8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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) January 16, 2003 (January 16, 2003)

Fulton Financial Corporation.

(Exact name of registrant as specified in its charter)

Pennsylvania	0-10587	23-2195389
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

One Penn Square, P.O. Box 4887, Lancaster, PA 17604

(Address of principal executive offices) (Zip Code)

717-291-2411

Registrant’s telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report.)

Item 5.     Other Events

On January 16, 2003, Fulton Financial Corporation (“Fulton”) entered into a definitive Agreement and Plan of Merger (the “Agreement”) with Premier Bancorp, Inc. (“Premier”). Under the Agreement, Premier will merge (the “Merger”) with and into Fulton, with Fulton surviving, and all of the outstanding shares of the common stock of Premier (“Premier Common Stock”) will be converted into shares of the common stock of Fulton (“Fulton Common Stock”). Following the Merger, Premier’s wholly-owned banking subsidiary, Premier Bank, will continue operations as a subsidiary of Fulton.

Under the terms of the Agreement, shares of Premier Common Stock will be exchanged for shares of Fulton Common Stock on the effective date of the Merger based on an exchange ratio of 1.34 shares of Fulton Common Stock for each share of Premier Common Stock outstanding. Each option to acquire shares of Premier Common Stock which is outstanding on the effective date of the Merger will be exchanged for options to acquire Fulton Common Stock, with the number of shares subject to such options and the exercise price adjusted appropriately based on the exchange ratio. The outstanding shares of Premier’s preferred stock are expected to be redeemed in connection with the transaction.

Consummation of the Merger is subject to various conditions, including, among others, the approval of the Merger by applicable bank regulatory authorities and the approval of the Agreement and the Merger by the shareholders of Premier. Premier has the right to terminate the Agreement under certain circumstances based on the market price of Fulton Common Stock. In connection with the execution of the Agreement, Premier has granted Fulton an option to acquire 835,000 shares (subject to adjustment) of Premier Common Stock at an exercise price of 17.85 per share, such option to be exercisable only upon the occurrence of certain events.

Assuming that all conditions are satisfied without unexpected delay, it is anticipated that the effective date of the Merger will occur during the third quarter of 2003.

Pursuant to General Instruction F to Form 8-K, the press release announcing the execution of the Agreement is attached as an exhibit to this Current Report and is incorporated herein by reference.

Item 7.     Financial Statements and Exhibits.

(c)    Exhibits.

Pursuant to Item 7(c) of Form 8-K, Fulton hereby files the following exhibits in accordance with Item 601 of Regulation S-K:

2

Number	Title
2.1	Agreement and Plan of Merger, dated January 16, 2003, between Fulton Financial Corporation and Premier Bancorp, Inc.
99.1	Warrant Agreement, dated January 16, 2003, between Fulton Financial Corporation and Premier Bancorp, Inc.
99.2	Warrant, dated January 16, 2003
99.3	Press Release dated January 16, 2003
99.4	Transaction Information

3

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.

	FULTON FINANCIAL CORPORATION
Date: January 16, 2003	By:	/s/ Charles J. Nugent
	Name:	Charles J. Nugent
	Title:	Executive Vice President and Chief Financial Officer

4

EXHIBIT INDEX

Page Number

in Manually

Signed Original

2.1	Agreement and Plan of Merger, dated January 16, 2003, between Fulton Financial Corporation and Premier Bancorp, Inc.
99.1	Warrant Agreement, dated January 16, 2003, between Fulton Financial Corporation and Premier Bancorp, Inc.
99.2	Warrant, dated January 16, 2003
99.3	Press Release dated January 16, 2003
99.4	Transaction Information

5

EX-2.1

                                                                     Exhibit 2.1


                          Agreement and Plan of Merger

                                 By and Between

                              Premier Bancorp, Inc.

                                       and

                          Fulton Financial Corporation

                                January 16, 2003



                                TABLE OF CONTENTS

                                                                        
ARTICLE I - THE MERGER                                                       8
  Section 1.1  Merger                                                        8
  Section 1.2  Name                                                          9
  Section 1.3  Articles of Incorporation                                     9
  Section 1.4  Bylaws                                                        9
  Section 1.5  Directors and Officers                                        9

ARTICLE II - CONVERSION OF SHARES AND EXCHANGE OF STOCK CERTIFICATES         9
  Section 2.1  Conversion of Shares                                          9
  Section 2.2  Exchange of Stock Certificates                               10
  Section 2.3  Treatment of Outstanding Premier Options                     12
  Section 2.4  Reservation of Shares                                        13
  Section 2.5  Taking Necessary Action                                      13
  Section 2.6  Press Releases, Etc                                          13
  Section 2.7  Fulton Common Stock                                          13
  Section 2.8  No Dissenters' Rights                                        13
  Section 2.9  Premier Preferred Stock                                      14
  Section 2.10 Certain Actions                                              14

ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PREMIER                     14
  Section 3.1  Authority                                                    14
  Section 3.2  Organization and Standing                                    15
  Section 3.3  Subsidiaries                                                 15
  Section 3.4  Capitalization                                               15
  Section 3.5  Charter, Bylaws and Minute Books                             16
  Section 3.6  Financial Statements                                         16
  Section 3.7  Absence of Undisclosed Liabilities                           16
  Section 3.8  Absence of Changes                                           17
  Section 3.9  Dividends, Distributions and Stock Purchases                 17
  Section 3.10 Taxes                                                        17
  Section 3.11 Title to and Condition of Assets                             17
  Section 3.12 Contracts                                                    18
  Section 3.13 Litigation and Governmental Directives                       19
  Section 3.14 Compliance with Laws; Governmental Authorizations            20
  Section 3.15 Insurance                                                    20
  Section 3.16 Financial Institutions Bonds                                 20
  Section 3.17 Labor Relations and Employment Agreements                    21
  Section 3.18 Employee Benefit Plans                                       21
  Section 3.19 Related Party Transactions                                   22
  Section 3.20 No Finder                                                    22



                                       -2-



                                                                          
  Section 3.21 Complete and Accurate Disclosure                              22
  Section 3.22 Environmental Matters                                         22
  Section 3.23 Proxy Statement/Prospectus                                    23
  Section 3.24 SEC Filings                                                   23
  Section 3.25 Reports                                                       23
  Section 3.26 Loan Portfolio of Premier Bank                                24
  Section 3.27 Investment Portfolio                                          24
  Section 3.28 Regulatory Examinations                                       24
  Section 3.29 Regulatory Agreements                                         25
  Section 3.30 Beneficial Ownership of Fulton Common Stock                   25
  Section 3.31 Fairness Opinion                                              25

ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF FULTON                        25
  Section 4.1  Authority                                                     25
  Section 4.2  Organization and Standing                                     26
  Section 4.3  Capitalization                                                26
  Section 4.4  Articles of Incorporation and Bylaws                          26
  Section 4.5  Subsidiaries                                                  26
  Section 4.6  Financial Statements                                          27
  Section 4.7  Absence of Undisclosed Liabilities                            27
  Section 4.8  Absence of Changes; Dividends, Etc                            27
  Section 4.9  Litigation and Governmental Directives                        27
  Section 4.10 Compliance with Laws; Governmental Authorizations             28
  Section 4.11 Complete and Accurate Disclosure                              28
  Section 4.12 Labor Relations                                               28
  Section 4.13 Employee Benefits Plans                                       29
  Section 4.14 Environmental Matters                                         29
  Section 4.15 SEC Filings                                                   29
  Section 4.16 Proxy Statement/Prospectus                                    29
  Section 4.17 Regulatory Approvals                                          30
  Section 4.18 No Finder                                                     30
  Section 4.19 Taxes                                                         30
  Section 4.20 Title to and Condition of Assets                              30
  Section 4.21 Contracts                                                     30
  Section 4.22 Insurance                                                     31
  Section 4.23 Reports                                                       31

ARTICLE V - COVENANTS OF PREMIER                                             31
  Section 5.1 Conduct of Business                                            31
  Section 5.2 Best Efforts                                                   34
  Section 5.3 Access to Properties and Records                               34
  Section 5.4 Subsequent Financial Statements                                35
  Section 5.5 Update Schedules                                               35
  Section 5.6 Notice                                                         35
  Section 5.7 No Solicitation                                                35



                                       -3-



                                                                          
  Section 5.8  Affiliate Letters                                             38
  Section 5.9  No Purchases or Sales of Fulton Common Stock During Price
      Determination Period                                                   38
  Section 5.10 Dividends                                                     38

ARTICLE VI - COVENANTS OF FULTON                                             39
  Section 6.1  Best Efforts                                                  39
  Section 6.2  Access to Properties and Records                              40
  Section 6.3  Subsequent Financial Statements                               40
  Section 6.4  Update Schedules                                              40
  Section 6.5  Notice                                                        40
  Section 6.6  No Purchase or Sales of Fulton Common Stock During Price
      Determination Period                                                   41
  Section 6.7  Assumption of Premier Debentures                              41
  Section 6.8  Employment Arrangements                                       41
  Section 6.9  Insurance; Indemnification                                    42
  Section 6.10 Appointment of Fulton Director                                43
  Section 6.11 Continuation of Premier Bank's Structure, Name and Directors  43

ARTICLE VII - CONDITIONS PRECEDENT                                           44
  Section 7.1  Common Conditions                                             44
  Section 7.2  Conditions Precedent to Obligations of Fulton                 46
  Section 7.3  Conditions Precedent to the Obligations of Premier            49

ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER                             51
  Section 8.1  Termination                                                   51
  Section 8.2  Effect of Termination                                         52
  Section 8.3  Amendment                                                     53
  Section 8.4  Waiver                                                        53

ARTICLE IX - CLOSING AND EFFECTIVE TIME                                      53
  Section 9.1  Closing                                                       53
  Section 9.2  Effective Time                                                54

ARTICLE X - NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES                    54
  Section 10.1 No Survival                                                   54

ARTICLE XI - GENERAL PROVISIONS                                              54
  Section 11.1 Expenses                                                      54
  Section 11.2 Other Mergers and Acquisitions                                54
  Section 11.3 Notices                                                       55
  Section 11.4 Counterparts                                                  55
  Section 11.5 Governing Law                                                 55
  Section 11.6 Parties in Interest                                           55



                                      -4-



                                                                    
  Section 11.7 Disclosure Schedules.                                     56
  Section 11.8 Entire Agreement                                          56

  

                                       -5-



                               INDEX OF SCHEDULES

Schedule 2.3         Premier Options

Schedule 3.7         Undisclosed Liabilities

Schedule 3.8         Changes

Schedule 3.9         Dividends, Distributions and Stock Purchases

Schedule 3.10        Taxes

Schedule 3.11        Title to and Condition of Assets

Schedule 3.12        Contracts

Schedule 3.13        Litigation and Governmental Directives

Schedule 3.14        Compliance with Laws; Governmental Authorizations

Schedule 3.15        Insurance

Schedule 3.16        Financial Institutions Bonds

Schedule 3.17        Labor Relations and Employment Agreements

Schedule 3.18        Employee Benefit Plans

Schedule 3.19        Related Party Transactions

Schedule 3.20        Finders

Schedule 3.22        Environmental Matters

Schedule 3.26        Loan Portfolio

Schedule 3.27        Investment Portfolio

Schedule 3.29        Regulatory Agreements

Schedule 4.5         Subsidiaries

Schedule 4.7         Undisclosed Liabilities

Schedule 4.8         Dividends, Distributions and Stock Purchases

Schedule 4.9         Litigation and Governmental Directives

Schedule 4.10        Compliance with Laws; Governmental Authorizations

Schedule 4.14        Environmental Matters

Schedule 4.19        Taxes

Schedule 5.1 (xxi)   Pending and Contemplated Applications

Schedule 6.11        Current Premier Directors Fees

                                       -6-



                                INDEX OF EXHIBITS

Exhibit A         Form of Warrant Agreement

Exhibit B         Form of Warrant

Exhibit C         Form of Voting Agreement

Exhibit D         Form of Employment Agreements

Exhibit E         Form of Opinion of Premier's Counsel

Exhibit F         Form of Opinion of Fulton's Counsel

                                      -7-



                          AGREEMENT AND PLAN OF MERGER

     AGREEMENT AND PLAN OF MERGER made as of the 16th day of January, 2003, by
and between FULTON FINANCIAL CORPORATION, a Pennsylvania business corporation
having its administrative headquarters at One Penn Square, P. O. Box 4887,
Lancaster, Pennsylvania 17604 ("Fulton"), and PREMIER BANCORP, INC., a
Pennsylvania business corporation having its administrative headquarters at 379
North Main Street, Doylestown, Pennsylvania 18901 ("Premier")

                                   BACKGROUND:

     Fulton is a financial holding company registered under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). Premier is a financial holding
company registered under the BHC Act which is the parent of Premier Bank. In
addition to Premier Bank, Premier has four directly-owned subsidiaries: PBI
Capital Trust, Premier Capital Trust II, Lenders Abstract, LLC and Premier Bank
Insurance Services, LLC. Premier Bank and all of such subsidiaries are
collectively referred to herein as the "Premier Subsidiaries". Fulton and
Premier wish to merge with each other, resulting in Premier Bank becoming a
subsidiary of Fulton. Subject to the terms and conditions of this Agreement, the
foregoing transaction will be accomplished by means of a merger (the "Merger")
in which (i) Premier will be merged with and into Fulton, (ii) Fulton will
survive the Merger, and (iii) all of the outstanding shares of the common stock
of Premier, $0.33 par value per share ("Premier Common Stock"), will be
converted into shares of the common stock of Fulton, par value $2.50 per share
("Fulton Common Stock").

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

                                   WITNESSETH:

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

                             ARTICLE I - THE MERGER

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

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

                                      -8-



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

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

     Section 1.3  Articles of Incorporation. The Articles of Incorporation of
the Surviving Corporation shall be the Articles of Incorporation of Fulton as in
effect at the Effective Time.

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

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

      ARTICLE II - CONVERSION OF SHARES AND EXCHANGE OF STOCK CERTIFICATES

     Section 2.1  Conversion of Shares. At the Effective Time (as defined in
Section 9.2 herein) the shares of Premier Common Stock then outstanding shall be
converted into shares of Fulton Common Stock, as follows:

          (a)  General. Subject to the provisions of Sections 2.1(b), 2.1(c) and
     2.1(d) herein, each share of Premier Common Stock issued and outstanding
     immediately before the Effective Time, shall, at the Effective Time, be
     converted into and become without any action on the part of the holder
     thereof, and Fulton shall issue, 1.34 (such number, as it may be adjusted
     under Section 2.1(b) herein, the "Conversion Ratio") shares of Fulton
     Common Stock and the corresponding number of rights associated therewith
     pursuant to the Rights Agreement dated June 20, 1989, as amended and
     restated as of April 27, 1999, between Fulton and Fulton Bank (the "Fulton
     Rights Agreement"). Each share of Premier Common Stock to be converted into
     Fulton Common Stock pursuant to this Section 2.1 shall, by virtue of the
     Merger and without any action on the part of the holders thereof, cease to
     be outstanding, and be canceled, and each holder of share certificates
     evidencing shares of Premier Common Stock converted into Fulton Common
     Stock pursuant to this Section 2.1 shall thereafter cease to have any
     rights with respect to the shares represented thereby, except the right to
     receive the Fulton Common Stock therefor, without interest thereon, upon
     the surrender of the share certificates evidencing the Premier Common Stock
     in accordance with Section 2.2 hereof.

          (b)  Antidilution Provision. In the event that Fulton shall at any
     time before the Effective Time: (i) issue a dividend in shares of Fulton
     Common Stock, (ii) combine the

                                      -9-



     outstanding shares of Fulton Common Stock into a smaller number of shares,
     or (iii) subdivide the outstanding shares of Fulton Common Stock into a
     greater number of shares, then the Conversion Ratio shall be
     proportionately adjusted (calculated to four decimal places), so that each
     Premier shareholder shall receive at the Effective Time, in exchange for
     his shares of Premier Common Stock, the number of shares of Fulton Common
     Stock as would then have been owned by him if the Effective Time had
     occurred before the record date of such event (For example, if Fulton were
     to declare a five percent (5%) stock dividend after the date of this
     Agreement and if the record date for that stock dividend were to occur
     before the Effective Time, the Conversion Ratio would be adjusted from 1.34
     shares to 1.407 shares).

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

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

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

     Section 2.2  Exchange of Stock Certificates. Premier Common Stock
certificates

                                      -10-



shall be exchanged for Fulton Common Stock certificates in accordance with the
following procedures:

          (a)  Exchange Agent. The transfer agent of Fulton shall act as
     exchange agent (the "Exchange Agent") to receive Premier Common Stock
     certificates from the holders thereof and to exchange such stock
     certificates for Fulton Common Stock certificates and (if applicable) to
     pay cash for fractional shares of Fulton Common Stock pursuant to Section
     2.1(c) herein. Fulton shall cause the Exchange Agent on or promptly, but no
     later than three (3) business days after receipt of a final shareholder
     list following the Effective Date, to mail to each former shareholder of
     Premier a notice specifying the procedures to be followed in surrendering
     such shareholder's Premier Common Stock certificates.

          (b)  Surrender of Certificates. As promptly as possible after receipt
     of the Exchange Agent's notice, each former shareholder of Premier shall
     surrender his Premier Common Stock certificates to the Exchange Agent;
     provided, that if any former shareholder of Premier shall be unable to
     surrender his Premier Common Stock certificates due to loss or mutilation
     thereof, he may make a constructive surrender by following procedures
     comparable to those customarily used by Fulton for issuing replacement
     certificates to Fulton shareholders whose Fulton Common Stock certificates
     have been lost or mutilated. Upon receiving a proper actual or constructive
     surrender of Premier Common Stock certificates from a former Premier
     shareholder, the Exchange Agent shall issue to such shareholder, in
     exchange therefor, a Fulton Common Stock certificate representing the whole
     number of shares of Fulton Common Stock into which such shareholder's
     shares of Premier Common Stock have been converted in accordance with this
     Article II, together with a check in the amount of any cash to which such
     shareholder is entitled, pursuant to Section 2.1(c) herein, in lieu of the
     issuance of a fractional share.

          (c)  Dividend Withholding. Dividends, if any, payable by Fulton after
     the Effective Time to any former shareholder of Premier who has not prior
     to the payment date surrendered his Premier Common Stock certificates may,
     at the option of Fulton, be withheld. Any dividends so withheld shall be
     paid, without interest, to such former shareholder of Premier upon proper
     surrender of his Premier Common Stock certificates.

          (d)  Failure to Surrender Certificates. All Premier Common Stock
     certificates must be actually or constructively (as referenced in (b)
     above) surrendered to the Exchange Agent within two (2) years after the
     Effective Date. In the event that any former shareholder of Premier shall
     not have properly surrendered his Premier Common Stock certificates within
     two (2) years after the Effective Date, the shares of Fulton Common Stock
     that would otherwise have been issued to him may, at the option of Fulton,
     be sold and the net proceeds of such sale, together with the cash (if any)
     to which he is entitled in lieu of the issuance of a fractional share and
     any previously accrued dividends, shall be held by the Exchange Agent in a
     noninterest bearing account for his benefit. From and after any such sale,
     the sole right of such former shareholder of

                                      -11-



     Premier shall be the right to collect such net proceeds, cash and
     accumulated dividends. Subject to all applicable laws of escheat, such net
     proceeds, cash and accumulated dividends shall be paid to such former
     shareholder of Premier, without interest, upon proper actual or
     constructive surrender of his Premier Common Stock certificates.

          (e)  Expenses. All costs and expenses associated with the foregoing
     surrender and exchange procedure shall be borne by Fulton.

     Section 2.3  Treatment of Outstanding Premier Options.

          (a)  At the Effective Time, each holder of an option (collectively,
     "Premier Options") to purchase shares of Premier Common Stock that (i) is
     outstanding at the Effective Time, (ii) has been granted pursuant to the
     Premier Bancorp, Inc. 1995 Incentive Stock Option Plan (collectively, the
     "Premier Stock Option Plan") or otherwise granted by the Premier Board of
     Directors and evidenced by stock option agreements but not pursuant to any
     Premier Stock Option Plan; and (iii) would otherwise survive the Effective
     Time shall be entitled to receive, in substitution for such Premier Option,
     an option to acquire shares of Fulton Common Stock on the terms set forth
     below (each Premier Option as substituted, a "Fulton Stock Option").

          (b)  A Fulton Stock Option shall be a stock option to acquire shares
     of Fulton Common Stock with the following terms: (i) the number of shares
     of Fulton Common Stock which may be acquired pursuant to such Fulton Stock
     Option shall be equal to the product of the number of shares of Premier
     Common Stock covered by the Premier Option multiplied by the Conversion
     Ratio, provided that any fractional share of Fulton Common Stock resulting
     from such multiplication shall be rounded to the nearest whole share; (ii)
     the exercise price per share of Fulton Common Stock shall be equal to the
     exercise price per share of Premier Common Stock of such Premier Option,
     divided by the Conversion Ratio, provided that such exercise price shall be
     rounded to the nearest whole cent; (iii) the duration and other terms of
     such Fulton Stock Option shall be identical to the duration and other terms
     of such Premier Option, except that all references to Premier shall be
     deemed to be references to Fulton and its affiliates, where the context so
     requires and shall remain exercisable until the stated expiration date of
     the corresponding Premier Option; (iv) Fulton shall assume such Premier
     stock option, whether vested or not vested, as contemplated by Section
     424(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and
     (v) to the extent Premier Options qualify as incentive stock options under
     Section 422 of the Code, the Fulton Stock Options exchanged therefor shall
     also so qualify. Subject to the Fulton Stock Options and the foregoing, the
     Premier Stock Option Plans and all options or other rights to acquire
     Premier Common Stock issued thereunder shall terminate at the Effective
     Time. Fulton shall not issue or pay for any fractional shares otherwise
     issuable upon exercise of a Fulton Stock Option.

          (c)  Prior to the Effective Time, Fulton shall take appropriate action
     to reserve for issuance and, if not previously registered pursuant to the
     Securities Act of 1933, as

                                      -12-



     amended (the "1933 Act"), register the number of shares of Fulton Common
     Stock necessary to satisfy Fulton's obligations with respect to the
     issuance of Fulton Common Stock pursuant to the exercise of Fulton Stock
     Options and under Section 2.3.

          (d)  Prior to the Effective Time (to the extent required as determined
     by Fulton or Premier under applicable law, the terms of the Premier Stock
     Option Plan or otherwise), Fulton shall receive agreements from each holder
     of a Premier Option, pursuant to which each such holder agrees to accept a
     Fulton Stock Option in substitution for the Premier Option, as of the
     Effective Time.

          (e)  Schedule 2.3 sets forth a listing of each Premier Option as of
     the date of this Agreement (copies of which have been provided to Fulton),
     including the optionee, date of grant, shares of Premier Common Stock
     subject to such Option, the exercise price of such Option, expiration date,
     classification as an incentive stock option or a nonqualified stock option,
     vesting schedule and any special features thereof.

     Section 2.4  Reservation of Shares. Fulton agrees that (i) prior to the
Effective Time it will take appropriate action to reserve a sufficient number of
authorized but unissued shares of Fulton Common Stock to be issued in accordance
with this Agreement, and (ii) at the Effective Time, Fulton will issue shares of
Fulton Common Stock to the extent set forth in, and in accordance with, this
Agreement.

     Section 2.5  Taking Necessary Action. Fulton and Premier shall take all
such actions as may be reasonably necessary or appropriate in order to
effectuate the transactions contemplated hereby including, without limitation,
providing information necessary for preparation of any filings needed to obtain
the regulatory approvals required to consummate the Merger. In case at any time
after the Effective Time any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest Fulton with full title to all
properties, assets, rights, approvals, immunities and franchises of Premier, the
officers and directors of Premier, at the expense of Fulton, shall take all such
necessary action.

     Section 2.6  Press Releases, Etc. Fulton and Premier agree that all press
releases or other public communications relating to this Agreement or the
transactions contemplated hereby will require mutual approval by Fulton and
Premier, unless counsel has advised any such party that such release or other
public communication must immediately be issued and the issuing party has not
been able, despite its good faith efforts, to obtain such approval.

     Section 2.7  Fulton Common Stock. Each share of Fulton Common Stock that is
issued and outstanding immediately before the Effective Time shall, on and after
the Effective Time, remain issued and outstanding as one (1) share of Fulton
Common Stock, and each holder thereof shall retain his rights therein. The
holders of the shares of Fulton Common Stock outstanding immediately prior to
the Effective Time shall, immediately after the Effective Time, continue to hold
a majority of the outstanding shares of Fulton Common Stock.

     Section 2.8  No Dissenters' Rights. Pursuant to Section 1571(b)(1)(i) of
the BCL, the

                                      -13-



shareholders of Premier shall not be entitled to exercise dissenters' rights
under the provisions of Subchapter D of Chapter 15 of the BCL.

     Section 2.9   Premier Preferred Stock. The outstanding shares of Premier's
Series A 9.25% Non-Cumulative Perpetual Preferred Stock (the "Premier Preferred
Stock") shall not be converted into Fulton Common Stock as part of the Merger.
As set forth in Section 7.2(e) herein, all of the outstanding shares of the
Premier Preferred Stock shall be redeemed as of or prior to the Effective Time
in accordance with Sections 7 and 8 of the terms of the Premier Preferred Stock.

     Section 2.10  Certain Actions. Prior to the Effective Time, Fulton and
Premier shall take all such steps as may be required to cause any dispositions
of shares of Premier Common Stock (including derivative securities with respect
to such shares) resulting from the transactions contemplated by Article II of
this Agreement by each individual who is subject to the reporting requirements
of Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), with respect to Premier to be exempt under Rule 16b-3 promulgated under
the Exchange Act, such steps to be taken in accordance with the No-Action Letter
dated January 12, 1999 issued by the SEC to Skadden, Arps, Slate, Meagher & Flom
LLP.

            ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PREMIER

     Premier represents and warrants to Fulton, as of the date of this
Agreement, as follows:

     Section 3.1   Authority. The execution and delivery of this Agreement, the
Warrant Agreement and the Warrant and the performance of the transactions
contemplated herein and therein have been authorized by the Board of Directors
of Premier (its Board of Directors), at a meeting duly called and held, by a
vote of at least a majority of the members of the Board of Directors, the Board
of Directors (i) approved the Merger and this Agreement, and (ii) directed that
the Agreement be submitted for consideration by its shareholders with the
recommendation of the Board of Directors that the shareholders of Premier
approve this Agreement and the transactions contemplated thereby, and, except
for the approval of this Agreement by its shareholders, Premier has taken all
corporate action necessary on its part to authorize this Agreement, the Warrant
Agreement and the Warrant and the performance of the transactions contemplated
herein and therein. This Agreement, the Warrant Agreement and the Warrant have
been duly executed and delivered by Premier and, assuming due authorization,
execution and delivery by Fulton, constitute valid and binding obligations of
Premier, enforceable in accordance with their respective terms, except to the
extent enforcement is limited by bankruptcy, insolvency and other similar laws
affecting creditor's rights and the laws, regulations and rules affecting
financial institutions. The execution, delivery and performance of this
Agreement, the Warrant Agreement and the Warrant will not constitute a violation
or breach of or default under (i) the Articles of Incorporation or Bylaws of
Premier, (ii) the Articles of Incorporation or Bylaws of Premier Bank, (iii) any
statute, rule, regulation, order, decree or directive of any governmental
authority or court applicable to Premier or any Premier Subsidiary, subject to
the receipt of all required governmental approvals, or (iv) any agreement,
contract, memorandum of understanding, indenture or other instrument to which
Premier or any

                                      -14-



Premier Subsidiary is a party or by which Premier or any Premier Subsidiary or
any of their properties are bound.

     Section 3.2  Organization and Standing. Premier is a business corporation
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Pennsylvania. Premier is a financial holding company under
the BHC Act, and has full power and lawful authority to own and hold its
properties and to carry on its business as presently conducted. Premier Bank is
a banking corporation that is duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania. Premier Bank is an
insured bank under the provisions of the Federal Deposit Insurance Act, as
amended (the "FDI Act"), and is a member of the Federal Reserve System. Premier
Bank has full power and lawful authority to own and hold its properties and to
carry on its business as presently conducted. Each of the Premier Subsidiaries
currently conducting operations other than Premier Bank is an entity or business
trust that is duly organized, validly existing and in good standing under the
laws of its state of incorporation or formation. Each of the Premier
Subsidiaries currently conducting operations has full power and lawful authority
to own and hold its properties and to carry on its business as presently
conducted.

     Section 3.3  Subsidiaries. Premier Bank is a wholly-owned subsidiary of
Premier. Premier owns 100% of the common securities of PBI Capital Trust and
Premier Capital Trust II. Premier has a 1% membership interest in each of
Lenders Abstract, LLC and Premier Bank Insurance Services, LLC. Premier Bank has
a 99% membership interest in each of these limited liability companies Except
for the Premier Subsidiaries, Premier owns no subsidiaries, directly or
indirectly.

     Section 3.4  Capitalization. The authorized capital of Premier consists
exclusively of 30,000,000 shares of Premier Common Stock and 20,000,000 shares
of the Premier Preferred Stock. As of the date of this Agreement, there are
552,000 shares of Premier Preferred Stock outstanding, 3,452,273 shares of
Premier Common Stock validly issued, fully paid and non-assessable, and 109,858
shares are held as treasury shares. In addition, 303,748 shares of Premier
Common Stock are reserved for issuance upon the exercise of Premier Options and
835,000 shares of Premier Common Stock will be reserved for issuance upon
exercise of the Warrant. Except for the Premier Options and the Warrant, there
are no outstanding obligations, options or rights of any kind entitling other
persons to acquire shares of Premier Common Stock and there are no outstanding
securities or other instruments of any kind that are convertible into shares of
Premier Common Stock. The authorized capital of Premier Bank consists
exclusively of shares of common stock (the "Premier Bank Common Stock"). All of
the outstanding shares of Premier Bank Common Stock are owned beneficially and
of record by Premier and are validly issued, outstanding and fully-paid and
non-assessable. There are no outstanding obligations, options or rights of any
kind entitling other persons to acquire shares of Premier Bank Common Stock, and
there are no outstanding securities or instruments of any kind that are
convertible into shares of Premier Bank Common Stock. All outstanding shares of
the capital stock of the other Premier Subsidiaries are owned beneficially and
of record by Premier or Premier Bank, as appropriate, except that, in the case
of PBI Capital Trust and Premier Capital Trust II, Premier owns 100% of the
common securities and the purchasers thereof own the

                                      -15-



capital securities issued by each said Trust. There are no outstanding
obligations, options or rights of any kind entitling other persons to acquire
shares of such subsidiaries, and there are no outstanding securities or
instruments of any kind that are convertible into shares of such subsidiaries.
The Common Stock of Premier Bank the other Premier Subsidiaries is sometimes
collectively referred to herein as the "Premier Subsidiaries Common Stock".

     Section 3.5    Charter, Bylaws and Minute Books. The copies of the Articles
of Incorporation and Bylaws (or, with respect to PBI Capital Trust and Premier
Capital Trust II, their trust declarations) of Premier and the Premier
Subsidiaries that have been delivered to Fulton are true, correct and complete.
Except as previously disclosed to Fulton in writing, the minute books of Premier
and the Premier Subsidiaries that have been made available to Fulton for
inspection are true, correct and complete in all material respects and
accurately record the actions taken by the Boards of Directors and shareholders
of Premier and the Premier Subsidiaries at the meetings documented in such
minutes, excluding information related to the transactions contemplated by this
Agreement and to any other merger, consolidation, share exchange or sale,
exchange or other disposition of all, or substantially all, of Premier's
property or assets.

     Section 3.6    Financial Statements. Premier has delivered to Fulton the
following financial statements: Consolidated Balance Sheets at December 31, 2001
and 2000 and Consolidated Statements of Income, Statements of Stockholders'
Equity, and Consolidated Statements of Cash Flows of Premier for the years ended
December 31, 1999, 2000 and 2001, audited by KPMG LLP, and set forth in the 2001
Annual Report to Premier's shareholders and unaudited Consolidated Balance
Sheets of Premier at September 30, 2002 and unaudited Consolidated Statements of
Income for the nine-month periods ended September 30, 2002 and 2001, unaudited
Consolidated Statements of Stockholders' Equity for the nine-month periods ended
September 30, 2002 and 2001 and unaudited Consolidated Statements of Cash Flows
for the nine-month periods ended September 30, 2002 and 2001, as filed with the
Securities and Exchange Commission (the "SEC") in a Quarterly Report on Form
10-Q (the aforementioned Consolidated Statement of Condition as of September 30,
2002 being hereinafter referred to as the "Premier Balance Sheet"). Each of the
foregoing financial statements fairly present the consolidated financial
condition, assets and liabilities, and results of operations of Premier at their
respective dates and for the respective periods then ended and has been prepared
in accordance with generally accepted accounting principles consistently
applied, except as otherwise noted in a footnote thereto and except for the
omission of the notes from the financial statements applicable to any interim
period.

     Section 3.7    Absence of Undisclosed Liabilities. Except as disclosed in
Schedule 3.7, or as reflected, noted or adequately reserved against in the
Premier Balance Sheet, at September 30, 2002, Premier had no material
liabilities (whether accrued, absolute, contingent or otherwise) which were
required to be reflected, noted or reserved against in the Premier Balance Sheet
under generally accepted accounting principles. Except as disclosed in Schedule
3.7, Premier and the Premier Subsidiaries have not incurred, since September 30,
2002, any such liability, other than liabilities of the same nature as those set
forth in the Premier Balance Sheet, all of which have been reasonably incurred
in the Ordinary Course of Business. For purposes of this

                                      -16-



Agreement, the term "Ordinary Course of Business" shall mean the ordinary course
of business consistent with Premier's and the Premier Subsidiaries' customary
business practices.

     Section 3.8    Absence of Changes. Since September 30, 2002, Premier and
the Premier Subsidiaries have each conducted their businesses in the Ordinary
Course of Business and, except as disclosed in Schedule 3.8, neither Premier nor
the Premier Subsidiaries have undergone any changes in its condition (financial
or otherwise), assets, liabilities, business or operations, other than changes
in the Ordinary Course of Business, which have not been, in the aggregate,
materially adverse as to Premier and the Premier Subsidiaries on a consolidated
basis.

     Section 3.9    Dividends, Distributions and Stock Purchases. Since
September 30, 2002, Premier has not declared, set aside, made or paid any
dividend or other distribution in respect of the Premier Common Stock, or
purchased, issued or sold any shares of Premier Common Stock or the Premier
Subsidiaries Common Stock. Since the issuance of the outstanding shares of the
Premier Preferred Stock, regular quarterly dividends of $0.578125 per share have
been paid (the most recent such dividend was declared on January 6, 2003,
payable on January 31, 2003 to shareholders of record on January 16, 2003).

     Section 3.10   Taxes. Premier and Premier Bank have filed all federal,
state, county, municipal and foreign tax returns, reports and declarations which
are required to be filed by them or either of them as of September 30, 2002.
Except as disclosed in Schedule 3.10: (i) Premier and Premier Bank have paid all
taxes, penalties and interest which have become due pursuant thereto or which
became due pursuant to federal, state, county, municipal or foreign tax laws
applicable to the periods covered by the foregoing tax returns, (ii) neither
Premier nor the Premier Subsidiaries have received any notice of deficiency or
assessment of additional taxes, and no tax audits are in process; and (iii) the
Internal Revenue Service (the "IRS") has not commenced or given notice of an
intention to commence any examination or audit of the federal income tax returns
of Premier or Premier Bank for any year through and including the year ended
December 31, 2002. Except as disclosed in Schedule 3.10, neither Premier nor the
Premier Subsidiaries have granted any waiver of any statute of limitations or
otherwise agreed to any extension of a period for the assessment of any federal,
state, county, municipal or foreign income tax. Except as disclosed in Schedule
3.10, the accruals and reserves reflected in the Premier Balance Sheet are
adequate to cover all taxes (including interest and penalties, if any, thereon)
that are payable or accrued as a result of Premier's consolidated operations for
all periods prior to the date of such Balance Sheet.

     Section 3.11   Title to and Condition of Assets. Except as disclosed in
Schedule 3.11, Premier and the Premier Subsidiaries have good and marketable
title to all material consolidated real and personal properties and assets
reflected in the Premier Balance Sheet or acquired subsequent to September 30,
2002, (other than property and assets disposed of in the Ordinary Course of
Business), free and clear of all liens or encumbrances of any kind whatsoever;
provided, however, that the representations and warranties contained in this
sentence do not cover liens or encumbrances that: (i) are reflected in the
Premier Balance Sheet or in Schedule 3.11; (ii) represent liens of current taxes
not yet due or which, if due, may be paid without penalty, or which are being
contested in good faith by appropriate proceedings; and (iii)

                                      -17-



represent such imperfections of title, liens, encumbrances, zoning requirements
and easements, if any, as are not substantial in character, amount or extent and
do not materially detract from the value, or interfere with the present use, of
the properties and assets subject thereto. The material structures and other
improvements to real estate, furniture, fixtures and equipment reflected in the
Premier Balance Sheet or acquired subsequent to September 30, 2002: (A) are in
good operating condition and repair (ordinary wear and tear excepted), and (B)
comply in all material respects with all applicable laws, ordinances and
regulations, including without limitation all building codes, zoning ordinances
and other similar laws, except where any noncompliance would not materially
detract from the value, or interfere with the present use, of such structures,
improvements, furniture, fixtures and equipment. Premier and the Premier
Subsidiaries own or have the right to use all real and personal properties and
assets that are material to the conduct of their respective businesses as
presently conducted.

     Section 3.12   Contracts.

          (a) Each written or oral contract entered into by Premier or the
     Premier Subsidiaries (other than contracts with customers reasonably
     entered into by Premier or the Premier Subsidiaries in the Ordinary Course
     of Business) which involves aggregate payments or receipts in excess of
     $50,000 per year, including without limitation every employment contract,
     employee benefit plan, agreement, lease, license, indenture, mortgage and
     other commitment to which either Premier or the Premier Subsidiaries are a
     party or by which Premier or the Premier Subsidiaries or any of their
     properties may be bound (collectively referred to herein as "Material
     Contracts") is identified in Schedule 3.12. Except as disclosed in Schedule
     3.12, all Material Contracts are enforceable against Premier or the Premier
     Subsidiaries, as the case may be, and Premier or the Premier Subsidiaries
     have in all material respects performed all obligations required to be
     performed by them to date and are not in default in any material respect
     and Premier is not aware of any default by a third party under a Material
     Contract. Schedule 3.12 identifies all Material Contracts which require the
     consent or approval of third parties to the execution and delivery of this
     Agreement or to the consummation of the transactions contemplated herein.

          (b) Except for the Warrant Agreement and as set forth in Schedule
     3.12, as of the date of this Agreement, neither Premier nor the Premier
     Subsidiaries is a party to, or bound by, any oral or written:

          (i)    "material contract" as such term is defined in Item 601(b)(10)
          of Regulation S-K promulgated by the SEC;

          (ii)   consulting agreement not terminable on thirty (30) days or less
          notice involving the payment of more than $20,000 per annum, in the
          case of any such agreement;

          (iii)  agreement with any officer or other key employee the benefits
          of which are contingent, or the terms of which are materially altered,
          upon the occurrence

                                      -18-



          of a transaction of the nature contemplated by this Agreement;

          (iv)   agreement with respect to any officer providing any term of
          employment or compensation guarantee extending for a period longer
          than one year or for a payment in excess of $25,000;

          (v)    agreement or plan, including any stock option plan, stock
          appreciation rights plan, employee stock ownership plan, restricted
          stock plan or stock purchase plan, any of the benefits of which will
          be increased, or the vesting of the benefits of which will be
          accelerated, by the occurrence of any of the transactions contemplated
          by this Agreement or the value of any of the benefits of which will be
          calculated on the basis of any of the transactions contemplated by
          this Agreement;

          (vi)   agreement containing covenants that limit its ability to
          compete in any line of business or with any person, or that involve
          any restriction on the geographic area in which, or method by which,
          it may carry on its business (other than as may be required by law or
          any regulatory agency);

          (vii)  agreement, contract or understanding, other than this
          Agreement, and the Warrant Agreement, regarding the capital stock of
          Premier and/or Premier Bank or committing to dispose of some or all of
          the capital stock or substantially all of the assets of Premier and/or
          Premier Bank;

          (viii) collective bargaining agreement, contract, or other agreement
          or understanding with a labor union or labor organization; or

          (ix)   deferred compensation plan or arrangement.

          (c) Neither Premier nor Premier Bank is in default under or in
     violation of any provision of any note, bond, indenture, mortgage, deed of
     trust, loan agreement, lease or Material Contract to which it is a party or
     to which any of its respective properties or assets is subject, other than
     such defaults or violations as could not reasonably be expected,
     individually or in the aggregate, to have a material and adverse change on
     it.

     Section 3.13   Litigation and Governmental Directives. Except as disclosed
in Schedule 3.13, (i) there is no litigation, investigation or proceeding
pending, or to the Knowledge (as that term is defined below) of Premier or the
Premier Subsidiaries, threatened, that involves Premier or the Premier
Subsidiaries or any of their properties and that, if determined adversely, would
materially and adversely affect the condition (financial or otherwise), assets,
liabilities, business, operations or future prospects of Premier or the Premier
Subsidiaries; (ii) there are no outstanding orders, writs, injunctions,
judgments, decrees, regulations, directives, consent agreements or memoranda of
understanding issued by any federal, state or local court or governmental agency
or authority or arbitration tribunal issued against or with the consent of
Premier or the Premier Subsidiaries that materially and adversely affect the
condition (financial or otherwise), assets, liabilities, business, operations or
future

                                      -19-



prospects of Premier or the Premier Subsidiaries or that in any manner restrict
the right of Premier or the Premier Subsidiaries to carry on their businesses as
presently conducted taken as a whole; and (iii) neither Premier nor the Premier
Subsidiaries are aware of any fact or condition presently existing that might
give rise to any litigation, investigation or proceeding which, if determined
adversely to either Premier or the Premier Subsidiaries, would materially and
adversely affect the consolidated condition (financial or otherwise), assets,
liabilities, business, operations or future prospects of Premier or the Premier
Subsidiaries or would restrict in any manner the right of Premier or the Premier
Subsidiaries to carry on their businesses as presently conducted taken as a
whole. All litigation (except for bankruptcy proceedings in which Premier or the
Premier Subsidiaries have filed proofs of claim) in which Premier or the Premier
Subsidiaries are involved as a plaintiff (other than routine collection and
foreclosure suits initiated in the Ordinary Course of Business) in which the
amount sought to be recovered is greater than $50,000 is identified in Schedule
3.13. In this Agreement, the terms "Knowledge of Premier or Premier Bank" and
"Knowledge of Premier and the Premier Subsidiaries" shall mean the actual
knowledge of the officers of Premier.

     Section 3.14   Compliance with Laws; Governmental Authorizations. Except as
disclosed in Schedule 3.14 or where noncompliance would not have a material and
adverse effect upon the condition (financial or otherwise), assets, liabilities,
business, operations or future prospects of Premier or the Premier Subsidiaries:
(i) Premier and the Premier Subsidiaries are in compliance with all statutes,
laws, ordinances, rules, regulations, judgments, orders, decrees, directives,
consent agreements, memoranda of understanding, permits, concessions, grants,
franchises, licenses, and other governmental authorizations or approvals
applicable to Premier or the Premier Subsidiaries or to any of their properties;
and (ii) all material permits, concessions, grants, franchises, licenses and
other governmental authorizations and approvals necessary for the conduct of the
business of Premier or the Premier Subsidiaries as presently conducted have been
duly obtained and are in full force and effect, and there are no proceedings
pending or threatened which may result in the revocation, cancellation,
suspension or materially adverse modification of any thereof.

     Section 3.15   Insurance. All policies of insurance relating to Premier's
and Premier Subsidiaries' operations (except for title insurance policies),
including without limitation all financial institutions bonds, held by or on
behalf of Premier or the Premier Subsidiaries are listed in Schedule 3.15. All
such policies of insurance are in full force and effect, and no notices of
cancellation have been received in connection therewith.

     Section 3.16   Financial Institutions Bonds. Since January 1, 1999, Premier
Bank or its predecessors have continuously maintained in full force and effect
one or more financial institutions bonds listed in Schedule 3.16 insuring
Premier Bank against acts of dishonesty by each of its employees. No claim has
been made under any such bond and Premier Bank is not aware of any fact or
condition presently existing which might form the basis of a claim under any
such bond. Premier Bank has received no notice that its present financial
institutions bond or bonds will not be renewed by its carrier on substantially
the same terms as those now in effect.

                                      -20-



     Section 3.17 Labor Relations and Employment Agreements. Neither Premier nor
any of the Premier Subsidiaries are a party to or bound by any collective
bargaining agreement. Premier and the Premier Subsidiaries enjoy good working
relationships with their employees, and there are no labor disputes pending, or
to the Knowledge of Premier or Premier Bank threatened, that might materially
and adversely affect the condition (financial or otherwise), assets,
liabilities, business, operations or prospects of Premier or the Premier
Subsidiaries. Except as disclosed in Schedule 3.17, neither Premier nor the
Premier Subsidiaries have any employment contract, change of control agreement
or policy, severance agreement, deferred compensation agreement, consulting
agreement or similar obligation (including the amendments referred to below, an
"Employment Obligation") with any director, officer, employee, agent or
consultant; provided however, that, as of the date of this Agreement (and
effective as of the Effective Time), each of Clark S. Frame, John C. Soffronoff
and John J. Ginley has executed an employment agreement with Premier Bank so as
to, among other things, consent to certain respective changes in their duties,
powers and functions following the Merger and waiving any right to obtain
"change of control" or severance payments as a result of the Merger, such
agreements to be substantially in the form of Exhibit D attached hereto. For the
purposes of this Agreement, Messrs. Frame, Soffronoff and Ginley, shall be
referred to herein as the "Contract Employees". Except as disclosed in Schedule
3.17, as of the Effective Time (as defined in Section 9.2 herein), neither
Premier nor the Premier Subsidiary will have any liability for employee
termination rights arising out of any Employment Obligation and neither the
execution nor the consummation of this Agreement shall, by itself, entitle any
employee of Premier or the Premier Subsidiaries to any "change of control"
payments or benefits. Except as set forth on Schedule 3.17, no payment that is
owed or may become due to any director, officer, employee, or agent of Premier
or an Premier Subsidiary will be non-deductible to Premier or an Premier
Subsidiary or subject to tax under IRC (S) 280G or (S) 4999; nor will Premier or
an Premier Subsidiary be required to "gross up" or otherwise compensate any such
person because of the imposition of any excise tax on a payment to such person.

     Section 3.18   Employee Benefit Plans. All employee benefit plans,
contracts or arrangements to which Premier or the Premier Subsidiaries are a
party or by which Premier or the Premier Subsidiaries are bound, including
without limitation all pension, retirement, deferred compensation, savings,
incentive, bonus, profit sharing, stock purchase, stock option, life insurance,
death or survivor's benefit, health insurance, sickness, disability, medical,
surgical, hospital, severance, layoff or vacation plans, contracts or
arrangements (collectively the "Premier Benefit Plans"), but not including the
Employment Obligations described in Section 3.17, are identified in Schedule
3.18. Each of the Premier Benefit Plans which is an "employee pension benefit
plan" as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"; each such Plan being herein called a "Premier
Pension Plan") is exempt from tax under Sections 401 and 501 of the Code and has
been maintained and operated in material compliance with all applicable
provisions of the Code and ERISA. No "prohibited transaction" (as such term is
defined in Section 4975 of the Code or in ERISA) and not otherwise exempt under
ERISA or the Code has occurred in respect of the Premier Pension Plans. There
have been no material breaches of fiduciary duty by any fiduciary under or with
respect to the Premier Pension Plans or any other Premier Benefit Plan which is
an employee welfare benefit plan as defined in ERISA, and no claim is pending
or, to the Knowledge of

                                      -21-



Premier, threatened with respect to any Premier Benefit Plan other than claims
for benefits made in the Ordinary Course of Business. Neither Premier nor the
Premier Subsidiaries have incurred any material penalty imposed by the Code or
by ERISA with respect to the Premier Pension Plans or any other Premier Benefit
Plan. There has not been any audit of any Premier Benefit Plan by the Department
of Labor or the IRS.

     Section 3.19   Related Party Transactions. Except as disclosed in Schedule
3.19, neither Premier nor any of the Premier Subsidiaries have any contract,
extension of credit, business arrangement or other relationship of any kind with
any of the following persons: (i) any executive officer or director (including
any person who has served in such capacity since January 1, 1999) of Premier or
any of the Premier Subsidiaries; (ii) any shareholder owning five percent (5%)
or more of the outstanding Premier Common Stock; and (iii) any "associate" (as
defined in Rule 405 under the 1933 Act) of the foregoing persons or any business
in which any of the foregoing persons is an officer, director, employee or five
percent (5%) or greater equity owner. Each such contract or extension of credit
disclosed in Schedule 3.19, except as otherwise specifically described therein,
has been made in the Ordinary Course of Business on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable arms' length transactions with other persons that do not involve
more than a normal risk of collectability or present other unfavorable features.

     Section 3.20   No Finder. Except as disclosed in Schedule 3.20, neither
Premier nor any of the Premier Subsidiaries have paid or become obligated to pay
any fee or commission of any kind whatsoever to any investment banker, broker,
finder, financial advisor or other intermediary for, on account of or in
connection with the transactions contemplated in this Agreement.

     Section 3.21   Complete and Accurate Disclosure. Neither this Agreement
(insofar as it relates to Premier, the Premier Subsidiaries, the Premier Common
Stock, the Premier Preferred Stock, the Premier Subsidiaries' Common Stock, and
the involvement of Premier and the Premier Subsidiaries in the transactions
contemplated hereby) nor any financial statement, schedule (including without
limitation its Schedules to this Agreement), certificate, or other statement or
document delivered by Premier or the Premier Subsidiaries to Fulton in
connection herewith contains any statement which, at the time and in light of
the circumstances under which it is made, is false or misleading with respect to
any material fact or omits to state any material fact necessary to make the
statements contained herein or therein not false or misleading.

     Section 3.22   Environmental Matters. Except as disclosed in Schedule 3.22,
neither Premier nor any of the Premier Subsidiaries has any material liability
relating to any environmental contaminant, pollutant, toxic or hazardous waste
or other similar substance has been generated, used, stored, processed, disposed
of or discharged onto any of the real estate now or previously owned or acquired
(including without limitation any real estate acquired by means of foreclosure
or exercise of any other creditor's right) or leased by Premier or any of the
Premier Subsidiaries and which is required to be reflected, noted or adequately
reserved against in Premier's consolidated financial statements under generally
accepted accounting principles. In particular, without limiting the generality
of the foregoing sentence, except as disclosed in

                                      -22-



Schedule 3.22, neither Premier nor any of the Premier Subsidiaries have used or
incorporated: (i) any materials containing asbestos in any building or other
structure or improvement located on any of the real estate now or previously
owned or acquired (including without limitation any real estate acquired by
means of foreclosure or exercise of any other creditor's right) or leased by
Premier or any of the Premier Subsidiaries; (ii) any electrical transformers,
fluorescent light fixtures with ballasts or other equipment containing PCB's on
any of the real estate now or previously owned or acquired (including without
limitation any real estate acquired by means of foreclosure or exercise of any
other creditor's right) or leased by Premier or any of the Premier Subsidiaries;
or (iii) any underground storage tanks for the storage of gasoline, petroleum
products or other toxic or hazardous wastes or similar substances located on any
of the real estate now or previously owned or acquired (including without
limitation any real estate acquired by means of foreclosure or exercise of any
other creditor's right) or leased by Premier or any of the Premier Subsidiaries.

     Section 3.23   Proxy Statement/Prospectus. At the time the Proxy
Statement/Prospectus (as defined in Section 6.1(b) herein) is mailed to the
shareholders of Premier and at all times subsequent to such mailing, up to and
including the Effective Time, the Proxy Statement/Prospectus (including any pre-
and post-effective amendments and supplements thereto), with respect to all
information relating to Premier, the Premier Subsidiaries, Premier Common Stock,
the Premier Subsidiaries Common Stock and all actions taken and statements made
by Premier and the Premier Preferred Stock Subsidiaries in connection with the
transactions contemplated herein (except for information provided by Fulton to
Premier or the Premier Subsidiaries) will: (i) comply in all material respects
with applicable provisions of the 1933 Act, and the 1934 Act and the applicable
rules and regulations of the SEC thereunder; and (ii) not contain any statement
which, at the time and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or omits to state any
material fact that is required to be stated therein or necessary in order (A) to
make the statements therein not false or misleading, or (B) to correct any
statement in an earlier communication with respect to the Proxy
Statement/Prospectus which has become false or misleading.

     Section 3.24   SEC Filings. No registration statement, offering circular,
proxy statement, schedule or report filed and not withdrawn by Premier or
Premier Bank with the SEC or the Federal Reserve Board (the "FRB"), as
applicable, under the 1933 Act or the 1934 Act, on the date of effectiveness (in
the case of any registration statement or offering circular) or on the date of
filing (in the case of any report or schedule) or on the date of mailing (in the
case of any proxy statement), contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.

     Section 3.25   Reports. Premier and Premier Bank have filed all material
reports, registrations and statements that are required to be filed with the
FRB, the Federal Deposit Insurance Company ("FDIC"), the Pennsylvania Department
of Banking (the "Department") and any other applicable federal, state or local
governmental or regulatory authorities and such reports, registrations and
statements referred to in this Section 3.25 were, as of their respective dates,
in compliance in all material respects with all of the statutes, rules and

                                      -23-



regulations enforced or promulgated by the governmental or regulatory authority
with which they were filed; provided, however, that the failure to file any such
report, registration, or statement or the failure of any report, registration or
statement to comply with the applicable regulatory standard shall not be deemed
to be a breach of the foregoing representation unless such failure has or may
have a material adverse impact on Premier and the Premier Subsidiaries on a
consolidated basis. Premier has furnished Fulton with, or made available to
Fulton, copies of all such filings made in the last three fiscal years and in
the period from January 1, 2002 through the date of this Agreement. Premier is
required to file reports with the SEC pursuant to Section 12 of the 1934 Act,
and, except as set forth on Schedule 3.25, Premier has made all appropriate
filings under the 1934 Act and the rules and regulations promulgated thereunder;
provided, however, that the failure to make any such filing shall not be deemed
to be a breach of the foregoing representation unless such failure has or may
have a material adverse impact on Premier and the Premier Subsidiaries on a
consolidated basis. The Premier Common Stock is traded on the American Stock
Exchange ("AMEX") under the symbol "PPA" and the Premier Preferred Stock is
traded on the AMEX under the symbol "PPA.Pr.A."

     Section 3.26   Loan Portfolio of Premier Bank.

          (a)  Attached hereto as Schedule 3.26 is a list of (i) all outstanding
     commercial relationships, i.e. commercial loans, commercial loan
     commitments and commercial letters of credit, of Premier Bank in excess of
     $1,500,000, (ii) all loans of Premier Bank classified by Premier Bank or
     any regulatory authority as "Monitor," "Substandard," "Doubtful" or "Loss,"
     (iii) all commercial and mortgage loans of Premier Bank classified as
     "non-accrual," and (iv) all commercial loans of Premier Bank classified as
     "in substance foreclosed."

          (b)  Premier Bank has adequately reserved for or charged off loans in
     accordance with applicable regulatory requirements, generally accepted
     accounting principles and current written policies of Premier Bank.

          (c)  Premier Bank does not engage in so-called "subprime lending."

     Section 3.27   Investment Portfolio. Attached hereto as Schedule 3.27 is a
list of all securities held by Premier and the Premier Subsidiaries for
investment, showing the holder, principal amount, book value and market value of
each security as of a recent date, and of all short-term investments held by it
as of September 30, 2002. These securities are free and clear of all liens,
pledges and encumbrances, except as shown on Schedule 3.27. Except as set forth
on Schedule 3.27, the investment portfolio of Premier or the Premier
Subsidiaries does not include any financial derivatives.

     Section 3.28   Regulatory Examinations.

          (a)  Except for normal examinations conducted by a regulatory agency
     in the Ordinary Course of Business, no regulatory agency has initiated any
     proceeding or investigation into the business or operations of Premier or
     any of the Premier

                                      -24-



     Subsidiaries. Except as otherwise disclosed in Section 3.29, neither
     Premier nor any of the Premier Subsidiaries have received any objection
     from any regulatory agency to Premier's or any of the Premier Subsidiaries'
     response to any violation, criticism or exception with respect to any
     report or statement relating to any examinations of Premier and any of the
     Premier Subsidiaries which would have a materially adverse effect on
     Premier and any of the Premier Subsidiaries on a consolidated basis.

          (b)  Neither Premier nor any of the Premier Subsidiaries are required
     to divest any assets currently held by it or discontinue any activity
     currently conducted as a result of the Federal Deposit Insurance
     Corporation Improvement Act of 1991, any regulations promulgated
     thereunder, or otherwise which would have a materially adverse effect on
     Premier and any of the Premier Subsidiaries on a consolidated basis.

     Section 3.29   Regulatory Agreements. Except as set forth on Schedule 3.29,
on the date hereof, neither Premier nor Premier Bank is a party to any
assistance agreement, directive, commitment letter, supervisory agreement or
letter, memorandum of understanding, consent order, cease and desist order, or
condition of any regulatory order, decree or similar directive with or by the
FDIC, the Federal Reserve, the Department or any other financial services
regulatory agency having jurisdiction over Premier or Premier Bank that relates
to the conduct of the business of Premier or Premier Bank, nor has Premier or
Premier Bank been advised by any such regulatory agency or other governmental
entity that it is considering issuing or requesting any such agreement, order or
decree.

     Section 3.30   Beneficial Ownership of Fulton Common Stock. Premier and the
Premier Subsidiaries do not, and prior to the Effective Time, Premier and the
Premier Subsidiaries will not, own beneficially (within the meaning of SEC Rule
13-d-3(d)(1)) more than five percent (5%) of the outstanding shares of Fulton
Common Stock.

     Section 3.31   Fairness Opinion. Premier's Board of Directors has received
a written opinion from Boenning & Scattergood, Inc., to be updated in writing
prior to the publication of the Proxy Statement/Prospectus (a copy of such
updating written opinion being provided simultaneously to Fulton at the time of
receipt), to the effect that the Conversion Ratio, at the time of execution of
this Agreement and the mailing of the Proxy materials, is fair to Premier's
shareholders from a financial point of view.

              ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF FULTON

     Fulton represents and warrants to Premier, as of the date of this Agreement
and as of the date of the Closing, as follows:

     Section 4.1 Authority. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein have been authorized by the
Board of Directors of Fulton, and no other corporate action on the part of
Fulton is necessary to authorize this Agreement or the consummation by Fulton of
the transactions contemplated herein. This Agreement has been duly executed and
delivered by Fulton and, assuming due authorization,

                                      -25-



execution and delivery by Premier, constitutes a valid and binding obligation of
Fulton. The execution, delivery and consummation of this Agreement will not
constitute a violation or breach of or default under the Articles of
Incorporation or Bylaws of Fulton or any statute, rule, regulation, order,
decree, directive, agreement, indenture or other instrument to which Fulton is a
party or by which Fulton or any of its properties are bound.

     Section 4.2 Organization and Standing. Fulton is a business corporation
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Pennsylvania. Fulton is a registered financial holding
company under the BHC Act and has full power and lawful authority to own and
hold its properties and to carry on its business as presently conducted.

     Section 4.3 Capitalization. The authorized capital of Fulton consists
exclusively of 400,000,000 shares of Fulton Common Stock and 10,000,000 shares
of preferred stock without par value (the "Fulton Preferred Stock"). As of the
date of this Agreement, there were 104,027,373 shares of Fulton Common Stock
validly issued, fully paid and non-assessable and 2,837,958 shares are held as
treasury shares. No shares of Fulton Preferred Stock have been issued as of the
date of this Agreement, and Fulton has no present intention to issue any shares
of Fulton Preferred Stock. As of the date of this Agreement, there are no
outstanding obligations, options or rights of any kind entitling other persons
to acquire shares of Fulton Common Stock or shares of Fulton Preferred Stock and
there are no outstanding securities or other instruments of any kind convertible
into shares of Fulton Common Stock or into shares of Fulton Preferred Stock,
except as follows: (i) 2,820,919 shares of Fulton Common Stock were issuable
upon the exercise of outstanding stock options granted under the Fulton
Incentive Stock Option Plan and the Fulton Employee Stock Purchase Plan and (ii)
there were outstanding 106,848,292 Rights representing the right under certain
circumstances to purchase shares of Fulton Common Stock pursuant to the terms of
a Fulton Rights Agreement and (iii) 2,329,021 shares of Fulton Common Stock
reserved from time to time for issuance pursuant to Fulton's Employee Stock
Purchase and Dividend Reinvestment Plans. All shares of Fulton Common Stock that
are issued in the Merger shall include purchase Rights under the Fulton
Shareholder Rights Agreement unless, prior to the Effective Date, all Rights
issued under said Agreement shall have been redeemed by Fulton without a
Distribution Date having occurred under such Agreement.

     Section 4.4 Articles of Incorporation and Bylaws. The copies of the
Articles of Incorporation, as amended, and of the Bylaws, as amended, of Fulton
that have been delivered to Premier are true, correct and complete.

     Section 4.5 Subsidiaries. Schedule 4.5 contains a list of all subsidiaries
("Subsidiaries") which Fulton owns, directly or indirectly. Except as otherwise
disclosed on Schedule 4.5: (i) Fulton owns, directly or indirectly, all of the
outstanding shares of capital stock of each Subsidiary, and (ii) as of the date
of this Agreement: (A) there are no outstanding obligations, options or rights
of any kind entitling persons (other than Fulton or any Subsidiary) to acquire
shares of capital stock of any Subsidiary, and (B) there are no outstanding
securities or other instruments of any kind held by persons (other than Fulton
or any Subsidiary) that are convertible into shares of capital stock of any
Subsidiary. Each Subsidiary is duly organized,

                                      -26-



validly existing and in good standing under the laws of the jurisdiction
pursuant to which it is incorporated. Each Subsidiary has full power and lawful
authority to own and hold its properties and to carry on its business as
presently conducted. Each Subsidiary which is a banking institution is an
insured bank under the provisions of the FDI Act.

     Section 4.6 Financial Statements. Fulton has delivered to Premier the
following financial statements: Consolidated Balance Sheets at December 31, 2001
and 2000 and Consolidated Statements of Income, Consolidated Statements of
Shareholders' Equity, and Consolidated Statements of Cash Flows for the years
ended December 31, 2001, 2000 and 1999, audited by Arthur Andersen LLP for the
years 1999, 2000 and 2001 and set forth in the Annual Report to the shareholders
of Fulton for the year ended December 31, 2001, and unaudited Consolidated
Balance Sheets as of September 30, 2002, unaudited Consolidated Statements of
Income for the nine-month periods ended September 30, 2002 and 2001, and
unaudited Consolidated Statements of Cash Flows for the nine-months ended
September 30, 2002 and 2001 as filed with the SEC in a Quarterly Report on Form
10-Q (the Consolidated Balance Sheet as of September 30, 2002 being hereinafter
referred to as the "Fulton Balance Sheet"). Each of the foregoing financial
statements fairly presents the consolidated financial position, assets,
liabilities and results of operations of Fulton at their respective dates and
for the respective periods then ended and has been prepared in accordance with
generally accepted accounting principles consistently applied, except as
otherwise noted in a footnote thereto.

     Section 4.7 Absence of Undisclosed Liabilities. Except as disclosed in
Schedule 4.7 or as reflected, noted or adequately reserved against in the Fulton
Balance Sheet, at September 30, 2002 Fulton had no material liabilities (whether
accrued, absolute, contingent or otherwise) which were required to be reflected,
noted or reserved against in the Fulton Balance Sheet under generally accepted
accounting principles. Except as described in Schedule 4.7, since September 30,
2002 Fulton has not incurred any such liability other than liabilities of the
same nature as those set forth in the Fulton Balance Sheet, all of which have
been reasonably incurred in the ordinary course of business.

     Section 4.8 Absence of Changes; Dividends, Etc. Since September 30, 2002
(a) there has not been any material and adverse change in the condition
(financial or otherwise), assets, liabilities, business, operations or future
prospects of Fulton and the Fulton Subsidiaries on a consolidated basis and (b)
except as disclosed in Schedule 4.8, Fulton has not declared, set aside, made or
paid any dividend or other distribution in respect of the Fulton Common Stock,
or purchased, issued or sold any shares of Fulton Common Stock or the Fulton
Subsidiaries Common Stock.

     Section 4.9 Litigation and Governmental Directives. Except as disclosed in
Schedule 4.9: (i) there is no litigation, investigation or proceeding pending,
or to the Knowledge of Fulton threatened, that involves Fulton or any Fulton
Subsidiary or its properties and that, if determined adversely to Fulton or the
Fulton Subsidiary, would materially and adversely affect the condition
(financial or otherwise), assets, liabilities, business, operations or future
prospects of Fulton; (ii) there are no outstanding orders, writs, injunctions,
judgments, decrees, regulations, directives, consent agreements or memoranda of
understanding issued by any federal, state or

                                      -27-



local court or governmental agency or authority or of any arbitration tribunal
against Fulton which materially and adversely affect the condition (financial or
otherwise), assets, liabilities, business, operations or future prospects of
Fulton or restrict in any manner the right of Fulton to carry on its business as
presently conducted; and (iii) Fulton is not aware of any fact or condition
presently existing that might give rise to any litigation, investigation or
proceeding which, if determined adversely to Fulton, would materially and
adversely affect the condition (financial or otherwise), assets, liabilities,
business, operations or future prospects of Fulton or restrict in any manner the
right of Fulton to carry on its business as presently conducted.

     Section 4.10 Compliance with Laws; Governmental Authorizations. Except as
disclosed in Schedule 4.10 or where noncompliance would not have a material and
adverse effect upon the condition (financial or otherwise), assets, liabilities,
business, operations or future prospects of Fulton: (i) Fulton and each of its
Subsidiaries are in compliance with all statutes, laws, ordinances, rules,
regulations, judgments, orders, decrees, directives, consent agreements,
memoranda of understanding, permits, concessions, grants, franchises, licenses,
and other governmental authorizations or approvals applicable to their
respective operations and properties; and (ii) all permits, concessions, grants,
franchises, licenses and other governmental authorizations and approvals
necessary for the conduct of the respective businesses of Fulton and each of its
Subsidiaries as presently conducted have been duly obtained and are in full
force and effect, and there are no proceedings pending or threatened which may
result in the revocation, cancellation, suspension or materially adverse
modification of any thereof.

     Section 4.11 Complete and Accurate Disclosure. Neither this Agreement
(insofar as it relates to Fulton, Fulton Common Stock, and the involvement of
Fulton in the transactions contemplated hereby) nor any financial statement,
schedule (including, without limitation, its Schedules to this Agreement),
certificate or other statement or document delivered by Fulton to Premier in
connection herewith contains any statement which, at the time and under the
circumstances under which it is made, is false or misleading with respect to any
material fact or omits to state any material fact necessary to make the
statements contained herein or therein not false or misleading. In particular,
without limiting the generality of the foregoing sentence, the information
provided and the representations made by Fulton to Premier in connection with
the Registration Statement (as defined in Section 6.1(b)), both at the time such
information and representations are provided and made and at the time of the
Closing, will be true and accurate in all material respects and will not contain
any false or misleading statement with respect to any material fact or omit to
state any material fact required to be stated therein or necessary in order (i)
to make the statements made not false or misleading, or (ii) to correct any
statement contained in an earlier communication with respect to such information
or representations which has become false or misleading.

     Section 4.12 Labor Relations. Neither Fulton nor any of its Subsidiaries is
a party to or bound by any collective bargaining agreement. Fulton and each of
its Subsidiaries enjoy good working relationships with their employees, and
there are no labor disputes pending, or to the knowledge of Fulton or any
Subsidiary threatened, that might materially and adversely affect the condition
(financial or otherwise), assets, liabilities, business, operations or prospects
of Fulton.

                                      -28-



     Section 4.13 Employee Benefits Plans. Fulton's contributory profit-sharing
plan, defined benefits pension plan and 401(k) plan (hereinafter collectively
referred to as the "Fulton Pension Plans") are exempt from tax under Sections
401 and 501 of the Code, have been maintained and operated in compliance with
all applicable provisions of the Code and ERISA, are not subject to any
accumulated funding deficiency within the meaning of ERISA and the regulations
promulgated thereunder, and do not have any outstanding liability to the Pension
Benefit Guaranty Corporation (the "PBGC"). No "prohibited transaction" or
"reportable event" (as such terms are defined in the Code or ERISA) has occurred
with respect to the Fulton Pension Plans or any other employee benefit plan to
which Fulton or any of its subsidiaries are a party or by which Fulton or any of
its subsidiaries are bound (each hereinafter called a "Fulton Benefit Plan").
There have been no breaches of fiduciary duty by any fiduciary under or with
respect to the Fulton Pension Plans or any other Fulton Benefit Plan, and no
claim is pending or threatened with respect to any Fulton Benefit Plan other
than claims for benefits made in the Ordinary Course of Business. Neither Fulton
or any of its subsidiaries have incurred any liability for any tax imposed by
Section 4975 of the Code or for any penalty imposed by the Code or by ERISA with
respect to the Fulton Pension Plans or any other Fulton Benefit Plan. There has
not been any audit of any Fulton Benefit Plan by the Department of Labor, the
IRS or the PBGC since 1990.

     Section 4.14 Environmental Matters. Except as disclosed in Schedule 4.14,
Fulton has no material liability relating to any environmental contaminant,
pollutant, toxic or hazardous waste or other similar substance that has been
used, generated, stored, processed, disposed of or discharged onto any of the
real estate now or previously owned or acquired (including without limitation
real estate acquired by means of foreclosure or other exercise of any creditor's
right) or leased by Fulton and which is required to be reflected, noted or
adequately reserved against in Fulton's consolidated financial statements under
generally accepted accounting principles.

     Section 4.15 SEC Filings. No registration statement, offering circular,
proxy statement, schedule or report filed and not withdrawn by Fulton with the
SEC under the 1933 Act or the 1934 Act, on the date of effectiveness (in the
case of any registration statement or offering circular) or on the date of
filing (in the case of any report or schedule) or on the date of mailing (in the
case of any proxy statement), contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.

     Section 4.16 Proxy Statement/Prospectus. At the time the Proxy
Statement/Prospectus (as defined in Section 6.1(b)) is mailed to the
shareholders of Premier and at all times subsequent to such mailing, up to and
including the Effective Time, the Proxy Statement/Prospectus (including any pre-
and post-effective amendments and supplements thereto), with respect to all
information relating to Fulton, Fulton Common Stock, and actions taken and
statements made by Fulton in connection with the transactions contemplated
herein (other than information provided by Premier or Premier Bank to Fulton),
will: (i) comply in all material respects with applicable provisions of the 1933
Act and 1934 Act and the pertinent rules and regulations thereunder; and (ii)
not contain any statement which, at the time and in light of the circumstances
under which it is made, is false or misleading with respect to any material
fact,

                                      -29-



or omits to state any material fact that is required to be stated therein or
necessary in order (A) to make the statements therein not false or misleading,
or (B) to correct any statement in an earlier communication with respect to the
Proxy Statement/Prospectus which has become false or misleading.

     Section 4.17 Regulatory Approvals. Fulton is not aware of any reason why
any of the required regulatory approvals to be obtained in connection with the
Merger should not be granted by such regulatory authorities or why such
regulatory approvals should be conditioned on any requirement which would be a
significant impediment to Fulton's ability to carry on its business.

     Section 4.18 No Finder. Fulton has not paid or become obligated to pay any
fee or commission of any kind whatsoever to any broker, finder, advisor or other
intermediary for, on account of, or in connection with the transactions
contemplated in this Agreement.

     Section 4.19 Taxes. Fulton has filed, or has received extension for filing,
all federal, state, county, municipal and foreign tax returns, reports and
declarations which are required to be filed by it as of September 30, 2002.
Except as disclosed in Schedule 4.19, (i) Fulton has paid all taxes, penalties
and interest which have become due pursuant thereto or which became due pursuant
to federal, state, county, municipal or foreign tax laws applicable to the
periods covered by the foregoing tax returns, and (ii) Fulton has not received
any notice of deficiency or assessment of additional taxes. Except as disclosed
in Schedule 4.19, the accruals and reserves reflected in the Fulton Balance
Sheet are adequate to cover all material taxes (including interest and
penalties, if any, thereon) that are payable or accrued as a result of Fulton's
consolidated operations for all periods prior to the date of such Balance Sheet.

     Section 4.20 Title to and Condition of Assets. Fulton has good and
marketable title to all material consolidated real and personal properties and
assets reflected in the Fulton Balance Sheet or acquired subsequent to September
30, 2002 (other than property and assets disposed of in the Ordinary Course of
Business), free and clear of all liens or encumbrances of any kind whatsoever;
provided, however, that the representations and warranties contained in this
sentence do not cover liens or encumbrances that: (i) are reflected in the
Fulton Balance Sheet; (ii) represent liens of current taxes not yet due or
which, if due, may be paid without penalty, or which are being contested in good
faith by appropriate proceedings; and (iii) represent such imperfections of
title, liens, encumbrances, zoning requirements and easements, if any, as are
not substantial in character, amount or extent and do not materially detract
from the value, or interfere with the present or proposed use, of the properties
and assets subject thereto.

     Section 4.21 Contracts. All Fulton Material Contracts are enforceable
against Fulton, and Fulton has in all material respects performed all
obligations required to be performed by it to date and is not in default in any
material respect. "Fulton Material Contracts" shall be defined as each written
or oral contract entered into by Fulton or any Fulton Subsidiary (other than
contracts with customers reasonably entered into by Fulton in the Ordinary
Course of Business) which involves aggregate payments or receipts in excess of
$100,000 per year, including without limitation every employment contract,
employee benefit plan, agreement,

                                      -30-



lease, license, indenture, mortgage and other commitment to which either Fulton
or Fulton Subsidiaries are a party or by which Fulton or any of the Fulton
Subsidiaries or any of their properties may be bound.

       Section 4.22  Insurance. All policies of insurance covering operations of
Fulton which are, in the aggregate, material (except for title insurance
policies), including without limitation all financial institutions bonds, held
by or on behalf of Fulton are in full force and effect, and no notices of
cancellation have been received in connection therewith.

       Section 4.23  Reports. Fulton and the Fulton Subsidiaries has filed all
material reports, registrations and statements that are required to be filed
with the FRB, the FDIC, the Department, and any other applicable federal, state
or local governmental or regulatory authorities and such reports, registrations
and statements referred to in this Section 4.23 were, as of their respective
dates, in compliance in all material respects with all of the statutes, rules
and regulations enforced or promulgated by the governmental or regulatory
authority with which they were filed; provided, however, that the failure to
file any such report, registration or statement or the failure of any report,
registration or statement to comply with the applicable regulatory standard
shall not be deemed such failure has or may have a material adverse impact on
Fulton and the Fulton Subsidiaries on a consolidated basis. Fulton has furnished
Premier with, or made available to Premier, copies of all such filings made in
the last three fiscal years and in the period from January 1, 2003 to the date
of this Agreement. Fulton is required to file reports with the SEC pursuant to
Section 12 of the 1934 Act, and Fulton has made all appropriate filings under
the 1934 Act and the rules and regulations promulgated thereunder; provided,
however, that the failure to make any such filing shall not be deemed to be a
breach of the foregoing representation unless such failure has or may have a
material adverse impact on Fulton and the Fulton subsidiaries. The Fulton Common
Stock is traded on NASDAQ under the symbol "FULT."

                        ARTICLE V - COVENANTS OF PREMIER

               From the date of this Agreement until the Effective Time, Premier
covenants and agrees to do, and shall cause the Premier Subsidiaries to do, the
following:

       Section 5.1   Conduct of Business. Except as otherwise consented to by
Fulton in writing, Premier and the Premier Subsidiaries shall:

               (i)   use all reasonable efforts to carry on their respective
               businesses in, and only in, the Ordinary Course of Business;

               (ii)  use all reasonable efforts to preserve their present
               business organizations, to retain the services of their present
               officers and employees, and to maintain their relationships with
               customers, suppliers and others having business dealings with
               Premier or any of the Premier Subsidiaries;

               (iii) maintain all of their structures, equipment and other real
               property and tangible personal property in good repair, order and
               condition, except for ordinary

                                      -31-



               wear and tear and damage by unavoidable casualty;

               (iv)   use all reasonable efforts to preserve or collect all
               material claims and causes of action belonging to Premier or any
               of the Premier Subsidiaries;

               (v)    keep in full force and effect all insurance policies now
               carried by Premier or any of the Premier Subsidiaries;

               (vi)   perform in all material respects each of their obligations
               under all Material Contracts (as defined in Section 3.12 herein)
               to which Premier or any of the Premier Subsidiaries are a party
               or by which any of them may be bound or which relate to or affect
               their properties, assets and business;

               (vii)  maintain their books of account and other records in the
               Ordinary Course of Business;

               (viii) comply in all material respects with all statutes, laws,
               ordinances, rules and regulations, decrees, orders, consent
               agreements, memoranda of understanding and other federal, state,
               and local governmental directives applicable to Premier or any of
               the Premier Subsidiaries and to the conduct of their businesses;

               (ix)   not amend Premier's or any of the Premier Subsidiaries'
               Articles of Incorporation or Bylaws except in accordance with the
               terms hereof or to the extent necessary to consummate the
               transactions contemplated by this Agreement;

               (x)    not enter into or assume any Material Contract, incur any
               material liability or obligation, or make any material
               commitment, except in the Ordinary Course of Business;

               (xi)   not enter into or assume any material contract, incur any
               material liability or obligation, make any material acquisition
               or disposition of any properties or assets (except for
               acquisitions or dispositions of properties or assets in
               accordance with any Material Contract disclosed on Schedule 3.12
               or which do not exceed, in any case, $200,000), or subject any of
               their properties or assets to any material lien, claim, charge,
               or encumbrance of any kind whatsoever, except for loan and
               investment activity engaged in the Ordinary Course of Business
               and consistent with past practice;

               (xii)  not knowingly take or permit to be taken any action which
               would constitute or cause a material breach of any
               representation, warranty or covenant set forth in this Agreement
               as of or subsequent to the date of this Agreement or as of the
               Effective Date;

               (xiii) except as permitted in Section 5.10 herein, not declare,
               set aside or pay any dividend or make any other distribution in
               respect of Premier Common Stock

                                      -32-



               or of Premier Preferred Stock;

               (xiv)    not authorize, purchase, redeem, issue (except upon the
               exercise of outstanding options under the Premier Stock Option
               Plans) or sell (or grant options or rights to purchase or sell)
               any shares of Premier Common Stock or any other equity or debt
               securities of Premier (other than the Warrant or the Premier
               Common Stock issuable under the Warrant);

               (xv)     not increase the rate of compensation of, pay a bonus or
               severance compensation to, establish or amend any Premier Benefit
               Plan, except as required by law (as defined in Section 3.18
               herein) for, or enter into or amend any Employment Obligation (as
               defined in Section 3.17 herein), severance or "change in control"
               agreement or arrangement with any officer, director, employee or
               consultant of Premier or any of the Premier Subsidiaries, except
               that Premier and the Premier Subsidiaries may grant reasonable
               salary increases and bonuses to their officers and employees in
               the Ordinary Course of Business to the extent consistent with
               past practice or their current policy disclosed in writing to
               Fulton, and are consistent, in magnitude and otherwise, with the
               current policy disclosed in writing to Fulton of Premier and the
               Premier Subsidiaries (provided, however, that no Contract
               Employees nor Bruce Sickel shall receive a salary increase or
               bonus);

               (xvi)    not enter into any related party transaction of the kind
               contemplated in Section 3.19 herein;

               (xvii)   in determining the additions to loan loss reserves and
               the loan write-offs, writedowns and other adjustments that
               reasonably should be made by Premier Bank and classifying,
               valuing and retaining its investment portfolio, during the fiscal
               year ending December 31, 2003 and thereafter, Premier and the
               Premier Subsidiaries shall consult with Fulton and shall act in
               accordance with generally accepted accounting principles;

               (xviii)  file with appropriate federal, state, local and other
               governmental agencies all tax returns and other material reports
               required to be filed, pay in full or make adequate provisions for
               the payment of all taxes, interest, penalties, assessments or
               deficiencies shown to be due on tax returns or by any taxing
               authorities and report all information on such returns
               truthfully, accurately and completely;

               (xix)    not renew any existing contract for services, goods,
               equipment or the like or enter into, amend in any material
               respect or terminate any contract or agreement (including without
               limitation any settlement agreement with respect to litigation)
               involving an amount in excess of $10,000 or for a term of one
               year or more;

               (xx)     except as permitted by (xi) above, not make any capital
               expenditures other

                                      -33-



               than in the Ordinary Course of Business or as necessary to
               maintain existing assets in good repair;

               (xxi)   not make application for the opening or closing of any,
               or open or close any, branches or automated banking facility
               other than as disclosed on Schedule 5.1(xxi);

               (xxii)  not make any equity investment or commitment to make such
               an investment in real estate or in any real estate development
               project, other than in connection with foreclosures, settlements
               in lieu of foreclosure or troubled loan or debt restructuring in
               the Ordinary Course of Business consistent with customary banking
               practice;

               (xxiii) not take any other action similar to the foregoing which
               would have the effect of frustrating the purposes of this
               Agreement or the Merger or cause the Merger not to qualify as a
               tax-free reorganization under Section 368 of the Code; and

               (xxiv)  following receipt of both shareholder and regulatory
               approval of the Merger and upon agreement as to the Effective
               Date by Fulton and Premier, conform its practices to the
               standards used by Fulton, with respect to its investment and loan
               portfolios and loan loss reserve; provided, however, (A) in
               taking such actions, Premier shall not be required to breach any
               existing contractual obligations and (B) any such actions taken
               at the request of Fulton shall be subject to the provisions of
               subparagraph (a) of Section 7.2(f) herein.

       Section 5.2     Best Efforts. Premier and the Premier Subsidiaries shall
cooperate with Fulton and shall use their best efforts to do or cause to be done
all things necessary or appropriate on its part in order to fulfill the
conditions precedent set forth in Article VII of this Agreement and to
consummate the transactions contemplated by this Agreement, including the
Merger. In particular, without limiting the generality of the foregoing
sentence, Premier and the Premier Subsidiaries shall: (i) cooperate with Fulton
in the preparation of all required applications for regulatory approval of the
transactions contemplated by this Agreement and in the preparation of the
Registration Statement (as defined in Section 6.1(b)); and (ii) cooperate with
Fulton in making Premier's and the Premier Subsidiaries' employees reasonably
available for training by Fulton at Premier's and the Premier Subsidiaries'
facilities prior to the Effective Time, to the extent that such training is
deemed reasonably necessary by Fulton to ensure that Premier's and the Premier
Subsidiaries' facilities will be properly operated in accordance with Fulton's
policies after the Merger.

       Section 5.3     Access to Properties and Records. Premier and the Premier
Subsidiaries shall give to Fulton and its authorized employees and
representatives (including without limitation its counsel, accountants, economic
and environmental consultants and other designated representatives) such access
during normal business hours to all properties, books, contracts, documents and
records of Premier and the Premier Subsidiaries as Fulton may

                                      -34-



reasonably request, subject to the obligation of Fulton and its authorized
employees and representatives to maintain the confidentiality of all nonpublic
information concerning Premier and the Premier Subsidiaries obtained by reason
of such access and subject to applicable law.

       Section 5.4  Subsequent Financial Statements. Between the date of signing
of this Agreement and the Effective Time, Premier and the Premier Subsidiaries
shall promptly prepare and deliver to Fulton as soon as practicable all internal
monthly and quarterly financial statements, all quarterly and annual reports to
shareholders and all reports to regulatory authorities prepared by or for either
Premier or any of the Premier Subsidiaries (including, without limitation,
delivery of Premier's audited annual financial statements for 2002 as soon as
they are available) (which additional financial statements and reports are
hereinafter collectively referred to as the "Additional Premier Financial
Statements"). The representations and warranties set forth in Sections 3.6, 3.7
and 3.8 shall apply to the Additional Premier Financial Statements.

       Section 5.5  Update Schedules. Premier or any of the Premier Subsidiaries
shall promptly disclose to Fulton in writing any material change, addition,
deletion or other modification to the information set forth in its Schedules
hereto.

       Section 5.6  Notice. Premier or any of the Premier Subsidiaries shall
promptly notify Fulton in writing of any actions, claims, investigations,
proceedings or other developments which, if pending or in existence on the date
of this Agreement, would have been required to be disclosed to Fulton in order
to ensure the accuracy of the representations and warranties set forth in this
Agreement or which otherwise could materially and adversely affect the condition
(financial or otherwise), assets, liabilities, business operations or future
prospects of Premier or any of the Premier Subsidiaries or restrict in any
manner their ability to carry on their respective businesses as presently
conducted.

       Section 5.7  No Solicitation.

             (a)  Premier and the Premier Subsidiaries shall not, and shall not
       authorize or permit any of their officers, directors or employees or any
       investment banker, financial advisor or attorney to initiate or encourage
       (including by way of furnishing non-public information), or take any
       other action to facilitate, any inquiries or the making of any proposal
       that constitutes, or may reasonably be expected to lead to, an
       Acquisition Proposal, provided, however, that if, at any time the Board
       of Directors of Premier determines in good faith, after consultation with
       outside counsel, that failure to do so would be reasonably likely to
       constitute a breach of its fiduciary duties under applicable law,
       Premier, in response to a written Acquisition Proposal that (i) was
       unsolicited or that did not otherwise result from a breach of this
       Section, and (ii) is reasonably likely to lead to a Superior Proposal,
       may (x) furnish non-public information with respect to Premier or the
       Premier Subsidiaries to the person who made such Acquisition Proposal
       pursuant to a customary confidentiality agreement and (y) participate in
       negotiations regarding such Acquisition Proposal. Without limiting the
       foregoing, it is understood that any violation of the restrictions set
       forth in the preceding sentence by any director or officer of Premier

                                      -35-



         or any of the Premier Subsidiaries or any investment banker, financial
         advisor, attorney, accountant, or other representative of Premier or
         any of the Premier Subsidiaries, whether or not acting on behalf of
         Premier or any of its subsidiaries, shall be deemed to be a breach of
         this Section by Premier.

             (b)  Premier shall call a meeting of its shareholders to be held as
         promptly as practicable for the purpose of voting upon this Agreement
         and shall take, in good faith, all actions which are necessary or
         appropriate on its part in order to secure the approval of this
         Agreement by its shareholders at the meeting, including recommending
         the approval of this Agreement by Premier's shareholders; provided,
         however, that Premier's Board of Directors shall not be required to
         take any action otherwise required by this sentence that it has
         determined in good faith, after consultation with outside counsel,
         would be reasonably likely to constitute a breach of its fiduciary
         duties under applicable law.

             (c)  The Board of Directors of Premier shall not (1) fail to
         recommend this Agreement, withdraw or modify, or propose to withdraw or
         modify, in a manner adverse to Fulton, its approval or recommendation
         of this Agreement or the Merger unless there is an Acquisition Proposal
         outstanding, (2) approve or recommend, or propose to approve or
         recommend, an Acquisition Proposal or (3) cause Premier to enter into
         any letter of intent, agreement in principle, acquisition agreement or
         other agreement with respect to an Acquisition Proposal unless (x) the
         Board of Directors of Premier shall have determined in good faith,
         after consultation with outside counsel, that failure to do so would be
         reasonably likely to constitute a breach of its fiduciary duties under
         applicable law and (y) the applicable Acquisition Proposal is a
         Superior Proposal.

             (d)  Nothing contained in this Section shall prohibit Premier from
         at any time taking and disclosing to its shareholders a position
         contemplated by Rule 14e-2(a) promulgated under the Securities Exchange
         Act of 1934, as amended, provided, however, that neither Premier nor
         its Board of Directors shall, except as permitted by paragraph (b) of
         this section, propose to approve or recommend, an Acquisition Proposal.

             (e)  Premier shall promptly (but in any event within one day)
         advise Fulton orally and in writing of any Acquisition Proposal or any
         inquiry regarding the making of an Acquisition Proposal including any
         request for information, the material terms and conditions of such
         request, Acquisition Proposal or inquiry and the identity of the person
         making such request, Acquisition Proposal or inquiry. Premier will, to
         the extent reasonably practicable, keep Fulton fully informed of the
         status and details (including amendments or proposed amendments) of any
         such request, Acquisition Proposal or inquiry.

             (i)    In the event the Board of Directors of Premier takes any of
             the actions set forth in clauses (1), (2) and/or (3) of Section
             5.7(c) in compliance with the standards in (x) and (y) therein,
             such action shall allow termination of this Agreement by Fulton
             under Section 8.1(b)(iii) herein which shall be treated in the

                                      -36-



         same manner as termination under Section 8.1(a) herein and shall allow
         exercise of the Warrant. In the event the Board of Directors of Premier
         takes any of the actions set forth in clauses (1), (2) and/or (3) of
         Section 5.7(c) without compliance with the standards in (x) and (y)
         therein, such action shall constitute a breach allowing termination of
         this Agreement by Fulton under Section 8.1(c)(iii) herein which shall
         be treated in the same manner as termination by Fulton under Section
         8.1(b)(i) herein and shall allow exercise of the Warrant.

         (ii)     This Agreement may be terminated by Premier prior to the
         shareholders meeting of Premier if (A) the Board of Directors of
         Premier shall have determined in good faith after consultation with
         outside counsel that failure to do so would be reasonably likely to
         constitute a breach of its fiduciary duties to Premier's shareholders
         under applicable law, (B) it is not in breach of its obligations under
         this Section 5.7 in any material respect and has complied with, and
         continues to comply with, all requirements and procedures of this
         Section 5.7 in all material respects and has authorized, subject to
         complying with the terms of this Agreement, Premier to enter into a
         binding written agreement for a transaction that constitutes a Superior
         Proposal and Premier notifies Fulton in writing that it intends to
         enter into such agreement, attaching the most current version of such
         agreement to such notice; (C) Fulton does not make, within five (5)
         business days after receipt of Premier's written notice of its
         intention to enter into a binding agreement for a Superior Proposal,
         any offer that the Board of Directors reasonably and in good faith
         determines, after consultation with its financial and legal advisors,
         is at least as favorable to the shareholders of Premier as the Superior
         Proposal and during such period Premier reasonably considers and
         discusses in good faith all proposals submitted by Fulton and, without
         limiting the foregoing, meets with, and causes its financial and legal
         advisors to meet with, Fulton and its advisors from time to time as
         required by Fulton to consider and discuss in good faith Fulton's
         proposals, and (D) prior to Premier's termination pursuant to this
         Section 5.7(e)(ii), Premier confirms in writing that such termination
         allows exercise of the Warrant. Premier agrees (x) that it will not
         enter into a binding agreement referred to in clause (B) above until at
         least the five (5) business days after Fulton has received the notice
         to Fulton required by clause (B) and (y) to notify Fulton promptly if
         its intention to enter into a binding agreement referred to in its
         notice to Fulton shall change at any time after giving such notice.

         (f)    For the purpose of this Section 5.7:

         (i)      "Acquisition Proposal" shall mean a written proposal or
         written offer (other than by another party hereto) for a tender or
         exchange offer for securities of Premier or any of the Premier
         Subsidiaries, or a merger, consolidation or other business combination
         involving an acquisition of Premier or any of the Premier Subsidiaries
         or any proposal to acquire in any manner a substantial equity interest
         in or a substantial portion of the assets of Premier or any of the
         Premier

                                      -37-



             Subsidiaries.

             (ii)      A "Superior Proposal" shall be an Acquisition Proposal
         that the Board of Directors of Premier believes in good faith (after
         consultation with its financial advisor) is reasonably capable of being
         completed, taking into account all relevant legal, financial,
         regulatory and other aspects of the Acquisition Proposal and the source
         of its financing, on the terms proposed and, believes in good faith
         (after consultation with its financial advisor and after taking into
         account the strategic benefits anticipated to be derived from the
         Merger and the long-term prospects of Premier and the Premier
         Subsidiaries as a combined company), would, if consummated, result in a
         transaction more favorable to the shareholders of Premier from a
         financial point of view, than the transactions contemplated by this
         Agreement and believes in good faith (after consultation with its
         financial advisor) that the person making such Acquisition Proposal
         has, or is reasonably likely to have or obtain, any necessary funds or
         customary commitments to provide any funds necessary to consummate such
         Acquisition Proposal.

         Section 5.8   Affiliate Letters. Premier shall use its best efforts to
deliver or cause to be delivered to Fulton, at or before the Closing, a letter
from each of the officers and directors of Premier (and shall use its best
efforts to obtain and deliver such a letter from each shareholder of Premier)
who may be deemed to be an "affiliate" (as that term is defined for purposes of
Rules 145 and 405 promulgated by the SEC under the 1933 Act) of Premier, in form
and substance satisfactory to Fulton, under the terms of which each such
officer, director or shareholder acknowledges and agrees to abide by all
limitations imposed by the 1933 Act and by all rules, regulations and releases
promulgated thereunder by the SEC with respect to the sale or other disposition
of the shares of Fulton Common Stock to be received by such person pursuant to
this Agreement.

         Section 5.9   No Purchases or Sales of Fulton Common Stock During Price
Determination Period. Premier and the Premier Subsidiaries shall not, and shall
use their best efforts to ensure that their executive officers and directors do
not, and shall use their best efforts to ensure that each shareholder of Premier
who may be deemed an "affiliate" (as defined in SEC Rules 145 and 405) of
Premier does not, purchase or sell on NASDAQ, or submit a bid to purchase or an
offer to sell on NASDAQ, directly or indirectly, any shares of Fulton Common
Stock or any options, rights or other securities convertible into shares of
Fulton Common Stock during the Price Determination Period.

         Section 5.10  Dividends. Between the date of this Agreement and the
Effective Date, Premier shall only declare and pay cash dividends as provided in
this Section 5.10. Premier shall only pay (a) quarterly cash dividends on its
Common Stock in an amount not in excess of $0.05 per share during each of the
first and second calendar quarters of 2003, maintaining the same record and
payment dates as Fulton; provided, however, that if the Effective Date has not
occurred on or before June 30, 2003, Premier may, for each calendar quarter
thereafter until the Effective Date (using the same record and payment dates as
referenced above), pay a cash dividend in such amount as would have been
received by Premier's Shareholders had the

                                      -38-



Effective Date occurred on July 16, 2003 taking into account any adjustments
required by Section 2.1(b), and (b) its regular quarterly cash dividends on its
Preferred Stock in accordance with its terms. With respect to dividends on the
Premier Common Stock, it is the intent of Fulton and Premier that Premier be
permitted to pay a dividend on the Premier Common Stock on the dates indicated
only if the shareholders of Premier, upon becoming shareholders of Fulton, would
not be entitled to receive a dividend on the Fulton Common Stock on the
applicable payment dates. Fulton shall provide Premier with prompt written
notice of the declaration of a dividend on the Fulton Common Stock.

                        ARTICLE VI - COVENANTS OF FULTON

         From the date of this Agreement until the Effective Time, or until such
later date as may be expressly stipulated in any Section of this Article VI,
Fulton covenants and agrees to do the following:

         Section 6.1   Best Efforts. Fulton shall cooperate with Premier and the
Premier Subsidiaries and shall use its best efforts to do or cause to be done
all things necessary or appropriate on its part in order to fulfill the
conditions precedent set forth in Article VII of this Agreement and to
consummate the transactions contemplated by this Agreement, including the
Merger. In particular, without limiting the generality of the foregoing
sentence, Fulton agrees to do the following:

                  (a)  Applications for Regulatory Approval. Fulton shall
         promptly prepare and file, with the cooperation and assistance of (and
         after review by) Premier and its counsel and accountants, all required
         applications for regulatory approval of the transactions contemplated
         by this Agreement, including without limitation applications for
         approval under the BHC Act, the Pennsylvania Banking Code of 1965, as
         amended and the Federal Deposit Insurance Act, as amended.

                  (b)  Registration Statement.  Fulton shall promptly prepare,
         with the cooperation and assistance of (and after review by) Premier
         and its counsel and accountants, and file with the SEC a registration
         statement (the "Registration Statement") for the purpose of registering
         the shares of Fulton Common Stock to be issued to shareholders of
         Premier under the provisions of this Agreement and a proxy statement
         and prospectus which is prepared as a part thereof (the "Proxy
         Statement/Prospectus") for the purpose of registering the shares of
         Fulton's Common Stock to be issued to the shareholders of Premier, and
         the soliciting of the proxies of Premier's shareholders in favor of the
         Merger, under the provisions of this Agreement. Fulton may rely upon
         all information provided to it by Premier and Premier Bank in this
         connection and Fulton shall not be liable for any untrue statement of a
         material fact or any omission to state a material fact in the
         Registration Statement, or in the Proxy Statement/Prospectus, if such
         statement is made by Fulton in reliance upon any information provided
         to Fulton by Premier or the Premier Subsidiaries or by any of their
         officers, agents or representatives. Fulton shall provide a draft of
         the Registration Statement to Premier and its counsel for comment and

                                      -39-



         review at least ten (10) business days in advance of the anticipated
         filing date.

                  (c)  State Securities Laws. Fulton, with the cooperation and
         assistance of Premier and its counsel and accountants, shall promptly
         take all such actions as may be necessary or appropriate in order to
         comply with all applicable securities laws of any state having
         jurisdiction over the transactions contemplated by this Agreement.

                  (d)  Stock Listing. Fulton, with the cooperation and
         assistance of Premier and its counsel and accountants, shall promptly
         take all such actions as may be necessary or appropriate in order to
         list the shares of Fulton Common Stock to be issued in the Merger on
         NASDAQ.

                  (e)  Adopt Amendments. Fulton shall not adopt any amendments
         to its charter or bylaws or other organizational documents that would
         alter the terms of Fulton's Common Stock or could reasonably be
         expected to have a material adverse effect on the ability of Fulton to
         perform its obligations under this Agreement.

                  (f)  Tax Treatment. Fulton shall take no action which would
         have the effect of causing the Merger not to qualify as a tax-free
         reorganization under Section 368 of the Code.

         Section 6.2  Access to Properties and Records. Fulton shall give to
Premier and to its authorized employees and representatives (including without
limitation Premier's counsel, accountants, economic and environmental
consultants and other designated representatives) such access during normal
business hours to all properties, books, contracts, documents and records of
Fulton as Premier may reasonably request, subject to the obligation of Premier
and its authorized employees and representatives to maintain the confidentiality
of all nonpublic information concerning Fulton obtained by reason of such
access.

         Section 6.3  Subsequent Financial Statements. Between the date of
signing of this Agreement and the Effective Time, Fulton shall promptly prepare
and deliver to Premier as soon as practicable each Quarterly Report to Fulton's
shareholders and any Annual Report to Fulton's shareholders normally prepared by
Fulton. The representations and warranties set forth in Sections 4.6, 4.7 and
4.8 herein shall apply to the financial statements (hereinafter collectively
referred to as the "Additional Fulton Financial Statements") set forth in the
foregoing Quarterly Reports and any Annual Report to Fulton's shareholders.

         Section 6.4  Update Schedules. Fulton shall promptly disclose to
Premier in writing any change, addition, deletion or other modification to the
information set forth in its Schedules to this Agreement.

         Section 6.5  Notice. Fulton shall promptly notify Premier in writing
of any actions, claims, investigations or other developments which, if pending
or in existence on the date of this Agreement, would have been required to be
disclosed to Premier in order to ensure the accuracy of the representations and
warranties set forth in this Agreement or which otherwise could materially and
adversely affect the condition (financial or otherwise), assets, liabilities,
business,

                                      -40-



operations or future prospects of Fulton or restrict in any manner the
right of Fulton to carry on its business as presently conducted.

         Section 6.6   No Purchase or Sales of Fulton Common Stock During Price
Determination Period. Neither Fulton nor any Subsidiary of Fulton, nor any
executive officer or director of Fulton or any Subsidiary of Fulton, nor any
shareholder of Fulton who may be deemed to be an "affiliate" (as that term is
defined for purposes of Rules 145 and 405 promulgated by the SEC under the 1933
Act) of Fulton, shall purchase or sell on NASDAQ, or submit a bid to purchase or
an offer to sell on NASDAQ, directly or indirectly, any shares of Fulton Common
Stock or any options, rights or other securities convertible into shares of
Fulton Common Stock during the Price Determination Period; provided, however,
that Fulton may purchase shares of Fulton Common Stock in the ordinary course of
business during the Price Determination Period for the benefit of Fulton's
Benefit Plans or Fulton's Dividend Reinvestment Plan.

         Section 6.7   Assumption of Premier Debentures. Fulton agrees that,
effective with the Effective Date, it shall assume Premier's 8.57% Junior
Subordinated Deferrable Interest Debentures due August 15, 2028 and Variable
Rate Junior Subordinated Deferrable Interest Debentures due November 30, 2032
and all of Premier's obligations under the related Indentures, and shall take
all actions necessary or appropriated in accordance therewith, including, if
requested by the trustee, execution of a supplemental indenture and other
appropriate documents or certificates.

         Section 6.8   Employment Arrangements.

                (a)  From and after the Effective Time, (i) Fulton, Premier Bank
         or another subsidiary of Fulton (any such parties employing employees
         of Premier or a Premier subsidiary, the "Fulton Employers") shall: (A)
         satisfy each of the Employment Obligations (as defined in Section 3.17
         herein), and (B) use its good faith efforts to retain each present
         employee of Premier and the Premier Subsidiaries in such employee's
         current position and salary compensation (or, if offered to, and
         accepted by, an employee, a position for which the employee is
         qualified with the Fulton Employers at a compensation commensurate with
         the position), (ii) in the event that the Fulton Employers shall
         continue to employ officers or employees of Premier and the Premier
         Subsidiaries as of the Effective Time, the Fulton Employers shall
         employ such persons on the Effective Time who are not Contract
         Employees (as that term is defined in Section 3.17 herein) as "at will"
         employees, and (iii) in the event the Fulton Employers are not willing
         to employ, or terminate the employment (other than as a result of
         unsatisfactory performance of their respective duties) of any officers
         or employees of Premier or the Premier Subsidiaries who are not
         Contract Employees and who do not receive any payment as a result of a
         Change of Control Agreement with Premier or Premier Bank, the Fulton
         Employers shall pay severance benefits to such employees (other than
         Contract Employees) as follows: (A) in the event employment is
         terminated on or prior to the date which is one year after the
         Effective Date, the greater of (I) three months' salary or (II) one
         week's salary and one week's salary for each year of service with
         Premier or an

                                      -41-



         Premier Subsidiary, thereafter, up to a maximum of 26 weeks' salary; or
         (B) in the event employment is terminated thereafter, in accordance
         with the then existing severance policy of Fulton or its successor.

               (b)  The Fulton Employers shall be obligated to provide employee
         benefits to each person who is an employee, on the Effective Time and
         continues to be employed that are substantially equivalent, in the
         aggregate, to the benefits under the Premier Benefit Plans prior to the
         Effective Time, until the earlier of: (A) at least three (3) years
         after the Effective Date, or (B) the date that the Fulton Employers can
         no longer satisfy the applicable qualified retirement plan
         discrimination testing under the Code. For vesting and eligibility
         purposes for employee benefits, under each Fulton Benefit Plan and/or
         any employee benefit plan established by Fulton after the Effective
         Date, employees of the Premier Subsidiaries shall receive credit for
         years of service with the Premier Subsidiaries.

         Section 6.9  Insurance; Indemnification.

               (a)  For four (4) years after the Effective Date, Fulton shall
         (and Premier Bank shall cooperate in these efforts) obtain and maintain
         "tail" coverage relating to Premier's existing directors and officers
         liability insurance policy (provided that such insurance shall be in
         such amount and with terms and conditions no less favorable to the
         Director and Officer Liability Policy of Premier as of the date of this
         Agreement and carry such premium (not to exceed 150% of the current
         premium for Premier's existing directors and officers liability
         insurance policy) and that Fulton may substitute therefor policies of
         at least the same coverage and amounts containing terms and conditions
         which are substantially no less advantageous) with respect to claims
         arising from facts or circumstances which occur prior to the Effective
         Date (other than relating to this Agreement and the transactions
         contemplated hereby) and covering persons who are covered by such
         insurance immediately prior to the Effective Date.

               (b)  From and after the Effective Date, Fulton shall indemnify,
         defend and hold harmless each person who is now, or has been at any
         time prior to the date hereof, or who becomes prior to the Effective
         Date, an officer, employee or director of Premier or a Premier
         Subsidiary (the "Indemnified Parties") against all losses, claims,
         damages, costs, expenses (including reasonable attorneys' fees),
         liabilities or judgments or amounts that are paid in settlement (which
         settlement shall require the prior written consent of Fulton, which
         consent shall not be unreasonably withheld) or in connection with any
         claim, action, suit, proceeding or investigation (a "Claim") in which
         an Indemnified Party is, or is threatened to be made, a party or a
         witness based in whole or in part out of the fact that such person is
         or was a director, officer or employee of Premier or a Premier
         Subsidiary if such Claim pertains to any matter of fact arising,
         existing or occurring prior to the Effective Date (including, without
         limitation, the Merger and other transactions contemplated by this
         Agreement) regardless of whether such Claim is asserted or claimed
         prior to, at, or after the Effective Date (the "Indemnified
         Liabilities") to the full extent permitted under applicable law as to
         the date hereof or amended prior to the Effective

                                      -42-



         Date and under the Articles of Incorporation or Bylaws of Premier or a
         Premier Subsidiary as in effect as of the date hereof (and Fulton shall
         pay expenses in advance of the full disposition of any such action or
         proceeding to each of the Indemnified Parties to the full extent
         permitted by applicable law and Fulton's Articles of Incorporation and
         Bylaws). Any Indemnified Party wishing to claim indemnification under
         this provision, upon learning of any claim, shall notify Fulton (but
         the failure to so notify Fulton shall not relieve Fulton from any
         liability which Fulton may have under this section except to the extent
         Fulton is materially prejudiced thereby). In the defense of any action
         covered by this Section 6.10(b), Fulton shall have the right to direct
         the defense of such action and retain counsel of its choice; provided,
         however, that, notwithstanding the foregoing, the Indemnified Parties
         as a group may retain a single law firm to represent them with respect
         to each matter under this section if there is, under applicable
         standards of professional conduct, a conflict on any significant issue
         between the positions of Fulton and the Indemnified Parties (the
         Indemnified Parties may also retain more than one law firm if there is,
         under applicable standards of professional conduct, a conflict of any
         significant issues between the positions of two or more Indemnified
         Parties). Fulton shall have an obligation to advance funds to satisfy
         an obligation of Fulton or any successor to Fulton under this Section
         6.10(b) to the same extent that Fulton would be obligated to advance
         funds under the indemnification provisions of its Articles of
         Incorporation and/or Bylaws.

         Section 6.10  Appointment of Fulton Director. Fulton shall, on or
promptly after the Effective Date (but no later than Fulton's next Board of
Directors meeting following the Effective Date), appoint to Fulton's Board of
Directors Clark S. Frame (or one of Premier's other current directors
designated, subject to the reasonable approval of Fulton, by vote of Premier's
Board of Directors prior to the Effective Date) to serve as a director of
Fulton. Such director shall stand for election at Fulton's 2004 annual meeting,
at which time Fulton shall nominate and recommend for election such director for
an additional term of three (3) years. Fulton has a mandatory retirement policy
for directors who attain age 70; however, Fulton would "grandfather" the present
director of Premier appointed as set forth above from the application of such
policy for a three year period after the Effective Date unless such director
would have otherwise been obligated to retire from the Board of Premier under
any policy it currently has in effect.

         Section 6.11  Continuation of Premier Bank's Structure, Name and
         Directors.

               (a)  For a period of three (3) years after the Effective Date,
         Fulton shall (subject to the right of Fulton and the Premier Bank
         Continuing Directors to terminate such obligations under this Section
         6.11(a) under subsections (b) and (c) below) (i) preserve the business
         structure of Premier Bank as a Pennsylvania commercial bank (provided
         that Fulton may cause Premier Bank's branch offices located in
         Northampton County, Pennsylvania to be transferred to another bank
         subsidiary of Fulton); (ii) preserve and use the present name of
         Premier Bank, and (iii) continue in office the present directors of
         Premier Bank who indicate their desire to serve the "Premier Bank
         Continuing Directors"), provided, that (A) for such three year period,
         each non-employee Premier

                                      -43-



         Bank Continuing Director shall continue to receive director's fees from
         Premier Bank on the same basis as prior to the Effective Date and shall
         continue to receive such other incidental benefits as he or she was
         receiving from Premier Bank prior to the Effective Date (the current
         fees and benefits being set forth on Schedule 6.11 and to remain
         unchanged through the Effective Date); provided that, in the event an
         individual Premier Bank Continuing Director ceases to act as a director
         or as a member of any committee thereof, the foregoing obligation to
         maintain existing fees and benefits shall not apply to successors in
         such positions and (B) after such three-year period, each Premier Bank
         Continuing Director shall be subject to Fulton's mandatory retirement
         rules for directors and shall receive the standard fee paid to
         directors of subsidiary banks of Fulton.

               (b)  Fulton shall have the right to terminate its obligations
         under subsection (a) of this Section 6.11 as a result of (i) regulatory
         requirements, (ii) safe and sound banking practices as enunciated by
         bank regulatory agencies, or (iii) the exercise of their fiduciary
         duties by Fulton's directors.

               (c)  Notwithstanding anything herein to the contrary, the Premier
         Bank Continuing Directors, in their exercise of their fiduciary duty as
         to the best interests of Premier Bank and Fulton, may, by a majority
         vote of such directors, modify or waive any or all of the foregoing
         provisions in subsection (a) of this Section 6.11.

                       ARTICLE VII - CONDITIONS PRECEDENT

         Section 7.1 Common Conditions. The obligations of the parties to
consummate this Agreement shall be subject to the satisfaction of each of the
following common conditions prior to or as of the Closing, except to the extent
that any such condition shall have been waived in accordance with the provisions
of Section 8.4 herein:

               (a)  Shareholder Approval: This Agreement shall have been duly
         authorized, approved and adopted by the shareholders of Premier in
         accordance with applicable law, AMEX rules and regulations, and the
         Articles of Incorporation of Premier.

               (b)  Regulatory Approvals:  The approval of each federal and
         state regulatory authority having jurisdiction over the transactions
         contemplated by this Agreement (including the Merger), including
         without limitation, the Federal Reserve Board, the Department and the
         Federal Deposit Insurance Corporation, shall have been obtained and all
         applicable waiting and notice periods shall have expired, subject to no
         terms or conditions which would (i) require or could reasonably be
         expected to require (A) any divestiture by Fulton of a portion of the
         business of Fulton, or any subsidiary of Fulton or (B) any divestiture
         by Premier or the Premier Subsidiaries of a portion of their businesses
         which Fulton in its good faith judgment believes will have a
         significant adverse impact on the business or prospects of Premier or
         the Premier Subsidiaries, as the case may be, or (ii) impose any
         condition upon Fulton or Premier Bank, or their other subsidiaries,
         taken as a whole, which in Fulton's good faith judgment (x) would be
         materially burdensome to Fulton and its subsidiaries taken as a whole,
         (y) would significantly

                                      -44-



         increase the costs incurred or that will be incurred by Fulton as a
         result of consummating the Merger or (z) would prevent Fulton from
         obtaining any material benefit contemplated by it to be attained as a
         result of the Merger.

               (c)  Stock Listing. The shares of Fulton Common Stock to be
         issued in the Merger shall have been authorized for listing on NASDAQ.

               (d)  Tax Opinion. Each of Fulton and Premier shall have received
         an opinion of Fulton's counsel, Barley, Snyder, Senft & Cohen, LLC,
         reasonably acceptable to Fulton and Premier, addressed to Fulton and
         Premier, with respect to federal tax laws or regulations, to the effect
         that:

               (i)    The Merger will constitute a reorganization within the
               meaning of Section 368(a)(1)(A) of the Code and Fulton and
               Premier will each be a "party to a reorganization" within the
               meaning of Section 368(b)(1) of the Code;

               (ii)   No gain or loss will be recognized by Fulton or Premier by
               reason of the Merger;

               (iii)  The bases of the assets of Premier in the hands of Fulton
               will be the same as the bases of such assets in the hands of
               Premier immediately prior to the Merger;

               (iv)   The holding period of the assets of Premier in the hands
               of Fulton will include the period during which such assets were
               held by Premier prior to the Merger;

               (v)    A holder of Premier Common Stock who receives shares of
               Fulton Common Stock in exchange for his Premier Common Stock
               pursuant to the reorganization (except with respect to cash
               received in lieu of fractional shares of Fulton Common Stock
               deemed issued as described below) will not recognize any gain or
               loss upon the exchange.

               (vi)   A holder of Premier Common Stock who receives cash in lieu
               of a fractional share of Fulton Common Stock will be treated as
               if he received a fractional share of Fulton Common Stock pursuant
               to the reorganization which Fulton then redeemed for cash. The
               holder of Premier Common Stock will recognize capital gain or
               loss on the constructive redemption of the fractional share in an
               amount equal to the difference between the cash received and the
               adjusted basis of the fractional share.

               (vii)  The tax basis of the Fulton Common Stock to be received by
               the shareholders of Premier pursuant to the terms of this
               Agreement will include the holding period of the Premier Common
               Stock surrendered in exchange therefor, provided that such
               Premier Common Stock is held as a capital interest at the

                                      -45-



          Effective Time.

          (viii) The holding period of the shares of Fulton Common Stock to be
          received by the shareholders of Premier will include the period during
          which they held the shares of Premier Common Stock surrendered,
          provided the shares of Premier Common Stock are held as a capital
          asset on the date of the exchange.

          (e) Registration Statement: The Registration Statement (as defined in
     Section 6.1(b), including any amendments thereto) shall have been declared
     effective by the SEC; the information contained therein shall be true,
     complete and correct in all material respects as of the date of mailing of
     the Proxy Statement/Prospectus (as defined in Section 6.1(b)) to the
     shareholders of Premier; regulatory clearance for the offering contemplated
     by the Registration Statement (the "Offering") shall have been received
     from each federal and state regulatory authority having jurisdiction over
     the Offering; and no stop order shall have been issued and no proceedings
     shall have been instituted or threatened by any federal or state regulatory
     authority to suspend or terminate the effectiveness of the Registration
     Statement or the Offering.

          (f) No Suits: No action, suit or proceeding shall be pending or
     threatened before any federal, state or local court or governmental
     authority or before any arbitration tribunal which seeks to modify, enjoin
     or prohibit or otherwise adversely and materially affect the transactions
     contemplated by this Agreement; provided, however, that if Fulton agrees to
     defend and indemnify Premier and Premier Bank and their respective officers
     and directors with regard to any such action, suit or proceeding pending or
     threatened against them or any of them, then such pending or threatened
     action, suit or proceeding shall not be deemed to constitute the failure of
     a condition precedent to the obligation of Premier to consummate this
     Agreement.

     Section 7.2 Conditions Precedent to Obligations of Fulton. The obligations
of Fulton to consummate this Agreement shall be subject to the satisfaction of
each of the following conditions prior to or as of the Closing, except to the
extent that any such condition shall have been waived by Fulton in accordance
with the provisions of Section 8.4 herein:

          (a) Accuracy of Representations and Warranties: All of the
     representations and warranties of Premier as set forth in this Agreement,
     all of the information contained in Schedules hereto and all Premier
     Closing Documents (as defined in Section 7.2(j)) shall be true and correct
     in all material respects as of the Closing as if made on such date (or on
     the date to which it relates in the case of any representation or warranty
     which expressly relates to an earlier date).

          (b) Covenants Performed: Premier shall have performed or complied in
     all material respects with each of the covenants required by this Agreement
     to be performed or complied with by it.

          (c) Opinion of Counsel for Premier: Fulton shall have received an
     opinion,

                                      -46-



     dated the Effective Time, from Shumaker Williams P.C., special counsel to
     Premier, in substantially the form of Exhibit C hereto. In rendering any
     such opinion, such special counsel may require and, to the extent they deem
     necessary or appropriate may rely upon, opinions of other counsel and upon
     representations made in certificates of officers of Premier, Fulton,
     affiliates of the foregoing, and others.

          (d) Affiliate Agreements: Shareholders of Premier who are or will be
     affiliates of Premier or Fulton for the purposes of Accounting Series
     Release No. 135 and the 1933 Act shall have entered into agreements with
     Fulton, in form and substance satisfactory to Fulton, reasonably necessary
     to assure compliance with Rule 145 under the 1933 Act.

          (e) Premier Options: As may be required by Section 2.3 herein, all
     holders of Premier Options shall have delivered documentation reasonably
     satisfactory to Fulton substituting the Fulton Stock Options for the
     Premier Stock Options.

          (f) No Material Adverse Change: Fulton (together with its accountants,
     if the advice of such accountants is deemed necessary or desirable by
     Fulton) shall have established to its reasonable satisfaction that, since
     the date of this Agreement, there shall not have been any material and
     adverse change in the condition (financial or otherwise), assets,
     liabilities, business or operations or future prospects of Premier and the
     Premier Subsidiaries on a consolidated basis taken as a whole. In
     particular, without limiting the generality of the foregoing sentence, the
     Additional Premier Financial Statements (as defined in Section 5.4) shall
     indicate that the consolidated financial condition, assets, liabilities and
     results of operations of Premier as of the respective dates reported
     therein do not vary adversely in any material respect from the consolidated
     financial condition, assets, liabilities and results of operations
     presented in the Premier Balance Sheet. For purposes of this Section
     7.2(f), a material and adverse change shall mean an event, change, or
     occurrence which, individually or together with any other event, change, or
     occurrence, has a material adverse impact on (i) the financial position,
     business or results of operations or future prospects of Premier or (ii)
     the ability of Premier to perform its obligations under this Agreement,
     provided that "material and adverse change" shall not be deemed to include
     the impact of (a) changes in banking and similar laws of general
     applicability or interpretations thereof by courts or governmental
     authorities, (b) changes in GAAP or regulatory accounting principles
     generally applicable to banks and their holding companies, (c) actions or
     omissions of Premier taken at the direction or behest of Fulton with the
     prior written consent of Fulton, including any action or actions,
     individually or in the aggregate, taken by Premier or the Premier
     Subsidiaries, (d) changes in economic conditions generally affecting
     financial institutions including changes in the general level of interest
     rates, and (e) the direct effects of compliance with this Agreement and of
     satisfying or causing to be satisfied the conditions set forth in this
     Article VII on the operating performance of Premier, including reasonable
     expenses incurred by Premier in consummating the transactions contemplated
     by the Agreement. At the Closing, Premier shall deliver to Fulton a
     certificate confirming the absence of a material adverse change described
     herein and a certificate (from appropriate officers of Premier and/or
     Premier's transfer agent) as to the issued and outstanding shares of

                                      -47-



     Premier Common Stock and Premier Preferred Stock, shares issuable under
     outstanding stock options granted under Premier's Stock Option Plan and any
     outstanding obligations, options or rights of any kind entitling persons to
     purchase or sell any shares of Premier Common Stock or Premier Preferred
     Stock and any outstanding securities or other instruments of any kind that
     are convertible into such shares

          (g)  Accountants' Letter. Subject to the requirements of Statement of
     Auditing Standards No. 72 of the American Institute of Certified Public
     Accountants, KPMG LLP, or such other accounting firm as is acceptable to
     Fulton, shall have furnished to Fulton an "agreed upon procedures" letter,
     dated the Effective Date, in form and substance satisfactory to Fulton to
     the effect that:

          (i)  In their opinion, the consolidated financial statements of
     Premier examined by them and included in the Registration Statement comply
     as to form in all material respects with the applicable accounting
     requirements of the 1933 Act and the published rules and regulations
     thereunder; and

          (ii) On the basis of limited procedures, not constituting an audit,
     including a limited review of the unaudited financial statements referred
     to below, a limited review of the latest available unaudited consolidated
     interim financial statements of Premier , inspection of the minute books of
     Premier and the Premier Subsidiaries since December 31, 2001, inquiries of
     officials of Premier and the Premier Subsidiaries responsible for financial
     and accounting matters and such other inquiries and procedures as may be
     specified in such letter, nothing came to their attention that caused them
     to believe that:

               (A) any unaudited Consolidated Balance Sheets, Consolidated
               Statements of Income, Consolidated Statements of Shareholders'
               Equity and Consolidated Statements of Cash Flows of Premier
               included in the Registration Statement are not in conformity with
               generally accepted accounting principles applied on a basis
               substantially consistent with that of the audited financial
               statements covered by their report included in the Registration
               Statement;

               (B) as of a specified date not more than five days prior to the
               date of delivery of such letter, there have been any changes in
               the consolidated shareholders' equity of Premier as compared with
               amounts shown in the balance sheet as of December 31, 2002
               included in the Registration Statement, except in each case for
               such changes, increases or decreases which the Registration
               Statement discloses have occurred or may occur and except for
               such changes, decreases or increases as aforesaid which are
               immaterial; and

               (C) for the period from January 1, 2003 to such specified date,
               there were any decreases in the consolidated total net interest
               income,

                                      -48-



               consolidated net interest income after provision for loan losses,
               consolidated other income, consolidated net income or net income
               per share amounts of Premier as compared with the comparable
               period of the preceding year, except in each case for decreases
               which the Registration Statement discloses have occurred or may
               occur, and except for such decreases which are immaterial.

          (h) Federal and State Securities and Antitrust Laws: Fulton and its
     counsel shall have determined to their satisfaction that, as of the
     Closing, all applicable securities and antitrust laws of the federal
     government and of any state government having jurisdiction over the
     transactions contemplated by this Agreement shall have been complied with.

          (i) Environmental Matters: No environmental problem of the kind
     contemplated in Section 3.22 and not disclosed in Schedule 3.22 shall have
     been discovered which would, or which potentially could, materially and
     adversely affect the condition (financial or otherwise), assets,
     liabilities, business, operations or future prospects of either Premier or
     Premier Bank.

          (j) Closing Documents: Premier shall have delivered to Fulton: (i) a
     certificate signed by Premier's President and Chief Executive Officer and
     by its Secretary (or other officers reasonably acceptable to Fulton)
     verifying that, to their knowledge, all of the representations and
     warranties of Premier set forth in this Agreement are true and correct in
     all material respects as of the Closing and that Premier has performed in
     all material respects each of the covenants required to be performed by it
     under this Agreement; (ii) all consents and authorizations of landlords and
     other persons that are necessary to permit this Agreement to be consummated
     without violation of any lease or other agreement to which Premier or
     Premier Bank is a party or by which they or any of their properties are
     bound; and (iii) such other certificates and documents as Fulton and its
     counsel may reasonably request (all of the foregoing certificates and other
     documents being herein referred to as the "Premier Closing Documents").

          (k) Redemption of Premier Preferred Stock. All of the outstanding
     shares of the Premier Preferred Stoc shall be redeemed as set forth in
     Section 2.9.

     Section 7.3 Conditions Precedent to the Obligations of Premier. The
obligation of Premier to consummate this Agreement shall be subject to the
satisfaction of each of the following conditions prior to or as of the Closing,
except to the extent that any such condition shall have been waived by Premier
in accordance with the provisions of Section 8.4 herein:

          (a) Accuracy of Representations and Warranties: All of the
     representations and warranties of Fulton as set forth in this Agreement,
     all of the information contained in its Schedules hereto and all Fulton
     Closing Documents (as defined in Section 7.3(g) of this Agreement) shall be
     true and correct in all material respects as of the Closing as if made on
     such date (or on the date to which it relates in the case of any
     representation or

                                      -49-



     warranty which expressly relates to an earlier date).

          (b) Covenants Performed: Fulton shall have performed or complied in
     all material respects with each of the covenants required by this Agreement
     to be performed or complied with by Fulton.

          (c) Opinion of Counsel for Fulton: Premier shall have received an
     opinion from Barley, Snyder, Senft & Cohen, LLC, counsel to Fulton, dated
     the Effective Time, in substantially the form of Exhibit F hereto. In
     rendering any such opinion, such counsel may require and, to the extent
     they deem necessary or appropriate may rely upon, opinions of other counsel
     and upon representations made in certificates of officers of Fulton,
     Premier, affiliates of the foregoing, and others.

          (d) Fulton Options: Fulton Stock Options shall have been substituted
     for the Premier Options pursuant to Section 2.3 herein. The Fulton Stock
     Option agreements shall have been delivered and the Registration Statement
     for the purpose of registering the shares necessary to satisfy Fulton's
     obligation with respect to the issuance of Fulton Common Stock pursuant to
     the exercise of the Fulton Stock Options shall have been declared
     effective.

          (e) No Material Adverse Change: Premier (together with its
     accountants, if the advice of such accountant is deemed necessary or
     desirable by Premier) shall have established to its reasonable satisfaction
     that, since the date of this Agreement, there shall not have been any
     material and adverse change in the condition (financial or otherwise),
     assets, liabilities, business or operations or future prospects of Fulton.
     In particular, without limiting the generality of the foregoing sentence,
     the Additional Fulton Financial Statements (as defined in Section 6.3)
     shall indicate that the consolidated financial condition, assets,
     liabilities and results of operations of Fulton as of the respective dates
     reported therein do not vary adversely in any material respect from the
     consolidated financial condition, assets, liabilities and results of
     operations presented in the Fulton Balance Sheet. For purposes of this
     Section 7.3(e), a material and adverse change shall mean an event, change,
     or occurrence which, individually or together with any other event, change,
     or occurrence, has a material adverse impact on (i) the financial position,
     business or results of operations or future prospects of Fulton or (ii) the
     ability of Fulton to perform its obligations under this Agreement, provided
     that "material and adverse change" shall not be deemed to include the
     impact of (a) changes in banking and similar laws of general applicability
     or interpretations thereof by courts or governmental authorities, (b)
     changes in GAAP or regulatory accounting principles generally applicable to
     banks and their holding companies, (c) changes in economic conditions
     generally affecting financial institutions including changes in the general
     level of interest rates, and (d) the direct effects of compliance with this
     Agreement and of satisfying or causing to be satisfied the conditions set
     forth in this Article VII on the operating performance of Fulton, including
     reasonable expenses incurred by Fulton in consummating the transactions
     contemplated by the Agreement. At the Closing, Fulton shall deliver to
     Premier a certificate confirming the absence of a material adverse change

                                      -50-



     described herein and a certificate (from appropriate officers of Fulton
     and/or Fulton's transfer agent) as to the issued and outstanding shares of
     Fulton Common Stock, shares of Fulton Common Stock reserved for issuance
     upon the exercise of stock options, under Fulton's Employee Stock Purchase
     Plan, under Fulton's Dividend Reinvestment Plan and under Fulton's
     Shareholders Rights Plan, any outstanding obligations, options or rights of
     any kind entitling persons to purchase or sell any shares of Fulton's
     Common Stock and any outstanding securities or other instruments of any
     kind that are convertible into such shares.

          (f) Fairness Opinion: Premier shall have obtained from Boenning &
     Scattergood, Inc., or from another independent financial advisor selected
     by the Board of Directors of Premier, an opinion dated within five (5) days
     of the Proxy Statement/Prospectus to be furnished to the Board of Directors
     of Premier stating that the Conversion Ratio contemplated by this Agreement
     is fair to the shareholders of Premier from a financial point of view.

          (g) Closing Documents: Fulton shall have delivered to Premier: (i) a
     certificate signed by Fulton's Chairman and Chief Executive Officer (or
     other officer reasonably acceptable to Premier) verifying that, to their
     knowledge, all of the representations and warranties of Fulton set forth in
     this Agreement are true and correct in all material respects as of the
     Closing and that Fulton has performed in all material respects each of the
     covenants required to be performed by Fulton; and (ii) such other
     certificates and documents as Premier and its counsel may reasonably
     request (all of the foregoing certificates and documents being herein
     referred to as the "Fulton Closing Documents").

                ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER

     Section 8.1 Termination. This Agreement may be terminated at any time
before the Effective Time (whether before or after the authorization, approval
and adoption of this Agreement by the shareholders of Premier) as follows:

          (a) Mutual Consent: This Agreement may be terminated by mutual consent
     of the parties upon the affirmative vote of a majority of each of the
     Boards of Directors of Premier and Fulton, followed by written notices
     given to the other party.

          (b) Unilateral Action by Fulton: This Agreement may be terminated
     unilaterally by the affirmative vote of the Board of Directors of Fulton,
     followed by written notice given promptly to Premier, if: (i) there has
     been a material breach by Premier of any representation, warranty or
     material failure to comply with any covenant set forth in this Agreement
     and such breach has not been cured within thirty (30) days after written
     notice of such breach has been given by Fulton to Premier; (ii) any
     condition precedent to Fulton's obligations as set forth in Article VII of
     this Agreement remains unsatisfied, through no fault of Fulton, on
     September 30, 2003; provided, that such date may be extended until December
     31, 2003 by Premier by written notice to Fulton (given not later than
     September 15, 2003) if the Closing shall not have occurred because of

                                      -51-



     failure to obtain approval from one or more regulatory authorities whose
     approval is required in connection with this Agreement; or (iii) Fulton's
     Board of Directors makes an election provided for in Section 5.7(e)(i)
     herein.

          (c) Unilateral Action By Premier: This Agreement may be terminated
     unilaterally by the affirmative vote of a majority of the Board of
     Directors of Premier, followed by written notice given promptly to Fulton,
     if: (i) there has been a material breach by Fulton of any representation,
     warranty or material failure to comply with any covenant set forth in this
     Agreement and such breach has not been cured within thirty (30) days after
     written notice of such breach has been given by Premier to Fulton; (ii) any
     condition precedent to Premier's obligations as set forth in Article VII of
     this Agreement remains unsatisfied, through no fault of Premier, on
     September 30, 2003; provided, that such date may be extended until December
     31, 2003 by Fulton by written notice to Premier (given not later than
     September 15, 2003) if the Closing shall not have occurred because of
     failure to obtain approval from one or more regulatory authorities whose
     approval is required in connection with this Agreement; or (iii) Premier's
     Board of Directors makes an election provided for in, and subject to the
     conditions of, Section 5.7(e)(ii) herein.

          (d) Market Price of Fulton Common Stock. Premier shall have the right
     to terminate this Agreement, through a resolution adopted by its Board of
     Directors, if the Closing Market Price is both less than (A) $11.18, i.e.,
     .60 multiplied by the Starting Price (the "Floor Price") and (B) the amount
     per share equal to (x) the Starting Price multiplied by (y) .80 multiplied
     by (z) the quotient of the Average NASDAQ Bank Index for the Price
     Determination Period (the numerator) over the NASDAQ Bank Index on the
     Pre-Announcement Date (the denominator). Thus, for example, assuming the
     Average NASDAQ Bank Index for the Price Determination Period reflects a
     decline of 30% from the Starting Date, (A) would be $11.18 and (b) would be
     $10.44 ($18.64 x .80 x .70) and the Closing Market Price would be required
     to be $10.44 or lower for Premier to have the right to terminate this
     Agreement under this Section 8.1(d).

          (i)  For purposes of this Section 8.1(d),(A) "Pre-Announcement Date"
          shall mean January 15, 2003, i.e., the business day immediately
          preceding the date of this Agreement, and (B) "Starting Price" shall
          mean $18.64, i.e., the last sale price for Fulton Common Stock on the
          Pre-Announcement Date as reported on NASDAQ.

          (ii) The Starting Price, the Closing Market Price, the Floor Price and
          the other amounts above shall be appropriately adjusted for an event
          described in Section 2.1(b) herein.

     Section 8.2 Effect of Termination.

          (a) Effect. In the event of a permitted termination of this Agreement
     under Section 8.1 herein, the Agreement shall become null and void and the
     transactions

                                      -52-



     contemplated herein shall thereupon be abandoned, except that the
     provisions relating to limited liability and confidentiality set forth in
     Sections 8.2(b) and 8.2(c) herein shall survive such termination.

          (b) Limited Liability. Subject to the terms of the Warrant Agreement
     and the Warrant, the termination of this Agreement in accordance with the
     terms of Section 8.1 herein shall create no liability on the part of either
     party, or on the part of either party's directors, officers, shareholders,
     agents or representatives, except that if this Agreement is terminated by
     Fulton by reason of a material breach by Premier, or if this Agreement is
     terminated by Premier by reason of a material breach by Fulton, and such
     breach involves an intentional, willful or grossly negligent
     misrepresentation or breach of covenant, the breaching party (i.e., Fulton
     or Premier) shall be liable to the nonbreaching party for all costs and
     expenses reasonably incurred by the nonbreaching party in connection with
     the preparation, execution and attempted consummation of this Agreement,
     including the reasonable fees of its counsel, accountants, consultants and
     other advisors and representatives. In no event shall either party's
     directors, officers, shareholders, agents or representatives have any
     personal liability for any misrepresentation or breach in connection with
     this Agreement.

          (c) Confidentiality. In the event of a termination of this Agreement,
     neither Fulton nor Premier nor Premier Bank shall use or disclose to any
     other person any confidential information obtained by it during the course
     of its investigation of the other party or parties, except as may be
     necessary in order to establish the liability of the other party or parties
     for breach as contemplated under Section 8.2(b) herein.

     Section 8.3 Amendment. To the extent permitted by law, this Agreement may
be amended at any time before the Effective Time (whether before or after the
authorization, approval and adoption of this Agreement by the shareholders of
Premier), but only by a written instrument duly authorized, executed and
delivered by Fulton and by Premier; provided, however, that, except as set forth
in Section 8.1(d) herein any amendment to the provisions of Section 2.1 herein
relating to the consideration to be received by the former shareholders of
Premier in exchange for their shares of Premier Common Stock shall not take
effect until such amendment has been approved, adopted or ratified by the
shareholders of Premier in accordance with applicable provisions of the BCL.

     Section 8.4 Waiver. Any term or condition of this Agreement may be waived,
to the extent permitted by applicable federal and state law, by the party or
parties entitled to the benefit thereof at any time before the Effective Time
(whether before or after the authorization, approval and adoption of this
Agreement by the shareholders of Premier) by a written instrument duly
authorized, executed and delivered by such party or parties.

                    ARTICLE IX - CLOSING AND EFFECTIVE TIME

     Section 9.1 Closing. Provided that all conditions precedent set forth in
Article VII of this Agreement shall have been satisfied or shall have been
waived in accordance with Section

                                      -53-



8.4 of this Agreement, the parties shall hold a closing (the "Closing") at the
offices of Fulton at One Penn Square, Lancaster, Pennsylvania, within thirty
(30) days after the receipt of all required regulatory and shareholder approvals
and after the expiration of all applicable waiting periods on a date to be
agreed upon by the parties, at which time the parties shall deliver the Premier
Closing Documents, the Fulton Closing Documents, the opinions of counsel
required by Sections 7.1(d), 7.2(c) and 7.3(c) herein, and such other documents
and instruments as may be necessary or appropriate to effectuate the purposes of
this Agreement.

     Section 9.2  Effective Time. Immediately following the Closing, and
provided that this Agreement has not been terminated or abandoned pursuant to
Article VIII hereof, Fulton and Premier will cause Articles of Merger (the
"Articles of Merger") to be delivered and properly filed with the Department of
State of the Commonwealth of Pennsylvania (the "Department of State"). The
Merger shall become effective on 11:59 p.m. on the day on which the Closing
occurs and Articles of Merger are filed with the Department of State or such
later date and time as may be specified in the Articles of Merger (the
"Effective Time"). The "Effective Date" when used herein means the day on which
the Effective Time occurs.

           ARTICLE X - NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES

     Section 10.1 No Survival. The representations and warranties of Premier and
of Fulton set forth in this Agreement shall expire and be terminated on the
Effective Time by consummation of this Agreement, and no such representation or
warranty shall thereafter survive. Except with respect to the agreements of the
parties which by their terms are intended to be performed either in whole or in
part after the Effective Time, the agreements of the parties set forth in this
Agreement shall not survive the Effective Time, and shall be terminated and
extinguished at the Effective Time, and from and after the Effective Time none
of the parties hereto shall have any liability to the other on account of any
breach of such agreements.

                        ARTICLE XI - GENERAL PROVISIONS

     Section 11.1 Expenses. Except as provided in Section 8.2(b) herein, each
party shall pay its own expenses incurred in connection with this Agreement and
the consummation of the transactions contemplated herein. For purposes of this
Section 11.1 herein, the cost of printing the Proxy Statement/Prospectus shall
be deemed to be an expense of Fulton.

     Section 11.2 Other Mergers and Acquisitions. Subject to the right of
Premier to refuse to consummate this Agreement pursuant to Section 8.1(c)(i)
herein by reason of a material breach by Fulton of the warranty and
representation set forth in Section 4.7 herein, nothing set forth in this
Agreement shall be construed: (i) to preclude Fulton from acquiring, or to limit
in any way the right of Fulton to acquire, prior to or following the Effective
Time, the stock or assets of any other financial services institution or other
corporation or entity, whether by issuance or exchange of Fulton Common Stock or
otherwise; (ii) to preclude Fulton from issuing, or to limit in any way the
right of Fulton to issue, prior to or following the Effective Time, Fulton
Common Stock, Fulton Preferred Stock or any other equity or debt securities; or
(iii) to preclude Fulton from taking, or to limit in any way the right of Fulton
to take, any other

                                      -54-



action not expressly and specifically prohibited by the terms of this Agreement.

     Section 11.3 Notices. All notices, claims, requests, demands and other
communications which are required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly delivered if delivered
in person, transmitted by telegraph or facsimile machine (but only if receipt is
acknowledged in writing), or mailed by registered or certified mail, return
receipt requested, as follows:

          (a)   If to Fulton, to:

                     Rufus A. Fulton, Jr., Chairman and Chief Executive Officer
                     Fulton Financial Corporation
                     One Penn Square
                     P.O. Box 4887
                     Lancaster, Pennsylvania 17604

                With a copy to:

                     Paul G. Mattaini, Esquire
                     Barley, Snyder, Senft & Cohen, LLC
                     126 East King Street
                     Lancaster, Pennsylvania 17602

          (b)   If to Premier, to:

                     John C. Soffronoff, President and Chief Executive Officer
                     Premier Bancorp, Inc.
                     379 North Main Street
                     Doylestown, Pennsylvania 18901

                With a copy to:

                     Nicholas Bybel, Jr., Esquire
                     Shumaker Williams P.C.
                     3425 Simpson Ferry Road
                     Camp Hill, Pennsylvania 17011

     Section 11.4 Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original, but all such
counterparts together shall be deemed to be one and the same instrument.

     Section 11.5 Governing Law. This Agreement shall be deemed to have been
made in, and shall be governed by and construed in accordance with the
substantive laws of, the Commonwealth of Pennsylvania.

     Section 11.6 Parties in Interest. This Agreement shall be binding upon and
inure to

                                      -55-



the benefit of the parties hereto and their respective successors, assigns
and legal representatives; provided, however, that neither party may assign its
rights or delegate its duties under this Agreement without the prior written
consent of the other party. Other than the right to receive the consideration
payable as a result of the Merger pursuant to Article II hereof, this Agreement
is not intended to and shall not confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.

     Section 11.7 Disclosure Schedules. The inclusion of a given item in a
disclosure schedule annexed to this Agreement shall not be deemed a conclusion
or admission that such item (or any other item) is material or is a material and
adverse change. Information disclosed for one section shall constitute
disclosure for other sections whether or not specifically referenced.

     Section 11.8 Entire Agreement. This Agreement, together with the Warrant
Agreement and the Warrant being executed by the parties on the date hereof, sets
forth the entire understanding and agreement of the parties hereto and
supersedes any and all prior agreements, arrangements and understandings,
whether oral or written, relating to the subject matter hereof and thereof.

                                      -56-



     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers all as of the day and year first above
written.

                                 FULTON FINANCIAL CORPORATION


                                 By:
                                          R. Scott Smith, Jr.
                                          President and Chief Operating Officer


                                 Attest:
                                          George R. Barr, Jr.
                                          Secretary


                                 PREMIER BANCORP, INC.

                                 By:
                                          John C. Soffronoff
                                          President and Chief Executive Officer


                                 Attest:
                                          John J. Ginley
                                          Secretary

                                      -57-

EX-99.1

                                                                    Exhibit 99.1

                                WARRANT AGREEMENT

     THIS WARRANT AGREEMENT is made as of January 16, 2003, by and between
FULTON FINANCIAL CORPORATION, a Pennsylvania corporation ("FULTON") and PREMIER
BANCORP, INC., a Pennsylvania corporation ("PREMIER").

                              W I T N E S S E T H:

     WHEREAS, Fulton and Premier are entering into an Agreement and Plan of
Merger on the date hereof (the "Merger Agreement") (capitalized terms used
herein which are not otherwise defined herein shall have the meanings ascribed
to them in the Merger Agreement);

     WHEREAS, it is a condition to execution of the Merger Agreement, that
Premier issue to Fulton, on the terms and conditions set forth herein, a warrant
entitling Fulton to purchase up to an aggregate of 835,000 shares of Premier's
common stock, $0.33 par value per share (the "Common Stock"); and

     WHEREAS, Premier wishes to issue to Fulton the warrant described below in
connection with the Merger Agreement.

     NOW, THEREFORE, in consideration of the execution of the Merger Agreement
and the premises herein contained, and intending to be legally bound, Fulton and
Premier agree as follows:

     1.   Issuance of Warrant. Concurrently with the execution of this
Agreement, Premier shall issue to Fulton a warrant in the form attached as
Schedule 1 hereto (the "Warrant," which term as used herein shall include any
warrant or warrants issued upon transfer or exchange of the original Warrant) to
purchase up to 835,000 shares of Common Stock (but in any event not to exceed
19.99% of the outstanding Common Stock taking into consideration shares of
Common Stock issuable upon exercise of the Warrant but excluding any other
unissued shares of such corporation which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion or
option rights, or otherwise), subject to adjustment as provided in this
Agreement and in the Warrant. The Warrant shall be exercisable at a purchase
price of $17.85 per share, i.e., the last sale price of the Common Stock on
January 15, 2003, as reported by AMEX, subject to adjustment as provided in the
Warrant (the "Exercise Price"). So long as the Warrant is outstanding and
unexercised, Premier shall at all times maintain and reserve, free from
preemptive rights, such number of authorized but unissued shares of the Common
Stock as may be necessary so that the Warrant may be exercised, without any
additional authorization of the Common Stock, after giving effect to all other
options, warrants, convertible securities and other rights to acquire shares of
the Common Stock. Premier represents and warrants that it has duly authorized
the execution and delivery of the Warrant and this Agreement and the issuance of
the Common Stock upon exercise of the Warrant. Premier covenants that the shares
of the Common Stock issuable upon exercise of the Warrant shall be, when so
issued, duly authorized, validly issued, fully paid and nonassessable and
subject to no preemptive rights. The Warrant

                                       1



and the shares of the Common Stock to be issued upon exercise of the Warrant are
hereinafter collectively referred to, from time to time, as the "Securities." So
long as the Warrant is owned by Fulton, the Warrant will in no event be
exercised for more than that number of shares of the Common Stock equal to
835,000 (subject to adjustment as provided in the Warrant) less the number of
shares of Common Stock at the time owned by Fulton.

     2.   Assignment, Transfer, or Exercise of Warrant.

          (a)  Subject to paragraph 2(b) below, Fulton will not sell, assign,
     transfer or exercise the Warrant, in whole or in part, without the prior
     written consent of Premier except upon or after the occurrence of any of
     the following prior to termination of the Warrant under Section 9 therein:
     (i) a breach by Premier of any covenant set forth in the Merger Agreement
     and which would permit a termination of the Merger Agreement by Fulton
     pursuant to Section 8.1(b)(i) which occurs following a bona fide proposal
     from any financially capable person (other than Fulton) to engage in an
     Acquisition Transaction; (ii) the failure of Premier's shareholders to
     approve the Merger Agreement at a meeting called for such purpose if at the
     time of such meeting there has been an announcement by any financially
     capable Person (other than Fulton) of a bona fide offer or proposal to
     effect an Acquisition Transaction and such offer or proposal has not been
     publicly withdrawn prior to mailing of the notice of the Premier
     shareholder meeting; (iii) the acquisition by any Person of Beneficial
     Ownership of 25% or more of the Common Stock (before giving effect to any
     exercise of the Warrant); (iv)(A) any Person (other than Fulton) shall have
     commenced a tender or exchange offer, or shall have filed an application
     with an appropriate bank regulatory authority with respect to an
     Acquisition Transaction and, (B) within six (6) months from such offer or
     filing, such person consummates an Acquisition Transaction; (v) Premier
     shall have entered into an agreement, letter of intent, or other
     understanding with any Person (other than Fulton) providing for such Person
     to engage in an Acquisition Transaction; and/or (vi) termination of the
     Merger Agreement by Fulton under Section 8.1(b)(iii) or termination of the
     Merger Agreement by Premier under Section 8.1(c)(iii). As used in this
     Paragraph 2, the terms "Beneficial Ownership" and "Person" shall have the
     respective meanings set forth in Paragraph 7(f). For purposes of this
     Agreement, "Acquisition Transaction" shall mean (x) a merger or
     consolidation or statutory share exchange or any similar transaction
     involving Premier or a Premier Subsidiary, (y) a purchase, lease or other
     acquisition of all or substantially all of the assets of Premier or a
     Premier Subsidiary or (z) a purchase or other acquisition of beneficial
     ownership of securities representing 25% or more of the voting power of
     Premier or a Premier Subsidiary.

          (b)  Notwithstanding the foregoing, Premier shall not be obligated to
     issue Shares upon exercise of the Warrant (i) in the absence of any
     required governmental or regulatory approval or consent necessary for
     Premier to issue the Shares or for Fulton to exercise the Warrant or prior
     to the expiration or termination of any waiting period

                                       2



     required by law or (ii) so long as any injunction or other order, decree or
     ruling issued by any federal or state court of competent jurisdiction is in
     effect that prohibits the sale or delivery of the Shares. Any sale,
     assignment or transfer of the Warrant, in whole or in part, or any sale,
     assignment or transfer of the Shares by Fulton, other than a sale to a
     directly-owned subsidiary of Fulton, shall be subject to the right of first
     refusal of Premier (or any assignee or assignees of Premier) at a price
     equal to the written offer price that Fulton receives from a third party
     (other than a directly-owned subsidiary of Fulton) and intends to accept.
     The right of first refusal shall terminate 15 days after notice of Fulton's
     intention to sell has been delivered to Premier. If an offer is made for a
     consideration that, in whole or in part, consists of other than cash, the
     value of the non-cash portion of the consideration shall be determined by a
     recognized investment banking firm selected jointly by Fulton and Premier,
     and the determination shall in no event be made later than the fifth day
     after notice of Fulton's intention to sell has been delivered to Premier.
     In the event of the failure or refusal of Premier to purchase the Warrant
     or all the Shares covered by Fulton's notice to sell, Fulton may, within 30
     days from the date of the notice, unless additional time is needed to give
     notification to or to obtain approval from any governmental or regulatory
     authority and, if so required, within five days after the date on which the
     required notification period has expired or been terminated or the approval
     has been obtained and any requisite waiting period with respect thereto has
     passed, sell all, but not less than all, of the portion of the Warrant or
     the Shares covered by the notice to the proposed transferee at no less than
     the price specified and on terms no more favorable to the buyer than those
     set forth in the notice.

     3.   Registration Rights. If, at any time within one year after the Warrant
may be exercised or sold, Premier shall receive a written request therefor from
Fulton, Premier shall prepare and file a registration statement (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), covering the Warrant and/or the Common Stock issued or
issuable upon exercise of the Warrant (the "Securities"), and shall use its best
efforts to cause the Registration Statement to become effective and remain
current for such period not in excess of 180 days from the day such registration
statement first becomes effective as may be reasonably necessary to affect such
sale or other disposition. Without the prior written consent of Fulton, neither
Premier nor any other holder of securities of Premier may include such
securities in the Registration Statement. The foregoing notwithstanding, if, at
the time of any request by Fulton for registration of Common Stock as provided
above, Premier is in registration with respect to an underwritten public
offering by Premier of shares of Common Stock, and if in the good faith judgment
of the managing underwriter or managing underwriters, or, if none, the sole
underwriter or underwriters, of such offering, the offer and sale of the Common
Stock covered by this Warrant Agreement would interfere with the successful
marketing of the shares of Common Stock offered by Premier, the number of shares
of Common Stock otherwise to be covered in the registration statement
contemplated hereby may be reduced; provided, however, that after any such
required reduction, the number of shares of Common Stock to be included in such
offering for the account of Fulton shall constitute at least 25% of the total
number of shares

                                       3



to be sold by Fulton and Premier in the aggregate; and provided further,
however, that if such reduction occurs, then Premier shall file a registration
statement for the balance as promptly as practicable thereafter as to which no
reduction pursuant to this Section 3 shall be permitted or occur and Fulton
shall thereafter be entitled to one additional registration and the one (1) year
period referred to in the first sentence of this section shall be increased to
two (2) years. Fulton shall provide all information reasonably requested by
Premier for inclusion in any registration statement to be filed hereunder. If
requested by Fulton in connection with such registration, Premier shall become a
party to any underwriting agreement relating to the sale of such shares, but
only to the extent of obligating itself in respect to representations,
warranties, indemnities and other agreements customarily included in such
underwriting agreements for Premier.

     4.   Duties of Premier upon Registration. If and whenever Premier is
required by the provisions of Paragraph 3 of this Agreement to effect the
registration of any of the Securities under the Securities Act, Premier shall:

          (a)  prepare and file with the Securities and Exchange Commission (the
"SEC") such amendments to the Registration Statement and supplements to the
prospectus contained therein as may be necessary to keep the Registration
Statement effective and current;

          (b)  furnish to Fulton and to the underwriters of the Securities being
registered such reasonable number of copies of the Registration Statement, the
preliminary prospectus and final prospectus contained therein, and such other
documents as Fulton or such underwriters may reasonably request in order to
facilitate the public offering of the Securities;

          (c)  use its best efforts to register or qualify the Securities
covered by the Registration Statement under the state securities or blue sky
laws of such jurisdictions as Fulton or such underwriters may reasonably
request;

          (d)  notify Fulton, promptly after Premier shall receive notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment to any prospectus forming a part of the Registration
Statement has been filed;

          (e)  notify Fulton promptly of any request by the SEC for the amending
or supplementing of the Registration Statement or the prospectus contained
therein, or for additional information;

          (f)  prepare and file with the SEC, promptly upon the request of
Fulton, any amendments or supplements to the Registration Statement or the
prospectus contained therein which, in the opinion of counsel for Fulton, are
required under the Securities Act or the rules and regulations promulgated by
the SEC thereunder in connection with the public offering of the Securities;

          (g)  prepare and promptly file with the SEC such amendments of or

                                       4



supplements to the Registration Statement or the prospectus contained therein
as may be necessary to correct any statements or omissions if, at the time when
a prospectus relating to such Securities is required to be delivered under the
Securities Act, any event shall have occurred as the result of which such
prospectus as then in effect would include an untrue statement of a material
fact or would omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

          (h)  advise Fulton, promptly after Premier shall receive notice or
obtain knowledge of the issuance of any stop order by the SEC suspending the
effectiveness of the Registration Statement, or the initiation or threatening of
any proceeding for that purpose, and promptly use its best efforts to prevent
the issuance of any stop order or to obtain its withdrawal if such stop order
should be issued; and

          (i)  at the request of Fulton, furnish on the date or dates provided
for in the underwriting agreement: (i) an opinion or opinions of counsel for
Premier for the purposes of such registration, addressed to the underwriters and
to Fulton, covering such matters as such underwriters and Fulton may reasonably
request and as are customarily covered by issuer's counsel at that time; and
(ii) a letter or letters from the independent accountants for Premier, addressed
to the underwriters and to Fulton, covering such matters as such underwriters or
Fulton may reasonably request, in which letters such accountants shall state
(without limiting the generality of the foregoing) that they are independent
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements and other financial data of Premier
included in the Registration Statement or any amendment or supplement thereto
comply in all material respects with the applicable accounting requirements of
the Securities Act.

     5.   Expenses of Registration. With respect to the registration requested
pursuant to Paragraph 3 of this Agreement, (a) Premier shall bear all
registration, filing and AMEX fees, printing and engraving expenses, fees and
disbursements of its counsel and accountants and all legal fees and
disbursements and other expenses of Premier to comply with state securities or
blue sky laws of any jurisdictions in which the Securities to be offered are to
be registered or qualified; and (b) Fulton shall bear all fees and disbursements
of its counsel and accountants, underwriting discounts and commissions, transfer
taxes for Fulton and any other expenses incurred by Fulton.

     6.   Indemnification. In connection with any Registration Statement or any
amendment or supplement thereto:

          (a)  Premier shall indemnify and hold harmless Fulton, any underwriter
(as defined in the Securities Act) for Fulton, and each person, if any, who
controls Fulton or such underwriter (within the meaning of the Securities Act)
from and against any and all loss,

                                       5



damage, liability, cost or expense to which Fulton or any such underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such loss, damage, liability, cost or expense arises out of or is
caused by any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any prospectus or preliminary
prospectus contained therein or any amendment or supplement thereto, or arises
out of or is based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that Premier will not be liable in any such
case to the extent that any such loss, damage, liability, cost or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished by
Fulton, such underwriter or such controlling person in writing specifically for
use in the preparation thereof.

          (b)  Fulton shall indemnify and hold harmless Premier, any underwriter
(as defined in the Securities Act), and each person, if any, who controls
Premier or such underwriter (within the meaning of the Securities Act) from and
against any and all loss, damage, liability, cost or expense to which Premier or
any such underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such loss, damage, liability, cost or
expense arises out of or is caused by any untrue or alleged untrue statement of
any material fact contained in the Registration Statement, any prospectus or
preliminary prospectus contained therein or any amendment or supplement thereto,
or arises out of or is based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances in which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was so made in reliance upon and in conformity with written information
furnished by Fulton specifically for use in the preparation thereof.

          (c)  Promptly after receipt by any party which is entitled to be
indemnified, pursuant to the provisions of subparagraph (a) or (b) of this
Paragraph 6, of any claim in writing or of notice of the commencement of any
action involving the subject matter of the foregoing indemnity provisions, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to the provisions of subparagraph (a) or (b) of this
Paragraph 6, promptly notify the indemnifying party of the receipt of such claim
or notice of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may otherwise
have to any indemnified party hereunder. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to participate
in and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any action include both the indemnified party or parties and the
indemnifying party and there is a conflict of interest which would prevent
counsel for the

                                       6



indemnifying party from also representing any indemnified party, such
indemnified party shall have the right to select separate counsel to participate
in the defense of such indemnified party. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party,
pursuant to the provisions of subparagraph (a) or (b) of this Paragraph 6, for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, other than reasonable costs of
investigation, unless (i) such indemnified party shall have employed separate
counsel in accordance with the provisions of the preceding sentence, (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after the notice of the commencement of the action, or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party.

          (d)  If recovery is not available under the foregoing indemnification
provisions, for any reason other than as specified therein, any party entitled
to indemnification by the terms thereof shall be entitled to obtain contribution
with respect to its liabilities and expenses, except to the extent that
contribution is not permitted under Section 11(f) of the Securities Act. In
determining the amount of contribution to which the respective parties are
entitled there shall be considered the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and/or prevent any statement or omission, and any
other equitable considerations appropriate under the circumstances. Fulton and
Premier agree that it would not be equitable if the amount of such contribution
were determined by pro rata or per capita allocation even if the underwriters
and Fulton as a group were considered a single entity for such purpose.

     7.   Redemption and Repurchase Rights.

          (a)  From and after the date on which any event described in Paragraph
2 of this Agreement occurs, the Holder as defined in the Warrant (which shall
include a former Holder), who has exercised the Warrant in whole or in part
shall have the right to require Premier to purchase some or all of the shares of
Common Stock for which the Warrant was exercised at a redemption price per share
(the "Redemption Price") equal to the highest of: (i) 110% of the Exercise
Price, (ii) the highest price paid or agreed to be paid for any share of Common
Stock by an Acquiring Person (as defined below) during the one year period
immediately preceding the date of redemption, and (iii) in the event of a sale
of all or substantially all of Premier's assets or all or substantially all of a
subsidiary of Premier's assets: (x) the sum of the price paid in such sale for
such assets and the current market value of the remaining assets of Premier as
determined by a recognized investment banking firm selected by such Holder and
reasonably acceptable to Premier, divided by (y) the number of shares of Common
Stock then outstanding. If the price paid consists in whole or in part of
securities or assets other than cash, the value of such securities or assets
shall be their then current market value as determined by a recognized
investment banking firm selected by the Holder and

                                       7



reasonably acceptable to Premier.

          (b)  From and after the date on which any event described in Paragraph
2 of this Agreement occurs, the Holder as defined in the Warrant (which shall
include a former Holder), shall have the right to require Premier to repurchase
all or any portion of the Warrant at a price (the "Warrant Repurchase Price")
equal to the product obtained by multiplying: (i) the number of shares of Common
Stock represented by the portion of the Warrant that the Holder is requiring
Premier to repurchase, times (ii) the excess of the Redemption Price over the
Exercise Price.

          (c)  The Holder's right, pursuant to this Paragraph 7, to require
Premier to repurchase a portion or all of the Warrant, and/or to require Premier
to purchase some or all of the shares of Common Stock for which the Warrant was
exercised, shall expire on the close of business on the 180th day following the
occurrence of any event described in Paragraph 2.

          (d)  The Holder may exercise its right, pursuant to this Paragraph 7,
to require Premier to repurchase all or a portion of the Warrant, and/or to
require Premier to purchase some or all of the shares of Common Stock for which
the Warrant was exercised, by surrendering for such purpose to Premier, at its
principal office within the time period specified in the preceding subparagraph,
the Warrant and/or a certificate or certificates representing the number of
shares to be purchased accompanied by a written notice stating that it elects to
require Premier to repurchase the Warrant or a portion thereof and/or to
purchase all or a specified number of such shares in accordance with the
provisions of this Paragraph 7. As promptly as practicable, and in any event
within five business days after the surrender of the Warrant and/or such
certificates and the receipt of such notice relating thereto, Premier shall
deliver or cause to be delivered to the Holder: (i) the applicable Redemption
Price (in immediately available funds) for the shares of Common Stock which it
is not then prohibited under applicable law or regulation from purchasing,
and/or (ii) the applicable Warrant Repurchase Price, and/or (iii) if the Holder
has given Premier notice that less than the whole Warrant is to be repurchased
and/or less than the full number of shares of Common Stock evidenced by the
surrendered certificate or certificates are to be purchased, a new certificate
or certificates, of like tenor, for the number of shares of Common Stock
evidenced by such surrendered certificate or certificates less the number shares
of Common Stock purchased and/or a new Warrant reflecting the fact that only a
portion of the Warrant was repurchased.

          (e)  To the extent that Premier is prohibited under applicable law or
regulation, or as a result of administrative or judicial action, from
repurchasing the Warrant and/or purchasing the Common Stock as to which the
Holder has given notice of repurchase and/or redemption, Premier shall
immediately so notify the Holder and thereafter deliver or cause to be
delivered, from time to time to the Holder, the portion of the Warrant
Repurchase Price and/or the Redemption Price which it is no longer prohibited
from delivering, within five business days after the date on which Premier is no
longer so prohibited; provided, however, that to the extent

                                       8



that Premier is at the time and after the expiration of 25 months, so prohibited
from delivering the Warrant Repurchase Price and/or the Redemption Price, in
full (and Premier hereby undertakes to use its best efforts to obtain all
required regulatory and legal approvals as promptly as practicable), Premier
shall deliver to the Holder a new Warrant (expiring one year after delivery)
evidencing the right of the Holder to purchase that number of shares of Common
Stock representing the portion of the Warrant which Premier is then so
prohibited from repurchasing, and/or Premier shall deliver to the Holder a
certificate for the shares of Common Stock which Premier is then so prohibited
from purchasing, and Premier shall have no further obligation to repurchase such
new Warrant or purchase such Common Stock; and provided further, that upon
receipt of such notice and until five days thereafter the Holder may revoke its
notice of repurchase of the Warrant and/or redemption of Common Stock by written
notice to Premier at its principal office stating that the Holder elects to
revoke its election to exercise its right to require Premier to repurchase the
Warrant and/or purchase the Common Stock, whereupon Premier will promptly
redeliver to the Holder the Warrant and/or the certificates representing shares
of Common Stock surrendered to Premier for purposes of such repurchase and/or
redemption, and Premier shall have no further obligation to repurchase such
Warrant and/or purchase such Common Stock.

          (f)  As used in this Agreement the following terms have the meanings
indicated:

               (1)  "Acquiring Person" shall mean any "Person" (hereinafter
defined) who or which is the "Beneficial Owner" (hereinafter defined) of 25% or
more of the Common Stock;

               (2)  A "Person" shall mean any individual, firm, corporation or
other entity and shall also include any syndicate or group deemed to be a
"Person" by operation of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended;

               (3)  A Person shall be a "Beneficial Owner," and shall have
"Beneficial Ownership," of all securities:

                    (i)  which such Person or any of its Affiliates (as
hereinafter defined) beneficially owns, directly or indirectly; and

                    (ii) which such Person or any of its Affiliates or
Associates has (1) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or otherwise) pursuant to any
agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (2) the right to
vote pursuant to any proxy, power of attorney, voting trust, agreement,
arrangement or understanding; and

               (4)  "Affiliate" and "Associate" shall have the respective
meanings

                                       9



ascribed to such terms in Rule 12b-2 of the regulations promulgated by the SEC
under the Securities and Exchange Act of 1934, as amended.

     8.   Remedies. Without limiting the foregoing or any remedies available to
Fulton, it is specifically acknowledged that Fulton would not have an adequate
remedy at law for any breach of this Warrant Agreement and shall be entitled to
specific performance of Premier's obligations under, and injunctive relief
against any actual or threatened violation of the obligations of any Person
subject to, this Agreement.

     9.   Miscellaneous.

          (a)  The representations, warranties, and covenants of Premier set
forth in the Merger Agreement are hereby incorporated by reference in and made a
part of this Agreement, as if set forth in full herein.

          (b)  This Agreement, the Warrant and the Merger Agreement set forth
the entire understanding and agreement of the parties hereto and supersede any
and all prior agreements, arrangements and understandings, whether written or
oral, relating to the subject matter hereof and thereof. No amendment,
supplement, modification, waiver, or termination of this Agreement shall be
valid and binding unless executed in writing by both parties.

          (c)  This Agreement shall be deemed to have been made in, and shall be
governed by and interpreted in accordance with the substantive laws of, the
Commonwealth of Pennsylvania.

                                       10



     IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers as of the day and year first above
written.


                                    FULTON FINANCIAL CORPORATION


                                    By:
                                             R. Scott Smith, Jr., President and
                                              Chief Operating Officer


                                    Attest:
                                             George R. Barr, Jr., Secretary


                                    PREMIER  BANCORP, INC.


                                    By:
                                             John C. Soffronoff, President and
                                              Chief Executive Officer


                                    Attest:
                                             John J. Ginley, Secretary

EX-99.2

                                                                    EXHIBIT 99.2

                                     WARRANT

                     to Purchase up to 835,000 Shares of the
                         Common Stock, $0.33 Par Value,
                                       of
                              PREMIER BANCORP, INC.

     This is to certify that, for value received, FULTON FINANCIAL CORPORATION
("FULTON") or any permitted transferee (Fulton or such transferee being
hereinafter called the "Holder") is entitled to purchase, subject to the
provisions of this Warrant and the related Warrant Agreement, each made this day
January 16, 2003 (the "Warrant Agreement"), by and between Fulton and PREMIER
BANCORP, INC., a Pennsylvania corporation ("PREMIER"), at any time on or after
the date hereof, an aggregate of up to 835,000 (but in any event not to exceed
19.99% of the outstanding Common Stock (defined below) taking into consideration
shares of Common Stock issuable upon exercise of this Warrant but excluding any
other unissued shares of Premier which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion or
option rights, or otherwise) fully paid and non-assessable shares of common
stock, $0.33 par value (the "Common Stock"), of Premier at a price per share
equal to $17.85, subject to adjustment as herein provided (the "Exercise
Price").

     1.   Exercise of Warrant. Subject to the provisions hereof and the
limitations set forth in Paragraph 2 of the Warrant Agreement, which Warrant
Agreement was entered into in connection with the Merger Agreement of even date
between Fulton and Premier (the "Merger Agreement"), this Warrant may be
exercised in whole or in part or sold, assigned or transferred at any time or
from time to time on or after the date hereof. This Warrant shall be exercised
by presentation and surrender hereof to Premier at the principal office of
Premier, accompanied by (i) a written notice of exercise, (ii) payment to
Premier, for the account of Premier, of the Exercise Price for the number of
shares of Common Stock specified in such notice, and (iii) a certificate of the
Holder specifying the event or events which have occurred and entitle the Holder
to exercise this Warrant. The Exercise Price for the number of shares of Common
Stock specified in the notice shall be payable in immediately available funds.

     Upon such presentation and surrender, Premier shall issue promptly (and
within one business day if requested by the Holder) to the Holder or its
assignee, transferee or designee the number of shares of Common Stock to which
the Holder is entitled hereunder. Premier covenants and warrants that such
shares of Common Stock, when so issued, will be duly authorized, validly issued,
fully paid and non-assessable, and free and clear of all liens and encumbrances.

     If this Warrant should be exercised in part only, Premier shall, upon
surrender of this Warrant for cancellation, execute and deliver a new Warrant
evidencing the rights of the Holder thereof to purchase the balance of the
shares of Common Stock issuable hereunder. Upon receipt by Premier of this
Warrant for exercise, in proper form, and subject to the limitations set forth
in paragraph 2 of the Warrant Agreement, the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the

                                        1



stock transfer books of Premier may then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered to
the Holder. Premier shall pay all expenses, and any and all United States
federal, state and local taxes and other charges, that may be payable in
connection with the preparation, issue and delivery of stock certificates
pursuant to this Paragraph 1 in the name of the Holder or its assignee,
transferee or designee.

     2.   Reservation of Shares; Preservation of Rights of Holder.

     Premier shall at all times, while this Warrant is outstanding and
unexercised, maintain and reserve, free from preemptive rights, such number of
authorized but unissued shares of Common Stock as may be necessary so that this
Warrant may be exercised without any additional authorization of Common Stock
after giving effect to all other options, warrants, convertible securities and
other rights to acquire shares of Common Stock at the time outstanding. Premier
further agrees that (i) it will not, by charter amendment or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act or omission, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be observed
or performed hereunder or under the Warrant Agreement by Premier, (ii) it will
promptly take all action (including (A) complying with all pre-merger
notification, reporting and waiting period requirements specified in 15 U.S.C.
ss.18a and the regulations promulgated thereunder and (B) in the event that,
under Section 3 of the Bank Holding Company Act of 1956, as amended (12 U.S.C.
ss.1842(a)(3)), or the Change in Bank Control Act of 1978, as amended (12 U.S.C.
ss.1817(j)), prior approval of the Board of Governors of the Federal Reserve
System (the "Board") is necessary before this Warrant may be exercised,
cooperating fully with the Holder in preparing any and all such applications and
providing such information to the Board as the Board may require) in order to
permit the Holder to exercise this Warrant and Premier duly and effectively to
issue shares of its Common Stock hereunder, and (iii) it will promptly take all
action necessary to protect the rights of the Holder against dilution as
provided herein.

     3.   Fractional Shares. Premier shall not be required to issue fractional
shares of Common Stock upon exercise of this Warrant but shall pay for any
fractional shares in cash or by check at the Exercise Price.

     4.   Exchange or Loss of Warrant. This Warrant is exchangeable, without
expense, at the option of the Holder, upon presentation and surrender hereof at
the principal office of Premier for other warrants of different denominations
entitling the Holder to purchase in the aggregate the same number of shares of
Common Stock issuable hereunder. The term "Warrant" as used herein includes any
warrants for which this Warrant may be exchanged. Upon receipt by Premier of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, Premier will execute and deliver a new Warrant of
like tenor and date.

     5.   Repurchase. The Holder shall have the right to require Premier to
repurchase all or any shares of Common Stock for which this Warrant was
exercised or all or any portion of this Warrant under the terms and subject to
the conditions of Paragraph 7 of the Warrant Agreement.

                                        2



     6.   Adjustment. The number of shares of Common Stock issuable upon the
exercise of this Warrant and the Exercise Price shall be subject to adjustment
from time to time as provided in this Paragraph 6.

          (A)  Stock Dividends, etc.

               (1)  Stock Dividends. In case Premier shall pay or make a
dividend or other distribution on any class of capital stock of Premier in
Common Stock, the number of shares of Common Stock issuable upon exercise of
this Warrant shall be increased by multiplying such number of shares by a
fraction of which the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the day immediately preceding the date
of such distribution and the numerator shall be the sum of such number of shares
and the total number of shares of Common Stock constituting such dividend or
other distribution, such increase to become effective immediately after the
opening of business on the day following such distribution.

               (2)  Subdivisions. In case outstanding shares of Common Stock
shall be subdivided into a greater number of shares of Common Stock, the number
of shares of Common Stock issuable upon exercise of this Warrant at the opening
of business on the day following the day upon which such subdivision becomes
effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the number of shares of Common Stock issuable upon
exercise of this Warrant at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
decreased, such increase or decrease, as the case may be, to become effective
immediately after the opening of business on the day following the date upon
which such subdivision or combination becomes effective.

               (3)  Reclassifications. The reclassification of Common Stock into
securities (other than Common Stock) and/or cash and/or other consideration
shall be deemed to involve a subdivision or combination, as the case may be, of
the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number or amount of securities and/or cash and/or
other consideration outstanding immediately thereafter and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
becomes effective," or "the day upon which such combination becomes effective,"
as the case may be, within the meaning of clause (2) above.

               (4)  Optional Adjustments. Premier may make such increases in the
number of shares of Common Stock issuable upon exercise of this Warrant, in
addition to those required by this subparagraph (A), as shall be determined by
its Board of Directors to be advisable in order to avoid taxation so far as
practicable of any dividend of stock or stock rights or any event treated as
such for federal income tax purposes to the recipients.

               (5)  Adjustment to Exercise Price. Whenever the number of shares
of Common Stock issuable upon exercise of this Warrant is adjusted as provided
in this Paragraph 6(A), the Exercise Price shall be adjusted by a fraction in
which the numerator is equal to the number of shares of Common Stock issuable
prior to the adjustment and the denominator is equal to the number of shares of
Common Stock issuable after the adjustment.

                                        3



          (B)  Certain Sales of Common Stock.

               (1)  Adjustment to Shares Issuable. If and whenever Premier sells
or otherwise issues (other than under circumstances in which Paragraph 6(A)
applies or pursuant to options to purchase Common Stock that are outstanding on
the date hereof or subsequently issued pursuant to Premier stock option or stock
purchase plans (including the dividend reinvestment plan in effect on the date
hereof), any shares of Common Stock, the number of shares of Common Stock
issuable upon exercise of this Warrant shall be increased by multiplying such
number of shares by a fraction, the denominator of which shall be the number
shares of Common Stock outstanding at the close of business on the day
immediately preceding the date of such sale or issuance and the numerator of
which shall be the sum of such number of shares and the total number of shares
constituting such sale or other issuance, such increase to become effective
immediately after the opening of business on the day following such sale or
issuance.

               (2)  Adjustment to Exercise Price. If and whenever Premier sells
or otherwise issues any shares of Common Stock (excluding any stock dividend or
other issuance not for consideration to which Paragraph 6(A) applies or pursuant
to options to purchase Common Stock that are outstanding on the date hereof or
subsequently issued pursuant to Premier stock option or stock purchase plans
(including the dividend reinvestment plan) in effect on the date hereof), for a
consideration per share which is less than the Exercise Price at the time of
such sale or other issuance, then in each such case the Exercise Price shall be
forthwith changed (but only if a reduction would result) to the price
(calculated to the nearest cent) determined by dividing: (i) an amount equal to
the sum of (aa) the number of shares of Common Stock outstanding immediately
prior to such issue or sale, multiplied by the then effective Exercise Price,
plus (bb) the total consideration, if any, received and deemed received by
Premier upon such issue or sale, by (ii) the total number of shares of Common
Stock outstanding immediately after such issue or sale.

          (C)  Definition. For purposes of this Paragraph 6, the term "Common
Stock" shall include (1) any shares of Premier of any class or series which has
no preference or priority in the payment of dividends or in the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of Premier and which is not subject to redemption by Premier, and (2) any rights
or options to subscribe for or to purchase shares of Common Stock or any stock
or securities convertible into or exchangeable for shares of Common Stock (such
convertible or exchangeable stock or securities being hereinafter called
"Convertible Securities"), whether or not such rights or options or the right to
convert or exchange any such Convertible Securities are immediately exercisable.
For purposes of any adjustments made under Paragraph 6(A) as a result of the
distribution, sale or other issuance of rights or options or Convertible
Securities, the number of Shares of Common Stock outstanding after or as a
result of the occurrence of events described in Paragraph 6(A)(1) shall be
calculated by assuming that all such rights, options or Convertible Securities
have been exercised for the maximum number of shares issuable thereunder. If an
adjustment is made at any time because of the subsequent issuance of any right
or option described in clause (2) of the first sentence of this Section (B), no
adjustment shall be made when shares are subsequently issued; provided further,
that no

                                        4



adjustment shall be made for issuances pursuant to options to purchase Common
Stock that are outstanding on the date hereof or subsequent issuances of Common
Stock pursuant to Premier stock option or stock purchase plans (including the
dividend reinvestment plan) in effect on the date hereof.

     7.   Notice. (A) Whenever the number of shares of Common Stock for which
this Warrant is exercisable is adjusted as provided in Paragraph 6, Premier
shall promptly compute such adjustment and mail to the Holder a certificate,
signed by the principal financial officer of Premier, setting forth the number
of shares of Common Stock for which this Warrant is exercisable as a result of
such adjustment having become effective.

          (B)  Upon the occurrence of any event which results in the Holder
having the right to require Premier to repurchase shares of Common Stock for
which this Warrant was exercised or this Warrant, as provided in Paragraph 7 of
the Warrant Agreement, Premier shall promptly notify the Holder of such event;
and Premier shall promptly compute the Redemption Price or the Warrant
Repurchase Price and furnish to the Holder a certificate, signed by the
principal financial officer of Premier, setting forth the Redemption Price or
the Warrant Repurchase Price, as applicable, and the basis and computation
thereof.

     8.   Rights of the Holder. (A) Without limiting the foregoing or any
remedies available to the Holder, it is specifically acknowledged that the
Holder would not have an adequate remedy at law for any breach of the provisions
of this Warrant and shall be entitled to specific performance of Premier's
obligations under, and injunctive relief against any actual or threatened
violation of the obligations of any Person (as defined in Paragraph 7 of the
Warrant Agreement) subject to, this Warrant.

          (B)  The Holder shall not, by virtue of its status as Holder, be
entitled to any rights of a shareholder in Premier.

     9.   Termination. This Warrant and all rights conferred hereby and under
the Warrant Agreement shall terminate and be of no further force and effect (i)
upon the Effective Time of the Merger provided for in the Merger Agreement, (ii)
upon a valid termination of the Merger Agreement (except a termination pursuant
to Section 8.1(b)(iii) of the Merger Agreement) unless an event described in
Paragraph 2 of the Warrant Agreement (including the occurrence of an event
described in paragraph (iv)(A) therein) occurs prior to such termination in
which case this Warrant and the rights conferred hereby, shall not terminate
until 12 months after the occurrence of such event, or (iii) to the extent this
Warrant has not previously been exercised, 12 months after the occurrence of an
event described in Paragraph 2 of the Warrant Agreement (unless termination of
the Merger Agreement in accordance with its terms (other than under Section
8.1(b)(iii) thereof) occurs prior to the occurrence of such event, in which case
(ii) above shall apply); except, however, that this Warrant and the Warrant
Agreement shall expire and be of no further force and effect as of 5:00 p.m. on
December 31, 2004.

     10.  Governing Law. This Warrant shall be deemed to have been delivered in,
and shall be governed by and interpreted in accordance with the substantive laws
of, the Commonwealth of Pennsylvania. In the event of any inconsistency between
this Warrant and the terms of the Warrant Agreement, the terms of the Warrant
Agreement shall govern.

                                        5



                            [SIGNATURE PAGE FOLLOWS]

                                        6



Dated: January 16, 2003
                                              PREMIER BANCORP, INC.


                                      By:
                                              John C. Soffronoff, President and
                                               Chief Executive Officer

                                      Attest:
                                              John J. Ginley, Secretary

                                        7

EX-99.3

                                                                    Exhibit 99.3

                              Filed by: Fulton Financial Corporation
                                        Pursuant to Rule 425 under the
                                        Securities Act of 1933 and deemed
                                        filed pursuant to Rule 14a-12 under the
                                        Securities Exchange Act of 1934
                                        Subject Company: Premier Bancorp, Inc.
                                        (Commission File No. 1-15513)


                                Fulton Financial
                                ----------------
                                  CORPORATION

FOR IMMEDIATE RELEASE                                Contact: Laura J. Wakeley
Full text available on PR NEWSWIRE                   Office:  (717) 291-2739


                     Fulton Financial Corporation to Acquire

                              Premier Bancorp, Inc.

     (January 16) -- Lancaster, Pa. - Fulton Financial Corporation (NASDAQ:
FULT), based in Lancaster, Pennsylvania with assets of $8.1 billion, has signed
a definitive agreement to acquire Premier Bancorp, Inc. (AMEX: PPA), based in
Doylestown, Pennsylvania. Premier Bancorp, Inc.'s banking subsidiary is Premier
Bank, also based in Doylestown. Fulton Financial Corporation is the third
largest bank holding company based in Pennsylvania,

     Rufus A. Fulton, Jr., chairman and chief executive officer of Fulton
Financial Corporation, and John C. Soffronoff, president and CEO of Premier
Bancorp, made the merger announcement jointly today.



Page 2

     "Premier Bancorp is a logical enhancement for our franchise," said Fulton.
"It is a great bank, and is located in a very attractive market. The bank's
employees have done an impressive job in making Premier a high performer,
particularly in terms of asset quality and earnings growth. Premier's employees
will find our corporate culture very similar to their own, and we look forward
to welcoming them to the Fulton family."

     "We are pleased and excited to merge with Fulton Financial Corporation,"
stated Soffronoff. "We feel this decision to join with Fulton is the right thing
to do for our shareholders, our customers, our employees and the communities we
serve, and we look forward to being a part of the Fulton team."

     Fulton Financial will acquire all issued and outstanding shares of common
stock of Premier Bancorp, Inc. It is anticipated that all outstanding shares of
Premier preferred stock shall be redeemed as of or before the closing date of
the transaction. According to the merger agreement, each share of Premier common
stock outstanding at the time of the merger will be exchanged for 1.34 shares of
Fulton Financial common stock, subject to adjustment. Based on the $18.64 per
share closing price of Fulton Financial stock on January 15, the transaction is
valued at approximately $89.3 million. As of December 31, 2002, Premier Bancorp
had approximately 3.3 million shares of common stock outstanding.

     The price represents a multiple of 3.76 times Premier Bancorp's common
shareholder equity as of September 30, 2002. The price equates to 23.13 times
trailing 12-month earnings as of September 30, 2002. The acquisition is subject
to approval by bank regulatory authorities and Premier Bancorp, Inc.
shareholders. It is expected to close during the third quarter of 2003.



Page 3

     As part of the agreement, Premier Bancorp granted Fulton Financial
Corporation an option to purchase 19.9% of its common stock shares under certain
conditions.

     Upon completion of its acquisition of Premier Bancorp, Inc., Fulton
Financial Corporation intends to retain Premier Bank as a separate subsidiary.
Clark S. Frame will remain as chairman of Premier Bank; Mr. Soffronoff will
remain as president and CEO. Additionally, one member of the Premier Bancorp
board of directors will become a member of the Fulton Financial Corporation
board.

     Premier Bancorp, with approximately $600 million in assets, operates seven
community banking offices in Bucks, Northampton and Montgomery Counties.

     Fulton Financial Corporation operates 188 offices in Pennsylvania,
Maryland, Delaware and New Jersey through the following banking affiliates:
Fulton Bank, Lancaster, PA; Lebanon Valley Farmers Bank, Lebanon, PA; Swineford
National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank,
N.A., Danville, PA; Hagerstown Trust, Hagerstown, MD; Delaware National Bank,
Georgetown, DE; The Bank, Woodbury, NJ; The Woodstown National Bank, Woodstown,
NJ; The Peoples Bank of Elkton, Elkton, MD, and Skylands Community Bank,
Hackettstown, NJ. The Corporation's financial services affiliates include Fulton
Financial Advisors, N.A., Lancaster, PA; Dearden, Maguire, Weaver and Barrett,
LLC, West Conshohocken, PA, and Fulton Insurance Services Group Inc., Lancaster,
PA. Residential mortgage lending is offered through Fulton Mortgage Company.



Page 4

     Additional information on Fulton Financial Corporation is available on the
Internet at www.fult.com. Additional information on Premier Bancorp, Inc. can be
found at www.premierbankonline.com.

Premier Bancorp and its officers and directors may be deemed to be participants
in the solicitation of proxies from Premier Bancorp shareholders with respect to
the transactions contemplated by the merger agreement. Information regarding
Premier's officers and directors is included in Premier's Proxy Statement for
its 2002 Annual Meeting, filed with the SEC on March 29, 2002. Premier's 2002
Proxy Statement also discloses the interests of such officers and directors in
the event of an acquisition of Premier (including, among other things, the
acceleration of certain benefits or rights upon a "change-in-control").
Premier's Quarterly Reports on Form 10-Q, filed with the SEC on May 6, 2002,
August 14, 2002 and November 13, 2002, contain additional disclosures concerning
agreements with Premier's officers. Premier's 2002 Proxy Statement and Quarterly
Reports on Form 10-Q are each available free of charge at the SEC's web site at
www.sec.gov and from Premier upon request.

In addition to the interests disclosed in Premier's 2002 Proxy Statement and
Quarterly Reports on Form 10-Q, upon completion of the merger, John C.
Soffronoff, president and chief executive officer of Premier, will enter into a
three year employment agreement, pursuant to which he will serve as president
and chief executive officer of Premier Bank. Clark S. Frame, chairman of
Premier, and John J. Ginley, senior vice president of Premier, will also enter
into three-year employment agreements with Premier. In addition, pursuant to the
merger agreement, one Premier director will become a director of Fulton. As of
the date of this news release, Premier is not aware of any director or officer
who beneficially owns in excess of 5% of Premier's common stock, except as
disclosed in its 2002 Proxy Statement.

Safe Harbor Statement: Except for historical information contained herein, the
matters discussed in this release are forward-looking statements. Investors are
cautioned that all forward-looking statements involve risks and uncertainty,
including without limitation, the ability to achieve anticipated merger related
operational efficiencies, the ability to enhance revenues through increased
market penetration, expanded lending capacity and product offerings and other
risks detailed from time to time in Fulton's and Premier's SEC filings,
including forms 10-Q and 10-K (copies of which are available from Fulton without
charge in hard copy or online at www.sec.gov). Fulton and Premier disclaim any
intention or obligation to publicly update or revise any forward-looking
statements, whether as a result of events or circumstances after the date hereof
or to reflect the occurrence of unanticipated events.

Additional Information and Where to Find It: It is expected that Fulton will
file a Registration Statement on SEC Form S-4, that Fulton and Premier will file
a Proxy Statement/Prospectus with the SEC in connection with the transaction
discussed herein, and that Premier will mail a Proxy Statement/Prospectus to
shareholders of Premier containing information about the Acquisition. Investors
and security holders are urged to read the Registration Statement and the Proxy
Statement/Prospectus carefully when they are available. The Registration
Statement and the Proxy Statement/Prospectus will contain important information
about Fulton, Premier, the acquisition of Premier by Fulton, the persons
soliciting proxies relating to the acquisition, their interests in the
acquisition and related matters. Investors and security holders will be able to
obtain free copies of these documents through the website maintained by the SEC
at http://www.sec.gov. Free copies of the Proxy Statement/Prospectus and these
other documents may also be obtained from Fulton by directing a request to
George R. Barr, secretary, at (717) 291-2411 or from Premier by directing a
request to John J. Ginley, secretary, at (215) 345-5100.

In addition to the Registration Statement and the Proxy Statement/Prospectus,
Fulton and Premier file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any reports,
statements or other information at the SEC public reference rooms at 450 Fifth
Street, N.W., Washington, D.C. 20549 or at any of the SEC's other public
reference rooms in New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for future information on the public reference rooms. Fulton's
and Premier's



Page 5

filings with the SEC are also available to the public from commercial document-
retrieval services and at the Web site maintained by the SEC at
http://www.sec.gov.

2003                                 # # #

EX-99.4

EXHIBIT 99.4