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2002. The Corporation may be required to issue additional shares to satisfy common share purchases related to the employee stock ownership plan described in NOTE 22. The dilutive effective of stock options outstanding on average shares outstanding in the diluted earnings per share reported on the income statement were 384,778, 332,404 and 232,579 shares at December 31, 2003, 2002 and 2001, respectively. 

Treasury shares consisting of 552,781 and 447,001 were reissued during 2003 and 2002 upon exercise of stock options. Treasury shares consisting of 17,663 and 67,484 were reissued in 2003 and 2002, respectively, to fund the business combination with SCC and SFA as described in NOTE 5. 

During 2003, 1,179,037 common shares were issued to fund the business combination with PFC, which is also described in NOTE 5. 

## NOTE 20— Restructuring Charges 

The Corporation incurred restructuring charges of $6,140 during 2002 in accordance with EITF 94-3. These restructuring charges were comprised of the following: $4,652 of employee separation costs consisting of severance packages for 95 employees from various affiliates of the Corporation including all levels of staff from the executive management level to back office support staff, $1,068 related to realignment of the various Boards of Directors and Board committees and $420 primarily related to the write-off of obsolete signage and supplies. These amounts are included as restructuring charges, as a component of Other Expenses on the Consolidated Statements of Income. 

These restructuring charges resulted from the merger of the charters of the Corporation’s two commercial banks (First Commonwealth Bank and Southwest Bank) and the adoption of a new common brand and identity for all financial services subsidiaries. 

Actual termination benefits paid and charged against the total severance liability were $2,823 and $1,263 during 2003 and 2002, respectively, leaving a remaining unpaid liability for severance costs of $566 at December 31, 2003. No additional severance accruals or adjustments were recorded during 2003 related to the 2002 restructuring. 

## NOTE 21— Income Taxes 

The income tax provision consists of: 

<img src='content_image/13340.jpg'>

Temporary differences between financial statement carrying amounts and tax bases of assets and liabilities that represent significant portions of the deferred tax assets (liabilities) at December 31, 2003 and 2002, were as follows: 

<img src='content_image/13339.jpg'>

The total tax provision for financial reporting differs from the amount computed by applying the statutory income tax rate to income before taxes. The differences are as follows: 

<img src='content_image/13338.jpg'>

