AMENDED AND RESTATED ARTICLES OF INCORPORATION
FULTON FINANCIAL CORPORATION
ARTICLE 1
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1. The name of the corporation is Fulton Financial Corporation.
ARTICLE 2
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2. The location and post office address of the registered office of the
corporation in this Commonwealth is:
One Penn Square
P.O. Box 4887
Lancaster, Pennsylvania 17604
ARTICLE 3
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3. The corporation is incorporated under the Business Corporation Law of
the Commonwealth of Pennsylvania for the purpose of engaging in and doing any
lawful act concerning any and all lawful business for which a corporation may be
incorporated under the Business Corporation Law of the Commonwealth of
Pennsylvania.
ARTICLE 4
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4. The term for which the corporation is to exist is perpetual.
ARTICLE 5
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5. The aggregate number of shares which the corporation shall have
authority to issue is 410,000,000 shares, divided into 400,000,0000 shares of
Common Stock of Two and 50/100 Dollars ($2.50) par value per share and
10,000,000 shares of Preferred Stock, without par value. The Board of Directors
shall have authority to the full extent now or hereafter permitted by law from
time to time to issue Preferred Stock as a class without series or in one or
more series and to fix by resolution the voting rights (which may be full,
limited, multiple, fractional or withheld altogether), designation, preferences,
qualifications,
limitations, restrictions, privileges, options, redemption rights, conversion
rights, and other special or relative rights of such class or any series
thereof.
ARTICLE 6
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6. The shareholders of the corporation shall not have the right to
cumulate their votes for the election of directors.
ARTICLE 7
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7.1 A greater than majority shareholder vote shall be required in order to
authorize certain Business Combinations (notwithstanding the fact that no vote
may be required or that a lesser percentage may be required by law), as follows:
(a) In addition to any affirmative vote which may otherwise be
required by law (including, without limitation, the affirmative vote of the
holders of any series of Preferred Stock then outstanding, voting separately as
a class, in the event that such a separate class vote shall be required under
the terms of the resolution of the Board of Directors authorizing the issuance
of such series and designating the rights of the holders thereof), and except as
otherwise expressly provided in Section 7.2 of this Article 7, the affirmative
vote of the holders of not less than 85% of the voting power of the then
outstanding shares of Voting Stock, voting together as a single class, shall be
required in order to authorize the following corporate actions:
(1) any merger or consolidation of the corporation or any
Subsidiary with or into any Interested Shareholder or with or into any other
corporation (whether or not itself an Interested Shareholder) which is, or after
such merger or consolidation would be, an Affiliate or Associate of an
Interested Shareholder;
(2) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (whether in one transaction or in a series of transactions) to, with
or for the benefit of any Interested Shareholder or any Affiliate or Associate
of any Interested Shareholder, of any assets of the corporation or of any
Subsidiary having an aggregate Fair Market Value equal to or greater than 10% of
consolidated shareholders equity as reported in the most recent year-end
financial statement of the corporation;
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(3) any issuance, sale or transfer by the corporation or by any
Subsidiary (whether in one transaction or in a series of transactions) of any
securities of the corporation or of any Subsidiary to any Interested Shareholder
or to any Affiliate or Associate of any Interested Shareholder in exchange for
cash, securities or other consideration having an aggregate Fair Market Value
equal to or greater than 10% of consolidated shareholders equity as reported in
the most recent year-end financial statements of the corporation;
(4) the adoption of any plan or proposal for the liquidation or
dissolution of the corporation proposed by or on behalf of any Interested
Shareholder or any Affiliate or Associate of any Interested Shareholder;
(5) any reclassification of stock (including any reverse stock
split) or recapitalization of the corporation, or any merger or consolidation of
the corporation with or into any Subsidiary or any other transaction (whether or
not with or into or otherwise involving an Interested Shareholder) which has the
effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of stock of the corporation or of any Subsidiary
which is directly or indirectly owned by any Interested Shareholder or by any
Affiliate or Associate of any Interested Shareholder; or
(6) any transaction or series of transactions which is similar in
purpose, form or effect to any of the foregoing.
(b) For purposes of this Article 7, the term "Business Combination"
shall mean any transaction which is referred to in any one or more of clauses
(1) through (6) of Paragraph (a) of Section 7.1 of this Article 7.
7.2 In addition to any affirmative vote which may otherwise be required by
law (including, without limitation, the affirmative vote of the holders of any
series Preferred Stock then outstanding, voting separately as a class, in the
event that such a separate class vote shall be required under the terms of the
resolution of the Board of Directors authorizing the issuance of such series and
designating the rights of the holders thereof), the affirmative vote of the
holders of only 66-2/3% of the voting power of the then outstanding Voting
Stock, voting together as a single class, shall be required in order to
authorize a Business Combination, if all of the conditions specified in either
of the following Paragraphs (a) or (b) are met:
(a) The Business Combination shall have been approved by a majority
of the Continuing Directors; or
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(b) All of the following six conditions shall have been met:
(1) The transaction constituting the Business Combination shall
provide for a consideration to be received by holders of Common Stock in
exchange for their stock, and the aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of Common
Stock in such Business Combination shall be at least equal to the highest of the
following:
(A) the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid in order to
acquire any shares of Common Stock beneficially owned by the Interested
Shareholder which were acquired (i) within the three-year period immediately
prior to the first public announcement of the proposed Business Combination (the
Announcement Date) or (ii) in the transaction in which it became an Interested
Shareholder, whichever is higher;
(B) the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Shareholder became an
Interested Shareholder (the Determination Date), whichever is higher; and
(C) the price per share equal to the Fair Market Value per share
of Common Stock determined pursuant to clause (B) immediately preceding,
multiplied by the ratio of (i) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid in
order to acquire any shares of Common Stock beneficially owned by the Interested
Shareholder which were acquired within the three-year period immediately prior
to the Announcement Date to (ii) the Fair Market Value per share of Common Stock
on the first day in such three-year period on which the Interested Shareholder
beneficially owned any shares of Common Stock.
(2) Whether or not the Interested Shareholder owns any shares of
Preferred Stock, the transaction constituting the Business Combination shall
provide for a consideration to be received by holders of Preferred Stock in
exchange for their stock, and the aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of Preferred
Stock shall be at least equal to the highest of the following:
(A) the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid in order to
acquire any shares of Preferred Stock beneficially owned by the Interested
Shareholder which were acquired (i)
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within the three-year period immediately prior to the Announcement Date or (ii)
in the transaction in which it became an Interested Shareholder, whichever is
higher;
(B) the highest preferential amount per share to which the holders
of shares of Preferred Stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the corporation;
(C) the Fair Market Value per share of Preferred Stock on the
Announcement Date or on the Determination Date, whichever is higher; and
(D) the price per share equal to the Fair Market Value per share of
Preferred Stock determined pursuant to clause (C) immediately preceding,
multiplied by the ratio of (i) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid in
order to acquire any shares of Preferred Stock beneficially owned by the
Interested Shareholder which were acquired within the three-year period
immediately prior to the Announcement Date to (ii) the Fair Market Value per
share of Preferred Stock on the first day in such three-year period on which the
Interested Shareholder beneficially owned any shares of Preferred Stock.
(3) The consideration to be received by holders of Common Stock shall
be in cash or in the same form as the Interested Shareholder has previously paid
for shares of Common Stock. If the Interested Shareholder has paid for shares
of Common Stock with varying forms of consideration, the form of consideration
for Common Stock shall be either cash or the form used to acquire the largest
number of shares of Common Stock previously acquired by it. If the Interested
Shareholder does not own beneficially any shares of Preferred Stock, the
consideration to be received by holders of Preferred Stock shall be in cash. If
the Interested Shareholder owns beneficially any shares of Preferred Stock, the
consideration to be received by holders of Preferred Stock shall be in cash or
in the same form as the Interested Shareholder has previously paid for shares of
Preferred Stock. If the Interested Shareholder has paid for shares of Preferred
Stock with varying forms of consideration, the form of consideration for
Preferred Stock shall be either cash or the form used to acquire the largest
number of shares of Preferred Stock previously acquired by it.
(4) After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business Combination:
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(A) except as approved by a majority of the Continuing Directors,
there shall have been no failure to declare and pay at the regular date therefor
any dividends (whether or not cumulative) payable on any outstanding Preferred
Stock;
(B) except as approved by a majority of the Continuing Directors,
there shall have been no reduction in the annual rate of dividends paid per
share on the Common Stock (adjusted as necessary for recapitalizations and for
stock splits, reverse stock splits, stock dividends and similar transactions
which have the effect of changing the number of outstanding shares of Common
Stock);
(C) such Interested Shareholder shall not have acquired beneficial
ownership of any additional shares of Voting Stock, except as part of the
transaction in which it became an Interested Shareholder; and
(D) such Interested Shareholder shall not have received the benefit,
directly or indirectly (except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the corporation, whether in anticipation of
or in connection with such Business Combination or otherwise.
(5) Such Interested Shareholder shall have taken all action necessary
to ensure that the Board of Directors shall include at all times representation
by Continuing Directors in proportion to the ratio of (i) the voting power of
the Voting Stock not owned beneficially by such Interested Shareholder at any
given time, to (ii) the voting power of all Voting Stock then outstanding.
(6) A proxy statement meeting the requirements of the Securities
Exchange Act of 1934 shall have been mailed to all holders of Voting Stock at
least 30 days prior to the consummation of such Business Combination for the
purpose of soliciting shareholder approval of such Business Combination. Such
proxy statement shall contain at the front thereof, in a prominent place, any
recommendations as to the advisability (or inadvisability) of the Business
Combination which the Continuing Directors, or any of them, may have furnished
in writing and, if deemed advisable by a majority of the Continuing Directors,
an opinion of a reputable investment banking firm as to the fairness (or
unfairness) of the terms of such Business Combination, from the point of view of
the holders of Voting Stock other than the Interested Shareholder (such
investment banking firm to be selected by a majority of the Continuing
Directors, to be furnished with all information it reasonably requests and to be
paid a reasonable fee for its services upon receipt by the corporation of such
opinion).
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7.3 (a) In addition to any affirmative vote which may otherwise be
required by law (including, without limitation, the affirmative vote of the
holders of any series of Preferred Stock then outstanding, voting separately as
a class, in the event that such a separate class vote shall be required under
the terms of the resolution of the Board of Directors authorizing the issuance
of such series and designating the rights of the holders thereof), the
affirmative vote of the holders of 66-2/3% of the voting power of the then
outstanding Voting Stock, voting together as a single class, shall be required
in order to authorize each of the following transactions which is not also a
Business Combination:
(1) Any merger or consolidation of the corporation pursuant to
which the approval of the shareholders of the corporation would be required
under the Business Corporation Law of the Commonwealth of Pennsylvania as then
in effect;
(2) Any merger or consolidation of a Subsidiary, if the surviving
or resulting corporation would not be a Subsidiary;
(3) Any sale, lease, exchange or other disposition of all or
substantially all of the assets of the corporation;
(4) Any acquisition of all or substantially all of the assets of
another corporation in exchange, in whole or in part, for shares of Voting Stock
which, following such acquisition, will constitute more than 50% of the voting
power of the Voting Stock then outstanding; or
(5) Any plan for the dissolution of the corporation.
(b) Any transaction involving the corporation or any Subsidiary which
is not a Business Combination and which is not referred to in Paragraph (a)(1)
through (a)(5) of Section 7.3 shall require only such shareholder approval, if
any, as may be required under (i) the Business Corporation Law of the
Commonwealth of Pennsylvania s then in effect, (ii) the provisions of any other
applicable Article of these Articles of Incorporation, or (iii) the terms of any
resolution of the Board of Directors authorizing the issuance of any series of
Preferred Stock and designating the rights of the holders thereof.
7.4 For purposes of this Article 7, the following terms shall have the
meanings set forth below:
(a) "Person" shall mean any individual, firm, corporation or other
entity.
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(b) "Interested Shareholder" shall mean any person (other than the
corporation or any Subsidiary) which, as of the record date for the
determination of shareholders entitled to vote on a proposed Business
Combination or immediately before the consummation of any such Business
Combination:
(1) Is at such time the beneficial owner, directly or indirectly,
of more than 5% of the voting power of the then outstanding Voting Stock;
(2) Is at such time an Affiliate of the corporation and at any
time within the two-year period immediately prior to such time was the
beneficial owner, directly or indirectly, of more than 5% of the voting power of
the then outstanding Voting Stock; or
(3) Is at such time an assignee of or has otherwise succeeded to
the beneficial ownership of any shares of Voting Stock which were at any time
within the two-year period immediately prior to such time beneficially owned by
any Interested Shareholder, if such assignment or succession shall have occurred
in the course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(c) A person shall be a "beneficial owner" of any shares of Voting
Stock:
(1) Which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly;
(2) Which such person or any of its Affiliates or Associates has
(i) the right to acquire (whether or not such right is exercisable immediately)
pursuant to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or understanding; or
(3) Which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
(d) For purposes of determining whether a person is an Interested
Shareholder pursuant to Paragraph (b) of this Section 7.4, the number of shares
of Voting Stock deemed to be outstanding shall include shares deemed owned by an
Interested Shareholder through application of Paragraph (c) of this Section 7.4,
but shall not include
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any other shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise.
(e) "Affiliate" shall mean any person which directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with the person specified.
(f) The term "Associate" used to indicate a relationship with any
person, means (i) any corporation or other organization (other than the
corporation or a Subsidiary) of which such person is an officer or partner or
is, directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities, (ii) any trust or other estate in which such person has a
substantial beneficial interest or as to which such person serves as trustee or
in a similar fiduciary capacity, and (iii) any relative or spouse of such
person, or any relative of such spouse, who has the same home as such person or
who is a director or officer of the corporation or of any Subsidiary.
(g) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the corporation;
provided, however, that for purposes of the definition of Interested Shareholder
set forth in Paragraph (b) of this Section 7.4, the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity security is
owned, directly or indirectly, by the corporation.
(h) "Continuing Director" shall mean (i) any member of the Board of
Directors of the corporation who is unaffiliated with and is not a
representative of an Interested Shareholder and who was a member of the Board of
Directors prior to the time that any Interested Shareholder became an Interested
Shareholder, and (ii) any successor of a Continuing Director who is unaffiliated
with and is not a representative of an Interested Shareholder and who is
recommended to succeed a Continuing Director by a majority of the Continuing
Directors then on the Board of Directors.
(i) "Fair Market Value" shall mean: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the Composite Tape for New York
Stock Exchange Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding the date in
question on the
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National Association of Securities Dealers, Inc. Automated Quotations System or
any system then in use, or if no such quotations are available, the fair market
value on the date in question of a share of such stock as determined by a
majority of the Continuing Directors in good faith; and (ii) in the case of
property other than cash or stock, the fair market value of such property on the
date in question as determined by a majority of the Continuing Directors in good
faith.
(j) "Voting Stock" shall mean all outstanding shares of capital stock
of the corporation entitled to vote generally in the election of directors.
(k) "Consideration other than cash to be received" as used in
Paragraphs (b)(1) and (b)(2) of Section 7.2 shall include, in the case of any
Business Combination in which the corporation is the surviving corporation, the
shares of Common Stock and the shares of Preferred Stock retained by the holders
thereof.
7.5 A majority of the Continuing Directors shall have the power and duty
to make factual determinations, on the basis of information known to them after
reasonable inquiry, as to all facts relating to the application of this Article
7, including, without limitation, the following:
(a) Whether a person is an Interested Shareholder;
(b) The number of shares of Voting Stock owned beneficially by any
person;
(c) Whether a person is an Affiliate or Associate of another;
(d) Whether a proposed transaction is a Business Combination within
the meaning of Paragraphs (a)(1) through (a)(6) of Section 7.1; and
(e) Whether the conditions set forth in Paragraph (b) of Section 7.2
have been met with respect to any Business Combination.
Any such determination made in good faith shall be binding upon and conclusive
with respect to all parties.
7.6 Nothing contained in this Article 7 shall be construed to relieve any
Interested Shareholder from any fiduciary obligation imposed by law.
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ARTICLE 8
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8. (a) For purposes of this Article 8, the term "Acquisition Proposal"
shall mean any action, proposal, plan or attempt by any person, firm,
corporation or other entity to: (1) make any tender or exchange offer for any
equity security of the corporation, (2) merge or consolidate the corporation or
any subsidiary of the corporation with or into another corporation, (3) purchase
or otherwise acquire all or substantially all of the assets of the corporation
or of any subsidiary of the corporation, or (4) any transaction or series of
transactions similar in purpose, form or effect to any of the foregoing.
(b) The Board of Directors, when evaluating an Acquisition Proposal
shall, in connection with the exercise of its judgment in determining what is in
the best interests of the corporation and its shareholders, give due
consideration to all relevant factors, including, without limitation, the
following:
(1) The adequacy of the offered consideration, not only in
relation to the then current market price of the securities of the corporation,
but also in relation to (i) the historical, present and anticipated future
operating results and financial position of the corporation, (ii) the value of
the corporation in a freely negotiated transaction, and (iii) the prospects and
future value of the corporation as an independent entity;
(2) The social and economic impact which the Acquisition Proposal,
if consummated, would have upon the customers, depositors and employees of the
corporation and its subsidiaries and upon the communities which they serve;
(3) The reputation and business practices and experience of the
offeror and its management and affiliates as they might affect (i) the business
of the corporation and its subsidiaries, (ii) the future value of the securities
of the corporation, and (iii) the customers, depositors and employees of the
corporation and its subsidiaries and the communities which they serve; and
(4) The antitrust and other legal and regulatory issues that might
arise by reason of the Acquisition Proposal.
(c) The Board of Directors may, in its sole discretion, oppose,
recommend or remain neutral with respect to an Acquisition Proposal on the basis
of its evaluation of which is in the best interests of the corporation and its
shareholders.
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(d) In the event that the Board of Directors determines that an
Acquisition Proposal is not in the best interests of the corporation and its
shareholders and should be opposed, it may take any lawful action for this
purpose, including, without limitation, the following:
(1) Advising the shareholders of the corporation of its opposition
to the Acquisition Proposal;
(2) Authorizing the initiation of legal proceedings;
(3) Authorizing the initiation of opposition proceedings before
any regulatory authority having jurisdiction over the Acquisition Proposal;
(4) Authorizing the corporation to acquire its own securities;
(5) Authorizing the corporation to issue authorized but unissued
securities, to sell treasury stock or to grant options with respect thereto; and
(6) Soliciting a more favorable offer from a third party.
ARTICLE 9
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9. (a) No director of the corporation shall be removed from office by
shareholder vote, except as follows:
(1) With cause, by the affirmative vote of the holders of a
majority of the voting power of the then outstanding shares of capital stock of
the corporation entitled to vote generally in the election of directors, voting
together as a single class, at a meeting of shareholders duly convened after
notice to the shareholders of such purpose; or
(2) Without cause, by the affirmative vote of the holders of not
less than 85% of the voting power of the then outstanding shares of capital
stock of the corporation entitled to vote generally in the election of
directors, voting together as a single class, at a meeting of shareholders duly
convened after notice to the shareholders of such purpose.
(b) In the event that the holders of any one or more series of
Preferred Stock shall have the right, voting separately as a class, to elect one
or more directors, the
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provisions of Paragraph (a) of this Article 9 shall not apply with respect to
any director so elected, who may be removed from office by shareholder vote upon
such affirmative vote of the holders of such Preferred Stock as may be specified
in the resolution of the Board of Directors authorizing the issuance of such
Preferred Stock and designating the rights of the holders thereof, or, if no
such vote is specified, upon such affirmative vote of the holders of such
Preferred Stock as may be required under the Business Corporation Law of the
Commonwealth of Pennsylvania as then in effect.
ARTICLE 10
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10. (a) No action required to be taken or which may be taken at any
annual or special meeting of shareholders of the corporation may be taken
without a duly called meeting and the power of the shareholders of the
corporation to consent in writing to action without a meeting is specifically
denied.
(b) A special meeting of the shareholders of the corporation may be
called only by (i) the Chief Executive Officer of the corporation, (ii) the
Executive Committee of the Board of Directors, or (iii) the Board of Directors
pursuant to a resolution adopted by the affirmative vote of a majority of the
whole Board of Directors. Special meetings may not be called by shareholders.
ARTICLE 11
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11. The authority to make, amend, alter, change or repeal the bylaws of
the corporation is hereby expressly and solely granted to and vested in the
Board of Directors, subject always to the power of the shareholders to make,
amend, alter, change or repeal the bylaws of the corporation by the affirmative
vote of the holders of not less than 85% of the voting power of the then
outstanding shares of capital stock of the corporation entitled to vote
generally in the election of directors, voting together as a single class, at a
meeting of shareholders duly convened after notice to the shareholders of such
purpose.
ARTICLE 12
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12. No provision of the Articles of Incorporation of the corporation may
be amended, altered, changed or repealed, except as follows:
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(a) Articles 5, 7, 8, 9, 10, 11, and this Article 12 may be amended,
altered, changed or repealed, or a provision inconsistent therewith may be
adopted, only as follows:
(1) Upon the affirmative vote of: (i) a majority of the Continuing
Directors (as that term is defined in Paragraph (h) of Section 7.4 of Article
7), (ii) a majority of the whole Board of Directors, and (iii) the holders of
not less than 66-2/3% of the voting power of the then outstanding shares of
capital stock of the corporation entitled to vote generally in the election of
directors, voting together as a single class, at a meeting of shareholders duly
convened after notice to the shareholders of such purpose; or
(2) Upon the affirmative vote of the holders of not less than 85% of
the voting power of the then outstanding shares of capital stock of the
corporation entitled to vote generally in the election of directors, voting
together as a single class, at a meeting of shareholders duly convened after
notice to the shareholders of such purpose.
(b) Articles other than those specified in Paragraph (a) of this
Article 12 may be amended, altered, changed or repealed, or a provision
inconsistent therewith may be adopted, only as follows:
(1) Upon the affirmative vote of: (1) a majority of the whole Board
of Directors, and (ii) the holders of not less than a majority of the voting
power of the then outstanding shares of capital stock of the corporation
entitled to vote generally in the election of directors, voting together as a
single class, at a meeting of shareholders duly convened after notice to the
shareholders of such purpose; or
(2) Upon the affirmative vote of the holders of not less than 85% of
the voting power of the then outstanding shares of capital stock of the
corporation entitled to vote generally in the election of directors, voting
together as a single class, at a meeting of shareholders duly convened after
notice to the shareholders of such purpose.
(c) The vote specified in Paragraphs (a) and (b) of this Article 12
shall be in addition to any vote which may otherwise be required by law,
including, without limitation, the affirmative vote of the holders of any series
of Preferred Stock then outstanding, voting separately as a class, in the event
that such a separate class vote shall be required under the terms of the
resolution of the Board of Directors authorizing the issuance of such series and
designating the rights of the holders thereof.
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FULTON FINANCIAL CORPORATION
BYLAWS
Adopted June 30, 1982
Amended September 20, 1983
Amended February 17, 1987
(Effective April 28, 1987)
Amended June 20, 1989
Amended March 20, 1990
(effective April 17, 1990)
Amended October 20, 1998
ARTICLE I
SHAREHOLDER MEETINGS
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Section 1. Annual Meeting. The annual meeting of the shareholders of the
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Company shall be held at the administrative office of the Company at One Penn
Square, Lancaster, Pennsylvania, or at such other place as may be authorized by
the Board of Directors, on such day each year as may be fixed from time to time
by the Board of Directors, or, if no day be so fixed, on the third Tuesday in
April of each year. Directors shall be elected at the annual meeting of the
shareholders and such other business as shall properly come before the meeting
may be transacted.
Section 2. Special Meetings. Special meetings of the shareholders may be
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called at any time by (i) the Chief Executive officer, (ii) the Executive
Committee of the Board of Directors, or (iii) the Board of Directors pursuant to
a resolution adopted by the affirmative vote of a majority of the whole Board of
Directors. Special meetings may not be called by shareholders.
Section 3. Notice of Meetings. Written notice of all meetings of
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shareholders shall be given to each shareholder of record entitled to vote at
the meeting at least ten (10) days prior to the day of the meeting by mail
addressed to the shareholder at his address as it appears on the books of the
Company. Such notice shall state the date, hour and place of the meeting and
shall also state the general nature of the business to be transacted in the case
of a special meeting. Notices shall be deemed to have been delivered when
deposited in the United States mail, postage prepaid, addressed to the
shareholder at his address as it appears on the books of the Company.
Section 4. Record Date. The Board of Directors may fix a date for the
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purpose of determining shareholders entitled to receive notice of and to vote at
any meeting or to receive any dividend, distribution or allotment of rights or a
date for any change, conversion or change of shares by fixing a record date not
more than fifty (50) days prior thereto.
Section 5. Voting List. The officer or agent having charge of the
-----------
transfer books for the shares of the Company shall make, at least five (5) days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting, arranged in alphabetical order, with the
address of and the number of shares held by each. Such list shall be kept on
file at the registered office of the Company until the time of the meeting and
shall be subject to inspection by any shareholder during usual business hours
and shall also be made available for inspection by any shareholder at any time
during the meeting.
Section 6. Quorum and Majority Action. A majority of the outstanding
--------------------------
shares, represented in person or by proxy, shall constitute a quorum at any
meeting of shareholders. A majority of votes cast shall decide each matter
submitted to the shareholders, except in cases where the vote of a larger number
of shares is required under the Articles of Incorporation or by law and except
that in elections of directors, the candidates receiving the highest number of
votes shall be elected.
Section 7. Voting of Shares. Each outstanding share entitled to vote at a
----------------
meeting shall be entitled to one (1) vote on each matter.
Shareholders may vote at any meeting of shareholders by proxy duly
authorized in writing. A proxy shall be valid only for one meeting to be
specified therein and any adjournments of such meeting. Proxies shall be dated
and shall be filed with the Secretary of the Company.
Section 8. Conduct of Meetings. At every meeting of the shareholders, the
-------------------
Chief Executive officer or, in his absence, an officer designated by the Chief
Executive officer, or, in the absence of such designation, a chairman (who shall
be one of the officers, if any is present) chosen by the shareholders of the
Company present, shall act as chairman of the meeting. The chairman of the
meeting shall appoint a person to serve as secretary of the meeting.
2
Section 9. No Action by Written Consent. No action required to be taken
----------------------------
or which may be taken at any annual or special meeting of the shareholders may
be taken without a duly called meeting and the power of the shareholders of the
Company to consent in writing to action without a meeting is specifically
denied.
ARTICLE II
DIRECTORS
---------
Section 1. Powers. The business and affairs of the Company and all
------
corporate powers shall be exercised by or under the authority of the Board of
Directors, subject to any limitation imposed by law, the Articles of
Incorporation, or these Bylaws as to action which requires approval by the
shareholders.
Section 2. Number and Qualifications of Directors. The Board of Directors
--------------------------------------
shall consist of not less than two (2) nor more than thirty-five (35) persons.
The directors shall be classified with respect to the time they shall severally
hold office by dividing them into three (3) classes, each consisting as nearly
as possible of one-third (1/3) of the number of the whole Board of Directors;
provided, however, that nothing herein shall be construed to require exact
equality in the number of directors in each class. At the Annual Meeting of
Shareholders to be held in 1983, the directors of one class shall be elected for
a term of one (1) year; directors of a second class shall be elected for a term
of two (2) years; and directors of a third class shall be elected for a term of
three (3) years and at each Annual Meeting of Shareholders thereafter the
successors to the class of directors whose term shall expire that year shall be
elected to hold office for a term of three (3) years, so that the term of office
of one (1) class of directors shall expire in each year. The directors shall
hold office until the expiration of the term for which they were elected and
until their successors are elected and have qualified. The number of directors
in each class of directors shall be determined by the Board of Directors.
Any person shall be eligible to be elected as a director of the Company,
except that no person shall be nominated who will attain the age of seventy (70)
years on or before the date of the Annual Meeting of Shareholders at which he is
to be elected.
Section 3. Nomination of Directors. Nomination for election to the Board
-----------------------
of Directors may be made by the Board of Directors or by any shareholder
entitled to vote for the election of directors. Each nomination shall specify
the term of office for which the person nominated is to be elected. Nominations,
other than those made by or on behalf of the existing management
3
of the Company, shall be made in writing and shall be delivered or mailed to the
Chief Executive officer not less than fourteen (14) days nor more than fifty
(50) days prior to any meeting of shareholders called for the election of
directors; provided, however, that if less than twenty-one (21) days' notice of
a meeting is given to shareholders, such nominations shall be mailed or
delivered to the Chief Executive Officer not later than the close of business on
the seventh day following the day on which the notice of meeting was mailed. The
notice to the Chief Executive officer of a nomination, other than one made on
behalf of existing management, shall set forth the name, age, residence address,
and principal occupation of the nominee. The chairman of the meeting shall
determine whether nominations have been made in accordance with the requirements
of this Section and, if he determines that a nomination is defective, the
nomination and any votes cast for the nominee shall be disregarded.
Section 4. Election. If directors of more than one class are to be
--------
elected at a meeting of the shareholders by reason of vacancy or otherwise,
there shall be a separate election for each class of directors to be elected at
that meeting.
Section 5. Organizational Meeting. Following the Annual Meeting of
----------------------
Shareholders, the chairman or the secretary of the meeting shall notify the
directors-elect of their election and they shall meet along with the continuing
directors at the first regularly scheduled meeting of the Board of Directors
following such annual meeting for the purpose of organizing the new Board,
appointing officers and transacting such other business as may properly come
before the meeting.
Section 6. Vacancies. A vacancy in the Board of Directors shall occur in
---------
the case of the happening of any of the following events: (a) a director shall
die or resign; (b) the shareholders shall fail to elect the number of directors
authorized to be elected at any meeting of shareholders at which any director is
to be elected; (c) the Board of Directors shall by resolution have elected to
increase the number of directors; (d) the Board of Directors shall declare
vacant the office of any director for such cause as the Board may determine; or
(e) a vacancy shall occur for any other reason.
Any vacancy occurring in the Board of Directors shall be filled by a
majority of the remaining members of the Board of Directors, though less than a
quorum, and each person so elected shall hold office until the next Annual
Meeting of Shareholders and until his successor is duly elected and has
qualified.
4
Section 7. Place of Meetings. All meetings of the Board of Directors shall
-----------------
be held at the administrative office of the Company at One Penn Square,
Lancaster, Pennsylvania or at such other place within or without this
Commonwealth as may be designated from time to time by a majority of the
directors or as may be designated in the notice calling the meeting.
Section 8. Regular Meetings. Regular meetings of the Board of Directors
----------------
shall be held, without call or notice, on the third Tuesday of January, March,
April, June, July, September, October and December or at such other times as a
majority of the Board of Directors may from time to time determine. When any
regular meeting of the Board of Directors falls upon a holiday, the meeting
shall be held on the next business day unless the Board shall designate some
other day.
Section 9. Special Meetings. Special meetings of the Board of Directors
----------------
may be called by the Chief Executive officer or at the request of three (3) or
more directors. Not less than twenty-four (24) hours' notice of the date, time
and place of any special meeting of the Board of Directors shall be given to
each director either: (a) in person; (b) by telephone; or (c) by notice to the
director's personal residence or business address appearing on the books of the
Company by telephone, mail, telegram or written notice delivered to such place.
Section 10. Quorum and Majority Action. A majority of all the members of
--------------------------
the Board of Directors in office shall constitute a quorum for the transaction
of business. If at any time fixed for a meeting, including the meeting to
organize the new Board following the Annual Meeting of Shareholders, a quorum is
not present, the directors in attendance may adjourn the meeting from time to
time until a quorum is obtained and the meeting may be held as adjourned without
further notice. Except as otherwise provided herein, a majority of those
directors present at any meeting of the Board of Directors at which a quorum is
present shall decide each matter considered.
A director may not vote by proxy or otherwise act by proxy at a meeting of
the Board of Directors.
Section 11. Conduct of Meetings. At every meeting of the Board of
-------------------
Directors, the Chairman of the Board or the President, or in their absence, an
officer of the Company designated by one of them, or, in the absence of such
designation, a chairman chosen by a majority of the directors present, shall
preside. A person to be designated by the Chairman of the Board shall serve as
secretary of the Board of Directors.
5
One or more directors may participate in a meeting of the Board of
Directors by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other.
Section 12. Mandatory Retirement. The office of a director shall be
--------------------
considered vacant at the annual meeting of shareholders next following his
attaining the age of seventy (70) years.
Section 13. Compensation. The Board of Directors, by the affirmative vote
------------
of a majority of the directors then in office and irrespective of any personal
interest of any of its members, shall have authority to establish a fee to be
paid to each director for attendance at meetings; provided, however, that no
such fee may be paid to any director who is also a salaried officer of the
Company or of any subsidiary of the Company.
Section 14. Personal Liability of Directors.
-------------------------------
(a) General Rule: A director of the Company shall not be personally
------------
liable for monetary damages for any action taken or any failure to take any
action, except to the extent that exemption from liability for monetary damages
is not permitted under the laws of the Commonwealth of Pennsylvania as now or
hereafter in effect. The provisions of this Subsection (a) are intended to
exempt the directors of the Company from liability for monetary damages to the
maximum extent permitted under the Pennsylvania Directors' Liability Act (42 Pa.
C.S. (S)8361 et seq.) or under any other law now or hereafter in effect.
-- ---
(b) Specific Rule Under Directors' Liability Act: Without limitation
--------------------------------------------
of Subsection (a) above, a director of the Company shall not be personally
liable for monetary damages for any action taken or any failure to take any
action, unless: (i) the director has breached or failed to perform the duties of
his office under Section 8363 of the Directors' Liability Act, and (ii) the
breach or failure to perform constitutes self-dealing, willful misconduct or
recklessness. The provisions of the preceding sentence shall not exempt a
director from: (i) the responsibility or liability of a director pursuant to any
criminal statute; or (ii) the liability of a director for the payment of taxes
pursuant to local, state or federal law.
(c) Modification or Repeal: The provisions of this Section may be
----------------------
modified or repealed by the Board of Directors in accordance with the procedures
for amending these Bylaws; provided, however, that any such modification or
repeal shall not have any effect upon the liability of a director relating to
any action taken, any failure to take any action, or events which
6
occurred prior to the effective date of such modification or repeal.
(d) Effective Date: ThiS Section shall become effective immediately
--------------
following its ratification by the shareholders of the corporation at a meeting
of shareholders duly convened after notice to the shareholders of such purpose.
ARTICLE III
COMMITTEES
----------
Section 1. Authority. The Board of Directors, by resolution adopted by a
---------
majority of the whole Board of Directors, may create such permanent or temporary
committees as the Board of Directors deems necessary for the proper conduct of
the business of the Company. Each committee shall consist of at least three (3)
directors and shall have and may exercise such powers as shall be conferred or
authorized by resolution of the Board and which are not inconsistent with these
Bylaws. The creation of any committee and the delegation to it of authority
shall not relieve the Board of Directors of any responsibility imposed by law
upon it.
Section 2. Appointment of Committees. The Chief Executive officer shall
-------------------------
submit to the Board of Directors, at its first meeting after the Annual Meeting
of Shareholders, his recommendations for the members of and chairmen of each
standing committee. The Board of Directors shall then appoint, in accordance
with such recommendations or otherwise, the members and a chairman for each such
committee. If the appointees accept their appointment, they shall serve for one
(1) year or until their successors are appointed. The Board of Directors may
fill any vacancy occurring on any committee and may remove and replace any
member of any committee. A director may be a member of more than one committee.
The Chairman of the Board and the President shall be ex-officio members of
all committees of the Board of Directors, except the Audit Committee (if one be
appointed).
Section 3. Place and Notice of Meetings. All committee meetings shall be
----------------------------
held at the administrative office of the Company at one Penn Square, Lancaster,
Pennsylvania or at such other place as may be designated by the chairman of the
committee or as may be designated in the notice calling the meeting.
7
Not less than twenty-four (24) hours' notice of the date, time and place of
any special committee meeting shall be given to each member of that committee
either: (a) in person; (b) by telephone; or (c) by notice to the member's
personal residence or business address appearing on the books of the Company by
telephone, mail, telegram, or written notice delivered to such place.
Section 4. Conduct of Committees. A majority of the membership of a
---------------------
committee shall constitute a quorum for the transaction of business; provided,
however, that in any case where the Chairman of the Board and the President are
members ex-officio of a committee and have not been specifically appointed to a
committee by resolution of the Board of Directors, then the number of members of
that committee necessary to constitute a quorum shall be that number which is a
majority of the number of members of that committee other than the ex-officio
members, but, for purposes of determining the presence of a quorum at any
meeting of that committee, any ex-officio members who are present shall be
counted. In any case, ex-officio committee members shall be entitled to vote.
Regular meetings of a committee may be held, without call or notice, at
such times as the committee members decide or as the Board of Directors may
require. Special meetings of a committee may be called at any time by its
chairman or by the Chairman of the Board or by the President. Except for its
chairman (who shall be appointed by the Board of Directors), each committee may
appoint a secretary and such other officers as the committee members deem
necessary. Each committee shall have the power and authority to obtain from the
appropriate officers of the Company all information necessary for the conduct of
the proper business of the committee.
One or more directors may participate in a meeting of a committee by means
of conference telephone or similar communication equipment by means of which all
persons participating in the meeting can hear each other.
Section 5. Executive Committee. There shall be a standing committee of the
-------------------
Board of Directors to be known as the Executive Committee consisting of the
Chief Executive officer and not less than five (5) other directors. Such
committee, during the intervals between meetings of the Board of Directors,
shall exercise all the powers and authority of the Board of Directors in the
management of the affairs of the Company, except the power and authority to do
the following: (a) to fill vacancies in the Board of Directors and the Executive
Committee; (b) to propose to the shareholders amendment of the Articles of
Incorporation; (c)
8
to make, alter, amend or repeal these Bylaws; (d) to adopt or propose to the
shareholders for adoption any plan of merger, consolidation, liquidation, or
dissolution; (e) to approve the sale of substantially all of the assets of the
Company; (f) to approve the sale and issuance of long term debt; (g) to declare
dividends; (h) to authorize the issuance of stock; or (i) to authorize
redemption of stock or distributions to shareholders.
The Executive Committee shall keep minutes of its proceedings and shall
report on its activities at each regular meeting of the Board of Directors.
Meetings of the Executive Committee may be called from time to time by the
persons specified in Section 4 above, or, in their absence or inability to act,
by a Vice-President
ARTICLE IV
OFFICERS
--------
Section 1. Number and Titles. The officers of the Company shall be a
-----------------
Chairman of the Board, a President, one or more Vice-Presidents, a Secretary, a
Treasurer and such other officers as may be appointed by the Board of Directors.
The same person may hold two (2) or more offices, excePt both the offices of
President
Section 2. Election and Term. The officers of the Company, except such
-----------------
officers as may be appointed in accordance with the provisions of Section 4 of
this Article IV, shall be elected annually by the Board of Directors and shall
hold office until they shall resign, shall be removed or otherwise disqualified
to serve, or their successors shall be elected and have qualified.
Section 3. Chief Executive Officer. At the annual organization meeting of
-----------------------
the new Board of Directors, the Board shall designate whether the Chairman of
the Board or the President or both shall have general executive powers and which
one shall be the Chief Executive officer of the Company.
Section 4. Subordinate Officers. The Chief Executive Officer may appoint
--------------------
such other officers or agents as he may deem necessary, subject to the authority
of the Board of Directors to disapprove any such appointment. A subordinate
officer shall hold office for such period, have such authority and perform such
duties as may be determined by the Chief Executive Officer. The Board of
Directors may delegate to any officer or committee the power to appoint
subordinate officers and to specify their duties and authority and to determine
their compensation.
9
Section 5. Chairman of the Board. The Chairman of the Board shall be a
---------------------
member of the Board of Directors. The Chairman of the Board shall, if present,
preside at all meetings of the Board of Directors and shall be an ex officio
member of all committees of the Board of Directors except the Audit Committee
(if one be appointed). The Chairman of the Board shall supervise the
administration of the policies adopted or approved by the Board of Directors and
he shall also have and may exercise such further powers and duties as from time
to time may be conferred upon or assigned to him by the Board of Directors. The
Chairman of the Board shall have authority to sign the share certificates of the
Company.
Section 6. President. The President of the Company shall be a member of
---------
the Board of Directors. In the absence or disability of the Chairman of the
Board, the President shall perform all the duties of the Chairman of the Board.
Subject to such supervisory powers as may be given by the Board of Directors to
the Chairman of the Board, the President shall have and may exercise any and all
powers and duties of supervision, direction and control of the business and
affairs of the Company vested by law, regulation and practice in the office of
President of a corporation and, in addition, he shall also have and may exercise
such further powers and duties as from time to time may be conferred upon or
assigned to him by the Board of Directors. The President shall be an ex-officio
member of all committees of the Board of Directors, except the Audit Committee
(if one be appointed). The President shall have the authority to sign the share
certificates of the Company.
Section 7. Vice-President. Each Vice-President of the Company shall have
--------------
such powers and duties as may be assigned to him by the Board of Directors. one
Vice-President shall be designated by the Board of Directors, in the absence or
inability to act of the President, to perform all of the duties of the
President.
Section 8. Secretary. The Secretary of the Company shall be responsible
---------
for the minute book of the Company. The Secretary shall attest such documents as
may be required and, in addition, shall have and may exercise such further
powers and duties as from time to time may be conferred upon or assigned to him
by the Board of Directors. The Secretary shall have authority to sign the share
certificates of the Company.
10
Section 9. Treasurer. The Treasurer of the Company shall be responsible
---------
for all of the Company's funds and securities, shall be responsible for keeping
complete and accurate records relating thereto, and shall prepare such reports
of the financial condition of the Company as may from time to time be requested
by the Board of Directors. In addition, the Treasurer shall have and may
exercise such further powers and duties as from time to time may be conferred
upon or assigned to him by the Board of Directors.
ARTICLE V
INDEMNIFICATION
---------------
Section 1. General Rule. Subject to the provisions of Section 2 below, the
------------
Company shall, to the fullest extent permitted under the laws of the
Commonwealth of Pennsylvania as now or hereafter in effect, indemnify any person
(and his heirs, executors and administrators) who was or is a party, witness or
other participant, or is threatened to be made a party, witness or other
participant, to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including, without
limitation, actions by or in the right of the Company), by reason of the fact
that he is or was a director or officer of the Company, or is or was serving at
the request of the Company as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, and may, to the fullest
extent permitted under the laws of the Commonwealth of Pennsylvania as now or
hereafter in effect, indemnify any person (and his heirs, executors and
administrators) who was or is a party, witness or other participant, or is
threatened to be made a party, witness or other participant, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including, without limitation, actions by or in
the right of the Company), by reason of the fact that he is or was an employee
or agent of the Company, or is or was serving at the request of the Company as
an employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against all expenses (including attorneys' fees, court
costs, transcript costs, fees of experts and witnesses, travel expenses and all
other similar expenses), judgments, fines, penalties and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding.
11
Section 2. Standard of Conduct. Except as provided in Section 4 below,
-------------------
indemnification shall be provided under Section 1 above only if it is determined
in accordance with the procedure set forth in Section 3 below that: (i) the
person seeking indemnification acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company; and (ii)
the act or failure to act giving rise to the claim for indemnification does not
constitute willful misconduct or recklessness. Notwithstanding the foregoing, no
person shall be indemnified 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.
Section 3. Procedure. Except as provided under Section 4 below,
---------
indemnification under Section 1 above (unless ordered by a court) shall be made
by the Company only as authorized in the specific case upon a determination that
indemnification is proper in the circumstances because the person seeking
indemnification has met the applicable standard of conduct set forth in Section
2 above. All such determinations shall be made in accordance with the following
procedure:
(a) Method of Determination (Directors and Officers): All
------------------------------------------------
determinations with respect to directors and officers shall be made as follows.
(1) If a Change in Control has occurred, unless the person seeking
indemnification shall have requested in writing that such determination be made
in accordance with Subsection (2) below, the determination shall be made by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to the person seeking indemnification; or
(2) If a Change in Control has not occurred, the determination shall
be made by the Board of Directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding in respect of
which indemnification is sought. In the event that such a quorum is not
obtainable, or, even if obtainable, a majority of such quorum so directs, the
determination shall be made by Independent Counsel in a written opinion to the
Board of Directors, a copy of which shall be delivered to the person seeking
indemnification.
12
(b) Method of Determination (Employees and Agents): All
----------------------------------------------
determinations with respect to employees and agents shall be made by the Board
of Directors by majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding in respect of which indemnification is
sought. In the event that such a quorum is not obtainable, or, even if
obtainable, a majority of such quorum so directs, the determination shall be
made by Independent Counsel in a written opinion to the Board of Directors, a
copy of which shall be delivered to the person seeking indemnification.
(c) Selection and Payment of Independent Counsel: In the event that a
--------------------------------------------
determination is to be made by Independent Counsel, such Independent Counsel
shall be selected and his fee paid as follows:
(1) If a Change in Control has not occurred, the Independent Counsel
shall be selected by the Board of Directors and the law firm or person so
selected shall be subject to the approval of the person seeking indemnification,
which approval shall not be unreasonably withheld.
(2) If a Change in Control has occurred, the Independent Counsel
shall be selected by the person seeking indemnification and the law firm or
person so selected shall be subject to the approval of the Board of Directors,
which approval shall not be unreasonably withheld.
(3) The Company shall pay all reasonable fees and expenses of the
Independent Counsel.
(d) No Presumption: The termination of any action, suit or proceeding
--------------
referred to in Section 1 above or of any claim, issue or matter therein, by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not of itself create a presumption that a person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation or that the act or failure to
act giving rise to the claim for indemnification constitutes willful misconduct
or negligence.
Section 4. Successful Defense. Notwithstanding any other provision of this
------------------
Article, to the extent that a person has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section 1
above, or in defense of any claim, issue or matter therein, he shall be
indemnified by the Company against all expenses (including attorneys' fees,
court costs, transcript costs, fees of experts and witnesses,
13
travel expenses and all other similar expenses) actually and reasonably incurred
by him in connection therewith.
Section 5. Advance Payment of Expenses. Subject to such terms, conditions
---------------------------
and limitations, if any, as the Board of Directors may in its discretion
determine to be appropriate, the Company shall (in the case of a director or
officer) and may (in the case of an employee or agent) advance all reasonable
expenses (including attorneys' fees, court costs, transcript costs, fees of
experts and witnesses, travel expenses and all other similar expenses)
reasonably incurred in connection with the defense of or other response to any
action, suit or proceeding referred to in Section 1 above upon receipt of an
undertaking by or on behalf of the person seeking the advance to repay all
amounts advanced if it shall ultimately be determined upon final disposition of
such action, suit or proceeding that he is not entitled to be indemnified by the
Company under the provisions of this Article. Notwithstanding the provisions of
the preceding sentence, the Company shall not be required to make any advance
payment of expenses (or to make any further advance if one or more advances
shall have been previously made) in the event that a determination is made by
the Board of Directors that the making of an advance or further advance would be
inappropriate in the circumstances because there is reason to believe that the
person seeking the advance did not meet the applicable standard of conduct set
forth in Section 2 above.
Section 6. No Duplication of Payments. The Company shall not be liable
--------------------------
under this Article to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that the person seeking indemnification has
otherwise actually received payment under any insurance policy, contract,
agreement or otherwise. In the event that the Company makes an advance payment
of expenses to or on behalf of any person, such person shall repay to the
Company the amount so advanced, if and to the extent that he subsequently
receives payment therefor under any insurance policy, contract, agreement or
otherwise.
Section 7. Insurance. The Company may purchase and maintain at its own
---------
expense one or more policies of insurance to protect itself and to protect any
director, officer, employee or agent of the Company or of another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss incurred by such person in such capacity, whether or not the
Company would have the authority to indemnify such person against any such
expense, liability or loss under this Article or under the laws of the
Commonwealth of Pennsylvania.
14
Section 8. Indemnification Agreements. The Company shall have authority by
--------------------------
vote of a majority of the Board of Directors to enter into an Indemnification
Agreement with any person who may be indemnified by the Company pursuant to the
provisions of this Article or otherwise. Any such Indemnification Agreement may
contain such terms and conditions as a majority of the Board of Directors shall
in the exercise of their discretion determine to be necessary or appropriate,
provided that such terms and conditions may not be inconsistent with the
substantive provisions of this Article. The fact that the Company has not
entered into an Indemnification Agreement with any person shall not in any way
limit the indemnification rights of such person under this Article or otherwise.
Section 9. Non-Exclusivity. The right to indemnification and to the
---------------
payment of expenses incurred in defending against or otherwise responding to any
action, suit or proceeding in advance of its final disposition as set forth in
this Article shall not be exclusive of any other rights which any person may now
have or hereafter acquire under any agreement, vote of shareholders, vote of
disinterested directors, or under any applicable law or under the Articles of
Incorporation of the Company, or otherwise.
Section 10. Certain Definitions. For purposes of this Article, the
-------------------
following terms shall have the meanings set forth below.
(a) Change in Control: Shall mean a change in control of the kind
-----------------
that would be required to be reported in response to Item 1 of Securities and
Exchange Commission Form 8-K promulgated under the Securities Exchange Act of
1934 and as in effect on the effective date of this Article. Without limitation
of the foregoing, a Change in Control of the Company shall be deemed to have
occurred upon the occurrence of any of the following events:
(1) Any person or group of persons acting in concert shall have
acquired, directly or indirectly, beneficial ownership of 20 percent or more of
the outstanding shares of the voting stock of the Company; or
(2) The composition of the Board of Directors of the Company shall
have changed such that during any period of 24 consecutive months, the persons
who at the beginning of such period were members of the Board of Directors cease
for any reason to constitute a majority of the Board of Directors, unless the
nomination or election of each director who was not a director at the beginning
of such period was approved in advance by directors representing not less than
two-thirds of the
15
directors then in office who were directors at the beginning of the period; or
(3) The Company shall be merged or consolidated with or its assets
purchased by another corporation and, as a result of such merger, consolidation
or sale of assets, less than a majority of the outstanding voting stock of the
surviving, resulting or purchasing corporation is owned, immediately after the
transaction, by the holders of the voting stock of the Company outstanding
immediately before the transaction: or
(4) The shareholders of the Company shall have approved any plan or
proposal for the liquidation or dissolution of the Company.
(b) Independent Counsel: Shall mean a law firm, or a member of a law
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firm, that is experienced in matters of corporation law and that has not in the
immediately preceding five years been retained to represent the Company, the
person seeking indemnification or any other party to the action, suit or
proceeding giving rise to the claim for indemnification.
Section 11. Survival of Rights. The indemnification rights provided to a person
under the provisions of this Article shall continue after such person ceases to
be a director, officer, employee or agent of the Company or of another entity,
as to any action taken, any failure to take action, or any events which occurred
while such person was a director, officer, employee or agent of the Company or
of another entity.
Section 12. Modification or Repeal. The provisions of this Article may be
----------------------
modified or repealed by the Board of Directors in accordance with the procedures
for amending these Bylaws; provided, however, that any such modification or
repeal shall not have any effect upon the indemnification rights of any person
as they relate to any action taken, any failure to take action, or events which
occurred prior to the effective date of such modification or repeal.
Section 13. Effective Date. This Article shall become effective
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immediately following its ratification by the shareholders of the Company at a
meeting of shareholders duly convened after notice to the shareholders of such
purpose and shall thereafter be subject to modification or repeal by the Board
of Directors as provided in Section 12 above.
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ARTICLE VI
EMERGENCIES
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Section 1. Emergency Executive Committee. In the event of any
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emergency declared by governmental authority, the result of a regional or
national disaster and of such severity as to prevent the normal conduct and
management of the affairs of the Company by its directors and officers as
contemplated by these Bylaws, any three (3) available directors shall constitute
the Executive Committee and may exercise the full authority of that committee
until such time as a duly elected Board of Directors can again assume full
responsibility for and control of the Company.
ARTICLE VII
AMENDMENT
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Section 1. Procedure. The authority to make, amend, alter, change or
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repeal the Bylaws of the Company is hereby expressly and solely granted to and
vested in the Board of Directors, subject always to the power of the
shareholders to make, amend, alter, change or repeal the Bylaws by the
affirmative vote of the holders of not less than 85% of the voting power of the
then outstanding shares of capital stock of the Company entitled to vote
generally in the election of directors, voting together as a single class, at a
meeting of shareholders duly convened after notice to the shareholders of such
purpose. The authority hereby granted to and vested in the Board of Directors
may be exercised upon the vote of a majority of entire Board of Directors at any
meeting of the Board, provided that 10 days' notice of the proposed amendment
has been given to each director.
ARTICLE VIII
MISCELLANEOUS
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Section 1. Restrictions on Transfer. To the extent that the Rights
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Agreement dated as of June 20, 1989 between the Company and Fulton Bank may be
deemed to impose restrictions on the transfer of securities of the Company, such
restrictions are hereby authorized.
Section 2. Uncertificated Shares. The Board of Directors may, by
---------------------
resolution, designate that any or all classes and series of shares of the
Corporation's stock, or any part thereof, shall be uncertificated shares;
provided, however, that such a designation shall not apply to shares represented
by a certificate until the certificate is surrendered to the Corporation.
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