UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. [ ])
the Securities Exchange Act of 1934 (Amendment No. [ ])
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Soliciting Material Under Rule 14a-12
ACNB Corporation
(Name of Registrant as Specified in Its Charter)
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![[MISSING IMAGE: lg_acnb-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-043727/lg_acnb-bw.jpg)
March 31, 2020
30, 2021
Dear Fellow Shareholders of ACNB Corporation:
On behalf of the Board of Directors, I am pleased to inform you of our Annual Meeting of Shareholders to be held on Tuesday, May 5, 2020,4, 2021, at 1:00 p.m., prevailing time,time. Due to the ongoing impact of the Coronavirus Disease 2019 (“COVID-19”), the Annual Meeting of Shareholders will be held in a virtual meeting format only via the internet at www.meetingcenter.io/200732442. You will not be able to attend the ACNB Corporation Operations Center, 100 V-Twin Drive, Gettysburg, Pennsylvania 17325.annual meeting physically. Enclosed with the proxy statement is the notice of meeting, proxy card, ACNB Corporation's 2019Corporation’s 2020 Annual Review, and ACNB Corporation's 2019Corporation’s 2020 Annual Report on Form 10-K.
The principal business of the meeting is to elect five (5)four (4) Class 32 Directors to serve for terms of three (3) years and until their successors are elected and qualified; to conduct a non-binding vote on executive compensation; to ratify the selection of RSM US LLP as ACNB Corporation'sCorporation’s independent registered public accounting firm; and, to 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 urge you to vote as soon as possible by completing, signing and returning the enclosed proxy card in the envelope provided or to vote via the internet or telephone. Your prompt vote will save the Corporation expenses involved in further communications. Your vote is important. Voting by written proxy, internet or telephone will ensure your representation at the annual meeting.
It is our intent to hold the Annual Meeting of Shareholders in person. However, we are sensitive to the public health concerns our shareholders may have and recommendations that public health officials may have in effect at that time as a result of Coronavirus Disease 2019 (COVID-19). Thus, there may be additional procedures or limitations imposed on meeting attendees, or the meeting may be held in a different location or solely by means of remote communications. Any such decisions will be announced atinvestor.acnb.com, and I encourage you to check this website prior to the meeting should you plan to attend. Thank you, in advance, for your understanding during these unprecedented times.
Sincerely,
![[MISSING IMAGE: sg_jamesphelt-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-043727/sg_jamesphelt-bw.jpg)
James P. Helt
President & Chief Executive Officer
President & Chief Executive Officer
ACNB CORPORATION
NASDAQ TRADING SYMBOL: ACNB
acnb.com
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AND
PROXY STATEMENT
2020
2021
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Proxy Statement
Dated and to be mailed to shareholders on or about March 31, 2020.30, 2021.
ACNB CORPORATION
16 LINCOLN SQUARE
P.O. BOX 3129
GETTYSBURG, PENNSYLVANIA 17325
(717) 334-3161
TO THE SHAREHOLDERS OF ACNB CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of ACNB Corporation will be held in a virtual meeting format only via the internet at the ACNB Corporation Operations Center, 100 V-Twin Drive, Gettysburg, Pennsylvania 17325www.meetingcenter.io/200732442 on Tuesday, May 5, 2020,4, 2021, at 1:00 p.m., prevailing time, for the purpose of considering and voting upon the following matters:
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To elect five (5)four (4) Class 32 Directors to serve for terms of three (3) years and until their successors are elected and qualified;
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To conduct a non-binding vote on executive compensation;
3.
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To ratify the selection of RSM US LLP as ACNB Corporation'sCorporation’s independent registered public accounting firm; and,
4.
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To transact such other business as may properly come before the 20202021 Annual Meeting and any adjournment or postponement thereof.
Only those shareholders of record, at the close of business on March 16, 2020,15, 2021, are entitled to notice of and to vote at the meeting.
Please promptly sign the enclosed proxy card and return it in the enclosed postage-paid envelope or vote by internet or telephone. We cordially invite you to attend and participate in the meeting.meeting online. Your proxy is revocable and you may withdraw it at any time prior to it being voted. You may deliver notice of revocation or deliver a later dated proxy to the Secretary of the Corporation before the vote at the meeting.
The Corporation'sCorporation’s Board of Directors is distributing the proxy statement, proxy card, ACNB Corporation's 2019Corporation’s 2020 Annual Review, and ACNB Corporation's 2019Corporation’s 2020 Annual Report on Form 10-K on or about March 31, 2020.
30, 2021.
BY ORDER OF THE BOARD OF DIRECTORS,
James P. Helt President & Chief Executive Officer | ||
 | ||
Gettysburg, Pennsylvania
March 31, 2020
30, 2021
YOUR VOTE IS IMPORTANT.
PLEASE VOTE YOUR PROXY TODAY.
PLEASE VOTE YOUR PROXY TODAY.
PROXY STATEMENT
GENERAL INFORMATION
Date, Time and Place of the Annual Meeting
ACNB Corporation, a Pennsylvania business corporation and registered financial holding company, furnishes this proxy statement in connection with the solicitation by the Board of Directors of proxies to be voted at the Corporation'sCorporation’s Annual Meeting of Shareholders. The Annual Meeting of Shareholders will be held on Tuesday, May 5, 2020,4, 2021, at 1:00 p.m., prevailing time, in a virtual meeting format only via the internet at www.meetingcenter.io/200732442. The password to access the ACNB Corporation Operations Center, 100 V-Twin Drive, Gettysburg, Pennsylvania 17325.virtual meeting is ACNB2021. Specific instructions to access the virtual meeting are located on your proxy card or are available at investor.acnb.com. You will not be able to attend the annual meeting physically. Included with this proxy statement is a copy of ACNB Corporation's 2019Corporation’s 2020 Annual Review and ACNB Corporation's 2019Corporation’s 2020 Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
2020.
The Corporation'sCorporation’s principal executive office is located at 16 Lincoln Square, Gettysburg, Pennsylvania 17325. The Corporation'sCorporation’s telephone number is (717) 334-3161. All inquiries regarding the annual meeting should be directed to Lynda L. Glass, Executive Vice President/Secretary & Chief Governance Officer of ACNB Corporation, at (717) 339-5085.
Description of ACNB Corporation
ACNB Corporation was formed in 1982 and became the holding company for the banking subsidiary in 1983. ACNB Corporation'sCorporation’s wholly-owned banking subsidiary is ACNB Bank, a Pennsylvania state-chartered bank and trust company, formerly Adams County National Bank. ACNB Bank operates in the Maryland markets as FCB Bank and NWSB Bank. The Corporation'sCorporation’s primary activity consists of owning and supervising its banking subsidiary.
The Corporation also owns and supervises Russell Insurance Group, Inc. as its insurance agency subsidiary.
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.
Internet Availability of Proxy Materials
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 5, 2020.4, 2021. The notice of meeting, proxy statement, proxy card, ACNB Corporation's 2019Corporation’s 2020 Annual Review, and ACNB Corporation's 2019Corporation’s 2020 Annual Report on Form 10-K are available atinvestor.acnb.com.
Solicitation and Voting of Proxies
The Board of Directors solicits this proxy for use at the Corporation's 2020Corporation’s 2021 Annual Meeting of Shareholders. The Corporation'sCorporation’s directors and officers and ACNB Bank employees may solicit proxies in person or by telephone, facsimile, email or other similar electronic means without additional compensation. The Corporation 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 beneficial owners of stock held by these entities, as well as will reimburse these third parties for their reasonable forwarding expenses. This proxy statement and the related proxy card are being distributed on or about March 31, 2020.30, 2021.
Shareholders of record at the close of business on March 16, 202015, 2021 (the annual meeting record date), are entitled to vote at the meeting. The Corporation'sCorporation’s records show that, as of the annual meeting record
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date, 8,669,9068,715,020 shares of the Corporation'sCorporation’s common stock, par value $2.50 per share, were outstanding. On all matters to come before the annual meeting, shareholders may cast one (1) vote for each share held. Cumulative voting rights do not exist with respect to the election of directors.
You may vote your shares by completing and returning a written proxy card or voting by internet or telephone. You may also vote in person at the meeting. Submitting your voting instructions by returning a proxy card, internet or telephone will not affect your right to attend the virtual meeting and vote, if you later decide to attend in person. attend.
If your shares are registered directly in your name with ACNB Corporation'sCorporation’s transfer agent, Computershare, 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 proxyholders or to vote in person at the meeting. The Corporation has enclosed a proxy card, as well as instructions to vote by internet or telephone, 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 or nominee how to vote and you are also invited to attend the meeting with proper identification asfollowing the instructions provided to you on your beneficial ownership.proxy card or available at investor.acnb.com. However, because you are not the shareholder of record, you may not vote your street name shares in person at the meeting, unless (1) you obtain a legal proxy executed in your favor from the holder of record.record in advance of the annual meeting or (2) you register at the annual meeting pursuant to registration instructions provided on your proxy card or at www.meetingcenter.io/200732442. 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.
By properly completing a proxy, you appoint Marian B. SchultzTodd L. Herring and D. Arthur Seibel, Jr.James J. Lott as proxyholders to vote your shares, as indicated on the proxy card. Any signed proxy card or vote by internet or telephone not specifying to the contrary will be votedFOR:
1.
Electing five (5)four (4) Class 32 Directors to serve for terms of three (3) years and until their successors are elected and qualified;
2.
2.
Approving the non-binding vote on executive compensation; and,
3.
3.
Ratifying the selection of RSM US LLP as ACNB Corporation'sCorporation’s independent registered public accounting firm.
You may revoke your written proxy by delivering written notice of revocation to Lynda L. Glass, Executive Vice President/Secretary & Chief Governance Officer of the Corporation, by executing a later dated proxy and giving written notice of the revocation to Ms. Glass, or by voting again by internet or telephone, at any time before the proxy is voted at the meeting. Proxyholders will vote shares represented by proxies on the accompanying proxy card, if properly signed and returned, or by internet or telephone in accordance with instructions from shareholders.
Although the Board of Directors knows of no other business to be presented, in the event that any other matters are properly brought before the meeting, any proxy given pursuant to this solicitation will be voted in accordance with the recommendations of the Board of Directors.
Quorum and Vote Required for Approval
As of the close of business on March 16, 2020,15, 2021, the Corporation had 8,669,9068,715,020 shares of common stock, par value $2.50 per share, outstanding.
Under Pennsylvania law and ACNB Corporation'sCorporation’s Bylaws, the presence of a quorum is required for each matter to be acted upon at the meeting. A majority of the outstanding shares of common stock, represented in person or by proxy, constitutes a quorum. Votes withheld and abstentions are counted in determining the presence of a quorum for a particular matter. Broker non-votes are not considered present and voting on a particular matter as to which the broker withheld authority and, therefore, not counted as a
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vote cast on that matter. Each share is entitled to one (1) vote on all matters submitted to a vote of the shareholders. All matters to be voted upon by the shareholders require the affirmative vote of a majority of shares voted, in person or by proxy, at the annual meeting, except in cases where the vote of a greater number of shares is required by law or under ACNB Corporation'sCorporation’s Articles of Incorporation or Bylaws. In the case of the election of directors, the candidates receiving the highest number of votes are elected. Shareholders are not entitled to cumulate votes for the election of directors.
If a quorum is present, approving the non-binding proposal on executive compensation and ratifying the independent registered public accounting firm for the year ending December 31, 2020,2021, requires the affirmative"FOR"“FOR” vote of a majority of all votes cast, in person or by proxy. Abstentions and broker non-votes are not deemed to constitute "votes cast"“votes cast” and, therefore, do not count either for or against the proposals.
If a quorum is present, the shareholders will elect the nominees for director receiving the highest number of"FOR"“FOR” votes cast by those shareholders entitled to vote for the election of directors. The proxyholders will not cast votes for or against any director nominees when the broker withheld authority.
Our Board of Directors believes that the purpose of corporate governance is to ensure that we maximize shareholder value in a manner consistent with legal requirements and the highest standards of integrity. The Board has adopted and adheres to corporate governance practices which the Board and executive management believe promote this purpose, are sound, and represent best practices. We continually review these governance practices, Pennsylvania law (the state in which we are incorporated), rules and listing standards of The Nasdaq Stock Market, SEC regulations, as well as best practices suggested by recognized governance authorities. Currently, our Board of Directors has sixteen (16)fourteen (14) members. Under the SEC and Nasdaq standards for independence, except for Messrs. Ritter andMr. Seibel, all non-employee directors and nominees meet the standards for independence. Mr. Ritter does not meet the independence standards because he had been employed by the Corporation and/orThis constitutes more than a subsidiary during the past three (3) years, andmajority of our Board of Directors. Mr. Seibel is not independent because he is the brother of Douglas A. Seibel, Executive Vice President/Chief Lending & Revenue Officer of ACNB Bank. This constitutes more than a majority of our Board of Directors. Only independent directors serve on our Audit Committee, Compensation Committee, and Nominating Committee.
Leadership Structure
The Corporation chooses to separate the roles of Chairman and President & Chief Executive Officer. The President & Chief Executive Officer is responsible for implementing the strategic direction of the Corporation, as determined by the Board of Directors, and for the day-to-day leadership and performance of the Corporation. The Chairman oversees the agenda for and presides over Board of Director meetings, as well as provides leadership to the Board and facilitates communication between the Board of Directors and executive management. The Corporation'sCorporation’s Chairman of the Board is considered independent under the SEC and Nasdaq standards for independence.
Risk Oversight
The Board of Directors has a role in overseeing the Corporation'sCorporation’s risks as a whole and at the committee level. The Audit Committee is primarily responsible for overseeing the risks the Corporation faces on behalf of the Board of Directors. TheIn doing so, the Audit Committee works closely with the Corporation'sCorporation’s Chairman of the Board, President & Chief Executive Officer, and ACNB Bank'sBank’s Chief Risk & Governance Officer, as well as with other members of management with respect to matters relating to risk management. The Audit Committee receives reports on risk management and the processes in place to monitor and control such exposures. The Audit Committee may also receive updates, from time to time, between meetings from management relating to risk oversight matters. The Audit Committee provides updates on its risk management activities to the full Board of Directors via the committee'scommittee’s meeting minutes. Further, members of management may make presentations on risk management to the full Board of Directors or another committee of the Board of Directors.
In addition to the Audit Committee, other committees of the Board of Directors consider the risks within their areas of responsibility. For example, the Compensation Committee considers the risks that may
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be implicated by the Corporation'sCorporation’s compensation practices. Also, the Strategic Planning Committee assesses the risks associated with the Corporation'sCorporation’s strategic plan and executive management succession plans.
plan.
Director Independence
In determining each director'sdirector’s and nominee'snominee’s independence, the Board of Directors considered loan transactions between ACNB Bank and the individuals, their family members, and businesses with which they are associated. The table below includes a description of other categories or types of transactions, relationships or arrangements considered by the Board (in addition to those listed above and those transactions set forth under "Transactions“Transactions with Directors and Executive Officers"Officers” below) in reaching its determination that the directors are independent.
| Name | | | Independent | | | Other Transactions/ Relationships/Arrangements | |
| | | Yes | | | None | |
| | | Yes | | | None | |
| | | Yes | | | None | |
| | | Yes | | |||
| | Legal Services | | ||||
James J. Lott | | | Yes | | | None | |
Donna M. Newell | | | Yes | | Engineering Services | | |
| | | Yes | | | None | |
| | | Yes | | | None | |
Marian B. Schultz | | | Yes | | | None | |
David L. Sites | | | Yes | | | None | |
Alan J. Stock | | | Yes | | | None | |
James E. Williams | | | Yes | | None | |
In each case, the Board of Directors determined that none of the transactions impaired the independence of the director.
Directors of ACNB Corporation
The following table sets forth, as of March 16, 202015, 2021 (in alphabetical order), selected information about the Corporation'sCorporation’s directors and director nominees.
| Name | | | Class of Director | | | Director Since | | | Age as of March 15, 2021 | | |||||||||
| Kimberly S. Chaney | | | | | 3 | | | | | | 2020 | | | | | | 59 | | |
| Frank Elsner, III | | | | | 3 | | | | | | 2002 | | | | | | 60 | | |
| James P. Helt | | | | | 3 | | | | | | 2017 | | | | | | 54 | | |
| Todd L. Herring, Vice Chairman | | | | | 1 | | | | | | 2017 | | | | | | 59 | | |
| Scott L. Kelley | | | | | 3 | | | | | | 2012 | | | | | | 69 | | |
| James J. Lott | | | | | 1 | | | | | | 2007 | | | | | | 58 | | |
| Donna M. Newell | | | | | 2 | | | | | | 2012 | | | | | | 50 | | |
| Daniel W. Potts | | | | | 3 | | | | | | 2004 | | | | | | 68 | | |
| Thomas A. Ritter | | | | | 2 | | | | | | 2001 | | | | | | 69 | | |
| Marian B. Schultz | | | | | 1 | | | | | | 1992 | | | | | | 71 | | |
| D. Arthur Seibel, Jr. | | | | | 2 | | | | | | 2017 | | | | | | 62 | | |
| David L. Sites | | | | | 2 | | | | | | 2010 | | | | | | 65 | | |
| Alan J. Stock, Chairman | | | | | 2 | | | | | | 2005 | | | | | | 63 | | |
| James E. Williams | | | | | 1 | | | | | | 2007 | | | | | | 67 | | |
Name | Class of Director | Director Since | Age as of March 16, 2020 | ||||
|---|---|---|---|---|---|---|---|
Richard L. Alloway II | 2 | 2015 | 52 | ||||
Kimberly S. Chaney | 3 | 2020 | 58 | ||||
Frank Elsner, III | 3 | 2002 | 59 | ||||
James P. Helt | 3 | 2017 | 53 | ||||
Todd L. Herring | 1 | 2017 | 58 | ||||
Scott L. Kelley | 3 | 2012 | 68 | ||||
James J. Lott | 1 | 2007 | 57 | ||||
Donna M. Newell | 2 | 2012 | 49 | ||||
J. Emmett Patterson | 1 | 2012 | 72 | ||||
Daniel W. Potts | 3 | 2004 | 67 | ||||
Thomas A. Ritter | 2 | 2001 | 68 | ||||
Marian B. Schultz | 1 | 1992 | 70 | ||||
D. Arthur Seibel, Jr. | 2 | 2017 | 61 | ||||
David L. Sites | 2 | 2010 | 64 | ||||
Alan J. Stock, Chairman | 2 | 2005 | 62 | ||||
James E. Williams | 1 | 2007 | 66 | ||||
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Executive Officers of ACNB Corporation
The following table sets forth, as of March 16, 2020,15, 2021, selected information about the Corporation'sCorporation’s Executive Officers, each of whom is appointed by the Board of Directors and each of whom holds office at the Board'sBoard’s discretion.
Name and Position | | Position Held | | | | Age as of | March | | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
James P. Helt | | | | | | | | ||||||
President & Chief Executive Officer of ACNB Corporation | | | 2017-Present | | | | |||||||
Chief Executive Officer of ACNB Bank | | | 2017-Present | | | | | ||||||
President of ACNB Bank | | | 2015-Present | | | | | ||||||
Executive Vice President of Banking Services of ACNB Bank | | | 2008-2015 | | | ||||||||
Lynda L. Glass | | | | ||||||||||
Chief Governance Officer | | | 2011-Present | | | | |||||||
Secretary | | | 2008-Present | | | ||||||||
Secretary & Treasurer | | | 2006-2008 | | | ||||||||
Executive Vice President | | | 2003-Present | | | ||||||||
Assistant Secretary | | | 1993-2003 | | | ||||||||
David W. Cathell | | | | ||||||||||
Executive Vice President/Treasurer & Chief Financial Officer | | | 2008-Present | | | | |||||||
Senior Vice President | | | 2007-2008 | | | ||||||||
Principal Financial Officer | | | 2006-2007 | | | | | ||||||
Meetings and Committees of the Board of Directors
The Board of Directors of ACNB Corporation met fourteen (14)thirteen (13) times during 2019.2020. The Corporation maintains an Audit Committee (which is established in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934), Executive Committee, Compensation Committee, Nominating Committee, and Strategic Planning Committee. A total of thirty-six (36)forty-three (43) Board and committee meetings of the Corporation'sCorporation’s Board of Directors were held in 2019.2020. During 2019,2020, each of the directors attended at least 75% of the combined total number of meetings of the Corporation'sCorporation’s Board of Directors and the committees of which he or she was a member. The Board of Directors has a written attendance policy statement which encourages and expects each director to attend the Annual Meeting of Shareholders. Thirteen (13)All directors of fifteen (15) attended the 20192020 Annual Meeting of Shareholders. We expect that all the Directorsdirectors will attend the 20202021 Annual Meeting of Shareholders.
Audit Committee. Members of the Audit Committee in 2019at December 31, 2020, were Daniel W. Potts, who served as Chair, Richard L. Alloway II, Frank Elsner, III,Kimberly S. Chaney, Todd L. Herring, James J. Lott, Alan J. Stock and James E. Williams. Each of these directors is "independent"“independent” as defined in the SEC and Nasdaq standards for independence. In addition, James P. Helt, David W. Cathell and Lynda L. Glass were invited to attend committee meetings. The principal duties of the Audit Committee, as set forth in its charter, include reviewing the Corporation'sCorporation’s financial reporting process and systems of internal accounting and financial controls; reviewing significant audit and accounting principles, policies and practices; reviewing performance of internal auditing procedures; overseeing risk management; and, recommending annually to the Board of Directors the engagement of an independent auditor. The Audit Committee has a charter which is available under the Governance Documents section of the Investor Relations/ACNB Corporation page of ACNB Bank'sInvestor Relations website at www.acnb.com.investor.acnb.com. The Audit Committee met six (6)five (5) times during 2019.2020.
Executive Committee. Members of the Executive Committee in 2019at December 31, 2020, were Frank Elsner, III, who served as Chair until November 19, 2019, Scott L. Kelley, Daniel W. Potts, Marian B. Schultz, David L. Sites, Alan J. Stock, who served as Chair, from November 19, 2019, until December 31, 2019,James P. Helt, Todd L. Herring, Scott L. Kelley, James J. Lott, Daniel W. Potts, D. Arthur Seibel, Jr., David L. Sites and James E. Williams. As of November 19, 2019 and December 17, 2019, James P. Helt and Todd L. Herring were added as members of the Executive Committee, respectively. In addition, David W. Cathell and Lynda L. Glass were invited to attend specific committee meetings. The principal duties of the Executive Committee
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are to act on behalf of the Board between meetings and to develop and maintain corporate governance policies. The Executive Committee has a charter which is available under the Governance Documents section of the Investor Relations/ACNB Corporation page of ACNB Bank'sInvestor Relations website at www.acnb.com.investor.acnb.com. The Executive Committee met two (2)eleven (11) times during 2019.2020.
Compensation Committee. Members of the Compensation Committee in 2019at December 31, 2020, were James E. Williams, who served as Chair, Frank Elsner, III, Todd L. Herring, Scott L. Kelley, James J. Lott, Donna M. Newell J. Emmett Patterson and Alan J. Stock. Each of these directors is "independent"“independent” as defined in the SEC and Nasdaq standards for independence. The principal duties of the Compensation Committee include evaluating and recommending to the Board of Directors the executive officer and director compensation plans, policies and programs of the Corporation. The Compensation Committee has a charter which is available under the Governance Documents section of the Investor Relations/ACNB Corporation page of ACNB Bank'sInvestor Relations website at www.acnb.com.investor.acnb.com. The Compensation Committee met six (6)four (4) times during 2019.2020.
Nominating Committee. Members of the Nominating Committee in 2019at December 31, 2020, were Marian B. Schultz,James J. Lott, who served as Chair, Richard L. Alloway II, Frank Elsner, III, James J. Lott, Donna M. Newell, Marian B. Schultz, David L. Sites, Alan J. Stock and James E. Williams. Each of these directors is "independent"“independent” as defined in the SEC and Nasdaq standards for independence. The principal duties of the Nominating Committee include identifying qualified individuals to serve on the Board and recommending nominees to the Board. The Nominating Committee has a charter which is available under the Governance Documents section of the Investor Relations/ACNB Corporation page of ACNB Bank'sInvestor Relations website at www.acnb.com.investor.acnb.com. The Nominating Committee met two (2) times during 2019.2020.
Strategic Planning Committee. Members of the Strategic Planning Committee in 2019at December 31, 2020, were Alan J. Stock,D. Arthur Seibel, Jr., who served as Chair, Richard L. Alloway II, Frank Elsner, III, James P. Helt, Todd L. Herring, Scott L. Kelley, Daniel W. Potts, Thomas A. Ritter, Marian B. Schultz and D. Arthur Seibel, Jr.Alan J. Stock. In addition, David W. Cathell and Lynda L. Glass were invited to attend committee meetings. The principal duties of the Strategic Planning Committee include overseeing the development of and monitoring the progress of the Corporation'sCorporation’s strategic plan; keeping the Board of Directors informed of developments, trends and opportunities in the industry that might help improve the Corporation'sCorporation’s profitability, growth and/or customer service; and, establishing Board and seniorexecutive management succession plans. The Strategic Planning Committee has a charter which is available under the Governance Documents section of the Investor Relations/ACNB Corporation page of ACNB Bank'sInvestor Relations website at www.acnb.com.investor.acnb.com. The Strategic Planning Committee met six (6)eight (8) times during 2019.2020.
Shareholder Communications
The Board of Directors has formal shareholder communications processes for the submission of shareholder proposals and nomination of directors, as described below. In addition, shareholders may contact any member of the Board personally, by telephone or by written correspondence including email. Written communications received by the Corporation from shareholders are shared with the full Board as deemed appropriate.
Submission of Shareholder Proposals
In order for a shareholder proposal (other than director nominations) to be considered for inclusion in ACNB Corporation'sCorporation’s proxy statement for next year'syear’s annual meeting, the written proposal must be received by the Corporation no later than December 1, 2020.November 30, 2021. Proposals may be sent to Lynda L. Glass, Executive Vice President/Secretary & Chief Governance Officer of ACNB Corporation, at 16 Lincoln Square, P.O. Box 3129, Gettysburg, Pennsylvania 17325.
All proposals must comply with SEC regulations regarding the inclusion of shareholder proposals in company-sponsored proxy materials. If a shareholder proposal is submitted to the Corporation after December 1, 2020,November 30, 2021, 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 20212022 proxy statement.
Employee Code of Ethics
Since May 1994, ACNB Bank, formerly Adams County National Bank, has had a Conflict of Interest/Code of Ethics. In 2003, as required by law and regulation, the Corporation'sCorporation’s Board of Directors adopted a
6
Code of Ethics which is applicable to our directors, officers and employees, and which has been amended as necessary from time to time.
The Code of Ethics encourages individuals to report any conduct that they believe in good faith to be an actual or apparent violation of the Code of Ethics to ACNB Corporation'sCorporation’s Chief Governance Officer. The Code of Ethics is available under the Governance Documents section of the Investor Relations/ACNB Corporation page of ACNB Bank'sInvestor Relations website at www.acnb.com.
ELECTION OF DIRECTORS
Nomination of Directors
The Corporation has a standing Nominating Committee with a charter. Recommendations to the Board of Directors as to the nominees for election as directors at the Annual Meeting of Shareholders are provided by the Nominating Committee. The Nominating Committee will consider shareholder-recommended nominees for director, and shareholders who desire 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, Sections 202, 203 and 207(b), of the Corporation'sCorporation’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 fourteen (14) days prior to the date of any shareholder meeting called for the election of directors.
Qualification and Nomination of Directors
The Corporation'sCorporation’s Articles of Incorporation authorize the number of directors to be not less than five (5) and not more than twenty-five (25). Further, the Corporation'sCorporation’s Articles of Incorporation and Bylaws provide for three (3) classes of directors with staggered terms of office of three (3) years that expire at successive annual meetings. Pursuant to Article II, Section 207(b), of the Corporation'sCorporation’s Bylaws, no director or nominee shall stand for election, if as of the date of election, he or she shall have attained the age of seventy-two (72) years old. Currently, the number of directors is set at sixteen (16)fourteen (14): Class 1 consists of five (5)four (4) directors, Class 2 consists of six (6)five (5) directors, and Class 3 consists of five (5) directors. As previously announced, Mr. Patterson, a Class 1 Director, will be resigning from the Board of Directors effective May 5, 2020.
The Nominating Committee believes that a director nominee must have the following attributes/qualifications before being recommended as a nominee: stock ownership in the Corporation, the willingness to commit time, a commitment to independence, a commitment to the Corporation'sCorporation’s community, financial competence, a good reputation, integrity, good communication skills, and the willingness and ability to speak up for the interests of the Corporation. A director nominee shall also have expertise that strengthens the Board of Directors. When evaluating potential director nominees, the Nominating Committee considers the skills and expertise of the current Board members and seeks director nominees with knowledge, skills and abilities that enhance and complement—rather than duplicate—the experiences and skills already represented on the Board of Directors. Further, the Nominating Committee ensures director nominees complement the Corporation'sCorporation’s strategic vision and direction, a fundamental priority for the Board of Directors. The Nominating Committee follows the same process for evaluating shareholder-recommended nominees for director.
The Nominating Committee does not have a formal policy with respect to diversity; however, the Board and the Nominating Committee believe that it is essential that members of the Board of Directors represent diverse viewpoints and experience. In considering candidates for the Board, the Nominating Committee considers the entirety of each candidate'scandidate’s credentials in the context of these standards.
The Board of Directors nominated incumbent directors Kimberly S. Chaney, Frank Elsner, III, James P. Helt, ScottDonna M. Newell, D. Arthur Seibel, Jr., David L. KelleySites and Daniel W. PottsAlan J. Stock to serve as Class 32 Directors until the expiration of the term of the class or until their earlier death, resignation or removal from office.
The proxyholders intend to vote all proxies for the election of each of the nominees named below, unless you indicate that your vote should be withheld from any or all of them.
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The Board of Directors proposes the following nominees for election as Class 32 Directors at the annual meeting:
Class 32 Director Nominees
| | Donna M. Newell | | | David L. Sites | |
| D. Arthur Seibel, Jr. | |||||
| | |||||
| |
The Board of Directors recommends that shareholders voteFOR the proposal to elect the nominees listed above.
Information as to Nominees and Directors
Set forth below, as of March 16, 2020,15, 2021, are the principal occupations and certain other information regarding nominees for director and continuing directors including the experience, qualifications, attributes or skills that contribute to the nominee'snominee’s or director'sdirector’s ability to oversee the management of the Corporation. Unless otherwise specified, all business experience is for the past five (5) years in the same or similar position. You will find information about their share ownership on pages 1311 through 15.
13.
Class 1 Directors (to(to serve until 2022)
| | |||||
| Todd L. Herring | | | Mr. Herring, age | | |
| James J. Lott | | | Mr. Lott, age | |
Marian B. Schultz | | Ms. Schultz, age |
| |
8
| James E. Williams | | | Mr. Williams, age | |
Class 2 Directors(to serve until 2024 if duly elected and qualified)
| ||||
Donna M. Newell | | Ms. Newell, age | ||
| | ||||
| D. Arthur Seibel, Jr. | | | Mr. | |
| | ||||
| David L. Sites | | | Mr. Sites, age |
| | |||||
| | Alan J. Stock | | | Mr. Stock, age | |
9
Class 3 Directors (to serve until 2023)
Kimberly S. Chaney | | | Ms.��Chaney, age | |
| Frank Elsner, III | | | Mr. Elsner, age |
| | |||||
| | James P. Helt | | | Mr. Helt, age | |
| Scott L. Kelley, Esquire | | | Mr. Kelley, age | |
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| | | | | real estate law; agricultural law; oil, gas and mineral law; and, estate planning and administration, as well as from his experience in the insurance industry. | |
| Daniel W. Potts | | | Mr. Potts, age | |
Principal Shareholders
As
The following table sets forth, as of JanuaryDecember 31, 2020, to the best of the Board of Directors knowsDirectors’ knowledge, the name and address of noeach person or entity who owns of record or who is known to be the beneficial owner of more than 5% of the Corporation'sCorporation’s outstanding common stock.
| Name and Address of Beneficial Owner | | | Amount and Nature of Beneficial Ownership(1) | | | Percentage of Class | |
| BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | | | 511,482(1) | | | 5.87% | |
(1)
On a Schedule 13G filed with the SEC on February 2, 2021, BlackRock, Inc. reported sole voting power with respect to 501,172 shares of the Corporation’s common stock and sole dispositive power with respect to 511,482 shares of the Corporation’s common stock.
Beneficial Ownership of Named Executive Officers, Directors and Nominees
The following table sets forth, as of JanuaryDecember 31, 2020, and from information received from the respective individuals, the amount and percentage of the common stock beneficially owned by each director, each nominee for director, each Named Executive Officer, and all Named 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.
Beneficial ownership of shares of ACNB Corporation common stock is determined in accordance with SEC Rule 13d-3, which provides that a person should be credited with the ownership of any stock
held, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:
•
Voting power, which includes the power to vote or to direct the voting of the stock; or,
•
•
Investment power, which includes the power to dispose or direct the disposition of the stock; or,
•
•
The right to acquire beneficial ownership within sixty (60) days after JanuaryDecember 31, 2020.
Unless otherwise indicated in a footnote appearing below the table, all shares reported in the table below are owned directly and individually by the reporting person. The number of shares owned by the directors, nominees and Named Executive Officers is rounded to the whole share.
Name of Individual or Identity of Group | | Amount and Nature of Beneficial Ownership(1) | | Percentage of Class | | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Class 1 Directors | | | | | | | | ||||
Todd L. Herring | | | 6,137 | (2) | | | — | | | ||
James J. Lott | | | 10,359 | (3) | | | — | | | ||
J. Emmett Patterson | | | 3,777 | (4) | | | — | | | ||
Marian B. Schultz | | | 9,097 | (5) | | | — | | | ||
James E. Williams | | | 10,013 | | | | — | | | ||
Class 2 Directors | | | | | | | | ||||
Richard L. Alloway II | | | 3,416 | | | | — | | | ||
Donna M. Newell | | | 6,764 | (6) | | | — | | | ||
Thomas A. Ritter | | | 14,580 | (7) | | | — | | | ||
D. Arthur Seibel, Jr. | | | 28,493 | (8) | | | — | | | ||
David L. Sites | | | 32,967 | (9) | | | — | | | ||
Alan J. Stock | | | 81,484 | (10) | | | — | | | ||
Class 3 Directors | | | | | | | | ||||
Kimberly S. Chaney | | | 5,939 | (11) | | | — | | | ||
Frank Elsner, III | | | 20,256 | (12) | | | — | | | ||
James P. Helt | | | 10,997 | (13) | | | — | | | ||
Scott L. Kelley | | | 16,284 | (14) | | | — | | | ||
Daniel W. Potts | | | 4,047 | | | | — | | | ||
Named Executive Officers | | | | | | | | ||||
Lynda L. Glass | | | 10,519 | (15) | | | — | | | ||
Executive Vice President/ | | | | | | | | ||||
David W. Cathell | | | 16,010 | (16) | | | — | | | ||
Executive Vice President/ | | | | | | | | ||||
All Named Executive Officers, Directors and Nominees as a Group (16 Directors/Nominees, 3 Executive Officers, 18 persons in total) | | | 291,139 | | | | 3.36 | % | | ||
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Name of Individual or Identity of Group Amount and Nature of
Beneficial Ownership(1) Percentage of
Class Class 1 Directors Todd L. Herring 7,733(2) — James J. Lott 13,489(3) — Marian B. Schultz 10,715(4) — James E. Williams 11,424 — Class 2 Directors Donna M. Newell 7,992(5) — Thomas A. Ritter 15,854(6) — D. Arthur Seibel, Jr. 29,969(7) — David L. Sites 38,929(8) — Alan J. Stock 83,118(9) — Class 3 Directors Kimberly S. Chaney 6,421(10) — Frank Elsner, III 21,986(11) — James P. Helt 13,692(12) — Scott L. Kelley 18,972(13) — Daniel W. Potts 6,165 — Named Executive Officers Lynda L. Glass
Executive Vice President/
Secretary & Chief Governance
Officer of ACNB Corporation 12,324(14) — David W. Cathell
Executive Vice President/
Treasurer & Chief Financial
Officer of ACNB Corporation 17,384(15) — All Named Executive Officers, Directors and Nominees as
a Group (14 Directors/Nominees, 3 Executive Officers,
16 persons in total) 316,167 3.63% (1)The securities"beneficially owned"“beneficially owned” by an individual are determined in accordance with the definitions of"beneficial ownership"“beneficial ownership” set forth in the General Rules and Regulations of the SEC and may include securities owned by or for theindividual'sindividual’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 ownershipwithin sixty (60) days after
JanuaryDecember 31, 2020. Beneficial ownership may be disclaimed as to certain of the securities.(2)Figure includes3,2584,814 shares held solely by Mr. Herring;947987 shares held in a trust for the benefit of Mr. Herring; 172 shares owned individually by his spouse; 880 shares held in hisspouse's 401(k) account;spouse’s IRA; and, 880 shares held in a trust for the benefit of a child.(3)(3)Figure includes3,2834,413 shares held solely by Mr. Lott;6,0768,076 shares held jointly with Mr.Lott'sLott’s spouse; and, 1,000 shares held in his IRA.(4)(4)Figure includes3,277 shares held solely by Mr. Patterson and 500 shares held jointly with Mr. Patterson's spouse.(5)Figure includes 2,9974,115 shares held solely by Ms. Schultz; 1,000 shares held jointly with Ms.Schultz'sSchultz’s spouse; and,5,1005,600 shares held solely by Ms.Schultz'sSchultz’s spouse.(5)(6)Figure includes2,9974,115 shares held solely by Ms. Newell;2,6092,719 shares held jointly with Ms.Newell'sNewell’s spouse; 905 shares held in her IRA; and, 253 shares held in Ms.Newell's spouse'sNewell’s spouse’s IRA.(6)(7)Figure includes9,44310,717 shares held solely by Mr. Ritter; 1,814 shares held jointly with Mr.Ritter'sRitter’s spouse; and, 3,323 shares held solely by Mr.Ritter'sRitter’s spouse.12
Figure includes 1,2982,342 shares held solely by Mr. Seibel; 10,29210,724 shares held in a trust for the benefit of Mr. Seibel; and, 16,903 shares held in his IRA.
(8)
(9)
Figure includes 3,8134,965 shares held solely by Mr. Sites; 9,184 shares held jointly with Mr. Sites' spouse; 16,78731,175 shares held in his IRA; 1,657IRAs; 2,763 shares held in Mr. Sites' spouse's IRA; 1,500 shares held in an investment partnership;Sites’ spouse’s IRAs; and, 26 shares held in a family trust of which Mr. Sites is trustee.
(9)
(10)
Figure includes 3,8135,447 shares held solely by Mr. Stock; 28,972 shares held jointly with Mr. Stock'sStock’s spouse; 3,299 shares held in his IRA; 7,601 shares held in Mr. Stock's spouse'sStock’s spouse’s IRA; and, 37,799 shares owned by Mr. Stock'sStock’s mother over which he has power of attorney.
(10)
(11)
Figure includes 49531 shares held solely by Ms. Chaney and 5,890 shares held jointly with Ms. Chaney'sChaney’s spouse.
(11)
(12)
Figure includes 4,7025,932 shares held solely by Mr. Elsner; 14,301 shares held jointly with Mr. Elsner'sElsner’s spouse; and, 1,2531,753 shares held in his IRA.
(12)
(13)
Figure includes 6,7208,898 shares held solely by Mr. Helt; 7521,202 shares held jointly with Mr. Helt'sHelt’s spouse; and, 3,5253,592 shares held in his IRA.
(13)
(14)
Figure includes 1,143749 shares held solely by Mr. Kelley; 2,4174,958 shares held jointly with Mr. Kelley'sKelley’s spouse; and, 12,72413,265 shares held in his IRA.
(14)
(15)
Figure includes 5,8767,324 shares held solely by Ms. Glass and 4,6435,000 shares held jointly with Ms. Glass'Glass’ spouse.
(15)
(16)
Figure includes 5,8207,194 shares held solely by Mr. Cathell; 1,785 shares held jointly with Mr. Cathell'sCathell’s spouse; and, 8,405 shares held in his IRA.
Compensation of the Board of Directors of ACNB Corporation and Subsidiaries
Directors of the Corporation are not compensated for their services. Further,services as set forth below. ACNB Bank does not compensate employee directors for attendance at Board of Directors meetings or committee meetings. The Compensation Committee annually reviews and recommends to the Board of Directors the compensation levels and elements for directors. Since April 1, 2019,2020, ACNB Bank'sBank’s non-employee directors have been compensated for their services rendered to the Corporation and to ACNB Bank as follows:
•
$23,000 annual retainer;
•
•
$800 per Board meeting;
•
•
$500 per committee meeting;
•
•
$200 for committee chair per meeting, unless otherwise specified;
•
•
$7501,000 for Audit Committee chair per meeting;
•
•
$750 for Compensation Committee chair per meeting;
•
•
$35,000 annually for Chairman of the Board;
•
•
$10,000 annually for Vice Chairman of the Board;
•
•
$600 allowance for a half-day seminar plus expenses, if applicable, and $1,000 allowance for a full-day seminar plus expenses, if applicable; and,
•
•
$125 per hour for continuing education by external, online web-basedvia online/webinar training, given preapproval.
Pursuant to a board approved plan, at the director'sdirector’s election, fifty percent (50%) or one hundred percent (100%) of each director'sdirector’s annual retainer, as paid on a quarterly basis, is paid as ACNB Corporation common stock in lieu of directors fees through the Corporation'sCorporation’s Dividend Reinvestment and Stock Purchase Plan.
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The following table summarizes the compensation of directors during 2019.2020.
| Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(1) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($)(2) | | | Total ($) | | |||||||||||||||
Richard L. Alloway II(3) | | | | $ | 16,508 | | | | | | — | | | | | | — | | | | | $ | 203 | | | | | $ | 16,711 | | |
| Kimberly S. Chaney | | | | $ | 48,275 | | | | | | — | | | | | | — | | | | | $ | 362 | | | | | $ | 48,637 | | |
| Frank Elsner, III | | | | $ | 70,488(4) | | | | | $ | 12,653 | | | | | | — | | | | | $ | 532 | | | | | $ | 83,673 | | |
| Todd L. Herring | | | | $ | 60,333(5) | | | | | $ | 12,653 | | | | | | — | | | | | $ | 515 | | | | | $ | 73,501 | | |
| Scott L. Kelley | | | | $ | 60,731(6) | | | | | $ | 12,653 | | | | | | — | | | | | $ | 1,622 | | | | | $ | 75,006 | | |
| James J. Lott | | | | $ | 52,325 | | | | | $ | 12,653 | | | | | | — | | | | | $ | 375 | | | | | $ | 65,353 | | |
| Donna M. Newell | | | | $ | 37,025 | | | | | $ | 12,653 | | | | | | — | | | | | $ | 323 | | | | | $ | 50,001 | | |
J. Emmett Patterson(7) | | | | $ | 14,667 | | | | | | — | | | | | | — | | | | | $ | 1,517 | | | | | $ | 16,184 | | |
| Daniel W. Potts | | | | $ | 60,050(8) | | | | | $ | 12,653 | | | | | | — | | | | | $ | 1,452 | | | | | $ | 74,155 | | |
| Thomas A. Ritter | | | | $ | 61,675(9) | | | | | $ | 12,653 | | | | | | — | | | | | | — | | | | | $ | 74,328 | | |
| Marian B. Schultz | | | | $ | 53,600 | | | | | $ | 12,653 | | | | | | — | | | | | $ | 1,840 | | | | | $ | 68,093 | | |
| D. Arthur Seibel, Jr. | | | | $ | 61,706 | | | | | $ | 12,653 | | | | | | — | | | | | $ | 730 | | | | | $ | 75,089 | | |
| David L. Sites | | | | $ | 58,050 | | | | | $ | 12,653 | | | | | | — | | | | | $ | 636 | | | | | $ | 71,339 | | |
| Alan J. Stock | | | | $ | 100,894(10) | | | | | $ | 12,653 | | | | | | — | | | | | $ | 795 | | | | | $ | 114,342 | | |
| James E. Williams | | | | $ | 58,225 | | | | | $ | 12,653 | | | | | | — | | | | | $ | 747 | | | | | $ | 71,625 | | |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(2) | Total ($) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Richard L. Alloway II | $ | 41,588 | $ | 18,235 | — | $ | 189 | $ | 60,012 | |||||||
Frank Elsner, III | $ | 104,238 | (3) | $ | 18,235 | — | $ | 483 | $ | 122,956 | ||||||
Todd L. Herring | $ | 45,525 | $ | 18,235 | — | $ | 464 | $ | 64,224 | |||||||
Scott L. Kelley | $ | 58,388 | (4) | $ | 18,235 | — | $ | 1,448 | $ | 78,071 | ||||||
James J. Lott | $ | 48,425 | $ | 18,235 | — | $ | 340 | $ | 67,000 | |||||||
Donna M. Newell | $ | 37,638 | $ | 18,235 | — | $ | 300 | $ | 56,173 | |||||||
J. Emmett Patterson | $ | 36,913 | $ | 18,235 | — | $ | 1,265 | $ | 56,413 | |||||||
Daniel W. Potts | $ | 63,463 | (5) | $ | 18,235 | — | $ | 1,286 | $ | 82,984 | ||||||
Thomas A. Ritter | $ | 57,563 | (6) | $ | 18,235 | — | — | $ | 75,798 | |||||||
Marian B. Schultz | $ | 46,763 | $ | 18,235 | — | $ | 1,708 | $ | 66,706 | |||||||
D. Arthur Seibel, Jr. | $ | 50,463 | $ | 18,235 | — | $ | 648 | $ | 69,346 | |||||||
David L. Sites | $ | 51,313 | $ | 18,235 | — | $ | 558 | $ | 70,106 | |||||||
Alan J. Stock | $ | 66,513 | (7) | $ | 18,235 | — | $ | 727 | $ | 85,475 | ||||||
James E. Williams | $ | 56,963 | $ | 18,235 | — | $ | 666 | $ | 75,864 | |||||||
(1)
(1)- Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for restricted stock granted on June
14, 2019,15, 2020, pursuant to the ACNB Bank Variable Compensation Plan under theCorporation'sCorporation’s 2018 Omnibus Stock Incentive Plan.
(2)
(2)
Represents the tax reportable imputed income attributed to the director supplemental life insurance plan.
(3)
Mr. Alloway resigned from the Board of Directors on June 9, 2020.
(4)
(3)
Includes $34,050$4,375 paid in 20192020 as Chairman of the Board, and $4,100$4,550 paid in 20192020 for Board meetings of Russell Insurance Group, Inc.
(5)
(4)
Includes $4,100$5,833 paid in 20192020 as Vice Chairman of the Board.
(6)
Includes $4,550 paid in 2020 for Board meetings of Russell Insurance Group, Inc.
(7)
Mr. Patterson retired from the Board of Directors at the 2020 Annual Meeting of Shareholders.
(8)
(5)
Includes $3,450$3,900 paid in 20192020 for Board meetings of Russell Insurance Group, Inc.
(9)
(6)
Includes $6,050$6,650 paid in 20192020 for Board meetings of Russell Insurance Group, Inc.
(10)
(7)
Includes $9,675$31,875 paid in 20192020 as Chairman and Vice Chairman of the Board.Board, and $3,900 paid in 2020 for Board meetings of Russell Insurance Group, Inc.
Director Deferred Fee Plan
In January 2001, ACNB Bank established a director deferred fee plan. Directors Alloway, Elsner, Herring, Kelley, Lott, Newell, Patterson, Schultz, Sites, Stock and Williams participated in 2019.2020. Directors may defer up to 100% of the director'sdirector’s income. Benefits are payable upon termination of service, change of control, and by specific participant election in accordance with IRS Code Section 409A. The deferred fees earn interest, and the interest and plan expenses are funded by bank-owned life insurance (BOLI).
Variable Compensation Plan
Effective January 1, 2018, the ACNB Bank Variable Compensation Plan was amended to allow directors to participate under the same terms as employees in order to better align the interests of the directors with the shareholders and to place similar restrictions, as placed upon employees who are granted
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restricted stock, on grants of shares from the 2009 RestrictedACNB Corporation 2018 Omnibus Stock Incentive Plan, or aany successor plan, or any similar plan under which equity awards may be granted and the directors are eligible to participate, as the restrictions placed upon employees who are granted restricted stock.participate. On June 14, 2019, each director
was15, 2020, eligible non-employee directors were granted a variable equity award of 500 shares of restricted stock, based upon prior year organizational performance, pursuant to the Variable Compensation Plan under the 2018 Omnibus Stock Incentive Plan. One-third (1/∕3) of this award became 100% vested as of the grant date of June 14, 2019,15, 2020, with the next one-third (1/∕3) 100% vested as of January 1, 2020,2021, and the final one-third (1/∕3) 100% vested as of January 1, 2021.2022.
Director Supplemental Life Insurance Plan
ACNB Bank has a director supplemental life insurance plan. All non-employee directors are eligible for the life insurance benefit. The plan currently insures thirteen (13)twelve (12) directors. The director life insurance benefit of $250,000 per participating director shall be provided unless the director separates from service prior to reaching the retirement age without at least nine (9) years of service, in which case the benefit is $100,000. This life insurance benefit is funded through a single premium BOLI program because BOLI is a more cost-efficient way of providing the benefits. The amounts of death benefits is the amount set forth in the individual'sindividual’s policy endorsement. The eligible participating directors are not required to pay any premiums on the life insurance policy, but have the imputed value of the insurance coverage included in their taxable incomes.
Long-Term Care Insurance
ACNB Bank provides long-term care insurance to directors, and eligibility is subject to medical underwriting acceptance. The plan currently insures ten (10)eleven (11) directors. The eligible participating directors are not required to pay any premiums. The long-term care insurance provides a monthly maximum base benefit of $4,000 for long-term care needs.
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EXECUTIVE COMPENSATION
Determination of Executive Compensation
The Compensation Committee is charged with recommending to the Board of Directors of ACNB Corporation the compensation for all executive officers of ACNB Corporation and its subsidiaries. The Committee may form and delegate authority to subcommittees or delegate authority to management when appropriate, as well as retain or obtain the advice of a compensation consultant, legal counsel, or other adviser.
Compensation Objectives and Policies
The primary objective of the Corporation'sCorporation’s compensation philosophy remains to attract, motivate, reward and retain executives who will maintain the safety and soundness of the Corporation and its subsidiaries. In addition, the Corporation'sCorporation’s compensation philosophy aims to sustain and enhance long-term investor value, enforce internal controls deemed appropriate by our auditors and regulators, and execute the strategic plans as prioritized by the Board of Directors.
The Compensation Committee and the Board of Directors of the Corporation seek to establish fair compensation policies in order to attract, motivate, reward and retain competent managers whose efforts will enhance the Corporation'sCorporation’s profitability and growth without exposing the Corporation to undue risk. The Compensation Committee treats compensation as an evolving process depending on the strategic objectives of the Corporation, as determined by the Board of Directors at that time.
The Role of the Named Executive Officers in Setting Compensation
The Named Executive Officers do not participate in the determination process of their respective annual base salaries and are not present when their respective compensation is discussed by the Compensation Committee or discussed and approved by the Board of Directors.
Mr. Helt, as President & Chief Executive Officer of the Corporation and ACNB Bank, provides insight to the Compensation Committee on the performance and compensation of the subsidiary bank'sbank’s executive officers including the other Named Executive Officers. He also assists in establishing performance goals and objectives for these executive officers.
The Compensation Process for the Named Executive Officers
| | |||||
| President & Chief Executive Officer of the Corporation and ACNB Bank | | | • Discusses the Named Executive | | |
| | • Is not present when his performance and compensation are discussed. | | |||
| Compensation Committee | | | • Reviews the performance of the President & Chief Executive Officer of the Corporation and the Bank in his absence. | |
| | • Reports on the performance of the Named Executive Officers and recommends the compensation levels to the Board of Directors. | | |||
| Board of Directors | | | • Without any Named Executive Officers participating or present, discusses the compensation levels of the Named Executive Officers and determines the levels of compensation. | |
| | • Uses its business judgment and the Compensation | |
The Role of a Consultant in Setting Compensation
The Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel, or other adviser. The Compensation Committee is directly responsible for retaining, determining the independence, determining if a conflict of interest exists, compensating, and overseeing the work of its advisers.
16
The Compensation Committee chose not to retain a compensation consultant for the year of 2019.2020. The Compensation Committee had previously engaged Mosteller & Associates, ("Mosteller"), a compensation consulting firm, in 2016. Given the thorough analysis presented by Mosteller & Associates and that 20192020 compensation awarded did not deviate from the Compensation Committee'sCommittee’s previous policies, it was determined that hiring a compensation consultant for 2019 would2020 was not be warranted.warranted especially in light of other priorities due to the COVID-19 pandemic. The Compensation Committee also reviewed and considered educational materials from various seminarswebinars and conferences, as well as other resources, as further explained inBenchmarking below.
Benchmarking
The Compensation Committee reviewed the information gathered from the proxies of their peer group, including the perquisites given to the Named Executive Officers from the peer institutions. It did not make any specific adjustment in any element of compensation based upon any specific information it received from other proxies, but is only used as an educational source as to the current trends in compensation.
The Compensation Committee also reviewed information it received from various seminars,webinars, conferences and publications. This information provides general compensation trends and is not used to specifically benchmark any specific element of executive compensation to any specific financial institution or group of financial institutions, but is only used as an educational source as to the current trends in compensation.
Summary Compensation Table
The following table summarizes the total compensation for 20192020 and 20182019 for James P. Helt, the Corporation'sCorporation’s President & Chief Executive Officer; David W. Cathell, the Corporation'sCorporation’s Executive Vice President/Treasurer & Chief Financial Officer; and, Lynda L. Glass, Executive Vice President/Secretary & Chief Governance Officer. These individuals are referred to as the Named Executive Officers.
| Name and Principal Position | | | Year | | | Salary ($)(1) | | | Bonus ($) | | | Stock Awards ($)(2) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | | | All Other Compensation ($) | | | Total ($) | | |||||||||||||||||||||
James P. Helt President & Chief Executive Officer of the Corporation(4) | | | | | 2020 | | | | | $ | 450,000 | | | | | $ | 59,500 | | | | | $ | 47,000 | | | | | $ | 161,502 | | | | | $ | 58,595(5) | | | | | $ | 776,597 | | |
| | | | 2019 | | | | | $ | 425,000 | | | | | $ | 56,000 | | | | | $ | 44,000 | | | | | $ | 140,074 | | | | | $ | 75,813(6) | | | | | $ | 740,887 | | | ||
David W. Cathell Executive Vice President/ Treasurer & Chief Financial Officer of the Corporation(7) | | | | | 2020 | | | | | $ | 261,779 | | | | | $ | 39,000 | | | | | $ | 28,000 | | | | | $ | 60,207 | | | | | $ | 12,841(8) | | | | | $ | 401,827 | | |
| | | | 2019 | | | | | $ | 250,000 | | | | | $ | 38,000 | | | | | $ | 27,000 | | | | | $ | 71,124 | | | | | $ | 22,469(9) | | | | | $ | 408,593 | | | ||
Lynda L. Glass Executive Vice President/ Secretary & Chief Governance Officer of the Corporation(10) | | | | | 2020 | | | | | $ | 276,161 | | | | | $ | 39,700 | | | | | $ | 29,800 | | | | | $ | 263,597 | | | | | $ | 72,439(11) | | | | | $ | 681,697 | | |
| | | | 2019 | | | | | $ | 263,300 | | | | | $ | 38,500 | | | | | $ | 29,000 | | | | | $ | 255,256 | | | | | $ | 75,024(12) | | | | | $ | 661,080 | | | ||
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Nonqualified Deferred Compensation Earnings ($)(2) | All Other Compensation ($) | Total ($) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
James P. Helt | 2019 | $ | 425,000 | $ | 56,000 | $ | 44,000 | $ | 140,074 | $ | 75,813 | (4) | $ | 740,887 | ||||||||
President & Chief Executive Officer of the Corporation(3) | 2018 | $ | 400,000 | $ | 37,000 | $ | 29,600 | $ | 59,830 | $ | 31,352 | (5) | $ | 557,782 | ||||||||
David W. Cathell | 2019 | $ | 250,000 | $ | 38,000 | $ | 27,000 | $ | 71,124 | $ | 22,469 | (7) | $ | 408,593 | ||||||||
Executive Vice President/ Treasurer & Chief Financial Officer of the Corporation(6) | 2018 | $ | 243,543 | $ | 27,000 | $ | 22,000 | $ | 72,910 | $ | 62,663 | (8) | $ | 428,116 | ||||||||
Lynda L. Glass | 2019 | $ | 263,300 | $ | 38,500 | $ | 29,000 | $ | 255,256 | $ | 75,024 | (10) | $ | 661,080 | ||||||||
Executive Vice President/ Secretary & Chief Governance Officer of the Corporation(9) | 2018 | $ | 255,625 | $ | 27,500 | $ | 22,000 | $ | 52,888 | $ | 58,489 | (11) | $ | 416,502 | ||||||||
(1)
- The salary shown for 2020 reflects an additional pay period for 27 total pay periods versus 26 total pay periods for a typical year.
The amount shown was deposited for a cash purchase of Corporation stock through the Corporation'sCorporation’s Dividend Reinvestment and Stock Purchase Plan and was issued as restricted stock grants pursuant to the ACNB Bank Variable Compensation Plan under the Corporation'sCorporation’s 2018 Omnibus Stock Incentive Plan.
(3)
(2)
The amounts shown represent the aggregate actuarial increase in the present value of the Named Executive Officer'sOfficer’s benefits under the pension plan and retirement income agreements.
17
Also serves as President & Chief Executive Officer of ACNB Bank and a director of Russell Insurance Group, Inc.
(5)
Includes 401(k) plan employer matching contribution of $11,400; deferred compensation accruals under his SERP of $40,985; imputed income of $810 related to supplemental life insurance; and, personal use of company car of $5,400.
(6)
(4)
Includes 401(k) plan employer matching contribution of $11,200; deferred compensation accruals under his SERP of $34,391; imputed income of $729 related to supplemental life insurance; personal use of company car of $4,493; and, merger-related work of $25,000.
(7)
(5)Includes 401(k) plan employer matching contribution of $11,000; deferred compensation accruals under his SERP of $5,067; imputed income of $646 related to supplemental life insurance; personal use of company car of $4,639; and, merger-related work of $10,000.
(6)
Also serves as Executive Vice President/Treasurer & Chief Financial Officer of ACNB Bank and Vice President & Treasurer of Russell Insurance Group, Inc.
(8)
Includes 401(k) plan employer matching contribution of $11,400 and imputed income of $1,441 related to supplemental life insurance.
(9)
(7)
Includes 401(k) plan employer matching contribution of $11,200; imputed income of $1,269 related to supplemental life insurance; and, merger-related work of $10,000.
(10)
(8)Includes 401(k) plan employer matching contribution of $11,000; deferred compensation accruals under his SERP of $45,575; imputed income of $1,088 related to supplemental life insurance; and, merger-related work of $5,000.
(9)
Also serves as Executive Vice President/Secretary and Chief Risk & Governance Officer of ACNB Bank, as well as a director and Vice President & Secretary of Russell Insurance Group, Inc.
(11)
Each of the Named Executive Officers has an employment agreement. On December 31, 2008, the Corporation and Adams County National Bank, now ACNB Bank, entered into an amended and restated employment agreement with Lynda L. Glass, Executive Vice President/Secretary & Chief Governance Officer of the Corporation and Executive Vice President/Secretary and Chief Risk & Governance Officer of the Bank. Ms. Glass'Glass’ agreement was again amended on December 27, 2016. On April 17, 2009, the Corporation and the Bank entered into an employment agreement with David W. Cathell, Executive Vice President/Treasurer & Chief Financial Officer of the Corporation and the Bank, which was then amended on December 27, 2016. On April 15, 2009, the Bank entered into an employment agreement with James P. Helt, President & Chief Executive Officer of the Corporation and the Bank, which was then amended on December 27, 2016. This amended agreement was replaced by the amended and restated employment agreement withbetween the Corporation, the Bank and Mr. Helt as of August 14, 2018 (together, the "Agreements"“Agreements” and "Executives"“Executives”). Under the Agreements, the Named Executive Officers are eligible for bonuses, paid time off, participation in employee benefit plans, and reimbursement of business expenses.
The initial terms of the Agreements are three (3) years which automatically extend for an additional one (1) year period on each annual anniversary date of the Agreements, unless notice is given one hundred eighty (180) days prior to the anniversary date, so that on each anniversary date if notice had not been previously given the term shall continue for three (3) years.
The Agreements automatically terminate if the Executives are terminated for "Cause"“Cause”, as defined in the Agreements, and all rights under the Agreements will terminate with the exception of the arbitration clause. The Agreements automatically terminate if the Executives terminate their employment for "Good Reason"“Good Reason”, as defined in the Agreements. If the Agreements terminate for "Good Reason"“Good Reason”, Messrs. Helt or Cathell or Ms. Glass would receive 2.99 times their agreed compensation and benefits for two (2) years. The Agreements automatically terminate upon the Executives'Executives’ disability, as defined in the Agreements, and the Executives will receive employee benefits and 75% of their compensation until (a) they return to work, (b) reach age sixty-five (65), (c) die, or (d) the employment period under the Agreements ends. The Agreements automatically terminate if the Executives voluntarily terminate the Agreements. If Messrs. Helt or Cathell or Ms. Glass gives notice within one hundred eighty (180) days of a "Change“Change in Control"Control”, as defined in the Agreements, or the Executive'sExecutive’s employment is terminated involuntarily, the respective Executive
18
is entitled to 2.99 times the Executive'sExecutive’s agreed compensation and to continue to receive benefits for two (2) years. Messrs. Helt and Cathell and Ms. Glass would receive grossed-up payments, if necessary.
The Agreements contain restrictive covenants precluding the Executives from engaging in competitive activities in a certain area and provisions preventing the Executives from disclosing proprietary information about the Corporation and ACNB Bank.
Variable Compensation Plan
Effective January 1, 2014, and subsequently amended effective January 1, 2018 and January 1, 2021, the Compensation Committee established the ACNB Bank Variable Compensation Plan (the "Plan"“Plan”), which provides guidelines for awarding cash and/or equity incentive bonuses. Under the Plan, the Compensation Committee may
make a recommendation to the Board of Directors to award stock under the ACNB Corporation 2009 Restricted Stock Plan or its successor plan, the 2018 Omnibus Stock Incentive Plan, any successor plan, or any similar plan under which equity awards may be granted, if it chooses to make equity awards. The Board of Directors also reserves the right to amend, suspend or terminate the Plan at any time. The guidelines contained in the Plan include general restrictions such as:
•
the award formulas are to be constructed to align the interests of the participant with those of the shareholders;
•
•
the participant must have an overall rating of "Good"“Meets Expectations” on his or her most recent individual performance appraisal, as applicable;
•
•
no incentive bonuses may be awarded if the Bank'sBank’s CAMELS rating assigned by its regulators falls below a certain rating;
•
•
no incentive bonuses will be awarded if the Board of Directors determines that the dividend payable to the shareholders is not reasonable or competitive; and,
•
•
all bonuses are subject to a clawback provision.
Criteria Considered in Deciding to Grant a Bonus Under the
ACNB Bank Variable Compensation Plan
| Factor | | | Rationale | | | 2019 Target | | |||
Return on Average Equity (ROAE) | | | Measures the | | | | 11.00% | | | |
Deposit Growth | | | Incentivizes employees to grow the | | | | 4.00% | | | |
Loan Growth | | | Incentivizes employees to grow the | | | | 4.25% | | | |
Leverage Capital Ratio | | | Our regulators look at our capital ratios to help determine if our capital is adequate and may place constraints on us if they determine that it is not. | | | | 9.00% | | | |
Non-Performing Loans to Total Loans | | | Incentivizes employees to grow the | | | | | < | | |
Net Income | | | Seeks to maintain an improved performance of the Bank. | | | ≥$19.25 | | |||
A maximum of fifty-nine percent (59%) of the bonus awarded to the respective Named Executive Officer was a cash award paid in 20192020 for 20182019 performance. The remaining portion of the bonus was in the form of an equity award under the ACNB Corporation 2018 Omnibus Stock Incentive Plan, as purchased through the Corporation'sCorporation’s Dividend Reinvestment and Stock Purchase Plan. Mr. Helt was awarded a larger bonus, given his position, than the other Named Executive Officers employed by ACNB Bank. The shares awarded to the Named Executive Officers were to vest in one-third (1/∕3) tranches, with the first third vesting in 2019.2020. The Compensation Committee intends to continue to useconsider restricted stock through the ACNB Corporation
19
2018 Omnibus Stock Incentive Plan or another successor plan in the future in conjunction with the ACNB Bank Variable Compensation Plan with the intended purpose to encourage stability and longevity in executive management.
Equity Compensation
In 2009, the Corporation'sCorporation’s shareholders approved the ACNB Corporation 2009 Restricted Stock Plan, which allowed the Corporation to grant up to 200,000 restricted shares of ACNB Corporation common stock under the plan. The Compensation Committee could grant restricted stock to employees and directors of the Corporation and ACNB Bank contingent, for example, upon the employee, director, Corporation or ACNB Bank meeting specified goals or the employee or director remaining employed or affiliated with ACNB Bank for a specific period of time. The 2009 Restricted Stock Plan expired by its own terms after ten (10) years on February 24, 2019.
In 2018, the Corporation'sCorporation’s shareholders approved the ACNB Corporation 2018 Omnibus Stock Incentive Plan, which allows the Corporation to grant up to 400,000 restricted shares of ACNB Corporation common stock under the plan. Awards that may be granted under the 2018 Omnibus Stock Incentive Plan include stock options (including qualified stock options and non-qualified stock options), stock appreciation rights ("SARs"(“SARs”), stock awards, restricted stock, stock units and restricted stock units ("RSUs"(“RSUs”), performance awards, and director compensation. All awards and the terms and conditions of such awards will be set forth in a written agreement.
On June 14, 2019,15, 2020, the Corporation granted a total of 2,741.97974,141.4741 restricted shares to the Named Executive Officers employed by ACNB Bank. Subject to earlier forfeiture or accelerated vesting, the restricted shares were to vest as follows: one-third (1/∕3) of the restricted shares 100% vested on the grant date, with the next one-third (1/∕3) of the restricted shares 100% vested as of January 1, 2020,2021, and the final one-third (1/∕3) of the restricted shares 100% vested as of January 1, 2021.2022.
The following table is a summary of the outstanding equity awards at December 31, 2019.
2020.
| Named Executive Officer | | | Number of Shares that Have Not Vested (#) | | | Market Value of Shares that Have Not Vested ($)(1) | | ||||||
| James P. Helt | | | | | 1,640.3840(2) | | | | | $ | 41,256 | | |
| Lynda L. Glass | | | | | 1,050.1466(3) | | | | | $ | 26,411 | | |
| David W. Cathell | | | | | 984.4453(4) | | | | | $ | 24,759 | | |
Named Executive Officer | Number of Shares that Have Not Vested (#) | Market Value of Shares that Have Not Vested ($)(1) | |||||
|---|---|---|---|---|---|---|---|
James P. Helt | 1,140.2006 | (2) | $ | 43,065 | |||
Lynda L. Glass | 779.7615 | (3) | $ | 29,452 | |||
David W. Cathell | 743.2017 | (4) | $ | 28,071 | |||
(1)
(1)- Value represents the number of shares that have not vested multiplied by
$37.770,$25.150, the average of the closing bid and ask prices for ACNB Corporation common stock on December 31,2019.2020.
(2)
(2)738.0436
1,021.2705 shares vest January 1, 2020,2021, and 402.1570619.1135 shares vest January 1, 2021.2022.
(3)
(3)514.7034
657.6023 shares vest January 1, 2020,2021, and 265.0580392.5443 shares vest January 1, 2021.2022.
(4)
(4)496.4236
615.6117 shares vest January 1, 2020,2021, and 246.7782368.8336 shares vest January 1, 2021.2022.
Supplemental Life Insurance Plan
In January 2001, ACNB Bank implemented a supplemental life insurance plan for certain officers, including the Named Executive Officers, of the Bank to provide death benefits for each officer'sofficer’s designated beneficiaries, which was amended and restated in December 2014. Beneficiaries designated by an officer are entitled to a split-dollar share of the death proceeds from the life insurance policies on each officer equal to the lesser of two (2) times the officer'sofficer’s base annual salary or the maximum dollar amount of the participant'sparticipant’s interest in the policy based upon the vesting schedule attached to his or her split-dollar policy endorsement. The plan is unsecured and unfunded, and there are no plan assets. The Bank has purchased single premium
20
bank-owned life insurance (BOLI) policies on the lives of the officers and intends to use income from the BOLI policies to offset the plan benefit expenses.
Group Term Life Insurance Plan
ACNB Bank maintains a group term life insurance plan. All full-time Bank employees are eligible to participate in the plan. For 2019,2020, the insurance benefit for employees was calculated as two (2) times base salary, with a maximum of $250,000.
Long-Term Care Insurance
ACNB Bank provides long-term care insurance to certain officers including the Named Executive Officers. The insurance provides a monthly benefit for long-term care needs.
401(k) Plan
ACNB Bank maintains a defined contribution profit-sharing 401(k) plan. ACNB Bank is the plan sponsor and plan administrator. The plan is subject to certain laws and regulations under 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 six (6) months and attaining the age of twenty (20) years and six (6) months. An eligible employee is automatically enrolled in the 401(k) plan, and the Bank will automatically withhold 6% of the employee'semployee’s wages unless otherwise directed. ACNB Bank matches a percentage of the employee'semployee’s contribution. In 2019,2020, ACNB Bank'sBank’s contribution equaled 100% of the employee'semployee’s contribution up to 3% of earned compensation plus 50% of the next 2% of earned compensation. Effective January 1, 2000, ACNB Bank adopted a "safe harbor"“safe harbor” provision for its 401(k) plan, which vests eligible contributions immediately upon entering the plan for both employer and employee contributions.
Defined Benefit Plan
Employees of ACNB Bank hired on or before March 31, 2012, are covered under the Bank'sBank’s Group Pension Plan for Employees provided that they meet the eligibility criteria of the plan. The plan is a defined benefit pension plan under the Employee Retirement Income Security Act of 1974. The plan was restated November 1, 1998, effective January 1, 1999, and subsequently amended effective November 1, 2000, January 1, 2010, and April 1, 2012. ACNB Bank is the plan sponsor and 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 benefit pension plan on behalf of a specific employee cannot be separately or individually calculated. ACNB Bank made no contributions to the plan in 2019,2020, as the plan is considered to be well funded.
Each eligible employee of ACNB Bank hired on or before March 31, 2012, who attainsattained the age of twenty (20) years and six (6) months and who completescompleted one (1) year of service, in which one thousand (1,000) hours arewere worked, iswas 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 sixty-five (65) years for the employee'semployee’s remaining lifetime with payments certain for five (5) years. Effective January 1, 2010, the formula for determining a participant'sparticipant’s benefit is the participant'sparticipant’s earned benefit as of December 31, 2009, plus 0.75% of the participant'sparticipant’s average monthly pay multiplied by the participant'sparticipant’s benefit service earned on and after January 1, 2010, but not more than twenty-five (25) years. If an employee has completed thirty (30) or more years of vested service, he or she is eligible to retire at age sixty-two (62) with no reduction applied to his or her benefit.
Supplemental Executive Retirement Plan
ACNB Bank entered into retirement income agreements with the Named Executive Officers to provide supplemental retirement income benefits to these officers upon the later of reaching their normal retirement date or separation of service. Messrs. Helt'sHelt’s and Cathell'sCathell’s and Ms. Glass'Glass’ benefits are payable in equal monthly installments for the greater of one hundred-eighty (180) months or the executive'sexecutive’s life. Benefits are
21
also payable upon death. Benefit amounts will be determined by the individual'sindividual’s number of years of service. Benefits accrue annually, but may be reduced if termination of service occurs before the normal retirement date except after a change in control. In exchange for providing benefits under the agreements, the executives are bound by respective noncompetition arrangements. No benefits are payable under the agreements if the executive directly or indirectly engages in a business or activity that may be deemed competitive with ACNB Bank or the Corporation within fifty (50) miles of ACNB Bank'sBank’s principal office. If the termination occurs before the executive'sexecutive’s respective retirement date, this restriction applies for five (5) years after the date of the executive'sexecutive’s separation of service; however, the restriction will not extend longer than three (3) years after the executive begins to receive benefits under the respective agreement. If the separation occurs after the executive'sexecutive’s retirement date, then the restriction shall be in place for three (3) years. The restriction does not apply after a change in control. ACNB Bank purchased bank-owned life insurance policies on each officer to fund the retirement income agreements.
As Named Executive Officers, Messrs. Helt and Cathell and Ms. Glass have entered into employment agreements with the Corporation and ACNB Bank, which govern any payments upon termination or change in control. If on December 31, 2019,2020, Messrs. Helt or Cathell or Ms. Glass terminated employment for "Good Reason"“Good Reason”, each would have received thirty-six (36) monthly payments in an amount equal to 2.99 times his or her respective agreed compensation plus benefits for two (2) years. If Messrs. Helt or Cathell or Ms. Glass terminates employment after a "Change“Change in Control"Control”, as defined in the respective employment agreements, then he or she will be entitled to a lump sum of 2.99 times his or her respective agreed compensation plus benefits for two (2) years following termination. If the Corporation terminates the Named Executive Officer'sOfficer’s employment without "Cause"“Cause”, then the respective Named Executive Officer will receive thirty-six (36) monthly payments in an amount equal to 2.99 times his or her respective agreed compensation plus benefits for two (2) years. Payments pursuant to a "Change“Change in Control"Control” or termination without "Cause"“Cause” or for "Good Reason"“Good Reason” will be grossed-up for Messrs. Helt and Cathell and Ms. Glass to accommodate for any excise tax imposed on the payments.
All employment agreements contain noncompetition, nonsolicitation and confidentiality provisions. If the Corporation terminates the Named Executive Officer'sOfficer’s employment without "Cause"“Cause” or if the Named Executive Officer terminates employment with "Good Reason"“Good Reason” or after a "Change“Change in Control"Control”, then the noncompetition and nonsolicitation provisions continue for two (2) years after the termination of employment. If the Named Executive Officer'sOfficer’s employment is terminated by the Corporation for "Cause"“Cause” or if the Named Executive Officer terminates employment voluntarily without "Good Reason"“Good Reason”, then the noncompetition and nonsolicitation provisions continue for one (1) year after termination of employment.
Upon a "Change“Change in Control"Control” followed by a separation of service, the Named Executive Officers will become vested in the retirement benefits under the supplemental executive retirement plan agreement. If the Named Executive Officer is terminated for reasons other than the commission of a felony involving Bank property prior to retirement, then he or she will be entitled to an early termination benefit in an amount determined based upon the year in which such termination occurs. The supplemental executive retirement plan agreement contains a noncompetition provision which restricts the Named Executive Officer'sOfficer’s ability to compete and solicit customers.
Upon any termination of employment, the respective Named Executive Officer will be entitled to receive normal retirement benefits equal to an amount determined by an actuarial formula as described in the defined benefit plan.
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James P. Helt
The following table shows the potential payments upon termination or change in control of the Corporation for James P. Helt. The chart assumes the triggering events took place on December 31, 2019.2020.
| Executive Benefits and Payments Upon Separation | | | Voluntary Termination | | | Early Retirement | | | Normal Retirement | | | Involuntary Not For Cause Termination | | | For Cause Termination | | | Voluntary for Good Reason Termination | | | Change in Control | | | Disability | | | Death | | |||||||||||||||||||||||||||
Supplemental Executive Retirement Plan(1) | | | | $ | 25,954 | | | | | $ | 25,954 | | | | | $ | 250,000 | | | | | $ | 25,954 | | | | | $ | 0 | | | | | $ | 25,954 | | | | | $ | 250,000 | | | | | $ | 0 | | | | | $ | 250,000 | | |
| Supplemental Executive Life Insurance | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 900,000 | | |
Severance Under Employment Agreement(2) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 44,936(3) | | | | | $ | 0 | | | | | $ | 44,936(3) | | | | | $ | 1,617,690(4) | | | | | $ | 33,815(5) | | | | | $ | 0 | | |
| Accrued Leave | | | | $ | 77,885 | | | | | $ | 77,885 | | | | | $ | 77,885 | | | | | $ | 77,885 | | | | | $ | 0 | | | | | $ | 77,885 | | | | | $ | 77,885 | | | | | $ | 77,885 | | | | | $ | 77,885 | | |
| Health and Welfare Benefits | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,157 | | | | | $ | 45,733 | | | | | $ | 0 | | | | | $ | 45,733 | | | | | $ | 45,733 | | | | | $ | 60,977 | | | | | $ | 0 | | |
| Restricted Stock Vesting | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 41,256 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 41,256 | | | | | $ | 41,256 | | | | | $ | 41,256 | | |
Executive Benefits and Payments Upon Separation | Voluntary Termination | Early Retirement | Normal Retirement | Involuntary Not For Cause Termination | For Cause Termination | Voluntary for Good Reason Termination | Change in Control | Disability | Death | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Supplemental Executive Retirement Plan(1) | $ | 15,522 | $ | 15,522 | $ | 250,000 | $ | 15,522 | $ | 0 | $ | 15,522 | $ | 250,000 | $ | 0 | $ | 250,000 | ||||||||||
Supplemental Executive Life Insurance | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 850,000 | ||||||||||
Severance Under Employment Agreement(2) | $ | 0 | $ | 0 | $ | 0 | $ | 41,434 | (3) | $ | 0 | $ | 41,434 | (3) | $ | 1,491,611 | (4) | $ | 31,179 | (5) | $ | 0 | ||||||
Accrued Leave | $ | 73,558 | $ | 73,558 | $ | 73,558 | $ | 73,558 | $ | 0 | $ | 73,558 | $ | 73,558 | $ | 73,558 | $ | 73,558 | ||||||||||
Health and Welfare Benefits | $ | 0 | $ | 0 | $ | 1,157 | $ | 42,783 | $ | 0 | $ | 42,783 | $ | 42,783 | $ | 57,044 | $ | 0 | ||||||||||
Restricted Stock Vesting | $ | 0 | $ | 0 | $ | 43,065 | $ | 0 | $ | 0 | $ | 0 | $ | 43,065 | $ | 43,065 | $ | 43,065 | ||||||||||
- (1)
Annual amount paid in twelve (12) equal monthly installments for the greater of 180 months or for life.
(2)
(2)
Amounts will be grossed-up to account for any excise taxes and does not include the costs of benefits.
(3)
(3)
For thirty-six (36) months.
(4)
(4)
Payable in a lump sum.
(5)
(5)
Monthly amount.
Lynda L. Glass
The following table shows the potential payments upon termination or change in control of the Corporation for Lynda L. Glass. The chart assumes the triggering events took place on December 31, 2019.2020.
| Executive Benefits and Payments Upon Separation | | | Voluntary Termination | | | Early Retirement | | | Normal Retirement | | | Involuntary Not For Cause Termination | | | For Cause Termination | | | Voluntary for Good Reason Termination | | | Change in Control | | | Disability | | | Death | | |||||||||||||||||||||||||||
Supplemental Executive Retirement Plan(1) | | | | $ | 47,443 | | | | | $ | 47,443 | | | | | $ | 67,075 | | | | | $ | 47,443 | | | | | $ | 0 | | | | | $ | 47,443 | | | | | $ | 67,075 | | | | | $ | 0 | | | | | $ | 67,075 | | |
| Supplemental Executive Life Insurance | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 542,400 | | �� |
Severance Under Employment Agreement(2) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 28,100(3) | | | | | $ | 0 | | | | | $ | 28,100(3) | | | | | $ | 1,011,600(4) | | | | | $ | 21,145(5) | | | | | $ | 0 | | |
| Accrued Leave | | | | $ | 46,938 | | | | | $ | 46,938 | | | | | $ | 46,938 | | | | | $ | 46,938 | | | | | $ | 0 | | | | | $ | 46,938 | | | | | $ | 46,938 | | | | | $ | 46,938 | | | | | $ | 46,938 | | |
| Health and Welfare Benefits | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,195 | | | | | $ | 26,259 | | | | | $ | 0 | | | | | $ | 26,259 | | | | | $ | 26,259 | | | | | $ | 39,389 | | | | | $ | 0 | | |
| Restricted Stock Vesting | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 26,411 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 26,411 | | | | | $ | 26,411 | | | | | $ | 26,411 | | |
Executive Benefits and Payments Upon Separation | Voluntary Termination | Early Retirement | Normal Retirement | Involuntary Not For Cause Termination | For Cause Termination | Voluntary for Good Reason Termination | Change in Control | Disability | Death | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Supplemental Executive Retirement Plan(1) | $ | 40,473 | $ | 40,473 | $ | 67,075 | $ | 40,473 | $ | 0 | $ | 40,473 | $ | 67,075 | $ | 0 | $ | 67,075 | ||||||||||
Supplemental Executive Life Insurance | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 526,600 | ||||||||||
Severance Under Employment Agreement(2) | $ | 0 | $ | 0 | $ | 0 | $ | 26,437 | (3) | $ | 0 | $ | 26,437 | (3) | $ | 951,717 | (4) | $ | 19,894 | (5) | $ | 0 | ||||||
Accrued Leave | $ | 45,571 | $ | 45,571 | $ | 45,571 | $ | 45,571 | $ | 0 | $ | 45,571 | $ | 45,571 | $ | 45,571 | $ | 45,571 | ||||||||||
Health and Welfare Benefits | $ | 0 | $ | 0 | $ | 1,195 | $ | 24,733 | $ | 0 | $ | 24,733 | $ | 24,733 | $ | 37,099 | $ | 0 | ||||||||||
Restricted Stock Vesting | $ | 0 | $ | 0 | $ | 29,452 | $ | 0 | $ | 0 | $ | 0 | $ | 29,452 | $ | 29,452 | $ | 29,452 | ||||||||||
- (1)
Annual amount paid in twelve (12) equal monthly installments for the greater of 180 months or for life.
(2)
(2)
Amounts will be grossed-up to account for any excise taxes and does not include the costs of benefits.
(3)
(3)
For thirty-six (36) months.
(4)
(4)
Payable in a lump sum.
(5)
(5)
Monthly amount.
23
David W. Cathell
The following table shows the potential payments upon termination or change in control of the Corporation for David W. Cathell. The chart assumes the triggering events took place on December 31, 2019.2020.
| Executive Benefits and Payments Upon Separation | | | Voluntary Termination | | | Early Retirement | | | Normal Retirement | | | Involuntary Not For Cause Termination | | | For Cause Termination | | | Voluntary for Good Reason Termination | | | Change in Control | | | Disability | | | Death | | |||||||||||||||||||||||||||
Supplemental Executive Retirement Plan(1) | | | | $ | 38,569 | | | | | $ | 38,569 | | | | | $ | 38,569 | | | | | $ | 38,569 | | | | | $ | 0 | | | | | $ | 38,569 | | | | | $ | 38,569 | | | | | $ | 0 | | | | | $ | 38,569 | | |
| Supplemental Executive Life Insurance | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 510,000 | | |
Severance Under Employment Agreement(2) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 26,753(3) | | | | | $ | 0 | | | | | $ | 26,753(3) | | | | | $ | 963,116(4) | | | | | $ | 20,132(5) | | | | | $ | 0 | | |
| Accrued Leave | | | | $ | 44,351 | | | | | $ | 44,351 | | | | | $ | 44,351 | | | | | $ | 44,351 | | | | | $ | 0 | | | | | $ | 44,351 | | | | | $ | 44,351 | | | | | $ | 44,351 | | | | | $ | 44,351 | | |
| Health and Welfare Benefits | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 1,795 | | | | | $ | 49,568 | | | | | $ | 0 | | | | | $ | 49,568 | | | | | $ | 49,568 | | | | | $ | 0 | | | | | $ | 0 | | |
| Restricted Stock Vesting | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 24,759 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 24,759 | | | | | $ | 24,759 | | | | | $ | 24,759 | | |
Executive Benefits and Payments Upon Separation | Voluntary Termination | Early Retirement | Normal Retirement | Involuntary Not For Cause Termination | For Cause Termination | Voluntary for Good Reason Termination | Change in Control | Disability | Death | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Supplemental Executive Retirement Plan(1) | $ | 38,569 | $ | 38,569 | $ | 38,569 | $ | 38,569 | $ | 0 | $ | 38,569 | $ | 38,569 | $ | 0 | $ | 38,569 | ||||||||||
Supplemental Executive Life Insurance | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 500,000 | ||||||||||
Severance Under Employment Agreement(2) | $ | 0 | $ | 0 | $ | 0 | $ | 25,249 | (3) | $ | 0 | $ | 25,249 | (3) | $ | 908,960 | (4) | $ | 19,000 | (5) | $ | 0 | ||||||
Accrued Leave | $ | 43,269 | $ | 43,269 | $ | 43,269 | $ | 43,269 | $ | 0 | $ | 43,269 | $ | 43,269 | $ | 43,269 | $ | 43,269 | ||||||||||
Health and Welfare Benefits | $ | 0 | $ | 0 | $ | 1,795 | $ | 44,963 | $ | 0 | $ | 44,963 | $ | 44,963 | $ | 0 | $ | 0 | ||||||||||
Restricted Stock Vesting | $ | 0 | $ | 0 | $ | 28,071 | $ | 0 | $ | 0 | $ | 0 | $ | 28,071 | $ | 28,071 | $ | 28,071 | ||||||||||
- (1)
Annual amount paid in twelve (12) equal monthly installments for the greater of 180 months or for life.
(2)
(2)
Amounts will be grossed-up to account for any excise taxes and does not include the costs of benefits.
(3)
(3)
For thirty-six (36) months.
(4)
(4)
Payable in a lump sum.
(5)
(5)
Monthly amount.
Transactions with Directors and Executive Officers
Some of ACNB Corporation'sCorporation’s directors, executive officers, and their immediate family members and the companies with which they are associated were customers of and had banking transactions with ACNB Corporation'sCorporation’s subsidiary bank during 2019.2020. All loans and loan commitments made to them and to their companies were made in the ordinary course of bank business, on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable transactions with other customers of the bank, and did not involve more than a normal risk of collectability or present other unfavorable features. ACNB Corporation'sCorporation’s subsidiary bank anticipates that they will enter into similar transactions in the future.
The Corporation does not regularly engage in business transactions with directors and executive officers outside of its business of banking. Generally, any other significant transactions with directors or executive officers are reviewed and approved by the Board of Directors on a case-by-case basis as the need arises.
The Audit Committee of the Board of Directors is comprised of directors who meet SEC and Nasdaq standards for independence. The Audit Committee operates under a written charter adopted by the Board of Directors in April 2000, which has been subsequently revised and is incorporated by reference from the Governance Documents section of the Investor Relations/ACNB Corporation page of ACNB Bank'sInvestor Relations website at www.acnb.com.investor.acnb.com.
The Audit Committee met with management periodically during the year to consider the adequacy of ACNB Corporation'sCorporation’s internal controls and the objectivity of its financial reporting. The Audit Committee discussed these matters with ACNB Corporation'sCorporation’s independent registered public accounting
firm and with appropriate ACNB Corporation financial personnel and internal auditors. The Audit Committee also discussed with ACNB Corporation'sCorporation’s management and independent registered public accounting firm the process used for certifications by ACNB Corporation'sCorporation’s Chief Executive Officer and Chief Financial Officer, which are required for certain of ACNB Corporation'sCorporation’s filings with the SEC.
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The Audit Committee also met privately at its regular meetings with both the independent registered public accounting firm and the internal auditors, each of whom has unrestricted access to the Audit Committee.
The Audit Committee selected RSM US LLP as the independent registered public accounting firm for ACNB Corporation after reviewing the firm'sfirm’s performance and independence from management.
Management has primary responsibility for ACNB Corporation'sCorporation’s financial statements and the overall reporting process, including ACNB Corporation'sCorporation’s system of internal controls.
The independent registered public accounting firm audited the annual financial statements prepared by management, expressed an opinion as to whether those financial statements fairly present the financial position, results of operations, and cash flows of ACNB Corporation in conformity with generally accepted accounting principles, and discussed with the Audit Committee any issues the firm believes should be raised with the Audit Committee.
The Audit Committee reviewed with management and RSM US LLP, ACNB Corporation'sCorporation’s independent registered public accounting firm, ACNB Corporation'sCorporation’s audited financial statements, as well as reviewed those financial statements and reports prior to issuance. Management has represented, and RSM US LLP has confirmed, to the Audit Committee that the financial statements were prepared in accordance with generally accepted accounting principles.
The Audit Committee received from and discussed with RSM US LLP the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm'sfirm’s Communications with Audit Committees.Committees and discussed with RSM US LLP its independence. These items relate to that firm'sfirm’s independence from ACNB Corporation. The Audit Committee also discussed with RSM US LLP matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board Auditing Standard No. 16 (Communications with Audit Committees).and the SEC. The Audit Committee implemented a procedure to monitor auditor independence, reviewed audit and non-audit services performed by RSM US LLP, and discussed with the firm its independence.
The Audit Committee reviewed the audited financial statements and, based upon the review and discussions above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2019,2020, which is then filed with the SEC.
At present, ACNB Corporation has one individual designated as "audit“audit committee financial expert"expert”. The Board of Directors has determined that Daniel W. Potts is qualified to serve as ACNB Corporation'sCorporation’s audit committee financial expert and is independent as defined under applicable SEC and Nasdaq rules.
This report is furnished by the Audit Committee.
Daniel W. Potts, Chair
Richard L. Alloway II
Kimberly S. Chaney
Todd L. Herring
James J. Lott
Alan J. Stock
James E. Williams
Kimberly S. Chaney
Todd L. Herring
Alan J. Stock
James E. Williams
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INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors of the Corporation conducted a review, analysis and due diligence which resulted in a competitive selection process to determine the Corporation's independent registered public accounting firm for the fiscal year ending December 31, 2018. As a result of this process, on March 20, 2018, the Audit Committee appointed RSM US LLP as the Corporation's independent registered public accounting firm, contingent upon completion of RSM US LLP's client acceptance procedures, and dismissed BDO USA, LLP from that role.
The report of BDO USA, LLP on the Corporation's financial statements as of and for the year ended December 31, 2017, did not contain an adverse opinion or a disclaimer of an opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
During the Corporation's fiscal year ended December 31, 2017 and the subsequent interim period preceding BDO USA, LLP's dismissal, there were: (i) no disagreements with BDO USA, LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of BDO USA, LLP, would have caused it to make reference to the subject matter of the disagreements in its reports on the consolidated financial statements for the Corporation; and, (ii) no "reportable events", as such term is defined in Item 304(a)(1)(v) of Regulation S-K.
During the Corporation's fiscal year ended December 31, 2017, and through the date of the Corporation's appointment of RSM US LLP, the Corporation did not consult with RSM US LLP regarding: (i) the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Corporation's consolidated financial statements, and no written or oral advice was provided by RSM US LLP that was an important factor considered by the Corporation in reaching a decision as to accounting, auditing, or financial reporting issues; or, (ii) any matter that was either the subject of a disagreement or event, as set forth in Item 304(a)(1)(iv) or Item 304(a)(1)(v) of Regulation S-K.
Aggregate fees billed to ACNB Corporation by RSM US LLP for 2020 and 2019 and 2018 for services rendered and BDO USA, LLP for 2018 for tax services rendered are presented below:
| | | | Year Ended December 31, 2020 | | | Year Ended December 31, 2019 | | ||||||
| Audit Fees | | | | $ | 330,325 | | | | | $ | 251,325 | | |
| Audit-Related Fees | | | | | — | | | | | | — | | |
| Tax Fees | | | | | 30,600 | | | | | | 22,050 | | |
| All Other Fees | | | | | — | | | | | | — | | |
| Total Fees | | | | $ | 360,925 | | | | | $ | 273,375 | | |
| | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||
|---|---|---|---|---|---|---|---|
Audit Fees | $ | 251,325 | $ | 186,375 | |||
Audit-Related Fees | — | — | |||||
Tax Fees | 22,050 | 29,358 | |||||
All Other Fees | — | — | |||||
| | | | | | | | |
Total Fees | $ | 273,375 | $ | 215,733 | |||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Audit Fees include fees billed for professional services rendered for the audit of the Corporation'sCorporation’s annual consolidated financial statements and the review of consolidated financial statements included in Forms 10-Q, or services normally provided in connection with statutory and regulatory filings (i.e., attest services required by FDICIA or Section 404 of the Sarbanes-Oxley Act), including out-of-pocket expenses, and for 2019expenses. For 2020, audit fees included fees billed for additional procedures during the year related to registration statements filed, internal controls, and the business combination transaction. For 2019, audit fees included fees billed for additional procedures during 2019.the year related to registration statements filed.
Tax Fees include fees billed for professional services rendered for tax compliance, tax advice, and tax planning.
When applicable, the Audit Committee considers whether any permissible provision of non-audit services is compatible with maintaining the independence of the independent registered public accounting firm.
The Audit Committee preapproves all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services, and other services. Preapproval will generally be provided for up to one (1) year, and any preapproval is detailed as to the particular service or category of services and is subject to a specific budget. In addition, the Audit Committee may also preapprove particular services on a case-by-case basis. None of the services related to any Audit-Related Fees, Tax Fees or All Other Fees described above were approved by the Audit Committee pursuant to the preapproval waiver provisions set forth in the applicable SEC rules. In addition, the Audit Committee annually considers and recommends to the Board of Directors the selection of the Corporation'sCorporation’s independent registered public accounting firm as independent auditors.
Section 16(a) of the Securities Exchange Act of 1934 requires ACNB Corporation'sCorporation’s directors, executive officers, and shareholders who beneficially own more than 10% of ACNB Corporation'sCorporation’s outstanding equity stock to file initial reports of ownership and reports of changes in ownership of common stock and other equity securities of ACNB Corporation with the SEC. Based on a review of copies of the reports we received, and on the statements of the reporting persons, we believe that all Section 16(a) filing requirements were complied with in a timely manner during 2019.
2020.
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PROPOSALSPROPOSALS
Cumulative voting rights do not exist with respect to the election of directors. The five (5)four (4) nominees for Class 32 Director receiving the highest number of "FOR"“FOR” votes cast, in person or by proxy, by those shareholders entitled to vote will be elected directors of the Corporation.
For the election of directors in Proposal 1, you may vote "FOR"“FOR” all of the nominees or your vote may be "WITHHELD"“WITHHELD” with respect to one (1) or more of the nominees. For the other proposals, you may vote "FOR"“FOR”, "AGAINST"“AGAINST” or "ABSTAIN"“ABSTAIN”. If you "ABSTAIN"“ABSTAIN”, it has the same effect as a vote "AGAINST"“AGAINST”. If you sign your proxy card or broker voting instruction card, or vote via internet or telephone, with no further instructions, your shares will be voted in accordance with the recommendations of the Board ("FOR"(“FOR” all of the Board'sBoard’s nominees, in favor of the non-binding shareholder vote on executive compensation, and "FOR"“FOR” all other proposals described in this proxy statement).
1.
TO ELECT FIVE (5)FOUR (4) CLASS 32 DIRECTORS TO SERVE FOR TERMS OF THREE (3) YEARS AND UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
Nominees for Class 32 Directors are:
| | Donna M. Newell | | | David L. Sites | |
| D. Arthur Seibel, Jr. | |||||
| | |||||
| |
The Board of Directors recommends a voteFOR the election of these nominees.
2.
TO CONDUCT A NON-BINDING VOTE ON EXECUTIVE COMPENSATION.
In accordance with the requirements of Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”) (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"“Dodd-Frank Act”)) and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to shareholder vote to approve, in a non-binding vote, the compensation of our Named Executive Officers.
The shareholders approved a resolution at the Corporation'sCorporation’s 2017 Annual Meeting of Shareholders to conduct an annual advisory vote on the Corporation'sCorporation’s executive compensation for the Named Executive Officers.
As described in detail in this proxy statement, our executive compensation programs are designed to attract, motivate, reward and retain our Named Executive Officers, who are critical to our success. We are asking our shareholders to indicate their support for our Named Executive Officer compensation as described in this proxy statement. This proposal, commonly known as a "Say“Say on Pay"Pay” proposal, gives our shareholders the opportunity to express their views on our Named Executive Officer compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask our shareholders to vote "FOR"“FOR” the following resolution at the Annual Meeting of Shareholders:
RESOLVED, that the Corporation'sCorporation’s shareholders approve, on a non-binding basis, the compensation paid to the Named Executive Officers, as disclosed in the Corporation'sCorporation’s Proxy Statement for the 20202021 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the SEC, the compensation tables, narrative discussion, and the other related tables and disclosure.
The Say on Pay vote is advisory, and therefore not binding on the Corporation, the Compensation Committee, or the Board of Directors. Our Board of Directors and our Compensation Committee value the opinions of our shareholders and, to the extent there is any significant vote against the Named Executive Officer compensation as disclosed in this proxy statement, we will consider our shareholders'shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
The Board of Directors recommends a voteFOR this proposal.
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3.
TO RATIFY THE SELECTION OF RSM US LLP AS ACNB CORPORATION'SCORPORATION’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020.2021.
The Board of Directors has approved the selection of RSM US LLP as the independent registered public accounting firm for the examination of its financial statements for the fiscal year ending December 31, 2020.2021. RSM US LLP served as the Corporation'sCorporation’s independent registered public accounting firm for the year ended December 31, 2019.
2020.
RSM US LLP has advised us that neither the firm nor any of its associates has any relationship with the Corporation or its subsidiaries other than the usual relationship that exists between the independent registered public accounting firm and its clients.
We expect a representative of RSM US LLP to be present at the Annual Meeting of Shareholders, to respond to appropriate questions, and to make a statement if the representative desires to do so.
The Board of Directors recommends a voteFOR this proposal.
4.
TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE 20202021 ANNUAL MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
Any shareholder may obtain a copy of ACNB Corporation'sCorporation’s Annual Report on Form 10-K for the year ended December 31, 2019,2020, including the financial statements and related schedules and exhibits, required to be filed with the SEC, without charge, by submitting a written request to Corporate Relations, ACNB Corporation, 16 Lincoln Square, P. O. Box 3129, Gettysburg, Pennsylvania 17325, or by calling (717) 339-5085. You may also view these documents on our website atinvestor.acnb.com.
The Board of Directors knows of no matters other than those discussed in this proxy statement that will be presented at the annual meeting. However, if any other matters are properly brought before the meeting, any proxy given pursuant to this solicitation will be voted in accordance with the recommendations of the Board of Directors.
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Your vote matters – here’s how to vote!You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 1:00 a.m., ET, on May 5, 2020. Online Gocard.OnlineGo to www.envisionreports.com/ACNB or scan the QR code. Login details are located in the shaded bar below. Phone Callbelow.PhoneCall toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada. SaveCanada.Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/ACNB. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. qT IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + 1. ToT1.To elect five (5)four (4) Class 32 Directors to serve for terms of three (3) years and until their successors are elected and qualified. Forqualified.For WithholdFor WithholdFor Withhold For Withhold For Withhold 01 - Kimberly S. Chaney 02 - Frank Elsner, III 03 - James P. Helt01- Donna M. Newell 04 - ScottAlan J. Stock 02- D. Arthur Seibel, Jr. 03- David L. Kelley 05 - Daniel W. Potts ForAgainst Abstain ForAgainst Abstain 2. ToSites For Against Abstain2.To conduct a non-binding vote on executive compensation. 3.compensation.3. To ratify the selection of RSM US LLP as ACNB Corporation's independentCorporation'sindependent registered public accounting firm for the fiscal year ending December 31, 2020.2021. For Against Abstain To transact such other business as
may properly come before the 20202021 Annual Meeting and any adjournment or postponement thereof. Pleasethereof.Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian or custodian, please give full title. Datetitle.Date (mm/dd/yyyy) — Please print date below. Signaturebelow.Signature 1 — Please keep signature within the box. Signaturebox.Signature 2 — Please keep signature within the box. + 503EZMC 4 2 B V 0383EA B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. A Proposals — The Board of Directors recommends a vote FOR all the nominees listed in Proposal 1 and FOR Proposals 2 and 3. 2020 Annual Meeting Proxy Card
2020 Annual Meeting Admission Ticket ACNB Corporation 2020TABLE OF CONTENTS
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The 2021 Annual Meeting of Shareholders Tuesday, May 5, 2020 ·of ACNB Corporation will be held onMay 4, 2021, 1:00 p.m. Eastern Time, ACNB Corporation Operations Center 100 V-Twin Drive, Gettysburg, PA 17325 Upon arrival, please presentvirtually via the internet at www.meetingcenter.io/200732442.To access the virtual meeting, you must have the information that is printed in the shaded bar located on the reverse side of this admission ticket and photo identification at the registration desk. Importantform.Meeting Password — ACNB2021Important notice regarding the Internetinternet availability of proxy materials for the Annual Meeting of Shareholders. TheShareholders.The material is available at: www.envisionreports.com/ACNB. qACNB.T IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + T+Notice of 20202021 Annual Meeting of Shareholders ProxyShareholdersProxy Solicited by the Board of Directors for Annual Meeting — May 5, 2020 The4, 2021The undersigned hereby constitutes and appoints Marian B. SchultzTodd L. Herring and D. Arthur Seibel, Jr.James J. Lott and each or either of them, Proxies of the undersigned, with full power of substitution to vote all of the shares of ACNB Corporation that the undersigned shareholder(s) may be entitled to vote at the Annual Meeting
of Shareholders to be held virtually via the internet at the ACNB Corporation Operations Center, 100 V-Twin Drive, Gettysburg, Pennsylvania 17325,www.meetingcenter.io/200732442 on Tuesday, May 5, 2020,4, 2021, at 1:00 p.m., prevailing time, and at any adjournment or postponement of the meeting, as indicated upon the matters referred to in the proxy statement, and upon any matters which may properly come before the Annual Meeting. SharesMeeting.Shares represented by this proxy will be voted by the shareholder(s). If no such directions are indicated, the Proxies will have authority to vote FOR the election of all the nominees listed in Proposal 1 and FOR Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. (Items(Items to be voted appear on reverse side.)Change of Address — Please print new address below. Commentsbelow.Comments — Please print your comments below. + C Non-Voting Items ACNB Corporation Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/ACNB.
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Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. qareas.T IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + 1. ToT1.To elect five (5)four (4) Class 32 Directors to serve for terms of three (3) years and until their successors are elected and qualified. Forqualified.For WithholdFor WithholdFor Withhold For Withhold For Withhold 01 - Kimberly S. Chaney 02 - Frank Elsner, III 03 - James P. Helt01- Donna M. Newell 04 - ScottAlan J. Stock 02- D. Arthur Seibel, Jr. 03- David L. Kelley 05 - Daniel W. Potts ForAgainst Abstain ForAgainst Abstain 2. ToSites For Against Abstain2.To conduct a non-binding vote on executive compensation. 3.compensation.3. To ratify the selection of RSM US LLP as ACNB Corporation's independentCorporation'sindependent registered public accounting firm for the fiscal year ending December 31, 2020.2021. For Against Abstain To transact such other business as may properly come before the 20202021 Annual Meeting and any adjournment or postponement thereof. Pleasethereof.Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian or custodian,
please give full title. Datetitle.Date (mm/dd/yyyy) — Please print date below. Signaturebelow.Signature 1 — Please keep signature within the box. Signaturebox.Signature 2 — Please keep signature within the box. + 1 U P X 0383FA B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. A Proposals — The Board of Directors recommends a vote FOR all the nominees listed in Proposal 1 and FOR Proposals 2 and 3. 2020 Annual Meeting Proxy Card
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Important notice regarding the Internetinternet availability of proxy materials for the Annual Meeting of Shareholders. TheShareholders.The material is available at: www.edocumentview.com/ACNB. qACNB.T IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q NoticeTNotice of 20202021 Annual Meeting of Shareholders ProxyShareholdersProxy Solicited by the Board of Directors for Annual Meeting — May 5, 2020 The4, 2021The undersigned hereby constitutes and appoints Marian B. SchultzTodd L. Herring and D. Arthur Seibel, Jr.James J. Lott and each or either of them, Proxies of the undersigned, with full power of substitution to vote all of the shares of ACNB Corporation that the undersigned shareholder(s) may be entitled to vote at the Annual Meeting of Shareholders to be held virtually via the internet at the ACNB Corporation Operations Center, 100 V-Twin Drive, Gettysburg, Pennsylvania 17325,www.meetingcenter.io/200732442 on Tuesday, May 5, 2020,4, 2021, at 1:00 p.m., prevailing time, and at any adjournment or postponement of the meeting, as indicated upon the matters referred to in the proxy statement, and upon any matters which may properly come before the Annual Meeting. Shares Meeting.Shares
represented by this proxy will be voted by the shareholder(s). If no such directions are indicated, the Proxies will have authority to vote FOR the election of all the nominees listed in Proposal 1 and FOR Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. (Items(Items to be voted appear on reverse side.) ACNB Corporation
