SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Definitive Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Fulton Financial Corporation
- --------------------------------------------------------------------------------
(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):
[X] No fee required.
[_] 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:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[_] 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
FULTON FINANCIAL CORPORATION
P. O.P.O. BOX 4887
ONE PENN SQUARE
LANCASTER, PENNSYLVANIA 17604
*NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
-----------------------------------------
*TO BE HELD MAY 1, 1997
-----------------------APRIL 14, 1998
--------------------------
TO THE SHAREHOLDERS OF FULTON FINANCIAL CORPORATION:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its directors, the
regular Annual Meeting of the shareholders of FULTON FINANCIAL CORPORATION will
be held on Thursday, May 1, 1997,Tuesday, April 14, 1998, at 12:00 noon, at the Hershey Lodge and
Convention Center, West Chocolate Avenue and University Drive, Hershey,
Pennsylvania, for the purpose of considering and voting upon the following
matters:
1. ELECTION OF DIRECTORS. To elect the tenseven nominees listed in
the accompanying Proxy Statement for the terms specified.
2. AMENDMENT OF THE ARTICLES OF INCORPORATION. To approve a proposal
adopted by the Board of Directors to amend the Articles of
Incorporation for the purpose of increasing the number of
authorized shares of common stock from 100 million to 200 million
shares.
3. OTHER BUSINESS. To consider such other business as may
properly be brought before the meeting and any adjournments
thereof.
Only those shareholders of record at the close of business on March 13,
1997February
24, 1998 shall be entitled to be given notice of, and to vote at the meeting.
It is requested that you promptly execute the enclosed Proxy and return
it in the enclosed postpaid envelope. You are cordially invited to attend the
meeting. Your Proxy is revocable and may be withdrawn at any time before it is
voted at the meeting.
A copy of the Annual Report of Fulton Financial Corporation is
enclosed.
*BY ORDER OF THE BOARD OF DIRECTORS
-----------------------------------
*WILLIAM R. COLMERY
-------------------
Secretary
Enclosures
March 25, 19976, 1998
*BOLD FACE TYPE
PROXY STATEMENT
Dated and to beTo Be Mailed March 25, 19976, 1998
FULTON FINANCIAL CORPORATION
P. O.P.O. BOX 4887
ONE PENN SQUARE
LANCASTER, PENNSYLVANIA 17604
(717) 291-2411
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 1, 1997APRIL 14, 1998
TABLE OF CONTENTS
-----------------
PAGE
----
GENERAL
Introduction...................................................................2- -------
Introduction...................................................................
- ------------
Date, Time and Place of Meeting................................................2Meeting ...............................................
- -------------------------------
Shareholders Entitled to Vote..................................................2Vote .................................................
- -----------------------------
Purpose of Meeting.............................................................2Meeting ............................................................
- ------------------
Solicitation of Proxies........................................................2Proxies .......................................................
- -----------------------
Revocability and Voting of Proxies.............................................2Proxies ............................................
- ----------------------------------
Voting of Shares and Principal Holders Thereof.................................3Thereof ................................
- ----------------------------------------------
Shareholder Proposals..........................................................4Proposals .........................................................
- ---------------------
RecommendationsRecommendation of the Board of Directors......................................4Directors ......................................
- ---------------------------------------------------------------------------------
INFORMATION CONCERNING ELECTION OF DIRECTORS
- --------------------------------------------
General Information............................................................4Information ...........................................................
- -------------------
Information about Nominees and Continuing Directors............................5Directors ...........................
- ---------------------------------------------------
Meetings and Committees of the Board of Directors..............................4Directors .............................
- -------------------------------------------------------------------------------------------------
Compensation of Directors.....................................................12Directors .....................................................
- -------------------------
Executive Officers............................................................12Officers.............................................................
- ------------------
1
Executive Compensation........................................................14Compensation.........................................................
- ----------------------
Transactions with Directors and Executive Officers............................17Officers.............................
- --------------------------------------------------
1
Section 16(a) Beneficial Ownership Reporting Compliance.......................17Compliance........................
- -------------------------------------------------------
AMENDMENT OF THE ARTICLES OF INCORPORATION
General Information...........................................................18
- -------------------
Recommendation of the Board of Directors......................................18
- ----------------------------------------
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS..............................19ACCOUNTANTS
- ------------------------------------------------
ADDITIONAL INFORMATION........................................................19INFORMATION.........................................................
- ----------------------
OTHER MATTERS.................................................................19MATTERS..................................................................
- -------------
2
GENERAL
-------
Introduction
- ------------
Fulton Financial Corporation, a Pennsylvania business corporation and
registered bank holding company, was organized pursuant to a plan of
reorganization adopted by Fulton Bank and implemented on June 30, 1982. On that
date, Fulton Bank became a wholly-owned subsidiary of Fulton Financial
Corporation and the shareholders of Fulton Bank became shareholders of Fulton
Financial Corporation. Since that time, Fulton Financial Corporation has
acquired other banks and currently owns the following subsidiary banks: Fulton
Bank, Delaware National Bank, Farmers Trust Bank, FNB Bank, N.A., Great Valley
Savings Bank, Hagerstown Trust Company, Lafayette Bank, Swineford National Bank,
The Bank of Gloucester County, and The Woodstown National Bank & Trust Company.Company and
The Peoples Bank of Elkton. In addition, Fulton Financial Corporation has four
direct, non-banking subsidiaries: Fulton Financial Realty Company (which owns or
leases certain properties on which facilities of Fulton Bank and Farmers Trust
Bank are located), Fulton Life Insurance Company (which reinsures credit life,
health and accident insurance that is directly related to extensions of credit
by subsidiary banks of Fulton Financial Corporation), Central Pennsylvania
Financial Corp. (which owns certain limited partnership interests in
low-moderate income and elderly housing projects and also owns certain
non-banking subsidiaries holding interests in real estate) and FFC Management,
Inc. (which holds certain investment securities).
On August 15, 1997, Fulton Financial Corporation entered into a Merger
Agreement with Keystone Heritage Group, Inc. ("KHG"), pursuant to which KHG will
be merged with and into Fulton Financial Corporation. Under the terms of the
Merger Agreement, each of the outstanding shares of common stock of KHG will be
exchanged, as of the effective date of the merger, for 1.83 shares of common
stock of Fulton Financial Corporation. The shareholders of KHG approved the
Merger Agreement at a special meeting held on February 17, 1998, and Fulton
Financial Corporation and KHG intend to complete the merger as of March 27,
1998; however, consummation of the Merger Agreement is subject to various
conditions, including regulatory approvals.
On January 26, 1998, Fulton Financial Corporation entered into a Merger
Agreement with Ambassador Bank of the Commonwealth ("ABC"). The Merger Agreement
provides that ABC will be merged with and into Lafayette Bank, a wholly-owned
subsidiary of Fulton Financial Corporation. Under the terms of the Merger
Agreement, each of the outstanding shares of common stock of ABC will be
exchanged, as of the effective date of the merger, for 1.12 shares of common
stock of Fulton Financial Corporation. Each holder of an option or warrant to
acquire ABC common stock which is outstanding on the effective date of the
transaction is to receive an equivalent number of shares of common stock of
Fulton Financial Corporation, as reduced by the exercise price of such option or
warrant. Consummation of the Merger Agreement is subject to various conditions,
including regulatory approvals and approval by the shareholders of ABC.
The meeting to which this Proxy Statement relates will be the fifteenthsixteenth
Annual Meeting of the shareholders of Fulton Financial Corporation.
3
Date, Time and Place of Meeting
- -------------------------------
The regular Annual Meeting of the shareholders of Fulton Financial
Corporation will be held on Thursday, May 1, 1997,Tuesday, April 14, 1998, at 12:00 noon, at the
Hershey Lodge and Convention Center, West Chocolate Avenue and University Drive,
Hershey, Pennsylvania.
Shareholders Entitled to Vote
- -----------------------------
Only those shareholders of record at the close of business on March 13,
1997February
24, 1998 shall be entitled to receive notice of, and to vote at the meeting.
Purpose of Meeting
- ------------------
The shareholders will be asked to consider and vote upon the following
matters at the meeting: (i) to elect tenseven directors for the terms specified
herein; and (ii) to approve a proposal adopted by the Board of Directors to amend
the Articles of Incorporation for the purpose of increasing the number of
authorized shares of common stock from 100 million to 200 million shares; and
(iii) to
3
consider and vote upon such other business as may be
properly brought before the meeting and any adjournment thereof.
Solicitation of Proxies
- -----------------------
This Proxy Statement is furnished in connection with the solicitation
of proxies, in the accompanying form, by the Board of Directors of Fulton
Financial Corporation for use at the Annual Meeting of shareholders to be held
at 12:00 noon on Thursday, May 1, 1997,Tuesday, April 14, 1998, and any adjournments thereof.
The expense of soliciting proxies will be borne by Fulton Financial
Corporation. In addition to the use of the mails, directors, officers and
employees of Fulton Financial Corporation and its subsidiaries may, without
additional compensation, solicit proxies personally or by telephone.
Revocability and Voting of Proxies
- ----------------------------------
The execution and return of the enclosed proxy will not affect a
shareholder's right to attend the meeting and to vote in person. Any proxy given
pursuant to this solicitation may be revoked by delivering written notice of
revocation to William R. Colmery, Secretary of Fulton Financial Corporation, at
any time before the proxy is voted at the meeting. Unless revoked, any proxy
given pursuant to this solicitation will be voted at the meeting in accordance
with the instructions thereon of the shareholder giving the proxy. In the
absence of instructions, all proxies will be voted FOR the election of the tenseven
nominees identified in this Proxy Statement and FOR the proposal to amend the
Articles of Incorporation.Statement. Although the Board of Directors
knows of no other business to be presented, in the event that any other matters
are properly brought before the meeting, any proxy given pursuant to this
solicitation will be voted in accordance with the recommendations of the
management of Fulton Financial Corporation.
Shares held for the account of shareholders who participate in the
Dividend Reinvestment Plan and for the account of employees who participate in
the Employee Stock Purchase Plan will be voted in accordance with the
instructions of each shareholder as set forth in his or her proxy. If a
shareholder
who participates in these plans does not return a proxy, the shares
held for the shareholder's account by the Plan Agent will not be voted.
Shares held for the account of employees of Fulton Financial
Corporation and its subsidiaries who participate in the Fulton Financial Stock
Fund
(formerly known as "Fund D") of the Fulton Financial Corporation Employee Retirement Plan and 401(k)
Plan will be voted by the Plan Trustee in accordance with the instructions of
each participant as set forth in the separate voting instruction sheet sent to
the participant with respect to such shares. Shares held under the Fulton
Financial Stock Fund with respect to which no voting instructions are received
by the Plan Trustee will be voted by the Plan Trustee FOR the election of the
tenseven nominees identified in the Proxy Statement and FOR
the proposal to amend the Articles of Incorporation.
4
Statement.
Voting of Shares and Principal Holders Thereof
- ----------------------------------------------
At the close of business on March 13, 1997,February 24, 1998, which is the record date
for determination of shareholders entitled to receive notice of, and to vote at
the meeting and any adjournment thereof, Fulton Financial Corporation had
outstanding 35,973,61740,625,880 shares of common stock. There is no other class of stock
outstanding. As of the record date, shares of Fulton Financial Corporation
common stock were held by the Trust Departments of the following Fulton
Financial Corporation subsidiariessubsidiares as sole fiduciary:
Farmers Trust Bank 42,943
-----------
Fulton Bank 1,151,859
-----------
FNB Bank, N.A. 129,782
-----------
Hagerstown Trust Company 149,919
-----------
Lafayette Bank 51,841
-----------
The Woodstown National
Bank & Trust Company 2,160
-----------
Total 1,528,504Farmers Trust Bank 29,723
Fulton Bank 1,356,746
FNB Bank, N.A. 90,090
Hagerstown Trust Company 133,806
Lafayette Bank 26,638
The Woodstown National Bank & Trust Company 14,520
Total: 1,651,523 Shares
===========
The shares held by the Trust Departments of the foregoing banks as sole
fiduciaries represent in the aggregate approximately 4.254.07 percent of the total
shares outstanding and will be voted FOR the election of the tenseven nominees
identified in this Proxy Statement and FOR the proposal to amend the Articles of
Incorporation.Statement.
A majority of the outstanding common stock present in person or by
proxy constitutes a quorum for the conduct of business. The judge of election
will treat shares of Fulton Financial Corporation common stock represented by a
properly signed and returned proxy as present at the Annual Meeting for purposes
of determining a quorum, without regard to whether the proxy is marked oras
casting a vote or abstaining. Likewise, the judge of elections will treat shares
of common stock represented by "broker non-votes" (i.e., shares of common stock
held in record name by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or persons entitled to vote, (ii) the
broker or nominee does not have discretionary voting power under applicable
rules of the National Association of Securities Dealers, Inc. or the instrument
under which it serves in such capacity, and (iii) over which the record holder
has indicated on the proxy or otherwise notified
5
Fulton Financial Corporation that it does not have authority to vote such shares
on that matter) as present for purposes of determining a quorum.
Each share is entitled to one vote on all matters submitted to a vote
of the shareholders. A majority of the votes cast at a meeting at which a quorum
is present is required in order to approve any matter submitted to a vote of the
shareholders, except in cases where the vote of a greater number of shares is
required by law or under the Articles of Incorporation or Bylaws. In the case of
the election of directors, the candidates receiving the highest number of votes,
up to the number of directors to be elected, shall be elected to the Board of
Directors. Under the Articles of Incorporation, the affirmative vote
of 66-2/3 percent of the outstanding shares entitled to vote is required in
order to approve the proposal to amend the Articles of Incorporation.
Abstentions and
5
broker non-votes will be counted as shares that are
outstanding, but will not be counted or voted in favor of the election of
directors or approval of the
proposal to amend the Articles of Incorporation. Consequently, abstentions and
broker non-votes will have the same effect as a vote against approval of the
proposal to amend the Articles of Incorporation.directors.
To the knowledge of Fulton Financial Corporation, no person owned of
record or beneficially on the record date more than five percent of the
outstanding common stock of Fulton Financial Corporation.
Shareholder Proposals
- ---------------------
Shareholder proposals intended to be presented at the 19981999 Annual
Meeting must be received at the executive offices of Fulton Financial
Corporation at One Penn Square, Lancaster, Pennsylvania not later than November
25, 1997,26, 1998, in order to be included in the proxy statement and proxy form to be
prepared by Fulton Financial Corporation in connection with the 19981999 Annual
Meeting.
RecommendationsRecommendation of the Board of Directors
- ---------------------------------------------------------------------------------
The Board of Directors recommends that the shareholders vote FOR the
election of the tenseven nominees identified in this Proxy Statement and FOR the
proposal to amend the Articles of Incorporation.Statement.
INFORMATION CONCERNING ELECTION OF DIRECTORS
--------------------------------------------
General Information
- -------------------
The Bylaws of Fulton Financial Corporation provide that the Board of
Directors shall consist of not less than two nor more than thirty-five persons
and that the directors shall be classified with respect to the time they shall
severally hold office by dividing them into three classes, each consisting as
nearly as possible of one-third of the number of the whole Board of Directors.
The Bylaws further provide that the directors of each class shall be elected for
a term of three years, so that the term of office of one class of directors
shall expire at the Annual Meeting each year. The Bylaws provide that the number
of directors in each class of directors shall be determined by the Board of
Directors.
A majority of the Board of Directors may increase the number of
directors between meetings of the shareholders. Any vacancy occurring in the
Board of Directors, whether due to an increase in the number of directors,
resignation, retirement, death or any other reason, may be filled by appointment
by the remaining directors. Any director who is appointed to fill a vacancy
shall hold office until the next Annual Meeting of the shareholders and until a
successor is elected and shall have
6
qualified. There is a mandatory retirement provision in the Bylaws, which states
that the
6
office of a director shall be considered vacant at the Annual Meeting
of shareholders next following the director's attaining the age of 70 years.
On August 15, 1997, Fulton Financial Corporation entered into a Merger
Agreement with Keystone Heritage Group, Inc. pursuant to which it expects to
acquire Lebanon Valley National Bank, which will be merged with and into Farmers
Trust Bank. It is expected that this acquisition and merger will be completed as
of March 27, 1998. In accordance with the terms of the Merger Agreement, Fulton
Financial Corporation has agreed to appoint Donald W. Lesher, Jr., age 53, and
Charles V. Henry, III, age 63, who are presently directors of Lebanon Valley
National Bank and will be directors of the merged bank to be known as Lebanon
Valley Farmers Bank, to the Board of Directors of Fulton Financial Corporation.
It is presently contemplated that such appointments would be made at the
regularly scheduled Board meeting on April 21, 1998. Mr. Lesher is President of
Lesher Mack Sales & Service, Inc., a truck dealership, and Mr. Henry is an
attorney with Henry & Beaver.
On January 26, 1998, Fulton Financial Corporation entered into a Merger
Agreement with Ambassador Bank of the Commonwealth pursuant to which it expects
to acquire Ambassador Bank of the Commonwealth, which will be merged with and
into Lafayette Bank. It is expected that this acquisition and merger will be
completed during the third quarter of 1998. In accordance with the terms of the
Merger Agreement, Fulton Financial Corporation has agreed to appoint one present
director of Ambassador Bank of the Commonwealth selected by its board of
directors and approved by the Board of Directors of Fulton Financial Corporation
to the Board of Directors of Fulton Financial Corporation on or promptly after
the effective date of the acquisition and merger. The director to be appointed
has not yet been selected.
The Board of Directors has presently fixed the number of directors at
twenty-five.twenty-four. There are fifteenseventeen continuing directors whose terms of office will
expire at either the 19981999 Annual Meeting or the 19992000 Annual Meeting. The Board
of Directors proposes to nominate the following tenseven persons for election to
the Board of Directors for the termsterm specified below:
For a Term of Two Years - Class 1999
------------------------------------
Samuel H. Jones, Jr.
For a Term of Three Years - Class of 20002001
-----------------------------------------
JeffreyJames P. Argires, M.D. John O. Shirk
Donald M. Bowman, Jr. James K. Sperry
Frederick B. Fichthorn Kenneth G. Albertson Eugene H. Gardner
Thomas D. Caldwell, Jr. Daniel M. Heisey
Harold D. Chubb Clyde W. Horst
William H. Clark, Jr. William E. Rusling
Rufus A. Fulton, Jr.Stoudt
Bernard J. Metz, Sr.
Each of the above nominees is presently a director of Fulton Financial
Corporation. In addition, each nominee currently serves on one bank subsidiary
board of directors and will continue to serve on such board as follows: Messrs.
Caldwell, Chubb, Fulton, Gardner, HeiseyArgires, Fichthorn, Shirk, Sperry and HorstStoudt - Fulton Bank; Mr. RuslingBowman -
Hagerstown Trust Company; and Mr. Metz - Lafayette Bank; Mr. Clark - Swineford National Bank; Mr. Albertson - The Bank of
Gloucester County; and Mr. Jones - The Woodstown National Bank & Trust Company.Bank.
In the event that any of the foregoing nominees is unable to accept
nomination or election, any proxy given pursuant to this solicitation will be
voted in favor of such other persons as the management
7
of Fulton Financial Corporation may recommend. However, the Board of Directors
has no reason to believe that any of its nominees will be unable to accept
nomination or to serve as a director if elected.
Section 3 of Article II of the Bylaws of Fulton Financial Corporation
requires that nominations, other than those made by or on behalf of the existing
management of Fulton Financial Corporation, must be made in writing and must be
delivered or mailed to the Chief Executive Officer of Fulton Financial
Corporation not less than 14 days nor more than 50 days prior to the date of the
Annual Meeting; provided, however, that if less than 21 days' notice of the
meeting is given to the shareholders, such nominations must be mailed or
delivered to the Chief Executive Officer of Fulton Financial Corporation not
later than the close of business on the seventh day following the day on which
notice of the meeting was mailed. The required notice must set forth the name,
age, residence address and principal occupation of each nominee. The chairman of
the meeting is required to determine whether nominations have been made in
accordance with the requirements of the Bylaws and, if he determines that a
nomination is defective, the nomination and any votes cast for the nominee shall
be disregarded.
7
Information about Nominees and Continuing Directors
- ---------------------------------------------------
Information concerning the tenseven persons to be nominated for election
to the Board of Directors of Fulton Financial Corporation at the 19971998 Annual
Meeting and concerning the fifteenseventeen continuing directors is set forth below,
including the number of shares of Fulton Financial Corporation common stock
beneficially owned, directly or indirectly, as of February 1, 1997January 31, 1998 by each of
them. Unless otherwise indicated in a footnote, shares shown as beneficially
owned by each nominee or continuing director are held either (i) individually by
the person indicated, (ii) individually by the person's spouse or children
living in the same household, (iii) jointly with the person's spouse or children
living in the same household or (iv) in the name of a bank, broker or nominee
for the account of the person or the person's spouse. No nominee or continuing
director owns beneficially more than one percent of the outstanding common stock
of Fulton Financial Corporation, except Samuel H. Jones, Jr., who owns 1.59%1.1.58%.
Years of service as a director include service as a director of Fulton Bank
prior to the formation of Fulton Financial Corporation.
NOMINEES
--------
CLASS OF 1999
-------------
(Two Year Term)
SAMUEL H. JONES, JR., age 63. President, S J Transportation Co.
(trucking company). Director since 1997. Shares of stock
beneficially owned: 570,392/1/. Mr. Jones also serves as a
director of Metatools, Inc., which is subject to the periodic
reporting requirements of Section 15(d) of the Securities Exchange Act
of 1934.
CLASS OF 20002001
-------------
(Three Year Term)
JEFFREY G. ALBERTSON, age 56. Attorney, Albertson, Ward & McCaffrey
(law firm). Director since 1996. Shares of stock beneficially owned:
65,934./2/ Mr. Albertson has the right to acquire an additional 12,199
shares pursuant to the exercise of stock options. The law firm of
Albertson, Ward & McCaffrey, Woodbury, New Jersey, has provided legal
services to The Bank of Gloucester County for many years and is
expected to continue to do so in the future.
THOMAS D. CALDWELL, JR., age 68. Attorney, Caldwell & Kearns, P.C.
(law firm). Director since 1982. Shares of stock beneficially owned:
60,508. The law firm of Caldwell & Kearns, P.C., Harrisburg,
Pennsylvania, has provided legal services to Fulton Bank for many
years and is expected to continue to do so in the future.
8
HAROLD D. CHUBB, age 64. Retired Director of Finance, Brethren in
Christ Denomination in North America. Director since 1975. Shares of
stock beneficially owned: 19,600/3/.
WILLIAM H. CLARK, JR., age 64. Partner, Clark, Lauer & Schaeffer
(certified public accountants). Director since 1987. Shares of stock
beneficially owned: 5,845.
RUFUS A. FULTON, JR., age 56. President and Chief Executive Officer,
Fulton Financial Corporation. Director since 1984. Shares of stock
beneficially owned: 48,816/4/. Mr. Fulton has the right to acquire an
additional 73,167 shares pursuant to the exercise of stock options.
EUGENE H. GARDNER, age 61. President, Gardner Investments (investment
advisor). Director since 1981. Shares of stock beneficially owned:
13,455/5/.
DANIEL M. HEISEY, age 48. Vice President, Fulton Bank. Director
since 1993. Shares of stock beneficially owned: 127,169.
CLYDE W. HORST, age 58. Chairman and Chief Executive Officer, The
Horst Group, Inc. (diversified holding company). Director since 1978.
Shares of stock beneficially owned: 29,442.
WILLIAM E. RUSLING, age 67. Retired President, Hercules Cement
Company (manufacturer of cement). Director since 1990. Shares of
stock beneficially owned: 28,050.
CONTINUING DIRECTORS
--------------------
CLASS OF 1998
-------------
JAMES P. ARGIRES, M.D., age 65.66. President, Lancaster Neurosurgical
Associates (neurosurgeon). Director since 1974. Shares of stock
beneficially owned: 11,590.12,975.
DONALD M. BOWMAN, JR., age 58.59. Chairman, D.M.D. M. Bowman, Inc. (trucking
company). Director since 1994. Shares of stock beneficially owned:
151,408/6/175,895/1/.
8
FREDERICK B. FICHTHORN, age 63.64. President, F & M Hat Company
(manufacturer and distributor of felt and straw hats). Director since
1993. Shares of stock beneficially owned: 50,436.
9
55,799.
BERNARD J. METZ, SR., age 68.69. Chairman, Metz Company (distributor of
mechanical air handling systems). Director since 1992. Shares of stock
beneficially owned: 7,882.
DONALD E. RUHL, age 63. President, Jacob H. Ruhl, Inc. (insurance
brokers). Director since 1983. Shares of stock beneficially owned:
23,820.8,880.
JOHN O. SHIRK, age 53.54. Partner, Barley, Snyder, Senft & Cohen, LLPLLC (law
firm). Director since 1983. Shares of stock beneficially owned:
17,634/7/18,430/2/. The law firm of Barley, Snyder, Senft & Cohen, LLP,LLC,
Lancaster, Pennsylvania, has provided legal services to Fulton
Financial Corporation and its subsidiaries for many years and is
expected to continue to do so in the future. Mr. Shirk also serves as a
director of Irex Corporation, which is subject to the periodic
reporting requirements of Section 15(d) of the Securities Exchange Act
of 1934.
JAMES K. SPERRY, age 64.65. Executive Vice President, Fulton Financial
Corporation, and Chairman of the Board and Chief Executive Officer of
Fulton Bank. Director since 1984. Shares of stock beneficially owned:
41,040/8/55,302/3/. Mr. Sperry has the right to acquire an additional 45,71332,132
shares pursuant to the exercise of stock options.
KENNETH G. STOUDT, age 53.54. President, The Stoudt Companies (employee
benefit consulting company). Director since 1987. Shares of stock
beneficially owned: 26,138.34,560.
CONTINUING DIRECTORS
--------------------
CLASS OF 1999
-------------
PATRICK J. FREER, age 47.48. Vice President, Strickler Insurance Agency,
Inc. (insurance broker). Director since 1996. Shares of stock
beneficially owned: 22,514/9/25,284/4/.
ROBERT D. GARNER, age 63.64. Chairman of the Board, Fulton Financial
Corporation. Director since 1981. Shares of stock beneficially owned:
61,201/10/78,794/5/. Mr. Garner has the right to acquire an additional 36,74024,639
shares pursuant to the exercise of stock options.
J. ROBERT HESS, age 62.63. President, Lancaster Malleable Castings Company
(manufacturer of malleable iron castings). Director since 1977. Shares
of stock beneficially owned: 76,318/11/84,429/6/.
10
CAROLYN R. HOLLERAN, age 5859. Partner, Jerlyn Associates (real estate
investments). Director since 1994. Shares of stock beneficially owned:
3,255.3,714.
9
SAMUEL H. JONES, JR., age 64. President, S J Transportation Co.
(trucking company). Director since 1997. Shares of stock beneficially
owned: 640,228. Mr. Jones also serves as a director of MetaCreations
Corp. and Jevic Transportation, Inc., which are subject to the periodic
reporting requirements of Section 15(d) of the Securities Exchange Act
of 1934.
ARTHUR M. PETERS, JR., age 68.69. Attorney. Director since 1990. Shares of
stock beneficially owned: 118,715.130,586. Mr. Peters has provided legal
services to FNB Bank, N.A. for many years and is expected to continue
to do so in the future.
STUART H. RAUB, JR., age 63.64. President, Industrial Piping Systems, Inc.
(distributor of industrial piping and related items). Director since
1981. Shares of stock beneficially owned: 15,305.17,242.
MARY ANN RUSSELL, age 61. Retired President and Chief Executive
Officer, Maple Farm, Inc. (provider of health care services). Director
since 1991. Shares of stock beneficially owned: 8,040.9,357.
CLASS OF 2000
-------------
JEFFREY G. ALBERTSON, age 57. Attorney, Albertson Ward (law firm).
Director since 1996. Shares of stock beneficially owned: 72,526.7 Mr.
Albertson has the right to acquire an additional 13,421 shares pursuant
to the exercise of stock options. The law firm of Albertson Ward,
Woodbury, New Jersey, has provided legal services to The Bank of
Gloucester County for many years and is expected to continue to do so
in the future.
THOMAS D. CALDWELL, JR., age 69. Attorney, Caldwell & Kearns, P.C. (law
firm). Director since 1982. Shares of stock beneficially owned: 66,558.
The law firm of Caldwell & Kearns, P.C., Harrisburg, Pennsylvania, has
provided legal services to Fulton Bank for many years and is expected
to continue to do so in the future.
HAROLD D. CHUBB, age 65. Retired Director of Finance, Brethren in
Christ Denomination in North America. Director since 1975. Shares of
stock beneficially owned: 21,537/8/.
WILLIAM H. CLARK, JR., age 65. Partner, Clark, Schaeffer, Jones &
Eichner (certified public accountants). Director since 1987. Shares of
stock beneficially owned: 6,564.
RUFUS A. FULTON, JR., age 57. President and Chief Executive Officer,
Fulton Financial Corporation. Director since 1984. Shares of stock
beneficially owned: 67,223/9/. Mr. Fulton has the right to acquire an
additional 86,136 shares pursuant to the exercise of stock options.
10
EUGENE H. GARDNER, age 62. President, Gardner Investments (investment
advisor). Director since 1981. Shares of stock beneficially owned:
14,825/10/.
DANIEL M. HEISEY, age 49. Vice President, Fulton Bank. Director since
1993. Shares of stock beneficially owned: 145,102.
CLYDE W. HORST, age 59. Chairman and Chief Executive Officer, The Horst
Group, Inc. (diversified holding company). Director since 1978. Shares
of stock beneficially owned: 32,386.
WILLIAM E. RUSLING, age 68. Retired President, Hercules Cement Company
(manufacturer of cement). Director since 1990. Shares of stock
beneficially owned: 30,885.
As of February 1, 1997,January 31, 1998, Fulton Financial Corporation's directors and
officers, as a group, owned of record and beneficially 1,903,307/12/2,126,856/11/ shares of
Fulton Financial Corporation common stock, representing 5.295.20 percent of such
shares then outstanding.
Footnotes
- ---------
1
As of February 1, 1997,/1/ Includes 29,999 shares held by Bowman Sales & Equipment, Inc.
/2/ Includes 1,190 shares held in a trust.
/3/ Includes 12,597 shares held in the Corporation's retirement plan.
/4/ Includes 17,739 shares held by Strickler Insurance Agency, Inc. Mr.
Jones held 2,317 shares of Fulton Financial
Corporation stock. In addition, he held 355,047 shares of common stock of
The Woodstown National Bank & Trust Company, which, based on an exchange
ratio of 1.6 shares of Fulton Financial Corporation common stock for each
such share, were converted into 568,075 shares of Fulton Financial
Corporation common stock on February 28, 1997, the effective date of the
acquisition of The Woodstown National Bank & Trust Company. For purposes
of calculating Mr. Jones' percentage ofFreer disclaims beneficial ownership of any of these shares beyond
his pro rata interest in the outstanding common stockcompany.
/5/ Includes 30,428 shares held in the Corporation's retirement plan and
also includes 7,480 shares held by his spouse as trustee under
various trusts for grandchildren.
/6/ Includes 64,146 shares held by Lancaster Malleable Castings Company.
Mr. Hess disclaims beneficial ownership of Fulton Financial Corporation asany of February 1,these shares beyond
his pro rata interest in the shares of common stock issuable in connection with the acquisition of
The Woodstown National Bank & Trust Company were included.
2company.
/7/ Includes 6,3236,955 shares held in the Albertson Ward & McCaffrey Profit Sharing Plan.
Mr. Albertson disclaims beneficial ownership of any of these shares
beyond his pro rata vested interest as a participant in such Plan.
3/8/ Includes 2,1412,333 shares held as custodian for grandchildren.
4/9/ Includes 11,51713,580 shares held in the Corporation's retirement plan.
5
11
/10/ Includes 7,8118,592 shares held in a trust.
611
/11/ Includes 21,000 shares held by Bowman Sales & Equipment, Inc.
7
Includes 1,082 shares held in a trust.
8
Includes 10,590 shares held in the Corporation's retirement plan.
9
Includes 16,127 shares held by Strickler Insurance Agency, Inc. Mr. Freer
disclaims beneficial ownership of any of these shares beyond his pro rata
interest in the company.
10
Includes 27,059 shares held in the Corporation's retirement plan.
11
Includes 58,315 shares held by Lancaster Malleable Castings Company. Mr.
Hess disclaims beneficial ownership of any of these shares beyond his pro
rata interest in the company.
12
Includes 277,189287,698 shares issuable upon the exercise of stock options,
which shares have been treated as outstanding shares for purposes of
calculating the percentage of outstanding shares owned by directors and
officers as a group. For purposes of calculating the percentage of outstanding shares,
shares of Fulton Financial Corporation common stock issuable in connection
with the acquisition of The Woodstown National Bank & Trust Company as of
February 28, 1997 were also included. See note 1.
Meetings and Committees of the Board of Directors
- -------------------------------------------------
The Board of Directors of Fulton Financial Corporation has a standing
Audit Committee, but does not have a standing Nominating Committee or
Compensation Committee. Fulton Bank has a standing Compensation Committee, which
has been acting on behalf of Fulton Financial Corporation and will continue to
do so until a Fulton Financial Corporation Compensation Committee is appointed.
The Board of Directors of Fulton Financial Corporation also has a standing
Executive Committee.
The functions of the Executive Committee of the Board of Directors of
Fulton Financial Corporation include, among other things, consideration of
compensation for executive officers of Fulton Financial Corporation and Fulton
Bank and chief executive officers of the other subsidiary banks and presentation
of salary recommendations to the Board of Directors for approval. 12
Members of the
Executive Committee during 19961997 were Kenneth G. Stoudt,Arthur M. Peters, Jr., Chairman, Mrs.
RussellHolleran and Messrs. Caldwell, Fichthorn, Fulton, Garner, Hess and Peters.Hess. In 1996,1997, Mr.
Fulton was Chief Executive Officer of Fulton Financial Corporation. Mr. Fulton
does not participate in discussions as to his own compensation. The Executive
Committee met three times during 1996.1997.
Members of the Audit Committee during 19961997 were William E. Rusling,
Chairman, Mrs. Holleran and Messrs. Albertson, Bowman, Chubb, Clark, Fichthorn,
Freer, Jones, Metz
and Peters. The Audit Committee met eightseven times during the year. The functions
of the Audit Committee include the following: performing all duties assigned by
the Board of Directors; reviewing with management and independent public
accountants the basis for the reports issued by Fulton Financial Corporation
pursuant to federal and state regulatory requirements; meeting with the
independent public accountants to review the scope of audit services,
significant accounting changes, audit conclusions regarding significant
accounting estimates, assessments as to the adequacy of internal controls and
the resolution of any reportable conditions or weakness, and compliance with
laws and regulations; overseeing the internal audit function; reviewing
regulatory examination reports and management's responses thereto; and reviewing
periodic reports from the loan review function.
Members of the Compensation Committee of Fulton Bank during 19961997 were
Stuart H. Raub, Jr.,J. Robert Hess, Chairman, Mrs. Russell and Messrs. Gardner, Hess, HorstChubb, Fichthorn and Ruhl.Shirk.
Messrs. Fulton and Sperry serve as ex-officio members of this Committee;
however, Mr. Sperry does not participate in discussions as to his own
compensation. The Committee met twelve times during the year to review benefit
and salary administration programs. The Committee also reviews increases in
salaries for officers and staff members of Fulton Financial Corporation, except
for itsthe executive officers, and makes recommendations in this regard to the
Board of Directors.
There were eightten meetings of the Board of Directors of Fulton Financial
Corporation and twenty-threetwenty-two meetings of committees of the Boards of Directors of
Fulton Financial Corporation and Fulton Bank during 1996.1997. The following
directors attended fewer than 75 percent of the aggregate
12
number of meetings of the Board of Directors and of the various committees on
which they served: Donald M. Bowman, Jr. and Thomas D. Caldwell, Jr.Kenneth G. Stoudt, who attended 73 percent of such meetings.
Compensation of Directors
- -------------------------
Each member of the Board of Directors of Fulton Financial Corporation
is paid an annual fee of $7,500 for his or her services as a director, except
that no fee is paid to any director who is also a salaried officer of Fulton
Financial Corporation or one of its subsidiary banks. In addition, commencing on
April 15, 1997, directors have been paid a fee of $300 for each Board of
Directors meeting attended. Certain directors have elected to participate in the
Fulton Financial Corporation Deferred Compensation Plan, under which a director
may elect not to receive the normal director's fees when earned, but instead, to
receive them, together with interest, in a lump sum or in installments over a
period of up to twenty (20) years following retirement.
Executive Officers
- ------------------
13
The following persons are the executive officers of Fulton Financial
Corporation:
Name Age Office Held and Term of Office
- ---- --- ------------------------------
Rufus A. Fulton, Jr. 5657 President and Chief Executive Officer of Fulton Financial
Corporation since January 1993; previously President, Executive
Vice President and Vice President of Fulton Financial
Corporation and Executive Vice President and Senior Vice
President of Fulton Bank. Member of Senior Management of
Fulton Financial Corporation.
James K. Sperry 6465 Executive Vice President of Fulton Financial Corporation and
Chairman of the Board and Chief Executive Officer of Fulton
Bank since January 1993; previously Vice President of Fulton
Financial Corporation and President, Executive Vice President
and Senior Vice President of Fulton Bank. Member of Senior
Management of Fulton Financial Corporation and Fulton Bank.
R. Scott Smith, Jr. 4950 Executive Vice President of Fulton Financial Corporation and
President and Chief Operating Officer of Fulton Bank since
January 1993; previously Senior Executive Vice President,
Executive Vice President, Senior Vice President and Vice
President of Fulton Bank. Member of Senior Management of
Fulton Financial Corporation and President
and Chief Operating Officer of Fulton
Bank since January 1993; previously
Senior Executive Vice President,
Executive Vice President, Senior Vice
President and Vice President of Fulton
Bank. Member of Senior Management of
Fulton Financial Corporation and
Fulton Bank.
Charles J. Nugent 4849 Executive Vice President and Chief Financial Officer of
Fulton Financial Corporation since November 1992; previously
Senior Vice President, Chief Financial Officer and Treasurer
of First Peoples Financial Corporation (New Jersey). Member
of Senior Management of Fulton Financial Corporation.
14
Executive Compensation
- -------------------------------------------------
The following Summary Compensation Table shows all compensation paid by
Fulton Financial Corporation for services rendered during the past three fiscal
years by the Chief Executive Officer and each of the most highly compensated
executive officers whose total annual salary and bonus exceeded $100,000 in
1996.1997.
SUMMARY COMPENSATION TABLE
--------------------------
Annual Compensation Long-Term
Compensation
--------------------- ---------------------------------------------- ---------
Name and All Other
Principal Position Year Salary Bonus Options All OtherCompensation*
- --------------------------------------------- ---- ------ ----- ------- Compensation* -------------
Rufus A. Fulton, Jr., 1997 $447,777.98 $17,222.23 12,000 $67,166.70
President and Chief 1996 $409,260.80$409.260.80 $15,740.80 11,000 $61,389.12
President and Chief
Executive Officer 1995 $361,129.60 $20,834.40 11,000 $54,169.44
1994 $312,963.04 $12,037.04 10,997 $46,944.46
James K. Sperry, 1996 $250,370.44**1997 $264,814.93*** $9,629.62 8,800 $37,833.34$10,185.19 9,700 $40,000.00
Executive Vice President 1996 $250,370.44*** $ 9,629.62 8,800 $37,833.34
1995 $236,286.00*** $13,632.00 8,800 $35,729.28
1994 $221,482.00** $8,518.46 8,798 $33,305.62
R. Scott Smith, Jr., 1996 $243,629.89 $9,370.38 8,250 $36,544.481997 $262,889.12 $10,111.12 9,100 $39,433.37
Executive Vice President 1996 $243,629.89 $ 9,370.38 8,250 $36,544.48
1995 $221,499.20 $12,778.80 8,250 $33,224.88
1994 $192,592.66 $7,407.41 8,248 $28,888.90
Charles J. Nugent, 1996 $182,963.04 $7,037.04 7,425 $27,444.461997 $207,037.22 $ 7,962.17 8,500 $31,055.58
Executive Vice President and 1995 $165,630.40 $9,555.601996 $182,963.04 $ 7,037.04 7,425 $24,844.56$27,444.46
Chief Financial Officer 1994 $141,555.70 $5,444.45 7,423 $21,233.351995 $165,630.40 $ 9,555.60 7,425 $24,844.56
15
* Amounts accrued under the Fulton Financial Corporation Retirement Plan for
the account of each named executive officer.
** Includes $15,000, the receipt of which has been deferred pursuant to the
Deferred Compensation Plan for Senior Management.
*** Includes $35,000, the receipt of which has been deferred pursuant to the
Fulton Financial Corporation Deferred Compensation Plan for Senior Management.Plan.
**** Includes $50,000, the receipt of which has been deferred pursuant to the
Fulton Financial Corporation Deferred Compensation Plan for Senior Management.
16Plan.
15
STOCK OPTION GRANTS IN FISCAL YEAR 19961997
Potential Realized Value at
% of Total Assumed Annual Rates of
Stock
Options Exercise or Stock Price Appreciation for Option
Options Granted to Base Price Option Term
Name Granted Employees Per Share Expiration Date 5% 10%
---- ------- --------- ----------- ---------------- ----------------------------------------- --------------- -----------------------------
Rufus A. Fulton, Jr.
11,000 9.55% $19.12512,100 8.74% $27.125 June 30, 2006 $132,303.65 $335,283.532007 $206,411.01 $523,086.15
James K. Sperry
8,800 7.64% $19.1259,700 7.00% $27.125 June 30, 2006 $105,842.91 $268,226,822007 $165,469.97 $419,333.52
R. Scott Smith, Jr.
8,250 7.17% $19.1259,100 6.57% $27.125 June 30, 2006 $ 99,227.73 $251,462.602007 $155,234.71 $393,395.34
Charles J. Nugent
7,425 6.45% $19.1258,500 6.14% $27.125 June 30, 2006 $ 89,304.95 $226,316.332007 $144,999.45 $367,457.18
1716
AGGREGATED STOCK OPTION EXERCISES IN FISCAL YEAR 19961997 AND
FISCAL YEAR END OPTION VALUES
Number of
Unexercised Value of Unexercised
Shares Acquired Value Options at In-the-Money Options at
Name on ExerciseExercise* Realized Fiscal Year End** Fiscal Year End*
- ---- -------------------------- -------- --------------- -------------------------------
Rufus A. Fulton, Jr. 11,05814,605 $129,118.83 92,572 $ 72,087.86 86,444 $596,732.641,570,014.01
James K. Sperry 15,160 $110,438.95 74,046 $534,442.3247,189 $597,048.40 43,957 $ 412,946.31
R. Scott Smith, Jr. 3,6308,521 $103,409.10 86,431 $ 25,518.90 78,056 $621,189.921,593,563.45
Charles J. Nugent 31,314 $138,477.31----------- ----------- 42,939 $ 630,240.77
* Restated to reflect 10% stock dividend paid on June 13, 1997.
** All options are currently exercisable (oror were exercised, in part,
subsequent to the end of Fiscal Year 1996)1997. (In January, 1998, Rufus A.
Fulton, Jr. and James K. Sperry acquired 6,436 and 11,825 shares,
respectively, upon exercise of options, and as a result, Mr. Fulton and Mr.
Sperry held 86,136 and 32,132 unexercised options, respectively, as of
January 31, 1998).
1817
Executive Committee Report on Executive Compensation
----------------------------------------------------
Compensation for executive officers of Fulton Financial Corporation is
determined by the Board of Directors after receiving recommendations from the
Executive Committee based upon external salary comparisons and individual
performance. In making recommendations to the Board of Directors regarding the
appropriate levels of executive officer compensation for 1996,1997 the Executive
Committee first considered the executive management tiers and corresponding base
salary ranges which had been developed by Towers Perrin, a consultant on
executive compensation, and approved by the Board of Directors on September 19,
1995. This executive compensation program is based, to a significant degree, on
peer group information, because the Board of Directors believes that Fulton
Financial Corporation must offer competitive salaries in order to attract and
retain qualified executive officers.
In making recommendations to the Board of Directors regarding the
appropriate levels of executive officer compensation for 1996,1997, the Executive
Committee also considered the individual performance factors described in this
paragraph. With regard to the compensation paid to executive officers other than
the Chief Executive Officer, the Executive Committee considered information
provided by the Chief Executive Officer as to each executive officer's level of
individual performance, contribution to the organization, and salary history
during the past five years. With regard to the compensation paid to the Chief
Executive Officer, the Executive Committee considered his performance level, the
results of management decisions made by him, and the earnings of Fulton
Financial Corporation during the previous year. The Executive Committee did not
assign a particular weight to any of the foregoing individual performance
factors, nor did it establish specific target levels for individual performance
or corporate earnings. The compensation recommendations of the Executive
Committee were based on its overall subjective assessment of the value of the
services provided by each executive officer to Fulton Financial Corporation,
after giving careful consideration to the peer group compensation information
described above and the individual performance factors discussed in this
paragraph.
The peer group of bank holding companies chosen by the Executive
Committee for purposes of making a comparative analysis of executive
compensation doesfor 1997 did not include all of the same bank holding companies
that are incorporated in the old
or new peer groupsgroup established to compare shareholder
returns, as indicated in the Performance Graph included in this Proxy Statement.
The major differences amongbetween the peer groups is that the peer group chosen for
executive compensation analysis includesincluded bank holding companies with assets
between $1.8 and $4.7 billion from a seven-state region of the Eastern United
States that arewere deemed to be potential competitors with Fulton Financial
Corporation in attracting executive talent, while the old peer group chosen for shareholder return
analysis included only bank holding companies with assets between $1.1 and $6.1
billion that were located in the four-state Middle Atlantic region, which was
the market area for virtually all of Fulton Financial Corporation's business
activities. The new peer group chosen for
shareholder return analysis includes bank holding companies with assets between
$2 and $8 billion that are located in a nine-state (plus the District of
Columbia) region of the Eastern United States. AllBoth peer groups include bank
holding companies that are comparable to Fulton Financial Corporation in terms
of asset size, although they are not necessarily comparable in terms of
financial performance.
The peer group of
bank holding companies chosen for shareholder
19
return analysis has changed from that used in last year's proxy statement. The
peer group was changed because acquisitions caused the number of bank holding
companies in the old peer group to be reduced and also because, with the growth
in the asset size of Fulton Financial Corporation, as well as the geographic
expansion of the market areas of bank holding companies, it was determined that
a new peer group of bank holding companies with larger asset sizes in a region,
which includes states where holding companies which conduct business activities
in Fulton Financial Corporation's market area are based, should be designated.
Pursuant to an Incentive Stock Option Plan approved by the Board of
Directors and the shareholders in 1986,1996, Fulton Financial Corporation is
authorized to award incentive stock options
18
and non-qualified stock options to key employees of Fulton Financial Corporation
and its subsidiaries. These stock options enable the recipients to purchase
Fulton Financial Corporation common stock at the prices designated in the
awarded options. The number of options available for grant in any calendar year
is determined depending upon the performance of Fulton Financial Corporation
measured in terms of total shareholder return relative to a peer group,
determined at the sole discretion of those members of the Executive Committee
who are not eligible to receive options under the Incentive Stock Option Plan,
for the immediately preceding five year period. The awards of stock options made
to the executive officers of Fulton Financial Corporation during 19961997 were
determined by the Board of Directors based on the recommendations of the
Executive Committee. In making such recommendations, the Executive Committee
considered the number of shares to be optioned and the profitability of Fulton
Financial Corporation as well as information provided by the Chief Executive
Officer concerning each executive officer's level of individual performance and
contribution to the organization. The Executive Committee did not establish
specific target levels for individual performance or corporate profitability.
The Committee believes, however, that awards of stock options and bonuses are an
appropriate means of compensating executive officers based on the performance of
Fulton Financial Corporation.
EXECUTIVE COMMITTEE
-------------------
Kenneth G. Stoudt,Arthur M. Peters, Jr., Chairman J. Robert HessD. Garner
Thomas D. Caldwell, Jr. Arthur M. Peters, Jr.J. Robert Hess
Frederick B. Fichthorn Carolyn R. Holleran
Rufus A. Fulton, Jr.*
Mary Ann Russell
Robert D. Garner
* During 1996,1997, Mr. Fulton was Chief Executive Officer of Fulton Financial
Corporation.
Performance Graph
-----------------
The following graph shows cumulative investment returns to shareholders
based on the assumptions that (A) an investment of $100 was made on December 31,
1991,1992, in each of the following: (i) Fulton Financial Corporation common stock;
(ii) the stock of all United States companies traded on the NASDAQ Stock Market;
and (iii) common stock of the peer group of bank holding companies in a
nine-state (plus the District of Columbia) Eastern United States region with
total assets at September 30, 19961997 of $2 to $8 billion; and (iv) common stock of Fulton
Financial
20
Corporation's former peer group of bank holding companies in a four-state Mid-
Atlantic region with total assets at September 30, 1995 of $1.1 to $6.1 billion; and (B) all dividends
were reinvested in such securities over the past five years.
Comparison of Five Year-Cumulative Total Returns
Fulton Financial Corporation
(Graph gets inserted)
Legend Description
- ------ -----------
FFC FULTON FINANCIAL CORPORATION
NASDAQ NASDAQ Stock Market (US Companies)
New Peer Self-Determined Peer Group consisting of all bank holding companies with assets of $2 -
$8 billion at 9/30/96 with corporate headquarters in PA, MD, NJ, DE, OH, NY, DC, VA, WV
and NC and not under acquisition agreement as of 12/31/96
Old Peer Self-Determined Peer Group consisting of all bank holding companies with assets of $1.1
- $6.1 billion at 9/30/95 with corporate headquarters in PA, MD, NJ and DE and not
acquired after that date or under acquisition agreement as of 12/31/96
Notes:
- ------
A. The lines represent yearly index levels derived from compounded daily returns that
include all dividends.
B. If the yearly interval, based on the fiscal year-end, is not a trading day, the
preceding trading day is used.
C. The index level for all series was set to 100.0 on 12/31/91.
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
FFC 100.00 128.80 153.16 167.80 203.21 239.45
NASDAQ 100.00 116.38 133.59 130.59 184.67 227.16
New Peer 100.00 133.45 148.86 153.06 202.68 260.49
Old Peer 100.00 130.71 144.85 145.79 186.29 226.93
[LINE GRAPH APPEARS HERE]
Period Ending
--------------------------------------------------------------
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
FFC 100.00 118.91 130.27 157.77 185.90 316.59
NASDAQ 100.00 114.80 112.21 158.70 195.19 239.53
Peer Group 100.00 111.08 116.21 155.37 201.50 334.32
Legend Description
- ------ ------------
FFC FULTON FINANCIAL CORPORATION
NASDAQ NASDAQ Stock Market (US Companies)
19
Peer Group Self-Determined Peer Group consisting
of all bank holding companies with assets of
$2 - $8 billion at 9/30/97 with corporate
headquarters in PA, MD, NJ, DE, OH, NY, DC,
VA, WV and NC and not under acquisition
agreement as of 12/31/97
Notes:
A. The lines represent yearly index levels
derived from compounded daily returns that
include all dividends.
B. If the yearly interval, based on the fiscal
year-end, is not a trading day, the preceding
trading day is used.
C. The index level for all series was set to
100.0 on 12/31/92.
Period Ending
--------------------------------------------------------------
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
FFC 100.00 118.91 130.27 157.77 185.90 316.59
NASDAQ 100.00 114.80 112.21 158.70 195.19 239.53
Peer Group 100.00 111.08 116.21 155.37 201.50 334.32
Severance Agreements and Survivors' Benefits
--------------------------------------------
Fulton Financial Corporation has entered into severance agreements with
Messrs. Fulton, Sperry, Smith and Nugent (the "Executives"). Under the terms of
those agreements, certain limited severance benefits are payable in the event
that an Executive is discharged or resigns following, and for reasons relating
to, a change in control of Fulton Financial Corporation. Specifically, in the
event of such a discharge or resignation, the Executive would be entitled to
receive from Fulton Financial Corporation an annual benefit consisting of his
then effective base salary, certain fringe benefits in lieu of coverage under
employee benefit plans and a supplemental retirement benefit in lieu of his
continuing participation in the Fulton Financial Corporation Employee Retirement
Plan. Such benefits would be payable for a period of five years (or, in the
cases of Messrs. Smith and Nugent, three years) beginning on the date of the
Executive's discharge or resignation and continuing until (i) he elects to
terminate benefits in order to accept employment with another financial services
institution,institution; (ii) the end of the year in which he attains the age of 6565; or
(iii) he dies, whichever first occurs. 21
(Mr. Sperry attained age 65 on February
28, 1998).
Officers of Fulton Financial Corporation, Fulton Bank, and Farmers
Trust Bank as of April 1, 1992, who had been employed by the Corporation for at
least five years as of that date, are eligible to participate in a survivors'
benefit program. This program provides the employee's spouse, in the event of
the employee's death prior to retirement, with an annual income equal to the
lesser of $25,000 or 25 percent of the employee's final annual salary. This
benefit is paid from the date of death until the employee's 65th birthday with a
minimum of ten annual payments. Messrs. Fulton, Sperry, and Smith participate in
this program.
Transactions with Directors and Executive Officers
- --------------------------------------------------
Some of the directors and executive officers of Fulton Financial
Corporation and the companies with which they are associated were customers of,
and had banking transactions with Fulton Financial Corporation bank subsidiaries
during 1996.1997. All loans and commitments to loan made to such persons and to the
companies with which they are associated were made in
20
the ordinary course of bank business, on substantially the same terms (including
interest rates, collateral and repayment terms) as those prevailing at the time
for comparable transactions with other persons, and did not involve more than a
normal risk of collectibility or present other unfavorable features. It is
anticipated that similar transactions will be entered into in the future.
The law firm of Barley, Snyder, Senft & Cohen, LLP,LLC, Lancaster,
Pennsylvania, has provided legal services to Fulton Financial Corporation and
its subsidiaries for many years and is expected to continue to do so in the
future. John O. Shirk, a member of the Board of Directors of Fulton Financial
Corporation, is a partner in this law firm.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
directors and executive officers of Fulton Financial Corporation to file with
the Securities and Exchange Commission initial reports of ownership and reports
of change in ownership of common stock and other equity securities of Fulton
Financial Corporation. To the knowledge of Fulton Financial Corporation, all
Section 16(a) filing requirements applicable to its directors and executive
officers have been complied with, except for a late filing of a report of shares
purchased by director Samuel H. Jones, Jr. and his wife under the Corporation's
dividend reinvestment and stock purchase plan in 1996, Director Donald M. Bowman,
Jr. filed four late reports withNovember, 1997 as a result of
the Securities and Exchange Commission,
disclosing seven transactions which affected his beneficial ownership of Fulton
Financial Corporation common stock. The seven transactions involved the sale of
8,000 shares,purchases not being reflected in aggregate, of Fulton Financial Corporation stock in 1995a report generated by the D. M. Bowman, Inc. Profit Sharing Plan, a benefit plan maintained forCorporation's
stock transfer agent, which, at the employeestime of a corporation controlled by Mr. Bowman, and the purchase, of 3,400
shares, in aggregate, of Fulton Financial Corporation stock in 1996 by Bowman
Sales & Equipment, Inc., another corporation controlled by Mr. Bowman. Mr.
Bowman was personally unaware that these transactions had occurred until later,
and promptly reported the transactions after he became aware of them.
AMENDMENT OF THE ARTICLES OF INCORPORATION
22
General Information
- -------------------
The Articles of Incorporation of Fulton Financial Corporation, as presently
in effect, provide that the authorized capital of Fulton Financial Corporation
shall consist exclusively of 100 million shares of common stock, par value $2.50
per share, and 10 million shares of preferred stock without par value. As of
March 13, 1997, there were 35,973,617 shares of common stock outstanding, which
shares were held by 11,703 owners of record. In addition, as of that date
2,426,906 shares of common stock were reserved for issuance pursuantundergoing a
conversion to stock
option plans, 32,815 shares were reserved for issuance pursuant to the Dividend
Reinvestment Plan, and 38,433,338 shares were reserved for issuance pursuant to
the Shareholder Rights Plan adopted on June 20, 1989. Thus, 23,133,324 shares
of common stock are currently available for future financing, acquisitions
and other corporate purposes. (For each additional share issued, one share must
be reserved for issuance pursuant to the Shareholder Rights Plan; therefore,
only 11,566,662 shares remain available for discretionary issuance.) No shares
of preferred stock have been issued by Fulton Financial Corporation.
On January 21, 1997, the Board of Directors adopted a proposal to amend
Article 5 of the Articles of Incorporation of Fulton Financial Corporation for
the purpose of increasing the number of authorized shares of common stock from
100 million shares to 200 million shares. Under the proposed amendment, no
change would be made in the number of authorized shares of preferred stock. The
Board of Directors believes that it is desirable to have additional authorized
shares of common stock available for issuance for the purpose of raising
additional capital and for use in connection with acquisitions, stock dividends,
stock splits, employee benefit plans and for other general corporate purposes.
Having additional authorized shares of common stock available for issuance in
the future would provide Fulton Financial Corporation with greater flexibility
in pursuing such corporate purposes and would allow additional shares to be
issued without the expense and delay of further amendments to the Articles of
Incorporation, which would require shareholder approval at an annual or special
shareholders meeting. The rules of the NASDAQ National Market System, on which
Fulton Financial Corporation common stock trades, may, however, require
shareholder approval before additional shares could be issued under certain
circumstances. Fulton Financial Corporation has no present plan or intention to
issue any additional shares of common stock, except for 2,426,906 shares which
have been reserved for issuance in connection with outstanding stock options,
and 32,815 shares which have been reserved for issuance in connection with the
Dividend Reinvestment Plan.
The additional shares of Fulton Financial Corporation common stock for
which authorization is sought would be part of the existing class of common
stock and, if and when issued, would have the same rights and privileges as the
shares of common stock presently outstanding. The holders of Fulton Financial
Corporation common stock do not have preemptive rights in connection with the
issuance of additional shares of common stock.
If approved by the shareholders, the proposed amendment will become
effective upon the filing of Articles of Amendment with the Secretary of State
of the Commonwealth of Pennsylvania. Under the Articles of Incorporation of
Fulton Financial Corporation, the affirmative vote of 66-2/3 percent of the
outstanding shares entitled to vote is required in order to approve the proposed
amendment.
23
The proposed amendment to increase the number of authorized shares of
common stock is not proposed to discourage a takeover or change in control of
Fulton Financial Corporation. Nevertheless, in certain instances, a proposal to
increase the amount of authorized stock may have an anti-takeover effect. In
the event that a hostile takeover of Fulton Financial Corporation is threatened,
the Board of Directors could issue shares of common stock or preferred stock to
dilute the stock ownership of persons seeking to obtain control of the company.
Recommendation of the Board of Directors
- ----------------------------------------
The Board of Directors believes that its proposal to amend the Articles of
Incorporation for the purpose of increasing the number of authorized shares of
common stock is in the best interests of Fulton Financial Corporation and its
shareholders, and recommends that the proposal be approved by the shareholders.
Accordingly, the following resolutions will be presented to the shareholders at
the 1997 Annual Meeting:
RESOLVED, that the proposal of the Board of Directors to amend
the Articles of Incorporation of Fulton Financial Corporation for the
purpose of increasing the number of authorized shares of common stock
from 100 million shares to 200 million shares be, and is hereby
approved and adopted by the shareholders of the Corporation; and
RESOLVED FURTHER, that the officers and directors of the
Corporation be, and are hereby authorized and empowered on behalf of
the Corporation to execute and file Articles of Amendment and to take
all such other actions as they may determine in their discretion to be
necessary or appropriate in order to effect the foregoing amendment to
the Articles of Incorporation.new data processing system.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
For the year ended December 31, 19961997, Fulton Financial Corporation
engaged Arthur Andersen LLP, independent certified public accountants, to audit
the Corporation's financial statements. The appointment of Arthur Andersen LLP
for the current year will be reviewed in the second quarter of 1997.1998.
Representatives of Arthur Andersen LLP are expected to be present at the 19971998
Annual Meeting with the opportunity to make a statement and to be available to
respond to appropriate questions.
ADDITIONAL INFORMATION
*A copy of the Annual Report of Fulton Financial Corporation on Form 10-K as
- -----------------------------------------------------------------------------
filed with the Securities and Exchange Commission, including financial
- -----------------------------------------------------------------------
statements and financial statement schedules, is available without charge to
- ----------------------------------------------------------------------------
shareholders upon written request
- ---------------------------------
24
addressed to William R. Colmery, Secretary,
Fulton Financial Corporation, P.0. - ------------------------------------------------------------------------------
Box 4887, Lancaster, Pennsylvania 17604.
- ----------------------------------------21
OTHER MATTERS
The Board of Directors of Fulton Financial Corporation knows of no
matters other than those discussed in this Proxy Statement which will be
presented at the 19971998 Annual Meeting. However, if any other matters are properly
brought before the meeting, any proxy given pursuant to this solicitation will
be voted in accordance with the recommendations of the management of Fulton
Financial Corporation.
BY ORDER OF THE BOARD OF DIRECTORS
RUFUS A. FULTON, JR.
President and Chief Executive Officer
Lancaster, Pennsylvania
March 25, 19976, 1998
* BOLD FACE TYPE
2522
[FRONT SIDE]
P R O X Y FULTON FINANCIAL CORPORATION P R O X Y
LANCASTER, PENNSYLVANIA
The undersigned hereby appoints Herbert H. Jaffae and David C.S. Etter,
or either one of them, as proxies, with full power of substitution, to represent
and vote, as designated below, all of the Fulton Financial Corporation common
stock: (i) held of record by the undersigned on March 13, 1997,February 24, 1998, and (ii)
which the undersigned is otherwise entitled to vote at the Annual Meeting of
shareholders to be held on Thursday, May 1, 1997,Tuesday, April 14, 1998, at 12:00 noon, at the
Hershey Lodge and Convention Center, West Chocolate Avenue and University Drive,
Hershey, Pennsylvania, or any adjournment thereof.
1. ELECTION OF DIRECTORS (check one block) [_][ ] FOR
FOR A TWO YEAR TERM: Samuel H. Jones, Jr.
FOR A THREE YEAR TERM: JeffreyJames P. Argires, M.D., Donald M. Bowman, Jr.,
Frederick B. Fichthorn, Bernard J. Metz, Sr., John O.
Shirk, James K. Sperry, Kenneth G. Albertson, Thomas D. Caldwell, Jr., Harold
D. Chubb, William H. Clark, Jr., Rufus A. Fulton,
Jr., Eugene H. Gardner, Daniel M. Heisey, Clyde W.
Horst, William E. RuslingStoudt
For, except vote withheld from the following
nominee(s):
- -----------------------------------------------------------
[_]-----------------------------------------------------
[ ] WITHHELD as to all nominees
2. APPROVAL OF THE AMENDMENT OF THE ARTICLES OF INCORPORATION
[_] FOR [_] AGAINST [_] ABSTAIN
(Continued, and to be signed, on the other side)
[BACK SIDE]
(Continued from the other side)
This proxy is solicited by the Board of Directors and will be voted as
directed. If no directions are given, this proxy will be voted FOR the election
of the nominees listed, and FOR the proposal to approve the amendment of the
Articles of Incorporation.listed.
This proxy also confers authority to vote on any other business that
may be properly brought before the meeting or any adjournment thereof. If any
other business is presented at the meeting, the shares represented by this proxy
will be voted in accordance with the recommendation of the management of Fulton
Financial Corporation.
Dated: ___________________, 1997
__________________________________, 1998
-----------------------
------------------------------------
Signature
__________________________________------------------------------------
Signature
Please sign exactly as your name appears hereon. If stock is held in joint
names, each joint owner should sign. If signing for a corporation or partnership
or as Please mark, sign, date and mail attorney or fiduciary, indicate your full
this proxy promptly in the postage title. If more than one
fiduciary has prepaid return envelope provided. authority over the stock, all should sign.
Please mark, sign, date and mail
this proxy promptly in the postage
prepaid return envelope provided.
-2-