UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. [ ])
[ ] Filed by the Registrant
[ X] Filed by a Party other than the Registrant
Check the Appropriate Box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
ACNB CORPORATION
-------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement if
other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X ] No filing fee required
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and O-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 O-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule O-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>
April 9, 1997
DEAR SHAREHOLDER:
On behalf of the Board of Directors and management of ACNB
Corporation, I call your attention to the Annual Meeting of
Shareholders of the Corporation to be held on Tuesday, May 6,
1997, at 1:00 p.m., prevailing time, at the Main Office of Adams
County National Bank, 675 Old Harrisburg Road, Gettysburg,
Pennsylvania 17325.
The Notice of the Annual Meeting and the Proxy Statement
accompanying this letter address the formal business of the
meeting. The formal business schedule includes: a proposal to
fix the number of shareholders to be elected as Class 2 Directors
at four (4) and the election of four (4) Class 2 Directors for a
three (3) year term. At the meeting, members of the
Corporation's management will review the Corporation's operations
during the past year and be available to respond to questions.
We strongly encourage you to vote your shares, whether or
not you plan to attend the meeting. It is very important that
you sign, date and return the accompanying Proxy as soon as
possible, in the postage-paid envelope. If you do attend the
meeting and wish to vote in person, you must give written notice
thereof to the Secretary of the Corporation so that your Proxy
will be superseded by any ballot that you submit at the meeting.
Sincerely,
/s/ Ronald L. Hankey
--------------------
Ronald L. Hankey
President and
Chief Executive Officer
<PAGE>
ACNB CORPORATION
---------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 6, 1997
----------------------------
TO THE SHAREHOLDERS OF ACNB CORPORATION:
Notice is hereby given that the Annual Meeting of
Shareholders of ACNB CORPORATION (the "Corporation") will be held
at 1:00 p.m., prevailing time, on Tuesday, May 6, 1997, at the
Main Office of Adams County National Bank, 675 Old Harrisburg
Road, Gettysburg, Pennsylvania 17325, for the following purposes:
1. To fix the number of shareholders to be elected as
Class 2 Directors at four (4);
2. To elect four (4) Class 2 Directors to serve for a
three (3) year term expiring in 2000 and until their successors
are elected and qualified; and
3. To transact such other business as may properly come
before the Annual Meeting and any adjournment or postponement
thereof.
In accordance with the Bylaws of the Corporation and action
of the Board of Directors, only those shareholders of record at
the close of business on March 3, 1997, will be entitled to
notice of and to vote at the Annual Meeting and any adjournment
or postponement thereof.
A copy of the Corporation's Annual Report for the fiscal
year ended December 31, 1996, is enclosed with this Notice.
<PAGE>
You are urged to mark, sign, date and promptly return your
Proxy in the enclosed envelope so that your shares may be voted
in accordance with your wishes and in order that the presence of
a quorum may be assured. The prompt return of your signed Proxy,
regardless of the number of shares you hold, will aid the
Corporation in reducing the expense of additional proxy
solicitation. The giving of such Proxy does not affect your
right to vote in person if you attend the meeting and give
written notice to the Secretary of the Corporation.
By Order of the Board of Directors,
/s/ Ronald L. Hankey
--------------------
Ronald L. Hankey
President and
Chief Executive Officer
April 9, 1997
<PAGE>
ACNB CORPORATION
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 6, 1997
GENERAL
Introduction, Date, Time and Place of Annual Meeting
- ----------------------------------------------------
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of ACNB CORPORATION (the
"Corporation"), a Pennsylvania business corporation, of proxies
to be voted at the Annual Meeting of Shareholders of the
Corporation to be held on Tuesday, May 6, 1997, at 1:00 p.m.,
prevailing time, at the Main Office of Adams County National
Bank, 675 Old Harrisburg Road, Gettysburg, Pennsylvania 17325,
and at any adjournment or postponement of the Annual Meeting.
The principal executive office of the Corporation is located
at Adams County National Bank (the "Bank"), 675 Old Harrisburg
Road, Gettysburg, Pennsylvania 17325. The telephone number for
the Corporation is (717) 334-3161. All inquiries should be
directed to Ronald L. Hankey, President and Chief Executive
Officer of the Corporation. The Bank is a wholly-owned
subsidiary of the Corporation.
Solicitation and Voting of Proxies
- ----------------------------------
This Proxy Statement and the enclosed form of proxy (the
"Proxy") are first being sent to shareholders of the Corporation
on or about April 9, 1997.
Shares represented by proxies on the accompanying Proxy, if
properly signed and returned, will be voted in accordance with
the specifications made thereon by the shareholders. Any Proxy
not specifying to the contrary will be voted FOR the proposal to
fix the number of shareholders to be elected as Class 2 Directors
at four (4) and FOR the election of the nominees for Class 2
Director named below. Execution and return of the enclosed Proxy
will not affect a shareholder's right to attend the Annual
Meeting and vote in person, after giving written notice to the
Secretary of the Corporation. The cost of preparing, assembling,
printing, mailing and soliciting proxies, and any additional
material which the Corporation may furnish shareholders in
connection with the Annual Meeting, will be borne by the
Corporation. In addition to the use of the mails, certain
directors, officers and employees of the Corporation and the Bank
may solicit proxies personally, by telephone, telegraph and
telecopier. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries to forward proxy
solicitation material to the beneficial owners of stock held of
record by these persons and, upon request therefor, the
Corporation will reimburse them for their reasonable forwarding
expenses.
-1-
<PAGE>
Revocability of Proxy
- ---------------------
A shareholder who returns a Proxy may revoke the Proxy at
any time before it is voted only: (1) by giving written notice of
revocation to John W. Krichten, Secretary of ACNB Corporation, at
675 Old Harrisburg Road, Gettysburg, Pennsylvania 17325; (2) by
executing a later-dated proxy and giving written notice thereof
to the Secretary of the Corporation; or (3) by voting in person
after giving written notice to the Secretary of the Corporation.
Voting Securities, Record Date and Quorum
- -----------------------------------------
At the close of business on March 3, 1997, the Corporation
had issued and outstanding 5,253,278 shares of common stock, par
value $2.50 per share, the only authorized class of stock (the
"Common Stock").
Only holders of Common Stock of record at the close of
business on March 3, 1997, will be entitled to notice of and to
vote at the Annual Meeting. Cumulative voting rights do not
exist with respect to the election of directors. On all matters
to come before the Annual Meeting, each share of Common Stock is
entitled to one vote.
Under Pennsylvania law and the Bylaws of the Corporation,
the presence of a quorum is required for each matter to be acted
upon at the Annual Meeting. Pursuant to Section 1756 of the
Pennsylvania Business Corporation Law of 1988, as amended, the
presence in person or by proxy of shareholders entitled to cast
at least a majority of the votes that all shareholders are
entitled to cast constitutes a quorum for the transaction of
business at the Annual Meeting. Votes withheld and abstentions
will be counted in determining the presence of a quorum for a
particular matter. Broker non-votes will not be counted in
determining the presence of a quorum for the particular matter as
to which the broker withheld authority.
Assuming the presence of a quorum, the affirmative vote of a
majority of all votes cast by shareholders on the matter is
required for the approval of the proposal to fix the number of
shareholders to be elected as Class 2 Directors at four (4).
Abstentions and broker non-votes are not votes cast and,
therefore, do not count either for or against the proposal.
Abstentions and broker non-votes, however, have the practical
effect of reducing the number of affirmative votes required to
achieve a majority for such matter by reducing the total number
of shares voted for which the required majority is calculated.
Assuming the presence of a quorum, the four (4) nominees for
director receiving the highest number of votes cast by
shareholders entitled to vote for the election of directors shall
be elected as Class 2 Directors. Votes withheld from a nominee
and broker non-votes will not be cast for such nominee.
-2-
<PAGE>
PRINCIPAL BENEFICIAL OWNERS OF THE CORPORATION'S STOCK
Principal Owners
- ----------------
As of March 3, 1997, there are no persons who own of record
or who are known by the Board of Directors and management of the
Corporation to be the beneficial owner of more than 5 percent of
the Corporation's outstanding Common Stock.
Beneficial Ownership by Officers, Directors and Nominees
- --------------------------------------------------------
The following table sets forth as of March 3, 1997, and from
information furnished by the respective individuals, the amount
and percentage of the Common Stock beneficially owned by each
director, each nominee and all principal officers, directors and
nominees of the Corporation as a group. Unless otherwise noted,
shares are held individually and the "Percent of Class" is less
than 1% of the outstanding Common Stock.
____________________________
<TABLE>
<CAPTION>
Shares Percent of Outstanding
Beneficially Common Stock
Name and Address Owned<F1> Beneficially Owned
- ---------------- ------------ ------------------
<S> <C> <C>
Class 2 Directors and
Nominee for Class 2 Director
- ----------------------------
(to serve until 2000)
Richard L. Galusha 8,210 --
Wayne E. Lau 4,312<F2> --
Paul G. Pitzer 7,500<F3> --
Jennifer L. Weaver 600 --
Class 1 Directors
- ---------------------
(to serve until 1998)
Philip P. Asper 5,234<F4> --
D. Richard Guise 5,336<F5> --
Ronald L. Hankey 19,150<F6> --
Marian B. Schultz 2,050<F7> --
-3-
<PAGE>
Class 3 Directors
- --------------------
(to serve until 1999)
Robert G. Bigham 4,190<F8> --
Guy F. Donaldson 2,890 --
Frank Elsner, Jr. 11,318<F9> --
Philip M. Jones 89,974<F10> 1.71%
William B. Lower 43,528<F11> --
Ralph S. Sandoe 9,020<F12> --
L. Robert Snyder 5,808<F13> --
- ----------------------
<FN>
<F1> The securities "beneficially owned" by an individual are
determined in accordance with the definitions of "beneficial
ownership" set forth in the General Rules and Regulations of the
Securities and Exchange Commission and may include securities
owned by or for the individual's spouse and minor children and
any other relative who has the same home, as well as securities
to which the individual has or shares voting or investment power
or has the right to acquire beneficial ownership within 60 days
after March 3, 1997. Beneficial ownership may be disclaimed as
to certain of the securities.
<F2> Shares held jointly with Mr. Lau's spouse.
<F3> Shares held jointly with Mr. Pitzer's spouse.
<F4> Shares held jointly with Mr. Asper's spouse.
<F5> Includes 1,184 shares held jointly with Mr. Guise's spouse
and 540 shares held by his spouse.
<F6> Includes 12,922 shares held jointly with Mr. Hankey's
spouse.
<F7> Includes 700 shares held jointly with Mrs. Schultz' spouse
and 1,350 shares held jointly by her spouse and his mother.
<F8> Includes 2,020 shares held by Mr. Bigham as custodian for
his children.
<F9> Shares held jointly with Mr. Elsner's spouse.
<F10> Includes 5,218 shares held by Mr. Jones' spouse and 77,412
shares held by Times and News Publishing Company of which Mr.
Jones and his spouse own 56.74 percent.
<F11> Includes 42,456 shares held by William B. Lower, Trustee
of William B. Lower, Sr. Revocable Trust.
<F12> Includes 8,220 shares held jointly with Mr. Sandoe's
spouse.
<F13> Includes 276 shares held jointly with Mr. Snyder's spouse.
</FN>
</TABLE>
-4-
<PAGE>
ELECTION OF DIRECTORS
The Articles of Incorporation of the Corporation provide
that the Board of Directors shall consist of not less than five
(5) nor more than twenty-five (25) shareholders, the exact number
to be fixed and determined from time to time by resolution of a
majority of the shareholders at any annual or special meeting
thereof. The Bylaws of the Corporation provide that each
Director of the Corporation must be a shareholder of the
Corporation and, during the full term of his or her directorship,
shall own a minimum of One Thousand Dollars ($1,000.00) par value
of stock of the Corporation.
The Articles of Incorporation of the Corporation also
provide that the directors shall be divided into three classes as
nearly equal in number as possible. As of the date of this Proxy
Statement, Class 1 consists of four (4) Directors elected for a
three-year term expiring in 1998; Class 2 consists of four (4)
Directors elected for a three-year term expiring in 1997, and
Class 3 consists of seven (7) Directors elected for a three-year
term expiring in 1999.
A proposal will be offered at the Annual Meeting of
Shareholders to fix the number of shareholders to be elected as
Class 2 Directors at four (4) and a proposal for the election of
nominees for Class 2 Directors of the Corporation to serve for a
three-year term expiring in 2000. The affirmative vote of a
majority of the shareholders represented in person or by proxy at
the annual meeting is required to approve each of these
proposals.
Unless otherwise instructed, the Proxyholders will vote the
Proxies received by them for the proposal to fix the number of
shareholders to be elected as Class 2 Directors at four (4) and
for the election of the four (4) nominees for Class 2 Director
named below. If any nominee should be unavailable to serve as a
Director for any reason, Proxies will be voted in favor of a
substitute nominee as the Board of Directors of the Corporation
shall determine. The Board of Directors has no reason to believe
that the nominees named will be unable to serve, if elected. Any
vacancy occurring on the Board of Directors of the Corporation
for any reason may be filled by a majority of the directors then
in office until the expiration of the term of the vacancy.
There is no cumulative voting for the election of directors.
Each share of Common Stock is entitled to cast only one vote for
each nominee. For example, if a shareholder owns ten shares of
Common Stock, he or she may cast up to ten votes for each of the
directors in the class to be elected.
-5-
<PAGE>
INFORMATION AS TO NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS
The following table contains certain information, as of
March 3, 1997, with respect to the executive officers, current
directors and nominees for director.
<TABLE>
<CAPTION>
Principal Occupation for
Age as of Past Five Years and Director Since
March 1, Position Held with Corporation/
Name 1997 Corporation Bank
- ---- --------- -------------------- --------------
<S> <C> <C> <C>
Class 2 Directors and
Nominees For Class 2 Director
- -----------------------------
(to serve until 2000)
Richard L. 75 Realtor 1987/1962
Galusha <F1><F2>
Wayne E. 61 Sales Representative, 1987/1987
Lau <F3><F4> Destinations, Travel
Agency
Paul G. 78 Fruit Grower 1992/1967
Pitzer <F1><F3>
Jennifer L. 49 Director of Gettysburg 1992/1992
Weaver <F1><F2> Center of Harrisburg
Area Community College
Current Class 3 Directors
- -------------------------
(to serve until 1999)
Robert G. 52 Partner, Law Firm of 1982/1971
Bigham <F1><F2><F4> Bigham & Puhl
Guy F. Donaldson 65 Fruit Grower 1982/1981
<F3><F4>
Frank Elsner, Jr. 69 Chairman, Elsner 1982/1974
<F1><F3><F4> Engineering Works,
Inc., designer and
manufacturer of
special machinery
Philip M. Jones 79 CEO, Times and News 1982/1979
<F3><F4> Publishing Company
William B. Lower 67 President, Boyer 1982/1974
<F1><F2><F4> Nurseries & Orchards,
Inc.
-6-
<PAGE>
Ralph S. Sandoe 69 Fruit Broker 1987/1982
<F3><F4>
L. Robert Snyder 72 Chairman of the 1982/1979
<F3><F4> Board and President,
Littlestown Hardware
& Foundry Co., Inc.
Class 1 Directors
- ---------------------
(to serve until 1998)
Philip P. Asper 48 Building Contractor 1988/1988
<F1><F2><F4>
D. Richard Guise 63 President, Adams 1988/1988
<F1><F3><F4> County Motors Corporation,
automobile dealer
Ronald L. Hankey 56 President and Chief 1982/1975
<F5> Executive Officer of
the Corporation and Bank
Marian B. Schultz 47 Assistant Dean - 1992/1992
<F1><F3><F4> Division of Undeclared
Majors - Shippensburg
University
_______________________
<FN>
<F1> Member of the Executive Committee. This committee also
performs the functions of a compensation committee. The
Committee held five (5) meetings in 1996.
<F2> Member of the Audit Committee. The functions of this
committee include: periodic meetings with the Bank's Internal
Auditors; periodic reviews of the procedures of the Bank's
Internal Auditing Division and the information obtained by that
Division; reviewing the results of the audit by the independent
certified public accountants; and recommending the engagement and
continuation of the certified public accountants for the
Corporation and the Bank. The Committee held four (4) meetings
in 1996.
<F3> Member of the Trust Committee. This Committee reviews the
policies and procedures of the Trust Department and reviews the
individual accounts held within the Trust Department. The
Committee held eleven (11) meetings in 1996.
<F4> Member of the Loan Committee. This Committee meets between
regular Board of Directors meeting dates to act on loan matters.
This Committee met eleven (11) times in 1996.
<F5> Mr. Ronald L. Hankey is an ex-officio Member of all the
committees, except the Audit Committee which membership consists
solely of outside directors.
</FN>
</TABLE>
-7-
<PAGE>
During 1996, the Corporation's and the Bank's Board of
Directors each held twelve (12) meetings. Each of the Directors
attended at least 75 percent of the combined total number of
meetings of the Corporation's and of the Bank's Boards of
Directors and the committees of which he or she is a member, with
the exception of Mr. Guy F. Donaldson.
The Board of Directors of the Corporation has at present no
standing committees. The Corporation does not have a
compensation or a nominating committee; however, the Bank has an
Executive Committee, which functions as a Compensation Committee.
A shareholder who desires to propose an individual for
consideration by the Board of Directors as a nominee for director
should submit a proposal in writing to the Secretary of the
Corporation in accordance with Article II, Section 202 of the
Corporation's Bylaws. Any shareholder who intends to nominate
any candidate for election to the Board of Directors must notify
the Secretary of the Corporation in writing not less than sixty
(60) days prior to the anniversary date of the immediately
preceding annual meeting of shareholders of the Corporation.
EXECUTIVE COMPENSATION
Shown below is information concerning the annual
compensation for services in all capacities to the Corporation
for the fiscal years ended December 31, 1996, 1995 and 1994 of
those persons who were, at December 31, 1996, (i) Chief Executive
Officer, and (ii) the other four most highly compensated
executive officers of the Corporation to the extent such persons'
total annual salary and bonus exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------
<CAPTION>
(a) (b) (c) (d)
Name and Principal Salary Bonus
Position Year ($)<F1> ($)
- ------------------ ---- ------- -------
<S> <C> <C> <C>
Ronald L. Hankey 1996 167,698 1,677
President and Chief 1995 160,840 3,105
Executive Officer of 1994 155,330 13,000
the Corporation and
the Bank
______________________
<CAPTION>
Long-Term Compensation
-----------------------
Awards Payouts
------ --------
(a) (e) (f) (g) (h) (i)
Other Securities All
Annual Restricted Underlying LTIP other
Compen- Stock Options/ Pay- Compen-
Name and Principal sation Award(s) SARs outs sation
Position ($) ($) (#) ($) ($)<F2>
- ------------------ ------ --------- ------- ---- --------
<S> <C> <C> <C> <C> <C>
Ronald L. Hankey 0 0 0 0 6,390
President and Chief 0 0 0 0 3,105
Executive Officer of 0 0 0 0 3,000
the Corporation and
the Bank
- --------------------
<FN>
<F1> Includes directors fees of $5,590 and $5,125 paid in
1995 and 1994, respectively. Mr. Hankey did not receive
directors fees in 1996.
<F2> Amount contributed by Bank to 401(k) Plan.
</FN>
</TABLE>
-8-
<PAGE>
Retirement Plan
- ---------------
The employees of the Bank are covered under the Group
Pension Plan for Employees of Adams County National Bank (the
"Plan"). The Plan, as amended from time to time, is a defined
benefit pension plan under the Employee Retirement Income
Security Act of 1974. The most recent amendment is effective as
of November 1, 1989. The Plan is administered by Adams County
National Bank as the Plan Administrator.
Amounts are set aside each year to fund the Plan on the
basis of actuarial calculations. The amount of contribution to a
defined pension plan on behalf of a specific employee cannot be
separately or individually calculated. The total pension expense
for the Plan for 1996 was $251,031. The contribution made by the
Bank to the Plan in 1996 was $366,416. This contribution was
sufficient to meet the legal minimum funding requirements.
Each employee of the Bank who attains the age of 20 years
and 6 months and who completes six months of eligible service,
whichever is later, becomes eligible to participate in the Plan
on the following anniversary of the Plan. The Plan generally
provides for a prospective benefit at the age of 65 years for the
employee's remaining lifetime with payments certain for five
years, calculated as follows: 1 percent of final average
compensation below the applicable Social Security Covered
Compensation, and 1.3 percent of such earnings above the Covered
Compensation, the total being multiplied by years of credited
service up to a maximum of 45 years of credited service. The
employee benefit accrued as of October 31, 1989, shall be
maintained as a minimum benefit. If an employee has earned 30 or
more years of credited service, he is eligible to retire at age
62 with no reduction applied to his benefit.
The following table shows for different final average
compensation and for different years of credited service, the
annual benefits currently payable upon retirement at age 65 by a
participating employee:
<TABLE>
Annual Retirement Income<F1>
<CAPTION>
Final
Average Years of Service
Compensation 15 25 35 45 or more
- ------------ -------- ------- ------- ----------
<S> <C> <C> <C> <C>
$ 50,000 $ 8,796 $ 14,661 $ 20,525 $ 26,389
75,000 13,671 22,786 32,900 41,014
100,000 18,546 30,911 43,275 55,639
125,000 23,421 39,036 54,650 70,264
150,000 28,296 47,161 66,025 84,889
175,000 33,171 55,286 77,400 99,514
200,000 38,046 63,411 88,775 112,221
_______________
<FN>
<F1> Assumes normal retirement date (age 65) occurs in 1996.
Actual benefits may be slightly higher on account of benefits
earned under the Plan prior to recent amendment. Later
retirement dates produce smaller retirement benefits as Social
Security Covered Compensation increases.
</FN>
</TABLE>
-9-
<PAGE>
For 1996, the covered compensation, as reported above in the
Summary Compensation Table, for Mr. Hankey, President and Chief
Executive Officer, is $150,000; the covered compensation includes
salary only. As of December 31, 1996, Mr. Hankey had thirty-nine
(39) years of service credited under the Plan.
401(K) Plan
- -----------
The Bank maintains a defined contribution - profit sharing
401(K) Plan effective on January 31, 1993 (the "Plan"). The Plan
Sponsor and Plan Administrator is Adams County National Bank.
Ronald L. Hankey, President and Chief Executive Officer of the
Corporation and the Bank, and John W. Krichten, Secretary and
Treasurer of the Corporation and Senior Vice President, Cashier
and Chief Financial Officer of the Bank, are the Plan Trustees.
The Plan is subject to certain laws and regulations pursuant to
the Internal Revenue Code and participants are entitled to
certain rights and protection under the Employee Retirement
Income Security Act of 1974.
To be eligible to become a participant in the Plan, an
employee is required to work six months and attain the age of 20
1/2. An eligible employee may elect to contribute certain
portions of salary and wages (other than bonuses), or other
direct remuneration to the Plan. Generally, eligible employees
may not contribute more than 10 percent of such compensation.
The Bank matches a certain percentage of the employee
contribution. In 1996, the Bank's contribution equaled 100
percent of the employee's contribution up to a maximum of 4
percent of annual salary. The Bank's contributions to the Plan
for each participant vest in six (6) years. The employee's
contributions to the Plan vest immediately.
Executive Retirement Income Agreements. The Bank entered
into retirement income agreements with Mr. Hankey and certain
officers of the Bank to provide supplemental retirement income
benefits to such officers when they reach their normal retirement
date. The benefits are payable in one hundred eighty equal
monthly installments. Benefits are also payable upon disability,
early retirement, termination of service or death. Benefit
amounts will be determined by each officer's years of service and
compensation at retirement age. Benefits accrue annually, but no
vesting occurs until the individual completes ten years of
service with the Bank. Estimated liability under the agreements
is accrued as earned by the employee. The Bank is owner and
beneficiary of life insurance policies on each officer, which
have an aggregate cash value of approximately $1,759,264 at
December 31, 1996. The Bank purchased these policies to fund the
retirement income agreements entered into with these individuals.
Further information with respect to these agreements is set forth
in the Notes to Financial Statements contained in the Bank's
Annual Report to Shareholders which is enclosed with this Proxy
Statement.
Compensation of Directors
- -------------------------
Effective January 1, 1997, each director of the Bank will
receive an annual retainer of $2,850, $265 per monthly meeting
attended, $80 per hour (with a minimum payment of $80) for each
committee meeting attended. In addition, directors receive
seminar fees of $250 per half-day seminar and $400 for a full-day
seminar, plus expenses, if applicable.
-10-
<PAGE>
In 1996, each director of the Bank received an annual
retainer of $2,850, $250 for each meeting of the Board of
Directors attended and $75.00 per hour for each committee meeting
attended, with a minimum of $75.00 per committee meeting. In
addition, each Director received seminar fees of $150.00 for
half-day seminars and $300.00 for full-day seminars, plus
expenses, if applicable.
In the aggregate, the Board of Directors of the Bank
received $131,682 for all Board of Directors' meetings and
committee meetings attended in 1996. This amount includes all
Directors fees paid to all individuals who served as Directors in
1996. During 1996, the Board of Directors of the Corporation
held twelve (12) meetings. Directors received no remuneration
for attendance at these meetings of the Board of Directors of the
Corporation.
Compensation Committee Interlocks and Insider Participation in
Compensation Decisions
- ---------------------------------------------------------------
Ronald L. Hankey, President and Chief Executive Officer, is
an ex-officio member of the Executive Committee which also
performs the functions of a compensation committee. Mr. Hankey
makes recommendations to the Executive Committee regarding merit
raise increases for all employees based on a merit appraisal in
connection with recommendations provided by an outside
consultant. A merit review of Mr. Hankey, President and Chief
Executive Officer of the Corporation and the Bank, is conducted
by the Executive Committee. Mr. Hankey does not participate in
conducting his review. The merit review is submitted to the
entire Board of Directors to be voted upon.
Board Compensation Committee Report on Executive Compensation
- -------------------------------------------------------------
The Board of Directors of the Corporation is responsible for
the governance of the Corporation and its wholly-owned
subsidiary, Adams County National Bank (the "Bank"). In
fulfilling its fiduciary duties, the Board of Directors acts in
the best interests of the Corporation's shareholders, customers
and the communities served by the Corporation and the Bank. To
accomplish the strategic goals and objectives of the Corporation,
the Board of Directors engages competent persons who undertake to
accomplish these objectives with integrity and in a
cost-effective manner. The compensation of these individuals is part of the
Board of Directors' fulfillment of its duties to accomplish the Corporation's
strategic mission. The Bank provides compensation to the employees of the Bank.
Corporation employees receive no compensation.
The fundamental philosophy of the Bank's compensation
program is to offer competitive compensation opportunities for
all employees based on the individual's contribution and personal
performance. The compensation program is administered by an
Executive Committee comprised of nine (9) directors who are
listed below. The objectives of the Committee are to establish a
fair compensation policy to govern executive officers' base
salaries and incentive plans to attract and motivate competent
and dedicated managers whose efforts will enhance the products
and services of the Bank, the results of which will be improved
profitability, increased dividends to the Corporation's
shareholders and subsequent appreciation in the market value of
our shares.
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<PAGE>
The compensation of the Bank's top executives is reviewed
and approved annually by the Board of Directors. The top
executives whose compensation is determined by the Committee
include the chief executive officer and eight other executive
officers. The Committee utilizes a Regional Financial Industry
Salary Survey which covers financial institutions in the
Pennsylvania, Maryland, Washington, D.C., and Virginia
marketplace. The referenced survey includes more institutions
than are listed on the peer group performance chart.
The Board of Directors does not deem Section 162(m) of the
Internal Revenue Code (the "IRC") to be applicable to the
Corporation at this time. The Board of Directors intends to
monitor the future application of Section 162(m) of the IRC to
the compensation paid to its executive officers and in the event
that this section becomes applicable, it is the intent of the
Board of Directors to amend the Corporation's and the Bank's
compensation plans to preserve the deductibility of the
compensation payable under such plans.
Chief Executive Officer Compensation
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The Board of Directors determined that the Chief Executive
Officer's 1996 base salary of $167,698, approximately a 4.25
percent increase in base salary, combined with a $1,677 bonus, is
appropriate in light of the 1996 Corporation performance
accomplishments. There is no direct correlation between the
Chief Executive Officer's compensation, the Chief Executive
Officer's increase in compensation and the Corporation's 1996
performance. The Chief Executive Officer's compensation and the
increase in the Chief Executive Officer's base salary are based
on the Committee's subjective determination after review of all
information.
Executive Officers
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The Board of Directors established that the compensation of
the Bank's executive officers increased by 3 percent in 1996.
Compensation increases were determined by the Committee based on
its subjective analysis after review of all information that it
deemed relevant.
In addition to base salary, executive officers of the
Corporation and the Bank may participate currently in the Bank's
401(K) Plan.
Total compensation opportunities available to the employees
of the Bank are influenced by general labor market conditions,
the specific responsibilities of the individual, and the
individual's contributions to the Corporation's success.
Individuals are reviewed annually on a calendar year basis. The
Bank strives to offer compensation that is competitive with that
offered by employers of comparable size in our industry. Through
these compensation policies, the Corporation strives to meet its
strategic goals and objectives to its constituencies and provide
compensation that is fair and meaningful to its employees.
The foregoing report has been furnished by the Executive
Committee which performs the functions of a compensation
committee: Robert G. Bigham, Chairperson, Philip P. Asper, Frank
Elsner, Jr., Richard L. Galusha, D. Richard Guise, Ronald L.
Hankey (ex-officio member), William B. Lower, Paul G. Pitzer,
Marian B. Schultz and Jennifer L. Weaver.
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SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly change
in the cumulative total shareholder return on the Corporation's
Common Stock against the cumulative total return of the S&P 500
Stock Index and the Peer Group Index for the period of five
fiscal years commencing January 1, 1992 and ended December 31,
1996. The shareholder return shown on the graph below is not
necessarily indicative of future performance.
[PERFORMANCE GRAPH OMITTED.]
[Following is a description of the performance graph in a tabular
format.]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Peer Group Total 1000.00 1242.42 1779.05 2137.90 2292.18 2564.34
Peer Group Index 100.00 124.24 177.91 213.79 229.22 256.43
ACNB Corp. 100.00 136.18 199.11 155.18 194.07 186.24
S & P 500 417.09 435.71 466.45 459.27 615.93 740.74
S & P 500 Index 100.00 104.46 111.83 110.11 147.67 177.60
NOTE: The peer group for which information appears above
includes the following companies: ACNB Corporation; Century
Financial Corporation; CNB Financial Corporation; Citizens &
Northern Corporation; Drovers Bancshares Corporation; First West
Chester Corporation; Franklin Financial Services Corp.; Hanover
Bancorp, Inc.; Penn Security Bank & Trust Co.; PennRock Financial
Services Corp.; Sterling Financial Corp. These companies were
selected based on four criteria: total assets between $200
million and $700 million; market capitalization between $15
million and $170 million; headquarters located in Pennsylvania;
and not quoted on NASDAQ.
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CERTAIN TRANSACTIONS
There have been no material transactions between the
Corporation and the Bank, nor any material transactions proposed,
with any director or executive officer of the Corporation and the
Bank, or any associate of the foregoing persons. The Corporation
and the Bank have had and intend to continue to have banking and
financial transactions in the ordinary course of business with
directors and officers of the Corporation and the Bank and their
associates on comparable terms and with similar interest rates as
those prevailing from time to time for other customers of the
Corporation and the Bank.
Robert G. Bigham is a partner of the law firm of Bigham &
Puhl, which firm has been retained by the Bank throughout the
past several years and will be retained during 1997. During
1996, the firm received from the Bank fees of approximately
$95,770 for legal services rendered to the Bank. A substantial
portion of these fees pertained to services rendered by the law
firm for, and collection of, delinquent loan accounts which were
recovered by the Bank in the collection process.
Total loans outstanding from the Corporation and the Bank at
December 31, 1996, to the Corporation's and the Bank's officers
and directors as a group and to members of their immediate
families and companies in which they had an ownership interest of
10 percent or more was $4,076,000, or approximately 8 percent of
the total equity capital of the Bank. Loans to such persons were
made in the ordinary course of business, were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons, and did not involve more than
the normal risk of collectibility or present other unfavorable
features. The aggregate amount of indebtedness outstanding as of
the latest practicable date, March 3, 1997, to the above
described group was approximately $4,526,993.
PRINCIPAL OFFICERS OF THE CORPORATION
The following table sets forth selected information about
the principal officers of the Corporation, each of whom is
elected by the Board of Directors and each of whom holds office
at the discretion of the Board of Directors. Unless otherwise
noted, shares are individually held.
<TABLE>
<CAPTION>
Bank Number of Shares Age as of
Held Employee Beneficially March 3,
Name and Position Since Since Owned 1997
- ----------------- ----- -------- ---------------- ---------
<S> <C> <C> <C> <C>
Ronald L. Hankey 1982 1957 19,150 56
- - President
and Chief Executive
Officer
John W. Krichten - 1982 1980 27,804<F1> 50
Secretary and
Treasurer
Lynda L. Glass - 1993 1984 64<F2> 36
Assistant Secretary
______________________
<FN>
<F1> Includes 24,002 shares held jointly with Mr. Krichten's
spouse; and 682 shares held by Mr. Krichten, as custodian for
their children.
<F2> Shares held jointly with Ms. Glass' spouse.
</FN>
</TABLE>
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SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Corporation's officers and directors, and
persons who own more than 10 percent of the registered class of
the Corporation's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange
Commission ("SEC"). Officers, directors and greater than 10
percent shareholders are required by SEC regulation to furnish
the Corporation with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms
received by it or written representations from certain reporting
persons that no Forms 5 were required to be filed to report late
transactions for those persons, the Corporation believes that
during the period January 1, 1996 through December 31, 1996, its
officers and directors were in compliance with all filing
requirements applicable to them.
INDEPENDENT AUDITORS
Stambaugh-Ness, P.C., successor to Harry Ness & Company,
Certified Public Accountants, of York, Pennsylvania, served as
the Corporation's independent auditors for its 1996 fiscal year.
The Corporation has been advised by Stambaugh-Ness, P.C. that
none of its members has any financial interest in the
Corporation. In addition to performing customary audit services,
Stambaugh-Ness, P.C. assisted the Corporation and the Bank with
preparation of their federal and state tax returns, and provided
assistance in connection with regulatory matters, charging the
Bank for such services at its customary hourly billing rates.
These non-audit services were approved by the Corporation's and
the Bank's Boards of Directors after due consideration of the
effect of the performance thereof on the independence of the
auditors and after the conclusion by the Corporation's and the
Bank's Boards of Directors that there was no effect on the
independence of the auditors. The Board of Directors has engaged
Stambaugh-Ness, P.C. as the Corporation's independent auditors
for the fiscal year ending December 31, 1997.
ANNUAL REPORT
A copy of the Corporation's Annual Report for its fiscal
year ended December 31, 1996, is enclosed with this Proxy
Statement. A representative of the Corporation will be available
to respond to any appropriate questions concerning the Annual
Report presented by shareholders at the Annual Meeting.
SHAREHOLDER PROPOSAL SUBMISSIONS
Any shareholder who, in accordance with and subject to the
provisions of the proxy rules of the Securities and Exchange
Commission, wishes to submit a proposal for inclusion in the
Corporation's Proxy Statement for its 1998 Annual Meeting of
Shareholders must deliver such proposal in writing to the
President and Chief Executive Officer of ACNB Corporation at its
principal executive offices, 675 Old Harrisburg Road, Gettysburg,
Pennsylvania 17325, not later than Thursday, December 11, 1997.
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OTHER MATTERS
The Board of Directors does not know of any matters to be
presented for consideration other than the matters described in
the accompanying Notice of Annual Meeting of Shareholders, but if
any matters are properly presented, it is the intention of the
persons named in the accompanying Proxy to vote on such matters
in accordance with their best judgment.
ADDITIONAL INFORMATION
UPON WRITTEN REQUEST OF ANY SHAREHOLDER, A COPY OF THE
CORPORATION'S REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED
DECEMBER 31, 1996, INCLUDING THE FINANCIAL STATEMENTS AND THE
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 13a-1 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, MAY BE OBTAINED, WITHOUT
CHARGE, FROM RONALD L. HANKEY, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ACNB CORPORATION, 675 OLD HARRISBURG ROAD, GETTYSBURG,
PENNSYLVANIA 17325.
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ACNB CORPORATION
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 6, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Philip P.
Asper and D. Richard Guise, and each or any of them, proxies of
the undersigned, with full power of substitution, to vote all of
the shares of ACNB Corporation (the "Corporation") that the
undersigned may be entitled to vote at the Annual Meeting of
Shareholders of the Corporation to be held at the Main Office of
Adams County National Bank, 675 Old Harrisburg Road, Gettysburg,
Pennsylvania 17325 on Tuesday, May 6, 1997, at 1:00 p.m.,
prevailing time, and at any adjournment or postponement thereof
as follows:
1. PROPOSAL TO FIX THE NUMBER OF SHAREHOLDERS TO BE ELECTED AS
CLASS 2 DIRECTORS AT FOUR (4).
FOR AGAINST ABSTAIN
____ _____ _____
The Board of Directors recommends a vote FOR this proposal.
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2. ELECTION OF CLASS 2 DIRECTORS TO SERVE FOR A THREE-YEAR TERM
Richard L. Galusha, Wayne E. Lau, Paul G. Pitzer, Jennifer L.
Weaver
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed above (except to vote for all
as marked to the nominees listed
contrary below) above
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE
PROVIDED BELOW.)
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3. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting and
any adjournment or postponement thereof.
<PAGE>
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES
LISTED ABOVE AND FOR PROPOSAL 1.
Dated: ,1997
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--------------------------------
--------------------------------
Signature(s) (Seal)
Number of Shares Held of
Record on March 1,
1997
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THIS PROXY MUST BE DATED, SIGNED BY THE SHAREHOLDER AND
RETURNED PROMPTLY TO THE CORPORATION IN THE ENCLOSED ENVELOPE.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL
SHOULD SIGN. IF STOCK IS HELD JOINTLY, EACH OWNER SHOULD SIGN.
