DAUPHIN DEPOSIT CORP, DEF 14A, 1994-03-16

DAUPHIN DEPOSIT CORP
DEF 14A, 1994-03-16
STATE COMMERCIAL BANKS

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<PAGE>

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

[Amendment No. ________________]

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

DAUPHIN DEPOSIT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

DAUPHIN DEPOSIT CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:________________________________________________

(2) Form Schedule or Registration Statement No.:___________________________

(3) Filing Party:__________________________________________________________

(4) Date Filed:_________________________________

<PAGE>

[LOGO OF DAUPHIN DEPOSIT CORPORATION APPEARS HERE]

213 MARKET STREET
HARRISBURG, PENNSYLVANIA 17101

March 18, 1994

To the Shareholders of
Dauphin Deposit Corporation

You are cordially invited to attend the 1994 Annual Meeting of Shareholders
of your Corporation, Dauphin Deposit Corporation, which will be held on Monday,
April 18, 1994, at 9:00 A.M., at the Harrisburg Hilton and Towers, One North
Second Street, Harrisburg, Pennsylvania. A Notice of the Annual Meeting, a
Proxy Statement, a Proxy and a Reservation Form are enclosed herewith.

The Annual Report of Dauphin Deposit Corporation also is enclosed. We hope
that you take the opportunity to review the material contained in the Annual
Report, which reflects that your Corporation had another successful year in
1993.

The Board of Directors recommends a vote for the election to the Board of the
17 nominees listed in the Proxy Statement. Please sign, date and return the
Proxy promptly, whether or not you are able to attend the meeting. If you plan
to attend the meeting, please return the white copy of the Reservation Form
along with your Proxy. A postage paid return envelope is enclosed for your
convenience. Please bring the yellow copy of the Reservation Form with you to
the meeting.

Very truly yours,

/s/ William J. King,

William J. King,
Chairman of the Board and Chief
Executive Officer

/s/ Christopher R. Jennings,

Christopher R. Jennings,
President and Chief Operating Officer
<PAGE>

[LOGO OF DAUPHIN DEPOSIT CORPORATION APPEARS HERE]

213 MARKET STREET
HARRISBURG, PENNSYLVANIA 17101

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 18, 1994

To the Shareholders of
Dauphin Deposit Corporation

Notice is Hereby Given, that the Annual Meeting of Shareholders of Dauphin
Deposit Corporation will be held on April 18, 1994, at 9:00 A.M., at the
Harrisburg Hilton and Towers, One North Second Street, Harrisburg,
Pennsylvania, to hear the Annual Report of the President and to vote upon the
following matters:

1. To elect 17 Directors; for a list of nominees, see the enclosed Proxy
Statement.

2. To consider and vote upon such other business as properly may come
before the meeting and any adjournments thereof.

Only those shareholders of record at the close of business on March 3, 1994
will be entitled to notice of, and to vote at, such meeting and any
adjournments thereof.

Enclosed herewith is a Proxy Statement and a Proxy. You are urged to sign,
date and return the enclosed Proxy as promptly as possible whether or not you
plan to attend the meeting in person.

By Order of the Board of Directors,

/s/ Claire D. Flemming

Claire D. Flemming, Secretary

March 18, 1994
<PAGE>

[LOGO OF DAUPHIN DEPOSIT CORPORATION APPEARS HERE]

213 MARKET STREET
HARRISBURG, PENNSYLVANIA 17101

PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 18, 1994
APPROXIMATE DATE OF MAILING PROXY STATEMENT AND
PROXY TO SHAREHOLDERS:
MARCH 18, 1994

USE OF PROXY AND GENERAL INFORMATION

A Proxy for use in connection with the Annual Meeting of Shareholders of
Dauphin Deposit Corporation (herein called the "Corporation") to be held on
Monday, April 18, 1994, at 9:00 A.M., at the Harrisburg Hilton & Towers, One
North Second Street, Harrisburg, Pennsylvania, is enclosed. This Proxy is
solicited by the Board of Directors of the Corporation, and costs of
solicitation will be borne by the Corporation. The Corporation has engaged
Corporate Investor Communications, Inc., Carlstadt, New Jersey, a proxy
solicitation firm, to solicit proxies for the Annual Meeting from brokers and
nominees holding Corporation common stock. This solicitation is estimated to
cost $4,250 plus reasonable out-of-pocket expenses incurred by the solicitation
firm. The Proxy is revocable by the person giving it, by filing with the
Secretary of the Corporation either a written notice revoking the Proxy or a
duly executed Proxy bearing a later date. Shares of stock of the Corporation
represented by properly executed and filed Proxies will be voted in accordance
with the specifications of the Proxies. If not otherwise specified, the Proxy
will be voted FOR the election as Directors of the 17 nominees named in the
Proxy Statement, and upon the transaction of such other business as properly
may come before the meeting, in accordance with the best judgment of the
persons appointed as Proxies.

OUTSTANDING STOCK AND PRINCIPAL HOLDERS THEREOF

As of March 3, 1994, there were 32,432,913 shares of common stock of the
Corporation issued and outstanding and entitled to vote, having a par value of
$5.00 per share (the "Common Stock"). Only those shareholders of record at the
close of business on March 3, 1994 will be entitled to receive notice of, and
to vote at the Annual Meeting of Shareholders of the Corporation. Each
outstanding share is entitled to one vote on all matters. Shareholders do not
have the right to vote their shares cumulatively in the election of Directors.
A majority of the outstanding Common Stock present in person or by proxy
constitutes a quorum for the transaction of business at the Annual Meeting. In
the case of the election of Directors, the nominees receiving the highest
number of votes, up to the number of Directors to be elected, shall be elected
to the Board of Directors. Abstentions and broker non-votes will not constitute
or be counted as votes cast for purposes of the Annual Meeting.

As of March 3, 1994, Dauphin Deposit Bank and Trust Company ("Dauphin Bank"),
which includes the Bank of Pennsylvania Division and the Valleybank Division,
and Farmers Bank and Trust Company of Hanover ("Farmers Bank") (the "Banks"),
all of the outstanding stock of which is
<PAGE>

held by the Corporation, held, either directly or by way of their nominees, an
aggregate of approximately 6.78% or approximately 2,200,215 shares, of the
outstanding Common Stock in their respective trust departments as fiduciary for
numerous separate trusts, estates and agency accounts which beneficially own
such shares. Of these shares, the Banks had sole voting power with respect to
1,911,633 shares, shared voting power with respect to 261,664 shares, sole
investment power with regard to 1,217,589 shares and shared investment power
with regard to 982,627 shares. Pursuant to provisions of the applicable
governing instruments and/or in accordance with applicable principles of
fiduciary law, the Banks, as fiduciaries, have the right and power exercisable
either alone or in conjunction with a co-fiduciary, to vote such shares, either
in person or by proxy, for the election, as Directors, of the Board of
Directors' nominees so long as such vote is in the best interest of any such
trust, estate or agency account and the beneficiaries or principals thereof.
The Banks intend to vote such shares in favor of the election of the Board of
Directors' nominees as Directors.

To the best of the Corporation's information and belief, no other person
holds beneficially or of record, directly or indirectly, five percent (5%) or
more of the outstanding shares of Common Stock.

The following table sets forth, as of March 3, 1994, information relating to
beneficial ownership of shares of Common Stock by each of the Corporation's
Directors, each named executive officer of the Corporation set forth in the
executive compensation tables and all of the Corporation's Directors and
executive officers as a group.

<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES (1)
------------------------ ----------------------
<S> <C> <C>
William H. Alexander.................................... 10,592 (2)
John A. Arnold.......................................... 55,003 (3)
Jeffrey J. Burdge....................................... 48,831 (4)
James O. Green.......................................... 45,774
Alfred G. Hemmerich..................................... 1,886
Lee H. Javitch.......................................... 23,860 (5)
Christopher R. Jennings................................. 49,201
William J. King......................................... 139,383 (6)
William T. Kirchhoff.................................... 41,524 (7)
Lawrence J. LaMaina, Jr................................. 67,447 (8)
James E. Marley......................................... 500
Robert F. Nation........................................ 42,000 (9)
Elmer E. Naugle......................................... 41,688
Harry L. Nicholson...................................... 29,311 (10)
Walter F. Raab.......................................... 10,000
Paul C. Raub............................................ 27,910 (11)
Henry W. Rhoads......................................... 48,491 (12)
Paul B. Shannon......................................... 22,925 (13)
R. Champlin Sheridan, Jr. .............................. 16,416 (14)
All Directors and Executive Officers as a Group
(24 in number, including those listed above)........... 766,485
</TABLE>
- --------
(1) Except as otherwise stated in the following notes, each named individual
has sole voting and investment power over the shares listed opposite his
name. Each Director and executive officer owns less than 1% of the
Corporation's outstanding Common Stock. All Directors and executive
officers as a group owned 2.36% of the outstanding Common Stock. The
amounts shown include

2
<PAGE>

the following shares of Common Stock which the named executive officers and
all executive officers as a group have the right to acquire within 60 days
of March 3, 1994 through the exercise of stock options granted pursuant to
the Corporation's Stock Option Plan of 1986: Mr. King (103,860), Mr.
Jennings (39,268), Mr. LaMaina (23,269), Mr. Shannon (18,220), Mr.
Nicholson (14,156) and all executive officers as a group (223,183). Non-
employee Directors are not eligible to participate in the Stock Option Plan
of 1986.
(2) Includes 3,058 shares held jointly with spouse, 1,990 shares held by a
corporation of which Mr. Alexander is a controlling person and 5,544
shares held as co-trustee.
(3) Includes 45,139 shares held jointly with spouse, 1,338 shares held in
trust for benefit of spouse and 7,140 shares held in trust by spouse for
benefit of children.
(4) Includes 22,102 shares held directly by spouse.
(5) Includes 1,260 shares held as co-trustee.
(6) Includes 2,014 shares held directly by spouse.
(7) Includes 1,118 shares held directly by spouse and 30,000 shares held by
profit sharing plan of corporation of which Mr. Kirchhoff is a controlling
person.
(8) Includes 41,760 shares held jointly with spouse.
(9) Includes 10,500 shares held directly by spouse.
(10) Includes 723 shares held directly by spouse. Mr. Nicholson disclaims
beneficial ownership of these shares.
(11) Includes 13,955 shares held directly by spouse.
(12) Includes 4,148 shares held directly by spouse, 1,260 shares held in trust
by spouse for benefit of children and 24,200 shares held as co-trustee.
(13) Includes 4,705 shares held jointly with spouse.
(14) Includes 1,676 shares held jointly with spouse and 2,346 shares held
directly by spouse.

ELECTION OF DIRECTORS

The persons named in the enclosed Proxy intend to exercise the authority
conferred therein to vote in favor of the election as Directors of the 17
nominees listed below (or a lesser number if any named nominees are unavailable
for election) if no contrary instruction is given on the Proxy. The Board of
Directors does not know of any reason for such unavailability by a nominee. All
nominees presently are Directors of the Corporation. Each Director elected at
the Annual Meeting of Shareholders will, in the absence of resignation, removal
or disqualification, serve for one year from the Annual Meeting or until his
successor is duly elected and qualifies. There are no present Directors of the
Corporation whose terms of office extend beyond the Annual Meeting of April 18,
1994. The information given below has been furnished by the nominees for the
benefit of the shareholders.

3
<PAGE>

<TABLE>
<CAPTION>
POSITION WITH CORPORATION (OTHER
THAN AS DIRECTOR), IF ANY, PRESENT
DIRECTOR PRINCIPAL OCCUPATION AND PRINCIPAL
NAME AND AGE SINCE* OCCUPATION FOR PAST FIVE YEARS
- ------------ -------- -------------------------------------------------------
<S> <C> <C>
James O. Green.......... 1984 Retired, formerly Chairman of the Board (1983 to 1986)
69 Green's Dairy Inc.
Alfred G. Hemmerich..... 1983 Retired October 1, 1993, formerly President (1990 to
65 a October, 1993) Green Hills Management Company (real es-
tate develop- ment); Vice President (1977 to 1990),
Gilbert/Commonwealth, Inc. (consulting engineers).
Lee H. Javitch.......... 1982 Private Investor; formerly Chairman of the Board and
63 b Chief Executive Officer of Giant Food Stores, Inc.,
Carlisle, Pennsylvania.
Christopher R. Jennings. 1987 President (1987 to date) and Chief Operating Officer
50 c (May, 1992 to date) of the Corporation; formerly Part-
ner, Coopers & Lybrand (national accounting firm).
William J. King......... 1980 Chairman of the Board (1987 to date) Chief Executive
64 a,c Officer (1986 to date) Chairman of Executive Committee
(1982 to date) of Dauphin Bank and the Corporation.
William T. Kirchhoff.... 1979 Executive Vice President, Cleveland Brothers Equipment
52 c Company, Inc. (sale of construction equipment).
Lawrence J. LaMaina, 1992 Chairman, President and Chief Executive Officer of
Jr. ................... Farmers Bank; Vice Chairman (July 1992 to date) of the
59 Corporation.
James E. Marley......... 1993 Chairman of the Board (1993 to date), Chief Operating
58 a Officer (1990 to 1992) and President (1986 to 1992) of
AMP Incorporated (manufacturer of electrical compo-
nents); Director of AMP Incorporated, Armstrong World
Industries, Inc. and Harsco Corporation.
Robert F. Nation........ 1978 President, Penn Harris Company (owner and operator of
67 a,b,c motor inns); Director of Harsco Corporation.
Elmer E. Naugle......... 1982 Retired 1987, formerly fiscal officer, Shippensburg
69 a State University.
Walter F. Raab.......... 1977 Director and member of the Executive Committee of the
69 a,b Board of Directors of AMP Incorporated (manufacturer of
electrical components); Chairman and Chief Executive
Officer of AMP Incorporated (1982 to 1/1/90); Director
of the West Company, Air Products and Chemicals, Inc.
and the Harris Corporation.
Paul C. Raub............ 1984 Chairman of the Board (1989 to date); President (1966-
67 a,c 1989), York Corrugating Company.
Henry W. Rhoads......... 1979 Attorney, Rhoads & Sinon.
56 c
R. Champlin Sheridan, 1992 Chairman and Chief Executive Officer of The Sheridan
Jr. ................... Group, Inc. (publication and book printers).
64 a
</TABLE>
- --------
Notes:
* Includes period prior to January 1, 1977, named person served as a Director
of Dauphin Deposit Trust Company, which merged into Dauphin Bank on January 1,
1977, at which time the Corporation

4
<PAGE>

acquired all outstanding shares of Dauphin Bank. Does not include period, if
any, served as Director of other banks merged with Dauphin Bank or acquired by
the Corporation.

a. Member of Audit Committee of the Corporation.
b. Member of Compensation Committee of the Corporation.
c. Member of Executive Committee of the Corporation.

All nominees except Messrs. LaMaina and Sheridan also are Directors of
Dauphin Bank. Messrs. King, Jennings, LaMaina and Sheridan also are Directors
of Farmers Bank.

The Audit Committee of the Corporation reviews the scope of the external
audit by the Corporation's independent certified public accountants. The
Committee also recommends the selection of independent certified public
accountants to the Executive Committee and the Board of Directors of the
Corporation. The Committee held 4 meetings during 1993.

The Compensation Committee of the Corporation reviews and evaluates salaries
of all officers of Dauphin Bank and Farmers Bank of $65,000 or more and makes
recommendations as to such salaries to the Board of Directors of Dauphin Bank
and Farmers Bank, respectively. During 1993, the Compensation Committee held 4
meetings.

The Corporation does not have a Nominating Committee, but recommendations for
election as Directors of the Corporation are made by the Executive Committee to
the Board, which then nominates candidates for election to the Board. During
1993, the Executive Committee held 13 meetings.

The Board of Directors of the Corporation held 5 meetings during 1993. All of
the Directors of the Corporation attended at least 75 percent of the aggregate
of (1) the total number of meetings of the Board of Directors of the
Corporation (held during the period which they served as a Director) and (2)
the total number of meetings held by all committees of the Board of Directors
of the Corporation on which they served (during the periods that they served),
except Mr. Javitch who attended 70% of the meetings held.

EXECUTIVE COMPENSATION

The following table shows, for the fiscal years ending December 31, 1991,
1992 and 1993, the cash compensation paid or accrued, as well as certain other
compensation paid or accrued for those years, to the Chief Executive Officer of
the Corporation and to each of the other four most highly compensated executive
officers of the Corporation in all capacities in which they served:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- ------------------- -------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER ALL
NAME ANNUAL RESTRICTED OTHER
AND COMPEN- STOCK OPTIONS/ LTIP COMPEN-
PRINCIPAL SALARY BONUS SATION AWARD(S) SARS PAYOUTS SATION
POSITION YEAR ($) ($)(1) ($) ($) (#)(2) ($) ($)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. King,........ 1993 425,000 193,996 -- -- 35,000 -- 5,695(3)
Chairman of the Board, 1992 400,000 176,585 -- -- 29,600 -- 9,202
Chairman of the Execu- 1991 376,236 164,423 -- -- 29,600 -- 7,020
tive Committee and
Chief Executive Officer
of Dauphin Bank and the
Corporation
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------- ------------------- -------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER ALL
NAME ANNUAL RESTRICTED OTHER
AND COMPEN- STOCK OPTIONS/ LTIP COMPEN-
PRINCIPAL SALARY BONUS SATION AWARD(S) SARS PAYOUTS SATION
POSITION YEAR ($) ($)(1) ($) ($) (#)(2) ($) ($)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Christopher R.
Jennings,.............. 1993 307,500 108,228 -- -- 20,000 -- 4,012(4)
President and Chief 1992 290,000 98,806 -- -- 16,600 -- 4,702
Operating Officer of 1991 273,890 92,500 -- -- 16,600 -- 2,960
the Corporation
Lawrence J. LaMaina,
Jr.,................... 1993 240,750 97,314 -- -- 13,000 -- 4,272(6)
Vice Chairman of the 1992(5) 209,698 87,200 -- -- 6,400 -- 21,272
Corporation and Chair-
man, President and
Chief Executive Officer
of Farmers Bank
Paul B. Shannon,........ 1993 200,000 70,392 -- -- 15,000 -- 3,363(7)
Senior Executive 1992 173,667 58,879 -- -- 13,000 -- 4,569
Vice President and
Chief 1991 135,967 55,601 -- -- 9,000 -- 2,415
Credit Officer of the
Corporation and Presi-
dent of Dauphin Bank
Harry L. Nicholson,..... 1993 123,500 42,912 -- -- 5,000 -- 3,474(8)
Executive Vice Presi- 1992 117,000 39,776 -- -- 3,400 -- 6,717
dent
and Chief Investment 1991 111,354 33,407 -- -- 3,400 -- 4,717
Officer of the Corpora-
tion
</TABLE>
- --------
(1) Reflects bonus earned during the fiscal year and paid during the next
fiscal year. Also includes a voluntary year-end distribution equal to two
weeks of base salary paid by Dauphin Bank and Farmers Bank each year to all
of their respective employees, including Messrs. King, Jennings, LaMaina,
Shannon and Nicholson.

(2) Non-qualified options to acquire shares of Common Stock.

(3) Consists of $2,249 in Corporation contributions to the Corporation's 401(k)
Savings Plan, $1,687 in premiums on a term life insurance policy for Mr.
King's benefit, and $1,759, which represents the economic benefit to Mr.
King under the Corporation's split dollar life insurance program.

(4) Consists of $2,249 in Corporation contributions to the Corporation's 401(k)
Savings Plan, $1,220 in premiums on a term life insurance policy for Mr.
Jennings' benefit, and $543, which represents the economic benefit to Mr.
Jennings under the Corporation's split dollar life insurance program.

(5) On July 1, 1992, FB&T Corporation was merged with and into the Corporation
and, as a consequence thereof, Farmers Bank became a wholly-owned
subsidiary of the Corporation. In accordance with the terms of the merger,
Mr. LaMaina, who was previously Chairman, President and Chief Executive
Officer of FB&T Corporation and Farmers Bank, was appointed Vice Chairman
of the Corporation and remained Chairman, President and CEO of Farmers
Bank. The salary listed for Mr. LaMaina reflects total base salary paid
during calendar year 1992 even though the merger was not consummated until
July 1, 1992. Similarly, Mr. LaMaina's bonus was paid in accordance with
the Farmers Bank Incentive Compensation Plan for services rendered during
calendar year 1992. In addition to the salary and bonus listed for services
rendered during 1992, Mr. LaMaina also received a payment of $690,000 from
FB&T Corporation immediately prior to the effective date of the merger in
settlement of his rights pursuant to the change in

6
<PAGE>

control provisions of his employment agreement with FB&T Corporation. The
employment agreement terminated on July 1, 1992, the effective date of the
merger.

(6) Consists of $2,249 in Corporation contributions to the Corporation's 401(k)
Savings Plan, $954 in premiums on a term life insurance policy for Mr.
LaMaina's benefit, and $1,068, which represents the economic benefit to Mr.
LaMaina under the Corporation's split dollar life insurance program.

(7) Consists of $2,249 in Corporation contributions to the Corporation's 401(k)
Savings Plan, $796 in premiums on a term life insurance policy for Mr.
Shannon's benefit, and $318, which represents the economic benefit to Mr.
Shannon under the Corporation's split dollar life insurance program.

(8) Consists of $2,249 in Corporation contributions to the Corporation's 401(k)
Savings Plan, $491 in premiums on a term life insurance policy for Mr.
Nicholson's benefit, and $734, which represents the economic benefit to Mr.
Nicholson under the Corporation's split dollar life insurance program.

Stock Options.

The following table contains information concerning the grant of stock
options under the Corporation's Stock Option Plan of 1986 to the Chief
Executive Officer and the other four highest compensated executive officers of
the Corporation during the year ending December 31, 1993.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
- ------------------------------------------------------------------- ---------------------
(A) (B) (C) (D) (E) (F) (G)
NO. OF % OF
SECURITIES TOTAL
UNDER- OPTIONS
LYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE EXPIRA-
GRANTED IN FISCAL PRICE TION
NAME (#) (2) YEAR ($/SH) (3) DATE (4) 5% ($) 10% ($)
---- ---------- ---------- ---------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
William J. King......... 35,000 22.95% $24.88 07/08/03 $ 547,641 $ 1,387,831
Christopher R. Jennings. 20,000 13.11% $24.88 07/08/03 $ 312,938 $ 793,046
Lawrence J. LaMaina,
Jr. ................... 13,000 8.52% $24.88 07/08/03 $ 203,410 $ 515,480
Paul B. Shannon......... 15,000 9.84% $24.88 07/08/03 $ 234,703 $ 594,785
Harry L. Nicholson...... 5,000 3.28% $24.88 07/08/03 $ 78,234 $ 198,262
</TABLE>
- --------
(1) Illustrates value that would be realized upon exercise of the options
immediately prior to the expiration of their term, assuming the specified
compounded rates of appreciation on the Common Stock over the term of the
options.

(2) The date of grant for all options is July 8, 1993. All options granted are
non-qualified stock options without stock appreciation rights. The options
vest over a five year period with 20% of the options becoming exercisable
for shares each year on the anniversary of the date of grant. To the extent
not already exercisable, the options become automatically exercisable in
the event of a merger or consolidation of the Corporation in which the
Corporation is not the surviving entity, or the sale of all or
substantially all of the assets of the Corporation, or an offer to purchase
made by a party, other than the Corporation, to all stockholders of the
Corporation for at least 35% of the outstanding stock. In addition, the
Compensation Committee of the Board of Directors may, in its discretion,
accelerate the vesting schedule, upon such terms and conditions as it may
impose.

7
<PAGE>

(3) The exercise price of all options granted is equal to the market price of
the Common Stock on the date of grant. The exercise price may be paid in
cash, or in shares of Common Stock owned by the option holder prior to
exercising the option, provided such shares have a fair market value on the
date of payment equal to the option exercise price for the shares of Common
Stock being purchased, or partly in cash and partly in such shares of
Common Stock.

(4) All options expire 10 years from the date of grant. Notwithstanding the
foregoing: (1) In the event of normal or early retirement prior to the end
of the option term, the option shall remain exercisable for a period of
three years from the date of retirement (but not later than the end of the
option term) to the extent the option was vested, by acceleration or
otherwise, at the time of retirement; (2) in the event an option holder
ceases to be employed by reason of death or disability prior to the end of
the option term, the option shall remain exercisable for one year from the
date of cessation of employment (but not later than the end of the option
term) to the extent the option was vested, by acceleration or otherwise, at
the time of cessation of employment; and (3) in the event an option holder
ceases to be employed other than by reason of death or disability, the
option shall remain exercisable for three months from the date of cessation
of employment (but not later than the end of the option term) to the extent
the option was exercisable at the time of cessation of employment.

Option/SAR Exercises and Holdings.

The following table sets forth information with respect to the Chief
Executive Officer and the other four highest compensated executive officers of
the Corporation concerning the exercise of options and/or stock appreciation
rights ("SARs") during the year ending December 31, 1993 and unexercised
options and SARs held as of the end of 1993.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUE

<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END (#) FY-END ($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) (1) UNEXERCISABLE UNEXERCISABLE (2)
---- --------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
William J. King......... 15,500 $145,343 103,860/ $1,011,296/
76,440 $ 222,447
Christopher R. Jennings. 0 $ 0 39,268/ $ 363,508/
46,740 $ 164,251
Lawrence J. LaMaina, 4,000 $ 57,028 13,149/ $ 160,034/
Jr. ................... 38,395 $ 274,099
Paul B. Shannon......... 2,520 $ 35,406 18,220/ $ 163,995/
34,400 $ 114,690
Harry L. Nicholson...... 0 $ 0 14,156/ $ 140,482/
9,760 $ 26,159
</TABLE>
- --------
(1) Fair market value of Common Stock at exercise, minus the exercise price.

(2) Fair market value of Common Stock at year-end ($25.50 per share).

Pension Plans.

The Corporation maintains the Dauphin Deposit Corporation Pension Plan (the
"Pension Plan") which is a non-contributory defined benefit pension plan. The
Pension Plan provides benefits for all eligible employees, including the named
executive officers.

8
<PAGE>

The Pension Plan's current benefit formula provides plan participants with a
normal retirement benefit equal to 1.375% of a participant's average
compensation not in excess of a participant's covered compensation multiplied
by the participant's applicable benefit service credited after July 1, 1985
plus 1.625% of a participant's average compensation in excess of a
participant's covered compensation multiplied by the participant's applicable
benefit service, not in excess of 35 years, credited after July 1, 1985.
Different benefit formulas apply for service prior to July 1, 1985 depending on
the retirement plan in which the employee participated prior to 1985. A
participant's average compensation is computed using the five consecutive plan
years which produce the highest average. A participant's covered compensation
is the average of the Social Security taxable wage bases in effect during the
35 years ending with the year in which an individual attains Social Security
retirement age. The covered compensation figure is adjusted each year until the
participant reaches Social Security retirement age in order to reflect changes
in the Social Security taxable wage base. For purposes of the Pension Plan,
compensation is defined as a participant's annual rate of earnings as of
January 1st, exclusive of overtime and bonuses, subject, however, to a maximum
compensation limit for 1993 of $235,840, as adjusted. Generally, the Plan also
provides a death benefit in the form of a survivor annuity to the surviving
spouse of a vested active or vested former participant who dies prior to the
commencement of retirement benefits.

The Corporation and Dauphin Bank have also entered into non-qualified
Supplemental Pension Agreements with Mr. King and Mr. Jennings. Under the
Supplemental Pension Agreements, Mr. King and Mr. Jennings upon retirement are
generally entitled to a benefit equal to 55% of their highest five year average
compensation reduced by their applicable benefit under the Pension Plan, their
applicable social security benefit and the applicable benefit from their prior
employer's qualified retirement plan.

The following table sets forth the projected pension benefits payable to a
covered participant upon normal retirement in 1993 under the Pension Plan based
on various levels of average compensation and assuming the current benefit
formulas were in effect for the entire period of credited service. The
narrative immediately below the table sets forth the additional pension
benefits payable to Messrs. King and Jennings under their non-qualified
Supplemental Pension Agreements based on certain assumptions set forth in the
narrative.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE -----------------------------------------
COMPENSATION 10 15 25 35 40
- ------------ ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
$ 20,000............................ $ 2,750 $ 4,125 $ 6,875 $ 9,625 $ 11,000
$ 50,000............................ 7,557 11,336 18,893 26,450 28,012
$ 80,000............................ 12,432 18,648 31,080 43,512 45,074
$100,000............................ 15,682 23,523 39,205 54,887 56,449
$150,000............................ 23,807 35,711 59,518 83,325 84,887
$235,840............................ 37,756 56,634 94,390 115,641* 115,641*
$300,000............................ 37,756 56,634 94,390 115,641* 115,641*
$350,000............................ 37,756 56,634 94,390 115,641* 115,641*
$400,000............................ 37,756 56,634 94,390 115,641* 115,641*
$450,000............................ 37,756 56,634 94,390 115,641* 115,641*
$500,000............................ 37,756 56,634 94,390 115,641* 115,641*
$550,000............................ 37,756 56,634 94,390 115,641* 115,641*
$600,000............................ 37,756 56,634 94,390 115,641* 115,641*
$650,000............................ 37,756 56,634 94,390 115,641* 115,641*
$700,000............................ 37,756 56,634 94,390 115,641* 115,641*
</TABLE>

9
<PAGE>

Mr. King's yearly supplemental pension benefit, commencing at
his normal retirement and payable in equal monthly installments
for his lifetime, is $210,585 (assumes 1993 compensation for
supplemental pension purposes remains constant at $601,585 to
normal retirement). Mr. Jennings' yearly supplemental pension
benefit, commencing at his normal retirement and payable in
equal monthly installments for his lifetime, is $118,238
(assumes 1993 compensation for supplemental pension purposes
remains constant at $406,307 to normal retirement).
- --------
* Benefits payable from the Pension Plan are subject to maximums prescribed in
the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended,
and by the Internal Revenue Code of 1986, as amended. The maximum annual
qualified pension benefit allowable during 1993 under the Pension Plan was
$115,641. Figures in the Pension Plan Table above show normal retirement
benefits payable under the Pension Plan assuming normal retirement in 1993.

The projected benefit amounts set forth in the table are not subject to
reduction for social security benefits. Voluntary year end distributions and
incentive payments made under the Annual Management Performance Incentive Plan
do not qualify as compensation covered under the Pension Plan. Compensation
utilized for purposes of determining benefits under the Pension Plan as of
December 31, 1993 is as follows: Mr. King $425,000, Mr. Jennings $307,500, Mr.
LaMaina $240,750, Mr. Shannon $200,000, and Mr. Nicholson $123,500. For
purposes of the Pension Plan at December 31, 1993, Mr. King had 14 years and 4
months of service, Mr. Jennings had 6 years and 5 months of service, Mr.
Shannon had 14 years and 3 months of service, Mr. LaMaina had 1 year and 6
months of service, and Mr. Nicholson had 17 years and 2 months of service.

The Pension Plan costs are based on actuarial assumptions, and cannot be
specifically allocated to any one individual. No contribution to the Pension
Plan was required or made for 1993.

Change in Control and Employment Agreements.

The Corporation and Dauphin Bank have entered into various Change in Control
Agreements with the executive officers listed in the Summary Compensation
Table. In addition, the Corporation and Farmers Bank have entered into an
employment contract with Mr. LaMaina which also contains change in control
provisions.

Where change in control benefits are provided under an Agreement, the
agreements generally provide that if the executive officer's employment with
the Corporation, Dauphin Bank or Farmers Bank, respectively, is terminated
pursuant to a change in control, the executive officer's base salary in effect
on the date of termination, plus an amount equal to bonuses, if any, earned by
the executive officer for the immediately preceding year will continue for a
period of two to five years, depending on the particular Agreement, but not
beyond the date on which the respective executive officer attains age 65 or
dies. Each payment made following termination, however, will be reduced by the
executive officer's earned income from all sources during the corresponding pay
period. Mr. Jennings' Agreement provides that an amount equal to slightly less
than three times his average annual compensation for the prior 5 years will be
paid to him in a lump sum upon termination pursuant to a change in control and
also provides for a one year consulting agreement following termination at his
annual base salary on the date of termination. The Agreements with Messrs.
King, Jennings, Shannon and Nicholson provide that the Corporation or Dauphin
Bank, as applicable, will also provide the executive officer with available
insurance coverages in effect at the time of the executive officer's
termination pursuant to a change in control, offset by coverage by any
subsequent employment. Such benefits will continue for a period of two years or
until the executive officer attains the age of 65, depending on the particular
agreement. Depending on the particular Agreement, the Corporation or Dauphin
Bank, as applicable, will also continue to provide the executive officer with
the pre-

10
<PAGE>

retirement death benefits and the supplemental retirement income benefits
described above following termination of employment. A termination pursuant to
a change in control may occur in connection with a merger, consolidation,
acquisition, reorganization, sale of assets or significant stock acquisition of
the Corporation, Dauphin Bank or Farmers Bank, as applicable.

In connection with the merger of FB&T Corporation into the Corporation on
July 1, 1992, the Corporation and Farmers Bank entered into an
employment/consulting agreement with Mr. LaMaina for a minimum of three (3)
years. In addition to the change in control provisions previously discussed,
the terms of Mr. LaMaina's Agreement include a base annual salary of $225,000
in calendar year 1992 and $240,750 thereafter (subject to increase upon merit
review), the opportunity for additional incentive compensation and other fringe
benefits. The employment/consulting agreement with Mr. LaMaina was amended on
April 2, 1993 to extend the term of full-time employment for an additional 18
months.

The benefits provided under the Agreements are unfunded and will be paid out
of the general assets of the Corporation, Dauphin Bank or Farmers Bank, at such
time as the benefits become payable.

Board Compensation Committee Report On Executive Compensation.

Pursuant to recently adopted rules designed to enhance disclosure of
companies' policies toward executive compensation, set forth below is a report
submitted by the Compensation Committee of the Board of Directors (the
"Compensation Committee") addressing the Corporation's executive compensation
policies for 1993. The Compensation Committee is composed of the following non-
employee Directors of the Corporation: Jeffrey J. Burdge--Chairman, John A.
Arnold, Lee H. Javitch, Robert F. Nation and Walter F. Raab.

The key elements of the Corporation's executive compensation package consist
of base salary, annual bonus and stock options. In addition to the programs
discussed herein, the Compensation Committee takes into account the full
compensation package afforded by the Corporation to the executive officers,
including pension benefits, supplemental retirement benefits, insurance and
other benefits.

The Corporation's executive compensation program, particularly the annual
bonus, is designed to be closely linked to corporate performance and returns to
shareholders. To this end, the Corporation, in conjunction with its independent
compensation consultants, has developed an overall compensation strategy and
specific compensation plans that tie a significant portion of executive
compensation to the Corporation's success in meeting specified performance
goals. The overall objectives of this strategy are to attract and retain the
best possible executive talent, to motivate these executives to achieve the
goals inherent in the Corporation's business strategy, to link executive and
shareholder interests through equity based plans and finally to provide a
compensation package that recognizes individual contributions as well as
overall business results.

The Compensation Committee is composed entirely of independent non-employee
Directors of the Corporation. The Compensation Committee is responsible for
setting and administering the policies which cover both annual compensation
(base salary and annual bonus) and grants pursuant to the Corporation's Stock
Option Plan of 1986, as amended (the "Stock Option Plan"). Each year the
Compensation Committee conducts a full review of the Corporation's executive
compensation program. This review includes a report from management as to
corporate performance for the prior year, as well as the preparation and
presentation to the Compensation Committee of a financial plan for the current
year. This review in 1993 also included recommendations from the Corporation's
independent compensation consultants as to bonus award opportunities under the
Corporation's Annual Management Performance Incentive Plan (the "Incentive
Bonus Plan") and the grant of

11
<PAGE>

options pursuant to the Stock Option Plan. The Compensation Committee
considered the Corporation's business plan and expected results and the
Corporation's strategic initiatives and results achieved. The Compensation
Committee also compares the Corporation's compensation program with the
compensation programs of a list of peer group companies compiled by Dauphin
Bank which is composed of regional banks of varying asset size located both
within and outside of the Corporation's traditional central and south central
Pennsylvania market area. For purposes of determining appropriate levels of
stock option grants, the Compensation Committee also considers a separate list
of peer group companies with stock option plans compiled by the Corporation's
independent compensation consultants using long term incentive plan surveys.
The peer group companies listed represent the Corporation's direct and indirect
competitors for executive talent in the banking industry. With respect to
comparisons with peer group companies, the Compensation Committee considers
both the performance and compensation levels of these comparable companies in
establishing the Corporation's executive compensation levels. For 1993, the
compensation amounts of the Corporation's named executive officers fell within
the median range of compensation paid by the other peer group companies. The
peer group lists reviewed by the Compensation Committee represent only a small
portion of those companies comprising the NASDAQ Bank Stocks Index which the
Corporation uses as its industry index in the Performance Graph set forth
elsewhere in this Proxy Statement. The NASDAQ Bank Stock Index includes all
commercial banks and bank holding companies which stock is traded on the NASDAQ
National Market and the NASDAQ Small Cap Market.

The Compensation Committee meets without the Chief Executive Officer present
to evaluate his performance under the Corporation's executive compensation
program and reports on that evaluation to the full Board of Directors. With
regard to the other four highest paid executive officers not including the
Chief Executive Officer, the Compensation Committee considers the
recommendations of the Chief Executive Officer as to base salary, performance
under the Incentive Bonus Plan and grants of options and/or stock appreciation
rights under the Stock Option Plan.

Base Salary.

The Compensation Committee approves annual base salary adjustments for all
officers with annual base salaries of $65,000 and above. Base salaries for new
officers are initially determined by evaluating the responsibility of the
position held and the experience of the individual, and by reference to the
competitive market place for executive talent, including a comparison to base
salaries for comparable positions at the financial institutions included in the
list of peer group companies compiled by Dauphin Bank. With the exception of
Mr. LaMaina, whose base salary is set pursuant to the terms of an employment
agreement entered into on July 1, 1992 in connection with the FB&T Corporation
merger, the base salary of the named executive officers is reviewed and
approved each year by the Compensation Committee prior to approval by the full
Board of Directors.

Typically, annual salary adjustments for executive officers are determined by
evaluating the performance of the Corporation and its executive officers, and
by taking into account any additional or new responsibilities assumed by
individual executive officers in connection with promotions or organizational
changes. It has been the practice of the Corporation, upon recommendation from
the Chief Executive Officer, to treat overall corporate performance as the
primary factor in the amount of salary adjustments for executive officers. In
measuring corporate performance, the Committee considers return on equity,
return on assets, earnings per share and total return to shareholders.

With respect to the base salary granted to Mr. King in 1993, the Compensation
Committee took into account the Corporation's performance during 1992 and also
compared Mr. King's base salary with the base salaries of the chief executive
officers of the peer companies referred to above. Particular emphasis was
placed upon the Corporation's success in meeting its return on equity goal in
1992 and the assessment by the Compensation Committee of Mr. King's individual
performance.

12
<PAGE>

Mr. King was granted a base salary of $425,000 for 1993, an increase of 6.25%
over his $400,000 base salary for 1992.

Annual Bonus.

The Compensation Committee reviews the tentative award payments and
performance levels for participants in the Incentive Bonus Plan in January of
each year. Under the Incentive Bonus Plan, bonus awards are calculated based on
corporate and individual performance in accordance with a formula previously
approved by the Compensation Committee. As for named executive officers, the
corporate performance measures typically account for up to 75% of the award
payment while the individual performance measures are accorded a weight of up
to 25%. The corporate performance measure under the Incentive Bonus Plan is
return on equity. In addition to return on equity, the Compensation Committee
may, in its discretion, consider return on assets as a secondary corporate
performance factor which, if considered, could increase or decrease the award
payment. In 1993, the Compensation Committee considered only return on equity
in measuring corporate performance under the Incentive Bonus Plan. For each
year of participation, the Compensation Committee determines those executive
officers eligible to participate in the Incentive Bonus Plan and establishes
target bonus awards based on a percentage of the respective officer's base
salary for the year in question. Actual bonus awards under the Incentive Bonus
Plan formula are tied to actual corporate and individual performance and may be
higher or lower than the pre-set target bonus awards. In no event, however, can
a participant's actual bonus award exceed 150% of the participant's target
bonus award. The Compensation Committee approves annual return on equity
targets and individual performance targets at the beginning of each year and
bonus award recommendations based on these targets made by senior management at
the close of the year.

In 1993, the Corporation exceeded its target return on equity goal. In
addition, during 1993 Mr. King achieved 100% of his previously established
individual performance objectives, including an increase in net profits in
excess of that set forth in the Corporation's business plan. Based on these
results, Mr. King was awarded a bonus of $177,650, a 10.21% increase over the
bonus paid to him in 1992. In awarding this bonus, the Compensation Committee
also considered the performance of the Corporation's common stock during 1993
and Mr. King's role in promoting the long-term strategic growth of the
Corporation. Mr. King's actual bonus award for 1993 amounted to approximately
105% of the pre-set target bonus award.

In addition to the incentive bonus discussed above, it has been the annual
practice of the Board of Directors of Dauphin Bank and Farmers Bank to consider
awarding a discretionary year-end bonus distribution to all employees of
Dauphin Bank and Farmers Bank equal to two weeks of each employee's base
salary. This discretionary year-end bonus is considered and approved by the
Dauphin Bank and Farmers Bank Board of Directors.

In 1993, the Dauphin Bank and Farmers Bank Board of Directors approved such a
discretionary year-end bonus for all employees of Dauphin Bank and Farmers
Bank. As a result, Mr. King received an additional bonus distribution of
$16,346 at year-end 1993.

Stock Option Plan.

Under the Stock Option Plan, which was approved by the shareholders at the
1987 Annual Meeting, incentive stock options, non-qualified stock options and
stock appreciation rights in conjunction with such options, may be granted to
executive officers of the Corporation or its subsidiaries. The Compensation
Committee sets guidelines for the size of stock option awards based on a
recommendation each year from the Corporation's independent compensation
consultants and management. Although the size of awards is largely a subjective
determination based on the particular executive officer, factors considered
include competitive compensation data from the list

13
<PAGE>

of peer group companies compiled by the Corporation's independent compensation
consultants, the amount of options previously awarded to an executive officer
and the value of unexercised in-the-money options at year end. In the event of
poor corporate performance, the Compensation Committee can elect not to award
options. In 1993, the stock option award to the Chief Executive Officer fell
below the median level for such compensation as determined by reference to peer
group companies reviewed.

Stock options during 1993 were granted with an exercise price equal to 100%
of the fair market value of the Common Stock on the date of grant and vest over
a five year vesting schedule (20% vested per year). All options granted were
non-qualified stock options. No stock appreciation rights were granted during
1993.

In 1993, Mr. King received options to purchase 35,000 shares of Common Stock
with an exercise price of $24.88 per share. This represents an 18.24% increase
over the 29,600 options that were granted to Mr. King in 1992. Mr. King
presently is the beneficial owner, directly and indirectly, of 35,523 shares of
Common Stock and also holds presently exercisable options to purchase an
additional 103,860 shares. The Compensation Committee believes that significant
equity interests in the Corporation held by the Corporation's senior management
are beneficial to the common interests of shareholders and management.

COMPENSATION COMMITTEE
Jeffrey J. Burdge--Chairman
John A. Arnold
Lee H. Javitch
Robert F. Nation
Walter F. Raab

Performance Graph.

The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Common Stock during the five years ended
December 31, 1993 with the cumulative total return on (i) a broad equity market
index, the S&P 500 Index, (ii) a published industry index, the NASDAQ Bank
Stocks Index and (iii) a peer group constructed by the Corporation composed of
all commercial banks and bank holding companies located in the United States
with assets ranging between $3 billion and $6 billion. The comparison assumes
$100 was invested on December 31, 1988 in the Common Stock and in each of the
indices and assumes reinvestment of dividends.

14
<PAGE>

FIVE YEAR CUMULATIVE TOTAL RETURN

[PERFORMANCE GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Dauphin Deposit............................. 100 109 98 137 184 204
S&P 500..................................... 100 132 128 166 179 197
NASDAQ Bank Stocks.......................... 100 111 81 134 194 221
Peer Group *................................ 100 106 95 111 127 133
</TABLE>
- --------
* Companies included in the peer group index are: Bank South Corporation;
Citizens Bancorp; Cullen/Frost Bankers, Inc.; Deposit Guaranty Corp.; First
Bancorp of Ohio, Inc.; First Citizens Bancshares; First Commercial
Corporation; Hibernia Corporation; Imperial Bancorp; Keystone Financial,
Inc.; Liberty National Bancorp; Magna Group, Inc.; Mercantile Bankshares
Corp.; Premier Bancorp, Inc.; Provident Bancorp, Inc.; Riggs National
Corporation; Southern National Corp.; Summit Bancorporation; Synovus
Financial Corp.; Trustmark Corporation; U.S. Trust Corporation; Valley
Bancorporation; Valley National Bancorp; Wilmington Trust Corporation; and
Zions Bancorporation.

In subsequent proxy statements, the Corporation will use the NASDAQ Bank
Stocks Index in lieu of the peer group index and is presenting both indices in
the graph above in order to comply with Securities and Exchange Commission
regulations which require a dual presentation where a

15
<PAGE>

registrant selects a different index from the index used for the immediately
preceding fiscal year. The Corporation has changed to the NASDAQ Bank Stocks
Index because it is a published industry index readily available to the
Corporation at no charge, thereby relieving the Corporation of the time
consuming task of constructing its own peer group index on an annual basis.

Directors' Fees.

Directors of the Corporation who are not officers of the Corporation receive
an annual retainer fee of $5,000 and are paid $425 for attendance at the Annual
Meeting and at each Board Meeting and $450 for attendance at each meeting of
the Executive Committee of the Board, $275 for attendance at each meeting of
the Audit Committee of the Board and $250 for attendance at each meeting of any
other committee of the Board. Directors of Dauphin Bank who are not officers of
Dauphin Bank are paid $325 for attendance at each meeting of the Board, $450
for attendance at each meeting of the Executive Committee of the Board, $275
for attendance at each meeting of the Trust Committee of the Board and $250 for
attendance at each meeting of any other committee of the Board. Directors of
Farmers Bank who are not officers of Farmers Bank are paid $200 for each Board
or Committee meeting attended plus an annual retainer of $4,250 per year. In
addition, non-officer Directors who serve on bank Advisory Boards receive
attendance fees ranging from $175 to $300 per meeting, depending upon the
particular Advisory Board.

TRANSACTIONS WITH MANAGEMENT

Dauphin Bank and Farmers Bank have had in the past, and expect to have in the
future, transactions in the ordinary course of their business, with Directors
and officers of Dauphin Bank, Farmers Bank and the Corporation and their
associates, on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with other persons, which do not involve more than the normal risk
of collectibility or present other unfavorable features.

Henry W. Rhoads, a Director and member of the Executive Committee of the
Corporation and Dauphin Bank, is a partner in the law firm of Rhoads & Sinon,
which the Corporation and its subsidiaries have retained for past years and the
present year as general counsel. Dauphin Bank and the Corporation paid the law
firm approximately $706,000 in 1993 as compensation for legal services to the
Corporation, Dauphin Bank and other subsidiaries. In addition, the Rhoads &
Sinon law firm entered into a 15 year lease with Dauphin Bank in 1989 pursuant
to which the firm occupies a portion of Dauphin Bank's office building on
Market Square, Harrisburg, Pennsylvania, at an annual base rent of $339,785.
Commencing in the sixth year of the initial lease term, an annual additional
rent may be due based on increases in the Consumer Price Index. The law firm
has the option to renew the lease for two (2) consecutive additional terms.

SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires that directors
and certain officers of the Corporation file reports of ownership and changes
in ownership with the Securities and Exchange Commission as to the shares of
Corporation Common Stock beneficially owned by them.

Based solely on its review of copies of such forms received by it, the
Corporation believes that during the Corporation's fiscal year ending on
December 31, 1993, all filing requirements applicable to its directors and
officers were complied with in a timely fashion, except for one late report
filed by Director James O. Green reflecting one sale of 200 shares by a trust
of which Mr. Green is the beneficiary.

16
<PAGE>

RELATIONS WITH INDEPENDENT AUDITORS

KPMG Peat Marwick was the appointed independent auditor for the Corporation
in 1993. It is anticipated that the same firm will be selected for the current
year. The firm is a member of the SEC Practice Section of the American
Institute of Certified Public Accountants and has submitted a copy of its peer
review results to the Corporation.

During 1993, the Corporation's independent auditors, KPMG Peat Marwick,
performed certain non-audit services which are in addition to its basic
engagement for the examination of the Corporation's financial statements. The
Audit Committee of the Board of Directors of the Corporation approved the audit
and non-audit services performed by the Corporation's independent auditors and
considered the possible effect of the non-audit services on the independence of
the auditors, prior to granting approval for each service.

A representative of the auditing firm will be present at the Shareholders
Meeting to make a statement if he desires to do so and to respond to
appropriate questions.

SHAREHOLDER PROPOSALS

The Corporation must receive by November 18, 1994 any shareholder proposals
for such proposals to be considered for inclusion in the Corporation's Proxy
Statement and Proxy for the 1995 Annual Meeting of Shareholders.

OTHER BUSINESS

The Board of Directors of the Corporation does not intend to present any
business at the Annual Meeting other than the matters hereinabove referred to,
and the Board does not know of any other matters to be presented for action at
the meeting. Discretionary authority to vote on any other matters that may come
before the meeting will be conferred by such Proxies upon the person voting
them, unless a shareholder specifically indicates in such Proxy that such
authority is withheld. It is the intention of the persons designated as proxies
to vote in accordance with their best judgment on such matters.

It is important that proxies be returned promptly. Shareholders are urged to
vote, sign, date and return the accompanying form of Proxy in the enclosed
envelope.

By Order of the Board of Directors,

/s/ Claire D. Flemming

Claire D. Flemming, Secretary

March 18, 1994

THE CORPORATION IS FURNISHING EACH PERSON SOLICITED A COPY OF ITS 1993 ANNUAL
REPORT TO SHAREHOLDERS WHICH INCLUDES A COPY OF THE CORPORATION'S ANNUAL REPORT
ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1993, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934.

17
<PAGE>

PROXY

DAUPHIN DEPOSIT CORPORATION

Annual Meeting April 18, 1994

The undersigned hereby appoints F. Richard W. Cook, Larry A. Hartman and Linda
R. Schroeder, or any of them, my true and lawful attorney(s) with full power
of substitution for me and in my name, place and stead, to vote all stock of
the undersigned at the Annual Meeting of Shareholders of Dauphin Deposit
Corporation, to be held at the Harrisburg Hilton and Towers, One North Second
Street, Harrisburg, Pennsylvania, on Monday, April 18, 1994 at 9:00 a.m., and
at all adjournments thereof. IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL
VOTE FOR THE ELECTION AS DIRECTORS OF THE 17 NOMINEES NAMED ON THE REVERSE
SIDE AND UPON THE TRANSACTION OF SUCH OTHER BUSINESS AS PROPERLY MAY COME
BEFORE THE MEETING, IN ACCORDANCE WITH THE BEST JUDGEMENT OF THE PERSONS
APPOINTED AS PROXIES HEREIN.

(Please mark, sign, date and return this proxy in the enclosed
postage paid envelope.)

<PAGE>

1. ELECTION OF DIRECTORS

FOR WITHHOLD
all nominees listed AUTHORITY
(except as to vote for all
marked to the nominees listed
contrary below)

[ ] [ ]

William H. Alexander, John A. Arnold, Jeffrey J. Burdge, James O. Green,
Alfred G. Hemmerich, Lee H. Javitch, Christopher R. Jennings, William J. King,
William T. Kirchhoff, Lawrence J. LaMaina, Jr., James E. Marley, Robert F.
Nation, Elmer E. Naugle, Walter F. Raab, Paul C. Raub, Henry W. Rhoads, and R.
Champlin Sheridan, Jr.

(Instructions: To withhold authority to vote for any individual, strike a line
through the nominee's name in the list above.)

2. IN THE DISCRETION OF THE PERSONS NAMED IN THIS PROXY, TO VOTE UPON THE
TRANSACTION OF SUCH OTHER BUSINESS AS PROPERLY MAY COME BEFORE THE MEETING
AND ANY ADJOURNMENTS THEREOF.

The undersigned acknowledges receipt of notice of
the aforesaid Annual Meeting of Shareholders.

DATED: , 1994
-------------------------------------

(SEAL)
-------------------------------------------

Note: The signature(s) on this Proxy must
correspond with the name(s) as written upon the
face of the share certificate. Executors,
administrators, trustees, guardians, and other
fiduciaries please so indicate when signing.

"PLEASE MARK INSIDE BLUE BOXES SO
THAT DATA PROCESSING EQUIPMENT
WILL RECORD YOUR VOTES"
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF DAUPHIN DEPOSIT CORPORATION.