-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JXXVkO/Gi/JxNX41yhXa2YWn/Mn28dr2uTnRZMf3aUSicao0//6O4BqyiBSqAtzR cLxwUAVOmDUmr0RzzHC36w== 0000763907-97-000001.txt : 19970328 0000763907-97-000001.hdr.sgml : 19970328 ACCESSION NUMBER: 0000763907-97-000001 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970327 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST UNITED CORP/MD/ CENTRAL INDEX KEY: 0000763907 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 521380770 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14237 FILM NUMBER: 97565755 BUSINESS ADDRESS: STREET 1: 19 S SECOND ST CITY: OAKLAND STATE: MD ZIP: 21550 BUSINESS PHONE: 3013349471 MAIL ADDRESS: STREET 1: 19 S SECOND ST CITY: OAKLAND STATE: MD ZIP: 21550 DEF 14A 1 SCHEDULE 14- INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant ( X ) Filed by a Party other than the Registrant ( ) Check the appropriate box: ( ) Preliminary Proxy Statement ( ) Confidential, for use of the Commission Only (as permitted by Rule 14a6(e) (2)) (X) Definitive Proxy Statement ( ) Definitive Additional Materials ( ) Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12 FIRST UNITED CORPORATION ------------------------------------------------ (Name of Registrant as Specified In Its Charter) FIRST UNITED CORPORATION ------------------------------------------------ (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): (X) No fee required. ( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: ____________________________________________________________ 2) Aggregate number of securities to which transaction applies: ______________________________________________________________ 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: ______________________________________________________________ 5) Total fee paid: -------------------------------------------------------------- ( ) Fee paid previously with preliminary materials. ( ) Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: _________________________________________ 2) Form, Schedule or Registration Statement No.: _________________________________________ 3) Filing Party: _________________________________________ 4) Date Filed ___________________________________________ (Amended by Sec Act Rel No. 7331; Exch Act Rel No. 37692 eff 10/07/96.) FIRST UNITED CORPORATION 19 South Second Street P.O. Box 9 Oakland, Maryland 21550 March 28, 1997 PROXY STATEMENT INFORMATION CONCERNING THE SOLICITATION The enclosed proxy is solicited by the Board of Directors of First United Corporation (the "Company") in connection with the Annual Meeting of Shareholders to be held on April 29, 1997, and any adjournment or postponements thereof. The cost of soliciting proxies will be borne by the Company. In addition to solicitation by mail, proxies may be solicited by officers, directors and regular employees of the Company personally or by telephone, telegraph or facsimile. No additional remuneration will be paid to officers, directors or regular employees who solicit proxies. The Company may reimburse brokers, banks, custodians, nominees and other fiduciaries for their reasonable out-of-pocket expenses in forwarding proxy materials to their principals. The Company has also engaged ChaseMellon Securities Transfer, Inc. to assist in the solicitation of proxies, at an estimated cost of $1,000 plus reasonable expenses. Please complete, sign the enclosed proxy and return it to our transfer agent, ChaseMellon, promptly. Should you attend the meeting and desire to vote in person, you may withdraw your proxy by written request delivered to the Secretary of the Company, prior to its exercise by the named proxies. Also, your proxy may be revoked before it is exercised, whether or not you attend the meeting, by notifying Robert W. Kurtz, Secretary, First United Corporation, P.O. Box 9, Oakland, Maryland 21550-0009, in writing prior to the Annual Meeting. Your proxy may also be revoked by using a subsequently signed proxy. Your proxy will be voted in accordance with the instructions on the proxy card; if no instructions are given, your proxy will be voted FOR the director nominees listed below, FOR the ratification of the appointment of independent auditors and in the discretion of the persons named in the proxy with respect to any other matter properly brought before the meeting. The proxy materials are first being mailed to shareholders on or about March 28, 1997. SUBMISSION OF SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING Shareholder proposals intended to be presented at the 1998 Annual Meeting of Shareholders must be received by the Company not later than November 29, 1997, in order to be eligible for inclusion in the Company's 1998 Proxy Statement. OUTSTANDING VOTING SECURITIES; VOTING RIGHTS Only shareholders of record of the Company's Common Stock, par value $.01 per share ("Common Stock") at the close of business on February 28, 1997, (the "Record Date") will be entitled to receive notice of and vote at the Annual Meeting. As of the Record Date, there were 6,414,539 shares of Common Stock outstanding and entitled to be voted at the Annual Meeting, except that an aggregate of 730,508 shares, or 11.39%, held by the Trust Department of First United National Bank & Trust ("FUNBT"), as sole trustee for the benefit of various beneficiaries, may not be voted in the election of directors. Each share of Common Stock is entitled to one vote. Directors are elected by a plurality of the votes cast by the holders of shares of Common Stock present in person or represented by proxy at the meeting, in which there is a quorum present. Consequently, withholding of votes, abstentions and broker non-votes will not affect the outcome of the plurality vote. STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT The following table sets forth the number of shares of Common Stock beneficially owned as of February 28, 1997, by directors and executive officers and by each person that, to the Company's knowledge, beneficially owns more than 5% of the Company's outstanding Common Stock. Except as otherwise indicated and except for shares held by members of an individual's family or in trust, all shares are held with sole dispositive and voting power. Common Stock Percent of Beneficially Outstanding DIRECTORS & EXECUTIVE OFFICERS: Owned Common Stock David J. Beachy 7,403 .12% Donald M. Browning 17,821 .28% Rex W. Burton 9,119 .14% Paul Cox, Jr. 1,294 .02% Richard D. Dailey, Jr. 2,590 .04% William B. Grant 5,804 .09% Maynard G. Grossnickle 9,957 .16% Raymond F. Hinkle 5,684 .09% Robert W. Kurtz 8,002 .12% Andrew E. Mance 46,120 .72% Elaine L. McDonald 1,916 .03% Donald E. Moran 100,560 1.57% I. Robert Rudy 27,562 .43% James F. Scarpelli, Sr. 96,340 (2) 1.50% Karen F. Spiker 6,640 .10% Richard G. Stanton 14,512 .23% Robert G. Stuck 2,213 .03% Frederick A. Thayer, III 53,589 .84% Directors & Executive Officers as a group (19 persons) 418,662 6.53% OTHER BENEFICIAL OWNERS: Firstoak & Company 629,368 (1) 9.81% (1) Shares held in the name of Firstoak Co., a nominee, are administered by the Trust Department of FUNBT in a fiduciary capacity. Firstoak & Co. disclaims beneficial ownership of such shares. (2) Includes 656 shares held in the James and Margaret Scarpelli Foundation Trust which Mr. Scarpelli has a 1/4 interest. ELECTION OF DIRECTORS (PROPOSAL NO. 1) A Board of Directors of 18 persons is to be elected by the shareholders. All of the nominees named below will be elected to serve as directors until the 1998 Annual Meeting of Shareholders and until their respective successors have been elected and qualified. Unless authority to vote is withheld, the enclosed proxy will be voted in favor of the nominees listed below. The Board of Directors has no reason to believe that any nominee herein will be unable to serve, but if any of them become unable to serve, the proxies may be voted with discretionary authority for the election of other persons to serve as directors. NAME Age (1) Occupation During Past Five Years Director Since David J. Beachy 56 Vice President, 1985 Fred E. Beachy Lumber Co., Inc., Building Supplies Donald M. Browning 72 Chairman of the 1985 Board, Browning's, Inc. Retail Groceries Rex W. Burton 62 Owner & President, 1992 Burtons, Inc., Dry Goods Paul Cox, Jr. 57 Owner, Pro-Tax 1993 Tax Consulting Firm Richard D. Dailey, Jr. 40 President, Cumberland Electric Company 1995 William B. Grant 43 Chairman of the Board and 1995 Chief Executive Officer ("CEO") First United Corporation and First United National Bank & Trust (2) Executive Committee Report The basic philosophy of the Company's compensation program is to offer competitive compensation for all executive employees which takes into account both individual contributions and corporate performance. Compensation levels for executives were recommended by the Executive Committee and approved by the non- employee directors of the Board. The principal elements of executive compensation are base salary, which is not at risk, and a component of salary which is at risk and dependent upon corporate performance. Base salaries are set at levels intended to foster a career development among executives, consistent with the long-term nature of the Company's business objectives. In setting base salary levels, consideration is given to establishing salary levels that approximate the amounts paid for similar executive positions at other comparable community banking organizations. Salary adjustments and "at risk" amounts are determined in accordance with the Annual Incentive Program established for executive officers and other members of senior management. The incentive program, which was developed in consultation with the Company's independent accountants, utilizes a targeted goal-oriented approach whereby each year the committee establishes performance goals based on the recommendation of the Chairman and CEO. The performance goals include strategic financial measures such as return on equity, return on assets, and efficiency ratio. Each of these elements is weighted approximately the same. The measures are established annually at the start of each fiscal year and are tied directly to the Company's business strategy, projected budgeted results and competitive peer group performance. The targeted goals are set at levels which only reward continued exceptional Company performance. The incentive awards are expressed as a percent of base pay and measured on a range around the targeted goals with a fixed maximum incentive award. Performance below certain stated minimum hreshold levels will result in no incentive payout to the executives. The goals established at the beginning of fiscal year 1996 were met, and accordingly, the portion of compensation which is "at risk" was awarded. The committee considered a number of factors in evaluating the compensation level of William B. Grant, Chairman and CEO of the Company and Robert W. Kurtz, President of the Company. The committee took into consideration the additional responsibilities that Mr. Grant and Mr. Kurtz incurred with their newly appointed positions on June 1, 1996. The committee also recognized the ability of the Company to achieve and exceed its 1996 net earnings objectives, including return on assets and return on equity. After taking these items into consideration, the committee opted to increase Mr. Grant's and Mr. Kurtz's base pay for 1997. EXECUTIVE COMMITTEE BY: David J. Beachy Donald M. Browning Rex W. Burton Paul Cox, Jr. Donald E. Moran I. Robert Rudy Richard G. Stanton (5) PERFORMANCE GRAPH Set forth below is a graph showing 5 year cumulative total return of the Common Stock as compared with the NASDAQ - listed bank index, as prepared by the Center for Research in Securities Prices, and the NASDAQ total index. A list of component companies within the NASDAQ - listed bank index will be provided upon written request. If a straight line is drawn between the years 1991 and 1996, the graph would reflect a steady increase in the performance of the Company's stock. Management believes the unusually high stock price in 1993 was an aberration resulting from speculative trading at above-normal multiples, and that the successive declines in 1994, 1995 and 1996 reflects a gradual correction in the market price. Year Total NASDAQ First United Corp. NASQAQ Banks - -------------------------------------------------------------------- 1991 $100.00 $100.00 $100.00 1992 $116.38 $131.03 $145.55 1993 $133.60 $244.83 $166.00 1994 $130.59 $217.29 $165.39 1995 $184.67 $186.25 $246.32 1996 $227.16 $168.40 $325.60 Shareholder return is calculated and presented on the basis of $100.00 invested at December 31, 1991. PENSION AND PROFIT SHARING PLANS The following table shows the maximum annual retirement benefits payable under the Company Defined Benefit Pension Plan for various levels of compensation during the year of service: APPROXIMATE ANNUAL BENEFIT UPON RETIREMENT AT AGE 65 BASED ON YEARS OF CREDITED SERVICE FINAL ANNUAL COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 30,000 6,000 8,000 10,000 12,000 14,000 70,000 15,000 20,000 25,000 30,000 35,000 110,000 24,000 32,000 40,000 48,000 56,000 150,000 33,000 44,000 55,000 66,000 77,000 190,000 33,000 44,000 55,000 66,000 77,000 For purposes of this table, final average compensation shown is twelve times the average of the highest salary during sixty consecutive months in the last one hundred twenty months preceding normal retirement. Also, for purposes of the table, benefits are payable for life with a minimum guarantee of ten years. Benefits are computed on an actuarial basis. To convert the benefits at normal retirement to a lifetime only benefit, the amounts would be increased by a factor of 1.0677% during 1996. Social Security benefits are not shown on the table and would not reduce retirement benefits under the plan. (6) Projected Benefits for Highly Compensated Employees: CURRENT COMPENSATION CREDITED SERVICE AT ESTIMATED ANNUAL COVERED BY THE PLAN NORMAL RETIREMENT BENEFITS AT RETIREMENT William B. Grant $114,763 40 Years $64,766 Robert W. Kurtz $111,276 38 Years $63,039 TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS Some of the directors and officers of the Company and their associates were customers of and had banking transactions with banking subsidiaries of the Company in the ordinary course of business during 1996. All loans and loan commitments included in such transactions were made on the same terms, including interest rates and collateral, as those prevailing at the same time for comparable transactions with others, and in the opinion of the management of the Company, do not involve more than a normal risk of collectability or present other unfavorable features. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the rules thereunder, the Company's executive officers and directors are required to file with the Securities and Exchange Commission reports of their ownership of Common Stock. Based solely on a review of copies of such reports furnished to the Company, or written representations that no reports were required, the Company believes that during the fiscal year ended December 31, 1996, its executive officers and directors complied with the Section 16(a) requirements, except that late filings were made with respect to the following reporting persons: One report was filed approximately 3 days late by Mr. Beachy; three reports were filed approximately 1, 2, and 5 days late by Mr. Rudy; and three reports were filed approximately 3, 5, and 13 days late by Ms. Spiker. OTHER MATTERS As of the date of this proxy statement, the Board of Directors is not aware of any matters, other than those stated above, that may properly be brought before the meeting. In such event, persons named in the enclosed form of proxy or their substitutes will vote with respect to any such matters in accordance with their best judgment. BY ORDER OF THE BOARD OF DIRECTORS /S/ ROBERT W. KURTZ ROBERT W. KURTZ Secretary (7) FIRST UNITED CORPORATION Oakland, Maryland Notice of Annual Shareholders' Meeting March 28, 1997 To Shareholders of First United Corporation Oakland, Maryland Notice is hereby given that the Annual Meeting of the Shareholders of First United Corporation (the "Company") will be held in the McHenry House, the Wisp Ski Area, in McHenry, Maryland 21541. The meeting is scheduled for: TUESDAY, APRIL 29, 1997, at 3:00 p.m. The purposes of the meeting are to (i) elect eighteen (18) Directors to serve for the ensuing year, (ii) to ratify the accounting firm of Ernst & Young, LLP to act as the independent auditors of the Company and, (iii) to transact such other business as may be properly brought before said meeting or any adjournment thereof. IT IS HOPED THAT YOU WILL PLAN TO ATTEND, BUT WHETHER OR NOT YOU CONTEMPLATE ATTENDING THE MEETING, YOU ARE REQUESTED TO EXECUTE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY. IF YOU SHOULD ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON, SHOULD YOU SO DESIRE. ALL SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON FEBRUARY 28, 1997, ARE ENTITLED TO VOTE AT THIS MEETING. Anyone acting as proxy agent for a Shareholder must present a proxy properly executed by the Shareholder authorizing said agent in form and substance satisfactory to the judges of election, and otherwise in accordance with the Company's By-Laws. Sincerely, /S/ROBERT W. KURTZ ROBERT W. KURTZ Secretary March 28, 1997 To Our Shareholders: On behalf of the Board of Directors and the whole First United Team, I cordially invite you to attend the Annual Shareholders' Meeting to be held on Tuesday, April 29, 1997, at 3:00 p.m. in the McHenry House at the Wisp Ski Area in McHenry, Maryland 21541. The notice of meeting and proxy statement accompanying this letter describe the specific business to be acted upon. In addition to the specific matters to be acted upon, there will be a report on the progress of your Company and an opportunity to ask questions on matters of general interest to shareholders. It is important that your shares be represented at the meeting. Whether or not you plan to attend in person, we would ask that you mark, sign, date and promptly return the enclosed proxy in the envelope provided. There will be a reception with light refreshments immediately following the shareholders' meeting for all registered shareholders. I look forward to seeing you there. Sincerely yours, /S/ WILLIAM B. GRANT WILLIAM B. GRANT Chairman of the Board & Chief Executive Officer PROXY FIRST UNITED CORPORATION P.O. Box 9 Oakland, MD 21550-0009 The undersigned hereby appoints Naomi Oliver and Don Sincell, and each of them, as Proxies, with the powers the undersigned would possess if personally present, and with full power of substitution, and hereby authorizes them to represent and to vote as designated on the reverse side, all the shares of Common Stock of First United Corporation held of record by the undersigned on February 28, 1997 at the annual meeting of shareholders to be held on April 29, 1997 or any adjournment thereof. ( Please sign reverse side and return immediately) THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS - -------------------------------------------------------------------------------- SHAREHOLDER SURVEY As a shareholder of First United Corporation, we want you to know that we are committed to meeting your expectations as an investor. Please take a few moments to complete this survey. Your opinions are very important to us, and your completing this survey will help us to serve you in the future. Once you have completed it, return the entire form, including the proxy and survey n the envelope provided. Thank you for your time and input. It is appreciated. 1. How satisfied are you with your First United Corporation Investment? ____ Not Satisfied ____ Satisfied ____ Very Satisfied ____ No Opinion 2. How satisfied are you with the format and location of our Annual Meeting? ____ Not Satisfied ____ Satisfied ____ Very Satisfied ____ No Opinion 3. Are you satisfied with responsiveness of our current transfer agent, ChaseMellon Shareholder Services? ____ Not Satisfied ____ Satisfied ____ Very Satisfied ____ No Opinion 4. Over the past 3 years, we have paid out in dividends approximately 46% of earnings and have increased the dividend by approximately 14% each year. Are you satisfied with our dividend payments and increases? ____ Not Satisfied ____ Satisfied ____ Very Satisfied ____ No Opinion 5. With your First United Investment, is your primary focus on the stock's long term appreciation, or are you more concerned with the current income provided by the dividend. ____ My primary focus is to see the value of my stock increase. ____ My primary focus is to maximize the current income yield provided by the dividend. 6. Do you currently receive more than one Annual Report? ____ Yes ____ No If yes, how many do you receive? ____________ 7. How long have you been a shareholder of First United? ____ Less than 1 year ____ 1 to 5 years ____ Greater than 5 years 8. Please rank in order of importance, the financial ratios which are relevant to you. ____ Return on Equity ____ Price to earnings ____ Earnings per share ____ Share Price to Book Value ____ Dividend Yield ____ Other ____________________ ____ Return on Assets ____ I do not review financial ratios. 1. Election of Directors: (INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line through the nominee's name in the list below.) FOR WITHHOLD all nominees AUTHORITY David J. Beachy Richard D. Dailey Jr. listed (except as to vote for Donald M. Moran James F.Scarpelli,Sr. marked to the all nominees Donald M. Browning William B.Grant contrary listed Raymond F. Hinkle Karen Spiker Rex W. Burton Robert W. Kurtz I. Robert Rudy Richard G.Stanton Andrew E. Mance Robert G. Stuck Frederick A. Thayer,III Paul Cox Jr. Maynard G. Grossnickle Elaine L. McDonald --------- ---------- 2. Proposal to ratify the 3. In their discretion the Proxies are Appointment of Ernst & Young authorized to vote upon such other business LLP as the independent auditors as may properly come before the meeting and of First United Corporation any adjournments thereof. FOR AGAINST ABSTAIN ----- -------- -------- THIS PROXY WILL BE VOTED AS SPECIFIED. HOWEVER, IN THE ABSENCE OF DIRECTION TO THE CONTRARY, THE ATTORNEYS NAMED HEREIN INTEND TO VOTE THIS PROXY "FOR" PROPOSALS 1 AND 2 HERON,AND FOR MATTERS WHICH MAY BE PRESENTED AT THE MEETING IN ACCORDANCE WITH RECOMMENDATIONS OF THE BOARD OF DIRECTORS. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF NOTICE OF THE AFORESAID ANNUAL MEETING OF SHAREHOLDERS. - ------------------------------------------ Signature(s) - ------------------------------------------ Signature(s) - ------------------------------------------ Date NOTE: Please sign exactly as name appears heron. Joint holders should each sign. When signing as attorney, executor, administrator, trustee or guardian, please indicate the capacity in which you are signing. If a corporation or other entity please sign in full corporate or entity name by authorized person. - -------------------------------------------------------------------------------- SHAREHOLDER SURVEY (continued) 9. Please check the sections of the Annual Report which you read? ____ Chairman's letter ____ Consolidated Statements of Condition and Income ____ Profiles of Business ____ Form 10K (Booklet inserted in back of Report) ____ Financial Highlights 10. Please check below the services which you now use at "My Bank" First United ____ Mortgage ____ Trust ____ Other ____________ ____ Home Equity Line ____ Brokerage ____ I do not currently ____ Certificate of Deposit ____ Auto Loan bank with First ____ Checking Account ____ Personal Credit Line Bank. ____ Savings Account ____ Telephone Banking 11. Would you like someone to contact you regarding these services available at "My Bank" First United? ____ Yes ____ No 12. Which of our Shareholder services are you currently using? _____ Dividend Reinvestment _____ Direct Deposit of Dividends _____ Stock Repurchase Plan _____ I do not currently use any of these services, but would be interested in learning more about them. _____ I do not use any of these services. 13. Would you be interested in voting your proxy by phone using an 800 number? ____ Would use ____ Would not use ____ Might use 14. Would you utilize Personal Computer (PC) Banking? ____ Yes ____ No COMMENTS:_______________________________________________________________________ ________________________________________________________________________________ -----END PRIVACY-ENHANCED MESSAGE-----