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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ___________.14a-11(c) or ___________.14a-12
Fulton Financial Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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FULTON FINANCIAL CORPORATION
P.O. BOX 4887
ONE PENN SQUARE
LANCASTER, PENNSYLVANIA 17604
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
TO BE HELD APRIL 18, 2000
-------------------------
TO THE SHAREHOLDERS OF FULTON FINANCIAL CORPORATION:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its directors, the
regular Annual Meeting of the shareholders of FULTON FINANCIAL CORPORATION will
be held on Tuesday, April 18, 2000, at 12:00 noon, at the Hershey Lodge and
Convention Center, West Chocolate Avenue and University Drive, Hershey,
Pennsylvania, for the purpose of considering and voting upon the following
matters:
1. ELECTION OF DIRECTORS. To elect the six nominees listed in the
accompanying Proxy Statement for the terms specified.
2. OTHER BUSINESS. To consider such other business as may properly be
brought before the meeting and any adjournments thereof.
Only those shareholders of record at the close of business on February 28,
2000 shall be entitled to be given notice of, and to vote at the meeting.
It is requested that you promptly execute the enclosed Proxy and return it
in the enclosed postpaid envelope. You are cordially invited to attend the
meeting. Your Proxy is revocable and may be withdrawn at any time before it is
voted at the meeting.
A copy of the Annual Report of Fulton Financial Corporation is enclosed.
*BY ORDER OF THE BOARD OF DIRECTORS
-----------------------------------
*WILLIAM R. COLMERY
-------------------
Secretary
Enclosures
March 9, 2000
<PAGE>
PROXY STATEMENT
Dated and To Be Mailed March 9, 2000
FULTON FINANCIAL CORPORATION
P.O. BOX 4887
ONE PENN SQUARE
LANCASTER, PENNSYLVANIA 17604
(717) 291-2411
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 18, 2000
TABLE OF CONTENTS
-----------------
PAGE
----
GENERAL
- -------
Introduction...................................................................
- ------------
Date, Time and Place of Meeting................................................
- -------------------------------
Shareholders Entitled to Vote..................................................
- -----------------------------
Purpose of Meeting.............................................................
- ------------------
Solicitation of Proxies........................................................
- -----------------------
Revocability and Voting of Proxies.............................................
- -----------------------------------
Voting of Shares and Principal Holders Thereof.................................
- ----------------------------------------------
Shareholder Proposals..........................................................
- ---------------------
Recommendation of the Board of Directors.......................................
- ----------------------------------------
INFORMATION CONCERNING ELECTION OF DIRECTORS
- --------------------------------------------
General Information............................................................
- -------------------
Information about Nominees and Continuing Directors............................
- ---------------------------------------------------
Meetings and Committees of the Board of Directors..............................
- -------------------------------------------------
Compensation of Directors......................................................
- -------------------------
Executive Officers.............................................................
- ------------------
Executive Compensation.........................................................
- ----------------------
Transactions with Directors and Executive Officers.............................
- --------------------------------------------------
Section 16(a) Beneficial Ownership Reporting Compliance........................
- -------------------------------------------------------
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS...............................
- ------------------------------------------------
ADDITIONAL INFORMATION.........................................................
- ----------------------
OTHER MATTERS..................................................................
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GENERAL
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Introduction
- ------------
Fulton Financial Corporation, a Pennsylvania business corporation and
registered bank holding company, was organized pursuant to a plan of
reorganization adopted by Fulton Bank and implemented on June 30, 1982. On that
date, Fulton Bank became a wholly-owned subsidiary of Fulton Financial
Corporation and the shareholders of Fulton Bank became shareholders of Fulton
Financial Corporation. Since that time, Fulton Financial Corporation has
acquired other banks and currently owns the following subsidiary banks: Fulton
Bank, Delaware National Bank, Lebanon Valley Farmers Bank, FNB Bank, N.A., Great
Valley Savings Bank, Hagerstown Trust Company, Lafayette Ambassador Bank,
Swineford National Bank, The Bank of Gloucester County, The Woodstown National
Bank & Trust Company and The Peoples Bank of Elkton. In addition, Fulton
Financial Corporation has five direct, non-banking subsidiaries: Fulton
Financial Realty Company (which owns or leases certain properties on which
facilities of Fulton Bank and Lebanon Valley Farmers Bank are located), Fulton
Life Insurance Company (which reinsures credit life, health and accident
insurance that is directly related to extensions of credit by subsidiary banks
of Fulton Financial Corporation), Central Pennsylvania Financial Corp. (which
owns, directly or indirectly, certain limited partnership interests, principally
in low-moderate income and elderly housing projects), FFC Management, Inc.
(which holds certain investment securities and corporate owned life insurance
policies) and Fulton Financial Advisors, N.A. (which plans to offer fiduciary
and other financial services).
The meeting to which this Proxy Statement relates will be the eighteenth
Annual Meeting of the shareholders of Fulton Financial Corporation.
Date, Time and Place of Meeting
- -------------------------------
The regular Annual Meeting of the shareholders of Fulton Financial
Corporation will be held on Tuesday, April 18, 2000, at 12:00 noon, at the
Hershey Lodge and Convention Center, West Chocolate Avenue and University Drive,
Hershey, Pennsylvania.
Shareholders Entitled to Vote
- -----------------------------
Only those shareholders of record at the close of business on February 28,
2000 shall be entitled to receive notice of, and to vote at the meeting.
Purpose of Meeting
- ------------------
The shareholders will be asked to consider and vote upon the following
matters at the meeting: (i) to elect six directors for the terms specified
herein; and (ii) to consider and vote upon such other business as may be
properly brought before the meeting and any adjournment thereof.
Solicitation of Proxies
- -----------------------
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This Proxy Statement is furnished in connection with the solicitation of
proxies, in the accompanying form, by the Board of Directors of Fulton Financial
Corporation for use at the Annual Meeting of shareholders to be held at 12:00
noon on Tuesday, April 18, 2000, and any adjournments thereof.
The expense of soliciting proxies will be borne by Fulton Financial
Corporation. In addition to the use of the mails, directors, officers and
employees of Fulton Financial Corporation and its subsidiaries may, without
additional compensation, solicit proxies personally or by telephone.
Revocability and Voting of Proxies
- ----------------------------------
The execution and return of the enclosed proxy will not affect a
shareholder's right to attend the meeting and to vote in person. Any proxy given
pursuant to this solicitation may be revoked by delivering written notice of
revocation to William R. Colmery, Secretary of Fulton Financial Corporation, at
any time before the proxy is voted at the meeting. Unless revoked, any proxy
given pursuant to this solicitation will be voted at the meeting in accordance
with the instructions thereon of the shareholder giving the proxy. In the
absence of instructions, all proxies will be voted FOR the election of the six
nominees identified in this Proxy Statement. Although the Board of Directors
knows of no other business to be presented, in the event that any other matters
are properly brought before the meeting, any proxy given pursuant to this
solicitation will be voted in accordance with the recommendations of the
management of Fulton Financial Corporation.
Shares held for the account of shareholders who participate in the Dividend
Reinvestment and Stock Purchase Plan and for the account of employees who
participate in the Employee Stock Purchase Plan will be voted in accordance with
the instructions of each shareholder as set forth in his or her proxy. If a
shareholder who participates in these plans does not return a proxy, the shares
held for the shareholder's account by the Plan Agent will not be voted.
Shares held for the account of employees of Fulton Financial Corporation
and its subsidiaries who participate in the Fulton Financial Stock Fund of the
Fulton Financial Corporation Profit Sharing Plan and Affiliate 401(k) Savings
Plan will be voted by the Plan Trustee in accordance with the instructions of
each participant as set forth in the separate voting instruction sheet sent to
the participant with respect to such shares. Shares held under the Fulton
Financial Stock Fund with respect to which no voting instructions are received
by the Plan Trustee will be voted by the Plan Trustee FOR the election of the
six nominees identified in the Proxy Statement.
Voting of Shares and Principal Holders Thereof
- ----------------------------------------------
At the close of business on February 28, 2000, which is the record date for
determination of shareholders entitled to receive notice of, and to vote at the
meeting and any adjournment thereof, Fulton Financial Corporation had
outstanding 68,156,274 shares of common stock. There is no other class of stock
outstanding. As of the record date, shares of Fulton Financial Corporation
common stock were held by the Trust Departments of the following Fulton
Financial Corporation subsidiaries as sole fiduciary:
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<TABLE>
<S> <C> <C>
Fulton Bank 2,009,473
FNB Bank, N.A. 85,873
Hagerstown Trust Company 122,936
Lafayette Ambassador Bank 38,453
Lebanon Valley Farmers Bank 477,968
The Woodstown National Bank
& Trust Company 52,041
Total: 2,786,744 Shares
=========
</TABLE>
The shares held by the Trust Departments of the foregoing banks as sole
fiduciaries represent in the aggregate approximately 4.09 percent of the total
shares outstanding and will be voted FOR the election of the six nominees
identified in this Proxy Statement.
A majority of the outstanding common stock present in person or by proxy
constitutes a quorum for the conduct of business. The judge of election will
treat shares of Fulton Financial Corporation common stock represented by a
properly signed and returned proxy as present at the Annual Meeting for purposes
of determining a quorum, without regard to whether the proxy is marked as
casting a vote or abstaining. Likewise, the judge of election will treat shares
of common stock represented by "broker non-votes" (i.e., shares of common stock
held in record name by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or persons entitled to vote, (ii) the
broker or nominee does not have discretionary voting power under applicable
rules of the National Association of Securities Dealers, Inc. or the instrument
under which it serves in such capacity, and (iii) over which the record holder
has indicated on the proxy or otherwise notified Fulton Financial Corporation
that it does not have authority to vote such shares on that matter) as present
for purposes of determining a quorum.
Each share is entitled to one vote on all matters submitted to a vote of
the shareholders. A majority of the votes cast at a meeting at which a quorum
is present is required in order to approve any matter submitted to a vote of the
shareholders, except in cases where the vote of a greater number of shares is
required by law or under the Articles of Incorporation or Bylaws. In the case
of the election of directors, the candidates receiving the highest number of
votes, up to the number of directors to be elected, shall be elected to the
Board of Directors. Abstentions and broker non-votes will be counted as shares
that are outstanding, but will not be counted or voted in favor of the election
of directors.
To the knowledge of Fulton Financial Corporation, no person owned of record
or beneficially on the record date more than five percent of the outstanding
common stock of Fulton Financial Corporation.
Shareholder Proposals
- ---------------------
Shareholder proposals intended to be presented at the 2001 Annual Meeting
must be received at the executive offices of Fulton Financial Corporation at One
Penn Square, Lancaster, Pennsylvania not later than November 9, 2000, in order
to be included in the proxy statement and
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proxy form to be prepared by Fulton Financial Corporation in connection with the
2001 Annual Meeting.
Recommendation of the Board of Directors
- ----------------------------------------
The Board of Directors recommends that the shareholders vote FOR the
election of the six nominees identified in this Proxy Statement.
INFORMATION CONCERNING ELECTION OF DIRECTORS
--------------------------------------------
General Information
- -------------------
The Bylaws of Fulton Financial Corporation provide that the Board of
Directors shall consist of not less than two nor more than thirty-five
persons and that the directors shall be classified with respect to the time they
shall severally hold office by dividing them into three classes, each consisting
as nearly as possible of one-third of the number of the whole Board of
Directors. The Bylaws further provide that the directors of each class shall be
elected for a term of three years, so that the term of office of one class of
directors shall expire at the Annual Meeting each year. The Bylaws provide that
the number of directors in each class of directors shall be determined by the
Board of Directors.
A majority of the Board of Directors may increase the number of directors
between meetings of the shareholders. Any vacancy occurring in the Board of
Directors, whether due to an increase in the number of directors, resignation,
retirement, death or any other reason, may be filled by appointment by the
remaining directors. Any director who is appointed to fill a vacancy shall hold
office until the next Annual Meeting of the shareholders and until a successor
is elected and shall have qualified. There is a mandatory retirement provision
in the Bylaws, which states that the office of a director shall be considered
vacant at the Annual Meeting of shareholders next following the director's
attaining the age of 70 years.
William E. Rusling has reached the mandatory retirement age of 70, and, as
required under the Bylaws, will be retiring from the Board of Directors as of
the 2000 Annual Meeting. Daniel M. Heisey will also be retiring from the Board
of Directors as of that date.
The Board of Directors has fixed the number of directors at twenty-three.
There are seventeen continuing directors whose terms of office will expire at
either the 2001 Annual Meeting or the 2002 Annual Meeting. The Board of
Directors proposes to nominate the following six persons for election to the
Board of Directors for the term specified below:
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For a Term of Three Years - Class of 2003
-----------------------------------------
Jeffrey G. Albertson Rufus A. Fulton, Jr.
Harold D. Chubb Eugene H. Gardner
William H. Clark Clyde W. Horst
Each of the above nominees is presently a director of Fulton Financial
Corporation. In addition, each nominee currently serves on one bank subsidiary
board of directors and will continue to serve on such board as follows: Messrs.
Chubb, Fulton, Gardner and Horst - Fulton Bank; Mr. Albertson - The Bank of
Gloucester County; and Mr. Clark - Swineford National Bank.
In the event that any of the foregoing nominees is unable to accept
nomination or election, any proxy given pursuant to this solicitation will be
voted in favor of such other persons as the management of Fulton Financial
Corporation may recommend. However, the Board of Directors has no reason to
believe that any of its nominees will be unable to accept nomination or to serve
as a director if elected.
Section 3 of Article II of the Bylaws of Fulton Financial Corporation
requires that nominations, other than those made by or on behalf of the existing
management of Fulton Financial Corporation, must be made in writing and must be
delivered or mailed to the Chief Executive Officer of Fulton Financial
Corporation not less than 14 days nor more than 50 days prior to the date of the
Annual Meeting; provided, however, that if less than 21 days' notice of the
meeting is given to the shareholders, such nominations must be mailed or
delivered to the Chief Executive Officer of Fulton Financial Corporation not
later than the close of business on the seventh day following the day on which
notice of the meeting was mailed. The required notice must set forth the name,
age, residence address and principal occupation of each nominee. The chairman of
the meeting is required to determine whether nominations have been made in
accordance with the requirements of the Bylaws and, if he determines that a
nomination is defective, the nomination and any votes cast for the nominee shall
be disregarded.
Information about Nominees and Continuing Directors
- ---------------------------------------------------
Information concerning the six persons to be nominated for election to the
Board of Directors of Fulton Financial Corporation at the 2000 Annual Meeting
and concerning the seventeen continuing directors is set forth below, including
the number of shares of Fulton Financial Corporation common stock beneficially
owned, directly or indirectly, as of February 1, 2000 by each of them. Unless
otherwise indicated in a footnote, shares shown as beneficially owned by each
nominee or continuing director are held either (i) individually by the person
indicated, (ii) individually by the person's spouse or children living in the
same household, (iii) jointly with the person's spouse or children living in the
same household, or (iv) in the name of a bank, broker or nominee for the account
of the person or the person's spouse. No nominee or continuing director owns
beneficially more than one percent of the outstanding common stock of Fulton
Financial Corporation, except Samuel H. Jones, Jr., who owns 1.35% percent.
Years of service as a director include service as a director of Fulton Bank
prior to the formation of Fulton Financial Corporation.
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NOMINEES
--------
CLASS OF 2003
-------------
(Three Year Term)
.JEFFREY G. ALBERTSON, age 59. Attorney, Albertson Ward (law firm).
Director since 1996. Shares of stock beneficially owned: 118,665./1/
.HAROLD D. CHUBB, age 67. Retired Director of Finance, Brethren in
Christ Denomination in North America. Director since 1975. Shares of
stock beneficially owned: 28,913./2/
.WILLIAM H. CLARK, JR., age 67. Retired Partner, Clark, Schaeffer,
Jones & Eichner (certified public accountants). Director since 1987.
Shares of stock beneficially owned: 9,421.
.RUFUS A. FULTON, JR., age 59. Chairman of the Board, President and
Chief Executive Officer, Fulton Financial Corporation. Director since
1984. Shares of stock beneficially owned: 258,531./3/
.EUGENE H. GARDNER, age 64. President, Gardner, Russo & Gardner
(investment advisor). Director since 1981. Shares of stock
beneficially owned: 20,192./4/
.CLYDE W. HORST, age 61. Chairman of the Board, The Horst Group,
Inc. (diversified holding company). Director since 1978. Shares of
stock beneficially owned: 52,124.
CONTINUING DIRECTORS
--------------------
CLASS OF 2001
.JAMES P. ARGIRES, M.D., age 68. President, Lancaster Neurosurgical
Associates (neurosurgeon). Director since 1974. Shares of stock
beneficially owned: 18,581.
.DONALD M. BOWMAN, JR., age 61. Chairman of the Board, D. M. Bowman,
Inc. (trucking company). Director since 1994. Shares of stock
beneficially owned: 278,514./5/
.FREDERICK B. FICHTHORN, age 66. Chairman of the Board, F & M Hat
Company (manufacturer and distributor of felt and straw hats).
Director since 1993. Shares of stock beneficially owned: 79,667./6/
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.CHARLES V. HENRY, III, age 65. Attorney, Henry & Beaver, LLP (law
firm). Director since 1998. Shares of stock beneficially owned:
112,424./7/
.JOSEPH J. MOWAD, M.D., age 64. Director of Urology, Geisinger
Medical Center (urologist). Director since 1999. Shares of stock
beneficially owned: 24,237.
.JOHN O. SHIRK, age 56. Attorney, Barley, Snyder, Senft & Cohen, LLC
(law firm). Director since 1983. Shares of stock beneficially owned:
26,318./8/ Mr. Shirk also serves as a director of Irex Corporation,
which is subject to the periodic reporting requirements of Section
15(d) of the Securities Exchange Act of 1934.
.JAMES K. SPERRY, age 67. Retired Executive Vice President, Fulton
Financial Corporation, and Retired Chairman of the Board and Chief
Executive Officer of Fulton Bank. Director since 1984. Shares of
stock beneficially owned: 108,857./9/
.KENNETH G. STOUDT, age 55. President, The Stoudt Companies
(employee benefit consulting company). Director since 1987. Shares
of stock beneficially owned: 51,125.
CLASS OF 2002
.MARTIN D. COHEN, age 57. Attorney, Cohen & Feeley, P.C. (law firm).
Director since 1998. Shares of stock beneficially owned: 121,350./10/
.PATRICK J. FREER, age 50. President, Strickler Insurance Agency,
Inc. (insurance broker). Director since 1996. Shares of stock
beneficially owned: 36,317./11/
.ROBERT D. GARNER, age 66. Retired Chairman of the Board, Fulton
Financial Corporation. Director since 1981. Shares of stock
beneficially owned: 137,084./12/
.J. ROBERT HESS, age 65. President, Lancaster Malleable Castings
Company (manufacturer of malleable iron castings). Director since
1977. Shares of stock beneficially owned: 118,647./13/
.CAROLYN R. HOLLERAN, age 61. Partner, Jerlyn Associates (real
estate investments). Director since 1994. Shares of stock
beneficially owned: 16,025.
.SAMUEL H. JONES, JR., age 66. President, S J Transportation Co.
(trucking company). Director since 1997. Shares of stock
beneficially owned: 925,228. Mr. Jones also serves as a director of
MetaCreations Corp., which is subject to the periodic reporting
requirements of Section 15(d) of the Securities Exchange Act of 1934.
.DONALD W. LESHER, JR., age 55. President, Lesher Mack Sales and
Service (truck dealership). Director since 1998. Shares of stock
beneficially owned: 66,973.
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.STUART H. RAUB, JR., age 66. President, Industrial Piping Systems,
Inc. (distributor of industrial piping and related items). Director
since 1981. Shares of stock beneficially owned: 38,629./14/
.MARY ANN RUSSELL, age 64. Retired President and Chief Executive
Officer, Maple Farm, Inc. (provider of health care services).
Director since 1991. Shares of stock beneficially owned: 14,046.
As of February 1, 2000, Fulton Financial Corporation's directors and
executive officers, as a group, owned of record and beneficially 3,080,215/15/
shares of Fulton Financial Corporation common stock, representing 4.46 percent
of such shares then outstanding.
Footnotes
---------
1. Includes 9,562 shares held in the Albertson Ward Profit Sharing Plan and
18,473 shares which may be acquired pursuant to the exercise of stock
options. Mr. Albertson disclaims beneficial ownership of any of the shares
held in the Albertson Ward Profit Sharing Plan beyond his pro rata vested
interest as a participant in such Plan.
2. Includes 2,510 shares held as custodian for grandchildren.
3. Includes 21,195 shares held in the Corporation's Profit Sharing Plan and
149,440 shares which may be acquired pursuant to the exercise of stock
options.
4. Includes 10,714 shares held in trust.
5. Includes 53,878 shares held by Bowman Sales & Equipment, Inc.
6. Includes 3,664 shares held in the F&M Hat Company Profit Sharing Plan. Mr.
Fichthorn disclaims beneficial ownership of any of the shares held in the
F&M Hat Company Profit Sharing Plan beyond his pro rata vested interest as
a participant in such Plan.
7. Includes 442 shares held in a trust.
8. Includes 1,635 shares held in a trust.
9. Includes 30,366 shares held in the Corporation's Profit Sharing Plan and
13,666 shares which may be acquired pursuant to the exercise of stock
options.
10. Includes 2,955 shares held as custodian for children and 12,250 shares held
by the Martin D. Cohen Foundation.
11. Includes 24,390 shares held by Strickler Insurance Agency, Inc. Mr. Freer
disclaims beneficial ownership of any of these shares beyond his pro rata
interest in the company.
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12. Includes 44,273 shares held in the Corporation's Profit Sharing Plan, 6,048
shares which may be acquired pursuant to the exercise of stock options and
20,840 shares held by his spouse as trustee under various trusts for
grandchildren.
13. Includes 88,200 shares held by Lancaster Malleable Castings Company. Mr.
Hess disclaims beneficial ownership of any of these shares beyond his pro
rata interest in the company.
14. Includes 1,663 shares held in the Industrial Piping Systems, Inc. 401(k)
Plan. Mr. Raub disclaims beneficial ownership of any shares held in the
Industrial Piping Systems 401(k) Plan beyond his pro-rata vested interest
as a participant in such Plan. Also includes 3,899 shares held by a
revocable trust of which his spouse is settlor.
15. Includes 515,797 shares issuable upon the exercise of stock options, which
shares have been treated as outstanding shares for purposes of calculating
the percentage of outstanding shares owned by directors and executive
officers as a group.
Meetings and Committees of the Board of Directors
- -------------------------------------------------
The Board of Directors of Fulton Financial Corporation has a standing Audit
Committee and Human Resources Committee, which serves as the compensation
committee, but does not have a standing Nominating Committee. The Board of
Directors of Fulton Financial Corporation also has a standing Executive
Committee and Trust Committee.
The functions of the Executive Committee of the Board of Directors of
Fulton Financial Corporation include, among other things, consideration of
compensation for executive officers of Fulton Financial Corporation and
presentation of salary recommendations to the Board of Directors for approval.
Members of the Executive Committee during 1999 were J. Robert Hess, Chair, Mrs.
Holleran and Messrs. Bowman, Fichthorn, Fulton, Garner, and Jones. In 1999, Mr.
Fulton was Chief Executive Officer of Fulton Financial Corporation. Mr. Fulton
does not participate in discussions as to his own compensation. The Executive
Committee met two times during 1999.
Members of the Audit Committee during 1999 were Carolyn R. Holleran, Chair,
and Messrs. Argires, Chubb, Clark, Freer, Heisey, Raub and Sperry. The Audit
Committee met eight times during the year. The functions of the Audit Committee
include the following: performing all duties assigned by the Board of
Directors; reviewing with management and independent public accountants the
basis for the reports issued by Fulton Financial Corporation pursuant to federal
and state regulatory requirements; meeting with the independent public
accountants to review the scope of audit services, significant accounting
changes, audit conclusions regarding significant accounting estimates,
assessments as to the adequacy of internal controls and the resolution of any
reportable conditions or weakness, and compliance with laws and regulations;
overseeing the internal audit function; reviewing regulatory examination reports
and management's responses thereto; and reviewing periodic reports from the loan
review function.
Members of the Human Resources Committee during 1999 were John O. Shirk,
Chair, Mrs. Russell and Messrs. Albertson, Bowman, Garner, Jones, Lesher and
Rusling. Mr. Fulton serves as
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an ex-officio member of this Committee. The Committee (and its predecessor, the
Compensation Committee of the Board of Directors of Fulton Bank) met nine times
during the year to review benefit and salary administration programs. The
Committee also reviews increases in salaries for officers and staff members of
Fulton Financial Corporation, except for the executive officers, and makes
recommendations in this regard to the Board of Directors.
Members of the Trust Committee during 1999 were Kenneth G. Stoudt, Chair
and Messrs. Cohen, Fichthorn, Gardner, Henry, Hess, Horst and Mowad. The Trust
Committee met six times during the year. The Trust Committee, which was formed
in 1999, was initially responsible for overseeing the activities of the
Investment Management and Trust Services Department of Fulton Bank and the
retail sales of non-FDIC insured investment products by Fulton Bank and other
Fulton Financial Corporation subsidiaries. In the future, it is expected that
the Trust Committee will oversee the activities of Fulton Financial Advisors,
N.A., a newly formed subsidiary which plans to offer fiduciary and other
financial services.
There were eight meetings of the Board of Directors of Fulton Financial
Corporation and twenty-five meetings of committees of the Board of Directors of
Fulton Financial Corporation during 1999. No director attended fewer than 75
percent of the aggregate number of meetings of the Board of Directors and of the
various committees on which he or she served, except J. Robert Hess, who
attended 74% of the meetings and Martin D. Cohen, who attended 68% of the
meetings.
Compensation of Directors
- -------------------------
Each member of the Board of Directors of Fulton Financial Corporation is
paid an annual fee of $7,500 for his or her services as a director, except that
no fee is paid to any director who is also a salaried officer of Fulton
Financial Corporation or one of its subsidiary banks. In addition, directors
are paid a fee of $300 for each Board of Directors meeting attended. Certain
directors have elected to participate in the Fulton Financial Corporation
Deferred Compensation Plan, under which a director may elect not to receive the
normal director's fees when earned, but instead, to receive them, together with
interest, in a lump sum or in installments over a period of up to twenty (20)
years following retirement.
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Executive Officers
- ------------------
The following persons are the executive officers of Fulton Financial
Corporation:
<TABLE>
<CAPTION>
Name Age Office Held and Term of Office
- ---- --- -------------------------------------------------------------
<S> <C> <C>
Rufus A. Fulton, Jr. 59 Chairman of the Board, President and Chief Executive Officer
of Fulton Financial Corporation since January, 1999;
previously President and Chief Executive of Fulton Financial
Corporation. Member of Senior Management of Fulton
Financial Corporation.
R. Scott Smith, Jr. 52 Executive Vice President of Fulton Financial Corporation and
since July, 1998, Chairman of the Board and Chief Executive
Officer of Fulton Bank; previously President and Chief
Operating Officer of Fulton Bank. Member of Senior
Management of Fulton Financial Corporation and Fulton Bank.
Charles J. Nugent 51 Executive Vice President and Chief Financial Officer of
Fulton Financial Corporation. Member of Senior Management
of Fulton Financial Corporation.
Richard J. Ashby, Jr. 55 Executive Vice President of Fulton Financial Corporation and
President and Chief Operating Officer of Fulton Bank since
January, 1999; previously Chairman of the Board, President
and Chief Executive Officer of Lafayette Ambassador Bank.
Member of Senior Management of Fulton Financial Corporation
and Fulton Bank.
</TABLE>
12
<PAGE>
Executive Compensation
- ----------------------
The following Summary Compensation Table shows all compensation paid by
Fulton Financial Corporation for services rendered during the past three fiscal
years by the Chief Executive Officer and each of the most highly compensated
executive officers whose total annual salary and bonus exceeded $100,000 in
1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
Annual Compensation Long-Term Compensation
------------------- ----------------------
Name and All Other
Principal Position Year Salary Bonus Options Compensation*
- ------------------ ---- ------ ----- ------- -------------
<S> <C> <C> <C> <C> <C>
Rufus A. Fulton, Jr., 1999 $553,703.80 $21,296.30 21,500 $83,055.57
President and Chief 1998 $495,926.08 $19,074.08 21,500 $74,388.91
Executive Officer 1997 $447,777.98 $17,222.23 15,124 $67,166.70
R. Scott Smith, Jr., 1999 $310,074.26 $11,925.93 16,500 $46,511.14
Executive Vice President 1998 $286,722.31 $11,296.30 16,500 $43,008.35
1997 $262,889.12 $10,111.12 11,374 $39,433.37
Charles J. Nugent, 1999 $255,185.31 $ 9,814.82 15,500 $38,277.80
Executive Vice President and 1998 $231,111.40 $ 8,888.90 15,400 $34,666.71
Chief Financial Officer 1997 $207,037.22 $ 7,962.17 10,624 $31,055.58
Richard J. Ashby,Jr. 1999 $224,388.92**** $ 8,407.41 13,000 $33,658.34
Executive Vice President 1998** $204,333.33*** $ 7,666.67 12,700 $ 4,800.00
1997** $192,778.02*** $ 7,222.23 8,749 $ 4,800.00
</TABLE>
* Amounts accrued under the Fulton Financial Corporation Profit Sharing Plan
for the account of each named executive officer (and in the case of Mr.
Ashby in 1997 and 1998, amounts of employer-matched funds contributed under
the Fulton Financial Corporation Affiliates 401(k) Savings Plan for his
account).
** Compensation paid as Chairman of the Board, President and Chief Executive
Officer of Lafayette Ambassador Bank.
*** Includes $5,000, the receipt of which has been deferred pursuant to the
Fulton Financial Corporation Deferred Compensation Plan.
****Includes $10,000, the receipt of which has been deferred pursuant to the
Fulton Financial Corporation Deferred Compensation Plan.
13
<PAGE>
STOCK OPTION GRANTS IN FISCAL YEAR 1999
<TABLE>
<CAPTION>
Potential Realized Value At
% of Total Assumed Annual Rates of
Options Exercise or Stock Price Appreciation for
Options Granted to Base Price Option Term
Name Granted Employees Per Share Expiration Date 5% 10%
---- ------- --------- --------- --------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Rufus A. Fulton, Jr. 21,500 9.18% $20.84 June 30, 2009 $281,782.48 $714,092.00
R. Scott Smith, Jr. 16,500 7.04 20.84 June 30, 2009 216,251.65 548,024.24
Charles J. Nugent 15,500 6.62 20.84 June 30, 2009 203,145.51 514,810.65
Richard J. Ashby, Jr. 13,000 5.55 20.84 June 30, 2009 170,380.07 431,776.66
</TABLE>
14
<PAGE>
AGGREGATED STOCK OPTION EXERCISES IN FISCAL YEAR 1999 AND FISCAL YEAR
END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Unexercised Value of Unexercised
Shares Acquired Value Options at In-the-Money Options at
Name on Exercise* Realized Fiscal Year End** Fiscal Year End*
- ---- ------------ -------- ----------------- ----------------
<S> <C> <C> <C> <C>
Rufus A. Fulton, Jr. 6975 $ 77,360.20 149,440 $634,688.13
R. Scott Smith, Jr. 7970 109,650.10 132,119 707,710.25
Charles J. Nugent 91,478 317,824.20
Richard J. Ashby, Jr. 6756 84,498.57 104,573 574,239.32
</TABLE>
* Restated to reflect a 10% stock dividend paid on June 1, 1999.
** All options are currently exercisable.
15
<PAGE>
Executive Committee Report on Executive Compensation
----------------------------------------------------
Compensation for executive officers of Fulton Financial Corporation is
determined by the Board of Directors after receiving recommendations from the
Executive Committee based upon external salary comparisons and individual
performance. In making recommendations to the Board of Directors regarding the
appropriate levels of executive officer compensation for 1999, the Executive
Committee first considered the executive management tiers and corresponding base
salary ranges which had been developed by Towers Perrin, a consultant on
executive compensation, and approved by the Board of Directors in 1995. This
executive compensation program is based, to a significant degree, on peer group
information, because the Board of Directors believes that Fulton Financial
Corporation must offer competitive salaries in order to attract and retain
qualified executive officers.
In making recommendations to the Board of Directors regarding the
appropriate levels of executive officer compensation for 1999, the Executive
Committee also considered the individual performance factors described in this
paragraph. With regard to the compensation paid to executive officers other
than the Chief Executive Officer, the Executive Committee considered information
provided by the Chief Executive Officer as to each executive officer's level of
individual performance, contribution to the organization, and salary history
during the past five years. With regard to the compensation paid to the Chief
Executive Officer, the Executive Committee considered his performance level, the
results of management decisions made by him, and the earnings of Fulton
Financial Corporation during the previous year. The Executive Committee did not
assign a particular weight to any of the foregoing individual performance
factors, nor did it establish specific target levels for individual performance
or corporate earnings. The compensation recommendations of the Executive
Committee were based on its overall subjective assessment of the value of the
services provided by each executive officer to Fulton Financial Corporation,
after giving careful consideration to the peer group compensation information
described above and the individual performance factors discussed in this
paragraph.
The peer group of bank holding companies chosen by the Executive Committee
for purposes of making a comparative analysis of executive compensation for 1999
did not include all of the same bank holding companies that are incorporated in
the peer group established to compare shareholder returns, as indicated in the
Performance Graph included in this Proxy Statement. The major difference
between the peer groups is that the peer group chosen for executive compensation
analysis included bank holding companies with assets between $2.2 and $7.2
billion from a seven-state region of the Eastern United States that were deemed
to be potential competitors with Fulton Financial Corporation in attracting
executive talent, while the peer group chosen for shareholder return analysis
includes bank holding companies with assets between $2 and $8 billion as of
September 30, 1996 that are located in a nine-state (plus the District of
Columbia) region of the Eastern United States. Both peer groups include bank
holding companies that are comparable to Fulton Financial Corporation in terms
of asset size, although they are not necessarily comparable in terms of
financial performance.
Pursuant to an Incentive Stock Option Plan approved by the Board of
Directors and the shareholders in 1996, Fulton Financial Corporation is
authorized to award incentive stock options and non-qualified stock options to
key employees of Fulton Financial Corporation and its
16
<PAGE>
subsidiaries. These stock options enable the recipients to purchase Fulton
Financial Corporation common stock at the prices designated in the awarded
options. The number of options available for grant in any calendar year is
determined depending upon the performance of Fulton Financial Corporation
measured in terms of total shareholder return relative to a peer group,
determined at the sole discretion of those members of the Executive Committee
who are not eligible to receive options under the Incentive Stock Option Plan
for the immediately preceding five year period. The awards of stock options made
to the executive officers of Fulton Financial Corporation during 1999 were
determined by the Board of Directors based on the recommendations of the
Executive Committee. In making such recommendations, the Executive Committee
considered the number of shares to be optioned and the profitability of Fulton
Financial Corporation as well as information provided by the Chief Executive
Officer concerning each executive officer's level of individual performance and
contribution to the organization. The Executive Committee did not establish
specific target levels for individual performance or corporate profitability.
The Committee believes, however, that awards of stock options and bonuses are an
appropriate means of compensating executive officers based on the performance of
Fulton Financial Corporation.
EXECUTIVE COMMITTEE
-------------------
J. Robert Hess, Chair Robert D. Garner
Donald M. Bowman, Jr. Carolyn R. Holleran
Frederick B. Fichthorn Samuel H. Jones Jr.
Rufus A. Fulton, Jr.*
* During 1999 Mr. Fulton was Chairman of the Board, President and Chief
Executive Officer of Fulton Financial Corporation.
Performance Graph
-----------------
The following graph shows cumulative investment returns to shareholders
based on the assumptions that (A) an investment of $100 was made on December 31,
1994, in each of the following: (i) Fulton Financial Corporation common stock;
(ii) the stock of all United States companies traded on the NASDAQ Stock Market;
and (iii) common stock of the peer group of bank holding companies in a nine-
state (plus the District of Columbia) Eastern United States region with total
assets at September 30, 1996 of $2 to $8 billion; and (B) all dividends were
reinvested in such securities over the past five years.
Comparison of Five Year-Cumulative Total Returns
Fulton Financial Corporation
(Graph gets inserted)
Legend Description
- ------ -----------
17
<PAGE>
FFC FULTON FINANCIAL CORPORATION
NASDAQ NASDAQ Stock Market (U.S. Companies)
Peer Group Self-Determined Peer Group consisting of all bank
holding companies with assets of $2 - $8 billion at
9/30/96 with corporate headquarters in PA, MD, NJ, DE,
OH, NY, DC, VA, WV and NC and not under acquisition
agreement as of 12/31/99
Notes:
- ------
A. The lines represent yearly index levels derived from
compounded daily returns that include all dividends.
B. If the yearly interval, based on the fiscal year-end,
is not a trading day, the preceding trading day is used.
C. The index level for all series was set to 100.0 on
12/31/94.
- --------------------------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
- --------------------------------------------------------------------------------
FFC 100.00 121.10 142.70 243.03 215.60 195.57
- --------------------------------------------------------------------------------
NASDAQ 100.00 141.33 173.89 213.07 300.25 542.43
- --------------------------------------------------------------------------------
Peer Group 100.00 132.91 171.73 287.51 281.99 238.17
- --------------------------------------------------------------------------------
Severance Agreements and Survivors' Benefits
--------------------------------------------
Fulton Financial Corporation has entered into severance agreements with
Messrs. Fulton, Smith, Ashby and Nugent (the "Executives"). Under the terms of
those agreements, certain limited severance benefits are payable in the event
that an Executive is discharged or resigns following, and for reasons relating
to, a change in control of Fulton Financial Corporation. Specifically, in the
event of such a discharge or resignation, the Executive would be entitled to
receive from Fulton Financial Corporation an annual benefit consisting of his
then effective base salary, certain fringe benefits in lieu of coverage under
employee benefit plans and a supplemental retirement benefit in lieu of his
continuing participation in the Fulton Financial Corporation Employee Retirement
Plan. Such benefits would be payable, in the case of Mr. Fulton, for a period
of five years and, in the cases of Messrs. Smith, Ashby and Nugent, for a period
of three years, beginning on the date of the Executive's discharge or
resignation and continuing until (i) he elects to terminate benefits in order to
accept employment with another financial services institution; (ii) the end of
the year in which he attains the age of 65; or (iii) he dies, whichever first
occurs.
Officers of Fulton Financial Corporation, Fulton Bank, and Lebanon Valley
Farmers Bank as of April 1, 1992, who had been employed by the Corporation for
at least five years as of that date, are eligible to participate in a survivors'
benefit program. This program provides the employee's spouse, in the event of
the employee's death prior to retirement, with an annual income equal to the
lesser of $25,000 or 25 percent of the employee's final annual salary. This
benefit is paid from the date of death until the employee's 65th birthday with a
minimum of ten annual payments. Messrs. Fulton, Smith and Ashby participate in
this program.
Transactions with Directors and Executive Officers
- --------------------------------------------------
18
<PAGE>
Some of the directors and executive officers of Fulton Financial
Corporation and the companies with which they are associated were customers of,
and had banking transactions with Fulton Financial Corporation bank subsidiaries
during 1999. All loans and commitments to lend made to such persons and to the
companies with which they are associated were made in the ordinary course of
bank business, on substantially the same terms (including interest rates,
collateral and repayment terms) as those prevailing at the time for comparable
transactions with other persons, and did not involve more than a normal risk of
collectibility or present other unfavorable features. It is anticipated that
similar transactions will be entered into in the future.
Some of the directors of Fulton Financial Corporation are members of law
firms which provided legal services to Fulton Financial Corporation or its
subsidiaries in 1999 and prior years. The law firm of Albertson Ward, Woodbury,
New Jersey, has provided legal services to The Bank of Gloucester County, a
subsidiary of Fulton Financial Corporation, for many years. In 1999, Albertson
Ward was paid $130,526 in fees for such services, which constituted more than
five percent (5%) of its gross revenues. Director Jeffrey G. Albertson is a
partner in this firm. The law firm of Barley, Snyder, Senft & Cohen, LLC,
Lancaster, Pennsylvania, provided legal services to Fulton Financial Corporation
and its subsidiaries in 1999. John O. Shirk, a director of Fulton Financial
Corporation, is a partner in this law firm. The law firm of Henry & Beaver,
LLP, Lebanon, Pennsylvania, has, for many years, provided legal services to
Lebanon Valley National Bank, which was merged with a subsidiary of Fulton
Financial Corporation in 1998 to form Lebanon Valley Farmers Bank. In 1999, it
provided legal services to Lebanon Valley Farmers Bank. Director Charles V.
Henry, III is a partner in this law firm. In each case, the law firm is
expected to continue to provide legal services to Fulton Financial Corporation
or its subsidiaries in the future.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the directors
and executive officers of Fulton Financial Corporation to file with the
Securities and Exchange Commission initial reports of ownership and reports of
change in ownership of common stock and other equity securities of Fulton
Financial Corporation. To the knowledge of Fulton Financial Corporation, all
Section 16(a) filing requirements applicable to its directors and executive
officers have been complied with, except in the case of Martin D. Cohen, a
report of a sale of shares in a brokerage account required to be filed on or
before September 10, 1999, was filed later on October 4, 1999; in the case of
Frederick B. Fichthorn, a late filing was made because he was unaware that
shares owned by the Profit Sharing Plan of F&M Hat Company were reportable by
him even though he has only an undivided pro rata interest in such shares; and
in the case of Stuart H. Raub, Jr., late filings were made because he was
unaware that shares owed by the Industrial Piping Systems, Inc. 401(k) Plan were
reportable by him, even though he has only an undivided pro rata interest in
such shares and also because he was unaware that shares which he received as a
beneficiary of an estate and shares purchased in a revocable trust of which his
wife was settlor were reportable by him. In each case, the failure to file
timely reports was inadvertent.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
------------------------------------------------
19
<PAGE>
For the year ended December 31, 1999, Fulton Financial Corporation engaged
Arthur Andersen LLP, independent certified public accountants, to audit the
Corporation's financial statements. The appointment of Arthur Andersen LLP for
the current year will be reviewed in the second quarter of 2000.
Representatives of Arthur Andersen LLP are expected to be present at the 2000
Annual Meeting with the opportunity to make a statement and to be available to
respond to appropriate questions.
ADDITIONAL INFORMATION
----------------------
A copy of the Annual Report of Fulton Financial Corporation on Form 10-K
-------------------------------------------------------------------------
as filed with the Securities and Exchange Commission, including financial
- --------------------------------------------------------------------------
statements and financial statement schedules, is available without charge to
- ----------------------------------------------------------------------------
shareholders upon written request addressed to William R. Colmery, Secretary,
- -----------------------------------------------------------------------------
Fulton Financial Corporation, P.0. Box 4887, Lancaster, Pennsylvania 17604.
- ---------------------------------------------------------------------------
OTHER MATTERS
-------------
The Board of Directors of Fulton Financial Corporation knows of no matters
other than those discussed in this Proxy Statement which will be presented at
the 2000 Annual Meeting. However, if any other matters are properly brought
before the meeting, any proxy given pursuant to this solicitation will be voted
in accordance with the recommendations of the management of Fulton Financial
Corporation.
BY ORDER OF THE BOARD OF DIRECTORS
RUFUS A. FULTON, JR.
Chairman of the Board, President and
Chief Executive Officer
Lancaster, Pennsylvania
March 9, 2000
20
<PAGE>
[FRONT SIDE]
PROXY FULTON FINANCIAL CORPORATION PROXY
LANCASTER, PENNSYLVANIA
The undersigned hereby appoints Thomas D. Caldwell, Jr., David S. Etter and
Arthur M. Peters, Jr., or any one of them, as proxies, with full power of
substitution, to represent and vote, as designated below, all of the Fulton
Financial Corporation common stock: (i) held of record by the undersigned on
February 28, 2000, and (ii) which the undersigned is otherwise entitled to vote
at the Annual Meeting of shareholders to be held on Tuesday, April 18, 2000, at
12:00 noon, at the Hershey Lodge and Convention Center, West Chocolate Avenue
and University Drive, Hershey, Pennsylvania, or any adjournment thereof.
DIRECTORS RECOMMEND A "FOR" VOTE FOR THE FOLLOWING MATTER:
ELECTION OF DIRECTORS (check one block) FOR
FOR A THREE YEAR TERM: Jeffrey G. Albertson, Harold D. Chubb, William H.
Clark, Rufus A. Fulton, Jr., Eugene H. Gardner
and Clyde W. Horst
For, except vote withheld from the following
nominee(s):
--------------------------------------------
WITHHELD as to all nominees
(Continued, and to be signed, on the other side)
<PAGE>
[BACK SIDE]
(Continued from the other side)
This proxy is solicited by the Board of Directors and will be voted as
directed. If no directions are given, this proxy will be voted FOR the election
of the nominees listed.
This proxy also confers authority to vote on any other business that may be
properly brought before the meeting or any adjournment thereof. If any other
business is presented at the meeting, the shares represented by this proxy will
be voted in accordance with the recommendation of the management of Fulton
Financial Corporation.
Date:________________, 2000
---------------------------
Signature
---------------------------
Signature
Please sign exactly as your name appears
hereon. If stock is held in joint names,
each joint owner should sign. If signing
for a corporation or partnership or as
attorney or fiduciary, indicate your
Please mark, sign, date and mail full title. If more than one fiduciary
this proxy promptly in the postage has authority over the stock, all should
prepaid return envelope provided. sign.
-2-
