Company's Board or to individual directors by writing to:

Letters mailed to this address will be received by the director who serves as Chair of the Audit Committee or the director who serves as Chair of the CGNC, as alternate. A letter addressed to an individual director will be forwarded unopened to that director by the Chair of the Audit Committee or his delegate.

Shareholders may also contact the Company's Corporate Secretary, Karen B. Woods, at First Financial Bancorp, 255 E. Fifth Street, Suite 2900, Cincinnati, OH 45202.

Information regarding this process is also available within the Investor Relations section of our website at www.bankatfirst.com/investor under the "Corporate Governance" tab, by clicking on the link "Communicating with the Board of Directors."

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Executive Compensation

Compensation Discussion and Analysis

I.   Executive Summary     33       Market Competitiveness     38  
    Introduction     33   IV.   Compensation of Executives in 2018     39  
    2018 Business Highlights     34       Elements and Mix of Compensation     40  
    2018 Executive Compensation Highlights     35       Pay for Performance     40  
    Best Practices     36   V.   Compensation of Executives in 2019     47  
II.   Compensation Philosophy and Objectives     36   VI.   Policies, Guidelines and Other Practices     47  
III.   Compensation Decision Making     37                
    Role of the Compensation Committee     37   Compensation Committee Report     49  
    Role of Executive Management     38                
    Role of the Compensation Consultant     38                


I.    Executive Summary

Introduction

This Compensation Discussion and Analysis describes and explains the material elements of 2018 compensation for our Chief Executive Officer, our Chief Financial Officer, and our other highly compensated executive officers. Detailed information regarding the compensation of these executive officers, also called "Named Executive Officers" or "NEOs", is set forth in the tables following this Compensation Discussion and Analysis. We also provide an overview of our executive compensation philosophy and our executive compensation program. In addition, we explain how and why the Compensation Committee of our Board arrived at specific compensation policies and decisions involving the NEOs.

For 2018, our Named Executive Officers are:

Name
  Title
Claude E. Davis1   Executive Chair
Archie M. Brown, Jr.2   President and Chief Executive Officer
John M. Gavigan3   Chief Operating Officer
James M. Anderson2   Chief Financial Officer
Anthony M. Stollings   EVP, Commercial Banking
Karen B. Woods2,4   General Counsel and Chief Risk Officer
William R. Harrod   Chief Credit Officer
Shannon M. Kuhl4   Chief Risk Officer
1.
Mr. Davis served as President and Chief Executive Officer until April 1, 2018.

2.
Effective April 1, 2018.

3.
Mr. Gavigan served as Chief Financial Officer until April 1, 2018.

4.
Ms. Kuhl served as Chief Risk Officer through November 14, 2018. Ms. Woods became Chief Risk Officer effective November 14, 2018.

You should read this section of the proxy statement when determining your vote on the compensation of our NEOs (see Proposal 3—Non-Binding, Advisory Vote to Approve Executive Officer Compensation). This CD&A contains information that is important to your voting decision.

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2018 Business Highlights

2018 was a transformational year for the Company. In April 2018, we completed the merger with MainSource Financial Group, an Indiana-based bank holding company, and in May 2018 we completed the conversion of MainSource's operating systems. As a result of the merger, the Company grew by $4.4 billion in assets, $2.8 billion in loans and $3.3 billion in deposits. Following the merger, our Board was reconstituted with nine former members of the Company's board and six former members of MainSource's board. We also reorganized our executive team, with our former Chief Executive Officer becoming Executive Chair and MainSource's former President and Chief Executive Officer becoming President and Chief Executive Officer of the Company. An additional reorganization of the executive team occurred in November 2018 with the addition of certain executives and certain executives taking on new or additional responsibilities.

Notwithstanding these significant changes, the Company continued its pattern of excellent profitability. During 2018, the Company reported net income of $172.6 million, or $1.93 per diluted share, an increase of 78% from 2017. On an operating basis, we reported net income of $204.7 million, or $2.28 per diluted share, 107.1% higher than 2017. As the following charts demonstrate, the Company has succeeded in growing rapidly while maintaining profitability and efficiency.

GRAPHIC   GRAPHIC

GRAPHIC

 

GRAPHIC
1
Non-GAAP financial measure which management believes facilitates a better understanding of the Company's financial condition. See Appendix A for Non-GAAP reconciliation.

In addition to completing the merger and reorganizing its management team, the Company accomplished many of its goals during 2018:

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2018 Executive Compensation Highlights

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Best Practices

Our Compensation Committee follows many compensation and corporate governance best practices when establishing executive compensation:

What We Do
  What We Don't Do

Mandate that all members of the Compensation Committee must be independent

 

Include tax gross-ups in our compensation plans

Impose robust stock ownership guidelines on our executive officers

 

Provide our executives with significant perquisites.

Emphasize long-term compensation for executives, including a three-year vesting period on all long term incentive awards

 

Pay dividends on unvested restricted stock. All dividends accrue and are paid only on earned shares once the stock has vested.

Regularly obtain guidance from an independent compensation consultant as to the amount and mix of compensation

 

Allow our directors, executives or other employees to hedge, pledge or sell short our stock

Require a double trigger in the event of a change in control (both a change in control and an involuntary termination or reduction in compensation must occur) before severance awards may be paid

 

Allow shares forfeited under our equity plans to be re-issued (share recycling)

Require a double trigger for the acceleration of vesting of our equity awards in the event of a change in control

 

Allow for the repricing of any stock options

Require a clawback of incentive compensation in the event of fraud that results in the restatement of our financial statements or willful misconduct

   

Permit significant discretion by the Compensation Committee to adjust compensation for various factors, including the creation of excess risk

   

Consider the Company's "say-on-pay" vote results when making compensation decisions. At the annual meeting of shareholders in 2018, the Company's 2017 executive compensation program received overwhelming shareholder approval with 96.5% of shareholder votes cast in favor of the Company's "say-on-pay" resolution.

   


II.    Compensation Philosophy and Objectives

The compensation program adopted by the Compensation Committee is designed to reward employee performance and the growth of long-term shareholder value. The Compensation Committee seeks to attract, retain and motivate the Company's employees by aligning competitive, market-based compensation programs with the Company's objectives, business strategy and financial performance. At the same time, the Committee seeks to ensure that the Company's compensation program promotes a customer-focused culture in which employees are not incentivized to take inappropriate risks.

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The Compensation Committee has identified the following guiding principles that form the basis for the Company's compensation program. Compensation should:

    Support a pay-for-performance culture that results in the growth of long-term shareholder value.

      For executives, a higher percentage of pay should be variable based on the achievement of corporate financial goals. The compensation program should also promote stock ownership to enhance alignment with shareholders.

      For non-executives, compensation should motivate both corporate and individual goals.
    Drive alignment with the Company's strategic plan and business goals, creating a clear line of sight between objectives and the rewards for achieving them.
    Be competitive within the market to enable the Company to attract and retain high performing employees who are critical to the Company's success.
    Incorporate proper governance practices and be structured to ensure employees are not incentivized to take unnecessary or excessive risks.
    Be fair, internally equitable and flexible when appropriate and necessary.


III.    Compensation Decision-Making

Three parties play an important role in establishing compensation levels for the Company's executive officers: (i) the Compensation Committee, (ii) senior management, and (iii) outside advisors. The sections that follow describe the role each of these parties plays in the compensation-setting process, as well as other important factors that impact compensation decisions.

Role of the Compensation Committee.    The Compensation Committee has the responsibility to:

In determining the amount of NEO compensation each year, the Compensation Committee reviews competitive market data from the banking industry as a whole, as well as peer group data. It makes specific compensation decisions and awards based on such information, along with Company performance, individual performance and other circumstances as appropriate.

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Role of Executive Management in Compensation Decisions for NEOs

Throughout the year, the Compensation Committee meets with the CEO and other executive officers to solicit and obtain recommendations with respect to the Company's compensation programs and practices. The CEO makes recommendations to the Compensation Committee as to the appropriate base salaries, annual cash incentive opportunities, and stock awards for the executive officers other than himself.

In approving compensation for 2018, the Compensation Committee considered the CEO's recommendations for the executive officers. The Compensation Committee, in consultation with its compensation consultant and the Executive Chair of the Board, made its own determinations regarding the compensation for the CEO, which were then ratified and approved by the Board.

Role of the Compensation Consultant

To assist in its efforts to meet the objectives outlined above in 2018, the Compensation Committee retained Willis Towers Watson through July 2018 and then Meridian Compensation Partners, LLC beginning in August 2018 to provide general executive compensation consulting services to the Committee and to support management's need for advice and counsel. Pursuant to the Compensation Committee's charter, the Compensation Committee has the power to retain or terminate such consultant and engage other advisors.

The independent compensation consultant typically collaborates with management to obtain data, clarify information, and review preliminary recommendations prior to the time they are shared with the Compensation Committee. The consultant provides data regarding market practices, and works with management to develop recommendations for changes to plan designs and policies consistent with the philosophies and objectives discussed earlier.

In accordance with SEC Rules and NASDAQ listing standards, the Committee took appropriate actions to confirm the independence of Willis Towers Watson and Meridian Compensation Partners, LLC.

Market Competitiveness

From time to time, our Compensation Committee considers the compensation practices of a group of similarly-sized publicly-traded financial services/banking organizations designated as the Company's peer group in establishing and reviewing the compensation of our executive officers. Companies have historically been included in the Company's peer group based on their relevance in terms of asset size (approximately one-half to two times the asset size of the Company), business model, products, services and geographic location as compared to that of the Company, as well as those the Compensation Committee deem to be high performing financial institutions. The Committee reviews and approves the peer group annually with input from our independent compensation consultant and management.

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Based on the significant change in the size of the Company during 2018, the Compensation Committee performed a full review of the Company's peer group and made significant changes following the merger. The 2018 peer group consisted of the following 20 financial services companies:

Name of Institution

    Asset Size as of 6/30/18
(In Billions)
 

Pinnacle Financial Partners, Inc.

    $24.0  

TCF Financial Corporation

    $23.2  

Chemical Financial Corporation

    $20.3  

Fulton Financial Corporation

    $20.2  

United Bankshares, Inc.

    $19.2  

Old National Bancorp

    $17.5  

BancorpSouth Bank

    $17.2  

Simmons First National Corporation

    $16.2  

First Midwest Bancorp, Inc.

    $14.8  

South State Corporation

    $14.6  

Peer Median

  $14.0  

Trustmark Corporation

    $13.5  

Union Bankshares Corporation

    $13.1  

United Community Banks, Inc.

    $12.4  

Cadence Bancorporation

    $11.3  

Heartland Financial USA, Inc.

    $11.3  

Customers Bancorp, Inc.

    $11.1  

WesBanco, Inc.

    $10.9  

Renasant Corporation

    $10.5  

First Merchants Corporation

    $9.7  

Park National Corporation

    $7.5  

First Financial Bancorp

  $13.9  

Our Compensation Committee uses peer information as a reference point when evaluating the elements and amounts of the compensation paid to our Chief Executive Officer and our other executive officers. The Committee does not establish the compensation of our executive officers using direct comparisons to our peer group, but instead uses peer group data as a competitive market check on executive officer compensation. Peer group data is one of several factors used by the Compensation Committee when setting the compensation of our Chief Executive Officer and other executive officers.


IV.    Compensation of Executives in 2018

As a result of the significant changes that occurred during 2018, including the merger with MainSource that increased the size of the Company by 50% and the blending and realignment of the management teams that resulted in the addition of new executives and several executives taking on new or expanded responsibilities, the Compensation Committee engaged in a series of compensation reviews to ensure continued alignment among the compensation philosophy, the Company's strategic objectives and the structure of the executive compensation program.

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Elements and Mix of Compensation

To achieve the above-stated principles and objectives, the 2018 executive compensation program consisted primarily of the following elements:

    Performance-Based Compensation:    
                                    
    Base Salary—

To competitively compensate executives for day-to-day contributions, skills, experience, and expertise.

          Short-Term Incentive Compensation—

To motivate executives through the opportunity to share in the rewards of the current year's results.

          Long-Term Equity Incentive Compensation—

To motivate executives through the opportunity to share in the rewards of sustained long-term results and value creation consisting of both time- and performance-based restricted stock.

   
                                    

 

 

Non-Performance Based Benefits:

 

 
                                    
    To provide competitive benefits that encourage retention by supporting the security and protection of executives and their families, including:

Employment agreements and change in control and severance agreements;

Retirement and other benefits; and

Limited perquisites and other personal benefits.

   

The Compensation Committee takes a holistic approach to establishing the total compensation package for its executives and each element of compensation is interdependent on the other elements. Applying the Company's core values and drawing upon the principles and philosophy discussed above, the Compensation Committee utilizes these elements of compensation as building blocks to construct a complete compensation package for each executive that appropriately satisfies the core design criteria of pay for performance, alignment with shareholder interests, market competitiveness, proper governance and compliance with all legal and regulatory guidelines.

The mix and relative weighting of each compensation element reflect the competitive market and the Company's compensation philosophy. The mix of pay may be adjusted from time to time to best support our immediate or longer-term objectives, changes in executive responsibility, and internal consistency.

Target compensation for each NEO is a mix of short-term (cash) and long-term (stock) incentives. A substantial portion of this mix is at risk and varies based on the performance of the Company, including the creation of long term shareholder value. The emphasis on compensation elements related to performance is specifically intended to affect the actual level of compensation realized versus target. If the Company performs well (based on both internal objectives and peer group comparisons), award levels are intended to be strong. If the Company underperforms, award levels and values will be negatively impacted.

The mix of compensation awarded in 2018 to our NEOs reflects our compensation philosophy. A substantial portion of our executives' compensation is performance-based and at risk.

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CEO/Executive Chair

GRAPHIC

Other NEOs

GRAPHIC

Base Salary

Base salaries for our NEOs reflect their role and value to the Company. Base salaries are reviewed annually and adjusted as appropriate to reflect each NEO's performance, contribution, and experience as well as relative position to the market and each other. Base salary levels are a foundational component of compensation since several elements of compensation are linked to this core element (e.g., cash and stock incentives). At lower executive levels, base salaries represent the largest portion of total compensation, but at senior executive levels such fixed compensation is progressively replaced by compensation that is "at risk" and varies based on performance outcomes.

The Compensation Committee sets base salaries for NEOs by utilizing published survey data that is position specific. In addition, the committee, to the extent available, will supplement the survey data with proxy information on base salaries paid by the peer group to executive officers with comparable positions. The Committee will also allow for recognition of each executive's role, contribution, performance and experience. The Compensation Committee reviews base salaries annually, but may engage in additional reviews as necessary to address competitive increases or to reflect increases in a particular NEO's responsibilities.

In anticipation of the merger with MainSource, the Compensation Committee reviewed the realigned executive structure in September 2017 and established base salaries for all executive officers taking into account the size of the combined organization. The Committee also reviewed peer data in order to ensure that base salaries are competitive within the market, with a general goal of ensuring that base salaries and total compensation are competitive with the median of the market data. In the fourth quarter of 2018, the Compensation Committee engaged in a supplementary

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review of executive compensation and further adjusted the base salaries of certain executives to account for new roles and responsibilities. The table below provides the base salaries as of April 2, 2018:

Named Executive Officer

    Base Salary
 

Claude E. Davis

    $776,900  

Archie M. Brown, Jr.

    $776,900  

John M. Gavigan1

    $310,000  

James M. Anderson

    $360,000  

Anthony M. Stollings

    $415,000  

Karen B. Woods1

    $310,000  

William R. Harrod

    $285,000  

Shannon M. Kuhl

    $310,000  
1.
Effective November 14, 2018, the Compensation Committee approved the following base salary increases:

Short-Term Incentive Compensation

Short-term incentives serve as a key mechanism to vary pay levels according to Company-wide short-term performance, linking executive financial rewards to the value delivered to our shareholders. Such incentives are earned and paid annually, but only after established threshold corporate performance levels are achieved. To underscore the importance of creating value for our shareholders, payouts for the Company's executive officers under the STIP are based entirely on corporate, rather than individual, performance. This approach also emphasizes that collective individual performances will result in improved business performance and favorably impact shareholder value.

2018 Target Compensation.    Generally, the Compensation Committee establishes target compensation levels for our executives under the STIP at the beginning of each fiscal year, taking into consideration such factors as the compensation philosophy, program objectives, relevant market data, individual performance and the scope and responsibility of each individual. In general, target short-term incentive opportunities are targeted at or below market median levels, with executives having the opportunity to earn higher payouts if warranted based on the overall performance of the Company.

In 2018, the Compensation Committee engaged in a review of the new executive team and adjusted STIP target levels effective with the April 1 closing date of the merger with MainSource. The Compensation Committee engaged in a second review of STIP compensation in November 2018 and adjustments were made to certain executives' targets effective November 14, 2018. The Compensation Committee believes the 2018 target compensation decisions provided reasonable target pay opportunities in relation to pay offered for comparable positions by financial services companies included in our peer group.

Target award opportunities are expressed as a percentage of actual base salary paid for the performance year for all participants. Actual awards may range from 0% to a maximum of 200% of the target award opportunity. The NEO target levels were as follows for the 2018 plan year:

Named Executive Officer

    Target STIP (as a percentage
of base salary)
 

Claude E. Davis

    60 %

Archie M. Brown, Jr.

    60 %

John M. Gavigan

    50 %

James M. Anderson

    50 %

Anthony M. Stollings

    50 %

Karen B. Woods1

    40 %

William R. Harrod

    40 %

Shannon M. Kuhl

    40 %
1.
Effective November 14, 2018, the Compensation Committee approved the following target STIP increase:

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Our 2018 program specified incentive payments under the STIP to our named executive officers (other than William R. Harrod) are paid in cash up to 100% of target levels, with amounts earned above target paid in immediately-vested stock that is subject to a three-year holding period.

2018 Performance Measures

Performance measures and their relative weightings are selected and approved by the Compensation Committee based on their relevance as key, balanced measures that drive shareholder value creation and align with the Company's internal, board-approved business plan. Performance is measured over a 12-month period for all participants (including the NEOs).

Traditionally the STIP performance measures include a mix of 2-3 absolute and relative measures designed to reflect the Company's performance compared to its budget and its peers. For 2018, however, the Compensation Committee discussed the challenges of setting absolute performance goals given the uncertainty around the timing of the merger and appropriate goal-setting for the combined Company. Because of these challenges, the Compensation Committee approved the use of Return on Assets (ROA) relative to the KBW Regional Banking Index (KBW Index) as the single performance metric for 2018. The KBW Index is made up of approximately 50 regional banks (excluding the Company) located throughout the country that are generally within an asset and market capitalization range comparable to the Company. This peer group is broader than the Company's established peer group which is used for setting overall compensation. Additionally, the Committee adjusted the payout scale to require top performance (at or above the 90th percentile of the peer group) in order to achieve a 200% payout. The Committee believed this adjustment was appropriate to incent greater performance.

The Compensation Committee believed that relative Return on Assets was appropriate as the single metric in 2018 to measure short-term performance because of its strong correlation with shareholder value.

Based upon these considerations, the Committee approved the following metric for the Company's 2018 STIP:

      Payout

Metric

  Weight   <25% of
Peers
  50% of Peers   75% of Peers   >90% of
Peers

Return on Assets (relative to peer)

  100%   0% Target
Payout
  100% Target
Payout
  150% Target
Payout
  200% Target
Payout

In order to generate a payout, the Company's ROA was required to exceed a threshold of the 25th percentile of the peer group. Thereafter, the actual payout was interpolated with a maximum of 200% of the payout of the target award opportunity.

Additionally, the Committee determined that no payouts under the STIP would be made if the Company's earnings per diluted share was below $0.

The Compensation Committee has discretion to make a downward adjustment to STIP payouts in the event of a material risk management failure or a material error that results in financial restatement. Additionally, the Compensation Committee has discretion to adjust the formulaically-calculated payout for performance in non-financial areas that may or may not directly affect the Company's achievement of specific financial metrics for a particular year, but are nevertheless important to the enhancement of shareholder value. The Committee did not make any adjustments in 2018 as a result of this discretion.

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2018 STIP Payouts

The calculation of the payouts for 2018 under the annual Short-Term Incentive Compensation Plan for all participants, including the named executive officers of the Company, was as follows:

      FFBC—12 months GAAP (adjusted)
ending December 31, 2018
KRX Peer Group1—3Q18 ending September 30, 2018

Measure

  FFBC
Results
(%)
  FFBC
Ranking
(percentile)
  Payout
Multiple
  Total
Payout
(%)
  Peer
Group
Component
Median
(%)
  Peer
Group
Component
Top
Quartile
(%)
  Peer
Group
Component
Lowest
Quartile
(%)

Return on Assets

  1.62   82.5   3.3   175.0   1.32   1.51   1.13
1.
Peer performance reflects data for the twelve months ended September 30, 2018. Company performance based on 12 month GAAP (adjusted) actuals ended December 31, 2018. Information concerning the reconciliation of non-GAAP information is provided in Appendix A.

Based upon the Company's performance at 175% of target, the Compensation Committee approved the following STIP payouts to the Company's NEOs for 2018, including the payment of cash up to each executive's target and stock with a three-year holding requirement for amounts above 100% of target:

Named Executive Officer

    Total STIP Payout     Amount Paid
in Cash
    Amount Paid
in Stock
 

Claude E. Davis

    $815,744     $466,139     $349,605  

Archie M. Brown, Jr.

    $753,116     $430,352     $322,764  

John M. Gavigan

    $272,521     $155,726     $116,795  

James M. Anderson

    $297,740     $170,137     $127,603  

Anthony M. Stollings

    $360,224     $205,842     $154,382  

Karen B. Woods

    $220,107     $125,775     $94,332