As filed with the Office of the Securities and Exchange Commission on August 23,
2002
Registration No. 33-26248
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT
NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST UNITED CORPORATION
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(Exact name of Registrant as specified in charter)
Maryland 52-1380770
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or organization)
19 South Second Street, Oakland, Maryland 21550 (888) 692-2654
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(Address, Including Zip Code and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
William B. Grant
Chairman of the Board and Chief Executive Officer
First United Corporation
19 South Second Street, Oakland, Maryland 21550
(888) 692-2654
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(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
Copies to:
Abba David Poliakoff, Esq.
Andrew D. Bulgin, Esq.
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
233 East Redwood Street
Baltimore, Maryland 21202
(410) 576-4000
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [X]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |_|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| _________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
EXPLANATORY NOTE
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This Registration Statement (File No. 33-26248) as originally filed related to
the offering of 250,000 shares of Common Stock issuable under the First United
Corporation Dividend Reinvestment and Stock Purchase Plan. This Post-Effective
Amendment No. 2 is being filed for the purpose of updating information contained
in the Dividend Reinvestment and Stock Purchase Plan. The registration fees in
respect of the Common Stock registered under File No. 33-26248 were paid at the
time of the original filing of the Registration Statement on Form S-3.
Prospectus
First United Corporation
Dividend Reinvestment and Stock Purchase Plan
194,431 Shares of Common Stock
This Prospectus relates to 194,431 shares of our Common Stock, par value
$.01 per share, to be issued under the First United Corporation Dividend
Reinvestment and Stock Purchase Plan. Complete details of the Plan are discussed
in this Prospectus in an easy to understand question and answer format.
The Plan provides stockholders with an opportunity to automatically
reinvest their cash dividends in shares of Common Stock. The Plan also provides
participating stockholders, referred to as "Participants", with a convenient and
economical way to voluntarily purchase additional shares of Common Stock through
optional cash payments of not less than $50 per payment nor more than $10,000
per calendar quarter.
Shares of Common Stock purchased by Participants may, at our option, be
newly issued shares, shares purchased in the open market, or shares purchased in
negotiated transactions. Newly issued shares of Common Stock are purchased from
us at the average of the highest asked and lowest bid prices of Common Stock
quoted on The Nasdaq Stock Market for the three trading days immediately
preceding the date of purchase. The price of shares of Common Stock purchased in
the open market or in negotiated transactions is the weighted average price at
which the shares are actually purchased. Our Common Stock is currently quoted
and traded on The Nasdaq Stock Market under the symbol "FUNC". On August 21,
2002, the average of the highest asked price and the lowest bid price of Common
Stock was $17.05 per share, and the closing price was $16.93 per share.
Investment in Common Stock through or held pursuant to the Plan has the
same market risks as any other investment in Common Stock. See the risk factors
listed in Part I, Item 1 of our Annual Report on Form 10-K for the year ended
December 31, 2001. PLEASE READ THIS PROSPECTUS AND THE RISK FACTORS CAREFULLY
BEFORE INVESTING AND RETAIN THIS PROSPECTUS FOR YOUR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSIT OR SAVINGS ACCOUNTS OR OTHER
OBLIGATIONS OF ANY BANK OR NON-BANK SUBSIDIARY OF FIRST UNITED CORPORATION, AND
THEY ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY OR INSTRUMENTALITY.
The date of this Prospectus is August 23, 2002
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AVAILABLE INFORMATION
We are subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which means that we are required
to file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission ("Commission"). These
Commission filings are available to the public over the Internet at its Website
at http://www.sec.gov. You may also read and copy any document we file with the
Commission at its Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain information on the operation of the Public Reference
Room by calling the Commission at 800-SEC-0330.
We have filed a registration statement on Form S-3 (File No. 33-26248), as
amended (the "Registration Statement"), with the Commission registering under
the Securities Act of 1933, as amended (the "Securities Act"), the shares of
Common Stock offered pursuant to the Plan. This Prospectus is part of the
Registration Statement. As allowed by the Commission's rules, this Prospectus
does not contain all of the information that you can find in the Registration
Statement or the exhibits to the Registration Statement. The Commission allows
us to "incorporate by reference" into this Prospectus the information we have
filed with the Commission. The information incorporated by reference is an
important part of this Prospectus, and the information that we file subsequently
with the Commission will automatically update this Prospectus. Statements
contained in this Prospectus concerning that information are necessarily
summaries of that information, and each statement is qualified in its entirety
by reference to the applicable source of that information filed with the
Commission. The historical and future information that is incorporated by
reference in this Prospectus is considered to be part of this Prospectus and can
be obtained at the locations described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents that we have filed with the Commission are
incorporated herein by reference: (i) Annual Report on Form 10-K for the year
ended December 31, 2001 filed on March 22, 2002; (ii) Quarterly Report on Form
10-Q for the three-month period ended June 30, 2002 filed on August 14, 2002;
(iii) Quarterly Report on Form 10-Q for the three-month period ended March 31,
2002 filed on May 10, 2002; and (iv) Current Report on Form 8-K filed on April
23, 2002.
All documents that we file with the Commission pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act after the date of this Prospectus and
prior to termination of this offering shall be deemed to be incorporated by
reference in, and deemed a part of, this Prospectus from the date of such
filing. Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document that
also is, or is deemed to be, incorporated by reference in this Prospectus
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Any person to whom a copy of this Prospectus is delivered may obtain
without charge, upon written or oral request, a copy of any and all of the
information that has been incorporated by reference in this Prospectus (not
including exhibits to such information unless such exhibits are specifically
incorporated by reference into the information that the Prospectus
incorporates). Requests for such information should be directed to Office of the
Secretary, First United Corporation, 19 South Second Street, Oakland, Maryland
21550, telephone number 888-692-2654.
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FIRST UNITED CORPORATION
First United Corporation is a Maryland corporation and financial holding
company registered under the Bank Holding Company Act of 1956, as amended. Our
principal subsidiary is First United Bank & Trust (the "Bank"), which is a
Maryland-chartered bank that was chartered in 1900. Through 22 banking offices
and 30 automated teller machines, the Bank provides a complete range of retail
and commercial banking services to a customer base in Garrett, Allegany,
Washington and Frederick Counties in Maryland, in Mineral, Hampshire, Berkeley
and Hardy Counties in West Virginia and to residents in surrounding regions of
Pennsylvania and West Virginia. The customer base in the aforementioned
geographical areas consists of individuals, businesses and various governmental
units. The services provided by the Bank include checking, savings, NOW and
Money Market deposit accounts, business loans, personal loans, mortgage loans,
lines of credit and consumer-oriented financial services including IRA and KEOGH
accounts. In addition, the Bank provides a full range of brokerage services
through a networking arrangement with PrimeVest Financial Services, Inc., a full
service broker-dealer, and a full line of insurance products through Gonder
Insurance Agency, Inc., which is a subsidiary of the Bank. The Bank also
provides safe deposit and night depository facilities and a complete line of
trust services.
Additionally, Oakfirst Life Insurance Corporation, an Arizona reinsurance
company, OakFirst Loan Center, Inc., a West Virginia finance company, OakFirst
Loan Center, LLC, a Maryland finance company, and First United Capital Trust, a
Delaware statutory business trust (the "Capital Trust"), are wholly-owned
subsidiaries of First United Corporation. See "Description of Securities--First
United Capital Trust Preferred Securities" for more information about the
Capital Trust.
The Bank has three wholly-owned subsidiaries: First United Auto Finance,
LLC, a Maryland indirect automobile leasing company that no longer actively
markets its business; Gonder Insurance Agency, Inc., a full service Maryland
insurance producer; and First United Capital Investments, Inc., a Delaware
corporation that owns First United Investment Trust, a Maryland real estate
investment trust.
Our principal executive offices are located at 19 South Second Street,
Oakland, Maryland 21550, telephone number 888-692-2654.
DESCRIPTION OF THE PLAN
The following is a question and answer statement of the provisions of the
Plan. The Plan was authorized by our board of directors and has been in effect
since January 9, 1989. The Plan will continue until terminated by us.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of our Common Stock with a
convenient method of investing some or all of their cash dividends in shares of
Common Stock and of making optional cash investments in additional shares of
Common Stock. The Plan permits us, at our election, to use shares purchased in
the open market or in negotiated transactions or to use our authorized and
unissued shares to satisfy the Plan's requirements. The Plan originally reserved
250,000 shares of Common Stock to be made available for dividend reinvestment.
There are currently 194,431 shares of Common Stock remaining for issuance under
the Plan.
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Advantages
2. What are the advantages of the Plan?
Participants may have some or all of the cash dividends paid on their
shares of Common Stock automatically reinvested in additional shares of Common
Stock. Participants also may make optional cash investments (of a minimum of $50
per payment and up to a maximum of $10,000 per quarter) at any time, whether or
not they elect to reinvest dividends. Full investment of funds is possible under
the Plan, whether or not there is a sufficient amount to buy a whole share,
because the Plan permits fractions of shares, as well as full shares, to be
credited to Participants' accounts. In addition, dividends in respect of such
fractions, as well as full shares, will be credited to Participants' accounts.
Participants avoid safekeeping requirements and record keeping costs for shares
credited to their accounts through the free custodial service and reporting
provisions of the Plan. Statements of account will be furnished to Participants
on a quarterly basis to provide simplified record keeping.
Administration
3. Who administers the Plan?
Mellon Bank, N.A. (the "Agent") administers the Plan. Certain of the
administrative support services are provided to the Agent by Mellon Investor
Services, a registered transfer agent, P.O. Box 3338, South Hackensack, NJ
07606-1938. The Agent keeps records, sends statements of account to Participants
and performs other duties relating to the Plan.
In administering the Plan, the Agent will not be liable for any act done or
any omission to act in good faith, including, without limitation, any claims of
liability: (a) arising out of a failure to terminate a Participant's account
upon the Participant's death prior to receipt of notice in writing of such
death; (b) with respect to the prices at which shares of our Common Stock are
purchased or sold, regarding the times when or the manner in which such
purchases or sales are made, the decision whether to purchase such shares of
Common Stock on the open market, in negotiated transactions, or from us, or
fluctuations in the market value of the Common Stock; and (c) regarding any
matters relating to the operation or management of the Plan. The Agent may not
create a lien on any funds, securities or other property held under the Plan.
Neither we nor the Agent can assure that a Participant will realize any
profit in connection with shares of Common Stock purchased pursuant to the Plan
or protect the Participant against a loss in connection with the shares
purchased for the Participant under the Plan in accordance with the
Participant's instructions as indicated on the Authorization Form. It is up to
each Participant to make a decision regarding the sale of any shares owned by
the Participant, including shares credited to the Participant's Plan account.
Participation
4. Who is eligible to participate in the Plan?
All holders of record of shares of Common Stock are eligible to participate
in the Plan. To be eligible to participate in the Plan, beneficial owners of
shares of Common Stock whose shares are registered in names other than their own
(for instance, in the name of a broker) must become stockholders of record by
having such shares transferred into their own names or make arrangements with
their broker, bank or other nominee to participate on their behalf.
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A stockholder will not be eligible to participate in the Plan if he or she
resides in a jurisdiction in which it is unlawful for us to permit
participation. A stockholder's right to participate in the Plan is not
transferable apart from a transfer of his or her shares of Common Stock to
another person.
5. How does a stockholder participate?
A stockholder may join the Plan at any time by completing the Authorization
Form and delivering it to the Agent. A stockholder may also enroll through the
Internet by visiting Investor ServiceDirect (R) at www.melloninvestor.com and
following the on-line instructions. A stockholder who does not wish to
participate in the Plan will continue to receive dividends, as declared, by
check without any further action on the part of the Participant.
6. When will participation begin?
Cash dividends, when declared, are generally paid on the first business day
of February, May, August, and November to stockholders of record on the
applicable record date. If the Authorization Form returned by a stockholder
entitled to a dividend is received by the Agent at least 21 days prior to the
date a dividend is paid, the Plan will go into effect for that stockholder with
that dividend payment (and will apply to subsequent dividends). If the
Authorization Form is received less than 21 days prior to the dividend payment
date, then any dividend payable on that date will be paid in cash and the
stockholder's participation in the Plan will begin with the next dividend
payment date. See Question No. 8 for information concerning the making of
optional cash investments and Question No. 10 for information regarding the
timing of optional cash investments.
The Plan does not represent a change in our dividend policy, nor does it
represent a guarantee of future dividends, which are subject to the discretion
of the board of directors. The declaration of future dividends will depend upon
a number of factors, including our future earnings, our capital requirements,
regulatory constraints, and our financial condition as well as that of the Bank.
7. What does the Authorization Form provide?
The Authorization Form allows each stockholder to decide the extent to
which he or she will participate in the Plan. In addition, the stockholder, by
checking the appropriate box on the Authorization Form, may make optional cash
investments.
The Agent will use cash dividends, plus any optional cash investments
received from a Participant, to purchase additional shares of Common Stock. Cash
dividends on shares of Common Stock credited to a Participant's account under
the Plan are always automatically reinvested regardless of which investment
option is selected.
Optional Cash Investments
8. Who is eligible to make optional cash investments?
Participants who have submitted a signed Authorization Form, or who have
enrolled through Investor ServiceDirect (R), whether or not they have authorized
the reinvestment of dividends, are eligible to make optional cash investments.
The Agent will apply any optional cash investments received from Participants to
the purchase of shares of Common Stock for the account of such Participants.
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If a Participant chooses to participate by optional cash investments only,
we will pay cash dividends on shares registered in the Participant's name in the
usual manner and the Agent will apply any optional cash investments received
from the Participant to the purchase of additional shares of Common Stock for
the Participant's account under the Plan. Dividends paid on shares of Common
Stock credited to the account of the Participant under the Plan will be
automatically reinvested in additional shares of Common Stock.
An initial optional cash investment may be made by a Participant when
enrolling in the Plan by enclosing a check with the Authorization Form. Checks
should be made payable to Mellon Bank, N.A. and returned along with the
Authorization Form. Thereafter, optional cash investments may be made prior to
each dividend payment date through the use of the cash investment form attached
to each statement of account sent to Participants by the Agent. Optional cash
investments may not be made through Investor ServiceDirect (R).
9. What are the limitations on making optional cash investments?
The option to make cash investments is available to each Participant at any
time; however, optional cash investments by a Participant cannot be less than
$50 per investment nor exceed a total of $10,000 per calendar quarter per
Participant. The same amount need not be sent each quarter and there is no
obligation to make an optional cash investment in every quarter.
10. When will the Agent invest optional cash investments?
Optional cash investments received before a dividend payment date will be
held by the Agent and combined with funds received from that dividend for
purchase of Common Stock under the Plan. Any optional cash investment received
after the dividend payment date will be returned to the Participant.
Participants are urged to mail optional investment checks at least 5 days prior
to the dividend payment date so that they reach the Agent prior to the dividend
payment date, but in no event earlier than 30 days prior to the dividend payment
date. Neither we nor the Agent can control the delivery of mail, and, therefore,
neither we nor the Agent will be responsible if an optional cash investment is
not made due to a delay in the delivery of a Participant's check. Any optional
cash investments received more than 30 days prior to a dividend payment date
will be returned to the Participant.
No interest will be paid by the Agent on optional cash investments held by
the Agent.
Purchases
11. How many shares of Common Stock will be purchased by Participants?
The number of shares that will be purchased by each Participant depends on
the amount of the Participant's dividend, including dividends on shares credited
to the Participant's account under the Plan, the amount of any optional cash
investments and the applicable purchase price of the shares of Common Stock (see
Question No. 12). Each Participant's account will be credited with that number
of shares, including fractional shares computed to four decimal places, equal to
the total amount to be invested divided by the applicable purchase price.
Shares of Common Stock purchased pursuant to the Plan will be registered in
the name of the Participant, if the Participant is a holder of record. If a
broker or other nominee is participating on behalf of a beneficial owner of
shares, then the shares purchased will be registered in the broker's name or
other nominee's name and credited to the respective Participant's account.
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We reserve the right to limit the maximum number of shares that we may sell
to Participants for reinvestment of dividends under the Plan with respect to any
dividend payment date to the number of shares that would have been sold if all
dividends paid on that date were reinvested under the Plan. If, with respect to
any dividend payment date, we exercise such right and as a result there are
insufficient shares available after investment of Participants' dividends to
permit investment of all optional cash investments received, shares available
for optional cash investments will be allocated among all Participants making
optional cash investments in proportion to the amounts of their optional cash
investments. The Agent will refund any payments by Participants that are not
invested due to this limitation.
12. When and at what price will shares of Common Stock be purchased under the
Plan?
Shares of Common Stock will be purchased with reinvested dividends and
optional cash investments under the Plan at such times as the Agent may
determine, as promptly as reasonably practicable after a dividend is paid, and
in no event later than 21 days after such dividend payment date. No interest
will be paid on funds held by the Agent under the Plan.
We, in our sole discretion, will decide whether shares will be purchased in
the open market, in privately negotiated transactions or from us. Generally, we
anticipate that shares of Common Stock will be purchased through open market
transactions.
If the Agent buys shares in the open market or in privately negotiated
transactions, it will not allocate any shares to Participants' accounts until it
has acquired sufficient shares from us and/or others to cover the quarterly
purchases for all Plan participants. In that case, the purchase price to
Participants will be based on the weighted average of the prices paid for the
shares acquired from us and/or others during the purchase period with respect to
a particular dividend, which prices will include, if applicable, standard dealer
mark-ups, brokerage commissions and/or other expenses charged by the brokers or
dealers through whom the shares are purchased. Participants will, therefore,
bear the cost of such fees and commissions.
If newly issued shares of Common Stock are sold to Participants pursuant to
the Plan, the purchase price of such shares will be the average of the highest
asked and lowest bid prices of Common Stock quoted on The Nasdaq Stock Market
for the three trading days immediately preceding the date of purchase.
The Agent may in its discretion commingle the funds represented by
dividends to be reinvested and Participants' optional cash investments for the
purpose of forwarding purchase orders and may offset purchase and sale orders
for the same investment date.
The Agent will hold the shares purchased under the Plan in each
Participant's name, or, if a broker or other nominee is participating on behalf
of a beneficial owner, in the broker's name or other nominee's name, but the
Agent will have no responsibility for the value of such shares after their
purchase.
Our Common Stock is thinly-traded. Thus, depending on the number of shares
involved, purchases in the open market to satisfy the requirements of the Plan
may have a significant effect on prevailing market prices, which could result in
the payment of higher prices for shares than would be the case were the Plan not
in effect. Additionally, because the prices at which shares are purchased under
the Plan are determined as of specified dates or as of dates otherwise beyond
the control of Participants, Participants may lose any advantage otherwise
available from being able to select the timing of their investments. For
example, because the price charged to Participants for shares purchased in the
open market or in negotiated transactions is the weighted average price at which
the shares are actually purchased over a
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period of up to 21 calendar days following an investment date, Participants may
pay a higher price for shares purchased under the Plan than for shares purchased
on the investment date outside of the Plan.
Our Common Stock is currently quoted and traded on The Nasdaq Stock Market
under the symbol "FUNC".
13. May a Participant purchase shares through the Plan but have dividends on
those shares sent directly to him or her?
No. The purpose of the Plan is to provide Participants with a convenient
method of purchasing shares of Common Stock and having the dividends on those
shares reinvested. Accordingly, dividends paid on shares held in the Plan will
be automatically reinvested in additional shares of Common Stock.
Costs
14. Are any fees or expenses charged to Participants in connection with
participation in the Plan?
Participants will not pay any service charges in connection with the Plan,
as the expenses of administering the Plan will be paid by us. As stated above
(see Question No. 12), Participants will bear the cost of standard dealer
mark-ups, brokerage commissions and other expenses charged in connection with
the purchase of shares of Common Stock with reinvested dividends or optional
cash investments. Additionally, the Agent charges a $0.06 per share brokerage
commission when shares of Common Stock held in a Participant's Plan account are
sold, and this charge will be deducted from the gross proceeds of any such sale.
The Agent may change this fee at any time in its discretion, and it will notify
Participants of any such change.
Reports to Participants
15. How will Participants be advised of the purchase of shares of Common Stock?
As soon as practicable after each quarterly purchase of shares, each
Participant will receive a statement of account. These statements are the
Participant's continuing record of the cost of purchases and should be retained
for tax purposes. Participants also will receive copies of the same
communications sent to all other stockholders, including the quarterly reports,
annual report, notice of annual meeting and proxy statement, and income tax
information for reporting dividends paid.
Dividends
16. Will Participants be credited with dividends on shares held in their account
under the Plan?
Yes. We pay dividends, as declared, to the record holders of all shares of
our Common Stock. As the record holder of shares purchased under the Plan for
Participants, the Agent will receive dividends for all Plan shares held on the
record date. The Agent will credit such dividends to Participants' accounts in
the Plan on the basis of full and fractional shares held in their respective
accounts and will reinvest such dividends in additional shares.
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Certificates for Shares
17. Will stock certificates be issued for shares of Common Stock purchased?
Generally, certificates for shares of Common Stock purchased under the Plan
will not be issued to Participants. The number of shares credited to an account
under the Plan will be shown on the Participant's statement of account. This
additional service protects against loss, theft or destruction of stock
certificates.
At the request of a Participant, certificates for any number of shares, up
to the total number of full shares credited to an account under the Plan, will
be issued to the Participant. Please see Question No. 32 for information on
contacting the Agent. Any remaining full shares and all fractional shares will
continue to be held in the Participants account.
Shares held in or credited to the account of a Participant under the Plan
may not be pledged unless and until the Participant requests that a certificate
for such shares be issued in his or her name.
Certificates for fractional shares will not be issued.
18. In whose name will accounts be maintained and certificates registered when
issued?
An account will be maintained in each Participant's name as shown on our
stockholder records at the time the Participant joins the Plan. When issued,
certificates for full shares will be registered in the name of the person or
entity who holds the account.
Upon written request, certificates also can be registered and issued in
names other than the account name, subject to compliance with any applicable
laws and the payment by the Participant of any applicable taxes, provided that
the request bears the signatures of the Participant and the signature is
guaranteed by a financial institution, broker or dealer that is a member of the
Securities Transfer Agent Medallion Program.
Changing Method of Participation and Withdrawal
19. How does a Participant change his or her method of participation?
A Participant may change his or her method of participation at any time
either by completing a new Authorization Form and mailing it to the Agent, or by
requesting the change through Investor ServiceDirect (R) at
www.melloninvestor.com (see Question 32 for information on contacting the
Agent). The change will apply as of the next dividend payment date after the
Agent receives the new Authorization Form or processes the on-line change
request, as the case may be.
20. May a Participant withdraw from the Plan?
Yes. The Plan is entirely voluntary and a Participant may withdraw at any
time.
If the request to withdraw is received by the Agent prior to any dividend
payment date, the amount of the dividend, and any optional cash investment that
would otherwise have been invested, will be paid as soon as practicable to the
withdrawing Participant. Thereafter, all dividends will be paid in cash. A
stockholder may re-enroll in the Plan at any time.
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21. How does a Participant withdraw from the Plan?
To withdraw from the Plan, a Participant must notify the Agent that he or
she wishes to withdraw. Please see Question No. 32 for information on contacting
the Agent. Upon a Participant's withdrawal from the Plan or the termination of
the Plan by us, a certificate for full shares credited to the Participant's
account under the Plan will be issued and a cash payment will be made for any
fractional shares.
22. What happens to fractional shares registered in the Participant's Plan
account when he or she withdraws from the Plan?
When a Participant withdraws from the Plan, a cash adjustment representing
any fractional shares will be mailed directly to the Participant. The cash
adjustment will be based on the highest bid price of the Common Stock quoted on
The Nasdaq Stock Market as of the close of business on the day of transaction
for which the withdrawal request is received by the Agent.
Other Information
23. Can Plan shares be sold through the Plan?
Yes. Participants may sell some or all of the shares of Common Stock
credited to their Plan accounts at any time by contacting the Agent and
requesting that certain shares be sold (see Question No. 32 for information on
contacting the Agent). The Agent will record sales orders on the date of
receipt. The Agent will execute a sales order on behalf of the Participant in
the open market or in negotiated transactions, or will sell the shares to us, as
soon as reasonably practicable after receipt of the Participant's request. The
proceeds received by the Participant will be based on the weighted average sales
price per share (including trading fees and other applicable taxes) of the
aggregate number of shares sold for the Plan. After settlement of the sale, the
Agent will mail a check to the Participant for the proceeds of the sale, less a
brokerage commission and any applicable transfer taxes (see Question 14 for
information on the brokerage commission). Please note that the Agent cannot and
does not guarantee the actual sale date or price, nor can it stop or cancel any
outstanding sales or issuance requests. All sale requests are final.
Alternatively, a Participant may sell his or her shares through a broker of
the Participant's choice, in which case the Participant must first request a
certificate for those shares from the Agent (see Question No. 17 for
instructions on how to obtain a certificate).
24. What if a Participant sells or otherwise disposes of all of his or her
shares not held in the Plan?
The disposition by a Participant of all shares of Common Stock registered
in his or her name that are not credited to the Participant's account under the
Plan will have no effect on the shares credited to the Participant's Plan
account, and, unless otherwise instructed by the Participant, the Agent will
continue to reinvest the dividends on the shares credited to that account.
25. If additional shares of Common Stock are sold through a rights offering, how
will the rights of the Plan be handled?
In a rights offering, a Participant will receive rights based upon shares
held of record in his or her name and upon whole shares credited to his or her
account under the Plan. Rights issued in respect of shares credited to an
account will be issued to the Participant in his or her name.
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26. What happens if a stock dividend is issued or a stock split is declared on
shares of Common Stock?
Any shares issued by us as a stock dividend or in a stock split on shares
of Common Stock credited to the account of a Participant under the Plan will be
added to the Participant's account. Any shares issued by us as a stock dividend
or in a stock split on shares of Common Stock held directly by a Participant
will be mailed to the Participant in the same manner as to stockholders who are
not participating in the Plan.
27. How will a Participant's shares credited to the Plan be voted at meetings of
stockholders?
Prior to a meeting of stockholders, each Participant will be provided with
an instruction form that can be used by the Participant to direct the vote of
shares of Common Stock held in the Participant's Plan account. If the form is
completed and returned as provided in the form, all shares held in that
Participant's Plan account will be voted in accordance with the Participant's
instructions. If the Participant desires to vote in person at the meeting, a
proxy for shares credited to the Participant's Plan account may be obtained upon
written request received by the Agent at least 15 days before the meeting.
If no instructions are received on a properly executed returned proxy card
or returned instruction form with respect to any item thereon, all of a
Participant's shares (both those registered in the Participant's name, if any,
and those credited to the Participant's Plan account) will be voted (in the same
manner as for non-participating stockholders who return proxies and do not
provide instructions) in accordance with management's recommendations. If the
proxy card or instruction form is not returned, or if it is returned unsigned,
none of the Participant's shares will be voted unless the Participant votes in
person.
28. What are the federal income tax consequences of participation in the Plan?
A Participant will be treated for Federal income tax purposes as having
received on each dividend payment date the full amount of the cash dividend
payable on that date with respect to shares of Common Stock owned by the
Participant, including shares registered in the Participant's name and shares
held for the Participant's Plan account, even though that amount is not actually
received by the Participant in cash but instead is applied to the purchase of
new shares for the Participant's account.
A Participant's cost basis for shares of Common Stock purchased with
reinvested dividends or optional cash investments will be the purchase price of
the shares. We believe that the prices at which shares are purchased under the
Plan and allocated to Participants constitute the fair market value of such
shares.
Additionally, when shares of Common Stock are purchased for a Participant's
Plan account in the open market or in privately negotiated transactions with
reinvested dividends or optional cash investments, a Participant also must treat
as received by him or her that portion of any brokerage commissions or discounts
paid by us that is attributable to the purchase of the shares. Therefore, the
Participant's cost basis in such shares held for his or her account will be
equal to the purchase price of the shares plus a portion of any brokerage
commissions and discounts paid by us that is attributable to those shares.
In the case of foreign stockholders whose dividends are subject to United
States income tax withholding, or domestic stockholders whose dividends are
subject to United States backup withholding, the Agent will, to the extent
permitted by law, invest in shares of Common Stock an amount equal to the
dividends less the amount of tax required to be withheld in each case. The
regular statements of account confirming purchases made for such Participants
will indicate the amount of tax withheld.
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THE FOREGOING IS A SUMMARY BASED ON INTERPRETATION OF CURRENT FEDERAL INCOME TAX
LAWS. PARTICIPANTS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX
CONSEQUENCES APPLICABLE TO THEM AS WELL AS THE STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES APPLICABLE TO THEM.
29. May the Plan be changed or discontinued?
We reserve the right to make modifications to the Plan and to suspend or
terminate the Plan at any time. Any such modification, suspension or termination
will be announced to Participants and to nonparticipating stockholders.
30. Who interprets and regulates the Plan?
We reserve the right to interpret and regulate the Plan as may be necessary
or desirable in connection with the operation of the Plan.
31. Can First United Corporation temporarily curtail or suspend purchases or
sales of Common Stock under the Plan?
Yes. We may temporary curtail or suspend purchases or sales of Common Stock
at any time if such purchases or sales would in the Agent's judgment contravene,
or be restricted by, applicable regulations, interpretations or orders of the
Securities and Exchange Commission, any other governmental commission, agency or
instrumentality, any court, securities exchange or the National Association of
Securities Dealers, Inc. The Agent shall not be accountable, or otherwise
liable, for failure to make purchases of sales at such times and under such
circumstances.
32. How can I contact the Agent regarding questions and other matters?
Questions regarding enrollment, purchase or sale of shares of Common Stock,
and other transactions or services offered pursuant to the Plan should be
directed to the Agent:
- - Through the Internet
You can enroll in the Plan, obtain information, request that Plan shares be
sold, change your dividend options, change your address, request the issuance of
stock certificates, download forms and take other actions regarding your account
through Investor ServiceDirect (R) at www.melloninvestor.com. To gain access,
you will need a password, which you may establish when you visit the Web site.
If you forget your password, it can be reset by calling 877-978-7778.
- - By Telephone
You may direct your questions and sale requests to shareowner customer
service at its toll-free number (within the United States and Canada) at
800-953-2593
If you are calling from outside of the United States or Canada, you may
reach shareowner customer service at 201-329-8660
Customer Service Representatives are available from 9:00 a.m. to 7:00 p.m.,
Eastern Standard Time, Monday through Friday (except holidays). Additionally, an
automated voice response system is available 24 hours a day, 7 days a week.
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- - In Writing
You may also send questions and sale requests to the Agent at the following
address:
Mellon Bank, N.A.
c/o Mellon Investor Services
P.O. Box 3338
South Hackensack, NJ 07606-1938
Be sure to include your name, address, daytime phone number, social
security or taxpayer identification number and a reference to First United
Corporation on all correspondence.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue up to 25,000,000 shares of Common Stock, par
value $.01 per share, of which 6,080,589 shares were issued and outstanding as
of August 1, 2002. The outstanding shares of Common Stock are fully paid and
nonassessable. The shares of Common Stock offered in this offering will, upon
their purchase, be fully paid and nonassessable. The holders of Common Stock
have one vote per share in all proceedings in which action shall be taken by our
stockholders.
Preferred Stock
Our Articles of Incorporation provide that the board of directors may,
without the approval of the stockholders, authorize and issue up to 2,000,000
shares of preferred stock, no par value, in one or more classes with such
designations, powers, preferences, and relative, participating, optional and
other rights, qualifications, limitations, and restrictions as the directors may
determine, including the dividend rate, conversion rights, voting rights,
redemption price, and liquidation preference. Any class of preferred stock may
rank senior to shares of Common Stock with respect to the payment of dividends
or amounts upon liquidation, dissolution or winding-up, or both. In addition,
any such shares of preferred stock may have class voting rights. As of the date
of this Prospectus, there are no outstanding shares of our preferred stock.
Issuances of preferred stock, while providing us with flexibility in connection
with general corporate purposes, may, among other things, have an adverse effect
on the rights of holders of our Common Stock. For example, the issuance of any
preferred stock with voting or conversion rights may adversely affect the voting
power of the holders of Common Stock, and, in certain circumstances, such
issuances could have the effect of decreasing the market price of our Common
Stock. We have no current intention to issue any shares of preferred stock.
First United Capital Trust Preferred Securities
The Capital Trust issued 2,300,000 shares of trust preferred securities
(the "Trust Preferred Securities") in August of 1999. These securities have a
liquidation amount of $10.00 per security. The Capital Trust used the proceeds
from the sale of these securities, along with the proceeds from the sale to us
of all of its common stock, to purchase at par $23.00 million of our 9.375%
junior subordinated debentures due on September 30, 2029. Distributions on the
Trust Preferred Securities are payable from interest payments received by the
Capital Trust from our junior subordinated debentures. These distributions are
payable quarterly at a rate of 9.375% of the liquidation amount, subject to our
option to defer interest payments for up to 20 quarterly periods under certain
conditions. Therefore, payments to be made by the Capital Trust on the Trust
Preferred Securities are dependent on payments that we make
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under our junior subordinated debentures. We have fully, irrevocably and
unconditionally guaranteed the Capital Trust's obligations under the Trust
Preferred Securities. At any time after September 30, 2004, we may redeem our
subordinated debentures at par, and, in that case, the Capital Trust may redeem
the Trust Preferred Securities at their liquidation amounts.
Rights to Dividends
So long as we are not in default and have not deferred our obligation to
make payments of interest in connection with the Trust Preferred Securities, and
subject to any prior rights of holders of preferred stock then outstanding, the
holders of our Common Stock will be entitled to dividends when, as, and if
declared by our board of directors out of funds legally available for dividends.
Under the Maryland General Corporation Law, dividends may be legally declared or
paid only if, after their payment, we can pay our debts as they come due in the
usual course of business, and then only if our total assets equal or exceed the
sum of our liabilities plus the amount that would be needed to satisfy the
preferential rights upon dissolution of any holders of preferred stock then
outstanding whose preferential rights are superior to those receiving the
distribution. Additionally, we are subject to the November 14, 1985 policy
statement issued by the Board of Governors of the Federal Reserve System, which
provides that bank holding companies should pay dividends only out of the past
year's net income, and then only if their prospective rate of earnings retention
appears consistent with their capital needs, asset quality, and overall
financial condition.
Rights Upon Liquidation
In the event of our voluntary or involuntary liquidation or dissolution, or
the winding-up of our affairs, our assets will be applied first to the payment,
satisfaction and discharge of our existing debts and obligations, including the
necessary expenses of dissolution or liquidation, then to satisfy any senior
rights of holders of our preferred securities, if any, and then pro rata to the
holders of our Common Stock. We have guaranteed the payment of distributions to
holders of the Trust Preferred Securities. Therefore, our debts and obligations
to be satisfied upon our liquidation or winding-up will include, to the extent
the Capital Trust is unable to do so, any amounts owed to the holders of the
Trust Preferred Securities, and we will be required to make these payments out
of our assets before we can make any payments to the holders of our Common
Stock.
General Voting Requirements
Except with respect to certain extraordinary transactions, the affirmative
vote of the holders of a majority of the shares of Common Stock entitled to vote
is required to approve any action for which stockholder approval is required.
The approval of a sale or transfer of substantially all of our assets,
liquidation, merger, consolidation, reorganization, or similar extraordinary
corporate transaction requires the affirmative vote of two-thirds of the shares
of Common Stock entitled to vote on the matter. See "Anti-Takeover Measures" and
"Business Combinations" below for special voting requirements.
Anti-Takeover Measures
Generally, our Articles of Incorporation and Bylaws contain certain
provisions designed to enhance the ability of the board of directors to deal
with attempts to acquire control of the Company. These provisions may be deemed
to have an anti-takeover effect and may discourage takeover attempts that have
not been approved by the board of directors (including takeovers that certain
stockholders may deem to be in their best interest). These provisions also could
discourage or make more difficult a
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merger, tender offer or proxy contest, even though such transaction may be
favorable to the interests of stockholders, and could potentially adversely
affect the market price.
The following discussion briefly summarizes protective provisions contained
in the Articles of Incorporation and Bylaws. This summary is necessarily general
and is not intended to be a complete description of all the features and
consequences of those provisions, and is qualified in its entirety by reference
to the Articles of Incorporation and Bylaws.
Staggered Board Terms. Our Articles of Incorporation provide that the board of
directors be divided into three classes of directors, with each class serving a
staggered three-year term. At each annual meeting of stockholders, the
successors to the class of directors whose term shall then expire shall be
elected to hold office for a term expiring at the third succeeding annual
meeting.
The Bylaws provide that any directorships resulting from any vacancies on
our board of directors resulting from death, resignation, disqualification,
removal or other cause or resulting from any increase in the number of directors
may be filled by the board of directors, acting by a majority of the directors
then in office, even though less than a quorum. In the case of vacancies, any
director so chosen shall hold office until the next election of the class for
which such director shall have been chosen and until his or her successor shall
be elected and qualify. In the case of an increase in the number of directors,
any director so chosen shall hold office until the next annual meeting of
stockholders and thereafter until his or her successor shall be elected and
qualify.
Removal of Directors. The Bylaws also provide that a director may be removed
only for cause, which means only because of criminal conviction of a felony,
unsound mind, adjudication of bankruptcy, or conduct prejudicial to our
interests. A removal for cause must be approved by the affirmative vote of a
majority of the remainder of the board of directors or by the affirmative vote
of a majority of our outstanding capital stock entitled to vote for the election
of directors. Any attempt by stockholders to remove a director for cause
(including any special meeting called for such purpose) shall be permitted only
after notice to the director in question describing the specific charges
constituting cause thereunder, and a hearing at which the director shall have a
full opportunity to refute the charges.
These provisions may preclude a third party from removing incumbent
directors and simultaneously gaining control of the board of directors by
filling the vacancies created by removal with its own nominees. Under the
classified board provisions described above, it would take at least two
elections of directors for any individual or group to gain control of the board
of directors. Accordingly, these provisions may discourage a third party from
initiating a proxy contest, making a tender offer or otherwise attempting to
gain control of First United Corporation.
Business Combinations
Unless an exemption is available, the Maryland General Corporation Law
prohibits certain "business combinations" (including any merger or similar
transaction subject to a statutory stockholder vote and additional transactions
involving transfers of assets or securities in specific amounts) between a
Maryland corporation and certain "interested stockholders" for a period of five
years after the most recent date on which that stockholder became an interested
stockholder. For purposes of this prohibition, an "interested stockholder" is:
(i) any person who, after the date on which the corporation has 100 or more
beneficial owners of its stock, beneficially owns 10% or more of the voting
power of the corporation's shares; and (ii) any affiliate of the corporation
who, at any time within the two-year period prior to the date in question and
after the date on which the corporation has 100 or more beneficial owners of its
stock, was the beneficial owner of 10% or more of the voting power of the
then-outstanding
-16-
voting stock of the corporation, or an affiliate thereof. After that five-year
period, any such business combination must be recommended by the board of
directors of the corporation and approved by the affirmative vote of at least:
(i) 80% of the votes entitled to be cast by holders of outstanding voting shares
of the corporation; and (ii) two-thirds of the votes entitled to be cast by
holders of outstanding voting shares of the corporation other than shares held
by the interested stockholder with whom the business combination is to be
effected, unless the corporation's stockholders receive a minimum price (as
described in the Maryland General Corporation Law) for their shares and the
consideration is received in cash or in the same form as previously paid by the
interested stockholder for its shares.
These provisions of Maryland law do not apply, however, to business
combinations that are approved or exempted by the board of directors prior to
the time that the stockholder becomes an interested stockholder, or if our
Articles of Incorporation are amended to specifically provide that we are not
subject to the foregoing requirements. Under the Maryland General Corporation
Law, such an amendment must be approved by an affirmative vote of at least 80%
of the votes entitled to be cast by all holders of outstanding shares of voting
stock and two-thirds of the votes entitled to be cast by holders of outstanding
shares of voting stock who are not interested stockholders.
Control Share Acquisitions
The Maryland General Corporation Law provides that "control shares" of a
Maryland corporation acquired in a "control share acquisition" have no voting
rights except to the extent approved by the affirmative vote of two-thirds of
the votes entitled to be cast on the matter, excluding shares of stock owned by
the acquiror or by officers or directors who are employees of the corporation.
"Control shares" are voting shares of stock which, if aggregated with all other
such shares of stock previously acquired by the acquiror, or in respect of which
the acquiror is able to exercise or direct the exercise of voting power except
solely by virtue of a revocable proxy, would entitle the acquiror to exercise
voting power in electing directors within one of the following ranges of voting
power: (i) one-tenth or more but less than one-third; (ii) one-third or more but
less than a majority; or (iii) a majority of all voting power. Control shares do
not include shares the acquiring person is then entitled to vote as a result of
having previously obtained stockholder approval. A "control share acquisition"
means the acquisition of control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions (including an undertaking to pay expenses and
delivery of an "acquiring person statement"), may compel the corporation's board
of directors to call a special meeting of stockholders to be held within 50 days
of demand to consider the voting rights of the shares. If no request for a
meeting is made, the corporation may itself present the question at any
stockholders' meeting.
Unless the charter or bylaws provide otherwise, if voting rights are not
approved at the meeting or if the acquiring person does not deliver an acquiring
person statement within 10 days following a control share acquisition then,
subject to certain conditions and limitations, the corporation may redeem any or
all of the control shares (except those for which voting rights have previously
been approved) for fair value determined, without regard to the absence of
voting rights for the control shares, as of the date of the last control share
acquisition or of any meeting of stockholders at which the voting rights of such
shares are considered and not approved. Moreover, unless the charter or bylaws
provides otherwise, if voting rights for control shares are approved at a
stockholders' meeting and the acquiror becomes entitled to exercise or direct
the exercise of a majority or more of all voting power, other stockholders may
exercise appraisal rights. The fair value of the shares as determined for
purposes of such appraisal rights may not be less than the highest price per
share paid by the acquiror in the control share acquisition.
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USE OF PROCEEDS
The proceeds from any purchases from us, if any, of shares of Common Stock
pursuant to the Plan are expected to be used for general corporate purposes. We
have no basis for estimating either the number of shares of Common Stock that
will ultimately be sold pursuant to the Plan or the prices at which such shares
will be sold.
LEGAL OPINION
Certain matters with respect to the legality of the issuance of the shares
of the Common Stock offered pursuant to the Plan have been passed upon by
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, The Garrett Building,
233 East Redwood Street, Baltimore, Maryland 21202-3332.
EXPERTS
The consolidated financial statements of First United Corporation appearing
in First United Corporation's Annual Report (Form 10-K) for the year ended
December 31, 2001, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
INDEMNIFICATION
Our Articles of Incorporation provide that each director and officer shall
be indemnified by us to the full extent permitted by Maryland law. Our Bylaws
provide in general that we shall indemnify any director or officer who is a
party to any suit or proceeding, other than an action by or in the right of
First United Corporation by reason of his or her having been a director or
officer of First United Corporation, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such suit or proceeding if he or she has acted in good faith and
in a manner he or she reasonably believed to be in, or not opposed to, our best
interests, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The Bylaws also
require us to indemnify any such person with respect to actions by or in the
right of First United Corporation against expenses incurred in connection with
this Prospectus and the related registration statement if he or she acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, our best interests, unless he or she is adjudged liable to us. Such
rights of indemnification are not exclusive of any other rights to which
directors or officers may otherwise be entitled. The Bylaws further provide that
the directors and officers shall be indemnified as permitted by Maryland
corporation law and, in the event of any inconsistency between the Bylaw
provisions and such law, the provisions of the Maryland corporation law shall
govern.
Section 2-418 of the Maryland General Corporation Law establishes
provisions whereby a Maryland corporation may indemnify any director or officer
made party to an action or proceeding by reason of service in that capacity,
against judgments, penalties, fines, settlements and reasonable expenses
incurred in connection with such action or proceeding unless it is proved that
the director or officer (i) acted in bad faith or with active and deliberate
dishonesty, (ii) actually received an improper personal benefit in money,
property or services or (iii) in the case of a criminal proceeding, had
reasonable cause to believe that his or her act was unlawful. However, if the
proceeding is a derivative suit in favor of First United Corporation,
indemnification may not be made if the individual is adjudged to be liable to
us. In no case may indemnification be made until a determination has been
reached that the director or officer has met the
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applicable standard of conduct. Indemnification for reasonable expenses is
mandatory if the director or officer has been successful on the merits or
otherwise in the defense of any action or proceeding covered by the
indemnification statute. The statute also provides for indemnification of
directors and officers by court order. The indemnification provided or
authorized in the indemnification statute does not preclude a corporation from
extending other rights (indemnification or otherwise) to directors and officers.
We maintain a director and officer liability insurance policy covering our
director and officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
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TABLE OF CONTENTS
Available Information....................................................... 3
Incorporation of Certain Documents by Reference............................. 3
First United Corporation.................................................... 4
Description of the Plan..................................................... 4
Description of Securities................................................... 14
Use of Proceeds............................................................. 18
Legal Opinion............................................................... 18
Experts..................................................................... 18
Indemnification............................................................. 18
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALES HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF FIRST UNITED CORPORATION SINCE THE DATE HEREOF. NO DEALER, BROKER,
SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFERING CONTAINED IN THIS PROSPECTUS, AND
INFORMATION OR REPRESENTATIONS NOT HEREIN CONTAINED, IF GIVEN OR MADE, MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY FIRST UNITED CORPORATION. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY STATE OR JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
PROSPECTUS
[LOGO] FIRST UNITED
Corporation
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table itemizes the expenses incurred by First United
Corporation (the "Company") in connection with the offering of the Shares being
registered hereby. All amounts shown are estimates.
Printing and Mailing Cost.......................... $ 9,400
Legal Fees and Expenses............................ 5,000
Accounting Services................................ 2,500
Miscellaneous Expenses............................. 500
Total..................................... $ 17,400
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Maryland General Corporation Law permits a corporation to indemnify its
present and former directors, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made a party by reason of their services in
those capacities, unless it is established that:
(a) The act or omission of the director was material to the matter giving
rise to such proceeding and
(i) was committed in bad faith or
(ii) was the result of active and deliberate dishonesty;
(b) The director actually received an improper personal benefit in money,
property, or services; or
(c) In the case of any criminal proceeding, the director had reasonable
cause to believe that the act or omission was unlawful.
Maryland law permits a corporation to indemnify a present or former officer to
the same extent as a director.
In addition to the foregoing, a court of appropriate jurisdiction may under
certain circumstances order indemnification if it determines that the director
or officer is fairly and reasonably entitled to indemnification in view of all
of the relevant circumstances, whether or not the director or officer has met
the standards of conduct set forth in the preceding paragraph or has been
declared liable on the basis that a personal benefit improperly received in a
proceeding charging improper personal benefit to the director or the officer. If
the proceeding was an action by or in the right of the corporation or involved a
determination that the director or officer received an improper personal
benefit, however, no indemnification may be made if the individual is adjudged
liable to the corporation, except to the extent of expenses approved by a court
of appropriate jurisdiction.
II-1
The Maryland General Corporation Law additionally permits a corporation to
pay or reimburse, in advance of the final disposition of a proceeding,
reasonable expenses incurred by a present or former director or officer made a
party to the proceeding by reason of his or her service in that capacity,
provided that the corporation shall have received:
(a) A written affirmation by the director or officer of his or her good
faith belief that he or she has met the standard of conduct necessary
for indemnification by the corporation; and
(b) A written undertaking by or on behalf of the director to repay the
amount paid or reimbursed by the corporation if it shall ultimately be
determined that the standard of conduct was not met.
The Company has provided for indemnification of its directors, officers,
employees, and agents in Article VIII of its Bylaws. This provision reads as
follows:
ARTICLE VIII
Indemnification
SECTION 1. As used in this Article VIII, any word or words that are defined
in Section 2-418 of the Corporations and Associations Article of the
Annotated Code of Maryland (the "Indemnification Section"), as amended from
time to time, shall have the same meaning as provided in the
Indemnification Section.
SECTION 2. Indemnification of Directors and Officers. The Corporation shall
indemnify and advance expenses to a director or officer of the Corporation
in connection with a proceeding to the fullest extent permitted by and in
accordance with the Indemnification Section. Notwithstanding the foregoing,
the Corporation shall be required to indemnify a director or officer in
connection with a proceeding commenced by such director or officer against
the Corporation or its directors or officers only if the proceeding was
authorized by the Board of Directors.
SECTION 3. Indemnification of Other Agents and Employees. With respect to
an employee or agent, other than a director or officer of the Corporation,
the Corporation may, as determined by and in the discretion of the Board of
Directors of the Corporation, indemnify and advance expenses to such
employees or agents in connection with a proceeding to the extent permitted
by and in accordance with the Indemnification Section.
The Maryland General Corporation Law authorizes a Maryland corporation to
limit by provision in its charter the liability of directors and officers to the
corporation or to its stockholders for money damages except to the extent:
(a) The director or officer actually receives an improper benefit or
profit in money, property, or services, for the amount of the benefit
or profit actually received, or
(b) A judgment or other final adjudication adverse to the director or
officer is entered in a proceeding based on a finding in the
proceeding that the director's or officer's action, or failure to act,
was the result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding.
II-2
The Company has limited the liability of its directors and officers for
money damages in Article Ninth of its Articles of Incorporation. This provision
reads as follows:
NINTH: No Director or officer of the Corporation shall be liable to
the Corporation or to its stockholders for money damages except (i) to the
extent that it is proved that such Director or officer actually received an
improper benefit or profit in money, property or services, for the amount
of the benefit or profit in money, property or services actually received,
or (ii) to the extent that a judgment or other final adjudication adverse
to such Director or officer is entered in a proceeding based on a finding
in the proceeding that such Director's or officer's action, or failure to
act, was the result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding. No amendment of these
Articles of Incorporation or repeal of any of its provisions shall limit or
eliminate the benefits provided to directors and officers under this
provision with respect to any act or omission which occurred prior to such
amendment.
As permitted under Section 2-418 (k) of the Maryland General Corporation
Law, the Company has purchased and maintains insurance on behalf of its
directors and officers against any liability asserted against such directors and
officers in their capacities as such, whether or not the Company would have the
power to indemnify such persons under the provisions of Maryland law governing
indemnification.
Section 8(k) of the Federal Deposit Insurance Act (the "FDI Act") provides
that the Federal Deposit Insurance Corporation (the "FDIC") may prohibit or
limit, by regulation or order, payments by any insured depository institution or
its holding company for the benefit of directors and officers of the insured
depository institution, or others who are or were "institution-affiliated
parties," as defined under the FDI Act, in order to pay or reimburse such person
for any liability or legal expense sustained with regard to any administrative
or civil enforcement action which results in a final order against the person.
The FDIC has adopted regulations prohibiting, subject to certain exceptions,
insured depository institutions, their subsidiaries and affiliated holding
companies from indemnifying officers, directors or employees for any civil money
penalty or judgment resulting from an administrative or civil enforcement action
commenced by any federal banking agency, or for that portion of the costs
sustained with regard to such an action that results in a final order or
settlement that is adverse to the director, officer or employee.
ITEM 16. EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Amended and Restated Articles of Incorporation (incorporated
by reference to Exhibit 3.1 of the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1998)
4.2 Amended and Restated By-Laws (incorporated by reference to
Exhibit 3(ii) of the Company's Annual Report on Form 10-K for the
year ended December 31, 1997)
4.3 Dividend Reinvestment and Stock Purchase Plan (included in the
Prospectus)
4.4 Authorization Form (filed herewith)
5 Opinion of Gordon, Feinblatt, Rothman, Hoffberger & Hollander,
LLC (filed herewith)
23.1 Consent of Ernst & Young LLP (filed herewith)
II-3
23.2 Consent of Gordon, Feinblatt, Rothman, Hoffberger & Hollander,
LLC (contained in Exhibit 5)
99 Letter to Stockholders relating to the Dividend Reinvestment and
Stock Purchase Plan (filed herewith)
Item 17. Undertakings.
The undersigned registrant hereby agrees:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change in such
information in the registration statement;
Provided, however, that (a)(i) and (a)(ii) will not apply if the
information required to be included in a post-effective amendment
thereby is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall
be deemed to be the initial bona fide offering hereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(d) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oakland, State of Maryland, on August 21, 2002.
By: /s/ William B. Grant
------------------------------------
William B. Grant, Chairman and CEO
By: /s/ Robert W. Kurtz
------------------------------------
Robert W. Kurtz, President and CFO
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints William B. Grant and Robert W. Kurtz, and each of
them (with full power to each of them to act alone), his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
PRINCIPAL EXECUTIVE OFFICER:
August 21, 2002 By: /s/ William B. Grant
------------------------------------
William B. Grant, Chairman and CEO
PRINCIPAL FINANCIAL & ACCOUNTING OFFICER:
August 21, 2002 By: /s/ Robert W. Kurtz
------------------------------------
Robert W. Kurtz, President and CFO
II-5
A MAJORITY OF THE BOARD OF DIRECTORS:
August 21, 2002 By: /s/ David J. Beachy
-----------------------------------
David J. Beachy, Director
August 21, 2002 By: /s/ Donald M. Browning
-----------------------------------
Donald M. Browning, Director
August 21, 2002 By: /s/ Rex W. Burton
-----------------------------------
Rex W. Burton, Director
August 21, 2002 By: /s/ Paul Cox, Jr.
-----------------------------------
Paul Cox, Jr., Director
August 21, 2002 By: /s/ William B. Grant
-----------------------------------
William B. Grant, Director
August 21, 2002 By: /s/ Maynard G. Grossnickle
-----------------------------------
Maynard G. Grossnickle, Director
August 21, 2002 By: /s/ Raymond F. Hinkle
-----------------------------------
Raymond F. Hinkle, Director
August 21, 2002 By: /s/ Robert W. Kurtz
-----------------------------------
Robert W. Kurtz, Director
August 21, 2002 By: /s/ Elaine L. McDonald
-----------------------------------
Elaine L. McDonald, Director
August 21, 2002 By:
-----------------------------------
Donald E. Moran, Director
August 21, 2002 By: /s/ Karen F. Myers
-----------------------------------
Karen F. Myers, Director
August 21, 2002 By: /s/ I. Robert Rudy
-----------------------------------
I. Robert Rudy, Director
II-6
August 21, 2002 By: James F. Scarpelli, Sr.
-----------------------------------
James F. Scarpelli, Sr., Director
August 21, 2002 By: /s/ Richard G. Stanton
-----------------------------------
Richard G. Stanton, Director
August 21, 2002 By: /s/ Robert G. Stuck
-----------------------------------
Robert G. Stuck, Director
August 21, 2002 By: /s/ Frederick A. Thayer, III
-----------------------------------
Frederick A. Thayer, III, Director
II-7
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.1 Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1 of the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1998)
4.2 Amended and Restated By-Laws (incorporated by reference to
Exhibit 3(ii) of the Company's Annual Report on Form 10-K for the
year ended December 31, 1997)
4.3 Dividend Reinvestment and Stock Purchase Plan (included in the
Prospectus)
4.4 Authorization Form (filed herewith)
5 Opinion of Gordon, Feinblatt, Rothman, Hoffberger & Hollander,
LLC (filed herewith)
23.1 Consent of Ernst & Young LLP (filed herewith)
23.2 Consent of Gordon, Feinblatt, Rothman, Hoffberger & Hollander,
LLC (contained in Exhibit 5)
99 Letter to Stockholders relating to the Dividend Reinvestment and
Stock Purchase Plan (filed herewith)