FIRST UNITED BANCSHARES INC /AR/, 424B1, 1994-05-16

FIRST UNITED BANCSHARES INC /AR/
424B1, 1994-05-16
STATE COMMERCIAL BANKS

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<PAGE> 1

FIRST UNITED BANCSHARES, INC.

To the Stockholders of
First United Bancshares, Inc.

Enclosed is a Notice of Special Meeting of Stockholders of First United
Bancshares, Inc. ("First United") which will be held at the main office of First
National Bank of El Dorado at Main and Washington Streets, El Dorado, Arkansas
on June 13, 1994 at 2:00 P.M.

At a Special Meeting, Stockholders of First United will consider and vote
upon the merger of First United and InvestArk Bankshares, Inc. ("InvestArk")
whereby InvestArk will be merged with and into First United. The Agreement
between First United and InvestArk provides that the stockholders of InvestArk
will receive total consideration of $26,125,000 consisting of fully paid and
nonassessable shares of Common Stock, $1.00 par value of First United, if the
average price of First United Common Stock is between $26.50 and $29.50. If the
average price is in this range the number of shares of First United common stock
to be exchanged for all of the issued and outstanding shares of InvestArk Common
Stock will be determined by dividing $26,125,000 by the average price of First
United Common stock. The average price of First United Common Stock is defined
as the average sales price per share for all trades occurring during the period
of ten (10) trading days on which one or more trades actually takes place and
which ends immediately prior to the second trading day preceding the closing
date. Notwithstanding the foregoing, the number of shares of First United Common
Stock to be exchanged shall not be less than 885,593 and shall not be greater
than 985,849 which equate to an average price of First United Common Stock of
$29.50 and $26.50, respectively.

If the average price of First United common stock is less than $26.50, the
amount of shares issued shall equal the ceiling of 985,849 shares. Also, if the
average price of First United common stock is more than $29.50, the amount of
shares issued shall equal the floor of 885,593 shares. The total consideration
exchanged will vary from $26,125,00 if the average price is either higher than
$29.50 or lower than $26.50. For example, if the average price is $35.00, the
InvestArk stockholders shall receive 885,593 shares of First United common
stock, each share having a value of $35.00 representing total consideration of
$30,995,755. If the average price is $22.00, the InvestArk stockholders shall
receive 985,849 shares of First United common stock, each having a value of
$22.00 representing a total of $21,688,678.

InvestArk is a bank holding company which is primarily engaged in the
business of banking through its two wholly-owned bank subsidiaries, with branch
offices in Izard and Arkansas counties which provide a full range of banking
services to its customers.

The Board of Directors believes that the proposed merger upon the terms and
conditions set forth in the accompanying Proxy Statement is in the best
interests of our Stockholders and therefore recommends that you vote in favor of
the merger. Additional information regarding the proposed merger, InvestArk and
the rights of dissenting Stockholders is set forth in the enclosed Proxy
Statement and I urge you to read this material carefully.

You are cordially invited to attend the meeting in person. Whether or not
you plan to attend the Special Meeting, please sign, date and return as soon as
possible the enclosed proxy in the enclosed self-addressed and stamped envelope.
If you attend the meeting, you may vote in person if you wish, even though you
previously returned your proxy.

Very truly yours,

(SIG)

JAMES V. KELLEY
Chairman of the Board
<PAGE> 2

FIRST UNITED BANCSHARES, INC.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

June 13, 1994

NOTICE is hereby given that a Special Meeting of Stockholders of First
United Bancshares, Inc. has been called by the Board of Directors and will be
held at the main office of First National Bank Building, Main and Washington
Streets, El Dorado, Arkansas on June 13, 1994 at 2:00 p.m. for the following
purposes:

1. To consider and vote upon an Agreement and Plan of Reorganization dated
as of December 17, 1993 which provides for the merger of InvestArk
Bankshares, Inc. into First United Bancshares, Inc. of El Dorado,
Arkansas.

2. To transact such other business as may properly come before the meeting
or any adjournment thereof.

All Stockholders of record at the close of business on April 29, 1994 are
entitled to vote at the meeting. The proposal 1 above requires the affirmative
vote of two-thirds of shares entitled to vote for approval.

Whether or not you plan to attend, please sign the enclosed Proxy and
return it at once in the stamped return envelope in order to insure that your
shares will be represented at the meeting. If you attend in person, the proxy
can be disregarded, if you wish, and you may vote your own shares.

By Order of the Board of Directors

(SIG)

ROBERT G. DUDLEY,
Secretary

Dated: May 16, 1994
<PAGE> 3

INVESTARK BANKSHARES, INC.

To the Stockholders of
InvestArk Bankshares, Inc.

Enclosed is a Notice of Special Meeting of Stockholders of InvestArk
Bankshares, Inc. ("InvestArk") which will be held at the main office of First
Stuttgart Bank and Trust Company at 412 South Main Street, Stuttgart, Arkansas
on June 13, 1994 at 10:00 A.M.

At a Special Meeting, Stockholders of InvestArk will consider and vote upon
the merger of InvestArk with and into First United Bancshares, Inc. ("First
United"). The Agreement between First United and InvestArk provides that the
stockholders of InvestArk will receive total consideration of $26,125,000
consisting of fully paid and nonassessable shares of Common Stock, $1.00 par
value of First United, if the average price of First United Common Stock is
between $26.50 and $29.50. If the average price is in this range the number of
shares of First United common stock to be exchanged for all of the issued and
outstanding shares of InvestArk Common Stock will be determined by dividing
$26,125,000 by the average price of First United Common Stock. The average price
of First United Common Stock is defined as the average sales price per share for
all trades occurring during the period of ten (10) trading days on which one or
more trades actually takes place and which ends immediately prior to the second
trading day preceding the closing date. Notwithstanding the foregoing, the
number of shares of First United Common Stock to be exchanged shall not be less
than 885,593 and shall not be greater than 985,849 which equate to an average
price of First United Common Stock of $29.50 and $26.50, respectively.

If the average price of First United common stock is less than $26.50, the
amount of shares issued shall equal the ceiling of 985,849 shares. Also, if the
average price of First United common stock is more than $29.50, the amount of
shares issued shall equal the floor of 885,593 shares. The total consideration
exchanged will vary from $26,125,000 if the average price is either higher than
$29.50 or lower than $26.50. For example, if the average price is $35.00, the
InvestArk stockholders shall receive 885,593 shares of First United common
stock, each share having a value of $35.00 representing total consideration of
$30,995,755. If the average price is $22.00, the InvestArk stockholders shall
receive 985,849 shares of First United common stock, each share having a value
of $22.00 representing a total of $21,688,678.

Stockholders of InvestArk will also consider and vote upon the election by
InvestArk to be governed by the Arkansas Business Corporation Act of 1987. This
vote will be incidental to the vote on the merger in that the election will only
be made in order to facilitate compliance with statutory law in consummating the
merger and no election will be made unless the merger is approved.

First United is a bank holding company which is engaged in the business of
banking through its five wholly-owned bank subsidiaries, with branch offices in
Union, Van Buren, Columbia, Ouachita, and Crawford counties which provide a full
range of banking services to its customers.

The Board of Directors believes that the proposed merger upon the terms and
conditions set forth in the accompanying Proxy Statement is in the best
interests of our stockholders and therefore recommends that you vote in favor of
the merger and the election to be governed by the 1987 Act. Additional
information regarding the proposed merger, the above-referenced election, First
United and the rights of dissenting stockholders is set forth in the enclosed
Proxy Statement and I urge you to read this material carefully.

Very truly yours,

(SIG)

HARRY C. ERWIN
Chairman of the Board
<PAGE> 4

INVESTARK BANKSHARES, INC.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

June 13, 1994

NOTICE is hereby given that the Special Meeting of Stockholders of
InvestArk Bankshares, Inc. has been called by the Board of Directors and will be
held at the main office of First Stuttgart Bank and Trust Company located at 412
South Main Street, Stuttgart, Arkansas on June 13, 1994 at 10:00 a.m. for the
following purposes:

1. To consider and vote upon an Agreement and Plan of Reorganization
("Agreement") dated as of December 17, 1993 which provides for the
merger of InvestArk Bankshares, Inc. into First United Bancshares, Inc.
of El Dorado, Arkansas.

2. To consider and vote upon an election to be governed by the Arkansas
Business Corporation Act of 1987. This vote will be incidental to the
vote upon the Agreement and will only be effective if the Agreement is
approved.

3. To transact such other business as may properly come before the meeting
or any adjournment thereof.

All stockholders of record at the close of business on April 29, 1994 are
entitled to vote at the meeting. Both proposals 1 and 2 above require the
affirmative vote of two-thirds of shares entitled to vote for approval.

By Order of the Board of Directors

(SIG)

HARRY C. ERWIN
Chairman of the Board

Dated: May 16, 1994
<PAGE> 5

FIRST UNITED BANCSHARES, INC.

AND

INVESTARK BANKSHARES, INC.

JOINT PROXY STATEMENT
------------------------

FIRST UNITED BANCSHARES, INC.

PROSPECTUS
985,849 SHARES OF COMMON STOCK
PAR VALUE $1.00

This Proxy Statement and Prospectus ("Proxy Statement") is being furnished
to the stockholders of InvestArk Bankshares, Inc. ("InvestArk") and First United
Bancshares, Inc. ("First United or the Company") in connection with the
solicitation of proxies by the Board of Directors of InvestArk and First United,
respectively, for use at the special meeting of stockholders of InvestArk to be
held on June 13, 1994, including any adjournments or postponements of the
meeting, and for use at a special meeting of stockholders of First United to be
held on June 13, 1994, including any adjournments or postponements of the
meeting. At the meetings or any adjournments or postponements thereof, the
stockholders of InvestArk and First United will be asked to consider and vote on
a proposal to authorize and approve the transactions contemplated by the
Agreement and Plan of Reorganization between First United and InvestArk, dated
December 17, 1993 (the "Agreement"), and incidental thereto the stockholders of
InvestArk will be asked to consider and vote on a proposal to elect to have
InvestArk governed by the Arkansas Business Corporation Act of 1987. Pursuant to
the Agreement and the Plan of Merger ("Plan of Merger") which is Exhibit A to
the Agreement, First United would acquire all of the issued and outstanding
stock of InvestArk through a merger transaction (the "Merger") in which
InvestArk would merge with and into First United in exchange for the issuance to
the stockholders of InvestArk of up to 985,849 shares of First United common
stock, par value $1.00 ("Common Stock").

First United has agreed to register under the Securities Act of 1933, as
amended (the "Securities Act") the 985,849 shares of First United Common Stock
that may be issued to stockholders of InvestArk in exchange for their stock in
InvestArk. Consequently, this Proxy Statement serves as a Prospectus of First
United under the Securities Act for the issuance of shares of First United
Common Stock to stockholders of InvestArk.

This Proxy Statement and the accompanying forms of proxy are first being
mailed to stockholders of InvestArk and First United on or about May 16, 1994.
On May 2, 1994, the closing price on the National Association of Securities
Dealers Automatic Quotation System of a share of First United Common Stock was
$30.00.

THE ABOVE MATTERS ARE DISCUSSED IN DETAIL IN THIS PROXY STATEMENT.
STOCKHOLDERS ARE STRONGLY URGED TO READ AND CONSIDER CAREFULLY THIS
PROXY STATEMENT IN ITS ENTIRETY.
------------------------

THE SECURITIES TO BE ISSUED IN THE PROPOSED TRANSACTION 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 PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------

THE DATE OF THIS PROXY STATEMENT IS MAY 16, 1994.
<PAGE> 6

NO PERSON IS AUTHORIZED BY FIRST UNITED OR INVESTARK TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS
PROXY STATEMENT, IN CONNECTION WITH THE SOLICITATION AND THE OFFERING MADE BY
THIS PROXY STATEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT DOES
NOT CONSTITUTE THE SOLICITATION OF A PROXY OR AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO PURCHASE, ANY SECURITIES IN ANY JURISDICTION IN
WHICH SUCH SOLICITATION OR OFFERING MAY NOT LAWFULLY BE MADE.

NEITHER THE DELIVERY OF THIS PROXY STATEMENT NOR ANY DISTRIBUTION OF
SECURITIES MADE HEREUNDER SHALL IMPLY THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF FIRST UNITED OR INVESTARK
SINCE THE DATE HEREOF.

------------------------

AVAILABLE INFORMATION

First United is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and, in accordance therewith,
files proxy statements, reports and other information with the Securities and
Exchange Commission ("Commission"). This filed material can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices in Chicago (500 West Madison, Northwestern Atrium Center, 14th
Floor, Chicago, Illinois 60661) and in New York (75 Park Place, New York, New
York 10007) and copies of such material can be obtained by mail from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. First United's Common Stock is traded on the
National Association of Securities Dealers Automated Quotation National Market
System and the Company's Exchange Act reports and other information can be
inspected and copied at the National Association of Securities Dealers, 1735 "K"
Street, N.W., Washington, D.C. 20006.

First United has filed with the Commission a Registration Statement on Form
S-4 (together with any amendments thereto, the "Registration Statement") under
the Securities Act with respect to a maximum 985,849 shares of First United
Common Stock to be issued upon consummation of the transactions contemplated by
the Agreement. This Proxy Statement does not contain all the information set
forth in the Registration Statement and the exhibits thereto, certain portions
of which have been omitted as permitted by rules and regulations of the
Commission. Copies of the Registration Statement are available from the
Commission, upon payment of prescribed rates. For further information, reference
is made to the Registration Statement and the exhibits filed therewith.
Statements contained in this Proxy Statement or any document incorporated by
reference in this Proxy Statement relating to the contents of any contract or
other document referred to herein or therein are not necessarily complete, and
in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement or such other
document, each such statement being qualified in all respects by such reference.

------------------------

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

THIS PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM MR. JOHN E. BURNS, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER,
FIRST UNITED BANCSHARES, INC., MAIN AND WASHINGTON STREETS, EL DORADO, ARKANSAS
71730, (501) 863-3181. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
REQUEST, ALTHOUGH NOT REQUIRED, SHOULD BE MADE, BY CERTIFIED MAIL, ON OR BEFORE
JUNE 6, 1994.

2
<PAGE> 7

The following documents of First United, which have been filed with the
Commission under the Exchange Act, are incorporated by reference into this Proxy
Statement:

1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, filed with the Commission on March 30, 1994.

2. The Company's most recent Current Report on Form 8-K filed with the
Commission on January 5, 1994.

Each document filed subsequent to the date of this Proxy Statement pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the holding of
the meeting of the Stockholders of InvestArk and First United, respectively,
shall be deemed to be incorporated by reference in this Proxy Statement and
shall be part hereof from the date of filing of such document. Any statement
contained in a document incorporated or deemed to be incorporated in this Proxy
Statement shall be deemed to be modified or superseded for purposes of this
Proxy Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference modifies or supersedes such document.

All information contained in this Proxy Statement relating to First United
has been supplied by First United and all information relating to InvestArk has
been supplied by InvestArk.

3
<PAGE> 8

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-------
<S> <C>
SUMMARY
The Company...................................................................... 6
InvestArk........................................................................ 6
Federal Reserve Board Investigations............................................. 6
The Merger....................................................................... 6
Combined Company................................................................. 7
No Fairness Opinion.............................................................. 7
Election by InvestArk Stockholders Under the 1987 Act............................ 7
The First United Special Meeting................................................. 8
The InvestArk Special Meeting.................................................... 8
Certain Federal Income Tax Consequences.......................................... 8
Dissenters' Rights............................................................... 8
Regulatory Approvals............................................................. 9
Accounting Treatment............................................................. 9
Market Prices.................................................................... 9
Comparative Per Share Data....................................................... 9
Selected Financial Data.......................................................... 11
THE INVESTARK SPECIAL MEETING
Date, Time and Place............................................................. 12
Purpose of Meeting............................................................... 12
Shares Outstanding and Entitled to Vote; Record Date............................. 12
Vote Required.................................................................... 12
Voting; Solicitation of Proxies.................................................. 12
THE FIRST UNITED SPECIAL MEETING
Date, Time and Place............................................................. 13
Purpose of Meeting............................................................... 13
Shares Outstanding and Entitled to Vote; Record Date............................. 13
Vote Required.................................................................... 13
Voting; Solicitation of Proxies.................................................. 13
THE MERGER
Background of the Merger......................................................... 14
Reason for the Merger............................................................ 16
Fairness of the Transaction...................................................... 16
The Agreement.................................................................... 16
Regulatory Approvals............................................................. 18
Antitrust Matters................................................................ 18
Certain Federal Income Tax Consequences.......................................... 18
Accounting Treatment............................................................. 19
Right of Dissent Under the 1965 Act.............................................. 19
Right of Dissent under the 1987 Act.............................................. 20
Exchange Ratio for the Merger.................................................... 21
Expenses of the Merger........................................................... 22
FINANCIAL INFORMATION
Pro Forma Combining Balance Sheets............................................... 23
Pro Forma Combining Statements of Income......................................... 24
Notes to Pro Forma Combining Financial Statements................................ 27
</TABLE>

4
<PAGE> 9

<TABLE>
<CAPTION>
PAGE
-------
<S> <C>
ELECTION BY INVESTARK STOCKHOLDERS UNDER THE 1987 ACT
Election Incidental to the Merger................................................ 27
Reason for the Election.......................................................... 27
Result of the Election........................................................... 27
FIRST UNITED BANCSHARES, INC.
General.......................................................................... 30
Regulation....................................................................... 30
Offices.......................................................................... 32
Employees........................................................................ 32
Description of First United Common Stock......................................... 32
Resale of First United Common Stock.............................................. 32
Recent Acquisition............................................................... 33
INVESTARK BANKSHARES, INC.
Description of Business.......................................................... 33
Management's Discussion and Analysis............................................. 33
Directors and Executive Officers................................................. 42
Transactions with Management..................................................... 43
Principal Stockholders of InvestArk.............................................. 43
Federal Reserve Board Investigations............................................. 44
Resulting Ownership in First United.............................................. 45
Registration Rights.............................................................. 46
Competition...................................................................... 46
Litigation....................................................................... 46
Offices.......................................................................... 47
Employees........................................................................ 47
Description of InvestArk Stock................................................... 47
Comparison of Rights of Holders of InvestArk Common Stock and
First United Common Stock..................................................... 47
LEGAL MATTERS AND EXPERTS
Legal Opinions................................................................... 48
Experts.......................................................................... 48
General.......................................................................... 48
INDEX TO INVESTARK FINANCIAL STATEMENTS............................................ F-1
ANNEXES
</TABLE>

<TABLE>
<S> <C> <C>
I - Agreement and Plan of Reorganization A-I-1
II - Arkansas Business Corporation Act of 1965 sec. 4-26-1007 A-II-1
III- Arkansas Business Corporation Act of 1987 sec. 4-27-1301 et. seq. A-III-1
</TABLE>

5
<PAGE> 10

SUMMARY

The following is a summary of certain information contained elsewhere in
this Proxy Statement. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information contained elsewhere in this Proxy
Statement, in the attached Annexes and in the documents incorporated by
reference. Stockholders are urged to read carefully this Proxy Statement and the
attached Annexes in their entirety.

THE COMPANY

The Company is a multi-bank holding company located in El Dorado, Arkansas
with five wholly-owned subsidiary banks operating in over 28 locations in seven
communities throughout the State of Arkansas. The Company's subsidiary banks
consist of First National Bank of El Dorado, El Dorado, Arkansas; First National
Bank of Magnolia, Magnolia, Arkansas; City National Bank of Fort Smith, Fort
Smith, Arkansas; Merchants and Planters Bank, N.A., Camden, Arkansas; and
Commercial Bank at Alma, Alma, Arkansas (collectively called the "Subsidiary
Banks"). The Company had consolidated assets of $938,694,000, and stockholders'
equity of $91,257,000 as of December 31, 1993.

The Company's Common Stock is traded on the National Association of
Securities Dealers Automated Quotation National Market System Over-the-Counter
Market (NASDAQ-NMS) under the symbol "UNTD". The Company's principal executive
offices are located at Main and Washington Streets, El Dorado, Arkansas, 71730,
and its telephone number is (501) 863-3181.

INVESTARK

InvestArk is a privately-owned Arkansas bank holding company which owns
99.7% of Bank of North Arkansas, Melbourne, Arkansas ("North Arkansas") and 100%
of First Stuttgart Bank and Trust Company, Stuttgart, Arkansas ("First Bank").
InvestArk had consolidated assets of $184,904,000 and stockholders' equity of
$16,865,000 as of December 31, 1993.

There is no public market for shares of InvestArk's outstanding capital
stock. InvestArk's principal executive offices are located at 412 South Main
Street, Stuttgart, Arkansas, 72021; its telephone number is (501) 673-3545.

FEDERAL RESERVE BOARD INVESTIGATIONS

On March 4, 1993, the Board of Governors of the Federal Reserve System
commenced a formal investigation of the ownership and control of Worthen Banking
Corporation ("Worthen"). The investigation appears to be focused on whether
members of the families of Jackson T. Stephens and Wilton R. Stephens (deceased)
have exerted control over Worthen in violation of the Bank Holding Company Act
and the Change in Bank Control Act. The events and transactions which are the
subject of the investigation do not involve InvestArk or First United. The
investigation is still ongoing. See "InvestArk Bankshares, Inc. -- Federal
Reserve Board Investigations."

In addition, in February 1993, InvestArk management was advised that the
Federal Reserve Bank of St. Louis (the "St. Louis FED") had initiated a review
of the purchase and sale of municipal and other securities by and between
Stephens Inc., a registered broker-dealer owned by the Stephens family, and
InvestArk's bank subsidiaries to determine whether the transactions violated the
prohibitions of Section 23A and 23B of the Federal Reserve Act. First United's
obligation to consummate the Merger is conditioned upon the St. Louis FED not
having notified either of the parties of actual or proposed regulatory action
having an adverse effect on First United, InvestArk or the InvestArk bank
subsidiaries. See "InvestArk Bankshares, Inc. -- Federal Reserve Board
Investigations."

THE MERGER

On December 17, 1993, the Company and InvestArk entered into a definitive
agreement pursuant to which the Company proposes to acquire all of the issued
and outstanding stock of InvestArk by merger of InvestArk with and into First
United. The acquisition of InvestArk will be consummated through the issuance

6
<PAGE> 11

to InvestArk's stockholders of up to 985,849 shares of First United Common
Stock. The reason for the Merger is to expand the markets of the Company and
thereby increase the earning potential of the Company. The Agreement requires
that the merger be accounted for as a pooling of interests. See "The
Merger -- The Agreement."

On October 21, 1993, the date immediately prior to the announcement of the
agreement in principle, shares of First United Common Stock traded on the
NASDAQ-NMS at a closing sales price of $29.50. There is no established market
value for the stock of InvestArk.

Stephens Inc., a registered broker-dealer, served as a financial adviser to
InvestArk with respect to the Merger. For its role, Stephens Inc. is to receive
a $100,000 cash payment plus reasonable expenses from InvestArk. Stephens Inc.
is controlled by certain members of the families of Jackson T. Stephens and
Wilton R. Stephens (deceased) who are also affiliates of InvestArk. There are no
other benefits, other than the benefit of share ownership and/or continued
employment, to be received by insiders, officers, directors, affiliates or
principal stockholders of either InvestArk or First United as a result of the
Merger.

THE BOARD OF DIRECTORS OF FIRST UNITED AND INVESTARK UNANIMOUSLY RECOMMEND
THAT FIRST UNITED AND INVESTARK STOCKHOLDERS, RESPECTIVELY, VOTE IN FAVOR OF THE
ADOPTION OF THE AGREEMENT.

COMBINED COMPANY

As a result of the Merger, the combined operations and its constituent
parts of First United and InvestArk as of December 31, 1993 and for the year
then ended will reflect assets, shareholders' equity, net interest income and
income from continuing operations as follows (in thousands):

<TABLE>
<CAPTION>
% %
FIRST PRO FORMA PRO FORMA PRO FORMA
UNITED COMBINED INVESTARK COMBINED COMBINED
-------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Assets................................. $938,694 83.54 $ 184,904 16.46 $1,123,598
Shareholders' equity................... 91,257 84.40 16,865 15.60 108,122
Net interest income.................... 35,553 82.56 7,510 17.44 43,063
Income from continuing operations...... 11,937 90.33 1,278 9.67 13,215
</TABLE>

If the maximum of 985,849 shares of common stock of First United are issued
to InvestArk stockholders, First United will have a total of 5,258,125 shares of
common stock issued and outstanding. Present First United stockholders will
control 81.25% of such shares and InvestArk stockholders will control 18.75% of
such shares. Approximately two-thirds of all shares issued to InvestArk
stockholders will be issued to members of the Stephens family. Pursuant to an
agreement with the Board of Governors of the Federal Reserve System, these
shares will be placed in trust and the voting power over such shares shall be
exercised by the trustee, who shall vote such shares equal to the percentages of
affirmative and negative votes of all other shares on any matter presented to
stockholders. The W. R. Stephens Trust and the W. R. Stephens, Jr. Trust
presently own approximately 3.95% of all issued and outstanding shares of First
United common stock and these shares will continue to be voted by their
respective trustees. See "InvestArk Bankshares, Inc. -- Resulting Ownership in
First United."

NO FAIRNESS OPINION

No fairness opinion will be rendered in connection with this transaction.

ELECTION BY INVESTARK STOCKHOLDERS UNDER THE 1987 ACT

The Election by the stockholders of InvestArk to be governed by the
Arkansas Business Corporation Act of 1987 codified at Ark. Code Ann. sec.
4-27-101 et. seq. (the "1987 Act") is incidental to and a condition of the
Merger proposal and approval of such election will have no force or effect
unless the Merger is likewise approved.

7
<PAGE> 12

InvestArk is a corporation organized under the Arkansas Business
Corporation Act of 1965, codified at Ark. Code Ann. sec. 4-26-101 et.seq. (the
"1965 Act"). The 1987 Act is applicable to those corporations that were
incorporated on or after January 1, 1988 or those "1965 Act" corporations that
elect to be governed by the 1987 Act by amending their Articles of Incorporation
to so state. The stockholders of First United elected to be governed by the 1987
Act by amending its Articles of Incorporation.

The 1965 Act and 1987 Act have statutory merger procedures that must be
complied with in order to legally consummate a merger. Although both Acts
contain similar provisions, InvestArk must elect to be governed by the 1987 Act
in order to facilitate compliance with the applicable statutory procedures.

THE FIRST UNITED SPECIAL MEETING

Approval of the Merger by the stockholders of First United will be
considered at a Special Meeting to be held at the First National Bank Building,
El Dorado, Arkansas on June 13, 1994 at 2:00 p.m. Central Daylight Time.

The affirmative vote of the holders of two-thirds of the outstanding shares
of First United Common Stock is required for approval of the Merger. Directors,
executive officers and their affiliates hold a total of approximately 26.50% of
the outstanding Common Stock of First United. Stockholders of First United are
entitled to dissenters' rights. See "The Merger -- Right of Dissent under the
1987 Act."

THE INVESTARK SPECIAL MEETING

Approval of the Merger by the stockholders of InvestArk will be considered
at a Special Meeting to be held at 412 South Main Street, Stuttgart, Arkansas on
June 13, 1994, at 10:00 a.m. Central Daylight Time.

The affirmative vote of the holders of a two-thirds of the outstanding
shares of InvestArk common stock is required for the approval of the Merger and
the Election to be governed by the 1987 Act. Directors, executive officers and
their affiliates hold a total of 6.30% of the outstanding stock of InvestArk. In
addition, stockholders who in the aggregate own 66.14% of the issued and
outstanding shares of InvestArk common stock have contractually committed to
vote their shares in favor of the Merger. Stockholders of InvestArk are entitled
to dissenters' rights. See "The Merger -- Right of Dissent under the 1965 Act;
Right of Dissent under the 1987 Act."

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

It is intended that for federal income tax purposes the Merger will be
treated as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and, accordingly, for federal
income tax purposes, no gain or loss will be recognized by either First United
or InvestArk as a result of the Merger and InvestArk's stockholders will not
recognize gain or loss upon the receipt of First United Common Stock in exchange
for InvestArk common stock. InvestArk expects to receive an opinion of counsel,
dated as of the effective date of the Merger, opining that no gain or loss will
be recognized by the InvestArk stockholders upon the receipt of First United
Common Stock in exchange for InvestArk common stock in connection with the
Merger. The parties to this transaction will not request a ruling from the
Internal Revenue Service concerning the taxability of this transaction. See "The
Merger -- Certain Federal Income Tax Consequences."

DISSENTERS' RIGHTS

Holders of both First United Common Stock and InvestArk common stock are
entitled to dissenter's rights with respect to the Merger. Holders of First
United Common Stock may exercise their right of dissent under the 1987 Act,
while Holders of InvestArk Common Stock may exercise their right of dissent
under either the 1965 Act or the 1987 Act. See "The Merger -- Right of Dissent
under the 1965 Act; Right of Dissent under the 1987 Act."

8
<PAGE> 13

REGULATORY APPROVALS

At this time, First United has received the approval of the Board of
Governors of the Federal Reserve to merge InvestArk into First United. First
United has also received the approval of the Arkansas Bank Commissioner to
consummate the Merger. See "The Merger -- Regulatory Approvals."

ACCOUNTING TREATMENT

First United intends to treat the Merger as a pooling of interests for
accounting purposes. Consummation of the Merger is conditioned upon the receipt
of the opinion of Arthur Andersen & Co. that the Merger will qualify for the
pooling of interests accounting treatment. See "The Merger -- Accounting
Treatment."

MARKET PRICES

First United Common Stock is traded over-the-counter in the NASDAQ National
Market System. InvestArk common stock is not traded publicly and there is no
quoted market for the stock. The table below shows the high and low closing
sales prices for First United Common Stock.

<TABLE>
<CAPTION>
FIRST UNITED
COMMON STOCK(1)
--------------------
1 SHARE
--------------------
HIGH LOW
------ -------
<S> <C> <C>
1991............................................ $13.50 $ 11.75
1992............................................ $26.00 $13.375
1993............................................ $29.50 $ 23.00
</TABLE>

- ---------------
(1) All share prices have been adjusted for a two-for-one stock split which was
declared July 27, 1992.

On October 21, 1993, immediately prior to the public announcement of the
agreement in principle between First United and InvestArk as to the proposed
merger transaction, the closing sales price for First United Common Stock was
$29.50. On May 2, 1994, the closing sales price for First United Common Stock
was $30.00.

COMPARATIVE PER SHARE DATA

The following table sets forth for the periods indicated selected
historical per share data of First United and InvestArk and the corresponding
pro forma and pro forma equivalent per share amounts giving effect to the
proposed Merger. The data presented are based upon the consolidated financial
statements and related notes of First United which are incorporated by reference
in this Proxy Statement, and the consolidated financial statements and related
notes of InvestArk and the pro forma combining balance sheet and income
statements, including the notes thereto, appearing elsewhere herein. This
information should be read in conjunction with such historical and pro forma
financial statements and related notes thereto. The assumptions used in the
preparation of this table appear elsewhere in this Proxy Statement. See
"Financial Information." These data are not necessarily indicative of the
results of the future operations of the combined

9
<PAGE> 14

organization or the actual results that would have occurred if the Merger had
been consummated prior to the periods indicated.

<TABLE>
<CAPTION>
FIRST UNITED/INVESTARK INVESTARK PRO FORMA
FIRST PRO FORMA COMBINED(1) EQUIVALENT(2)
UNITED INVESTARK ------------------------ ------------------------
HISTORICAL HISTORICAL $26.50 $29.00 $29.50 $26.50 $29.00 $29.50
---------- ---------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Book value per common share:
December 31, 1993............ $21.36 $78.09 $20.56 $20.90 $20.96 $93.75 $87.15 $85.94
Cash dividends per common
share:
Year ended December 31,
1991...................... .50 .90 .50 .50 .50 2.28 2.09 2.05
Year ended December 31,
1992...................... .60 .95 .60 .60 .60 2.74 2.50 2.46
Year ended December 31,
1993...................... .66 1.15 .66 .66 .66 3.01 2.75 2.71
Income per share from
continuing operations:
Year ended December 31,
1991...................... 1.77 4.19 1.61 1.63 1.64 7.34 6.80 6.72
Year ended December 31,
1992...................... 2.44 10.33 2.41 2.45 2.46 10.99 10.22 10.09
Year ended December 31,
1993...................... 2.79 5.93 2.51 2.55 2.56 11.45 10.63 10.50
</TABLE>

- ---------------

(1) See "Financial Information."

(2) The InvestArk pro forma equivalents represent the respective First
United/InvestArk pro forma combined earnings, dividends and book value per
common share multiplied by the applicable exchange ratio of 4.56 ($26.50
First United stock value), 4.17 ($29.00 First United stock value) or 4.10
($29.50 First United stock value) shares of First United Common Stock for
each share of InvestArk Common Stock so that the First United/InvestArk pro
forma equivalent amounts are equated to the respective values for one share
of InvestArk Common Stock. The exchange ratio is determined by dividing
First United common stock to be received by the InvestArk stockholders by
the 215,960 shares of InvestArk Common Stock currently outstanding.

SELECTED FINANCIAL DATA

The table on the following page presents selected historical financial data
of First United and InvestArk and selected unaudited pro forma financial data
after giving effect to the Merger as a pooling of interests for accounting
purposes, assuming the Merger had occurred at the beginning of the earliest
period presented, but without giving effect to costs associated with the
consummation of the Merger, which currently are estimated to total $175,000. The
First United historical data for each of the years in the five-year period ended
December 31, 1993 are based on the historical financial statements of First
United as audited by Arthur Andersen & Co., independent public accountants. The
InvestArk historical data for each of the years in the five-year period ended
December 31, 1993 are based on the historical financial statements of InvestArk
as audited by Martin and Company, independent auditors. The pro forma data is
not necessarily indicative of the results of operations or the financial
condition that would have been reported had the Merger been in effect during
those periods, or as of those dates, or that may be reported in the future. Pro
forma combined per share data of First United and InvestArk give effect to the
exchange of each share of InvestArk common stock for 4.17 shares of First United
Common Stock.

10
<PAGE> 15

These data should be read in conjunction with the consolidated financial
statements of each of First United and InvestArk, and the related notes thereto,
incorporated by reference herein and in conjunction with the unaudited pro forma
financial information, including the notes thereto, appearing elsewhere in this
Proxy Statement. See "Incorporation of Certain Documents by Reference" and
"Financial Information."

SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1989 1990 1991 1992 1993
--------- --------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
FIRST UNITED -- HISTORICAL
Operating Data
Total interest income.................. $ 65,903 $ 68,213 $ 68,976 $ 63,381 $ 59,413
Net interest income.................... 24,825 26,913 29,933 34,691 35,553
Provision for possible loan losses..... 3,837 2,122 3,250 2,422 1,215
Income from continuing operations...... 6,201 7,438 7,547 10,443 11,937
Per Share Data
Income from continuing operations...... 1.45 1.74 1.77 2.44 2.79
Cash dividend paid..................... 0.50 0.50 0.50 0.60 0.66
Selected Balance Sheet Items
Total assets........................... 765,338 797,242 848,582 895,527 938,694
Total securities....................... 261,600 294,366 373,824 427,090 425,535
Net loans.............................. 374,136 376,544 369,726 363,655 406,331
Total deposits......................... 660,851 689,713 743,631 772,995 806,449
Long-term debt......................... 11,643 10,536 9,429 8,321 7,214
Capital accounts....................... 61,025 66,327 71,737 79,618 91,257

INVESTARK -- HISTORICAL
Operating Data
Total interest income.................. $ 14,756 $ 15,786 $ 15,960 $ 14,188 $ 12,555
Net interest income.................... 5,942 6,171 6,778 7,819 7,510
Provision for possible loan losses..... 448 1,576 1,464 64 600
Income from continuing operations...... 1,435 286 907 2,233 1,278
Per Share Data
Income from continuing operations...... 6.64 1.32 4.19 10.33 5.93
Cash dividend paid..................... 0.63 0.60 0.90 0.95 1.15
Selected Balance Sheet Items
Total assets........................... 164,535 183,114 189,738 190,933 184,904
Total securities....................... 60,956 74,690 72,239 82,462 87,864
Net loans.............................. 81,409 87,621 86,745 85,906 83,002
Total deposits......................... 143,135 159,936 166,072 170,102 163,300
Long-term debt......................... 1,100 890 870 500 509
Capital accounts....................... 12,908 13,102 13,833 15,820 16,865
</TABLE>

11
<PAGE> 16

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1989 1990 1991 1992 1993
--------- --------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
PRO FORMA -- COMBINED
Operating Data
Total interest income.................. $ 80,659 $ 83,999 $ 84,936 $ 77,569 $ 71,968
Net interest income.................... 30,767 33,084 36,711 42,510 43,063
Provision for possible loan losses..... 4,285 3,698 4,714 2,486 1,815
Income from continuing operations...... 7,636 7,724 8,454 12,676 13,215
Per Share Data
Income from continuing operations...... 1.48 1.49 1.63 2.45 2.55
Cash dividend paid..................... 0.50 0.50 0.50 0.60 0.66
Selected Balance Sheet Items
Total assets........................... 929,873 980,356 1,038,320 1,086,460 1,123,598
Total securities....................... 322,556 369,056 446,063 509,462 513,399
Net loans.............................. 455,545 464,165 456,471 449,561 489,333
Total deposits......................... 803,986 849,649 909,703 943,097 969,749
Long-term debt......................... 12,743 11,406 10,299 8,821 7,723
Capital accounts....................... 73,933 79,429 85,570 95,438 108,122
</TABLE>

THE INVESTARK SPECIAL MEETING
DATE, TIME AND PLACE

The InvestArk Special Meeting will be held on June 13, 1994, commencing at
10:00 a.m. Central Daylight Time, at the offices of InvestArk, 412 South Main
Street, Stuttgart, Arkansas.

PURPOSE OF MEETING

The purpose of the InvestArk Special Meeting is to consider and vote upon
the adoption of the Agreement between InvestArk and First United and to consider
and vote upon the election of InvestArk to be governed by the Arkansas Business
Corporation Act of 1987 (the "Election").

SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE

The close of business on April 29, 1994 has been fixed by the Board of
Directors of InvestArk as the record date for the determination of holders of
InvestArk common stock entitled to notice of and to vote at the InvestArk
Special Meeting. At the close of business on April 29, 1994, there were 215,960
shares of InvestArk common stock issued and outstanding held by 159 shareholders
of record. Holders of record of InvestArk common stock on the record date are
entitled to one vote per share and are entitled to dissenters' rights. See "The
Merger -- Right of Dissent under the 1965 Act; Right of Dissent under the 1987
Act."

VOTE REQUIRED

The affirmative vote of two-thirds of all the shares of InvestArk common
stock outstanding on the record date is required to adopt the Agreement and the
Election.

As of January 1, 1994, directors, executive officers and their affiliates
own 6.30% of the outstanding stock of InvestArk. In addition, other stockholders
who in the aggregate own 66.14% of the outstanding shares of InvestArk common
stock, have contractually committed to vote their shares in favor of the Merger.

VOTING; SOLICITATION OF PROXIES

Proxies for use at the InvestArk Special Meeting accompany copies of this
Proxy Statement delivered to record holders of InvestArk common stock and such
proxies are solicited on behalf of the Board of Directors of InvestArk. A holder
of InvestArk common stock may use his proxy if he is unable to attend the
InvestArk

12
<PAGE> 17

Special Meeting in person or wishes to have his shares voted by proxy even if he
does attend the meeting. The proxy may be revoked in writing by the person
giving it at any time before it is exercised by notice of such revocation to the
secretary of InvestArk, or by submitting a proxy having a later date, or by such
person appearing at the InvestArk meeting and electing to vote in person. All
proxies validly submitted and not revoked will be voted in the manner specified
therein. If no specification is made, the proxies will be voted in favor of the
Merger and the Election.

InvestArk will bear the cost of solicitation of proxies from its
stockholders. In addition to using the mails, proxies may be solicited by
personal interview. Officers and other employees of InvestArk acting on
InvestArk's behalf, may solicit proxies personally.

THE FIRST UNITED SPECIAL MEETING

DATE, TIME AND PLACE

The First United Special Meeting will be held on June 13, 1994, commencing
at 2:00 p.m. Central Daylight Time at the First National Bank Building, Main and
Washington Streets, El Dorado, Arkansas.

PURPOSE OF MEETING

The purpose of the First United Special Meeting is to consider and vote
upon the adoption of the Agreement between InvestArk and First United.

SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE

The close of business on April 29, 1994 has been fixed by the Board of
Directors of First United as the record date for determination of holders of
First United Common Stock entitled to notice of and to vote at the First United
Special Meeting. At the close of business on April 29, 1994, there were
4,272,276 shares of First United Common Stock issued and outstanding held by
approximately 800 stockholders of record. Holders of record of First United
Common Stock on the record date are entitled to one vote per share, and are
entitled to Dissenter's Rights. See "The Merger -- Right of Dissent under the
1987 Act."

VOTE REQUIRED

The affirmative vote of two-thirds of all the shares of First United Common
Stock outstanding on the record date is required to adopt the Agreement. As of
January 1, 1994, directors, executive officers and their affiliates own
approximately 26.50% of the outstanding Common Stock of First United.

VOTING; SOLICITATION OF PROXIES

Proxies for use at the First United Special Meeting accompany copies of
this Proxy Statement delivered to record holders of First United Common Stock. A
holder of First United Common Stock may use his proxy if he is unable to attend
the First United Special Meeting in person or wishes to have his shares voted by
proxy even if he does attend the meeting. The proxy may be revoked in writing by
the person giving it at any time before it is exercised by notice of such
revocation to the secretary of First United, or by submitting a proxy having a
later date, or by such person appearing at the First United Special Meeting and
electing to vote in person. All proxies validly submitted and not revoked will
be voted in the manner specified therein. If no specification is made, the
proxies will be voted in favor of the Merger.

First United will bear the cost of solicitation of proxies from its
stockholders. In addition to using the mails, proxies may be solicited by
personal interview. Officers and other employees of First United, acting on
First United's behalf, may solicit proxies personally.

13
<PAGE> 18

THE MERGER

BACKGROUND OF THE MERGER

From time to time, the board of directors and management of InvestArk have
considered various strategies for InvestArk, including merging with a larger
company. Representatives of Stephens Inc. of Little Rock, Arkansas, InvestArk's
financial advisors, were authorized to solicit potential merger partners.
Stephens Inc. initially compiled a broad list of prospects who might have an
interest. This list was then narrowed to a list of potential merger partners,
including First United, based on an evaluation of compatibility with InvestArk's
business, ability to provide satisfactory terms, and business and financial
prospects. The board viewed each of these criteria as being important to the
maximization of the InvestArk stockholders' value and the long-term best
interest of stockholders. Of primary importance was the ability of the potential
merger partner to continue and increase the market value of the investment by
InvestArk stockholders through continued and enhanced business operations. The
board also considered whether a potential merger partner would be able to
provide InvestArk stockholders with readily marketable shares if a merger
transaction ensued and was effected through a tax-advantaged share exchange.

Twelve companies from the list, including First United, were contacted on a
confidential basis concerning the possible merger. Eight of those companies were
sufficiently interested to sign confidentiality agreements and receive a package
of basic information about InvestArk. Although several parties indicated
additional general interest after reviewing the basic information, only First
United expressed a level of interest serious enough to merit further discussion.
After indicating specific interest and after the confidentiality agreement was
executed, First United was given the opportunity to examine the books and
records of InvestArk on a confidential basis. After First United completed its
review, the chairman of the board of InvestArk, with the assistance of
InvestArk's financial advisors, negotiated the specific financial terms of the
transaction with First United's Chief Financial Officer. These terms were placed
in a letter of intent which was executed on October 21, 1993. This letter of
intent provided the framework for the definitive, binding agreement between
InvestArk and First United. The definitive agreement was prepared and finalized
between October 21, 1993, and December 17, 1993. The definitive agreement was
formally presented to InvestArk's board for consideration on that date.

In order to fully and finally evaluate the economic terms of the
transaction, the InvestArk board of directors, with the assistance of its
financial advisors, reviewed and evaluated the proposed transaction based on a
variety of criteria. The price was evaluated as a multiple of InvestArk's 1992
income, as a multiple of InvestArk's estimated 1993 net income, and as a
multiple of InvestArk's estimated September 30, 1993, book value. Assuming that
each First United share is valued in the range of $26.50 to $29.50, the First
United offer is equal to 11.70 times InvestArk's 1992 net income, and
approximately 1.5 times InvestArk's September 30, 1993 book value as estimated
at the time. These multiples were determined by the board of InvestArk to be
within the range of reasonableness when compared to other similar transactions.

The proposed transaction was also evaluated in regard to the earnings
effect on First United and on the basis of the amount of dividends which, based
on past payment history, would result to InvestArk stockholders. These
comparisons also indicated that the proposed transaction would be beneficial.

14
<PAGE> 19

The InvestArk board, with the assistance of its financial advisors, also
compared the proposed transaction with other transactions which were apparently
similar. The table below is a summary of selected comparable merger transactions
that the board considered which reflects the names, dates, total value and
multiples of income and equity of the targets.

<TABLE>
<CAPTION>
TRANSACTION
VALUE/ TARGET
-----------------
DATE TRANSACTION NET
ACQUIRER TARGET ANNOUNCED VALUE INCOME EQUITY
- ------------------------------------- --------- ---------------------- ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Worthen Banking Corp. 01/31/92 $ 37,950(a) 11.6x 1.9x
First National Bank, Fayetteville
Worthen Banking Corp. 06/30/92 100,000 30.1 2.0
The Union of Arkansas Corp.
State First Financial Corp. 01/01/93 7,352(b) 10.1 1.2
First National Bank of Nashville 8,388(c) 11.5 1.4
Union Planters Corp. 01/01/93 25,300 13.9 1.5
Bank of East Tennessee
Worthen Banking Corp. 04/23/93 14,700(d) 15.2 1.9
First Bentonville Bancshares, Inc.
Union Planters Corp. 05/31/93 15,500 N/A 3.3
Garrett Bancshares, Inc.
Union Planters Corp. 06/01/93 8,300 12.2 1.3
Erin Bank & Trust Company
Union Planters Corp. 08/20/93 23,000 22.0 1.9
Mid-South Bancorp, Inc.
</TABLE>

- ---------------

(a) Based on $15,750 thousand of cash paid and the issuance of 1,200 thousand
shares multiplied by the Worthen stock price as of 01/31/92 of $18.50.

(b) Based on the issuance of 262,566 shares issued multiplied by
estimated/approximate value of $28.00 per share.

(c) Based on the issuance of 37,000 additional shares which is subject to
satisfaction of contingency provisions in the purchase agreement.

(d) Purchase price based on a stated multiple of 1.85 times adjusted book
value, to be paid 60% in stock and the assumption of approximately $5
million of debt.

The InvestArk board evaluated the price/earnings multiples of the stock of
selected publicly traded bank holding companies located in Arkansas, Missouri,
and Tennessee. This evaluation reflected that the trading range price of First
United shares was reasonable in comparison to the shares of other selected
publicly traded bank holding companies, and therefore the shares to be received
by InvestArk stockholders appeared to be reasonably valued by the market. The
board of InvestArk also reviewed a summary of selected comparable merger
transactions and determined that the total consideration was reasonable and
within the range of other similar transactions. The board of InvestArk also
reviewed the First United 1992 annual report on Form 10-K, as well as the Form
10-Q filed by First United for the period ended September 30, 1993. The board of
InvestArk, through its financial advisors, also requested certain additional
information regarding material litigation, environmental concerns and
nonperforming assets of First United. The historical and current market price
and trading trends for First United stock were also charted and reviewed. These
were viewed favorably by the board of InvestArk.

15
<PAGE> 20

After all of these matters were reviewed and considered by the board, the
board determined that the First United offer was acceptable, and the Agreement
was approved on December 17, 1993, for presentation to the InvestArk
stockholders.

For its role as financial advisor to InvestArk, Stephens Inc. is to receive
a cash payment of $100,000 from InvestArk, plus reimbursement for reasonable
expenses which are expected to be minimal. Payment is to be made at the closing
of the merger. Stephens Inc. is controlled by certain members of the families of
Wilton R. Stephens (deceased) and Jackson T. Stephens, who are also affiliates
of InvestArk. Various Stephens family members and trusts own in the aggregate
66.14% of the outstanding shares of InvestArk common stock and have entered into
an agreement with First United to vote such shares in favor of the Merger.

Stephens Inc. has acted as a market maker for First United common stock,
which is traded on the National Association of Securities Dealers automated
quotation system national market system, for many years. However, Stephens Inc.
has temporarily suspended its role as a market maker in First United common
stock pending closing of the merger.

REASON FOR THE MERGER

The acquisition of InvestArk will expand First United's current markets.
The banking subsidiaries of InvestArk are located in Melbourne, Arkansas and
Stuttgart, Arkansas. Currently, there are no banking offices in the First United
system located in Melbourne or Stuttgart. Thus, the acquisition of InvestArk
expands First United's market into new areas.

Management of First United believes that by expanding its markets, it will
increase the range and competitiveness of its banking services to persons
residing in the Melbourne and Stuttgart areas while increasing the earning power
of First United.

FAIRNESS OF THE TRANSACTION

THE BOARD OF DIRECTORS OF FIRST UNITED AND INVESTARK BELIEVE THAT THE
PROPOSED ACQUISITION TERMS ARE FAIR TO THE STOCKHOLDERS OF BOTH FIRST UNITED AND
INVESTARK AND RECOMMEND A VOTE IN FAVOR OF THE ADOPTION OF THE AGREEMENT.

THE AGREEMENT

The following description of certain features of the Agreement is qualified
in its entirety by the full text of the Agreement, which is incorporated herein
by reference and attached hereto by Annex.

Under the terms of the Agreement, InvestArk will be merged with and into
First United in exchange for the issuance by the Company of a maximum of 985,849
newly issued shares of First United Common Stock to the holders of the common
stock of InvestArk.

The Agreement provides that the stockholders of InvestArk will receive
total consideration of $26,125,000 consisting of fully paid and nonassessable
shares of Common Stock, $1.00 par value of First United, if the average price of
First United Common Stock is between $26.50 and $29.50. If the average price is
in this range the number of shares of First United common stock to be exchanged
for all of the issued and outstanding shares of InvestArk Common Stock will be
determined by dividing $26,125,000 by the average price of First United Common
Stock. The average price of First United Common Stock is defined as the average
sales price per share for all trades occurring during the period of ten (10)
trading days on which one or more trades actually takes place and which ends
immediately prior to the second trading day preceding the closing date.
Notwithstanding the foregoing, the number of shares of First United Common Stock
to be exchanged shall not be less than 885,593 and shall not be greater than
985,849 which equate to an average price of First United Common Stock of $29.50
and $26.50, respectively.

16
<PAGE> 21

$29.50, the amount of shares issued shall equal the floor of 885,593 shares. The
total consideration exchanged will vary from $26,125,000 if the average price is
either higher than $29.50 or lower than $26.50. For example, if the average
price is $35.00, the InvestArk stockholders shall receive 885,593 shares of
First United common stock, each share having a value of $35.00 representing
total consideration of $30,995,755. If the average price is $22.00, the
InvestArk stockholders shall receive 985,849 shares of First United common
stock, each share having a value of $22.00 representing total consideration of
$21,688,678. See "The Merger -- Exchange Ratio for the Merger".

Fractional shares of First United Common Stock shall not be issued and any
InvestArk stockholder entitled to receive a fractional share shall receive a
cash payment equal to the value of the fractional share based on the average
price of First United Common Stock.

The Agreement can be terminated by InvestArk if the First United Common
Stock average price is less than $22.00 and the scheduled closing date is more
than 120 days after the date of the Agreement. First United may terminate the
Agreement if the First United Common Stock average price is $35.00 or more and
the scheduled closing date is more than 120 days after the date of the
Agreement. However, First United may not terminate the Agreement based upon the
aforementioned ground if: (i) First United has agreed or announced its intention
to be acquired by a third party or merge into a third party that is the
surviving corporation, or (ii) First United has received an unsolicited offer of
proposal to engage in such a transaction. In addition, either party may
terminate the Agreement, if the Merger is not closed on or before May 31, 1994
provided that the failure to close is not caused by a breach of the Agreement by
the party seeking to terminate it.

First United and InvestArk have agreed, for the period prior to the
consummation of the merger, to operate their respective businesses only in the
usual, regular and ordinary course. In addition, First United and InvestArk will
use reasonable efforts to maintain and keep their respective properties in as
good repair and condition as at present, except for ordinary wear and tear and
to perform all obligations required under all material contracts, leases, and
documents relating to or affecting their respective assets prior to the
consummation of the Merger. First United and InvestArk have further agreed that,
prior to consummation of the Merger, they will not incur any material
liabilities or obligations, except in the ordinary course of business, or take
any action which would or is reasonably likely to adversely affect the ability
of either First United or InvestArk to obtain any necessary approvals, adversely
affect the ability of First United or InvestArk to perform their covenants and
agreements under the Agreement, or result in any of the conditions to the Merger
not being satisfied. InvestArk has further agreed that, unless otherwise
required by applicable law, it shall not initiate, solicit or encourage any
inquiry or proposal which constitutes a competing transaction.

The Agreement requires that certain conditions occur or be waived prior to
the closing date ("conditions precedent"), including (a) approval by InvestArk
stockholders by two-thirds of all outstanding shares; (b) approval by First
United stockholders by two-thirds of all outstanding shares; (c) approval by the
appropriate bank regulatory authorities; (d) receipt by the Company of an
opinion from Arthur Andersen & Co. that the Merger will qualify for pooling of
interests treatment under the applicable accounting principles; and (e)
satisfaction of other normal conditions to closing a merger transaction. It is
also a condition to the Merger that First United have an effective registration
statement on file with the Securities and Exchange Commission covering the
issuance of shares to be exchanged pursuant to the Merger. Prior to the
effective date of the Merger, any condition of the Agreement except, those
required by law may be waived by the party benefited by the condition.

The effective date of the Merger will be the date the Articles of Merger
are filed with the Arkansas Secretary of State, or the date so stated in the
Articles of Merger. The Agreement provides that a closing date will be set by
mutual agreement to occur within a reasonable time following the date on which
the last of all regulatory and other approvals necessary to consummate the
Merger have been received and all necessary time periods imposed by regulatory
authorities have elapsed. The parties may, however, amend the Agreement to
provide a later closing date.

17
<PAGE> 22

REGULATORY APPROVALS

The Merger is subject to prior approval by the appropriate banking
regulatory authorities. An application has been filed for approval of the Merger
with the Board of Governors of the Federal Reserve ("Board") for First United to
acquire InvestArk. In conjunction with the Board application, the Merger is also
subject to review by the Department of Justice as to its competitive effects. An
application has also been filed with the Arkansas Bank Department ("Department")
for approval of the Merger. The application made to the Board was approved on
March 15, 1994. The application made to the department was approved on February
24, 1994.

ANTITRUST MATTERS

The Department of Justice has thirty (30) calendar days after approval by
the Board in which to challenge the proposed Merger on anti-trust
considerations. The approval letter from the Board provided that the Merger may
not be consummated until thirty (30) calendar days after the effective date of
such letter. The thirty calendar days has expired from the effective date of the
Board's approval. The letter also provided that the transaction must be
consummated no later than three (3) months from that effective date unless the
period is extended for good cause by the Board upon request by First United.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

General. For federal income tax purposes the law provides that participants
(a "Party" or "Parties") in a transaction, including the transaction
contemplated by the Merger, which meets certain specific statutory and case law
requirements (a "reorganization") are entitled to special tax treatment which
effectively defers the instance of taxation on any gain inherent in a
reorganization. This result is achieved by treating the Parties as if they had
continued substantially unaffected by the reorganization. Under Section 361, no
gain or loss is recognized by a Party as a result of a reorganization (Section
references under this caption are to the Internal Revenue Code of 1986, as
amended (the "Code"). Section 362(b) provides that the tax basis of property
received by a Party in a reorganization is the same as it would be in the hands
of the transferor, increased by any gain recognized by the transferor on such
transfer. The tax basis of the underlying assets of the Parties is not changed.

For the stockholders of corporations which are Parties to a reorganization,
Section 354 provides that no gain or loss shall be recognized to such
stockholders on the exchange of their stock of one Party for the stock of
another Party. Section 358 provides that the basis of the stock received by such
a stockholder shall be the same as the basis of the stock surrendered in the
exchange. Under Section 1223, the holding period of the stock received by a
stockholder of one of the Parties will include the period for which the stock
exchanged by such stockholder was held.

As a result of case law interpreting the special tax treatment available
for reorganizations, there is also (i) a continuity-of-interest concept which
requires that, in the aggregate, stockholders of each of the corporate parties
to a reorganization maintain a minimum level of equity ownership in the
surviving corporate party, (ii) a continuity of business enterprise requirement;
and (iii) a valid business purpose requirement.

Tax Consequences. It is expected that at or prior to the closing date of
the Merger, InvestArk will receive closing tax opinion of tax counsel to
InvestArk that for federal income tax purposes, under current law, assuming that
the Merger and related transactions will take place as described in the Merger
Agreement and that the case law requirements described above, relating to
continuity of stockholder interest, continuity of business enterprise and valid
business purpose, are satisfied, the Merger will constitute a reorganization
within the meaning of Section 368(a)(1)(A) of the Code, and First United and
InvestArk each will be a Party to the reorganization within the meaning of
Section 368(b) of the Code.

If the Merger constitutes such a reorganization, the following will be all
of the material federal income tax consequences of the Merger to InvestArk and
its stockholders in the opinion of Shults, Ray & Kurrus: (i) no gain or loss
will be recognized by the InvestArk stockholders upon the receipt of First
United Common Stock in exchange for InvestArk common stock in connection with
the Merger; (ii) the tax basis of the First

18
<PAGE> 23

United Common Stock to be received by the InvestArk stockholders in connection
with the Merger will be the same as the basis in the InvestArk Common Stock
surrendered in exchange therefor; (iii) the holding period of the First United
Common Stock to be received by the InvestArk stockholders in connection with the
Merger will include the holding period of the InvestArk common stock surrendered
in exchange therefor, provided that InvestArk common stock is held as a capital
asset at the effective time of the Merger; and (iv) the payment of cash to
stockholders of InvestArk in lieu of the issuing fractional shares of First
United Common Stock will be treated as if the fractional shares were distributed
as part of the exchange and then redeemed by First United for cash and the
payments received will be treated as distributions in redemption of the
fractional shares, subject to the provisions of Section 302 of the Code.

Cash Received by Holders of InvestArk or First United Common Stock Who
Dissent. A stockholder of InvestArk or First United who perfects his dissenter's
rights under the laws of Arkansas and who receives payment of the fair value of
his shares of InvestArk common stock will be treated as having received such
payment in redemption of such stock. Such redemption will be subject to the
conditions and limitations of Section 302 of the Code, including the attribution
rules of Section 318. In general, if the dissenting shares of common stock are
held by the holder as a capital asset at the effective time of the Merger, such
holder will recognize capital gain or loss measured by the difference between
the amount of cash received by such holder and the basis for such shares. Each
holder of common stock who contemplates exercising his dissenter's rights should
consult his own tax adviser as to the possibility that any payment to him will
be treated as dividend income.

THE DISCUSSION SET FORTH ABOVE DOES NOT ADDRESS THE STATE, LOCAL OR FOREIGN
TAX ASPECTS OF THE MERGER. THE DISCUSSION IS BASED ON CURRENTLY EXISTING
PROVISIONS OF THE CODE, EXISTING AND PROPOSED TREASURY REGULATIONS THEREUNDER
AND CURRENT ADMINISTRATIVE RULINGS AND COURT DECISIONS. ALL OF THE FOREGOING ARE
SUBJECT TO CHANGE AND ANY SUCH CHANGE COULD AFFECT THE CONTINUING VALIDITY OF
THIS DISCUSSION. EACH INVESTARK AND FIRST UNITED STOCKHOLDER SHOULD CONSULT HIS
OR HER OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
MERGER TO HIM OR HER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND
FOREIGN TAX LAWS.

ACCOUNTING TREATMENT

First United intends to treat the merger as a pooling of interests for
accounting purposes. Consequently, in accordance with generally accepted
accounting principles, First United anticipates that it will restate its
consolidated financial statements to include the assets, liabilities,
stockholders' equity and results of operations of InvestArk as reflected in its
consolidated financial statements, subject to appropriate adjustments, if any,
to conform accounting principles of the two companies.

RIGHT OF DISSENT UNDER THE 1965 ACT

HOLDERS OF INVESTARK COMMON STOCK WILL BE ENTITLED TO EXERCISE DISSENTER'S
RIGHTS EITHER UNDER THE 1965 ACT OR THE 1987 ACT. IF APPROVED, THE ELECTION TO
BE GOVERNED BY THE 1987 ACT BY THE STOCKHOLDERS OF INVESTARK, AS DISCUSSED
BELOW, WILL BE MADE PRIOR TO CONSUMMATION OF THE MERGER BUT SUBSEQUENT TO A VOTE
ON SUCH MERGER. THEREFORE, FIRST UNITED WILL RECOGNIZE COMPLIANCE WITH EITHER
THE 1965 ACT OR THE 1987 ACT AS A VALID EXERCISE OF DISSENTER'S RIGHTS WITH
RESPECT TO SUCH MERGER. FOR A DISCUSSION OF THE PROCEDURE TO BE FOLLOWED UNDER
THE 1987 ACT, SEE "THE MERGER -- RIGHT OF DISSENT UNDER THE 1987 ACT."

Under Arkansas law, holders of InvestArk common stock are entitled to
dissenters' rights pursuant to Ark. Code Ann. sec. 4-26-1007 of the 1965 Act.
However, if a holder of shares of InvestArk common stock chooses to follow the
procedure under the 1965 Act, he shall only be entitled to such rights if he
complies with that statute. The following summary does not purport to be a
complete statement of the method of compliance

19
<PAGE> 24

with Section 4-26-1007 and is qualified by reference to those statutory sections
which are attached, hereto by Annex.

A holder of InvestArk stock who wishes to perfect his dissenter's rights in
the event that the Merger is adopted must:

(a) File with the corporation, prior to or at the meeting of
stockholders at which the vote on the Agreement is to be made, written
objection to the Agreement; and

(b) Not have voted in favor of the Agreement.

Any written notice of objection to the Agreement pursuant to clause (a) of
the immediately proceeding paragraph should be mailed or delivered to InvestArk
Bankshares, Inc., 412 South Main Street, Stuttgart, Arkansas 72021, Attention:
Harry C. Erwin, Chief Executive Officer. Because the written objection must be
delivered prior to or at the stockholder vote on the Agreement, it is
recommended, although not required, that a stockholder using the mail should use
certified or registered mail, return receipt requested, to confirm that he has
made timely delivery.

Within ten (10) days after the consummation of the Merger, any stockholder
objecting to the Merger must make a written demand on First United for payment
of the fair value of his shares as of the day before the vote on the Agreement
was taken. This second notice should be mailed to First United Bancshares, Inc.,
Main and Washington Streets, El Dorado, Arkansas, 71730, Attention: John E.
Burns, Vice President and Chief Financial Officer. The demand must state the
number and class of shares owned. If a demand is not made within the 10-day
period, the stockholder is bound by the Agreement.

Within ten (10) days after the Merger is effected, First United shall give
notice to each dissenting stockholder who made demand as provided above for the
payment of the value of his shares. If the dissenting stockholder and First
United agree upon the value of the shares within thirty (30) days after the date
of the Merger, then payment shall be made within ninety (90) days of the Merger.
Simultaneously with the payment, the dissenting stockholder shall surrender the
certificates representing his shares.

If within the thirty-day period no agreement is reached as to the value of
the dissenting stockholder's shares, the dissenting stockholder must file a
petition in Pulaski County Circuit Court within 60 days after the expiration of
the 30-day period asking for a determination of the fair value of his shares.
The judgment will be final and is payable only upon and simultaneously with the
surrender of the certificates representing the shares to First United. If a
dissenting stockholder fails to file a petition within the 60-day period, he and
all persons claiming under him shall be bound by the terms of the Agreement.

RIGHT OF DISSENT UNDER THE 1987 ACT

HOLDERS OF FIRST UNITED COMMON STOCK OR INVESTARK COMMON STOCK SHALL BE
ENTITLED TO DISSENTER'S RIGHTS PURSUANT TO ARK. CODE ANN. SEC. 4-27-1301 ET.
SEQ. OF THE 1987 ACT WITH RESPECT TO THE MERGER. HOWEVER, A HOLDER OF FIRST
UNITED COMMON STOCK SHALL ONLY BE ENTITLED TO EXERCISE DISSENTER'S RIGHTS UNDER
THE 1987 ACT, WHEREAS A HOLDER OF INVESTARK COMMON STOCK MAY ALSO EXERCISE SUCH
RIGHTS UNDER THE 1965 ACT, SEE "THE MERGER -- RIGHT OF DISSENT UNDER THE 1965
ACT."

The following summary does not purport to be a complete statement of the
method of compliance with the 1987 Act and is qualified by reference to those
statutory sections which are attached hereto by Annex.

A holder of either InvestArk or First United Common Stock who wishes to
perfect his dissenter's rights in the event that the Merger is adopted must:

(a) File with the corporation, prior to or at the meeting of
stockholders at which the vote on the Agreement is to be made, written
objection to the Agreement; and

(b) Not have voted in favor of the Agreement.

20
<PAGE> 25

Any written notice of objection to the Agreement pursuant to clause (a) of
the immediately preceding paragraph should be mailed or delivered to InvestArk
Bankshares, Inc., 412 South Main Street, Stuttgart, Arkansas 72021, Attention:
Mr. Harry C. Erwin, Chief Executive Officer (if you are a stockholder of First
United, to First United Bancshares, Inc., Main and Washington Streets, El
Dorado, Arkansas 71730, Attention: John E. Burns, Vice President and Chief
Financial Officer). Because the written objection must be delivered prior to or
at the stockholder vote on the Merger, it is recommended, although not required,
that a stockholder using the mail should use certified or registered mail,
return receipt requested, to confirm that he has made timely delivery.

If the Merger is adopted at the stockholders meeting, the corporation must
send to the dissenting stockholder, no later than ten (10) days after the
corporate action was taken, a dissenter's notice which will inform the
stockholder where a demand for payment must be sent, where the stockholder's
share certificates must be deposited and provide a form for demanding payment.
The dissenter's notice will also notify the stockholder of a time period within
not fewer than thirty (30) nor more than sixty (60) days which the stockholder
must deliver the payment demand form and stock certificates to the corporation.

As soon as the Merger is consummated, or upon receipt of a payment demand
by the dissenting stockholder, First United must pay the dissenting stockholder
the amount First United estimates to be the fair value of the shares, plus
accrued interest and deliver to the dissenting stockholder the corporation's
balance sheet as of the most recent fiscal year, an income statement for that
year, a statement of changes in stockholder equity for that year, and the latest
available interim financial statement. At this time, First United shall also
deliver to the dissenting stockholder a statement of the corporation's estimate
of fair value of the shares, an explanation of how interest was calculated, a
statement of the dissenter's right to demand a higher value for his shares and a
copy of the appropriate statutory provisions governing the dissenters rights
procedure.

Within thirty (30) days after the dissenting stockholder has received
payment in the amount the corporation estimates to be the fair value of the
shares, the dissenting stockholder must notify the corporation, in writing, of
his own estimate of fair value. If the dissenting stockholder does not notify
the corporation within this thirty (30) day period, he waives his right to
demand a higher payment.

If the demand for payment, as referenced in the immediately preceding
paragraph remains unsettled for sixty (60) days from the date the corporation
receives the dissenting stockholders demand for payment, the corporation must
commence a proceeding and file a petition in Pulaski County Circuit Court to
determine the fair value of the shares and the amount of accrued interest to be
paid.

EXCHANGE RATIO FOR THE MERGER

If the average sales price is between $26.50 and $29.50 the number of
shares of First United Common Stock to be issued pursuant to the Merger is
calculated by dividing $26,125,000 by the average sales price of First United
Common Stock for all trades occurring during the period of ten (10) days on
which one or more trades actually takes place and which ends immediately prior
to the second trading day preceding the closing date. If the average sales price
is less than $26.50 the total number of shares exchanged will be the ceiling of
985,849. If the average sales price is more than $29.50 the total number of
shares exchanged will be the floor of 885,593. The exchange ratio for the Merger
is calculated by taking the number of shares of First United Common Stock to be
issued and dividing this number by the total number of issued and outstanding
shares of InvestArk common stock, which is 215,960. The following table
illustrates a range of average sales prices for First United Common Stock and
based upon these average sales prices, calculates the number of shares of First
United Common Stock to be issued and the resulting exchange ratio. Furthermore,
the table illustrates the total consideration to be exchanged which shall vary
depending upon the average sales price of First United Common Stock. This table
is for illustration purposes only and should not be relied upon as the actual

21
<PAGE> 26

amount of shares to be issued, the actual average sales price, the actual
exchange ratio, or the actual amount of consideration to be exchanged.

CALCULATION OF EXCHANGE RATIO

<TABLE>
<CAPTION>
FIRST UNITED FIRST UNITED TOTAL
AVERAGE COMMON STOCK EXCHANGE CONSIDERATION
SALES PRICE ISSUED RATIO(2) EXCHANGED
- ------------ ------------ -------- -------------
<S> <C> <C> <C>
22.00 985,849 4.5650 21,688,678
26.50 985,849 4.5650 26,125,000
28.00 933,035 4.3204 26,125,000
29.50 885,593 4.1007 26,125,000
35.00 885,593 4.1007 30,995,755
</TABLE>

- ---------------

(2) The Exchange Ratio represents the number of shares of First United Common
Stock that a stockholder of InvestArk would receive for one share of
InvestArk common stock. However, as discussed above, fractional shares will
not be issued.

EXPENSES OF THE MERGER

First United and InvestArk will bear their own expenses incident to
preparing for entering into and carrying out the Merger Agreement and the
consummation of the Merger, except that First United will pay all expenses
incident to the preparation of this Proxy Statement and its printing and
distribution and for the filing of necessary applications for approval of the
Merger with the Board and Department.

FINANCIAL INFORMATION

The following unaudited Pro Forma Combining Balance Sheet as of December
31, 1993, and Unaudited Pro Forma Combining Income Statements for the years
ended December 31, 1993, 1992, and 1991 illustrate the effect of the proposed
Merger as if the Merger had occurred at the beginning of the earliest period
presented.

These Pro Forma Combining Financial Statements should be read in
conjunction with the historical financial statements of First United which are
incorporated by reference herein and InvestArk which are included herein.

The Pro Forma Combining Financial Statements are presented for comparative
purposes only and are not intended to be indicative of actual results had the
transactions occurred as of the dates indicated above nor do they purport to
indicate which may be attained in the future.

22
<PAGE> 27

PRO FORMA COMBINING BALANCE SHEETS(1)

<TABLE>
<CAPTION>
DECEMBER 31, 1993
-----------------------------------------------------------
PRO FORMA PRO FORMA
FIRST UNITED INVESTARK ADJUSTMENTS COMBINED
------------ --------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks.................... $ 45,013 $ 7,214 $ $ 52,227
Short-term investments..................... 32,671 1,180 33,851
Securities held for sale................... 83,468 0 83,468
Investment securities...................... 342,067 87,864 429,931
Net loans.................................. 406,331 83,002 489,333
Premises and equipment..................... 11,182 2,722 13,904
Goodwill................................... 4,308 0 4,308
Other real estate owned.................... 897 143 1,040
Other assets............................... 12,757 2,779 15,536
------------ --------- ----------- ----------
Total Assets..................... $938,694 $ 184,904 $ 0 $1,123,598
------------ --------- ----------- ----------
------------ --------- ----------- ----------
LIABILITIES AND CAPITAL ACCOUNTS
Deposits................................... $806,449 $ 163,300 $ $ 969,749
Federal funds purchased and securities sold
under agreements to repurchase........... 27,109 3,403 30,512
Other liabilities.......................... 6,665 827 7,492
Long-term debt............................. 7,214 509 7,723
------------ --------- ----------- ----------
Total Liabilities................ 847,437 168,039 1,015,476
------------ --------- ----------- ----------
Preferred stock............................ 0 0 0
Common stock............................... 4,272 2,191 (2,191)(2) 5,173
901 (2)
Surplus.................................... 11,126 1,105 (1,105)(2) 13,391
2,265 (2)
Undivided Profits.......................... 75,859 13,720 89,579
Less: Treasury Stock....................... 0 (130) 130 (2) 0
Net unrealized loss on marketable
equity securities.................. -- (21) -- (21)
------------ --------- ----------- ----------
Total Capital Accounts........... 91,257 16,865 0 108,122
------------ --------- ----------- ----------
Total Liabilities and Capital
Accounts....................... $938,694 $ 184,904 $ 0 $1,123,598
------------ --------- ----------- ----------
------------ --------- ----------- ----------
</TABLE>

23
<PAGE> 28

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1993

------------------------------------
FIRST PRO FORMA
UNITED INVESTARK COMBINED
--------- ------- ---------
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<S> <C> <C> <C>
Interest income............................................ $59,413 $12,555 $71,968
Interest expense........................................... 23,860 5,045 28,905
--------- ------- ---------
Net interest income........................................ 35,553 7,510 43,063
Provision for loan losses.................................. (1,215) (600) (1,815)
--------- ------- ---------
Net interest income after provision for loan losses........ 34,338 6,910 41,248
Other income
Service charges on deposit accounts...................... 2,932 348 3,280
Trust department income.................................. 1,000 515 1,515
Security gains........................................... 55 -- 55
Other service charges and fees........................... -- 90 90
Other operating income................................... 1,168 556 1,724
--------- ------- ---------
Total other income............................... 5,155 1,509 6,664
Other expense
Salaries................................................. 8,167 2,189 10,356
Pension and other employee benefits...................... 2,454 758 3,212
Net occupancy expense.................................... 1,788 427 2,215
Equipment expense........................................ 814 454 1,268
Data processing expense.................................. 1,573 171 1,744
Other operating expense.................................. 7,289 2,994 10,283
--------- ------- ---------
Total other expense.............................. 22,085 6,993 29,078
--------- ------- ---------
Income before income taxes................................. 17,408 1,426 18,834
Income tax expense......................................... 5,471 148 5,619
--------- ------- ---------
Income from continuing operations.......................... $11,937 $ 1,278 $13,215
--------- ------- ---------
--------- ------- ---------
Earnings per share(3)...................................... $ 2.79 $ 5.93 $ 2.55
Weighted average shares outstanding........................ 4,272,276 215,450 5,173,138
</TABLE>

24
<PAGE> 29

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
1992
-----------------------------------
FIRST PRO FORMA
UNITED INVESTARK COMBINED
--------- ------- ---------
(IN THOUSANDS, EXCEPT FOR SHARE
DATA)
<S> <C> <C> <C>
Interest income............................................ $63,381 $14,188 $77,569
Interest expense........................................... 28,690 6,369 35,059
--------- ------- ---------
Net interest income........................................ 34,691 7,819 42,510
Provision for loan losses.................................. (2,422) (64) (2,486)
--------- ------- ---------
Net interest income after provision for loan losses........ 32,269 7,755 40,024
--------- ------- ---------
Other income
Service charges on deposit accounts...................... 2,831 380 3,211
Trust department income.................................. 919 488 1,407
Security gains............................................. 386 0 386
Other service charges and fees........................... 0 68 68
Other operating income................................... 1,379 568 1,947
--------- ------- ---------
Total other income............................... 5,515 1,504 7,019
--------- ------- ---------
Other expense
Salaries................................................. 7,770 2,088 9,858
Pension and other employee benefits...................... 2,611 454 3,065
Net occupancy expense.................................... 1,881 422 2,303
Equipment expense........................................ 605 433 1,038
Data processing expense.................................. 1,860 166 2,026
Other operating expense.................................. 7,966 2,962 10,928
--------- ------- ---------
Total other expense.............................. 22,693 6,525 29,208
--------- ------- ---------
Income before income taxes................................. 15,091 2,734 17,825
Income tax expense......................................... 4,648 501 5,149
--------- ------- ---------
Income from continuing operations.......................... $10,443 $ 2,233 $12,676
--------- ------- ---------
--------- ------- ---------
Earnings per share(3)...................................... $ 2.44 $ 10.33 $ 2.45
Weighted average shares outstanding........................ 4,272,276 216,235 5,173,138
</TABLE>

25
<PAGE> 30

PRO FORMA COMBINING INCOME STATEMENT(1)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
1991
-----------------------------------
FIRST PRO FORMA
UNITED INVESTARK COMBINED
--------- ------- ---------
(IN THOUSANDS, EXCEPT FOR SHARE
DATA)
<S> <C> <C> <C>
Interest income............................................ $ 68,976 $15,960 $ 84,936
Interest expense........................................... 39,043 9,182 48,225
--------- ------- ---------
Net interest income........................................ 29,933 6,778 36,711
Provision for loan losses.................................. (3,250) (1,464) (4,714)
--------- ------- ---------
Net interest income after provision for loan losses........ 26,683 5,314 31,997
Other income
Service charges on deposit accounts...................... 2,669 397 3,066
Trust department income.................................. 886 470 1,356
Security gains........................................... 254 0 254
Other service charges and fees........................... 0 82 82
Other operating income................................... 1,137 666 1,803
--------- ------- ---------
Total other income............................... 4,946 1,615 6,561
--------- ------- ---------
Other expense
Salaries................................................. 7,566 2,040 9,606
Pension and other employee benefits...................... 2,279 412 2,691
Net occupancy expense.................................... 1,773 461 2,234
Equipment expense........................................ 623 370 993
Data processing expense.................................. 1,570 163 1,733
Other operating expense.................................. 7,285 2,448 9,733
--------- ------- ---------
Total other expense.............................. 21,096 5,894 26,990
--------- ------- ---------
Income before income taxes................................. 10,533 1,035 11,568
Income tax expense....................................... 2,986 128 3,114
--------- ------- ---------
Income from continuing operations.......................... $ 7,547 $ 907 $ 8,454
--------- ------- ---------
--------- ------- ---------
Earnings per share(3)...................................... $ 1.77 $ 4.19 $ 1.63
Weighted average shares outstanding........................ 4,272,276 216,212 5,173,138
</TABLE>

26
<PAGE> 31

NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS

(1) The adjustments to the Pro Forma Combining Financial Statements do not
include direct expenses related to the Merger, which will be recorded
at the time of the Merger. The pro forma data are not necessarily
indicative of the operating results or financial position that would
have occurred had the Merger been consummated at the dates indicated,
nor necessarily indicative of future operating results of financial
position.

(2) These adjustments reflect the issuance of approximately 900,862 shares
of First United Common Stock in exchange for all InvestArk common
stock and the retirement of InvestArk common stock held in treasury.
The actual number of shares of First United Common Stock to be issued
pursuant to the Merger will fluctuate based upon the average price of
First United Common Stock assumed to be at 29.00 for these Pro Forma
Combining Financial Statements.

(3) Pro forma per share data are based on the number of shares of First
United Common Stock that would have been outstanding had the Merger
occurred at the beginning of the earliest period presented. The
following table illustrates pro forma earnings per share based upon
the allowable minimum and maximum average price of First United Common
Stock of $26.50 and $29.50, respectively, pursuant to the Agreement.

<TABLE>
<CAPTION>
$26.50 $29.50
------ ------
<S> <C> <C>
Year ended December 31, 1991.................................. $ 1.61 $ 1.64
Year ended December 31, 1992.................................. 2.41 2.46
Year ended December 31, 1993.................................. 2.51 2.56
</TABLE>

ELECTION BY INVESTARK STOCKHOLDERS UNDER THE 1987 ACT

ELECTION INCIDENTAL TO THE MERGER

THE ELECTION BY THE STOCKHOLDERS OF INVESTARK TO BE GOVERNED BY THE
ARKANSAS BUSINESS CORPORATION ACT OF 1987 IS INCIDENTAL TO THE MERGER PROPOSAL
AND APPROVAL OF SUCH ELECTION WILL HAVE NO FORCE OR EFFECT UNLESS THE MERGER IS
LIKEWISE APPROVED.

REASON FOR THE ELECTION

InvestArk is a corporation that was organized under the Arkansas Business
Corporation Act of 1965, codified at Ark. Code Ann. sec.4-26-101 et.seq. The
1987 Act is applicable to those corporations that were incorporated on or after
January 1, 1988 or those "1965 Act" corporations that elect to be governed by
the 1987 Act by amending their Articles of Incorporation to so state. The
stockholders of First United elected to be governed by the 1987 Act by amending
its Articles of Incorporation.

The 1965 Act and 1987 Act have statutory merger procedures that must be
complied with in order to legally consummate a merger. Although both acts
contain similar provisions, it is advisable for InvestArk to elect to be
governed by the 1987 Act in order to facilitate compliance with the applicable
statutory requirements.

RESULT OF THE ELECTION

The affirmative vote of two-thirds of all outstanding shares of InvestArk
common stock will authorize InvestArk to amend its Articles of Incorporation and
thereby elect to be governed by the 1987 Act. First United is governed by the
1987 Act and shares of First United Common Stock received by InvestArk
stockholders upon consummation of the Merger will entitle such stockholders
rights under the 1987 Act. The following discussion is an analysis of the
material differences between the 1965 and 1987 Act with respect to Stockholders'
rights.

Powers of Directors in Setting Preferences, Rights and Limitation of
Classes and Series of Stocks. The 1965 Act states that the preferences, rights
and limitations of classes of stock must be specified in the Articles,

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<PAGE> 32

and that the power to establish certain limited rights and preferences for
series may be delegated to the Board. The 1987 Act, however, allows inclusion of
a provision in the Articles which gives the Board the power to set the
preferences, rights and limitations of any class or series of stock before any
shares of the class or series are issued. This power is exercised by filing with
the Secretary of State Articles of Amendment, adopted without stockholder
action.

Preemptive Rights. The 1987 Act denies stockholders preemptive rights
(i.e., the right of existing stockholders to acquire newly-issued shares of
stock on a pro rata basis of current ownership interest) unless the Articles
specifically authorize preemptive rights. In contrast, the 1965 Act grants
certain preemptive rights unless denied by the Articles.

Restrictions On Distributions. The 1987 Act allows a corporation to elect
in its Articles to restrict its ability to make distributions. The 1965 Act has
no such provision.

Quorum. The 1987 Act, like the 1965 Act, provides that a quorum, for
purposes of a stockholders meeting, will be a majority of the shares entitled to
vote unless the Articles provide otherwise. The 1987 Act does not provide a
minimum size for the quorum. The 1965 Act provides that a quorum may not be less
that one-third of the shares entitled to vote.

Cumulative Voting. Cumulative voting is a method of voting for directors
where each share entitled to vote is given as many votes as there are board
positions being voted on; the votes may be "cumulated," or cast for a single
position, rather than spread among the available positions. The 1987 Act does
not allow stockholders to cumulate their votes for election of directors unless
the Articles of Incorporation so provide. This is contrary to the 1965 Act,
which grants stockholders absolute cumulative voting rights.

Removal of Directors. The 1987 Act allows the Articles to provide that
directors may be removed only for cause. The 1965 Act does not allow such a
limitation and provides that directors may be removed with or without cause by a
majority of the shares entitled to vote.

Vacancy on Board of Directors. The 1987 Act provides that unless the
Articles provide otherwise, any vacancy on the board may be filled by either the
stockholders or the remaining directors. This is a change from the 1965 Act,
under which the remaining directors fill vacancies unless the Articles provide
otherwise.

Amendment of By-Laws. The 1987 Act provides that the Articles may reserve
to the stockholders the power to amend a corporation's by-laws. If the power is
not so reserved, the board may amend the by-laws, but stockholders may not be
excluded from the power to amend the by-laws. The 1965 Act provides that the
board of directors alone have the power to amend the by-laws, unless the
Articles reserve that power solely to the stockholders.

By-Law Increasing Quorum or Voting Requirements for Stockholders. The 1987
Act allows the stockholders to adopt a by-law that fixes a greater stockholder
quorum or voting requirement than the statutory requirement if such by-law is
authorized by the Articles of Incorporation. The 1965 Act has no such provision.

Voting to Adopt Merger. The 1987 Act allows the Articles to set a voting
requirement for mergers which is greater than the statutory requirement of a
majority of votes to be cast. The 1965 Act includes a statutory requirement of
two-thirds of the votes entitled to be cast to approve a merger.

Sales of Assets in Regular Course of Business and Mortgage of Assets.
Unless otherwise provided in the Articles, the 1987 Act allows the board to act
without stockholder approval in the sale or other disposition of all, or
substantially all, of the property of the corporation in the usual course of
business and to mortgage all or any of the corporation's property, whether or
not in the usual course of business. However, the 1965 Act contains the same
provision.

Notice of Stockholder Meetings. The 1987 Act requires notice of the date,
time, and place of each annual or special meeting of the stockholders. If the
meeting is to consider a proposal to increase the authorized capital stock or in
bonded indebtedness of the corporation, the notice must be given no fewer than
75 days before the meeting period. The 1965 Act has the same provision. Under
the 1987 Act, in all other cases the

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<PAGE> 33

notice must be given no fewer than 10 and no more than 60 days before the
meeting date. Under the 1965 Act notice cannot be given fewer than 10 and more
than 50 days prior to the meeting.

Proxies. Like the 1965 Act, the 1987 Act allows a stockholder to vote by
proxy. The procedural provisions for the exercise of proxies under the 1987 Act
are the same as under the 1965 Act.

Voting. The 1987 Act, unlike the 1965 Act, does not count abstaining votes
in determining whether there are sufficient affirmative votes to approve a
measure. The 1965 Act states that (unless a greater number is required by
statute or by the Articles) approval by stockholders takes the affirmative vote
of a majority of the shares represented at the meeting and entitled to vote on
the subject matter. The 1987 Act, however, provides that the action is approved
if the votes cast within the voting group favoring the action exceed the votes
cast opposing the action.

Dissenting Stockholders. Those transactions giving rise to dissenters'
rights under the 1965 Act are as follows:

1. Consummation of a sale of all or substantially all of the assets of
a corporation otherwise than in the usual or ordinary course of its
business.

2. Consummation of a merger or consolidation to which the corporation
is a party unless on the date the Articles of Merger are filed the
surviving corporation wholly owns the other corporations that are parties
to the Merger.

Under the 1987 Act, a stockholder is entitled to dissent from the following
corporate actions:

1. Consummation of a plan of merger to which the corporation is a
party if stockholder approval is required or if the corporation is a
subsidiary that is merged with its parent;

2. Consummation of a plan of share exchange to which the corporation
is a party and which requires stockholder approval;

3. Consummation of a sale or exchange of all, or substantially all, of
the property of the corporation other than in the usual and regular course
of business if stockholder approval is required;

4. An amendment of the Articles of Incorporation that materially and
adversely affects the rights of dissenters' shares; or

5. Any other corporate action taken pursuant to a stockholder vote to
the extend the Articles of Incorporation, the By-Laws, or a resolution of
the board of directors provides that stockholders are entitled to dissent.

For a summary of the procedure that would be followed in order to exercise
dissenters' rights under the 1965 Act, See "The Merger -- Right of Dissent under
the 1965 Act." For a summary of the procedure that would be followed in order to
exercise dissenters' rights under the 1987 Act, See "The Merger -- Right of
Dissent under the 1987 Act."

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<PAGE> 34

FIRST UNITED BANCSHARES, INC.
GENERAL

First United is a multi-bank holding company incorporated in 1980 for the
purpose of holding all of the outstanding stock of The First National Bank of El
Dorado, El Dorado, Arkansas having assets of $286 million, deposits of $244
million, and stockholders' equity of $31 million, as of September 30, 1993.
Between 1981 and 1988, First United acquired three other banks in different
cities within Arkansas. The banks acquired were the First National Bank of
Magnolia, Magnolia, Arkansas, having assets of $201 million, deposits of $176
million, and stockholders' equity of $21 million, as of September 30, 1993;
Merchants and Planters Bank, N.A. of Camden, Camden, Arkansas, having assets of
$90 million, deposits of $81 million, and stockholders' equity of $9 million as
of September 30, 1993; and City National Bank of Fort Smith, Fort Smith,
Arkansas, having assets of $310 million deposits of $271 million and
stockholders' equity of $27 million as of September 30, 1993. Each of the banks
are wholly-owned by First United, and, furthermore, are banks organized under
the laws of the United States and are regulated by the Office of the Comptroller
of the Currency.

On November 30, 1993 First United acquired Commerce Financial Corporation
which wholly-owned Commercial Bank at Alma, Alma, Arkansas. Commerce Financial
Corporation was merged into First United which succeeded to the ownership of
Commercial Bank at Alma which had assets of $45 million, deposits of $40
million, and stockholders' equity of $5.5 million as of the date of closing.
Commercial Bank at Alma is a state-chartered institution and is regulated under
the supervision of the Arkansas Bank Department.

The banks offer customary services of banks of similar size and similar
markets, including interest-bearing and non-interest-bearing deposit accounts,
commercial, real estate and personal loans, trust services, correspondent
banking services and safe deposit box activities.

The banking business is highly competitive. The Subsidiary Banks of First
United compete actively with national and state banks, savings and loan
associations, securities dealers, mortgage bankers, finance companies and
insurance companies.

REGULATION

First United is a registered bank holding company pursuant to the Bank
Holding Company Act of 1956, as amended (the "Act"), and as such, is subject to
regulation and examination by the Federal Reserve Board and is required to file
with the Federal Reserve Board annual reports and other information regarding
the business operations of itself and its subsidiaries. The Act provides that a
bank holding company may be required to obtain Federal Reserve Board approval
for the acquisition of more than 5% of the voting securities of substantially
all of the assets of any bank or bank holding company, unless it already owns a
majority of the voting securities of such bank or bank holding company. The Act
prohibits First United from engaging in any business other than banking or
bank-related activities specifically allowed by the Federal Reserve Board. The
Act also prohibits First United and its subsidiaries from engaging in certain
tie-in arrangements in connection with the extension of credit, the lease of
sale of property or the provision of any services.

As a registered bank holding company, First United is subject to the
Federal Reserve Board's position that a bank holding company should serve as a
"source of strength" for its bank subsidiaries. In an early application of the
doctrine the Federal Reserve Board announced that failure to assist a troubled
bank subsidiary when its holding company was in a position to do so was an
unsafe and unsound practice and the Federal Reserve Board claimed the authority
to order a bank holding company to capitalize its subsidiary banks.

In 1991 Congress modified the source of strength doctrine by creating a
system of prompt corrective actions under which the federal banking agencies are
required to take certain actions to resolve the problems of depository
institutions based on their level of capitalization. In a bank holding company
organization, an undercapitalized insured depository institution must submit a
capital restoration plan to the appropriate agency which may not accept the plan
unless the company controlling the institution has guaranteed that the
institution will comply with the plan until the institution has been adequately
capitalized on average during

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<PAGE> 35

each of four consecutive calendar quarters. The aggregate liability to the
guaranteeing companies is the lesser of an amount equal to 5 percent of the
institution's total assets at the time the institution became undercapitalized,
or the amount which is necessary to bring the institution into compliance with
applicable capital standards.

For a significantly undercapitalized institution, the appropriate agency
must prohibit a bank holding company from making any capital distribution
without prior Federal Reserve Board approval. The agency also may require a bank
holding company to divest or liquidate the institution.

First United and its subsidiaries are also subject to various federal
banking laws including the Financial Institutions, Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") which, among other things, made substantive
changes to the deposit insurance system. As a part of the reorganization of the
deposit insurance funds, the deposit premiums for insurance of Bank Insurance
Fund members were significantly increased. FIRREA also authorized bank holding
companies to acquire savings and thrift institutions without tandem operation
restrictions. Furthermore, FIRREA expanded the authority of regulatory agencies
to assess severe penalties ranging from $5,000 per day to $l,000,000 per day, on
persons or institutions that the agency finds in violation of a broad range of
activities.

First United and its subsidiaries are also subject to the provisions of the
Federal Deposit Insurance Corporation Improvement Act of 1991, which provided
for industry-wide standards in such areas as real estate lending, further
restrictions on brokered deposits and insider lending, establishment of a
risk-based deposit insurance system, enhanced examinations and audits of banking
institutions, the adoption of a Truth-in-Savings Act, various
merger-and-acquisitions related provisions, and the implementation of
legislation on foreign bank operations in the United States.

The provisions of the Community Reinvestment Act of 1977, as amended, are
applicable to the subsidiaries of First United. Federal regulators are required
to consider performance under the Community Reinvestment Act before approving an
application to establish a branch or acquire another financial institution. The
Federal Reserve Board has promulgated regulations governing compliance with the
Community Reinvestment Act in Regulation BB. Recent regulatory and statutory
developments show that compliance with the Community Reinvestment Act is subject
to strict scrutiny and is often grounds for denial of an application to federal
regulators. First United's subsidiary banks are all rated "satisfactory" for CRA
purposes.

On January 19, 1989, the Federal Reserve Board issued final guidelines to
implement risk-based capital requirements for bank holding companies. The
guidelines establish a systematic analytical framework that makes regulatory
capital requirements more sensitive to differences in risk profiles among
banking organizations, takes off-balance sheet exposures into account in
assessing capital adequacy, and minimizes disincentives to holding liquid,
low-risk assets. The guidelines provided for phasing in risk-based capital
standards through the end of 1992, at which time the standards became fully
effective. The Company's year end 1993 Tier 1 ratio of 18.83% and Total capital
ratio of 19.53% exceeds the current minimum regulatory requirements of 4.00% and
8.00% respectively.

The table below illustrates all of the capital requirements applicable to
First United and its subsidiaries.

REGULATORY COMPARISON OF CAPITAL RATIOS

<TABLE>
<CAPTION>
REGULATORY
DECEMBER 31, 1993 FIRST UNITED REQUIREMENTS
- ----------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Total Capital/Total Assets....................................... 10.53% 6.00%
Primary Capital/Total Assets..................................... 10.53% 5.50%
Total Risk-Based Capital......................................... 19.53% 8.00%
Tier 1 Capital................................................... 18.83% 4.00%
Leverage Ratio................................................... 9.31% 3.00%
</TABLE>

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First United's Subsidiary Banks are subject to a variety of regulations
concerning the maintenance of reserves against deposits, limitations on the
rates that can be charged on loans or paid on deposits, branching, restrictions
on the nature and amounts of loans and investments that can be made and limits
on daylight overdrafts.

The Subsidiary Banks are limited in the amount of dividends they may
declare. Prior approval must be obtained from the appropriate regulatory
authorities before dividends can be paid by the Banks to First United if the
amount of adjusted capital, surplus and retained earnings is below defined
regulatory limits. First United's subsidiary banks will have available for
payment of dividends without regulatory approval, approximately $15,400,000 of
undistributed earnings as of December 31, 1993. The Subsidiary Banks are also
restricted from extending credit or making loans to or investments in First
United and certain other affiliates as defined in the Act. Furthermore, loans
and extensions of credit are subject to certain other collateral requirements.

OFFICES

First United's executive offices are located in the offices of First
National Bank of El Dorado at Main and Washington Streets, El Dorado, Arkansas
71730.

EMPLOYEES

As of December 31, 1993, First United and its Subsidiary Banks had
approximately 373 full-time equivalent employees, 100 of whom are located in El
Dorado, 144 of whom are located in Fort Smith, 67 of whom are located in
Magnolia, 37 of whom are located in Camden, and 25 of whom are located in Alma.

DESCRIPTION OF FIRST UNITED COMMON STOCK

The following summary of the terms of First United Common Stock does not
purport to be complete and is qualified in its entirety by reference to the 1987
Act and First United's Amended and Restated Articles of Incorporation. First
United's Amended and Restated Articles of Incorporation authorizes the issuance
of 12,000,000 shares of Common Stock, $1.00 par value. There are 4,272,276 fully
paid and non-assessable shares of First United Common Stock issued and
outstanding.

Each share of First United Common Stock is entitled to one vote on all
matters to be voted on by stockholders, including the right to cumulate votes
for the election of the Board of Directors, and to dividends when and if
declared from time to time by the Board of Directors. There is no right of
preemption associated with the First United Common Stock. Upon liquidation, each
share would be entitled to share pro rata in all of the assets of First United
available for distribution to the holders of Common Stock. The transfer agent
for First United Common Stock is First National Bank of El Dorado, El Dorado,
Arkansas. First United Common Stock is traded on NASDAQ-National Market System
over-the-counter under the symbol of "UNTD."

RESALE OF FIRST UNITED COMMON STOCK

The First United Common Stock issued pursuant to the Merger will be freely
transferable under the Securities Act of 1933 (the "Securities Act"), except for
shares issued to any InvestArk stockholder who may be deemed to be an
"affiliate" of InvestArk for purposes of Rule 145 under the Securities Act. Each
such stockholder has entered into an agreement with First United providing that
such affiliate will not transfer any First United Common Stock received in the
merger except in compliance with the Securities Act and will not sell or
otherwise transfer such Common Stock (or any interest therein) until financial
results of First United and its subsidiaries (including InvestArk) for at least
30 days of combined operations are published. This restriction is expected to
expire by November 15, 1994. See also "InvestArk Bancshares, Inc. -- Resulting
Ownership in First United".

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<PAGE> 37

RECENT ACQUISITION

On November 30, 1993, First United acquired Commerce Financial Corporation,
Alma, Arkansas, which wholly-owned Commercial Bank at Alma, Alma, Arkansas.
Commercial Bank at Alma is a state-chartered commercial bank which at the
closing date had approximately $45,000,000 in assets, $40,000,000 in deposits
and $5,500,000 million in stockholder equity. The merger of Commerce Financial
Corporation with and into First United was accounted for under the purchase
method of accounting. Total cash consideration paid by First United in the
acquisition of Commerce Financial Corporation was approximately $5,367,000.

INVESTARK BANKSHARES, INC.
DESCRIPTION OF BUSINESS

InvestArk is a multi-bank holding company which owns 99.7% and 100% of the
common stock of The Bank of North Arkansas, Melbourne, Arkansas ("North
Arkansas") and First Stuttgart Bank and Trust Company, Stuttgart, Arkansas,
("First Bank") respectively. InvestArk may engage, directly or through
subsidiaries, in those activities closely related to banking which are
specifically permitted under the Bank Holding Company Act of 1956, as amended.

InvestArk was organized as an Arkansas bank holding company on July 20,
1984. The sole asset of InvestArk is the stock it holds in its two bank
subsidiaries. The subsidiaries grant commercial, installment and real estate
loans to customers principally in Arkansas County and Izard County, Arkansas. As
of September 30, 1993, these subsidiaries had a total of $83,133,078 of loans
outstanding and a loan loss reserve of $896,091. InvestArk adjusted its
allowance for possible loan losses and reserve against other real estate owned
to add $690,000 in the fourth quarter of 1993. This amount resulted in a
reduction of the same amount in InvestArk's capital account. However, this
reduction in capital was substantially recouped by InvestArk's retention of
fourth quarter earnings. For a more complete discussion regarding the
aforementioned mentioned adjustment, see "InvestArk Bankshares,
Inc. -- Management Discussion and Analysis".

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis highlights the significant factors
affecting InvestArk's consolidated financial statements. For a more complete
understanding of the following discussion, reference should be made to
InvestArk's consolidated financial statements and related notes thereto
presented elsewhere in this Proxy Statement.

BALANCE SHEET ANALYSIS

Financial Condition. At December 31, 1993 total assets were $184,904,000
reflecting a modest decrease over the December 31, 1992 level of $190,940,000.
InvestArk receives a major portion of its income from earning assets which
consist of interest bearing deposits with other banks, federal funds sold,
investment securities and loans. See tables 1 and 2.

InvestArk's loan portfolio represents the largest component of the earning
asset base and has the largest impact upon income from earning assets. However,
the loan portfolio continues to experience modest declines as a result of
weakened loan demand. Inherent in InvestArk's loan portfolio is credit risk.
InvestArk maintains an allowance against which loan losses are charged.
Management evaluates the allowance adequacy quarterly. Management's methodology
to determine the adequacy of the allowance considers specific credit reviews,
past loan loss experience, current economic conditions and trends and the volume
and composition of the loan portfolio. See tables 5 through 9 and "Earnings
Analysis -- Provision for Possible Loan Losses" for additional information.

Investment securities continues to grow. At December 31, 1993, investment
securities had a balance of $87,864,000 as compared to December 31, 1992 level
of $82,462,000. The increase from 1992 to 1993 primarily reflects a shift out of
cash and due from bank accounts to investment securities in an effort to
maximize earning asset levels. See tables 3 and 4.

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<PAGE> 38

As the primary source to fund earning assets, deposits have decreased to a
level of $163,300,000 at December 31, 1993 as compared to December 31, 1992
level of $170,102,000. Time deposits decreased by $8,110,000 or 10% for the year
ended December 31, 1993 due to declining interest rates and the resulting shift
from interest bearing deposits due to depositors shortening their time horizons.
See table 10 for further analysis of time deposits in excess of $100,000.

Liquidity and Interest Rate Sensitivity Management. Liquidity is the
ability of the bank to fund the needs of its borrowers, depositors and
creditors. Based on maturity structure and anticipated loan and deposit funding
requirements, InvestArk anticipates that its liquidity requirements will be met
in the foreseeable future. InvestArk's management is of the opinion that
traditional sources of maturing loans and investment securities, federal funds
and the base of core deposits will be adequate to provide liquidity needs. See
tables 4, 6 and 10 for additional information on certain investment, loan and
time deposit maturities.

The matching of assets and liabilities may be analyzed by examining the
extent to which such assets and liabilities are "interest rate sensitive" and by
monitoring an institution's interest rate sensitivity "gap." An asset or
liability is said to be interest rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest rate sensitivity
gap is defined as the difference between the amount of interest-earning assets
expected to mature or reprice within a specific time period and the amount of
interest-bearing liabilities expected to mature or reprice within that time
period. A gap is considered positive when the amount of interest rate sensitive
assets maturing within a specific time frame exceeds the amount of interest rate
sensitive liabilities maturing within that same time frame. During a period of
falling interest rates, a positive gap tends to result in a decrease in net
interest income. Whereas in a rising interest rate environment, an institution
with a positive gap could experience the opposite results. The table below
represents InvestArk's gap position as of December 31, 1993 (in thousands):

<TABLE>
<CAPTION>
0-30 31-90 91-180 181-365 OVER
DAYS DAYS DAYS DAYS 1 YEAR
------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Rate sensitive assets...................................... 29,745 12,583 14,224 20,053 98,212
Rate sensitive liabilities................................. 24,471 14,807 11,661 15,712 73,161
------ ------ ------ ------- -------
Net gap.......................................... 5,274 (2,224) 2,563 4,341 25,051
------ ------ ------ ------- -------
------ ------ ------ ------- -------
</TABLE>

At December 31, 1993, InvestArk's interest-bearing assets maturing or
repricing within one year exceeded the interest-bearing liabilities maturing or
repricing within the same time period. Based upon its evaluation of the interest
rate market, management feels InvestArk's gap position is in compliance with its
asset/liability management policies.

Capital. The Federal Reserve Board requires banks to maintain capital based
on "risk-adjusted" assets so that categories of assets with potentially higher
risk will require more capital backing than assets with lower risk. In addition,
banks are required to maintain capital to support, on a risk-adjusted basis,
certain off-balance sheet activities such as loan commitments.

At December 31, 1993, InvestArk's Tier 1 capital and total capital as a
percentage of total risk-adjusted assets were each 13.5% which exceeded the
required minimum levels. The required minimum levels for Tier 1 capital and
total capital are 4.0% and 8.0%, respectively.

EARNINGS ANALYSIS

For the years ended December 31, 1993, 1992, and 1991, net income was
approximately $1,278,000, $2,233,000, and $907,000, respectively. For the years
ended December 31, 1993, 1992 and 1991, the return on average assets was 0.7%,
1.3%, and 0.5%, respectively, while the return on average equity was 7.6%,
14.3%, and 6.3%, respectively.

The primary components of total income and expense which affect net income
are net interest income, provision for possible loan losses, non-interest
income, non-interest expense and the provision for income taxes. Significant
factors affecting these categories are presented below.

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<PAGE> 39

Net Interest Income. For the years ended December 31, 1993, 1992, and 1991,
net interest income was $7,510,000, $7,819,000 and $6,777,000, respectively. The
decrease in 1993 over 1992 levels results from levels of yields on investment
securities and yields decreasing relatively more as compared to rate decreases
on interest-bearing deposits. These increases in 1992 over 1991 levels result
from increases in earnings assets and a decrease in interest expense which was
the result of falling interest rates. See Tables 1 and 2.

Provision for Possible Loan Losses. For the year ended December 31, 1993,
InvestArk made additions to its allowance for possible loan losses of
approximately $600,000 compared to $64,000 in 1992 and $1,463,000 in 1991.
Almost 60% or $311,000 of the increase in 1993 as compared to 1992 levels
results primarily from concern with respect to decrease in agricultural yields
in the fall of 1993. The drop in yields was attributable to extremely dry
weather conditions throughout the crop cycle which conditions were only
partially offset by improved commodity prices. Based on such data, management
determined that a reserve of approximately 1.25% was necessary for its
agribusiness-related loans. As discussed in Note 3 to the consolidated financial
statements the markets in which InvestArk operates are dependent upon the
agribusiness economic sector. Additionally, the credit worthiness of a large
loan was downgraded and a portion specifically reserved which accounted for 15%
of the increase in the provision during 1993. As a result of the plant
modernization measures undertaken by this borrower in 1993, cash flows from
operations were diverted from the scheduled debt repayments to capital
expenditures. Pending resumption of principal and interest payments, the loan
was placed on nonaccrual and specifically reserved based on underlying
collateral values.

Net charge-offs on loans were $179,000 in 1993, $175,000 in 1992 and
$929,000 in 1991, respectively. The allowance for loans and lease losses were
$1,494,000 or 1.8% of loans at December 31, 1993, compared to $1,073,000 or 1.2%
at December 31, 1992.

Non-Interest Income. Total non-interest income for the year ended December
31, 1993 was $1,509,000 as compared to $1,504,000 for 1992 and $1,615,000 in
1991. The large increase in 1992 over 1991 was primarily in the category of
other operating income. Other operating income increased primarily because of
lease rental income derived from leveraged lease transactions entered into
during 1991. Management believes the level of non-interest income prior to 1992
is more representative of the levels to be expected in the future as the
leverage leases terminate in April 1994.

Non-Interest Expense. Total non-interest expense for the year ended
December 31, 1993 was $6,988,000 as compared to $6,517,000 for 1992 and
$5,890,000 in 1991. The increase for 1993 is primarily in the category of
employee benefits. The increase for 1992 is primarily in the category of other
expense. Other expense increased primarily because of increased annual FDIC
insurance assessments, legal fees and costs attributable to the foreclosure and
subsequent writedowns of other real estate.

Provision for Income Taxes. Income tax expense for the years ended December
31, 1993, 1992 and 1991 was $148,000, $501,000, and $128,000, respectively.
Effective tax rates were 10%, 18%, and 12% for 1993, 1992, 1991, respectively.
Note 7 to the consolidated financial statements provides further details of the
applicable income tax expense.

REGULATORY ISSUES

Pursuant to the Interest Rate Control Amendment to the Constitution of the
State of Arkansas, "consumer loans and credit sales" have a maximum limitation
of 17% per annum and all "general loans" have a maximum limitation of 5% over
the Federal Reserve Discount Rate in effect at the time the loans are made. The
Arkansas Supreme Court has determined that "consumer loans and credit sales" are
"general loans" and are subject to the limitation of 5% over the Federal Reserve
Discount Rate as well as a maximum limitation of 17% per annum. As a general
rule, InvestArk is required to comply with the Arkansas usury laws on loans made
within the State of Arkansas.

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<PAGE> 40

ACCOUNTING STANDARDS

During 1993 the Financial Accounting Standards Board (FASB) issued SFAS No.
114 (Accounting by Creditors for Impairment of a Loan) which becomes effective
beginning in 1995. This statement defines the measurement requirements for loans
that are impaired or deemed to be troubled debt restructurings. Management has
not determined the effect that this statement will have upon adoption.

Also during 1993 the FASB issued SFAS No. 115 "Accounting for Certain
Investments in Debt and Equity Securities," which InvestArk will adopt on
January 1, 1994. This statement addresses the accounting and reporting for
investments in debt and certain equity securities. Debt securities not
classified as trading account securities or investment securities expected to be
held to maturity and all equity securities will be classified as
available-for-sale securities and reported at fair value, with net unrealized
gains and losses reported, net of tax, as a separate component of stockholders'
equity. InvestArk believes the impact of adopting this statement will not be
material to its financial position or results of operations as it expects to
hold its investment securities to maturity.

36
<PAGE> 41

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES

TABLE 1 -- COMPARATIVE AVERAGE BALANCES -- YIELDS AND RATES ($ IN THOUSANDS)

The Average Assets and Liabilities table below shows the average balances
of the assets and liabilities of the corporation, the interest income or expense
associated with those assets and liabilities, and the computed yield or rate
based upon the interest income or expense for each of the last three years.

<TABLE>
<CAPTION>
1993 1992 1991
------------------------------ ------------------------------ ------------------------------
AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
-------- -------- ------ -------- -------- ------ -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Federal funds sold and
securities purchased
under resell
agreements.............. 718 21 2.92% 1,531 66 4.31% 1,713 150 8.76%
Investment securities:
U.S. Treasury and U.S.
Agencies.............. $ 50,867 $ 2,969 5.84% $ 45,492 $ 3,059 6.72% $ 36,018 $ 2,814 7.81%
Obligations of states
and political
subdivisions.......... 20,759 1,993 9.60% 17,020 1,833 10.77% 15,550 1,581 10.17%
Other securities........ 26,546 1,554 5.85% 28,407 1,867 6.57% 33,828 2,634 7.79%
Loans -- net of unearned
income.................. 82,110 6,577 8.01% 86,718 7,874 9.08% 89,164 9,241 10.36%
-------- -------- ------ -------- -------- ------ -------- -------- ------
Total interest-earning
assets.................... 180,999 13,114 7.25% 179,168 14,699 8.20% 176,272 16,420 9.32%
Cash and due from banks..... 4,990 5,467 5,368
Other assets................ 6,528 9,236 10,113
Allowance for loan losses... (1,078) (1,078) (1,134)
-------- -------- --------
Total Assets........ $191,439 $192,793 $190,619
-------- -------- --------
-------- -------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing
liabilities:
Interest-bearing demand
deposits................ $ 38,211 $ 1,072 2.81% $ 32,844 $ 1,110 3.38% $ 29,110 $ 1,427 4.90%
Savings deposits.......... 26,663 803 3.01% 21,804 741 3.40% 16,319 718 4.40%
Time deposits............. 76,242 3,047 4.00% 85,628 4,300 5.02% 93,867 6,520 6.95%
Federal funds purchased
and securities sold
under repurchase
agreements.............. 3,814 123 3.22% 5,556 218 3.92% 6,944 517 7.45%
-------- -------- ------ -------- -------- ------ -------- -------- ------
Total interest-bearing
liabilities............... 144,930 5,045 3.48% 145,833 6,369 4.37% 146,240 9,182 6.28%
-------- -------- --------
Noninterest-bearing demand
deposits.................. 27,972 30,161 28,203
Accrued expenses and other
liabilities............... 1,756 1,164 1,756
Stockholders' equity........ 16,781 15,635 14,420
-------- -------- --------
Total liabilities
and stockholders'
equity............ $191,439 $192,793 $190,619
-------- -------- --------
-------- -------- --------
NET INTEREST MARGIN........... $ 8,069 $ 8,330 $ 7,238
Less tax equivalent
adjustments:
Investments............. 559 511 461
-------- -------- --------
Net interest margin
per annual
report............ $ 7,510 $ 7,819 $ 6,777
-------- -------- --------
-------- -------- --------
</TABLE>

Non-accruing loans have been included in the average loan balances and
interest collected prior to these loans having been placed on non-accrual has
been included in interest income. Interest income and average yield on
tax-exempt assets have been calculated on a fully tax equivalent basis using a
34% tax rate for the years 1993, 1992 and 1991.

37
<PAGE> 42

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES -- (CONTINUED)

TABLE 2 -- VOLUME AND YIELD/RATE VARIANCE ANALYSIS

The Volume and Yield/Rate variance table shows the change from year to year
for each component of the tax equivalent net interest margin separated into the
amount generated by volume changes and the amount generated by changes in the
yield or rate (Tax Equivalent Basis -- $ in Thousands):

<TABLE>
<CAPTION>
1993 COMPARED TO 1992 1992 COMPARED TO 1991
CHANGE DUE TO: CHANGE DUE TO:
---------------------------- ----------------------------
YIELD/ YIELD/
VOLUME RATE NET VOLUME RATE NET
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
REVENUE EARNED ON:
Federal funds sold and securities purchased
under resell agreements................... (35) (10) (45) (16) (68) (84)
Investment securities:
U.S. Treasury and U.S. Agencies........... 361 (451) (90) 741 (496) 245
Obligations of states and political
subdivisions............................ 403 (243) 160 150 102 252
Other securities.......................... (122) (191) (313) (422) (345) (767)
Loans -- net of unearned income.............. (418) (879) (1,297) (255) (1,112) (1,367)
------ ------ ------ ------ ------ ------
Total interest-earning assets.................. 189 (1,774) (1,585) 198 (1,919) (1,721)
INTEREST PAID ON:
Interest-bearing demand deposits............. 181 (219) (38) 183 (500) (317)
Savings deposits............................. 166 (104) 62 241 (218) 23
Time deposits................................ (473) (780) (1,253) (570) (1,650) (2,220)
Federal funds purchased and securities sold
under repurchase agreements............... (68) (27) (95) (103) (196) (299)
------ ------ ------ ------ ------ ------
Total interest-bearing liabilities............. (194) (1,130) (1,324) (249) (2,564) (2,813)
------ ------ ------ ------ ------ ------
Change in net interest income on a tax
equivalent
basis........................................ 383 (644) (261) 447 645 1,092
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
</TABLE>

The change in interest due to both volume and yield/rate has been allocated
to change due to volume and change due to yield/rate in proportion to the
absolute value of the change of each. Tax exempt income has been adjusted to a
tax equivalent basis using a tax rate of 34% for the years 1993, 1992 and 1991.
The balances of non-accrual loans and related income recognized have been
included for purposes of these computations.

38
<PAGE> 43

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES -- (CONTINUED)

TABLE 3 -- INVESTMENT PORTFOLIO

The table below indicates book values of investment securities by type at
year-end for each of the last three years (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
U.S. Treasury and U.S. Government agencies...................... $51,380 $46,466 $40,012
Obligations of states and political subdivisions................ 24,700 18,701 15,901
Other securities................................................ 8,399 13,839 16,252
------- ------- -------
Total Debt Securities................................. 84,479 79,006 72,165
Equity Securities............................................... 3,385 3,455 66
------- ------- -------
Total Investment Securities........................... $87,864 $82,461 $72,231
------- ------- -------
------- ------- -------
</TABLE>

TABLE 4 -- MATURITY DISTRIBUTION AND YIELDS OF INVESTMENT PORTFOLIO

The following table details the maturities of investment securities at
December 31, 1993 and the weighted average yield for each range of maturities
(Tax Equivalent Basis -- in thousands):

<TABLE>
<CAPTION>
MATURING
---------------------------------------------------------------------------------------
AFTER ONE AFTER FIVE AFTER
WITHIN BUT WITHIN BUT WITHIN TEN
ONE YEAR YIELD FIVE YEARS YIELD TEN YEARS YIELD YEARS YIELD TOTAL
-------- ----- ---------- ----- ---------- ----- ------ ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and U.S. Government
Agencies................................ $11,960 7.01 % $ 34,783 5.85 % $ 2,406 9.35 % $2,231 7.58 % $51,380
Obligations of states and political
subdivisions............................ 1,379 7.25 % 13,567 8.02 % 7,287 8.47 % 2,467 10.26% 24,700
Other securities.......................... 1,914 8.78 % 4,205 8.49 % 1,750 8.91 % 530 8.89 % 8,399
-------- ---------- ---------- ------ -------
Total debt securities............. $15,253 7.25 % $ 52,555 6.62 % $ 11,443 8.72 % $5,228 8.97 % $84,479
-------- ---------- ---------- ------
-------- ---------- ---------- ------
Equity securities......................... 3,385
-------
Total investment securities....... $87,864
-------
-------
</TABLE>

Included in the above maturity schedule are mortgage related securities
totaling $10,075,000 which have contractual maturities as follows: Within One
Year -- $3,369,000; After One But Within Five Years -- $2,863,000; After Five
But Within Ten Years -- $1,772,000; After Ten Years -- $2,071,000. Due to the
nature of mortgage related securities, the actual maturities of these
investments can be substantially shorter than their contractual maturity.
Management believes the actual weighted average maturity of the entire mortgage
related portfolio to be approximately 7.35 years.

At December 31, 1993 there were no securities in the portfolio of any one
issuer with a carrying value exceeding ten percent of total stockholders'
equity.

TABLE 5 -- COMPOSITION OF THE LOAN PORTFOLIO

<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Commercial, Financial and Agricultural....................... 35,232 39,112 39,654 44,274 38,252
Real Estate.................................................. 37,956 35,493 36,808 33,097 31,952
Consumer Loans............................................... 11,290 12,373 11,051 10,470 10,994
Loans for Purchasing or Carrying Securities.................. 0 0 0 0 17
Financing Leases............................................. 18 0 0 0 0
------ ------ ------ ------ ------
Total Loans........................................ 84,496 86,978 87,513 87,841 81,215
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</TABLE>

Construction loans outstanding at December 31, 1993 are not material in
amount. However, to the extent loans are made to finance construction, those
amounts are included in the table above as Real Estate Loans.

39
<PAGE> 44

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES -- (CONTINUED)

TABLE 6 -- LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES

<TABLE>
<CAPTION>
WITHIN ONE ONE YEAR AFTER
YEAR OR THROUGH FIVE
LESS FIVE YEARS YEARS TOTAL
---------- ---------- ----- ------
<S> <C> <C> <C> <C>
Commercial, Financial and Agricultural................ 27,885 7,285 62 35,232
Real Estate (Excluding loans secured by 1-4 family
residential properties)............................. 9,626 12,954 0 22,580
---------- ---------- ----- ------
37,511 20,239 62 57,812
---------- ---------- ----- ------
---------- ---------- ----- ------
</TABLE>

<TABLE>
<CAPTION>
MATURING:
-------------------------------
ONE YEAR AFTER
THROUGH FIVE
FIVE YEARS YEARS TOTAL
---------- ----- ------
<S> <C> <C> <C>
Above loans due after one year which have:
Predetermined interest rates.................................... 17,310 62 17,372
Floating interest rates......................................... 2,929 0 2,929
---------- ----- ------
20,239 62 20,301
---------- ----- ------
---------- ----- ------
</TABLE>

TABLE 7 -- NON-PERFORMING ASSETS AND PAST DUE LOANS

The table below shows InvestArk's non-performing assets and past due loans
at the end of each of the last five years (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------
1993 1992 1991 1990 1989
----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Loans accounted for on a non-accrual basis...... $ 474 $ 446 $ 764 $1,570 $ 831
Restructured loans.............................. 0 0 0 231 231
----- ------ ------ ------ ------
Non-performing loans.......................... 474 446 764 1,801 1,062
Other Real Estate Owned......................... 143 1,242 2,753 890 1,190
----- ------ ------ ------ ------
Non-performing assets......................... 617 1,688 3,517 2,691 2,252
Accruing loans past due 90 days or more......... 31 100 993 1,969 1,017
----- ------ ------ ------ ------
Total non-performing assets and past due
loans...................................... $ 648 $1,788 $4,510 $4,660 $3,269
----- ------ ------ ------ ------
----- ------ ------ ------ ------
</TABLE>

If interest on non-accrual loans had been accrued, such income would have
approximated $39,000 in 1993. The interest which was included in earnings for
1993 for non-accrual loans is immaterial.

At December 31, 1993, InvestArk had no loan concentrations greater than ten
percent of total loans except as shown in Table 5.

InvestArk does not accrue interest on any loan for which payment of
interest or principal is not expected, on any loan which is seriously delinquent
unless the obligation is both well secured and in the process of collection, or
on any loan that is maintained on a cash basis due to deterioration in the
financial condition of the borrower. Management considers a debt to be "well
secured" if it is secured by collateral in the form of liens on or pledges of
real or personal property that have a realizable value sufficient to discharge
the debt in full or by the guaranty of a financially responsible party. A debt
is considered to be "in process of collection" if, based on a probable specific
event, it is expected that the loan will be repaid or brought current. At
December 31, 1993, InvestArk has no loans about which Management has serious
doubts as to their collectibility other than those disclosed above.

40
<PAGE> 45

INVESTARK BANKSHARES, INC.

STATISTICAL DISCLOSURES -- (CONTINUED)

TABLE 8 -- ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

The table below summarizes InvestArk's loan loss experience for each of the
last five years (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1993 1992 1991 1990 1989
------ ------ ------ ----- ------
<S> <C> <C> <C> <C> <C>
Amount of loan loss reserve at beginning of period....... $1,073 $1,184 $ 978 $ 922 $1,004
Loans charged off:
Real estate loans...................................... (35) (52) (93) (13) (35)
Commercial, Financial and Agricultural................. (180) (219) (831) (713) (551)
Consumer............................................... (40) (80) (58) (22) (44)
------ ------ ------ ----- ------
Total charge-offs.............................. (255) (351) (982) (748) (630)
Recoveries on loans previously charged off:
Real estate loans...................................... 16 2 2 12 19
Commercial, Financial and Agricultural................. 24 157 27 4 9
Consumer............................................... 36 17 24 28 33
------ ------ ------ ----- ------
Total recoveries............................... 76 176 53 44 61
Net charge-offs.......................................... (179) (175) (929) (704) (569)
Additions to allowance charged to operating expense...... 600 64 1,135 760 487
------ ------ ------ ----- ------
Amount of loan loss reserve at end of period............. $1,494 $1,073 $1,184 $ 978 $ 922
------ ------ ------ ----- ------
------ ------ ------ ----- ------
Percentage of net charge-offs during period to average
loans outstanding during the period.................... 0.22% 0.20% 1.04% 0.83% 0.71%
------ ------ ------ ----- ------
------ ------ ------ ----- ------
</TABLE>

TABLE 9 -- ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

The following table is a summary by allocation category of InvestArk's
allowance for loan losses (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------------------------------------------------------------
% LOANS % LOANS % LOANS % LOANS % LOANS
IN EACH IN EACH IN EACH IN EACH IN EACH
1993 CATEGORY 1992 CATEGORY 1991 CATEGORY 1990 CATEGORY 1989 CATEGORY
------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial,
Financial
and
Agricultural... $ 943 42% $ 754 45% $ 825 45% $ 716 50% $ 662 47%
Real Estate... 378 45% 225 41% 200 42% 171 38% 167 39%
Consumer...... 85 13% 89 13% 86 13% 63 12% 78 14%
Unallocated... 88 5 71 28 15
------ -------- -------- -------- --------
$1,494 $ 1,073 $ 1,182 $ 978 $ 922
------ -------- -------- -------- --------
------ -------- -------- -------- --------
</TABLE>

TABLE 10 -- TIME DEPOSITS OF $100,000 OR MORE

The table below shows maturities on outstanding time deposits of $100,000
or more at December 31, 1993 (in thousands):

<TABLE>
<CAPTION>
CERTIFICATES
OF DEPOSIT
------------
<S> <C>
3 months or less............................................................. $ 9,734
Over 3 months through 6 months............................................... 5,715
Over 6 months through 12 months.............................................. 4,758
Over 12 months............................................................... 1,303
------------
$ 21,510
------------
------------
</TABLE>

41
<PAGE> 46

DIRECTORS AND EXECUTIVE OFFICERS

The Board of Directors of InvestArk will be dissolved and positions held by
executive officers of InvestArk will no longer exist upon the consummation of
the Merger. Executive officers of the InvestArk subsidiaries are expected to
remain in the respective positions with North Arkansas and First Bank. At this
time none of the directors or executive officers of InvestArk are expected to be
on the Board of Directors or an executive officer of First United after
consummation of the Merger. The directors of InvestArk and its subsidiaries are
set forth below:

DIRECTORS OF INVESTARK AND ITS SUBSIDIARIES

<TABLE>
<CAPTION>
SHARES OF INVESTARK
COMMON STOCK OWNED
BENEFICIALLY AS OF
DECEMBER 31, 1993
DIRECTOR (1)PRINCIPAL OCCUPATION AND PERCENT OF
NAME AGE SINCE AND DIRECTORSHIP CLASS IF MORE THAN 1%
- ------------------- --- -------- ------------------------------------ ---------------------
<S> <C> <C> <C> <C>
Wesley Arnold 58 1988 Self-employed Grocer, Director of 100
North Arkansas
Harry C. Erwin 56 1984 Chairman & Chief Executive Officer 4,315(2.00%)
of InvestArk; Chairman & Chief
Executive Officer of First Bank;
Director of North Arkansas
L. Clyde Carter 84 1984 Retired, Director of InvestArk; 5,116(2.37%)
Director of First Bank
Harlin Hames 56 1985 Retired 1985; Director of North 225
Arkansas
Tommy Hillman 57 1979 President, Winrock Farms, Inc. 1,715
Director of InvestArk; Director of
First Bank; Director of North
Arkansas
Jerry J. Hoskyn 51 1991 Self-employed Farmer; Director of 100
InvestArk; Director of First Bank
Harold Ives 64 1985 President, Terminal Truck Brokers, 996
Inc. Director of InvestArk; Director
of First Bank
Steven M. Keith 38 1992 President, KBX, Inc. -- Grain 100
Brokerage Director of InvestArk;
Director of First Bank
Cole Martin 52 1992 Director of InvestArk; Director of 100
First Bank; President of First Bank;
Chairman of North Arkansas
James E. Miller 58 1988 Owner of G.H. Miller & Sons; 150
Director of North Arkansas
John E. Stephens 45 1988 Self-Employed Farmer; Director of 700
InvestArk, Director of First Bank;
Director of North Arkansas;
Secretary of InvestArk
</TABLE>

- ---------------

(1) This column represents the year in which the directorship commenced. If a
person serves as director for both InvestArk and one or both of its
subsidiaries, the year disclosed reflects the date the directorship in
InvestArk commenced.

42
<PAGE> 47

EXECUTIVE OFFICERS OF INVESTARK AND ITS SUBSIDIARIES

In addition to Messrs. Harry C. Erwin, Cole Martin, and John E. Stephens,
the executive officers of InvestArk and its subsidiaries are:

SHARES OF
INVESTARK COMMON
STOCK OWNED
EXECUTIVE BENEFICIALLY AS
OFFICER OF
NAME AGE SINCE POSITION DECEMBER 31, 1993
- -------------------- --- --------- ------------------------------------- ------------------
<S> <C> <C> <C> <C>
Robert M. Koch 48 1989 Senior Vice President of First Bank 0
Lloyd T. Jones, Sr. 52 1986 President and Chief Executive Officer 25
of North Arkansas; Director of North
Arkansas
</TABLE>

During 1993, the Board of Directors of InvestArk held 16 meetings and all
the incumbent directors then in office were in attendance at more than
seventy-five percent of the meetings. The Board of Directors does not have a
nominating, compensation or audit committee.

TRANSACTIONS WITH MANAGEMENT

Directors and executive officers of InvestArk and its subsidiaries, their
associates and members of their immediate families were customers of and had
transactions including loans and commitments to lend with subsidiaries of
InvestArk in the ordinary course of business during 1993. All such loans and
commitments were made by the subsidiaries on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and did not involve more than normal
risk of collectibility or present other unfavorable features. Similar
transactions may be expected to take place in the ordinary course of business in
the future. On December 31, 1993, the aggregate of these related party loans was
approximately $2,212,000 or approximately 2.6% of total loans outstanding of the
subsidiaries and 2.0% of pro forma combined capital accounts.

PRINCIPAL STOCKHOLDERS OF INVESTARK

The following table sets forth, as of December 31, 1993, the only persons
who were known by InvestArk to own of record or beneficially more than five (5%)
of InvestArk Common Stock and the number of shares owned beneficially by each of
them.

<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES DIRECTLY OWNED PERCENT OF CLASS
- ------------------------------------------------------------ --------------------- ----------------
<S> <C> <C>
W. R. Stephens, Jr. Trust................................... 45,200 20.92%
Vernon J. Giss, Trustee
Ernest Butler, Jr., Trustee
W. R. Stephens Trust........................................ 34,158 15.81%
Jackson T. Stephens, Trustee
Vernon J. Giss, Trustee
Bess C. Stephens, Trustee
Jackson T. Stephens......................................... 48,358 22.39%
</TABLE>

Various other Stephens family members and affiliated entities listed on the
chart below own in the aggregate an additional 15,133 shares or 7.00% of the
outstanding shares of InvestArk Common Stock.

All directors and executive officers of InvestArk and its subsidiaries as a
group (12 persons) as of December 31, 1993 owned 13,642 shares or 6.30% of the
outstanding shares of InvestArk Common Stock. No director or executive officer
of InvestArk owns any shares of First United Common Stock. Neither First United
nor any of its subsidiaries nor any director or executive officer of First
United owns any shares of InvestArk Common Stock.

43
<PAGE> 48

FEDERAL RESERVE BOARD INVESTIGATIONS

On March 4, 1993, the Board of Governors of the Federal Reserve System (the
"Board") ordered its staff to commence a formal investigation to review the
ownership and control of Worthen Banking Corporation of Little Rock, Arkansas
("Worthen") for compliance with the control provisions of the Bank Holding
Company Act and the Change in Bank Control Act. This investigation appears to be
focused primarily on whether members of the families of Jackson T. Stephens and
Wilton R. Stephens (deceased) and affiliated entities (collectively, the
Stephens Family), who currently own 26% of Worthen's outstanding common stock,
have exerted control over Worthen in violation of the above-referenced statutes.
First United has been advised by the Stephens Family that the investigation is
continuing, but the Board has not announced any finding or determination that
any violation of law has or has not occurred. The events and transactions which
are the subject of the Worthen investigation do not in any way relate to or
involve InvestArk or First United.

In addition, in February 1993, InvestArk management was advised by the
Federal Reserve Bank of St. Louis (the "St. Louis FED") that the agency had
initiated a review of certain transactions between InvestArk's bank subsidiaries
and Stephens Inc., a registered broker-dealer owned by the Stephens Family.
These transactions involved the purchase and sale of municipal and other
securities; and the purpose of the review, which is still ongoing, is to
determine whether the transactions violated the prohibitions of Sections 23A and
23B of the Federal Reserve Act. Section 23A places several restrictions on what
it refers to as "covered transactions" between a bank and its affiliates. Except
as exempted by the Federal Reserve Board, covered transactions include bank
loans or extensions of credit to an affiliate, purchases of securities issued by
an affiliate, purchases of assets from an affiliate, the bank's acceptance of
securities issued by an affiliate as collateral for a loan or extension of
credit, and the bank's issuance of a guaranty, acceptance, or letter of credit
on behalf of an affiliate. Covered transactions are subject to two general
limitations. First, with respect to quantitative restrictions, covered
transactions between a bank (including its subsidiaries) and an affiliate are
limited to 10% of the bank's capital and surplus. Aggregate covered transactions
between a bank (including its subsidiaries) and all affiliates are limited to
20% of the bank's capital and surplus. Secondly, any covered transaction between
a bank and an affiliate must be on terms and conditions that are consistent with
safe and sound banking practices. Certain covered transactions are subject to
collateral requirements. The amount of collateral required depends on the type
of collateral used, as set forth in the statute. Depending upon the type of
collateral used the market value of such collateral must equal between 100% of
the covered transaction and 130% of the covered transaction. Section 23A also
contains an absolute prohibition on the bank's (or bank subsidiaries) purchase
of low-quality assets from an affiliate. Section 23B generally requires that a
bank and its subsidiaries engage in transactions with affiliates only on terms
and under circumstances, including credit standards, that are substantially the
same, or at least as favorable to the bank or its subsidiary, as those
prevailing at the time for comparable transactions with or involving
non-affiliated companies. Alternatively, in the absence of comparable
transactions, any such transactions must be on terms and under circumstances,
including credit standards, that in good faith would be offered to or applied to
non-affiliated companies.

The St. Louis FED has not announced any results of its review. However,
First United's obligation to consummate the Merger is conditioned upon the St.
Louis FED not having notified either of the parties of actual or proposed
regulatory action with respect to the investigation that could reasonably be
expected to have an adverse effect on First United, InvestArk or InvestArk's
bank subsidiaries. InvestArk management has reviewed the transactions under
review by the St. Louis FED and determined that InvestArk's bank subsidiaries
have benefitted from significant appreciation of the securities purchased taken
as a whole. In order to assure compliance with Section 23A and 23B of the
Federal Reserve Act, InvestArk and its subsidiary banks underwent a two step
process (1) an internal review was conducted to identify all "covered"
transactions with Stephens Inc., if any, and (2) new policies and procedures
were established and reviewed by the St. Louis FED, to ensure compliance with
the Section 23A and 23B of the Federal Reserve Act with respect to any future
affiliate transactions. InvestArk management has no reason to believe that the
St. Louis FED will take any action with respect to the transactions under review
which would have a material adverse effect on First United, InvestArk or
InvestArk's bank subsidiaries.

44
<PAGE> 49

RESULTING OWNERSHIP IN FIRST UNITED

The W. R. Stephens Trust beneficially owns 207,884 shares of First United
Common Stock which equals 4.86% of the issued and outstanding shares of First
United. The W.R. Stephens Jr. Trust beneficially owns 2,100 shares of First
United Common Stock which equals .04% of the issued and outstanding shares of
First United. The additional shares of First United Common Stock to be received
by these and other Stephens Family members in the Merger will increase the total
number of shares beneficially owned by the Stephens Family to a maximum of
862,140, or 16.40% of the outstanding shares of First United Common Stock.
Accordingly, the Stephens Family would be required to file a Notice of Change in
Bank Control and receive approval of the Board in order to own and vote these
shares directly. Because of the existence of the Worthen investigation, and in
lieu of making such a filing at this time, the Stephens family has agreed to
place all of the shares of First United Common Stock its members and affiliates
will receive in the Merger in trust with an independent trustee. The
beneficiaries of the Stephens Trust and the number of shares deposited therein
by each of them are set forth in the following table. The agreement governing
the Stephens Trust provides that the Trustee shall have sole authority to vote
the shares deposited by the beneficiaries, and shall vote them in proportion to
the percentage of shares of First United Common Stock voted for or against any
proposal brought before the stockholders of First United. However, any
abstention of First United Common Stock will not be counted in computing the
above described percentage. (The 209,984 shares of Common Stock of First United
beneficially owned by the W.R. Stephens Trust and the W.R. Stephens Jr. Trust
will continue to be owned and voted directly by their respective trustees). The
beneficiaries of the Stephens Trust will retain dispositive power over the
shares of First United Common stock deposited therein; provided that they have
agreed not to sell 5% or more of the outstanding shares of First United Common
Stock to a purchaser or group of purchasers without the prior written approval
of the Board unless the sale is transacted in connection with an acquisition of
First United approved by its Board of Directors. The Stephens Trust will
terminate when, and if, the Stephens Family ceases to own 10% or more of the
shares of First United's outstanding Common Stock or the Board grants the
Stephens Family permission to own and vote the shares held therein directly.
Based upon the maximum of 985,849 shares to be issued to the stockholders of
InvestArk, the Stephens Trust will own of record 12.41% of the outstanding
shares of First United Common Stock as reflected by the table below.

STEPHENS FAMILY
FIRST UNITED STOCK OWNERSHIP

<TABLE>
<CAPTION>
FIRST UNITED FIRST UNITED FIRST UNITED % % %
SHARES SHARES TO BE SHARES OWNED SHARES SHARES TOTAL
STEPHENS CURRENTLY ACQUIRED IN AFTER THE DIRECTLY OWNED IN SHARES
SHAREHOLDERS OWNED MERGER(1) MERGER OWNED(2) TRUST(2) OWNED(2)
- ----------------------------------------- ------------ ------------ ------------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
W. R. Stephens Trust..................... 207,884(3) 155,981 363,865 3.95% 2.97% 6.92%
Bess C. Stephens,
Jackson T. Stephens and
Vernon J. Giss, Trustee
Jackson T. Stephens...................... 0 220,731 220,731 -- 4.20% 4.20%
W. R. Stephens, Jr. Trust................ 2,100(3) 206,338 208,438 .04% 3.92% 3.96%
Vernon J. Giss and
Ernest Butler, Jr., Trustees
W. R. Stephens, Jr. ..................... 0 1,971 1,971 -- .04% .04%
Revocable Trust
W. R. Stephens, Jr., Trustee
Elizabeth Ann Stephens................... 0 45,743 45,743 -- .87% .87%
Campbell Trust
Vernon J. Giss and
Ernest Butler, Jr., Trustees
Warren A. Stephens....................... 0 15,872 15,872 -- .30% .30%
Stephens Group, Inc. .................... 0 5,520 5,520 -- .10% .10%
------------ ------------ ------------ -------- -------- --------
Total................................ 209,984 652,156 862,140 3.99% 12.41% 16.40%
</TABLE>

45
<PAGE> 50

- ---------------

(1) Computed based on the maximum number of First United shares (985,849) to be
issued to InvestArk stockholders in connection with the merger, taking into
account cash payments for fractional shares.

(2) Computed based on 5,258,125 shares (4,272,276 shares currently outstanding
plus the maximum number of shares to be issued in the merger.)

(3) These shares will not be deposited in the Stephens Trust.

REGISTRATION RIGHTS

Pursuant to the Shareholders Agreement dated December 17, 1993 by and
between W. R. Stephens, The W. R. Stephens, Jr. Trust, The W. R. Stephens Trust,
Jackson T. Stephens, Warren A. Stephens and The Elizabeth Ann Stephens Trust
(the "Shareholders") and First United, the Shareholders, on or after the
effective date of the Merger, shall have three different types of registration
rights.

Demand Rights on Form Other Than S-3. The Shareholders have the right to
make two requests of First United to register under the Securities Act, in each
case, at least Five Million ($5,000,000) in market value of First United Common
Stock beneficially owned by the Shareholders. First United has agreed to use its
best reasonable efforts to register the shares as soon as practicable if a
request is made. However, First United will be entitled to postpone for a
reasonable period of time the registering of the Common Stock, if, in good
faith, the board of directors of First United determines it is advisable because
registering the Common Stock at such time would be materially detrimental to
First United. If the filing is delayed by 90 days First United shall obtain the
written opinion of a nationally recognized banking firm supporting the
determination to postpone the filing. If the Shareholders exercise their right
of demand, they shall pay all out-of-pocket expenses incurred in connection with
the registration of the securities, except for registration on Form S-3 as
discussed below.

Demand Rights on Form S-3. If a demand for registration is made in
accordance with the immediately preceding paragraph and such registration is
filed on Form S-3, the Shareholders shall pay all underwriting discounts and
commissions applicable to the First United Common Stock held by said
Shareholders, the fees and disbursements of their own counsel and accountants
and all other expenses associated with the offering of the Shareholder's stock.
If First United chooses to issue additional shares of common stock concurrently
with the registration of Shareholder's stock, it shall pay all underwriting
discounts and commissions applicable to the additional stock, the fees and
disbursements of its own counsel and accountants and its pro rata share of all
other expenses of the offering.

Piggy-Back Rights. If at any time First United proposes to register any of
its securities under the Securities Act of 1933, other than securities to be
issued pursuant to a stock option or other employee benefit plan, First United
has agreed to give written notice to the Shareholders of such a registration.
If, within five days after receipt of such notice, the Shareholders submit a
written request to First United, First United shall include the First United
Common Stock held by the Shareholders and specified in the Shareholder's request
in such a registration. Notwithstanding the foregoing, if the offering of the
Shareholder's securities is to be made by or through underwriters, First United
shall not be required to include the shares of First United Common Stock of the
Shareholders if the managing or co-managing underwriters reasonably believe in
good faith that such inclusion would materially and adversely affect such
offering. Under the right of "piggy-back" registration, First United shall pay
all expenses incurred in connection with registration of the securities.

COMPETITION

The banking subsidiaries of InvestArk compete actively with national and
state banks, savings and loan associations, securities dealers, mortgage
bankers, finance companies and insurance companies.

LITIGATION

There is no material pending litigation in which InvestArk or its
subsidiaries is a party.

46
<PAGE> 51

OFFICES

InvestArk's executive offices are located in the offices of First Stuttgart
Bank and Trust Company, Stuttgart, Arkansas, at 412 South Main Street,
Stuttgart, Arkansas 72021.

EMPLOYEES

As of December 31, 1993, InvestArk and its subsidiaries has 108 employees,
32 of whom are located in Melbourne and 76 of whom are located in Stuttgart.

DESCRIPTION OF INVESTARK STOCK

InvestArk has one class of common stock issued and outstanding. As of
December 31, 1993, InvestArk had 5,000,000 shares of authorized common stock,
$10.00 par value, and 215,960 shares issued and outstanding while 3,162 shares
are held in treasury. Currently, approximately 159 stockholders own shares of
the common stock of InvestArk.

<TABLE>
<CAPTION>
DIVIDENDS PAID PER SHARE
-------------------------
1991 1992 1993
----- ----- -----
<S> <C> <C> <C>
Common Stock................................ $0.75 $0.85 $1.05
</TABLE>

COMPARISON OF RIGHTS OF HOLDERS OF INVESTARK COMMON STOCK AND FIRST UNITED
COMMON STOCK

InvestArk is a corporation organized and existing under the laws of the
State of Arkansas, including the Arkansas Business Corporation Act of 1965.
First United is a corporation organized and existing under the laws of the State
of Arkansas, including the Arkansas Business Corporation Act of 1987. Holders of
InvestArk common stock have the rights, privileges and duties provided by the
1965 Act, while the holders of First United Common Stock have the rights,
privileges and duties provided by the 1987 Act. For a detailed discussion of all
material differences between the rights of security holders of InvestArk, and
the rights of security holders of First United, see "Election by InvestArk
Stockholders under the 1987 Act -- Result of Election".

The holders of InvestArk common stock and First United Common Stock are
both entitled to cumulative voting for directors. Pursuant to First United's
By-Laws, the number of directors of the corporation may not be less than three
nor more than twenty-five. The InvestArk By-Laws require that the number of
directors may not be less than three nor more than ten. Furthermore, holders of
InvestArk common stock and First United common stock do not have preemptive
rights with respect to issuance of additional securities.

Both InvestArk and First United have corporate power to indemnify their
officers and directors with respect to certain liabilities. Under the 1987 Act,
the ability to indemnify officers and directors with respect to liabilities
incurred by them in their conduct and good faith of the business of the
corporation is broader than under the 1965 Act. Such power is limited, however,
by applicable federal laws and regulations including federal banking laws and
regulations and the applicable state law.

First United's Articles of Incorporation contain a paragraph that may have
the effect of operating as an anti-takeover provision. Paragraph SEVENTH
contains a super-majority voting requirement of two-thirds ( 2/3) of all shares
issued and outstanding that are entitled to vote for approval of 1) a merger or
share exchange with another corporation unless such merger or share exchange can
be effected under the authority of state law without shareholder approval, 2) a
transaction to sell, exchange, lease or otherwise dispose of all, or
substantially all, of the corporation's assets and property except where
accomplished in the usual and regular course of business, 3) a transaction
effecting a dissolution or liquidation of the corporation, or 4) any amendment
of the Articles of Incorporation. The InvestArk Articles of Incorporation do not
contain a like provision. However, under the 1965 Act, InvestArk must have a
two-thirds ( 2/3) majority vote of all votes entitled to be cast to adopt a
merger.

47
<PAGE> 52

LEGAL MATTERS AND EXPERTS

LEGAL OPINIONS

The legality of the First United Common Stock to be issued after the Merger
has been consummated by and between First United and InvestArk will be passed
upon for First United by Ivester, Skinner & Camp, P.A., 111 Center Street, Suite
1200, Little Rock, Arkansas 72201. Certain tax matters relating to the Merger
will be passed upon by Shults, Ray & Kurrus, 200 West Capitol Avenue, Suite
1600, Little Rock, Arkansas 72201.

EXPERTS

The consolidated financial statements of First United Bancshares, Inc. as
of December 31, 1993 and 1992 and for each of the years in the three-year period
ended December 31, 1993 are incorporated by reference in this Proxy Statement
and have been audited by Arthur Andersen & Co., independent public accountants,
as indicated in their reports with respect thereto, and such consolidated
financial statements of First United have been incorporated by reference herein
in reliance upon the authority of said firm as experts in accounting and
auditing.

The consolidated financial statements of InvestArk Bankshares, Inc. as of
December 31, 1993, 1992 and 1991 have been audited by Martin and Company,
independent auditors, whose report thereon appear elsewhere herein and in the
Registration Statement and have been so included in reliance upon the report of
Martin and Company given upon their authority of said firm as experts in
accounting and auditing.

GENERAL

As of the date of this Proxy Statement, the board of directors of First
United or InvestArk does not intend to present, and has not been informed that
another person intends to present, any matter for action at either meeting of
stockholders other than as discussed in this Proxy Statement. If any other
matters properly come before the meeting, it is intended that the holders of the
proxies will act in accordance with their best judgment.

48
<PAGE> 53

INDEX TO INVESTARK FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Financial Statements -- December 31, 1993, 1992 and 1991
Report of Independent Auditors...................................................... F-2
Consolidated Balance Sheets......................................................... F-3
Consolidated Statements of Income................................................... F-4
Consolidated Statements of Stockholders' Equity..................................... F-5
Consolidated Statements of Cash Flows............................................... F-6
Notes to Financial Statements....................................................... F-7
</TABLE>

F-1
<PAGE> 54

INDEPENDENT AUDITOR'S REPORT

The Board of Directors
Investark Bankshares, Inc.
Stuttgart, Arkansas

We have audited the consolidated balance sheets of Investark Bankshares,
Inc. and subsidiaries at December 31, 1993 and 1992, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the years in the three year period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Investark
Bankshares, Inc. and subsidiaries, at December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
years in the three year period ended December 31, 1993, in conformity with
generally accepted accounting principles.

Martin & Company
Certified Public Accountants

January 28, 1994

F-2
<PAGE> 55

INVESTARK BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992

ASSETS

<TABLE>
<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
Cash and due from banks......................................... $ 7,214,200 $ 12,938,041
Interest bearing deposits with other Banks...................... 1,180,607 1,744,435
Federal funds sold.............................................. 425,000
Investment securities -- at amortized cost (approximate fair
value of $90,264,913 and $85,407,531 at December 31, 1993 and
1992, respectively)........................................... 87,863,744 82,461,782
Loans........................................................... 84,524,871 87,025,647
Less: Unearned interest....................................... (29,095) (46,944)
Allowance for loan losses............................... (1,493,554) (1,073,186)
------------ ------------
83,002,222 85,905,517
------------ ------------
Premises and equipment, less allowance for depreciation......... 2,721,970 2,956,535
Accrued interest receivable and other assets.................... 2,921,623 4,508,206
------------ ------------
$184,904,366 $190,939,516
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand........................................................ $ 26,951,112 $ 26,677,868
Savings and interest-bearing demand........................... 63,458,333 62,423,952
Time deposits................................................. 72,890,494 81,000,303
------------ ------------
163,299,939 170,102,123
------------ ------------
Borrowed funds.................................................. 3,911,988 4,215,540
Accrued interest payable and other liabilities.................. 812,027 745,669
Minority interest in subsidiaries............................... 15,100 56,078
------------ ------------
Total liabilities............................................... 168,039,054 175,119,410
------------ ------------
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock, $10 par value; 5,000,000 shares authorized,
219,122 shares issued, 215,960 and 215,356 shares
outstanding................................................ 2,191,220 2,191,220
Surplus....................................................... 1,105,133 1,098,929
Retained earnings............................................. 13,719,965 12,690,099
Less: Treasury stock, 3,162 and 3,766 shares at cost.......... (129,964) (157,144)
Net unrealized loss on marketable equity securities...... (21,042) (2,998)
------------ ------------
Total stockholders' equity...................................... 16,865,312 15,820,106
------------ ------------
$184,904,366 $190,939,516
------------ ------------
------------ ------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-3
<PAGE> 56

INVESTARK BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Interest income:
Loans, including fees................................. $6,577,419 $7,873,808 $9,240,762
U. S. Government obligations.......................... 852,087 864,223 658,113
Obligations of federal agencies and corporations...... 2,116,520 2,194,579 2,156,191
Obligations of states and political subdivisions...... 1,433,853 1,322,492 1,120,763
Other securities...................................... 1,553,915 1,867,193 2,633,943
Federal funds sold and securities purchased under
resell agreements.................................. 20,930 65,979 150,115
---------- ---------- ----------
12,554,724 14,188,274 15,959,887
---------- ---------- ----------
Interest expense:
Deposits.............................................. 4,921,914 6,163,074 8,714,734
Borrowed funds........................................ 123,246 206,159 467,660
---------- ---------- ----------
5,045,160 6,369,233 9,182,394
---------- ---------- ----------
Net interest income..................................... 7,509,564 7,819,041 6,777,493
Provision for credit losses............................. 600,000 64,491 1,463,398
---------- ---------- ----------
Net interest income after provision for credit losses... 6,909,564 7,754,550 5,314,095
---------- ---------- ----------
Noninterest income:
Trust department fees................................. 515,135 488,510 469,848
Service charges -- deposits........................... 347,725 380,190 397,121
Other service charges and fees........................ 90,000 67,676 81,570
Other................................................. 555,787 567,535 666,435
---------- ---------- ----------
1,508,647 1,503,911 1,614,974
---------- ---------- ----------
Noninterest expense:
Salaries.............................................. 2,188,969 2,088,131 2,039,672
Employee benefits..................................... 757,828 453,918 411,830
Net occupancy......................................... 427,220 422,272 460,821
Equipment............................................. 453,475 432,458 369,521
Other................................................. 3,160,034 3,119,775 2,608,291
---------- ---------- ----------
6,987,526 6,516,554 5,890,135
---------- ---------- ----------
Income before income taxes and minority interest in net
earnings of consolidated subsidiaries................. 1,430,685 2,741,907 1,038,934
Provision for income taxes.............................. 147,753 500,721 128,271
---------- ---------- ----------
Income before minority interest in net earnings of
consolidated subsidiaries............................. 1,282,932 2,241,186 910,663
Minority interest in net earnings of consolidated
subsidiaries.......................................... 5,106 7,964 4,097
---------- ---------- ----------
Net income.............................................. $1,277,826 $2,233,222 $ 906,566
---------- ---------- ----------
---------- ---------- ----------
Net income per share.................................... $ 5.93 $ 10.33 $ 4.19
---------- ---------- ----------
---------- ---------- ----------
Average number of shares outstanding during the year.... 215,450 216,235 216,212
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE> 57

INVESTARK BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<TABLE>
<CAPTION>
ALLOWANCE FOR
COMMON STOCK UNREALIZED LOSSES
------------------- RETAINED TREASURY ON MARKETABLE
SHARES AMOUNT SURPLUS EARNINGS STOCK EQUITY SECURITIES TOTAL
------- ---------- ---------- ----------- --------- ----------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance -- December 31, 1990...... 219,122 $2,191,220 $1,098,929 $ 9,949,919 $(118,624) $ (19,589) $13,101,855
Net income...................... 906,566 906,566
Cash dividends $.90 per share... (194,566) (194,566)
Sale of marketable equity
securities................... 19,589 19,589
------- ---------- ---------- ----------- --------- ----------------- -----------
Balance -- December 31, 1991...... 219,122 2,191,220 1,098,929 10,661,919 (118,624) 0 13,833,444
Net income...................... 2,233,222 2,233,222
Cash dividends $.95 per share... (205,042) (205,042)
Increase in unrealized loss on
marketable equity
securities................... (2,998) (2,998)
Purchase 856 common shares...... (38,520) (38,520)
------- ---------- ---------- ----------- --------- ----------------- -----------
Balance -- December 31, 1992...... 219,122 2,191,220 1,098,929 12,690,099 (157,144) (2,998) 15,820,106
Net income...................... 1,277,826 1,277,826
Cash dividends
$1.15 per share.............. (247,960) (247,960)
Increase in unrealized loss of
marketable equity
securities................... (18,044) (18,044)
Sale of 604 common shares....... 6,204 27,180 33,384
------- ---------- ---------- ----------- --------- ----------------- -----------
Balance -- December 31, 1993...... 219,122 $2,191,220 $1,105,133 $13,719,965 $(129,964) $ (21,042) $16,865,312
------- ---------- ---------- ----------- --------- ----------------- -----------
------- ---------- ---------- ----------- --------- ----------------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE> 58

INVESTARK BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Operating activities:
Net income...................................... $ 1,277,826 $ 2,233,222 $ 906,566
----------- ----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for credit losses.................. 600,000 64,491 1,463,398
Depreciation................................. 552,153 529,097 467,406
Writedown of other real estate and leased
equipment.................................. 205,927 454,170 364,236
Net amortization (accretion) of investment
security premiums (discounts).............. 22,144 (3,344) (135,264)
Net gain on disposition of investment
securities................................. (75,609) (15,771) (404,126)
Deferred income tax benefit.................. (278,044) (6,315) (61,466)
Minority interest in subsidiaries'
undistributed
income..................................... 5,106 7,964 4,097
(Increase) decrease in interest receivable
and other assets........................... 415,887 687,464 (2,263,412)
Increase (decrease) in interest payable and
other liabilities.......................... 20,275 (784,344) (334,609)
----------- ----------- -----------
Total adjustments....................... 1,467,839 933,412 (899,740)
----------- ----------- -----------
Net cash provided by operating activities......... 2,745,665 3,166,634 6,826
----------- ----------- -----------
Cash flows from investing activities:
Proceeds from maturities of CD's -- other
banks........................................ 1,060,178 291,342 2,551,737
Purchase of CD's -- other banks................. (496,000)
Proceeds from disposition of investment
securities................................... 29,638,082 20,440,815 22,433,415
Purchase of investment securities............... (35,004,973) (30,646,818) (19,103,182)
Net (increase) decrease in loans................ 2,303,295 775,175 (908,807)
Proceeds from sale of equipment and other
real estate.................................. 1,291,285 1,104,105 209,686
Purchase of premises and equipment.............. (366,061) (236,121) (640,334)
----------- ----------- -----------
Net cash provided (used) by investing
activities...................................... (1,574,194) (8,271,502) 4,542,515
----------- ----------- -----------
Cash flows from financing activities:
Net increase in demand deposits, NOW and savings
deposits..................................... 1,307,625 6,866,620 2,681,621
Net increase (decrease) in time deposits........ (8,109,809) (2,836,351) 3,454,392
Proceeds of long-term debt...................... 860,764
Repayment of borrowings......................... (851,034) (369,699)
Increase (decrease) in short-term borrowings.... (313,282) (3,365,602) 116,641
Payment on capital notes........................ (300,000) (30,000)
Purchase of Treasury Stock...................... (38,520)
Proceeds from sale of treasury stock............ 33,384
Cash dividends.................................. (247,960) (205,042) (194,566)
----------- ----------- -----------
Net cash provided (used) by financing
activities...................................... (7,320,312) (248,594) 6,028,088
----------- ----------- -----------
Net increase (decrease) in cash and equivalents... (6,148,841) (5,353,462) 10,577,429
Cash and cash equivalents at beginning of year.... 13,363,041 18,716,503 8,139,074
----------- ----------- -----------
Cash and cash equivalents at end of year.......... $ 7,214,200 $13,363,041 $18,716,503
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE> 59

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting principles and reporting policies followed by Investark
Bankshares, Inc. and its subsidiaries (the "Company") conform with generally
accepted accounting principles and with general practices within the financial
services industry. The following is a description of the more significant of
these policies:

Principles of consolidation

The consolidated financial statements include the accounts of the Company
and its subsidiaries, First Stuttgart Bank and Trust Company (formerly First
National Bank in Stuttgart), Stuttgart, Arkansas (100% owned) and of The Bank of
North Arkansas, Melbourne, Arkansas (99.7% owned). All significant intercompany
balances and transactions have been eliminated.

Cash flows

For purposes of reporting cash flows, cash and cash equivalents include
cash and due from banks, and federal funds sold.

Investment securities

Investment securities, except for investments in mutual funds, are stated
at cost adjusted for amortization of premiums and accretion of discounts.
Investments in mutual funds are carried at the lower of cost or market. Gains
and losses on the sale of investment securities are computed using the specific
identification method.

Allowance for loan losses

The allowance for loan losses is established through charges to expense and
is maintained at a level which, in management's judgement, is necessary to
provide for future losses from the current portfolios. This judgement is based
on analysis of the current and expected economic conditions, risk
characteristics of the loan portfolios and prior loan loss experience in
relation to loans outstanding.

Interest on loans

Interest on installment loans is recognized as income over the lives of the
loans by the sum-of-the-months-digits and simple interest methods. The results
of using the sum-of-the-months-digits method do not differ materially from those
obtained by using the interest method. Interest on other loans is recognized
based on the principal amounts outstanding. The accrual of interest on loans is
discontinued when, in the opinion of management, there is doubt as to the
ability of the borrower to pay interest or principal. The balances of non-
accrual loans were $474,067 and $446,379 at December 31, 1993 and 1992. Interest
previously accrued but uncollected on these loans was $148,031 and $51,142 at
December 31, 1993 and 1992.

Premises and equipment

Premises and equipment are stated at cost, less accumulated depreciation.
Depreciation is computed principally by the straight-line method.

Real estate owned other than premises

Real estate owned other than premises consists primarily of property
acquired in settlement of loans These properties are initially recorded at the
lower of cost or fair value as determined by appraisal at the date acquired.
Losses arising from such acquisitions are charged to the allowance for loan
losses. Carrying values are subsequently reduced through a charge to operations
when current appraisals indicate a decline in value.

F-7
<PAGE> 60

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Fair value is based on the estimated net amount realizable on disposition of the
property. Amounts included in other assets at December 31, 1993 and 1992, were
$142,874 and $1,241,534, respectively.

Income taxes

Provisions for income taxes are based on amounts reported in the statements
of income (after exclusion of non-taxable income such as interest on state and
municipal securities) and include deferred taxes on temporary differences in the
recognition of income and expense for tax and financial statement purposes.
Deferred taxes are computed using the liability method as prescribed in SFAS No.
109, "Accounting for Income Taxes."

Off-balance-sheet financial instruments

In the ordinary course of business the Company has entered into
off-balance-sheet financial instruments consisting of commitments to extend
credit, commitments under credit card arrangements, commercial letters of credit
and standby letters of credit. Such financial instruments are recorded in the
financial statements when they become payable.

Trust Department assets

In accordance with the usual practice of banks, property other than cash
deposits held by the Company's subsidiary bank's Trust Department in a fiduciary
or agency capacity for customers, is not included in the consolidated financial
statements.

Reclassification

Certain 1992 amounts have been reclassified to conform with the 1993
presentation.

NOTE 2: INVESTMENT SECURITIES

The book and approximate fair values of investment securities are
summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1993
------------------------------------------------------
BOOK UNREALIZED UNREALIZED APPROXIMATE
VALUE GAINS LOSSES FAIR VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
U. S. Government........................... $18,030,129 $ 555,924 $ (15,504) $18,570,549
Federal agencies and corporations.......... 23,773,613 236,020 (58,853) 23,950,780
States and political subdivisions.......... 24,699,566 1,138,754 (52,828) 25,785,492
Other securities........................... 7,900,568 311,839 (5,043) 8,207,364
Mortgage-backed securities................. 10,074,910 335,498 (23,596) 10,386,812
----------- ---------- ---------- -----------
Total debt securities...................... 84,478,786 2,578,035 (155,824) 86,900,997
Federal Reserve Bank stock and other equity
securities............................... 3,384,958 (21,042) 3,363,916
----------- ---------- ---------- -----------
$87,863,744 $2,578,035 $ (176,866) $90,264,913
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>

F-8
<PAGE> 61

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31, 1992
------------------------------------------------------
BOOK UNREALIZED UNREALIZED APPROXIMATE
VALUE GAINS LOSSES FAIR VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
U. S. Government........................... $14,742,329 $ 495,362 $ (4,973) $15,232,718
Federal agencies and corporations.......... 20,335,711 411,055 (98,673) 20,648,093
States and political subdivisions.......... 18,440,150 719,055 (39,473) 19,119,732
Other securities........................... 16,612,521 1,065,524 (18,474) 17,659,571
Mortgage-backed securities................. 11,872,671 456,403 (37,059) 12,292,015
----------- ---------- ---------- -----------
Total debt securities...................... 82,003,382 3,147,399 (198,652) 84,952,129
Federal Reserve Bank stock and other equity
securities............................... 458,400 (2,998) 455,402
----------- ---------- ---------- -----------
$82,461,782 $3,147,399 $ (201,650) $85,407,531
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>

The book and approximate fair values of investment securities at December
31, 1993 and 1992, by contractual maturity, are shown below. Actual maturities
may differ from contractual maturities due to the existence of call or
prepayment options.

<TABLE>
<CAPTION>
DECEMBER 31, 1993 DECEMBER 31, 1992
---------------------------- ----------------------------
APPROXIMATE APPROXIMATE
BOOK VALUE FAIR VALUE BOOK VALUE FAIR VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Due in one year or less............... $11,883,780 $12,063,150 $14,794,911 $15,008,930
Due after one year through five
years............................... 49,692,189 50,900,606 37,230,012 38,798,851
Due after five years through ten
years............................... 9,671,306 10,142,426 13,483,007 13,984,579
Due after ten years................... 3,156,601 3,408,003 4,622,783 4,867,753
Mortgage-backed securities............ 10,074,910 10,386,812 11,872,669 12,292,016
------------ ------------ ------------ ------------
Total debt securities................. 84,478,786 86,900,997 82,003,382 84,952,129
Equity securities..................... 3,384,958 3,363,916 458,400 455,402
------------ ------------ ------------ ------------
$87,863,744 $90,264,913 $82,461,782 $85,407,531
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>

Proceeds from disposition of investment securities during 1993 and 1992
were as follows:

<TABLE>
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
Proceeds from disposition (primarily maturities and
calls).................................................. $29,638,082 $20,440,815
Realized gains on disposition............................. 76,826 21,773
Realized losses on disposition............................ 1,217 6,002
</TABLE>

The Company has the intent and ability to hold securities which may have
book values greater than fair values to their maturity date.

Investment securities with carrying amounts of $31,289,667 and $34,330,551
at December 31, 1993 and 1992, respectively, were pledged to secure public
deposits and for other purposes required or permitted by law.

F-9
<PAGE> 62

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 3: LOANS

Major classifications of loans are as follows:

<TABLE>
<CAPTION>
DECEMBER DECEMBER
31, 31,
1993 1992
---------- ----------
<S> <C> <C>
Real estate................................................ $37,955,597 $35,492,564
Agricultural production.................................... 14,099,782 12,467,213
Commercial................................................. 19,800,236 24,262,093
Loans to individuals....................................... 11,318,623 12,420,292
Other (including overdrafts)............................... 1,350,633 2,383,485
----------- -----------
84,524,871 87,025,647
Less: unearned interest.................................... 29,095 46,944
----------- -----------
Net loans.................................................. 84,495,776 86,978,703
Less: allowance for possible loan losses................... 1,493,554 1,073,186
----------- -----------
$83,002,222 $85,905,517
----------- -----------
----------- -----------
</TABLE>

The Company's subsidiary banks grant agribusiness, commercial and other
loans throughout their market areas. Although they have diversified loan
portfolios, a substantial portion of their borrowers' ability to honor their
contracts is dependent upon the agribusiness economic sector.

NOTE 4: ALLOWANCE FOR POSSIBLE LOAN LOSSES

Changes in the allowance for possible loan losses were as follows:

<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Balance -- Beginning of year................................. $1,073,186 $1,184,181
Provision charged to operations.............................. 600,000 64,491
Recoveries................................................... 75,719 175,998
Loans charged-off............................................ (255,351) (351,484)
---------- ----------
Balance -- End of year....................................... $1,493,554 $1,073,186
---------- ----------
---------- ----------
</TABLE>

NOTE 5: PREMISES AND EQUIPMENT

Major classifications of these assets are summarized as follows:

<TABLE>
<CAPTION>
USEFUL LIVES
------------
1993 1992 (YEARS)
--------- --------- ------------
<S> <C> <C> <C>
Land............................................. $ 619,437 $ 627,937
Buildings and improvements....................... 3,243,733 3,696,562 5-40
Furniture and equipment.......................... 2,250,439 3,219,031 3-15
--------- ---------
6,113,609 7,543,530
Less: allowance for depreciation................. 3,391,639 4,586,995
--------- ---------
$2,721,970 $2,956,535
--------- ---------
--------- ---------
</TABLE>

Depreciation expense was $552,153, $529,097 and $467,406 in 1993, 1992 and
1991, respectively.

F-10
<PAGE> 63

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 6: LEASES

First Stuttgart Bank is lessor of computer equipment under operating leases
which expire during 1994. Minimum future rental payments receivable under these
noncancellable leases are:

The lessees are to provide all maintenance to the equipment under the terms
of the leases.

NOTE 7: INCOME TAXES

The income tax provision, including taxes on securities gains and losses
consists of the following:

<TABLE>
<CAPTION>
1993 1992 1991
--------- -------- --------
<S> <C> <C> <C>
Federal income tax
Currently payable................................ $ 425,797 $507,036 $189,737
Deferred......................................... (278,044) (6,315) (61,466)
--------- -------- --------
$ 147,753 $500,721 $128,271
--------- -------- --------
--------- -------- --------
</TABLE>

The tax effect of the temporary differences which comprise deferred income
taxes are as follows:

<TABLE>
<CAPTION>
1993 1992 1991
--------- -------- --------
<S> <C> <C> <C>
Temporary differences in tax and book
reporting of bad debts...................... $(195,799)
Temporary differences in tax and book
reporting of security transactions.......... (917) $ (8,868) $(15,632)
Depreciation expense different for tax and
book purposes............................... (61,201) 6,706 30,049
Temporary differences in tax and book
reporting for other real estate
transactions................................ 11,450 (10,957) (75,883)
Effect of recognizing loss on pension plan
curtailment................................. (73,100)
Other -- net.................................. 41,523 6,804
--------- -------- --------
$(278,044) $ (6,315) $(61,466)
--------- -------- --------
--------- -------- --------
</TABLE>

The income tax provision differs from the statutory rate primarily because
of the income tax treatment of exempt income and provision for loan losses and
use of alternative minimum tax credits.

NOTE 8: EMPLOYEE BENEFIT PLANS

First Stuttgart Bank has a defined benefit pension plan which covers
substantially all its employees. The benefits are based on years of service and
the employee's compensation during the last five years of employment. The
funding policy is to contribute annually an amount that does not exceed the
maximum amount deductible for federal income tax purposes. Contributions are
intended to provide not only for benefits attributed to service to date but also
for those expected to be earned in the future.

F-11
<PAGE> 64

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following tables set forth the plan's funded status and amounts
recognized in the Bank's balance sheet at December 31, 1993 and 1992 (amounts in
thousands):

<TABLE>
<CAPTION>
1993 1992
------ ------
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits of
$860 and $770............................................... $ 879 $ 781
------ ------
------ ------
Projected benefit obligation for service rendered to date...... $1,071 $ 957
Plan assets at fair value...................................... 1,117 1,008
------ ------
Plan assets in excess of projected benefit obligation.......... 46 51
Unrecognized prior service cost................................ (27) (28)
Unrecognized net obligation at January 1, 1993 and 1992, being
recognized over 22 years.................................... (42) (45)
Unrecognized net loss.......................................... 116 110
------ ------
Prepaid pension cost........................................... $ 93 $ 88
------ ------
------ ------
</TABLE>

Net pension cost for 1993, 1992 and 1991 included the following components:

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Service costs-benefits earned during the period........... $ 55 $ 55 $ 59
Interest cost on projected benefit obligation............. 67 59 53
Expected return on plan assets............................ (71) (63) (60)
Amortization of:
Prior service cost...................................... (1) (1) (1)
Unrecognized net obligation existing at January 1, 1993,
1992 and 1991........................................ (3) (3) (3)
Gain.................................................... 1 2 5
---- ---- ----
Net pension cost.......................................... $ 48 $ 49 $ 53
---- ---- ----
---- ---- ----
</TABLE>

The weighted-average discount rate and the rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation were 7.0% and 4.5% respectively. The expected
long-term rate of return on assets was 7.0%.

In connection with the merger with First United Bancshares, First Stuttgart
Bank is to terminate its defined benefit plan during 1994. Under generally
accepted accounting principles, if the net effect of the termination is a loss,
it should be recognized when the termination is probable and the effects are
reasonably estimable. Accordingly, a loss of $215,000 on the termination of this
plan is included in the accompanying 1993 statement of income.

The Bank of North Arkansas has a defined contribution employee benefit
plan, qualified under IRC Section 401(k) that covers all employees, with the
exception of employees who are highly compensated. Contributions to the plan are
based on the total amount of salary reduction the employee elects to defer, a
discretionary matching contribution equal to a percentage of the amount the
employee elects to defer, which percentage will be determined each year by the
employer, and a discretionary amount determined each year by the employer. To
share in the matching and discretionary contribution, the employee must complete
a year of service and be actively employed on the last day of the Plan Year. The
amount of pension expense was $13,345 and $15,606 for 1993 and 1992,
respectively.

F-12
<PAGE> 65

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

Cash and due from banks and short-term investments:
For these short-term items, the carrying amount is a reasonable estimate of
fair value.

Investment securities:
Fair values are based on quoted market prices, if available. If a quoted
market price is not available, fair value is estimated using quoted market
prices for similar securities.

Loans:
The fair value of loans is estimated by discounting the expected future
cash flows using current rates at which similar loans would be made to
borrowers with similar credit ratings and for similar remaining maturities.

Deposit liabilities:
The fair value of demand deposits, savings accounts and certain money
market deposits is the amount payable on demand at the reporting date. The
fair value of fixed-maturity certificates of deposit is estimated using the
rates currently offered for deposits with similar remaining maturities.

Borrowed funds:
For borrowings with fixed interest rates, fair value is estimated using the
rates currently available to the Company's subsidiary banks for debt with
similar terms and remaining maturities. For floating rate debt the fair
value approximates the recorded liability.

Commitments to extend credit and letters of credit:
The fair value of commitments is estimated using the fees currently charged
to enter into similar arrangements, taking into account the remaining terms
of the agreements and the present creditworthiness of the counterparties.
For fixed rate loan commitments, fair value also considers the difference
between current levels of interest rates and committed rates. The fair
value of letters of credit is based on the fees currently charged for
similar agreements or on the estimated cost to terminate them or otherwise
settle the obligations with the counterparties at the reporting date.

F-13
<PAGE> 66

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The estimated fair values of the Company's financial instruments at
December 31, 1993 and 1992 are as follows (amounts in thousands):

<TABLE>
<CAPTION>
1993 1992
--------------------- ---------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Financial assets:
Cash and equivalents.......................... $ 7,214 $ 7,214 $ 13,363 $ 13,363
Short-term investments........................ 1,181 1,181 1,744 1,744
Investment securities......................... 87,864 90,286 82,461 85,410
Loans......................................... 84,496 84,682 86,979 88,730
Less: allowance for loan losses............... (1,494) (1,494) (1,073) (1,073)
-------- -------- -------- --------
Net loans..................................... $ 83,002 $ 83,188 $ 85,906 $ 87,657
-------- -------- -------- --------
-------- -------- -------- --------
Financial liabilities:
Deposits...................................... $163,300 $163,648 $170,102 $107,706
Borrowed funds................................ 3,912 3,912 4,216 4,216
Off-balance-sheet instruments:
Commitments to extend credit.................. 21,637 21,637 18,375 18,375
Letters of credit............................. 647 647 472 472
</TABLE>

NOTE 10: NOTES PAYABLE

Borrowed funds at December 31, 1993 and 1992 include the following:

<TABLE>
<CAPTION>
1993 1992
-------- --------
<S> <C> <C>
Note payable, 5.5% interest, due monthly through May 2003,
secured by pledge of assets.................................. $320,133
Note payable, 4.4% interest, due monthly through May 1998,
secured by pledge of assets.................................. 189,597
Note payable, 6% interest, due in annual installments of
$190,000 plus interest through 1998, secured by 79,762 shares
of stock of The Bank of North Arkansas....................... $500,000
-------- --------
$509,730 $500,000
-------- --------
-------- --------
</TABLE>

Scheduled maturities after December 31, 1993 are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER
31, AMOUNT
- ----------- --------
<S> <C>
1994............................................... $ 66,396
1995............................................... 69,698
1996............................................... 73,166
1997............................................... 76,809
1998............................................... 52,731
After 1998......................................... 170,930
--------
$509,730
--------
--------
</TABLE>

F-14
<PAGE> 67

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 11: COMMITMENTS AND CONTINGENCIES

The consolidated financial statements do not reflect various commitments
and contingent liabilities which arise in the normal course of the Company's
business and which involve elements of credit risk, interest rate risk and
liquidity risk. These commitments and contingent liabilities consist of
commitments to extend credit and letters of credit. A summary of the commitments
and contingent liabilities at December 31, 1993 and 1992 are summarized below:

<TABLE>
<CAPTION>
1993 1992
---------- ----------
<S> <C> <C>
Commitments to extend credit............................... $18,411,675 $15,725,759
Credit card arrangements................................... 3,225,782 2,648,940
Letters of credit.......................................... 646,938 472,038
----------- -----------
$22,284,395 $18,846,737
----------- -----------
----------- -----------
</TABLE>

Commitments to extend credit, credit card arrangements and letters of
credit all include some exposure to credit loss in the event of nonperformance
of the customer. The Company's credit policies and procedures for credit
commitments and financial guarantees are the same as those for extensions of
credit that are recorded in the consolidated financial statements. Because these
instruments have fixed maturity dates, and because many of them expire without
being drawn upon, they do not generally present any significant liquidity risk
to the Company.

In the ordinary course of business, there are various legal proceedings
involving the Company and its subsidiaries, most of which are considered
litigation incidental to the conduct of business. These proceedings include,
among other matters, defense of routine corporate, employment, banking and
lender liability related litigation. Management, after consulting with legal
counsel and based on the facts available and proceedings to date, some of which
are preliminary, is of the opinion that the ultimate resolution of these
proceedings will not have a material adverse effect on the consolidated
financial position of the Company.

NOTE 12: CONCENTRATIONS OF CREDIT

Substantially all of the Company's loans, commitments to loan and letters
of credit have been granted to customers in their trade area who are also
depositors of the Company. The concentrations of credit by type of loan are set
forth in Note 3. The distribution of commitments to extend credit approximates
the distribution of loans outstanding.

NOTE 13: DIVIDEND RESTRICTIONS

As State Banks, First Stuttgart Bank and The Bank of North Arkansas are
each restricted in the amount of dividends they may pay in any year without
prior permission from the Arkansas Bank Commissioner to fifty percent of its net
income for the year. The Banks' ability to pay dividends is also restricted by
the minimum capital requirement of their regulatory agencies which require them
to maintain at least an 8.25% risk-based capital ratio.

NOTE 14: RELATED PARTY TRANSACTIONS

Some of the directors and executive officers and the companies in which
they had a significant interest were customers of and had transactions with the
Company's subsidiary banks. Such transactions were made in the ordinary course
of the Banks' business on substantially the same terms and conditions, including
interest rates and collateral, as those prevailing at the same time for
comparable transactions with other customers and did not, in the opinion of
management, involve more than a normal credit risk or present other unfavorable
features. The aggregate amount of loans to such related parties amounted to
$2,212,481 and $3,345,252 at

F-15
<PAGE> 68

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

December 31, 1993 and 1992, respectively. Transactions during 1993 included new
loans amounting to $2,459,497 and repayments amounting to $3,592,268.

NOTE 15: SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid $5,166,679 and $7,031,918 in interest on deposits and
other borrowings during 1993 and 1992, respectively, and income taxes of
$289,000 and $470,000 for 1993 and 1992.

NOTE 16: PENDING MERGER

On December 17, 1993 the Company entered into an agreement to merge with
First United Bancshares, Inc. of El Dorado, Arkansas. Under the terms of this
agreement First United would acquire all of the outstanding stock of Investark
Bankshares, Inc. through issuance of First United common stock valued at
approximately $26,125,000. This transaction is expected to be consummated in the
first half of 1994.

NOTE 17: EFFECTS OF RECENTLY ADOPTED ACCOUNTING STANDARDS

During 1993, the Financial Accounting Standards Board (FASB) issued SFAS
No. 114 (Accounting by Creditors for Impairment of a Loan) which becomes
effective beginning in 1995. This statement requires that impaired loans that
are within the scope of the Statement essentially be measured based on the
present value of expected future cash flows discounted at the loan's effective
rate, or as a practical expedient, at the loan's observable market price or the
fair value of the collateral if the loan is collateral dependent. Management has
not determined the effect this statement will have when adopted.

In 1993, the Financial Accounting Standards Board (FASB) issued SFAS No.
115, (Accounting for Certain Investments in Debt and Equity Securities), that
becomes effective for fiscal years beginning after 1993. This Statement
addresses the accounting and reporting for investments in debt and certain
equity securities. Debt securities not classified as trading account securities
or investment securities expected to be held to maturity and all equity
securities will be classified as available for sale and are reported at fair
value, with net unrealized gains and losses reported, net of tax, as a separate
component of stockholders' equity. InvestArk will apply the new rules starting
in the first quarter of 1994 and believes the impact of adopting this statement
will not be material to its financial position or results of operations.

F-16
<PAGE> 69

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 18: CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

The financial position of Investark Bankshares, Inc. (parent company only),
its results of operations and cash flows are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1993 1992
---------- ----------
<S> <C> <C>
Condensed financial position:
Assets:
Cash............................................................. $ 52,090 $ 94,395
Investment in subsidiaries....................................... 16,826,950 16,174,658
Other assets..................................................... 185,811 137,195
----------- -----------
Total assets............................................. $17,064,851 $16,406,248
----------- -----------
----------- -----------
Liabilities and capital accounts:
Long-term debt................................................... $ 500,000
Other liabilities................................................ $ 199,539 86,142
----------- -----------
Total liabilities........................................ 199,539 586,142
----------- -----------
Common stock....................................................... 2,191,220 2,191,220
Surplus............................................................ 1,105,133 1,098,929
Retained earnings.................................................. 13,719,965 12,690,099
Treasury stock..................................................... (129,964) (157,144)
Net unrealized loss on marketable equity securities................ (21,042) (2,998)
----------- -----------
Total capital............................................ 16,865,312 15,820,106
----------- -----------
Total liabilities and capital............................ $17,064,851 $16,406,248
----------- -----------
----------- -----------
</TABLE>

F-17
<PAGE> 70

INVESTARK BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1993 1992 1991
--------- ---------- ---------
<S> <C> <C> <C>
Condensed operating results:
Dividends from subsidiaries.......................... $ 703,072 $ 734,746 $ 245,766
Other income......................................... 2,726 3,790
---------- ---------- ---------
703,072 737,472 249,556
---------- ---------- ---------
Interest............................................. 15,133 55,437 73,924
Other expense........................................ 70,978 54,611 29,718
---------- ---------- ---------
86,111 110,048 103,642
---------- ---------- ---------
Income before tax benefit and equity in undistributed
income of subsidiaries............................... 616,961 627,424 145,914
Income tax benefit..................................... (31,685) (35,412) (46,937)
---------- ---------- ---------
Income before equity in undistributed income of
subsidiaries......................................... 648,646 662,836 192,851
Equity in undistributed income of subsidiaries......... 629,180 1,570,386 713,715
---------- ---------- ---------
Net income............................................. $1,277,826 $2,233,222 $ 906,566
---------- ---------- ---------
---------- ---------- ---------
Condensed statements of cash flows:
Cash flows from operating activities:
Net income........................................ $1,277,826 $2,233,222 $ 906,566
Undistributed income.............................. (629,180) (1,570,386) (713,715)
Gain on sale of stock............................. (1,896)
Amortization...................................... 3,011 3,011 2,814
(Increase) decrease in other assets............... (75,166) (26,103) 76,595
Increase (decrease) in other liabilities.......... 139,948 (13,431) 5,909
---------- ---------- ---------
716,439 624,417 278,169
---------- ---------- ---------
Cash flows from investing activities:
Purchase First Stuttgart Bank stock.................. (44,168)
Purchase Bank of North Arkansas stock................ (923) (13,756)
Proceeds from sale of stock.......................... 9,796
---------- ---------- ---------
(44,168) 8,873 (13,756)
---------- ---------- ---------
Cash flows from financing activities:
Sale of treasury stock............................... 33,384
Purchase of treasury stock........................... (38,520)
Proceeds from long-term debt......................... 313,764
Repayment of borrowings.............................. (813,764) (369,699)
Dividends paid....................................... (247,960) (205,042) (194,566)
---------- ---------- ---------
(714,576) (613,261) (194,566)
---------- ---------- ---------
Net increase (decrease) in cash........................ (42,305) 20,029 69,847
Cash beginning of year................................. 94,395 74,366 4,519
---------- ---------- ---------
Cash at end of year.................................... $ 52,090 $ 94,395 $ 74,366
---------- ---------- ---------
---------- ---------- ---------
Supplementary data for cash flows:
Interest paid........................................ $ 15,133 $ 55,437 $ 95,607
</TABLE>

F-18
<PAGE> 71

APPENDIX I

AGREEMENT AND PLAN OF REORGANIZATION

This Agreement and Plan of Reorganization ("Agreement") is made as of
December 17, 1993 by and between First United Bancshares, Inc. ("United") and
InvestArk Bankshares, Inc. ("InvestArk").

WHEREAS, InvestArk owns ninety nine and seven tenths percent (99.7%) of the
issued and outstanding shares of capital stock of The Bank of North Arkansas,
Melbourne, Arkansas ("North Arkansas") and one hundred percent (100%) of the
issued and outstanding shares of capital stock of First Stuttgart Bank & Trust
Company, Stuttgart, Arkansas ("First Bank"); and

WHEREAS, United desires to acquire one hundred percent (100%) of the
capital stock of InvestArk (the "InvestArk Common Stock") upon the terms and
conditions hereinafter set forth through the merger of InvestArk with and into
United (the "Merger") pursuant to a Plan of Merger in substantially the form
attached hereto as Exhibit A (the "Plan of Merger"); and

WHEREAS, the respective Boards of Directors of United and InvestArk believe
that such proposed Merger and the exchange of shares of United Stock (as defined
in Section 2.01(a) hereof) for the InvestArk Common Stock, pursuant and subject
to the terms of this Agreement and the Plan of Merger (the "Merger Agreements"),
is desirable and in the best short-term and long-term interests of their
respective corporations and shareholders; and

WHEREAS, United and InvestArk desire to make certain representations,
warranties and agreements in connection with the Merger and also to prescribe
various conditions to the Merger;

NOW, THEREFORE, in consideration of the promises and the representations,
warranties and agreements herein contained, the parties hereto agree as follows:

ARTICLE I

THE MERGER

1.01. The Merger. Subject to the terms and conditions of this Agreement,
United and InvestArk agree to effect the Merger of InvestArk with and into
United in accordance with the Arkansas Business Corporation Act (the "ABCA").

1.02. Effective Time of the Merger. Subject to the provisions of the Merger
Agreements, articles of merger (the "Articles of Merger") shall be duly prepared
and executed by United and InvestArk and thereafter delivered to the Secretary
of State of Arkansas for filing, as provided in the ABCA, as soon as practicable
on or after the Closing Date (as defined in Section 1.03). The Merger shall
become effective upon the filing of the Articles of Merger with the Secretary of
State of Arkansas or at such time within two business days thereafter as is
provided in the Articles of Merger (the "Effective Time").

1.03. Closing. The closing of the Merger (the "Closing") will take place at
the offices of United at a time and on a date (the "Closing Date") to be
specified in writing by the parties as soon as reasonably practicable after the
later to occur of all regulatory and other approvals and the expiration of all
waiting periods.

ARTICLE II

EFFECT OF THE MERGER

2.01. Effect on Common Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of
InvestArk Common Stock, but subject to the rights of dissenting shareholders of
InvestArk:

(a) Conversion of InvestArk Common Stock. One hundred percent of the
issued and outstanding shares of InvestArk Common Stock shall be converted
into the right to receive an aggregate amount of

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fully paid and nonassessable shares of voting common stock, $1.00 par
value, of United determined by dividing $26,125,000.00 by the United
Average Price as defined below. Notwithstanding the foregoing, the number
of shares of United common stock to be issued shall not be less than
885,593 and shall not be greater than 985,849. The number of shares of
common stock of United so determined shall be referred to as the United
Stock. The United Average Price shall be the average sales price per share
of United common stock for all trades occurring during the period of 10
trading days on which one or more trades actually takes place and which
ends immediately prior to the second trading day preceding the Closing
Date. Each owner of InvestArk Common Stock shall be entitled to receive a
pro rata portion of the United Stock based upon each owner's pro rata
ownership of the total of outstanding shares of InvestArk Common Stock at
the Effective Time. Fractional shares of United Stock shall not be issued.
Any InvestArk shareholder entitled to receive a fractional share shall
receive a cash payment in lieu thereof equal to the value of the fractional
share based on the United Average Price.

(b) Cancellation of Shares. All shares of InvestArk Common Stock
issued and outstanding immediately prior to the Effective Time shall no
longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each holder of a certificate representing any
such shares shall cease to have any rights with respect thereto, except the
right to receive a pro rata number of shares of United Stock to be issued
in consideration therefor upon the surrender of such certificate in
accordance with the Plan of Merger.

(c) Anti-Dilution. If prior to the Effective Time United shall declare
a stock dividend or subdivide, split up, reclassify or combine its shares
of United common stock or make a distribution on United common stock of any
security, appropriate adjustment or adjustments will be made in the
conversion rate set forth in subsection (a).

(d) Registration. The United Stock shall when issued be subject to and
covered by an effective registration statement as filed under the
Securities Act of 1933 (the "Securities Act") and such issuance shall
comply with any applicable state "Blue Sky" laws.

(e) Termination of 401(k) Plan and Pension Plan. United shall have no
liability to employees or directors of InvestArk, North Arkansas or First
Bank for benefits of such employees or directors of InvestArk, North
Arkansas or First Bank under the North Arkansas 401(k) plan or the First
Bank pension plan. On or before the Closing Date, InvestArk shall and shall
cause North Arkansas and First Bank to take all action necessary and
appropriate to provide for termination of said plans and distribution of
accrued benefits as of June 30, 1994. Such action shall specifically
include, without limitation, entering into written agreements, in a form
and for amounts satisfactory to United, with all participants in and
beneficiaries of said plans in which each plan participant and beneficiary
agrees (1) to accept such distribution in full satisfaction of all benefits
due and rights under said plans; (2) that the participant's or
beneficiary's distribution is equal to the present value of said
participant's or beneficiary's benefits due or rights under the plans, and
(4) to release InvestArk, North Arkansas and First Bank from any further
liability or obligation under said 401(k) or pension plan.

2.02. Approval By Shareholders. Consummation of the Merger shall be
contingent upon its approval by the legally required votes of the shares of
InvestArk Common Stock and United common stock at shareholders meetings duly
called for the purpose of voting on the Merger. In the event the number of
shares owned by InvestArk shareholders exercising dissenters' rights would or
could, in the written opinion of United's outside accountants, reasonably be
expected to cause the cash consideration paid by United to dissenters to
jeopardize United's ability to account for the Merger as a pooling of interests
then United shall have the right to terminate this Agreement. The Boards of
Directors of InvestArk and United shall recommend approval of the Merger to
their respective shareholders, unless such recommendation is inconsistent with
their fiduciary duties to the shareholders.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES
OF INVESTARK

InvestArk hereby represents and warrants to United the following:

3.01. Organization, Standing and Power of InvestArk. InvestArk is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Arkansas and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted, except where the failure to have such power or authority would not
have a material adverse effect on the business, operations or financial
condition of InvestArk or any InvestArk Subsidiary (as hereinafter defined).
InvestArk is not qualified to do business in any other state or foreign
jurisdiction, and its ownership or leasing of property or the conduct of its
business does not require it to be so qualified, except where such failure to be
so qualified would not have a material adverse effect on the business,
operations or financial condition of InvestArk or any InvestArk Subsidiary.
InvestArk is registered as a bank holding company with the Federal Reserve Board
under the Bank Holding Company Act of 1956, as amended (the "BHC Act").
InvestArk has delivered to United true, accurate and complete copies of its
currently effective Articles of Incorporation and Bylaws, including all
amendments thereto.

3.02. Ownership, Organization, Standing and Power of InvestArk
Subsidiaries. InvestArk directly and beneficially owns all of the shares of the
outstanding capital stock of First Bank and 99.7% of the outstanding capital
stock of North Arkansas. North Arkansas and First Bank are hereinafter called
collectively the "InvestArk Subsidiaries" or individually an "InvestArk
Subsidiary". North Arkansas and First Bank are InvestArk's only subsidiaries. No
equity securities of North Arkansas or First Bank are or may become required to
be issued by reason of any option, warrant, call, right or agreement of any
character whatsoever; there are outstanding no securities or rights convertible
into or exchangeable for shares of any capital stock of North Arkansas or First
Bank; and there are no other contracts, commitments, understandings or
arrangements by which either North Arkansas or First Bank is bound to issue
additional shares of its capital stock or options, warrants, calls, rights or
agreements to purchase or acquire any additional shares of its capital stock.
All of the shares of capital stock of North Arkansas and First Bank owned by
InvestArk are fully paid and nonassessable and are owned free and clear of any
claim, lien, encumbrance or agreement with respect thereto. North Arkansas and
First Bank are banking associations duly organized, validly existing and in good
standing under the laws of Arkansas, and have the corporate power and authority
to own or lease their properties and assets and to carry on their businesses as
they are now being conducted, except where the failure to have such power or
authority would not have a material adverse effect on the business, operations
or financial condition of North Arkansas, or First Bank. The deposits of North
Arkansas and First Bank are insured by the Federal Deposit Insurance Corporation
("FDIC") to the extent provided by law. InvestArk has delivered to United true,
accurate and complete copies of the currently effective Articles of
Incorporation and Bylaws of North Arkansas and First Bank, including all
amendments thereto. Except for $406,000.00 in capital stock of the Federal Home
Loan Bank of Dallas owned by First Bank and except for securities held in their
capacities as fiduciaries, North Arkansas and First Bank do not own
beneficially, directly or indirectly, any class of equity securities,
partnership interests or similar interests of any corporation, bank,
partnership, limited partnership, business trust, association or similar
organization. The authorized capital stock of North Arkansas consists of 100,000
shares of common stock, $25.00 par value, of which 80,000 shares are
outstanding. Of the outstanding shares, 79,762 are owned by InvestArk and 238
are owned by others. The authorized capital stock of First Bank consists of
110,000 shares of common stock, $10.00 par value, of which 110,000 shares are
outstanding and are owned by InvestArk. North Arkansas and First Bank or their
predecessor banks have been chartered as banking institutions for more than 10
years.

3.03. Capital Structure of InvestArk. The authorized capital stock of
InvestArk consists of 5,000,000 shares of common stock, $10.00 par value, of
which 219,626 shares are outstanding, including 3,162 shares held by InvestArk
in its treasury. Neither InvestArk, North Arkansas nor First Bank has issued and
has outstanding bonds, debentures, notes or other indebtedness having the right
to vote (or convertible into securities having the right to vote) on any matters
on which shareholders may vote ("Voting Debt"). All

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outstanding shares of InvestArk Common Stock are validly issued, fully paid,
nonassessable, and not subject to preemptive rights. There are no options,
warrants, calls, rights, or agreements of any character whatsoever to which
InvestArk, North Arkansas or First Bank is a party or by which InvestArk, North
Arkansas or First Bank is obligated to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or any voting debt
securities or by which InvestArk, North Arkansas or First Bank is obligated to
grant, extend or enter into any such option, warrant, call, right or agreement.
Immediately before and after the Effective Time there will be no option,
warrant, call, right or agreement obligating InvestArk, North Arkansas or First
Bank to issue, deliver or sell, or cause to be issued, delivered or sold, any
shares of capital stock or obligating InvestArk, North Arkansas or First Bank to
grant, extend or enter into any such option, warrant, call, right or agreement.

3.04. Authority. InvestArk has all requisite corporate power and authority
to enter into this Agreement and the Plan of Merger and, subject only to
approval of this Agreement and the Plan of Merger by the shareholders of
InvestArk and of applicable regulatory authorities, to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Plan of Merger and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of InvestArk's board of directors. This Agreement
and the Plan of Merger have been duly executed and delivered by InvestArk, and,
subject to such shareholder approval, each constitutes a valid and binding
obligation of InvestArk enforceable in accordance with its terms, except as the
enforceability of the Agreement may be subject to or limited by bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws
relating to or affecting the rights of creditors and by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law). The execution and delivery of this Agreement and the Plan
of Merger do not, and the consummation of the transactions contemplated hereby
and thereby will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or the loss
of a material benefit under, or the creation of a lien, pledge, security
interest or other encumbrance on assets (any such conflict, violation, default,
right of termination, cancellation or acceleration loss or creation, a
"Violation"), pursuant to any provision of (a) the Articles of Incorporation or
Bylaws of InvestArk, North Arkansas or First Bank or (b) any loan or credit
agreement, note, mortgage, indenture, lease, or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to InvestArk, North
Arkansas or First Bank or their respective properties or assets, except where
such violation would not have a material adverse effect on the business,
operations or financial condition of InvestArk or any InvestArk Subsidiary.
Other than in connection or in compliance with the provisions of the ABCA, the
Securities Act and the regulations thereunder, the Securities and Exchange Act
of 1934, as amended, and the rules and regulations thereunder (the "Exchange
Act"), the securities or blue sky laws of the various states, and consents,
authorizations, approvals, notices or exemptions required under the BHC Act, the
National Bank Act, Arkansas banking laws, and from other regulatory agencies, no
consent, approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a "Governmental
Entity"), is required by or with respect to InvestArk, North Arkansas or First
Bank in connection with the execution and delivery of this Agreement and the
Plan of Merger by InvestArk or the consummation by InvestArk of the transactions
contemplated hereby and thereby.

3.05. InvestArk Financial Statements. (a) The (i) consolidated balance
sheets of InvestArk as of December 31, 1992 and the related consolidated
statements of income, consolidated statements of cash flows and consolidated
statements of shareholders equity for the twelve months ended December 31, 1992
certified by Martin and Company, (ii) consolidated balance sheets of InvestArk
as of December 31, 1991 and the related consolidated statements of income,
consolidated statements of cash flows and consolidated statements of
shareholders equity for the twelve months ended December 31, 1991 certified by
Martin and Company, (iii) the unaudited compilations of the consolidated balance
sheets of InvestArk as of September 30, 1993 and the related consolidated
statements of income, consolidated statements of cash flows and consolidated
statements of shareholders equity for the nine months ended September 30, 1993,
and (iv) the internally prepared and unaudited financial statements for North
Arkansas and First Bank dated July 30, 1993, (items (i) - (iv) being called
collectively the "InvestArk Financial Statements"), copies of which have been

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furnished by InvestArk to United, have been prepared in accordance with
generally accepted accounting principles and practices applied on a consistent
basis throughout the periods involved (except as otherwise noted therein and
except for year-end adjustments of the unaudited financial statements of a
non-material nature), and except as reflected in Section 5.05, present fairly
the consolidated financial condition of InvestArk, at the dates, and the
consolidated results of operations and cash flows for the periods, stated
therein. Neither InvestArk, North Arkansas nor First Bank has any liability of
any nature, whether direct, indirect, accrued, absolute, contingent or
otherwise, which is material to InvestArk, North Arkansas or First Bank, except
as provided for or disclosed in the InvestArk Financial Statements and except
for such of the following liabilities as are incurred in the ordinary course of
business:

(i) deposit liabilities and interest payable thereon,

(ii) federal funds purchased and securities sold under repurchase
agreements and interest payable thereon,

(iii) other short term borrowings,

(iv) contingent liability upon negotiable instruments endorsed for
the purpose of collection,

(v) taxes,

(vi) accounts payable of the operating business,

(vii) salaries and benefits payable,

(viii) unearned income and premiums,

(ix) abandoned and garnished accounts, and

(x) letters of credit and similar commitments.

(b) Without limitation of the foregoing, InvestArk has no reserve allowance
for self-insured health and dental benefit claims and knows of no facts which
should cause it to create such a reserve.

3.06. InvestArk Reports. InvestArk, North Arkansas and First Bank have
filed all reports, registrations and statements, together with any amendments
required to be made with respect thereto, that were and are required to be filed
with (i) the Federal Reserve Board, (ii) the FDIC, (iii) the Arkansas State Bank
Department (the "ASBD") and (iv) any other applicable securities, banking or
regulatory authorities (all such reports and statements are collectively
referred to herein as the "InvestArk Reports"), except where such failure to
file would not have a material adverse effect on the business operations or
financial condition of InvestArk or any InvestArk Subsidiary. The InvestArk
Reports complied in all material respects with all of the statutes, rules and
regulations enforced or promulgated by the regulatory authority with which they
were filed and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

3.07. Information Supplied. None of the information supplied or to be
supplied by InvestArk for inclusion or incorporation by reference in any
document to be filed with the Securities and Exchange Commission, the Federal
Reserve Board, or any regulatory agency in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. InvestArk has made available to United all financial and
other information InvestArk reasonably believes necessary to enable United to
make informed judgments concerning the state of the financial and other
conditions and affairs of InvestArk, North Arkansas and First Bank.

3.08. Authorizations; Compliance with Applicable Laws. InvestArk, North
Arkansas and First Bank hold all authorizations, permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities which are material
to the operations of the businesses of InvestArk, North Arkansas or First Bank
(the

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"InvestArk Permits"), including appropriate authorizations from the ASBD.
InvestArk, North Arkansas and First Bank are in compliance with the terms of the
InvestArk Permits, except where the failure so to comply would not have a
material adverse effect on InvestArk, North Arkansas or First Bank. The
businesses of InvestArk, North Arkansas and First Bank are not being conducted
in violation of any federal, state or local law, statute, ordinance or
regulation of any Governmental Entity (collectively "Laws"), including, without
limitation, Regulation O of the Federal Reserve Board, except for possible
violations which individually or in the aggregate do not and, insofar as
reasonably can be foreseen, in the future will not, have a material adverse
effect on InvestArk, North Arkansas or First Bank. Except for the inquiry by the
Federal Reserve Board ("FRB") under Sections 23A and 23B of the Federal Reserve
Act as disclosed in Exhibit 3.08, no investigation or review by any Governmental
Entity with respect to InvestArk, North Arkansas or First Bank is pending or, to
the best of their knowledge, threatened, nor has any Governmental Entity
indicated an intention to conduct the same. Without limiting the foregoing,
there have been no acts or omissions occurring on or with respect to real estate
currently or previously owned, leased or otherwise used in the ordinary course
of business by InvestArk, North Arkansas or First Bank, or to the best of their
knowledge in which InvestArk, North Arkansas or First Bank has or had an
investment or security interest (by mortgage, deed of trust, or otherwise),
including, without limitation, properties under foreclosure, properties held by
InvestArk, North Arkansas or First Bank in its capacity as a trustee, or
properties in which any venture capital or similar unit of InvestArk, North
Arkansas or First Bank has or had an interest (the "InvestArk Property"), which
constitute or result, or may have constituted or resulted, in the creation of
any federal, state or common law nuisance (whether or not the nuisance condition
is, or was, foreseen or unforeseen) or which do not comply or have not complied
with federal, state or local environmental laws including, without limitation,
the Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery
Act, the Toxic Substances Control Act and the Comprehensive Environmental,
Response, Compensation and Liability Act, as amended, and their state and local
law counterparts, all rules and regulations promulgated thereunder and all other
legal requirements associated with the ownership and use of the InvestArk
Property (collectively, "Environmental Laws"), and as a result of which acts or
omissions InvestArk, North Arkansas or First Bank is subject to or reasonably
likely to incur a material liability or suffer a diminution in value of any
interest exceeding $100,000.00. Neither InvestArk, North Arkansas nor First Bank
is subject to or reasonably likely to incur a material liability or suffer a
diminution in value of any interest exceeding $100,000.00 as a result of its
ownership, lease, operation, or use of any InvestArk Property or as a result of
its investment or security interest (as described above) in any InvestArk
Property (a) that is contaminated by or contains any hazardous waste, toxic
substances or related materials, including without limitation asbestos, PCBs,
pesticides, herbicides, petroleum products, substances defined as "hazardous
substances" or "toxic substances" in the Environmental Laws, and any other
substances or waste that is hazardous to human health or the environment
(collectively, "Toxic Substances"), or (b) on which any Toxic Substance has been
stored, disposed of, placed, or used in the construction thereof. No claim,
action, suit or proceeding is pending against InvestArk, North Arkansas or First
Bank relating to the InvestArk Property before any court or other governmental
authority or arbitration tribunal relating to Toxic Substances, pollution or the
environment, and there is no outstanding judgment, order, writ, injunction,
decree, or award against or affecting InvestArk, North Arkansas or First Bank
with respect thereto.

3.09. Litigation and Claims. Except as disclosed in Exhibit 3.08 and 3.09
(a) neither InvestArk, North Arkansas nor First Bank is subject to any
continuing order of, or written agreement or memorandum of understanding with,
or continuing material investigation by, any federal or state banking or
insurance authority or other Governmental Entity, or any judgment, order, writ,
injunction, decree or award of any Governmental Entity or arbitrator, including,
without limitation, cease-and-desist or other orders of any bank regulatory
authority, (b) there is no claim of any kind, action, suit, litigation,
proceeding, arbitration, investigation, or controversy affecting InvestArk,
North Arkansas or First Bank pending or, to the best of their knowledge,
threatened, which will have or can reasonably be expected to have a material
adverse effect on InvestArk, North Arkansas or First Bank and (c) there are no
uncured material violations, or violations with respect to which material
refunds or restitutions may be required, cited in any compliance report to
InvestArk, North Arkansas or First Bank as a result of the examination by any
bank regulatory authority.

3.10. Taxes. InvestArk, North Arkansas and First Bank have filed all tax
returns required to be filed by them and have paid or have set up an adequate
reserve for the payment of, all taxes required to be paid as

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shown on such returns, and the most recent InvestArk Financial Statements
reflect an adequate reserve for all taxes payable by InvestArk, North Arkansas
and First Bank accrued through the date of such financial statements. There has
been no examination by the United States Internal Revenue Service ("IRS") of
InvestArk, North Arkansas or First Bank for over seven years. There is no
examination pending by the IRS with respect to InvestArk, North Arkansas or
First Bank, neither InvestArk, North Arkansas nor First Bank has executed or
filed with the IRS any agreement which is still in effect extending the period
for assessment and collection of any federal tax, and there are no existing
material disputes as to federal, state, or local taxes due from InvestArk, North
Arkansas or First Bank. There are no material liens for taxes upon the assets of
InvestArk, North Arkansas or First Bank, except for statutory liens for taxes
not yet delinquent. Neither InvestArk, North Arkansas nor First Bank is a party
to any action or proceeding by any governmental authority for assessment and
collection of taxes, and no claim for assessment and collection of taxes has
been asserted against any of them. For the purpose of this Agreement, the term
"tax" (including, with correlative meaning, the terms "taxes" and "taxable")
shall include all federal, state, and local income, profits, franchise, gross
receipts, payroll, sales, employment, use, personal and real property,
withholding, excise and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts. InvestArk, North Arkansas and First Bank have withheld
from their employees and timely paid to the appropriate governmental agency
proper and accurate amounts for all periods through the date hereof in material
compliance with all tax withholding provisions of applicable federal, state, and
local laws (including without limitation income, social security and employment
tax withholding for all types of compensation).

3.11. Certain Agreements. Except as disclosed in Exhibit 3.11, neither
InvestArk, North Arkansas nor First Bank is a party to any (i) consulting,
professional services, employment or other agreement not terminable at will
providing any term of employment, compensation, guarantee, or severance or
supplemental retirement benefit, (ii) union, guild or collective bargaining
agreement, (iii) agreement or plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of the
transactions contemplated by this Agreement, (iv) any stock option plan, stock
appreciation rights plan, restricted stock plan, stock purchase plan or similar
plan granting rights to acquire stock in InvestArk, North Arkansas or First
Bank, or (v) contract containing covenants which limit the ability of InvestArk,
North Arkansas or First Bank to compete in any line of business or with any
person or which involve any restriction of the geographical area in which, or
method by which, InvestArk, North Arkansas or First Bank may carry on its
business (other than as may be required by law or applicable regulatory
authorities). InvestArk, North Arkansas and First Bank shall terminate all
existing consulting, professional services and employment contracts, other than
at will employment contracts, and those agreements set forth in Exhibit 3.11, by
no later than the Closing Date.

3.12. Benefit Plans. (a) Exhibit 3.12 hereto lists (i) each employee bonus,
incentive, deferred compensation, stock purchase, stock appreciation right,
stock option and severance pay plan, (ii) each pension, profit sharing, stock
bonus, thrift, savings and employee stock ownership plan, and (iii) every other
employee benefit plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (collectively
"Benefit Plans"), which InvestArk, North Arkansas or First Bank maintains or to
which InvestArk, North Arkansas or First Bank contributes on behalf of current
or former employees. All of the plans and programs listed in Exhibit 3.12
(collectively, "InvestArk Benefit Plans") comply in all material respects with
all applicable requirements of ERISA and all other applicable federal and state
laws, including without limitation the reporting and disclosure requirements of
Part 1 of Title I of ERISA. With respect to the InvestArk Benefit Plans,
individually and in the aggregate, no event has occurred, and there exists no
condition or set of circumstances, in connection with which InvestArk, North
Arkansas or First Bank could be subject to any liability that is reasonably
likely to have a material adverse effect upon InvestArk, North Arkansas or First
Bank (except liability for benefits claims and funding obligations payable in
the ordinary course) under ERISA, the Code or any other applicable law. Each of
the InvestArk Benefit Plans that is intended to be a pension, profit sharing,
stock bonus, thrift, savings or employee stock ownership plan that is qualified
under Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), has been determined by the IRS to qualify under Section 401(a) of the
Code, or an application for the

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determination of such qualification will be made to the IRS under Section 401(b)
of the Code and the regulations thereunder, and there exist no circumstances
that would materially adversely affect the qualified status of any such
InvestArk Benefit Plan under that section. Each InvestArk Benefit Plan that is a
defined benefit pension plan has assets with an aggregate value that exceeds the
actuarially present value of its liability for accrued benefits as determined on
the basis of the actuarial assumptions used for the most recent actuarial
valuation of such Plan, no such Plan has incurred an accumulated funding
deficiency within the meaning of Section 412(a) of the Code, and no such Plan is
a "multi-employer plan" within the meaning of Section 3(37) of ERISA. There is
no pending or, to the best of InvestArk's knowledge, threatened litigation,
governmental proceeding or investigation against or relating to any InvestArk
Benefit Plan, and there is no reasonable basis for any material proceedings,
claims, actions or proceedings against any Plan. No "reportable event" (as
defined in Section 4043(b) of ERISA) (other than a "reportable event" for which
the 30-day notice requirement has been waived by the Pension Benefit Guaranty
Corporation) has occurred with respect to any InvestArk Benefit Plan, and no
InvestArk Benefit Plan has engaged in a "prohibited transaction" (as defined in
Section 406 of ERISA and Section 4975(c) of the Code) since the date on which
said sections became applicable to such Plan which could reasonably result in a
material liability.

(b) InvestArk has delivered to United copies of (i) each InvestArk Benefit
Plan, (ii) the most recent summary plan descriptions of each InvestArk Benefit
Plan, (iii) each trust agreement, insurance policy or other instrument relating
to the funding of any InvestArk Benefit Plan, (iv) the most recent Annual
Reports (Form 5500 series) and accompanying schedules filed with the IRS or
United States Department of Labor with respect to each InvestArk Benefit Plan,
(v) the most recent determination letter issued by the IRS with respect to each
InvestArk Benefit Plan that is intended to qualify under Section 401 of the
Code, (vi) the most recent available financial statements for each InvestArk
Benefit Plan that has assets, (vii) the most recent actuarial report for any
InvestArk Benefit Plan that is a defined benefit pension plan, and if any such
Plan was amended subsequent to the date of such report, information about the
financial effects of such amendment and (viii) the most recent audited financial
statements for each InvestArk Benefit Plan for which audited financial
statements are required by ERISA.

3.13. Insurance. InvestArk has delivered to United correct and complete
copies of all material policies of insurance of InvestArk, North Arkansas and
First Bank currently in effect, including, but not limited to, directors and
officers liability policies and blanket bond policies. Neither InvestArk, North
Arkansas nor First Bank has any liability for unpaid premiums or premium
adjustments not properly reflected on the InvestArk Financial Statements.

3.14. Conduct of InvestArk to Date. Except as contemplated by this
Agreement and the Plan of Merger, from and after December 31, 1992 through the
date of this Agreement: (a) other than the conversion of First Bank to a state
bank, InvestArk, North Arkansas and First Bank have carried on their respective
businesses in the ordinary and usual course consistent with past practices, (b)
InvestArk, North Arkansas and First Bank have not issued or sold any capital
stock or issued or sold any corporate debt securities which would be classified
as long term debt on the balance sheet of InvestArk, North Arkansas or First
Bank, (c) InvestArk, North Arkansas and First Bank have not granted any option
for the purchase of capital stock (except as referred to in Section 3.03),
effected any stock split, or otherwise changed their capitalization, (d)
InvestArk has not declared, set aside, or paid any cash or stock dividend or
other distribution in respect to its capital stock except for usual quarterly
cash dividends of 20 cents per share for the first and second quarters of 1993
and 25 cents per share for the third quarter of 1993; the dividend declared but
not yet paid for the fourth quarter shall be 50 cents per share, (e) neither
InvestArk, North Arkansas nor First Bank has incurred any material obligation or
liability (absolute or contingent), except normal trade or business obligations
or liabilities incurred in the ordinary course of business, except as set forth
on Exhibit 3.11 or in conjunction with this Agreement, or mortgaged, pledged, or
subjected to lien, claim, security interest, charge, encumbrance or restriction
any of its assets or properties, (f) neither InvestArk, North Arkansas nor First
Bank has discharged or satisfied any material lien, mortgage, pledge, claim,
security interest, charges, encumbrance, or restriction or paid any material
obligation or liability (absolute or contingent), other than in the ordinary
course of business, (g) neither InvestArk, North Arkansas nor First Bank has
since September 30, 1993, sold, assigned, transferred, leased, exchanged, or
otherwise disposed of any of its properties or assets other than for a fair

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consideration in the ordinary course of business, (h) except as set forth in
Exhibit 3.14(h), neither InvestArk, North Arkansas nor First Bank has increased
the rate of compensation of, or paid any bonus to, any of its directors,
officers, or other employees, except merit or promotion increases (including
bonuses paid in January, 1993) in accordance with existing policy; entered into
any new, or amended or supplemented any existing, employment, management,
consulting, deferred compensation, severance, or other similar contract;
adopted, entered into, terminated, amended or modified any InvestArk Benefit
Plan in respect of any of present or former directors, officers or other
employees; or agreed to do any of the foregoing, (i) neither InvestArk, North
Arkansas nor First Bank has suffered any material damage, destruction, or loss,
whether as the result of flood, fire, explosion, earthquake, accident, casualty,
labor trouble, requisition or taking of property by any government or any agency
of any government, windstorm, embargo, riot, act of God, or other similar or
dissimilar casualty or event or otherwise, whether or not covered by insurance,
(j) neither InvestArk, North Arkansas nor First Bank has cancelled or
compromised any debt to an extent exceeding $50,000.00 owed to InvestArk, North
Arkansas or First Bank or claim to an extent exceeding $50,000.00 asserted by
InvestArk, North Arkansas or First Bank, (k) neither InvestArk, North Arkansas
nor First Bank has entered into any transaction, contract, or commitment outside
the ordinary course of its business, other than the conversion of First Bank
from a national banking association to a state chartered bank, (1) neither
InvestArk, North Arkansas nor First Bank has entered, or agreed to enter, into
any agreement or arrangement granting any preferential right to purchase any of
its material assets, properties or rights or requiring the consent of any party
to the transfer and assignment of any such material assets, properties or
rights, (m) there has not been any change in the method of accounting or
accounting practices of InvestArk, North Arkansas and First Bank, and (n)
InvestArk, North Arkansas and First Bank have kept all records substantially in
accordance with all regulatory and statutory requirements and substantially in
accordance with industry standards specified by the American Bankers
Association, and have retained such records for the periods required by statute,
regulation or American Bankers Association industry standards.

3.15. Material Adverse Change. Since December 31, 1992, there has been no
material adverse change in the financial condition, results of operations or
business of InvestArk, North Arkansas or First Bank.

3.16. Properties, Leases and Other Agreements. Except (i) with respect to
debts reflected in the InvestArk Financial Statements, (ii) for any lien for
current taxes not yet delinquent, (iii) for pledges to secure deposits and (iv)
for such other liens, security interests, claims, charges, options or other
encumbrances and imperfections of title which do not materially affect the value
or interfere with or impair the present and continued use of personal or real
property reflected in the InvestArk Financial Statements or acquired since the
date of such Statements, InvestArk, North Arkansas and First Bank have good
title, free and clear of any liens, security interests, claims, charges, options
or other encumbrances to all of the personal and real property reflected in the
InvestArk Financial Statements, and all personal and real property acquired
since the date of such InvestArk Financial Statements, except such personal and
real property as has been disposed of in the ordinary course of business.
Substantially all of the buildings and equipment in regular use by InvestArk,
North Arkansas and First Bank have been reasonably maintained and are in good
and serviceable condition, reasonable wear and tear excepted. All leases
material to InvestArk, North Arkansas and First Bank pursuant to which
InvestArk, North Arkansas or First Bank, as lessee, leases real or personal
property are valid and effective in accordance with their respective terms and
there is not, under any of such leases, any material existing default by
InvestArk, North Arkansas or First Bank, or any other party thereto, or any
event which with notice or lapse of time or both would constitute such a
material default. No options to renew said leases have lapsed and the terms of
the leases govern the rights of the respective landlords of InvestArk, North
Arkansas and First Bank.

3.17. Accounting. Neither InvestArk nor any of its affiliates will take any
action that would, in the reasonable opinion of United, prevent the Merger from
qualifying for pooling of interests accounting treatment.

3.18. No Untrue Statements. No representation or warranty hereunder or
information contained in any financial statement or any other document delivered
to United pursuant to this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading.

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3.19. Proper Documentation. With respect to all loans to borrowers which
are payable to InvestArk, North Arkansas or First Bank either directly or as a
participant and except for such imperfections in documentation which when
considered as a whole would not have a net adverse effect on the business,
operations or financial condition of either InvestArk, North Arkansas or First
Bank in excess of $100,000.00:

(a) All loans were made for good, valuable and adequate consideration
in the normal and ordinary course of business, and the notes and other
evidences of indebtedness and any loan agreements or security documents
executed in connection therewith are true and genuine and constitute the
valid and legally binding obligations of the borrowers to whom the loans
were made and are legally enforceable against such borrowers in accordance
with their terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and similar debtor relief laws from time to
time in effect, as well as general principles of equity applied by a court
of proper jurisdiction (regardless of whether such enforceability is
considered in a proceeding in equity or at law);

(b) The amounts represented to United as the balances owing on the
loans are the correct amounts actually and unconditionally owing, are
undisputed, and are not subject to any offsets, credits, deductions or
counterclaims;

(c) The collateral securing each loan as referenced in a loan officer
worksheet, loan summary report or similar interoffice loan documentation is
in fact the collateral held by InvestArk, North Arkansas or First Bank to
secure each loan;

(d) InvestArk, North Arkansas or First Bank has possession of all loan
document files and credit files for all loans held by them containing
promissory notes and other relevant evidences of indebtedness with original
signatures of their borrowers and guarantors;

(e) InvestArk, North Arkansas and First Bank hold validly perfected
liens or security interests in the collateral granted to them to secure all
loans as referenced in the loan officer worksheets, loan summary reports or
similar interoffice loan documentation and the loan or credit files contain
the original security agreements, mortgages, or other lien creation and
perfection documents unless originals of such documents are filed of public
record;

(f) Each lien or security interest of InvestArk, North Arkansas or
First Bank in the collateral held for each loan is properly perfected in
the priority described as being held by InvestArk, North Arkansas or First
Bank in the loan officer worksheets, loan summary reports or similar
interoffice loan documentation contained in the loan document or credit
files;

(g) InvestArk, North Arkansas and First Bank are in possession of all
collateral that the loan document files or credit files indicate they have
in their possession;

(h) All guaranties granted to InvestArk, North Arkansas and First Bank
to insure payment of loans constitute the valid and legally binding
obligations of the guarantors and are enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, and similar debtor relief laws from time to time in effect, as
well as general principles of equity applied by a court of proper
jurisdiction (regardless of whether such enforceability is considered in a
proceeding in equity or at law);

(i) With respect to any loans in which InvestArk, North Arkansas and
First Bank have sold participation interests to another bank or other
financial institution, none of the buyers of such participation interests
are in default under any participation agreements.

3.20. Not in Default. Neither InvestArk, North Arkansas nor First Bank is
in default under any material agreement, ordinance, resolution, decree, bond,
note, indenture, order or judgment to which it is a party, by which it is bound,
or to which its properties or assets are subject.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF UNITED

United hereby represents and warrants to InvestArk and Sellers as follows:

4.01. Organization, Standing and Power. United is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Arkansas and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted,
except where the failure to have such power or authority would not have a
material adverse effect on the business, operations or financial condition of
United and its subsidiaries. United is registered as a bank holding company with
the Federal Reserve Board under the BHC Act.

4.02. Authority. Subject to the approval of this Agreement and the Plan of
Merger by the shareholders of United and of applicable regulatory authorities,
United has all requisite corporate power and authority to enter into this
Agreement and the Plan of Merger and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and the Plan of
Merger and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of
United's board of directors. This Agreement and the Plan of Merger have been
duly executed and delivered by United, and, subject to such shareholder and
regulatory approval, each constitutes a valid and binding obligation of United
enforceable in accordance with its terms, except as the enforceability of the
Agreement may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors. The execution and delivery of this Agreement
and the Plan of Merger do not, and the consummation of the transactions
contemplated hereby and thereby will not, result in any Violation pursuant to
any provision of the Articles of Incorporation or Bylaws of United or any of its
subsidiaries or result in any Violation of any loan or credit agreement, note,
mortgage, indenture, lease, or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to United or any of its subsidiaries or
their respective properties or assets. Other than in connection or in compliance
with the provisions of the ABCA, the Securities Act, the Exchange Act, the
securities or blue sky laws of the various states, and consents, authorizations,
approvals, notices or exemptions required under the BHC Act, the National Bank
Act, Arkansas banking laws, and from other regulatory authorities, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to United in
connection with the execution and delivery of this Agreement and the Plan of
Merger by United or the consummation by United of the transactions contemplated
hereby and thereby, the failure to obtain which would have a material adverse
effect on United or any United subsidiary.

4.03. Capital Structure of United. The authorized capital stock of United
consists of 12,000,000 shares of common stock, $1.00 par value, of which
4,272,276 shares are outstanding. United has no issued and outstanding bonds,
debentures, notes or other indebtedness having the right to vote (or convertible
into securities having the right to vote) on any matters on which shareholders
may vote. All outstanding shares of United common stock are validly issued,
fully paid, nonassessable, and not subject to preemptive rights. There are no
options, warrants, calls, rights, or agreements of any character whatsoever to
which United is a party or by which United is obligated to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or any voting debt securities or by which United is obligated to grant,
extend or enter into any such option, warrant, call, right or agreement.
Immediately before and after the Effective Time there will be no option,
warrant, call, right or agreement obligating United to issue, deliver or sell,
or cause to be issued, delivered or sold, any shares of capital stock or
obligating United to grant, extend or enter into any such option, warrant, call,
right or agreement.

4.04. United Financial Statements. (a) The (i) consolidated balance sheets
of United as of September 30, 1993 and the related consolidated statements of
income, consolidated statements of cash flows and consolidated statements of
shareholders equity for the nine months ended September 30, 1993 and (ii)
consolidated balance sheets of United as of December 31, 1991 and December 31,
1992 and the related consolidated statements of income, consolidated statements
of cash flows and consolidated statements of shareholders equity for the twelve
months ended December 31, 1991 and December 31, 1992, respectively,

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certified by Arthur Andersen & Company, (items (i) and (ii) being called
collectively the "United Financial Statements" copies of which have been
furnished by United to InvestArk, have been prepared in accordance with
generally accepted accounting principles and practices applied on a consistent
basis throughout the periods involved (except as other side noted therein and
except for year end adjustments of a non-material nature), and present fairly
the consolidated financial condition of United, at the dates, and the
consolidated results of operations and cash flows for the periods, stated
therein. Neither United nor any United subsidiary has any liability of any
nature, whether direct, indirect, accrued, absolute, contingent or otherwise,
which is material to United, except as provided for or disclosed in the United
Financial Statements and except for such of the following liabilities as are
incurred in the ordinary course of business:

(i) deposit liabilities and interest payable thereon,

(ii) federal funds purchased and securities sold under repurchase
agreements and interest payable thereon,

(iii) other short term borrowings,

(iv) contingent liability upon negotiable instruments endorsed for
the purpose of collection,

(v) taxes,

(vi) accounts payable of the operating business,

(vii) salaries and benefits payable,

(viii) unearned income and premiums,

(ix) abandoned and garnished accounts, and

(x) letters of credit and similar commitments.

4.05. United Reports. United and its subsidiaries have filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, that were and are required to be filed with (i) the FRB,
(ii) the Office of the Comptroller of the Currency, (iii) the FDIC, (iv) the
Arkansas State Bank Department (the "ASBD") and (v) any other applicable
securities, banking or regulatory authorities (all such reports and statements
are collectively referred to herein as the "United Reports") except where such
failure to file would not have a material adverse effect on the business
operations or financial condition of United. The United Reports complied in all
material respects with all of the statutes, rules and regulations enforced or
promulgated by the regulatory authority with which they were filed and did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

4.06. Authorizations; Compliance with Applicable Laws. United and its
subsidiaries hold all authorizations, permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities which are material to the
operations of the businesses of United and its subsidiaries (the "United
Permits"). United and its subsidiaries are in compliance with the terms of the
United Permits, except where the failure to comply would not have a material
adverse effect on United. The businesses of United and its subsidiaries are not
being conducted in violation of any federal, state or local law, statute,
ordinance or regulation of any Governmental Entity (collectively "Laws"),
including, without limitation, Regulation O of the FRB, except for possible
violations which individually or in the aggregate do not and, insofar as
reasonably can be foreseen, in the future will not, have a material adverse
effect on United. No investigation or review by any Governmental Entity with
respect to United or its subsidiaries is pending or threatened, nor has any
Governmental Entity indicated an intention to conduct the same. Without limiting
the foregoing, there have been no acts or omissions occurring on or with respect
to real estate currently or previously owned, leased or otherwise used by United
or any United subsidiary or in which United or any United subsidiary has or had
an investment or security interest (by mortgage, deed of trust, or otherwise),
including, without limitation, properties under foreclosure, properties held by
United or a United subsidiary in its capacity as a trustee, or properties in
which any venture capital or similar unit of United or a United subsidiary has
or had an interest (the "United Property"), which constitute or result, or may
have constituted or resulted, in the creation of any federal, state or common
law

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nuisance (whether or not the nuisance condition is, or was, foreseen or
unforeseen) or which do not comply or have not complied with federal, state or
local Environmental Laws, and as a result of which acts or omissions United or a
United subsidiary is subject to or reasonably likely to incur a material
liability or suffer a diminution in value of any interest exceeding $100,000.00.
Neither United nor any United subsidiary is subject to or reasonably likely to
incur a material liability or suffer a diminution in value of any interest
exceeding $100,000.00 as a result of its ownership, lease, operation, or use of
any United Property or as a result of its investment or security interest (as
described above) in any United Property (a) that is contaminated by or contains
any hazardous waste, toxic substances or related materials, including without
limitation asbestos, PCBs, pesticides, herbicides, petroleum products,
substances defined as "hazardous substances" or "toxic substances" in the
Environmental Laws, and any other substances or waste that is hazardous to human
health or the environment (collectively, "Toxic Substances"), or (b) on which
any Toxic Substance has been stored, disposed of, placed, or used in the
construction thereof. No claim, action, suit or proceeding is pending against
United or any United subsidiary relating to the United Property before any court
or other governmental authority or arbitration tribunal relating to Toxic
Substances, pollution or the environment, and there is no outstanding judgment,
order, writ, injunction, decree, or award against or affecting United or any
United subsidiary with respect thereto.

4.07. Litigation and Claims. Except as disclosed in this Agreement (a)
neither United nor any United subsidiary is subject to any continuing order of,
or written agreement or memorandum of understanding with, or continuing material
investigation by, any federal or state banking or insurance authority or other
Governmental Entity, or any judgment, order, writ, injunction, decree or award
of any Governmental Entity or arbitrator, including, without limitation,
cease-and-desist or other orders of any bank regulatory authority, (b) there is
no claim of any kind, action, suit, litigation, proceeding, arbitration,
investigation, or controversy affecting United or any United subsidiary pending
or threatened, which will have or can reasonably be expected to have a material
adverse effect on United and (c) there are no uncured material violations, or
violations with respect to which material refunds or restitutions may be
required, cited in any compliance report to United or any United subsidiary as a
result of the examination by any bank regulatory authority.

4.08. Material Adverse Change. Since September 30, 1993, there has been no
material adverse change in the financial condition, results of operations or
business of United.

4.09. Not in Default. Neither United nor any United subsidiary is in
default under any material agreement, ordinance, resolution, decree, bond, note,
indenture, order or judgment to which it is a party, by which it is bound, or to
which its properties or assets are subject.

ARTICLE V

COVENANTS OF INVESTARK

5.01. Affirmative Covenants. InvestArk hereby covenants and agrees with
United that prior to the Effective Time, unless the prior written consent of
United shall have been obtained, and except as otherwise contemplated herein,
InvestArk will and InvestArk will cause North Arkansas and First Bank to:

(a) operate their businesses only in the usual, regular and ordinary
course consistent with past practices;

(b) use reasonable efforts to preserve intact their business
organization and assets, maintain their rights and franchises, retain the
services of their officers and key employees (except that they shall have
the right to lawfully terminate the employment of any officer or key
employee if such termination is in accordance with InvestArk's existing
employment procedures) and maintain their relationships with customers;

(c) use reasonable efforts to maintain and keep their properties in as
good repair and condition as at present, except for depreciation due to
ordinary wear and tear;

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(d) use reasonable efforts to keep in full force and effect insurance
and bonds comparable in amount and scope of coverage to that now
maintained; provided, however, that InvestArk shall not be required to
purchase insurance policies for directors' and officers' liabilities;

(e) perform in all material respects all obligations required to be
performed by them under all material contracts, leases, and documents
relating to or affecting their assets, properties, and business;

(f) comply with and perform in all material respects all obligations
and duties imposed upon them by all Laws; and

(g) give United notice of all boards of directors meetings, allow
United to have a non-voting representative at each such meeting except to
the extent that InvestArk's legal counsel advises the directors that
permitting United's presence would constitute a breach of their fiduciary
duties, and provide United with all written materials and communications
provided to the directors in connection with such meetings.

5.02. Negative Covenants. Except as specifically contemplated by this
Agreement, from the date hereof until the earlier of the termination of the
Agreement or the Effective Time, InvestArk shall not do, and InvestArk will
cause North Arkansas and First Bank not to do, without the prior written consent
of United, any of the following:

(a) incur any material liabilities or material obligations, whether
directly or by way of guaranty, including any obligation for borrowed money
whether or not evidenced by a note, bond, debenture or similar instrument,
except in the ordinary course of business consistent with past practice;

(b) (i) except as disclosed in Exhibit 3.14(h), grant any bonuses or
increase in compensation to their employees, officers or directors, (ii)
effect any change in retirement or any other benefits to any class of
employees or officers (unless any such change shall be required by this
Agreement or applicable law) which would increase their retirement benefit
liabilities, (iii) adopt, enter into, amend or modify any InvestArk Benefit
Plan except as provided herein, (iv) terminate the employment or services
of any director or officer, (vi) hire any officer or elect any new
director, or (vii) fix the 1994 rate of compensation for Lloyd Jones, Cole
Martin or Robert Koch;

(c) declare or pay any dividend on, or make any other distribution in
respect of, their outstanding shares of capital stock, except dividends
consistent with past dividend rates; provided, however, that InvestArk
shall not declare or pay any dividends on its common stock in excess of
$1.05 per share paid and $1.15 per share declared in the fiscal year ending
December 31, 1993, and $0.25 per share for the first quarter of 1994, the
50 cents per share dividend declared in the fourth quarter of 1994 being
payable on January 4, 1994;

(d) (i) redeem, purchase or otherwise acquire any shares of their
capital stock or any securities or obligations convertible into or
exchangeable for any shares of their capital stock, or any options,
warrants, conversion or other rights to acquire any shares of their capital
stock or any such securities or obligations; (ii) merge with or into or
consolidate with any other corporation or bank, or effect any
reorganization or recapitalization; (iii) purchase or otherwise acquire any
substantial portion of the assets or any class of stock, of any
corporation, bank or other business; (iv) liquidate, sell, dispose of, or
encumber any assets or acquire any assets, other than in the ordinary
course of business consistent with past practice; or (v) split, combine or
reclassify any of their capital or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of their capital stock;

(e) issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale of, any shares of their capital
stock of any class (including shares held in treasury), any Voting Debt or
any securities convertible into, or any rights, warrants or options to
acquire, any such shares, Voting Debt or convertible securities;

(f) except as may be required by applicable law, initiate, solicit or
encourage (including by way of furnishing information or assistance), or
take any other action to facilitate, any inquiries or the making of

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any proposal which constitutes, or may reasonably be expected to lead to,
any Competing Transaction (as such term is defined below), or negotiate
with any person in furtherance of such inquiries or to obtain a Competing
Transaction, or agree to or endorse any Competing Transaction, or authorize
any of their officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by
InvestArk, North Arkansas or First Bank to take any such action and, upon
learning of such action by any representative, shall take appropriate steps
to terminate such action, InvestArk shall promptly notify United orally and
in writing of all of the relevant details relating to all inquiries and
proposals which it may receive relating to any of such matters; for
purposes of this Agreement, "Competing Transaction" shall mean any of the
following involving InvestArk, North Arkansas or First Bank; any merger,
consolidation, share exchange or other business combination; a sale, lease,
exchange, mortgage, pledge, transfer or other disposition of a substantial
portion of assets; a sale of shares of capital stock (or securities
convertible or exchangeable into or otherwise evidencing, or any agreement
or instrument evidencing, the right to acquire capital stock);

(g) propose or adopt any amendments to their corporate charters or
bylaws;

(h) authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into an agreement in principle
with respect to any acquisition of a material amount of assets or
securities or any release or relinquishment of any material contract rights
not in the ordinary course of business;

(i) except in their fiduciary capacities, purchase any shares of
United common stock;

(j) change any method of accounting in effect at December 31, 1992, or
change any method of reporting income or deductions for federal income tax
purposes from those employed in the preparation of the federal income tax
returns for the taxable year ending December 31, 1992, except as may be
required by law or generally accepted accounting principles;

(k) take action which would or is reasonably likely to (i) adversely
affect the ability of either of United or InvestArk to obtain any necessary
approvals of governmental authorities required for the transactions
contemplated hereby; (ii) adversely affect InvestArk's ability to perform
its covenants and agreements under this Agreement; or (iii) result in any
of the conditions to the Merger set forth in Article VIII not being
satisfied;

(l) change the lending, investment, asset/liability management and
other material policies concerning the business of InvestArk, North
Arkansas or First Bank, unless required by Law or order or unless such
change does not cause a material adverse effect on InvestArk, North
Arkansas or First Bank;

(m) agree in writing or otherwise to do any of the foregoing;

(n) make any single new loan or series of loans not in accordance with
existing loan policies to one borrower or related series of borrowers in an
aggregate amount greater than $250,000.00;

(o) sell or otherwise dispose of securities owned as investments
except at maturity dates or in accordance with past practices for
securities held for sale or trading or in accordance with Generally
Accepted Accounting Principles for securities classified as "held to
maturity"; or

(p) sell or dispose of any real estate or other assets having a value
in excess of $100,000.00.

5.03. Access and Information. Upon reasonable notice, InvestArk shall (and
shall cause North Arkansas and First Bank to) afford to United's officers,
employees, accountants, counsel and other representatives, access, during normal
business hours during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records. During such period,
InvestArk shall (and shall cause North Arkansas and First Bank to) furnish
promptly to United (i) a copy of each InvestArk Report filed or received by it
during such period pursuant to the requirements of the BHC Act and any other
federal or state banking laws promptly after such documents are available, (ii)
the monthly financial statements of InvestArk, North Arkansas and First Bank (as
prepared in accordance with generally accepted accounting principles) promptly
after such financial statements are available, (iii) a summary of any action
taken by the Boards of Directors,

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or any committee thereof, of InvestArk, North Arkansas and First Bank, and (iv)
all other information concerning its business, properties and personnel as
United may reasonably request. Unless otherwise required by law, each party will
hold any information obtained from the other in connection with the transaction
which is nonpublic in confidence until such time as such information otherwise
becomes publicly available through no wrongful act of the party holding
nonpublic information of the other party, and in the event of termination of
this Agreement for any reason each party shall promptly return all nonpublic
documents obtained from the other party, and any copies made of such documents,
to such other party or destroy such documents and copies.

5.04. Update Disclosure; Breaches.

From and after the date hereof until the earlier of the termination of this
Agreement or the Effective Time, InvestArk and United shall provide to the other
party prompt notice of any matters which have occurred from and after the date
hereof which are material to the financial condition or operations of the
disclosing party or which have a material bearing on any matter dealt with
herein.

InvestArk and United shall, in the event either becomes aware of any
existing, impending, or threatened occurrence of any event or condition which
would cause or constitute a material breach (or would have caused or constituted
a breach had such event occurred or been known prior to the date hereof) of any
of the warranties, representations or agreements contained or referred to
herein, give prompt written notice thereof to the other party and the
responsible party shall use its best efforts to prevent or promptly remedy the
same.

5.05. Reserve. InvestArk shall cause North Arkansas by December 31, 1993 to
make an addition to its allowance for loan losses in the amount of $140,000.00
and InvestArk shall cause First Bank by December 31, 1993 to make an addition to
its allowance for loan losses in the amount of $450,000.00 and to establish a
reserve against other real estate owned in the amount of $100,000.00. It is
expressly provided, however, that InvestArk, North Arkansas and First Bank shall
have no obligation to make the foregoing additions to reserves unless, after
using their best efforts to obtain such approval and consent, InvestArk, North
Arkansas and First Bank shall have obtained written approval and consent of the
Arkansas State Bank Commissioner to make the additions.

ARTICLE VI

ADDITIONAL AGREEMENTS

6.01. Shareholders Meetings. InvestArk and United shall call meetings of
their shareholders to be held as promptly as practicable for the purpose of
voting upon the Merger Agreements.

6.02. Legal Conditions to Merger. Each of InvestArk and United will take
all reasonable actions necessary to comply promptly with all legal requirements
it may have with respect to the Merger (including furnishing all information
required by the Federal Reserve Board or in connection with approvals of or
filings with any other Governmental Entity) and will promptly cooperate with and
furnish information to each other in connection with any such requirements
imposed upon any of them or any of their subsidiaries in connection with the
Merger. Each of InvestArk and United will, respectively, cause their
subsidiaries to, take in a prompt manner all reasonable actions necessary to
obtain (and will cooperate with each other in obtaining) any agreement, consent,
authorization, order or approval of, or any exemption by, any Governmental
Entity or other public or private third party, required to be obtained or made
by United, InvestArk or any of their subsidiaries in connection with the Merger
or the taking of any action contemplated thereby or by this Agreement and the
Plan of Merger.

6.03. Reports.

(a) Prior to the Effective Time, InvestArk shall prepare and file as and
when required all InvestArk Reports.

(b) InvestArk shall prepare such InvestArk Reports such that (i) they
comply in all material respects with all of the statutes, rules and regulations
enforced or promulgated by the regulatory authority with which

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they are filed and do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and (ii) with respect to any InvestArk Reports
containing financial information of the type included in the InvestArk Financial
Statements, the financial information (A) is prepared in accordance with
generally accepted accounting principles and practices as utilized in the
InvestArk Financial Statements, applied on a consistent basis (except as stated
therein or in the notes thereto) (B) presents fairly the consolidated financial
condition of InvestArk, at the dates, and the consolidated results of operations
and cash flows for the periods, stated therein and (C) in the case of interim
fiscal periods, reflects all adjustments, consisting only of normal recurring
items necessary for a fair presentation, subject to year-end audit adjustments.

6.04. Brokers or Finders. Each of United and InvestArk represents, as to
itself, that no agent, broker, investment banker, financial advisor or other
firm or person is or will be entitled to any broker's or finder's fee or any
other commission or similar fee in connection with any of the transactions
contemplated by this Agreement; provided, however, InvestArk may pay Stephens
Inc. a reasonable financial advisory fee for services rendered in connection
with the transactions contemplated by this Agreement not to exceed $100,000.00
plus out-of-pocket expenses, such payment to be subject to receipt of any
necessary regulatory approval.

6.05. Reasonable Efforts. Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including cooperating fully with the other parties. In case at any time after
the Effective Time any further action is reasonably necessary or desirable to
carry out the purposes of this Agreement or to vest United with full title to
all properties, assets, rights, approvals, immunities and franchises of either
of InvestArk, North Arkansas or First Bank, the proper officers and directors of
each party to this Agreement shall take all such necessary action.

6.06. Governmental and Other Third Party Approvals. InvestArk and United
shall each use their reasonable best efforts to obtain all governmental and
other third party approvals, authorizations and consents that may be necessary
or reasonably required of them in order to effect the transactions contemplated
by this Agreement. InvestArk and United agree to make all filings and
applications for such approvals and reviews as soon as practicable, to prosecute
the same with reasonable diligence and to notify each other when such approvals,
authorizations and consents have been received. InvestArk and United will
provide each other with copies of all regulatory notices and filings made in
connection with the transactions contemplated by this Agreement prior to filing.
United and InvestArk will each provide to the other copies of any correspondence
received from any regulatory agency relating to such filings, and shall use its
best efforts to keep the other party advised of the progress of obtaining all
regulatory and third party approvals required for the consummation of all
transactions contemplated by this Agreement.

ARTICLE VII

CONDITIONS PRECEDENT

7.01. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction prior to the Closing Date of the following conditions:

(a) Shareholder Approval. The Merger Agreements shall have been
approved and adopted by the legally required votes of the holders of the
outstanding shares of InvestArk and United common stock at shareholders
meetings duly called for the purpose of voting on the Merger.

(b) Federal Reserve Board. The Merger Agreements and the transactions
contemplated hereby shall have been approved by the Federal Reserve Board
without any condition not acceptable to United, all conditions required to
be satisfied prior to the Effective Time imposed by the terms of such
approvals shall have been satisfied and all waiting periods relating to
such approvals shall have expired.

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(c) Arkansas State Bank Commissioner. The Arkansas State Bank
Commissioner shall have approved the transfer of ownership of North
Arkansas and First Bank to United without any condition not acceptable to
United.

(d) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall be in effect.

(e) No Proceeding or Litigation. No material action, suit or
proceeding before any court or any governmental or regulatory authority
shall have been commenced against United, InvestArk or any affiliate,
associate, officer or director of either of them, seeking to restrain,
enjoin, prevent, change or rescind the transactions contemplated hereby or
questioning the validity or legality of any such transactions.

(f) Closing Date. The Closing Date shall occur on or before May 31,
1994 unless extended by InvestArk and United.

(g) Consents Under Agreements. United, InvestArk and their
subsidiaries shall have obtained the consent or approval of each person
whose consent or approval shall be required in connection with the
transactions contemplated hereby under any loan or credit agreement, note,
mortgage, indenture, lease or other agreement or instrument.

(h) Securities Laws. A registration statement for the United Stock
shall have become effective under the Securities Act and shall not be the
subject of any stop order or proceedings seeking a stop order. United shall
have obtained all securities or "blue sky" permits and other authorizations
necessary under state securities laws for United to issue the United Stock
and consummate the Merger.

7.02. Conditions to Obligations of United. The obligation of United to
effect the Merger is subject to the satisfaction of the following conditions
unless waived in writing by United:

(a) Representations and Warranties. Each of the representations and
warranties of InvestArk set forth in this Agreement shall be true and
correct in all material respects (except that where any statement in a
representation or warranty expressly includes a standard of materiality,
such statement shall be true and correct in all respects) as of the date of
this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as though
made on and as of the Closing Date, except for changes expressly
contemplated by this Agreement.

(b) Performance of Obligations of InvestArk. InvestArk shall have
performed in all material respects each of the obligations required to be
performed by it under this Agreement and the Plan of Merger at or prior to
the Closing Date, and United shall have received a certificate signed on
behalf of InvestArk by the chief executive officer and by the chief
financial officer of InvestArk to such effect.

(c) Opinion of Counsel. InvestArk shall have delivered to United an
opinion of its counsel, Shults, Ray and Kurrus, dated as of the Closing
Date and in form and substance satisfactory to counsel for United, to the
aggregate effect that: (i) InvestArk has been duly incorporated and
organized and is a corporation validly existing in good standing under the
laws of Arkansas with full corporate power and authority to enter into this
Agreement and the Plan of Merger and to consummate the transactions
contemplated thereby; (ii) all corporate proceedings and other actions on
the part of InvestArk necessary to be taken in connection with the Merger
and (except for the filing of the Articles of Merger) necessary to make
same effective have been duly and validly taken; (iii) this Agreement and
the Plan of Merger have been duly and validly authorized, executed and
delivered on behalf of InvestArk and constitute (subject to standard
exceptions to enforceability arising from the bankruptcy laws and rules of
equity) valid and binding agreements of InvestArk; and (iv) the execution
of the Articles of Merger by InvestArk has been duly and validly
authorized.

(d) No Material Adverse Change. There shall have been no material
adverse change since December 31, 1992 in the financial condition, results
of operations or business of InvestArk, North Arkansas or First Bank.
Material adverse change shall include commencement or making of any

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investigation, lawsuit or claim which, if decided adversely to InvestArk,
North Arkansas or First Bank, would have a material adverse effect on
InvestArk, First Bank or North Arkansas.

(e) Environmental Audits. Phase I environmental audits of the
InvestArk Property shall have been conducted at United's expense and shall,
to United's satisfaction, reflect no material problems under Environmental
Laws.

(f) Pooling Opinion. United shall have received an opinion from Arthur
Andersen & Co. to the effect that the Merger qualifies for
pooling-of-interests accounting treatment under applicable accounting
principles and that it will be so treated by the SEC if consummated in
accordance with the Merger Agreements.

(g) FRB Inquiry. Neither United nor InvestArk shall have received
notice from the FRB and/or the Federal Reserve Bank of St. Louis of actual
or proposed regulatory action with respect to the inquiry disclosed in
Exhibit 3.08 that could reasonably be expected to have an adverse effect on
InvestArk, United and/or the InvestArk Subsidiaries.

(h) Amendment of Articles of Incorporation. InvestArk shall have
perfected an amendment to its articles of incorporation to provide that it
shall be governed by the Arkansas Business Corporation Act of 1987.

(i) Affiliates. Each person who receives a portion of the United Stock
and who might reasonably be considered to be an affiliate of InvestArk, as
defined in paragraph (a) of Rule 144 of the Rules of the Securities and
Exchange Commission under the Securities Act, shall have executed and
delivered at Closing a letter substantially in the form set forth in
Exhibit 7.02(i).

7.03. Conditions to Obligations of InvestArk. The obligation of InvestArk
to effect the Merger is subject to the satisfaction of the following conditions
unless waived by InvestArk:

(a) Representations and Warranties. Each of the representations and
warranties of United set forth in this Agreement shall be true and correct
in all material respects (except that where any statement in a
representation or warranty expressly includes a standard of materiality,
such statement shall be true and correct in all respects) as of the date of
this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as though
made on and as of the Closing Date, except for changes expressly
contemplated by this Agreement, and InvestArk shall have received a
certificate signed on behalf of United by the chief executive officer and
by the chief financial officer of United to such effect.

(b) Performance of Obligations of United. United shall have performed
in all material respects each of the obligations required to be performed
by it under this Agreement and the Plan of Merger at or prior to the
Closing Date, and InvestArk shall have received a certificate signed on
behalf of United by the chief executive officer and by the chief financial
officer of United to such effect.

(c) Opinion of Counsel. United shall have delivered to InvestArk an
opinion of its counsel, Ivester, Skinner & Camp, P.A., dated as of the
Closing Date and in form and substance satisfactory to counsel for
InvestArk, to the aggregate effect that: (i) United is a corporation
validly existing under the laws of Arkansas with full corporate power and
authority to enter into this Agreement and the Plan of Merger and to
consummate the transactions contemplated thereby; (ii) all corporate
proceedings and other actions on the part of United necessary to be taken
in connection with the Merger and (except for the filing of the Articles of
Merger) necessary to make same effective have been duly and validly taken;
(iii) this Agreement has been duly and validly authorized, executed and
delivered on behalf of United and constitutes (subject to standard
exceptions to enforceability arising from the bankruptcy laws and rules of
equity) a valid and binding agreement of United; and (iv) the execution of
the Articles of Merger by United has been duly and validly authorized.

(d) No Material Adverse Change. There shall have been no material
adverse change since September 30, 1993 in the financial condition, results
of operations or business of United.

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ARTICLE VIII

TERMINATION AND AMENDMENT

8.01. Termination. This Agreement and the Plan of Merger may be terminated
at any time prior to the Effective Time:

(a) by mutual consent of the Board of Directors of United and the
Board of Directors of InvestArk;

(b) by either United or InvestArk (A) if there has been a breach in
any material respect (except that where any statement in a representation
or warranty expressly includes a standard of materiality, such statement
shall have been breached in any respect) of any representation, warranty,
covenant or agreement on the part of InvestArk, on the one hand, or United
on the other hand, respectively, set forth in this Agreement, or (B) if any
representation or warranty of InvestArk on the one hand, or United on the
other hand, respectively, shall be discovered to have become untrue in any
material respect (except that where any statement in a representation or
warranty expressly includes a standard of materiality, such statement shall
have become untrue in any respect), in either case which breach or other
condition has not been cured within 10 business days following receipt by
the nonterminating party of notice of such breach or other condition from
the terminating party;

(c) by either United or InvestArk if any permanent Injunction
preventing the consummation of the Merger shall have become final and
nonappealable;

(d) by either United or InvestArk if the Merger shall not have been
consummated on or before May 31, 1994, for a reason other than the failure
of the terminating party to comply with its obligations under this
Agreement;

(e) by either United or InvestArk if the Federal Reserve Board has
denied approval of the Merger and neither United nor InvestArk has, within
30 days after the entry of the Federal Reserve Board's order denying such
approval, filed a petition seeking review of such order as provided by
Section 9 of the BHC Act;

(f) by United or InvestArk if any condition precedent to the
terminating party's obligation to effect the Merger has not been satisfied
and such condition cannot reasonably be expected to be satisfied prior to
the date specified in Subsection 8.01(d);

(g) by InvestArk if the United Average Price is less than $22.00 and
the scheduled Closing Date is more than 120 days after the date of this
Agreement; or

(h) by United if the United Average Price is $35.00 or more and the
scheduled Closing Date is more than 120 days after the date of this
Agreement; provided, however, that United may not terminate under this
subsection (h) if United has (i) agreed or announced its intention to be
acquired by a third party or merge into a third party that is the surviving
corporation, or (ii) received an unsolicited offer or proposal to engage in
such a transaction;

(i) by United if, by no later than December 31, 1993 (i) North
Arkansas shall not have made an addition to its allowance for loan losses
in the amount of $140,000.00 and (ii) First Bank shall not have made an
addition to its allowance for loan losses in the amount of $450,000.00 and
shall have established a reserve against other real estate owned in the
amount of $100,000.00; provided, however, that United shall exercise any
right to terminate under this subsection by no later than January 31, 1994.

8.02. Effect of Termination. In the event of termination of this Agreement
by either InvestArk or United as provided in Section 8.01, this Agreement and
the Plan of Merger shall forthwith become void and there shall be no liability
or obligation on the part of InvestArk, United, or their respective officers or
directors, except to the extent that such termination results from the willful
breach by a party hereto of any of its representations, warranties, covenants or
agreements set forth in this Agreement.

8.03. Amendment. Subject to the next following sentence, this Agreement and
the Plan of Merger may be amended by the parties hereto by action taken or
authorized by the respective Boards of Directors of

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United and InvestArk at any time prior to the Closing Date. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.

8.04. Extension; Waiver. At any time prior to the Effective Time, United,
on the one hand, and InvestArk, on the other hand, by action taken or authorized
by their respective Boards of Directors, may, to the extent legally allowed, (i)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (ii) waive any inaccuracies in the representations and
warranties of the other contained herein or in any document delivered by the
other pursuant hereto, and (iii) waive compliance by the other with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party.

ARTICLE IX

GENERAL PROVISIONS

9.01. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally (with receipt
confirmed) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):

(a) if to United, to

First United Bancshares, Inc.
Attention: John E. Burns
P. O. Box 751
El Dorado, Arkansas 71731

with a copy to:

Hermann Ivester, Esq.
Ivester, Skinner & Camp, P.A.
111 Center Street, Suite 1200
Little Rock, Arkansas 72201

(b) if to InvestArk, to:

Mr. Harry C. Erwin
Chairman and Chief Executive Officer
InvestArk Bankshares, Inc.
P. O. Box 908
Stuttgart, AR 72160-0908

with a copy to:

H. Baker Kurrus, Esq.
Shults, Ray & Kurrus
200 West Capitol, Suite 1600
Little Rock, AR 72201-3637

9.02. Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The phrase "made available" in this
Agreement shall mean that the information referred to has been made available if
requested by the party to whom such information is to be made available.

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9.03. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.

9.04. Entire Agreement. This Agreement (including the documents and the
instruments referred to herein, including the Plan of Merger) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.

9.05. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Arkansas.

9.06. Publicity. The parties hereto agree that they will consult with each
other concerning any proposed press release or public announcement pertaining to
the Merger and will use their best efforts to agree upon the text of such press
release or public announcement prior to the publication of such press release or
the making of such public announcement. However, the determination by United as
to when and whether it will make a public statement and the contents of any such
public statement shall be final and binding.

9.07. Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.

9.08. Knowledge of the Parties. Wherever in this Agreement any
representation or warranty is made upon the knowledge of a party hereto that is
not an individual, such knowledge shall include the actual knowledge, after due
inquiry, of any executive officer of such party or an executive officer of any
Subsidiary thereof.

9.09. Expenses. Except as otherwise provided herein, all Expenses incurred
by United and InvestArk in connection with or related to the authorization,
preparation and execution of this Agreement, the Plan of Merger, and all other
matters related to the closing of the transactions contemplated hereby,
including, without limitation of the generality of the foregoing, all fees and
expenses of agents, representatives, counsel and accountants employed by either
such party or its affiliates, shall be borne solely and entirely by the party
which has incurred the same.

9.10. Non-Survival of Representations and Warranties. None of the
representations, warranties and covenants contained in this Agreement shall
survive the Closing or, following Closing, be the basis for any action by any
party; all terms and conditions hereof shall merge in the closing documents and
shall not survive Closing.

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IN WITNESS WHEREOF, InvestArk and United have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.

FIRST UNITED BANCSHARES, INC.

By: /s/ JAMES V. KELLEY
James V. Kelley
Chairman, President and
Chief Executive Officer
ATTEST:

/s/ ROBERT G. DUDLEY
Robert G. Dudley, Secretary

INVESTARK BANKSHARES, INC.

By: /s/ HARRY C. ERWIN
Harry C. Erwin
Chairman, President and
Chief Executive Officer
ATTEST:

/s/ JOHN STEPHENS
Secretary

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<PAGE> 94

EXHIBIT A

PLAN OF MERGER

This Plan of Merger, dated as of December 17, 1993 ("Plan of Merger"), by
and between First United Bancshares, Inc., an Arkansas corporation ("United"),
and InvestArk Bankshares, Inc., an Arkansas corporation ("InvestArk").

WHEREAS, InvestArk is a corporation with authorized capital stock
consisting of 5,000,000 shares of common stock, $10.00 par value of which
219,122 shares of common stock, including 3,766 treasury shares, ("InvestArk
Common Stock") are validly issued and outstanding on the date hereof;

WHEREAS, United is a corporation with authorized capital stock of
12,000,000 shares of common stock, $1.00 par value, of which 4,272,276 shares
are validly issued and outstanding on the date hereof;

WHEREAS, United is a corporation duly organized and existing under the laws
of Arkansas;

WHEREAS, concurrently with the execution and delivery of this Plan of
Merger, United and InvestArk have entered into an Agreement and Plan of
Reorganization (the "Agreement" and, together with this Plan of Merger, the
"Merger Agreements") that contemplates the merger of InvestArk with and into
United (the "Merger") upon the terms and conditions provided in this Plan of
Merger and the Agreement and pursuant to the Arkansas Business corporation Act
(the "ABCA");

WHEREAS, the Boards of Directors of United and InvestArk deem it fair and
equitable to, and in the best short-term and long-term interests of, their
respective corporations and shareholders that InvestArk be merged with and into
United with United being the surviving corporation, and each such Board of
Directors has approved this Plan of Merger, has authorized its execution and
delivery, and has directed that this Plan of Merger and the Merger be submitted
to InvestArk and United shareholders for approval.

NOW, THEREFORE, in consideration of the promises and the agreements herein
contained, the parties hereto adopt and agree to the following agreements, terms
and conditions relating to the Merger and the mode of carrying the same into
effect:

ARTICLE I

THE MERGER

1.01. The Merger. Subject to the terms and conditions of the Merger
Agreements, InvestArk will be merged with and into United, which will continue
as the surviving corporation, in accordance with and with the effect provided in
the ABCA.

1.02. Effective Time of the Merger. Subject to the provisions of the Merger
Agreements, articles of merger (the "Articles of Merger") shall be duly prepared
and executed by United and InvestArk and thereafter delivered to the Secretary
of State of the State of Arkansas for filing, as provided in the ABCA, as soon
as practicable on or after the Closing Date (as defined in the Agreement). The
Merger shall become effective upon the filing of the Articles of Merger with the
Secretary of the State of Arkansas or at such time within two business days
thereafter as is provided in the Articles of Merger (the "Effective Time").

1.03. Effects of the Merger. (a) At the Effective Time, (i) the separate
existence of InvestArk shall cease and InvestArk shall be merged with and into
United (United and InvestArk are sometimes referred to herein as the
"Constituent Corporations" and United is sometimes referred to herein as the
"Surviving Corporation"), (ii) the Articles of Incorporation of United in effect
as of the Effective Time (the "Articles") shall be the Articles of Incorporation
of the Surviving Corporation, and (iii) the Bylaws of United in effect as of the
Effective Time (the "Bylaws") shall be the Bylaws of the Surviving Corporation.

(b) At and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises of a public as well as
of a private nature, and be subject to all the restrictions, disabilities and
duties of each of the Constituent Corporations; and all and singular rights,
privileges, powers and
<PAGE> 95

franchises of each of the Constituent Corporations, and all property, real,
personal and mixed and all debts due to either of the Constituent Corporations
on whatever account, as well as for stock subscriptions and all other things in
action or belonging to each of the Constituent Corporations, shall be vested in
the Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as effectually
the property of the Surviving Corporation as they were of the Constituent
Corporations, and the title to any real estate vested by deed or otherwise, in
either of the Constituent Corporations, shall not revert or be in any way
impaired; but all rights of creditors and all liens upon any property of either
of the Constituent Corporations shall be preserved unimpaired, and all debts,
liabilities and duties of the Constituent Corporations shall thenceforth attach
to the Surviving Corporation, and may be enforced against it to the same extent
as if said debts and liabilities had been incurred by it. Any action or
proceeding, whether civil, criminal or administrative, pending by or against
either Constituent Corporation shall be prosecuted as if the Merger had not
taken place, and the Surviving Corporation may be substituted as a party in such
action or proceeding in place of any Constituent Corporation.

ARTICLE II

EFFECT OF THE MERGER ON THE COMMON STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES

2.01. Conversion of InvestArk Common Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of InvestArk Common Stock, but subject to the rights of dissenting
shareholders of InvestArk:

(a) Conversion of InvestArk Common Stock. The issued and outstanding shares
of InvestArk Common Stock shall be converted in accordance with the Agreement
into the right to receive the consideration provided in Section 2.01 of the
Agreement.

(b) Cancellation of Shares. All shares of InvestArk Common Stock issued and
outstanding immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive a pro rata
amount of the consideration provided therefor upon the surrender of such
certificate in accordance with the Plan of Merger.

2.02. Exchange of Certificates. (a) Exchange Agent. As of the Effective
Time, United shall deposit with the Trust Department of First National Bank of
El Dorado, El Dorado, Arkansas or such other bank or trust company designated by
United (the "Exchange Agent") for the benefit of the holders of shares of
InvestArk Common Stock, for exchange in accordance with this Article II through
the Exchange Agent, the number of shares of United common stock and cash (the
"Exchange Fund") to be paid pursuant to Section 2.01 in exchange for shares of
InvestArk Common Stock outstanding immediately prior to the Effective Time.

(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of InvestArk Common Stock (the "Certificates")
whose shares were converted into the right to receive shares of United common
stock and cash pursuant to Section 2.01, (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as United may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the United common stock and cash payment due.
Upon surrender of a Certificate for cancellation to the Exchange Agent or to
such other agent or agents as may be appointed by United, together with such
letter of transmittal, duly executed, the holder of such Certificate shall be
entitled to receive in exchange therefor a certificate representing the number
of whole shares of United common stock and cash which such holder has the right
to receive pursuant to Section 2.01 of the Agreement, and the Certificate so
surrendered shall forthwith be cancelled. Until surrendered as contemplated by
this Section 2.02, each Certificate shall be deemed at any time after the
Effective Time to represent only the right
<PAGE> 96

to receive upon such surrender the consideration specified in Section 2.01 of
the Agreement.

(c) Distributions with Respect to Unexchanged Shares. No delivery of United
common stock or cash payment of any kind shall be made to the holder of any
unsurrendered Certificate until the holder of record of such Certificate shall
surrender such Certificate.

(d) No Further Ownership Rights in InvestArk Common Stock. The
consideration paid upon the surrender of shares of InvestArk Common Stock in
accordance with the terms hereof including any cash shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares of InvestArk
Common Stock, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of InvestArk
Common Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and payment shall be made as
provided in this Plan of Merger.

(e) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the shareholders of InvestArk for six months after the
Effective Time shall be delivered to United, upon demand, and any shareholders
of InvestArk who have not theretofore complied with this Section 2.02 shall
thereafter look only to United for payment of the United common stock and cash
due for their InvestArk stock.

(f) No Liability. Neither United nor InvestArk shall be liable to any
holder of shares of InvestArk Common Stock for shares of United common stock or
cash from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.

ARTICLE III

CONDITIONS; TERMINATION; AMENDMENT

3.01. Conditions to the Merger. Consummation of the Merger is conditional
upon the fulfillment or waiver of the conditions precedent set forth in Article
VII of the Agreement.

3.02. Termination. This Plan of Merger may be terminated and the Merger
abandoned by mutual consent of the respective Boards of Directors of InvestArk
and United at any time prior to the Effective Time. If the Agreement is
terminated in accordance with Article IX thereof, then this Plan of Merger will
terminate simultaneously and the Merger will be abandoned without further action
by InvestArk or United.

3.03. Amendment. Subject to the next following sentence, this Plan of
Merger may be amended by the parties hereto by action taken or authorized by
their respective Boards of Directors at any time before the Closing Date. This
Plan of Merger may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.

3.04. Extension; Waiver. At any time prior to the Closing Date, United and
InvestArk, by action taken or authorized by their respective Board of Directors,
may, to the extent legally allowed, (i) extend the time for the performance of
any of the obligations or other acts of the other party hereto and (ii) waive
compliance by the other with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument on behalf of
such party.

ARTICLE IV

GENERAL PROVISIONS

4.01. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally (with receipt
confirmed) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):

(a) if to United, to
<PAGE> 97

First United Bancshares, Inc.
Attention: John E. Burns
P. O. Box 751
El Dorado, Arkansas 71731

with a copy to:

Hermann Ivester, Esq.
Ivester, Skinner & Camp, P.A.
111 Center Street, Suite 1200
Little Rock, Arkansas 72201

(b) if to InvestArk, to

Mr. Harry C. Erwin
Chairman and Chief Executive Officer
InvestArk Bankshares, Inc.
P.O. Box 908
Stuttgart, ARkansas 72160-0908

with a copy to:

H. Baker Kurrus, Esq.
Shultz, Ray & Kurrus
Worthen Bank Building
200 West Capitol Avenue, Suite 1600
Little Rock, Arkansas 72203

4.02. Interpretation. When a reference is made in this Plan of Merger to
Sections, such reference shall be to a Section of this Plan of Merger unless
otherwise indicated. The headings contained in this Plan of Merger are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Plan of Merger.

4.03. Counterparts. This Plan of Merger may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.

4.04. Governing Law. This Plan of Merger shall be governed and construed in
accordance with the laws of the State of Arkansas.

IN WITNESS WHEREOF, InvestArk and United have caused this Plan of Merger to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.

FIRST UNITED BANKSHARES, INC.

By: /s/ JAMES V. KELLEY
James V. Kelley
Chairman, President and
Chief Executive Officer
Attest:
/s/ ROBERT G. DUDLEY
Robert G. Dudley, Secretary
<PAGE> 98

INVESTARK BANKSHARES, INC.

By: /s/ HARRY C. ERWIN
Harry C. Erwin
Chairman, President and
Chief Executive Officer

/s/ JOHN STEPHENS
Secretary

<PAGE> 99

EXHIBIT 3.08

RESERVE BOARD INQUIRY

The Federal Reserve Board has inquired about certain transactions by and
among InvestArk, First Bank, North Arkansas and Stephens Inc. The Federal
Reserve Board has questioned these transactions under Sections 23A and 23B of
the Federal Reserve Act. The boards of directors of First Stuttgart Bank & Trust
Company and Bank of North Arkansas have received full reports of these
transactions and have provided to The Federal Reserve Board the Information
requested by such Board.
<PAGE> 100

EXHIBIT 3.09

LITIGATION AND CLAIMS

The following matters are disclosed pursuant to Section 3.09:

1. Claim by Charles C. Miller, Estate of Annie Smith and/or assigns and
distributees, and Gwen Lee for payment pursuant to a stock purchase agreement
dated December 27, 1984. All other similarly situated claimants have accepted
the sum of $23.40 per share in payment of the obligations set forth in such
agreement. The amount payable under the stock purchase agreement to the three
claimants is calculated by InvestArk to be $30,771.00.

2. Griffith Farming v. First National Bank in Stuttgart; Circuit Court of
Monroe County, Arkansas; No. CIV-89-3.
<PAGE> 101

EXHIBIT 3.11

1. Agreement with Erwin & Co. for preparation of 1993 tax returns for
InvestArk, First Bank, and North Arkansas.

2. Agreement with Martin and Company for preparation of 1993 audits return
for InvestArk, First Bank, and North Arkansas.

3. Supplemental retirement contract dated January 5, 1991, between Lloyd
Jones and North Arkansas.

4. Engagement letter between Stephens Inc. and InvestArk, and the related
indemnity agreement.

5. Leases, maintenance agreements, service contracts and other similar
agreements on miscellaneous fixtures, equipment, software and other property
entered into in the ordinary course of business, such as vault maintenance
contracts, elevator maintenance contracts, cleaning service contracts, software
licenses and maintenance agreements and the like.

6. Agreement regarding life insurance with Cole Martin.
<PAGE> 102

EXHIBIT 3.12

1. Profit Sharing Plan at Bank of North Arkansas.,as.

2. Defined Contribution Qualified Pension Plan at First Bank.

3. Self-Insured Health Care Plan (contract expires 8/1/94).

4. Miscellaneous life and accident policies (expiration last day of each month).
<PAGE> 103

EXHIBIT 3.14(H)

COMPENSATION INCREASES

There are no bonuses or increases in compensation for employees of North
Arkansas or First Bank other than those bonuses and increases in compensation
which have been authorized in the books and records of the companies and which
have been accrued and budgeted. For First Bank, bonuses totaling $103,765.44
have been authorized. For North Arkansas, bonuses totaling $30,000 have been
authorized. The weighted average percentage salary increase for North Arkansas
employees from 1993 to 1994, exclusive of compensation for Lloyd Jones, is
approximately 3.7%. The 1994 compensation for Lloyd Jones has not been fixed.

The 1994 compensation for Cole Martin and Robert M. Koch have not been
determined.
<PAGE> 104

EXHIBIT 7.02(I)

First United Bancshares, Inc.
Main and Washington Streets
El Dorado, Arkansas 71730

Gentlemen:

I may presently be considered to be an "affiliate", as defined in paragraph
(a) of Rule 144 of the Rules and Regulations of the Securities and Exchange
Commission ("SEC") under the Securities Act of 1933, as amended (the "Act"), of
InvestArk Bankshares, Inc. an Arkansas Corporation ("InvestArk"). Pursuant to
the merger (the "Merger") of InvestArk with and into First United Bancshares,
Inc. ("First United"), I will acquire shares of the common stock, par
value $1 per share ("Common Stock"), of First United. I represent and warrant
that I (i) am acquiring said shares (as the same may be increased, decreased or
are changed in accordance with the Agreement and Plan of Merger dated December
17, 1993, relating to the Merger, the ("Shares") for my own account (or in the
capacity indicated hereon) and with no present intention of dividing my
participation with others or otherwise making a distribution of the Shares and
(ii) shall not make any sale, transfer or other disposition of the Shares in
violation of the Act or the General Rules and Regulations promulgated thereunder
by the SEC.

I have been advised that the issuance of the Shares to me pursuant to the
Merger has been registered under the Act in the Registration Statement on SEC
Form 5-4, as amended, Registration No. ("Registration Statement") as
filed with the SEC, receipt of a copy of which Registration Statement is hereby
acknowledged. However, I have also been advised that any public offering or sale
by me of any of the Shares will, under current law, require either (i) the
further registration (by amendment of such Form S-4 or otherwise) under the Act
of the Shares to be sold or (ii) compliance with Rule 145 promulgated under the
Act or (iii) the availability of another exemption from such registration.

I agree not to sell, transfer or dispose of the Shares [ ]nless (i) there
is in effect a registration statement under the Act covering such sale,
transfer, or other disposition, or (ii), such sale, transfer or disposition
complies with Rule 145 or is otherwise exempt from registration. Further, I will
furnish to First United such documentation incident to such sale, transfer or
other disposition as First United shall reasonably request evidencing the
availability of any exemption from registration being claimed. Such
documentation shall be provided to First United prior to any such sale, transfer
or other disposition in order that First United, or its counsel, may have a
reasonable opportunity to review the documentation and form an opinion as to the
validity of any such exemption.

I agree that notwithstanding any provision herein or contained in the
Agreement and Plan of Reorganization that I will not sell, transfer, or
otherwise dispose of the Shares, unless United has made public disclosure of
financial results reflecting 30 days' of post-Merger combined operations of
InvestArk and First United within the meaning of Section 201.01 of the SEC's
Codification of Financial Reporting Policies. In addition, I hereby represent
and warrant to First United that I have not made any sales of InvestArk or
United common stock during the 30-day period immediately preceding the date
hereof and I further agree not to engage in any such sales prior to the merger,
nor have I pledged or will I pledge any United or InvestArk common stock to
secure any obligation during such period.

I represent and warrant to First United that:

1. I have carefully read this letter and discussed its requirements and
other applicable limitations upon the sale, transfer or other disposition of the
Shares, to the extent I felt necessary, with my counsel or counsel for
InvestArk.

2. I have been informed by First United that any distribution by me of the
Shares has not been registered under the Act and that the Shares must be held by
me indefinitely until (i) such distribution of the Shares has been registered
under the Act, (ii) a sale of the Shares is made in conformity with the volume
and other
<PAGE> 105

limitations of Rule 145 promulgated by the SEC under the Act, or (iii) some
other exemption from registration is available with respect to any such proposed
sale, transfer or other disposition of the Shares.

3. I have been informed by First United that it is required to file
periodic reports with the SEC and the NASDAQ and that certain sales of the
Shares by me may not be required to be registered under the Act by virtue of
Rule 145 promulgated by the SEC under the Act, provided that such sales are made
in accordance with all of the terms and conditions of such Rule, including among
other things the following:

(a) The amount of First United Common Stock sold by me pursuant to
Rule 145 during any period of three months cannot exceed the quantity limit
of (i) one percent of the total outstanding First United Common Stock or
(ii) the average reported weekly trading volume on NASDAQ during the four
week period immediately preceding receipt of the order by the broker to
execute the transaction, whichever of (i) or (ii) is greater. In computing
the quantity limit it is necessary to count sales not only by me but also
by certain immediate family members and other related persons and others
with whom I may act in concert.

(b) Sales must be made in brokers' transactions as defined by the SEC
Rule 144 (certain provisions of which are incorporated by reference into
Rule 145).

(c) No sales may be made under the Rule unless First United has filed
all SEC reports required to be filed by First: United.

(d) The broker must be given information showing compliance with Rule
145.

4. I understand that First United is under no obligation to [ ]egister
(except to the extent as expressed in that Certain Shareholders Agreement, dated
December 17, 1993) the sale, transfer or other disposition of the Shares by me
or on my behalf or to take any other action necessary in order to make
compliance with an exemption from registration available.

5. I have been informed by First United that if I propose to sell any of
these Shares pursuant to Rule 145, and if such sale would be permitted under the
terms of this letter, First United will, upon my written request, supply me with
the following:

(a) A statement as to whether First United has complied with the
provisions of Rule 145 regarding filing of SEC reports as a condition to
sales made pursuant to that Rule;

(b) A confirmation as to the number of shares of First United Common
Stock outstanding as shown by the most recent report or statement published
by it; and

The information and documents described or referred to above were furnished
to me before my right to acquire the Shares became fixed.

Very truly yours,
<PAGE> 106

APPENDIX II

4-26-1007. RIGHTS OF DISSENTING SHAREHOLDERS.

(a) If a shareholder of a corporation which is a party to a merger or
consolidation files with the corporation, prior to or at the meeting of
shareholders at which the plan of merger or consolidation is submitted to a
vote, a written objection to the plan of merger or consolidation and does not
vote in favor thereof, and the shareholder within ten (10) days after the date
on which the vote was taken makes written demand on the surviving or new
domestic or foreign corporation for payment of the fair value of his shares as
of the day prior to the date on which the vote was taken approving the merger or
consolidation, then, if the merger or consolidation is effected, the surviving
or new corporation shall pay to the shareholder, upon surrender of this
certificate or certificates representing the shares, the fair value thereof.

(b) The demand shall state the number and class of the shares owned by the
dissenting shareholder.

(c) Any shareholder failing to make demand within the ten-day period shall
be bound by the terms of the merger or consolidation.

(d) Within ten (10) days after the merger or consolidation is effected, the
surviving or new corporation, as the case may be, shall give notice to each
dissenting shareholder who has made demand as herein provided for the payment of
the fiar value of his shares.

(e)(1) If within thirty (30) days after the date on which the merger or
consolidation was effected the value of such shares is agreed upon between
dissenting shareholder and the surviving or new corporation, payment shall be
made within ninety (90) days after the date on which such merger or
consolidation was effected, upon the surrender of his certificate or
certificates representing those shares.

(2) Upon payment of the agreed value, the dissenting shareholder shall
cease to have any interest in those shares or in the corporation.

(f)(1) If within the period of thirty (30) days the shareholder and the
surviving or new corporation do not so agree, then the dissenting shareholder,
within sixty (60) days after the expiration of the thirty-day period, may file a
petition in the circuit court of the county in which the registered office of
the surviving corporation is located, if the surviving corporation is a domestic
corporation or in the Pulaski County Circuit Court if the surviving corporation
is a foreign corporation, asking for a finding and determination of the fair
value of the shares and shall be entitled to judgment against the surviving or
new corporation for the amount of the fair value as of the day prior to the date
on which the vote was taken approving such merger or consolidation, together
with interest thereon to the date of the judgment.

(2) The judgment shall be payable only upon and simultaneously with the
surrender to the surviving or new corporation of the certificate or certificates
representing the shares.

(3) Upon payment of the judgment, the dissenting shareholder shall cease to
have any interest in the shares or in the surviving or new corporation.

(4) Unless the dissenting shareholder files the petition within the time
herein limited, the shareholder and all persons claiming under him shall be
bound by the terms of the merger or consolidation.

(g) Shares acquired by the surviving or new corporation pursuant to the
payment of the agreed value thereof or to payment of the judgment entered, as in
this section provided, may be held and disposed of by the corporation as in the
case of other treasury shares.

(h) The provisions of this section shall not apply to a merger if, on the
date of the filing of the articles of merger, the surviving corporation is the
owner of all the outstanding shares of the other domestic or foreign
corporations that are parties to the merger.

HISTORY. Acts 1965, No. 576, sec. 76; A.S.A. 1947, sec. 64-707.

A-II-1
<PAGE> 107

APPENDIX III

RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES

4-27-1301. DEFINITIONS.

In this subchapter:

1. "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer;

2. "Dissenter" means a shareholder who is entitled to dissent from
corporate action under sec. 4-27-1302 and who exercises that right when and in
the manner required by sec.sec. 4-27-1320 -- 4-27-1328;

3. "Fair value", with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to which
the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable;

4. "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances;

5. "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation;

6. "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder;

7. "Shareholder" means the record shareholder or the beneficial
shareholder.

HISTORY. Acts 1987, No. 958, sec. 64-1301; 1987 (1st Ex. Sess.), No. 11,
sec. 10.

4-27-1302. RIGHT OF DISSENT.

A. A shareholder is entitled to dissent from and obtain payment of the fair
value of his shares in the event of any of the following corporate actions:

1. Consummation of a plan of merger to which the corporation is a party:

(i) If shareholder approval is required for the merger by
sec. 4-27-1103 or the articles of incorporation and the shareholder is
entitled to vote on the merger; or

(ii) If the corporation is a subsidiary that is merged with its parent
under sec. 4-27-1104;

2. Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan;

3. Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the shareholders within one
(1) year after the date of sale;

4. An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:

(i) Alters or abolishes a preferential right of the shares;

(ii) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares;

A-III-1
<PAGE> 108

(iii) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;

(iv) Excludes or limits the right of the shares to vote on any matter,
or to cumulate votes, other than a limitation by dilution through issuance
of shares or other securities with similar voting rights; or

(v) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be acquired
for cash under sec. 4-27-604; or

5. Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws, or a resolution of the board of directors
provides that voting or nonvoting shareholders are entitled to dissent and
obtain payment for their shares.

B. A shareholder entitled to dissent and obtain payment for his shares
under this subchapter may not challenge the corporate action creating his
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.

HISTORY. Acts 1987, No. 958, sec. 64-1302; 1987 (1st Ex. Sess.), No. 11,
sec. 11.

4-27-1303. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.

A. A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one (1) person and notifies the corporation in writing
of the name and address of each person on whose behalf he asserts dissenters'
rights. The rights of a partial dissenter under this subsection are determined
as if the shares as to which he dissents and his other shares were registered in
the names of different shareholders.

B. A beneficial shareholder may assert dissenters' rights as to shares held
on his behalf only if:

1. He submits to the corporation the record shareholder's written
consent to the dissent not later than the time the beneficial shareholder
asserts dissenters' rights; and

2. He does so with respect to all shares of which he is the beneficial
shareholder or over which he has power to direct the vote.

HISTORY. Acts 1987, No. 958, sec. 64-1303.

4-27-1403 -- 4-27-1319. [RESERVED.]

PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS

4-27-1320. NOTICE OF DISSENTERS' RIGHTS.

A. If proposed corporate action creating dissenters' rights under
sec. 4-27-1302 is submitted to a vote at a shareholders' meeting, the meeting
notice must state that shareholders are or may be entitled to assert dissenters'
rights under this chapter and be accompanied by a copy of this chapter.

B. If corporate action creating dissenters' rights under sec. 4-27-1302 is
taken without a vote of shareholders, the corporation shall notify in writing
all shareholders entitled to assert dissenters' rights that the action was taken
and send them the dissenters' notice described in sec. 4-27-1322.

HISTORY. Acts 1987, No. 958, sec. 64-1304.

A-III-2
<PAGE> 109

4-27-1321. NOTICE OF INTENT TO DEMAND PAYMENT.

A. If proposed corporate action creating dissenters' rights under
sec. 4-27-1302 is submitted to a vote at a shareholders' meeting, a shareholder
who wishes to assert dissenters' rights:

(1) Must deliver to the corporation before the vote is taken written
notice of his intent to demand payment for his shares if the proposed
action is effectuated; and

(2) Must not vote his shares in favor of the proposed action.

B. A shareholder who does not satisfy the requirements of subsection A. of
this section is not entitled to payment for his shares under this subchapter.

HISTORY. Acts 1987, No. 958, sec. 64-1305.

4-27-1322. DISSENTERS' NOTICE.

A. If proposed corporate action creating dissenters' rights under
sec. 4-27-1302 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of sec. 4-27-1321.

B. The dissenters' notice must be sent no later than ten (10) days after
the corporate action was taken, and must:

1. State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;

2. Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;

3. Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not he acquired beneficial ownership
of the shares before that date;

4. Set a date by which the corporation must receive the payment
demand, which date may not be fewer than thirty (30) nor more than sixty
(60) days after the date the notice required by subsection A. of this
section is delivered; and

5. Be accompanied by a copy of this subchapter.

HISTORY. Acts 1987, No. 958, sec. 64-1306.

4-27-1323. DUTY TO DEMAND PAYMENT.

A. A shareholder sent a dissenters' notice described in sec. 4-27-1322 must
demand payment, certify whether he acquired beneficial ownership of the shares
before the date required to be set forth in the dissenters' notice pursuant to
sec. 4-27-1322B.3., and deposit his certificates in accordance with the terms of
the notice.

B. The shareholder who demands payment and deposits his share certificates
under subsection A. of this section retains all other rights of a shareholder
until these rights are cancelled or modified by the taking of the proposed
corporate action.

C. A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this subchapter.

HISTORY. Acts 1987, No. 958, sec. 64-1307.

A-III-3
<PAGE> 110

4-27-1324. SHARE RESTRICTIONS.

A. The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under sec. 4-27-1326.

B. The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.

HISTORY. Acts 1987, No. 958, sec. 64-1308.

4-27-1325. PAYMENT.

A. Except as provided in sec. 4-27-1327, as soon as the proposed
corporation action is taken, or upon receipt of a payment demand, the
corporation shall pay each dissenter who complied with sec. 4-27-1323 the amount
the corporation estimates to be the fair value of his shares, plus accrued
interest.

B. The payment must be accompanied by:

1. The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen (16) months before the date of payment, an
income statement for that year, a statement of changes in shareholders'
equity for that year, and the latest available interim financial
statements, if any;

2. A statement of the corporations' estimate of the fair value of the
shares;

3. An explanation of how the interest was calculated;

4. A statement of the dissenter's right to demand payment under
sec. 4-27-1328; and

5. A copy of this subchapter.

HISTORY. Acts 1987, No. 958, sec. 64-1309.

4-27-1326. FAILURE TO TAKE ACTION.

A. If the corporation does not take the proposed action within sixty (60)
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.

B. If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under sec. 4-27-1322 and repeat the payment demand procedure.

HISTORY. Acts 1987, No. 958, sec. 64-1310.

4-27-1327. AFTER-ACQUIRED SHARES.

A. A corporation may elect to withhold payment required by sec. 4-27-1325
from a dissenter unless he was the beneficial owner of the shares before the
date set forth in the dissenters' notice as the date of the first announcement
to news media or to shareholders of the terms of the proposed corporate action.

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B. To the extent the corporation elects to withhold payment under
subsection. A. of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of his demand. The corporation shall send with its offer a statement of its
estimate of the fair value of the shares, an explanation of how the interest was
calculated, and a statement of the dissenter's right to demand payment under
sec. 4-27-1328.

HISTORY. Acts 1987, No. 958, sec. 64-1311.

4-27-1328. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.

A. A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment of
his estimate (less any payment under sec. 4-27-1325), or reject the
corporation's offer under sec. 4-27-1327 and demand payment of the fair value of
his shares and interest due, if:

1. The dissenter believes that the amount paid under sec. 4-27-1325 or
offered under sec. 4-27-1327 is less than the fair value of his shares or
that the interest due is incorrectly calculated;

2. The corporation fails to make payment under sec. 4-27-1325 within
sixty (60) days after the date set for demanding payment; or

3. The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty (60) days after the date set
for demanding payment.

B. A dissenter waives his right to demand payment under this section unless
he notifies the corporation of his demand in writing under subsection A. of this
section within thirty (30) days after the corporation made or offered payment
for his shares.

HISTORY. Acts 1987, No. 958, sec. 64-1312.

4-27-1329. [RESERVED.]

JUDICIAL APPRAISAL OF SHARES

4-27-1330. COURT ACTION.

A. If a demand for payment under sec. 4-27-1328 remains unsettled, the
corporation shall commence a proceeding within sixty (60) days after receiving
the payment demand and petition the court to determine the fair value of the
shares and accrued interest. If the corporation does not commence the proceeding
within the sixty-day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.

B. The corporation shall commence the proceeding in the circuit court of
the county where the corporation's principal office (or, if none in this state,
its registered office) is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic corporation
merged with or whose shares were acquired by the foreign corporation was
located.

C. The corporation shall make all dissenters (whether or nor residents of
this state) whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.

D. The jurisdiction of the court in which the proceeding is commenced under
subsection B. of this section is plenary and exclusive. The court may appoint
one (1) or more persons as appraisers to receive evidence and recommend decision
on the question of fair value. The appraisers have the powers described in

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the order appointing them, or in any amendment to it. The dissenters are
entitled to the same discovery rights as parties in other civil proceedings.

E. Each dissenter made a party to the proceeding is entitled to judgment:

(1) For the amount, if any, by which the court finds the fair value of
his shares, plus interest, exceeds the amount paid by the corporation; or

(2) For the fair value, plus accrued interest, of his after-acquired
shares for which the corporation elected to withhold payment under
sec. 4-27-1327.

HISTORY. Acts 1987, No. 958, sec. 64-1313.

4-27-1331. COURT COSTS AND COUNSEL FEES.

A. The court in an appraisal proceeding commenced under sec. 4-27-1330
shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court shall
assess the costs against the corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily, vexatiously, or not
in good faith in demanding payment under sec. 4-27-1328.

B. The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:

1. Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of sec.sec. 4-27-1320 -- 4-27-1328; or

2. Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by this chapter.

C. If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.

HISTORY. Acts 1987, No. 958, sec. 64-1314.

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