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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 27, 1998
KEYSTONE HERITAGE GROUP, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-13775 23-2219740
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
555 Willow Street
Lebanon, Pennsylvania 17046
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (717) 274-6800
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 2. Acquisition or Disposition of Assets.
On March 27, 1998 (the "Effective Date"), Keystone Heritage Group,
Inc., a Pennsylvania corporation ("Keystone"), was merged (the "Merger") with
and into Fulton Financial Corporation, a Pennsylvania corporation ("Fulton"),
pursuant to a Merger Agreement dated as of August 15, 1997 (the "Merger
Agreement"), by and between Keystone and Fulton. On the Effective Date, all of
the Common Shares of Keystone outstanding were converted into and became 1.83
Common Shares of Fulton.
In connection with the transactions contemplated by the Merger
Agreement, Keystone and Fulton entered into a Warrant Agreement dated as of
August 15, 1997 (the "Warrant Agreement"), pursuant to which Keystone granted
Fulton a Warrant to purchase up to 981,740 Common Shares of Keystone, at a
purchase price of $36.75 per share, subject to adjustment as provided therein
(the "Warrant"). The Warrant was not exercised, and it terminated by its terms
on the Effective Date.
Also in connection with the Merger, Lebanon Valley National Bank, a
wholly-owned subsidiary of Keystone ("Lebanon"), entered into Employment
Agreements dated as of August 15, 1997 with each of Albert B. Murry, the
President and Chief Executive Officer of Lebanon ("Murry"), and Kurt A.
Phillips, the Executive Vice President and Chief Financial Officer of Lebanon
("Phillips"), pursuant to which Murry and Phillips shall each serve in their
current positions for a term of four years and three years, respectively,
following the Effective Date.
Pursuant to the Merger Agreement, for a period from the Effective Date
through a date determined by Fulton (not to be before five years after the
Effective Date), Fulton shall (subject to the right of Fulton to terminate such
obligations as a result of regulatory considerations, safe and sound banking
practices, or their fiduciary duties by Fulton's directors): offer appointment
to all present directors of Lebanon who indicate their desire to serve (the
"LVNB Continuing Directors") to the board of directors of Lebanon Valley Farmers
Bank, a wholly-owned subsidiary of Fulton formed pursuant to the merger on the
Effective Date of Lebanon and Farmers Trust Bank, a wholly-owned subsidiary of
Fulton, provided, that (A) each non-employee LVNB Continuing Director shall
receive director's fees from Lebanon Valley Farmers Bank in the form of an
annual retainer of $9,000 and (B) each LVNB Continuing Director shall be subject
to Fulton's mandatory retirement rules for directors. Albert B. Murry is to be
appointed chairman of the board and chief executive officer of Lebanon Valley
Farmers Bank.
Pursuant to the Merger Agreement, Fulton has agreed to appoint to
Fulton's Board of Directors on or promptly after the Effective Date, two of
Keystone's current directors to serve as
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directors of Fulton. Keystone's initial designees to Fulton's Board will be
Charles V. Henry, III, and Donald W. Lesher, Jr., current directors of Keystone.
During the five-year period after the Effective Date, the Fulton Board of
Directors shall nominate such designees for election, and support their
election, at each annual meeting of shareholders of Fulton at which such
designees' terms expire. During such period, in the event either of such
designees shall cease to serve as a director of Fulton, the LVNB Continuing
Directors shall have the right to designate one other person then serving on the
Board of Directors of Lebanon Valley Farmers Bank to serve as a director of
Fulton (subject to the reasonable concurrence of Fulton as to the person
designated.)
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Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(b) Pro Forma Financial Information
Reference is made to the Registration Statement on Form S-4
(Registration No. 333-41335) filed with the SEC on December 2, 1997 as amended
by Pre-Effective Amendment No. 1 filed with the SEC on January 8, 1998.
(c) Exhibits
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Exhibit Number
(Referenced to
Item 601 of
Regulation S-K) Description of Exhibit
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2
Merger Agreement dated August 15,
1997 by and between Keystone
Heritage Group, Inc. and Fulton
Financial Corporation (incorporated
by reference to Exhibit 2 to
Keystone's Form 8-K Current
Report filed with the SEC on
September 10, 1997).
10.1 Warrant Agreement dated August 15,
1997 by and between Keystone
Heritage Group, Inc. and Fulton
Financial Corporation (incorporated
by reference to Exhibit 10.1 to
Keystone's Form 8-K Current
Report filed with the SEC on
September 10, 1997).
10.2 Employment Agreement dated
August 15, 1997 by and between
Lebanon Valley National Bank
and Albert B. Murry
(incorporated by reference to
Exhibit 10.2 to Keystone's
Form 8-K Current Report filed
with the SEC on September 10,
1997).
10.3 Employment Agreement dated
August 15, 1997 by and between
Lebanon Valley National Bank
and Kurt A. Phillips (incorporated by
reference to Exhibit 10.3 to
Keystone's Form 8-K Current
Report filed with the SEC on
September 10, 1997).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KEYSTONE HERITAGE GROUP, INC.
Date: March 27, 1998 By: /s/ Albert B. Murry
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Albert B. Murry,
President and Chief
Executive Officer
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EXHIBIT INDEX
Exhibit Description of Exhibit
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2 Merger Agreement dated August 15, 1997 by and
between Keystone Heritage Group, Inc. and Fulton
Financial Corporation (incorporated by
reference to Exhibit 2 to Keystone's Form
8-K Current Report filed with the SEC on
September 10, 1997).
10.1 Warrant Agreement dated August 15, 1997 by and
between Keystone Heritage Group, Inc. and Fulton
Financial Corporation (incorporated by
reference to Exhibit 10.1 to Keystone's Form
8-K Current Report filed with the SEC on
September 10, 1997).
10.2 Employment Agreement dated August 15, 1997 by
and between Lebanon Valley National Bank
and Albert B. Murry (incorporated by reference to
Exhibit 10.2 to Keystone's Form 8-K Current
Report filed with the SEC on September 10,
1997).
10.3 Employment Agreement dated August 15, 1997 by
and between Lebanon Valley National Bank
and Kurt A. Phillips (incorporated by reference
to Exhibit 10.3 to Keystone's Form 8-K Current
Report filed with the SEC on September 10,
1997).
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