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:
[x] Preliminary Proxy Statement [_] Confidential, For Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] 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:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
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[_] 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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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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WRC DRAFT 2/8/99
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 20, 1999
--------------------------
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 20, 1999, 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 teneleven 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 100200 million shares to 200400
million shares.
3. AMENDMENT OF THE EMPLOYEE STOCK PURCHASE PLAN. To approve a
proposal adopted by the Board of Directors to amend the Employee
Stock Purchase Plan for the purpose of increasing by 500,000
shares the number of shares of common stock for which options are
authorized to be granted under the Plan.
4. 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,
19971, 1999
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, 199711, 1999
*BOLD FACE TYPE
PROXY STATEMENT
Dated and to beTo Be Mailed March 25, 199711, 1999
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 20, 1999
TABLE OF CONTENTS
-----------------
PAGE
----
GENERAL
Introduction...................................................................3- -------
Introduction............................................................
- ------------
Date, Time and Place of Meeting................................................3Meeting ........................................
- -------------------------------
Shareholders Entitled to Vote..................................................3Vote ..........................................
- -----------------------------
Purpose of Meeting.............................................................3Meeting .....................................................
- ------------------
Solicitation of Proxies........................................................4Proxies ................................................
- -----------------------
Revocability and Voting of Proxies.............................................4Proxies .....................................
- ----------------------------------
Voting of Shares and Principal Holders Thereof.................................5Thereof .........................
- ----------------------------------------------
Shareholder Proposals..........................................................6Proposals ..................................................
- ---------------------
RecommendationsRecommendation of the Board of Directors......................................6Directors ...............................
- ---------------------------------------------------------------------------------
INFORMATION CONCERNING ELECTION OF DIRECTORS
- --------------------------------------------
General Information............................................................6Information ....................................................
- -------------------
Information about Nominees and Continuing Directors............................8Directors ....................
- ---------------------------------------------------
Meetings and Committees of the Board of Directors.............................12Directors ......................
- -------------------------------------------------------------------------------------------------
Compensation of Directors.....................................................13Directors ..............................................
- -------------------------
Executive Officers............................................................13Officers......................................................
- ------------------
1
Executive Compensation........................................................15Compensation..................................................
- ----------------------
Transactions with Directors and Executive Officers............................22Officers......................
- --------------------------------------------------
Section 16(a) Beneficial Ownership Reporting Compliance.......................22Compliance.................
- -------------------------------------------------------
AMENDMENT OF THE ARTICLES OF INCORPORATION
- ------------------------------------------
General Information...........................................................23Information.....................................................
- -------------------
1
Recommendation of the Board of Directors ...............................
- ----------------------------------------
AMENDMENT OF THE EMPLOYEE STOCK PURCHASE PLAN
- ---------------------------------------------
General Information ....................................................
- -------------------
Summary of the Plan ....................................................
- -------------------
Recommendation of the Board of Directors......................................24Directors ...............................
- ----------------------------------------
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS..............................24ACCOUNTANTS
- ------------------------------------------------
ADDITIONAL INFORMATION........................................................24INFORMATION..................................................
- ----------------------
OTHER MATTERS.................................................................25MATTERS...........................................................
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EXHIBITS
- --------
Exhibit A - Employee Stock Purchase Plan ...............................
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, Lebanon Valley Farmers Trust Bank, FNB Bank, N.A., Great
Valley Savings Bank, Hagerstown Trust Company, Lafayette Ambassador 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 Lebanon Valley 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, directly or indirectly, certain limited partnership interests, principally
in low-moderate income and elderly housing projects and also owns certain non-banking subsidiaries holding interests in
real estate)projects) and FFC Management, Inc.
(which holds certain investment securities)securities and corporate owned life insurance
policies).
The meeting to which this Proxy Statement relates will be the
fifteenthseventeenth Annual Meeting of the shareholders of Fulton Financial Corporation.
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 20, 1999, 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,
19971,
1999 shall be entitled to receive notice of, and to vote at the meeting.
3
Purpose of Meeting
- ------------------
The shareholders will be asked to consider and vote upon the following
matters at the meeting: (i) to elect teneleven directors for the terms specified
herein; (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 to 400 million shares; and
(iii) to 3
approve an amendment to the Employee Stock Purchase Plan for the
purpose of increasing by 500,000 shares the number of shares of common stock for
which options are authorized to be granted under the Plan; and (iv) to 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 20, 1999, 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
teneleven nominees identified in this Proxy Statement, and FOR the proposal to amend
the Articles of Incorporation.Incorporation and FOR the proposal to amend the Employee Stock
Purchase Plan. 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 and Stock Purchase 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
RetirementProfit Sharing
4
Plan and Affiliate 401(k) Savings 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 teneleven nominees identified in the Proxy
Statement, and FOR the proposal to amend the Articles of Incorporation.
4
Incorporation, and FOR the
proposal to amend the Employee Stock Purchase Plan.
Voting of Shares and Principal Holders Thereof
- ----------------------------------------------
At the close of business on March 13, 1997,1, 1999, 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 ______________outstanding__________ 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 subsidiaries as sole fiduciary:
Farmers Trust Bank __________
Fulton Bank __________
FNB Bank, N.A. __________
Hagerstown Trust Company __________
Lafayette Bank __________
The Woodstown National
Bank & Trust Company __________
Total Shares
==========
Fulton Bank
-----------------
FNB Bank, N.A.
-----------------
Hagerstown Trust Company
-----------------
Lafayette Ambassador Bank
-----------------
Lebanon Valley Farmers Bank
-----------------
The Woodstown National Bank
& Trust Company
-----------------
Total: Shares
-----------------
The shares held by the Trust Departments of the foregoing banks as sole
fiduciaries represent in the aggregate approximately ___________approximately_____ percent of the total
shares outstanding and will be voted FOR the election of the teneleven nominees
identified in this Proxy Statement, and FOR the proposal to amend the Articles of
Incorporation.Incorporation and FOR the proposal to amend the Employee Stock Purchase Plan.
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 electionselection 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 Fulton Financial Corporation
that it does not have authority to vote such shares on that matter) as present
for purposes of determining a quorum.
5
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. A majority of the votes cast is
necessary to approve the amendment of the Employee Stock Purchase Plan.
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 proposalproposals to amend the Articles of Incorporation. Consequently, abstentionsIncorporation and broker non-votes will have the
same effect as a vote against approval of the
proposal to amend the Articles of Incorporation.Employee Stock Purchase Plan.
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 19982000 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,December
12, 1999, in order to be included in the proxy statement and proxy form to be
prepared by Fulton Financial Corporation in connection with the 19982000 Annual
Meeting.
RecommendationsRecommendation of the Board of Directors
- ---------------------------------------------------------------------------------
The Board of Directors recommends that the shareholders vote FOR the
election of the teneleven nominees identified in this Proxy Statement, and FOR the
proposal to amend the Articles of Incorporation.Incorporation and FOR the proposal to amend
the Employee Stock Purchase Plan.
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
6
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 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.
Thomas D. Caldwell, Jr., Bernard J. Metz, Sr., and Arthur M. Peters, Jr.
have reached the mandatory retirement age of 70, and, as required under the
Bylaws, will be retiring from the Board of Directors as of the 1999 Annual
Meeting.
The Board of Directors has presently fixed the number of directors at twenty-five.
There are fifteenfourteen continuing directors whose terms of office will expire at
either the 19982000 Annual Meeting or the 19992001 Annual Meeting. The Board of
Directors proposes to nominate the following teneleven persons for election to the
Board of Directors for the terms specified below:
For a Term of Two Years - Class 1999
------------------------------------
Samuel H. Jones, Jr.of 2001
---------------------------------------
Charles V. Henry, III Joseph J. Mowad, M.D.
For a Term of Three Years - Class of 20002002
-----------------------------------------
Jeffrey G. Albertson EugeneMartin D. Cohen Carolyn R. Holleran
Patrick J. Freer Samuel H. Gardner
ThomasJones, Jr.
Robert D. Caldwell,Garner Donald W. Lesher, Jr.
Daniel M. Heisey
Harold D. Chubb Clyde W. Horst
WilliamJ. Robert Hess Stuart H. Clark, Jr. William E. Rusling
Rufus A. Fulton, Jr.Raub
Mary Ann Russell
Each of the above nominees, except Joseph J. Mowad, M.D., 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: Mrs. Russell and Messrs. Caldwell, Chubb, Fulton, Gardner, HeiseyGarner, Hess and HorstRaub - Fulton
Bank; Dr. Mowad - FNB Bank, N.A.; Mrs. Holleran - Great Valley Savings Bank; Mr.
RuslingCohen - Lafayette Ambassador Bank; Mr. ClarkMessrs. Freer, Henry and Lesher - Swineford NationalLebanon
Valley Farmers Bank; Mr. Albertson - The Bank of
Gloucester County; and Mr. Jones - The Woodstown National Bank & Trust
Company.
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 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
7
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 teneleven persons to be nominated for election
to the Board of Directors of Fulton Financial Corporation at the 19971999 Annual
Meeting and concerning the fifteenfourteen 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, 199728, 1999 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.__%.
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
-------------2001
(Two Year Term)
CHARLES V. HENRY, III, age 64. Attorney, Henry & Beaver, LLP (law
firm). Director since 1998. Shares of stock beneficially owned:
102,929.1
JOSEPH J. MOWAD, M.D., age 63. Director of Urology, Geisinger Medical
Center (urologist). Shares of stock beneficially owned: 20,213.
CLASS OF 2002
(Three Year Term)
MARTIN D. COHEN, age 56. Attorney, Cohen, Feeley & Ortwein, P.C. (law
firm). Director since 1998. Shares of stock beneficially owned:
136,850.2
PATRICK J. FREER, age 49. Vice President, Strickler Insurance Agency,
Inc. (insurance broker). Director since 1996. Shares of stock
beneficially owned: 32,239.3
ROBERT D. GARNER, age 65. Retired Chairman of the Board, Fulton
Financial Corporation. Director since 1981. Shares of stock
beneficially owned: 124,333.4
8
J. ROBERT HESS, age 64. President, Lancaster Malleable Castings
Company (manufacturer of malleable iron castings). Director since
1977. Shares of stock beneficially owned: 106,157.5
CAROLYN R. HOLLERAN, age 60. Partner, Jerlyn Associates (real estate
investments). Director since 1994. Shares of stock beneficially owned:
14,135.
SAMUEL H. JONES, JR., age 63.65. President, S J Transportation Co.
(trucking company). Director since 1997. Shares of stock beneficially
owned: 570,392/1/.821,823. Mr. Jones also serves as a director of Metatools,MetaCreations
Corp. and Jevic Transportation, Inc., which isare subject to the
periodic reporting requirements of Section 15(d) of the Securities
Exchange Act of 1934.
DONALD W. LESHER, JR., age 54. President, Lesher Mack Sales and
Service (truck dealership). Director since 1998. Shares of stock
beneficially owned: 59,383.
STUART H. RAUB, JR., age 65. President, Industrial Piping Systems,
Inc. (distributor of industrial piping and related items). Director
since 1981. Shares of stock beneficially owned: 22,123.
MARY ANN RUSSELL, age 63. Retired President and Chief Executive
Officer, Maple Farm, Inc. (provider of health care services). Director
since 1991. Shares of stock beneficially owned: 11,984.
CONTINUING DIRECTORS
--------------------
CLASS OF 2000
-------------
(Three Year Term)
JEFFREY G. ALBERTSON, age 56.58. 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.107,871.6 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 64.66. Retired Director of Finance, Brethren in
Christ Denomination in North America. Director since 1975. Shares of
stock beneficially owned: 19,600/3/.26,911.7
WILLIAM H. CLARK, JR., age 64.66. Partner, Clark, LauerSchaeffer, Jones &
SchaefferEichner (certified public accountants). Director since 1987. Shares of
stock beneficially owned: 5,845.8,363.
RUFUS A. FULTON, JR., age 56.58. Chairman of the Board, 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.213,898.8
9
EUGENE H. GARDNER, age 61.63. President, Gardner Investments (investment
advisor). Director since 1981. Shares of stock beneficially owned:
13,455/5/.17,563.9
DANIEL M. HEISEY, age 48.50. Retired Vice President, Fulton Bank.
Director since 1993. Shares of stock beneficially owned: 127,169.183,332.
CLYDE W. HORST, age 58.60. Chairman and Chief Executive Officer, The
Horst Group, Inc. (diversified holding company). Director since 1978.
Shares of stock beneficially owned: 29,442.47,387.
WILLIAM E. RUSLING, age 67.69. Retired President, Hercules Cement Company
(manufacturer of cement). Director since 1990. Shares of stock
beneficially owned: 28,050.
CONTINUING DIRECTORS
--------------------38,112.
CLASS OF 1998
-------------2001
JAMES P. ARGIRES, M.D., age 65.67. President, Lancaster Neurosurgical
Associates (neurosurgeon). Director since 1974. Shares of stock
beneficially owned: 11,590.16,514.
DONALD M. BOWMAN, JR., age 58.60. Chairman D.M.of the Board, D. M. Bowman,
Inc. (trucking company). Director since 1994. Shares of stock
beneficially owned: 151,408/6/.253,265.10
FREDERICK B. FICHTHORN, age 63.65. President, F & M Hat Company
(manufacturer and distributor of felt and straw hats). Director since
1993. Shares of stock beneficially owned: 50,436.
9
BERNARD J. METZ, SR., age 68. 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:
23,820.70,193.
JOHN O. SHIRK, age 53. Partner,55. Attorney, Barley, Snyder, Senft & Cohen, LLPLLC
(law firm). Director since 1983. Shares of stock beneficially owned:
17,634/7/.23,836.11 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 64.66. Retired Executive Vice President, Fulton
Financial Corporation, and Retired Chairman of the Board and Chief
Executive Officer of Fulton Bank. Director since 1984. Shares of stock
beneficially owned: 41,040/8/. Mr. Sperry has the right to acquire an additional
45,713 shares pursuant to the exercise of stock options.98,375.12
KENNETH G. STOUDT, age 53.54. President, The Stoudt Companies (employee
benefit consulting company). Director since 1987. Shares of stock
beneficially owned: 26,138.
CLASS OF 1999
-------------
PATRICK J. FREER, age 47. Vice President, Strickler Insurance Agency,
Inc. (insurance broker). Shares of stock beneficially owned:
22,514/9/.
ROBERT D. GARNER, age 63. Chairman of the Board, Fulton Financial
Corporation. Director since 1981. Shares of stock beneficially
owned: 61,201/10/. Mr. Garner has the right to acquire an additional
36,740 shares pursuant to the exercise of stock options.
J. ROBERT HESS, age 62. President, Lancaster Malleable Castings
Company (manufacturer of malleable iron castings). Director since
1977. Shares of stock beneficially owned: 76,318/11/.45,829.
10
CAROLYN R. HOLLERAN, age 58 Partner, Jerlyn Associates (real estate
investments). Director since 1994. Shares of stock beneficially
owned: 3,255.
ARTHUR M. PETERS, JR., age 68. Attorney. Director since 1990. Shares
of stock beneficially owned: 118,715.
STUART H. RAUB, JR., age 63. President, Industrial Piping Systems,
Inc. (distributor of industrial piping and related items). Director
since 1981. Shares of stock beneficially owned: 15,305.
MARY ANN RUSSELL, age 61. President and Chief Executive Officer,
Maple Farm, Inc. (provider of health care services). Director since
1991. Shares of stock beneficially owned: 8,040.
As of February 1, 1997,28, 1999, Fulton Financial Corporation's directors and
executive officers, as a group, owned of record and beneficially 1,903,307/12/____.13 shares
of Fulton Financial Corporation common stock, representing 5.29 percent___percent of such
shares then outstanding.
Footnotes
- ---------
1 As of February 1, 1997, 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 of beneficial ownership of the
outstanding common stock of Fulton Financial Corporation as of February 1,
the shares of common stock issuable in connection with the acquisition of
The Woodstown National Bank & Trust Company were included.
2
Includes 6,323402 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.
3trust.
2 Includes 2,1412,688 shares held as custodian for grandchildren.
4children.
3 Includes 11,517 shares held in the Corporation's retirement plan.
5
11
Includes 7,811 shares held in a trust.
6
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 16,12722,173 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.
104 Includes 27,05939,383 shares held in the Corporation's retirement plan.
11Profit Sharing Plan, 5,500
shares which may be acquired pursuant to the exercise of stock options and
18,390 shares held by his spouse as trustee under various trusts for
grandchildren.
5 Includes 58,31580,182 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.
6 Includes 8,693 shares held in the Albertson Ward Profit Sharing Plan and
16,785 shares which may be acquired pursuant to the exercise of stock
options. Mr. Albertson disclaims beneficial ownership of any of the shares
held in the Albertson Ward Profit Sharing Plan beyond his pro rata vested
interest as a participant in such Plan.
7 Includes 2,987 shares held as custodian for grandchildren.
8 Includes 17,671 shares held in the Corporation's Profit Sharing Plan and
116,321 shares which may be acquired pursuant to the exercise of stock
options.
9 Includes 9,740 shares held in a trust.
10 Includes 55,474 shares held by Bowman Sales & Equipment, Inc.
11 Includes 1,487 shares held in a trust.
12 Includes 277,18927,016 shares held in the Corporation's Profit Sharing Plan and
12,427 shares which may be acquired pursuant to the exercise of stock
options.
13 Includes __ 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 executive
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 1.11
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 19961998 were Kenneth G. Stoudt,Arthur M. Peters, Jr.,
Chairman, Mrs. RussellHolleran and Messrs. Caldwell, Fichthorn, Fulton, Garner, Hess and
Peters.Hess. In 1996,1998, 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 threetwo times during 1996.1998.
Members of the Audit Committee during 19961998 were William E. Rusling,
Chairman, Mrs. Holleran and Messrs. Albertson, Bowman, Chubb, Clark, Fichthorn,Cohen, Freer,
Henry, Jones, Lesher, Metz and Peters. The Audit Committee met eight 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 19961998 were Stuart H. Raub, Jr.,J.
Robert Hess, Chairman, Mrs. Russell and Messrs. Gardner, Hess, HorstChubb, Fichthorn and Ruhl.
Messrs.Shirk. Mr.
Fulton and Sperry serveserves as an ex-officio membersmember of this Committee;
however, Mr. Sperry does not participate in discussions as to his own
compensation.Committee. 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 eight 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. The following
directors1998. No director attended
fewer than 75 percent of the aggregate 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.he or she served.
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, directors are
12
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. 5658 Chairman of the Board, President and Chief Executive Officer of
Fulton Financial Corporation since January, 1993;1999; previously
President Executive Vice President and Vice
PresidentChief Executive of Fulton Financial Corporation and Executive Vice
President and Senior Vice President of
Fulton Bank.Corporation.
Member of Senior Management of Fulton Financial Corporation.
James K. Sperry 64R. Scott Smith, Jr. 51 Executive Vice President of Fulton Financial Corporation and
since July, 1998, 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 PresidentChief
Operating Officer of Fulton Bank. Member of Senior Management
of Fulton Financial Corporation and Fulton Bank.
R. Scott Smith,Charles J. Nugent 50 Executive Vice President and Chief Financial Officer of Fulton
Financial Corporation. Member of Senior Management of Fulton
Financial Corporation.
Richard J. Ashby, Jr. 4954 Executive Vice President of Fulton Financial Corporation and
President and Chief Operating Officer of Fulton Bank since
January, 1993;1999; previously Senior Executive Vice President,
Executive Vice President, Senior Vice
President and Vice PresidentChairman of Fulton
Bank. Member of Senior Management of
Fulton Financial Corporation and
Fulton Bank.
Charles J. Nugent 48 Executive Vicethe Board, President and
Chief FinancialExecutive Officer of Fulton Financial
Corporation since November 1992;
previously Senior Vice President,
Chief Financial Officer and Treasurer
of First Peoples Financial Corporation
(New Jersey).Lafayette Ambassador Bank. Member
of Senior Management of Fulton Financial Corporation.Corporation and Fulton
Bank.
1413
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
1996.1998.
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., 1998 $495,926.08 $19,074.08 21,500 $74,388.91
President and Chief 1997 $447,777.98 $17,222.23 15,124 $67,166.70
Executive Officer 1996 $409,260.80 $15,740.80 11,00015,121 $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***1998 $143,966.44** $9,629.62 8,800 $37,833.34-0- -0- $33,594.97
Executive Vice President 1995 $236,286.00*1997 $264,814.93*** $13,632.00 8,800 $35,729.28
1994 $221,482.00*$10,185.19 12,124 $40,000.00
(Retired) 1996 $250,370.44*** $8,518.46 8,798 $33,305.62$ 9,629.62 12,097 $37,833.34
R. Scott Smith, Jr., 1996 $243,629.89 $9,370.38 8,250 $36,544.481998 $286,722.31 $11,296.30 16,500 $43,008.35
Executive Vice President 1995 $221,499.20 $12,778.80 8,250 $33,224.88
1994 $192,592.66 $7,407.41 8,248 $28,888.901997 $262,889.12 $10,111.12 11,374 $39,433.37
1996 $243,629.89 $ 9,370.38 11,341 $36,544.48
Charles J. Nugent, 1996 $182,963.04 $7,037.04 7,425 $27,444.461998 $231,111.40 $ 8,888.90 15,400 $34,666.71
Executive Vice President and 1995 $165,630.40 $9,555.60 7,425 $24,844.561997 $207,037.22 $ 7,962.17 10,624 $31,055.58
Chief Financial Officer 1994 $141,555.70 $5,444.45 7,423 $21,233.351996 $182,963.04 $ 7,037.04 10,207 $27,444.46
Richard J. Ashby,Jr. **** 1998 $204,333.33***** $ 7,666.67 12,700 $ 4,800.00
Executive Vice President 1997 $192,778.02***** $ 7,222.23 8,749 $ 4,800.00
1996 $181,222.28***** $ 6,777.78 8,694 $ 4,800.00
15
* Amounts accrued under the Fulton Financial Corporation RetirementProfit Sharing Plan
for the account of each named executive officer.
** Includes $15,000,officer (and in the receiptcase of which has been deferred pursuant toMr. Ashby,
amounts of employer-matched funds contributed under the Deferred CompensationFulton Financial
Corporation Affiliates 401(k) Savings Plan for Senior Management.his account) and, in the case of
Mr. Sperry, the fair market value of his company automobile transferred to him
upon his retirement.
*** Includes $35,000, the receipt Mr. Sperry retired as Executive Vice President of which has been deferred pursuant to the
Deferred Compensation Plan for Senior Management.Fulton Financial
Corporation on June 30, 1998.
**** Includes $50,000, the receipt of which has been deferred pursuant to the
Fulton Financial Corporation Deferred Compensation Plan for Senior Management.
16Plan.
**** Compensation paid as Chairman of the Board, President and Chief Executive
Officer of Lafayette Ambassador Bank.
***** Includes $5,000, the receipt of which has been deferred pursuant to the
Fulton Financial Corporation Deferred Compensation Plan.
14
STOCK OPTION GRANTS IN FISCAL YEAR 19961998
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% $19.12521,500 8.59% $24.8125 June 30, 2006 $132,303.65 $335,283.53
James K. Sperry
8,800 7.64% $19.125 June 30, 2006 $105,842.91 $268,226,822008 $335,495.56 $850,211.60
R. Scott Smith, Jr. 8,250 7.17% $19.12516,500 6.59 24.8125 June 30, 2006 $ 99,227.73 $251,462.602008 257,473.34 652,488.10
Charles J. Nugent 7,425 6.45% $19.12515,400 6.16 24.8125 June 30, 2006 $ 89,304.95 $226,316.332008 240,308.44 608,988.86
Richard J. Ashby, Jr. 12,700 5.08 24.8125 June 30, 2008 198,176.43 502,218.05
1715
AGGREGATED STOCK OPTION EXERCISES IN FISCAL YEAR 19961998 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. 11,058 $ 72,087.86 86,444 $596,732.6412,948 $228,572.61 122,662 $949,653.25
James K. Sperry 15,160 $110,438.95 74,046 $534,442.3234,015 536,063.05 12,427 48,190.50
R. Scott Smith, Jr. 3,630 $ 25,518.90 78,056 $621,189.929,741 252,705.89 112,367 1,025,604.71
Charles J. Nugent 31,314 $138,477.31- - 69,076 442,501.10
Richard J. Ashby, Jr. 4,522 107,420.11 89,402 833,098.69
* Restated to reflect a five-for-four stock split in the form of a stock
dividend paid on May 27, 1998.
** All options are currently exercisable (oror were exercised, in part,
subsequent to the end of Fiscal Year 1996)1998. (In January, 1999, Rufus A.
Fulton, Jr. acquired 6,341 shares upon exercise of options, and as a
result, Mr. Fulton held 116,321 unexercised options as of February 28,
1999).
1816
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 1996,1998, 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,in 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 1996,1998, 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 1998
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
amongdifference between
the peer groups is that the peer group chosen for executive compensation
analysis includesincluded bank holding companies with assets between $1.8$2.1 and $4.7$6.8
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
17
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 19961998 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 1996,1998, Mr. Fulton was President and 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,
1991,1993, 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)
18
Legend Description
- ------ -----------
FFC FULTON FINANCIAL CORPORATION
NASDAQ NASDAQ Stock Market (US(U.S. Companies)
New Peer Group Self-Determined Peer Group consisting
of all bank holding companies with assets
of $2 - $8 billion at 9/30/9697 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 12/31/9698
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 12/31/91.93.
12/31/91 12/31/92
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
FFC 100.00 128.80 153.16 167.80 203.21 239.45109.56 132.68 156.34 266.25 236.20
NASDAQ 100.00 116.38 133.59 130.59 184.67 227.16
New97.75 138.26 170.01 208.58 293.21
Peer Group 100.00 133.45 148.86 153.06 202.68 260.49
Old Peer 100.00 130.71 144.85 145.79 186.29 226.93106.22 140.48 181.15 302.74 298.19
Severance Agreements and Survivors' Benefits
--------------------------------------------
Fulton Financial Corporation has entered into severance agreements with
Messrs. Fulton, Sperry, Smith, Ashby 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, in the case of Mr. Fulton, for a period of
five years (or,and, in the cases of Messrs. Smith, Ashby and Nugent, for a period of
three years)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
Officers of Fulton Financial Corporation, Fulton Bank, and Lebanon
Valley 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,Smith and SmithAshby
participate in this program.
19
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 1996.1998. All loans and commitments to loanlend made to such persons and to the
companies with which they are associated were made in 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.
Some of the directors of Fulton Financial Corporation are members of
law firms which provided legal services to Fulton Financial Corporation or its
subsidiaries in 1998 and prior years. The law firm of Albertson Ward, Woodbury,
New Jersey, has provided legal services to The Bank of Gloucester County, a
subsidiary of Fulton Financial Corporation, for many years. In 1998, Albertson
Ward was paid $178,062 in fees for such services, which constituted more than
five percent (5%) of its gross revenues. Director Jeffrey G. Albertson is a
partner in this firm. 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.1998. John O. Shirk, a member of the Board of Directorsdirector of Fulton Financial
Corporation, is a partner in this law firm. The law firm of Henry & Beaver, LLP,
Lebanon, Pennsylvania, has, for many years, provided legal services to Lebanon
Valley National Bank, which was merged with a subsidiary of Fulton Financial
Corporation in 1998 to form Lebanon Valley Farmers Bank. In 1998, it provided
legal services to both banks. Director Charles V. Henry, III is a partner in
this law firm. In each case, the law firm is expected to continue to provide
legal services to Fulton Financial Corporation or its subsidiaries in the
future.
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 in 1996, Director Donald M. Bowman,
Jr.the case of Jeffrey G. Albertson,
reports of change in ownership required to be filed four lateon or before August 10 and
September 10, 1998, respectively, were filed later, on January 27, 1999; in the
case of James K. Sperry, a report of change in ownership required to be filed on
or before May 10, 1998, was filed later, on May 31; and in the case of Kenneth
G. Stoudt, a report of change in ownership required to be filed on or before
September 10, 1998 was filed later, on September 22. In each case, the failure
to file timely reports with 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, in aggregate, of Fulton Financial Corporation stock in 1995 by the
D. M. Bowman, Inc. Profit Sharing Plan, a benefit plan maintained for the
employees 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.inadvertent.
20
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 100200 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, 1997,1, 1999, there were _________________ shares of common stock
outstanding, which shares were held by _________________ owners of record. In
addition, as of that date, _____________ shares of common stock were reserved for
issuance pursuant to stock option plans,________ shares were reserved for
issuance pursuant to the Dividend Reinvestment and Stock Purchase Plan, and
___________ shares were reserved for issuance pursuant to the Shareholder Rights
Plan adopted on June 20, 1989. Thus, ___________ shares were 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 _____________________ shares remain
available for discretionary issuance.) No shares of preferred stock have been
issued by Fulton Financial Corporation.
On January 21, 1997,19, 1999, 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
100200 million shares to 200400 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, issuance pursuant to the Dividend Reinvestment and Stock Purchase
Plan and 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 ___________________ shares
which have been reserved for issuance in connection with outstanding stock options,
and ________________ shares which have been reserved for issuance in connection
with the Dividend Reinvestment and Stock Purchase 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
21
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 19971999 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 100200 million shares to 200400
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.
AMENDMENT OF THE EMPLOYEE STOCK PURCHASE PLAN
---------------------------------------------
General Information
- -------------------
On February 18, 1986, the Board of Directors of Fulton Financial
Corporation approved and adopted an Employee Stock Purchase Plan (the "Plan"),
which was subsequently approved by the shareholders at the Annual Meeting of
shareholders held on April 15, 1986. The Plan was originally scheduled to
terminate on February 18, 1996, but an amendment was approved by shareholders at
the Annual Meeting of shareholders held on April 17, 1995 which provided that
the Plan would continue in existence until terminated by the Board of Directors.
Under the Plan, the Board of Directors is authorized to grant options to
employees of Fulton Financial Corporation and its subsidiaries to purchase
shares of the common stock of Fulton Financial Corporation with up to a 15%
price discount. The purpose of the Plan is to advance the interests of Fulton
Financial Corporation and its shareholders by encouraging employees to acquire a
stake in the future of Fulton Financial Corporation by purchasing shares of its
common stock.
22
The Plan permits the Board of Directors to amend, modify, suspend or
terminate the Plan at any time, although the Board may not, without the consent
of the shareholders of Fulton Financial Corporation, make any amendment which
increases the number of shares for which options may be granted, changes the
class of eligible employees, or materially increases the benefits accruing to an
employee under the Plan.
It is anticipated that the number of shares of Fulton Financial
Corporation common stock for which options were originally authorized to be
granted under the Plan will soon be exhausted. The Board of Directors believes
that it is in the best interests of Fulton Financial Corporation and its
shareholders for the Plan to continue. The Board of Directors has approved an
amendment to the Plan to increase by 500,000 shares the number of shares of
common stock for which options are authorized to be granted so that the Plan can
continue its existence once the shares for which options were originally
authorized to be granted are exhausted.
Summary of the Plan
- -------------------
A copy of the Plan is attached to this Proxy Statement as Exhibit A.
The following is a summary of the more significant terms of the Plan:
The Plan authorizes the Board of Directors of Fulton Financial
Corporation to grant options for up to a total of 100,000 shares of Fulton
Financial Corporation common stock, which total is subject to adjustment for
stock splits, stock dividends, reorganizations, recapitalizations, and other
changes in the corporate structure of Fulton Financial Corporation. Since the
shareholders originally approved the Plan, the adjustments for stock splits and
stock dividends have increased the authorized shares from 100,000 shares to
____________ shares, with current available shares of ______________. When an
option is exercised, Fulton Financial Corporation delivers authorized but
unissued shares or treasury shares.
The Plan is administered by the Stock Option Committee of the Board of
Directors (the "Committee"), consisting of those members of the Executive
Committee of the Board of Directors who are not eligible to receive options
under the Plan. The Committee has complete discretion to determine whether or
not options will be granted under the Plan in any year and, if so, the total
number of shares that will be optioned in such year. Each option expires on the
date specified by the Committee at the time it is granted, except that all
options granted under the Plan must expire five years from the date of grant.
When options are granted under the Plan, options must be granted
proportionately to all employees of Fulton Financial Corporation and its
subsidiaries who were employed by Fulton Financial Corporation or any subsidiary
on December 31 of the year immediately preceding the year in which options are
granted, except that the Committee may elect to exclude those employees who
customarily work 20 hours or less per week. Only those members of the Board of
Directors who are also employees of Fulton Financial Corporation or one of its
subsidiaries are eligible to participate in the Plan. When options are granted,
each eligible employee is granted an option to purchase the number of whole
shares that can be purchased, at the applicable option price established by the
Committee, with a
23
percentage of his or her total compensation for the immediately proceeding
calendar year. The Committee may limit the number of shares that can be
purchased pursuant to each option and no employee may be granted an option to
purchase stock with an aggregate fair market value of more than $25,000 during
any calendar year. The Committee may also place other limitations on options
granted under the Plan, such as requiring that options be exercised only with
funds accumulated through payroll deductions or restricting transfer of the
stock purchased under the Plan.
The option price per share is determined by the Committee, but may not
be less than the lesser of: (i) 85% of the fair market value of the stock on the
date of grant, or (ii) 85% of the fair market value of the stock on the date of
exercise. An option which is exercised more than 27 months after the date of
grant, however, must be exercised at a price equal to 85% of the fair market
value of the shares on the date of exercise.
During the lifetime of an optionee, an option may be exercised only by
the optionee and only if the optionee is an employee of Fulton Financial
Corporation or one of its subsidiaries at the time of exercise. If an optionee's
employment terminates by reason of death or disability, the option may be
exercised by the optionee or the heirs or personal representatives of the
optionee for a period of three months following termination of employment.
Recommendation of the Board of Directors
- ----------------------------------------
The Board of Directors believes that the proposal to amend the Plan for
the purpose of increasing by 500,000 shares the number of shares of common stock
for which options are authorized to be granted under the Plan is in the best
interests of Fulton Financial Corporation and its shareholders, and recommends
that the amendment be approved by the shareholders. Accordingly, the following
resolutions will be presented to the shareholders at the Annual Meeting:
RESOLVED, that the proposal of the Board of Directors to
amend the Fulton Financial Corporation Employee Stock Purchase
Plan for the purpose of increasing by 500,000 shares the number
of shares of Fulton Financial Corporation common stock for which
options are authorized to be granted under the Plan be, and
hereby is 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 to take
all such actions as they may in their discretion determine to be
necessary or appropriate in order to effect the foregoing
amendment to the Plan.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
------------------------------------------------
For the year ended December 31, 19961998, 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 1997.1999.
Representatives of Arthur Andersen LLP are expected to be present at
24
the 19971999 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.
- -------------------------------------------------------------------------------------------------------------------
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 19971999 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.
Chairman of the Board, President and
Chief Executive Officer
Lancaster, Pennsylvania
March 25, 199711, 1999
* BOLD FACE TYPE
25
EXHIBIT A
FULTON FINANCIAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose of the Plan
The purpose of this Employee Stock Purchase Plan is to advance the
interests of Fulton Financial Corporation and its shareholders by
encouraging its employees and the employees of its affiliates to acquire a
stake in the future of the Company by purchasing shares of the common stock
of Fulton Financial Corporation. It is intended that this Employee Stock
Purchase Plan shall be an employee stock purchase plan within the meaning
of Section 423 of the Internal Revenue Code of 1954, as amended.
2. Definitions
For purposes of the Plan, the following words or phrases have the meanings
assigned to them below:
(a) "Affiliate" shall mean a parent or subsidiary corporation as defined
in Section 425 of the Code (substituting "Company" for "employer
corporation"), including a parent or a subsidiary which becomes such
after the adoption of the Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1954, as amended.
(d) "Committee" shall mean the Stock Option Committee of the Board.
(e) "Company" shall mean Fulton Financial Corporation.
(f) "Date of Grant" in respect of any option granted under the Plan shall
mean the date on which that option is granted by the Board.
(g) "Date of Exercise" in respect of any option granted under the Plan
shall be the date specified by the Committee in its rules and
regulations governing the exercise of options granted under the Plan.
(h) "Disinterested" in respect of a director shall mean a director of the
Company who is not eligible to receive options under the Plan.
(i) "NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotations System.
26
(j) "Optionee" shall mean an employee to whom an option has been granted
pursuant to the Plan.
(k) "Plan" shall mean this Employee Stock Purchase Plan.
(l) "Stock" shall mean the $2.50 par value common stock of the Company.
(m) "Total compensation" shall mean the total remuneration paid to an
employee by the Company and its affiliates during any calendar year,
as reported on the employee's Federal Income Tax Withholding
Statement(s) (Form W-2).
3. Administration of the Plan
(a) The Plan shall be administered by the Stock Option Committee (the
"Committee") of the Board which shall consist of all members of the
Executive Committee of the Board who are not eligible to receive
options under the Plan; provided, however, that the Committee shall at
all times consist of at least three disinterested directors. No
Committee member shall be eligible (or shall have been eligible within
one year prior to his appointment) to receive options under the Plan
or to be selected as a participant under any discretionary plan of the
Company or any of its affiliates, entitling him to acquire stock,
stock options or stock appreciation rights of the Company or any of
its affiliates. The Board may from time to time remove members from,
or add members to, the Committee. Vacancies on the Committee, however
caused, shall be filled by the Board.
(b) The Committee shall be vested with full authority to adopt, amend and
rescind such rules, regulations and procedures as it deems necessary
or desirable to administer the Plan and to interpret the provisions of
the Plan, unless otherwise determined by the Board. Any determination,
decision or action of the Committee in connection with the
construction, interpretation, administration or application of the
Plan shall be final, conclusive and binding upon all Optionees and any
person claiming under or through an Optionee, unless otherwise
determined by the Board.
(c) Any determination, decision or action of the Committee provided for in
the Plan may be made or taken by action of a majority of the
disinterested members of the Board if it so determines, with the same
force and effect as if such determination, decision or action had been
made or taken by the Committee. No member of the Committee or of the
Board shall be liable for any determination, decision or action made
in good faith with respect to the Plan or any option granted under the
Plan.
4. Stock Subject to the Plan
The Board shall have the authority from time to time from and after the
effective date hereof to grant options under the Plan to purchase an
aggregate of 100,000 shares of Stock, subject to adjustment as provided in
Section 10 below. As the Board may determine from time to
27
time, the Stock optioned may consist either in whole or in part of
authorized but unissued shares or shares held in treasury.
5. Eligibility
When options are granted under the Plan, options shall be granted to all
employees of the Company or any affiliate who were employed by the Company
or any affiliate on December 31 of the year immediately preceding the year
in which options are granted, except that the Committee may elect to
exclude those employees who customarily work 20 hours or less per week.
6. Allocation of Optioned Stock
(a) When options are granted under the Plan, each eligible employee shall
be granted an option to purchase the number of whole shares that can
be purchased, at the applicable option price established by the
Committee, with a percentage (which shall be uniform for all eligible
employees) of his total compensation for the immediately preceding
calendar year; provided, however, that the Committee may limit the
maximum number of shares that may be purchased pursuant to each
option, provided that such limitation is uniform for all eligible
employees.
(b) All options granted under the Plan shall be subject to the following
additional limitations:
(i) No option shall be granted to any employee who, immediately after
the grant, would own stock possessing five percent or more of the
total combined voting power of the Company or any of its
affiliates. In computing the stock ownership of an employee for
purposes of this limitation, the rules of Section 425(d) of the
Code shall apply and stock which an employee may purchase under
the Plan or under any other plan maintained by the Company shall
be treated as stock owned by the employee.
(ii) No option shall be granted to any employee which at the Date of
Grant, would permit his rights to purchase stock under the Plan
and all other employee stock purchase plans of the Company and
its affiliates to accrue at a rate exceeding $25,000 of fair
market value (determined pursuant to Section 7 below) for each
calendar year in which such option is outstanding at any time.
7. Option Price
(a) The option price per share of the Stock that may be purchased pursuant
to each option shall be determined by the Committee, subject to
approval by the Board, but shall not in any event be less than the
lesser of (i) 85% of the fair market value per share of the Stock on
the Date of Grant, or (ii) 85% of the fair market value per share of
the Stock on the Date of Exercise, subject to adjustment as set forth
in Section 10 below.
28
(b) During such time as the Stock is not listed on an established stock
exchange but is listed in the NASDAQ National Market System, the fair
market value per share shall be the average of the highest and lowest
trading prices for the Stock on the applicable date or, if no trade of
Stock occurred on that day, the fair market value shall be determined
by reference to such prices on the next preceding day on which such
prices were quoted.
(c) During such time as the Stock is not listed on an established stock
exchange or in the NASDAQ National Market System, the fair market
value per share shall be the average of the closing dealer "bid" and
"ask" prices for the Stock, as quoted by NASDAQ for the applicable
date or, if no "bid" and "ask" prices are quoted for that day, the
fair market value shall be determined by reference to such prices on
the next preceding day on which such prices were quoted.
(d) If the Stock is listed on an established stock exchange or exchanges,
the fair market value shall be deemed to be the closing price of the
Stock on such stock exchange or exchanges on the applicable date or,
if no sale of the Stock has been made on any stock exchange on that
day, the fair market value shall be determined in reference to such
prices on the next preceding day on which such prices were quoted.
(e) In the event the Stock is not traded on an established stock exchange
and no closing dealer "bid" and "ask" prices are available, then the
fair market value of the Stock shall be as determined in good faith by
the Committee.
8. Terms and Conditions of Options
(a) Each option shall be evidenced by a written stock option agreement
specifying the maximum dollar value of the Stock that may be purchased
pursuant to the option, the option term, and such terms and conditions
established by the Committee as are consistent with the terms of the
Plan.
(b) Each option granted under the Plan shall expire on the date determined
by the Committee; provided, however, that, subject to the provisions
of paragraph (d) below, each option shall terminate not later than the
date which is five years from the Date of Grant, and provided further,
that options exercised more than 27 months after the Date of Grant
must be exercised at an option price per share equal to 85% of the
fair market value per share on the Date of Exercise.
(c) The Committee may from time to time establish such further terms,
conditions and limitations on the exercise of options granted under
the Plan as it may, in its sole discretion, deem appropriate, and
which are not inconsistent with Section 423 of the Code, including,
without limitation, payroll deduction requirements, restrictions on
exercise dates, restrictions on transfer of the Stock purchased
pursuant to the options granted under the Plan and participation in
the dividend reinvestment plan of the Company.
29
(d) An option granted pursuant to the Plan may be exercised only while the
Optionee is employed by the Company or one of its affiliates and, if
not fully exercised prior to termination of employment, will expire on
the date of termination; provided, however, that in the event of a
termination of employment by reason of death or disability, the option
may be exercised by the Optionee or his heirs or personal
representatives for a period of three months following termination of
employment.
(e) During the lifetime of an Optionee, an option granted pursuant to the
Plan shall be exercisable only by the Optionee and shall not be
assignable or transferable by him other than by will or the laws of
descent and distribution.
9. Exercise of Options
(a) Each Optionee who elects to exercise an option granted pursuant to
this Plan shall comply with such rules, regulations and procedures
regarding the exercise of options as the Committee shall from time to
time establish.
10. Changes in Capital Structure
(a) In the event of any change in the Stock subject to the Plan or the
Stock subject to any option granted hereunder, through merger,
consolidation, reorganization, recapitalization, reincorporation,
stock split, stock dividend or other change in the corporate structure
of the Company, the Committee shall appropriately adjust the number of
shares subject to the Plan and, where appropriate, the maximum number
of shares subject to each outstanding option. Such adjustment shall
not result in the issuance of fractional shares. Each such adjustment
shall be made in such manner as not to constitute a "modification" of
the option as defined in Section 425 of the Code.
(b) If the Company is succeeded by another corporation in a merger or
consolidation or if more than 50% of its stock is acquired by another
corporation, all options granted under the Plan shall be assumed by
the successor corporation and each such option shall be applicable to
the stock of the successor corporation, with only such modifications
as may be necessary to continue the status of such option as an option
granted under an employee stock purchase plan within the meaning of
Section 423 of the Code.
(c) The grant of an option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or
business structure or to merge, consolidate, dissolve, liquidate, sell
or transfer all or any part of its business or assets.
11. Registration of Stock
No option granted pursuant to the Plan shall be exercisable in whole or in
part if at any time the Committee shall determine in its discretion that
the listing, registration or qualification of the shares of Stock subject
to such option on any securities exchange or under any applicable
30
law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the
granting of such option or the issuance of shares thereunder, unless such
listing, registration, qualification, consent or approval may be effected
or obtained free of any conditions not acceptable to the Board.
12. Amendment or Termination of the Plan
(a) The Board may at any time amend, modify, suspend or terminate the
Plan; provided that, except as provided in Section 10, above, the
Board may not, without the consent of the shareholders of the Company,
make any amendment or modification which:
(i) increases the maximum number of shares of Stock as to which
options may be granted under the Plan,
(ii) changes the class of eligible employees,
(iii) increases materially the benefits accruing to an employee under
the Plan, or
(iv) otherwise requires the approval of the shareholders of the
Company in order to maintain the exemption available under Rule
16b-3 (or any similar rule) under the Securities Exchange Act of
1934.
(b) Notwithstanding the provisions of paragraph (a) above, the Board
reserves the right to amend or modify the terms and provisions of the
Plan and of any outstanding options granted under the Plan to the
extent necessary to qualify the options granted under the Plan for
such favorable federal income tax treatment (including deferral of
taxation upon exercise) as may be afforded options granted under an
employee stock purchase plan within the meaning of Section 423 of the
Code, the regulations promulgated thereunder, and any amendments or
replacements thereof.
(c) [Deleted]
(d) No amendment, modification or termination of the Plan (whether by
action of the Board or by expiration of the Plan term) shall in any
manner affect any option theretofore granted under the Plan without
the consent of the Optionee or any person claiming under or through
the Optionee.
13. Effective Date
The Plan shall become effective on the date on which it is adopted by the
Board, provided that the Plan is approved by the shareholders of the
Company within twelve months thereafter. The Board may issue options
pursuant to the Plan prior to its approval by the shareholders of
31
the Company, provided that all such options are contingent upon shareholder
approval of the Plan within said twelve-month period.
32
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[FRONT SIDE]
P R O X Y FULTON FINANCIAL CORPORATION P R O X Y
LANCASTER, PENNSYLVANIA
The undersigned hereby appoints Herbert H. JaffaeDavid S. Etter and David C. Etter,Kenneth E.
Shenenberger, 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, 1997,1, 1999, 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 20, 1999, at
12:00 noon, at the Hershey Lodge and Convention Center, West Chocolate Avenue
and University Drive, Hershey, Pennsylvania, or any adjournment thereof.
YOUR DIRECTORS RECOMMEND A "FOR" VOTE FOR EACH OF THE FOLLOWING MATTERS:
1. ELECTION OF DIRECTORS (check one block) [_] FOR
FOR A TWO YEAR TERM: Samuel H. Jones, Jr.Charles V. Henry, III, and Joseph J. Mowad, M.D.
FOR A THREE YEAR TERM: Jeffrey G. Albertson, ThomasMartin D. Caldwell,Cohen, Patrick J. Freer, Robert D. Garner,
J. Robert Hess, Carolyn R. Holleran, Samuel H. Jones,
Jr., Harold
D. Chubb, WilliamDonald W. Lesher, Jr., Stuart H. Clark,Raub, Jr., Rufus A. Fulton,
Jr., Eugene H. Gardner, Daniel M. Heisey, Clyde W.
Horst, William E. Rusling and
Mary Ann Russell
For, except vote withheld from the following
nominee(s):
- ---------------------------------------------------------------------------------------------------------------
[_] WITHHELD as to all nominees
2. APPROVAL OF THE AMENDMENT OF THE ARTICLES OF INCORPORATION (check one block)
The Articles of Incorporation would be amended for the purpose of increasing
the number of authorized shares of common stock from 200 million to 400
million shares.
[_] FOR [_] AGAINST [_] ABSTAIN
3. AMENDMENT OF THE EMPLOYEE STOCK PURCHASE PLAN (check one block)
The Employee Stock Purchase Plan would be amended for the purpose of
increasing by 500,000 shares the number of shares of common stock for which
options are authorized to be granted under the Plan.
[_] 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.Incorporation and
FOR the amendment of the Employee Stock Purchase Plan.
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
__________________________________, 1999
-----------------------------
-----------------------------------------
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.
-2-