As Filed With the Securities and Exchange Commission On March , 2001 --- April 2, 2003

Registration Statement No. 333- -------- ================================================================================


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 ----------


FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933 ----------


FULTON FINANCIAL CORPORATION ------------------------------------------------------ (Exact

(Exact name of registrant as specified in its charter)

Pennsylvania

6720

23-2195389 - ------------------------------- ---------------------------- ---------------- (State

(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer Identification No.)

One Penn Square

Lancaster, Pennsylvania 17604

717-291-2411 ------------------------------------------------------ (Address,

(Address, including zip code, and telephone number, including area code, 

of registrant'sregistrant’s principal executive offices)

Rufus A. Fulton, Jr.

Chairman and Chief Executive Officer

One Penn Square

Lancaster, Pennsylvania 17604

717-291-2411 ------------------------------------------------------ (Name,

(Name, address, including zip code, and telephone number, including area code,

of agent for service) ---------- Copies to:


COPIES TO:

Paul G. Mattaini, Esquire Charles

Kimberly J. Ferry,Decker, Esquire

Barley, Snyder, Senft & Cohen, LLC Rhoads & Sinon, LLP

126 East King Street One South Market Square, 12th Floor

Lancaster, Pennsylvania 17604-2893 Harrisburg,

Nicholas Bybel, Jr., Esquire

Jean Svoboda, Esquire

Shumaker Williams, P.C.

3245 Simpson Ferry Road

Camp Hill, Pennsylvania 17108 ---------- 17011


Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective. ----------


If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: | | ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. | | ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box, and list Securities Act registration statement number of the earlier effective registration statement for the same offering. | | ¨


CALCULATION OF REGISTRATION FEE


Title Of Each Class Of

Securities To Be

Registered

    

Amount

To Be

Registered (1)

    

Proposed Maximum Offering Price

Per Unit

(2)(3)

    

Proposed

Maximum

Aggregate

Offering

Price (2)(3)

    

Amount Of Registration Fee


Common Stock, par value $2.50 per share (and associated stock purchase rights)(4)

    

4,877,178

    

$24.49

    

119,442,089

    

$9,663


- ------------------------------------------------------------------------------------------------------------------------------------ CALCULATION OF REGISTRATION FEE Title Of Each Class Of Amount To Be Proposed Maximum Offering Proposed Maximum Aggregate Amount Of Securities To Be Registered Registered(1) Price Per Unit (2)(3) Offering Price (2)(3)
(1)Based on the maximum number of shares of the Registrant’s common stock that may be issued in connection with the proposed merger of Premier Bancorp, Inc. with and into the Registrant. In accordance with Rule 416, this Registration Fee - ------------------------------------------------------------------------------------------------------------------------------------ Common Stock, par value $2.50 per share (and associated 6,606,734 $25.71875 169,916,940 $42,479Statement shall also register any additional shares of the Registrant’s common stock which may become issuable to prevent dilution resulting from stock splits, stock dividends or similar transactions as provided by the agreement relating to the merger.

(2)Estimated solely for purposes of calculating the registration fee.

(3)Computed in accordance with Rule 457(f)(1), on the basis of the average of the high and low prices reported by AMEX for the common stock of Premier Bancorp, Inc. on March 31, 2003 of $24.49 and based on 3,417,515 shares of Premier Bancorp, Inc. common stock to be exchanged in the merger and unexercised options to purchase 222,170 shares of Premier Bancorp, Inc. common stock.

(4)Prior to the occurrence of certain events, the stock purchase rights)(4) - ------------------------------------------------------------------------------------------------------------------------------------ rights will not be evidenced separately from the common stock.
(1) Based on the maximum number of shares of the Registrant's common stock that may be issued in connection with the proposed merger of Drovers Bancshares Corporation with and into the Registrant. In accordance with Rule 416, this Registration Statement shall also register any additional shares of the Registrant's common stock which may become issuable to prevent dilution resulting from stock splits, stock dividends or similar transactions as provided by the agreement relating to the merger. (2) Estimated solely for purposes of calculating the registration fee. (3) Computed in accordance with Rule 457(f)(1), on the basis of the average of the closing bid and ask price of the common stock of Drovers on March 21, 2001 of $25.71875 and based on 5,094,733 shares of Drovers common stock to be exchanged in the merger and unexercised options to purchase 233,278 shares of Drovers common stock. (4) Prior to the occurrence of certain events, the stock purchase rights will not be evidenced separately from the common stock. ----------


The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ [DROVERS LETTERHEAD] , 2001 ------------------------ Dear Shareholder: The Board of Directors of Drovers Bancshares Corporation and Fulton Financial Corporation have each approved an agreement and plan of merger providing for the acquisition of Drovers by Fulton Financial through a merger. Drovers will hold a special meeting of our shareholders to approve the merger agreement on May 17, 2001, at 9:00 a.m., at The Historical Society of York County, 250 East Market Street, York, Pennsylvania 17401. In the merger, Drovers shareholders will receive 1.24 shares of Fulton Financial common stock for each share of Drovers common stock that they hold. Drovers shareholders generally will not recognize federal income tax gain or loss in connection with the merger, except for any cash you receive instead of fractional shares of Fulton Financial common stock or upon exercise of dissenter's rights. Fulton Financial common stock trades on the Nasdaq National Market under the symbol "FULT." On ________ __, 2001, the closing price of Fulton Financial's common stock was $_____, making the value of 1.24 shares of Fulton Financial common stock equal to $_______ on that date. Drovers common stock is also listed on the Nasdaq National Market, under the symbol "DROV." The closing price of Drovers' common stock on ______ __, 2001 was $_____. These prices will fluctuate between now and completion of the merger. The merger cannot be completed unless the holders of a majority of the votes cast at the special meeting vote to approve the merger agreement. Thus, your vote is very important. Drovers' Board of Directors strongly supports this combination of Drovers and Fulton Financial and recommends that you vote in favor of the agreement and plan of merger. All shareholders of Drovers are invited to attend the special meeting of shareholders in person. However, in order to ensure that your shares will be voted, whether or not you plan to attend the meeting, please take the time to vote by completing and mailing the enclosed proxy card to Drovers. The attached document provides you with detailed information about the proposed merger. I encourage you to read this entire document carefully. You may also obtain additional information about Fulton Financial and Drovers from documents filed with the Securities and Exchange Commission. Sincerely, A. Richard Pugh, Chairman of the Board, Chief Executive Officer and President DROVERS BANCSHARES CORPORATION 30 South George Street York, Pa 17401 ---------- NOTICE OF SPECIAL



Proxy Statement/ Prospectus

PREMIER BANCORP, INC.

PROXY STATEMENT

FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 17, 2001 WE HEREBY GIVE YOU NOTICE that Drovers Bancshares Corporation will hold a special meeting of shareholders on Thursday,

May 17, 2001, at 9:00 a.m., local time, at The Historical Society of York County, 250 East Market Street, York, Pennsylvania 17401, to consider and vote upon the following matters, all as more fully described in the accompanying document: 1. The approval and adoption of the Agreement and Plan of Merger dated December 27, 2000, between Fulton Financial Corporation and Drovers, which provides, among other things, for the merger of Drovers with and into Fulton Financial and the conversion of each share of common stock of Drovers outstanding immediately prior to the merger into 1.24 shares (subject to adjustment) of Fulton Financial common stock, plus cash in lieu of any fractional share interest; 2. The adjournment of the special meeting, if necessary, to permit further solicitation of proxies in the event that there are not sufficient votes at the time of the special meeting to approve the merger agreement; and 3. The transaction of such other business as may properly be brought before the special meeting. The Board of Directors of Drovers recommends a vote "FOR" each proposal. The Board of Directors of Drovers has fixed the close of business on ____________________, as the record date for determining shareholders entitled to notice of, and to vote at, the special meeting. A list of shareholders entitled to vote at the special meeting will be available for inspection at Drovers' main office for a period of ten days prior to the special meeting and also will be available for inspection at the special meeting. Your vote is important regardless of the number of shares you own. Whether or not you plan to attend the special meeting, the Board of Directors of Drovers urges you to complete, sign, date and return the enclosed proxy card as soon as possible in the enclosed postage-paid envelope. This will not prevent you from voting in person at the special meeting but will assure that your vote is counted if you are unable to attend. If you are a shareholder whose shares are not registered in your own name, you will need additional documentation from your record holder in order to vote personally at the special meeting. BY ORDER OF THE BOARD OF DIRECTORS /s/ John D. Blecher, Secretary - ------------------------------ April _____, 2001 Proxy Statement/ Prospectus DROVERS BANCSHARES CORPORATION PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS May 17, 2001 Nasdaq National Market9, 2003

American Stock Exchange Symbol: DROV ---------- PPA


FULTON FINANCIAL CORPORATION

PROSPECTUS FOR 6,606,734

4,877,178 SHARES OF FULTON FINANCIAL COMMON STOCK

Nasdaq National Market Symbol: FULT

This document constitutes a proxy statement of Drovers Bancshares CorporationPremier Bancorp, Inc. in connection with the solicitation of proxies by the Board of Directors of DroversPremier for use at the specialannual meeting of shareholders to be held at The Historical Society of York County, 250 East Marketthe Doylestown Country Club, Green Street, York,Doylestown, Pennsylvania, 17401, on Thursday,Friday, May 17, 2001,9, 2003, at 9:00 a.m., local time. At the meeting, DroversPremier shareholders will be asked to consider and vote on the following proposals:

1. To elect five Class 2 directors to the Board of Directors of Premier;

2. To approve and adopt the Agreement and Plan of Merger, dated December 27, 2000,January 16, 2003, between DroversPremier and Fulton Financial Corporation which provides, among other things, for the merger of DroversPremier with and into Fulton Financial and the conversion of each share of common stock of DroversPremier outstanding immediately prior to the merger into 1.241.34 shares (subject to adjustment) of Fulton Financial common stock, plus cash in lieu of any fractional share interest or upon exercise of dissenter's rights; 2.interest;

3. To adjourn the meeting if necessary to allow DroversPremier time to solicit more votes in favor of the merger agreement; and 3.

4. To transact such other business as may properly be brought before the specialannual meeting.

This document also constitutes a prospectus of Fulton Financial filed as part of a registration statement filed with the Securities and Exchange Commission relating to up to 6,606,7344,877,178 shares of Fulton Financial common stock being registered for this transaction. On ____________, 2001,, 2003, the closing price of Fulton Financial'sFulton’s common stock was $______,$, making the value of 1.241.34 shares of Fulton Financial common stock equal to $______________ $on that date. The closing price of Drovers'Premier’s common stock on that date was $______.$. These prices will fluctuate between now and the closing of the merger. This document does not cover any resale of the Fulton Financial stock being registered for this transaction by any shareholders deemed to be affiliates of Fulton Financial or Drovers. DroversPremier. Premier and Fulton Financial have not authorized any person to make use of this document in connection with any such resale. Drovers

Premier and Fulton Financial provided all information related to their respective companies.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of thethis document. Any representation to the contrary is a criminal offense.

These securities are not savings or deposit accounts or other obligations of any bank or nonbank subsidiary of any of the parties, and they are not insured by the Federal Deposit Insurance Corporation or any governmental agency.

The date of this document is _____, 2001., 2003. This document was first sent to shareholders on or about April _____, 2001. 11, 2003.


You should rely only on the information contained in this document or to which this document has referred you. DroversPremier and Fulton Financial have not authorized anyone to provide you with information that is different. You should not assume that the information in this document is accurate as of any date other than the date on the front of the document.

The document incorporates important business and financial information about Fulton Financial and DroversPremier that is not included in or delivered with the document. This information is available without charge to security holders upon written or oral request to the following persons at either DroversPremier or Fulton Financial: William R. Colmery, Secretary John D. Blecher, Secretary Fulton Financial Corporation Drovers Bancshares Corporation One Penn Square 30 South George Street Lancaster, PA 17605 York, PA 17401 717-291-2411 717-843-1586 Fulton:

George R. Barr, Jr., Secretary

John J. Ginley, Secretary

Fulton Financial Corporation

Premier Bancorp, Inc.

One Penn Square

379 North Main Street

Lancaster, PA 17602

Doylestown, PA 18901

717-291-2411

215-345-5100

To obtain timely delivery of requested documents, you must request the information no later than [five (5) business days before meeting]. May 2, 2003.


TABLE OF CONTENTS Page ---- QUESTIONS AND ANSWERS ABOUT THE MERGER.................................. 1 SUMMARY................................................................. 2 The Companies......................................................... 2 Agreement to Merge.................................................... 4 Each Drovers Share Will Be Exchanged For 1.24 Shares Of Fulton Financial Common Stock............................................... 4 No Federal Income Tax On Shares Received In Merger.................... 4 Drovers Board Recommends Shareholder Approval......................... 4 Exchange Ratio Is Fair From A Financial Point Of View According To Drovers' Financial Advisor........................................... 4 Vote Required To Approve Merger Agreement............................. 5 Annual Meeting To Be Held............................................. 5 Record Date Set At [record date]; One Vote Per Share Of Drovers Stock. 5 Conditions That Must Be Satisfied For The Merger To Occur............. 5 Regulatory Approvals Required......................................... 5 Termination And Amendment Of The Merger Agreement..................... 6 Dissenters' Rights Of Appraisal....................................... 6 Fulton Financial To Use Pooling Accounting Treatment.................. 6 Fulton Financial To Continue As Surviving Corporation................. 6 Your Rights As Shareholders Will Change After The Merger.............. 7 Warrant Agreement..................................................... 7 Interests of Certain Persons In The Merger............................ 7 Forward Looking Information........................................... 7 Share Information And Market Prices................................... 8 Comparative Per Share Data............................................ 9 SELECTED FINANCIAL DATA................................................. 12 THE ANNUAL MEETING...................................................... 14 Date, Time And Place.................................................. 14 Matters To Be Considered At The Annual Meeting........................ 14 Record Date; Stock Entitled To Vote; Quorum........................... 14 Votes Required........................................................ 14 Voting Of Proxies..................................................... 15 Abstentions; Broker Non-votes......................................... 15 Revocability Of Proxies............................................... 15 Solicitation Of Proxies............................................... 15 THE MERGER.............................................................. 16 Background of Merger.................................................. 16 Drovers' Board of Director's Reasons for the Merger................... 18 Recommendation of Drovers' Board of Directors......................... 19 Opinion of Drovers' Financial Advisor................................. 19 Summary of Proposal................................................ 21 Stock Trading History.............................................. 21 Comparable Company Analysis........................................ 22 Analysis of Selected Merger Transactions........................... 24 Discounted Dividend Stream and Terminal Value Analysis............. 24 Pro Forma Merger Analysis.......................................... 25 Contribution Analysis.............................................. 25 Compensation of Sandler O'Neill.................................... 27 -i- Fulton's Board Of Directors' Reasons For The Merger................... 27 Effect Of The Merger.................................................. 27 Exchange Ratio........................................................ 27 Effective Date Of The Merger.......................................... 28 Exchange Of Drovers Stock Certificates................................ 28 Conditions To The Merger.............................................. 28 Representations and Warranties........................................ 29 Business Pending The Merger........................................... 30 Dividends............................................................. 31 No Solicitation Of Transactions....................................... 31 Amendment; Waivers.................................................... 32 Termination; Effect Of Termination.................................... 32 Management And Operations After The Merger............................ 33 Employment; Severance................................................. 33 Retirement Plans; Employee Benefits................................... 34 Regulatory Approvals.................................................. 34 Accounting Treatment.................................................. 35 Material Contracts.................................................... 35 Material Federal Income Tax Consequences.............................. 35 NASDAQ Listing........................................................ 36 Expenses.............................................................. 36 Resale Of Fulton Financial Common Stock............................... 36 No Dissenters' Rights Of Appraisal.................................... 36 General............................................................ 36 Fair Value......................................................... 36 Notice of Intention to Dissent..................................... 36 Notice to Demand Payment........................................... 36 Failure to Comply with Notice to Demand Payment, etc............... 37 Payment of Fair Value of Shares.................................... 37 Estimate by Dissenter of Fair Value of Shares...................... 37 Valuation Proceeding............................................... 37 Costs and Expenses................................................. 37 Dividend Reinvestment Plan............................................ 38 Interests Of Certain Persons in the Merger........................... 38 Share Ownership and Stock Options.................................. 38 Indemnification; Directors and Officers Insurance.................. 38 Existing Change in Control Agreements.............................. 38 Employment and Other Agreements.................................... 39 Directors Fees..................................................... 39 Warrant Agreement and Warrant......................................... 40 General............................................................ 40 Effect of Warrant Agreement........................................ 40 Terms of Warrant Agreement......................................... 40 Exercise of the Warrant............................................ 40 Termination of the Warrant......................................... 41 Adjustments........................................................ 41 Repurchase of Warrant or Warrant Shares............................ 41 Registration Rights................................................ 42 INFORMATION ABOUT FULTON FINANCIAL...................................... 42 General............................................................... 42 Market Price Of And Dividends On Fulton Financial Common Stock And Related Shareholder Matters.......................................... 42 Indemnification....................................................... 43 INFORMATION ABOUT DROVERS............................................... 43 General............................................................... 43 Market Price Of And Dividends On Drovers Common Stock And Related Shareholder Matters.................................................. 44 -ii- PRO FORMA COMBINED FINANCIAL INFORMATION................................ 45 DESCRIPTION OF FULTON FINANCIAL COMMON STOCK............................ 50 General............................................................... 50 Dividend Reinvestment Plan............................................ 51 Securities Laws....................................................... 51 Antitakeover Provisions............................................... 51 COMPARISON OF SHAREHOLDER RIGHTS........................................ 53 ADJOURNMENT............................................................. 55 EXPERTS................................................................. 56 LEGAL MATTERS........................................................... 56 OTHER MATTERS........................................................... 56 SHAREHOLDER PROPOSALS................................................... 56 WHERE YOU CAN FIND MORE INFORMATION..................................... 56 INCORPORATION BY REFERENCE.............................................. 57

Page


SUMMARY

4

The Companies (See page 44 for Fulton, page 49 for Premier)

4

Agreement to Merge (See page 16)

5

Each Premier Share Will Be Exchanged For 1.34 Shares Of Fulton Common Stock (See page 30)

5

No Federal Income Tax On Shares Received In Merger (See page 40)

6

Premier Board Recommends Shareholder Approval (See page 18)

6

Exchange Ratio Is Fair From A Financial Point Of View According To Premier’s Financial Advisor (See page 19)

6

Vote Required To Approve Merger Agreement (See page 15)

6

Annual Meeting To Be Held May 9, 2003 (See page 14)

6

Record Date Set At March 31, 2003; Voting (See page 14)

7

Conditions That Must Be Satisfied For The Merger To Occur (See page 32)

7

Regulatory Approvals Required (See page 39)

7

Termination And Amendment Of The Merger Agreement (See page 38)

7

No Dissenters’ Rights Of Appraisal (See page 41)

8

Fulton To Continue As Surviving Corporation (See page 30)

8

Your Rights As Shareholders Will Change After The Merger (See page 64)

8

Warrant Agreement (See page 35)

8

Interests of Certain Persons In The Merger (See page 42)

8

Forward Looking Information

9

Share Information And Market Prices

9

Comparative Per Share Data

10

Selected Financial Data

13

RISK FACTORS

15

THE ANNUAL MEETING

15

Time, Date and Place

16

Matters to be Considered

16

Shares Outstanding and Entitled to Vote; Record Date

16

How to Vote Your Shares

16

Vote Required

17

Solicitation of Proxies

17

THE MERGER

18

Background of Merger

18

Recommendation of the Premier Board of Directors and Reasons for the Merger

20

Opinion of Premier’s Financial Advisor

21

Compensation of Boenning & Scattergood

31

Fulton’s Board Of Directors’ Reasons For The Merger

31

Effect Of The Merger

31

Exchange Ratio

32

Effective Date Of The Merger

32

Exchange Of Premier Stock Certificates

33

Conditions To The Merger

33

Representations and Warranties

34

Business Pending The Merger

35

Dividends

35

No Solicitation Of Transactions

36

Warrant Agreement and Warrant

37

General

37

Effect of Warrant Agreement

37

Terms of Warrant Agreement

37

Exercise of the Warrant

37

Termination of the Warrant

38

Adjustments

38

Repurchase of Warrant or Warrant Shares

38

Registration Rights

38

Amendment; Waivers

39

Termination; Effect Of Termination

39

Management And Operations After The Merger

40

Employment; Severance

40

Employee Benefits

40

Regulatory Approvals

40

Material Contracts

41

Material Federal Income Tax Consequences

41

NASDAQ Listing

42

Expenses

42

Resale Of Fulton Common Stock

42

Dissenters’ Rights

42

Dividend Reinvestment Plan

42

Redemption of Preferred Stock

43

Interests Of Certain Persons in the Merger

43

INFORMATION ABOUT FULTON FINANCIAL

45

General

45

Market Price Of And Dividends On Fulton Common Stock And Related Shareholder Matters

45

Indemnification

46

Description Of Fulton Financial Common Stock

46

General

46

Dividend Reinvestment Plan

47

Securities Laws

47

Antitakeover Provisions

47

INFORMATION ABOUT PREMIER

49

General

49

Market Price Of And Dividends On Premier Common Stock And Related Shareholder Matters

50

Independent Accountant

54

Executive Compensation

55

Election Of Directors

59

Security Ownership Of Certain Beneficial Owners And Management

61

Section 16(a) Beneficial Ownership Reporting Compliance

63

Performance Graph

64

Annual Report

65

ADJOURNMENT

65

COMPARISON OF SHAREHOLDER RIGHTS

65

EXPERTS

67

LEGAL MATTERS

67

OTHER MATTERS

68

SHAREHOLDER PROPOSALS

68

WHERE YOU CAN FIND MORE INFORMATION

68

INCORPORATION BY REFERENCE

68

EXHIBITS A Agreement and Plan of Merger dated December 27, 2000 A-1 B Warrant Agreement and Warrant dated December 27, 2000 B-1 C Opinion of Sandler O'Neill & Partners, L.P. C-1 D Dissenters Rights Statute D-1 -iii-

A

Agreement and Plan of Merger, dated January 16, 2003 

A-1

B

Warrant Agreement and Warrant, dated January 16, 2003

B-1

C

Opinion of Boenning & Scattergood, Inc.

C-1

QUESTIONS AND ANSWERS ABOUT THE MERGER Q: What do I need to do now? A: After you have carefully read this document, just indicate on your proxy card how you want your shares to be voted, then sign and mail it in the enclosed prepaid return envelope as soon as possible, so that your shares may be represented and voted at the special meeting to be held on May 17, 2001. Q: If my shares are held in "street name" by my broker, will my broker vote my shares for me? A: Maybe. Your broker will vote your shares only if you provide instructions on how to vote. You should follow the directions provided by your broker. Without instructions, your shares will not be voted on the merger agreement. Q: Can I change my vote after I have mailed my signed proxy card? A: Yes. There are three ways for you to revoke your proxy and change your vote. First, you may send a written notice to the person to whom you submitted your proxy stating that you would like to revoke your proxy. Second, you may complete and submit a new proxy card with a later date. Third, you may vote in person at the special meeting. If you have instructed a broker to vote your shares, you must follow directions received from your broker to change your vote. Q: Should I send in my stock certificates now? A: No. Shortly after the merger is completed, Fulton Financial will send you written instructions for exchanging your stock certificates. Fulton Financial will request that you return your Drovers stock certificates at that time. Q: When do you expect to merge? A: Fulton Financial and Drovers expect to complete the merger on or about July 1, 2001. In addition to the approval of Drovers shareholders, Fulton Financial must also obtain regulatory approvals. Fulton Financial and Drovers expect to receive all necessary approvals no later than the second quarter of 2001. Q: Who should I call with questions or to obtain additional copies of this document? A: You should call either: William R. Colmery, Secretary Fulton Financial Corporation One Penn Square Lancaster, PA 17604 717-291-2411 John D. Blecher, Secretary Drovers Bancshares Corporation 30 South George Street York, PA 17401 717-843-1586 Q: If my shares are held in an IRA, who votes those shares? A. You vote shares held by you in an IRA as though you held those shares directly. -1-

Q1:What do I need to do now?

A:After you have carefully read this document, indicate on your proxy card how you want your shares to be voted, then sign and mail it in the enclosed prepaid return envelope as soon as possible, so that your shares may be represented and voted at the annual meeting to be held on May 9, 2003.

Q2:If my shares are held in “street name” by my broker, will my broker vote my shares for me?

A:Maybe. Your broker will vote your shares only if you provide instructions on how to vote. You should follow the directions provided by your broker. Without instructions, your shares will not be voted on the merger agreement.

Q3:Can I change my vote after I have mailed my signed proxy card?

A:Yes. There are three ways for you to revoke your proxy and change your vote. First, you may send a written notice to the person to whom you submitted your proxy stating that you would like to revoke your proxy. Second, you may complete and submit a new proxy card with a later date. Third, you may vote in person at the annual meeting. If you have instructed a broker to vote your shares, you must follow directions received from your broker to change your vote.

Q4:Should I send in my stock certificates now?

A:No. Shortly after the merger is completed, Fulton will send you written instructions for exchanging your stock certificates. Fulton will request that you return your Premier stock certificates at that time.

Q5:When do you expect to merge?

A:Fulton and Premier expect to complete the merger no later than the third quarter of 2003. In addition to the approval of Premier shareholders, Fulton must also obtain regulatory approvals. Fulton and Premier expect to receive all necessary approvals no later than the third quarter of 2003.

Q6:Who should I call with questions or to obtain additional copies of this document?

A:You should call either:

George R. Barr, Jr., Secretary

John J. Ginley, Secretary

Fulton Financial Corporation

Premier Bancorp, Inc.

One Penn Square

379 North Main Street

Lancaster, PA 17604

Doylestown, PA 18901

717-291-2411

215-345-5100

Q7:If my shares are held in an IRA, who votes those shares?

A.You vote shares held by you in an IRA as though you held those shares directly.

SUMMARY

This summary highlights selected information from this document. Because this is a summary, it does not contain all of the information that is important to you. To understand the merger fully, you should carefully read this entire document and the attached exhibits. See "Where“Where You Can Find More Information"Information” on page ___68 for reference to additional information available to you regarding Fulton Financial and Drovers. Premier.

The Companies (See page ________45 for Fulton, page ______49 for Drovers) Premier)

Fulton Financial Corporation

One Penn Square

Lancaster, Pennsylvania 17604

717-291-2411

Fulton Financial Corporation is a Pennsylvania business corporation and a registered financial holding company that maintains its headquarters in Lancaster, Pennsylvania. As a financial holding company, Fulton Financial engages in general commercial and retail banking and trust business, and also in related financial businesses, through its 1819 directly-held bank and nonbank subsidiaries. Fulton Financial'sFulton’s bank subsidiaries currently operate 112125 banking offices in Pennsylvania, 1619 banking offices in Maryland, six12 banking offices in Delaware, and 2637 banking offices in New Jersey. As of December 31, 2000,2002, Fulton Financial had consolidated total assets of approximately $6.6$8.4 billion. Four of Fulton Financial's bank subsidiaries recently entered into agreements with Sovereign Bank to purchase a total of 18 branches from Sovereign Bank which are located in New Jersey, Delaware and Pennsylvania. In the aggregate, approximately $310 million in deposits and $53 million in loans are associated with these 18 branches. Fulton Financial anticipates that the branch acquisitions will be completed in June, 2001, provided that related regulatory approval(s) are received prior thereto.

The principal assets of Fulton Financial are its eleventen wholly-owned bank subsidiaries: .

Fulton Bank, a Pennsylvania bank and trust company which is not a member of the Federal Reserve System; .

Lebanon Valley Farmers Bank, a Pennsylvania bank and trust company which is a member of the Federal Reserve System; .

Swineford National Bank, a national banking association which is a member of the Federal Reserve System; .

Lafayette Ambassador Bank, a Pennsylvania bank and trust company which is a member of the Federal Reserve System; .

FNB Bank, National Association, a national banking association which is a member of the Federal Reserve System; .

Hagerstown Trust Company, a Maryland trust company which is not a member of the Federal Reserve System; .

Delaware National Bank, a national banking association which is a member of the Federal Reserve System; .

The Bank, of Gloucester County, a New Jersey bank which is not a member of the Federal Reserve System; . The Woodstown National Bank & Trust Company, a national banking association which is a member of the Federal Reserve System; -2- .

The Peoples Bank of Elkton, a Maryland bank which is not a member of the Federal Reserve System; and .

Skylands Community Bank, a New Jersey bank which is not a member of the Federal Reserve System.

In addition, Fulton Financial has sevennine wholly-owned nonbank direct subsidiaries: .

Fulton Financial Realty Company, which holds title to or leases certain properties on which Fulton Bank maintains branch offices or other facilities; .

Fulton Life InsuranceReinsurance Company, LTD, which engages in the business of reinsuring credit life, accident and health insurance that is directly related to extensions of credit by Fulton Financial'sFulton’s bank subsidiaries; .

Central Pennsylvania Financial Corp., which owns certain non-banking subsidiaries holding interests in real estate and certain limited partnership interests in partnerships invested in low and moderate income housing projects; .

FFC Management, Inc., which owns certain securities and corporate owned life insurance policies; .

Fulton Financial Advisors, N.A.,National Association, a limited purpose national banking association with trust powers; .

Dearden, Maguire, Weaver and Barrett, Inc.,LLC, an investment management and advisory firm; and .

Fulton Insurance Services Group, Inc., an insurance agency. agency;

FFC Penn Square, Inc., which holds certain trust preferred securities; and

Drovers Bancshares Corporation 30 South GeorgeCapital Trust I, which issued certain trust preferred securities.

Premier Bancorp, Inc.

379 North Main Street York,

Doylestown, PA 17401 717-843-1586 Drovers,18901

215-345-5100

Premier, a Pennsylvania corporation, is the holding company for The Drovers & MechanicsPremier Bank, a Pennsylvania state chartered bank and trust company.bank. At December 31, 2000, Drovers2002, Premier had total consolidated assets of approximately $796$610 million, deposits of approximately $569$456 million and shareholders'shareholders’ equity of approximately $55$38 million. DroversPremier Bank has sixteenseven branches located in York County, Pennsylvania, one corporate banking office in Frederick County, Maryland,Bucks, Northampton and another corporate banking office in Cumberland County,Montgomery Counties, Pennsylvania. DroversPremier Bank is engaged principally in the business of taking deposits and making commercial loans, residential mortgage loans, commercial loans, consumer loans and home equity and property improvement loans. Drovers Bank has two wholly- owned subsidiaries: . 96 South George Street, Inc., which owns a building attached to Drovers Bank's main office which houses Drovers' corporate offices. . Drovers Investment Company, a Delaware investment holding company. Drovers Bank also owns 60% of the membership interests in Drovers Settlement Services, LLC, which offers real estate title insurance and settlement services. -3- In addition, DroversPremier has two wholly-owned non-bank subsidiaries: . Drovers Realty Company, which holds title to or leases property on which Drovers Bank maintains branch offices. . Droverssubsidiaries, PBI Capital Trust I,and Premier Capital Trust II.

Premier Bank also owns a Delaware trust subsidiary Drovers also holds an99% membership in, and Premier owns a 1% membership interest in, Pennbankseach of Lenders Abstract, LLC and Premier Bank Insurance Company, an offshore reinsurance company and a joint venture with seven other Pennsylvania banks. Services, LLC.

Agreement to Merge (See page _____) 18)

Fulton Financial and DroversPremier entered into a merger agreement on December 27, 2000.January 16, 2003. The merger agreement provides that each share of DroversPremier common stock outstanding on the effective date of the merger will be exchanged for 1.241.34 shares (subject to adjustment) of Fulton Financial common stock, and DroversPremier will merge with Fulton Financial.Fulton. A copy of the merger agreement is attached to this document as Exhibit A and is incorporated herein by reference.

Each DroversPremier Share Will Be Exchanged For 1.241.34 Shares Of Fulton Financial Common Stock (See page ____) 32)

If the merger is completed, you will receive 1.241.34 shares of Fulton Financial common stock for each share of DroversPremier common stock you own. Fulton Financial will not issue any fractional shares. DroversPremier common shareholders will receive a cash payment for any fractional shares based on the market price of Fulton Financial common stock during a period leading up to completion of the merger. On _______, 2001,, 2003, the closing price of Fulton Financial common stock was $____,$, making the

value of 1.241.34 shares of Fulton Financial common stock equal to $____ $on that date. Because the market price of Fulton Financial stock fluctuates, you will not know when you vote what the shares will be worth when issued in the merger.

If the average price of Fulton Financial common stock is below $19.50$11.18 for a ten day period just before the merger, Drovers may terminate the merger agreement unless Fulton Financial elects to increase the exchange ratio. Similarly,and if the price of Fulton Financial common stock is above $26.38 just beforehas also declined 20% more than the merger, Fulton Financialdecline (if any) in the average NASDAQ Bank Index for the same period as compared to the NASDAQ Bank Index on January 15, 2003, Premier may terminate the merger agreement unless Drovers elects to decrease the exchange ratio. In either case, neithermerger. Neither party would owe the other any penalty or fee as a result of termination of the merger agreement. The market price termination provisions will be based on an average of the closing bid and asked prices for the Fulton common stock for the ten (10) consecutive trading days immediately preceding the date which is two (2) business days prior to the closing date of the merger. See “Termination; Effect of Termination” on page 39.

No Federal Income Tax On Shares Received In Merger (See page _____) Drovers41)

Premier shareholders generally will not recognize gain or loss for federal income tax purposes for the shares of Fulton Financial common stock they receive in the merger. Fulton Financial'sFulton’s attorneys have issued a legal opinion to this effect, which is included as an exhibit to the registration statement filed with the SEC for the shares to be issued in the merger. DroversPremier shareholders will be taxed on cash received instead of any fractional share, or upon exercise of dissenters rights.share. Tax matters are complicated, and tax results may vary among shareholders. Fulton Financial and DroversPremier urge you to contact your own tax advisor to understand fully how the merger will affect you. Drovers

Premier Board Recommends Shareholder Approval (See page _____) 20)

The DroversPremier Board believes that the merger is in the best interests of DroversPremier and its shareholders and recommends that you vote "FOR"“FOR” approval of the merger agreement.

Exchange Ratio Is Fair From A Financial Point Of View According To Drovers'Premier’s Financial Advisor'Advisor (See page _____) Sandler O'Neill21)

Boenning & Partners, L.P.Scattergood, Inc. has given an opinion to the DroversPremier Board that, as of _________, 2001,January 16, 2003 and as of [date], the exchange ratio in the merger is fair from a financial point of view to Drovers'Premier’s shareholders. The full text of this opinion is attached as Exhibit C to this document. Fulton Financial and DroversPremier encourage you to read the opinion -4- carefully. DroversPremier has agreed to pay Sandler O'NeillBoenning & Scattergood, Inc. a fee equal to 0.8% of the aggregate consideration received by Drovers shareholders.approximately $915,000. A portion of this fee was paid upon engagement, a portion when the merger agreementfairness opinion was signed,issued and an additional portion will be paid upon approval of the merger agreement by Drovers shareholders, and the balance will be paid upon completion of the merger.

Vote Required To Approve Merger Agreement (See page _____) 17)

Approval of the merger agreement requires the affirmative vote of the holders of at least a majority66 2/3% of the votes cast at the special meeting.Premier’s outstanding common stock. The directors and executive officers of DroversPremier and their affiliates together beneficially own about ______%44.77% of Premier’s outstanding common stock as of March 31, 2003. The directors and executive officers of Premier have signed voting agreements pursuant to which they have agreed to vote their shares in favor of the shares entitled to be cast at the meeting. merger.

Brokers who hold shares of DroversPremier common stock as nominees will not have authority to vote such shares with respect to the merger unless shareholders provide them with voting instructions.

The merger does not require the approval of Fulton Financial'sFulton’s shareholders. Special

Annual Meeting To Be Held May 17, 20019, 2003 (See page _____) Drovers16)

Premier will hold the specialits annual meeting of shareholders on Thursday,Friday, May 17, 2001,9, 2003, at 9:00 a.m., local time, at The Historical Society of York County, 250 East Marketthe Doylestown Country Club, Green Street, York, Pennsylvania 17401. Doylestown, Pennsylvania.

At the meeting, you will vote on the election of five Class 2 directors, the merger agreement, a proposal to adjourn the meeting to solicit additional proxies, if necessary, in the event there are not sufficient votes at the time of the specialannual meeting to approve the merger agreement, and any other business that properly arises.

Record Date Set At [record date]; One Vote Per Share Of Drovers StockMarch 31, 2003; Voting (See page _____) 16)

You are entitled to vote at the specialannual meeting if you owned shares of DroversPremier common stock at the close of business on [record date] March 31, 2003,the record date. On [record date],March 31, 2003, there were _________3,417,515 shares of DroversPremier common stock outstanding. You will have one vote at the meeting for each share of DroversPremier common stock you owned on [record date]March 31, 2003 for all matters except the election of directors, for which you are entitled to exercise cumulative voting rights.

Conditions That Must Be Satisfied For The Merger To Occur (See page _____) 33)

The following conditions must be met for Fulton Financial and DroversPremier to complete the merger in addition to other customary conditions: .

approval of the merger by Drovers'Premier’s shareholders; .

the absence of legal restraints that prevent the completion of the merger; .

receipt of a legal opinion that the merger will be tax-free to shareholders, except for any cash received in lieu of fractional shares; .

the continuing accuracy of the parties'parties’ representations in the merger agreement; . Arthur Andersen, LLP delivers its opinion that the merger can be accounted for as a pooling

receipt of interests;all required regulatory approvals; and .

the continuing effectiveness of the registration statement filed with the SEC.

Regulatory Approvals Required (See page _____) 40)

Fulton Financial and DroversPremier cannot complete the merger unless Fulton Financial obtains the approvals of the Federal Reserve Board and the Pennsylvania Department of Banking. Fulton Financial has filed the required -5- applications and notices seeking approval of the merger. Although Fulton Financial and DroversPremier believe regulatory approvals will be received in a timely manner, Fulton Financial and DroversPremier cannot be certain when or if they will be obtained.

Termination And Amendment Of The Merger Agreement (See page _____) Drovers39)

Premier and Fulton Financial can mutually agree at any time to terminate the merger agreement without completing the merger. Either party can also terminate the merger agreement in the following circumstances: .

if any condition precedent to a party'sparty’s obligations under the merger agreement is unsatisfied on September 30, 2001,2003, through no fault of the other party; . party, provided that this date may be extended until December 31, 2003, if closing has not occurred because regulatory approval has not then been received;

if the other party has materially breached a representation, warranty or covenant and has not cured such breach within thirty days of receiving written notice of the breach; or .

the market price of Fulton Financial common stock for a ten day period just before the merger is $11.18, and the decline in Fulton Common Stock is at least 20% greater than $26.38 (in Fulton Financial's case), unless Drovers elects to decrease the exchange ratio, or less than $19.50 (in Drovers' case), unless Fulton Financial elects to increase the exchange ratio. decline, if any, generally experienced in bank stocks as measured against an index.

In addition, Fulton Financial may terminate the merger agreement if Drovers'Premier’s Board of Directors exercises its fiduciary duty with respect to a proposed acquisition of DroversPremier by someone other than Fulton.

Fulton Financial. Fulton Financial and DroversPremier can agree to amend the merger agreement in any way, except that after the shareholders'shareholders’ meeting they cannot decrease the consideration you will receive in the merger except, as noted above, in the event Drovers' Board of Directors elects to decrease the exchange ratio in the event the market price of Fulton Financial common stock just before the merger is greater than $26.38.merger. Either company can waive any of the

requirements of the other company in the merger agreement, except that neither company can waive any required regulatory approval. Dissenters'

No Dissenters’ Rights Of Appraisal'Appraisal (See page _____) Drovers'42)

Premier’s shareholders are not entitled to exercise dissenters'dissenters’ rights assuming the merger is consummated, in accordance withunder the provisions of Subchapter D of Chapter 15 of the Pennsylvania Business Corporation Law of 1988, as amended, a copy of which is attached to this document as Exhibit D. amended.

Fulton Financial has the right to terminate the merger agreement if Drovers' shareholders exercise dissenters' rights with respect to 10% or more of the Drovers common stock. Additionally, the exercise of such rights by holders of an aggregate of 10% or more of the Drovers common stock could affect the ability of Fulton Financial to use "pooling of interests" accounting treatment. Fulton Financial To Use Pooling Accounting Treatment (See page _____) Fulton Financial will account for the merger as a pooling of interests for accounting and financial reporting purposes. Fulton Financial To Continue As Surviving Corporation (See page _____) 31)

Fulton Financial will continue as the surviving corporation after the merger. The Boards of Directors and executive officers of Fulton Financial and its subsidiaries will not change as a result of the merger, except that: .

Fulton Financial will appoint to its Board of Directors twoone of Drovers'Premier’s current directors who will serve until Fulton’s 2004 annual meeting, and Fulton will nominate such person to serve for a three year term at least one 3-year term; . Fulton Bank will appoint to its Board of Directors three other of Drovers' current directors for at least three consecutive 1- year terms; -6- . Drovers' current President, A. Richard Pugh, will join Fulton Bank's senior management team and other Drovers officers will be integrated into Fulton Bank's current management structure; and . such meeting;

All of DroversPremier Bank’s current directors are expected to serveremain on a York regional advisory board of Fulton Bank for at least three yearsPremier Bank’s Board following the anticipated merger of Drovers Bank with and into Fulton Bank. merger.

Your Rights As Shareholders Will Change After The Merger (See page _____) 65)

Upon completion of the merger, you will become a shareholder of Fulton Financial. Fulton Financial'sFulton. Fulton’s Articles of Incorporation and Bylaws and Pennsylvania law determine the rights of Fulton Financial'sFulton’s shareholders. The rights of shareholders of Fulton Financial differ in certain respects from the rights of shareholders of Drovers. Premier.

Warrant Agreement (See page _____) 37)

In connection with the merger agreement, and to discourage other companies from acquiring Drovers, DroversPremier granted Fulton Financial a warrant to purchase up to 1,250,000835,000 shares of DroversPremier common stock at an exercise price of $19.75$17.85 per share. The warrant acts to discourage other companies from acquiring Premier and provides compensation to Fulton in the event that the merger falls through because another party gains control of Premier. Generally, Fulton Financial may exercise this warrant only if another party seeks to gain control of Drovers.Premier. We do not believe that any of the events which would permit Fulton Financial to exercise the warrant have occurred as of the date of this document.

The warrant agreement and warrant are attached to this document as Exhibit B.

Interests of Certain PersonsInPersons In The Merger (See page _____) 43)

When considering the recommendation of the DroversPremier Board, you should be aware that some directors and officers have interests in the merger which may conflict with their interests as shareholders. These interests include: . Drovers'

Each of Premier’s current Chairman, Clark S. Frame, President and Chief Executive Officer, A. Richard Pugh hasJohn C. Soffronoff, and Senior Vice President and Secretary, John J. Ginley, have entered into an employment agreementagreements with FultonPremier Bank that provides him with employment by Fulton Bankwill become effective upon completion of the merger (Drovers Bankmerger. These employment agreements will be merged with Fulton Bank, with Fulton Bank surviving, shortly following completion of the merger of Fulton Financial and Drovers). This employment agreement will replace an existing change in control agreementagreements which Mr. Pugheach of Messers. Soffronoff and Ginley had with Drovers; . Officers and directors hold stock options to purchase Drovers stock that will convert into options to purchase Fulton Financial stock. As of ______, 2001, the difference between the aggregate exercise price and the market value of the shares underlying the options held by executive officers and directors, which represents the economic value of the options, was $___ million; . Premier;

Officers and directors hold stock options to purchase Premier stock that will convert into options to purchase Fulton stock. As of, 2003, the difference between the aggregate exercise price and the market value of the shares underlying the options held by executive officers and directors, which represents the economic value of the options, was approximately $; and

Following the merger, Fulton Financial will indemnify, and provide liability insurance to, directors of Drovers; and . In whatever capacity (whether on the Fulton Financial board, the Fulton Bank board or the Drovers regional advisory board), Drovers' directors serve following completion of the merger, they will be entitled, under the merger agreement, to receive fees that are at least as much as they are currently receiving from Drovers. Premier.

Forward Looking Information

This document contains and incorporates some "forward-looking statements"“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding intent, belief or current expectations about matters including statements as to "beliefs," "expectations," "anticipations," "intentions"“beliefs,” “expectations,” “anticipations,” “intentions” or similar words. Forward-looking -7- statements are also statements that are not statements of historical fact. Forward-looking statements are subject to risks, uncertainties and assumptions. These include, by their nature: .

the effects of changing economic conditions in Fulton Financial'sFulton’s and Drovers'Premier’s market areas and nationally; .

credit risks of commercial, real estate, consumer and other lending activities; .

significant changes in interest rates; .

changes in federal and state banking laws and regulations which could impact operations; .

funding costs; .

other external developments which could materially affect the business and operations of Fulton Financial and Drovers; and . Premier;

the ability of Fulton Financial to assimilate DroversPremier after the merger. merger; and

other risks detailed from time to time in Premier’s and Fulton’s SEC filings, including forms 10-Q and 10-K.

If one or more of these risks or uncertainties occurs or if the underlying assumptions prove incorrect, actual results, performance or achievements in 20012003 and beyond could differ materially from those expressed in, or implied by, the forward-looking statements.

Share Information And Market Prices

Fulton Financial common stock trades on the National Market System of the NASDAQ Stock Market under the symbol "FULT"“FULT”. DroversPremier common stock trades on the NASDAQ National MarketAmerican Stock Exchange under the trading symbol "DROV"“PPA”. The following table below shows the last sale prices of Fulton Financial common stock, DroversPremier common stock and the equivalent price per share of DroversPremier common stock based on the exchange ratio on December 26, 2000January 15, 2003 and _________, 2001. , 2003.

On December 26, 2000,January 15, 2003, the last trading day before public announcement of the merger agreement, the per share closing price for Fulton Financial common stock was $22.94.$18.64. Based on such closing price for such date and the conversion ratio of 1.241.34 shares of Fulton Financial common stock for each share of DroversPremier common stock, the pro forma value of the shares of Fulton Financial common stock to be received in exchange for each share of DroversPremier common stock was $28.45. $24.98.

On December 26, 2000,January 15, 2003, the last trading day before public announcement of the merger agreement, the per share closing price for DroversPremier common stock was $19.75. $17.85.

The foregoing historical and pro forma equivalent per share market information is summarized in the following table. -8- Historical Pro Forma Price Per Share Equivalent Price Per Share - ------------------------------------------------------------------------------- Fulton Financial Common Stock - ------------------------------------------------------------------------------- Closing Price on December 26, 2000 $22.94 N/A - ------------------------------------------------------------------------------- Closing Price on __________, 2001 N/A - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Drovers Common Stock - ------------------------------------------------------------------------------- Closing Price on December 26, 2000 $19.75 $28.45(1) - ------------------------------------------------------------------------------- Closing Price on __________, 2001 - -------------------------------------------------------------------------------

     

Historical

Price Per Share


    

Pro Forma

Equivalent

Price Per Share1


Fulton Common Stock

            

Closing Price on January 15, 2003

    

$

18.64

    

 

N/A

Closing Price on            , 2003

          

 

N/A

Premier Common Stock

            

Closing Price on January 15, 2003

    

$

17.85

    

$

24.98

Closing Price on            , 2003

          

$

 

The market prices of both Fulton Financial and DroversPremier common stock will fluctuate prior to the merger. You should obtain current market quotations for Fulton Financial common stock and DroversPremier common stock.

Comparative Per Share Data

Fulton Financial and DroversPremier have summarized below the per share information for each company on an historical, pro forma combined and equivalent basis. You should read this information in conjunction with the historical financial statements and the related notes contained in the annual and quarterly reports and other documents Fulton Financial and DroversPremier have filed with the SEC or attached to this document. See "Where“Where You Can Find More Information"Information” on page ____.68. The Fulton Financial pro forma information gives effect to the merger, accounted for as a pooling-of-interests, assuming that 1.241.34 shares of Fulton Financial common stock are issued for each outstanding share of DroversPremier common stock. - ---------- (1) Based upon the product of the Conversion Ratio (1.24) and the closing price of Fulton Financial common stock on December 26, 2000 and __________________, 2001. -9-


1Based upon the product of the Conversion Ratio (1.34) and the closing price of Fulton common stock on January 15, 2003 and, 2003, respectively.

Selected Historical and Pro Forma

Combined Per Share Data (A) (Shares in thousands)

Fulton


As of or for the Year Ended
December 31, 2002


Historical Per Common Share:

Average Shares Outstanding (Basic)

102,636,000

Average Shares Outstanding (Diluted)

103,309,000

Book Value

$8.54  

Cash Dividends

$0.586

Net Income (Basic)

$1.30  

Net Income (Diluted)

$1.29  

Fulton, Premier Combined

Pro Forma Per Common Share:

Average Shares Outstanding (Basic)

107,145,726

Average Shares Outstanding (Diluted)

107,990,579

Book Value

$9.03  

Cash Dividends

$0.586

Net Income (Basic)

$1.253

Net Income (Diluted)

$1.243


(A)The above combined pro forma per share equivalent information is based on average shares outstanding during the period except for the book value per share which is based on period end shares outstanding. Financial information reflects the acquisition of Premier accounted for under the purchase method of accounting applied to historical financial information as of and for the year ended December 31, 2002. Per share dividends reflect Fulton’s historic payment history. Net income utilized in the calculation of income per share does not reflect any anticipated expense savings, revenue enhancements or capital restructuring anticipated by Fulton as a result of this transaction.

Selected Historical and Pro Forma

Combined Per Share Data (A)

Premier


As of or for the Year Ended December 31, ---------------------------------------- 2000 1999 1998 ---- ---- ---- 2002


Historical Per Common Share: - ---------------------------- Share:

Average Shares Outstanding (Basic) 71,242 72,422 72,415

3,365,467

Average Shares Outstanding (Diluted) 71,654 72,828 73,170

3,493,716

Book Value $ 9.45 $ 8.54 $ 8.37

  $7.81  

Cash Dividends $ 0.623 $ 0.558 $ 0.504

  $0.00  

Net Income (Basic) $ 1.46 $ 1.34 $ 1.22

  $1.26  

Net Income (Diluted) $ 1.45 $ 1.33 $ 1.21 Fulton Financial, Drovers Combined - ----------------------------------

  $1.22  

Equivalent Pro Forma Per Common Share: --------------------------- Average Shares Outstanding (Basic) 77,551 78,731 78,724 Average Shares Outstanding (Diluted) 77,963 79,137 79,479 Share:

Book Value

$12.10

Cash Dividends

  $  9.21 $ 8.35 $ 8.16 Cash Dividends $ 0.623 $ 0.558 $ 0.504 0.785

Net Income (Basic)

  $  1.38 $ 1.33 $ 1.21 1.68  

Net Income (Diluted)

  $  1.37 $ 1.32 $ 1.20 1.67  

- ---------- (A) The above combined pro forma per share
(A)The above combined pro forma per-share equivalent information is based on average shares outstanding during the period except for the book value per share which is based on period end shares outstanding. The number of shares in each case has been adjusted for stock dividends and stock splits by each institution through the periods. The combined pro forma information is based on the historical information of both Fulton Financial and Drovers adjusted to reflect this transaction being accounted for on a pooling basis. -10- Selected Historical and Pro Forma Combined Per Share Data (A) (Shares in thousands)
Drovers As of or for the Year Ended December 31, ---------------------------------------- 2000 1999 1998 ---- ---- ---- Historical Per Common Share: - ---------------------------- Average Shares Outstanding (Basic) 5,060 4,939 4,912 Average Shares Outstanding (Diluted) 5,096 4,993 4,986 Book Value $10.84 $10.15 $ 9.78 Cash Dividends $ 0.51 $ 0.46 $ 0.42 Net Income (Basic) $ 0.61 $ 1.54 $ 1.39 Net Income (Diluted) $ 0.61 $ 1.52 $ 1.37 Equivalent Probook value per share which is based on period end shares outstanding. The number of shares in each case has been adjusted for stock dividends and stock splits by each institution through the periods. The equivalent pro forma Per Common Share: - -------------------------------------- Book Value $11.64 $10.60 $10.41 Cash Dividends $0.773 $0.692 $0.625 Net Income (Basic) $ 1.71 $ 1.65 $ 1.51 Net Income (Diluted) $ 1.70 $ 1.64 $ 1.49
- ---------- (A) The above combined pro forma per-share equivalent information is based on average shares outstanding during the period except for the book value per share which is based on period end shares outstanding. The number of shares in each case has been adjusted for stock dividends and stock splits by each institution through the periods. The equivalent pro forma per common share information is derived by applying the exchange ratio of 1.24per common share information is derived by applying the exchange ratio of 1.34 shares of Fulton $2.50 per share par value common stock for each Premier $0.33 per share par value common stock to the Fulton, Premier combined pro forma per common share information.

Selected Financial $2.50 par value common stock for each Drovers no par value common stock to the Fulton Financial, Drovers combined pro forma per common share information. -11- SELECTED FINANCIAL DATA Data

The following tables show certain historical consolidated summary financial data for both Fulton Financial and Drovers.Premier. This information is derived from the consolidated financial statements of Fulton Financial and DroversPremier incorporated by reference in, or included with, this document. See "Where“Where You Can Find More Information"Information” on page __. 68.

Fulton Financial Corporation

Selected Historical Financial Data (In

(In thousands, except per share data) FOR THE YEAR 2000 1999 1998 1997 1996 - ------------------------------------------------------------------------------------------------------------------------------ Interest income $ 462,581 $ 418,730 $ 409,234 $ 387,248 $ 353,636 Interest expense 210,481 174,827 177,694 168,153 151,437 ---------- ---------- ---------- ---------- ---------- Net interest income 252,100 243,903 231,540 219,095 202,199 Provision for loan losses 8,645 8,216 5,582 8,417 5,951 Other income 69,611 61,358 58,293 48,713 41,653 Other expenses 165,022 159,340 155,908 149,538 144,174 ---------- ---------- ---------- ---------- ---------- Income before income taxes 148,044 137,705 128,343 109,853 93,727 Income taxes 44,240 40,479 39,832 33,448 27,815 ---------- ---------- ---------- ---------- ---------- Net income $ 103,804 $ 97,226 $ 88,511 $ 76,405 $ 65,912 ========== ========== ========== ========== ========== PER-SHARE DATA - ------------------------------------------------------------------------------------------------------------------------------ Net income (basic) $ 1.46 $ 1.34 $ 1.22 $ 1.06 $ 0.92 Net income (diluted) 1.45 1.33 1.21 1.04 0.91 Cash dividends 0.623 0.558 0.504 0.431 0.381 AT YEAR END - ------------------------------------------------------------------------------------------------------------------------------ Total assets $6,571,155 $6,070,019 $5,838,663 $5,377,654 $4,936,072 Net loans 4,806,498 4,364,776 3,972,976 3,904,087 3,535,202 Deposits 4,934,405 4,546,813 4,592,969 4,418,543 4,072,400 Long-term debt 441,973 328,250 296,018 53,045 67,498 Shareholders' equity 679,336 614,294 608,334 564,491 500,294 AVERAGE BALANCES - ------------------------------------------------------------------------------------------------------------------------------ Average Shareholders' equity $ 623,780 $ 615,928 $ 87,552 $ 523,252 $ 475,243 Average Total assets 6,270,397 5,890,621 5,535,447 5,117,365 4,725,999
-12- Drovers Bancshares Corporation

FOR THE YEAR

  

2002


  

2001


  

2000


  

1999


  

1998


Interest income

  

$

469,288

  

$

518,680

  

$

519,661

  

$

465,221

  

$

450,195

Interest expense

  

 

158,219

  

 

227,962

  

 

243,874

  

 

199,128

  

 

199,430

   

  

  

  

  

Net interest income

  

 

311,069

  

 

290,718

  

 

275,787

  

 

266,093

  

 

250,765

Provision for loan losses

  

 

11,900

  

 

14,585

  

 

15,024

  

 

9,943

  

 

6,848

Other income

  

 

115,783

  

 

102,744

  

 

76,980

  

 

68,002

  

 

65,999

Other expenses

  

 

225,536

  

 

218,921

  

 

186,472

  

 

177,026

  

 

173,274

   

  

  

  

  

Income before income taxes

  

 

189,416

  

 

159,956

  

 

151,271

  

 

147,126

  

 

136,642

Income taxes

  

 

56,468

  

 

46,367

  

 

44,437

  

 

42,499

  

 

41,635

   

  

  

  

  

Net income

  

$

132,948

  

$

113,589

  

$

106,834

  

$

104,627

  

$

95,007

   

  

  

  

  

PER-SHARE DATA

                    

Net income (basic)

  

$

1.30

  

$

1.10

  

$

1.05

  

$

1.02

  

$

0.92

Net income (diluted)

  

 

1.29

  

 

1.09

  

 

1.05

  

 

1.01

  

 

0.92

Cash dividends

  

 

0.586

  

 

0.530

  

 

0.426

  

 

0.426

  

 

0.384

AT YEAR END

                    

Total assets

  

$

8,387,778

  

$

7,770,711

  

$

7,364,804

  

$

6,787,424

  

$

6,433,612

Net loans

  

 

5,317,068

  

 

5,373,020

  

 

5,374,659

  

 

4,882,606

  

 

4,420,481

Deposits

  

 

6,245,528

  

 

5,986,804

  

 

5,502,703

  

 

5,051,512

  

 

5,048,924

Long-term debt

  

 

535,555

  

 

456,802

  

 

559,503

  

 

460,573

  

 

358,696

Shareholders’ equity

  

 

863,742

  

 

811,454

  

 

731,171

  

 

662,749

  

 

654,070

AVERAGE BALANCES

                    

Shareholders’ equity

  

$

838,213

  

$

779,014

  

$

673,971

  

$

663,841

  

$

633,056

Total assets

  

 

7,900,500

  

 

7,520,071

  

 

7,019,523

  

 

6,533,632

  

 

6,093,496

Premier Bancorp, Inc.

Selected Historical Financial Data (In

(In thousands, except for per share data) FOR THE YEAR 2000 1999 1998 1997 1996 - ------------------------------------------------------------------------------------------------------------------------------- Interest income $ 56,663 $ 46,562 $ 40,991 $ 36,267 $ 30,055 Interest expense 33,338 24,286 21,736 19,254 14,791 ---------- ---------- ---------- ---------- ---------- Net interest income 23,325 22,276 19,255 17,013 15,264 Provision for loan losses 6,379 1,727 1,266 386 645 Other income 5,707 5,349 5,408 3,953 3,364 Other expenses 19,763 16,751 15,231 13,234 12,050 ---------- ---------- ---------- ---------- ---------- Income before income taxes 2,890 9,147 8,166 7,346 5,933 Income taxes (218) 1,546 1,356 1,715 1,084 ---------- ---------- ---------- ---------- ---------- Net income $ 3,108 $ 7,601 $ 6,810 $ 5,631 $ 4,849 ========== ========== ========== ========== ========== PER-SHARE DATA - ------------------------------------------------------------------------------------------------------------------------------- Net income (basic) $ 0.61 $ 1.54 $ 1.39 $ 1.15 $ 0.99 Net income (diluted) 0.61 1.52 1.37 1.14 0.99 Cash dividends 0.51 0.46 0.42 0.35 0.33 AT YEAR END - ------------------------------------------------------------------------------------------------------------------------------- Total assets $796,257 $720,108 $597,793 $524,892 $446,713 Net loans 502,526 456,293 386,197 310,369 279,987 Deposits 568,628 505,134 457,672 402,086 360,204 Long-term debt 110,308 102,737 62,830 43,558 29,385 Shareholders' equity 55,165 51,200 48,193 43,470 38,092 AVERAGE BALANCES - ------------------------------------------------------------------------------------------------------------------------------- Average Shareholders' equity $ 52,837 $ 50,158 $ 46,350 $ 40,556 $ 36,429 Average total assets 751,997 645,334 559,172 491,237 404,621
-13-

   

2002


  

2001


  

2000


  

1999


  

1998


For the Year

                    

Interest income

  

$

32,794

  

$

29,651

  

$

26,693

  

$

21,929

  

$

16,516

Interest expense

  

 

15,265

  

 

16,625

  

 

15,294

  

 

11,420

  

 

8,922

   

  

  

  

  

Net interest income

  

 

17,529

  

 

13,026

  

 

11,399

  

 

10,509

  

 

7,594

Provision for loan losses

  

 

870

  

 

818

  

 

528

  

 

719

  

 

505

Other income

  

 

937

  

 

594

  

 

319

  

 

124

  

 

357

Other expenses

  

 

10,953

  

 

9,405

  

 

8,454

  

 

6,744

  

 

4,903

   

  

  

  

  

Income before income taxes

  

 

6,643

  

 

3,397

  

 

2,736

  

 

3,170

  

 

2,543

Income taxes

  

 

1,929

  

 

863

  

 

675

  

 

765

  

 

788

   

  

  

  

  

Net income

  

$

4,714

  

$

2,534

  

$

2,061

  

$

2,405

  

$

1,755

   

  

  

  

  

LESS: preferred stock dividends

  

$

468

  

$

—  

  

$

—  

  

$

—  

  

$

—  

   

  

  

  

  

Net income applicable to common shareholder

  

$

4,246

  

$

2,534

  

$

2,061

  

$

2,405

  

$

1,755

   

  

  

  

  

Per—Share Data

                    

Net income (basic)

  

$

1.26

  

$

0.79

  

$

0.67

  

$

0.80

  

$

0.67

Net income (diluted)

  

 

1.22

  

 

0.74

  

 

0.60

  

 

0.70

  

 

0.56

Cash dividends

  

 

—  

  

 

—  

  

 

—  

  

 

—  

  

 

—  

At Year End

                    

Total assets

  

$

609,972

  

$

450,569

  

$

355,201

  

$

318,660

  

$

249,193

Net loans

  

 

355,598

  

 

310,876

  

 

235,552

  

 

196,121

  

 

138,100

Deposits

  

 

456,486

  

 

358,282

  

 

303,293

  

 

237,481

  

 

191,226

Long-term debt

  

 

60,000

  

 

30,000

  

 

—  

  

 

—  

  

 

15,000

Subordinated debt

  

 

1,500

  

 

3,500

  

 

1,500

  

 

1,500

  

 

1,500

Shareholders’ equity

  

 

38,436

  

 

19,609

  

 

16,455

  

 

12,647

  

 

11,767

Average Balances

                    

Shareholders’ equity

  

$

29,297

  

$

18,549

  

$

13,510

  

$

13,671

  

$

10,933

Total assets

  

 

525,217

  

 

399,102

  

 

339,758

  

 

291,040

  

 

214,118

RISK FACTORS

An investment in the Fulton common stock in connection with the merger involves certain risks. In addition to the other information contained in this proxy statement/prospectus, you should carefully consider the following risk factors in deciding whether to vote for approval of the merger agreement.

RISK FACTORS RELATED TO THE SPECIALMERGER

Fluctuations in Market Price of Fulton Common Stock May Cause the Value of the Merger Consideration to Decrease and Premier’s Board of Directors may abandon the merger.

Upon completion of the merger, your shares of Premier common stock will be converted into shares of Fulton common stock. While the merger consideration has been structured to provide that Premier shareholders will receive for each of their shares of Premier common stock, 1.34 shares of Fulton common stock, the value of 1.34 shares of Fulton common stock at the time of the merger is uncertain. Stock price changes may result from a variety of factors that are beyond the control of Fulton, including, among other things, changes in Fulton’s business, operations and prospects, regulatory considerations and general market and economic conditions.

Although the aggregate market value of the Fulton common stock that you will receive in the merger is fixed within certain limits, Premier will have the right to terminate the merger agreement and abandon the merger before the closing if:

The average trading price for Fulton common stock for the 10 consecutive days immediately preceding the date which is two business days before the effective date of the merger is less than $11.18 per share; and

The average trading price for Fulton common stock for the 10 consecutive days immediately preceding the date which is two business days before the effective date of the merger is less than the amount per share equal to $18.64 multiplied by .80 multiplied by the quotient of the Average NASDAQ Bank Index for the 10 trading days immediately preceding the two business days prior to the effective date over the NASDAQ Bank Index on January 15, 2003.

Accordingly, at the time you vote with respect to the merger, you will not know the market value or the number of the shares of Fulton common stock that you will receive in the merger nor will you know whether Premier’s Board of Directors will opt to terminate the merger agreement if the above conditions occur.

The price of Fulton common stock may vary from its price on the date of this proxy statement/prospectus, the date of the Premier annual meeting and the date for determining the average trading price discussed above. Because the date the merger is completed will be later than the date of the annual meeting, the price of the Fulton common stock on the date of the annual meeting may not be indicative of its price on the date the merger is completed.

You Will Have Less Influence as a Shareholder of Fulton Than as a Shareholder of Premier.

As a Premier shareholder, you currently have the right to vote in the election of the board of directors of Premier and on other matters affecting Premier. The merger will transfer control of Premier to Fulton and to the shareholders of Fulton. When the merger occurs, you will become a shareholder of Fulton with a percentage ownership of Fulton that is smaller than your percentage ownership of Premier. Because of this, you will have less influence on the management and policies of Fulton than you now have on the management and policies of Premier.

THE ANNUAL MEETING

We are providing this document to holders of DroversPremier common stock to solicit your proxy for use at the specialannual meeting of DroversPremier shareholders and any adjournments or postponements of the meeting.

Time, Date Time Andand Place Drovers

The annual meeting of Premier’s shareholders will hold the special meeting at The Historical Society of York County, 250 East Market Street, York, Pennsylvania 17401be held at 9:00 a.m., local time, on Friday, May 17, 2001. 9, 2003, at the Doylestown Country Club, located at Green Street, Doylestown, Pennsylvania 18901.

Matters To Beto be Considered At

The Special Meeting Atpurposes of the specialannual meeting holdersare to elect five Class 2 directors to the Board of Drovers common stock willDirectors, to consider and vote upon proposals to: . approve and adopt the merger agreement; .agreement, to approve a proposal to adjourn the meeting if more time is needed to solicit proxies;proxies and .to transact anysuch other business thatas may properly be broughtcome before the specialannual meeting or any adjournmentsadjournment or postponement of the annual meeting. At this time, the Premier board of directors is unaware of any matters, other than set forth in the preceding sentence, that may be presented for action at the annual meeting.

A vote for approval of the merger agreement is a vote for approval of the merger of DroversPremier into Fulton Financial and for the exchange of DroversPremier common stock for Fulton Financial common stock. If the merger is completed, DroversPremier common stock will be cancelled and you will receive 1.241.34 shares (subject to adjustment)adjustment for stock splits, stock dividends and similar matters) of Fulton Financial common stock in exchange for each share of DroversPremier common stock that you hold. Fulton Financial will pay cash in lieu of issuing any fractional share interests to you.

Shares Outstanding and Entitled to Vote; Record Date; Stock Entitled To Vote; Quorum You are entitleDate

The close of business on March 31, 2003 has been fixed by Premier’s board of directors as the record date for the determination of holders of Premier common stock entitled to notice of and to vote at the Drovers' specialannual meeting if you own Drovers common stockand any adjournment or postponement of the annual meeting. At the close of business on ________________, 2001, the record date. On [record date], ____________date, 3,417,515 shares of DroversPremier common stock were outstanding and entitled to vote. Each share of Premier common stock entitles the holder to one vote at the annual meeting on all matters properly presented at the annual meeting, except for the election of five (5) Class 2 directors, where cumulative voting is permitted.

How to Vote Your Shares

Shareholders of record may vote by mail or by attending the annual meeting and voting in person. If you choose to vote by mail, simply mark the enclosed proxy card, date and sign it, and return it in the postage paid envelope provided.

If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from the holder of record that you must follow in order for your shares to be voted. Also, please note that if the holder of record of your shares is a broker, bank or other nominee and you wish to vote in person at the annual meeting, you must bring a letter from the broker, bank or other nominee confirming that you are the beneficial owner of the shares.

Any shareholder executing a proxy may revoke it at any time before it is voted by:

delivering to the Secretary of Premier prior to the annual meeting a written notice of revocation addressed to John J. Ginley, Corporate Secretary, Premier Bancorp, Inc., 379 North Main Street, Doylestown, Pennsylvania 18901;

delivering to Premier prior to the annual meeting a properly executed proxy with a later date; or

attending the annual meeting and voting in person.

Attendance at the annual meeting will not, in and of itself, constitute revocation of a proxy.

Each proxy returned to Premier (and not revoked) by the holder of Premier common stock will be voted in accordance with the instructions indicated thereon. If no instructions are indicated, the proxy will be votedFOR election of each of the nominees,FOR approval and adoption of the merger agreement, andFOR each proposal.

At this time, the Premier board of directors is unaware of any matters, other than set forth above, that may be presented for action at the annual meeting or any adjournment or postponement of the annual meeting. If other matters are properly presented, however, the persons named as proxies will vote in accordance with their judgment with respect to such matters. The persons named as proxies by a shareholder may propose and vote for one or more adjournments or postponements of the annual meeting to permit additional solicitation of proxies in favor of approval and adoption of the merger agreement, but no proxy voted against the merger agreement will be voted in favor of any such adjournment or postponement.

Vote Required

A quorum, consisting of the holders of a majority of the issued and outstanding and held by approximately ________ holdersshares of record. A quorum requires the presence,Premier common stock, must be present in person or by proxy before any action may be taken at the annual meeting. Abstentions will be treated as shares that are present for purposes of shareholdersdetermining the presence of a quorum but will not be counted in the voting on a proposal.

Cumulative voting rights exist only with respect to the election of directors. This means that each shareholder has the number of votes equal to the number of directors to be elected multiplied by the number of shares owned and is entitled to cast at leastthe whole number of votes for one nominee or to distribute them among two or more nominees, as the shareholder determines. The proxy holders also have the right to vote cumulatively and to distribute their votes among nominees as they consider advisable, unless a shareholder indicates on his or her proxy how he or she desires the votes to be cumulated for voting purposes. On all other matters to come before the annual meeting, each share of common stock is entitled to one vote for each share owned.

If a quorum is present, the five nominees for Class 2 Director receiving a majority of the votes which allcast by the shareholders of Drovers are entitled to vote will be elected. The proxy holders will not cast votes withheld or broker non-votes for or against any director nominees.

The affirmative vote of 66 2/3% of the outstanding shares of Premier common stock, in person or by proxy, is necessary to approve and adopt the merger agreement on the record date. Droversbehalf of Premier.

Premier intends to count the following shares as present at the special meeting for the purpose of determining a quorum: . shares of DroversPremier common stock present in person at the specialannual meeting but not voting; .voting, and shares of DroversPremier common stock represented byfor which it has received proxies onbut with respect to which the shareholder hasholders of such shares have abstained on any matter;matter, as “present” at the annual meeting for purposes of determining whether a quorum exists. Because approval and . shares of Drovers common stock represented by proxies from a broker with no indication of how the shares are to be voted. Votes Required Approvaladoption of the merger agreement requires the affirmative vote of 66 2/3% of the outstanding shares of Premier common stock, such nonvoting shares and abstentions will not be counted in determining whether or not the required number of shares have been voted to approve and adopt the merger agreement. Therefore, they will effectively act as a majorityvote against the merger. In addition, under applicable rules, brokers who hold shares of votes cast onPremier common stock in street name for customers who are the beneficial owners of such shares are prohibited from giving a proxy to vote shares held for such customers in favor of the approval of the merger agreement proposalwithout specific instructions to that effect from such customers. Accordingly, shares held by customers who fail to provide instructions with respect to their shares of Premier common stock to their broker will not be voted for or against the merger. However, failing to vote effectively acts as a vote against the merger agreement. Such “broker non-votes,” if any, will be counted as present for determining the presence or absence of a quorum for the transaction of business at the special meeting. Approvalannual meeting or any adjournment or postponement thereof.

The directors and executive officers of Premier collectively owned approximately 44.77% of the proposal to adjourn the special meeting, if necessary, requires the affirmative voteoutstanding shares of a majority of the votes cast at the special meeting. -14- You have one vote for each share of DroversPremier common stock that you hold of record on each matter to be considered at the special meeting. Asas of the record date for the specialannual meeting (inclusive of stock options exercisable within 60 days). Premier’s directors and executive officers of Drovers and their affiliates beneficially owned and were entitledhave entered into Voting Agreements with Fulton pursuant to which they have agreed to vote approximately _____________all of their shares of Drovers common stock, or approximately _____% of the shares of Drovers common stock outstanding on the record date. In addition, as of the record date, the trust department of Drovers' Bank held ___ shares as trustee for various clients. It is anticipated that these trust department shares will be voted in favor of approval and adoption of the merger agreement. Voting Of Proxies Drovers will vote shares represented by all properly executed proxies received in time for the special meeting in the manner specified on each proxy. Drovers will vote properly executed proxies that do not contain voting instructions in favor of the merger agreementagreement. See “Security Ownership of Certain Beneficial Owners and Management,” beginning on page 61.

Solicitation of Proxies

Premier will pay for the costs of mailing this document to its shareholders, as well as all other costs incurred by it in favor of any adjournment proposal. Abstentions; Broker Non-votes If you abstain from voting on any proposal considered at the special meeting, we will not count the abstention as a vote "for" or "against" the proposal for purposes of the special meeting. Under rules relating to how brokers vote shares held in brokerage accounts, brokers who hold your shares in street name cannot give a proxy to vote your shares on the merger agreement or the adjournment proposal without receiving specific instructions from you. We will not count these broker non-votes as a vote "for" or "against" the merger agreement or the adjournment proposal for purposes of the special meeting. As a result: . because approval of the merger agreement requires the affirmative vote of a majority of all votes cast at the special meeting, abstentions and broker non- votes will not affect the vote on the merger agreement; and . because approval of an adjournment proposal requires the affirmative vote of a majority of all votes cast at the special meeting, abstentions and broker non- votes will not affect the vote on any adjournment proposal. Revocability Of Proxies If you grant a proxy, you may revoke your proxy at any time until it is voted by: . delivering a notice of revocation to the Corporate Secretary of Drovers; . submitting a signed proxy cardconnection with a later date; or . appearing at the special meeting and voting in person. Attendance at the special meeting will not in and of itself revoke a proxy. Any written notice of revocation or other communications with respect to the revocation of proxies should be addressed to: John D. Blecher, Secretary, Drovers Bancshares Corporation, 30 South George Street, York, PA 17401. A shareholder whose shares are held in street name should follow the instructions of his or her broker regarding revocation of proxies. Solicitation Of Proxies Drovers will bear the cost of the solicitation of proxies from its shareholders. Fulton Financial will bear the costshareholders on behalf of printing this document. -15- Drovers will solicit proxiesits board of directors. In addition to solicitation by mail. In addition,mail, the directors, officers and employees of DroversPremier and its subsidiaries may solicit proxies from

shareholders of Premier in person or by telephone, facsimile telegram or in person. Droversother electronic methods without compensation other than reimbursement by Premier for their actual expenses.

Arrangements also will make arrangementsbe made with brokerage housesfirms and other custodians, nominees and fiduciaries for the forwarding proxyof solicitation material to the beneficial owners of Premier common stock held of record by thosesuch persons, and DroversPremier will reimburse themsuch firms, custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses.expenses in connection therewith. You should not send in your stock certificates with your proxy card. As described below under the caption "The Merger -- “The Merger—Exchange of DroversPremier Stock Certificates"Certificates” on page ____,33, you will receive materials for exchanging shares of DroversPremier common stock shortly after the merger.

THE MERGER

The following information is intended to summarize the most significant aspects of the merger agreement. This description is not complete. We have attached the full merger agreement and the warrant agreement to this document as Exhibit A and Exhibit B, respectively, and we incorporate each in this document by reference. We urge all shareholders to read the merger agreement carefully.

The merger agreement provides that: . Drovers

Premier will merge into Fulton Financial;Fulton; and .

You, as a shareholder of Drovers,Premier, will receive 1.241.34 shares (subject to adjustment for stock splits, stock dividends and similar events) of Fulton Financial common stock for each share of DroversPremier that you own if the merger is completed.

The Board of Directors of DroversPremier has unanimously approved and adopted the merger agreement and believes the merger is in your best interests. Drovers'Premier’s Board of Directors recommends that you vote "FOR"“FOR” the merger agreement.

Background of Merger For many

From time to time over the past several years, the strategyPremier’s management and board of Drovers' Boarddirectors have considered various strategic alternatives as part of Directors has beentheir continuing efforts to increase profitability while operatingenhance Premier’s community banking franchise and to maximize shareholder value. These strategic alternatives have included continuing as an independent community-focused bank. In recent years, meeting the increased effortsinstitution, acquiring branch offices or other community banks, establishing related lines of both localbusiness, issuing trust preferred securities and regional competitors to provide new servicespreferred stock, and attract customersentering into a strategic merger with similarly-sized or larger institutions. The board also has become increasingly difficult. The expenses of attempting to keep pace with competition, combined with the perceived need to materially increase non- interest income and invest heavily in new technologies, also have placed significant pressures on Drovers' ability to continuesought to enhance profitability in the face of increasing competitionshareholder value through a stock dividend and a possible downturn inshare repurchase program.

In October 2002, the economy. Additionally, the trading market for Drovers common stock, which had been trading during 2000 at earnings multiples significantly lower than similarly sized bank holding companies, has been extremely limited. Drovers' earnings also were negatively impacted during 2000 by the need to substantially increase Drovers Bank's loan loss reserve due to the charge off of a significant commercial loan during the year. In consideration of the foregoing factors and prompted in part by the decrease in the market price of the Drovers common stock during the first half of 2000, the Executive Committee of the Drovers' Board of Directors authorized the engagement of Sandler O'Neill & Partners, L.P., an investment banking firm, in July of 2000, to prepare a valuation analysis and report with regard to Drovers. The Executive Committee also appointed a separate subcommitteeClark S. Frame, Chairman of the Board, and John C. Soffronoff, President and Chief Executive Officer, to work with Sandler O'Neill in conjunction with preparationprepare information for the Board of Directors regarding a review of the valuation reportstrategic options available to the Board of Directors and to meet with Boenning & Scattergood, Inc. (“Boenning”). The Board of Directors authorized assessment of strategic options and engagement of Boenning as Premier Bancorp, Inc.’s financial advisor. Assessment of Premier’s strategic options was made subject to the Board of Directors’ further analyze Drovers' existing strategic planconsideration and strategic alternativesaction. Later that month, Clark S. Frame, John C. Soffronoff, Bruce E. Sickel and John J. Ginley from Premier met with representatives of Boenning to review and discuss business and valuation issues, potential interest levels of possible transaction candidates, and whether, given available information, it might be in the best interests of Premier and its constituencies to Droversengage in light of the valuation report. The subcommittee was composed of A. Richard Pugh, Chairman, President and CEO of Drovers and outside Directors Gary A. Stewart, Harlow R. Prindle, David C. McIntosh, George W. Hodges and Daniel E. Hess.a business combination with another financial institution.

Premier engaged Boenning on October 25, 2002. After reviewing a draft of Sandler O'Neill's preliminary valuation report in August 2000, and discussing the strategic alternatives available to Drovers, the subcommittee authorized Sandler O'Neill to determine whether or not any third partythat date, Boenning contacted 11 financial institutions, would be interested in acquiring Drovers and, if so, at what potential price and upon what potential terms. After further discussions with the subcommittee and representatives of Sandler -16- O'Neill, the subcommittee determined that Mr. Pugh should seek preliminary expressions of interest (based only upon publicly available information regarding Drovers) from several regional bank holding companies identified by the subcommittee and Sandler O'Neill. Mr. Pugh and representatives of the subcommittee subsequently held meetings with two potential acquirors, one of which was Fulton during SeptemberFinancial Corporation. Of the 11 contacted financial institutions, seven executed confidentiality agreements with Boenning, including Fulton on October 30, 2002. Information regarding Premier was provided to each of the seven financial institutions that executed the confidentiality agreement.

On November 1, 2002, representatives of Boenning, on behalf of Premier, met with Rufus A. Fulton, Jr., Chairman and OctoberChief Executive Officer, and R. Scott Smith, Jr., President and Chief Operating Officer, of 2000. On October 11, 2000,Fulton Financial Corporation to discuss Fulton’s interest in expanding its banking presence in the subcommittee metBucks, Montgomery and

Northampton county markets. Based on Fulton’s interest in the geographic region, Boenning advised Fulton of Premier’s interest in exploring a potential affiliation with Fulton. After further discussion and the exchange of information on Premier, Fulton notified Boenning of its desire to review third quarter financials for Droverspursue a potential affiliation with Premier and to update subcommittee members concerning discussionshave a meeting with representatives of its management team. Between October 30 and November 8, 2002, Boenning met with the two potential acquirors. At this meeting, the subcommittee formally retained Sandler O'Neill to advise it with regard torepresentatives of five other financial institutions regarding exploration of a potential transactionaffiliation with Premier.

A meeting with representatives of Boenning, Fulton and asked thatPremier occurred on November 12, 2002, whereby Fulton and Premier discussed strategic visions and the twofuture of each company and the financial services industry in general. Based on their similar philosophies, Fulton and Premier agreed to continue to explore a potential combination between their respective companies.

Between November 12 and 19, 2002, Boenning and/or Premier also met with four other financial institutions each providewhich had previously executed confidentiality agreements to discuss the strategic visions and future of those companies.

On November 20, 2002, Fulton submitted a non-disclosable,confidential non-binding indication of interest, letterincluding a range of potential financial terms, to Drovers outlining the preliminary terms and conditions of a merger with Drovers. Confidentiality agreements were obtained from thePremier via Boenning. On November 27, 2002, two potential acquirors on October 30, 2000 and thereafter Drovers exchanged financial and other information through Sandler O'Neill with each of the institutions. Following the exchange of information, which constituted a preliminary due diligence review, both of the potential acquirorsfour other financial institutions that Boenning had met with also submitted non-binding, non-disclosable indicationwritten indications of interest letters to Drovers, datedthrough Boenning.

At Premier’s December 4, and December 5, 2000, respectively. At a2002, special meeting of the full Board of Directors, on December 8, 2000, at which Drovers' legal counsel and representatives of Sandler O'Neill were present, management and the subcommittee advised the Drovers Board of their activities and the process that had been followedBoenning presented to date, and of the expressions of interest that had been obtained. The Board determined that the process of gathering information relevant to a decision regarding continued independence or a possible merger with a larger financial institution should continue, and that the expressions of interest from the two interested parties should be refined in additional detail regarding pricing structure and other material terms. At the meeting, legal counsel advised the Board as to their fiduciary duties and acknowledged that the Board was continuing a process which it had established many years ago to continue to study the strategic alternatives available to Drovers in a frank and fully-informed manner. As discussed with the Board the strategic alternatives available to Drovers were to continue to pursue a strategy of independence through the execution of the Drovers' strategic plan or to further pursue, through negotiations designed to end in a definitive acquisition agreement, one or bothconfidential non-binding indications of interest presently beforeincluding the Board and/or to seek otherone received from Fulton Financial Corporation, dated November 20, 2002. Terms of the indications of interest from other third partywere discussed, including financial institutions. Duringterms. Information regarding each of the meeting, executive officers of Drovers also reviewed in detail the current strategic plan, including historical financial statements and ratios for the last five years (1995 through 2000) and projected financial statements and performance ratios for the next five years (2001 through 2005). Representatives of Sandler O'Neill next reviewed each expressioncompanies submitting an indication of interest in detailwas presented to and as noted above, after discussion,discussed by the board of directors. At this meeting, Premier’s Board authorized management, outside legal counselcontinued discussions with Fulton and Sandler O'Neillone other company and the conduct of due diligence on Premier by Fulton and one other company. Due diligence on Premier was conducted between December 9-12, 2002.

On December 12, 2002, at Premier’s regularly scheduled Board of Directors meeting, Messrs. Frame and Soffronoff provided a status report of the two companies’ results of due diligence and further discussions between the parties. On December 13, 2002, Boenning was informed by the other company that had performed due diligence on Premier that it was no longer interested in pursuing a business combination with Premier. Also, on December 13, 2002, representatives of Boenning telephoned Mr. Fulton to enter into more formal negotiations with both acquirorsgenerally discuss Fulton’s due diligence review of Premier and to request that each potential acquiror submitinformation on Fulton. On December 16, 2002, Fulton and Boenning executed a confidentiality agreement and certain confidential financial information of Fulton was provided to Boenning.

On December 17, 2002, Fulton submitted a revised indication of interest letter which would address specifically the pricing and exchange ratio, including a mechanism for protecting Drovers against a downward shift in the stock price of the acquiring institution prior to closing, and additional specifics on how the acquiring institutions intended to provide for Drovers' employees, both as to benefits and severance, retention of the "Drovers Bank" name and related social issues. While the Board authorized management to continue the process to explore possible combinations, no decision was made atPremier via Boenning. At the December 8, 200019, 2002, Premier Board of Directors special meeting, as to whether Drovers would remain independent or would enter into a combination. After thewhich was attended by representatives of Boenning and Shumaker Williams, P.C., Fulton’s December 8, 2000 Board Meeting, management entered into detailed negotiations with the two potential acquirors regarding price and terms for a possible merger. In response to these negotiations, the two potential acquirors submitted revised17, 2002 indication of interest letters each dated as of December 14, 2000. A special meeting ofwas reviewed and discussed. Transaction terms were discussed with and by the full Board of Directors, was held onincluding proposed financial terms. Information regarding the proposed transaction and Fulton Financial Corporation were reviewed and discussed by the board of directors. At this meeting, the Board of Directors rejected Fulton’s revised proposal as presented but authorized continued negotiations with Fulton.

On December 15, 200023, 2002, at a meeting among representatives of Boenning, Premier and Fulton, the parties discussed price and other matters related to review the proposed transaction. Over the next week, several telephone calls between representatives of Boenning, Premier and Fulton occurred in which financial and other issues were discussed.

On January 6, 2003, Fulton submitted a second revised confidential indication of interest letters. Drovers' legal counsel andto Premier via Boenning. At a January 7, 2003 Premier Board of Directors special meeting, in which representatives of Sandler O'NeillBoenning and Shumaker Williams, P.C. were present, at this meeting. Each of the indications of interest provided for the merger of Drovers and Drovers Bank into the acquiring bank holding company and its primary subsidiary bank, respectively, in a tax-free stock exchange transaction. Each of the indications of interest alsoproposed transaction terms were discussed the treatment of Drovers Bank employees following the merger, the name of the surviving institution, directors and executive officers, employee benefits and the fact that Drovers would be required to issue an option to purchase up to 19.9% of its issued and outstanding common stock to the acquiring -17- institution as a lock-up mechanism in connection with the proposed merger. After careful considerationBoard of eachDirectors, including financial terms. The January 6, 2003 Fulton revised confidential non-binding indication of interest was reviewed and the recommendations of management and after exhaustive discussion,discussed by the Board of Directors. Clark S. Frame, Chairman of the Board, John C. Soffronoff, President and Chief Executive Officer, and Premier’s representatives were authorized management to enter into finalcontinue negotiations with Fulton and to advise the second acquiror that Drovers was not interested in continuing negotiations at that time. The Board also authorized management to make arrangements with Fulton to conduct due diligence as soon as possibleregarding Fulton for further consideration and action by the Board of Directors. On January 8, 2003, Premier, through Boenning, sent a due diligence request list to request that Fulton, provideand on January 9, 2003, representatives of Boenning telephoned Fulton representatives and discussed due diligence items.

On January 10, 2003, several telephone calls were made between representatives of Boenning, Premier and Fulton to discuss deal points, including financial terms. Also on January 10, 2003, due diligence was conducted on Fulton by Premier and its representatives, and a draft of a definitive merger agreement. Over the ensuing period, Drovers' legal counsel and management team engaged in a due diligence investigation of Fulton and negotiated with Fulton and Fulton's legal counsel concerning the definitive terms of aproposed merger agreement and appropriate exhibits. Drovers' management also cooperatedrelated agreements were forwarded to Premier and its legal counsel by Fulton’s legal counsel. From January 12-15, 2003, legal counsel for both Premier and Fulton, together with Fulton's due diligence investigation. the parties and their representatives, negotiated the merger agreement and related documents.

On December 27, 2000, DroversJanuary 16, 2003, Premier’s Board of Directors held a special meeting at which representatives of Boenning and Shumaker Williams, P.C. were present. The results of Premier’s due diligence on Fulton was discussed by the Board Meeting, with all Directors present or participating via telephone conference call, to reviewof Directors. Boenning and counsel briefed the draft definitiveBoard on final negotiations concerning the merger agreement and related exhibits, including the Drovers Stock Option Agreement.matters. During thatthis meeting, the Drovers Board reviewed the potential financial and strategic benefits of the transaction and other alternatives available to Drovers, including remaining independent. The Board also reviewed a financial analysis of the proposed transaction, as prepared and presented by Drovers' financial advisors, Sandler O'Neill. Legal counsel to Drovers conducted a detailed review of the definitive agreement and also reviewed the Board's fiduciary duties as they related to an acquisition of Drovers. Sandler O'Neill described the fixed exchange ratio and how it was negotiated andBoenning delivered theirits opinion to the Premier Board of Directors that, as of such date, the exchange ratio in the merger was fair to the holders of Premier common stock from a financial point of view to the Drovers stockholders. After consideration and discussion of the definitive agreement and related exhibits, the Drovers Board voted to approve the merger and authorized the execution of the definitive agreement and related documents. Each of the Drovers' Directors voted in favor of the merger with the exception of Director Basil A. Shorb, who voted against the transaction solely on the basis that Drovers should continue as an independent community banking organization.view. The Fulton Board of Directors, had met previously at a regularwith special counsel, reviewed the agreement and its terms. The Board Meeting on December 19, 2000 and hadof Directors discussed the deal terms including financial terms. Following review by the Premier Board of Directors of the foregoing matters, the Premier Board unanimously approved the definitivemerger agreement and related documentsthe transactions contemplated by the merger agreement. The board of directors of Premier believes that the transaction and authorizedits terms are in the executionbest interests of the merger agreement.Premier shareholders and Premier’s other constituencies. Immediately following the conclusion of the DroversPremier Board Meeting on December 27, 2000,January 16, 2003, the parties executed the definitive agreement and related documents and made a public announcement of the transaction. Drovers'

Recommendation of the Premier Board of Director'sDirectors and Reasons for the Merger. AtMerger

The Premier board has unanimously approved the merger agreement and unanimously recommends that Premier shareholders vote “FOR” approval and adoption of the merger agreement.

The Premier board has determined that the merger is fair to, and in the best interests of, Premier and its meeting on December 27, 2000,shareholders. In approving the Droversmerger agreement, the Premier board consulted with Boenning with respect to the financial aspects and fairness of directors determined thatthe exchange ratio from a financial point of view and with its legal counsel as to its legal duties and the terms of the merger agreementagreement. In arriving at its determination, the Premier board also considered a number of factors, including the following:

the board’s familiarity with and review of information concerning the business, results of operations, financial condition, competitive position and future prospects of Premier;

the current and prospective environment in which Premier operates, including national, regional and local economic conditions, the competitive environment for banks and other financial institutions generally and the merger transaction with Fulton wereincreased regulatory burdens on financial institutions generally and the trend toward consolidation in the best interestsbanking industry and in the financial services industry;

the financial presentation of Drovers, its shareholders and other constituencies. In making this determination, the board concluded, among other things, that the merger transaction with Fulton was superior to the other alternatives available to Drovers and to the prospects of continuing to operate Drovers as an independent community-focused banking company. In the course of reaching its decision to approve the agreement, the Drovers board of directors consulted with Sandler O'Neill, and its legal counsel. The board considered, among other things, the factors described aboveBoenning and the following: . The opinion of Sandler O'NeillBoenning that, as of the date of such opinion, the exchange ratio in the mergerof 1.34 shares of Fulton common stock per share was fair, to Drovers' shareholders from a financial point of view. . The board's familiarity with and reviewview, to the holders of Drovers' business, prospects and financial condition, including its future prospects were it to remain independent. . The pressures of competition and Drover's limited economies of scale on Drovers' ability to increase profitability while continuing to operate as an independent community-focused banking company. -18- . A determination that a business combination with Fulton would expand Drovers' lending capabilities and increase the range of financial products and services available to Drovers' customers. . The prices, multiples of earnings per share and premiums over book value and market value paid in recent acquisitions of banks. . The earnings and financial condition of Fulton. . The significantly higher cash dividends which have been historically paid on shares of FultonPremier common stock as compared to cash dividends historically paid(see “—Opinion of Premier’s Financial Advisor,” beginning on shares of Drovers common stock. . Thepage 21);

the historical market prices for shares of Fulton common stock. . The substantially greater liquidity of FultonPremier common stock comparedand the fact that the 1.34 per share merger consideration represented a 39.9% premium over the per share closing price of Premier common stock on January 15, 2003 and a 73.5% premium over the per share closing prices of Premier common stock one month prior to the relatively illiquid market for Drovers common stock. . Fulton's agreementmerger announcement (see “Market Price of and Dividends on Fulton Common Stock” on page 43 and “Market Price of and Dividends on Premier Common Stock” on page 50);

results that two directors from Drovers' board of directors wouldcould be appointed to Fulton's board of directors, and that three other members of Drovers' board of directors would be appointed to Fulton Bank's board of directors. . The business and prospects of Fulton, including its prior experience acquiring banks, its existing presence in Drovers' traditional market areas, the economic vitality of the other market areas served by Fulton and the opportunities presented by customer demand in those market areas. . The experience of Fulton's senior management team. . The merger is expected to be tax freeobtained by Premier if it continued to Drovers' shareholders. . The alternativesoperate independently, and the likely benefits to shareholders of Drovers continuingsuch course, as an independent community- focused banking company or combiningcompared with other potential merger partners, compared to the effectvalue of Drovers combining with Fulton pursuant to the merger agreement,consideration being offered by Fulton;

the financial attributes of Fulton and Fulton’s common stock, dividend yield, liquidity and corporate fundamentals;

the determination thateffects of the merger transaction with Fulton presented the best opportunity for maximizing long-term shareholder valueon Premier’s depositors and serving Drovers' other constituencies including, without limitation, its customers employees and the communities inserved by Premier, which it is located. The foregoing discussionwas deemed to be favorable given that they would be served by a geographically diversified organization which had greater resources than Premier;

the historical performance of Fulton;

the future business prospects of Fulton;

the ability for Premier’s Board to continue to maintain the Premier Bank brand name for at least three years following the merger; and

the effects of the informationmerger on Premier’s employees, including the prospects for employment with a large, growing organization such as Fulton.

The discussion and factors considered by the DroversPremier board of directors isare not intended to be exhaustive, but is believed to includeincludes all material factors considered by the Drovers board of directors.considered. In reaching its determination to approve and recommendapproving the merger the Droversagreement, Premier’s board of directors did not assign any relativespecific or specificrelative weights to any of the foregoing factors, and individual directors may have given differing weights to different factors. After deliberating with respect to the merger transaction with Fulton, considering, among other things, the matters discussed above and the opinion of Sandler O'Neill referred to above, the Drovers board of directors approved and adopted the merger agreement and the merger transaction with Fulton. Recommendation of Drovers' Board of Directors. The board of directors of Drovers believes that the terms of the merger are in the best interests of Drovers, its shareholders and other constituencies, and has approved the merger agreement. The board of directors of Drovers recommends that the shareholders of Drovers approve the merger agreement. -19- weighted factors differently.

Opinion of Drovers'Premier’s Financial Advisor By

Pursuant to an engagement letter agreement dated as of August 29, 2000, DroversOctober 25, 2002, as amended, Premier retained Sandler O'NeillBoenning to act as an independentits exclusive financial advisor in connection with Drovers'Premier’s consideration of a possible business combination with a second party. Sandler O'Neill is a nationally recognized investment banking firm whose principal business specialty is financial institutions.combination. In the ordinary course of its investment banking business, Sandler O'Neill is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions. Sandler O'Neill acted as financial advisor to Drovers in connection with the merger and participated in certainwith Fulton, the Premier board requested Boenning to render its opinion as to the fairness, from a financial point of view, of the negotiations leadingexchange ratio to the merger agreement.holders of Premier common stock. At the request of the Drovers Board, representatives of Sandler O'Neill attended the December 27, 2000January 16, 2003 meeting at which the BoardPremier’s board considered and approved the merger agreement. At the meeting, Sandler O'Neill deliveredagreement, Boenning rendered its opinion to the Drovers Board its written opinionboard that, based upon and subject to the various considerations set forth therein, as of such date,January 16, 2003, the exchange ratio was fair to Drovers shareholdersthe holders of Premier common stock from a financial point of view. Sandler O'Neill has also deliveredWe will refer to the Drovers Board a written opinion datedas of January 16, 2003 as the date“January Opinion” and the opinion as of this document which is substantially identical toas of [DATE] as the December 27, 2000 opinion. “Proxy Opinion.”

The full text of Sandler O'Neill's opinionBoenning’s Proxy Opinion, which sets forth the assumptions made, matters considered and limitations of the review undertaken, is attached as Exhibit C to this proxy statement/prospectus, is incorporated herein by reference, and should be read in its entirety in connection with this document. The summary of the opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O'Neill in rendering the opinion. The opinion is incorporated by reference into this description and this descriptionof Boenning set forth below is qualified in its entirety by reference to the opinion. Drovers shareholders are urged to readfull text of the opinion carefullyattached as Exhibit C to this document.

Boenning was selected to act as Premier’s financial advisor in connection with theirits strategic alternatives based upon its qualifications, expertise, reputation and experience. Boenning has formally acted as financial advisor, lead underwriter and placement agent to Premier at various times on a contractual basis. Boenning has knowledge of, and experience with the Pennsylvania and surrounding banking markets, as well as banking organizations operating in those markets, and was selected by Premier because of its knowledge of, experience with, and reputation in the financial services industry. Boenning, as part of its investment banking business, is engaged regularly in the valuation of assets, securities and companies in connection with various types of asset and securities transactions, including mergers, acquisitions, public offerings, private placements, and valuations for various other purposes and in the determination of adequate consideration in such transactions. In the ordinary course of its business as a broker-dealer, Boenning may, from time to time, purchase securities from, and sell securities to, Premier.

On January 16, 2003, Premier’s board of directors approved and executed the proposed merger. Sandler O'Neill's opinion was directedmerger agreement. Prior to the Drovers board and was providedapproval, Boenning delivered its January Opinion to the board for its information in considering the merger. The opinion is directed only to the fairnessPremier’s Board stating that, as of such date, the exchange ratio pursuant to Droversthe merger agreement was fair to the shareholders of Premier from a financial point of view. It does not addressBoenning reached the underlying business decisionsame opinion as of Droversthe date of its Proxy Opinion. The full text of the Proxy Opinion which sets forth assumptions made, matters considered and limits on the review undertaken is attached as Exhibit C to engagethis document.

No limitations were imposed by Premier’s board of directors upon Boenning with respect to the investigations made or procedures followed by Boenning in rendering the January Opinion or the Proxy Opinion.

In arriving at its opinion, Boenning, among other things:

reviewed the merger agreement;

reviewed and analyzed the stock market performance of Premier and Fulton;

studied and analyzed the consolidated financial and operating data of Premier and Fulton;

considered the terms and conditions of the merger between Premier and Fulton as compared with the terms and conditions of comparable bank, bank holding company, and financial holding company mergers and acquisitions;

met and/or anycommunicated with certain members of Premier’s and Fulton’s senior management to discuss their respective operations, historical financial statements, and future prospects;

reviewed this document;

compared the financial performance of Premier and Fulton and the prices and trading activity of the stocks of Premier and Fulton with those of certain other aspectcomparable publicly-traded banks, bank holding companies, and financial holding companies and their securities;

discussed the strategic objectives of the merger and isthe plans for the combined company with senior executives of Premier and Fulton, including estimates of the cost savings and other synergies projected by Fulton for the combined company;

participated in discussions and negotiations among representatives of Premier and Fulton and their advisors; and

conducted such other financial analyses, studies and investigations as it deemed appropriate.

In connection with rendering its January Opinion and Proxy Opinion, Boenning assumed that in the course of obtaining the necessary regulatory and governmental approvals for the merger, no restriction will be imposed on Fulton or Premier that would have a material adverse effect on the contemplated benefits of the merger. Boenning also assumed that there will not occur any change in applicable law or regulation that would cause a recommendationmaterial adverse change in the prospects or operations of Fulton after the merger.

Boenning relied, without independent verification, upon the accuracy and completeness of all of the financial and other information reviewed by and discussed with it for purposes of its opinions. With respect to any Drovers shareholderPremier’s and Fulton’s financial forecasts and other information reviewed by Boenning in rendering its opinions, Boenning assumed that such information was reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Premier and Fulton as to howtheir most likely future performance and the cost savings and other potential synergies (including the amount, timing and achievability thereof) anticipated to result from the merger. Boenning did not make an independent evaluation or appraisal of the assets (including loans) or liabilities of Premier or Fulton nor was it furnished with any such shareholder should vote atappraisal. Boenning also did not independently verify, and has relied on and assumed, that all allowances for loan and lease losses set forth in the special meetingbalance sheets of Premier and Fulton were adequate and complied fully with respect toapplicable law, regulatory policy and sound banking practice as of the mergerdate of such financial statements. In addition, Boenning did not review credit files of either Premier or any other matter. In rendering its December 27, 2000 opinion, Sandler O'Neill performed a variety of financial analyses. Fulton.

The following is a summary of selected analyses prepared by Boenning and presented to Premier’s Board in connection with the materialJanuary Opinion and analyzed by Boenning in connection with the January Opinion and Proxy Opinion. In connection with delivering its Proxy Opinion, Boenning updated certain analyses performeddescribed below to reflect current market conditions and events occurring since the date of the January Opinion. The reviews and updates led Boenning to conclude that it was not necessary to change the conclusions it had reached in connection with rendering the January Opinion.

Summary of Transaction. Boenning calculated the implied pricing and valuation multiples based on the implied per share deal price of [XX] (derived by Sandler O'Neill, but is not a complete descriptionmultiplying the exchange ratio of all1.34 by the analyses underlying Sandler O'Neill's opinion.last reported per share sale price of Fulton of $XX.XX as of [DATE]). Based on Premier’s fiscal year 2002 earnings per common share of [XX], book value per common share of [XX], tangible book value per common share of [XX], and price per common share of [XX] (the last reported per common share price of Premier as of [DATE]), the key valuation statistics were as follows:

Aggregate Consideration to Common Shareholders1

Deal Price Per Common Share

Deal Price / 2002 Earnings Per Common Share

Deal Price / Book Value Per Common Share

Deal Price / Tangible Book Value Per Common Share

Deal Price / Market Price Per Common Share at Announcement


1Includes the implied value to option holders in excess of their exercise price.

Comparable Companies Analysis. Boenning compared selected publicly available financial, operating and stock market data for Premier with those of two peer groups. The preparationfirst group, referred to as the “de novo peer group,” consisted of SEC reporting banks, bank holding companies, and financial holding companies headquartered in Delaware, Maryland, New Jersey, Ohio, Pennsylvania and Virginia that were founded between 1990 and 1993. The companies in the De Novo Peer Group were:

Unity Bancorp, Inc, Clinton, New Jersey;

Long Island Financial Corporation, Islandia, New York;

SVB Financial Services, Inc., Somerville, New Jersey;

CNBC Bancorp, Columbus, Ohio;

Bridge View Bancorp, Englewood Cliffs, New Jersey;

East Penn Bank, Emmaus, Pennsylvania;

Annapolis Bancorp, Inc., Annapolis, Maryland; and

Easton Bancorp, Inc., Easton, Maryland.

The second group, referred to as the “size peer group”, consisted of SEC-reporting banks, bank holding companies, and financial holding companies headquartered in Pennsylvania with assets between $[500] million and $[750] million as of [DATE]. The companies in the Size Peer Group were

CNB Financial Corporation, Clearfield;

Republic First Bancorp, Inc., Philadelphia;

First Chester County Corporation, West Chester;

Fidelity D & D Bancorp, Inc., Dunmore;

Chester Valley Bancorp, Inc., Downingtown;

IBT Bancorp, Inc., Irwin;

First Colonial Group, Inc., Nazareth;

Leesport Financial Corp., Wyomissing;

Franklin Financial Services Corporation, Chambersburg;

Bryn Mawr Bank Corporation, Bryn Mawr;

Penseco Financial Services Corporation, Scranton; and

QNB Corp, Quakertown.

The results of these comparisons, based on [DATE] financial information and stock price data as of [DATE], are set forth in the following table.

Premier


De Novo Median


Size Median


($s in MMs, except per share)

Assets

Equity Capital / Assets

Loans / Deposits

Nonperforming Assets2 / Assets

Return on Average Assets

Return on Average Common Equity

Non-Interest Income / Average Assets

Non-Interest Expense / Average Assets

Efficiency Ratio3

Net Interest Margin

Four Year Average Results:

Return on Average Assets

Return on Average Common Equity

Non-Interest Income / Average Assets

Non-Interest Expense / Average Assets

Efficiency Ratio3

Net Interest Margin

Compound Annual Growth Rate4

Assets

Loans

Deposits

Common Equity Market Capitalization

Price / 52 Week High Price

Price to:

Book Value Per Common Share

Tangible Book Value Per Common Share

LTM5 Earnings Per Common Share

Dividend Yield

LTM5 Dividend Payout Ratio

Avg. Daily Common Share Trading Volume

Avg. Weekly Volume / Common Shares Outstanding


2Defined as total nonaccrual loans plus other real estate owned plus accruing loans that are 90 days past due.

3Defined as non-interest expense less intangible amortization divided by the sum of net interest income plus non-interest income

4Reflects that compound annual growth rate from [DATE] to [DATE]

5LTM stands for latest twelve months.

Boenning also compared selected publicly available financial, operating and stock market data for Fulton with those of a fairness opinion is a complex process involving subjective judgmentspeer group of selected publicly traded bank and financial holding companies that had assets between $[4] billion and $[20] billion as of [DATE], headquartered in the Mid-Atlantic region. The companies in the peer group were:

Commerce Bancorp, Inc., Cherry Hill, New Jersey;

Mercantile Bankshares Corporation, Baltimore, Maryland;

Valley National Bancorp, Wayne, New Jersey;

Wilmington Trust Corporation, Wilmington, Delaware;

Hudson United Bancorp, Mahwah, New Jersey;

Riggs National Corporation, Washington, D.C.;

Susquehanna Bancshares, Inc., Lititz, Pennsylvania;

Provident Bancshares Corporation, Baltimore, Maryland;

First Commonwealth Financial Corporation, Indiana, Pennsylvania; and

The Trust Company of New Jersey, Jersey City, New Jersey.

The results of these comparisons, based on [DATE] financial information and stock price data as of [DATE,] are set forth in the following table.

Fulton


Peer Median


($s in MMs, except per share)

Assets

Equity Capital / Assets

Loans / Deposits

Nonperforming Assets6 / Assets

Return on Average Assets

Return on Average Common Equity

Non-Interest Income / Average Assets

Non-Interest Expense / Average Assets

Efficiency Ratio7

Net Interest Margin

Four Year Average Results:

Return on Average Assets

Return on Average Common Equity

Non-Interest Income / Average Assets

Non-Interest Expense / Average Assets

Efficiency Ratio7

Net Interest Margin

Compound Annual Growth Rate8

Assets

Loans

Deposits

Common Equity Market Capitalization

Price / 52 Week High Price

Price to:

Book Value Per Common Share

Tangible Book Value Per Common Share

LTM9 Earnings Per Common Share

Dividend Yield

LTM9 Dividend Payout Ratio

Avg. Daily Common Share Trading Volume

Avg. Weekly Volume / Common Shares Outstanding


6Defined as total nonaccrual loans plus other real estate owned plus accruing loans that are 90 days past due.

7Defined as non-interest expense less intangible amortization divided by the sum of net interest income plus non-interest income

8Reflects that compound annual growth rate from [DATE] to [DATE]

9LTM stands for latest twelve months.

Comparable Transaction Analysis. Boenning also compared the multiples of latest twelve months’ earnings, book value and tangible book value inherent to the merger with the multiples paid in recent acquisitions of banks, bank holding companies, and financial holding companies that Boenning deemed comparable. The transactions deemed comparable by Boenning included both interstate and intrastate bank, bank holding company, and financial holding company acquisitions announced after [June 30, 2001], in which the selling institution’s assets were between $[250] million and $[1] billion as of the most appropriate and relevant methods of financial analysis and the application of those methodsrecent period publicly available prior to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O'Neill believes that its analyses must be consideredannouncement. Boenning compared this “national group” as a whole as well as certain of its subgroups, including a regional group, a performance group and a recently announced group, with the Premier/Fulton transaction. The “regional group” included transactions involving banks, bank holding companies, and financial holding companies in which the acquired company was located in Mid-Atlantic region. The “recently announced group” included transactions involving banks, bank holding companies, and financial holding companies which were announced after [July 1, 2002]. The “performance group” included transactions involving banks, bank holding companies, and financial holding companies which had a return on average equity between [10]% and [15]% at the time of sale as well as year over year asset growth greater than [15]%. In addition to the national, regional, performance and recently announced groups, Boenning also compared transactions involving “de novo” banking companies that selecting only portionswere founded between 1990 and 1993 that were headquartered in Connecticut, Delaware, Maryland, New Jersey, New York, Ohio, Pennsylvania and Virginia and had announced their intention to be acquired with the Premier/Fulton transaction. The results of these comparisons, are set forth in the factors and analyses,following table.

Fulton/ Premier


National Median


Regional Median


Recent Median


Performance Median


De Novo Median


($s in MMs, except per share)

Number of Transactions

Seller Information:

Assets

Equity Capital / Assets

LTM Return on Average Assets

LTM Return on Average Common Equity

NPAs10 / Assets

Deal Price to:

Book Value

Tangible Book Value

LTM Earnings

Deposits

Assets

10Defined as total nonaccrual loans and other real estate owned.

No company or attempting to ascribe relative weights to such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company includedtransaction, however, used in Sandler O'Neill's comparative analyses described belowthis analysis is identical to DroversPremier, Fulton or Fulton and no transaction is identical to the merger.transaction. Accordingly, an analysis of comparable companies or transactionsthe result of the foregoing is not merely mathematical; rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that couldwould affect the public trading values or merger transaction values, as the case may be, of Drovers or Fulton and the companies or company to which they are being compared. The

Discounted Dividend Analysis. Using discounted dividend analyses, Boenning estimated the present value of the future cash flows that would accrue to a holder of a share of Premier common stock over a five-year period. This stand-alone analysis was based on several assumptions, including a range of price to earnings projections for Drovers and Fulton relied upon by Sandler O'Neill in its analyses were reviewed with management and were based upon internal projectionsmultiples of Drovers and Fulton for the13x to 17x to Premier’s terminal year ending December 31, 2001 and on published IBES consensuscommon earnings estimates for Fulton for 2000 and 2001. For theper share, Premier management’s five year ending December 31, 2001, Sandler O'Neill's analyses assumed a projected earnings per share of $1.70 for Drovers and $1.56 for Fulton. For periods after 2001, Sandler O'Neill assumed, with Drovers' consent, an annual growth rate on earning assets for Drovers of 8.5% for 200215%, and 12% thereafter and 5% for Fulton. The 2001 earnings projections furnished to Sandler O'Neill were prepared by the senior management of Drovers and Fulton for internal purposes only and not with a view towards public disclosure. Those projections, as well as the other earnings estimates relied upon by Sandler O'Neill in its analyses, were based on numerous variables and assumptions which are inherently uncertain; accordingly, actual results could vary materially from those set forth in such projections. In performing its analyses, Sandler O'Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of Drovers, Fulton and Sandler O'Neill. The analyses performed by Sandler O'Neill are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than -20- suggested by such analyses. Sandler O'Neill prepared its analyses solely for purposes of rendering its opinion and provided such analyses to the Drovers Board at the December 27th meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O'Neill's analyses do not necessarily reflect the value of DroversPremier’s current common stock orcash dividend payout ratio of 0%. The analysis did not consider the $.05 cash dividend per common share that Fulton has permitted Premier to declare and pay quarterly on its common stock orper the prices at which Drovers common stock or Fulton common stock may be sold at any time. Summary of Proposal. Sandler O'Neill reviewed the financial terms of the proposed transaction. Based on the closing pricemerger agreement. The range of Fulton common stock on December 22, 2000 of $22.625 and an exchange ratio of 1.24 shares of Fulton common stock for each share of Drovers common stock, Sandler O'Neill calculated an implied transaction value per share of Drovers common stock of $28.06. The implied aggregate transaction value was approximately $145.6 million, based upon 5,190,642 diluted shares of Drovers common stock outstanding, which was determined using the treasury stock method at the implied value of $28.06. Based upon the implied transaction value per share and Drovers' September 30, 2000 financial information, Sandler O'Neill calculated the following ratios: Implied value/Book value 2.64x Implied value/Tangible book value 2.64x Implied value/Last Twelve Months Normalized EPS (1) 17.98x Implied value/Projected 2001 EPS 16.51x Implied Value/Deposits 26.82% - ---------- Normalizedmultiples applied to Premier’s estimated five-year earnings per share exclude after-tax non-recurring chargesvalue reflected a variety of $2.39 million relating toscenarios regarding the loan loss provisiongrowth and profitability prospects of Premier and valuation for banking securities transactions. For purposes of Sandler O'Neill's analyses, earnings per share were based on diluted earnings per share. Sandler O'Neill noted that the implied transaction value represented a 90.2% premium over the November 22, 2000 closing price of Drovers common stock of $14.75. Stock Trading History. Sandler O'Neill reviewed the history of the reported trading prices and volume of Drovers common stock and Fulton common stock, and the relationship between the movements in the prices of Drovers common stock and Fulton common stock, respectively, to movements in certain stock indices, including the Standard & Poor's 500 Index, the Nasdaq Bank Index and the median performance of a composite peer group of publicly traded commercial banks for each of Drovers and Fulton selected by Sandler O'Neill. During the one year period ended December 21, 2000, Drovers' common stock underperformed each of the indices to which it was compared, and Fulton's common stock outperformed each of the indices to which it was compared. -21-
Beginning Index Value Ending Index Value December 22, 1999 December 21, 2000 --------------------- ------------------ Drovers 100.00% 77.50% Drovers Composite Group 100.00 88.30 Nasdaq Bank Index 100.00 112.39 S&P 500 Index 100.00 88.77 Beginning Index Value Ending Index Value December 22, 1999 December 21, 2000 --------------------- ------------------ Fulton 100.00% 131.05% Fulton Composite Group 100.00 129.95 Nasdaq Bank Index 100.00 112.39 S&P 500 Index 100.00 88.77 Comparable Company Analysis.
Sandler O'Neill used publicly available information to compare selected financial and market trading information for Drovers and two groups of commercial banks selected by Sandler O'Neill, a regional group and a highly valued group.general. The regional group consisted of Drovers and the following 13 publicly traded regional commercial banks: Center Bancorp Inc CNB Financial Corp. Community Banks Inc. Greater Community Bancorp Interchange Financial Services Lakeland Bancorp Omega Financial Corp. Patriot Bank Corp. Republic First Bancorp Inc. Royal Bancshares of PA Sun Bancorp Inc. Vista Bancorp Inc. Yardville National Bancorp The highly valued group consisted of the following 10 publicly traded commercial banks which had a return on average equity greater than 16% (based on last twelve months' earnings) and a price- to-tangible book value greater than 180%: Arrow Financial Corp. Central Coast Bancorp First Banks America Inc. Nara Bank NA Peapack-Gladstone Financial Prosperity Bancshares Inc. Suffolk Bancorp Summit Bancshares Inc. S.Y. Bancorp Inc. UNB Corp. The analysis compared publicly available financial information for Drovers and the median data for each of the regional group and highly valued group as of and for each of the years ended December 31, 1995 through 1999 and as of and for the twelve months ended September 30, 2000. The table below sets forth the comparative data as of and for the twelve months ended September 30, 2000 with pricing data as of December 22, 2000.
Highly Drovers Regional Valued Bancshares Group Group ---------- ----- ----- Total assets $755,308 $750,694 $740,524 Tangible equity / total assets 7.13% 6.89% 7.36% Intangible assets / total equity 0.05% 0.87% 2.73%
-22-
Highly Drovers Regional Valued Bancshares Group Group ---------- ----- ----- Net loans / total assets 64.39% 62.48% 66.69% Gross loans / total deposits 90.36% 86.54% 78.94% Total borrowings / total assets 19.05% 12.59% 0.91% Non-performing assets / total assets 0.28% 0.42% 0.24% Loan loss reserves / gross loans 0.88% 1.17% 1.46% Net interest margin 3.57% 4.09% 5.09% Non-interest income / average assets 0.76% 0.64% 0.92% Non-interest expense / average assets 2.44% 2.62% 2.96% Efficiency ratio 59.29% 58.79% 54.06% Return on average assets(1) 1.08% 0.91% 1.48% Return on average equity(1) 15.26% 12.05% 18.19% Price / tangible book value per share 179.08% 169.49% 223.35% Price / earnings per share(1) 12.18x 12.34x 12.26x Dividend yield 2.67% 3.47% 1.74% Dividend payout ratio(1) 32.54% 45.74% 22.69% - -----------------------
Utilizes Drovers' normalized last twelve months' earnings per share for the period ended September 30, 2000. Sandler O'Neill also used publicly available information to perform a similar comparison of selected financial and market trading information for Fulton and a group of highly valued commercial banks selected by Sandler O'Neill. The highly valued group consisted of the following 13 publicly traded commercial banks which had a return on average equity greater than 16% (based on last twelve months' earnings) and a price-to-tangible book value greater than 225%: City National Corp. Commerce Bancorp Inc. Commerce Bancshares Inc. Community First Bankshares Cullen/Frost Bankers Inc. First Midwest Bancorp Inc. FirstMerit Corp. International Bancshares Corp. Silicon Valley Bancshares Sky Financial Group Inc. TCF Financial Corp. Valley National Bancorp Wilmington Trust Corp. The analysis compared publicly available financial information for Fulton with the median data for the highly valued group as of and for each of the years ended December 31, 1995 through 1999 and as of and for the twelve months ended September 30, 2000. The table below sets forth the comparative data as of and for the twelve months ended September 30, 2000 with pricing data as of December 22, 2000.
Highly Valued Fulton* Group ------- ----- Total assets $6,478,773 $7,354,813 Tangible equity / total assets 9.57% 6.31% Intangible assets / total equity 4.18% 11.98% Net loans / total assets 73.26% 69.47% Gross loans / total deposits 99.64% 89.90% Total borrowings / total assets 13.96% 13.48% Non-performing assets / total assets 0.29% 0.30% Loan loss reserves / gross loans 1.27% 1.40% Net interest margin 4.46% 4.39% Non-interest income / average assets 0.95% 1.57% Non-interest expense / average assets 2.63% 3.55%
- ---------- * Unaduited -23-
Highly Valued Fulton* Group ------- ----- Efficiency ratio 50.83% 53.65% Return on average assets 1.67% 1.53% Return on average equity 16.75% 20.07% Price / tangible book value per share 261.86% 330.08% Price / earnings per share 15.71x 15.14x Dividend yield 2.68% 2.64% Dividend payout ratio 42.07% 39.21%
Analysis of Selected Merger Transactions. Sandler O'Neill reviewed certain transactions announced from January 1, 2000 through December 22, 2000 involving publicly traded commercial banks as acquired institutions with transaction values greater than $15 million. Sandler O'Neill reviewed 91 transactions announced nationwide and 15 transactions announced in the Mid-Atlantic region. Sandler O'Neill reviewed the multiples of transaction value to last four quarters' earnings, transaction value to book value, transaction value to tangible book value, transaction value to total deposits and premium to market and computed high, low, mean and median multiples and premiums for the respective groups of transactions. These multiples were applied to Drovers' financial information as of and for the twelve months ended September 30, 2000. As illustrated in the following table, Sandler O'Neill derived an imputed range of values per share of Drovers common stock of $19.09 to $28.16 based upon the median multiples for nationwide transactions and $18.10 to $27.86 based upon the median multiples for Mid-Atlantic transactions.
Nationwide Transactions MidAtlantic Transactions Median Implied Median Implied Multiple Value Multiple Value Transaction value/ LTM EPS (1) 18.05x $28.16 17.86x $27.86 Transaction value / Est. 2001 net income 15.26 25.93 14.25 24.21 Transaction value/Book value 2.43x 25.78 2.29x 24.35 Transaction value/Tangible book value 2.52x 26.75 2.51x 26.62 Premium to market (2) 29.39% 19.09 22.70% 18.10 Transaction value/Total deposits 25.14% 26.94 23.17% 24.83
- ---------- (1) Utilizes Drovers' normalized last twelve months' earnings per share for the period ended September 30, 2000. (2) Reflects premiums to the seller's price one month before the announcement of the transaction and were applied to Drovers' closing stock price as of November 22, 2000. Discounted Dividend Stream and Terminal Value Analysis. Sandler O'Neill also performed an analysis which estimated the future stream of after-tax dividend flows of Drovers through December 31, 2004 under various circumstances, assuming Drovers' current dividend payout ratio and that Drovers performed in accordance with the earnings forecasts reviewed with management. To approximate the terminal value of Drovers common stock at December 31, 2004, Sandler O'Neill applied price/earnings multiples ranging from 10x to 20x and applied multiples of tangible book value ranging from 150% to 275%. The dividend income streams and terminal values and projected annual cash dividends were then discounted to present valuesvalue using differenta discount rates ranging from 9% to 15% chosen to reflect different assumptions regarding required ratesrate of 12%, reflecting an assumed rate of return ofrequired by holders or prospective buyers of DroversPremier’s common stock. As illustrated in the following table, thisThe analysis indicated an imputed range of valuesthat, based upon the aforementioned assumptions, the per common share of Droversthe present value of Premier’s common stock, of $15.62 to $36.39 when applying the price/earnings multiples and $15.60 to $33.48 when applying multiples of tangible book value. -24-
Price/Earnings Multiples Tangible Book Value Multiple ------------------------ ---------------------------- Discount Rate 10x 20x 1.5x 2.75x - ------------- --- --- ---- ----- 9 % $19.19 $36.39 $19.16 $33.48 11 17.89 33.89 17.86 31.18 13 16.70 31.60 16.68 29.08 15 15.62 29.51 15.60 27.15
on a stand-alone basis, ranged from $[14.90] – $[27.60].

In connection with itsthe discounted dividend analysis Sandler O'Neillperformed, Boenning considered and discussed with the Drovers BoardPremier’s board how the present value analysis would be affected by changes in the underlying assumptions, including variations with respect to the growth rate of assets, net interest spread, non-interest income, non-interest expenses and dividend payout ratio. Sandler O'NeillBoenning noted that the discounted dividend stream and terminal value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereofof this analysis, are not necessarily indicative of actual values or future results.

Pro Forma Merger Analysis. Sandler O'NeillRelative Value and Contribution Analyses. Boenning analyzed certain potential pro forma effectsthe changes in the amount of earnings, book value and cash dividends represented by one share of Premier common stock prior to the merger based upon anand the number of shares of Fulton common stock after the merger resulting from the exchange ratio of 1.24, Drovers' and Fulton's current and projected income statements and balance sheets, and assumptions regarding1.34. The analysis considered, among other things, the economic environment, accounting and tax treatment of the merger, charges associated with the merger, operating efficiencies and other adjustments discussed with the senior managements of Drovers and Fulton. As illustrated in the following table, this analysis indicated that, in the first full year following the merger, the merger would be accretive to Drovers' projected earnings per share and dividend and dilutive to its tangible book value. Also, the analysis indicatedchanges that the merger would be slightly dilutivecause to Fulton'sPremier’s earnings and tangibleper common share, book value per common share forand cash dividends per common share. The analysis indicated the same period. The actual results achieved by Drovers and Fulton may vary from projected results and the variations may be material. following information:

Year ending

Common Share Values as of and for the
[year ended December 31, 2002 Drovers2002]


Premier


Pro Forma

Fulton

Equivalent2


Net Income Applicable to Common Shareholders

Cash Dividend

1

Book Value

Tangible Book Value


1Analysis does not consider the $.05 cash dividend that Fulton - ----------------------------- ------- ------ Stand-alone Pro Forma(1) Stand alone Pro Forma ----------- ------------ ----------- --------- Projected EPS $ 1.82 $ 2.10 $ 1.70 $1.69 Projected tangible book value(2) 12.07 11.85 $ 9.59 $9.56 Projected dividend .57 .82 .66 .66 Projected tangible equity/assets ratio(2) NM NM 10.07% 9.70% has permitted Premier to declare and pay on its common stock quarterly per the terms of the merger agreement.
- ---------- (1) Determined by multiplying

2Equivalents may include certain assumed consolidation adjustments.

In reviewing the pro forma combined earnings, equity and assets of Fulton values bybased on the exchange ratio. (2) At beginning of period. Contribution Analysis. Sandler O'Neill reviewedmerger with Premier, Boenning analyzed the relative contributions to becontribution that Premier would have made by Drovers and Fulton to the combined institutioncompany’s earnings, assets, loans, deposits and equity as of [DATE]. Boenning also reviewed the percentage ownership that Premier shareholders would hold in the combined company. Boenning has not expressed any opinion as to the actual value of Fulton common stock when issued in the merger or the price at which Fulton common stock will trade after the merger. The analysis indicated the following information as of and for the twelve months ended [DATE]:

Premier


Fulton


Net Income Applicable to Common Shareholders

Net Income

Assets

Loans

Deposits

Equity

Ownership

Hurdle Rate Analysis. Using a range of discount rates and a range of terminal price to earnings per common share multiples, Boenning estimated a range of compound annual earnings per common share growth rates required over a five year period for Premier to obtain an implied per common share stand alone market price comparable to the implied consideration offered by Fulton on a present value basis. Boenning calculated a range of future values of the per common share implied value of the Fulton transaction over a five-year period based on projected financial informationa range of Droversdiscount rates from 10% to 14%. The range of discount rates reflected the expected rate of return required by holders or prospective buyers of Premier common stock. Using a range of price to earnings per common share multiples of 12.5x to 17.5x to reflect the growth and Fultonprofitability prospects of Premier as well as general market valuations for comparable banking companies, Boenning calculated Premier’s potential earnings per common share at the end of five years by dividing the price to common earnings per share multiples into the range of future values. The annual growth rate was calculated based on the potential earnings per common share values at the end of five years and Premier’s earnings per common share value of [$xxx] for the year[year ended December 31, 2000. The percentage of pro forma shares owned was determined using an exchange ratio of 1.24. This2002]. Boenning then compared the resulting earnings growth rates with Premier’s historical and estimated future earnings per common share growth rates.

In connection with the hurdle rate analysis indicated thatperformed, Boenning considered and discussed with Premier’s board how the implied contributionsanalysis would be affected by changes in the underlying assumptions, including variations with respect to the combined entity were as follows: Drovers Fulton ------- ------ Total assets 11.01% 88.99% Total cash & securities 14.56 85.44 Total net loans 9.64 90.36 Total intangibles 0.00 100.00 Total deposits 10.21 89.79 Total borrowings 16.84 83.16 Tangible equity 8.19 91.81 Total equity 7.87 92.13 2000 estimated net income 5.03 94.97 2001 estimated net income 7.17 92.83 Percentagerange of pro forma shares owned 8.17 91.83 discount rates and price to per common share earnings multiples used.

In connection with rendering its December 27, 2000 opinion, Sandler O'Neill reviewed, among other things: (1)January Opinion and Proxy Opinion, Boenning performed a variety of financial analyses. Although the merger agreement and certainevaluation of the schedules thereto; (2)fairness, from a financial point of view, of the warrant and warrant agreement dated December 27, 2000 between Drovers and Fulton; (3) certain publicly available financial statements and other -25- historical financial information of Drovers that they deemed relevant; (4) certain publicly available financial statements and other historical financial information of Fulton that they deemed relevant; (5) certain internal financial analyses and forecasts of Drovers forconsideration to be paid in the years ending December 31, 2000 and 2001 prepared by management of Drovers and the views of senior management of Drovers,Merger was to some extent a subjective one based on limited discussions with membersthe experience and judgment of senior management, regarding Drovers' pastBoenning and current business,not merely the result of mathematical analysis of financial condition, results of operations and future prospects; (6) certain internal financial analyses and forecasts of Fulton for the years ending December 31, 2000 and 2001 prepared by management of Fulton, consensus earnings per share estimates for Fulton for the years ending December 31, 2000 and 2001 published by IBES and the views of senior management of Fulton, based on limited discussions with members of senior management of Fulton, regarding Fulton's past and present business, financial condition, results of operations and future prospects; (7) the pro forma impact of the Merger, including the relative contributions of Drovers and Fulton to the resulting institution; (8) the publicly reported historical price and trading activity for Drovers' and Fulton's common stock, including a comparison of certain financial and stock market information for Drovers and Fulton with similar publicly available information for certain other companies the securities of which are publicly traded; (9) the financial terms of recent business combinations in the commercial banking industry, to the extent publicly available; (10) the current market environment generally and the banking environment in particular; and (11) such other information, financial studies, analyses and investigations and financial, economic and market criteria as they considered relevant. In connection with rendering its opinion included as an appendix to this document, Sandler O'Neill confirmed the appropriateness of its reliancedata, Boenning principally relied on the previously discussed financial valuation methodologies in its determinations. Boenning believes its analyses used to render its December 27, 2000 opinion by performing procedures to update certainmust be considered as a whole and that selecting portions of such analyses and factors considered by reviewing the assumptions upon whichBoenning without considering all such analyses were based and factors could create an incomplete view of the other factors considered in renderingprocess underlying Boenning opinions. In its opinion. In performing its reviewsanalysis, Boenning made numerous assumptions with respect to business, market, monetary and analyses, Sandler O'Neill assumed and relied upon the accuracy and completeness of all the financial information, analyseseconomic conditions, industry performance and other information that was publicly availablematters, many of which are beyond Premier and Fulton’s control. Any estimates contained in Boenning analyses are not necessarily indicative of future results or otherwise furnished to, reviewed byvalues, which may be significantly more or discussed with it. Sandler O'Neill was not asked to and did not undertake an independent verification of the accuracy or completeness of any ofless favorable than such information and they do not assume any responsibility or liability for the accuracy or completeness of any of such information. Sandler O'Neill did not make an independent evaluation or appraisal of the assets, the collateral securing assets or the liabilities, contingent or otherwise, of Drovers or Fulton or any of their respective subsidiaries, or the collectibility of any such assets, nor was it furnished with any such evaluations or appraisals. Sandler O'Neill is not an expert in the evaluation of allowances for loan losses and it has not made an independent evaluation of the adequacy of the allowance for loan losses of Drovers or Fulton, nor has it reviewed any individual credit files relating to Drovers or Fulton. With Drovers' consent, Sandler O'Neill has assumed that the respective allowances for loan losses for both Drovers and Fulton are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. estimates.

In addition, Sandler O'Neill has not conducted any physical inspection of the properties or facilities of Drovers or Fulton. Sandler O'Neill is not an accounting firm and they have relied, with Drovers' consent, on the reports of the independent accountants of Drovers and Fulton for the accuracy and completeness of the financial statements furnished to them. With respect to all financial projections and the published earnings per share estimates prepared by and/or reviewed with the managements of Drovers and Fulton and used by Sandler O'Neill inreaching its analyses, Sandler O'Neill assumed that they reflected the best currently available estimates and judgments of the respective managements of the respective future financial performances of Drovers and Fulton and that such performances will be achieved. Sandler O'Neill expressed no opinion as to suchfairness, none of the analyses or factors considered by Boenning was assigned any particular weighting by Boenning than any other analysis. As a result of its consideration of the aggregate of all factors present and analyses performed, Boenning reached the conclusion, and opined, that the exchange ratio pursuant to the merger agreement was fair to the shareholders of Premier from a financial projections orpoint of view.

Boenning’s Proxy Opinion was based solely upon the assumptions on which they were based. Sandler O'Neill's opinion was necessarily based uponinformation available to it and the economic, market economic and other conditionscircumstances as they existed on, and could be evaluated as of the date its Proxy Opinion was delivered; events occurring after the date of its opinion. Sandler O'Neill assumed,Proxy Opinion could materially affect the assumptions used in all respects materialpreparing its Proxy Opinion. Boenning has not undertaken to reaffirm and revise its analysis, that all of the representations and warranties contained in the merger agreement and all related agreements are true and correct, that each party to such agreements will perform all of the covenants required to be performed by such party under such agreements and that the conditions precedent in the Agreement are not waived. Sandler O'Neill also assumed, with Drovers' consent, that there has been no material change in Drovers'Proxy Opinion or Fulton's assets, financial condition, results of operations, business or prospects sinceotherwise comment upon any events occurring after the date of the last publicly filed financial statements available to them, that Drovers and Fulton will remain as going concerns for all periods relevant to its analyses, and that the merger will be accounted for as a pooling of interests and will qualify as a tax-free reorganization for federal income tax purposes. -26- Proxy Opinion.

The full text of the opinion,Boenning Proxy Opinion, dated as of January 16, 2003, which sets forth assumptions made and matters considered, and limits on the review undertaken is attached as Exhibit C. C to this document. Premier’s shareholders are urged to read the Proxy Opinion in its entirety. Boenning Proxy Opinion is directed only to the exchange ratio pursuant to the merger agreement from a financial point of view, is for the information of the board of directors of Premier, and does not address any other aspect of the merger nor does it constitute a recommendation to any holder of Premier common stock as to how such holder should vote at the Premier annual meeting.

The foregoing provides only a summary of the Proxy Opinion of Boenning and is qualified in its entirety by reference to the full text of that opinion, which is set forth in Exhibit C to this document.

Compensation of Sandler O'Neill Drovers has agreedBoenning & Scattergood

Premier and Boenning entered into an agreement relating to pay Sandler O'Neill a transaction feethe services to be provided by Boenning in connection with the merger. Premier agreed to pay Boenning a cash fee of $15,000 upon execution of the engagement agreement. In addition, concurrently with the execution of a definitive agreement, Premier agreed to pay Boenning a cash fee equal to 1% of the market value of the aggregate consideration offered in exchange for the outstanding shares of Premier common stock in the merger a substantial portionwith $150,000 of which is contingentsuch fee payable upon the approvalissuance of Boenning’s fairness opinion and the merger by Drovers' shareholders andbalance payable at the time of the closing of the merger. Based on the closing price1.34 per share exchange ratio payable in the merger and the number of Fultonshares of Premier common stock and common stock equivalents outstanding on _________, 2001 (the latest practicablethe record date priorfor the annual meeting, this fee will amount to approximately $900,000. Pursuant to the date of this document), Drovers would pay Sandler O'Neill a transaction fee of approximately $________, of which approximately $115,000 has been paid, approximately $__________ will be due upon approval of the merger by Drovers shareholders and the remainder will be due upon closing of the merger. Drovers has also paid Sandler O'Neill a fee of $100,000 for rendering its fairness opinion, which will be credited against that portion of the transaction fee due upon closing of the merger. Whether or not the merger is completed, Drovers hasBoenning engagement agreement, as amended, Premier also agreed to reimburse Sandler O'NeillBoenning for its reasonable out-of-pocket expenses incurred in connection with its engagementretention, not to exceed $15,000 without Premier’s prior approval, and to indemnify Sandler O'Neill and its affiliates and their respective partners, directors, officers, employees, agents, and controlling personsit against certain expenses and liabilities, including liabilities under securities laws. Sandler O'Neillliabilities.

Boenning has in the past provided certain other investment banking services to DroversPremier in the past and has received compensation for such services. In the ordinary course of its business as a broker-dealer, Sandler O'Neill may also purchase securities from and sell securities to Drovers and Fulton and may actively trade the equity or debt securities of Drovers and Fulton and their respective affiliates for its own account and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities. Fulton Financial's

Fulton’s Board Of Directors'Directors’ Reasons For The Merger

The acquisition of DroversPremier was attractive to Fulton Financial'sFulton’s Board of Directors because it presented an opportunity to acquire a performing financial institution in a geographic market which would contribute to the expansion and strengthening of Fulton Financial'sFulton’s presence in York County,Bucks, Northampton and Montgomery Counties, Pennsylvania, which has occurred to date through de novo branching and which fit the profile of Fulton Financial'sFulton’s desired markets in terms of economic growth and demographics.

The Fulton board of directors met at a special board meeting on November 19, 2002, and approved the nature and amount of consideration that could be offered by management, and authorized the Chairman of the Board, President and any Executive Vice President to negotiate and sign the form of the definitive agreement. At a regular board meeting on January 21, 2003, the Fulton board of directors unanimously approved and ratified the definitive merger agreement and related documents and the execution of the merger agreement.

Effect Of The Merger

Upon completion of the merger, DroversPremier will merge with and into Fulton, Financial, and the separate legal existence of DroversPremier will cease. As a consequence of the merger, all property, rights, debts and obligations of DroversPremier will automatically transfer to and vest in Fulton, Financial, in accordance with Pennsylvania law. Fulton, Financial, as the surviving corporation, will be governed by the Articles of Incorporation and Bylaws of Fulton Financial in effect immediately prior to completion of the

merger. The directors and executive officers of Fulton Financial prior to the merger will continue, in their respective capacities, as the directors and executive officers of Fulton Financial after the merger, except that Fulton Financial will appoint to its Board of Directors twoone current directorsdirector of Drovers. Premier.

Exchange Ratio

On the effective date of the merger, each outstanding share of DroversPremier common stock will automatically convert into 1.241.34 shares of Fulton Financial common stock. You will receive cash instead of receiving fractional share interests of Fulton Financial common stock.

Fulton Financial will adjust the number of shares of Fulton Financial common stock issuable in exchange for shares of DroversPremier common stock to take into account any stock splits, stock dividends, reclassifications or other similar events that may occur involving Fulton Financial common stock prior to closing.

On the effective date of the merger, each outstanding option to purchase shares of DroversPremier common stock will automatically convert into an option to purchase Fulton Financial common stock. The number of shares of Fulton Financial common stock issuable upon exercise will equal the number of shares of DroversPremier common stock -27- subject to the option multiplied by 1.24,1.34, rounded to the nearest whole share. The exercise price for a whole share of Fulton Financial common stock will equal the stated exercise price of the option divided by 1.24.1.34. Shares issuable upon the exercise of such options to acquire Fulton Financial common stock will remain subject to the terms of the plans and grant agreements of DroversPremier under which DroversPremier issued the options.

Treatment of Stock Options and Preferred Stock

At the effective time of the merger, each outstanding and unexercised option to purchase shares of Premier common stock issued under a Premier stock option plan, whether or not then vested and exercisable, will be cancelled and substituted for an option to purchase Fulton common stock on the following terms: (i) the number of shares of Fulton common stock which may be acquired will be equal to the product of the number of shares of Premier common stock covered by the Premier option multiplied by the conversion ratio, provided that any fractional share will be rounded to the nearest whole share; (ii) the exercise price per share of Fulton common stock will be equal to the exercise price per share of Premier common stock of the related Premier option, divided by the conversion ratio, provided that the exercise price will be rounded to the nearest whole cent; (iii) the duration and other terms of the Fulton stock option will be identical to the duration and other terms of the Premier option, except that all references to Premier will be deemed to be references to Fulton and its affiliates, where the context so requires and will remain exercisable until the stated expiration date of the corresponding Premier option.

The outstanding shares of Premier’s Series A Preferred Stock will not be converted into Fulton common stock. All of the outstanding shares of Premier’s Series A Preferred Stock will be redeemed in accordance with its terms as of or prior to the effective time of the merger. (See “Redemption of Preferred Stock” on page 43).

Effective Date Of The Merger

The effective date of the merger will occur within thirty days following the receipt of all regulatory and shareholder approval.approvals. Fulton Financial and DroversPremier may also mutually agree on a different date. Fulton Financial and DroversPremier presently expect that the effective date of the merger will occur on or about July 1, 2001. no later than the third quarter of 2003.

On or prior to the effective date of the merger, Fulton Financial and DroversPremier will file articles of merger with the Pennsylvania Department of State and such document will set forth the effective date of the merger. Either Fulton Financial or DroversPremier can terminate the merger agreement if, among other reasons, the merger does not occur on or before September 30, 2001,2003, and the terminating party has not breached or failed to perform any of its obligations under the merger agreement. However, either party may extend this date to December 31, 2003, if closing has not occurred by September 30, 2003 because regulatory approval is still pending. See "-- Termination;“Termination; Effect of Termination"Termination” on page _______. 39.

Exchange Of DroversPremier Stock Certificates

No later than fivethree business days after receipt of a final shareholders list following the effective date of the merger, Fulton Financial will send a transmittal form to each record owner of DroversPremier common stock. The transmittal form will contain instructions on how to surrender certificates representing DroversPremier common stock for certificates representing Fulton Financial common stock.

You should not forward any DroversPremier stock certificates until you have received transmittal forms from Fulton Financial.Fulton. You should not return stock certificates with the enclosed proxy card.

Until you exchange your certificates representing DroversPremier common stock, you will not receive the certificates representing Fulton Financial common stock into which your DroversPremier shares have converted. In addition, at its option, Fulton Financial may withhold dividends on the Fulton Financial shares if you fail to exchange your certificates. When you surrender your DroversPremier certificates, you will receive any unpaid dividends without interest. For all other purposes, however, each certificate which represents shares of DroversPremier common stock outstanding at the effective date of the merger will evidence ownership of the shares of Fulton Financial common stock into which those shares converted as a result of the merger. Neither Fulton Financial nor DroversPremier will have liability for any amount paid in good faith to a public official pursuant to any applicable abandoned property, escheat or similar law.

Conditions To The Merger

The obligations of Fulton Financial and DroversPremier to complete the merger are subject to various conditions, which include, among other customary provisions for transactions of this type, the following: .

approval of the merger agreement by Drovers'Premier’s shareholders; .

receipt of all required regulatory approvals, including the expiration or termination of any notice and waiting periods; .

the absence of any action, suit or proceeding, pending or threatened, which seeks to modify, enjoin or prohibit or otherwise adversely and materially affect the transaction contemplated by the merger agreement; .

delivery of a tax opinion to each of Fulton Financial and Drovers; . Premier;

the absence of any material and adverse change in the condition, assets, liabilities, business or operations or future prospects of either party; -28- .

the accuracy in all material respects as of the date of the merger agreement and as of the effective date of the merger of the representations and warranties of the other party, except as to any representation or warranty which specifically relates to an earlier date and except as otherwise contemplated by the merger agreement; . holders of less than 10% of Drovers common stock exercise dissenters rights; . receipt of an opinion from Arthur Andersen, LLP, that the merger qualifies for pooling of interests accounting; .

the other party'sparty’s material performance of all its covenants and obligations; and .

other conditions customary for similar transactions, such as the receipt of officer certificates and legal opinions.

Except for the requirements of shareholder approval, regulatory approvals and the absence of any legal action preventing the merger, each of the conditions described above may be waived in the manner and to the extent described in "Amendment; Waivers"“Amendment; Waivers” on page _______.39. As of the date of this document, Fulton Financial'sFulton’s counsel has delivered the required tax opinion.

Representations and Warranties

The merger agreement contains customary representations and warranties relating to: .

the corporate organizations of Fulton, Financial, DroversPremier and DroversPremier Bank and their respective subsidiaries; .

the capital structures of Fulton Financial and Drovers; . Premier;

the approval and enforceability of the merger agreement; .

the consistency of financial statements with generally accepted accounting principles; .

the filing of tax returns and payment of taxes; .

the absence of material adverse changes, since September 30, 2000,2002, in the condition, assets, liabilities, business or operations of either Fulton Financial or Drovers,Premier, on a consolidated basis; .

the absence of undisclosed material pending or threatened litigation; .

compliance with applicable laws and regulations; .

retirement and other employee plans and matters relating to the Employee Retirement Income Security Act of 1974; .

the quality of title to assets and properties; .

the maintenance of adequate insurance; .

the performance of material contracts; .

the absence of undisclosed brokers'brokers’ or finders'finders’ fees; .

the absence of material environmental violations, actions or liabilities; -29- .

the consistency of the allowance for loan losses with generally accepted accounting principles and all applicable regulatory criteria; and .

the accuracy of information supplied by Fulton Financial and DroversPremier in connection with the Registration Statement filed by Fulton Financial with the SEC, this document and all applications filed with regulatory authorities for approval of the merger; and merger.

The merger agreement also contains other representations and warranties by DroversPremier relating to: .

transactions between DroversPremier and certain related parties; .

the filing of all regulatory reports; .

the lack of any regulatory agency proceeding or investigation into the business or operations of DroversPremier or any of its subsidiaries; and .

the receipt by the DroversPremier Board of Directors of a written fairness opinion.

Business Pending The Merger

Under the merger agreement, between the date the merger agreement was signed and the date the merger occurs, DroversPremier and its subsidiaries agreed, among other things, to: .

use all reasonable efforts to carry on their respective businesses in the ordinary course; .

use all reasonable efforts to preserve their respective business organizations, to retain the services of their present officers and employees and to maintain their relationships with customers, suppliers and others with whom they have business dealings; .

maintain all of their structures, equipment and other property in good repair; .

use all reasonable efforts to preserve or collect all material claims and causes of action; .

maintain insurance policies;

materially perform their obligations under all material contracts; .

maintain their books of account and other records in the ordinary course of business; .

comply in all material respects with all regulations and laws that apply; .

not amend their Articles of Incorporation or bylaws; .

not enter into any material contract or incur any material liability or obligation except in the ordinary course of business; .

not make any material acquisition or disposition of properties or assets that would exceed $100,000; . $200,000 except for ordinary course loan and investment activity;

not take any action that would be a material breach of any representation, warranty or covenant;

not declare, set aside or pay any dividend or other distribution on its capital stock, except as otherwise specifically set forth in the merger agreement (see "Dividends"“Dividends” on page ____)35); .

not authorize, purchase, redeem, issue or sell any shares of DroversPremier common stock or any other equity or debt securities, with limited exceptions for shares purchased in the open market for distribution under certain Drovers plans; -30- . securities;

not increase the rate of compensation of, pay a bonus or severance compensation to, or create or amend employment agreements for any officer, director, employee or consultant, except as otherwise required or permitted by the merger agreement, except that they may grant and pay routine periodic salary increases in accordance with past practices; . not take any action which would result in any of the representations and warranties becoming untrue; . not implement any new employee benefit or welfare plan, or amend any plan; .

not enter into renew, modify or compromise any transaction with any affiliate of Drovers, unless permitted by the merger agreement;certain related party transactions; and .

not open or close any branches or automated banking facilities. facilities except as otherwise permitted in the merger agreement.

Dividends

The merger agreement permits DroversPremier to pay a regular quarterly cash dividend not to exceed $.13$.05 per share of DroversPremier common stock outstanding for the first and second quarter of 2001 and $.14 per share in each quarter thereafter during which2003. If the merger is not yet completed;completed on or before June 30, 2003, Premier may, for each quarter thereafter until the effective date of the merger, pay a dividend in an amount equal to the amount Premier’s shareholders would have received had the merger been effective on July 16,

2003; provided that DroversPremier may not pay its shareholders a dividend for any quarter in which such shareholders are entitled to receive a dividend from Fulton Financial for the same quarter. Subject to applicable regulatory restrictions, if any, DroversPremier Bank may pay cash dividends sufficient to permit payment of the dividends by Drovers.Premier. Neither DroversPremier nor DroversPremier Bank may pay any other dividend without the prior written consent of Fulton Financial. Fulton. Premier may continue to pay its regular quarterly cash dividends on its preferred stock in accordance with its terms.

No Solicitation Of Transactions

The merger agreement prohibits DroversPremier or any of its affiliates or representatives from: .

responding to, soliciting, initiating or encouraging any inquiries relating to an acquisition of DroversPremier or its subsidiaries by a party other than Fulton, Financial, or engaging in negotiations with respect to such a transaction; .

withdrawing approval or recommendation of the merger agreement or the merger except under limited circumstances concerning a third party'sparty’s proposal to acquire DroversPremier or its subsidiaries; .

approving or recommending a third party'sparty’s proposal to acquire DroversPremier or its subsidiaries; or .

causing DroversPremier to enter into any kind of agreement with a third party relating to the third party'sparty’s proposal to acquire DroversPremier or its subsidiaries unless the DroversPremier Board of Directors determines in good faith and with the written advice of outside counsel that failure to do so would be reasonably likely to constitute a breach of its fiduciary duties and the applicable proposal is superior to Fulton Financial'sFulton’s acquisition terms.

However, if at any time the Board of Directors of DroversPremier determines in good faith, based on the written advice of outside counsel, that failure to consider a third party'sparty’s proposal would be reasonably likely to constitute a breach of its fiduciary duties, Drovers,Premier, in response to a written acquisition proposal that was unsolicited and that is reasonably likely to lead to a better proposal, may: .

give the third party non-public information relating to DroversPremier or its subsidiaries pursuant to a customary confidentiality agreement; and .

participate in negotiations regarding such proposal. -31- Drovers

Premier agreed to notify Fulton Financial if it receives any inquiries or proposals relating to an acquisition by a party other than Fulton Financial. Amendment; Waivers SubjectFulton.

Board of Directors’ Covenant to any applicable legal restrictions, at any time priorRecommend the Merger Agreement

Premier’s directors and executive officers entered into voting agreements by which they agreed to completionvote all shares of voting capital stock beneficially owned by them in favor of the merger agreement. The Premier board of directors is permitted to withdraw, modify or change in a manner adverse to Fulton, Financial and Drovers may: . amend the merger agreement, except that any amendment relatingits recommendation to the considerationPremier shareholders with respect to be received by the Drovers shareholders in exchange for their shares must be approved by the Drovers shareholders (unless Drovers' Board of Directors elects to decrease the exchange ratio in the event the market price of Fulton Financial common stock just before the merger is greater than $26.38); . extend the time for the performance of any of the obligations or other acts of Fulton Financial and Drovers required in the merger agreement; or . waive any term or condition in the merger agreement to the extent permitted by law. Termination; Effect Of Termination Fulton Financial and Drovers may terminate the merger agreement at any time prior to completion of the merger by mutual written consent. Either Fulton Financial or Drovers may terminate the merger agreement at any time prior to completion of the merger if: . any condition precedent to its obligations under the merger agreement remains unsatisfied as of September 30, 2001 through no fault of its own, . there has been a material breach by the other party of a representation, warranty or covenant in the merger agreement and such breach has not been cured within thirty days the merger only if:

after written noticeconsultation with its outside legal counsel, the board of such breach has been given: or . the Board of Directors of Drovers, actingdirectors determines in good faith and consistent withthat failing to take such action, in response to an unsolicited bona fide written superior proposal (as defined in the merger agreement), would be reasonably likely to constitute a breach of its fiduciary duties takes certain actions in connection with anunder applicable law;

the applicable acquisition of Drovers by a party other than Fulton Financial, which it believes is more favorable to Drovers' shareholders. Additionally, Fulton Financial may terminate the merger agreement if the price of Fulton Financial common stock just before completion of the merger is greater than $26.38. However, Drovers may cause Fulton Financial to amend the merger agreement to decrease the exchange ratio, eliminating Fulton Financial's right to terminate. Specifically, the current conversion ratio of 1.24 would be multiplied by the ceiling price ($26.38) and divided by the actual closing price of Fulton Financial Common Stock. The product of this calculation equals the new, reduced exchange ratio. Similarly, Drovers may terminate the merger agreement if the price of Fulton Financial common stock just before completion of the merger is less than $19.50. Fulton Financial may cause the merger agreement to be amended to increase the exchange ratio, eliminating Drovers' right to terminate under this provision. Specifically, the current exchange ratio of 1.24 would be multiplied by the floor price ($19.50) and divided by the actual closing price of Fulton Financial Common Stock. The product of this calculation equals the new, increased exchange ratio. In the event that either Fulton Financial or Drovers terminates the merger agreement, neither Fulton Financial nor Drovers will have any continuing liability or obligation other than the obligation dealing with confidentiality and any liabilities resulting from a breach by the other of a material term or condition of the merger agreement. -32- Management And Operations After The Merger The Board of Directors and executive officers of Fulton Financial and its subsidiaries will not change as a result of the merger, except as follows: . Fulton Financial will appoint to its Board of Directors two current directors of Drovers for at least one 3-year term; . Fulton Bank will appoint to its Board of Directors three other current directors of Drovers for at least three consecutive 1-year terms; . A. Richard Pugh will join the senior management team of Fulton Bank and other Drovers officers will be integrated into Fulton Bank's management team; and . Drovers' current directors will be given positions on a York County regional advisory board to Fulton Bank for at least three years. The current Drovers directors who will serve as Fulton Financial and Fulton Bank directors have not yet been identified. Fulton Financial intends to cause Drovers Bank to merge with and into Fulton Bank subsequent to the merger of Fulton Financial and Drovers. For a period of three years following the effective date of the merger of Fulton Financial and Drovers, Fulton Financial has agreed to operate the former business of Drovers Bank as the York County, Pennsylvania division of Fulton Bank under the name of "Drovers Bank, a division of Fulton Bank" or a similar name and to appoint the current directors of Drovers Bank to a regional advisory board of the Drovers division of Fulton Bank. Fulton Financial may shorten the three year period due to regulatory considerations, safe banking practices or the exercise of the Fulton's directors' fiduciary duties. All such directors shall continue to receive directors' fees for a period of three years equal to the greater of the fees paid by Drovers or Drovers Bank or the fees paid by Fulton Financial or Fulton Bank, as applicable. In addition, the trust business of Drovers Bank will be transferred to Fulton Financial Advisors, N.A., a subsidiary of Fulton Financial which provides trust and related financial services. Fulton Financial also intends that Drovers Bank's Frederick, Maryland branch be sold to Hagerstown Trust Company, a Maryland trust company and a wholly-owned subsidiary of Fulton Financial. It is anticipated that the Frederick branch will be sold by Drovers Bank to Hagerstown Trust Company shortly following the merger of Fulton Financial and Drovers. Employment; Severance Upon completion of the merger, Fulton Financial will use its best efforts to continue the employment of persons who were full-time employees of Drovers or Drovers Bank. Where that is not possible for whatever reason, Fulton Financial will make severance payments to affected persons. Fulton Financial will also make severance payments to any employee who declines a position that requires re-location of more than 25 miles from both his or her current place of employment and his or her residence. Severance benefits will consist of two week's salary (at then current levels) plus one week's salary for each year of service with a maximum of fifty- two week's salary. A person eligible for severance benefits will remain eligible for such benefits if his or her employment is involuntarily terminated without cause within one year of the merger's effective date. Any person whose employment with Fulton Financial is involuntarily terminated without cause more than one year after the effective date of the merger will receive such severance benefits from Fulton Financial as are provided under Fulton Financial's general severance policy for such terminations. Any such person will be given full credit for each year of service as a Drovers employee. -33- Retirement Plans; Employee Benefits Upon completion of the merger, Fulton Financial will continue to maintain The Drovers & Mechanics Bank Salary Deferral Plan and the Drovers & Mechanics Bank Pension Plan for all Drovers or Drovers Bank employees who are participants in the Plans and become Fulton Financial employees. Fulton Financial will maintain the Plans until the Plans no longer satisfy discrimination testing for qualified plans under the Internal Revenue Code or until the required cash contribution under the Pension Plan and the matching contribution under the Salary Deferral Plan exceed 10% of the covered payroll. If Fulton Financial ceases to maintain the Plans, former Drovers employees shall participate in the retirement plans provided by Fulton Financial and its subsidiaries. The non-retirement employee benefits provided to former Drovers employees after the merger's effective date will be substantially equivalent to or better than the employee benefits, in the aggregate, provided by Fulton Financial or its subsidiaries to their similarly situated employees. Each Drovers employee who becomes an employee of Fulton Financial or of a Fulton Financial subsidiary will be entitled to full credit for each year of service with Drovers for purposes of determining eligibility for vesting, but not benefit accrual, in Fulton Financial's employee benefit plans, programs and policies. Regulatory Approvals Fulton Financial and Drovers must obtain regulatory approvals before the merger can be completed, but cannot assure you that these regulatory approvals will be obtained or when they will be obtained. Itproposal is a condition to completion of the merger that Fulton Financialsuperior proposal; and Drovers receive

Premier has complied in all necessary regulatory approvals to the merger, without the imposition by any regulator of any condition or requirements that would so materially and adversely impact the economic or business benefits of the merger that, had such condition or requirement been know, Fulton Financial and Drovers would not, in the exercise of reasonable judgment, have entered into the merger transaction. Fulton Financial and Drovers cannot assure you that the regulatory approvals of the merger will not contain terms, conditions or requirements which would have such an impact. Fulton Financial and Drovers are not aware of any material governmental approvals or actions that are required to complete the merger, except as described below. If any other approval or action is required, the parties expect that they will seek such approval or action. The merger is subject to the prior approval of the Board of Governors of the Federal Reserve System pursuant to the Bank Holding Company Act of 1956, as amended. Under this law, the Federal Reserve Board generally may not approve any proposed transaction: . That would result in a monopoly or that would further a combination or conspiracy to monopolize banking in the United States, or . That could substantially lessen competition in any section of the country, that would tend to create a monopoly in any section of the country, or that would be in restraint of trade, unless the Federal Reserve Board finds that the public interest in meeting the convenience and needs of the community served clearly outweighs the anti-competitive effects of the proposed transaction. The Federal Reserve Board is also required to consider the financial and managerial resources and future prospects of the bank holding companies and banks concerned, as well as the convenience and needs of the community to be served. Consideration of financial resources generally focuses on capital adequacy. Consideration of convenience and needs includes the parties' performance under the Community Reinvestment Act of 1977. The merger may not be completed until the 30th day following the date of the Federal Reserve Board approval, although the Federal Reserve Board may reduce that period to 15 days. During this period, the United States Department of Justice has the opportunity to challenge the transaction on antitrust grounds. The commencement of any antitrust action would stay the effectiveness of the Federal Reserve Board's approval, unless a court of competent jurisdiction specifically ordered otherwise. -34- Fulton Financial filed notice of the proposed mergerrespects with the Federal Reserve Bankrequirements described under “No Solicitation of Philadelphia on March 23, 2001, seeking prior approval of the merger from the Federal Reserve Bank, pursuant to authority delegated to it by the Federal Reserve Board. As of the date of this document, the Federal Reserve Bank has not yet approved or disapproved the merger. The merger is also subject to the prior approval of the Pennsylvania Department of Banking under the provisions of the Pennsylvania Banking Code of 1965, as amended. Fulton Financial filed an application for approval of the proposed merger with the Department of Banking on March 28, 2001. As of the date of this document, the Department of Banking has not yet approved or disapproved the merger. Accounting Treatment Fulton Financial will account for the merger as a pooling of interests which means the companies will be treated as if they had previously been combined for accounting and financial reporting purposes. Material Contracts There have been no other material contracts or other transactions between Drovers and Fulton Financial since signing the merger agreement, nor have there been any material contracts, arrangements, relationships or transactions between Drovers and Fulton Financial during the past five years, other than in connection with the merger agreement and as described in this document. Material Federal Income Tax Consequences To complete the merger, Fulton Financial and Drovers must receive an opinion of Barley, Snyder, Senft & Cohen, LLC, counsel to Fulton Financial, that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, and that Fulton Financial and Drovers will each be a party to the reorganization within the meaning of Section 368(b) of the Code. In the opinion of Barley, Snyder, Senft & Cohen, LLC, the material federal income tax consequences of the merger will be as follows: . Fulton Financial and Drovers will not recognize gain or loss in the merger; . Drovers' shareholders will not recognize any gain or loss upon receipt of Fulton Financial common stock in exchange for Drovers common stock, except that shareholders who receive cash proceeds for fractional interests or upon exercise of dissenter's rights will recognize gain or loss equal to the difference between such proceeds and the tax basis allocated to their fractional share interests, and such gain or loss will constitute capital gain or loss if the shareholders held their Drovers common stock as a capital asset at the effective date of the merger; . the tax basis of shares of Fulton Financial common stock Drovers' shareholders receive in the merger will be the same as the tax basis of their shares of Drovers common stock less any basis that would be allocable to a fractional share of Fulton Financial common stock for which cash is received; and . the holding period of the Fulton Financial common stock that Drovers' shareholders receive in the merger will include the holding period of their shares of Drovers common stock, provided that they hold their Drovers common stock as a capital asset at the time of the merger. This is not a complete description of all the federal income tax consequences of the merger and, in particular, does not address tax considerations that may affect the treatment of shareholders who acquired their Drovers common stock pursuant to the exercise of employee stock options or otherwise as compensation, or shareholders which are exempt organizations or who are not citizens or residents of the United States. Each shareholder's individual circumstances may affect the tax consequences of the merger to such shareholder. In -35- addition, this discussion does not address the tax consequences of the merger under applicable state, local, or foreign laws. Accordingly, you should consult a tax advisor to discuss the specific tax consequences of the merger to you. NASDAQ Listing Drovers' obligation to complete the merger is subject to the condition that Fulton Financial common stock continue to be authorized for quotation on the National Market tier of the NASDAQ Stock Market. Expenses Fulton Financial and Drovers will each pay all their own costs and expenses, including fees and expenses of financial consultants, accountants and legal counsel, except that Fulton Financial will pay for the cost of printing and mailing this document. Resale Of Fulton Financial Common Stock The Fulton Financial common stock issued in the merger will be freely transferable under the Securities Act of 1933 except for shares issued to any Drovers shareholder who is an "affiliate" of Drovers or Fulton Financial for purposes of SEC Rule 145. Each director and executive officer of Drovers will enter into an agreement with Fulton Financial providing that, as an affiliate, he or she will not transfer any Fulton Financial common stock received in the merger except in compliance with the securities laws. This document does not cover resale of Fulton Financial common stock received by any affiliate of Drovers or Fulton Financial. Dissenters' Rights' General. The Pennsylvania Business Corporation Law of 1988, grants shareholders of Drovers the right to dissent from the merger and to obtain payment of the "fair value" of their shares in the event Fulton Financial and Drovers complete the merger. If you are a shareholder of Drovers and you contemplate exercising your right to dissent, you should read carefully the provisions of Subchapter D of Chapter 15 of the Pennsylvania Business Corporation Law of 1988, which is attached to this document as Exhibit D. A discussion of the provisions of the statute follow here. The discussion describes the steps that you must take if you want to exercise your right to dissent. You should read this summary and the full text of the law. Before the day of the shareholders meeting, send any written notice or demand required concerning your exercise of dissenters' rights to William R. Colmery, Secretary, Fulton Financial Corporation, One Penn Square, Lancaster, Pennsylvania 17602. Fair Value. The term "fair value" means the value of a share of Drovers common stock immediately before the day of the merger, taking into account all relevant factors, but excluding any appreciation or depreciation in anticipation of the merger. Notice of Intention to Dissent. If you wish to dissent, you must: . File a written notice of intention to demand payment of the fair value of your shares if the merger is effected with Drovers prior to the vote of shareholders on the merger at the meeting; . Make no change in your beneficial ownership of stock from the date you give notice through the day of the merger; and . Not vote your stock for approval of the agreement. Neither a proxy nor a vote against approval of the merger satisfies the necessary written notice of intention to dissent. Notice to Demand Payment. If the merger is approved by the required vote of shareholders, Fulton Financial will mail a notice to all dissenters who gave due notice of intention to demand payment and who did not vote for approval of the agreement. The notice will state where and when you must deliver a written demand for -36- payment and where you must deposit certificates for stock in order to obtain payment. The notice will include a form for demanding payment and a copy of the law. The time set for receipt of the demand for payment and deposit of stock certificates will be not less than 30 days from the date of mailing of the notice. Failure to Comply with Notice to Demand Payment, etc. You must take each step in the indicated order and in strict compliance with the statute to keep your dissenters' rights. If you fail to follow the steps, you will lose your right to dissent and you will receive 1.24 shares of Fulton Financial common stock for each share of Drovers common stock that you hold. Payment of Fair Value of Shares. Promptly after the merger, or upon timely receipt of demand for payment if the merger already has taken place, Fulton Financial will send dissenters, who have deposited their stock certificates, the amount that Fulton Financial estimates to be the fair value of the stock. The remittance or notice will be accompanied by: . A closing balance sheet and statement of income of Drovers for a fiscal year ending not more than 16 months before the date of remittance or notice together with the latest available interim financial statements; . A statement of Fulton Financial's estimate of the fair value of the Drovers common stock; and . A notice of the right of the dissenter to demand supplemental payment, accompanied by a copy of the law. Estimate by Dissenter of Fair Value of Shares. If a dissenter believes that the amount stated or remitted by Fulton Financial is less than the fair value of the stock, the dissenter may send an estimate of the fair value of the stock to Fulton Financial. If Fulton Financial remits payment of the estimated value of a dissenter's stock and the dissenter does not file his or her own estimate within 30 days after the mailing by Fulton Financial of its remittance, the dissenter will be entitled to no more than the amount remitted by Fulton Financial. Valuation Proceeding. If any demands for payment remain unsettled within 60 days after the latest to occur of: . The merger; . Timely receipt by Fulton Financial of any demands for payment; or . Timely receipt by Fulton Financial of any estimates by dissenters of the fair value, then, Fulton Financial may file an application, in the Court of Common Pleas of Lancaster County, requesting that the court determine the fair value of the stock. If this happens, all dissenters, no matter where they reside, whose demands have not been settled, shall be made parties to the proceeding. In addition, a copy of the application will be delivered to each dissenter. If Fulton Financial fails to file the application, then any dissenter, on behalf of all dissenters who have made a demand and who have not settled their claim against Fulton Financial, may file an application in the name of Fulton Financial at anytime within the 30-day period after the expiration of the 60-day period and request that the Lancaster County Court determine the fair value of the shares. The fair value determined by the Lancaster County Court may, but need not, equal the dissenters' estimates of fair value. If no dissenter files an application, then each dissenter entitled to do so shall be paid Fulton Financial's estimates of the fair value of the common stock and no more, and may bring an action to recover any amount not previously remitted, plus interest at a rate the Lancaster County Court finds fair and equitable. Fulton Financial intends to negotiate in good faith with any dissenting shareholders. If, after negotiation, a claim cannot be settled, then Fulton Financial intends to file an application requesting that the fair value of the common stock be determined by the Lancaster County Court. Costs and Expenses. The costs and expenses of any valuation proceedings in the Lancaster County Court, including the reasonable compensation and expenses of any appraiser appointed by the Court to recommend a -37- decision on the issue of fair value, will be determined by the Court and assessed against Fulton Financial except that any part of the costs and expenses may be apportioned and assessed by the Court against all or any of the dissenters who are parties and whose action in demanding supplemental payment the Court finds to be dilatory, obdurate, arbitrary, vexatious or in bad faith. Dividend Reinvestment Plan Fulton Financial currently maintains a shareholder dividend reinvestment plan. This plan provides shareholders of Fulton Financial with a simple and convenient method of investing cash dividends, as well as voluntary cash payments, in additional shares of Fulton Financial common stock without payment of any brokerage commission or service charge. Fulton Financial expects to continue to offer this plan after the effective date of the merger, and shareholders of Drovers who become shareholders of Fulton Financial will be eligible to participate in the plan. Interests Of Certain Persons in the Merger Certain members of management of Drovers and Drovers Bank, and their Boards of Directors, may have additional interests in the merger that differ from their interests as shareholders of Drovers. The Drovers Board of Directors was aware of these factors and considered them, among other matters, in approving the merger agreement. Share Ownership and Stock Options As of the record date, the directors and executive officers of Drovers beneficially own approximately ______________ shares of Drovers common stock, and hold options to purchase approximately __________ shares of Drovers common stock. On the effective date of the merger, each option will convert into an option to acquire Fulton Financial common stock. The number of shares of Fulton Financial common stock issuable upon the exercise of the converted option will equal the number of shares of Drovers common stock covered by the option multiplied by 1.24, and the exercise price for a whole share of Fulton Financial common stock will be the stated exercise price of the option divided by 1.24. Shares issuable upon the exercise of options to acquire Fulton Financial common stock will be issuable in accordance with the terms of the respective plans and grant agreements of Drovers under which Drovers issued the options. Indemnification; Directors and Officers Insurance Fulton Financial has agreed to indemnify the directors, officers and employees of Drovers against all losses, expenses, including attorney's fees, claims, damages or liabilities and settlement amounts arising out of actions or omissions occurring prior to completion of the merger, including the transactions contemplated by the merger agreement, to the fullest extent permitted under Pennsylvania law. Fulton Financial has also agreed to provide Drovers' existing directors and officers with coverage under a "tail" insurance policy for a period of three years after the merger, subject to certain maximum cost limits. Existing Change in Control Agreements. Drovers has existing Change in Control Agreements with 6 senior officers of Drovers: John D. Blecher, Matthew A. Clemens, Debra A. Goodling, Michael J. Groft, Michael E. Kochenour and Shawn A. Stine. Completion of the merger will constitute a change in control under these agreements. The agreements provide for the payment of certain benefits in the event the senior officer's employment is terminated by Drovers or Fulton without good cause. The senior officer will also be entitled to benefits under the agreement if the senior officer terminates his or her employment following: . an assignment of any duties materially inconsistent with his or her position, . a reduction in the senior officer's fixed salary or elimination of, or material adverse modification to any incentive or other supplemental currently taxable compensation plan, except any such -38- reduction, elimination or modification that is applied generally to senior executive officers of Fulton Financial, . a relocation of the senior officer's principal executive office outside of York County, Pennsylvania, or any requirement that the senior officer be based other than at Drovers' principal executive offices in York, Pennsylvania, except on a temporary basis in the ordinary course of business, or . a termination or material adverse modification to any nonqualified deferred compensation plan in which the senior executive participates without substitution of comparable benefits, except any such termination or modification that is applied generally to senior executive officers who had such benefits. If the senior officer's employment is terminated at any time prior to the 2nd anniversary of the merger for any of the above reasons, the senior officer is entitled to receive . the continued payment of their full compensation for 18 months (as to Messrs. Groft, Kochenour, and Stine and Ms. Goodling) or 12 months (as to Messrs. Blecher and Clemens)Transactions”, subject to reduction by one-half of the Form W-2 income from new employment) and . continuation of benefits for up to 18 months (as to Messrs. Groft, Kochenour and Stine and Ms. Goodling) or 12 months (as to Messrs. Blecher and Clemens) and an acceleration of the right to exercise current options held by the respective senior officer under Drovers' stock option plans. Employment and Other Agreements Pugh Employment Agreement. Mr. A. Richard Pugh, Chairman, President and Chief Executive Officer of Drovers, entered into a new employment agreement with Fulton Bank as of December 27, 2000. Mr. Pugh's agreement provides that he shall be employed as Chairman, President and Chief Executive officer of "Drovers Bank, a division of Fulton Bank," upon completion of the merger until the first business day of the month following his 65th birthday. Under the agreement, Mr. Pugh is entitled to an annual salary of $380,000 (including any holiday bonus). Mr. Pugh will also be entitled to participate in Fulton Bank's employee retirement and welfare benefit plans and other benefit programs, including medical and disability benefit programs and stock option plans, as may be provided for similarly situated executive officers of Fulton Financial's bank subsidiaries, and no less favorable, in the aggregate, than the benefits currently provided to Mr. Pugh from Drovers and Drovers Bank. In the event that Mr. Pugh would voluntarily terminate his employment with Fulton Bank, other than for "Good Reason," as defined in the agreement, Fulton Bank has agreed to pay Mr. Pugh the salary and benefits explained above for the shorter of 3 years or the remaining term of the agreement. If Mr. Pugh terminates his employment for "Good Reason," as defined in the agreement, or is terminated by Fulton Bank without "Cause," as defined in the agreement, Fulton Bank will pay Mr. Pugh the salary and benefits under the agreement for the full term of the agreement. The agreement also provides that for a period of 2 years after the termination of his employment, Mr. Pugh will not compete with or solicit employees or customers of Fulton Bank or Fulton Financial. This employment agreement with Fulton Bank replaces a Change in Control Agreement that Mr. Pugh had entered into with Drovers and Drovers Bank. Directors Fees Each of Drovers current directors will serve in one or more of the following capacities after the effective date of the merger: . Two Drovers directors will serve as directors of Fulton Financial for at least three years; -39- . Three other Drovers directors will serve as directors of Fulton Bank for at least three years; and . All Drovers directors will serve as members of the York County regional advisory board to the Drovers division of Fulton Financial for at least three years. As such, each director will be entitled to receive fees for his or her service in such capacity that are no less than the fees received by him or her from Drovers or, if higher, the fees paid by Fulton Financial or Fulton Bank, as the case may be. The current Drovers directors who will serve as Fulton Financial and Fulton Bank directors have not yet been identified. above.

Warrant Agreement and Warrant

General

In connection with the merger agreement, DroversPremier executed a warrant agreement, dated December 27, 2000January 16, 2003, which permits Fulton Financial to purchase DroversPremier common stock under certain circumstances. Under the warrant agreement, Fulton Financial received a warrant to purchase up to 1,250,000835,000 shares of DroversPremier common stock. This number represents approximately 19.8%19.5% of the issued and outstanding shares of DroversPremier common stock on December 27, 2000January 16, 2003 taking into consideration the shares issuable under the warrant. The exercise price per share to purchase DroversPremier common stock under the warrant is $19.75,$17.85, subject to adjustment. The warrant is only exercisable if certain events specified in the warrant occur. These triggering events are described below. None of the triggering events have occurred to the best of Fulton Financial'sFulton’s or Drovers'Premier’s knowledge as of the date of this document.

Effect of Warrant Agreement

Certain attempts to acquire DroversPremier or an interest in DroversPremier would cause the warrant to become exercisable as described above. Fulton Financial'sFulton’s exercise of the warrant would significantly increase a potential acquirer'sacquirer’s cost of acquiring DroversPremier compared to the cost that would be incurred without the warrant agreement. Therefore, the warrant agreement, together with Drovers'Premier’s agreement not to solicit other transactions relating to the acquisition of DroversPremier by a third party, may have the effect of discouraging other persons from making a proposal to acquire Drovers. Premier.

Terms of Warrant Agreement

The following is a brief summary of the material provisions of the warrant agreement, and we qualify this discussion by reference to the full warrant agreement and warrant. A complete copy of the warrant agreement and warrant is included as Exhibit B to this document, and is incorporated in this document by reference. Fulton Financial and DroversPremier urge you to read it carefully.

Exercise of the Warrant

The warrant is exercisable only upon the occurrence of one of the following events: .

if DroversPremier breaches any covenant in the merger agreement which would permit Fulton Financial to terminate the merger agreement and which occurs following a third party'sparty’s proposal to merge with or acquire or lease all or substantially all of the assets of DroversPremier or one of its subsidiaries, or to acquire 25% or more of the voting power of DroversPremier or one of its subsidiaries; .

if Drovers'Premier’s shareholders fail to approve the merger and, at the time of the shareholders'shareholders’ meeting, a third party proposal to merge with or acquire or lease all or substantially all of the assets of DroversPremier or one of its subsidiaries, or to acquire 25% or more of the voting power of DroversPremier or a subsidiary has been announced; -40- .

if a person other than Fulton Financial acquires beneficial ownership of 25% or more of DroversPremier common stock; .

if a person or group, other than Fulton, Financial, enters into an agreement or letter of intent with DroversPremier to merge or consolidate with Drovers,Premier, to acquire all or substantially all of the assets or liabilities of DroversPremier or one of its subsidiaries, or to acquire beneficial ownership of 25% or more of the voting power of DroversPremier or one of its subsidiaries; .

if a person or group, other than Fulton, Financial, commences a tender offer or exchange offer and within six months consummates a merger with or acquisition of DroversPremier or 25% of the voting power of DroversPremier or one of its subsidiaries; or .

if Fulton Financialor Premier terminates the merger agreement because Drovers'Premier’s Board of Directors takes certain actions inconsistent with Fulton'sFulton’s acquisition of Drovers. Premier.

If the warrant becomes exercisable, Fulton Financial may exercise the warrant by presenting the warrant to DroversPremier along with: .

a written notice of exercise; .

payment to DroversPremier of the exercise price for the number of shares specified in the notice of exercise; and .

a certificate specifying the events which have occurred which cause the warrant to be exercisable.

Termination of the Warrant

The warrant terminates on the earlier of: .

the effective date of the merger; or .

termination of the merger agreement in accordance with its terms (other than a termination by Fulton Financial caused by Drovers'Premier’s Board taking action), except that if one of the events described above which causes the warrant to be exercisable occurs prior to termination of the merger agreement, the warrant shall not terminate until twelve months after such event; or .

if the warrant has not previously been exercised, twelve months after the occurrence of one of the events described above which causes the warrant to be exercisable. exercisable; or

December 31, 2004.

Adjustments

In the event of any change in DroversPremier common stock by reason of stock dividends, split-ups, recapitalizations, combinations, conversions, divisions, exchanges of shares or the like, the number and kind of shares issuable under the warrant are adjusted appropriately.

Repurchase of Warrant or Warrant Shares

Under the warrant agreement, Fulton Financial has the right to require DroversPremier to repurchase the warrant or, in the event the warrant has been exercised in whole or in part, redeem the shares obtained upon such exercise. In the case of a repurchase of shares obtained upon exercise of the warrant, the redemption price per share is to be equal to the highest of: (i) 110% of the exercise price, (ii) the highest price paid or agreed to be paid for any share of common stock by an acquiring person (defined as any person who or which is the beneficial owner of 25% or more of the DroversPremier common stock) during the one year period immediately preceding the date of redemption, and (iii) in the event of a sale of all or substantially all of Drovers'Premier’s assets: (x) the sum of the price paid in such sale for such assets and the current market value of the remaining assets of DroversPremier as determined by a recognized -41- investment banking firm selected by Fulton Financial,and reasonably acceptable to Premier, divided by (y) the number of shares of DroversPremier common stock then outstanding. If the price paid consists in whole or in part of securities or assets other than cash, the value of such securities or assets shall be their then current market value as determined by a recognized investment banking firm selected by Fulton Financial. and reasonably acceptable to Premier.

In the case of a repurchase of the warrant, the redemption price is to be equal to the product obtained by multiplying: (i) the number of shares of DroversPremier common stock represented by the portion of the warrant that Fulton Financial is requiring DroversPremier to repurchase, times (ii) the excess of the redemption price over the exercise price.

Registration Rights Drovers

Premier granted Fulton Financial the right to request registration under the Securities Act of 1933 for the shares of DroversPremier common stock which are issuable upon exercise of the warrant.

Amendment; Waivers

Subject to any applicable legal restrictions, at any time prior to completion of the merger, Fulton and Premier may:

amend the merger agreement, except that any amendment relating to the consideration to be received by the Premier shareholders in exchange for their shares must be approved by the Premier shareholders;

extend the time for the performance of any of the obligations or other acts of Fulton and Premier required in the merger agreement; or

waive any term or condition in the merger agreement to the extent permitted by law.

Termination; Effect Of Termination

Fulton and Premier may terminate the merger agreement at any time prior to completion of the merger by mutual written consent.

Either Fulton or Premier may terminate the merger agreement at any time prior to completion of the merger if:

any condition precedent to its obligations under the merger agreement remains unsatisfied as of September 30, 2003 through no fault of its own; provided that either party may extend this date to December 31, 2003, if the merger has not occurred by September 30, 2003 because regulatory approval is still pending.

there has been a material breach by the other party of a representation, warranty or covenant in the merger agreement and such breach has not been cured within thirty days after written notice of such breach has been given; or

the Board of Directors of Premier, acting in good faith and consistent with its fiduciary duties, takes certain actions in connection with an acquisition of Premier by a party other than Fulton, which it believes is more favorable to Premier’s shareholders.

In addition, Premier may terminate the merger agreement if the price of Fulton common stock just before completion of the merger is less than $11.18, and the price of Fulton common stock has also declined 20% more than the decline (if any) in the average NASDAQ Bank Index for the same period as compared to the NASDAQ Bank Index on January 15, 2003. Neither party would owe the other any penalty or fee as a result of termination of the merger agreement. The market price termination provisions will be based on an average of the closing bid and asked prices for the Fulton common stock for the ten (10) consecutive trading days immediately preceding the date which is two (2) business days prior to the closing date of the merger. Specifically, the index comparison is calculated as follows:

eighty percent of the last sale price for Fulton common stock on January 15, 2003, (which was $18.64) times

the average NASDAQ Bank Index for the 10 business day period described below, divided by the NASDAQ Bank Index on January 15, 2003.

We anticipate that the merger will close in the third quarter of 2003. Neither Premier nor Fulton can predict whether the market price of Fulton’s common stock will increase, decrease or remain stable between the date of this document and the end of the period in which the average closing market price is determined.

In the event that either Fulton or Premier terminates the merger agreement, neither Fulton nor Premier will have any continuing liability or obligation other than the obligation dealing with confidentiality and any liabilities resulting from a breach by the other of a material term or condition of the merger agreement. However, if the merger terminates under certain circumstances, described above, Fulton will have the right to exercise the warrant.

Management And Operations After The Merger

The Board of Directors and executive officers of Fulton and its subsidiaries will not change as a result of the merger, except as follows:

Fulton will appoint to its Board of Directors one current director of Premier to serve until Fulton’s 2004 annual meeting and will nominate him at that meeting to serve for a 3-year term;

Premier Bank’s current directors will remain as directors of Premier Bank. The current Premier director who will serve as a Fulton director is Clark S. Frame.

In addition, Fulton agreed, for a period of three years, to

preserve the business structure of Premier Bank as a Pennsylvania commercial bank (provided that Fulton may cause Premier Bank’s branch offices located in Northampton County, Pennsylvania to be transferred to another bank subsidiary of Fulton); and

preserve and use the present name of Premier Bank.

Employment; Severance

Upon completion of the merger, Fulton will use its best efforts to continue the employment of persons who were full-time employees of Premier or Premier Bank. Where that is not possible for whatever reason, Fulton will make severance payments to affected persons.

If employment is involuntarily terminated, without cause, within one year of the effective date of the merger, severance benefits will consist of three month’s salary (at then current levels) or one week’s salary plus one week’s salary for each year of service with Premier up to a maximum of twenty-six weeks’ salary.

In the event employment is involuntarily terminated, without cause, after one year, severance payments will be made in accordance with Fulton’s then existing severance policy. Any such person will be given full credit for each year of service as a Premier employee.

Employee Benefits

The employee benefits provided to former Premier employees after the merger’s effective date will be substantially equivalent to the employee benefits, in the aggregate, provided by Premier for at least three years after the effective date of the merger, or until Fulton or its subsidiaries can no longer satisfy the applicable qualified retirement plan discrimination testing under the Internal Revenue Code. Each Premier employee who becomes an employee of Fulton or of a Fulton subsidiary will be entitled to full credit for each year of service with Premier for purposes of determining eligibility for vesting in Fulton’s employee benefit plans, programs and policies.

Regulatory Approvals

Fulton and Premier must obtain regulatory approvals before the merger can be completed, but cannot assure you that these regulatory approvals will be obtained or when they will be obtained.

It is a condition to completion of the merger that Fulton and Premier receive all necessary regulatory approvals to the merger, without the imposition by any regulator of any condition or requirements that would so materially and adversely impact the economic or business benefits of the merger that, had such condition or requirement been known, Fulton and Premier would not, in the exercise of reasonable judgment, have entered into the merger transaction. Fulton and Premier cannot assure you that the regulatory approvals of the merger will not contain terms, conditions or requirements which would have such an impact.

Fulton and Premier are not aware of any material governmental approvals or actions that are required to complete the merger, except as described below. If any other approval or action is required, the parties expect that they will seek such approval or action.

The merger is subject to the prior approval of the Board of Governors of the Federal Reserve System pursuant to the Bank Holding Company Act of 1956, as amended. Under this law, the Federal Reserve Board generally may not approve any proposed transaction:

That would result in a monopoly or that would further a combination or conspiracy to monopolize banking in the United States, or

That could substantially lessen competition in any section of the country, that would tend to create a monopoly in any section of the country, or that would be in restraint of trade, unless the Federal Reserve Board finds that the public interest in meeting the convenience and needs of the community served clearly outweighs the anti-competitive effects of the proposed transaction.

The Federal Reserve Board is also required to consider the financial and managerial resources and future prospects of the bank holding companies and banks concerned, as well as the convenience and needs of the community to be served. Consideration of financial resources generally focuses on capital adequacy. Consideration of convenience and needs includes the parties’ performance under the Community Reinvestment Act of 1977.

The merger may not be completed until the 30th day following the date of the Federal Reserve Board approval, although the Federal Reserve Board may reduce that period to 15 days. During this period, the United States Department of Justice has the opportunity to challenge the transaction on antitrust grounds. The commencement of any antitrust action would stay the effectiveness of the Federal Reserve Board’s approval, unless a court of competent jurisdiction specifically ordered otherwise.

Fulton filed notice of the proposed merger with the Federal Reserve Bank of Philadelphia on April 1, 2003, seeking prior approval of the merger from the Federal Reserve Bank, pursuant to authority delegated to it by the Federal Reserve Board. As of the date of this document, the Federal Reserve Bank has not yet approved or disapproved the merger.

The merger is also subject to the prior approval of the Pennsylvania Department of Banking under the provisions of the Pennsylvania Banking Code of 1965, as amended. Fulton filed notice seeking approval of the proposed merger with the Department of Banking on April 1, 2003. As of the date of this document, the Department of Banking has not yet approved or disapproved the merger.

Material Contracts

There have been no other material contracts or other transactions between Premier and Fulton since signing the merger agreement, nor have there been any material contracts, arrangements, relationships or transactions between Premier and Fulton during the past five years, other than in connection with the merger agreement and as described in this document.

Material Federal Income Tax Consequences

To complete the merger, Fulton and Premier must receive an opinion of Barley, Snyder, Senft & Cohen, LLC, counsel to Fulton, that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, and that Fulton and Premier will each be a party to the reorganization within the meaning of Section 368(b) of the Code.

In the opinion of Barley, Snyder, Senft & Cohen, LLC, the material federal income tax consequences of the merger will be as follows:

Fulton and Premier will not recognize gain or loss in the merger;

Premier’s shareholders will not recognize any gain or loss upon receipt of Fulton common stock in exchange for Premier common stock, except that shareholders who receive cash proceeds for fractional interests will recognize gain or loss equal to the difference between such proceeds and the tax basis allocated to their fractional share interests, and such gain or loss will constitute capital gain or loss if the shareholders held their Premier common stock as a capital asset at the effective date of the merger;

the tax basis of shares of Fulton common stock Premier’s shareholders receive in the merger will be the same as the tax basis of their shares of Premier common stock less any basis that would be allocable to a fractional share of Fulton common stock for which cash is received; and

the holding period of the Fulton common stock that Premier’s shareholders receive in the merger will include the holding period of their shares of Premier common stock, provided that they hold their Premier common stock as a capital asset at the time of the merger.

This is not a complete description of all the federal income tax consequences of the merger and, in particular, does not address tax considerations that may affect the treatment of shareholders who acquired their Premier common stock pursuant to the exercise of employee stock options or otherwise as compensation, or shareholders which are exempt organizations or who are not citizens or residents of the United States. Each shareholder’s individual circumstances may affect the tax consequences of the merger to such shareholder. In addition, this discussion does not address the tax consequences of the merger under applicable state, local, or foreign laws. Accordingly, you should consult a tax advisor to discuss the specific tax consequences of the merger to you.

NASDAQ Listing

The obligation of Premier and Fulton to complete the merger is subject to the condition that Fulton common stock to be issued in the merger be authorized for quotation on the National Market tier of the NASDAQ Stock Market.

Expenses

Fulton and Premier will each pay all their own costs and expenses, including fees and expenses of financial consultants, accountants and legal counsel, except that Fulton will pay for the cost of printing and mailing this document.

Resale Of Fulton Common Stock

The Fulton common stock issued in the merger will be freely transferable under the Securities Act of 1933 except for shares issued to any Premier shareholder who is an “affiliate” of Premier or Fulton for purposes of SEC Rule 145. This document does not cover resale of Fulton common stock received by any affiliate of Premier or Fulton. Each director and executive officer of Premier will enter into an agreement with Fulton providing that, as an affiliate, he or she will not transfer any Fulton common stock received in the merger except in compliance with the securities laws.

Dissenters’ Rights

Premier shareholders are not entitled to dissenters right under Subchapter D of Chapter 15 of the Pennsylvania Business Corporation Law of 1988.

Dividend Reinvestment Plan

Fulton currently maintains a shareholder dividend reinvestment plan. This plan provides shareholders of Fulton with a simple and convenient method of investing cash dividends, as well as voluntary cash payments, in additional shares of Fulton common stock without payment of any brokerage commission or service charge. Fulton expects to continue to offer this plan after the effective date of the merger, and shareholders of Premier who become shareholders of Fulton will be eligible to participate in the plan.

Redemption of Preferred Stock

Premier’s Series A 9.25% Non-Cumulative Perpetual Preferred Stock is governed by the Statement of Rights, Designations and Preferences amending Premier’s Articles of Incorporation. All outstanding shares of Premier’s Series A Preferred Stock will be redeemed as of or prior to the effective time of the merger in accordance with its redemption terms. The Statement of Rights provides that the Series A Preferred Stock may not be redeemed prior to June 14, 2007 except in the event of a change of control of Premier. The merger of Premier with Fulton constitutes a change of control. If the Series A Preferred Stock is redeemed prior to June 13, 2003, each share of Series A Preferred Stock will be redeemed at $25.625 per share. If the Series A Preferred Stock is redeemed after June 13, 2003, each share of Series A Preferred Stock will be redeemed at $25.50 per share. The aggregate payment of the redemption price to each holder of Series A preferred stock will be rounded down to the nearest whole cent. Premier will send a notice of redemption to each Series A preferred shareholder not less than 30 days prior to the date set for redemption. The notice will describe the redemption procedure in detail.

Interests Of Certain Persons in the Merger

When you are considering the recommendation of Premier’s board of directors with respect to approving the merger agreement and the merger, you should be aware that Premier directors and executive officers have interests in the merger as individuals which are in addition to, or different from, their interests as shareholders of Premier. The Premier board of directors was aware of these factors and considered them, among other matters, in approving the merger agreement and the merger. These interests are described below.

Share Ownership and Stock Options

As of the record date, the directors and executive officers of Premier own approximately 1,442,632 shares of Premier common stock, and hold options to purchase approximately 222,170 shares of Premier common stock. On the effective date of the merger, each option will convert into an option to acquire Fulton common stock. The number of shares of Fulton common stock issuable upon the exercise of the converted option will equal the number of shares of Premier common stock covered by the option multiplied by 1.34, and the exercise price for a whole share of Fulton common stock will be the stated exercise price of the option divided by 1.34. Shares issuable upon the exercise of options to acquire Fulton common stock will be issuable in accordance with the terms of the respective plans and grant agreements of Premier under which Premier issued the options.

Change of Control Agreements

Under the merger agreement, Fulton agreed to honor various contractual obligations which have been entered into by Premier and/or its subsidiaries and some of their executive officers, including change of control agreements between Premier, Premier Bank and each of Messrs. Soffronoff, Ginley and Sickel. These agreements generally provide that, in the event that a change of control of Premier or Premier Bank occurs, Premier or Premier Bank shall pay to the executive a lump sum cash severance payment equal to two times the executive’s current annual direct salary if the executive leaves or is terminated following the change of control within certain time frames. However, as part of the merger agreement, Messrs. Soffronoff and Ginley agreed to waive their change of control payments and instead accepted employment agreements with Premier Bank that became effective on the date of the merger. These new agreements are described below.

Assuming that his employment by Premier and Premier Bank was terminated following consummation of the merger in the third quarter of 2003 and that Fulton did not offer Mr. Sickel a position having equivalent responsibilities, authority, compensation and benefits as he received immediately prior to the change of control, the amount of the cash severance that would be payable to Mr. Sickel under his change of control agreement with Premier and Premier Bank is $358,000.

Employment Agreements

Messrs. Frame, Ginley and Soffronoff entered into employment agreements with Premier Bank which will become effective on, and are contingent upon, the effectiveness of the merger. Each agreement provides that the respective officer shall be employed for a period of three years from the effective date of the merger. Under their respective agreements, Messrs. Frame, Soffronoff and Ginley are entitled to an annual salary of $160,000, $240,000

and $235,000, respectively, and will also be entitled to benefits comparable to those offered by Premier Bank on January 16, 2003, including pension, profit sharing, medical and disability benefit programs and other Premier employee benefit plans and Fulton’s bonus programs.

For each of Messrs. Frame, Soffronoff and Ginley, in the event his employment was terminated “without cause” as defined in the agreement, Premier Bank has agreed to pay him the salary and benefits described above for the remaining term of the agreement. Each of them is also entitled to receive two times his salary in the event of a change in control, as defined in the agreement, of Premier Bank or of Fulton. The agreement also provides that for the longer of one year after the termination of his employment or the period of time by which any payment he is to receive is measured, the executive will not compete with Premier Bank.

These employment agreements with Premier Bank replace the Change in Control Agreements that each of Messers. Soffronoff and Ginley had previously entered into with Premier and Premier Bank.

Indemnification and Insurance

The merger agreement provides that Fulton shall indemnify and hold harmless each present and former director, officer and employee of Premier or a Premier subsidiary, determined as of the effective time of the merger, against any costs or expenses, judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the effective time of the merger, whether asserted or claimed prior to or after the effective time of the merger, arising in whole or in part out of, or pertaining to (i) the fact that he or she was a director, officer or employee of Premier or any of its subsidiaries, or is or was serving at the request of Premier or Premier Bank as a director, officer or employee of an affiliate, or (ii) the merger agreement or any of the transactions contemplated thereby, to the fullest extent permitted by law.

In addition, the merger agreement provides that Fulton shall maintain Premier’s existing directors’ and officers’ liability insurance policy for acts or omissions occurring prior to the effective time of the merger for the benefit of persons who are currently covered by such insurance policy for a period of four years following the effective time of the merger. Fulton may, however, substitute new policies in lieu of Premier’s existing policies if the new policies provide at least the same coverage and amounts containing terms and conditions which are substantially no less advantageous.

Currently, all of Premier and Premier Bank’s insurance policies are purchased through Richard B. Ryon Insurance, an agency in which director Richard F. Ryon is a partner.

Directors Fees

Each of Premier’s current directors will serve in one or more of the following capacities after the effective date of the merger:

One Premier director, Clark S. Frame, will serve as director of Fulton; and

All Premier Bank directors will continue to serve as directors of Premier Bank.

As such, each non-employee director will be entitled to receive fees for his or her service in such capacity equal to the fees received by him or her from Premier for a period of three years.

Other than as set forth above, no director or executive officer of Premier has any direct or indirect material interest in the merger, except insofar as ownership of Premier common stock might be deemed such an interest. See “Security Ownership of Certain Beneficial Owners and Management,” beginning on page 61.

INFORMATION ABOUT FULTON FINANCIAL

General

As permitted by the rules of the SEC, financial and other information relating to Fulton Financial that is not included in or delivered with this document, including information relating to Fulton Financial'sFulton’s directors and executive officers, is incorporated herein by reference. See "WHERE“WHERE YOU CAN FIND MORE INFORMATION"INFORMATION” on page ______68 and "INCORPORATION“INCORPORATION BY REFERENCE"REFERENCE” on page _________. 68.

Market Price Of And Dividends On Fulton Financial Common Stock And Related Shareholder Matters

The Fulton Financial common stock trades on the NASDAQ National Market under the symbol "FULT"“FULT”. As of December 31, 2000,2002, Fulton Financial had 15,99717,251 shareholders of record. The table below shows for the periods indicated the amount of dividends paid per share and the quarterly ranges of high and low sales prices for Fulton Financial common stock as reported by the NASDAQ National Market. Stock price information does not necessarily reflect mark-ups, mark-downs or commissions. Per share amounts have been retroactively adjusted to reflect the effect of stock dividends declared.
Price Range Per Share Per Share High Low Dividend 2001 First Quarter $ $ $ Second Quarter (through __________, 2001) 2000 First Quarter $20.06 $15.18 $0.143 Second Quarter 22.75 17.00 0.160 Third Quarter 21.94 19.00 0.160 Fourth Quarter 23.88 19.44 0.160 1999 First Quarter $19.91 $17.32 $0.130 Second Quarter 20.59 18.45 0.143 Third Quarter 20.06 17.86 0.143 Fourth Quarter 19.58 16.37 0.143
-42-

   

Price Range Per Share


  

Per Share

Dividend


   

High


  

Low


  

2003

            

First Quarter

  

$

19.10

  

$

17.52

  

$

0.150

Second Quarter (through         ,2003)

            

2002

            

First Quarter

  

$

20.24

  

$

17.00

  

$

0.136

Second Quarter

  

 

20.29

  

 

18.40

  

 

0.150

Third Quarter

  

 

19.50

  

 

16.85

  

 

0.150

Fourth Quarter

  

 

19.12

  

 

16.92

  

 

0.150

2001

            

First Quarter

  

$

17.57

  

$

15.47

  

$

0.122

Second Quarter

  

 

17.95

  

 

14.62

  

 

0.136

Third Quarter

  

 

18.40

  

 

16.64

  

 

0.136

Fourth Quarter

  

 

17.92

  

 

16.69

  

 

0.136

For certain limitations on the ability of Fulton Financial'sFulton’s subsidiaries to pay dividends to Fulton, Financial, see Fulton Financial'sFulton’s Annual Report on Form 10-K for the year ended December 31, 2000,2002, which is incorporated herein by reference. See "WHERE“WHERE YOU CAN FIND MORE INFORMATION"INFORMATION” on page ______. 68.

On December 26, 2000,January 15, 2003, the last full trading day prior to public announcement of the proposed merger, the high, low and last sales price of Fulton Financial common stock were as follows:

High: $23.25

$19.00

Low: $22.375

$18.62

Last Sales price: $22.9375

$18.64

On ______________________, 2001,, 2003, the most recent practicable date prior to the printing of this document, the high, low and last sales price of Fulton Financial common stock was as follows:

High:

$         

Low:

$         

Last Sales price:

$         

You should obtain current market quotations prior to making any decisions as toabout the merger.

Indemnification

The Bylaws of Fulton Financial provide for indemnification of its directors, officers, employees and agents to the fullest extent permitted under the laws of the Commonwealth of Pennsylvania, provided that the person seeking indemnification acted in good faith, in a manner he or she reasonably believed to be in the best interests of Fulton, Financial, and without willful misconduct or recklessness. Fulton Financial has purchased insurance to indemnify its directors, officers, employees and agents under certain circumstances.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling Fulton Financial pursuant to the foregoing provisions of Fulton Financial'sFulton’s Bylaws, Fulton Financial has been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the 1933 Act and is therefore unenforceable. INFORMATION ABOUT DROVERS As permitted by the rules of the SEC, financial and other information relating to Drovers that is not included in or delivered with this document, including information relating to Drovers' directors and executive officers, is incorporated herein by reference. See "WHERE YOU CAN FIND MORE INFORMATION" on page ______ and "INCORPORATION BY REFERENCE" on page _________. General Drovers Bancshares Corporation is a one-bank holding company headquartered in York, Pennsylvania. The Drovers & Mechanics Bank is a wholly-owned bank subsidiary of Drovers. Drovers Bank is a Pennsylvania commercial bank subject to the supervision of the Pennsylvania Department of Banking and the Federal Deposit Insurance Corporation. Drovers Bank was organized in 1883 as a national bank and became a state-chartered non-member of the Federal Reserve System on February 14, 1979. Drovers Bank has two wholly-owned subsidiaries: 96 South George Street, Inc. and Drovers Investment Company. 96 South's primary asset is an office building attached to Drovers Bank's Main Office which houses our corporate headquarters. Drovers Investment -43- Company's assets consist of investment securities, primarily municipal bonds. In addition, Drovers Bank is 60% owner of Drovers Settlement Services, a joint venture with Abstracting Company of York. DSS offers real estate title insurance and settlement services. Drovers Bank offers a wide variety of banking and trust services to individuals and commercial customers in its service area. Personal banking services include checking accounts, savings and time accounts, certificates of deposit, personal and mortgage loans, home improvement loans, safe deposit services, estate planning and administration, personal trust management and discount brokerage services. Commercial banking services are provided to businesses, nonprofit organizations and local municipalities. These services include checking accounts, savings and time accounts, financing activities and corporate trust services in the areas of pension, profit sharing and employee benefit plans. Investment services and trust launched a new initiative at the end of 1999, Oak Tree Investment Group. Oak Tree Investment Group provides enhanced investment management, financial planning and brokerage services. Drovers also wholly owns two other subsidiaries: Drovers Realty Company and Drovers Capital Trust I. Drovers Realty Company has various real estate holdings, including ground and building leases. It rents the real estate to Drovers Bank for use as branch offices. Drovers Capital Trust I owns junior subordinated deferrable debentures due from Drovers. The debentures are the sole asset of the Trust. The Trust issued $7,500,000 of preferred securities to investors secured by the debentures. In addition, Drovers entered into a joint venture with seven other Pennsylvania banks to form Pennbanks Insurance Company, an offshore reinsurance company. Each bank in the venture owns a segregated cell through which its respective premiums and losses from credit life and accident and health insurance are funded and for which each bank has sole responsibility. Drovers had $796 million in assets and $569 million in deposits at December 31, 2000. Drovers Bank's deposits are ensured by the FDIC up to FDIC limits. On December 31, 2000, Drovers Bank employed 237 full-time equivalent employees throughout its branch offices. Drovers Bank operates 16 community banking offices in York County, one community banking office in Frederick County, Maryland, and an additional community banking office in Cumberland County, Pennsylvania. Market Price

Description Of And Dividends On Drovers Common Stock And Related Shareholder Matters The Drovers common stock trades on the NASDAQ National Market under the symbol "DROV". As of _______________________________, there were _____________ shares of Drovers common stock issued and outstanding, held by approximately ___ shareholders of record. The following table sets forth the high and low closing sale prices for shares of Drovers common stock for the periods indicated as reported on the NASDAQ National Market and the cash dividends paid per share for such periods, adjusted to reflect 5% stock dividends issued in 2000 and 1999. Such prices do not necessarily reflect mark-ups, mark-downs or commissions.
Price Range Per Share Per Share High Low Dividend ------------ --------- 2001 - ----------------------------------------------------------------- First Quarter Second Quarter (through ________________, 2001) 2000 - ----------------------------------------------------------------- First Quarter $ 18.57 $ 12.92 $ 0.12 Second Quarter 15.63 12.92 0.13 Third Quarter 15.88 14.00 0.13 Fourth Quarter 27.19 12.50 0.13
-44-
Price Range Per Share Per Share High Low Dividend ------------ --------- 1999 - ----------------------------------------------------------------- First Quarter $ 22.90 $ 20.46 $ 0.11 Second Quarter 22.38 20.95 0.11 Third Quarter 22.14 19.76 0.12 Fourth Quarter 23.10 19.41 0.12
The merger agreement restricts Drovers ability to pay a regular quarterly cash dividend as described under the heading "THE MERGER -- Dividends" on page ________. On December 26, 2000, the last full trading day prior to public announcement of the proposed merger, the high, low and last sales price of Drovers common stock were as follows:
High: $20.00 Low: $18.00 Last Sales price: $19.75
On ______________________, 2001, the most recent practicable date prior to the printing of this document, the high, low and last sales price of Drovers common stock was as follows:
High: $ Low: $ Last Sales price: $
You should obtain current market quotations prior to making any decisions as to the merger. Drovers' ability to continue to pay dividends may be dependent upon its receipt of dividends from Drovers Bank. See Drovers' Annual Report on Form 10-K for the year ended December 31, 2000, which is incorporated herein by reference. See "WHERE YOU CAN FIND MORE INFORMATION" on page _______ and "INCORPORATION BY REFERENCE" on page _________. PRO FORMA COMBINED FINANCIAL INFORMATION The unaudited pro forma combined condensed balance sheet and the unaudited pro forma combined condensed statements of income of Fulton Financial set forth below give effect, using the pooling-of-interests method of accounting, to the proposed acquisition of Drovers (based upon an exchange ratio of 1.24 shares of Fulton Financial common stock for each share of Drovers common stock). The unaudited pro forma combined balance sheet is presented as though the Merger between Fulton Financial and Drovers was consummated as of December 31, 2000. The unaudited pro forma combined condensed statements of income are presented as though the Merger was consummated as of the beginning of the periods presented. The unaudited pro forma financial information, including the notes thereto set forth below, is not necessarily indicative of the financial condition or results of operations of Fulton Financial as they would have been had the proposed acquisition of Drovers occurred during the periods presented or as they may be in the future. The unaudited pro forma financial information set forth below should be read in conjunction with the financial statements of Fulton Financial, including the notes thereto, which are incorporated herein by reference, and the financial statements of Drovers, including the notes thereto, which are incorporated herein by reference. See "WHERE YOU CAN FIND MORE INFORMATION on page _____ and "INCORPORATION BY REFERENCE" on page _________. -45- FULTON FINANCIAL CORPORATION PRO FORMA COMBINED CONDENSED BALANCE SHEET (UNAUDITED) FOR THE YEAR ENDED DECEMBER 31, 2000 (in thousands)
Fulton Drovers Financial Bancshares Pro Forma Corporation Corporation Adjustments (A) Combined ASSETS Cash and due from banks $ 267,178 $ 15,342 $ -- $ 282,520 Interest-bearing deposits 3,199 5,163 8,362 Mortgage loans held for sale 5,241 937 6,178 Investment securities 1,225,408 232,247 1,457,655 Loans, net of unearned 4,866,767 506,960 5,373,727 Less: Allowance for loan losses (60,269) (5,371) (65,640) ------------------------------------------------------- Net loans 4,806,498 501,589 5,308,087 Other assets 263,631 40,979 304,610 ------------------------------------------------------- Total Assets $6,571,155 $796,257 $ -- $7,367,412 ======================================================= LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Noninterest bearing $ 857,696 $ 57,611 $ -- $ 915,307 Interest-bearing 4,076,709 511,017 4,587,726 ------------------------------------------------------- Total Deposits 4,934,405 568,628 5,503,033 Short-term borrowings 408,166 53,263 461,429 Long Term debt 441,973 110,308 552,281 Other liabilities 107,275 8,893 116,168 ------------------------------------------------------- Total Liabilities 5,891,819 741,092 -- 6,632,911 ------------------------------------------------------- Shareholders' equity: Common stock 182,052 44,818 (31,285) 195,585 Capital surplus 444,570 -- 14,440 459,010 Retained earnings 67,201 10,495 77,696 Accumulated other comprehensive income (loss) 2,358 (148) 2,210 Less: Treasury stock, at cost (16,845) -- 16,845 -- ------------------------------------------------------- Total shareholders' equity 679,336 55,165 -- 734,501 ------------------------------------------------------- Total liabilities and shareholders' $6,571,155 $796,257 $ $7,367,412 =======================================================
(A) The transaction calls for the issuance of Fulton Financial common stock in exchange for 100% of the 5.1 million eligible shares of Drovers common stock issued. The adjustment assumes that all available shares of treasury stock will be issued first and the remaining shares will be issued from authorized shares. -46- FULTON FINANCIAL CORPORATION PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME (UNAUDITED) FOR THE YEAR ENDED DECEMBER 31, 2000 (In thousands, except per-share data)
Fulton Drovers Financial Bancshares Pro Forma Corporation Corporation Adjustments Combined Interest Income: Loans, including fees $391,328 $42,076 --$ $433,404 Investment securities 70,498 14,305 84,803 Other interest income 755 282 1,037 - --------------------------------------------------------------------------------------- Total Interest Income 462,581 56,663 -- 519,244 Interest Expense: Deposits 164,020 23,579 187,599 Borrowings 46,461 9,759 56,220 - --------------------------------------------------------------------------------------- Total Interest Expense 210,481 33,338 -- 243,819 - --------------------------------------------------------------------------------------- Net Interest Income 252,100 23,325 -- 275,425 Provision for Loan Losses 8,645 6,379 15,024 - --------------------------------------------------------------------------------------- Net Interest Income After Provision for loan losses 243,455 16,946 -- 260,401 Other income 69,611 5,707 75,318 Salaries and employee benefits 93,109 10,011 103,120 Other expenses 71,913 9,752 81,665 - --------------------------------------------------------------------------------------- Total Other Expenses 165,022 19,763 -- 184,785 - --------------------------------------------------------------------------------------- Income Before Income Taxes 148,044 2,890 -- 150,934 Income taxes 44,240 (218) 44,022 - --------------------------------------------------------------------------------------- Net Income $103,804 $ 3,108 --$ $106,912 ======================================================================================= Per-share Data: Net Income (basic) $1.46 $0.61 $1.38 Net Income (diluted) $1.45 $0.61 $1.37
-47- FULTON FINANCIAL CORPORATION PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME (UNAUDITED) FOR THE YEAR ENDED DECEMBER 31, 1999 (In thousands, except per share data)
Fulton Drovers Financial Bancshares Pro Forma Corporation Corporation Adjustments Combined Interest Income: Loans, including fees $343,722 $34,983 --$ $378,705 Investment securities 74,741 11,550 86,291 Other interest income 267 29 296 - -------------------------------------------------------------------------------------- Total Interest Income 418,730 46,562 -- 465,292 Interest Expense: Deposits 143,165 18,293 161,458 Borrowings 31,662 5,993 37,655 - -------------------------------------------------------------------------------------- Total Interest Expense 174,827 24,286 -- 199,113 - -------------------------------------------------------------------------------------- Net Interest Income 243,903 22,276 -- 266,179 Provision for Loan Losses 8,216 1,727 9,943 - -------------------------------------------------------------------------------------- Net Interest Income After Provision for loan losses 235,687 20,549 -- 256,236 Other income 61,358 5,349 66,707 Salaries and employee benefits 88,657 9,042 97,699 Other expenses 70,683 7,709 78,392 - -------------------------------------------------------------------------------------- Total Other Expenses 159,340 16,751 -- 176,091 - -------------------------------------------------------------------------------------- Income Before Income Taxes 137,705 9,147 -- 146,852 Income taxes 40,479 1,546 42,025 - -------------------------------------------------------------------------------------- Net Income $ 97,226 $ 7,601 --$ $104,827 ====================================================================================== Per-share Data: Net Income (basic) $ 1,34 $1.54 $1.33 Net Income (diluted) $1.33 $1.52 $1.32
-48- FULTON FINANCIAL CORPORATION PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME (UNAUDITED) FOR THE YEAR ENDED DECEMBER 31, 1998 (In thousands, except per-share data)
Fulton Drovers Financial Bancshares Pro Forma Corporation Corporation Adjustments Combined Interest Income: Loans, including fees $338,536 $30,483 --$ $369,019 Investment securities 68,998 10,467 79,465 Other interest income 1,700 41 1,741 - -------------------------------------------------------------------------------------- Total Interest Income 409,234 40,991 -- 450,225 Interest Expense: Deposits 159,684 17,374 177,058 Borrowings 18,010 4,362 22,372 - -------------------------------------------------------------------------------------- Total Interest Expense 177,694 21,736 -- 199,430 - -------------------------------------------------------------------------------------- Net Interest Income 231,540 19,255 -- 250,795 Provision for Loan Losses 5,582 1,266 6,848 - -------------------------------------------------------------------------------------- Net Interest Income After Provision for loan losses 225,958 17,989 -- 243,947 Other income 58,293 5,408 63,701 Salaries and employee benefits 84,112 8,006 92,118 Other expenses 71,796 7,225 79,021 - -------------------------------------------------------------------------------------- Total Other Expenses 155,908 15,231 -- 171,139 - -------------------------------------------------------------------------------------- Income Before Income Taxes 128,343 8,166 -- 136,509 Income taxes 39,832 1,356 41,188 - -------------------------------------------------------------------------------------- Net Income $ 88,511 $ 6,810 --$ $ 95,321 ====================================================================================== Per-share Data: Net Income (basic) $1.22 $1.39 $1.21 Net Income (diluted) $1.21 $1.37 $1.20
-49- DESCRIPTION OF FULTON FINANCIAL COMMON STOCK Common Stock

General

The authorized capital of Fulton Financial consists exclusively of 400 million shares of common stock, par value $2.50 per share, and 10 million shares of preferred stock, without par value. As of December 31, 2000,2002, there were issued and outstanding 71,925,000approximately 101,106,248 million shares of Fulton Financial common stock, which shares were held by 15,99717,251 owners of record, and there were 1,849,0002,802,780 shares issuable upon the exercise of options. No shares of preferred stock have been issued by Fulton Financial. Fulton Financial'sFulton. Fulton’s common stock is listed for quotation on the NASDAQ National Market System under the symbol "FULT"“FULT”. The holders of Fulton Financial common stock are entitled to one vote per share on all matters submitted to a vote of the shareholders and may not cumulate their votes for the election of directors. Each share of Fulton Financial common stock is entitled to participate on an equal pro rata basis in dividends and other distributions. The holders of Fulton Financial common stock do not have preemptive rights to subscribe for additional shares that may be issued by Fulton, Financial, and no share is entitled in any manner to any preference over any other share. Fulton Financial Advisors, N.A. serves as the transfer agent for Fulton Financial. Fulton.

The holders of Fulton Financial common stock are entitled to receive dividends when, as and if declared by the Board of Directors out of funds legally available. Fulton Financial has in the past paid quarterly cash dividends to its shareholders on or about the 15th15th day of January, April, July and October of each year. The ability of Fulton Financial to pay dividends to its shareholders is dependent primarily upon the earnings and financial condition of Fulton Financial'sFulton’s subsidiary banks. Funds for the payment of dividends on Fulton Financial common stock are expected for the foreseeable future to be obtained primarily from dividends paid to Fulton Financial by its bank subsidiaries, which dividends are subject to certain statutory limitations, described below:

- -------------------------------------------------------------------------------------------------------------------

Pennsylvania State

Chartered Banks

Fulton Bank, Lebanon Valley Farmers Bank, and Lafayette Ambassador Bank

may pay dividends only out of accumulated net earnings and Chartered Banks Valley Farmers Bank, and may not declare or pay any dividend requiring a reduction Lafayette Ambassador Bank of the statutorily required surplus of the institution - -------------------------------------------------------------------------------------------------------------------

National Banks

Swineford National Bank, FNB Bank, N.A., Delaware National Bank, and Fulton Financial Advisors, N.A.

the approval of the Office of the Comptroller of the FNB Bank, N.A., Delaware Currency is required under federal law if the total of all National Bank, The dividends declared during any calendar year would exceed Woodstown National Bank the net profits (as defined) of the bank for the year, and Trust Company and combined with its retained net profits (as defined) for the Fulton Financial Advisors, two preceding calendar years N.A. - -------------------------------------------------------------------------------------------------------------------

Maryland Commercial

Banks

Hagerstown Trust Company and The Peoples Bank of Elkton

may only declare a cash dividend from their undivided Banks and The Peoples Bank of profits or (with the prior approval of the Maryland Bank Elkton Commissioner) from its surplus in excess of 100% of its required capital stock, in each case after providing for due or accrued expenses, losses, interest and taxes. In addition, if Hagerstown'sHagerstown’s or Peoples'Peoples’ surplus becomes less than 100% of its required capital stock, Hagerstown or Peoples may not declare or pay any cash dividends that exceed 90% of its net earnings until its surplus becomes 100% of its required capital stock - -------------------------------------------------------------------------------------------------------------------

-50-
- -------------------------------------------------------------------------------------------------------------------

New Jersey Banks

The Bank of Gloucester and Skylands Community Bank

may not declare or pay any dividends which would impair County and Skylands their capital stock or reduce their surplus to a level of Community Bank less than 50% of their capital stock or if the surplus is currently less than 50% of the capital stock, the payment of such dividends would not reduce the surplus of the bank - -------------------------------------------------------------------------------------------------------------------

In addition to the foregoing statutory restrictions on dividends, state banking regulations (with respect to state-chartered banks), the FDIC (with respect to state-chartered banks that are not members of the Federal Reserve System, such as Fulton Bank, Skylands Community Bank, Hagerstown Trust Company, The Bank of Gloucester County and The Peoples Bank of Elkton), the FRB (with respect to state-chartered banks that are members of the Federal Reserve System, such as Lebanon Valley Farmers Bank and Lafayette Ambassador Bank), and the OCC (with respect to national banks such as Swineford National Bank, FNB Bank, N.A., Delaware National Bank, The Woodstown National Bank and Trust Company and Fulton Financial Advisors, N.A.), also have adopted minimum capital standards and have broad authority to prohibit a bank from engaging in unsafe or unsound banking practices. The payment of a dividend by a bank could, depending upon the financial condition of the bank involved and other factors, be deemed to impair its capital or to be as such an unsafe or unsound practice.

Dividend Reinvestment Plan

The holders of Fulton Financial common stock may elect to participate in the Fulton Financial Corporation Dividend Reinvestment Plan, which is a plan administered by Fulton Financial Advisors, N.A. as the plan agent. Under the dividend reinvestment plan, dividends payable to participating shareholders are paid to the plan agent and are used to purchase, on behalf of the participating shareholders, additional shares of Fulton Financial common stock. Participating shareholders may make additional voluntary cash payments, which are also used by the plan agent to purchase, on behalf of such shareholders, additional shares of Fulton Financial common stock. Shares of Fulton Financial common stock held for the account of participating shareholders are voted by the plan agent in accordance with the instructions of each participating shareholder as set forth in his or her proxy.

Securities Laws

Fulton, Financial, as a business corporation, is subject to the registration and prospectus delivery requirements of the Securities Act of 1933 and is also subject to similar requirements under state securities laws. Fulton Financial common stock is registered with the Securities and Exchange Commission under Section 12(g) of the Securities Exchange Act of 1934, and Fulton Financial is subject to the periodic reporting, proxy solicitation and insider trading requirements of the 1934 Act. The executive officers, directors and ten percent shareholders of Fulton Financial are subject to certain restrictions affecting their right to buy and sell shares of Fulton Financial common stock owned beneficially by them. Specifically, each such person is subject to the beneficial ownership reporting requirements and to the short-swing profit recapture provisions of Section 16 of the 1934 Act and may sell shares of Fulton Financial common stock only: (i) in compliance with the provisions of SEC Rule 144, (ii) in compliance with the provisions of another applicable exemption from the registration requirements of the 1933 Act, or (iii) pursuant to an effective registration statement filed with the SEC under the 1933 Act.

Antitakeover Provisions

The Articles of Incorporation and Bylaws of Fulton Financial include certain provisions which may be considered to be "antitakeover"“antitakeover” in nature because they may have the effect of discouraging or making more difficult the acquisition of control over Fulton Financial by means of a hostile tender offer, exchange offer, proxy contest or similar transaction. These

provisions are intended to protect the shareholders of Fulton Financial (including the present shareholders of Drovers,Premier, who will become shareholders of Fulton Financial following the merger) by providing a measure of assurance that Fulton Financial'sFulton’s shareholders will be treated fairly in the event of an unsolicited takeover bid and by preventing a successful takeover bidder from exercising its voting control to the detriment of the other shareholders. However, the antitakeover provisions set forth in the Articles of Incorporation and Bylaws of Fulton, Financial, taken as a whole, may discourage a hostile tender offer, exchange offer, proxy -51- solicitation or similar transaction relating to Fulton Financial common stock. To the extent that these provisions actually discourage such a transaction, holders of Fulton Financial common stock may not have an opportunity to dispose of part or all of their stock at a higher price than that prevailing in the market. In addition, these provisions make it more difficult to remove, and thereby may serve to entrench, incumbent directors and officers of Fulton, Financial, even if their removal would be regarded by some shareholders as desirable.

The provisions in the Articles of Incorporation of Fulton Financial which may be considered to be "antitakeover"“antitakeover” in nature include the following: .

a provision that provides for substantial amounts of authorized but unissued capital stock, including a class of preferred stock whose rights and privileges may be determined prior to issuance by Fulton Financial'sFulton’s Board of Directors; .

a provision that does not permit shareholders to cumulate their votes for the election of directors; .

a provision that requires a greater than majority shareholder vote in order to approve certain business combinations and other extraordinary corporate transactions; .

a provision that establishes criteria to be applied by the Board of Directors in evaluating an acquisition proposal; .

a provision that requires a greater than majority shareholder vote in order for the shareholders to remove a director from office without cause; .

a provision that prohibits the taking of any action by the shareholders without a meeting and eliminates the right of shareholders to call a specialan annual meeting; .

a provision that limits the right of the shareholders to amend the Bylaws; and .

a provision that requires, under certain circumstances, a greater than majority shareholder vote in order to amend the Articles of Incorporation.

The provisions of the Bylaws of Fulton Financial which may be considered to be "antitakeover"“antitakeover” in nature include the following: .

a provision that limits the permissible number of directors; .

a provision that establishes a Board of Directors divided into three classes, with members of each class elected for a three-year term that is staggered with the terms of the members of the other two classes; and .

a provision that requires advance written notice as a precondition to the nomination of any person for election to the Board of Directors, other than in the case of nominations made by existing management.

As a Pennsylvania business corporation and a corporation registered under the Securities Exchange Act of 1934, Fulton Financial is subject to, and may take advantage of the protections of, the antitakeover provisions of the Pennsylvania Business Corporation Law of 1988, as amended. These antitakeover provisions, which are designed to discourage the acquisition of control over a targeted Pennsylvania business corporation, include: .

a provision whereby the directors of the corporation, in determining what is in the best interests of the corporation, may consider factors other than the economic interests of the shareholders, such as the effect of any action upon other constituencies, including employees, suppliers, customers, creditors and the community in which the corporation is located; -52- .

a provision that permits shareholders to demand that a controlling person pay to them the fair value of their shares in cash upon a change in control; .

a provision that restricts certain business combinations unless there is prior approval by the directors or a supermajority of the shareholders; .

a provision permitting a corporation to adopt a shareholders rights plan; .

a provision denying the right to vote to a person who acquires a specified percentage of stock ownership unless those voting rights are restored by a vote of disinterested shareholders; and .

a provision requiring a person who acquires "control shares"“control shares”, which are described in the previous sentence, to disgorge to the corporation all profits from the sale of equity securities within eighteen months thereafter.

Corporations may elect to "opt out"“opt out” of any or all of these antitakeover provisions of the Pennsylvania corporate law. Fulton Financial has not elected to opt out of any of the protections provided by the antitakeover statutes.

On April 27, 1999, Fulton Financial extended the term of its Shareholder Rights Plan, originally adopted in June of 1989, by ten years. The plan is intended to discourage unfair or financially inadequate takeover proposals and abusive takeover practices and to encourage third parties who may in the future be interested in acquiring Fulton Financial to negotiate with Fulton Financial'sFulton’s Board of Directors. The plan may have the effect of discouraging or making more difficult the acquisition of Fulton Financial by means of a hostile tender offer, exchange offer or similar transaction. The plan is similar to shareholder rights plans which have been adopted by many other bank holding companies and business corporations and contains "flip-in"“flip-in” rights (allowing certain shareholders to purchase Fulton Financial'sFulton’s common stock equal to two times the right'sright’s exercise price) and "flip-over"“flip-over” rights (allowing rights holders to acquire shares of the acquirer'sacquirer’s stock at a substantial discount) which are typically included in plans of this kind. Each share of Fulton Financial common stock, including all shares that will be issued to Drovers'Premier’s shareholders in the Merger, will also represent one right pursuant to the terms of the plan, which right will initially, and until it becomes exercisable, trade with and be represented by the Fulton Financial common stock certificates to be received by the shareholders of Drovers. Premier.

The management of Fulton Financial does not presently contemplate recommending to the shareholders the adoption of any additional antitakeover provisions. COMPARISON OF SHAREHOLDER RIGHTS If Fulton Financial

INFORMATION ABOUT PREMIER

A copy of Premier’s annual report on Form 10-K accompanies this document. As permitted by the rules of the SEC, financial and Drovers completeother information relating to Premier that is not included in or delivered with this document, including information relating to Premier’s directors and executive officers, is incorporated herein by reference. See “WHERE YOU CAN FIND MORE INFORMATION” on page 66 and “INCORPORATION BY REFERENCE” on page 68.

General

Premier is a Pennsylvania business corporation and a registered financial holding company headquartered in Doylestown, Bucks County, Pennsylvania. Premier was incorporated on July 15, 1997 and reorganized on November 17, 1997 as the merger,one-bank holding company of Premier Bank. Premier’s primary business is the operation of its wholly-owned subsidiary, Premier Bank. In December 2000, Premier became a registered financial holding company.

Premier Bank was organized in 1990 as a Pennsylvania chartered banking institution and began operations on April 24, 1992. Premier bank is a community-oriented financial services provider whose business primarily consists of

attracting retail deposits from the general public and small to mid-sized businesses and originating commercial and consumer loans in its market area. Premier bank’s deposit products include checking, savings and money market accounts as well as certificates of deposit. Premier bank offers numerous credit products but specializes in lending to small to mid-sized commercial businesses and professionals. Premier bank offers a full array of lending products including loans secured by real estate and other assets, working capital lines and other commercial loans. Other credit products include residential mortgage loans, home equity loans and lines of credit, personal lines of credit and other consumer loans. Premier Bank also offers other services such as internet banking, telephone banking, cash management services, automated teller services and safe deposit boxes. Premier bank is a member of the Federal Reserve System, and its deposits are insured by the Federal Deposit Insurance Corporation’s Bank Insurance Fund to the fullest extent provided by law.

Premier owns 100% of the common securities of PBI Capital Trust, a Delaware statutory business trust formed for the sole purpose of issuing $10 million in trust preferred securities, and Premier Capital Trust II, a Delaware statutory business trust formed for the sole purpose of issuing $15 million in trust preferred securities. Premier has a 1% membership interest in, and Premier Bank has a 99% membership interest in, each of Lenders Abstract, LLC, a provider of title insurance policies, and Premier Bank Insurance Services, LLC, a provider of long term health care insurance policies.

Premier had approximately $610 million in assets and $456 million in deposits at December 31, 2002. On December 31, 2002, Premier Bank employed 78 full-time and 36 part-time employees throughout its branch offices. Premier Bank operates seven community banking offices in Bucks, Northampton and Montgomery counties.

Market Price Of And Dividends On Premier Common Stock And Related Shareholder Matters

The Premier common stock trades on the American Stock Exchange under the symbol “PPA”. As of March 31, 2003, there were 3,417,515 shares of Premier common stock issued and outstanding, held by approximately 957 shareholders of Drovers automatically will become shareholdersrecord. The following table sets forth the high and low closing sale prices for shares of Fulton Financial,Premier common stock for the periods indicated as reported on the American Stock Exchange and their rightsthe cash dividends paid per share for such periods. Such prices do not necessarily reflect mark-ups, mark-downs or commissions.

   

Price Range Per Share


  

Per Share

Dividend


   

High


  

Low


  

2003

            

First Quarter

  

$

25.09

  

$

14.25

    

Second Quarter (through ___, 2003

            

2002

            

First Quarter

  

$

9.74

  

$

8.75

  

$

0.00

Second Quarter

  

 

12.25

  

 

9.15

  

 

0.00

Third Quarter

  

 

13.44

  

 

11.00

  

 

0.00

Fourth Quarter

  

 

14.50

  

 

12.30

  

 

0.00

2001

            

First Quarter

  

$

7.00

  

$

6.25

  

$

0.00

Second Quarter

  

 

8.80

  

 

7.15

  

 

0.00

Third Quarter

  

 

9.90

  

 

8.50

  

 

0.00

Fourth Quarter

  

 

10.21

  

 

9.35

  

 

0.00

The merger agreement restricts Premier’s ability to pay a regular quarterly cash dividend as shareholdersdescribed under the heading “THE MERGER Dividends”—on page 35.

On January 15, 2003, the last full trading day prior to public announcement of the proposed merger, the high, low and last sales price of Premier common stock were as follows:

High:

$17.99

Low:

$17.75

Last Sales Price

$17.85

On, 2003, the most recent practicable date prior to the printing of this document, the high, low and last sales price of Premier common stock were as follows:

High:

$

Low:

$

Last Sales Price

$

You should obtain current market quotations prior to making any decisions as to the merger.

Premier’s ability to continue to pay dividends may be dependent upon its receipt of dividends from Premier Bank. See Premier’s Annual Report on Form 10-K for the year ended December 31, 2002, which is incorporated herein by reference. See “WHERE YOU CAN FIND MORE INFORMATION” on page 66 and “INCORPORATION BY REFERENCE” on page 68.

Board Of Directors And Executive Officers

Governance

The Board of Directors is empowered by Premier’s articles of incorporation and bylaws to oversee all of Premier’s and its subsidiaries’ business, property, and affairs. The Board performs this function through meetings and by delegating certain responsibilities to the committees described below. Premier, as a company listed on the American Stock Exchange, is also subject to the AMEX’s rules and regulations.

During 2002, Premier’s Board of Directors held 14 meetings and Premier Bank’s Board of Directors held 14 meetings. In addition to Board meetings, Premier Bank maintains five standing committees that meet periodically throughout the year. Each director, except Messrs. Mackell, Perrucci, Rich, Schatz and Stein, attended at least 75% of the combined total number of Premier’s and Premier Bank’s board meetings and the committees of which he or she was a member.

Directors and Executive Officers of Premier and Premier Bank

The following table sets forth selected information about Premier’s and Premier Bank’s directors and executive officers as of December 31, 2002. The officers are elected annually by the Board of Directors, and each holds office at the discretion of the Board.

Name


Position


Positions Held Since

Corporation/Bank


Age as of

March 31, 2003


Clark S. Frame

Chairman of the Board

Class 3 Director

1997/1992

1997/1992

52

Barry J. Miles, Sr.

Vice Chairman of the Board

Class 3 Director

1997/1992

1997/1992

53

John C. Soffronoff

President

Chief Executive Officer

Class 3 Director

1997/1992

1997/1992

1997/1992

56

Bruce E. Sickel

Treasurer

Senior Vice President

Chief Financial Officer

Class 1 Director

1997/1992

1997/1992

1997/1992

1997/1992

43

Name


Position


Positions Held Since

Corporation/Bank


Age as of

March 31, 2003


John J. Ginley

Secretary

Senior Vice President

Chief Loan Officer

Class 2 Director

1997/1992

1997/1992

1997/1992

1999/1999

60

Daniel E. Cohen

Class 1 Director

1997/1992

59

Dr. Thomas E. Mackell

Class 2 Director

1997/1992

57

Dr. Daniel A. Nesi

Class 3 Director

1997/1992

65

Neil W. Norton

Class 2 Director

1997/1992

57

Thomas M. O’Mara

Class 3 Director

1997/1992

50

Michael J. Perrucci

Class 1 Director

1997/1992

49

Brian R. Rich

Class 1 Director

1997/1993

43

Ezio U. Rossi

Class 1 Director

1997/1994

73

Richard F. Ryon

Class 3 Director

1997/1993

52

Gerald Schatz

Class 1 Director

1997/1992

68

Irving N. Stein

Class 2 Director

1997/1992

53

HelenBeth Garofalo Vilcek

Class 2 Director

1997/1992

45

John A. Zebrowski

Class 1 Director

1997/1992

61

Committees and Meetings of Premier’s and the Bank’s Boards of Directors

Premier Bancorp, Inc.’s Board of Directors has, at present, no standing committees, except the Audit Committee, which jointly serves Premier and Premier Bank. Premier does not maintain a nominating or compensation committee. A shareholder who intends to nominate an individual for consideration by the Board of Directors as a nominee for director should submit a written nomination to Premier’s President in accordance with Article IV, Section 2 of Premier’s bylaws. All shareholder notifications must be made in writing and delivered or mailed to Premier’s President not less than 14 nor more than 50 days in advance of a shareholders’ meeting called for the election of directors, subject to certain other exceptions.

During 2002, Premier Bank’s Board of Directors maintained the following five standing committees: Executive, Audit/Compliance, Compensation, Loan, and Investment/ALCO. The function and composition of each of these committees is described below.

Executive:

This committee meets on an as-needed basis to take action on issues between regular Board of Director meetings. This committee did not meet in 2002. Mr. Clark S. Frame serves as Chairman of this committee. The other members of the committee are Daniel E. Cohen, Barry J. Miles, Sr., Daniel A. Nesi, Thomas M. O’Mara, Brian R. Rich, Richard F. Ryon and Ezio U. Rossi.

Audit/Comp:

This committee jointly serves Premier and Premier Bank. The Audit Committee oversees the accounting and tax functions of Premier, recommends to the Board the engagement of independent auditors for the year, reviews with management and the auditors the plan and scope of the audit engagement, reviews the annual financial statements of Premier and any recommended changes or modifications to control procedures and accounting practices and policies, and monitors with management and the auditors Premier’s system of internal controls and its accounting and reporting practices. The committee also provides oversight for Premier Bank’s regulatory compliance program. This committee met 4 times in 2002. Mr. Neil W. Norton serves as Chairman of this committee. The other members of the committee are Barry J. Miles, Sr., Michael J. Perrucci, HelenBeth Garofalo Vilcek and John A. Zebrowski.

Compensation:

This committee addresses issues affecting the executive officers. The committee met 4 times in 2002. Mr. Richard F. Ryon serves as Chairman of this committee. The other

members of the committee are Thomas E. Mackell, Neil W. Norton, Michael J. Perrucci, HelenBeth Garofalo Vilcek and John A. Zebrowski.

Loan:

This committee reviews and approves loans in accordance with Premier Bank’s established loan policy, as it exists from time to time. This committee met 41 times in 2002. Mr. Clark S. Frame serves as Chairman of this committee. The other members of the committee are Daniel E. Cohen, John J. Ginley, Edward A. Grosik*, Suzanne M. Hartshorne*, Barry J. Miles, Sr., Dr. Daniel A. Nesi and John C. Soffronoff.

Investment/

Alco:

This committee reviews Premier Bank’s operating results, its interest rate sensitivity, investment portfolio and performance versus the annual budget. This committee met 3 times in 2002. Mr. Bruce E. Sickel serves as Chairman of this committee. The other members of the committee are Clark S. Frame, John J. Ginley, Dr. Thomas E. Mackell, Thomas M. O’Mara, Ezio U. Rossi, Richard F. Ryon, Gerald Schatz, John C. Soffronoff and Irving N. Stein.


*Non-director members.

Compensation of the Board of Directors

In 2002, directors earned $300 for each Board or committee meeting attended. Directors earned a total of $103,200 for meetings attended in 2002, which was paid in February, 2003. In 2002, directors also received a $3,000 retainer, which totaled $48,000 for all directors, and was paid in February, 2002.

Audit Committee Report to Shareholders

Pursuant to rules adopted by the SEC designed to improve disclosures related to the functioning of corporate audit committees and to enhance the reliability and credibility of financial statements of public companies, Premier’s Audit Committee submits the following report:

The Board of Directors’ Audit Committee is responsible for providing independent, objective oversight of Premier’s accounting functions and internal controls. The Audit Committee is composed of five directors, each of whom is “independent” as defined in Section 121 of the AMEX Company Guide. The Audit Committee operates under a written charter approved by the Board of Directors on June 8, 2000, and as amended on March 8, 2001.

Management is responsible for Premier’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of Premier’s financial statements in accordance with the generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

In connection with these responsibilities, the Audit Committee met with management and the independent accountants to review and discuss the December 31, 2002 financial statements. The Audit Committee also discussed with the independent accountants the matters required by Statement on Auditing Standards No. 61 (Communication with Audit Committees). The Audit Committee also received written disclosures from the independent accountants required by Independence Discussions with Audit Committees, and the Audit Committee discussed with the independent accountants that firm’s independence.

Based upon the Audit Committee’s discussions with management and the independent accountants, and the Audit Committee’s review of the representations of management and the independent accountants, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in Premier’s Annual Report on Form 10-K for the year ended December 31, 2002, filed with the Securities and Exchange Commission on March 24, 2003.

This report of the Audit Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that Premier specifically incorporates this information by reference, and shall not otherwise be deemed filed under the Acts.

The foregoing report has been furnished by the members of the Audit Committee.

Members of the Audit Committee

Neil W. Norton, Chairman

Barry J. Miles, Sr.

Michael J. Perrucci

HelenBeth Garofalo Vilcek

John A. Zebrowski

Independent Accountant

KPMG LLP was Premier’s independent auditors for the fiscal year ended December 31, 2002. Premier’s Board of Directors has reappointed KPMG LLP to continue as independent auditors for the fiscal year ending December 31, 2003. Representatives of KPMG LLP are expected to attend the annual meeting. They will be determinedgiven an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from shareholders present at the annual meeting.

Audit and Non-Audit Fees

The following table presents fees for professional audit services rendered by KPMG LLP for the audit of Premier’s annual financial statements for 2002, and fees billed for other services rendered by KPMG LLP.

Audit fees, excluding audit related

$  78,584

Financial information systems design and implementation

$           0

All Other Fees:

Audit related fees(1)

$136,839

Other non-audit services(2)

$  24,025

Total all other fees

$160,864


1Audit related fees consisted principally of reviews of registration statements, issuances of consents and agreed upon procedures performed relating to a preferred stock offering.

2Other non-audit fees consisted of tax compliance services.

Consideration of Non-Audit Services Provided by the Pennsylvania Business Corporation Law of 1988,Independent Accountant

The Audit Committee considered whether, and by Fulton Financial's Articles of Incorporation and Bylaws. determined that, the services provided under other non-audit services are compatible with maintaining the auditor’s independence.

Executive Compensation

The following is a summary of material differences betweentable summarizes the rights of holders of Fulton Financial common stock and the rights of holders of Drovers common stock. These differences arise from differing provisionsannual compensation awarded, paid to, or earned by, each of the Articlesnamed executive officers during the last three fiscal years.

Summary Compensation Table

      

Annual Compensation


    

Long Term Compensation

Payouts


Name and Principal Position


  

Year


  

Salary

($)1


  

Bonus

($)


    

All Other

Compensation

($)


Clark S. Frame

Chairman of Premier and of

Premier Bank

  

2002

  

100,000

  

45,000

    

10,1622

John C. Soffronoff

President and Chief Executive
Officer of Premier and of

Premier Bank

  

2002

2001

2000

  

168,000

139,523

133,010

  

45,000

32,000

15,000

    

18,6103

13,2253

13,9083

Bruce E. Sickel

Treasurer of Premier and Senior

Vice President and Chief Financial

Officer of Premier Bank

  

2002

2001

2000

  

145,000

121,984

116,282

  

45,000

32,000

15,000

    

8,6154

9,0544

8,0584

John J. Ginley

Secretary of Premier and Senior

Vice President and Chief Loan

Officer of Premier Bank

  

2002

2001

2000

  

167,823

155,250

147,992

  

45,000

32,000

15,000

    

9,6435

9,6025

9,2325


1Salary adjustments were made on January 1 of each year.

2Includes bank contributions to the 401(k) Plan on behalf of Mr. Frame of $1,572; the payment of club dues in the amount of $3,790; and a car allowance for Mr. Frame of $4,800.

3Includes bank contributions to the 401(k) Plan on behalf of Mr. Soffronoff of $6,000, $4,780 and $5,183 for 2002, 2001 and 2000, respectively; the payment of club dues in the amount of $7,810, $3,645 and $3,925 for 2002, 2001 and 2000 respectively; and a car allowance for Mr. Soffronoff, valued at $4,800 for each of 2002, 2001 and 2000.

4Includes bank contributions to the 401(k) Plan on behalf of Mr. Sickel of $3,815, $4,254and $3,258 for 2002, 2001 and 2000, respectively; and a car allowance for Mr. Sickel, valued at $4,800 for each of 2002, 2001 and 2000.

5Includes bank contributions to the 401(k) Plan on behalf of Mr. Ginley of $4,843, $4,802 and $4,432 for 2002, 2001 and 2000, respectively; and a car allowance for Mr. Ginley, valued at $4,800 for each of 2002, 2001 and 2000.

Exercises of IncorporationStock Options in Fiscal Year 2002 and BylawsFiscal Year-End Option Values

The following table sets forth certain information relating to stock options held by the executives named in the Summary Compensation Table.

Aggregated Option/Sar Exercises In Last Fiscal Year

And Fy-End Option/Sar Values

Name


    

Shares Acquired

On Exercise (#)


    

Value Realized ($)(1)


    

Number of Securities Underlying Unexercised

Options/SARsat FY-End

(#)

Exercisable/Unexercisable


    

Value of Unexercised In-The-Money Options/SARs at FY-End

($)(2)

Exercisable/Unexercisable


Clark S. Frame

    

  —

    

  —

    

19,019/0

    

170,649/0

John C. Soffronoff

    

7,160

    

66,164

    

34,965/0

    

329,303/0

Bruce E. Sickel

    

  —

    

  —

    

34,440/0

    

327,193/0

John J. Ginley

    

  —

    

  —

    

28,665/0

    

267,941/0


(1)Based on the fair market value of the corporation’s common stock on exercise date.

(2)The fair market value of the corporation’s common stock on December 31, 2002, was approximately $14.50 per share.

Equity Compensation Plan Information

The following table summarizes our equity compensation plan information as of Fulton FinancialDecember 31, 2002. Information is included for the equity compensation plans approved by Premier’s shareholders. Premier does not maintain any equity compensation plans not approved by Premier’s shareholders.

Plan Category


    

Number of shares to be issued upon exercise of outstanding options, warrants and rights

(a)


    

Weighted-average
exercise price of
outstanding
options, warrants
and rights
(b)


    

Number of shares available for future issuance under equity compensation plans (excluding securities reflected in column (a))

(c)


Equity compensation plans approved by Premier Bancorp, Inc. shareholders(1)

    

303,748

    

$5.98

    

8,326

Equity compensation plans not approved by Premier Bancorp, Inc. shareholders

    

           0

    

$      0

    

       0


(1)Premier maintains an Incentive Stock Option Plan. The plan was approved by Premier’s shareholders. Please see the description of this plan below.

Change of Control Agreements

In March 1998, Premier, Premier Bank and Droversexecutives John C. Soffronoff, John J. Ginley and fromBruce E. Sickel entered into change of control agreements. The agreements define certain severance benefits Premier and Premier Bank will pay to the existence of Fulton Financial's Shareholder Rights Plan. The most significant differences are: . Fulton Financial has adopted a Shareholder Rights Plan, which provides Fulton Financial's shareholders with certain stock-related rightsnamed executives in the event of a hostile takeoverchange of control. The benefits were granted in order to recognize the past and present service of the executives and to provide incentive for their continued valued service. The agreements continue until such time as either party gives the other written notice of termination of employment with, or without, cause. The agreements are not intended to affect the employment status of the executives in the absence of a change of control.

In the event of a change of control, the executives are entitled to receive a lump sum payment equal to two times their respective current annual direct salary at the earliest of four specified events. If, at the end of six months after the date of the change of control, none of the specified events have occurred, the executives shall no longer be entitled to the payments upon termination. The proposed transaction as described in this proxy statement/prospectus constitutes a change of control and thus, the executives will be entitled to certain payments. However, as part of the Agreement and Plan of Merger, John C. Soffronoff and John J. Ginley have agreed to waive their change of control payments and have instead entered into new employment contracts with Premier Bank. Bruce E. Sickel will receive his change of control payment. Please see the section entitled “Interests of Certain Persons in the Merger” on page 43 for further information.

Incentive Stock Option Plan

Premier maintains the Premier Bancorp, Inc. 1995 Incentive Stock Option Plan which it assumed in 1997 in connection with the bank’s reorganization into a holding company structure. Premier Bank’s shareholders approved the plan at the 1995 annual meeting in order to advance the development, growth and financial condition of Premier Bank. The bank originally reserved 100,000 shares under the plan, or 315,000 shares as of December 31, 2002, as adjusted for all stock dividends and splits. The plan provides for awards of qualified stock options and non-qualified stock options to officers and directors and is administered by the full Board of Directors. In 2002, Premier did not grant any qualified stock options or any non-qualified stock options under the plan.

Common Stock Purchase Options

In connection with the organization of Premier Bank in 1992, certain incorporators, directors and officers were issued common stock purchase options to purchase shares of the bank (which option obligations were assumed in 1997 by Premier pursuant to the reorganization and formation of the holding company). The options were exercisable for ten years after the date of grant. In April 1992, 105,122 common stock purchase options were issued (which figure has been adjusted to 486,497 to reflect all stock splits and dividends). All outstanding options were exercised prior to April 23, 2002.

401(k) Plan

Premier Bank maintains a 401(k) tax deferred retirement savings plan for employees. The plan has two features: an elective deferral feature and a savings plus feature. To be eligible to become a member of the plan, an employee must have completed at least six months service and attained age 21. All employee contributions vest immediately. Employer contributions vest equally over a three year period. The plan is subject to certain terms and restrictions imposed by the Internal Revenue Code of 1986, as amended, and the Employee Retirement Income Security Act.

An eligible employee may choose the elective deferral feature of the plan by entering into an agreement with Premier Bank to defer current total compensation by up to 15% (unless otherwise limited by the 401(k) administrators). In 2002, Premier Bank matched this deferred compensation with a discretionary match which is currently set at 50%, up to 6% of the employee’s salary. The amount of the match, if any, is determined by Premier Bank each year.

During 2002, Premier Bank made a contribution of $102,058 to the plan. The amounts allocated to the four most highly compensated officers in 2002 were as follows (these amounts do not include the employee’s individual contribution): Mr. Frame, $1,572; Mr. Soffronoff $6,000; Mr. Sickel $3,815; and Mr. Ginley $4,843.

Compensation Committee Report on Executive Compensation

Premier’s Board of Directors governs Premier and its subsidiaries. In fulfilling its fiduciary duties, the Board of Directors endeavors to act in the best interests of Premier’s shareholders, customers, and the communities served by Premier and its subsidiaries. To accomplish Premier’s strategic goals and objectives, the Board of Directors engages competent persons, who undertake to accomplish these objectives with integrity and cost-effectiveness. The Board of Directors fulfills part of its strategic mission through the compensation of these individuals. Premier’s officers and directors are not compensated separately from Premier Bank.

The Board of Directors seeks to offer competitive compensation opportunities to all employees based on the individual’s contribution and personal performance. Premier Bank’s compensation committee administers the compensation program. The committee seeks to establish a fair compensation policy to govern the executive officers’ base salaries and incentive plans to attract and motivate competent, dedicated, and ambitious managers, whose efforts will enhance Premier Bank’s products and services and will result in improved profitability, increased dividends to the shareholders, and subsequent appreciation in the market value of Premier’s shares.

The Board reviews and annually approves the compensation of Premier Bank’s executives, including the Chairman, President, Chief Financial Officer, and Chief Lending Officer. As a guideline in determining base salaries, the committee uses information from the Executive Compensation review published by SNL Financial. Premier Bank uses a Northeast and Mid-Atlantic region peer group for banks in the range of $250-$500 million and $500-$1 billion range because of common industry issues and competition for the same executive talent group. This peer group may include some but maynot all of the financial institutions contained in Premier’s Performance Graph on page 64.

The Board of Directors does not deem Section 162(m) of the Internal Revenue Code to be applicable to Premier Bank at this time. The Board of Directors intends to monitor the future application of Section 162(m) to the compensation paid to its executive officers; and in the event that this section becomes applicable, the Board intends to amend its compensation policies to preserve the deductibility of the compensation payable under the policies.

Chief Executive Officer Compensation.The Board of Directors and compensation committee determined that the Chief Executive Officer’s 2002 base salary compensation of $168,000 was appropriate in light of the following 2001 Premier accomplishments: the continued growth in assets, deposits and loans, the continued successful completion of the annual business plan and record earnings.

No direct correlation exists between the Chief Executive Officer’s compensation, the Chief Executive Officer’s increase in compensation, and any of the above criteria, nor does the committee give any specific weight to any of the above individual criteria. The committee subjectively determines the increase in the Chief Executive Officer’s compensation based on a review of all relevant information.

Executive Officers’ Compensation.The Board of Directors increased the compensation of Premier Bank’s executive officers by approximately 17% over 2002 compensation, effective January 1, 2003. The Board determined these increases based on its subjective analysis of the individual’s contribution to the bank’s strategic goals and objectives. In determining whether the strategic goals have been achieved, the effectBoard considers numerous factors, including the following: Premier’s performance as measured by earnings, revenues, return on equity, market share, total assets and non-performing loans. Although the Board measured the performance and increases in compensation in light of discouraging such a takeover, while Drovers has not adoptedthese factors, no direct correlation exists between any specific criteria and an employee’s compensation, nor does the Board, in its analysis, attribute specific weight to any such plan; and . Drovers shareholders have dissenters' rights and Fulton Financial's shareholders do not generally have such rights. -53- A comparisoncriteria. The Board makes a subjective determination after review of Drovers common stock and Fulton Financial common stockall relevant information, including the above.

General labor market conditions, the individual’s specific responsibilities and the rightsindividual’s contributions to Premier’s success influence total compensation opportunities available to the employees. The Board reviews individuals annually and strives to offer compensation that is competitive with that offered by employers of comparable size in the industry. Through its compensation policy, Premier strives to meet its strategic goals and objectives to its constituencies and provide compensation that is fair and meaningful to its executive officers.

In addition to base salary, the bank’s executive officers may participate in annual and long-term incentive plans, including the bank’s 401(k) plan.

The foregoing report has been furnished by the members of the Compensation Committee:

Members of the Compensation Committee

Richard F. Ryon, Chairman

Thomas E. Mackell

Neil W. Norton

Michael J. Perrucci

HelenBeth Garofalo Vilcek

John A. Zebrowski

Election Of Directors

Qualification and Nomination of Directors

Article IV, Section 1 of Premier’s bylaws authorizes the number of directors to be not less than 5 nor more than 25. The bylaws provide for three classes of directors with staggered three year terms of office. The Board of Directors may, from time to time, fix the number of directors and their respective classifications. The number of Board members is currently 18. The Board of Directors nominated the five persons named below to serve as Class 2 Directors until the 2006 annual meeting of shareholders or until their earlier death, resignation, or removal from office. All of the nominees are presently members of the Board of Directors and all have consented to serve another term as a director if re-elected. Pursuant to Premier’s bylaws, vacancies on the Board of Directors, including vacancies resulting from an increase in the number of directors, may be filled by a majority of the Board of Directors then in office. The Board of Directors may select someone to fill a vacancy until the expiration of the term of the class of directors to which he or she was appointed.

In accordance with Premier’s bylaws, the Board of Directors is divided into three classes, as nearly equal in number as possible, known as Class 1, 2 and 3, whose terms expire at successive annual meetings. Therefore, the bylaws provide for a classified Board with staggered three year terms of office. Currently, Class 1 consists of seven directors, Class 2 consists of five directors, and Class 3 consists of six directors. Shareholders will elect five Class 2 Directors at the annual meeting to serve for three year terms that expire at Premier’s 2006 annual meeting. In the interim between annual meetings, the Board has the authority under the bylaws to increase or decrease the size of the Board and to fill vacancies.

The proxy holders follows: intend to vote all proxies for the election of each of the five nominees named below, unless you indicate that your vote should be withheld from any or all of them. Each nominee elected as a director will continue in office until his or her successor has been duly elected and qualified, or until his or her death, resignation or retirement.

The Board of Directors proposes the following nominees for election as Class 2 Directors at the annual meeting:

John J. Ginley

Dr. Thomas E. Mackell

Neil W. Norton

Irving N. Stein

HelenBeth Garofalo Vilcek

The Board of Directors recommends that shareholders voteFORthe proposal to elect the five nominees listed above as Class 2 Directors.

Information as to Nominees and Directors

Set forth below, as of March 31, 2003, is the principal occupation and certain other information regarding the nominees and other directors whose terms of office will continue after the annual meeting. You will find information about their share ownership on page 61.

Class 1 Directors (to serve until 2005)

- ------------------------------------------------------------------------------------------------------------------ DROVERS FULTON FINANCIAL - ------------------------------------------------------------------------------------------------------------------ Title Common Stock, no par value Common Stock, $2.50 par value per share - ------------------------------------------------------------------------------------------------------------------ Shares Authorized 15,000,000 400,000,000 - ------------------------------------------------------------------------------------------------------------------ Shares Issued & Outstanding _________

Daniel E. Cohen

Mr. Cohen, age 59, has served as a member of ____________ __________ as of _________ - ------------------------------------------------------------------------------------------------------------------ Preemptive Rights No No - ------------------------------------------------------------------------------------------------------------------ Classification ofPremier’s Board of Directors since 1997 and of Premier Bank since 1992. Mr. Cohen is a partner in the law firm of Laub, Seidel, Cohen & Hof, L.L.C. located in Easton, Pennsylvania.

Michael J. Perrucci

Mr. Perrucci, age 49, has served as a member of Premier’s Board of Directors divided into foursince 1997 and of Premier Bank since 1992. Mr. Perrucci is a partner in the law firm of Fishbein, Badillo, Wagner, Harding located in Phillipsburg, New Jersey.

Brian R. Rich

Mr. Rich, age 43, has served as a member of Premier’s Board of Directors divided classes with four year terms; into three classes with three one-fourthsince 1997 and of directors elected each year terms; one-thirdPremier Bank since 1993. Mr. Rich is the President of year. directors elected each year. - ------------------------------------------------------------------------------------------------------------------ Voting: ElectionJack Rich, Inc., a fuel oil and energy company located in Gilberton, Pennsylvania. Mr. Rich has been a director of Schuylkill Energy Resources, located in Shenandoah, Pennsylvania since 1989.

Ezio U. Rossi

Mr. Rossi, age 73, has served as a member of Premier’s Board of Directors Non-cumulative Non-cumulative - ------------------------------------------------------------------------------------------------------------------ Voting: Other Matters One vote for each share ownedsince 1997 and of record. One vote for each share ownedPremier Bank since 1994. Mr. Rossi was the former owner of record. - ------------------------------------------------------------------------------------------------------------------ Shareholder Rights Plan No Yes - ------------------------------------------------------------------------------------------------------------------ Dissenters' Rights Yes Not generally available - ------------------------------------------------------------------------------------------------------------------ Dividend Reinvestment Plan Yes (suspended) Yes - ------------------------------------------------------------------------------------------------------------------ Market Listed for quotation on NASDAQ National Listed for quotation on NASDAQ Market National Market - ------------------------------------------------------------------------------------------------------------------ Registered under 1934 Act Yes Yes - ------------------------------------------------------------------------------------------------------------------ LimitationArctic Foods, Inc., a frozen food company located in Washington, New Jersey. He is currently retired.

Gerald Schatz

Mr. Schatz, age 68, has served as a member of LiabilityPremier’s Board of Directors Yes Yes for Monetary Damages - ------------------------------------------------------------------------------------------------------------------ Indemnificationsince 1997 and of Premier Bank since 1992. Mr. Schatz is Chairman of Wordsworth Academy, Play and Learn Centers and Wyncote Academy, a child care and development company located in Fort Washington, Pennsylvania.

Bruce E. Sickel

Mr. Sickel, age 43, has served as a member of Premier’s Board of Directors Yes Yes Officerssince 1997 and Employees - ------------------------------------------------------------------------------------------------------------------ Transactionsof Premier Bank since 1992. He is a Senior Vice President, the Chief Financial Officer and Treasurer of Premier and the bank.

John A. Zebrowski

Mr. Zebrowski, age 61, has served as a member of Premier’s Board of Directors since 1997 and of Premier Bank since 1992. Mr. Zebrowski is the President of J. A. Z. Associates, a plastic resin dealer located in Doylestown, Pennsylvania.

Class 2 Directors (to serve until 2003)

and Nominees (to serve until 2006)

John J. Ginley

Mr. Ginley, age 60, has served as a member of Premier’s and Premier Bank’s Board of Directors since December 1999. Mr. Ginley is a Senior Vice President, Chief Loan Officer and Secretary of Premier and of Premier Bank.

Dr. Thomas E. Mackell

Dr. Mackell, age 57, has served as a member of Premier’s Board of Directors since 1997 and of Premier Bank since 1992. Dr. Mackell is a surgeon with 10% or more Affirmative votehis medical offices located in Doylestown, Pennsylvania.

Neil W. Norton

Mr. Norton, age 57, has served as a member of 85%Premier’s Board of shareholders 85% affirmative shareholder Beneficial Owners vote; reduced to 66-2/3% if certain conditions are met - ------------------------------------------------------------------------------------------------------------------ ApprovalDirectors since 1997 and of Major Transactions MajorityPremier Bank since 1992. Mr. Norton is the President of votes cast at shareholders 2/3Norton Oil Company, a home heating oil company located in Phillipsburg, New Jersey.

Irving N. Stein

Mr. Stein, age 53, has served as a member of votes cast at meeting shareholders meeting - ------------------------------------------------------------------------------------------------------------------

-54-
- ------------------------------------------------------------------------------------------------------------------ DROVERS FULTON FINANCIAL - ------------------------------------------------------------------------------------------------------------------ AmendmentPremier’s Board of ArticlesDirectors since 1997 and of Incorporation Provisions providing for classified Provisions regarding requiredPremier Bank since 1992. Mr. Stein is the Vice President of Keystone Motors, Inc., a car dealership located in Doylestown and Berwyn, Pennsylvania.

HelenBeth
Garofalo Vilcek

Ms. Garofalo Vilcek, age 45, has served as a member of Premier’s Board transactions with 10% vote for business combinations shareholders require approval byof Directors since 1997 and of Premier Bank since 1992. Ms. Garofalo Vilcek is a real estate broker located in Bangor, Pennsylvania.

Class 3 Directors (to serve until 2004)

Clark S. Frame

Mr. Frame, age 52, has served as a member of Premier’s Board of Directors since 1997 and other major transactions, majorityof Premier Bank since 1992. Mr. Frame serves as Chairman of the Board of Premier and 85% of votes removalPremier Bank.

Barry J. Miles, Sr.

Mr. Miles, age 53, has served as a member of directors, which all shareholders are entitled to amendment of articles and cast certain other provisions require either: (i) affirmative vote of holders of 85% of voting power; or (ii) approval of a majority of directors and continuing directors and affirmative vote of 66-2/3 of holders of voting power otherwise: (i) majority of directors and affirmative vote of holders of a majority of voting power or (ii) affirmative vote of holders of 85% of voting power. - ------------------------------------------------------------------------------------------------------------------ QualificationPremier’s Board of Directors Directors must own a minimumsince 1997 and of 2,000 No special ownership shares requirements - ------------------------------------------------------------------------------------------------------------------ Authorized ClassPremier Bank since 1992. Mr. Miles serves as Vice Chairman of Preferred Stock No Yes. 10,000,000 shares, without par value which can be issued under terms and conditions to be determined by the Board of Premier and of Premier Bank. Mr. Miles is a realtor in Easton, Pennsylvania.

Dr. Daniel A. Nesi

Dr. Nesi, age 65, has served as a member of Premier’s Board of Directors - ------------------------------------------------------------------------------------------------------------------ Rightsince 1997 and of Premier Bank since 1992. Dr. Nesi is a surgeon with his medical offices located in Doylestown, Pennsylvania.

Thomas M. O’Mara

Mr. O’Mara, age 50, has served as a member of Premier’s Board of Directors since 1997 and of Premier Bank since 1992. Mr. O’Mara is the owner of Master Gardener, a textiles company located in Yardley, Pennsylvania and Spartenberg, South Carolina.

Richard F. Ryon

Mr. Ryon, age 52, has served as a member of Premier’s Board of Directors since 1997 and of Premier Bank since 1993. Mr. Ryon is a partner in Richard B. Ryon Insurance, an insurance agency located in Pottsville, Pennsylvania.

John C. Soffronoff

Mr. Soffronoff, age 56, has served as a member of Premier’s Board of Directors since 1997 and of Premier Bank since 1992. Mr. Soffronoff is the President and Chief Executive Officer of Premier and of Premier Bank.

Security Ownership Of Certain Beneficial Owners And Management

Principal Shareholders

The following table sets forth, as of March 31, 2003, the name and address of each person who owns of record or who is known by the Board of Directors to be the beneficial owner of more than 5% of Premier’s outstanding common stock, the number of shares beneficially owned by such person and the percentage of Premier’s outstanding common stock so owned.

Name and Address


 

Shares

Beneficially Owned


  

Percent of

Outstanding

Common Stock

Beneficially Owned


Clark S. Frame

c/o Premier Bancorp, Inc.

379 N. Main Street

Doylestown, PA 18901

 

194,862

  

5.35%

Share Ownership by the Directors and Executive Officers

The following table sets forth the beneficial ownership of shares of Premier’s common stock, as well as all other Premier stock-based holdings, by the current directors and the executive officers and the directors and executive officers as a group, as of March 31, 2003. Unless otherwise indicated, all shares are held individually.

Name of Individual or
Identity of Group


    

Amount and Nature of Beneficial Ownership(1)


     

Percentage of Class


 

Daniel E. Cohen

    

98,629

(2)

    

2.71

%

Clark S. Frame

    

194,862

(3)

    

5.35

%

John J. Ginley

    

72,116

(4)

    

1.98

%

Dr. Thomas E. Mackell(20)

    

76,320

(5)

    

2.10

%

Barry J. Miles, Sr.

    

60,174

(6)

    

1.65

%

Dr. Daniel A. Nesi

    

127,877

(7)

    

3.51

%

Neil W. Norton

    

43,722

(8)

    

1.20

%

Thomas M. O’Mara(20)

    

59,154

(9)

    

1.63

%

Michael J. Perrucci

    

56,113

(10)

    

1.54

%

Brian R. Rich

    

110,936

(11)

    

3.05

%

Ezio U. Rossi

    

136,481

 

    

3.75

%

Richard F. Ryon

    

109,197

(12)

    

3.00

%

Gerald Schatz

    

123,871

(13)

    

3.40

%

Bruce E. Sickel

    

,058

(14)

    

1.62

%

John C. Soffronoff

    

60,075

(15)

    

1.65

%

Irving N. Stein

    

77,136

(16)

    

2.12

%

HelenBeth Garofalo Vilcek

    

47,207

(17)

    

1.30

%

John A. Zebrowski

    

116,449

(18)

    

3.20

%

All Officers and Directors as a Group (18 persons in total)

    

1,629,377

(19)

    

44.77

%


(1)The securities “beneficially owned” by an individual are determined in accordance with the definition of “beneficial ownership” set forth in the General Rules and Regulations of the Securities and Exchange Commission and may include securities owned by or for the individual’s spouse and minor children and any other relative who has the same home, as well as securities over which the individual has or shares voting or investment power, or has the right to callacquire beneficial ownership within 60 days after March 31, 2003. Beneficial ownership may be disclaimed as to certain of the securities.

(2)Includes 33,368 shares held jointly with Mr. Cohen’s spouse; 31,878 in Laub, Seidel, Cohen & Hof profit sharing plan f/b/o Daniel Cohen; 18,191 shares held solely by Mr. Cohen’s spouse; and 15,192 exercisable stock options.

(3)Includes 16,900 shares held individually; 100,458 shares held jointly with Mr. Frame’s spouse; 12,600 shares held as custodian for minor sons; 14,700 shares held as Trustee of Clark C. Frame Trust; 10,395 shares held as Trustee of CCF Trust for John M. Frame; 10,395 shares held as Trustee of CCF Trust for Martha Jackson; 10,395 shares held as Trustee of CCF Trust for David C. Frame; and 19,019 exercisable stock options.

(4)Includes 28,665 shares held solely by Mr. Ginley; and 43,451 shares held jointly with Mr. Ginley’s spouse.

(5)Includes 39,966 shares held individually; 8,662 shares held jointly with Dr. Mackell’s spouse; 18,375 held by Thomas E. Mackell, M.D. Ltd. Profit Sharing Plan; and 9,317 exercisable stock options.

(6)Includes 22,585 shares held individually; 32,760 shares held jointly with Mr. Miles’ spouse; and 4,829 exercisable stock options.

(7)

Includes 69,466 shares held individually; 37,720 shares held as Trustee for Daniel A. Nesi, M.D. Assoc.; 2,484 shares held as custodian for Paolo Sierra; 2,604 shares held as custodian for Diego Sierra; and 15,603 exercisable

stock options.

(8)Includes 31,359 shares held individually; 2,358 shares held jointly with Mr. Norton’s spouse; 105 shares held as custodian for a No No Special Meeting - ------------------------------------------------------------------------------------------------------------------ Shareholder Inspection Rights General General - ------------------------------------------------------------------------------------------------------------------ Rightminor son; and 9,900 exercisable stock options.

(9)Includes 1,386 shares held individually; 45,946 shares held jointly with Mr. O’Mara’s spouse; 1,386 shares held in Mr. O’Mara’s spouse’s IRA; and 10,436 exercisable stock options.

(10)Includes 35,000 shares held individually; 6,000 shares held by Mr. Perrucci’s son; 6,000 shares held by Mr. Perrucci’s daughter; and 9,113 exercisable stock option.

(11)Includes 65,810 shares held individually; 9,712 shares held by Morca Steam Heat Co.; 17,325 shares held by Waste Management & Processors, Inc.; 8,662 shares held by B-D Mining Co.; and 9,427 exercisable stock options.

(12)Includes 50,083 shares held individually; 49,938 shares held as partner of ShareholdersRyon & Co.; and 9,176 exercisable stock options.

(13)Includes 9,791 exercisable stock options.

(14)Includes 14,242 shares held individually; 6,912 shares held jointly with Mr. Sickel’s spouse; 3,464 shares held as Custodian for his children; and 34,440 exercisable stock options.

(15)Includes 26,957 shares held individually; 28,768 shares held jointly with Mr. Soffronoff’s spouse; 2,820 shares held in Mr. Soffronoff’s spouse’s IRA; and 1,890 exercisable stock options.

(16)Includes 61,206 shares held individually; 1,574 shares held jointly with Mr. Stein’s spouse; 5,196 shares held by Mr. Stein as custodian for his sons pursuant to act by No No Written Consent - ------------------------------------------------------------------------------------------------------------------ the Uniform Gift to Minors Act; and 9,160 exercisable stock options.

(17)Includes 32,876 shares held individually; 4,605 shares held in Ms. Garofalo Vilcek’s spouse’s IRA; and 9,726 exercisable stock options.

(18)Includes 9,726 exercisable stock options.

(19)Percentages assume that all options exercisable within 60 days of March 31, 2003 have been exercised. Therefore, on a pro forma basis, 3,639,685 shares would be outstanding.

(20)Directors Mackell and O’Mara are brothers-in-law.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires that Premier’s officers and directors, and persons who own more than 10% of the registered class of Premier’s equity securities, file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors, and greater than 10% shareholders are required by SEC regulation to furnish Premier with copies of all Section 16(a) forms they file.

Based solely on its review of the copies of Forms 3, 4 and 5 and amendments thereto received by it, or written representations from the reporting persons that no Forms 5 were required for those persons, Premier believes that during the period from January 1, 2002, through December 31, 2002, its officers and directors complied with all applicable filing requirements, except for Director HelenBeth Garofalo Vilcek, who inadvertently filed one Form 4 late to report two transactions.

Performance Graph

The Stock Price Performance Graph below shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement/prospectus into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Acts.

The graph compares Premier’s stock performance from January 1, 2000, through December 31, 2002, against the performance of the S&P 500 Total Return Index and the SNL AMEX Bank Index for the same period. The graph shows the cumulative investment return to shareholders, based on the assumption that a $100 investment was made on December 31, 1999, in each of the corporation’s common stock, the S&P 500 Total Return Index and the SNL AMEX Bank Index, and that all dividends were reinvested in such securities over the past three fiscal years. Shareholder return shown on the graph below is not necessarily indicative of future performance.

LOGO

Annual Report

A copy of Premier’s annual report on Form 10-K for its fiscal year ended December 31, 2002, is enclosed with this proxy statement/prospectus. A representative of KPMG LLP, the independent auditors who examined the financial statements in the annual report, will attend the meeting. The representative will have the opportunity to make a statement, if he desires to do so, and will be available to respond to any appropriate shareholder questions concerning the annual report. Premier specifically incorporates the following sections of its annual report on Form10-K, as filed with the SEC on March 24, 2003, into this proxy statement/prospectus: Item 1, Description of Business; Item 6, Selected Financial Data; Item 8, Financial Statements and Supplementary Data; Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations; and Item 7A, Quantitative and Qualitative Disclosures About Market Risk.

ADJOURNMENT

In the event that DroversPremier does not have sufficient votes for a quorum or to approve the merger agreement at the specialannual meeting, DroversPremier intends to adjourn the meeting to permit further solicitation of proxies. The Board of Directors of DroversPremier recommends that shareholders vote their proxies in favor of the adjournment proposal so that their proxies may be used to vote for an adjournment if necessary. The proxy holders will vote properly executed proxies in favor of the adjournment proposal unless the proxies indicate otherwise. If DroversPremier adjourns the specialannual meeting, DroversPremier will not give notice of the time and place of the adjourned meeting other than by an announcement of such time and place at the specialannual meeting. -55-

COMPARISON OF SHAREHOLDER RIGHTS

If Fulton and Premier complete the merger, shareholders of Premier automatically will become shareholders of Fulton, and their rights as shareholders will be determined by the Pennsylvania Business Corporation Law of 1988, and by Fulton’s Articles of Incorporation and Bylaws. The following is a summary of material differences between the rights of holders of Fulton common stock and the rights of holders of Premier common stock. These differences arise from differing provisions of the Articles of Incorporation and Bylaws of Fulton and Premier and from the existence of Fulton’s Shareholder Rights Plan.

The most significant differences are:

Fulton has adopted a Shareholder Rights Plan, which provides Fulton’s shareholders with certain stock-related rights in the event of a hostile takeover but may have the effect of discouraging such a takeover, while Premier has not adopted any such plan; and

A comparison of Premier common stock and Fulton common stock and the rights of their respective holders follows:

  

Premier


 

Fulton Financial


Title

 

Common Stock, $0.33 par value per share

 

Common Stock, $2.50 par value per share

Shares Authorized

 

30,000,000

 

400,000,000

Shares Issued & Outstanding

 

3,417,515 as of March 31, 2003

 

100,627,380 as of March 31, 2003

Preemptive Rights

 

No

 

No

Classification of Board of Directors

 

Board of Directors divided into three classes with three year terms; approximately one-third of directors elected each year.

 

Board of Directors divided into three classes with three year terms; approximately one-third of directors elected each year.

Premier


Fulton Financial


Voting: Election of Directors

Cumulative

Non-cumulative

Voting: Other Matters

One vote for each share owned of record.

One vote for each share owned of record.

Shareholder Rights Plan

No

Yes

Dissenters’ Rights

Not generally available

Not generally available

Dividend Reinvestment Plan

No

Yes

Market

Listed on the American Stock Exchange

Listed for quotation on NASDAQ National Market

Registered under 1934 Act

Yes

Yes

Limitation of Liability of Directors for Monetary Damages

Yes

Yes

Indemnification of Directors, Officers and Employees

Yes

Yes

Transactions with 10% or more Beneficial Owners

No

85% affirmative shareholder vote; reduced to 66- 2/3% if certain conditions are met

Approval of Major Transactions

Affirmative vote of holders of 66 2/3% of outstanding shares

2/3 of votes cast at shareholders meeting

Amendment of Articles of Incorporation

Affirmative vote of 66 2/3% of outstanding shares

Provisions regarding required vote for business combinations and other major transactions, removal of directors, amendment of articles and certain other provisions require either: (i) affirmative vote of holders of 85% of voting power; or (ii) approval of a majority of directors and continuing directors and affirmative vote of 66- 2/3 of holders of voting power; otherwise: (i) majority of directors and affirmative vote of holders of a majority of voting power or (ii) affirmative vote of holders of 85% of voting power.

Qualification of Directors

Must be a shareholder; 2/3 of the number of directors must be Pennsylvania residents

No special ownership requirements

Premier


Fulton Financial


Authorized Class of Preferred Stock


Yes. 20,000,000 shares, with or without par value, which can be issued under terms and conditions to be determined by the Board of Directors.

552,000 shares of Series A, Preferred Stock, no par value, issued and outstanding as of March 31, 2003

Yes. 10,000,000 shares, without par value which can be issued under terms and conditions to be determined by the Board of Directors

Right of Shareholders to call an Annual meeting

Yes. If the Board of Directors does not call and hold an annual meeting during the calendar year

No

Right of Shareholders to call a Special Meeting

Yes. By the holders of not less than 1/5 of all shares entitled to vote

No

Shareholder Inspection Rights

General

General

Right of Shareholders to act by Written Consent

Yes

No

EXPERTS

The consolidated financial statements of Fulton Financial at December 31, 2000Corporation and 1999subsidiaries as of and for each of the three years in the periodyear ended December 31, 2000,2002, included in Fulton Financial'sFulton’s Annual Report on Form 10-K for the year ended December 31, 20002002, have been audited by Arthur Andersen,KPMG LLP, independent public accountants, as indicated in their report with respect thereto, and are includedincorporated by reference herein in reliance upon the authority of said firm as experts in giving said reports.report. The consolidatedfinancial statements of Fulton for the years ended December 31, 2001 and 2000 were audited by other auditors who have ceased operations. Those auditors’ report, dated January 22, 2002 on those financial statements was unqualified and included an explanatory note that they did not audit the financial statements of Drovers Bancshares Corporation, a company acquired during 2001 in a transaction accounted for as a pooling of interest.

The consolidated financial statements of Premier Bancorp, Inc. as of December 31, 20002002 and 19992001 and for each of the three years in the three year period ended December 31, 2000,2002, included in Drovers'Premier’s Annual Report on Form 10-K for the year ended December 31, 2000,2002, have been audited by Stambaugh-Ness, P.C.,KPMG LLP, independent public accountants, as indicated in their report with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in giving said reports.

LEGAL MATTERS

Barley, Snyder, Senft & Cohen, LLC will pass on the validity of the Fulton Financial common stock issued in the merger, and certain federal income tax consequences of the merger. Rhoads & Sinon, LLP,

Shumaker Williams, P.C., Harrisburg, Pennsylvania, has acted as special counsel to DroversPremier in connection with the merger.

OTHER MATTERS As of the date of this document, the

The Board of Directors of Drovers knows of no matters which will be presented for consideration at the special meeting other than mattersthose described in this document.proxy statement or referred to in the accompanying Notice of annual meeting of Shareholders that may be presented at the annual meeting. However, if any other matters shall come beforematter should be properly presented for consideration and voting at the specialannual meeting or any adjournments of the forms ofmeeting, the proxy holders will confer discretionary authority to the individuals named as proxies to vote the shares represented byproxies in the proxy on any such matters. manner they determine to be in the corporation’s best interest.

SHAREHOLDER PROPOSALS

Because DroversPremier and Fulton Financial anticipate that the merger will be completed duringno later than the secondthird quarter of 2001or on or about July 1, 2001, Drovers2003, Premier does not intend to holdanticipate holding a 20012004 annual meeting of DroversPremier shareholders. In the event the merger is not completed, and such a meeting is held, any shareholder who, in accordance with and subject to be eligiblethe provisions of the proxy rules of the Securities and Exchange Commission, wishes to submit a proposal for inclusion in Drovers'Premier’s proxy statement relatedfor its 2004 annual meeting of Shareholders should have delivered the written proposal to suchthe President of Premier at its principal executive offices, 379 North Main Street, Doylestown, Pennsylvania 18901, by December 12, 2003. If a shareholder proposal is submitted to the corporation after that date, it is considered untimely and, although the proposal may be considered at the annual meeting, shareholder proposals mustit may not be received by Drovers within a reasonable time after Drovers publicly announcesincluded in the datecorporation’s 2004 proxy statement. Article IV, Section 2 of the corporation’s bylaws requires that a shareholder deliver a notice of nomination for election to the Board of Directors to the President not less than 14 or more than 50 days in advance of a shareholders’ meeting and within a reasonable time before Drovers mails its proxy statement to shareholders. called for the election of directors.

WHERE YOU CAN FIND MORE INFORMATION

Fulton Financial and DroversPremier are subject to the informational requirements of the Securities Exchange Act of 1934, and file reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports, proxy statements and other information that Fulton Financial and/or DroversPremier files at the Securities and Exchange Commission'sCommission’s public reference rooms at: .

450 Fifth Street, N.W., Washington, D.C. 20549 . 7 World Trade Center, Suite 1300, New York, New York 10048 .

Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661

You may call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference rooms. Fulton Financial'sFulton’s and Drovers'Premier’s Securities and Exchange Commission filings are also available on the Securities and Exchange Commission'sCommission’s Internet site at http://www.sec.gov. You can also inspect -56- reports, proxy statements and other information concerning Fulton Financial and Drovers at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. 20006, or concerning Premier at the offices of The American Stock Exchange, 86 Trinity Place, New York, NY 10006. Additionally, Premier’s Internet site iswww.premierbankonline.com.

Fulton Financial filed a Registration Statement on Form S-4 (No. 333-____)) to register with the Securities and Exchange Commission the Fulton Financial common stock issuable to DroversPremier shareholders in the merger. This document is a part of that Registration Statement and constitutes a prospectus of Fulton Financial in addition to being a proxy statement of DroversPremier for the specialannual meeting. As allowed by Securities and Exchange Commission rules, this document does not contain all the information you can find in the Registration Statement or the exhibits to the Registration Statement.

INCORPORATION BY REFERENCE

Some of the information that you may want to consider in deciding how to vote with respect to the merger is not physically included in this document, but rather is "incorporated“incorporated by reference"reference” to documents that have been filed by Fulton Financial and DroversPremier with the Securities and Exchange Commission. As permitted by the SEC, the following documents are incorporated by reference in this document.

Documents filed by Fulton Financial (SEC File No. 0-10587): .

Annual Report on Form 10-K filed March 20, 2001,27, 2003, for the year ended December 31, 2000. . 2002.

Current Report on Form 8-K filed January 16, 2003.

Current Report on Form 8-K filed February 4, 2001. . 2003.

The description of Fulton Financial common stock contained in Fulton Financial'sFulton’s registration statement on Form 8-A, dated July 3, 1989, and any amendment or reports filed for purposes of updating such description.

Documents filed by DroversPremier (SEC File No. 0-26069)1-15513): .

Annual Report on Form 10-K filed March ____, 2000,24, 2003, for the year ended December 31, 2000. . 2002.

Current Report on Form 8-K filed January 3, 2001. . 21, 2003.

The description of DroversPremier common stock contained in Drovers'Premier’s registration statement on Form 8-A, dated March 1, 1983,S-4, filed August 22, 1997 and amended on September 9, 1997, and any amendment or reports filed for purposes of updating such description.

All documents filed by Fulton Financial and DroversPremier pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, after the date of this document and prior to the specialannual meeting are also are incorporated by reference into this document and will be deemed to be a part hereof from the date of filing of such documents.

Any statement contained in a document that is incorporated by reference will be deemed to be modified or superseded for all purposes to the extent that a statement contained herein (or in any other document that is subsequently filed with the Securities and Exchange Commission and incorporated by reference) modifies or is contrary to that previous statement.

We may have sent you some of the documents incorporated by reference, but you can obtain any of them through us or the Securities and Exchange Commission. Documents incorporated by reference are available from Fulton Financial and/or DroversPremier without charge, excluding all exhibits unless we have specifically incorporated by reference an exhibit in this document. DroversPremier shareholders may obtain documents incorporated by reference in this document, with respect to Fulton, Financial, by requesting them in writing or by telephone from: Fulton Financial Corporation, One Penn Square, Lancaster, PA 17604, Attention: WilliamGeorge R. ColmeryBarr, Jr. (telephone number (717) 291-2411), and with respect to Drovers,Premier, by requesting them in writing or by telephone from: Drovers Bancshares Corporation, 30 South GeorgePremier Bancorp, Inc., 379 North Main Street, York, Pennsylvania 17401,Doylestown, PA 18901, Attention: John D. Blecher,J. Ginley, Secretary (telephone -57- number (717) 843-1586.(215) 345-5100). In order to ensure timely delivery of such documents, any request should be made by ______________________, 2001. May 2, 2003.

All information contained or incorporated by reference in this document relating to Fulton Financial and its subsidiaries has been supplied by Fulton Financial.Fulton. All information contained or incorporated by reference in this document relating to DroversPremier and its subsidiaries has been supplied by Drovers. -58- EXHIBIT Premier.

Exhibit “A”

Agreement and Plan of Merger


A AGREEMENT AND PLAN OF MERGER BY AND BETWEEN DROVERS BANCSHARES CORPORATION AND FULTON FINANCIAL CORPORATION A-1 GREEMENT AND PLAN OF MERGER

BY AND BETWEEN

PREMIER BANCORP, INC.

AND

FULTON FINANCIAL CORPORATION

JANUARY 16, 2003


TABLE OF CONTENTS

ARTICLE I. I—THE MERGER................................................................................... 7 MERGER

1

Section 1.1. Merger................................................................................ 7 ----------- ------ 1.1 Merger

1

Section 1.2. Name.................................................................................. 7 ----------- ---- 1.2 Name

2

Section 1.3.1.3 Articles of Incorporation............................................................. 7 ----------- ------------------------- Incorporation

2

Section 1.4. Bylaws................................................................................ 8 ----------- ------ 1.4 Bylaws

2

Section 1.5 Directors and Officers................................................................ 8 ----------- ---------------------- Officers

2

ARTICLE II. II—CONVERSION OF SHARES AND EXCHANGE OF STOCK CERTIFICATES............................... 8 CERTIFICATES

2

Section 2.1.2.1 Conversion of Shares.................................................................. 8 ----------- -------------------- (a) General....................................................................................... 8 ------- (b) Antidilution Provision........................................................................ 8 ---------------------- (c) No Fractional Shares.......................................................................... 8 -------------------- (d) Cancelled DBC Shares.......................................................................... 8 -------------------- (e) Closing Market Price.......................................................................... 8 -------------------- Shares

2

Section 2.2.2.2 Exchange of Stock Certificates........................................................ 9 ----------- ------------------------------ (a) Exchange Agent................................................................................ 9 -------------- (b) Surrender of Certificates..................................................................... 9 ------------------------- (c) Dividend Withholding.......................................................................... 9 -------------------- (d) Failure to Surrender Certificates............................................................. 9 --------------------------------- (e) Expenses...................................................................................... 9 -------- Certificates

3

Section 2.3.2.3 Treatment of Outstanding DBC Options.................................................. 9 ----------- ------------------------------------ Premier Options.

5

Section 2.4.2.4 Reservation of Shares................................................................. 10 ----------- --------------------- Shares

6

Section 2.5.2.5 Taking Necessary Action............................................................... 10 ----------- ----------------------- Action

6

Section 2.6.2.6 Press Releases, Etc................................................................... 10 ----------- ------------------- Etc

6

Section 2.7. FFC2.7 Fulton Common Stock...................................................................... 10 ----------- ---------------- Stock

6

Section 2.8.2.8 No Dissenters’ Rights of Dissenting Shareholders of DBC.............................................. 11 ----------- ----------------------------------------

6

Section 2.9 Premier Preferred Stock

6

Section 2.10 Certain Actions

7

ARTICLE III. III—REPRESENTATIONS AND WARRANTIES OF DBC.................................................. 11 PREMIER

7

Section 3.1. Authority............................................................................. 11 ----------- --------- 3.1 Authority

7

Section 3.2.3.2 Organization and Standing............................................................. 11 ----------- ------------------------- Standing

7

Section 3.3. Subsidiaries.......................................................................... 11 ----------- ------------ 3.3 Subsidiaries

8

Section 3.4. Capitalization........................................................................ 11 ----------- -------------- 3.4 Capitalization

8

Section 3.5.3.5 Charter, Bylaws and Minute Books...................................................... 12 ----------- -------------------------------- Books

8

Section 3.6.3.6 Financial Statements.................................................................. 12 ----------- -------------------- Statements

9

Section 3.7.3.7 Absence of Undisclosed Liabilities.................................................... 12 ----------- ---------------------------------- Liabilities

9

Section 3.8.3.8 Absence of Changes.................................................................... 12 ----------- ------------------ Changes

9

Section 3.9.3.9 Dividends, Distributions and Stock Purchases.......................................... 12 ----------- -------------------------------------------- Purchases

10

Section 3.10. Taxes................................................................................. 12 ------------ ----- 3.10 Taxes

10

Section 3.11.3.11 Title to and Condition of Assets...................................................... 13 ------------ -------------------------------- Assets

10

Section 3.12. Contracts............................................................................. 13 ------------ --------- 3.12 Contracts.

11

Section 3.13.3.13 Litigation and Governmental Directives................................................ 14 ------------ -------------------------------------- Directives

12

Section 3.14.3.14 Compliance with Laws; Governmental Authorizations..................................... 14 ------------ ------------------------------------------------- Authorizations

13

Section 3.15. Insurance............................................................................. 14 ------------ --------- 3.15 Insurance

13

Section 3.16.3.16 Financial Institutions Bonds.......................................................... 15 ------------ ---------------------------- Bonds

13

Section 3.17.3.17 Labor Relations and Employment Agreements............................................. 15 ------------ ----------------------------------------- Agreements

13

Section 3.18.3.18 Employee Benefit Plans................................................................ 15 ------------ ----------------------

A-2 Plans

14

Section 3.19.3.19 Related Party Transactions............................................................ 15 ------------ -------------------------- Transactions

14

Section 3.20.3.20 No Finder............................................................................. Finder

15 ------------ ---------

Section 3.21.3.21 Complete and Accurate Disclosure...................................................... Disclosure

15 ------------ --------------------------------


Section 3.22.3.22 Environmental Matters................................................................. 16 ------------ --------------------- Matters

15

Section 3.23.3.23 Proxy Statement/Prospectus............................................................ Prospectus

16 ------------ --------------------------

Section 3.24.3.24 SEC Filings........................................................................... Filings

16 ------------ -----------

Section 3.25. Reports............................................................................... 3.25 Reports

16 ------------ -------

Section 3.26.3.26 Loan Portfolio of Drovers Bank........................................................ Premier Bank.

17 ------------ ------------------------------

Section 3.27.3.27 Investment Portfolio.................................................................. Portfolio

17 ------------ --------------------

Section 3.28.3.28 Regulatory Examinations............................................................... Examinations.

17 ------------ -----------------------

Section 3.29.3.29 Regulatory Agreements

18

Section 3.30 Beneficial Ownership of FFCFulton Common Stock.............................................. 17 ------------ ---------------------------------------- Stock

18

Section 3.30.3.31 Fairness Opinion...................................................................... 17 ------------ ---------------- Opinion

18

ARTICLE IV. IV—REPRESENTATIONS AND WARRANTIES OF FFC...................................................... 17 FULTON

18

Section 4.1. Authority............................................................................. 17 ----------- --------- 4.1 Authority

18

Section 4.2.4.2 Organization and Standing............................................................. Standing

18 ----------- -------------------------

Section 4.3. Capitalization........................................................................ 4.3 Capitalization

18 ----------- --------------

Section 4.4.4.4 Articles of Incorporation and Bylaws.................................................. 18 ----------- ------------------------------------ Bylaws

19

Section 4.5. Subsidiaries.......................................................................... 18 ----------- ------------ 4.5 Subsidiaries

19

Section 4.6.4.6 Financial Statements.................................................................. 18 ----------- -------------------- Statements

19

Section 4.7.4.7 Absence of Undisclosed Liabilities.................................................... 18 ----------- ---------------------------------- Liabilities

20

Section 4.8.4.8 Absence of Changes.................................................................... 19 ----------- ------------------ Changes; Dividends, Etc.

20

Section 4.9.4.9 Litigation and Governmental Directives................................................ 19 ----------- -------------------------------------- Directives

20

Section 4.10.4.10 Compliance with Laws; Governmental Authorizations..................................... 19 ------------ ------------------------------------------------- Authorizations

20

Section 4.11.4.11 Complete and Accurate Disclosure...................................................... 19 ------------ -------------------------------- Disclosure

21

Section 4.12.4.12 Labor Relations....................................................................... 19 ------------ --------------- Relations

21

Section 4.13.4.13 Employee Benefits Plans............................................................... 19 ------------ ----------------------- Plans

21

Section 4.14.4.14 Environmental Matters................................................................. 20 ------------ --------------------- Matters

22

Section 4.15.4.15 SEC Filings........................................................................... 20 ------------ ----------- Filings

22

Section 4.16.4.16 Proxy Statement/Prospectus............................................................ 20 ------------ -------------------------- Prospectus

22

Section 4.17.4.17 Regulatory Approvals.................................................................. 20 ------------ -------------------- Approvals

22

Section 4.18.4.18 No Finder............................................................................. 20 ------------ --------- Finder

22

Section 4.19. Taxes................................................................................. 20 ------------ ----- 4.19 Taxes

22

Section 4.20.4.20 Title to and Condition of Assets...................................................... 20 ------------ -------------------------------- Assets

23

Section 4.21. Contracts............................................................................. 21 ------------ --------- 4.21 Contracts

23

Section 4.22. Insurance............................................................................. 21 ------------ --------- 4.22 Insurance

23

Section 4.23. Reports............................................................................... 21 ------------ ------- 4.23 Reports

23

ARTICLE V. V—COVENANTS OF DBC........................................................................... 21 PREMIER

24

Section 5.1.5.1 Conduct of Business................................................................... 21 ----------- ------------------- Business

24

Section 5.2.5.2 Best Efforts.......................................................................... 22 ----------- ------------ Efforts

27

Section 5.3.5.3 Access to Properties and Records...................................................... 22 ----------- -------------------------------- Records

27

Section 5.4.5.4 Subsequent Financial Statements....................................................... 23 ----------- ------------------------------- Statements

27

Section 5.5.5.5 Update Schedules...................................................................... 23 ----------- ---------------- Schedules

27

Section 5.6. Notice................................................................................ 23 ----------- ------ 5.6 Notice

28

Section 5.7.5.7 No Solicitation....................................................................... 23 ----------- --------------- Solicitation.

28

Section 5.8.5.8 Affiliate Letters..................................................................... 24 ----------- ----------------- Letters

30

ii


Section 5.9.5.9 No Purchases or Sales of FFCFulton Common Stock During Price Determination Period........... 25 ----------- ---------------------------------------------------------------------------

A-3 Period

31

Section 5.10. Dividends............................................................................. 25 ------------ --------- Section 5.11. Accounting Treatment.................................................................. 25 ------------ -------------------- 5.10 Dividends

31

ARTICLE VI. VI—COVENANTS OF FFC.......................................................................... 25 FULTON

31

Section 6.1.6.1 Best Efforts.......................................................................... 25 ----------- ------------ (a) Applications for Regulatory Approval.......................................................... 25 ------------------------------------ (b) Registration Statement........................................................................ 25 ---------------------- (c) State Securities Laws......................................................................... 26 --------------------- (d) Stock Listing................................................................................. 26 ------------- (e) Adopt Amendments.............................................................................. 26 ---------------- (f) Tax Treatment................................................................................. 26 ------------- Efforts

31

Section 6.2.6.2 Access to Properties and Records...................................................... 26 ----------- -------------------------------- Records

32

Section 6.3.6.3 Subsequent Financial Statements....................................................... 26 ----------- ------------------------------- Statements

33

Section 6.4.6.4 Update Schedules...................................................................... 26 ----------- ---------------- Schedules

33

Section 6.5. Notice................................................................................ 26 ----------- ------ 6.5 Notice

33

Section 6.6. Employment Arrangements............................................................... 26 ----------- ----------------------- Section 6.7.6.6 No Purchase or Sales of FFCFulton Common Stock During Price Determination Period............ 27 ----------- -------------------------------------------------------------------------- Period

33

Section 6.7 Assumption of Premier Debentures

33

Section 6.8 Drovers Division and Drovers Regional Directors....................................... 27 ----------- ----------------------------------------- Employment Arrangements

34

Section 6.9 Insurance............................................................................. 28 --------- Insurance; Indemnification

34

Section 6.10.6.10 Appointment of FFCFulton Director

35

Section 6.11 Continuation of Premier Bank’s Structure, Name and Fulton Bank Directors.......................................... 28 ------------ -------------------------------------------- Combined Financial Statements.......................................................................... 29 ----------------------------- Assumption of DBC Debentures........................................................................... 29 ---------------------------- Directors

36

ARTICLE VII. VII—CONDITIONS PRECEDENT...................................................................... 29 PRECEDENT

36

Section 7.1.7.1 Common Conditions..................................................................... 29 ----------- ----------------- (a) Shareholder Approval.......................................................................... 29 -------------------- (b) Regulatory Approvals.......................................................................... 29 -------------------- (c) Stock Listing................................................................................. 29 ------------- (d) Tax Opinion................................................................................... 29 ----------- (e) Registration Statement........................................................................ 30 ---------------------- (f) No Suits...................................................................................... 30 -------- (g) Pooling....................................................................................... 30 ------- Conditions

36

Section 7.2.7.2 Conditions Precedent to Obligations of FFC............................................ 30 ----------- ------------------------------------------ (a) Accuracy of Representations and Warranties.................................................... 30 ------------------------------------------ (b) Covenants Performed........................................................................... 30 ------------------- (c) Opinion of Counsel for DBC.................................................................... 30 -------------------------- (d) Affiliate Agreements.......................................................................... 31 -------------------- (e) DBC Options................................................................................... 31 ----------- (f) No Material Adverse Change.................................................................... 31 -------------------------- (g) Accountants' Letter........................................................................... 31 ------------------- (h) Federal and State Securities and Antitrust Laws............................................... 32 ----------------------------------------------- (i) Environmental Matters......................................................................... 32 --------------------- (j) Closing Documents............................................................................. 32 ----------------- (k) Dissenting Stockholders....................................................................... 32 ----------------------- Fulton

39

Section 7.3.7.3 Conditions Precedent to the Obligations of DBC........................................ 32 ----------- ---------------------------------------------- (a) Accuracy of Representations and Warranties.................................................... 32 ------------------------------------------ (b) Covenants Performed........................................................................... 32 ------------------- (c) Opinion of Counsel for FFC.................................................................... 32 --------------------------

A-4 (d) FFC Options................................................................................... 32 ----------- (e) No Material Adverse Change.................................................................... 33 -------------------------- (f) Fairness Opinion.............................................................................. 33 ---------------- (g) Closing Documents............................................................................. 33 ----------------- Premier

42

ARTICLE VIII. VIII—TERMINATION, AMENDMENT AND WAIVER........................................................ 33 WAIVER

43

Section 8.1. Termination........................................................................... 33 ----------- ----------- (a) Mutual Consent................................................................................ 33 -------------- (b) Unilateral Action by FFC...................................................................... 33 ------------------------ (c) Unilateral Action By DBC...................................................................... 33 ------------------------ (d) Market Price of FFC Common Stock.............................................................. 34 -------------------------------- 8.1 Termination

43

Section 8.2.8.2 Effect of Termination................................................................. 34 ----------- --------------------- (a) Effect........................................................................................ 34 ------ (b) Limited Liability............................................................................. 34 ----------------- (c) Confidentiality............................................................................... 34 --------------- Termination

45

Section 8.3. Amendment............................................................................. 34 ----------- --------- 8.3 Amendment

45

Section 8.4. Waiver................................................................................ 35 ----------- ------ 8.4 Waiver

46

ARTICLE IX. IX—CLOSING AND EFFECTIVE TIME............................................................... 35 TIME

46

Section 9.1. Closing............................................................................... 35 ----------- ------- 9.1 Closing

46

Section 9.2.9.2 Effective Time........................................................................ 35 ----------- -------------- Time

46

ARTICLE X. X—NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES............................................ 35 WARRANTIES

46

Section 10.1.10.1 No Survival........................................................................... 35 ------------ ----------- Survival

46

ARTICLE XI. XI—GENERAL PROVISIONS....................................................................... 35 PROVISIONS

46

Section 11.1. Expenses.............................................................................. 35 ------------ -------- 11.1 Expenses

46

Section 11.2.11.2 Other Mergers and Acquisitions........................................................ 35 ------------ ------------------------------ Acquisitions

47

Section 11.3. Notices............................................................................... 35 ------------ ------- 11.3 Notices

47

Section 11.4. Counterparts.......................................................................... 36 ------------ ------------ 11.4 Counterparts

48

Section 11.5.11.5 Governing Law......................................................................... 36 ------------ ------------- Law

48

Section 11.6.11.6 Parties in Interest................................................................... 36 ------------ ------------------- Interest

48

Section 11.7.11.7 Disclosure Schedules

48

iii


Section 11.8 Entire Agreement...................................................................... 36 ------------ ---------------- Agreement

48

iv


INDEX OF SCHEDULES Schedule 2.3 DBC Options - ------------ Schedule 3.7 Undisclosed Liabilities - ------------ Schedule 3.8 Changes - ------------ Schedule 3.9 Dividends, Distributions and Stock Purchases - ------------ Schedule 3.10 Taxes - ------------- Schedule 3.11 Title to and Condition of Assets - ------------- Schedule 3.12 Contracts - ------------- Schedule 3.13 Litigations and Governmental Directives - ------------- Schedule 3.14 Compliance with Laws; Governmental Authorizations - ------------- Schedule 3.15 Insurance - ------------- Schedule 3.16 Financial Institutions Bonds - ------------- Schedule 3.17 Labor Relations and Employment Agreements - ------------- Schedule 3.18 Employee Benefit Plans - ------------- A-5 Schedule 3.19 Related Party Transactions - ------------- Schedule 3.20 Finders - ------------- Schedule 3.22 Environmental Matters - ------------- Schedule 3.26 Loan Portfolio - ------------- Schedule 3.27 Investment Portfolio - ------------- Schedule 4.5 Subsidiaries - ------------ Schedule 4.7 Undisclosed Liabilities - ------------ Schedule 4.8 Dividends, Distributions and Stock Purchases - ------------ Schedule 4.9 Litigation and Governmental Directives - ------------ Schedule 4.10 Compliance with Laws; Governmental Authorizations - ------------- Schedule 4.14 Environmental Matters - ------------- Schedule 4.19 Taxes - ------------- Schedule 6.8 Drovers Bank Director Fees - ------------

Schedule 2.3

Premier Options

Schedule 3.7

Undisclosed Liabilities

Schedule 3.8

Changes

Schedule 3.9

Dividends, Distributions and Stock Purchases

Schedule 3.10

Taxes

Schedule 3.11

Title to and Condition of Assets

Schedule 3.12

Contracts

Schedule 3.13

Litigation and Governmental Directives

Schedule 3.14

Compliance with Laws; Governmental Authorizations

Schedule 3.15

Insurance

Schedule 3.16

Financial Institutions Bonds

Schedule 3.17

Labor Relations and Employment Agreements

Schedule 3.18

Employee Benefit Plans

Schedule 3.19

Related Party Transactions

Schedule 3.20

Finders

Schedule 3.22

Environmental Matters

Schedule 3.26

Loan Portfolio

Schedule 3.27

Investment Portfolio

Schedule 3.29

Regulatory Agreements

Schedule 4.5

Subsidiaries

Schedule 4.7

Undisclosed Liabilities

Schedule 4.8

Dividends, Distributions and Stock Purchases

Schedule 4.9

Litigation and Governmental Directives

Schedule 4.10

Compliance with Laws; Governmental Authorizations

Schedule 4.14

Environmental Matters

Schedule 4.19

Taxes

Schedule 5.1 (xxi)

Pending and Contemplated Applications

Schedule 6.11

Current Premier Directors Fees

v


INDEX OF EXHIBITS Exhibit A Form of Warrant Agreement - --------- Exhibit B Form of Warrant - --------- Exhibit C Form of Employment Agreement - --------- Exhibit D Form of Opinion of DBC's Counsel - --------- Exhibit E Form of Opinion of FFC's Counsel - --------- A-6

Exhibit A

Form of Warrant Agreement

Exhibit B

Form of Warrant

Exhibit C

Form of Voting Agreement

Exhibit D

Form of Employment Agreements

Exhibit E

Form of Opinion of Premier’s Counsel

Exhibit F

Form of Opinion of Fulton’s Counsel

vi


AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER made as of the 27/th/16th day of December, 2000,January, 2003, by and between FULTON FINANCIAL CORPORATION, a Pennsylvania business corporation having its administrative headquarters at One Penn Square, P. O. Box 4887, Lancaster, Pennsylvania 17604 ("FFC"(“Fulton), and DROVERS BANCSHARES CORPORATION,PREMIER BANCORP, INC., a Pennsylvania business corporation having its administrative headquarters at 30 South George379 North Main Street, York,Doylestown, Pennsylvania 17401 ("DBC"18901 (“Premier).

BACKGROUND: FFC

Fulton is a financial holding company registered under the Bank Holding Company Act of 1956, as amended (the "BHC Act"BHC Act). DBCPremier is a bankfinancial holding company registered under the BHC Act which is the parent of The Drovers & Mechanics Bank ("Drovers Bank").Premier Bank. In addition to DroversPremier Bank, DBCPremier has two wholly-ownedfour directly-owned subsidiaries: Drovers Realty Company and DroversPBI Capital Trust, I. DroversPremier Capital Trust II, Lenders Abstract, LLC and Premier Bank has two-wholly-owned subsidiaries: 96 South George Street, Inc. and Drovers Investment Company and owns 60% of the membership interests in Drovers SettlementInsurance Services, LLC. DroversPremier Bank and all of such subsidiaries are collectively referred to herein as "DBC Subsidiaries"the “Premier Subsidiaries. FFCFulton and DBCPremier wish to merge with each other.other, resulting in Premier Bank becoming a subsidiary of Fulton. Subject to the terms and conditions of this Agreement, the foregoing transaction will be accomplished by means of a merger (the "Merger"Merger) in which (i) DBCPremier will be merged with and into FFC,Fulton, (ii) FFCFulton will survive the Merger, and (iii) all of the outstanding shares of the common stock of DBC, noPremier, $0.33 par value per share ("DBC(“Premier Common Stock"Stock), will be converted into shares of the common stock of FFC,Fulton, par value $2.50 per share ("FFC(“Fulton Common Stock"Stock). Simultaneously with the effectiveness of the Merger and subject to appropriate documentation and regulatory approvals, FFC shall cause Drovers Bank to merge (the "Bank Merger") with and into Fulton Bank, an existing bank subsidiary of FFC, and transfer the trust business of Drovers to Fulton Financial Advisors, N.A. ("Advisors"), an affiliate of FFC, immediately after the Bank Merger (the "Trust Business Transfer") (the Bank Merger, the Trust Business Transfer, along with any branch consolidations and/or closures deemed desirable by FFC, is referred to herein as the "Restructuring").

Simultaneously with the execution of this Agreement, the parties are entering into a Warrant Agreement in substantially the form ofExhibit A --------- attached hereto (the "Warrant Agreement"Warrant Agreement), which provides for the delivery by DBCPremier of a warrant in substantially the form ofExhibit B attached hereto (the --------- "Warrant"Warrant) entitling FFCFulton to purchase shares of the DBCPremier Common Stock in certain circumstances. In addition, Premier has obtained voting agreements in the form ofExhibit C attached hereto, from the directors and executive officers listed on Exhibit C, who have agreed to vote shares of voting capital stock beneficially owned by them in Premier in favor of this Agreement, the Merger and, to the extent required, all transactions incident thereto (collectively, the “Voting Agreements”).

WITNESSETH:

NOW, THEREFORE, in consideration of the mutual covenants contained herein and intending to be legally bound, the parties hereby agree as follows:

ARTICLE I. I—THE MERGER

Subject to the terms and conditions of this Agreement, DBCPremier shall merge with and into FFCFulton in accordance with the following:

Section 1.1. Merger.1.1 Merger. At the Effective Time (as defined in Section 9.2 ----------- ------ herein) (i) DBCPremier shall merge with and into FFCFulton pursuant to the provisions of the Pennsylvania Business


Corporation Law of 1988, as amended (the "BCL"BCL), whereupon the separate existence of DBCPremier shall cease and FFCFulton shall be the surviving corporation (hereinafter sometimes referred to as the "Surviving Corporation"Surviving Corporation), and (ii) the DBCPremier Common Stock will be converted into FFCFulton Common Stock pursuant to the provisions of Article II hereof.

Section 1.2. Name.1.2 Name. The name of the Surviving Corporation shall be "Fulton ----------- ----“Fulton Financial Corporation"Corporation”. The address of the principal office of the Surviving Corporation will be One Penn Square, P.O. Box 4887, Lancaster, Pennsylvania 17604.

Section 1.3.1.3 Articles of Incorporation.Incorporation. The Articles of Incorporation of ----------- ------------------------- the Surviving Corporation shall be the Articles of Incorporation of FFCFulton as in effect at the Effective Time. A-7

Section 1.4. Bylaws.1.4 Bylaws. The Bylaws of the Surviving Corporation shall be ----------- ------ the Bylaws of FFCFulton as in effect at the Effective Time.

Section 1.5 Directors and Officers.Officers. The directors and officers of the ----------- ---------------------- Surviving Corporation shall be the directors and officers of FFCFulton in office at the Effective Time. Each of such directors and officers shall serve until such time as his successor is duly elected and has qualified.

ARTICLE II. II—CONVERSION OF SHARES AND EXCHANGE OF STOCK CERTIFICATES

Section 2.1.2.1 Conversion of Shares.Shares. At the Effective Time (as defined in ----------- -------------------- Section 9.2 herein) the shares of DBCPremier Common Stock then outstanding shall be converted into shares of FFCFulton Common Stock, as follows:

(a) General:General. Subject to the provisions of Sections 2.1(b), ------- 2.1(c) and 2.1(d) herein, each share of DBCPremier Common Stock issued and outstanding immediately before the Effective Time, shall, at the Effective Time, be converted into and become without any action on the part of the holder thereof, and in exchange therefor FFCFulton shall issue, 1.241.34 (such number, as it may be adjusted under Section 2.1(b) herein, the "Conversion Ratio"Conversion Ratio) shares of FFCFulton Common Stock and the corresponding number of rights associated therewith pursuant to the Rights Agreement dated June 20, 1989, as amended and restated as of April 27, 1999, between FFCFulton and Fulton Bank.Bank (the “Fulton Rights Agreement”). Each share of DBCPremier Common Stock to be converted into FFCFulton Common Stock pursuant to this Section 2.1 shall, by virtue of the Merger and without any action on the part of the holders thereof, cease to be outstanding, and be canceled, and retired, and each holder of share certificates evidencing shares of DBCPremier Common Stock to be converted into the right to receive FFCFulton Common Stock pursuant to this Section 2.1 shall thereafter cease to have any rights with respect to the shares represented thereby, except the right to receive the FFCFulton Common Stock therefor, without interest thereon, upon the surrender of the share certificates evidencing the DBCPremier Common Stock in accordance with Section 2.2 hereof.

(b)Antidilution Provision:Provision. In the event that FFCFulton shall at any ---------------------- time before the Effective Time: (i) issue a dividend in shares of FFCFulton Common Stock, (ii) combine the outstanding shares of FFCFulton Common Stock into a smaller number of shares, or (iii)

subdivide the outstanding shares of FFCFulton Common Stock into a greater number of shares, then the Conversion Ratio shall be proportionately adjusted (calculated to four decimal places), so that each DBCPremier shareholder shall receive at the Effective Time, in exchange for his shares of DBCPremier Common Stock, the number of shares of FFCFulton Common Stock as would then have been owned by him if the Effective Time had occurred before the record date of such event (For example, if FFCFulton were to declare a five percent (5%) stock dividend after the date of this Agreement and if the record date for that stock dividend were to occur before the Effective Time, the Conversion Ratio would be adjusted from 1.241.34 shares to 1.3021.407 shares).

(c)No Fractional Shares:Shares. No fractional shares of FFCFulton Common -------------------- Stock shall be issued in connection with the Merger. In lieu of the issuance of any fractional share to which he would otherwise be entitled, each former shareholder of DBCPremier shall receive in cash an amount equal to the fair market value of his fractional interest, which fair market value shall be determined by multiplying such fraction by the Closing Market Price (as defined in Section 2.1(e) herein).

(d)Cancelled DBC Shares.Premier Shares. Notwithstanding the provisions of -------------------- Section 2.1(a) herein, the following shares of DBCPremier Common Stock shall not be converted into FFCFulton Common Stock, and shall be cancelled, at the Effective Time: (i) Dissenting Shares (as defined in Section 2.8 herein); (ii) shares of DBCPremier Common Stock then owned by FFCFulton or any direct or indirect subsidiary of FFCFulton (except for trust account shares or shares acquired in connection with debts previously contracted); and (iii)(ii) shares of DBC SharesPremier Common Stock owned by DBCPremier or any direct or indirect subsidiary of DBCPremier (except for trust account shares or shares acquired in connection with debts previously contracted).

(e)Closing Market Price:Price. For purposes of this Agreement, the -------------------- Closing Market Price shall be the average of the per share closing bid and asked pricesprice for FFCFulton Common Stock, calculated to two decimal places, for the ten (10) consecutive trading days immediately preceding the date which is two (2) business days before the Effective Date (as such term is defined in Section 9.2 herein), as reported on the National Market System of the National Association of Securities Dealers Automated Quotation System ("NASDAQ"(“NASDAQ), the foregoing period of ten (10) trading days being hereinafter sometimes referred to as the "PricePrice Determination Period"Period. (For example, if June 30, 2001July 1, 2003 were to be the Effective Date, then the Price Determination Period would be June 14, 15,13, 16, 17, 18, 19, 20, 21, 22,23, 24, 25 and 26, and 27, 2001)2003). In the event that NASDAQ shall fail to report a closing bid and asked pricesprice for FFCFulton Common Stock for any A-8 trading day during the Price Determination Period, the closing bid and asked pricesprice for that day shall be equal to the average of the closing bid and asked prices as quoted: (i) by F. J. Morrissey & Company, Inc. and by Ryan, Beck & Co.; or (ii) in the event that both of these firms are not then making a market in FFCFulton Common Stock, by two brokerage firms then making a market in FFCFulton Common Stock to be selected by FFCFulton and approved by DBC. Premier.

Section 2.2.2.2 Exchange of Stock Certificates. DBCCertificates. Premier Common Stock ----------- ------------------------------ certificates shall be exchanged for FFCFulton Common Stock certificates in accordance with the following procedures:

(a)Exchange Agent:Agent. The transfer agent of FFCFulton shall act as -------------- exchange agent (the "Exchange Agent"Exchange Agent) to receive DBCPremier Common Stock certificates from the holders thereof and to exchange such stock certificates for FFCFulton Common Stock certificates and (if applicable) to pay cash for fractional shares of FFCFulton Common Stock pursuant to Section 2.1(c) herein. FFCFulton shall cause the Exchange Agent on or promptly, but no later than three (3) business days after receipt of a final shareholder list following the Effective Date, to mail to each former shareholder of DBCPremier a notice specifying the procedures to be followed in surrendering such shareholder's DBCshareholder’s Premier Common Stock certificates.

(b)Surrender of Certificates. As promptly as possible after ------------------------- receipt of the Exchange Agent'sAgent’s notice, each former shareholder of DBCPremier shall surrender his DBCPremier Common Stock certificates to the Exchange Agent;provided --------, that if any former shareholder of DBCPremier shall be unable to surrender his DBCPremier Common Stock certificates due to loss or mutilation thereof, he may make a constructive surrender by following procedures comparable to those customarily used by FFCFulton for issuing replacement certificates to FFCFulton shareholders whose FFCFulton Common Stock certificates have been lost or mutilated. Upon receiving a proper actual or constructive surrender of DBCPremier Common Stock certificates from a former DBCPremier shareholder, the Exchange Agent shall issue to such shareholder, in exchange therefor, an FFCa Fulton Common Stock certificate representing the whole number of shares of FFCFulton Common Stock into which such shareholder'sshareholder’s shares of DBCPremier Common Stock have been converted in accordance with this Article II, together with a check in the amount of any cash to which such shareholder is entitled, pursuant to Section 2.1(c) herein, in lieu of the issuance of a fractional share.

(c)Dividend Withholding:Withholding. Dividends, if any, payable by FFC --------------------Fulton after the Effective Time to any former shareholder of DBCPremier who has not prior to the payment date surrendered his DBCPremier Common Stock certificates may, at the option of FFC,Fulton, be withheld. Any dividends so withheld shall be paid, without interest, to such former shareholder of DBCPremier upon proper surrender of his DBCPremier Common Stock certificates.

(d)Failure to Surrender Certificates:Certificates. All DBCPremier Common Stock --------------------------------- certificates must be actually or constructively (as referenced in (b) above) surrendered to the Exchange Agent within two (2) years after the Effective Date. In the event that any former shareholder of DBCPremier shall not have properly surrendered his DBCPremier Common Stock certificates within two (2) years after the Effective Date, the shares of FFCFulton Common Stock that would otherwise have been issued to him may, at the option of FFC,Fulton, be sold and the net proceeds of such sale, together with the cash (if any) to which he is entitled in lieu of the issuance of a fractional share and any previously accrued dividends, shall be held by the Exchange Agent in a noninterest bearing account for his benefit. From and after any such sale, the sole right of such former shareholder of DBCPremier shall be the right to collect such net proceeds, cash and accumulated dividends. Subject to all applicable laws of escheat, such net proceeds, cash and accumulated dividends shall be paid to such former shareholder of DBC,Premier, without interest, upon proper actual or constructive surrender of his DBCPremier Common Stock certificates.

(e) Expenses:Expenses. All costs and expenses associated with the -------- foregoing surrender and exchange procedure shall be borne by FFC. Fulton.

Section 2.3.2.3 Treatment of Outstanding DBCPremier Options. ----------- ------------------------------------

(a) At the Effective Time, each holder of an option (collectively, "DBC Options"Premier Options) to purchase shares of DBCPremier Common Stock that (i) is outstanding at the Effective Time, (ii) has been granted pursuant to the Drovers Bancshares CorporationPremier Bancorp, Inc. 1995 Incentive Stock Option Plan, the Drovers Bancshares Corporation 1995 Stock Option Plan and the Drovers Bancshares Corporation 1999 Non-Employee Directors Stock Option Plan (collectively, the "DBCPremier Stock Option Plans"Plan) or otherwise granted by the Premier Board of Directors and evidenced by stock option agreements but not pursuant to any Premier Stock Option Plan; and (iii) would otherwise survive the Effective Time shall be entitled to receive, in substitution for such DBCPremier Option, an option to acquire shares of FFCFulton Common Stock on the terms set forth below (each DBCPremier Option as substituted, an "FFCa “Fulton Stock Option"Option). A-9

(b) An FFCA Fulton Stock Option shall be a stock option to acquire shares of FFCFulton Common Stock with the following terms: (i) the number of shares of FFCFulton Common Stock which may be acquired pursuant to such FFCFulton Stock Option shall be equal to the product of the number of shares of DBCPremier Common Stock covered by the DBCPremier Option multiplied by the Conversion Ratio, provided that any fractional share of FFCFulton Common Stock resulting from such multiplication shall be rounded to the nearest whole share; (ii) the exercise price per share of FFCFulton Common Stock shall be equal to the exercise price per share of DBCPremier Common Stock of such DBCPremier Option, divided by the Conversion Ratio, provided that such exercise price shall be rounded to the nearest whole cent; (iii) the duration and other terms of such FFCFulton Stock Option shall be identical to the duration and other terms of such DBCPremier Option, except that all references to DBCPremier shall be deemed to be references to FFCFulton and its affiliates, where the context so requires and shall remain exercisable until the stated expiration date of the corresponding DBCPremier Option; (iv) FFCFulton shall assume such DBCPremier stock option, whether vested or not vested, as contemplated by Section 424(a) of the Internal Revenue Code of 1986, as amended (the "Code"Code); and (v) to the extent DBCPremier Options qualify as incentive stock options under Section 422 of the Code, the FFCFulton Stock Options exchanged therefor shall also so qualify. Subject to the FFCFulton Stock Options and the foregoing, the DBCPremier Stock Option Plans and all options or other rights to acquire DBCPremier Common Stock issued thereunder shall terminate at the Effective Time. FFCFulton shall not issue or pay for any fractionfractional shares otherwise issuable upon exercise of a FFCFulton Stock Option.

(c) Prior to the Effective Time, FFCFulton shall take appropriate action to reserve for issuance and, if not previously registered pursuant to the Securities Act of 1933, as amended (the "1933 Act"1933 Act), register the number of shares of FFCFulton Common Stock necessary to satisfy FFC'sFulton’s obligations with respect to the issuance of FFCFulton Common Stock pursuant to the exercise of FFCFulton Stock Options and under Section 2.3.

(d) Prior to the Effective Time (to the extent required as determined by FFCFulton or DBCPremier under applicable law, the terms of the DBCPremier Stock Option PlansPlan or otherwise), FFC

Fulton shall receive agreements from each holder of a DBCPremier Option, pursuant to which each such holder agrees to accept an FFCa Fulton Stock Option in substitution for the DBCPremier Option, as of the Effective Time.

(e)Schedule 2.3 sets forth a listing of each DBCPremier Option as of ------------ the date of this Agreement (copies of which have been provided to FFC)Fulton), including the optionee, date of grant, shares of DBCPremier Common Stock subject to such Option, the exercise price of such Option, expiration date, classification as an incentive stock option or a nonqualified stock option, vesting schedule and any special features thereof.

Section 2.4.2.4 Reservation of Shares. FFCShares. Fulton agrees that (i) prior to the ----------- --------------------- Effective Time it will take appropriate action to reserve a sufficient number of authorized but unissued shares of FFCFulton Common Stock to be issued in accordance with this Agreement, and (ii) at the Effective Time, FFCFulton will issue shares of FFCFulton Common Stock to the extent set forth in, and in accordance with, this Agreement.

Section 2.5.2.5 Taking Necessary Action. FFCAction. Fulton and DBCPremier shall take all such ----------- ----------------------- actions as may be reasonably necessary or appropriate in order to effectuate the transactions contemplated hereby including, without limitation, providing information necessary for preparation of any filings needed to obtain the regulatory approvals required to consummate the Merger and the Restructuring.Merger. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement and to vest FFCFulton with full title to all properties, assets, rights, approvals, immunities and franchises of DBC,Premier, the officers and directors of DBC,Premier, at the expense of FFC,Fulton, shall take all such necessary action.

Section 2.6.2.6 Press Releases, Etc. FFCEtc. Fulton and DBCPremier agree that all press ----------- ------------------- releases or other public communications relating to this Agreement or the transactions contemplated hereby will require mutual approval by FFCFulton and DBC,Premier, unless counsel has advised any such party that such release or other public communication must immediately be issued and the issuing party has not been able, despite its good faith efforts, to obtain such approval.

Section 2.7. FFC2.7 Fulton Common Stock.Stock. Each share of FFCFulton Common Stock that is ----------- ---------------- issued and outstanding immediately before the Effective Time shall, on and after the Effective Time, remain issued and outstanding as one (1) share of FFCFulton Common Stock, and each holder thereof shall retain his rights therein. The holders of the shares of FFCFulton Common Stock outstanding immediately prior to the Effective Time shall, immediately after the Effective Time, continue to hold a majority of the outstanding shares of FFCFulton Common Stock. A-10

Section 2.8.2.8 No Dissenters’ Rights. Pursuant to Section 1571(b)(1)(i) of Dissenting Shareholdersthe BCL, the shareholders of DBC. The shareholders ----------- ---------------------------------------- of DBCPremier shall not be entitled to and may exercise dissenters'dissenters’ rights if and to the extent they are entitled to do so under the provisions of Subchapter D of Chapter 15 of the BCL. Shareholders

Section 2.9 Premier Preferred Stock. The outstanding shares of Premier’s Series A 9.25% Non-Cumulative Perpetual Preferred Stock (the “Premier Preferred Stock”) shall not be converted into Fulton Common Stock as part of the Merger. As set forth in Section 7.2(e) herein, all of the outstanding shares of the Premier Preferred Stock shall be redeemed as of or

prior to the Effective Time in accordance with Sections 7 and 8 of the terms of the Premier Preferred Stock.

Section 2.10 Certain Actions. Prior to the Effective Time, Fulton and Premier shall take all such steps as may be required to cause any dispositions of shares of Premier Common Stock (including derivative securities with respect to such shares) resulting from the transactions contemplated by Article II of this Agreement by each individual who have properly exercised their dissenters rights are referredis subject to hereinthe reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as "Dissenting Shareholders" and each share of DBC heldamended (the “1934 Act”), with respect to Premier to be exempt under Rule 16b-3 promulgated under the Exchange Act, such steps to be taken in accordance with the No-Action Letter dated January 12, 1999 issued by a Dissenting Shareholder is referredthe SEC to herein as a "Dissenting Share". Skadden, Arps, Slate, Meagher & Flom LLP.

ARTICLE III. III—REPRESENTATIONS AND WARRANTIES OF DBC DBCPREMIER

Premier represents and warrants to FFC,Fulton, as of the date of this Agreement, as follows:

Section 3.1. Authority.3.1 Authority. The execution and delivery of this Agreement, ----------- --------- the Warrant Agreement and the Warrant and the performance of the transactions contemplated herein and therein have been authorized by the Board of Directors of DBCPremier (its Board of Directors,Directors), at a meeting duly called and held, by a vote of at least a majority of the members of the Board of Directors, the Board of Directors (i) approved the Merger and this Agreement, and (ii) directed that the Agreement be submitted for consideration by its shareholders with the recommendation of the Board of Directors that the shareholders of DBCPremier approve this Agreement and the transactions contemplated thereby),thereby, and, except for the approval of this Agreement by its shareholders, DBCPremier has taken all corporate action necessary on its part to authorize this Agreement, the Warrant Agreement and the Warrant and the performance of the transactions contemplated herein and therein. This Agreement, the Warrant Agreement and the Warrant have been duly executed and delivered by DBCPremier and, assuming due authorization, execution and delivery by FFC,Fulton, constitute valid and binding obligations of DBC. Upon executionPremier, enforceable in accordance with their respective terms, except to the extent enforcement is limited by bankruptcy, insolvency and delivery of the Warrant Agreementother similar laws affecting creditor’s rights and the Warrant, such documents shall constitute binding obligations of DBC.laws, regulations and rules affecting financial institutions. The execution, delivery and performance of this Agreement, the Warrant Agreement and the Warrant will not constitute a violation or breach of or default under (i) the Articles of Incorporation or Bylaws of DBC,Premier, (ii) the Articles of Incorporation or Bylaws of DroversPremier Bank, (iii) any statute, rule, regulation, order, decree or directive of any governmental authority or court applicable to DBCPremier or any DBCPremier Subsidiary, subject to the receipt of all required governmental approvals, or (iv) any agreement, contract, memorandum of understanding, indenture or other instrument to which DBCPremier or any DBCPremier Subsidiary is a party or by which DBCPremier or any DBCPremier Subsidiary or any of their properties are bound.

Section 3.2.3.2 Organization and Standing. DBCStanding. Premier is a business corporation ----------- ------------------------- that is duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania. DBCPremier is a bankfinancial holding company under the BHC Act, and has full power and lawful authority to own and hold its properties and to carry on its business as presently conducted. DroversPremier Bank is a banking corporation that is duly organized, validly existing and in

good standing under the laws of the Commonwealth of Pennsylvania. DroversPremier Bank is an insured bank under the provisions of the Federal Deposit Insurance Act, as amended (the "FDI Act"FDI Act), and is not a member of the Federal Reserve System. DroversPremier Bank has full power and lawful authority to own and hold its properties and to carry on its business as presently conducted. Each of the DBCPremier Subsidiaries currently conducting operations other than DroversPremier Bank is a corporationan entity or business trust that is duly organized, validly existing and in good standing under the laws of its state of incorporation.incorporation or formation. Each of the DBCPremier Subsidiaries currently conducting operations has full power and lawful authority to own and hold its properties and to carry on its business as presently conducted.

Section 3.3. Subsidiaries. Drovers3.3 Subsidiaries. Premier Bank is a wholly-owned subsidiary of ----------- ------------ DBC and each of the other DBC Subsidiaries is a wholly-owned subsidiary of DBC or Drovers Bank, as appropriate provided that, in the case of Drovers Capital Trust I, DBCPremier. Premier owns 100% of the common securities of said trust,PBI Capital Trust and provided further Drovers SettlementPremier Capital Trust II. Premier has a 1% membership interest in each of Lenders Abstract, LLC and Premier Bank Insurance Services, LLC isLLC. Premier Bank has a 60% owned subsidiary.99% membership interest in each of these limited liability companies Except for the DBCPremier Subsidiaries, DBCPremier owns no subsidiaries, directly or indirectly.

Section 3.4. Capitalization.3.4 Capitalization. The authorized capital of DBCPremier consists ----------- -------------- exclusively of 15,000,00030,000,000 shares of DBCPremier Common Stock. There are 5,076,703Stock and 20,000,000 shares of DBCthe Premier Preferred Stock. As of the date of this Agreement, there are 552,000 shares of Premier Preferred Stock outstanding, 3,452,273 shares of Premier Common Stock validly issued, outstanding, fully paid and non- assessable,non-assessable, and no109,858 shares are held as treasury shares. In addition, 266,047303,748 shares of DBCPremier Common Stock are reserved for issuance upon the exercise of StockPremier Options granted under DBC's Stock Option Plans and 1,250,000835,000 shares of DBCPremier Common Stock will be reserved for issuance upon exercise of the Warrant. Except for the DBCPremier Options and the Warrant, there are no outstanding obligations, options or rights of any kind entitling other persons to acquire shares of DBCPremier Common Stock and there are no outstanding securities or other instruments of any kind that are convertible into shares of DBCPremier Common Stock. The authorized capital of DroversPremier Bank consists exclusively of 1,000,000 shares of common stock par value $5.00 per share (the "DroversPremier Bank Common Stock"Stock),. All of which 709,400 shares are validly issued, outstanding and fully-paid and non- assessable, and no shares are held as treasury shares. Allthe outstanding shares of DroversPremier Bank Common Stock are owned beneficially and of record by DBC.Premier and are validly issued, outstanding and fully-paid and non-assessable. There are no outstanding obligations, options or rights of any kind entitling other persons to acquire shares of DroversPremier Bank Common Stock, and there are no A-11 outstanding securities or instruments of any kind that are convertible into shares of DroversPremier Bank Common Stock. All outstanding shares of the capital stock of the other DBCPremier Subsidiaries are owned beneficially and of record by DBCPremier or DroversPremier Bank, as appropriate, except that, in the case of DroversPBI Capital Trust I, DBCand Premier Capital Trust II, Premier owns 100% of the common securities and the purchasers thereof own the capital securities issued by each said Trust..Trust. There are no outstanding obligations, options or rights of any kind entitling other persons to acquire shares of such subsidiaries, and there are no outstanding securities or instruments of any kind that are convertible into shares of such subsidiaries. The Common Stock of DroversPremier Bank the other DBCPremier Subsidiaries is sometimes collectively referred to herein as the "DBCPremier Subsidiaries Common Stock"Stock.

Section 3.5.3.5 Charter, Bylaws and Minute Books.Books. The copies of the ----------- -------------------------------- CertificateArticles of Incorporation and Bylaws (or, with respect to DroversPBI Capital Trust I, its Amended and Restated DeclarationPremier Capital Trust II,

their trust declarations) of Trust) of DBCPremier and the DBCPremier Subsidiaries that have been delivered to FFCFulton are true, correct and complete. Except as previously disclosed to FFCFulton in writing, the minute books of DBCPremier and the DBCPremier Subsidiaries that have been made available to FFCFulton for inspection are true, correct and complete in all material respects and accurately record the actions taken by the Boards of Directors and shareholders of DBCPremier and the DBCPremier Subsidiaries at the meetings documented in such minutes. minutes, excluding information related to the transactions contemplated by this Agreement and to any other merger, consolidation, share exchange or sale, exchange or other disposition of all, or substantially all, of Premier’s property or assets.

Section 3.6.3.6 Financial Statements. DBCStatements. Premier has delivered to FFCFulton the ----------- -------------------- following financial statements: Statements of ConditionConsolidated Balance Sheets at December 31, 19992001 and 19982000 and Consolidated Statements of Income, Statements of Shareholders'Stockholders’ Equity, and Consolidated Statements of Cash Flows of Drovers BankPremier for the years ended December 31, 1997, 19981999, 2000 and 1999, certified2001, audited by Stambaugh Ness, P.C.,KPMG LLP, and set forth in the 19992001 Annual Report to Drovers Bank'sPremier’s shareholders and unaudited Consolidated StatementsBalance Sheets of Condition of DBCPremier at September 30, 20002002 and December 31, 1999 andunaudited Consolidated Statements of Income for the three and nine-month periods ended September 30, 20002002 and 1999,2001, unaudited Consolidated Statements of Stockholders’ Equity for the nine-month periods ended September 30, 2002 and 2001 and unaudited Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 20002002 and 1999,2001, as filed with the Securities and Exchange Commission (the "SEC"SEC) in a Quarterly Report on Form 10- Q10-Q (the aforementioned Consolidated Statement of Condition as of September 30, 20002002 being hereinafter referred to as the "DBCPremier Balance Sheet"Sheet). Each of the foregoing financial statements fairly present the consolidated financial condition, assets and liabilities, and results of operations of DBCPremier at their respective dates and for the respective periods then ended and has been prepared in accordance with generally accepted accounting principles consistently applied, except as otherwise noted in a footnote thereto and except for the omission of the notes from the financial statements applicable to any interim period.

Section 3.7.3.7 Absence of Undisclosed Liabilities.Liabilities. Except as disclosed in ----------- ---------------------------------- Schedule 3.7, or as reflected, noted or adequately reserved against in the DBC - ------------Premier Balance Sheet, at September 30, 2000, DBC2002, Premier had no material liabilities (whether accrued, absolute, contingent or otherwise) which were required to be reflected, noted or reserved against in the DBCPremier Balance Sheet under generally accepted accounting principles. Except as disclosed inSchedule 3.7 DBC, Premier and the DBC ------------Premier Subsidiaries have not incurred, since September 30, 2000,2002, any such liability, other than liabilities of the same nature as those set forth in the DBCPremier Balance Sheet, all of which have been reasonably incurred in the Ordinary Course of Business. For purposes of this Agreement, the term "OrdinaryOrdinary Course of Business"Business shall mean the ordinary course of business consistent with DBC'sPremier’s and the DBC Subsidiaries'Premier Subsidiaries’ customary business practices.

Section 3.8.3.8 Absence of Changes.Changes. Since September 30, 2000, DBC2002, Premier and the ----------- ------------------ DBCPremier Subsidiaries have each conducted their businesses in the Ordinary Course of Business and, except as disclosed inSchedule 3.8, neither DBCPremier nor the DBC ------------Premier Subsidiaries have undergone any changes in its condition (financial or otherwise), assets, liabilities, business or

operations, other than changes in the Ordinary Course of Business, which have not been, in the aggregate, materially adverse as to DBCPremier and the DBCPremier Subsidiaries on a consolidated basis.

Section 3.9.3.9 Dividends, Distributions and Stock Purchases. Except as ----------- -------------------------------------------- disclosed in Schedule 3.9, sincePurchases. Since September 30, 2000, DBC2002, Premier has not declared, set ------------ aside, made or paid any dividend or other distribution in respect of the DBCPremier Common Stock, or purchased, issued or sold any shares of DBCPremier Common Stock or the DBCPremier Subsidiaries Common Stock. Since the issuance of the outstanding shares of the Premier Preferred Stock, regular quarterly dividends of $0.578125 per share have been paid (the most recent such dividend was declared on January 6, 2003, payable on January 31, 2003 to shareholders of record on January 16, 2003).

Section 3.10. Taxes. DBC3.10 Taxes. Premier and DroversPremier Bank have filed all federal, state, ------------ ----- county, municipal and foreign tax returns, reports and declarations which are required to be filed by them or either of them as of September 30, 2000.2002. Except as disclosed inSchedule 3.10:3.10: (i) DBCPremier and DroversPremier Bank have paid all taxes, ------------- penalties and interest which have become due pursuant thereto or which became due pursuant to federal, state, county, municipal or foreign tax laws applicable to the periods covered by the foregoing tax returns, (ii) neither DBCPremier nor the DBCPremier Subsidiaries have received any notice of deficiency or assessment of additional taxes, and no tax audits are in process; and (iii) the Internal Revenue Service (the "IRS"IRS) has not commenced or given notice of an intention to commence any examination or audit of the A-12 federal income tax returns of DBCPremier or DroversPremier Bank for any year through and including the year ended December 31, 1999.2002. Except as disclosed inSchedule -------- 3.10, neither DBCPremier nor the DBCPremier Subsidiaries have granted any waiver of any - ---- statute of limitations or otherwise agreed to any extension of a period for the assessment of any federal, state, county, municipal or foreign income tax. Except as disclosed inSchedule 3.10, the accruals and reserves reflected in the ------------- DBCPremier Balance Sheet are adequate to cover all taxes (including interest and penalties, if any, thereon) that are payable or accrued as a result of DBC'sPremier’s consolidated operations for all periods prior to the date of such Balance Sheet.

Section 3.11.3.11 Title to and Condition of Assets.Assets. Except as disclosed in ------------ -------------------------------- Schedule 3.11 DBC, Premier and the DBCPremier Subsidiaries have good and marketable title to - ------------- all material consolidated real and personal properties and assets reflected in the DBCPremier Balance Sheet or acquired subsequent to September 30, 20002002, (other than property and assets disposed of in the Ordinary Course of Business), free and clear of all liens or encumbrances of any kind whatsoever; provided, however, -------- ------- that the representations and warranties contained in this sentence do not cover liens or encumbrances that: (i) are reflected in the DBCPremier Balance Sheet or inSchedule 3.11;3.11; (ii) represent liens of current taxes not yet due or which, if - ------------- due, may be paid without penalty, or which are being contested in good faith by appropriate proceedings; and (iii) represent such imperfections of title, liens, encumbrances, zoning requirements and easements, if any, as are not substantial in character, amount or extent and do not materially detract from the value, or interfere with the present use, of the properties and assets subject thereto. The material structures and other improvements to real estate, furniture, fixtures and equipment reflected in the DBCPremier Balance Sheet or acquired subsequent to September 30, 2000:2002: (A) are in good operating condition and repair (ordinary wear and tear excepted), and (B) comply in all material respects with all applicable laws, ordinances and regulations, including without limitation all

building codes, zoning ordinances and other similar laws, except where any noncompliance would not materially detract from the value, or interfere with the present use, of such structures, improvements, furniture, fixtures and equipment. DBCPremier and the DBCPremier Subsidiaries own or have the right to use all real and personal properties and assets that are material to the conduct of their respective businesses as presently conducted.

Section 3.12.3.12 Contracts.

(a) Each written or oral contract entered into ------------ --------- by DBCPremier or the DBCPremier Subsidiaries (other than contracts with customers reasonably entered into by DBCPremier or the DBCPremier Subsidiaries in the Ordinary Course of Business) which involves aggregate payments or receipts in excess of $100,000$50,000 per year, including without limitation every employment contract, employee benefit plan, agreement, lease, license, indenture, mortgage and other commitment to which either DBCPremier or the DBCPremier Subsidiaries are a party or by which DBCPremier or the DBCPremier Subsidiaries or any of their properties may be bound (collectively referred to herein as "Material Contracts"Material Contracts) is identified inSchedule 3.12.3.12. Except as ------------- disclosed inSchedule 3.12, all Material Contracts are enforceable against DBC -------------Premier or the DBCPremier Subsidiaries, as the case may be, and DBCPremier or the DBCPremier Subsidiaries have in all material respects performed all obligations required to be performed by them to date and are not in default in any material respect and DBCPremier is not aware of any default by a third party under a Material Contract.Schedule 3.12 ------------- identifies all Material Contracts which require the consent or approval of third parties to the execution and delivery of this Agreement or to the consummation of the transactions contemplated herein.

(b) Except for the Warrant Agreement and as set forth inSchedule 3.12, as of the date of this Agreement, neither DBCPremier nor the DBC - -------------Premier Subsidiaries is a party to, or bound by, any oral or written:

(i) "material contract"“material contract” as such term is defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC;

(ii) consulting agreement not terminable on thirty (30) days or less notice involving the payment of more than $20,000 per annum, in the case of any such agreement;

(iii) agreement with any officer or other key employee the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction of the nature contemplated by this Agreement;

(iv) agreement with respect to any officer providing any term of employment or compensation guarantee extending for a period longer than one year or for a payment in excess of $25,000;

(v) agreement or plan, including any stock option plan, stock appreciation rights plan, employee stock ownership plan, restricted stock plan or

stock purchase plan, any of the benefits of which will A-13 be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement;

(vi) agreement containing covenants that limit its ability to compete in any line of business or with any person, or that involve any restriction on the geographic area in which, or method by which, it may carry on its business (other than as may be required by law or any regulatory agency);

(vii) agreement, contract or understanding, other than this Agreement, and the Warrant Agreement, regarding the capital stock of DBCPremier and/or DroversPremier Bank or committing to dispose of some or all of the capital stock or substantially all of the assets of DBCPremier and/or DroversPremier Bank; or

(viii) collective bargaining agreement, contract, or other agreement or understanding with a labor union or labor organization. organization; or

(ix) deferred compensation plan or arrangement.

(c) Neither DBCPremier nor DroversPremier Bank is in default under or in violation of any provision of any note, bond, indenture, mortgage, deed of trust, loan agreement, lease or Material Contract to which it is a party or to which any of its respective properties or assets is subject. subject, other than such defaults or violations as could not reasonably be expected, individually or in the aggregate, to have a material and adverse change on it.

Section 3.13.3.13 Litigation and Governmental Directives.Directives. Except as disclosed ------------ -------------------------------------- inSchedule 3.13, (i) there is no litigation, investigation or proceeding ------------- pending, or to the Knowledge (as that term is defined below) of DBCPremier or the DBCPremier Subsidiaries, threatened, that involves DBCPremier or the DBCPremier Subsidiaries or any of their properties and that, if determined adversely, would materially and adversely affect the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of DBCPremier or the DBCPremier Subsidiaries; (ii) there are no outstanding orders, writs, injunctions, judgments, decrees, regulations, directives, consent agreements or memoranda of understanding issued by any federal, state or local court or governmental agency or authority or arbitration tribunal issued against or with the consent of DBCPremier or the DBCPremier Subsidiaries that materially and adversely affect the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of DBCPremier or the DBCPremier Subsidiaries or that in any manner restrict the right of DBCPremier or the DBCPremier Subsidiaries to carry on their businesses as presently conducted taken as a whole; and (iii) neither DBCPremier nor the DBCPremier Subsidiaries are aware of any fact or condition presently existing that might give rise to any litigation, investigation or proceeding which, if determined adversely to either DBCPremier or the DBCPremier Subsidiaries, would materially and adversely affect the consolidated condition (financial or otherwise), assets, liabilities, business, operations or future prospects of DBCPremier or the DBCPremier Subsidiaries or would restrict in any manner the right of DBCPremier or the DBCPremier Subsidiaries to carry on their businesses as presently

conducted taken as a whole. All litigation (except for bankruptcy proceedings in which DBCPremier or the DBCPremier Subsidiaries have filed proofs of claim) in which DBCPremier or the DBCPremier Subsidiaries are involved as a plaintiff (other than routine collection and foreclosure suits initiated in the Ordinary Course of Business) in which the amount sought to be recovered is greater than $50,000 is identified inSchedule 3.13.3.13. In this Agreement, the terms "KnowledgeKnowledge of DBCPremier or ------------- Drovers Bank"Premier Bank” and "Knowledge“Knowledge of DBCPremier and the DBC Subsidiaries"Premier Subsidiaries shall mean the actual knowledge of the officers of DBC or any member of the Board of Directors of DBC. Premier.

Section 3.14.3.14 Compliance with Laws; Governmental Authorizations.Authorizations. Except ------------ ------------------------------------------------- as disclosed inSchedule 3.14 or where noncompliance would not have a material ------------- and adverse effect upon the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of DBCPremier or the DBCPremier Subsidiaries: (i) DBCPremier and the DBCPremier Subsidiaries are in compliance with all statutes, laws, ordinances, rules, regulations, judgments, orders, decrees, directives, consent agreements, memoranda of understanding, permits, concessions, grants, franchises, licenses, and other governmental authorizations or approvals applicable to DBCPremier or the DBCPremier Subsidiaries or to any of their properties; and (ii) all material permits, concessions, grants, franchises, licenses and other governmental authorizations and approvals necessary for the conduct of the business of DBCPremier or the DBCPremier Subsidiaries as presently conducted have been duly obtained and are in full force and effect, and there are no proceedings pending or threatened which may result in the revocation, cancellation, suspension or materially adverse modification of any thereof.

Section 3.15. Insurance.3.15 Insurance. All policies of insurance relating to DBC'sPremier’s and ------------ --------- DBC Subsidiaries'Premier Subsidiaries’ operations (except for title insurance policies), including without limitation all financial institutions bonds, held by or on behalf of DBCPremier or the DBCPremier Subsidiaries are listed inSchedule 3.15.3.15. All such policies of ------------- insurance are in full force and effect, and no notices of cancellation have been received in connection therewith. A-14

Section 3.16.3.16 Financial Institutions Bonds.Bonds. Since January 1, 1994, ------------ ---------------------------- Drovers1999, Premier Bank hasor its predecessors have continuously maintained in full force and effect one or more financial institutions bonds listed inSchedule 3.16 insuring DroversPremier Bank ------------- against acts of dishonesty by each of its employees. No claim has been made under any such bond and DroversPremier Bank is not aware of any fact or condition presently existing which might form the basis of a claim under any such bond. DroversPremier Bank has received no notice that its present financial institutions bond or bonds will not be renewed by its carrier on substantially the same terms as those now in effect.

Section 3.17.3.17 Labor Relations and Employment Agreements.Agreements. Neither DBCPremier nor ------------ ----------------------------------------- any of the DBCPremier Subsidiaries are a party to or bound by any collective bargaining agreement. DBCPremier and the DBCPremier Subsidiaries enjoy good working relationships with their employees, and there are no labor disputes pending, or to the Knowledge of DBCPremier or DroversPremier Bank threatened, that might materially and adversely affect the condition (financial or otherwise), assets, liabilities, business, operations or prospects of DBCPremier or the DBCPremier Subsidiaries. Except as disclosed inSchedule 3.17 -------------, neither DBCPremier nor the DBCPremier Subsidiaries have any employment contract, change of control agreement or policy, severance agreement, deferred compensation agreement, consulting agreement or similar obligation (including the amendments referred to below, an “Employment Agreement between A. Richard Pugh, Chairman, President and Chief Executive Officer of DBC, and Fulton Bank in the form of Exhibit C hereto which is being executed on the date hereof --------- and which shall become effective at the Effective Time, an "Employment Obligation"Obligation) with any director, officer, employee, agent or consultant.

consultant; provided however, that, as of the date of this Agreement (and effective as of the Effective Time), each of Clark S. Frame, John C. Soffronoff and John J. Ginley has executed an employment agreement with Premier Bank so as to, among other things, consent to certain respective changes in their duties, powers and functions following the Merger and waiving any right to obtain “change of control” or severance payments as a result of the Merger, such agreements to be substantially in the form ofExhibit D attached hereto. For the purposes of this Agreement, Messrs. Frame, Soffronoff and Ginley, shall be referred to herein as the “Contract Employees”. Except as disclosed inSchedule 3.17, as of the Effective Time (as defined in Section ------------- 9.2 herein), neither DBCPremier nor the DBCPremier Subsidiary will have any liability for employee termination rights arising out of any Employment Obligation. Obligation and neither the execution nor the consummation of this Agreement shall, by itself, entitle any employee of Premier or the Premier Subsidiaries to any “change of control” payments or benefits. Except as set forth onSchedule 3.17, no payment that is owed or may become due to any director, officer, employee, or agent of Premier or an Premier Subsidiary will be non-deductible to Premier or an Premier Subsidiary or subject to tax under IRC § 280G or § 4999; nor will Premier or an Premier Subsidiary be required to “gross up” or otherwise compensate any such person because of the imposition of any excise tax on a payment to such person.

Section 3.18.3.18 Employee Benefit Plans.Plans. All employee benefit plans, ------------ ---------------------- contracts or arrangements to which DBCPremier or the DBCPremier Subsidiaries are a party or by which DBCPremier or the DBCPremier Subsidiaries are bound, including without limitation all pension, retirement, deferred compensation, savings, incentive, bonus, profit sharing, stock purchase, stock option, life insurance, death or survivor'ssurvivor’s benefit, health insurance, sickness, disability, medical, surgical, hospital, severance, layoff or vacation plans, contracts or arrangements (collectively the "DBCPremier Benefit Plans"Plans), but not including the Employment Obligations described in Section 3.17, are identified inSchedule 3.18.3.18. Each of the DBCPremier Benefit Plans ------------- which is an "employee“employee pension benefit plan"plan” as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"(“ERISA; each such Plan being herein called a "DBCPremier Pension Plan"Plan) is exempt from tax under Sections 401 and 501 of the Code and has been maintained and operated in material compliance with all applicable provisions of the Code and ERISA. No "prohibited transaction"“prohibited transaction” (as such term is defined in Section 4975 of the Code or in ERISA) and not otherwise exempt under ERISA or the Code has occurred in respect of the DBCPremier Pension Plans. There have been no material breaches of fiduciary duty by any fiduciary under or with respect to the DBCPremier Pension Plans or any other DBCPremier Benefit Plan which is an employee welfare benefit plan as defined in ERISA, and no claim is pending or, to the Knowledge of DBC,Premier, threatened with respect to any DBCPremier Benefit Plan other than claims for benefits made in the Ordinary Course of Business. Neither DBCPremier nor the DBCPremier Subsidiaries have incurred any material penalty imposed by the Code or by ERISA with respect to the DBCPremier Pension Plans or any other DBCPremier Benefit Plan. There has not been any audit of any DBCPremier Benefit Plan by the Department of Labor or the IRS.

Section 3.19.3.19 Related Party Transactions.Transactions. Except as disclosed inSchedule ------------ -------------------------- -------- 3.19, neither DBCPremier nor any of the DBCPremier Subsidiaries have any contract, extension - ---- of credit, business arrangement or other relationship of any kind with any of the following persons: (i) any executive officer or director (including any person who has served in such capacity since January

1, 1999) of DBCPremier or any of the DBCPremier Subsidiaries; (ii) any shareholder owning five percent (5%) or more of the outstanding DBCPremier Common Stock; and (iii) any "associate"“associate” (as defined in Rule 405 under the 1933 Act) of the foregoing persons or any business in which any of the foregoing persons is an officer, director, employee or five percent (5%) or greater equity owner. Each such contract or extension of credit disclosed inSchedule 3.19, except as otherwise specifically described therein, has been made - ------------- in the Ordinary Course of Business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable arms'arms’ length transactions with other persons that do not involve more than a normal risk of collectability or present other unfavorable features.

Section 3.20.3.20 No Finder.Finder. Except as disclosed inSchedule 3.20, neither ------------ --------- ------------- DBCPremier nor any of the DBCPremier Subsidiaries have paid or become obligated to pay any fee or commission of any kind whatsoever to any investment banker, broker, finder, financial advisor or other intermediary for, on account of or in connection with the transactions contemplated in this Agreement.

Section 3.21.3.21 Complete and Accurate Disclosure.Disclosure. Neither this Agreement ------------ -------------------------------- (insofar as it relates to DBC,Premier, the DBCPremier Subsidiaries, the DBCPremier Common Stock, the DBC Subsidiaries'Premier Preferred Stock, the Premier Subsidiaries’ Common Stock, and the involvement of DBCPremier and the DBCPremier Subsidiaries in the transactions contemplated hereby) nor any financial statement, schedule (including without A-15 limitation its Schedules to this Agreement), certificate, or other statement or document delivered by DBCPremier or the DBCPremier Subsidiaries to FFCFulton in connection herewith contains any statement which, at the time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact or omits to state any material fact necessary to make the statements contained herein or therein not false or misleading.

Section 3.22.3.22 Environmental Matters.Matters. Except as disclosed inSchedule ------------ --------------------- -------- 3.22 or as reflected, noted or adequately reserved against in the DBC Balance - ---- Sheet, to the knowledge of DBC,, neither DBCPremier nor any of the DBCPremier Subsidiaries havehas any material liability relating to any environmental contaminant, pollutant, toxic or hazardous waste or other similar substance has been generated, used, stored, processed, disposed of or discharged onto any of the real estate now or previously owned or acquired (including without limitation any real estate acquired by means of foreclosure or exercise of any other creditor'screditor’s right) or leased by DBCPremier or any of the DBCPremier Subsidiaries and which is required to be reflected, noted or adequately reserved against in DBC'sPremier’s consolidated financial statements under generally accepted accounting principles. In particular, without limiting the generality of the foregoing sentence, except as disclosed inSchedule 3.22, neither DBCPremier nor any of ------------- the DBCPremier Subsidiaries have used or incorporated: (i) any materials containing asbestos in any building or other structure or improvement located on any of the real estate now or previously owned or acquired (including without limitation any real estate acquired by means of foreclosure or exercise of any other creditor'screditor’s right) or leased by DBCPremier or any of the DBCPremier Subsidiaries; (ii) any electrical transformers, fluorescent light fixtures with ballasts or other equipment containing PCB'sPCB’s on any of the real estate now or previously owned or acquired (including without limitation any real estate acquired by means of foreclosure or exercise of any other creditor'screditor’s right) or leased by DBCPremier or any of the DBCPremier Subsidiaries; or (iii) any underground storage tanks for the storage of gasoline, petroleum products or other toxic or hazardous wastes or similar substances located on any of the real estate now or previously owned or acquired (including without limitation any real estate acquired by

means of foreclosure or exercise of any other creditor'screditor’s right) or leased by DBCPremier or any of the DBCPremier Subsidiaries.

Section 3.23.3.23 Proxy Statement/Prospectus.Prospectus. At the time the Proxy ------------ -------------------------- Statement/Prospectus (as defined in Section 6.1(b) herein) is mailed to the shareholders of DBCPremier and at all times subsequent to such mailing, up to and including the Effective Time, the Proxy Statement/Prospectus (including any pre-pre - - and post-effective amendments and supplements thereto), with respect to all information relating to DBC,Premier, the DBCPremier Subsidiaries, DBCPremier Common Stock, the DBCPremier Subsidiaries Common Stock and all actions taken and statements made by DBCPremier and the DBCPremier Preferred Stock Subsidiaries in connection with the transactions contemplated herein (except for information provided by FFCFulton to DBCPremier or the DBCPremier Subsidiaries) will: (i) comply in all material respects with applicable provisions of the 1933 Act, and the Securities Exchange1934 Act of 1934, as amended (the "1934 Act"), and the applicable rules and regulations of the SEC thereunder; and (ii) not contain any statement which, at the time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or omits to state any material fact that is required to be stated therein or necessary in order (A) to make the statements therein not false or misleading, or (B) to correct any statement in an earlier communication with respect to the Proxy Statement/Prospectus which has become false or misleading.

Section 3.24.3.24 SEC Filings.Filings. No registration statement, offering circular, ------------ ----------- proxy statement, schedule or report filed and not withdrawn by DBCPremier or DroversPremier Bank with the SEC or the Federal Deposit Insurance CorporationReserve Board (the "FDIC"FRB), as applicable, under the 1933 Act or the 1934 Act, on the date of effectiveness (in the case of any registration statement or offering circular) or on the date of filing (in the case of any report or schedule) or on the date of mailing (in the case of any proxy statement), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

Section 3.25. Reports. DBC3.25 Reports. Premier and DroversPremier Bank have filed all material ------------ ------- reports, registrations and statements that are required to be filed with the Federal Reserve Board (the "FRB"),FRB, the Federal Deposit Insurance Corporation (the "FDIC"Company (“FDIC”), the Pennsylvania Department of Banking (the "Department"Department) and any other applicable federal, state or local governmental or regulatory authorities and such reports, registrations and statements referred to in this Section 3.25 were, as of their respective dates, in compliance in all material respects with all of the statutes, rules and regulations enforced or promulgated by the governmental or regulatory authority with which they were filed; provided, however, that the failure to file any such report, registration, or statement or the failure of any report, registration or statement to comply with the applicable regulatory standard shall not be deemed to be a breach of the foregoing representation unless such failure has or may have a material adverse impact on DBCPremier and the DBCPremier Subsidiaries on a consolidated basis. DBCPremier has furnished FFCFulton with, or made available to FFC,Fulton, copies of all such filings made in the last three fiscal years and in the period from January 1, 20002002 through the date of this Agreement. DBCPremier is required to file reports with the SEC pursuant A-16 to Section 12 of the 1934 Act, and, DBCexcept as set forth onSchedule 3.25, Premier has made all appropriate filings under the 1934 Act and the rules and regulations promulgated thereunder.thereunder; provided, however, that the failure to make any such filing shall not be deemed to be a breach of the foregoing representation

unless such failure has or may have a material adverse impact on Premier and the Premier Subsidiaries on a consolidated basis. The DBCPremier Common Stock is traded on NASDAQthe American Stock Exchange (“AMEX”) under the symbol "DROV." “PPA” and the Premier Preferred Stock is traded on the AMEX under the symbol “PPA.Pr.A.”

Section 3.26.3.26 Loan Portfolio of DroversPremier Bank. ------------ ------------------------------

(a) Attached hereto asSchedule 3.26 is a list of (i) all ------------- outstanding commercial relationships, i.e. commercial loans, commercial loan commitments and commercial letters of credit, of DroversPremier Bank in excess of $3,000,000,$1,500,000, (ii) all loans of DroversPremier Bank classified by DroversPremier Bank or any regulatory authority as "Monitor," "Substandard," "Doubtful"“Monitor,” “Substandard,” “Doubtful” or "Loss,"“Loss,” (iii) all commercial and mortgage loans of DroversPremier Bank classified as "non-accrual,"“non-accrual,” and (iv) all commercial loans of DroversPremier Bank classified as "in“in substance foreclosed."

(b) DroversPremier Bank has adequately reserved for or charged off loans in accordance with applicable regulatory requirements, generally accepted accounting principles and Drovers Bank's reserve for loan losses is adequatecurrent written policies of Premier Bank.

(c) Premier Bank does not engage in all material respects. so-called “subprime lending.”

Section 3.27.3.27 Investment Portfolio.Portfolio. Attached hereto asSchedule 3.27 is a ------------ -------------------- ------------- list of all securities held by DBCPremier and the DBCPremier Subsidiaries for investment, showing the holder, principal amount, book value and market value of each security as of a recent date, and of all short-term investments held by it as of September 30, 2000.2002. These securities are free and clear of all liens, pledges and encumbrances, except as shown onSchedule 3.27. ------------- 3.27. Except as set forth onSchedule 3.27, the investment portfolio of Premier or the Premier Subsidiaries does not include any financial derivatives.

Section 3.28.3.28 Regulatory Examinations. ------------ -----------------------

(a) Except for normal examinations conducted by a regulatory agency in the Ordinary Course of Business, no regulatory agency has initiated any proceeding or investigation into the business or operations of DBCPremier or any of the DBCPremier Subsidiaries. Neither DBCExcept as otherwise disclosed in Section 3.29, neither Premier nor any of the DBCPremier Subsidiaries have received any objection from any regulatory agency to DBC'sPremier’s or any of the DBC Subsidiaries'Premier Subsidiaries’ response to any violation, criticism or exception with respect to any report or statement relating to any examinations of DBCPremier and any of the DBCPremier Subsidiaries which would have a materially adverse effect on DBCPremier and any of the DBCPremier Subsidiaries on a consolidated basis.

(b) Neither DBCPremier nor any of the DBCPremier Subsidiaries are required to divest any assets currently held by it or discontinue any activity currently conducted as a result of the Federal Deposit Insurance Corporation Improvement Act of 1991, any regulations promulgated thereunder, or otherwise which would have a materially adverse effect on DBCPremier and any of the DBCPremier Subsidiaries on a consolidated basis.

Section 3.29.3.29 Regulatory Agreements. Except as set forth onSchedule 3.29, on the date hereof, neither Premier nor Premier Bank is a party to any assistance agreement, directive, commitment letter, supervisory agreement or letter, memorandum of understanding, consent order, cease and desist order, or condition of any regulatory order, decree or similar directive with or by the FDIC, the Federal Reserve, the Department or any other financial services regulatory agency having jurisdiction over Premier or Premier Bank that relates to the conduct of the business of Premier or Premier Bank, nor has Premier or Premier Bank been advised by any such regulatory agency or other governmental entity that it is considering issuing or requesting any such agreement, order or decree.

Section 3.30 Beneficial Ownership of FFCFulton Common Stock. DBCStock. Premier and the DBC ------------ ----------------------------------------Premier Subsidiaries do not, and prior to the Effective Time, DBCPremier and the DBCPremier Subsidiaries will not, own beneficially (within the meaning of SEC Rule 13-d-3(d)(1)) more than five percent (5%) of the outstanding shares of FFCFulton Common Stock.

Section 3.30.3.31 Fairness Opinion. DBC'sOpinion. Premier’s Board of Directors has received a ------------ ---------------- written opinion from Sandler O'NeillBoenning & Partners, L.P.Scattergood, Inc., a copy of which has been furnished to FFC to be confirmedupdated in writing prior to the publication of the Proxy Statement/Prospectus (a copy of such confirmingupdating written opinion being provided simultaneously to FFCFulton at the time of receipt), to the effect that the Conversion Ratio, at the time of execution of this Agreement and the mailing of the Proxy materials, is fair to DBC'sPremier’s shareholders from a financial point of view.

ARTICLE IV. IV—REPRESENTATIONS AND WARRANTIES OF FFC FFCFULTON

Fulton represents and warrants to DBC,Premier, as of the date of this Agreement and as of the date of the Closing, as follows:

Section 4.1. Authority.4.1 Authority. The execution and delivery of this Agreement and ----------- --------- the consummation of the transactions contemplated herein have been authorized by the Board of Directors of FFC,Fulton, and no other corporate action on the part of FFCFulton is necessary to authorize this Agreement or the consummation by FFCFulton of the transactions contemplated herein. This Agreement has been duly executed and delivered by FFCFulton and, assuming due authorization, execution and delivery by DBC,Premier, constitutes a valid and binding obligation of FFC.Fulton. The execution, delivery and consummation of this Agreement will not constitute a violation or breach of or default under the Articles of Incorporation or Bylaws of FFCFulton or any statute, rule, regulation, order, decree, directive, agreement, indenture or other instrument to which FFCFulton is a party or by which FFCFulton or any of its properties are bound. A-17

Section 4.2.4.2 Organization and Standing. FFCStanding. Fulton is a business corporation ----------- ------------------------- that is duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania. FFCFulton is a registered financial holding company under the BHC Act and has full power and lawful authority to own and hold its properties and to carry on its present business. business as presently conducted.

Section 4.3. Capitalization.4.3 Capitalization. The authorized capital of FFCFulton consists ----------- -------------- exclusively of 400,000,000 shares of FFCFulton Common Stock and 10,000,000 shares of preferred stock without

par value (the "FFCFulton Preferred Stock"Stock). As of December 23, 2000,the date of this Agreement, there were 71,924,771104,027,373 shares of FFCFulton Common Stock validly issued, outstanding, fully paid and non-assessable and 899,6682,837,958 shares are held as treasury shares. No shares of FFCFulton Preferred Stock have been issued as of the date of this Agreement, and FFCFulton has no present intention to issue any shares of FFCFulton Preferred Stock. As of December 23, 2000,the date of this Agreement, there are no outstanding obligations, options or rights of any kind entitling other persons to acquire shares of FFCFulton Common Stock or shares of FFCFulton Preferred Stock and there are no outstanding securities or other instruments of any kind convertible into shares of FFCFulton Common Stock or into shares of FFCFulton Preferred Stock, except as follows: (i) 1,778,8082,820,919 shares of FFCFulton Common Stock were issuable upon the exercise of outstanding stock options granted under the FFCFulton Incentive Stock Option Plan and the FFCFulton Employee Stock Purchase Plan and (ii) there were outstanding 71,924,771106,848,292 Rights representing the right under certain circumstances to purchase shares of FFCFulton Common Stock pursuant to the terms of a ShareholderFulton Rights Agreement dated June 20, 1989, as amended and restated as of April 27, 1999 ("the FFC Shareholder Rights Agreement"), entered into between FFC and Fulton Bank and (iii) 2,329,021 shares of FFCFulton Common Stock reserved from time to time for issuance pursuant to FFC'sFulton’s Employee Stock Purchase and Dividend Reinvestment Plans. All shares of FFCFulton Common Stock that are issued in the Merger shall include purchase Rights under the FFCFulton Shareholder Rights Agreement unless, prior to the Effective Date, all Rights issued under said Agreement shall have been redeemed by FFCFulton without a Distribution Date having occurred under such Agreement.

Section 4.4.4.4 Articles of Incorporation and Bylaws.Bylaws. The copies of the ----------- ------------------------------------ Articles of Incorporation, as amended, and of the Bylaws, as amended, of FFCFulton that have been delivered to DBCPremier are true, correct and complete.

Section 4.5. Subsidiaries. 4.5 Subsidiaries.Schedule 4.5 contains a list of all ----------- ------------ ------------ subsidiaries ("Subsidiaries"(“Subsidiaries) which FFCFulton owns, directly or indirectly. Except as otherwise disclosed onSchedule 4.5:4.5: (i) FFCFulton owns, directly or indirectly, all ------------ of the outstanding shares of capital stock of each Subsidiary, and (ii) as of the date of this Agreement: (A) there are no outstanding obligations, options or rights of any kind entitling persons (other than FFCFulton or any Subsidiary) to acquire shares of capital stock of any Subsidiary, and (B) there are no outstanding securities or other instruments of any kind held by persons (other than FFCFulton or any Subsidiary) that are convertible into shares of capital stock of any Subsidiary. Each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction pursuant to which it is incorporated. Each Subsidiary has full power and lawful authority to own and hold its properties and to carry on its business as presently conducted. Each Subsidiary which is a banking institution is an insured bank under the provisions of the FDI Act.

Section 4.6.4.6 Financial Statements. FFCStatements. Fulton has delivered to DBCPremier the ----------- -------------------- following financial statements: Consolidated Balance Sheets at December 31, 19992001 and 19982000 and Consolidated Statements of Income, Consolidated Statements of Shareholders'Shareholders’ Equity, and Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999, 1998 and 1997, certifiedaudited by Arthur Andersen LLP for the years 1999, 2000 and 2001 and set forth in the Annual Report to the shareholders of FFCFulton for the year ended December 31, 19992001, and unaudited Consolidated Balance Sheets as of September 30, 2000,2002, unaudited Consolidated Statements of Income for the three-month and nine-month periods ended September 30, 2000,2002 and 2001, and unaudited Consolidated Statements of Cash Flows for the nine-months ended September 30, 20002002 and 1999,

2001 as filed with the SEC in a Quarterly Report on Form 10-Q (the Consolidated Balance Sheet as of September 30, 20002002 being hereinafter referred to as the "FFCFulton Balance Sheet"Sheet). Each of the foregoing financial statements fairly presents the consolidated financial position, assets, liabilities and results of operations of FFCFulton at their respective dates and for the respective periods then ended and has been prepared in accordance with generally accepted accounting principles consistently applied, except as otherwise noted in a footnote thereto. Section 4.7.

Section 4.7 Absence of Undisclosed Liabilities.Liabilities. Except as disclosed in ----------- ---------------------------------- Schedule 4.7 or as reflected, noted or adequately reserved against in the FFC - ------------Fulton Balance Sheet, at September 30, 2000 FFC2002 Fulton had no material liabilities (whether accrued, absolute, contingent or otherwise) which were required to be reflected, noted or reserved against in the FFCFulton Balance Sheet under generally accepted accounting principles. Except as described inSchedule 4.7, since September 30, ------------ 2000 FFC2002 Fulton has not incurred any such liability other than liabilities of the same nature as those set forth in the FFCFulton Balance Sheet, all of which have been reasonably incurred in the ordinary course of business. A-18

Section 4.8.4.8 Absence of Changes; Dividends, Etc..Etc. Since September 30, ----------- ----------------------------------- 20002002 (a) there has not been any material and adverse change in the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of FFCFulton and the FFCFulton Subsidiaries on a consolidated basis and (b) except as disclosed inSchedule 4.8 FFC, Fulton has not declared, set aside, made or paid any ------------ dividend or other distribution in respect of the FFCFulton Common Stock, or purchased, issued or sold any shares of FFCFulton Common Stock or the FFCFulton Subsidiaries Common Stock.

Section 4.9.4.9 Litigation and Governmental Directives.Directives. Except as disclosed ----------- -------------------------------------- inSchedule 4.9:4.9: (i) there is no litigation, investigation or proceeding ------------ pending, or to the knowledgeKnowledge of FFCFulton threatened, that involves FFCFulton or any Fulton Subsidiary or its properties and that, if determined adversely to FFC,Fulton or the Fulton Subsidiary, would materially and adversely affect the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of FFC;Fulton; (ii) there are no outstanding orders, writs, injunctions, judgments, decrees, regulations, directives, consent agreements or memoranda of understanding issued by any federal, state or local court or governmental agency or authority or of any arbitration tribunal against FFCFulton which materially and adversely affect the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of FFCFulton or restrict in any manner the right of FFCFulton to carry on its business as presently conducted; and (iii) FFCFulton is not aware of any fact or condition presently existing that might give rise to any litigation, investigation or proceeding which, if determined adversely to FFC,Fulton, would materially and adversely affect the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of FFCFulton or restrict in any manner the right of FFCFulton to carry on its business as presently conducted.

Section 4.10.4.10 Compliance with Laws; Governmental Authorizations.Authorizations. Except ------------ ------------------------------------------------- as disclosed inSchedule 4.10 or where noncompliance would not have a material ------------- and adverse effect upon the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of FFC:Fulton: (i) FFCFulton and each of its Subsidiaries are in compliance with all statutes, laws, ordinances, rules, regulations, judgments, orders, decrees, directives, consent agreements, memoranda of understanding, permits, concessions, grants, franchises, licenses, and other

governmental authorizations or approvals applicable to their respective operations and properties; and (ii) all permits, concessions, grants, franchises, licenses and other governmental authorizations and approvals necessary for the conduct of the respective businesses of FFCFulton and each of its Subsidiaries as presently conducted have been duly obtained and are in full force and effect, and there are no proceedings pending or threatened which may result in the revocation, cancellation, suspension or materially adverse modification of any thereof.

Section 4.11.4.11 Complete and Accurate Disclosure.Disclosure. Neither this Agreement ------------ -------------------------------- (insofar as it relates to FFC, FFCFulton, Fulton Common Stock, and the involvement of FFCFulton in the transactions contemplated hereby) nor any financial statement, schedule (including, without limitation, its Schedules to this Agreement), certificate or other statement or document delivered by FFCFulton to DBCPremier in connection herewith contains any statement which, at the time and under the circumstances under which it is made, is false or misleading with respect to any material fact or omits to state any material fact necessary to make the statements contained herein or therein not false or misleading. In particular, without limiting the generality of the foregoing sentence, the information provided and the representations made by FFCFulton to DBCPremier in connection with the Registration Statement (as defined in Section 6.1(b)), both at the time such information and representations are provided and made and at the time of the Closing, will be true and accurate in all material respects and will not contain any false or misleading statement with respect to any material fact or omit to state any material fact required to be stated therein or necessary in order (i) to make the statements made not false or misleading, or (ii) to correct any statement contained in an earlier communication with respect to such information or representations which has become false or misleading.

Section 4.12.4.12 Labor Relations.Relations. Neither FFCFulton nor any of its Subsidiaries is ------------ --------------- a party to or bound by any collective bargaining agreement. FFCFulton and each of its Subsidiaries enjoy good working relationships with their employees, and there are no labor disputes pending, or to the knowledge of FFCFulton or any Subsidiary threatened, that might materially and adversely affect the condition (financial or otherwise), assets, liabilities, business, operations or prospects of FFC. Fulton.

Section 4.13.4.13 Employee Benefits Plans. FFC'sPlans. Fulton’s contributory profit-sharing ------------ ----------------------- plan, defined benefits pension plan and 401(k) plan (hereinafter collectively referred to as the "FFCFulton Pension Plans"Plans) are exempt from tax under Sections 401 and 501 of the Code, have been maintained and operated in compliance with all applicable provisions of the Code and ERISA, are not subject to any accumulated funding deficiency within the meaning of ERISA and the regulations promulgated thereunder, and do not have any outstanding liability to the Pension Benefit Guaranty Corporation (the "PBGC"PBGC). No "prohibited transaction"“prohibited transaction” or "reportable event"“reportable event” (as such terms are defined in the Code or ERISA) has occurred with respect to the FFCFulton Pension Plans or any other employee benefit plan to which FFCFulton or any of A-19 its subsidiaries are a party or by which FFCFulton or any of its subsidiaries are bound (each hereinafter called an "FFCa “Fulton Benefit Plan"Plan). There have been no breaches of fiduciary duty by any fiduciary under or with respect to the FFCFulton Pension Plans or any other FFCFulton Benefit Plan, and no claim is pending or threatened with respect to any FCCFulton Benefit Plan other than claims for benefits made in the Ordinary Course of Business. Neither FCCFulton or any of its subsidiaries have incurred any liability for any tax imposed by Section 4975 of the Code or for any penalty imposed by the Code or by

ERISA with respect to the FFCFulton Pension Plans or any other FFCFulton Benefit Plan. There has not been any audit of any FCCFulton Benefit Plan by the Department of Labor, the IRS or the PBGC since 1990.

Section 4.14.4.14 Environmental Matters.Matters. Except as disclosed inSchedule 4.14 ------------ --------------------- ------------- or as reflected, noted or adequately reserved against in the FFC Balance Sheet, FFC, Fulton has no material liability relating to any environmental contaminant, pollutant, toxic or hazardous waste or other similar substance that has been used, generated, stored, processed, disposed of or discharged onto any of the real estate now or previously owned or acquired (including without limitation real estate acquired by means of foreclosure or other exercise of any creditor'screditor’s right) or leased by FFCFulton and which is required to be reflected, noted or adequately reserved against in FFC'sFulton’s consolidated financial statements under generally accepted accounting principles.

Section 4.15.4.15 SEC Filings.Filings. No registration statement, offering circular, ------------ ----------- proxy statement, schedule or report filed and not withdrawn by FFCFulton with the SEC under the 1933 Act or the 1934 Act, on the date of effectiveness (in the case of any registration statement or offering circular) or on the date of filing (in the case of any report or schedule) or on the date of mailing (in the case of any proxy statement), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

Section 4.16.4.16 Proxy Statement/Prospectus.Prospectus. At the time the Proxy ------------ -------------------------- Statement/Prospectus (as defined in Section 6.1(b)) is mailed to the shareholders of DBCPremier and at all times subsequent to such mailing, up to and including the Effective Time, the Proxy Statement/Prospectus (including any pre- and post-effective amendments and supplements thereto), with respect to all information relating to FFC, FFCFulton, Fulton Common Stock, and actions taken and statements made by FFCFulton in connection with the transactions contemplated herein (other than information provided by DBCPremier or DroversPremier Bank to FFC)Fulton), will: (i) comply in all material respects with applicable provisions of the 1933 Act and 1934 Act and the pertinent rules and regulations thereunder; and (ii) not contain any statement which, at the time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or omits to state any material fact that is required to be stated therein or necessary in order (A) to make the statements therein not false or misleading, or (B) to correct any statement in an earlier communication with respect to the Proxy Statement/Prospectus which has become false or misleading.

Section 4.17.4.17 Regulatory Approvals. FFCApprovals. Fulton is not aware of any reason why ------------ -------------------- any of the required regulatory approvals to be obtained in connection with the Merger should not be granted by such regulatory authorities or why such regulatory approvals should be conditioned on any requirement which would be a significant impediment to FFC'sFulton’s ability to carry on its business.

Section 4.18.4.18 No Finder. FFCFinder. Fulton has not paid or become obligated to pay any ------------ --------- fee or commission of any kind whatsoever to any broker, finder, advisor or other intermediary for, on account of, or in connection with the transactions contemplated in this Agreement.

Section 4.19. Taxes. FFC4.19 Taxes. Fulton has filed, or has received extension for filing, ------------ ----- all federal, state, county, municipal and foreign tax returns, reports and declarations which are required to be

filed by it as of September 30, 1999.2002. Except as disclosed inSchedule 4.19, (i) FFCFulton has paid all taxes, penalties and ------------- interest which have become due pursuant thereto or which became due pursuant to federal, state, county, municipal or foreign tax laws applicable to the periods covered by the foregoing tax returns, and (ii) FFCFulton has not received any notice of deficiency or assessment of additional taxes. Except as disclosed inSchedule 4.19, the accruals and reserves reflected in the FFCFulton Balance Sheet are - ------------- adequate to cover all material taxes (including interest and penalties, if any, thereon) that are payable or accrued as a result of FFC'sFulton’s consolidated operations for all periods prior to the date of such Balance Sheet.

Section 4.20.4.20 Title to and Condition of Assets. FFCAssets. Fulton has good and ------------ -------------------------------- marketable title to all material consolidated real and personal properties and assets reflected in the FFCFulton Balance Sheet or acquired subsequent to September 30, 20002002 (other than property and assets disposed of in the Ordinary Course of Business), free and clear of all A-20 liens or encumbrances of any kind whatsoever; provided, however, that the -------- ------- representations and warranties contained in this sentence do not cover liens or encumbrances that: (i) are reflected in the FFCFulton Balance Sheet; (ii) represent liens of current taxes not yet due or which, if due, may be paid without penalty, or which are being contested in good faith by appropriate proceedings; and (iii) represent such imperfections of title, liens, encumbrances, zoning requirements and easements, if any, as are not substantial in character, amount or extent and do not materially detract from the value, or interfere with the present or proposed use, of the properties and assets subject thereto.

Section 4.21. Contracts.4.21 Contracts. All FFCFulton Material Contracts are enforceable ------------ --------- against FFC,Fulton, and FFCFulton has in all material respects performed all obligations required to be performed by it to date and is not in default in any material respect. "FFCFulton Material Contracts"Contracts shall be defined as each written or oral contract entered into by FFCFulton or any Fulton Subsidiary (other than contracts with customers reasonably entered into by FFCFulton in the Ordinary Course of Business) which involves aggregate payments or receipts in excess of $100,000 per year, including without limitation every employment contract, employee benefit plan, agreement, lease, license, indenture, mortgage and other commitment to which either FFCFulton or FFCFulton Subsidiaries are a party or by which FFCFulton or any of the FFCFulton Subsidiaries or any of their properties may be bound.

Section 4.22. Insurance.4.22 Insurance. All policies of insurance covering operations of ------------ --------- FFCFulton which are, in the aggregate, material (except for title insurance policies), including without limitation all financial institutions bonds, held by or on behalf of FFCFulton are in full force and effect, and no notices of cancellation have been received in connection therewith.

Section 4.23. Reports. FFC4.23 Reports. Fulton and the Fulton Subsidiaries has filed all material reports, registrations ------------ ------- and statements that are required to be filed with the FRB, the FDIC, the Department, and any other applicable federal, state or local governmental or regulatory authorities and such reports, registrations and statements referred to in this Section 4.23 were, as of their respective dates, in compliance in all material respects with all of the statutes, rules and regulations enforced or promulgated by the governmental or regulatory authority with which they were filed; provided, however, that the failure to file any such report, registration or statement or the failure of any report, registration or statement to comply with the applicable regulatory standard shall not be deemed to be a breach of the foregoing representation unless

such failure has or may have a material adverse impact on FFCFulton and the FFCFulton Subsidiaries on a consolidated basis. FFCFulton has furnished DBCPremier with, or made available to DBC,Premier, copies of all such filings made in the last three fiscal years and in the period from January 1, 20002003 to the date of this Agreement. FFCFulton is required to file reports with the SEC pursuant to Section 12 of the 1934 Act, and FFCFulton has made all appropriate filings under the 1934 Act and the rules and regulations promulgated thereunder.thereunder; provided, however, that the failure to make any such filing shall not be deemed to be a breach of the foregoing representation unless such failure has or may have a material adverse impact on Fulton and the Fulton subsidiaries. The FFCFulton Common Stock is traded on NASDAQ under the symbol "FULT." “FULT.”

ARTICLE V. V—COVENANTS OF DBC PREMIER

From the date of this Agreement until the Effective Time, DBCPremier covenants and agrees to do, and shall cause the DBCPremier Subsidiaries to do, the following:

Section 5.1.5.1 Conduct of Business.Business. Except as otherwise consented to by ----------- ------------------- FFCFulton in writing, which consent will not be unreasonably withheld or delayed, DBCPremier and the DBCPremier Subsidiaries shall:

(i) use all reasonable efforts to carry on their respective businesses in, and only in, the Ordinary Course of Business;

(ii) use all reasonable efforts to preserve their present business organizations, to retain the services of their present officers and employees, and to maintain their relationships with customers, suppliers and others having business dealings with DBCPremier or any of the DBCPremier Subsidiaries;

(iii) maintain all of their structures, equipment and other real property and tangible personal property in good repair, order and condition, except for ordinary wear and tear and damage by unavoidable casualty;

(iv) use all reasonable efforts to preserve or collect all material claims and causes of action belonging to DBCPremier or any of the DBCPremier Subsidiaries;

(v) keep in full force and effect all insurance policies now carried by DBCPremier or any of the DBCPremier Subsidiaries;

(vi) perform in all material respects each of their obligations under all Material Contracts (as defined inSection 3.12 herein) to which DBCPremier or any of the DBCPremier Subsidiaries are a party or by which any of them may be bound or which relate to or affect their properties, assets and business;

(vii) maintain their books of account and other records in the Ordinary Course of Business;

(viii) comply in all material respects with all statutes, laws, ordinances, rules and regulations, decrees, orders, consent agreements, memoranda of

understanding and other federal, state, and local governmental directives applicable to DBCPremier or any of the DBCPremier Subsidiaries and to the conduct of their businesses;

(ix) not amend DBC'sPremier’s or any of the DBC Subsidiaries'Premier Subsidiaries’ Articles of Incorporation or Bylaws; Bylaws except in accordance with the terms hereof or to the extent necessary to consummate the transactions contemplated by this Agreement;

(x) not enter into or assume any Material Contract, incur any material liability or obligation, or make any material commitment, except in the Ordinary Course of Business;

(xi) not enter into or assume any material contract, incur any material liability or obligation, make any material acquisition or disposition of any properties or assets (except for acquisitions or dispositions of properties or assets in accordance with any Material Contract disclosed onSchedule 3.12 or which do not exceed, in any case, $100,000)$200,000), or subject any of their properties or assets to any material lien, claim, charge, or encumbrance of any kind whatsoever; whatsoever, except for loan and investment activity engaged in the Ordinary Course of Business and consistent with past practice;

(xii) not knowingly take or permit to be taken any action which would A-21 constitute or cause a material breach of any representation, warranty or covenant set forth in this Agreement as of or subsequent to the date of this Agreement or as of the Effective Date;

(xiii) except as permitted in Section 5.10 herein, not declare, set aside or pay any dividend or make any other distribution in respect of DBCPremier Common Stock or of Premier Preferred Stock;

(xiv) not authorize, purchase, (other than open market purchases to obtain DBC Common Stock or issuance of shares for distribution pursuant to DBC's dividend reinvestment plan or employee stock purchase plan prior to January 5, 2001 and issuance of stock options to acquire shares of DBC Common Stock to certain of DBC's directors in the first quarter of 2001 in consideration for deferred directors fees, pursuant to the provisions of the Drovers Bancshares Corporation 1999 Non-Employee Directors Stock Option Plan), redeem, issue (except upon the exercise of outstanding options under the DBCPremier Stock Option Plans) or sell (or grant options or rights to purchase or sell) any shares of DBCPremier Common Stock or any other equity or debt securities of DBCPremier (other than the distribution, under DBC's dividend reinvestment plan, of shares acquired in open market purchases, or the Warrant or the DBCPremier Common Stock issuable under the Warrant);

(xv) not increase the rate of compensation of, pay a bonus or severance compensation to, establish or amend any DBCPremier Benefit Plan, except as required by law (as defined in Section 3.18 herein) for, or enter into or amend any Employment Obligation (as defined in Section 3.17 herein), severance or “change in control” agreement or arrangement with any officer, director, employee or consultant of DBCPremier or any of the DBCPremier Subsidiaries, except that DBCPremier and the DBCPremier Subsidiaries may grant reasonable salary increases and bonuses to their officers and employees in the Ordinary Course of Business to the extent consistent with their past practice or their current policy disclosed in writing to Fulton, and are consistent, in magnitude and otherwise, with the past practicescurrent policy disclosed

in writing to Fulton of DBCPremier and the DBC Subsidiaries; Premier Subsidiaries (provided, however, that no Contract Employees nor Bruce Sickel shall receive a salary increase or bonus);

(xvi) not enter into any related party transaction of the kind contemplated in Section 3.19 herein except in the Ordinary Course of Business consistent with past practice (as disclosed on Schedule 3.19); herein;

(xvii) in determining the additions to loan loss reserves and - ------------- the loan write-offs, writedowns and other adjustments that reasonably should be made by DroversPremier Bank and classifying, valuing and retaining its investment portfolio, during the fiscal year ending December 31, 2000, DBC2003 and thereafter, Premier and the DBCPremier Subsidiaries shall consult with FFCFulton and shall act in accordance with generally accepted accounting principles and DBC's and the DBC Subsidiaries' customary business practices; principles;

(xviii) file with appropriate federal, state, local and other governmental agencies all tax returns and other material reports required to be filed, pay in full or make adequate provisions for the payment of all taxes, interest, penalties, assessments or deficiencies shown to be due on tax returns or by any taxing authorities and report all information on such returns truthfully, accurately and completely;

(xix) not renew any existing contract for services, goods, equipment or the like or enter into, amend in any material respect or terminate any contract or agreement (including without limitation any settlement agreement with respect to litigation) that isinvolving an amount in excess of $10,000 or may reasonably be expected to havefor a material adverse effect on DBC and the DBC Subsidiaries except in the Ordinary Courseterm of Business consistent with past practice; one year or more;

(xx) except as permitted by (xi) above, not make any capital expenditures other than in the Ordinary Course of Business or as necessary to maintain existing assets in good repair;

(xxi) except as permitted by (xi) above, not make application for the opening or closing of any, or open or close any, branches or automated banking facility; facility other than as disclosed onSchedule 5.1(xxi);

(xxii) not make any equity investment or commitment to make such an investment in real estate or in any real estate development project, other than in connection with foreclosures, settlements in lieu of foreclosure or troubled loan or debt restructuring in the Ordinary Course of Business consistent with customary banking practice; or

(xxiii) not take any other action similar to the foregoing which would have the effect of frustrating the purposes of this Agreement or the Merger or cause the Merger not to qualify for pooling-of-interests accounting treatment or as a tax- freetax-free reorganization under Section 368 of the Code.Code; and

(xxiv) following receipt of both shareholder and regulatory approval of the Merger and upon agreement as to the Effective Date by Fulton and Premier, conform its practices to the standards used by Fulton, with respect to its investment and loan portfolios and loan loss reserve; provided, however, (A) in taking such actions, Premier shall not be required to breach any existing contractual obligations and (B) any such actions taken at the request of Fulton shall be subject to the provisions of subparagraph (a) of Section 5.2.7.2(f) herein.

Section 5.2 Best Efforts. DBCEfforts. Premier and the DBCPremier Subsidiaries shall cooperate ----------- ------------ with FFCFulton and shall use their best efforts to do or cause to be done all things necessary or appropriate on its part in order to fulfill the conditions precedent set forth in Article VII of this Agreement and to consummate the transactions contemplated by this Agreement, including the Merger and the Restructuring.Merger. In particular, without limiting the generality of the foregoing sentence, DBCPremier and the DBCPremier Subsidiaries shall: (i) cooperate with FFCFulton in the preparation of all required applications for regulatory approval of the transactions contemplated by this Agreement and in the preparation of the Registration Statement (as defined in Section 6.1(b)); and (ii) cooperate with FFCFulton in making DBC'sPremier’s and the DBC Subsidiaries'Premier Subsidiaries’ employees reasonably available for training by FFCFulton at DBC'sPremier’s and the DBC Subsidiaries'Premier Subsidiaries’ facilities prior to the Effective Time, to the extent that such training is deemed reasonably necessary by FFCFulton to ensure that DBC'sPremier’s and the DBC Subsidiaries'Premier Subsidiaries’ facilities will be properly operated in accordance with FFC'sFulton’s policies after the Merger.

Section 5.3.5.3 Access to Properties and Records. DBCRecords. Premier and the DBC ----------- --------------------------------Premier Subsidiaries shall give to FFCFulton and its authorized employees and representatives (including without limitation its counsel, accountants, economic and environmental consultants and other designated representatives) such access during normal business hours to all properties, books, contracts, documents and records of DBCPremier and the DBCPremier Subsidiaries as FFCFulton may reasonably request, subject to the obligation of FFCFulton and its authorized employees and representatives to maintain the confidentiality of all nonpublic information concerning DBCPremier and the DBCPremier Subsidiaries obtained by reason of such access and subject to applicable law. A-22

Section 5.4.5.4 Subsequent Financial Statements.Statements. Between the date of ----------- ------------------------------- signing of this Agreement and the Effective Time, DBCPremier and the DBCPremier Subsidiaries shall promptly prepare and deliver to FFCFulton as soon as practicable all internal monthly and quarterly financial statements, all quarterly and annual reports to shareholders and all reports to regulatory authorities prepared by or for either DBCPremier or any of the DBCPremier Subsidiaries (including, without limitation, delivery of DBC'sPremier’s audited annual financial statements for 20002002 as soon as they are available) (which additional financial statements and reports are hereinafter collectively referred to as the "Additional DBCAdditional Premier Financial Statements"Statements). The representations and warranties set forth in Sections 3.6, 3.7 and 3.8 shall apply to the Additional DBCPremier Financial Statements.

Section 5.5.5.5 Update Schedules. DBCSchedules. Premier or any of the DBCPremier Subsidiaries shall ----------- ---------------- promptly disclose to FFCFulton in writing any material change, addition, deletion or other modification to the information set forth in its Schedules hereto.

Section 5.6. Notice. DBC5.6 Notice. Premier or any of the DBCPremier Subsidiaries shall promptly ----------- ------ notify FFCFulton in writing of any actions, claims, investigations, proceedings or other developments which, if pending or in existence on the date of this Agreement, would have been required to be disclosed to FFCFulton in order to ensure the accuracy of the representations and warranties set forth in this Agreement or which otherwise could materially and adversely affect the condition (financial or otherwise), assets, liabilities, business operations or future prospects of DBCPremier or any of the DBCPremier Subsidiaries or restrict in any manner their ability to carry on their respective businesses as presently conducted.

Section 5.7.5.7 No Solicitation. ----------- --------------- Solicitation.

(a) DBCPremier and the DBCPremier Subsidiaries shall not, and shall not authorize or permit any of their officers, directors or employees or any investment banker, financial advisor or attorney to initiate or encourage (including by way of furnishing non-public information), or take any other action to facilitate, any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, an Acquisition Proposal, provided, however, that if, at any time the Board of Directors of DBCPremier determines in good faith, based on the written advice ofafter consultation with outside counsel, that failure to do so would be reasonably likely to constitute a breach of its fiduciary duties under applicable law, DBC,Premier, in response to a written Acquisition Proposal that (i) was unsolicited or that did not otherwise result from a breach of this Section, and (ii) is reasonably likely to lead to a Superior Proposal, may (x) furnish non-public information with respect to DBCPremier or the DBCPremier Subsidiaries to the person who made such Acquisition Proposal pursuant to a customary confidentiality agreement and (y) participate in negotiations regarding such Acquisition Proposal. Without limiting the foregoing, it is understood that any violation of the restrictions set forth in the preceding sentence by any director or officer of DBCPremier or any of the DBCPremier Subsidiaries or any investment banker, financial advisor, attorney, accountant, or other representative of DBCPremier or any of the DBCPremier Subsidiaries, whether or not acting on behalf of DBCPremier or any of its subsidiaries, shall be deemed to be a breach of this Section by DBC. Premier.

(b) DBCPremier shall call a meeting of its shareholders to be held as promptly as practicable for the purpose of voting upon this Agreement and shall take, in good faith, all actions which are necessary or appropriate on its part in order to secure the approval of this Agreement by its shareholders at the meeting, including recommending the approval of this Agreement by DBC'sPremier’s shareholders; provided, however, that DBC'sPremier’s Board of Directors shall not be required to take any action otherwise required by this sentence that it has determined in good faith, based on the advice ofafter consultation with outside counsel, would be reasonably likely to constitute a breach of its fiduciary duties under applicable law.

(c) The Board of Directors of DBCPremier shall not (1) fail to recommend this Agreement, withdraw or modify, or propose to withdraw or modify, in a manner adverse to FFC,Fulton, its approval or recommendation of this Agreement or the Merger unless there is an Acquisition Proposal outstanding, (2) approve or recommend, or propose to approve or recommend, an Acquisition Proposal or (3) cause DBCPremier to enter into any letter of

intent, agreement in principle, acquisition agreement or other agreement with respect to an Acquisition Proposal unless (x) the Board of Directors of DBCPremier shall have determined in good faith, based on the written advice ofafter consultation with outside counsel, that failure to do so would be reasonably likely to constitute a breach of its fiduciary duties under applicable law and (y) the applicable Acquisition Proposal is a Superior Proposal.

(d) Nothing contained in this Section shall prohibit DBCPremier from at any time taking and disclosing to its shareholders a position contemplated by Rule 14e-2(a) promulgated under the Securities Exchange Act of 1934, as amended, provided, however, that neither DBCPremier nor its Board of Directors shall, except as permitted by paragraph (b) of this section, propose to approve or recommend, an Acquisition Proposal. A-23

(e) DBCPremier shall promptly (but in any event within one day) advise FFCFulton orally and in writing of any Acquisition Proposal or any inquiry regarding the making of an Acquisition Proposal including any request for information, the material terms and conditions of such request, Acquisition Proposal or inquiry and the identity of the person making such request, Acquisition Proposal or inquiry. DBCPremier will, to the extent reasonably practicable, keep FFCFulton fully informed of the status and details (including amendments or proposed amendments) of any such request, Acquisition Proposal or inquiry. (f)

(i) In the event the Board of Directors of DBCPremier takes any of the actions set forth in clauses (1), (2) and/or (3) of Section 5.7(c) in compliance with the standards in (x) and (y) therein, such action shall allow termination of this Agreement by FFCFulton under Section 8.1(b)(iii) herein which shall be treated in the same manner as termination under Section 8.1(a) herein and shall allow exercise of the Warrant. In the event the Board of Directors of DBCPremier takes any of the actions set forth in clauses (1), (2) and/or (3) of Section 5.7(c) without compliance with the standards in (x) and (y) therein, such action shall constitute a breach allowing termination of this Agreement by FFCFulton under Section 8.1(c)(iii) herein which shall be treated in the same manner as termination by FFCFulton under Section 8.1(b)(i) herein and shall allow exercise of the Warrant.

(ii) This Agreement may be terminated by DBCPremier prior to the shareholders meeting of DBCPremier if (A) the Board of Directors of DBCPremier shall have determined in good faith based on the advice ofafter consultation with outside counsel that failure to do so would be reasonably likely to constitute a breach of its fiduciary duties to DBC'sPremier’s shareholders under applicable law, (B) it is not in breach of its obligations under this Section 5.7 in any material respect and has complied with, and continues to comply with, all requirements and procedures of this Section 5.7 in all material respects and has authorized, subject to complying with the terms of this Agreement, DBCPremier to enter into a binding written agreement for a transaction that constitutes a Superior Proposal and DBCPremier notifies FFCFulton in writing that it intends to enter into such agreement, attaching the most current version of such agreement to such notice; (C) FFCFulton does not make, within five (5) business days after receipt of DBC'sPremier’s written notice of its intention to enter

into a binding agreement for a Superior Proposal, any offer that the Board of Directors reasonably and in good faith determines, after consultation with its financial and legal advisors, is at least as favorable to the shareholders of DBCPremier as the Superior Proposal and during such period DBCPremier reasonably considers and discusses in good faith all proposals submitted by FFCFulton and, without limiting the foregoing, meets with, and causes its financial and legal advisors to meet with, FFCFulton and its advisors from time to time as required by FFCFulton to consider and discuss in good faith FFC'sFulton’s proposals, and (D) prior to DBC'sPremier’s termination pursuant to this Section 5.7(f)5.7(e)(ii), DBCPremier confirms in writing that such termination allows exercise of the Warrant. DBCPremier agrees (x) that it will not enter into a binding agreement referred to in clause (B) above until at least the five (5) business days after FFCFulton has received the notice to FFCFulton required by clause (B) and (y) to notify FFCFulton promptly if its intention to enter into a binding agreement referred to in its notice to FFCFulton shall change at any time after giving such notice. (g)

(f) For the purpose of this Section 5.7:

(i) "Acquisition Proposal"Acquisition Proposal shall mean a written proposal or written offer (other than by another party hereto) for a tender or exchange offer for securities of DBCPremier or any of the DBCPremier Subsidiaries, or a merger, consolidation or other business combination involving an acquisition of DBCPremier or any of the DBCPremier Subsidiaries or any proposal to acquire in any manner a substantial equity interest in or a substantial portion of the assets of DBCPremier or any of the DBCPremier Subsidiaries.

(ii) A "Superior Proposal"Superior Proposal shall be an Acquisition Proposal that the Board of Directors of DBCPremier believes in good faith (after consultation with its financial advisor) is reasonably capable of being completed, taking into account all relevant legal, financial, regulatory and other aspects of the Acquisition Proposal and the source of its financing, on the terms proposed and, believes in good faith (after consultation with its financial advisor and after taking into account the strategic benefits anticipated to be derived from the Merger and the long-term prospects of DBCPremier and the DBCPremier Subsidiaries as a combined company), would, if consummated, result in a transaction more favorable to the shareholders of DBCPremier from a financial point of view, than the transactions contemplated by this Agreement and believes in good faith (after consultation with its financial advisor) that the person making such Acquisition Proposal has, or is reasonably likely to have or obtain, any necessary funds or customary commitments to provide any funds necessary to consummate such Acquisition Proposal.

Section 5.8.5.8 Affiliate Letters. DBCLetters. Premier shall use its best efforts to ----------- ----------------- deliver or cause to be delivered to FFC,Fulton, at or before the Closing, a letter from each of the officers and directors of DBCPremier (and shall use its best efforts to obtain and deliver such a letter from each shareholder of DBC)Premier) who may be deemed to be an "affiliate"“affiliate” (as that term is defined for A-24 purposes of Rules

145 and 405 promulgated by the SEC under the 1933 Act) of DBC,Premier, in form and substance satisfactory to FFC,Fulton, under the terms of which each such officer, director or shareholder acknowledges and agrees to abide by all limitations imposed by the 1933 Act and by all rules, regulations and releases promulgated thereunder by the SEC with respect to the sale or other disposition of the shares of FFCFulton Common Stock to be received by such person pursuant to this Agreement.

Section 5.9.5.9 No Purchases or Sales of FFCFulton Common Stock During Price ----------- ------------------------------------------------------ Determination Period. DBCPeriod. Premier and the DBCPremier Subsidiaries shall not, and shall use - -------------------- their best efforts to ensure that their executive officers and directors do not, and shall use their best efforts to ensure that each shareholder of DBCPremier who may be deemed an "affiliate"“affiliate” (as defined in SEC Rules 145 and 405) of DBCPremier does not, purchase or sell on NASDAQ, or submit a bid to purchase or an offer to sell on NASDAQ, directly or indirectly, any shares of FFCFulton Common Stock or any options, rights or other securities convertible into shares of FFCFulton Common Stock during the Price Determination Period.

Section 5.10 Dividends. Between the date of this Agreement and the Effective Date, Premier shall only declare and pay cash dividends as provided in this Section 5.10. Dividends. DBCPremier shall only pay (a) quarterly cash dividends on its Common Stock in an amount not declarein excess of $0.05 per share during each of the first and second calendar quarters of 2003, maintaining the same record and payment dates as Fulton; provided, however, that if the Effective Date has not occurred on or before June 30, 2003, Premier may, for each calendar quarter thereafter until the Effective Date (using the same record and payment dates as referenced above), pay a cash dividend on ------------ --------- the DBC Common Stock; provided, however, that DBC may declare and pay a dividend on the DBC Common Stock on each of (i) March 30, 2001 in thesuch amount of $.13 per share, (ii) June 29, 2001 in the amount of $.14 per share, provided thatas would have been received by Premier’s Shareholders had the Effective Date does not occur (or is not expectedoccurred on July 16, 2003 taking into account any adjustments required by Section 2.1(b), and (b) its regular quarterly cash dividends on its Preferred Stock in accordance with its terms. With respect to occur) on or before the record date for the dividenddividends on the FFCPremier Common Stock, scheduled to be paid on July 15, 2001; (iii) September 28, 2001 in the amount of $.14 per share, provided that the Effective Date does not occur (orit is not expected to occur) on or before the record date for the dividend on the FFC Common Stock scheduled to be paid on October 15, 2001 (it being the intent of FFCFulton and DBCPremier that DBCPremier be permitted to pay a dividend on the DBCPremier Common Stock on the dates indicated in subsections (ii), (iii) and (iv) above only if the shareholders of DBC,Premier, upon becoming shareholders of FFC,Fulton, would not be entitled to receive a dividend on the FFCFulton Common Stock on the applicable payment dates indicated in such subsections). Section 5.11. Accounting Treatment. DBC acknowledges that FFC intends to ------------ -------------------- treat the Merger as a "pooling-of-interest" for financial reporting purposes. DBCdates. Fulton shall not take (and shall use its best efforts not to permit anyprovide Premier with prompt written notice of the directors, officers, employees, stockholders, agents, consultants or other representativesdeclaration of DBC to take) any action that would preclude FFC from treating such business combination as a "pooling-of-interests" for financial reporting purposes. dividend on the Fulton Common Stock.

ARTICLE VI. VI—COVENANTS OF FFC FULTON

From the date of this Agreement until the Effective Time, or until such later date as may be expressly stipulated in any Section of this Article VI, FFCFulton covenants and agrees to do the following:

Section 6.1.6.1 Best Efforts. FFCEfforts. Fulton shall cooperate with DBCPremier and the DBC ----------- ------------Premier Subsidiaries and shall use its best efforts to do or cause to be done all things necessary or appropriate on its part in order to fulfill the conditions precedent set forth in Article VII of this Agreement and to consummate the transactions contemplated by this Agreement, including the Merger and the Restructuring.Merger. In particular, without limiting the generality of the foregoing sentence, FFCFulton agrees to do the following:

(a)Applications for Regulatory Approval: FFCApproval. Fulton shall promptly ------------------------------------ prepare and file, with the cooperation and assistance of (and after review by) DBCPremier and its counsel and accountants, all required applications for regulatory approval of the transactions contemplated by this Agreement, including without limitation applications for approval under the BHC Act, the Pennsylvania Banking Code of 1965, as amended and the Federal Deposit Insurance Act, as amended.

(b)Registration Statement: FFCStatement. Fulton shall promptly prepare, with the ---------------------- cooperation and assistance of (and after review by) DBCPremier and its counsel and accountants, and file with the SEC a registration statement (the "Registration Statement"Registration Statement) for the purpose of registering the shares of FFCFulton Common Stock to be issued to shareholders of DBCPremier under the provisions of this Agreement and a proxy statement and prospectus which is prepared as a part thereof (the "ProxyProxy Statement/Prospectus"Prospectus) for the purpose of registering the shares of FFC'sFulton’s Common Stock to be issued to the shareholders of DBC,Premier, and the soliciting of the proxies of DBC'sPremier’s shareholders in favor of the Merger, under the provisions of this Agreement. FFCFulton may rely upon all information provided to it by DBCPremier and DroversPremier Bank in this connection and FFCFulton shall not be liable for any untrue statement of a material fact or any omission to state a material fact A-25 in the Registration Statement, or in the Proxy Statement/Prospectus, if such statement is made by FFCFulton in reliance upon any information provided to FFCFulton by DBCPremier or the DBCPremier Subsidiaries or by any of their officers, agents or representatives. Fulton shall provide a draft of the Registration Statement to Premier and its counsel for comment and review at least ten (10) business days in advance of the anticipated filing date.

(c)State Securities Laws: FFC,Laws. Fulton, with the cooperation and --------------------- assistance of DBCPremier and its counsel and accountants, shall promptly take all such actions as may be necessary or appropriate in order to comply with all applicable securities laws of any state having jurisdiction over the transactions contemplated by this Agreement.

(d)Stock Listing: FFC,Listing. Fulton, with the cooperation and assistance of ------------- DBCPremier and its counsel and accountants, shall promptly take all such actions as may be necessary or appropriate in order to list the shares of FFCFulton Common Stock to be issued in the Merger on NASDAQ.

(e)Adopt Amendments: FFCAmendments. Fulton shall not adopt any amendments to its ---------------- charter or bylaws or other organizational documents that would alter the terms of FFC'sFulton’s Common Stock or could reasonably be expected to have a material adverse effect on the ability of FFCFulton to perform its obligations under this Agreement.

(f)Tax Treatment. FFCTreatment. Fulton shall take no action which would have the ------------- effect of causing the Merger not to qualify as a tax-free reorganization under Section 368 of the Code.

Section 6.2.6.2 Access to Properties and Records. FFCRecords. Fulton shall give to DBCPremier and ----------- -------------------------------- to its authorized employees and representatives (including without limitation DBC'sPremier’s counsel, accountants, economic and environmental consultants and other designated representatives) such

access during normal business hours to all properties, books, contracts, documents and records of FFCFulton as DBCPremier may reasonably request, subject to the obligation of DBCPremier and its authorized employees and representatives to maintain the confidentiality of all nonpublic information concerning FFCFulton obtained by reason of such access.

Section 6.3.6.3 Subsequent Financial Statements.Statements. Between the date of signing ----------- ------------------------------- of this Agreement and the Effective Time, FFCFulton shall promptly prepare and deliver to DBCPremier as soon as practicable each Quarterly Report to FFC'sFulton’s shareholders and any Annual Report to FFC'sFulton’s shareholders normally prepared by FFC.Fulton. The representations and warranties set forth in Sections 4.6, 4.7 and 4.8 herein shall apply to the financial statements (hereinafter collectively referred to as the "Additional FFCAdditional Fulton Financial Statements"Statements) set forth in the foregoing Quarterly Reports and any Annual Report to FFC'sFulton’s shareholders.

Section 6.4.6.4 Update Schedules. FFCSchedules. Fulton shall promptly disclose to DBCPremier in ----------- ---------------- writing any change, addition, deletion or other modification to the information set forth in its Schedules to this Agreement.

Section 6.5. Notice. FFC6.5 Notice. Fulton shall promptly notify DBCPremier in writing of any ----------- ------ actions, claims, investigations or other developments which, if pending or in existence on the date of this Agreement, would have been required to be disclosed to DBCPremier in order to ensure the accuracy of the representations and warranties set forth in this Agreement or which otherwise could materially and adversely affect the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of FFCFulton or restrict in any manner the right of FFCFulton to carry on its business as presently conducted.

Section 6.6. Employment Arrangements. ----------- ----------------------- (a) From and after the Effective Time, (i) FFC, Fulton Bank, Advisors or another subsidiary of FFC (the "FFC Employers") shall: (A) to satisfy each of the Employment Obligations (as defined in Section 3.17 herein), (B) use its best efforts to retain each present full-time employee of DBC and the DBC Subsidiaries at such employee's current position (or, if offered to, and accepted by, an employee, a position for which the employee is qualified with the FFC Employers at a salary commensurate with the position), (C) pay compensation to each person who was employed as of the Effective Time and who continues to be employed by the FFC Employers on and after the Effective Time, that is at least equal to the aggregate compensation that such person was receiving from DBC or the DBC Subsidiaries prior to the Effective Time (unless there is a material change in the duties and responsibilities of such employee), (ii) in the event that the FFC Employers shall continue to employ officers or employees of DBC and the DBC Subsidiaries as of the Effective Time, the FFC Employers shall employ such persons on the Effective Time as "at will" employees, and (iii) in the event the FFC Employers are not willing to employ, or terminate the employment (other than as a result of unsatisfactory performance of their respective duties and provided that a requirement to regularly A-26 perform duties at a location which is more than 25 miles from both an employee's principal place of employment with DBC and Drovers Bank and his residence as of the date of this Agreement may be treated as a termination of employment of such employee) of any officers or employees of DBC or the DBC Subsidiaries as of the Effective Time, the FFC Employers shall pay severance benefits to such employee (other than employees who receive payments under an Employment Obligation) as follows: (A) in the event employment is terminated on or prior to the date which is one year after the Effective Date, two week's salary plus one week's salary for each year of service with DBC or the DBC Subsidiaries, with a maximum of fifty-two week's salary; or (B) in the event employment is terminated thereafter, in accordance with the then existing severance policy of the Bank or its successor. (b) On and after the Effective Time, (i) the FFC Employers shall continue to maintain the Drovers and Mechanics Bank Salary Deferral Plan and the Drovers and Mechanics Bank Pension Plan (the "DBC Retirement Plans") for all employees of DBC and the DBC Subsidiaries who are participants in the DBC Retirement Plans as of the Effective Time and who become employees of the FFC Employers, provided however, FFC Employers shall be obligated to continue the Drovers Retirement Plans for those former DBC and DBC Subsidiaries' employee participants until the earlier of: (A) the date that the Drovers Retirement Plans can no longer satisfy applicable qualified retirement plan discrimination testing under the Code (taking into consideration all methods available for satisfying discrimination testing applicable to qualified retirement plans under the Code), or (B) the last day of the plan year of the Drovers Retirement Plans in which it is determined that the minimum required cash contribution, as determined under the Code for the Drovers and Mechanics Bank pension plan and the matching contribution under the Drovers and Mechanics Bank Salary Deferral Plan (based on the formula as of the Effective Time), exceed 10% of the participant covered payroll; thereafter DBC and DBC Subsidiaries' employees shall participate under the retirement plans provided by the FFC Employers for FFC employees; and (ii) with respect to non-retirement plan employee benefits, the FFC Employers shall provide employee benefits for all employees of DBC and the DBC Subsidiaries who become employees of the FFC Employers which are substantially equivalent to or better than, in the aggregate, the non-retirement plan employee benefits provided by DBC and the DBC Subsidiaries to the employees immediately prior to the Effective Time. DBC and the DBC Subsidiaries' employees who became employed by the FFC Employers shall receive service credit for vesting and eligibility purposes under the employee benefit plans of FFC for their service with DBC and the DBC Subsidiaries up through the Effective Time, provided, however, with respect to vesting and eligibility service credit under the FFC retirement plans, vesting and eligibility credit shall only be required at the point in time it is determined that the DBC and DBC Subsidiaries' employees are to participate in the FFC retirement plans. Section 6.7.6.6 No Purchase or Sales of FFCFulton Common Stock During Price ----------- ----------------------------------------------------- Determination Period.Period. Neither FFCFulton nor any Subsidiary of FFC,Fulton, nor any executive - -------------------- officer or director of FFCFulton or any Subsidiary of FFC,Fulton, nor any shareholder of FFCFulton who may be deemed to be an "affiliate"“affiliate” (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the 1933 Act) of FFC,Fulton, shall purchase or sell on NASDAQ, or submit a bid to purchase or an offer to sell on NASDAQ, directly or indirectly, any shares of FFCFulton Common Stock or any options, rights or other securities convertible into shares of FFCFulton Common Stock during the Price Determination Period; provided, however, that FFCFulton may purchase shares -------- ------- of FFCFulton Common Stock in the ordinary course of business during the Price Determination Period pursuant to FFC'sfor the benefit of Fulton’s Benefit Plans or FFC'sFulton’s Dividend Reinvestment Plan.

Section 6.7 Assumption of Premier Debentures. Fulton agrees that, effective with the Effective Date, it shall assume Premier’s 8.57% Junior Subordinated Deferrable Interest Debentures due August 15, 2028 and Variable Rate Junior Subordinated Deferrable Interest Debentures due November 30, 2032 and all of Premier’s obligations under the related Indentures, and shall take all actions necessary or appropriated in accordance therewith, including, if requested by the trustee, execution of a supplemental indenture and other appropriate documents or certificates.

Section 6.8 Drovers DivisionEmployment Arrangements.

(a) From and Drovers Regional Directors. ----------- ----------------------------------------------- (a) Forafter the Effective Time, (i) Fulton, Premier Bank or another subsidiary of Fulton (any such parties employing employees of Premier or a periodPremier subsidiary, the “Fulton Employers”) shall: (A) satisfy each of the Employment Obligations (as defined in Section 3.17 herein), and (B) use its good faith efforts to retain each present employee of Premier and the Premier Subsidiaries in such employee’s current position and salary compensation (or, if offered to, and accepted by, an employee, a position for which the employee is qualified with the Fulton Employers at a compensation commensurate with the position), (ii) in the event that the Fulton Employers shall continue to employ officers or employees of Premier and the Premier Subsidiaries as of the Effective Time, the Fulton Employers shall employ such persons on the Effective Time who are not Contract Employees (as that term is defined in Section 3.17 herein) as “at will” employees, and (iii) in the event the Fulton Employers are not willing to employ, or terminate the employment (other than as a result of unsatisfactory performance of their respective duties) of any officers or employees of Premier or the Premier Subsidiaries who are not Contract Employees and who do not receive any payment as a result of a Change of Control Agreement with Premier or Premier Bank, the Fulton Employers shall pay severance benefits to such employees (other than Contract Employees) as follows: (A) in the event employment is terminated on or prior to the date which is one year after the Effective Date, the greater of (I) three months’ salary or (II) one week’s salary and one week’s salary for each year of service with Premier or an Premier Subsidiary, thereafter, up to a maximum of 26 weeks’ salary; or (B) in the event employment is terminated thereafter, in accordance with the then existing severance policy of Fulton or its successor.

(b) The Fulton Employers shall be obligated to provide employee benefits to each person who is an employee, on the Effective Time and continues to be employed that are substantially equivalent, in the aggregate, to the benefits under the Premier Benefit Plans prior to the Effective Time, until the earlier of: (A) at least three (3) years after the Effective Date, FFC shall (subject toor (B) the right of FFC anddate that the Drovers Regional Directors to terminate such obligations under this Section 6.8(a) pursuant to subsections (c) and (d) below) (i) operateFulton Employers can no longer satisfy the former business of Drovers Bank as the York Division of Fulton Bank (subject to the Trust Business Transfer and such consolidations and/or closures of branch offices of Fulton Bank and Drovers Bank as deemed desirable by FFC) (the "Drovers Division")applicable qualified retirement plan discrimination testing under the name "Drovers Bank, a division ofCode. For vesting and eligibility purposes for employee benefits, under each Fulton Bank" Benefit Plan and/or similar designation authorizedany employee benefit plan established by Fulton after the Department (and to which the FDIC has no objection); and (ii) appoint the present directors of Drovers Bank who indicate their desire to serve (the "Drovers Regional Directors") on the boardEffective Date, employees of the Drovers Division (the "Regional Board"), provided, that, after such three-year period, each Regional DirectorPremier Subsidiaries shall be subject to FFC's mandatory retirement rulesreceive credit for directors. (b)years of service with the Premier Subsidiaries.

Section 6.9 Insurance; Indemnification.

(a) For a period of three (3)four (4) years after the Effective Date, (subject to the right of FFC and to Drovers Regional Directors to terminate such obligations under this Section 6.8(b) under subsections (c) and (d) below), each non-employee Drovers Regional Director and each director of FFC or Fulton Bank shall continue to receive aggregate director's fees from FFC or Fulton Bank in an amount not less than the fees he or she was receiving from DBC and the DBC Subsidiaries prior to the Effective Date (the current fees being set forth on Schedule 6.8 and to remain - ------------ A-27 unchanged through the Effective Date) or, if higher, the fees paid by FFC or Fulton Bank, as applicable, to its directors, provided that, in the event an individual ceases to act as a director of the Regional Board, FFC or Fulton Bank, the foregoing obligation to maintain existing fees and benefits shall not apply to successors in such positions. (c) FFC shall have the right to terminate its obligations under subsections (a) and (b) of this Section 6.8 as a result of (i) regulatory requirements, (ii) safe and sound banking practices, or (iii) the exercise of their fiduciary duties by FFC's directors.. (d) Notwithstanding anything herein to the contrary, the Drovers Regional Directors, in their exercise of their fiduciary duty as to the best interests of Fulton Bank and FFC, may, by a majority vote of such directors, modify or waive any or all of the foregoing provisions in subsections (a) and (b) of this Section 6.8. Section 6.9 Insurance; Indemnification.. -------------------------- (a) For three years after the Effective Date, FFC shall (and DroversPremier Bank shall cooperate in these efforts) obtain and maintain (a) "tail"“tail” coverage relating to DBC'sPremier’s existing directors and officers liability insurance policy (provided that such insurance shall be in such amount and with terms and conditions no less favorable to the Director and Officer Liability Policy of Premier as of the date of this Agreement and carry such premium as may be reasonably acceptable to FFC (not to exceed 150% of the current premium for DBC'sPremier’s existing directors and officers liability insurance policy) and that FFCFulton may substitute therefor policies of

at least the same coverage and amounts containing terms and conditions which are substantially no less advantageous) with respect to claims arising from facts or circumstances which occur prior to the Effective Date (other than relating to this Agreement and the transactions contemplated hereby) and covering persons who are covered by such insurance immediately prior to the Effective Date and (b) provide the Drovers Bank Continuing Directors with coverage under a directors and officers liability policy or policies similar to the coverage provided to directors of other subsidiaries of FFC. Date.

(b) From and after the Effective Date, FFCFulton shall indemnify, defend and hold harmless each person who is now, or has been at any time prior to the date hereof, or who becomes prior to the Effective Date, an officer, employee or director of DBCPremier or a DBCPremier Subsidiary (the "Indemnified Parties"Indemnified Parties) against all losses, claims, damages, costs, expenses (including reasonable attorneys'attorneys’ fees), liabilities or judgments or amounts that are paid in settlement (which settlement shall require the prior written consent of FFC,Fulton, which consent shall not be unreasonably withheld) or in connection with any claim, action, suit, proceeding or investigation (a "Claim"Claim) in which an Indemnified Party is, or is threatened to be made, a party or a witness based in whole or in part out of the fact that such person is or was a director, officer or employee of DBCPremier or a DBCPremier Subsidiary if such Claim pertains to any matter of fact arising, existing or occurring prior to the Effective Date (including, without limitation, the Merger and other transactions contemplated by this Agreement) regardless of whether such Claim is asserted or claimed prior to, at, or after the Effective Date (the "Indemnified Liabilities"Indemnified Liabilities) to the full extent permitted under applicable law as to the date hereof or amended prior to the Effective Date and under the Articles of Incorporation or Bylaws of DBCPremier or a DBCPremier Subsidiary as in effect as of the date hereof (and FFCFulton shall pay expenses in advance of the full disposition of any such action or proceeding to each of the Indemnified Parties to the full extent permitted by applicable law and FFC'sFulton’s Articles of Incorporation and Bylaws). Any Indemnified Party wishing to claim indemnification under this provision, upon learning of any claim, shall notify FFCFulton (but the failure to so notify FFCFulton shall not relieve FFCFulton from any liability which FFCFulton may have under this section except to the extent FFCFulton is materially prejudiced thereby). In the defense of any action covered by this Section 6.9(b)6.10(b), FFCFulton shall have the right to direct the defense of such action and retain counsel of its choice; provided, however, that, notwithstanding the foregoing, the Indemnified Parties as a group may retain a single law firm to represent them with respect to each matter under this section if there is, under applicable standards of professional conduct, a conflict on any significant issue between the positions of FFCFulton and the Indemnified Parties (the Indemnified Parties may also retain more than one law firm if there is, under applicable standards of professional conduct, a conflict of any significant issues between the positions of two or more Indemnified Parties). FFCFulton shall have an obligation to advance funds to satisfy an obligation of FFCFulton or any successor to FFCFulton under this Section 6.9(b)6.10(b) to the same extent that FFCFulton would be obligated to advance funds under the indemnification provisions of its Articles of Incorporation and/or Bylaws.

Section 6.10.6.10 Appointment of FFC and Fulton Bank Directors. FFCDirector. Fulton shall, on ------------ -------------------------------------------- or promptly after the Effective Date appoint to (i) FFC's(but no later than Fulton’s next Board of Directors two of DBC's current directors and (ii) Fulton Bank'smeeting following the Effective Date), appoint to Fulton’s Board of Directors threeClark S. Frame (or one of Premier’s other of DBC's

current directors (in each case, designated, subject to the reasonable approval of FFC,Fulton, by vote of DBC'sPremier’s Board of Directors prior to the Effective Date) to serve as directors of FFC or Fulton Bank, as applicable. The two (2) present directors of DBC designated to serve on the FFC Board would be offered at least one full three-year A-28 term as a director of FFC. TheFulton. Such director shall stand for election at Fulton’s 2004 annual meeting, at which time Fulton shall nominate and recommend for election such director for an additional term of three other present directors of DBC designated to serve on the(3) years. Fulton Bank Board would be offered at least three consecutive one-year terms ashas a director of Fulton Bank. FFC and Fulton Bank have mandatory retirement policiespolicy for directors who attain age 70; however, theyFulton would "grandfather" all“grandfather” the present directorsdirector of DBCPremier appointed as set forth above from the application of such policy for a three year period after the Effective Date unless asuch director would have otherwise been obligated to retire from the Board of DBCPremier under any policy it currently has in effect.

Section 6.11. Combined Financial Statements. FFC shall use its best ------------ ----------------------------- efforts to file with the SEC 30-days6.11 Continuation of combined financial statements in accordance with Rule 145 within 45 daysPremier Bank’s Structure, Name and Directors.

(a) For a period of three (3) years after the Effective Date, orFulton shall (subject to the right of Fulton and the Premier Bank Continuing Directors to terminate such obligations under this Section 6.11(a) under subsections (b) and (c) below) (i) preserve the business structure of Premier Bank as soona Pennsylvania commercial bank (provided that Fulton may cause Premier Bank’s branch offices located in Northampton County, Pennsylvania to be transferred to another bank subsidiary of Fulton); (ii) preserve and use the present name of Premier Bank, and (iii) continue in office the present directors of Premier Bank who indicate their desire to serve the “Premier Bank Continuing Directors”),provided, that (A) for such three year period, each non-employee Premier Bank Continuing Director shall continue to receive director’s fees from Premier Bank on the same basis as practical thereafter. Section 6.12. Assumption of DBC Debentures. FFC agrees that, effective ------------ ---------------------------- withprior to the Effective Date and withoutshall continue to receive such other incidental benefits as he or she was receiving from Premier Bank prior to the Effective Date (the current fees and benefits being set forth onSchedule 6.11 and to remain unchanged through the Effective Date); provided that, in the event an individual Premier Bank Continuing Director ceases to act as a director or as a member of any further action being required, itcommittee thereof, the foregoing obligation to maintain existing fees and benefits shall assume DBC's 9.25% Junior Subordinated Deferrable Interest Debentures due September 30, 2029not apply to successors in such positions and (B) after such three-year period, each Premier Bank Continuing Director shall be subject to Fulton’s mandatory retirement rules for directors and shall receive the standard fee paid to directors of subsidiary banks of Fulton.

(b) Fulton shall have the right to terminate its obligations under subsection (a) of this Section 6.11 as a result of (i) regulatory requirements, (ii) safe and sound banking practices as enunciated by bank regulatory agencies, or (iii) the exercise of their fiduciary duties by Fulton’s directors.

(c) Notwithstanding anything herein to the contrary, the Premier Bank Continuing Directors, in their exercise of their fiduciary duty as to the best interests of Premier Bank and Fulton, may, by a majority vote of such directors, modify or waive any or all of DBC's obligations under the related Indenture. foregoing provisions in subsection (a) of this Section 6.11.

ARTICLE VII. VII—CONDITIONS PRECEDENT

Section 7.1.7.1 Common Conditions. TheConditions.The obligations of the parties to ----------- ----------------- consummate this Agreement shall be subject to the satisfaction of each of the following common conditions prior

to or as of the Closing, except to the extent that any such condition shall have been waived in accordance with the provisions of Section 8.4 herein:

(a)Shareholder Approval:Approval: This Agreement shall have been duly -------------------- authorized, approved and adopted by the shareholders of DBC. Premier in accordance with applicable law, AMEX rules and regulations, and the Articles of Incorporation of Premier.

(b)Regulatory Approvals:Approvals: The approval of each federal and state regulatory authority having jurisdiction over the transactions contemplated by this Agreement (including the Merger and the Restructuring)Merger), including without limitation, the Federal Reserve Board, the Department and the Federal Deposit Insurance Corporation, shall have been obtained and all applicable waiting and notice periods shall have expired, subject to no terms or conditions which would (i) require or could reasonably be expected to require (A) any divestiture by FFCFulton of a portion of the business of FFC,Fulton, or any subsidiary of FFCFulton or (B) any divestiture by DBCPremier or the DBCPremier Subsidiaries of a portion of their businesses which FFCFulton in its good faith judgment believes will have a significant adverse impact on the business or prospects of DBCPremier or the DBCPremier Subsidiaries, as the case may be, or (ii) impose any condition upon FFC,Fulton or any of itsPremier Bank, or their other subsidiaries, taken as a whole, which in FFC'sFulton’s good faith judgment (x) would be materially burdensome to FFCFulton and its subsidiaries taken as a whole, (y) would significantly increase the costs incurred or that will be incurred by FFCFulton as a result of consummating the Merger or (z) would prevent FFCFulton from obtaining any material benefit contemplated by it to be attained as a result of the Merger.

(c)Stock Listing.Listing. The shares of FFCFulton Common Stock to be issued ------------- in the Merger shall have been authorized for listing on NASDAQ.

(d)Tax Opinion.Opinion. Each of FFCFulton and DBCPremier shall have received an ----------- opinion of FFC'sFulton’s counsel, Barley, Snyder, Senft & Cohen, LLC, reasonably acceptable to FFCFulton and DBC,Premier, addressed to FFCFulton and DBC,Premier, with respect to federal tax laws or regulations, to the effect that: (1)

(i) The Merger will constitute reorganizationsa reorganization within the meaning of Section 368(a)(1)(A) of the Code and Fulton and Premier will each be a “party to a reorganization” within the meaning of Section 368(b)(1) of the Code; (2)

(ii) No gain or loss will be recognized by FFCFulton or Fulton BankPremier by reason of the Merger; (3)

(iii) The bases of the assets of DBCPremier in the hands of FFCFulton will be the same as the bases of such assets in the hands of DBCPremier immediately prior to the Merger; (4)

(iv) The holding period of the assets of DBCPremier in the hands of FFCFulton will include the period during which such assets were held by DBCPremier prior to the Merger; (5)

(v) A holder of DBCPremier Common Stock who receives shares of FFCFulton Common Stock in exchange for his DBCPremier Common Stock pursuant to the reorganization (except with respect to cash received in lieu of A-29 fractional shares of FFCFulton Common Stock deemed issued as described below) will not recognize any gain or loss upon the exchange. (6)

(vi) A holder of DBCPremier Common Stock who receives cash in lieu of a fractional share of FFCFulton Common Stock will be treated as if he received a fractional share of FFCFulton Common Stock pursuant to the reorganization which FFCFulton then redeemed for cash. The holder of DBCPremier Common Stock will recognize capital gain or loss on the constructive redemption of the fractional share in an amount equal to the difference between the cash received and the adjusted basis of the fractional share. (7)

(vii) The tax basis of the FFCFulton Common Stock to be received by the shareholders of DBCPremier pursuant to the terms of this Agreement will include the holding period of the DBCPremier Common Stock surrendered in exchange therefor, provided that such DBCPremier Common Stock is held as a capital interest at the Effective Time. (8)

(viii) The holding period of the shares of FFCFulton Common Stock to be received by the shareholders of DBCPremier will include the period during which they held the shares of DBCPremier Common Stock surrendered, provided the shares of DBCPremier Common Stock are held as a capital asset on the date of the exchange.

(e)Registration Statement:Statement: The Registration Statement (as defined in ---------------------- Section 6.1(b), including any amendments thereto) shall have been declared effective by the SEC; the information contained therein shall be true, complete and correct in all material respects as of the date of mailing of the Proxy Statement/Prospectus (as defined in Section 6.1(b)) to the shareholders of DBC;Premier; regulatory clearance for the offering contemplated by the Registration Statement (the "Offering"Offering) shall have been received from each federal and state regulatory authority having jurisdiction over the Offering; and no stop order shall have been issued and no proceedings shall have been instituted or threatened by any federal or state regulatory authority to suspend or terminate the effectiveness of the Registration Statement or the Offering.

(f)No Suits:Suits: No action, suit or proceeding shall be pending or -------- threatened before any federal, state or local court or governmental authority or before any arbitration tribunal which seeks to modify, enjoin or prohibit or otherwise adversely and materially affect the transactions contemplated by this Agreement;provided,however, that if FFCFulton agrees to defend and indemnify DBCPremier and -------- ------- DroversPremier Bank and their respective officers and directors with regard to any such action, suit or proceeding pending or threatened against them or any of them, then such pending or threatened action, suit or proceeding shall not be deemed to constitute the failure of a condition precedent to the obligation of DBCPremier to consummate this Agreement. (g) Pooling. FFC and DBC shall have been advised in writing by Arthur ------- Andersen, LLP on the Effective Date that the Merger should be treated as a pooling transaction for financial accounting purposes.

Section 7.2.7.2 Conditions Precedent to Obligations of FFC.Fulton. The obligations ----------- ------------------------------------------ of FFCFulton to consummate this Agreement shall be subject to the satisfaction of each of the following conditions prior to or as of the Closing, except to the extent that any such condition shall have been waived by FFCFulton in accordance with the provisions of Section 8.4 herein:

(a)Accuracy of Representations and Warranties:Warranties: All of the ------------------------------------------ representations and warranties of DBCPremier as set forth in this Agreement, all of the information contained in Schedules hereto and all DBCPremier Closing Documents (as defined in Section 7.2(j)) shall be true and correct in all material respects as of the Closing as if made on such date (or on the date to which it relates in the case of any representation or warranty which expressly relates to an earlier date).

(b)Covenants Performed: DBCPerformed: Premier shall have performed or complied in all ------------------- material respects with each of the covenants required by this Agreement to be performed or complied with by it.

(c)Opinion of Counsel for DBC: FFCPremier: Fulton shall have received an opinion, -------------------------- dated the Effective Time, from Rhoads & Sinon, LLP,Shumaker Williams P.C., special counsel to DBC,Premier, in substantially the form ofExhibit C hereto. In rendering any such opinion, such ---------special counsel may require and, to the extent they deem necessary or appropriate may rely upon, opinions of other counsel and upon representations made in certificates of officers of DBC, FFC,Premier, Fulton, affiliates of the foregoing, and others. A-30

(d)Affiliate Agreements:Agreements: Shareholders of DBCPremier who are or will be -------------------- affiliates of DBCPremier or FFCFulton for the purposes of Accounting Series Release No. 135 and the 1933 Act shall have entered into agreements with FFC,Fulton, in form and substance satisfactory to FFC,Fulton, reasonably necessary to assure (i) compliance with Rule 145 under the 1933 Act and (ii) the ability of FFC to use pooling-of- interests accounting for the Merger if FFC has elected such treatment pursuant to this Agreement. Act.

(e) DBC Options:Premier Options: As may be required by Section 2.3 herein, all ----------- holders of DBCPremier Options shall have delivered documentation reasonably satisfactory to FFCFulton substituting the FFCFulton Stock Options for the DBCPremier Stock Options.

(f)No Material Adverse Change: FFCChange: Fulton (together with its -------------------------- accountants, if the advice of such accountants is deemed necessary or desirable by FFC)Fulton) shall have established to its reasonable satisfaction that, since the date of this Agreement, there shall not have been any material and adverse change in the condition (financial or otherwise), assets, liabilities, business or operations or future prospects of DBCPremier and the DBCPremier Subsidiaries on a consolidated basis taken as a whole. In particular, without limiting the generality of the foregoing sentence, the Additional DBCPremier Financial Statements (as defined in Section 5.4) shall indicate that the consolidated financial condition, assets, liabilities and results of operations of DBCPremier as of the respective dates reported therein do not vary adversely in any material respect from the consolidated financial condition, assets, liabilities and results of operations presented in the DBCPremier Balance Sheet. For purposes of this Section 7.2(f), a material and adverse change shall mean an event, change, or occurrence which, individually or together with any other event, change, or occurrence, has a material adverse impact on (i) the financial position, business or results

of operations or future prospects of DBCPremier or (ii) the ability of DBCPremier to perform its obligations under this Agreement, provided that "material“material and adverse change"change” shall not be deemed to include the impact of (a) changes in banking and similar laws of general applicability or interpretations thereof by courts or governmental authorities, (b) changes in GAAP or regulatory accounting principles generally applicable to banks and their holding companies, (c) actions or omissions of DBCPremier taken at the direction or behest of FFCFulton with the prior written consent of FFC,Fulton, including any action or actions, individually or in the aggregate, taken by DBCPremier or the DBCPremier Subsidiaries, (d) changes in economic conditions generally affecting financial institutions including changes in the general level of interest rates, and (e) the direct effects of compliance with this Agreement and of satisfying or causing to be satisfied the conditions set forth in this Article VII on the operating performance of DBC,Premier, including reasonable expenses incurred by DBCPremier in consummating the transactions contemplated by the Agreement. At the Closing, DBCPremier shall deliver to FFCFulton a certificate confirming the absence of a material adverse change described herein. herein and a certificate (from appropriate officers of Premier and/or Premier’s transfer agent) as to the issued and outstanding shares of Premier Common Stock and Premier Preferred Stock, shares issuable under outstanding stock options granted under Premier’s Stock Option Plan and any outstanding obligations, options or rights of any kind entitling persons to purchase or sell any shares of Premier Common Stock or Premier Preferred Stock and any outstanding securities or other instruments of any kind that are convertible into such shares..

(g) Accountants' Letter.Accountants’ Letter. Subject to the requirements of ------------------- Statement of Auditing Standards No. 72 of the American Institute of Certified Public Accountants, Arthur AndersenKPMG LLP, or such other accounting firm as is acceptable to FFC,Fulton, shall have furnished to FFCFulton an "agreed“agreed upon procedures"procedures” letter, dated the Effective Date, in form and substance satisfactory to FFCFulton to the effect that: (1)

(i) In their opinion, the consolidated financial statements of DBCPremier examined by them and included in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the published rules and regulations thereunder; and (2)

(ii) On the basis of limited procedures, not constituting an audit, including a limited review of the unaudited financial statements referred to below, a limited review of the latest available unaudited consolidated interim financial statements of DBC ,Premier, inspection of the minute books of DBCPremier and the DBCPremier Subsidiaries since December 31, 2000,2001, inquiries of officials of DBCPremier and the DBCPremier Subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that:

(A) any unaudited Consolidated Statements of Condition,Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Shareholders'Shareholders’ Equity and Consolidated Statements of Cash Flows of DBCPremier included in the Registration Statement are not in conformity with generally accepted

accounting principles applied on a basis substantially consistent with that of the audited financial statements covered by their report included in the Registration Statement;

(B) as of a specified date not more than five days prior to the date of delivery of such letter, there have been any changes in the consolidated shareholders'shareholders’ equity of DBCPremier as compared with amounts shown in the balance sheet as of December 31, 20002002 included in the Registration Statement, except in each case for such changes, increases or decreases which the Registration Statement discloses have occurred or may occur and except for such A-31 changes, decreases or increases as aforesaid which are immaterial; and

(C) for the period from January 1, 20012003 to such specified date, there were any decreases in the consolidated total or per share amounts of net interest income, consolidated net interest income after provision for loan losses, consolidated other income, or consolidated net income or net income per share amounts of DBCPremier as compared with the comparable period of the preceding year, except in each case for decreases which the Registration Statement discloses have occurred or may occur, and except for such decreases which are immaterial.

(h)Federal and State Securities and Antitrust Laws: FFCLaws: Fulton and its counsel shall have determined to their satisfaction that, as of the Closing, all applicable securities and antitrust laws of the federal government and of any state government having jurisdiction over the transactions contemplated by this Agreement shall have been complied with.

(i)Environmental Matters:Matters: No environmental problem of the kind --------------------- contemplated in Section 3.22 and not disclosed inSchedule 3.22 shall have been ------------- discovered which would, or which potentially could, materially and adversely affect the condition (financial or otherwise), assets, liabilities, business, operations or future prospects of either DBCPremier or DroversPremier Bank.

(j)Closing Documents: DBCDocuments: Premier shall have delivered to FFC:Fulton: (i) a ----------------- certificate signed by DBC's Chairman andPremier’s President and Chief Executive Officer and by its Secretary (or other officers reasonably acceptable to FFC)Fulton) verifying that, to their knowledge, all of the representations and warranties of DBCPremier set forth in this Agreement are true and correct in all material respects as of the Closing and that DBCPremier has performed in all material respects each of the covenants required to be performed by it under this Agreement; (ii) all consents and authorizations of landlords and other persons that are necessary to permit this Agreement to be consummated without violation of any lease or other agreement to which DBCPremier or DroversPremier Bank is a party or by which they or any of their properties are bound; and (iii) such other certificates and documents as FFCFulton and its counsel may reasonably request (all of the foregoing certificates and other documents being herein referred to as the "DBCPremier Closing Documents"Documents).

(k) Dissenting Stockholders. Dissenters' rights shall have been ----------------------- exercised with respect to less than ten percent (10%)Redemption of Premier Preferred Stock. All of the outstanding shares of DBC Common Stock.the Premier Preferred Stock shall be redeemed as set forth in Section 7.3.2.9.

Section 7.3 Conditions Precedent to the Obligations of DBC.Premier. The ----------- ---------------------------------------------- obligation of DBCPremier to consummate this Agreement shall be subject to the satisfaction of each of the following conditions prior to or as of the Closing, except to the extent that any such condition shall have been waived by DBCPremier in accordance with the provisions of Section 8.4 herein:

(a)Accuracy of Representations and Warranties:Warranties: All of the ------------------------------------------ representations and warranties of FFCFulton as set forth in this Agreement, all of the information contained in its Schedules hereto and all FFCFulton Closing Documents (as defined in Section 7.3(g) of this Agreement) shall be true and correct in all material respects as of the Closing as if made on such date (or on the date to which it relates in the case of any representation or warranty which expressly relates to an earlier date).

(b)Covenants Performed: FFCPerformed: Fulton shall have performed or complied in ------------------- all material respects with each of the covenants required by this Agreement to be performed or complied with by FFC. Fulton.

(c)Opinion of Counsel for FFC: DBCFulton: Premier shall have received an -------------------------- opinion from Barley, Snyder, Senft & Cohen, LLC, counsel to FFC,Fulton, dated the Effective Time, in substantially the form ofExhibit DF hereto. In rendering any such opinion, such counsel may require and, to the extent they deem necessary or appropriate may rely upon, opinions of other counsel and upon representations made in certificates of officers of FFC, DBC,Fulton, Premier, affiliates of the foregoing, and others.

(d) FFC Options: FFCFulton Options: Fulton Stock Options shall have been substituted for the ----------- DBCPremier Options pursuant to Section 2.3 herein. A-32 The Fulton Stock Option agreements shall have been delivered and the Registration Statement for the purpose of registering the shares necessary to satisfy Fulton’s obligation with respect to the issuance of Fulton Common Stock pursuant to the exercise of the Fulton Stock Options shall have been declared effective.

(e)No Material Adverse Change: DBCChange: Premier (together with its -------------------------- accountants, if the advice of such accountants is deemed necessary or desirable by DBC)Premier) shall have established to its reasonable satisfaction that, since the date of this Agreement, there shall not have been any material and adverse change in the condition (financial or otherwise), assets, liabilities, business or operations or future prospects of FFC.Fulton. In particular, without limiting the generality of the foregoing sentence, the Additional FFCFulton Financial Statements (as defined in Section 6.3) shall indicate that the consolidated financial condition, assets, liabilities and results of operations of FFCFulton as of the respective dates reported therein do not vary adversely in any material respect from the consolidated financial condition, assets, liabilities and results of operations presented in the FFCFulton Balance Sheet. For purposes of this Section 7.3(e), a material and adverse change shall mean an event, change, or occurrence which, individually or together with any other event, change, or occurrence, has a material adverse impact on (i) the financial position,

business or results of operations or future prospects of FFCFulton or (ii) the ability of FFCFulton to perform its obligations under this Agreement, provided that "material“material and adverse change"change” shall not be deemed to include the impact of (a) changes in banking and similar laws of general applicability or interpretations thereof by courts or governmental authorities, (b) changes in GAAP or regulatory accounting principles generally applicable to banks and their holding companies, (c) changes in economic conditions generally affecting financial institutions including changes in the general level of interest rates, and (d) the direct effects of compliance with this Agreement and of satisfying or causing to be satisfied the conditions set forth in this Article VII on the operating performance of FFC,Fulton, including reasonable expenses incurred by FFCFulton in consummating the transactions contemplated by the Agreement. At the Closing, FFCFulton shall deliver to DBCPremier a certificate confirming the absence of a material adverse change described herein. herein and a certificate (from appropriate officers of Fulton and/or Fulton’s transfer agent) as to the issued and outstanding shares of Fulton Common Stock, shares of Fulton Common Stock reserved for issuance upon the exercise of stock options, under Fulton’s Employee Stock Purchase Plan, under Fulton’s Dividend Reinvestment Plan and under Fulton’s Shareholders Rights Plan, any outstanding obligations, options or rights of any kind entitling persons to purchase or sell any shares of Fulton’s Common Stock and any outstanding securities or other instruments of any kind that are convertible into such shares.

(f)Fairness Opinion: DBCOpinion: Premier shall have obtained from Sandler, ---------------- O'NeillBoenning & Partners, L.P.Scattergood, Inc., or from another independent financial advisor selected by the Board of Directors of DBC,Premier, an opinion dated within five (5) days of the Proxy Statement/Prospectus to be furnished to the Board of Directors of DBCPremier stating that the Conversion Ratio contemplated by this Agreement is fair to the shareholders of DBCPremier from a financial point of view.

(g)Closing Documents: FFCDocuments: Fulton shall have delivered to DBC:Premier: (i) a ----------------- certificate signed by FFC'sFulton’s Chairman and Chief Executive Officer (or other officer reasonably acceptable to DBC)Premier) verifying that, to their knowledge, all of the representations and warranties of FFCFulton set forth in this Agreement are true and correct in all material respects as of the Closing and that FFCFulton has performed in all material respects each of the covenants required to be performed by FFC;Fulton; and (ii) such other certificates and documents as DBCPremier and its counsel may reasonably request (all of the foregoing certificates and documents being herein referred to as the "FFCFulton Closing Documents"Documents).

ARTICLE VIII. VIII—TERMINATION, AMENDMENT AND WAIVER

Section 8.1. Termination.8.1 Termination. This Agreement may be terminated at any time ----------- ----------- before the Effective Time (whether before or after the authorization, approval and adoption of this Agreement by the shareholders of DBC)Premier) as follows:

(a)Mutual Consent:Consent: This Agreement may be terminated by mutual -------------- consent of the parties upon the affirmative vote of a majority of each of the Boards of Directors of DBCPremier and FFC,Fulton, followed by written notices given to the other party.

(b)Unilateral Action by FFC:Fulton: This Agreement may be terminated ------------------------ unilaterally by the affirmative vote of the Board of Directors of FFC,Fulton, followed by written notice given promptly to DBC,Premier, if: (i) there has been a material breach by DBCPremier of any representation, warranty or material failure to comply with any covenant set forth in this Agreement and such breach has not been cured within thirty (30) days after written notice of such breach has been given by FFCFulton to DBC;Premier; (ii) any condition precedent to FFC'sFulton’s obligations as set forth in Article VII of this Agreement remains unsatisfied, through no fault of FFC,Fulton, on September 30, 2001;2003; provided, that such date may be extended until December 31, 2003 by Premier by written notice to Fulton (given not later than September 15, 2003) if the Closing shall not have occurred because of failure to obtain approval from one or more regulatory authorities whose approval is required in connection with this Agreement; or (iii) FFC'sFulton’s Board of Directors makes an election provided for in Section 5.7(f)5.7(e)(i) herein.

(c)Unilateral Action By DBC:Premier: This Agreement may be terminated ------------------------ unilaterally by the affirmative vote of a majority of the Board of Directors of DBC,Premier, followed by written notice given promptly to FFC,Fulton, if: (i) there has been a material breach by FFCFulton of any representation, warranty or material failure to comply with any covenant set forth in this Agreement and such breach has not been cured within thirty (30) days after written notice of such breach has been given by DBCPremier to FFC;Fulton; (ii) any condition precedent to DBC'sPremier’s obligations as set forth in Article VII A-33 of this Agreement remains unsatisfied, through no fault of DBC,Premier, on September 30, 20012003; provided, that such date may be extended until December 31, 2003 by Fulton by written notice to Premier (given not later than September 15, 2003) if the Closing shall not have occurred because of failure to obtain approval from one or more regulatory authorities whose approval is required in connection with this Agreement; or (iii) DBC'sPremier’s Board of Directors makes an election provided for in, and subject to the conditions of, Section 5.7(f)5.7(e)(ii) herein.

(d)Market Price of FFCFulton Common Stock. (i) DBC shall have the -------------------------------- right to terminate this Agreement, through a resolution adopted by its Board of Directors, if the Closing Market Price is less than $19.50, i.e. .85 multiplied by the Starting Price (the "Floor Price")Stock. Notwithstanding the foregoing, FFC, through a resolution adopted by its Board of Directors, shall have the option to cause DBC to amend this Agreement (and, upon such amendment, DBC shall not have the right to terminate this Agreement) to increase the Conversion Ratio to a level, calculated to four decimal places, equal to the Conversion Ratio multiplied by the quotient of the Floor Price (the numerator) over the Closing Market Price (the denominator). For example, if the Closing Market Price is $17.20 and the Floor Price is $19.50, FFC would have the option to increase the Conversion Ratio to 1.4058 (1.24 x 19.50/17.20) in lieu of terminating this Agreement. (ii) FFCPremier shall have the right to terminate this Agreement, through a resolution adopted by its Board of Directors, if the Closing Market Price is greaterboth less than $26.38,(A) $11.18, i.e. 1.15, ..60 multiplied by the Starting Price (the "Ceiling Price"Floor Price) and (B) the amount per share equal to (x) the Starting Price multiplied by (y) .80 multiplied by (z) the quotient of the Average NASDAQ Bank Index for the Price Determination Period (the numerator) over the NASDAQ Bank Index on the Pre-Announcement Date (the denominator). NotwithstandingThus, for example, assuming the foregoing, DBC throughAverage NASDAQ Bank Index for the Price Determination Period reflects a resolution adopted by its Boarddecline of Directors shall have30% from the optionStarting Date, (A) would be $11.18 and (b) would be $10.44 ($18.64 x .80 x .70) and the Closing Market Price would be required to cause FFCbe $10.44 or lower for Premier to amend this Agreement (and, upon such amendment, FFC shall not have the right to terminate this Agreement) to decrease the Conversion Ratio to a level, calculated to four decimal places, equal to the Conversion Ratio multiplied by the quotient of the Ceiling Price (the numerator) over the Closing Market Price (the denominator). For example, if the Closing Market Price is $28.67 and the Ceiling Price is $26.38, DBC would have the option to decrease the Conversion Ratio to 1.1410 (1.24 x 26.38/28.67) in lieu of terminatingAgreement under this Agreement. (iii)Section 8.1(d).

(i) For purposes of this Section 8.1(d), "Starting Price"(A) “Pre-Announcement Date shall mean $22.9375,January 15, 2003, i.e., the business day immediately preceding the date of this Agreement, and (B) “Starting Price” shall mean $18.64, i.e., the last

sale price for FFCFulton Common Stock on December 26, 2000the Pre-Announcement Date as reported on NASDAQ. (iv)

(ii) The Starting Price, the Closing Market Price, the Floor Price and the other amounts above shall be appropriately adjusted for an event described in Section 2.1(d)2.1(b) herein.

Section 8.2.8.2 Effect of Termination. ----------- ---------------------

(a) Effect.Effect. In the event of a permitted termination of this ------ Agreement under Section 8.1 herein, the Agreement shall become null and void and the transactions contemplated herein shall thereupon be abandoned, except that the provisions relating to limited liability and confidentiality set forth in Sections 8.2(b) and 8.2(c) herein shall survive such termination.

(b)Limited Liability.Liability. Subject to the terms of the Warrant ----------------- Agreement and the Warrant, the termination of this Agreement in accordance with the terms of Section 8.1 herein shall create no liability on the part of either party, or on the part of either party'sparty’s directors, officers, shareholders, agents or representatives, except that if this Agreement is terminated by FFCFulton by reason of a material breach by DBC,Premier, or if this Agreement is terminated by DBCPremier by reason of a material breach by FFC,Fulton, and such breach involves an intentional, willful or grossly negligent misrepresentation or breach of covenant, the breaching party (i.e., FFCFulton or DBC)Premier) shall be liable to the nonbreaching party for all costs and expenses reasonably incurred by the nonbreaching party in connection with the preparation, execution and attempted consummation of this Agreement, including the reasonable fees of its counsel, accountants, consultants and other advisors and representatives. In no event shall either party'sparty’s directors, officers, shareholders, agents or representatives have any personal liability for any misrepresentation or breach in connection with this Agreement.

(c) Confidentiality.Confidentiality. In the event of a termination of this --------------- Agreement, neither FFCFulton nor DBCPremier nor DroversPremier Bank shall use or disclose to any other person any confidential information obtained by it during the course of its investigation of the other party or parties, except as may be necessary in order to establish the liability of the other party or parties for breach as contemplated under Section 8.2(b) herein.

Section 8.3. Amendment.8.3 Amendment. To the extent permitted by law, this Agreement ----------- --------- may be amended at any time before the Effective Time (whether before or after the authorization, approval and adoption of this Agreement by the shareholders of DBC)Premier), but only by a written instrument duly authorized, executed and delivered by FFCFulton and by DBC;Premier; provided, however, that, except as set forth in -------- ------- Section 8.1(d) herein any amendment to the provisions of Section 2.1 herein relating to the consideration to be received by the former shareholders of DBCPremier in exchange for their shares of A-34 DBCPremier Common Stock shall not take effect until such amendment has been approved, adopted or ratified by the shareholders of DBCPremier in accordance with applicable provisions of the BCL.

Section 8.4. Waiver.8.4 Waiver. Any term or condition of this Agreement may be ----------- ------ waived, to the extent permitted by applicable federal and state law, by the party or parties entitled to the benefit thereof at any time before the Effective Time (whether before or after the authorization, approval and adoption of this Agreement by the shareholders of DBC)Premier) by a written instrument duly authorized, executed and delivered by such party or parties.

ARTICLE IX. IX—CLOSING AND EFFECTIVE TIME

Section 9.1. Closing.9.1 Closing. Provided that all conditions precedent set forth in ----------- ------- Article VII of this Agreement shall have been satisfied or shall have been waived in accordance with Section 8.4 of this Agreement, the parties shall hold a closing (the "Closing"Closing) at the offices of FFCFulton at One Penn Square, Lancaster, Pennsylvania, within thirty (30) days after the receipt of all required regulatory and shareholder approvals and after the expiration of all applicable waiting periods on a date to be agreed upon by the parties, at which time the parties shall deliver the DBCPremier Closing Documents, the FFCFulton Closing Documents, the opinions of counsel required by Sections 7.1(d), 7.2(c) and 7.3(c) herein, and such other documents and instruments as may be necessary or appropriate to effectuate the purposes of this Agreement.

Section 9.2.9.2 Effective Time.Time. Immediately following the Closing, and ----------- -------------- provided that this Agreement has not been terminated or abandoned pursuant to Article VIII hereof, FFCFulton and DBCPremier will cause Articles of Merger (the "ArticlesArticles of Merger"Merger) to be delivered and properly filed with the Department of State of the Commonwealth of Pennsylvania (the "DepartmentDepartment of State"State). The Merger shall become effective on 11:59 p.m. on the day on which the Closing occurs and Articles of Merger are filed with the Department of State or such later date and time as may be specified in the Articles of Merger (the "Effective Time"Effective Time). The "Effective Date"Effective Date when used herein means the day on which the Effective Time occurs.

ARTICLE X. X—NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES

Section 10.1.10.1 No Survival.Survival. The representations and warranties of DBCPremier and ------------ ----------- of FFCFulton set forth in this Agreement shall expire and be terminated on the Effective Time by consummation of this Agreement, and no such representation or warranty shall thereafter survive. Except with respect to the agreements of the parties which by their terms are intended to be performed either in whole or in part after the Effective Time, the agreements of the parties set forth in this Agreement shall not survive the Effective Time, and shall be terminated and extinguished at the Effective Time, and from and after the Effective Time none of the parties hereto shall have any liability to the other on account of any breach of such agreements.

ARTICLE XI. XI—GENERAL PROVISIONS

Section 11.1. Expenses.11.1 Expenses. Except as provided in Section 8.2(b) herein, each ------------ -------- party shall pay its own expenses incurred in connection with this Agreement and the consummation of the transactions contemplated herein. For purposes of this Section 11.1 herein, the cost of printing the Proxy Statement/Prospectus shall be deemed to be an expense of FFC. Fulton.

Section 11.2.11.2 Other Mergers and Acquisitions.Acquisitions. Subject to the right of DBC ------------ ------------------------------Premier to refuse to consummate this Agreement pursuant to Section 8.1(c)(i) herein by reason of a material breach by FFCFulton of the warranty and representation set forth in Section 4.7 herein, nothing set forth in this Agreement shall be construed: (i) to preclude FFCFulton from acquiring, or to limit in any way the right of FFCFulton to acquire, prior to or following the Effective Time, the stock or assets of any other financial services institution or other corporation or entity, whether by issuance or exchange of FFCFulton Common Stock or otherwise; (ii) to preclude FFCFulton from issuing, or to limit in any way the right of FFCFulton to issue, prior to or following the Effective Time, FFCFulton Common Stock, FFCFulton Preferred Stock or any other equity or debt securities; or (iii) to preclude FFCFulton from taking, or to limit in any way the right of FFCFulton to take, any other action not expressly and specifically prohibited by the terms of this Agreement.

Section 11.3. Notices.11.3 Notices. All notices, claims, requests, demands and other ------------ ------- communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly A-35 delivered if delivered in person, transmitted by telegraph or facsimile machine (but only if receipt is acknowledged in writing), or mailed by registered or certified mail, return receipt requested, as follows: (a) If to FFC, to:

(a)If to Fulton, to:

Rufus A. Fulton, Jr., PresidentChairman and Chief Executive Officer

Fulton Financial Corporation

One Penn Square

P.O. Box 4887

Lancaster, Pennsylvania 17604

With a copy to:

Paul G. Mattaini, Esquire

Barley, Snyder, Senft & Cohen, LLC

126 East King Street

Lancaster, Pennsylvania 17602 (b) If to DBC, to: A. Richard Pugh, Chairman,

(b)If to Premier, to:

John C. Soffronoff, President and Chief Executive Officer Drovers Bancshares Corporation 30 South George

Premier Bancorp, Inc.

379 North Main Street York,

Doylestown, Pennsylvania 17401 18901

With a copy to: Charles J.

Nicholas Bybel, Jr., Esquire

Shumaker Williams P.C.

3425 Simpson Ferry Esquire Rhoads & Sinon, LLP One South Market Square, 12/th/ Floor Harrisburg,Road

Camp Hill, Pennsylvania 17101 17011

Section 11.4. Counterparts.11.4 Counterparts. This Agreement may be executed simultaneously ------------ ------------ in several counterparts, each of which shall be deemed an original, but all such counterparts together shall be deemed to be one and the same instrument.

Section 11.5.11.5 Governing Law.Law. This Agreement shall be deemed to have been ------------ ------------- made in, and shall be governed by and construed in accordance with the substantive laws of, the Commonwealth of Pennsylvania.

Section 11.6.11.6 Parties in Interest.Interest. This Agreement shall be binding upon ------------ ------------------- and inure to the benefit of the parties hereto and their respective successors, assigns and legal representatives; provided, however, that neither party may -------- ------- assign its rights or delegate its duties under this Agreement without the prior written consent of the other party. Other than the right to receive the consideration payable as a result of the Merger pursuant to Article II hereof, this Agreement is not intended to and shall not confer upon any other person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

Section 11.7.11.7 Disclosure Schedules. The inclusion of a given item in a disclosure schedule annexed to this Agreement shall not be deemed a conclusion or admission that such item (or any other item) is material or is a material and adverse change. Information disclosed for one section shall constitute disclosure for other sections whether or not specifically referenced.

Section 11.8 Entire Agreement.Agreement. This Agreement, together with the Warrant ------------ ---------------- Agreement and the Warrant being executed by the parties on the date hereof, sets forth the entire understanding and agreement of the parties hereto and supersedes any and all prior agreements, arrangements and understandings, whether oral or written, relating to the subject matter hereof and thereof.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers all as of the day and year first above written. A-36 FULTON FINANCIAL CORPORATION By: __________________________________________ Rufus A. Fulton, Jr., President and Chief Executive Officer Attest: __________________________________________ William R. Colmery, Secretary DROVERS BANCSHARES CORPORATION By: __________________________________________ A. Richard Pugh, Chairman, President and Chief Executive Officer Attest: __________________________________________ John D. Blecher, Secretary A-37 EXHIBIT B

FULTON FINANCIAL CORPORATION

By:

/s/     R. SCOTT SMITH, JR.


R. Scott Smith, Jr.

President and Chief Operating Officer

Attest:

/s/    GEORGE R. BARR, JR.


George R. Barr, Jr.

Secretary

PREMIER BANCORP, INC.

By:

/s/    JOHN C. SOFFRONOFF


John C. Soffronoff

President and Chief Executive Officer

Attest:

/S/    JOHN J. GINLEY


John J. Ginley

Secretary

Exhibit “B”

Warrant Agreement


WARRANT AGREEMENT

THIS WARRANT AGREEMENT is made as of December 27, 2000January 16, 2003, by and betweenFULTON FINANCIAL CORPORATION, a Pennsylvania corporation ("FFC"(“FULTON) and DROVERS BANCSHARES CORPORATION,PREMIER BANCORP, INC., a Pennsylvania corporation ("DBC"(“PREMIER).

W I T N E S S E T H:

WHEREAS FFC, Fulton and DBCPremier are entering into an Agreement and Plan of Merger on the date hereof (the "Merger Agreement"Merger Agreement) (capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement);

WHEREAS, it is a condition to execution of the Merger Agreement, that DBCPremier issue to FFC,Fulton, on the terms and conditions set forth herein, a warrant entitling FFCFulton to purchase up to an aggregate of 1,250,000835,000 shares of DBC'sPremier’s common stock, no$0.33 par value per share (the "Common Stock"Common Stock);and

WHEREAS DBC, Premier wishes to issue to FFCFulton the warrant described below in connection with the Merger Agreement.

NOW, THEREFORE, in consideration of the execution of the Merger Agreement and the premises herein contained, and intending to be legally bound, FFCFulton and DBCPremier agree as follows:

1.Issuance of Warrant.Warrant. Concurrently with the execution of this ------------------- Agreement, DBCPremier shall issue to FFCFulton a warrant in the form attached asSchedule 1 ---------- hereto (the "Warrant",Warrant, which term as used herein shall include any warrant or warrants issued upon transfer or exchange of the original Warrant) to purchase up to 1,250,000shares835,000 shares of Common Stock (equal(but in any event not to approximately 19.9%exceed 19.99% of the outstanding Common Stock taking into consideration shares of Common Stock issuable upon exercise of the Warrant but excluding any other unissued shares of such corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion or option rights, or otherwise), subject to adjustment as provided in this Agreement and in the Warrant. The Warrant shall be exercisable at a purchase price of $19.75$17.85 per share, i.e., the last sale price of the Common Stock on December 26, 2000,January 15, 2003, as reported by NASDAQ,AMEX, subject to adjustment as provided in the Warrant (the "Exercise Price"Exercise Price). So long as the Warrant is outstanding and unexercised, DBCPremier shall at all times maintain and reserve, free from preemptive rights, such number of authorized but unissued shares of the Common Stock as may be necessary so that the Warrant may be exercised, without any additional authorization of the Common Stock, after giving effect to all other options, warrants, convertible securities and other rights to acquire shares of the Common Stock. DBCPremier represents and warrants that it has duly authorized the execution and delivery of the Warrant and this Agreement and the issuance of the Common Stock upon exercise of the Warrant. DBCPremier covenants that the shares of the Common Stock issuable upon exercise of the Warrant shall be, when so issued, duly authorized, validly issued, fully paid and nonassessable and subject to no preemptive rights. The Warrant and the shares of the Common Stock to be issued upon exercise of the Warrant are hereinafter collectively referred to, from time to time, as the "Securities."Securities.” So long as the Warrant is owned by FFC,Fulton, the Warrant will in no event be exercised for more than that number of shares of the Common Stock equal to 1,250,000835,000 (subject to adjustment as provided in the Warrant) less the number of shares of Common Stock at the time owned by FFC. Fulton.

2.Assignment, Transfer, or Exercise of Warrant. FFCWarrant.

(a) Subject to paragraph 2(b) below, Fulton will not sell, -------------------------------------------- assign, transfer or exercise the Warrant, in whole or in part, without the prior written consent of DBCPremier except upon or after the occurrence of any of the following prior to termination of the Warrant under Section 9 therein: (i) a breach by DBCPremier of any covenant set forth in the Merger Agreement and which would permit a termination of the Merger Agreement by FFCFulton pursuant to Section 8.1(b)(i) which occurs following a bona fide proposal from any financially capable person (other than FFC)Fulton) to engage in an Acquisition Transaction; (ii) the failure of DBC'sPremier’s shareholders to approve the Merger Agreement at a meeting called for such purpose if at the time of such meeting there has been an announcement by any financially capable Person (other than FFC)Fulton) of a bona fide offer or proposal to effect an Acquisition Transaction and such offer or proposal has not been publicly withdrawn prior to mailing of the notice of the DBCPremier shareholder meeting; (iii) the acquisition by any Person of Beneficial Ownership of 25% or more of the Common Stock (before giving effect to any exercise of the Warrant); (iv)(A) any Person (other than FFC)Fulton) shall have commenced a tender or exchange offer, or shall have filed an application with an appropriate bank regulatory authority with respect to an Acquisition

Transaction and, (B) within six (6) months from such offer or filing, such person consummates an Acquisition Transaction; (v) DBCPremier shall have entered into an agreement, letter of intent, or other understanding with any Person (other than FFC)Fulton) providing for such Person to engage B-1 in an Acquisition Transaction; and/or (vi) termination of the Merger Agreement by FFCFulton under Section 8.1(b)(iii) or termination of the Merger Agreement by DBCPremier under Section 8.1(c)(iii). As used in this Paragraph 2, the terms "Beneficial Ownership"Beneficial Ownership and "Person"Person shall have the respective meanings set forth in Paragraph 7(f). For purposes of this Agreement, "Acquisition Transaction"Acquisition Transaction shall mean (x) a merger or consolidation ofor statutory share exchange or any similar transaction involving DBCPremier or a DBCPremier Subsidiary, (y) a purchase, lease or other acquisition of all or substantially all of the assets of DBCPremier or a DBCPremier Subsidiary or (z) a purchase or other acquisition of beneficial ownership of securities representing 25% or more of the voting power of DBCPremier or a DBCPremier Subsidiary.

(b) Notwithstanding the foregoing, Premier shall not be obligated to issue Shares upon exercise of the Warrant (i) in the absence of any required governmental or regulatory approval or consent necessary for Premier to issue the Shares or for Fulton to exercise the Warrant or prior to the expiration or termination of any waiting period required by law or (ii) so long as any injunction or other order, decree or ruling issued by any federal or state court of competent jurisdiction is in effect that prohibits the sale or delivery of the Shares. Any sale, assignment or transfer of the Warrant, in whole or in part, or any sale, assignment or transfer of the Shares by Fulton, other than a sale to a directly-owned subsidiary of Fulton, shall be subject to the right of first refusal of Premier (or any assignee or assignees of Premier) at a price equal to the written offer price that Fulton receives from a third party (other than a directly-owned subsidiary of Fulton) and intends to accept. The right of first refusal shall terminate 15 days after notice of Fulton’s intention to sell has been delivered to Premier. If an offer is made for a consideration that, in whole or in part, consists of other than cash, the value of the non-cash portion of the consideration shall be determined by a recognized investment banking firm selected jointly by Fulton and Premier, and the determination shall in no event be made later than the fifth day after notice of Fulton’s intention to sell has been delivered to Premier. In the event of the failure or refusal of Premier to purchase the Warrant or all the Shares covered by Fulton’s notice to sell, Fulton may, within 30 days from the date of the notice, unless additional time is needed to give notification to or to obtain approval from any governmental or regulatory authority and, if so required, within five days after the date on which the required notification period has expired or been terminated or the approval has been obtained and any requisite waiting period with respect thereto has passed, sell all, but not less than all, of the portion of the Warrant or the Shares covered by the notice to the proposed transferee at no less than the price specified and on terms no more favorable to the buyer than those set forth in the notice.

3.Registration Rights.Rights. If, at any time within one year after the ------------------- Warrant may be exercised or sold, DBCPremier shall receive a written request therefor from FFC, DBCFulton, Premier shall prepare and file a registration statement (the "Registration Statement"Registration Statement) under the Securities Act of 1933, as amended (the "Securities Act"Securities Act), covering the Warrant and/or the Common Stock issued or issuable upon exercise of the Warrant (the "Securities"Securities), and shall use its best efforts to cause the Registration Statement to become effective and remain current for such period not in excess of 180 days from the day such registration statement first becomes effective as may be reasonably necessary to affect such sale or other disposition. Without the prior written consent of FFC,Fulton, neither DBCPremier nor any other holder of securities of DBCPremier may include such securities in the Registration Statement. The foregoing notwithstanding, if, at the time of any request by FFCFulton for registration of Common Stock as provided above, DBCPremier is in registration with respect to an underwritten public offering by DBCPremier of shares of Common Stock, and if in the good faith judgment of the managing underwriter or managing underwriters, or, if none, the sole underwriter or underwriters, of such offering, the offer and sale of the Common Stock covered by this Warrant Agreement would interfere with the successful marketing of the shares of Common Stock offered by DBC,Premier, the number of shares of Common Stock otherwise to be covered in the registration statement contemplated hereby may be reduced;provided, however, that after any such required reduction, the number of shares - -------- of Common Stock to be included in such offering for the account of FFCFulton shall constitute at least 25% of the total number of shares to be sold by FFCFulton and DBCPremier in the aggregate; andprovided further, however, that if such reduction occurs, -------- then DBCPremier shall file a registration statement for the balance as promptly as practicable thereafter as to which no reduction pursuant to this Section 3 shall be permitted or occur and FFCFulton shall thereafter be entitled to one additional registration and the one (1) year period referred to in the first sentence of this section shall be increased to two (2) years. FFCFulton shall provide all information reasonably requested by DBCPremier for inclusion in any registration statement to be filed hereunder. If requested by FFCFulton in connection with such registration, DBCPremier shall become a party to any underwriting agreement relating to the sale of such shares, but only to the extent of obligating itself in respect to representations, warranties, indemnities and other agreements customarily included in such underwriting agreements for DBC. Premier.

4.Duties of DBCPremier upon Registration.Registration. If and whenever DBCPremier is required by ------------------------------- the provisions of Paragraph 3 of this Agreement to effect the registration of any of the Securities under the Securities Act, DBCPremier shall:

(a) prepare and file with the Securities and Exchange Commission (the "SEC"SEC) such amendments to the Registration Statement and supplements to the prospectus contained therein as may be necessary to keep the Registration Statement effective and current;

(b) furnish to FFCFulton and to the underwriters of the Securities being registered such reasonable number of copies of the Registration Statement, the preliminary prospectus and final prospectus contained therein, and such other documents as FFCFulton or such underwriters may reasonably request in order to facilitate the public offering of the Securities;

(c) use its best efforts to register or qualify the Securities covered by the Registration Statement under the state securities or blue sky laws of such jurisdictions as FFCFulton or such underwriters may reasonably request;

(d) notify FFC,Fulton, promptly after DBCPremier shall receive notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment to any prospectus forming a part of the Registration Statement has been filed;

(e) notify FFCFulton promptly of any request by the SEC for the amending or supplementing of the Registration Statement or the prospectus contained therein, or for additional information;

(f) prepare and file with the SEC, promptly upon the request of FFC,Fulton, any amendments or supplements to the Registration Statement or the prospectus contained therein which, in the opinion of counsel for FFC,Fulton, are required under the Securities Act or the rules and regulations promulgated by the SEC thereunder in connection with the public offering of the Securities;

(g) prepare and promptly file with the SEC such amendments of or supplements to the Registration Statement or the prospectus contained therein as may be necessary to correct any statements or omissions if, at the time when a prospectus relating to such Securities is required to be delivered under the Securities Act, any event shall have occurred as the result of which such prospectus as then in effect would include an untrue statement of a material fact or would omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; B-2

(h) advise FFC,Fulton, promptly after DBCPremier shall receive notice or obtain knowledge of the issuance of any stop order by the SEC suspending the effectiveness of the Registration Statement, or the initiation or threatening of any proceeding for that purpose, and promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued; and

(i) at the request of FFC,Fulton, furnish on the date or dates provided for in the underwriting agreement: (i) an opinion or opinions of counsel for DBCPremier for the purposes of such registration, addressed to the underwriters and to FFC,Fulton, covering such matters as such underwriters and FFCFulton may reasonably request and as are customarily covered by issuer'sissuer’s counsel at that time; and (ii) a letter or letters from the independent accountants for DBC,Premier, addressed to the underwriters and to FFC,Fulton, covering such matters as such underwriters or FFCFulton may reasonably request, in which letters such accountants shall state (without limiting the generality of the foregoing) that they are independent accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements and other financial data of DBCPremier included in the Registration Statement or any amendment or supplement thereto comply in all material respects with the applicable accounting requirements of the Securities Act.

5.Expenses of Registration.Registration. With respect to the registration requested ------------------------ pursuant to Paragraph 3 of this Agreement, (a) DBCPremier shall bear all registration, filing and NASDAMEX fees, printing and engraving expenses, fees and disbursements of its counsel and accountants and all legal fees and disbursements and other expenses of DBCPremier to comply with state securities or blue sky laws of any jurisdictions in which the Securities to be offered are to be registered or qualified; and (b) FFCFulton shall bear all fees and disbursements of its counsel and accountants, underwriting discounts and commissions, transfer taxes for FFCFulton and any other expenses incurred by FFC. Fulton.

6. Indemnification.Indemnification. In connection with any Registration Statement or any --------------- amendment or supplement thereto:

(a) DBCPremier shall indemnify and hold harmless FFC,Fulton, any underwriter (as defined in the Securities Act) for FFC,Fulton, and each person, if any, who controls FFCFulton or such underwriter (within the meaning of the Securities Act) from and against any and all loss, damage, liability, cost or expense to which FFCFulton or any such underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such loss, damage, liability, cost or expense arises out of or is caused by any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, any prospectus or preliminary prospectus contained therein or any amendment or supplement thereto, or arises out of or is based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;provided,however, that DBCPremier will not be liable in any such -------- ------- case to the extent that any such loss, damage, liability, cost or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by FFC,Fulton, such underwriter or such controlling person in writing specifically for use in the preparation thereof.

(b) FFCFulton shall indemnify and hold harmless DBC,Premier, any underwriter (as defined in the Securities Act), and each person, if any, who controls DBCPremier or such underwriter (within the meaning of the Securities Act) from and against any and all loss, damage, liability, cost or expense to which DBCPremier or any such underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such loss, damage, liability, cost or expense arises out of or is caused by any untrue or alleged untrue statement of any material fact contained in the Registration Statement, any prospectus or preliminary prospectus contained therein or any amendment or supplement thereto, or arises out of or is based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance upon and in conformity with written information furnished by FFCFulton specifically for use in the preparation thereof.

(c) Promptly after receipt by any party which is entitled to be indemnified, pursuant to the provisions of subparagraph (a) or (b) of this Paragraph 6, of any claim in writing or of notice of the commencement of any action involving the subject matter of the foregoing indemnity provisions, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party pursuant to the provisions of subparagraph (a) or (b) of this Paragraph 6, promptly notify the indemnifying party of the receipt of such claim or notice of the commencement of such action, but the omission to so notify the indemnifying party will not relieve it from any liability which it may otherwise have to any indemnified party hereunder. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party shall have the right to participate in and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party;provided,however, that if the -------- ------- defendants in any action include both the indemnified party or parties and the indemnifying party and there is a conflict of interest which would prevent counsel for the indemnifying party from also representing any indemnified party, such indemnified party shall have the B-3 right to select separate counsel to participate in the defense of such indemnified party. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party, pursuant to the provisions of subparagraph (a) or (b) of this Paragraph 6, for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof, other than reasonable costs of investigation, unless (i) such indemnified party shall have employed separate counsel in accordance with the provisions of the preceding sentence, (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after the notice of the commencement of the action, or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party.

(d) If recovery is not available under the foregoing indemnification provisions, for any reason other than as specified therein, any party entitled to indemnification by the terms thereof shall be entitled to obtain contribution with respect to its liabilities and expenses, except to the extent that contribution is not permitted under Section 11(f) of the Securities Act. In determining the amount of contribution to which the respective parties are entitled there shall be considered the parties'parties’ relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and/or prevent any statement or omission, and any other equitable considerations appropriate under the circumstances. FFCFulton and DBCPremier agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation even if the underwriters and FFCFulton as a group were considered a single entity for such purpose.

7.Redemption and Repurchase Rights. -------------------------------- Rights.

(a) From and after the date on which any event described in Paragraph 2 of this Agreement occurs, the Holder as defined in the Warrant (which shall include a former Holder), who has exercised the Warrant in whole or in part shall have the right to require DBCPremier to purchase some or all of the shares of Common Stock for which the Warrant was exercised at a redemption price per share (the "Redemption Price"Redemption Price) equal to the highest of: (i) 110% of the Exercise Price, (ii) the highest price paid or agreed to be paid for any share of Common Stock by an Acquiring Person (as defined below) during the one year period immediately preceding the date of redemption, and (iii) in the event of a sale of all or substantially all of DBC'sPremier’s assets or all or substantially all of a subsidiary of DBC'sPremier’s assets: (x) the sum of the price paid in such sale for such assets and the current market value of the remaining assets of DBCPremier as determined by a recognized investment banking firm selected by such Holder and reasonably acceptable to Premier, divided by (y) the number of shares of Common Stock then outstanding. If the price paid consists in whole or in part of securities or assets other than cash, the value of such securities or assets shall be their then current market value as determined by a recognized investment banking firm selected by the Holder and reasonably acceptable to DBC. Premier.

(b) From and after the date on which any event described in Paragraph 2 of this Agreement occurs, the Holder as defined in the Warrant (which shall include a former Holder), shall have the right to require DBCPremier to repurchase all or any portion of the Warrant at a price (the "WarrantWarrant Repurchase Price"Price) equal to the product obtained by multiplying: (i) the number of shares of Common Stock represented by the portion of the Warrant that the Holder is requiring DBCPremier to repurchase, times (ii) the excess of the Redemption Price over the Exercise Price.

(c) The Holder'sHolder’s right, pursuant to this Paragraph 7, to require DBCPremier to repurchase a portion or all of the Warrant, and/or to require DBCPremier to purchase some or all of the shares of Common Stock for which the Warrant was exercised, shall expire on the close of business on the 180th day following the occurrence of any event described in Paragraph 2.

(d) The Holder may exercise its right, pursuant to this Paragraph 7, to require DBCPremier to repurchase all or a portion of the Warrant, and/or to require DBCPremier to purchase some or all of the shares of Common Stock for which the Warrant was exercised, by surrendering for such purpose to DBC,Premier, at its principal office within the time period specified in the preceding subparagraph, the Warrant and/or a certificate or certificates representing the number of shares to be purchased accompanied by a written notice stating that it elects to require DBCPremier to repurchase the Warrant or a portion thereof and/or to purchase all or a specified number of such shares in accordance with the provisions of this Paragraph 7. As promptly as practicable, and in any event within five business days after the surrender of the Warrant and/or such certificates and the receipt of such notice relating thereto, DBCPremier shall deliver or cause to be delivered to the Holder: (i) the applicable Redemption Price (in immediately available funds) for the shares of Common Stock which it is not then prohibited under applicable law or regulation from purchasing, and/or (ii) the applicable Warrant Repurchase Price, and/or (iii) if the Holder has given DBCPremier notice that less than the whole Warrant is to be repurchased and/or less than the full number of shares of Common Stock evidenced by the surrendered certificate or certificates are to be purchased, a new certificate or certificates, of like tenor, for the number of shares of Common Stock evidenced by such surrendered certificate or certificates less the number shares of Common Stock purchased and/or a new Warrant reflecting the fact that only a portion of the Warrant was repurchased. B-4

(e) To the extent that DBCPremier is prohibited under applicable law or regulation, or as a result of administrative or judicial action, from repurchasing the Warrant and/or purchasing the Common Stock as to which the Holder has given notice of repurchase and/or redemption, DBCPremier shall immediately so notify the Holder and thereafter deliver or cause to be delivered, from time to time to the Holder, the portion of the Warrant Repurchase Price and/or the Redemption Price which it is no longer prohibited from delivering, within five business days after the date on which DBCPremier is no longer so prohibited;provided -------- ,however, that to the extent that DBCPremier is at the time and after the expiration of - ------- 25 months, so prohibited from delivering the Warrant Repurchase Price and/or the Redemption Price, in full (and DBCPremier hereby undertakes to use its best efforts to obtain all required regulatory and legal approvals as promptly as practicable), DBCPremier shall deliver to the Holder a new Warrant (expiring one year after delivery) evidencing the right of the Holder to purchase that number of shares of Common Stock representing the portion of the Warrant which DBCPremier is then so prohibited from repurchasing, and/or DBCPremier shall deliver to the Holder a certificate for the shares of Common Stock which DBCPremier is then so prohibited from purchase,purchasing, and DBCPremier shall have no further obligation to repurchase such new Warrant or purchase such Common Stock;andprovidedfurther, that upon receipt of such notice and until --- -------- ------- five days thereafter the Holder may revoke its notice of repurchase of the Warrant and/or redemption of Common Stock by written notice to DBCPremier at its principal office stating that the Holder elects to revoke its election to exercise its right to require DBCPremier to repurchase the Warrant and/or purchase the Common Stock, whereupon DBCPremier will promptly redeliver to the Holder the Warrant and/or the certificates representing shares of

Common Stock surrendered to DBCPremier for purposes of such repurchase and/or redemption, and DBCPremier shall have no further obligation to repurchase such Warrant and/or purchase such Common Stock.

(f) As used in this Agreement the following terms have the meanings indicated:

(1) "Acquiring Person"Acquiring Person shall mean any "Person"Person (hereinafter defined) who or which is the "Beneficial Owner"Beneficial Owner (hereinafter defined) of 25% or more of the Common Stock;

(2) A "Person"Person shall mean any individual, firm, corporation or other entity and shall also include any syndicate or group deemed to be a "Person"Person by operation of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended;

(3) A Person shall be a "Beneficial Owner",Beneficial Owner, and shall have "BeneficialBeneficial Ownership",” of all securities:

(i) which such Person or any of its Affiliates (as hereinafter defined) beneficially owns, directly or indirectly; and

(ii) which such Person or any of its Affiliates or Associates has (1) the right to acquire (whether such right is exercisable immediately or only after the passage of time or otherwise) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (2) the right to vote pursuant to any proxy, power of attorney, voting trust, agreement, arrangement or understanding; and

(4) "Affiliate"Affiliate and "Associate"Associate shall have the respective meanings ascribed to such terms in Rule 12b-2 of the regulations promulgated by the SEC under the Securities and Exchange Act of 1934, as amended.

8. Remedies.Remedies. Without limiting the foregoing or any remedies available to -------- FFC,Fulton, it is specifically acknowledged that FFCFulton would not have an adequate remedy at law for any breach of this Warrant Agreement and shall be entitled to specific performance of DBC'sPremier’s obligations under, and injunctive relief against any actual or threatened violation of the obligations of any Person subject to, this Agreement.

9. Miscellaneous. ------------- Miscellaneous.

(a) The representations, warranties, and covenants of DBCPremier set forth in the Merger Agreement are hereby incorporated by reference in and made a part of this Agreement, as if set forth in full herein.

(b) This Agreement, the Warrant and the Merger Agreement set forth the entire understanding and agreement of the parties hereto and supersede any and all prior agreements, arrangements and understandings, whether written or oral, relating to the subject matter hereof and thereof. No amendment, supplement, modification, waiver, or termination of this Agreement shall be valid and binding unless executed in writing by both parties.

(c) This Agreement shall be deemed to have been made in, and shall be governed by and interpreted in accordance with the substantive laws of, the Commonwealth of Pennsylvania.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers as of the day and year first above written. FULTON FINANCIAL CORPORATION B-5 By: __________________________________________ Rufus A. Fulton, Jr., President and Chief Executive Officer Attest: __________________________________________ William R. Colmery, Secretary DROVERS BANCSHARES CORPORATION By: __________________________________________ A. Richard Pugh, Chairman, President and Chief Executive Officer Attest: __________________________________________ John D. Blecher, Secretary B-6 EXHIBIT B continued

FULTON FINANCIAL CORPORATION

By:

/s/    CHARLES J. NUGENT        


Charles J. Nugent,

Senior Executive Vice President

Attest:

/s/    GEORGE R. BARR, JR.         


George R. Barr, Jr.,

Secretary

PREMIER BANCORP, INC.

By:

/s/    JOHN C. SOFFRONOFF        


John C. Soffronoff,

President and
Chief Executive Officer

Attest:

/s/    JOHN J. GINLEY        


John J. Ginley,

Secretary

WARRANT

to Purchase up to 1,250,000835,000 Shares of the  

Common Stock, No$0.33 Par Value,

of DROVERS BANCSHARES CORPORATION

PREMIER BANCORP, INC.

This is to certify that, for value received,FULTON FINANCIAL CORPORATION ("FFC"(“FULTON) or any permitted transferee (FFC(Fulton or such transferee being hereinafter called the "Holder"Holder) is entitled to purchase, subject to the provisions of this Warrant from DROVERS BANCSHARES CORPORATION,and the related Warrant Agreement, each made this day January 16, 2003 (the “Warrant Agreement”), by and between Fulton andPREMIER BANCORP, INC., a Pennsylvania corporation ("DBC"(“PREMIER), at any time on or after the date hereof, an aggregate of up to 1,250,000835,000 (equal but in any event not to approximately exceed 19.99% of the outstanding Common Stock (defined below) taking into consideration shares of Common Stock issuable upon exercise of this Warrant but excluding any other unissued shares of Premier which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion or option rights, or otherwise) fully paid and non-assessable shares of common stock, no$0.33 par value (the "Common Stock"Common Stock), of DBCPremier at a price per share equal to $19.75,$17.85, subject to adjustment as herein provided (the "Exercise Price"Exercise Price).

1.Exercise of Warrant.Warrant. Subject to the provisions hereof and the ------------------- limitations set forth in Paragraph 2 of athe Warrant Agreement, of even date herewith by and between FFC and DBC (the "Warrant Agreement"), which Warrant Agreement was entered into in connection with the Merger Agreement of even date between FFCFulton and DBCPremier (the "Merger Agreement"Merger Agreement), this Warrant may be exercised in whole or in part or sold, assigned or transferred at any time or from time to time on or after the date hereof. This Warrant shall be exercised by presentation and surrender hereof to DBCPremier at the principal office of DBC,Premier, accompanied by (i) a written notice of exercise, (ii) payment to DBC,Premier, for the account of DBC,Premier, of the Exercise Price for the number of shares of Common Stock specified in such notice, and (iii) a certificate of the Holder specifying the event or events which have occurred and entitle the Holder to exercise this Warrant. The Exercise Price for the number of shares of Common Stock specified in the notice shall be payable in immediately available funds.

Upon such presentation and surrender, DBCPremier shall issue promptly (and within one business day if requested by the Holder) to the Holder or its assignee, transferee or designee the number of shares of Common Stock to which the Holder is entitled hereunder. DBCPremier covenants and warrants that such shares of Common Stock, when so issued, will be duly authorized, validly issued, fully paid and non-assessable, and free and clear of all liens and encumbrances.

If this Warrant should be exercised in part only, DBCPremier shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the rights of the Holder thereof to purchase the balance of the shares of Common Stock issuable hereunder. Upon receipt by DBCPremier of this Warrant for exercise, in proper form, for exercise, and subject to the limitations set forth in paragraph 2 of the Warrant Agreement, the Holder shall be deemed to be the holder of record of the shares of Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of DBCPremier may then be closed or that certificates representing such shares of Common Stock shall not then be actually delivered to the Holder. DBCPremier shall pay all expenses, and any and all United States federal, state and local taxes and other charges, that may be payable in connection with the preparation, issue and delivery of stock certificates pursuant to this Paragraph 1 in the name of the Holder or its assignee, transferee or designee.

2.Reservation of Shares; Preservation of Rights of Holder. ------------------------------------------------------- DBCHolder.

Premier shall at all times, while this Warrant is outstanding and unexercised, maintain and reserve, free from preemptive rights, such number of authorized but unissued shares of Common Stock as may be necessary so that this Warrant may be exercised without any additional authorization of Common Stock after giving effect to all other options, warrants, convertible securities and other rights to acquire shares of Common Stock at the time outstanding. DBCPremier further agrees that (i) it will not, by charter amendment or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act or omission, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder or under the Warrant Agreement by DBC,Premier, (ii) it will promptly take all action (including (A) complying with all pre-merger notification, reporting and waiting period requirements specified in 15 U.S.C. (S)18a§18a and the regulations promulgated thereunder and (B) in the event that, under Section 3 of the Bank Holding Company Act of 1956, as amended (12 U.S.C. (S)1842(a)§1842(a)(3)), or the Change in Bank Control Act of 1978, as amended (12 U.S.C. (S)1817(j)§1817(j)), prior approval of the Board of Governors of the Federal

Reserve System (the "Board"Board) is necessary before this Warrant may be exercised, cooperating fully with the Holder in preparing any and all such applications and providing such information to the Board as the Board may require) in order to permit the Holder to exercise this Warrant and DBCPremier duly and effectively to issue shares of its Common Stock hereunder, and (iii) it will promptly take all action necessary to protect the rights of the Holder against dilution as provided herein.

3.Fractional Shares. DBCShares. Premier shall not be required to issue fractional ----------------- shares of Common Stock upon exercise of this Warrant but shall pay for any fractional shares in cash or by check at the Exercise Price. B-7

4.Exchange or Loss of Warrant.Warrant. This Warrant is exchangeable, without --------------------------- expense, at the option of the Holder, upon presentation and surrender hereof at the principal office of DBCPremier for other warrants of different denominations entitling the Holder to purchase in the aggregate the same number of shares of Common Stock issuable hereunder. The term "Warrant"Warrant as used herein includes any warrants for which this Warrant may be exchanged. Upon receipt by DBCPremier of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant, if mutilated, DBCPremier will execute and deliver a new Warrant of like tenor and date.

5. Repurchase.Repurchase. The Holder shall have the right to require DBCPremier to ---------- repurchase all or any shares of Common Stock for which this Warrant was exercised or all or any portion of this Warrant under the terms and subject to the conditions of Paragraph 7 of the Warrant Agreement.

6. Adjustment.Adjustment. The number of shares of Common Stock issuable upon the ---------- exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as provided in this Paragraph 6.

(A)Stock Dividends, etc. ---------------------

(1)Stock Dividends.Dividends. In case DBCPremier shall pay or make a dividend --------------- or other distribution on any class of capital stock of DBCPremier in Common Stock, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased by multiplying such number of shares by a fraction of which the denominator shall be the number of shares of Common Stock outstanding at the close of business on the day immediately preceding the date of such distribution and the numerator shall be the sum of such number of shares and the total number of shares of Common Stock constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following such distribution.

(2) Subdivisions.Subdivisions. In case outstanding shares of Common Stock ------------ shall be subdivided into a greater number of shares of Common Stock, the number of shares of Common Stock issuable upon exercise of this Warrant at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the number of shares of Common Stock issuable upon exercise of this Warrant at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately decreased, such increase or decrease, as the case may be, to become effective immediately after the opening of business on the day following the date upon which such subdivision or combination becomes effective.

(3) Reclassifications.Reclassifications. The reclassification of Common Stock ----------------- into securities (other than Common Stock) and/or cash and/or other consideration shall be deemed to involve a subdivision or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to such reclassification into the number or amount of securities and/or cash and/or other consideration outstanding immediately thereafter and the effective date of such reclassification shall be deemed to be "the“the day upon which such subdivision becomes effective," or "the“the day upon which such combination becomes effective," as the case may be, within the meaning of clause (2) above.

(4)Optional Adjustments. DBCAdjustments. Premier may make such increases in the -------------------- number of shares of Common Stock issuable upon exercise of this Warrant, in addition to those required by this subparagraph (A), as shall be determined by its Board of Directors to be advisable in order to avoid taxation so far as practicable of any dividend of stock or stock rights or any event treated as such for federal income tax purposes to the recipients.

(5)Adjustment to Exercise Price.Price. Whenever the number of ---------------------------- shares of Common Stock issuable upon exercise of this Warrant is adjusted as provided in this Paragraph 6(A), the Exercise Price shall be adjusted

by a fraction in which the numerator is equal to the number of shares of Common Stock issuable prior to the adjustment and the denominator is equal to the number of shares of Common Stock issuable after the adjustment.

(B)Certain Sales of Common Stock. ----------------------------- Stock.

(1)Adjustment to Shares Issuable.Issuable. If and whenever DBCPremier sells ----------------------------- or otherwise issues (other than under circumstances in which Paragraph 6(A) applies or pursuant to options to purchase Common Stock that are outstanding on the date hereof or subsequently issued pursuant to DBCPremier stock option or stock purchase plans (including the dividend reinvestment plan in effect on the date hereof), any shares of Common Stock, the number of shares of Common Stock issuable upon exercise of this Warrant shall be increased by multiplying such number of shares by a fraction, the denominator of which shall be the number shares of Common Stock outstanding at the close of business on the day immediately preceding the date of such sale or issuance and the numerator of which shall be the sum of such number of shares and the total number of shares constituting such sale or other issuance, such increase to become effective immediately after the opening of business on the day following such sale or issuance.

(2)Adjustment to Exercise Price.Price. If and whenever DBCPremier sells or ---------------------------- otherwise issues any shares of Common Stock (excluding any stock dividend or other issuance not for consideration to which Paragraph 6(A) applies or pursuant to options to purchase Common Stock that are outstanding on the date hereof or subsequently issued pursuant to DBCPremier stock option or stock purchase plans (including the dividend reinvestment plan) in effect on the date B-8 hereof), for a consideration per share which is less than the Exercise Price at the time of such sale or other issuance, then in each such case the Exercise Price shall be forthwith changed (but only if a reduction would result) to the price (calculated to the nearest cent) determined by dividing: (i) an amount equal to the sum of (aa) the number of shares of Common Stock outstanding immediately prior to such issue or sale, multiplied by the then effective Exercise Price, plus (bb) the total consideration, if any, received and deemed received by DBCPremier upon such issue or sale, by (ii) the total number of shares of Common Stock outstanding immediately after such issue or sale.

(C) Definition. For purposes of this Paragraph 6, the term "Common ---------- Stock"Common Stock shall include (1) any shares of DBCPremier of any class or series which has no preference or priority in the payment of dividends or in the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of DBCPremier and which is not subject to redemption by DBC,Premier, and (2) any rights or options to subscribe for or to purchase shares of Common Stock or any stock or securities convertible into or exchangeable for shares of Common Stock (such convertible or exchangeable stock or securities being hereinafter called "Convertible Securities"Convertible Securities), whether or not such rights or options or the right to convert or exchange any such Convertible Securities are immediately exercisable. For purposes of any adjustments made under Paragraph 6(A) or 6(B) as a result of the distribution, sale or other issuance of rights or options or Convertible Securities, the number of Shares of Common Stock outstanding after or as a result of the occurrence of events described in Paragraph 6(A)(1) or 6(B)(1) shall be calculated by assuming that all such rights, options or Convertible Securities have been exercised for the maximum number of shares issuable thereunder. If an adjustment is made at any time because of the subsequent issuance of any right or option described in clause (2) of the first sentence of this Section (C)(B), no adjustment shall be made when shares are subsequently issued; provided further, that no adjustment shall be made for issuances pursuant to options to purchase Common Stock that are outstanding on the date hereof or subsequent issuances of Common Stock pursuant to DBCPremier stock option or stock purchase plans (including the dividend reinvestment plan) in effect on the date hereof.

7. Notice.Notice. (A) Whenever the number of shares of Common Stock for which ------ this Warrant is exercisable is adjusted as provided in Paragraph 6, DBCPremier shall promptly compute such adjustment and mail to the Holder a certificate, signed by the principal financial officer of DBC,Premier, setting forth the number of shares of Common Stock for which this Warrant is exercisable as a result of such adjustment having become effective.

(B) Upon the occurrence of any event which results in the Holder having the right to require DBCPremier to repurchase shares of Common Stock for which this Warrant was exercised or this Warrant, as provided in Paragraph 7 of the Warrant Agreement, DBCPremier shall promptly notify the Holder of such event; and DBCPremier shall promptly compute the Redemption Price or the Warrant Repurchase Price and furnish to the Holder a certificate, signed by the principal financial officer of DBC,Premier, setting forth the Redemption Price or the Warrant Repurchase Price, as applicable, and the basis and computation thereof.

8.Rights of the Holder.Holder. (A) Without limiting the foregoing or any -------------------- remedies available to the Holder, it is specifically acknowledged that the Holder would not have an adequate remedy at law for any breach of the provisions of this Warrant and shall be entitled to specific performance of DBC'sPremier’s obligations under, and injunctive relief against

any actual or threatened violation of the obligations of any Person (as defined in Paragraph 7 of the Warrant Agreement) subject to, this Warrant.

(B) The Holder shall not, by virtue of its status as Holder, be entitled to any rights of a shareholder in DBC. Premier.

9. Termination.Termination. This Warrant and theall rights conferred hereby and under the Warrant Agreement shall ----------- terminate and be of no further force and effect (i) upon the Effective Time of the Merger provided for in the Merger Agreement, (ii) upon a valid termination of the Merger Agreement (except a termination pursuant to Section 8.1(b)(iii) of the Merger Agreement) unless an event described in Paragraph 2 of the Warrant Agreement (including the occurrence of an event described in paragraph (iv)(A) therein) occurs prior to such termination in which case this Warrant and the rights conferred hereby, shall not terminate until 12 months after the occurrence of such event, or (iii) to the extent this Warrant has not previously been exercised, 12 months after the occurrence of an event described in Paragraph 2 of the Warrant Agreement (unless termination of the Merger Agreement in accordance with its terms (other than under Section 8.1(b)(iii) thereof) occurs prior to the occurrence of such event, in which case (ii) above shall apply). ; except, however, that this Warrant and the Warrant Agreement shall expire and be of no further force and effect as of 5:00 p.m. on December 31, 2004.

10.Governing Law.Law. This Warrant shall be deemed to have been delivered ------------- in, and shall be governed by and interpreted in accordance with the substantive laws of, the Commonwealth of Pennsylvania. In the event of any inconsistency between this Warrant and the terms of the Warrant Agreement, the terms of the Warrant Agreement shall govern.

[SIGNATURE PAGE FOLLOWS]

Dated: December 27, 2000 B-9 DROVERS BANCSHARES CORPORATION By: __________________________________________ A. Richard Pugh, Chairman, President and Chief Executive Officer Attest: __________________________________________ John D. Blecher, Secretary B-10 EXHIBIT C ________________, 2001 BoardJanuary 16, 2003

PREMIER BANCORP, INC.

By:

/s/    JOHN C. SOFFRONOFF        


John C. Soffronoff,

President and
Chief Executive Officer

Attest:

/s/    JOHN J. GINLEY        


John J. Ginley,

Secretary

Exhibit “C”

Opinion of Directors Drovers Bancshares Corporation 30 South George Street York, Pennsylvania 17401 Ladies and Gentlemen: Drovers Bancshares Corporation ("Drovers") and Fulton Financial Corporation ("Fulton") have entered into an Agreement and Plan of Merger, dated as of December 27, 2000 (the "Agreement"), pursuant to which Drovers will be merged with and into Fulton (the "Merger"). Upon consummation of the Merger, each share of Drovers common stock, no par value, issued and outstanding immediately prior to the Merger (the "Drovers Shares"), other than certain shares specified in the Agreement, will be converted into 1.24 shares (the "Conversion Ratio") of Fulton common stock, par value $2.50 per share (together with the corresponding number of stock purchase rights associated therewith pursuant to the Rights Agreement dated June 20, 1989, as amended, by and between Fulton and Fulton Bank, as Rights Agent). The Conversion Ratio is subject to adjustment under certain circumstances as set forth in the Agreement. The terms and conditions of the Merger are more fully set forth in the Agreement. You have requested our opinion as to the fairness, from a financial point of view, of the Conversion Ratio to the holders of Drovers Shares. Sandler O'NeillBoenning & Partners, L.P., as part of its investment banking business, is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions. In connection with this opinion, we have reviewed, among other things: (i) the Agreement and certain of the schedules thereto; (ii) the Warrant and Warrant Agreement dated December 27, 2000 by and between Drovers and Fulton; (iii) certain publicly available financial statements and other historical financial information of Drovers that we deemed relevant; (iv) certain publicly available financial statements and other historical financial information of Fulton that we deemed relevant; (v) certain internal financial analyses and forecasts of Drovers for the years ending December 31, 2000 and 2001 prepared by management of Drovers and the views of senior management of Drovers, based on limited discussions with members of senior management, regarding Drovers' past and current business, financial condition, results of operations and future prospects; (vi) certain internal financial analyses and forecasts of Fulton for the years ending December 31, 2000 and 2001 prepared by management of Fulton, consensus earnings per share estimates for Fulton for the years ending December 31, 2000 and 2001 published by I/B/E/S and the views of senior management of Fulton, based on limited discussions with members of senior management of Fulton, regarding Fulton's past and current business, financial condition, results of operations and future prospects; (vii) the pro forma impact of the Merger, including the relative contributions of assets, liabilities, equity and earnings of Drovers and Fulton to the resulting institution; (viii) the publicly reported historical price and trading activity for Drovers' and Fulton's common stock, including a comparison of certain financial and stock market information for Drovers and Fulton with similar publicly available information for certain other companies the securities of which are publicly traded; (ix) the financial terms of recent business combinations in the commercial banking industry, to the extent publicly available; (x) the current market environment generally and the banking environment in particular; and (xi) such other information, financial studies, analyses and investigations and financial, economic and market criteria as we considered relevant. In performing our review, we have relied upon the accuracy and completeness of all of the financial and other information that was available to us from public sources, that was provided to us by Drovers or Fulton or their respective representatives or that was otherwise reviewed by us and have assumed such accuracy and completeness for purposes of rendering this opinion. We have not been asked to and have not undertaken an independent verification of any of such information and we do not assume any responsibility or liability for the accuracy or C-1 completeness thereof. We did not make an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of Drovers or Fulton or any of their subsidiaries, or the collectibility of any such assets, nor have we been furnished with any such evaluations or appraisals. We did not make an independent evaluation of the adequacy of the allowance for loan losses of Drovers or Fulton nor have we reviewed any individual credit files relating to Drovers or Fulton. We have assumed that the respective allowances for loan losses for both Drovers and Fulton are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. We are not accountants and have relied upon the reports of the independent accountants for each of Drovers and Fulton for the accuracy and completeness of the financial statements made available to us. With respect to the financial projections and earnings estimates prepared by and/or reviewed with the respective managements of Drovers and Fulton, we have assumed that they have been reasonably prepared and that they reflect the best currently available estimates and judgments of the respective managements of the respective future financial performances of Drovers and Fulton and that such performances will be achieved, and we express no opinion as to such financial projections or estimates or the assumptions on which they are based. We have also assumed that there has been no material change in Drovers' or Fulton's assets, financial condition, results of operations, business or prospects since the date of the most recent financial statements made available to us. We have assumed in all respects material to our analysis that Drovers and Fulton will remain as going concerns for all periods relevant to our analyses, that all of the representations and warranties contained in the Agreement and all related agreements are true and correct, that each party to such agreements will perform all of the covenants required to be performed by such party under such agreements, that the conditions precedent in the Agreement are not waived and that the Merger will be accounted for as a pooling of interests and will qualify as a tax-free reorganization for federal income tax purposes. Our opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. Events occurring after the date hereof could materially affect this opinion. We have not undertaken to update, revise, reaffirm or withdraw this opinion or otherwise comment upon events occurring after the date hereof. We are expressing no opinion herein as to what the value of Fulton's common stock will be when issued to Drovers' shareholders pursuant to the Agreement or the prices at which Drovers' or Fulton's common stock will trade at any time. We have acted as Drovers' financial advisor in connection with the Merger and will receive a fee for our services, a significant portion of which is contingent upon consummation of the Merger. We will also receive a fee for rendering this opinion. In the past, we have also provided certain other investment banking services for Drovers and have received compensation for such services. In the ordinary course of our business as a broker-dealer, we may purchase securities from and sell securities to Drovers and Fulton. We may also actively trade the debt and/or equity securities of Drovers and Fulton for our own account and for the accounts of our customers and, accordingly, may at any time hold a long or short position in such securities. Our opinion is directed to the Board of Directors of Drovers in connection with its consideration of the Merger and does not constitute a recommendation to any shareholder of Drovers as to how such shareholder should vote at any meeting of shareholders called to consider and vote upon the Merger. Our opinion is not to be quoted or referred to, in whole or in part, in a registration statement, prospectus, proxy statement or in any other document, nor shall this opinion be used for any other purposes, without Sandler O'Neill's prior written consent; provided, however, that we hereby consent to the inclusion of this opinion as an appendix to Drovers' and Fulton's Proxy Statement/Prospectus dated the date hereof and to the references to this opinion therein. Based upon and subject to the foregoing, it is our opinion, as of the date hereof, that the Conversion Ratio is fair, from a financial point of view, to the holders of Drovers Shares. Very truly yours, C-2 EXHIBIT D DISSENTERS' RIGHTS STATUTE -------------------------- STATUTE RELATING TO INDEMNIFICATION Subchapter D of Chapter 17 of the Pennsylvania Business Corporation Law of 1988 Indemnification --------------- (S) 1741. Third-party actions Unless otherwise restricted in its bylaws, a business corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that he is or was a representative of the corporation, or is or was serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action or proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person did not act in good faith and in a manner that he reasonably believed to be in, or not opposed to, the best interests of the corporation and with respect to any criminal proceeding, had reasonable cause to believe that his conduct was unlawful. (S) 1742. Derivative and corporate actions Unless otherwise restricted in its bylaws, a business corporation shall have power to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a representative of the corporation or is or was serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of the action if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation. Indemnification shall not be made under this section in respect of any claim, issue or matter as to which the person has been adjudged to be liable to the corporation unless and only to the extent that the court of common pleas of the judicial district embracing the county in which the registered office of the corporation is located or the court in which the action was brought determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for the expenses that the court of common pleas or other court deems proper. (S) 1743. Mandatory indemnification Scattergood

[To the extent that a representative of a business corporation has been successful on the merits or otherwise in defense of any action or proceeding referred to in section 1741 (relating to third-party actions) or 1742 (relating to derivative and corporate actions) or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorney fees) actually and reasonably incurred by him in connection therewith. (S) 1744. Procedure for effecting indemnification D-1 Unless ordered by a court, any indemnification under section 1741(relating to third-party actions) or 1742 (relating to derivative and corporate actions) shall be made by the business corporation only as authorized in the specific case upon a determination that indemnification of the representative is proper in the circumstances because he has met the applicable standard of conduct set forth in those sections. The determination shall be made: (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the action or proceeding; (2) if such a quorum is not obtainable or if obtainable and a majority vote of a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or (3) by the shareholders. (S) 1745. Advancing expenses Expenses (including attorneys' fees) incurred in defending any action or proceeding referred to in this subchapter may be paid by a business corporation in advance of the final disposition of the action or proceeding upon receipt of an undertaking by or on behalf of the representative to repay the amount if it is ultimately determined that he is not entitled to be indemnified by the corporation as authorized in this subchapter or otherwise. (S) 1746. Supplementary coverage (a) General rule. The indemnification and advancement of expenses provided by, or granted pursuant to, the other sections of this subchapter shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding that office. Section 1728 (relating to interested directors or officers; quorum) and, in the case of a registered corporation, section 2538 (relating to approval of transactions with interested shareholders) shall be applicable to any bylaw, contract or transaction authorized by the directors under this section. A corporation may create a fund of any nature, which may, but need not be, under the control of a trustee, or otherwise secure or insure in any manner its indemnification obligations, whether arising under or pursuant to this section or otherwise. b) When indemnification is not to be made. Indemnification pursuant to subsection (a) shall not be made in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness. The articles may not provide for indemnification in the case of willful misconduct or recklessness. (c) Grounds. Indemnification pursuant to subsection (a) under any bylaw, agreement, vote of shareholders or directors or otherwise may be granted for any action taken and may be made whether or not the corporation would have the power to indemnify the person under any other provision of the law except as provided in this section and whether or not the indemnified liability arises or arose from any threatened, pending or completed action by or in the right of the corporation. Such indemnification is declared to be consistent with the public policy of this Commonwealth. (S) 1747. Power to purchase insurance Unless otherwise restricted in its bylaws, a business corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a representative of the corporation or is or was serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against that liability under the provisions of this subchapter. Such insurance is declared to be consistent with the public policy of this Commonwealth. (S) 1748. Application to surviving or new corporation D-2 For the purposes of this subchapter, references to "the corporation" include all constituent corporations absorbed in a consolidation, merger or division, as well as the surviving or new corporations surviving or resulting therefrom, so that any person who is or was a representative of the constituent, surviving or new corporation, or is or was serving at the request of the constituent, surviving or new corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this subchapter with respect to the surviving or new corporation as he would if he had served the surviving or new corporation in the same capacity. (S) 1749. Application to employee benefit plans For purposes of this subchapter: (1) References to "other enterprises" shall include employee benefit plans and references to "serving at the request of the corporation" shall include any service as a representative of the business corporation that imposes duties on, or involves services by, the representative with respect to an employee benefit plan, its participants or beneficiaries. (2) Excise taxes assessed on a person with respect to an employee benefit plan pursuant to applicable law shall be deemed "fines." (3) Action with respect to an employee benefit plan taken or omitted in good faith by a representative of the corporation in a manner he reasonably believed to be in the interest of the participants and beneficiaries of the plan shall be deemed to be action in a manner that is not opposed to the best interests of the corporation. (S) 1750. Duration and extent of coverage The indemnification and advancement of expenses provided by, or granted pursuant to, this subchapter shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a representative of the corporation and shall inure to the benefit of the heirs and personal representative of that person. D-3 Come]


Part II Information Not Required In Prospectus

Item 20. Indemnification of Directors and Officers.

Pennsylvania law provides that a Pennsylvania corporation may indemnify directors, officers, employees and agents of the corporation against liabilities they may incur in such capacities for any action taken or any failure to act, whether or not the corporation would have the power to indemnify the person under any provision of law, unless such action or failure to act is determined by a court to have constituted recklessness or willful misconduct. Pennsylvania law also permits the adoption of a bylaw amendment, approved by shareholders, providing for the elimination of a director'sdirector’s liability for monetary damages for any action taken or any failure to take any action unless (1) the director has breached or failed to perform the duties of his office and (2) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness.

The bylaws of Fulton Financial provide for (1) indemnification of directors, officers, employees and agents of the registrant and its subsidiaries and (2) the elimination of a director'sdirector’s liability for monetary damages, to the fullest extent permitted by Pennsylvania law.

Directors and officers are also insured against certain liabilities for their actions, as such, by an insurance policy obtained by Fulton Financial.

Item 21. Exhibits and Financial Statement Schedules.

(a) Exhibits. No. Title Page --- ----- ---- 2 Agreement and Plan of Merger dated December 27, 2000, A-1

No.


Title


Page


2

Agreement and Plan of Merger dated January 16, 2003, between Fulton Financial Corporation and Drovers Bancshares Corporation - furnished as Exhibit A to the document which is included in Part I of the Registration Statement 3 Articles of Incorporation, as amended and restated, and Bylaws of Fulton Financial Corporation, as amended - Incorporated by reference from Exhibit 3 of the Fulton Financial Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 1999. 4 Rights Agreement dated April 27, 1999 between Fulton Financial Corporation and Fulton Bank - Incorporated by reference to Fulton Financial Corporation's Form 8-K, Exhibit 4, filed May 6, 1999 5.1 Opinion of Barley, Snyder, Senft & Cohen, LLC regarding legality 8 Opinion of Barley, Snyder, Senft & Cohen, LLC regarding tax matters 13 Annual Report on Form 10-K for Fulton Financial Corporation for the year ending December 31, 2000, incorporated by reference in the document which is included in Part I of this Registration Statement 21 Subsidiaries of Registrant, incorporated by reference to Fulton Financial Corporation's Annual Report on Form 10-K for the year ended December 31, 2000. 23.1 Consent of Barley, Snyder, Senft & Cohen, LLC, included as part of Exhibit 5.1 and Exhibit 8 23.2 Consent of Sandler, O'Neill & Partners, L.P.* 23.3 Consent of Arthur Andersen LLP * To be filed by amendment 1 23.4 Consent of Stambaugh-Ness, P.C. 24 Power of Attorney (included in the signature page) 99.1 Form of Proxy 99.2 Letter to shareholders of Drovers Bancshares Corporation 99.3 Notice of Special Meeting of Shareholders of Drovers Bancshares Corporation and Premier Bancorp, Inc. (Furnished as Exhibit A to the document which is included in Part I of the Registration Statement.)

A-1

3

Articles of Incorporation, as amended and restated, and Bylaws of Fulton Financial Corporation, as amended (Incorporated by reference from Exhibit 3 of the Fulton Financial Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.)

4

Rights Agreement dated April 27, 1999 between Fulton Financial Corporation and Fulton Bank (Incorporated by reference to Fulton Financial Corporation’s Form 8-K, Exhibit 4, filed May 6, 1999.)

5.1

Opinion of Barley, Snyder, Senft & Cohen, LLC regarding legality

8

Opinion of Barley, Snyder, Senft & Cohen, LLC regarding tax matters

13

Annual Report on Form 10-K for Fulton Financial Corporation for the year ending December 31, 2002 (Incorporated by reference in the document which is included in Part I of this Registration Statement.)

21

Subsidiaries of Registrant (Incorporated by reference to Fulton Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 2002.)

23.1

Consent of Barley, Snyder, Senft & Cohen, LLC (Included as part of Exhibit 5.1 and Exhibit 8.)

23.2

Consent of Boenning & Scattergood, Inc.


23.3

Consent of KPMG LLP

23.4

Consent of KPMG LLP

23.5

Consent of Stambaugh Ness, PC

24

Power of Attorney (Included in the signature page)

99.1

Form of Proxy

99.2

Letter to shareholders of Premier Bancorp, Inc.

99.3

Notice of Annual Meeting of Shareholders of Premier Bancorp, Inc.

(b) Financial Statement Schedules. [None

None required.]

Item 22. Undertakings.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any fact or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the information to be included in a post-effective amendment by these paragraphs is contained in periodic reports filed by registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof . thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the


offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. (c)

(d) (1) The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form 2 with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form.

(2) The registrant undertakes that every prospectus (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (d)

(e) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the bylaws of the registrant, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (e)

(f) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (f)

(g) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. 3


SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lancaster, Commonwealth of Pennsylvania, on March 20, 2001. FULTON FINANCIAL CORPORATION By: /s/ Rufus A. Fulton, Jr. ------------------------------------ Rufus A. Fulton, Jr., Chairman and Chief Executive Officer April 2, 2003.

FULTON FINANCIAL CORPORATION

By:

/s/    RUFUS A. FULTON, JR.            


Rufus A. Fulton, Jr.,

Chairman and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints WilliamGeorge R. ColmeryBarr, Jr. and Charles J. Nugent and each of them, his true and lawful attorney-in- fact,attorney-in-fact, as agent with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacity, to sign any or all amendments to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. SIGNATURE CAPACITY DATE /s/ Jeffrey A. Albertson - ------------------------------ Jeffrey A. Albertson Director March 20, 2001 /s/ James R. Argires, M.D. - ------------------------------ James R. Argires, M.D. Director March 20, 2001 /s/ Donald W. Bowman, Jr. - ------------------------------ Donald W. Bowman, Jr. Director March 20, 2001 /s/ Beth Ann L. Chivinski Senior Vice President and - ------------------------------ Controller (Principal Beth Ann L. Chivinski Accounting Officer) March 20, 2001 /s/ Harold D. Chubb - ------------------------------ Harold D. Chubb Director March 20, 2001 /s/ William H. Clark, Jr. - ------------------------------ William H. Clark, Jr. Director March 20, 2001 /s/ Craig A. Dally - ------------------------------ Craig A. Dally Director March 20, 2001 /s/ Frederick B. Fichthorn - ------------------------------ 4 SIGNATURE CAPACITY DATE Frederick B. Fichthorn Director March 20, 2001 Chairman of the Board, /s/ Rufus A. Fulton, Jr. Chief Executive Officer, - ------------------------------ and Director (Principal Rufus A. Fulton, Jr. Executive Officer) March 20, 2001 /s/ Eugene H. Gardner - ------------------------------ Eugene H. Gardner Director March 20, 2001 /s/ Robert D. Garner - ------------------------------ Robert D. Garner Director March 20, 2001 /s/ Charles V. Henry, III - ------------------------------ Charles V. Henry, III Director March 20, 2001 /s/ Robert J. Hess - ------------------------------ Robert J. Hess Director March 20, 2001 /s/ Carolyn R. Holleran - ------------------------------ Carolyn R. Holleran Director March 20, 2001 /s/ Clyde W. Horst - ------------------------------ Clyde W. Horst Director March 20, 2001 /s/ Samuel H. Jones, Jr. - ------------------------------ Samuel H. Jones, Jr. Director March 20, 2001 /s/ Donald W. Lesher, Jr. - ------------------------------ Donald W. Lesher, Jr. Director March 20, 2001 /s/ Joseph J. Mowad, M.D. - ------------------------------ Joseph J. Mowad, M.D. Director March 20, 2001 Senior Executive Vice /s/ Charles J. Nugent President and Chief - ------------------------------ Financial Officer Charles J. Nugent (Principal Financial March 20, 2001 Officer) /s/ Mary Ann Russell - ------------------------------ Mary Ann Russell Director March 20, 2001 /s/ John O. Shirk - ------------------------------ John O. Shirk Director March 20, 2001 5 SIGNATURE CAPACITY DATE /s/ R. Scott Smith, Jr. - ------------------------------ President, Chief Operating R. Scott Smith, Jr. Officer and Director March 20, 2001 /s/ James K. Sperry - ------------------------------ James K. Sperry Director March 20, 2001 /s/ Kenneth G. Stoudt - ------------------------------ Kenneth G. Stoudt Director March 20, 2001 6

SIGNATURE


CAPACITY


DATE


/s/    JEFFREY G. ALBERTSON            


Jeffrey A. Albertson

Director

April 2, 2003

/s/    DONALD M. BOWMAN, JR.            


Donald W. Bowman, Jr.

Director

April 2, 20032

/s/    BETH ANN L. CHIVINSKI            


Beth Ann L. Chivinski

Senior Vice President and Controller (Principal Accounting Officer)

April 2, 2003

/s/    HAROLD D. CHUBB            


Harold D. Chubb

Director

April 2, 2003

/s/    WILLIAM H. CLARK, JR.            


William H. Clark, Jr.

Director

April 2, 2003

/s/    CRAIG A. DALLY            


Craig A. Dally

Director

April 2, 2003

/s/    FREDERICK B. FICHTHORN            


Frederick B. Fichthorn

Director

April 2, 2003

/s/    PATRICK J. FREER            


Patrick J. Freer

Director

April 2, 2003

/s/    RUFUS A. FULTON, JR.            


Rufus A. Fulton, Jr.

Chairman of the Board, Chief

Executive Officer, and Director
(Principal Executive Officer)

April 2, 2003


SIGNATURE


CAPACITY


DATE


/s/    EUGENE H. GARDNER            


Eugene H. Gardner

Director

April 2, 2003

/s/    ROBERT D. GARNER            


Robert D. Garner

Director

April 2, 2003

/s/    J. ROBERT HESS            


J. Robert Hess

Director

April 2, 2003

/s/    GEORGE W. HODGES            


George W. Hodges

Director

April 2, 2003

/s/    CAROLYN R. HOLLERAN            


Carolyn R. Holleran

Director

April 2, 2003

/s/    CLYDE W. HORST            


Clyde W. Horst

Director

April 2, 2003

/s/    SAMUEL H. JONES, JR.            


Samuel H. Jones, Jr.

Director

April 2, 2003

/s/    DONALD W. LESHER, JR.            


Donald W. Lesher, Jr.

Director

April 2, 2003

/s/    JOSEPH J. MOWAD, M.D.            


Joseph J. Mowad, M.D.

Director

April 2, 2003

/s/    CHARLES J. NUGENT            


Charles J. Nugent

Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer)

April 2, 2003

/s/    MARY ANN RUSSELL            


Mary Ann Russell

Director

April 2, 2003

/s/    JOHN O. SHIRK            


John O. Shirk

Director

April 2, 2003

/s/    R. SCOTT SMITH, JR.            


R. Scott Smith, Jr.

President, Chief Operating Officer and Director

April 2, 2003

/s/    JAMES K. SPERRY            


James K. Sperry

Director

April 2, 2003

/s/    KENNETH G. STOUDT            


Kenneth G. Stoudt

Director

April 2, 2003


Index of Exhibits

No.


Title


Page --- ----- ----


2

Agreement and Plan of Merger dated December 27, 2000,January 16, 2003, between A-1 Fulton A-1 Financial Corporation and Drovers Bancshares Corporation - furnishedPremier Bancorp, Inc. (Furnished as Exhibit A to the document which is included in Part I of the Registration Statement Statement.)

A-1

3

Articles of Incorporation, as amended and restated, and Bylaws of Fulton Financial Corporation, as amended -Incorporated(Incorporated by reference from Exhibit 3 of the Fulton Financial Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.)

4

Rights Agreement dated April 27, 1999 between Fulton Financial Corporation and Fulton Bank incorporated(Incorporated by reference to Fulton Financial Corporation'sCorporation’s Form 8-K, Exhibit 4, filed May 6, 1999 1999.)

5.1

Opinion of Barley, Snyder, Senft & Cohen, LLC regarding legality

8

Opinion of Barley, Snyder, Senft & Cohen, LLC regarding tax matters

13

Annual Report on Form 10-K for Fulton Financial Corporation for the year ending December 31, 2000, incorporated2002 (Incorporated by reference in the document which is included in Part I of this Registration Statement Statement.)

21

Subsidiaries of Registrant incorporated(Incorporated by reference to Fulton Financial Corporation'sCorporation’s Annual Report on Form 10-K for the year ended December 31, 2000. 2002.)

23.1

Consent of Barley, Snyder, Senft & Cohen, LLC included(Included as part of Exhibit 5.1 and Exhibit 8 8.)

23.2

Consent of Sandler O'NeillBoenning & Partners, L.P.* Scattergood, Inc.

23.3

Consent of Arthur Andersen,KPMG LLP

23.4

Consent of Stambaugh-Ness, P.C. KPMG LLP

23.5

Consent of Stambaugh Ness, PC

24

Power of Attorney (included(Included in the signature page)

99.1

Form of Proxy

99.2

Letter to shareholders of Drovers Bancshares Corporation Premier Bancorp, Inc.

99.3

Notice of SpecialAnnual Meeting of Shareholder of Drovers Bancshares Corporation * To be filed by amendment Premier Bancorp, Inc.

7