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
/X/ Definitive Proxy Statement
/_/ Confidential for use of the Commission only
(as permitted by Rule 14a-6(e)(2))
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to ss. 240.14a-12
ACNB CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required.
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
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 (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 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 No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
<PAGE>
April 5, 2000
Dear Fellow Shareholders of ACNB Corporation:
On behalf of the Board of Directors, I am pleased to invite you to attend
our Annual Meeting of Shareholders to be held on Tuesday, May 2, 2000, at 1:00
p.m., Eastern Time, at Adams County National Bank, 675 Old Harrisburg Road,
Gettysburg, Pennsylvania 17325. At the annual meeting, you will have the
opportunity to ask questions and to make comments. Enclosed with this proxy
statement are your proxy and ACNB Corporation's 1999 Annual Report to
Shareholders.
The principal business of the meeting is to: fix the number of directors of
the corporation at 11; fix the number of Class 1 Directors at 5; fix the number
of Class 2 Directors at 3; fix the number of Class 3 Directors at 3; elect 3
Class 2 Directors for a term of 3 years; and, transact any other business that
is properly presented at the annual meeting. The notice of meeting and proxy
statement accompanying this letter describe the specific business to be acted
upon in more detail.
I am delighted that you have invested in ACNB Corporation, and I hope that,
whether or not you plan to attend the annual meeting, you will vote as soon as
possible by completing, signing and returning the enclosed proxy in the envelope
provided. The prompt return of your proxy will save the corporation expenses
involved in further communications. Your vote is important. Voting by written
proxy will ensure your representation at the annual meeting if you do not attend
in person.
I look forward to seeing you on May 2, 2000, at the corporation's annual
meeting.
Sincerely,
/s/ Ronald L. Hankey
---------------------
Ronald L. Hankey
President
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF ACNB CORPORATION
TO BE HELD ON MAY 2, 2000
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that ACNB Corporation will hold its Annual Meeting
of Shareholders on Tuesday, May 2, 2000, at 1:00 p.m., Eastern Time, at Adams
County National Bank, 675 Old Harrisburg Road, Gettysburg, Pennsylvania 17325,
to consider and vote upon the following proposals:
1. To fix the number of directors of the corporation at 11;
2. To fix the number of Class 1 Directors at 5;
3. To fix the number of Class 2 Directors at 3;
4. To fix the number of Class 3 Directors at 3;
5. To elect the following individuals as Class 2 Directors, each to serve a
3 year term:
o Wayne E. Lau
o Jennifer L. Weaver
o Harry L. Wheeler
6. To transact any other business properly presented at the annual meeting.
Shareholders as of March 1, 2000 are entitled to notice of the meeting and
may vote at the annual meeting, either in person or by proxy.
Management welcomes your attendance at the annual meeting. Whether or not
you expect to attend the annual meeting in person, you are requested to
complete, sign, date and promptly return the enclosed proxy in the accompanying
postage-paid envelope. The prompt return of your proxy will save the corporation
expenses involved in further communications. Even if you return a proxy, you may
vote in person if you give written notice to the Secretary of the corporation
and attend the annual meeting. Returning your proxy will ensure that your shares
will be voted in accordance with your wishes and that the presence of a quorum
will be assured.
The corporation's Board of Directors is distributing this proxy statement,
form of proxy, and ACNB Corporation's 1999 Annual Report to Shareholders on or
about April 5, 2000.
By Order of the Board of Directors,
/s/ Ronald L. Hankey
---------------------------
Ronald L. Hankey
President
Gettysburg, Pennsylvania
April 5, 2000
YOUR VOTE IS IMPORTANT.
TO VOTE YOUR SHARES, PLEASE SIGN, DATE AND COMPLETE
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
ACNB CORPORATION
675 OLD HARRISBURG ROAD,
GETTYSBURG, PENNSYLVANIA 17325
OTC BB TRADING SYMBOL: ACNB
PROXY STATEMENT
2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 2, 2000
Mailed to Shareholders on or about April 5, 2000
<PAGE>
TABLE OF CONTENTS
Page
PROXY STATEMENT
GENERAL INFORMATION...........................................................1
Date, Time and Place of the Annual Meeting...........................1
Description of ACNB Corporation......................................1
VOTING PROCEDURES.............................................................2
Solicitation and Voting of Proxies...................................2
Quorum and Vote Required For Approval................................3
Revocability of Proxy................................................4
Methods of Voting....................................................4
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS.....................................5
Governance...........................................................5
Directors of ACNB Corporation........................................5
Executive Officers of ACNB Corporation...............................6
Committees and Meetings of ACNB Corporation's
Board of Directors.................................................6
Committees and Meetings of the Banks' Board of Directors.............6
Compensation of ACNB Corporation's Board of Directors................7
Compensation of The Farmers National Bank of Newville's
Board of Directors.................................................7
BOARD OF DIRECTORS' REPORT ON
EXECUTIVE COMPENSATION...............................................7
Compensation Committee Report........................................7
Chief Executive Officer Compensation.................................8
Executive Officers Compensation......................................8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION...................9
EXECUTIVE COMPENSATION.......................................................10
Summary Compensation Table..........................................10
Employment Contract with Ronald L. Hankey...........................11
Adams County National Bank's Pension Plan...........................11
The Farmers National Bank of Newville's Pension Plan................12
Adams County National Bank's 401(k) Plan............................13
The Farmers National Bank of Newville's 401(k) Plan.................13
Life Insurance Plans of the Banks...................................14
Executive Retirement Income Agreements..............................14
The Farmers National Bank of Newville's Bonus Plan..................15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............................15
<PAGE>
ELECTION OF DIRECTORS........................................................15
Qualification and Nomination of Directors...........................15
Information as to Nominees and Directors............................16
BENEFICIAL OWNERSHIP OF ACNB CORPORATION'S STOCK
OWNED BY PRINCIPAL OWNERS AND MANAGEMENT............................19
Principal Shareholders..............................................19
Share Ownership by the Directors, Officers and Nominees.............19
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE......................21
PERFORMANCE GRAPH............................................................22
PROPOSALS....................................................................23
To Fix the Number of Directors of ACNB Corporation at 11............23
To Fix the Number of Class 1 Directors at 5.........................23
To Fix the Number of Class 2 Directors at 3.........................23
To Fix the Number of Class 3 Directors at 3.........................23
To Elect 3 Class 2 Directors........................................23
INDEPENDENT AUDITORS.........................................................24
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING................................24
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING........................25
ADDITIONAL INFORMATION.......................................................25
<PAGE>
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
ACNB CORPORATION
TO BE HELD ON MAY 2, 2000
GENERAL INFORMATION
Date, Time and Place of the Annual Meeting
ACNB Corporation, a Pennsylvania business corporation and registered bank
holding company, is furnishing this proxy statement in connection with the
solicitation by the Board of Directors of proxies to be voted at the
corporation's Annual Meeting of Shareholders. The annual meeting will be held at
Adams County National Bank, 675 Old Harrisburg Road, Gettysburg, Pennsylvania
17325, on Tuesday, May 2, 2000, at 1:00 p.m., Eastern Time.
The corporation's principal executive office is located at 675 Old
Harrisburg Road, Gettysburg, Pennsylvania 17325. The corporation's telephone
number is (717) 334-3161. All inquiries regarding the annual meeting should be
directed to John W. Krichten, Secretary/Treasurer of ACNB Corporation.
Description of ACNB Corporation
ACNB Corporation was established in 1983 as a one-bank holding company
under the laws of Pennsylvania and the Bank Holding Company Act of 1956. On
March 1, 1999, Farmers National Bancorp, Inc. merged into ACNB Corporation and
The Farmers National Bank of Newville became a wholly-owned subsidiary of ACNB
Corporation. Thus, the corporation's activities, as the parent two-bank holding
company, consist of owning and supervising Adams County National Bank and The
Farmers National Bank of Newville, its wholly-owned depository subsidiaries.
Included with this proxy statement is a copy of the corporation's Annual
Report to Shareholders for the fiscal year ended December 31, 1999. You may
obtain a copy of the Annual Report to Shareholders for the 1998 fiscal year at
no cost by contacting John W. Krichten, Secretary/Treasurer, ACNB Corporation,
via mail at 675 Old Harrisburg Road, Gettysburg, Pennsylvania 17325, or via
telephone at (717) 334-3161.
We have not authorized anyone to provide you with information about the
corporation; therefore, you should rely only on the information contained in
this document or on documents to which we refer you. Although we believe we have
provided you with all the information helpful to you in your decision to vote,
events may occur at ACNB Corporation subsequent to printing this proxy statement
that might affect your decision or the value of your stock.
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<PAGE>
VOTING PROCEDURES
Solicitation and Voting of Proxies
The Board of Directors solicits this proxy for use at the corporation's
2000 annual meeting of shareholders. The corporation's directors and officers
and bank employees may solicit proxies in person or by telephone, facsimile,
telegraph or mail, but only for use at the annual meeting. The Adams County
National Bank will pay the cost of preparing, assembling, printing, mailing and
soliciting proxies and any additional material that the corporation sends to its
shareholders. The corporation will make arrangements with brokerage firms and
other custodians, nominees, and fiduciaries to forward proxy solicitation
materials to the owners of stock held by these persons. The Adams County
National Bank will reimburse these persons for their reasonable forwarding
expenses.
Only shareholders of record as of the close of business on Wednesday, March
1, 2000, (the voting record date), may vote at the annual meeting. The
corporation's records show that, as of the voting record date, 5,705,530 shares
of the corporation's common stock were outstanding. On all matters to come
before the annual meeting, shareholders may cast one vote for each share held.
Cumulative voting rights do not exist with respect to the election of directors.
As of March 1, 2000, the Board of Directors knows of no person who owns of
record or who is the beneficial owner of 5% or more of the corporation's
outstanding common stock.
If your shares are registered directly in your name with ACNB Corporation's
transfer agent, Registrar and Transfer Company, you are considered, with respect
to those shares, the shareholder of record, and these proxy materials are being
sent directly to you by the corporation. As the shareholder of record, you have
the right to grant your voting proxy directly to the proxy holders or to vote in
person at the meeting. The corporation has enclosed a proxy card for your use.
If your shares are held in a stock brokerage account or by a bank or other
nominee, you are considered the beneficial owner of shares held in street name,
and these proxy materials are being forwarded to you by your broker or nominee
which is considered, with respect to those shares, the shareholder of record. As
the beneficial owner, you have the right to direct your broker how to vote and
are also invited to attend the meeting. However, since you are not the
shareholder of record, you may not vote these shares in person at the meeting.
Your broker or nominee has enclosed a voting instruction card for you to use in
directing the broker or nominee how to vote your shares.
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<PAGE>
By properly completing a proxy, the shareholder appoints D. Richard Guise
and Philip P. Asper as proxy holders to vote his or her shares as specified on
the proxy. Any signed proxy not specifying to the contrary will be voted as
follows:
FOR fixing the number of directors of the corporation at 11;
FOR fixing the number of Class 1 directors at 5;
FOR fixing the number of Class 2 directors at 3;
FOR fixing the number of Class 3 directors at 3;
FOR the election of the following individuals as Class 2 directors for a
term of 3 years expiring in 2003:
o Wayne E. Lau
o Jennifer L. Weaver
o Harry L. Wheeler
The Board of Directors proposes to mail this proxy statement to the
corporation's shareholders on or about April 5, 2000.
Quorum and Vote Required For Approval
As of the close of business on March 1, 2000, the corporation had 5,705,530
shares of common stock, par value $2.50 per share, issued and outstanding.
In order to hold the annual meeting, a "quorum" of shareholders must be
present. Under Pennsylvania law, the presence, in person or by proxy, of the
holders of a majority of the shares entitled to vote is necessary to constitute
a quorum for the transaction of business at the meeting. The proxy holders will
count abstentions and broker non-votes as "present" for the purpose of
determining the presence of a quorum. However, the proxy holders will not count
broker non-votes as "present" when determining the presence of a quorum for the
particular matter on which the broker has expressly not voted. If you are a
beneficial owner and do not provide the shareholder of record with voting
instructions, your shares may constitute broker non-votes. In tabulating the
voting result for any particular proposal, shares that constitute broker
non-votes are not considered entitled to vote on that proposal. Thus, broker
non-votes will not affect the outcome of any of the matters being voted upon at
the meeting. Generally, broker non-votes occur when shares held by a broker for
a beneficial owner are not voted with respect to a particular proposal because
(1) the broker has not received voting instructions from the beneficial owner,
and (2) the broker lacks discretionary voting power to vote such shares.
Assuming the presence of a quorum, approval to fix the number of directors
of the Board of Directors and to fix the number of directors in each class
requires the affirmative "FOR" vote of a majority of all shares present, in
person or by proxy. Abstentions and broker non-votes are not deemed to
constitute "votes cast" and, therefore, do not count either for or against the
proposals. Abstentions and broker non-votes, however, have the practical effect
of reducing the
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<PAGE>
number of affirmative votes required to achieve a majority for the matter by
reducing the total number of shares voted from which the required majority is
calculated.
Assuming the presence of a quorum, the shareholders will elect the
candidates for director receiving the highest number of "FOR" votes cast by
those shareholders entitled to vote for the election of directors. The proxy
holders will not cast votes for or against any director candidates where the
broker withheld authority.
Revocability of Proxy
Shareholders who sign proxies may revoke them at any time before they are
voted by:
o delivering written notice of the revocation to John W. Krichten,
Secretary/Treasurer of ACNB Corporation, at 675 Old Harrisburg Road,
Gettysburg, Pennsylvania 17325; or
o delivering a properly executed later-dated proxy to John W. Krichten,
Secretary/Treasurer of the corporation, at 675 Old Harrisburg Road,
Gettysburg, Pennsylvania 17325; or
o attending the meeting and voting in person after giving written notice
to the Secretary/Treasurer of the corporation.
You have the right to vote and, if desired, to revoke your proxy any time
before the annual meeting. Should you have any questions, please contact John W.
Krichten, Secretary/Treasurer at (717) 334-3161.
Methods of Voting
Proxy Voting
o Mark your selections.
o Date your proxy and sign your name exactly as it appears on your
proxy.
o Mail the proxy to ACNB Corporation in the enclosed postage-paid
envelope.
Voting in Person
o Attend the annual meeting and show proof of eligibility to vote.
o Obtain a ballot.
o Mark your selections.
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o Date your ballot and sign your name exactly as it appears in the
corporation's transfer books.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
Governance
The Board of Directors oversees all of the corporation's business,
property, and affairs. The Chairman and the corporation's officers keep the
members of the Board informed of the corporation's business through discussions
at Board meetings and by providing them materials. The members also keep
themselves informed by attending Board and committee meetings.
During fiscal year 1999, the corporation's Board of Directors held 12
meetings. The Adams County National Bank Board of Directors held 12 meetings and
The Farmers National Bank of Newville Board of Directors held 12 meetings during
fiscal year 1999.
Directors of ACNB Corporation
The following table sets forth (in alphabetical order) selected information
about the corporation's directors.
<TABLE>
<CAPTION>
CLASS OF DIRECTOR AGE AS OF
NAME DIRECTOR SINCE MARCH 1, 2000
- ---- -------- ----- -------------
<S> <C> <C> <C>
Philip P. Asper 1 1988 51
Guy F. Donaldson 3 1981 68
Richard L. Galusha 2 1962 78
D. Richard Guise, Vice Chairman 1 1988 66
Ronald L. Hankey, Chairman 1 1975 59
Edgar S. Heberlig 1 1970 65
Philip M. Jones 3 1979 82
Wayne E. Lau 2 1987 65
William B. Lower 3 1974 70
Paul G. Pitzer 2 1967 81
Thomas A. Ritter 3 1997 48
Ralph S. Sandoe 3 1982 72
Marian B. Schultz 1 1992 50
L. Robert Snyder 3 1979 75
Jennifer L. Weaver 2 1992 52
Harry L. Wheeler 2 1987 59
</TABLE>
5
<PAGE>
Executive Officers of ACNB Corporation
The following table sets forth selected information about the
corporation's executive officers, each of whom is elected by the Board of
Directors and each of whom holds office at the Board's discretion.
<TABLE>
<CAPTION>
POSITION NUMBER OF SHARES AGE AS OF
NAME AND POSITION HELD SINCE BENEFICIALLY OWNED(1) MARCH 1, 2000
- ----------------- ---------- --------------------- -------------
<S> <C> <C> <C>
Ronald L. Hankey
President 1982 19,150 59
Chief Executive Officer 1982
Chairman of the Board 1982
John W. Krichten
Secretary 1982 24,108 53
Treasurer 1982
Lynda L. Glass
Assistant Secretary 1993 64 39
</TABLE>
- ------------------
(1) See Table entitled "Share Ownership by the Directors, Officers and
Nominees" on page 19 for share ownership information for all officers.
Committees and Meetings of ACNB Corporation's Board of Directors
The Board of Directors of the corporation has, at present, no standing
committees. The corporation does not have a compensation or nominating
committee; however, each of the subsidiary banks maintain a standing committee,
which performs the functions of 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 recommendation in
writing to the Secretary of the corporation in compliance with the requirements
of Article II, Section 202, of the corporation's Bylaws. Any shareholder who
intends to nominate a candidate for election to the Board of Directors must
notify the Secretary of the corporation in writing not less than 14 days prior
to the date of any shareholder meeting called for the election of directors (or,
for this year's annual meeting, by April 18, 2000).
Committees and Meetings of the Banks' Board of Directors
During 1999, the Adams County National Bank's Board of Directors maintained
4 standing committees: Executive, Audit, Loan and Trust. During 1999, The
Farmers National Bank of Newville's Board of Directors maintained 6 standing
committees: Discount Loan, ALCO, Appraisal, Compliance, Personnel and Building.
During 1999, ACNB's and both bank's Boards of Directors each held 12
meetings. Each of the directors attended at least 75% of the combined total
number of meetings of ACNB's and
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of the bank's Boards of Directors meetings and the committees of which he or she
is a member, with the exception of Directors Donaldson, Jones, Sandoe, Snyder,
Weaver and Wheeler.
Compensation of ACNB Corporation's Board of Directors
In 1999, the corporation's non-employee directors are compensated for their
services rendered to the corporation (and to Adams County National Bank) as
follows:
o an annual retainer of $3,000;
o $265 per monthly meeting;
o committee meeting fees paid at the rate of $125 per hour with a
minimum payment of $125; and
o $250 compensation for a half-day seminar, plus expenses, if
applicable; and $400 compensation for a full-day seminar, plus
expenses, if applicable.
Compensation of The Farmers National Bank of Newville's Board of Directors
In 1999, The Farmers National Bank of Newville non-employee directors were
compensated for their services rendered to the bank as follows:
o an annual retainer of $2,850;
o $265 per monthly meeting; and
o $80 per committee meeting, except the Appraisal Committee which is
paid at the rate of $50 per event.
The subsidiary banks do not compensate employee directors for attendance at
Board of Directors meetings or committee meetings. In the aggregate, Adams
County National Bank paid $130,461 to the Board of Directors for all services
rendered in 1999. In the aggregate, The Farmers National Bank of Newville paid
$65,040 to the Board of Directors for all services rendered in 1999.
BOARD OF DIRECTORS' REPORT ON
EXECUTIVE COMPENSATION
Compensation Committee Report
The Board of Directors of ACNB Corporation governs the corporation and its
subsidiary banks. 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 banks. To accomplish the
corporation's strategic goals and objectives, the Board of Directors engages
competent persons, who undertake to accomplish these objectives with integrity
and with cost-effectiveness. The Board of Directors fulfills part of its
strategic mission through the
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compensation of these individuals. Officers of the corporation are not
compensated. Each bank provides compensation to its employees.
The corporation seeks to offer competitive compensation opportunities for
all employees based on the individual's contribution and personal performance.
The Executive Committee, comprised of 11 directors (listed below), administers
the compensation program. The committee seeks to establish a fair compensation
policy to govern executive officers' base salaries and incentive plans to
attract and motivate competent, dedicated and ambitious managers, whose efforts
will enhance the corporation's products and services, the results of which will
be improved profitability, increased dividends to the corporation's
shareholders, and subsequent appreciation in the market value of the
corporation's shares.
The committee reviews and annually approves the compensation of the banks'
top executives, including the chief executive officer and 6 other executive
officers. As a guideline in determining base salaries, the committee uses a
regional financial industry salary survey which covers financial institutions in
the Pennsylvania, Maryland, Washington, D.C., and Virginia market place. The
referenced survey includes more institutions than are listed on the peer group
performance graph.
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 IRC Section 162(m) to the
compensation paid to its executive officers; and, in the event that this section
becomes applicable, the Board of Directors intends to amend the corporation's
and the banks' compensation plans to preserve the deductibility of the
compensation payable under the plans.
Chief Executive Officer Compensation
The Board of Directors determined that the Chief Executive Officer's 1999
base salary of $198,500, an approximate 5% increase in base salary, combined
with a $1,985 bonus, is appropriate in light of the 1999 ACNB Corporation
performance accomplishments. No direct correlation exists between the Chief
Executive Officer's compensation, the Chief Executive Officer's increase in
compensation, and ACNB Corporation's 1999 performance. The committee
subjectively determines the increase in the Chief Executive Officer's
compensation based on a review of all relevant information.
Executive Officers Compensation
The committee increased the compensation of the banks' executive officers
by approximately 3% in 1999. The committee determined the increases based on its
subjective analysis of the individual's contribution to the corporation's
strategic goals and objectives. In determining whether strategic goals have been
achieved, the committee considers numerous factors, including the following: the
corporation's performance as measured by earnings, revenues, return on assets,
return on equity, market share, total assets, and non-performing loans.
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Although the committee measured the performance and increases in compensation in
light of these factors, no direct correlation exists between any specific
criterion and the employees' compensation; nor does the committee, in its
analysis, attribute specific weight to any such criteria. The committee makes a
subjective determination after review of all relevant information, including the
above.
In addition to base salary, executive officers of the banks may participate
in the banks' 401(k) plan and retirement plan. (See pages 11-14 for more
information.)
General labor market conditions, the individual's specific responsibilities
and the individual's contributions to the corporation's success influence total
compensation opportunities available to the bank's executive officers. The
committee reviews individuals on a calender year basis and 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 executive officers.
This report is furnished by the Adams County National Bank's Executive
Committee which performs the functions of a compensation committee.
D. Richard Guise, Chairperson
Philip P. Asper William B. Lower Marian B. Schultz
Frank Elsner, Jr. Paul G. Pitzer Jennifer L. Weaver
Richard L. Galusha Thomas A. Ritter
C.F. Ditzler, Director Emeritus
Ronald L. Hankey (ex-officio member)
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
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 ACNB
Corporation and Adams County National 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.
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EXECUTIVE COMPENSATION
Shown below is information concerning the annual compensation for services
in all capacities to the corporation and the banks for the fiscal years ended
December 31, 1999, 1998 and 1997 of those persons who were, at December 31,
1999:
o Chief Executive Officer; and
o the other four most highly compensated executive officers of the
corporation and the banks to the extent such persons' total annual
salary and bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Annual Restricted Underlying All other
Compen- Stock Options/ LTIP Compen-
Name and Principal Salary Bonus sation Award(s) SARs Payouts sation
Position Year ($) ($) $ ($) (#) ($) ($)(1)(2)
-------- ---- --- --- ------ ---------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald L. Hankey, 1999 198,500 1,985 0 0 0 0 55,511
President and Chief 1998 189,000 1,890 0 0 0 0 55,226
Executive Officer of 1997 180,000 1,800 0 0 0 0 54,879
the corporation and
of Adams County
National Bank
John W. Krichten, 1999 99,052 991 0 0 0 0 13,162
Senior Vice 1998 96,157 961 0 0 0 0 13,020
President, Cashier 1997 93,130 931 0 0 0 0 12,823
and Chief Financial
Officer of the
corporation and of
Adams County
National Bank
</TABLE>
- --------------
(1) Includes amount contributed by Adams County National Bank to the 401(k)
Plan of $6,400, $6,400, and $6,315 in 1999, 1998 and 1997, respectively, on
behalf of Mr. Hankey. Includes deferred compensation (salary continuation
plan) of $49,111 and $48,826 in 1999 and 1998, respectively, on behalf of
Mr. Hankey.
(2) Includes amount contributed by Adams County National Bank to the 401(k)
Plan of $3,962, $3,846, and $3,725 in 1999, 1998 and 1997, respectively, on
behalf of Mr. Krichten. Includes deferred compensation (salary continuation
plan) of $9,200 and $9,174 in 1999 and 1998, respectively on behalf of Mr.
Krichten.
10
<PAGE>
Employment Contract with Ronald L. Hankey
Effective January 1, 1998, Adams County National Bank, the corporation and
Mr. Ronald L. Hankey, President and Chief Executive Officer of the corporation
and Adams County National Bank and a member of the Boards of Directors of the
corporation and Adams County National Bank, entered into an employment agreement
for a term of 3 years. The agreement renews automatically for additional 1 year
periods unless one party provides the other party with written notice of
termination. The agreement specifies Mr. Hankey's positions and duties,
compensation and benefits, and indemnification and termination provisions. The
agreement also contains a non-competition provision, a confidentiality
provision, and a change-in-control provision.
Under the terms of his employment agreement, Mr. Hankey serves as the
President and Chief Executive Officer of the corporation and of Adams County
National Bank and as a member of the Boards of Directors of the corporation and
of Adams County National Bank. The employment agreement provided Mr. Hankey with
an annual direct salary of $189,000 in 1998. This salary may be increased in
subsequent years as the Board of Directors deems appropriate. In addition, the
Boards of Directors of the corporation and Adams County National Bank have
discretion to pay a yearly bonus to Mr. Hankey. Mr. Hankey is not entitled to
receive director fees or other compensation for serving on the corporation's and
the Adams County National Bank's Boards of Directors or their committees. Mr.
Hankey is also entitled to receive the employee benefits made available by Adams
County National Bank to its employees.
The agreement with Mr. Hankey also provides that if his employment is
terminated by the corporation or Adams County National Bank, due to death,
disability or for "cause", then he is entitled to the full annual direct salary
through the date of termination. If Mr. Hankey's employment is terminated by the
corporation or Adams County National Bank other than pursuant to death,
disability or for "cause", or if Mr. Hankey terminates his employment for "good
reason", then he is entitled to his full annual direct salary from the date of
termination through the last day of the term of the agreement. If Mr. Hankey's
employment is terminated as a result of a change in control, then he is entitled
to his then current direct annual salary through the last date of the term of
the agreement and will continue to participate in all employee benefit plans and
programs in which he was previously entitled to participate.
Adams County National Bank's Pension Plan
The employees of Adams County National Bank are covered under the bank's
Group Pension Plan for Employees. The plan is a defined benefit pension plan
under the Employee Retirement Income Security Act of 1974. The most recent
amendment was effective November 1, 1989. Adams County National Bank is 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 in 1999 for the Adams County
11
<PAGE>
National Bank plan was $785,360. The contribution made by the bank in 1999 to
the plan was $291,958.17. This contribution was sufficient to meet the legal
minimum funding requirements.
Each employee of Adams County National Bank who attains the age of 20 years
and 6 months and who completes 6 months of eligible service, whichever is later,
is 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 5 years, calculated
as follows: 1% of final average compensation below the applicable Social
Security Covered Compensation, and 1.3% 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 minimum benefit is the amount an
employee accrued as of October 31, 1989. If an employee has earned 30 or more
years of credited service, he or she is eligible to retire at age 62 with no
reduction applied to his or her 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.
Annual Retirement Income (1)
----------------------------
Final Years of Service
Average -----------------------------------------------
Compensation 15 25 35 45 or more
------------ -- -- -- ----------
$ 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
- -----------------
(1) Assumes normal retirement date (age 65) occurs in 1999. Actual benefits may
be slightly higher on account of benefits earned under the plan prior to
the 1989 amendment. Later retirement dates produce smaller retirement
benefits as Social Security Covered Compensation increases.
For 1999, the covered compensation, as reported above in the Summary
Compensation Table, for Mr. Hankey, President and Chief Executive Officer, is
$198,500. The covered compensation includes salary only. As of December 31,
1999, Mr. Hankey had 42 years of service credited under the plan.
The Farmers National Bank of Newville's Pension Plan
The Farmers National Bank of Newville maintained a non-contributory funded
pension plan for all full-time bank employees who met certain eligibility
criteria. This plan was frozen in March, 1993 and no further contributions to
the plan are expected in the future.
12
<PAGE>
GROUP PENSION PLAN FOR EMPLOYEES OF THE FARMERS NATIONAL BANK OF NEWVILLE
ANNUAL BENEFIT AT RETIREMENT
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
SALARY 15 20 25 30 35
------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
40,000 15,432 20,576 25,720 25,720 25,720
60,000 23,148 30,864 38,580 38,580 38,580
80,000 31,619 42,158 52,698 52,698 52,598
100,000 41,375 55,166 68,958 68,958 68,958
120,000 51,131 68,174 85,218 85,218 85,218
</TABLE>
- ---------------------
Based on Integration Level of $72,600.
Benefits frozen effective April, 1993.
Adams County National Bank's 401(k) Plan
Adams County National Bank maintains a defined contribution - profit
sharing 401(k) plan. Adams County National Bank is the plan sponsor and plan
administrator. Ronald L. Hankey, President and Chief Executive Officer of the
corporation and of Adams County National Bank, and John W. Krichten,
Secretary/Treasurer of the corporation and Senior Vice President, Cashier and
Chief Financial Officer of Adams County National 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.
An employee is eligible to participate in the plan after working for 6
months and attaining the age of 20 years and 6 months. An eligible employee may
elect to contribute a portion of salary and wages (other than bonuses) or other
direct remuneration to the plan. Generally, an eligible employee may not
contribute more than 15% of his or her compensation. Adams County National Bank
matches a percentage of the employee's contribution. In 1999, Adams County
National Bank's contribution equaled 100% of the employee's contribution up to a
maximum of 4% of annual salary. Adams County National Bank's contributions to
the plan for each participant vest in 6 years. The employee's contributions to
the plan vest immediately.
The Farmers National Bank of Newville's 401(k) Plan
The Farmers National Bank of Newville maintains a contributory thrift plan
under Section 401(k) of the Internal Revenue Code. The plan permits Farmers
National Bank to appoint an administrative committee to assist in the
administration of the plan. Farmers National Bank appointed Carolyn H. Kough,
Executive Vice President and Chief Executive Officer of the bank, and W. Irvin
Nelson, Secretary, and a member of The Farmers National Bank of Newville's Board
of Directors, as the trustees of the plan. The plan is subject to certain laws
and regulations under the Internal Revenue Code and participants are entitled to
certain rights and protections under the Employee Retirement Income Security Act
of 1974.
To be eligible to become a participant in the plan, an employee must
complete one year of service during which the employee worked at least 1,000
hours, and attain the age of 21. A participating employee may elect to have the
bank contribute a portion of his or her
13
<PAGE>
compensation to the plan. This elective deferral may not exceed a specific plan
amount for any calendar year as determined by the Internal Revenue Service. The
plan also provides for The Farmers National Bank of Newville to make nonelective
contributions to the plan in an amount to be determined by the bank at its
discretion for any plan year. The employee's contributions to the plan vest
immediately. The bank's contributions to the plan for each participant vest
after 5 years of credited service. In the aggregate, The Farmers National Bank
of Newville contributed $274,597 to the plan in 1999.
Life Insurance Plans of the Banks
Each subsidiary bank maintains a group term life insurance plan. All full
time bank employees are eligible to participate in their respective plan. The
insurance benefit for employees of Adams County National Bank is calculated as 2
times salary, with a maximum of $100,000. The insurance benefit for employees of
The First National Bank of Newville is calculated as 1.5 times salary, with a
maximum of $50,000.
Executive Retirement Income Agreements
Adams County National Bank entered into retirement income agreements with
Mr. Hankey and other executive officers of Adams County National Bank to provide
supplemental retirement income benefits to these officers when they reach their
normal retirement date. The benefits are payable in 180 equal monthly
installments. Benefits are also payable upon disability, early retirement,
termination of service, or death. Benefit amounts will be determined by the
individual's number of years of service and compensation at retirement age.
Benefits accrue annually, but no vesting occurs until the individual completes
10 years of service with Adams County National Bank. Estimated liability under
the agreements is accrued as earned by the employee. Adams County National Bank
is the owner and beneficiary of life insurance policies on each officer, that
had an aggregate cash value of approximately $1,781,569 at December 31, 1999.
Adams County National 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 Consolidated Financial
Statements contained in ACNB Corporation's 1999 Annual Report to Shareholders
which is enclosed with this proxy statement.
14
<PAGE>
The Farmers National Bank of Newville's Bonus Plan
The Farmers National Bank of Newville provides its employees with annual
cash bonuses, subject to Board approval, based on years of service.
YEARS OF SERVICE BONUS
---------------- -----
After 1 Year 4%
2 Years 6%
3 Years 8%
4 Years 10%
5 - 20 Years 12%
20 - 25 Years 15%
25 Years or more 20%
The total cash bonus paid by The Farmers National Bank of Newville to all
employees in 1999 was $53,801.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The corporation and its subsidiary banks have not entered into any material
transactions, proposed or consummated, with any director or executive officer of
the corporation or the banks, or any associate of the foregoing persons. The
corporation and the banks have engaged in and intend to continue to engage in
banking and financial transactions in the ordinary course of business with
directors and officers of the corporation and the banks and their associates on
comparable terms with similar interest rates as those prevailing from time to
time for other bank customers.
Total loans outstanding from the banks at December 31, 1999, to the
corporation's and the banks' officers and directors as a group, members of their
immediate families and companies in which they had an ownership interest of 10%
or more, amounted to $5,237,645, or approximately 8.75% of the combined banks'
total equity capital. The banks made these loans in the ordinary course of
business, 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 collection or
present other unfavorable features. The aggregate amount of indebtedness as of
the latest practicable date, March 1, 2000, to the above described group was
approximately $4,938,070.
ELECTION OF DIRECTORS
Qualification and Nomination of Directors
The corporation's Articles of Incorporation and Bylaws authorize the number
of directors to be not less than 5 nor more than 25. They also provide for 3
classes of directors with staggered 3 year terms of office that expire at
successive annual meetings. Currently, Class 1 consists of 5 directors, Class 2
consists of 7 directors, and Class 3 consists of 4 directors.
15
<PAGE>
However, pursuant to Article 11 of the corporation's Articles of Incorporation
and Article I, Section 105 of the corporation's Bylaws, shareholders shall at
each meeting for the election of directors, determine by resolution how many
directors will be elected to serve in each class of directors to be elected at
that meeting. The Board of Directors believes that it is in the corporation's
best interest to fix the number of directors to be elected at 11. The proposed
11 member Board of Directors will consist of 5 Class 1 Directors, 3 Class 2
Directors and 3 Class 3 Directors. Shareholders will elect 3 Class 2 Directors
to serve for 3 year terms that expire at the corporation's 2003 annual meeting.
The Board of Directors nominated the 3 persons named below to serve as
Class 2 Directors until the 2003 annual meeting of shareholders or until their
earlier death, resignation or removal from office. All of the nominees for Class
2 Director are presently members of the Board of Directors and all have
consented to serve another term as a director if re-elected. If any of the
nominees should be unavailable to serve for any reason, a majority of the Board
of Directors then in office may fill the vacancy until the expiration of the
term of the class of directors to which he or she was appointed.
The proxy holders intend to vote all proxies for the election of each of
the 3 nominees named below, unless you indicate that your vote should be
withheld from any or all of them. Each candidate elected as a director will
continue in office until his or her successor has been duly elected and
qualified, or until his or her death, resignation or retirement.
The Board of Directors proposes the following nominees for election as
Class 2 Directors at the annual meeting:
o Wayne E. Lau
o Jennifer L. Weaver
o Harry L. Wheeler
The Board of Directors recommends that shareholders vote FOR the proposal
to fix the number of directors at 11; FOR the proposal to fix the number of
Class 1 directors at 5; FOR the proposal to fix the number of Class 2 directors
at 3; FOR the proposal to fix the number of Class 3 directors at 3; and FOR the
proposal to elect the 3 nominees listed above as Class 2 Directors.
Information as to Nominees and Directors
Set forth below is the principal occupation and certain other information
regarding the nominees and other directors whose terms of office will continue
after the annual meeting. You will find information about their share ownership
on pages 19-21.
16
<PAGE>
<TABLE>
<CAPTION>
CURRENT CLASS 2 DIRECTORS (to serve until 2000)
AND
NOMINEES FOR CLASS 2 DIRECTORS (to serve until 2003)
- ------------------------------
<S> <C>
Wayne E. Lau Mr. Lau, age 65, has been a member of both the corporation's and Adams
County National Bank's Boards of Directors since 1987. Mr. Lau is a
sales representative for Destinations, a travel agency located in East
Berlin, Pennsylvania.
Jennifer L. Weaver Ms. Weaver, age 52, has been a member of both the corporation's and
Adams County National Bank's Boards of Directors since 1992. She is
the Director of the Gettysburg Campus of Harrisburg Area Community
College.
Harry L. Wheeler Mr. Wheeler, age 59, has been a member of the corporation's Board of
Directors since March 1, 1999 when the merger of Farmers National
Bancorp, Inc. and ACNB Corporation was completed. He has also been a
member of the Board of Directors of Farmers National Bank of Newville
since 1987. Mr. Wheeler is the proprietor of Wheeler Drywall, located in
Carlisle, Pennsylvania.
BOARD OF DIRECTORS - CONTINUING AS DIRECTORS
CLASS 1 DIRECTORS (to serve until 2001)
- -----------------
Philip P. Asper Mr. Asper, age 51, has been a member of both the corporation's and
Adams County National Bank's Boards of Directors since 1988. He is a
building contractor in Biglerville, Pennsylvania.
D. Richard Guise Mr. Guise, age 66, has been a member of both the corporation's and
Adams County National Bank's Boards of Directors since 1988. He is the
President of Adams County Motors Corp., an automobile dealership
located in Gettysburg, Pennsylvania.
Ronald L. Hankey Mr. Hankey, age 59, is the President and Chief Executive Officer of the
corporation and of Adams County National Bank. He has been a member
of the corporation's Board of Directors and has served as the Chairman of
the Board since 1982. Mr. Hankey has been a member of Adams County
National Bank's Board of Directors and has served as the Chairman of the
Board since 1975. Mr. Hankey has also been a member of the Board of
Directors of Farmers National Bank of Newville since March 1, 1999.
17
<PAGE>
Edgar S. Heberlig Mr. Heberlig, age 65, has been a member of the corporation's Board of
Directors since March 1, 1999 when the merger of Farmers National
Bancorp, Inc. and ACNB Corporation was completed. He has also been a
member of the Board of Directors of Farmers National Bank of Newville
since 1970. Mr. Heberlig is a retired farm structure salesman and a retired
Navy pilot.
Marian B. Schultz Ms. Schultz, age 50, has been a member of
both the corporation's and Adams County National
Bank's Boards of Directors since 1992. She is
Assistant Dean, Division of Undeclared Majors, at
Shippensburg University, located in Shippensburg,
Pennsylvania and is currently serving as Interim Dean
- Special Academic Program.
CLASS 3 DIRECTORS (to serve until 2002)
- -----------------
Guy F. Donaldson Mr. Donaldson, age 68, has been a member of the corporation's Board of
Directors since 1982 and of Adams County National Bank's Board of
Directors since 1981. He is a fruit grower in Ortanna, Pennsylvania.
William B. Lower Mr. Lower, age 70, has been a member of the corporation's Board of
Directors since 1982 and of Adams County National Bank's Board of
Directors since 1974. Mr. Lower is President of Boyer Nurseries &
Orchards, Inc., located in Biglerville, Pennsylvania.
Ralph S. Sandoe Mr. Sandoe, age 72, has been a member of the corporation's Board of
Directors since 1987 and of Adams County National Bank's Board of
Directors since 1982. Mr. Sandoe is a fruit broker in Biglerville,
Pennsylvania.
CURRENT CLASS 2 DIRECTORS RETIRING AT THE 2000 ANNUAL MEETING
- -------------------------------------------------------------
Richard L. Galusha Mr. Galusha, age 78, has been a member of ACNB's Board of Directors
since 1987 and a director of Adams County National Bank since 1962.
Mr. Galusha is a realtor in Arendtsville, Pennsylvania.
Paul G. Pitzer Mr. Pitzer, age 81, has been a member of ACNB's Board of Directors
since 1992 and a director of Adams County National Bank since 1967. He
is a fruit grower in Biglerville, Pennsylvania.
18
<PAGE>
CURRENT CLASS 3 DIRECTORS RETIRING AT THE 2000 ANNUAL MEETING
- -------------------------------------------------------------
Philip M. Jones Mr. Jones, age 82, has been a member of ACNB's Board of Directors
since 1982 and a director of Adams County National Bank since 1979. He
is the Chief Executive Officer of Times and News Publishing Company in
Gettysburg, Pennsylvania.
L. Robert Snyder Mr. Snyder, age 75, has been a member of ACNB's Board of Directors
since 1982 and a director of Adams County National Bank since 1979. He
is Chairman of the Board of Littlestown Hardware & Foundry Co., Inc., in
Littlestown, Pennsylvania.
CLASS 3 DIRECTOR WHO RETIRED ON DECEMBER 30, 1999
- -------------------------------------------------
Thomas A. Ritter Mr. Ritter, age 47, was a member of both ACNB's and Adams County
National Bank's Board of Directors from 1997 until his retirement from
the Boards in December 1999. Mr. Ritter was an insurance agent in
Gettysburg, Pennsylvania. Effective January 1, 2000, he became an
Executive Vice President of Adams County National Bank.
</TABLE>
BENEFICIAL OWNERSHIP OF ACNB CORPORATION'S STOCK
OWNED BY PRINCIPAL OWNERS AND MANAGEMENT
Principal Shareholders
As of March 1, 2000, the Board of Directors knows of no person who owns of
record or who is known by the Board of Directors to be the beneficial owner of
more than 5% of the corporation's outstanding common stock.
Share Ownership by the Directors, Officers and Nominees
The following table sets forth, as of March 1, 2000, and from information
received from the respective individuals, the amount and percentage of the
common stock beneficially owned by each director, each nominee, and all
executive officers, directors and nominees of the corporation as a group. Unless
otherwise noted, shares are held individually and the percentage of class is
less than 1% of the outstanding common stock.
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF PERCENTAGE OF
IDENTITY OF GROUP BENEFICIAL OWNERSHIP (1)(2) CLASS
- ----------------- --------------------------- -------------
CLASS 1 DIRECTORS
- -----------------
Philip P. Asper 5,234(3) --
D. Richard Guise 8,788(4) --
Ronald L. Hankey 19,150(5) --
Edgar S. Heberlig 28,862(6)
Marian B. Schultz 2,050(7) --
19
<PAGE>
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF PERCENTAGE OF
IDENTITY OF GROUP BENEFICIAL OWNERSHIP (1)(2) CLASS
- ----------------- --------------------------- -------------
CLASS 2 DIRECTORS
- -----------------
Richard L. Galusha 8,210 --
Wayne E. Lau 4,312(8) --
Paul G. Pitzer 7,500(9) --
Jennifer L. Weaver 600 --
Harry L. Wheeler 8,361(10)
CLASS 3 DIRECTORS
- -----------------
Guy F. Donaldson 2,890 --
Philip M. Jones 91,274(11) 1.60%
William B. Lower 43,978(12) --
Thomas A. Ritter 3,374(13) --
Ralph S. Sandoe 9,020(14) --
L. Robert Snyder 5,958(15) --
John W. Krichten
Secretary/Treasurer 24,206(16) --
Lynda L. Glass 64(17)
Assistant Secretary
All Officers and Directors 273,831 4.80%
as a Group (16 Directors, 3
Officers, 18 persons in total)
- -----------
(1) 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 1, 2000. Beneficial ownership may be disclaimed as to certain
of the securities.
(2) Information furnished by the Directors and the corporation.
(3) These shares are held jointly with Mr. Asper's spouse.
(4) These shares are held jointly with Mr. Guise's spouse.
(5) Figure includes 6,228 shares held solely by Mr. Hankey; and 12,922 shares
held jointly with Mr. Hankey's spouse.
(6) Figure includes 26,375 shares held solely by Mr. Heberlig; 2,226 shares
held jointly with Mr. Heberlig's spouse; and 221 shares held solely by Mr.
Heberlig's spouse.
(7) Figure includes 700 shares held jointly with Mrs. Schultz's spouse; and
1,350 shares held solely by Mrs. Schultz's spouse.
(8) These shares are held jointly with Mr. Lau's spouse.
(9) These shares are held jointly with Mr. Pitzer's spouse.
(10) Figure includes 6,707 shares held solely by Mr. Wheeler; and 1,654 shares
held jointly with Mr. Wheeler's spouse.
20
<PAGE>
(11) Figure includes 8,644 shares held solely by Mr. Jones; 5,218 shares held
solely by Mr. Jones' spouse; and 77,412 shares held by Times and News
Publishing Co. of which Mr. Jones and his spouse own 56.74%.
(12) Figure includes 1,072 shares held solely by Mr. Lower; 42,456 shares held
by Mr. Lower as Trustee of the William B. Lower, Sr.; 450 shares held by
Mr. William B. Lower Sr. as Trustee of the William B. Lower, Sr. Revocable
Trust.
(13) Figure includes 1,590 shares held jointly with Mr. Ritter's spouse; and
1,784 shares held solely by Mr. Ritter's spouse.
(14) Figure includes 800 shares held solely by Mr. Sandoe; and 8,220 shares held
jointly with Mr. Sandoe's spouse.
(15) Figure includes 5,682 shares held solely by Mr. Snyder; and 276 shares held
jointly with Mr. Snyder's spouse.
(16) Figure includes 3,120 shares held solely by Mr. Krichten; 20,772 shares
held jointly with Mr. Krichten's spouse; and 314 shares held as custodian
for Mr. Krichten's daughter.
(17) These shares are held jointly with Ms. Glass' spouse.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that the
corporation's officers and directors, and persons who own more than 10% of the
registered class of the corporation's equity securities, file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors, and greater than 10% 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 Forms 3, 4 and 5 and amendments
thereto received by it, or written representations from certain reporting
persons that no Forms 5 were required for those persons, the corporation
believes that during the period from January 1, 1999, through December 31, 1999,
its officers and directors complied with all applicable filing requirements.
21
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly change in the
cumulative total shareholder return on ACNB Corporation's common stock against
the cumulative total return of the S&P 500 Stock Index and the NASDAQ Bank Index
for the period of 5 fiscal years commencing January 1, 1995 and ending December
31, 1999. The graph shows that the cumulative investment return to shareholders,
based on the assumption that a $100 investment was made on December 31, 1994, in
each of the corporation's capital stock, the S& P 500 Stock Index and the Peer
Group Index, and that all dividends were reinvested in such securities over the
past five (5) years, the cumulative total return on such investment would be
$151.74, $350.26 and $188.83, respectively. The shareholder return shown on the
graph below is not necessarily indicative of future performance.
[GRAPHIC]
In the printed version of the document, line graph
appears which depicts the following plot points:
1994 1995 1996 1997 1998 1999
---- ------ ------ ------ ------ ------
Peer Group Index 100 109.39 124.49 178.38 230.72 188.83
ACNB Corp. 100 124.88 119.68 181.66 180.90 151.74
S & P 500 Total Return Index 100 137.45 168.92 225.21 289.43 350.26
NOTE: The peer group for which information appears above includes the following
companies: CNB Financial Corporation; Citizens & Northern Corporation; Drovers
Bancshares Corporation; First West Chester Corporation; Franklin Financial
Services Corp.; Hanover Bancorp, Inc.; Penseco Financial Services Corporation;
Penns Woods Bancorp, Inc.; PennRock Financial Services Corp.; and, Sterling
Financial Corp. These companies were selected based on four criteria as of
September 30, 1999: total assets between $425 million and $1.1 billion; market
capitalization between $55 million and $250 million; headquarters located in
Pennsylvania; and, not quoted on NASDAQ.
22
<PAGE>
PROPOSALS
1. TO FIX THE NUMBER OF DIRECTORS OF ACNB CORPORATION AT 11.
The Board of Directors recommends a vote FOR this proposal.
2. TO FIX THE NUMBER OF CLASS 1 DIRECTORS AT 5.
The Board of Directors recommends a vote FOR this proposal.
3. TO FIX THE NUMBER OF CLASS 2 DIRECTORS AT 3.
The Board of Directors recommends a vote FOR this proposal.
4. TO FIX THE NUMBER OF CLASS 3 DIRECTORS AT 3.
The Board of Directors recommends a vote FOR this proposal.
5. TO ELECT 3 CLASS 2 DIRECTORS.
Nominees for Class 2 Director are:
o Wayne E. Lau (director since 1987)
o Jennifer L. Weaver (director since 1992)
o Harry L. Wheeler (director since 1999)
Each has consented to serve a 3 year term. (See page 15 for more
information.)
If any director is unable to stand for re-election, the Board may designate
a substitute. The proxy holders will vote in favor of a substitute nominee. The
Board of Directors has no reason to believe the 3 nominees for Class 2 Director
will be unable to serve if elected.
Cumulative voting rights do not exist with respect to the election of
directors. The affirmative vote of the majority of shares present (in person or
by proxy and entitled to vote at the annual meeting) is needed to elect a
director.
The Board of Directors recommends a vote FOR the election of the 3 nominees
as Class 2 Directors.
In the election of directors, you may vote "FOR" all of the nominees or
your vote may be "WITHHELD" with respect to one or more of the nominees. For the
other proposals, you may vote "FOR", "AGAINST" or "ABSTAIN." If you "ABSTAIN",
it has the same effect as a vote "AGAINST." If you sign your proxy card or
broker voting instruction card with no further instructions, your shares will be
voted in accordance with the recommendations of the Board ("FOR" all of the
Board's nominees and "FOR" all other items described in this proxy statement).
23
<PAGE>
INDEPENDENT AUDITORS
Stambaugh o Ness, P.C., successor to Harry Ness & Company, Certified Public
Accountants, of York, Pennsylvania, served as the corporation's independent
auditors for its 1999 fiscal year. The corporation has been advised by Stambaugh
o Ness, P.C. that none of its members have any financial interest in the
corporation. In addition to performing customary audit services, Stambaugh o
Ness, P.C. assisted the corporation and the banks with preparation of their
federal and state tax returns, and provided assistance in connection with
regulatory matters, charging the banks for such services at its customary hourly
billing rates. These non-audit services were approved by the corporation's and
the banks' 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 banks' Boards of Directors that there was no effect
on the independence of the auditors. The Board of Directors has engaged
Stambaugh o Ness, P.C. as the corporation's independent auditors for the fiscal
year ending December 31, 2000.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
In order for a shareholder proposal to be considered for inclusion in ACNB
Corporation's proxy statement for next year's annual meeting, the written
proposal must be received by the corporation no later than Thursday, December 7,
2000. Any proposal must comply with Securities and Exchange Commission
regulations regarding the inclusion of shareholder proposals in
company-sponsored proxy materials. If a shareholder proposal is submitted to the
corporation after December 7, 2000, it is considered untimely; and, although the
proposal may be considered at the annual meeting, the corporation is not
obligated to include it in the 2001 proxy statement. Similarly, in compliance
with the corporation's bylaws, shareholders wishing to nominate a candidate for
election to the Board of Directors, must notify the Secretary in writing no
later than 14 days in advance of the meeting. Shareholders must deliver any
proposals or nominations in writing to the Secretary/Treasurer of ACNB
Corporation at its principal executive office, 675 Old Harrisburg Road,
Gettysburg, Pennsylvania 17325. See page 6 for more information about
nominations to the Board of Directors.
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OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors knows of no matters other than those referred to in
the accompanying Notice of Annual Meeting of Shareholders that properly may come
before the annual meeting. However, if any other matter should be properly
presented for consideration and voting at the annual meeting or any adjournments
of the meeting, the persons named as proxy holders will vote the proxies in what
they determine to be the best interest of ACNB Corporation.
ADDITIONAL INFORMATION
Upon written request of any shareholder, a copy of ACNB Corporation's
report on Form 10-K for its fiscal year ended December 31, 1999, 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, may be obtained, without charge, from John W. Krichten,
Secretary/Treasurer of ACNB Corporation, 675 Old Harrisburg Road, Gettysburg,
Pennsylvania 17325.
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<PAGE>
ACNB CORPORATION
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 2, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints D. Richard Guise and Philip
P. Asper and each or any of them, proxies of the undersigned, with full power of
substitution to vote all of the shares of ACNB Corporation that the undersigned
shareholder may be entitled to vote at the Annual Meeting of Shareholders to be
held at 675 Old Harrisburg Road, Gettysburg, Pennsylvania 17325, on Tuesday, May
2, 2000, 1:00 p.m., Eastern Time, and at any adjournment or postponement of the
meeting as follows:
1. TO FIX THE NUMBER OF DIRECTORS OF ACNB CORPORATION AT 11.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
- --------------------------------------------------------------------------------
2. TO FIX THE NUMBER OF CLASS 1 DIRECTORS AT 5.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
- --------------------------------------------------------------------------------
3. TO FIX THE NUMBER OF CLASS 2 DIRECTORS AT 3.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
- --------------------------------------------------------------------------------
4. TO FIX THE NUMBER OF CLASS 3 DIRECTORS AT 3.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
- --------------------------------------------------------------------------------
5. TO ELECT 3 CLASS 2 DIRECTORS TO SERVE FOR A 3 YEAR TERM.
WAYNE E. LAU JENNIFER L. WEAVER HARRY L. WHEELER
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed above (except to vote for all nominees
as marked to the contrary below) listed above
The Board of Directors recommends a vote FOR these nominees.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
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<PAGE>
6. In their discretion, the proxy holders are authorized to vote upon such
other business as may properly come before the meeting and any adjournment
or postponement of the meeting.
THIS PROXY, WHEN PROPERLY SIGNED AND DATED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDERS. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE AND FOR PROPOSALS 1, 2, 3 and 4.
Dated: ______________________, 2000 ______________________________
Signature
------------------------------
Signature
Number of Shares Held of Record
on March 1, 2000
- ---------------------------
THIS PROXY MUST BE DATED, SIGNED BY THE SHAREHOLDER AND RETURNED PROMPTLY TO
ACNB 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.
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