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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN
PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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March 27, 201224, 2015

Dear Fellow Shareholders of ACNB Corporation:

        On behalf of the Board of Directors, I am pleased to invite you to attend our Annual Meeting of Shareholders to be held on Tuesday, May 1, 2012,5, 2015, at 1:00 p.m., prevailing time, at the ACNB Corporation Operations Center, 100 V-Twin Drive, Gettysburg, Pennsylvania 17325. At the annual meeting, you will have the opportunity to ask questions and to make comments. Enclosed with the proxy statement is the notice of meeting, proxy card, ACNB Corporation's 20112014 Annual Review, and ACNB Corporation's 20112014 Annual Report on Form 10-K.

        The principal business of the meeting is to fix the number of Directors of ACNB Corporation at fourteen (14)thirteen (13); to fix the number of Class 1 Directors at six (6)five (5); to fix the number of Class 2 Directors at four (4); to fix the number of Class 3 Directors at four (4); to elect one (1) Class 1 Director to serve for a term of one (1) year and until her successor is elected and qualified; to elect four (4) Class 2 Directors to serve for terms of three (3) years and until their successors are elected and qualified; to elect one (1) Class 3 Director to serve for a term of two (2) years and until his successor is elected and qualified; to conduct a non-binding vote on executive compensation; to ratify the selection of ParenteBeard LLCBDO USA, LLP as ACNB Corporation's independent auditors;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.

        Whether or not you plan to attend the annual meeting, I urge you to vote as soon as possible by completing, signing and returning the enclosed proxy card in the envelope provided. Theprovided or to vote via the internet or telephone. Your prompt return of your proxy cardvote 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 if you do not attend in person.

        I look forward to seeing you on May 1, 2012,5, 2015, at the Corporation's annual meeting.

Sincerely,

Thomas A. Ritter
President & Chief Executive Officer

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ACNB CORPORATION

NASDAQ TRADING SYMBOL: ACNB

acnb.com

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

AND

PROXY STATEMENT

20122015

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Proxy Statement

Dated and to be mailed to shareholders on or about March 27, 2012.24, 2015.

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ACNB CORPORATION
16 LINCOLN SQUARE
P.O. BOX 3129
GETTYSBURG, PENNSYLVANIA 17325
(717) 334-3161

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 1, 20125, 2015

TO THE SHAREHOLDERS OF ACNB CORPORATION:

        NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of ACNB Corporation will be held at the ACNB Corporation Operations Center, 100 V-Twin Drive, Gettysburg, Pennsylvania 17325 on Tuesday, May 1, 2012,5, 2015, at 1:00 p.m., prevailing time, for the purpose of considering and voting upon the following matters:

1.

To fix the number of Directors of ACNB Corporation at fourteen (14)thirteen (13);



2.

To fix the number of Class 1 Directors at six (6)five (5);



3.

To fix the number of Class 2 Directors at four (4);



4.

To fix the number of Class 3 Directors at four (4);



5.

To elect one (1) Class 1 Director to serve for a term of one (1) year and until her successor is elected and qualified;



6.

To elect four (4) Class 2 Directors to serve for terms of three (3) years and until their successors are elected and qualified;



7.

To elect one (1) Class 3 Director to serve for a term of two (2) years and until his successor is elected and qualified;



8.6.

To conduct a non-binding vote on executive compensation;



9.7.

To ratify the selection of ParenteBeard LLCBDO USA, LLP as ACNB Corporation's independent auditors;registered public accounting firm; and,



10.8.

To transact such other business as may properly come before the 20122015 Annual Meeting and any adjournment or postponement thereof.

        Only those shareholders of record, at the close of business on March 9, 2012,10, 2015, 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.envelope or vote by internet or telephone. We cordially invite you to attend the meeting. 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's Board of Directors is distributing the proxy statement, proxy card, ACNB Corporation's 20112014 Annual Review, and ACNB Corporation's 20112014 Annual Report on Form 10-K on or about March 27, 2012.24, 2015.

		BY ORDER OF THE BOARD OF DIRECTORS,
		Thomas A. Ritter President & Chief Executive Officer

Gettysburg, Pennsylvania
March 27, 201224, 2015

YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD.

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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's Annual Meeting of Shareholders. The Annual Meeting of Shareholders will be held on Tuesday, May 1, 2012,5, 2015, at 1:00 p.m., prevailing time, at the ACNB Corporation Operations Center, 100 V-Twin Drive, Gettysburg, Pennsylvania 17325. Included with this proxy statement is a copy of ACNB Corporation's 20112014 Annual Review and ACNB Corporation's 20112014 Annual Report on Form 10-K for the fiscal year ended December 31, 2011.2014.

        The Corporation's principal executive office is located at 16 Lincoln Square, Gettysburg, Pennsylvania 17325. The Corporation'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's wholly-owned banking subsidiary is ACNB Bank, a Pennsylvania state-chartered bank and trust company, formerly Adams County National Bank. The Corporation's primary activity consists of owning and supervising its banking subsidiary. On October 4, 2010, Adams County National Bank converted from a national banking association to a Pennsylvania state-chartered bank and trust company called ACNB Bank.

        On January 5, 2005, the Corporation completed its acquisition of Russell Insurance Group, Inc.        The Corporation nowalso owns and supervises Russell Insurance Group, Inc. as its insurance 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 1, 2012.5, 2015. The notice of meeting, proxy statement, proxy card, ACNB Corporation's 20112014 Annual Review, and ACNB Corporation's 20112014 Annual Report on Form 10-K are available atacnb.com under the ACNB Corporation Investor Relations tab or directly athttp://www.acnb.com/home/acn/acnb_meetingacnb-corporation.

VOTING PROCEDURES

Solicitation and Voting of Proxies

        The Board of Directors solicits this proxy for use at the Corporation's 20122015 Annual Meeting of Shareholders. The Corporation's directors and officers and bankACNB Bank employees may solicit proxies in person or by telephone, facsimile, email or other similar electronic means without additional compensation. The Corporation's subsidiary bankCorporation 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. The Corporation's subsidiary bankentities, 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 27, 2012.24, 2015.

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        Shareholders of record at the close of business on March 9, 201210, 2015 (the annual meeting record date), are entitled to vote at the meeting. The Corporation's records show that, as of the annual meeting record date, 5,945,8096,015,650 shares of the Corporation'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.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 meeting and vote, if you later decide to attend in person. If your shares are registered directly in your name with ACNB Corporation's transfer agent, Registrar and Transfer Company,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. However, because you are not the shareholder of record, you may not vote your street name shares in person at the meeting, unless you obtain a proxy executed in your favor from the holder of record. 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 Frank Elsner, IIIJ. Emmett Patterson and Marian B. Schultz 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.

Fixing the number of Directors of ACNB Corporation at fourteen (14)thirteen (13);



2.

Fixing the number of Class 1 Directors at six (6)five (5);



3.

Fixing the number of Class 2 Directors at four (4);



4.

Fixing the number of Class 3 Directors at four (4);



5.

Electing one (1) Class 1 Director to serve for a term of one (1) year and until her successor is elected and qualified;



6.

Electing four (4) Class 2 Directors to serve for terms of three (3) years and until their successors are elected and qualified;



7.

Electing one (1) Class 3 Director to serve for a term of two (2) years and until his successor is elected and qualified;



8.6.

Approving the non-binding vote on executive compensation; and,



9.7.

Ratifying the selection of ParenteBeard LLCBDO USA, LLP as ACNB Corporation's independent auditors.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, or by executing a later dated proxy and giving written notice of the revocation to Ms. Glass or 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 of 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

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be voted in accordance with the recommendations of the Board of Directors. This proxy statement is being mailed to the Corporation's shareholders on or about March 27, 2012.24, 2015.

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Quorum and Vote Required for Approval

        As of the close of business on March 9, 2012,10, 2015, the Corporation had 5,945,8096,015,650 shares of common stock, par value $2.50 per share, outstanding.

        Under Pennsylvania law and ACNB Corporation'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 counted in determining the presence of a quorum for a particular matter as to which the broker withheld authority. 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'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, fixing the number of directors of the Board of Directors, fixing the number of directors in each class, approving the non-binding proposal on executive compensation, and ratifying the independent auditorsregistered public accounting firm for the year ending December 31, 2012,2015, requires the affirmative"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" and, therefore, do not count either for or against the proposals. Abstentions and broker non-votes, however, have the practical effect of reducing the number of affirmative votes required to achieve a majority for the matter by reducing the total number of shares voted from which the required majority is calculated.

        If a quorum is present, the shareholders will elect the nominees for director receiving the highest number of"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 where the broker withheld authority.

GOVERNANCE OF THE CORPORATION

        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 twelve (12)thirteen (13) members. Pursuant to the Corporation's mandatory retirement requirements, Harry L. Wheeler will retire at the annual meeting. Under the SEC and Nasdaq standards for independence, all non-employee directors and nominees meet the standards for independence. This constitutes more than a majority of our Board of Directors. Only independent directors serve on our Audit Committee, Nominating Committee, and Compensation Committee.

Leadership Structure

        The Corporation chooses to separate the roles of Chairman and President & CEO.Chief Executive Officer. The President & CEOChief Executive Officer is responsible for implementing the strategic direction of the Corporation, as determined by the Board of Directors, and the day-to-day leadership and performance of the Corporation. The Chairman oversees the agenda for and presides over Board of Director meetings, as

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well as provides leadership to the Board and facilitates communication between

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the Board of Directors and executive management. The Corporation believes that even though the Corporation's Chairman of the Board is not considered independent under the SEC and Nasdaq standards for independence, he is best suited to serve as Chairman of the non-employee directors because he is the most familiar with the Corporation's business and industry. The Corporation also has formally designated a lead independent director, the Vice Chairman of the Board, who chairs the Corporation's Executive Committee.independence.

Risk Oversight

        The Board of Directors has a role in overseeing the Corporation'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. The Audit Committee works closely with the Corporation's Chairman of the Board, President & CEO,Chief Executive Officer, and ACNB Bank's Chief Risk 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 including management's assessment of risk exposures (including risks related to liquidity, credit, operations, and regulatory compliance), 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'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 be implicated by the Corporation's compensation practices. Also, the Strategic Planning Committee assesses the risks associated with the Corporation's executive management succession plans. The Corporation's Chairman of the Board and President & CEO work closely with these committees.

Director Independence

        In determining each director's and nominee's independence, the Board of Directors considered loan transactions between the bankACNB 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 with Directors and Executive Officers" below) in reaching its determination that the directors are independent.

        In each case, the Board of Directors determined that none of the transactions impaired the independence of the director.

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Directors of ACNB Corporation

        The following table sets forth, as of March 9, 201210, 2015 (in alphabetical order), selected information about the Corporation's directors and director nominees.

Executive Officers of ACNB Corporation and/or Subsidiary

        The following table sets forth, as of March 9, 2012,10, 2015, selected information about the Corporation's Named Executive Officers, each of whom is appointed by the Board of Directors and each of whom holds office at the Board's discretion.

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        Prior to the Corporation's acquisition of Russell Insurance Group, Inc. in 2005, Mr. Russell served as the President of Russell Insurance Group, Inc. since its founding in 1978.

        Prior to joining the Corporation, Mr. Cathell served as Senior Vice President & Chief Financial Officer of Fulton Bancshares Corporation in McConnellsburg, Pennsylvania, during 2005. Prior to that, Mr. Cathell was Executive Vice President & Chief Financial Officer of Pennsylvania State Bank in Camp Hill, Pennsylvania, from 1999 through 2004.

Meetings and Committees of the Board of Directors

        The Board of Directors of ACNB Corporation met twelve (12) times during 2011.2014. 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-five (35)thirty-one (31) Board and committee meetings of the Corporation's Board of Directors were held in 2011.2014. During 2011,2014, each of the directors attended at least 75% of the combined total number of meetings of the Corporation's Board of Directors and the committees of which he or she was a member except for Ms. Weaver whose absence was due to health reasons. While themember. The Board of Directors has no formala written attendance policy concerning attendance atstatement which encourages and expects each director to attend the Annual Meeting of Shareholders, all directors are expected to attend.Shareholders. All of the directors attended the 20112014 Annual Meeting of Shareholders, and we expect that they will all attend the 20122015 Annual Meeting of Shareholders.

        Audit Committee.    Members of the Audit Committee during 20112014 were Daniel W. Potts, who served as Chairperson,Chair, Frank Elsner, III, Robert W. Miller, Donna M. Newell, J. Emmett Patterson, Marian B. Schultz, David L. Sites and Harry L. Wheeler. Each of these directors is "independent" as defined in the SEC and Nasdaq standards for independence. In addition, Ronald L. Hankey, Thomas A. Ritter, David W. Cathell, Lynda L. Glass and James P. Helt were invited to attend committee meetings. The principal duties of the Audit Committee, as set forth in its charter, include 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 Corporate Governance Documents section of the ACNB Corporation page of ACNB Bank's website at www.acnb.com. The Audit Committee is incorporated by reference to Appendix A of the Corporation's 2010 proxy statement. The committee met four (4)five (5) times during 2011.2014.

        Executive Committee.    Members of the Executive Committee during 20112014 were Frank Elsner, III, who served as Chairperson,Chair, Daniel W. Potts, Marian B. Schultz, David L. Sites, Alan J. Stock Jennifer L. Weaver, and James E. Williams. Each of these directors is "independent" as defined in the SEC and Nasdaq standards for independence. In addition, Ronald L. Hankey and Thomas A. Ritter served as an ex-officio membersmember of this committee, and David W. Cathell, Lynda L. Glass and James P. Helt were invited to attend committee meetings. The principal duties of the Executive Committee are to act on behalf of the Board between meetings and to evaluate governance issues. The committeeExecutive Committee has a charter which is available under the Corporate Governance Documents section of the ACNB Corporation page of ACNB Bank's website at www.acnb.com. The Executive Committee met one (1) time during 2011.2014.

        Compensation Committee.    Members of the Compensation Committee during 20112014 were James E. Williams, who served as Chairperson,Chair, Frank Elsner, III, Scott L. Kelley, James J. Lott, J. Emmett Patterson, Marian B. Schultz Jennifer L. Weaver, and Harry L. Wheeler.Alan J. Stock. Each of these directors is "independent" as defined in the SEC and Nasdaq standards for independence. In addition, Ronald L. Hankey, as Chairman of the Board, was invited to attend committee meetings. The principal duties of the Compensation Committee include evaluating and recommending to the Board of Directors the executive officer compensation plans, policies and programs of the Corporation. The Compensation Committee has a charter which is available under the Corporate Governance Documents section of the Compensation Committee is incorporated by reference to Appendix AACNB Corporation page of this proxy statement.ACNB Bank's website at www.acnb.com. The Compensation Committee met nine (9)five (5) times during 2011.

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        Nominating Committee.    Members of the Nominating Committee during 20112014 were Marian B. Schultz, who served as Chairperson,Chair, Frank Elsner, III, Donna M. Newell, Alan J. Stock, Harry L. Wheeler and James E. Williams. Each of these directors is "independent" as defined in the SEC and Nasdaq standards for independence. In addition, Ronald L. Hankey, as Chairman of the Board, was invited to attend committee meetings. 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 Corporate Governance Documents section of the Nominating Committee is incorporated by reference to Appendix CACNB Corporation page of the Corporation's 2010 proxy statement.ACNB Bank's website at www.acnb.com. The Nominating Committee met three (3)two (2) times during 2011.2014.

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        Strategic Planning Committee.    Members of the Strategic Planning Committee during 20112014 were Ronald L. Hankey,Frank Elsner, III, who served as Chairperson, Frank Elsner, III, Robert W. Miller,Chair, Daniel W. Potts, Thomas A. Ritter, Marian B. Schultz, David L. Sites, Alan J. Stock Jennifer L. Weaver, and Harry L. Wheeler.James E. Williams. The principal duties of the Strategic Planning Committee include overseeing the development of and monitoring the progress of the Corporation's strategic plan; keeping the Board of Directors informed of developments, trends and opportunities in the industry that might help improve the Corporation's profitability, growth and/or customer service; and, establishing Board and senior management succession plans. The committeeStrategic Planning Committee has a charter which is available under the Corporate Governance Documents section of the ACNB Corporation page of ACNB Bank's website at www.acnb.com. The Strategic Planning Committee met six (6) times during 2011.2014.

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's proxy statement for next year's annual meeting, the written proposal must be received by the Corporation no later than November 27, 2012.25, 2015. 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 November 27, 2012,25, 2015, 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 2013 Proxy Statement.2016 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's Board of Directors first adopted a Code of Ethics which is applicable to our directors, officers and employees.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 Bank'sCorporation's Chief RiskGovernance Officer. We have filed a copy of theThe Code of Ethics withis available under the SEC as an exhibit toCorporate Governance Documents section of the Form 8-K filed by theACNB Corporation on March 19, 2010.page of ACNB Bank's website at www.acnb.com.

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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 and 203, of the Corporation's Bylaws. Any shareholder who intends to nominate a candidate for election to the Board of Directors must notify the Secretary of the Corporation in writing not less than fourteen (14) days prior to the date of any shareholder meeting called for the election of directors.

Qualification and Nomination of Directors

        The Corporation's Articles of Incorporation and Bylaws authorize the number of directors to be not less than five (5) and not more than twenty-five (25). They alsoFurther, the Corporation's Articles of Incorporation and Bylaws provide for three (3) classes of directors with staggered three-year terms of office of three (3) years that expire at successive annual meetings. Pursuant to Article II, Section 205, of the Corporation's Bylaws, directors who reachno 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), prior to the date of the annual meeting when such director's term expires, may not stand for reelection to the Board of Directors. years old. Currently, the number of directors is set at twelve (12)thirteen (13): Class 1 consists of five (5) directors, Class 2 consists of four (4) directors, and Class 3 consists of three (3)four (4) directors. However, pursuant to Article 11 of the Corporation's Articles of Incorporation and Article I, Section 105, of the Corporation's Bylaws, at each shareholder meeting for the election of directors, the shareholders determine how many directors will be elected to serve in each class. The Board of Directors believes that it is in the Corporation's best interest to fix the number of directors to be elected at the 20122015 Annual Meeting at fourteen (14)thirteen (13). The proposed fourteen (14)thirteen (13) member Board of Directors will consist of six (6)five (5) Class 1 Directors, four (4) Class 2 Directors, and four (4) Class 3 Directors. Shareholders will elect one (1) Class 1 Director to serve for a one (1) year term and until her successor is elected and qualified, four (4) Class 2 Directors to serve for terms of three (3) year termsyears until their successors are elected and qualified, and one (1) Class 3 Director to serve for a two (2) year term until his successor is elected and qualified.

        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'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'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's credentials in the context of these standards.

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        The Board of Directors nominated incumbent directors Jennifer L. Weaver to serve as a Class 1 Director andDonna M. Newell, David L. Sites and Alan J. Stock and Harry L. Wheeler to serve as Class 2 Directors until the expiration of the term of the respective classesclass or until their earlier death, resignation, or removal from office. Furthermore, after Nominating Committee review of various internal and external sources of information related to potential director nominees, upon the recommendation of two (2) current directors and the approval of the Nominating Committee, the Board of Directors nominated Donna M. Newell and ScottRichard L. KelleyAlloway II to serve as a Class 2 and Class 3 Directors, respectively,Director until the expiration of the term of the respective classesclass or until theirhis earlier death, resignation, or removal from office.

Ms. WeaverNewell and Messrs. Sites Stock and WheelerStock are presently members of the Board of Directors and have consented to serve another term as a director if reelected. Ms. Newell and Mr. Kelley are not presently members ofAlloway is a new nominee to the Board of Directors but haveand has consented to serve as directors if elected. If any of the nominees should be unavailable to serve for any reason, a majority of the Board of Directors then in office may fill the vacancy until the expiration of the term of the class of directors to which he or she was appointed.

        The 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.

        The Board of Directors proposes the following nominees for election as Class 2 Directors at the annual meeting:

Class 1 Director Nominee

Jennifer L. Weaver

Class 2 Director Nominees

Class 3 Director Nominee

Scott L. Kelley

        The Board of Directors recommends that shareholders voteFOR the proposalsproposal to elect the nominees listed above.

Information as to Nominees and Directors

        Set forth below, as of March 9, 2012,10, 2015, 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's or director'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 13 and12 through 14.

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Class 1 Directors (to serve until 2013)2016)

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Table of Contents human resources, and risk management.

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SHARE OWNERSHIP

Principal Shareholders

        As of December 31, 2011,2014, the Board of Directors knows of no person who owns of record or who is known to be the beneficial owner of more than 5% of the Corporation's outstanding common stock.

Beneficial Ownership of Executive Officers, Directors and Nominees

        The following table sets forth, as of December 31, 2011,2014, 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 December 31, 2011.2014.

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        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 executive officers is rounded to the nearest whole share.

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COMPENSATION AND PLAN INFORMATION

Compensation of the Board of Directors of ACNB Corporation and ACNB Bank

        Directors of the Corporation are not compensated for their services. Further, ACNB Bank does not compensate employee directors for attendance at Board of Directors meetings or committee meetings. However, in 2011,beginning April 1, 2014, ACNB Bank's non-employee directors were compensated for their services rendered to the Corporation and to ACNB Bank as follows:

•

$9,00011,000 annual retainer;



•

$400550 per Board meeting;



•

$175225 per hour for committee meetings with a minimum payment of $175;$225;



•

$100200 for committee chairpersonchair per meeting; and,



•

$500600 allowance for a half-day seminar plus expenses, if applicable, and $800$1,000 allowance for a full-day seminar plus expenses, if applicable.applicable; and,



•

$125 per hour for continuing education by external, online web-based training, given preapproval.

        Fifty percent (50%) of each director's annual retainer, as paid on a quarterly basis, is submitted as a voluntary cash purchase of ACNB Corporation common stock through the Corporation's Dividend Reinvestment and Stock Purchase Plan.

The following table summarizes the compensation of directors during 2011:2014:

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Director Deferred Fee Plan

        In January 2001, ACNB Bank established a director deferred fee plan. Directors Elsner, Kelley, Lott, Miller, Newell, Patterson, Schultz, Sites, Stock, Weaver, Wheeler and Williams participated in 2011.2014. Directors may defer up to 100% of the director'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).

Director Supplemental Life Insurance Plan

        Effective January 1, 2001, ACNB Bank establishedhas a director supplemental life insurance plan. All non-employee directors are eligible for the life insurance benefit, subject to medical underwriting acceptance.benefit. The plan currently insures ten (10)twelve (12) directors. The director life insurance benefit of

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$100,000 $250,000 per participating director shall be provided unless the director separates from service prior to reaching the retirement age, in which case the benefit is $100,000. This life insurance benefit will be providedfunded 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'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) 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.

Executive Compensation

Compensation Discussion and Analysis

Named Executive Officers

        The Compensation Committee is charged with recommending to the Board of Directors of ACNB Corporation the compensation for all of the Named Executive Officers. For the year 2011, the2014, our Named Executive Officers include the

•

Chairman ofthose individuals in the Board of the Corporation;



•

following table:

Named Executive Officer		Position at Corporate Level		Position at Subsidiary Level
Thomas A. Ritter		President & Chief Executive Officer		• President & Chief Executive Officer of ACNB Bank
				• Chairman of the Board of Russell Insurance Group, Inc.
Lynda L. Glass		Executive Vice President, Secretary & Chief Governance Officer		• Executive Vice President, Secretary & Chief Risk Officer of ACNB Bank
				• Vice President & Secretary of Russell Insurance Group, Inc.
David W. Cathell		Executive Vice President, Treasurer & Chief Financial Officer		• Executive Vice President, Treasurer & Chief Financial Officer of ACNB Bank
				• Vice President & Treasurer of Russell Insurance Group, Inc.
James P. Helt				• Executive Vice President of Banking Services of ACNB Bank
Frank C. Russell, Jr.				• President & Chief Executive Officer of Russell Insurance Group, Inc.




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Corporation Performance vs. Named Executive Officer ofBase Salary Increase

        The Corporation is committed to maintaining a strong, healthy financial institution and is committed to our shareholders. We highlight below our corporate performance and the Corporation;



•

Named Executive Vice President, Secretary & Chief Governance Officer ofOfficers' (except the Corporation;



•

Executive Vice President, Treasurer & Chief Financial Officer of the Corporation; and,



•

President & Chief Executive Officer of Russell Insurance Group, Inc.) base salary which is the main component of our Named Executive Officers' compensation.

		2013			2014			Percent Increase
Corporate Performance Highlights
Stock Price at 12/31 Close		$	18.06		$	21.75			20.4
Assets(1)		$	1,046,047		$	1,089,808			4.2
Net Income(1)		$	9,315		$	10,290			10.5
Earnings per Share		$	1.56		$	1.71			9.6
Named Executive Officer Compensation—Base Salary(2)
Thomas A. Ritter		$	305,400		$	313,000			2.5
Lynda L. Glass		$	224,400		$	230,000			2.5
David W. Cathell		$	208,000		$	218,500			5.0
James P. Helt		$	224,400		$	230,000			2.5

---

⁽¹⁾

In thousands.



⁽²⁾

Frank C. Russell, Jr. is not included in the table as his compensation is determined by contract and not by Corporation or subsidiary performance.

        The Chairman of the Board of the Corporation also serves as the Chairman of the Board of the Corporation's banking subsidiary, ACNB Bank. The President & Chief Executive Officer of the Corporation also serves as the President & Chief Executive Officer of ACNB Bank. The Executive Vice President, Secretary & Chief Governance Officer of the Corporation also served as Executive Vice President, Secretary & Chief Operating Officer of ACNB Bank until September 20, 2011, at which time she was appointed Executive Vice President, Secretary & Chief Risk Officer of the Bank. The Executive Vice President, Treasurer & Chief Financial Officer of the Corporation also serves as Executive Vice President, Treasurer & Chief Financial Officer of ACNB Bank.

Compensation Objectives and Policies

        The primary objectives of the Compensation CommitteeCorporation's compensation philosophy remain to attract, motivate, reward and retain executives who

•

maintain the safety and soundness of the Corporation,



•

sustain and enhance long-term investor value,



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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's profitability and growth.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.

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The Role of the Executive Officers in Setting Compensation

        The President & Chief Executive Officer discusses the Executive Vice President, Secretary & Chief Governance Officer's and the Executive Vice President, Treasurer & Chief Financial Officer's performance with the Compensation Committee and provides insight on merit compensation. The Compensation Committee, without input from other executive officers, reviews the performance of the President & Chief Executive Officer and the Chairman of the Board. The Compensation Committee then reports on the performance of the executives and recommends compensation levels to the Board of Directors.

        The Board of Directors of Russell Insurance Group, Inc., the insurance subsidiary, recommends the compensation level for the President & Chief Executive Officer of Russell Insurance Group, Inc. to the Compensation Committee, which reviews the recommendation and subsequently makes an independent recommendation to the Board of Directors of ACNB Corporation.

        The members of the Board of Directors of the Corporation, using their respective business judgment and after hearing the Compensation Committee's report, determine the compensation levels for all Named Executive Officers.        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. Only the President & Chief Executive Officer of the Corporation provides insight to the Compensation Committee on the performance and compensation of the other Named Executive Officers as illustrated below.

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The Compensation Process for the Named Executive Officers,
except the President & Chief Executive Officer of Russell Insurance Group, Inc.

The Compensation Process for the President & Chief Executive Officer
of Russell Insurance Group, Inc.

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The Role of a Consultant in Setting Compensation

        For compensation awarded in the year of 2011, theThe Compensation Committee engaged Larry R. Webber, an independent executivemay in its sole discretion retain or seek the advice of a compensation advisor, to assistconsultant or other adviser. The Compensation Committee is directly responsible for retaining, determining the Committee in fulfilling its responsibilities. Mr. Webber's engagement did not createindependence, determining if a conflict of interest exists, compensating, and Mr. Webber did not provide additional services tooverseeing the Corporation or anywork of its subsidiaries.

        Mr. Webber presentedadvisers. The Compensation Committee chose not to engage a 2011 executive compensation review which he preparedconsultant for the year 2014 as the Compensation Committee considered the shareholders' response to the Say on Pay vote and advised the Committee with regardchose not to materially change compensation for the Named Executive Officers except the President & Chief Executive Officer of Russell Insurance Group, Inc.

        The Compensation Committee also engaged Bank Financial Services Group (BFS Group) to provide an analysis of the supplemental executive retirement plans (SERPs). BFS Group furnished the Committee with information regarding SERP expenses and the benefits the Corporation and Bank will receive from bank-owned life insurance policies upon the death of the Named Executive Officers. The representative from BFS Group also discussed SERP benefits provided by other local financial institutions. BFS Group provides bank-owned life insurance policies and back office administrative services for SERP benefits.in 2014.

Benchmarking

        In 2011,2014, the Corporation through the services of Mr. Webber, benchmarkeddid not benchmark its compensation policies against a peer group approved by the Compensation Committee and consisting of the following institutions:

1.

Eastern Virginia Bankshares, Inc., Tappahannock, VA



2.

Middleburg Financial Corporation, Middleburg, VA



3.

National Bankshares, Inc., Blacksburg, VA



4.

C&F Financial Corporation, West Point, VA



5.

Old Point Financial Corporation, Hampton, VA

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6.

American National Bankshares, Inc., Danville, VA



7.

Bryn Mawr Bank Corporation, Bryn Mawr, PA



8.

Fox Chase Bancorp, Inc., Hatboro, PA



9.

Orrstown Financial Services, Inc., Shippensburg, PA



10.

CNB Financial Corporation, Clearfield, PA



11.

ESSA Bancorp, Inc., Stroudsburg, PA



12.

AmeriServ Financial, Inc., Johnstown, PA



13.

Codorus Valley Bancorp, Inc., York, PA



14.

Harleysville Savings Financial Corporation, Harleysville, PA



15.

Franklin Financial Services Corporation, Chambersburg, PA



16.

Citizens & Northern Corporation, Wellsboro, PA



17.

Wilber Corporation, Oneonta, NY



18.

Bridge Bancorp, Inc., Bridgehampton, NY



19.

Chemung Financial Corporation, Elmira, NY



20.

Shore Bancshares, Inc., Easton, MD



21.

Severn Bancorp, Inc., Annapolis, MD

        Mr. Webber's report presented information on the Corporation and the peer comparison of 2010 return on average assets (ROAA), return on average equity (ROAE), and earnings per share (EPS) growth. Mr. Webber obtained the relevant data from SNL Financial, a provider of financial services financial data.group. The Compensation Committee chose ROAAdid use numerous resources to educate itself on current trends in compensation as a metric because it illustrates how efficiently the Corporation is using its assets over time and does not reflect intermediate highs or lows. The Compensation Committee chose ROAE because it gauges the Corporation's profitability over the year as a percentage of shareholders' equity. The Compensation Committee chose EPS growth to emphasize the Corporation's compensation philosophy of sustaining and enhancing long-term investor value.

        ACNB Corporation exceeded its peers with regard to ROAA, ROAE and EPS growth as illustrated by the following tables extracted from Mr. Webber's report:outlined below.

2010 ROAAResource		2010 ROAE		2010 EPS GROWTHDescription
L.R. Webber Associates, Inc. Salary/Benefits Survey		The survey includes general compensation information and salary ranges for executives of financial institutions throughout Pennsylvania. The survey is not used to 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 at financial institutions primarily in Pennsylvania.
American Bankers Association Compensation and Benefits Survey Report

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        Mr. Webber's report also compared base salary, at-risk awards, and total compensation based upon information gained from 2010 proxy material. Although the Corporation exceeded its peers in the metrics comparison, the total compensation of the President & Chief Executive Officer; Executive Vice President, Secretary & Chief Operating Officer (now Executive Vice President, Secretary & Chief Risk Officer); and, Executive Vice President, Treasurer & Chief Financial Officer was lower than their peers as illustrated below:

				The survey provides information on compensation trends of financial institutions nationwide. It is not used to 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 at financial institutions nationwide.
	Chief Executive Officer & President		Executive Vice President, Secretary & Chief Operating Officer (now Executive Vice President, Secretary & Chief Risk Officer)		Executive Vice President, Treasurer & ChiefProxy Material of Other Financial OfficerInstitutions
		The proxy materials provide information on specific compensation at specific financial institutions. It is not used to 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 at financial institutions.
Information Received at Various Seminars and Conferences		The information provides general compensation trends. It is not used to 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.

        When Mr. Webber presented his analysis, the ACNB Bank title for Lynda L. Glass, as a Named Executive Officer, was Executive Vice President, Secretary & Chief Operating Officer and, therefore, the information which he presented was based upon the duties of a chief operating officer. Since then, Ms. Glass has taken on new responsibilities and her title has changed; however, there was no coincident increase in salary.

        The three above-referenced Named Executive Officers' at-risk cash bonuses as a percentage of salary were lower than their peers by approximately 17% to 29%. The Corporation and Bank did not provide equity awards in 2010; whereas, ACNB Corporation's peers awarded their Named Executive Officers up to 35% of their base salary in equity awards. The President & Chief Executive Officer's and the Executive Vice President, Treasurer & Chief Financial Officer's base salary continue to be lower than their peers. The Executive Vice President, Treasurer & Chief Financial Officer's base salary was raised by $20,000 to close the gap in the disparity among his salary and his peers.

        The Compensation Committee also benchmarked ACNB Bank's supplemental executive retirement plans to the information provided by BFS Group. The financial institutions included in BFS Group's report included Farmers and Merchants Trust Company, CNB Financial Corporation, Orrstown Bank, Codorus Valley Bancorp, Inc., and ESSA Bank & Trust. The information provided indicated that the payout period for ACNB Bank's supplemental executive retirement plans was shorter than that provided a majority of the peers. Also, the benchmarking indicated that the payout amounts were generally lower than the peer group's payout amounts. As a result of this information, the Compensation Committee determined to lengthen the payout period and to adjust the amount of the payouts.

        Additionally, the Corporation participates in an annual compensation survey and receives the results of the survey from L.R. Webber Associates, Inc., a compensation and benefits consulting firm which is not affiliated with Mr. Webber. The human resources manager of the Corporation's banking subsidiary interacts with the consulting firm and the applicable results of the survey are available to the Compensation Committee for review. The survey includes general compensation information and salary ranges for executives of financial institutions throughout Pennsylvania. The survey is not used to 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 at financial institutions primarily in Pennsylvania.

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        In addition to the L.R. Webber Associates, Inc. survey, the Corporation receives information on compensation trends of financial institutions nationwide through resources provided by the American Bankers Association. The Compensation Committee also reviews the proxy material of other financial institutions in an effort to become more versed in the form of compensation awarded to executives at financial institutions and reviews educational material regarding executive compensation provided at various seminars and conferences attended by Compensation Committee members throughout the year.

The Role of the Shareholders' Say on Pay Vote

        At the 20112014 Annual Meeting of Shareholders, the shareholders overwhelmingly voted in favor of approving the compensation of the Corporation's Named Executive Officers as presented in the

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Compensation Discussion and Analysis foundpresented in the Corporation's proxy statement dated March 28, 2011.25, 2014. The Compensation Committee will take the results of the vote, which has been consistently in favor of approving the compensation of the Corporation's Named Executive Officers, as well as the shareholders' vote on the frequency of the saySay on payPay vote, into consideration in awarding compensation in 2012the future consistent with the policies and practices outlined in the Compensation Discussion and Analysis and in providing for an annual saySay on payPay vote.

Components of Compensation

        While the specific amount of compensation provided to the Corporation's executives may slightly differ, the components of compensation are generally the same for our Named Executive Officers. For 2011,2014, the Corporation's executive compensation and benefits package consisted primarily of base salary, bonus, retirement plans, and employee health and welfare benefit plans.

Summary of Components of Compensation

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Base Salary

Named Executive Officers Employed by ACNB Bank

        The Compensation Committee believes that base salary should be the primary component of compensation. By setting base salary as the primary component of compensation, we discourage excessive risk-taking by our Named Executive Officers. Fixed compensation provides the executive with the security of knowing that the majority of his or her compensation is not tied to market fluctuations. The amount of base salary is designed to retain Named Executive Officers who can further the strategic objectives of the Corporation and/or a subsidiary of the Corporation and provide leadership to the Corporation.where needed. In recommending base salary, the Compensation Committee does not take into consideration any other forms of compensation which are and which may not be offered to the Named Executive Officers. The Compensation Committee believes that, by providing compensation without delay in the form of base salaries, it will successfully further the Corporation's goals of providing a stable environment for its Named Executive Officers which, in turn, encourages them to maintain the safety and soundness of the Corporation.

        Base salaries for our Named Executive Officers are established based upon their respective responsibilities, individual performance, longevity with the Corporation and/or a subsidiary of the Corporation, and key Corporation performance measures including profitability and growth. The Compensation Committee and the Board of Directors of the Corporation do not assign specific quantitative measures to profitability and growth or performance targets for purposes of base salary increases, but uses its business judgment to determine if the Corporation's profitability and growth are sufficient enough to allow the Corporation the flexibility to award merit increases such that the increase would be a safe and sound practice. For the year ended December 31, 2013, the Corporation reported an increase of five percent (5%) in net income, net income on a per share basis increased seven cents ($0.07), and shareholders' equity increased by five and one-half percent (5.5%).

        The Named Executive Officers are expected to assist the Corporation in sustaining and enhancing long-term investor value by maintaining the safety and soundness of the Corporation, enforcing internal controls deemed appropriate by our auditors and regulators, executing the strategic plans as prioritized by the Board of Directors, providing leadership and organizational development, and assisting in public relations. A Named Executive Officer's capacity to perform these tasks and achievement of these tasks are taken into consideration in determining whether the Named Executive Officer has performed as expected or has had outstanding performance. Except for the Executive Vice President, Treasurer & Chief Financial Officer's base salary which was raised in part to reduce the disparity among his base salary and his peers, the Named Executive Officers' salaries were raised only approximately 3.1%. The Social Security cost of living adjustment

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was 3.6% for 2011.        Although the Compensation Committee was pleased with theindividual performance ofreviews for the Named Executive Officers the increase in their respective base salary was a reflection of the current state of the economy and the desireCorporation and/or ACNB Bank were very favorable, these Named Executive Officers' respective salaries were not substantially increased in an effort to preserve the assets of the Corporation and its banking subsidiary and the increases were not a true reflection of their performance.the respective Named Executive Officer's performance or the performance of the Corporation or ACNB Bank.

Named Executive Officer Employed by Russell Insurance Group, Inc.

        The Board of Directors of Russell Insurance Group, Inc. recommends the amount of cash compensation for the President & Chief Executive Officer of Russell Insurance Group, Inc. to the Compensation Committee which reviews the recommendation. The Compensation Committee then makes an independent recommendation to the Board of Directors of ACNB Corporation, which sets the amount of cash compensation for all Named Executive Officers. The base amount and forms of compensation awarded the President & Chief Executive Officer of Russell Insurance Group, Inc. are based upon previous contract negotiations, the performance of Russell Insurance Group, Inc., and the role that the President & Chief Executive Officer of Russell Insurance Group, Inc. performs in the highly relationship-oriented industry of insurance sales.

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Bonus Awards

        The Corporation does not have a formalized bonus plan for all NamedPresident & Chief Executive Officers.Officer of Russell Insurance Group, Inc. Bonus

        The President & Chief Executive Officer of Russell Insurance Group, Inc. is the only Named Executive Officer who has a non-discretionary formulized bonus structure which is addressed in his employment agreement. Given that his duties include marketing and sales, the Board of Directors of Russell Insurance Group, Inc. believes that offering him a formulized bonus will increase the profitability of the subsidiary, and therefore the Corporation, because it incents him to exceed $1 million in pre-tax profits in a calendar year. Beginning in 2011, theThe bonus structure is equal to five percent (5%) of the pre-tax income (based on historical agency accounting system) earned by Russell Insurance Group, Inc. during the preceding calendar year, provided that the actual pre-tax profits for that year exceeds $1 million; further provided, however, if Russell Insurance Group, Inc. is assessed with impairment charges, then the Board of Directors of Russell Insurance Group, Inc. may, at its sole discretion, award, adjust, or not award the bonus for any year in which impairment charges are applied to the Russell Insurance Group, Inc. income statement. This new bonus structure also contains a clawback provision allowing the Corporation to recoup the appropriate funds if the Corporation is required to restate all or a portion of its financial statements as a result of or related to a restatement of Russell Insurance Group, Inc.'s financial statements andor if the Corporation determines in its sole discretion that it is required by state or federal laws or regulations to implement the clawback provision.

Discretionary Bonuses to ACNB Bank Employees

        The CorporationCompensation Committee may authorizerecommend to the Board of Directors discretionary bonus awards for the Named Executive Officers, or any other employee, for the purpose of rewarding exceptional effort and performance. TheFor the year 2014, the Corporation hashad not set forth specific criteria for awarding bonuses, but treats each year's performanceawarded bonuses on a case-by-case basis and usesused the Compensation Committee members' experience and individual business judgment when determining whether a bonus iswas appropriate.

        The Corporation may provide a holiday bonus annually to employees In the second quarter of its banking subsidiary. For2014, after receiving and reviewing the Corporation's audited financial statements for the year ended December 31, 2013, the Compensation Committee recommended and the Board approved bonuses for the Named Executive Officers (excluding the President & Chief Executive Officer of 2011,Russell Insurance Group, Inc. as his bonus structure is provided in his employment agreement as described in the bonus was oneparagraph above), based upon the general financial performance of the Corporation for the year 2013 and based upon the Named Executive Officer's performance. Fifty percent (1%(50%) of the employee's regular earnings. This discretionary bonus is intended to reward employees for their service throughout the year. As the discretionary bonus is awarded to all eligible employees, the amountrespective Named Executive Officer was deposited for a cash purchase of Corporation stock through the Corporation's Dividend Reinvestment and Stock Purchase Plan to further align the interests of the bonusNamed Executive Officer with those of the shareholders.

ACNB Bank Variable Compensation Plan

        Effective January 1, 2014, the Compensation Committee established the ACNB Bank Variable Compensation Plan (Plan), which provides guidelines for awarding cash and/or equity incentive bonuses in the future and which guidelines cover employees of the banking subsidiary, ACNB Bank. 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 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 employee with those of the shareholders;



•

the employee must have an overall rating of "Good" on the employee's most recent individual performance appraisal;

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•

no incentive bonuses may be awarded if the Bank'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 taken into account whenreasonable; and,



•

all bonuses will be subject to a clawback provision.

        For the 2014 year, the Compensation Committee determined that it would maintain its ability to recommend discretionary bonuses in 2015 for 2014 performance. In moving toward a non-discretionary bonus structure, the Compensation Committee set forth certain criteria that it would review, although the criteria are not binding, in determining executive compensation.whether to consider granting bonuses in 2015 for the 2014 year.

2014 Criteria for Review In Considering Whether to Grant a Discretionary Bonus

Retirement Plans

        The Compensation Committee believes that retirement benefits are another important way to provide long-term financial security to employees, thus encouraging longevity and a low employee turnover rate. As the defined benefit plan and 401(k) plan are tax qualified retirement plans, the Corporation's retirement plans are not tied to Corporation or individual performance.

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Defined Benefit Plan

        The Corporation's banking subsidiary, ACNB Bank, maintains a defined benefit plan which is available to all eligible employees hired on or before March 31, 2012. The plan provides a prospective benefit commencing at age sixty-five (65) for the employee's lifetime. If an employee has completed thirty (30) or more years of service, the employee is eligible to retire at age sixty-two (62) and receive full benefits. The plan contains a five (5) year vesting provision to ensure that the plan rewards employees for longevity. The amount paid under the plan is based upon a formula outlined in the plan and which is applicable to all ACNB Bank employees. The defined benefit plan is a very effective tool for employee retention and for providing long-term incentive compensation. All Named Executive Officers, with the exception of the President & Chief Executive Officer of Russell Insurance Group, Inc., are employees of ACNB Bank and are eligible to participate in the plan.

401(k) Plan

        Both ACNB Bank and Russell Insurance Group, Inc. maintain a 401(k) plan which allows employees to save their own money for retirement, to earn a matching contribution from the subsidiary, and to direct the investment of all funds in the 401(k) plan. The percentage of match contributed to

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the Named Executive Officer's account is the same as contributed to all other eligible employees in each plan and is prescribed by the Internal Revenue Code. These plans are viewed as a necessity to successfully hire and retain employees in a competitive marketplace. All Named Executive Officers participate in ACNB Bank's 401(k) plan, except the President & Chief Executive Officer of Russell Insurance Group, Inc. who participates in Russell Insurance Group, Inc.'s 401(k) plan.

Supplemental Executive Retirement Plan

        In 2011,2014, all Named Executive Officers, with the Corporation provided a supplemental executive retirement plan (SERP) to the Chairmanexception of the Board, President & Chief Executive Officer, and Executive Vice President, Secretary & Chief Risk Officer of ACNB Bank. Based upon the presentation of BFS Group and the information provided by Mr.��Webber, which is discussed in more detail inThe Role of a Consultant in Setting Compensation, the Compensation Committee determined to provide a SERP agreement to the Executive Vice President, Treasurer & Chief Financial Officer and to increase the retirement benefit to the President & Chief Executive Officer and the Executive Vice President, Secretary & Chief Risk Officerof Russell Insurance Group, Inc., were parties to offset a recent reduction in the Named Executive Officers' benefits under the Bank's defined benefit plan.supplemental executive retirement plan (SERP) agreements. The SERPsSERP agreements were and are being designed to account for some of the limitations with traditional pension plans and the reduction in benefits under ACNB Bank's defined benefit plan, and are intended to provide essential executive officers with an incentive to remain with the Corporation until retirement as opposed to terminating employment before retirement to work for a competitor. The triggering events for payment under the SERP agreements are reaching retirement age as delineated in the SERP agreement, change inof control followed by termination of employment, or death. Benefit amounts for a termination prior to retirement age will be determined by the individual's number of years of service encouraging longevity with the Corporation.Corporation and/or ACNB Bank, unless the termination follows a change in control, at which time, the Named Executive Officer will be fully vested in the SERP benefit. Payments under the SERP agreements are made after the Named Executive Officer reaches normal retirement age as defined in the respective agreement. The SERP provides no current remuneration to the applicable Named Executive Officers and, therefore, is not taken into consideration when determining base salary.

Health and Welfare Plans

        Health and welfare plans are not tied to the Corporation or individual performance. The cost of providing such benefits to all eligible employees is not taken into account when determining specific salaries of the Named Executive Officers and is a cost of doing business.

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Insurance Plans

        Group life, group disability, vision, and health insurance are available to all eligible employees. Such plans are standard in the industry and in the geographic area for all industries, as well as necessary to compete for talented and committed employees at all levels of the Corporation.

Supplemental Life Insurance Plan

        The Corporation's supplemental life insurance plan provides a split-dollar share of death benefits to the Named Executive Officer's beneficiary, depending upon the Named Executive Officer's eligibility to receive payments. The plan is funded with bank-owned life insurance and is used to provide an additional benefit to certain officers, including the Named Executive Officers, with a minimal cost to the Corporation. Split-dollar life insurance plans are widely available in the banking industry because the Corporation will recover its plan costs upon the death of the Named Executive Officer and the Named Executive Officer's beneficiary will receive a split of the insurance proceeds. Although this benefit does not provide any current remuneration to the Named Executive Officer, it provides further incentive for longevity with the Corporation and/or a subsidiary of the Corporation as it provides the executive the ability to provide some benefit to his or her family after his or her death. As the Corporation will recover its plan costs, the cost of the plan is not taken into consideration when determining base salary.

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Long-Term Care Insurance

        The Corporation provides long-term care insurance to certain officers, including the Named Executive Officers employed by the Corporation's banking subsidiary, ACNB Bank. The cost of providing this benefit is offset by interest earned on bank-owned life insurance on the life of the Named Executive Officer. Long-term care insurance is seen as an additional benefit used to attract and retain competent executives at minimal cost; therefore, the cost of the plan is not taken into consideration when determining base salary or other benefits.

Perquisites

        The Corporation provides either a Corporation-owned or Corporation-leased vehicle to the President & Chief Executive Officer of ACNB Bank and to the President & Chief Executive Officer of Russell Insurance Group, Inc. The provision of a Corporation vehicle to these individuals is a customary benefit in the financial services industry as individuals in these positions frequently engage in public relations on behalf of the Corporation, ACNB Bank and/or Russell Insurance Group, Inc.

Equity Compensation

        In 2009, the shareholders approved a restricted stock plan for the benefit of employees and directors of ACNB Corporation and ACNB Bank, as determined by the Compensation Committee. The plan is intended to advance the best interests of the Corporation and its shareholders by providing those persons who have responsibility for the Corporation's growth with additional incentives by encouraging them to acquire an ownership interest in the Corporation and, thereby, further encouraging them to contribute to the success of the Corporation and ACNB Bank. The price volatility inherent in any form of performance-based equity compensation remains the main reason why other forms of compensation will be relied upon more heavily than equity compensation. The Compensation Committee has not yet granted any shares of restricted stock given the current state of the economy. The Compensation Committeeand is also still engaging in a thorough analysis of the industry and review of criteria to determine the best method to enhance shareholder value by providing an incentive to its executives under the plan. The

        Although the Corporation hasdid not instituted anspecifically grant equity ownership requirementawards in 2014, in the second quarter of 2014, the Compensation Committee recommended and the Board approved cash bonuses for itsthe Named Executive Officers.