FIRST UNITED BANCSHARES INC /AR/, PRE 14A, 1994-04-01

FIRST UNITED BANCSHARES INC /AR/
PRE 14A, 1994-04-01
STATE COMMERCIAL BANKS

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/X/ Preliminary proxy statement
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

First United Bancshares, Inc.
(Name of Registrant as Specified in Its Charter)

John E. Burns
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transactions applies:
N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

N/A
(2) Form, schedule or registration statement no.:

N/A
(3) Filing party:

N/A
(4) Date filed:

N/A
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2

FIRST UNITED BANCSHARES, INC.
EL DORADO, ARKANSAS 71730

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 24, 1994

To The Stockholders of First United Bancshares, Inc.:

Notice is hereby given that the Annual Meeting of the Stockholders of First
United Bancshares, Inc. ("the Company") will be held in the First National
Building, El Dorado, Arkansas, on Tuesday, May 24, 1994, at 2:00 p.m. Central
Daylight Time, for the following purposes:

(1) To elect the board of directors who will serve until the next
annual meeting of stockholders;

(2) To ratify the appointment of Arthur Andersen & Co. as the
independent auditors of the Company until the next annual meeting of
stockholders;

(3) To amend the Articles of Incorporation to increase the number of
authorized shares of the Company from 12,000,000 shares to 24,000,000
shares;

(4) To consider and adopt the First United Bancshares, Inc. 1994
Equity Participation Plan; and

(5) To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.

Only stockholders of record as of the close of business on March 17, 1994
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof. The Company's stock transfer books will not be closed.
Stockholders are cordially invited to attend the Annual Meeting in person.

By Order of the Board of Directors

/S/ ROBERT G. DUDLEY

ROBERT G. DUDLEY
Secretary

El Dorado, Arkansas
April 22, 1994

YOUR VOTE IS IMPORTANT

YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR
SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE
PRESENCE OF A QUORUM MAY BE ASSURED. THE GIVING OF SUCH PROXY DOES NOT AFFECT
YOUR RIGHT TO REVOKE IT LATER OR VOTE YOUR SHARES IN PERSON IN THE EVENT YOU
SHOULD ATTEND THE ANNUAL MEETING. THE PROMPT RETURN OF YOUR SIGNED PROXY,
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD, WILL AID THE COMPANY IN REDUCING
THE EXPENSE OF ADDITIONAL PROXY SOLICITATION.
<PAGE> 3

INDEX

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SOLICITATION OF PROXY................................................................. 1
REVOCATION OF PROXY................................................................... 1
VOTING RIGHTS OF THE COMPANY'S SECURITIES
General............................................................................. 1
Cumulative Voting for Election of Directors......................................... 2
Method of Voting.................................................................... 2
Outstanding Voting Securities and Principal Holders Thereof......................... 2
ELECTION OF DIRECTORS
General............................................................................. 3
Nominees for Directors.............................................................. 3
Director Nomination and Qualification............................................... 6
Meetings and Committees of the Board................................................ 7
Compensation of Directors........................................................... 8
Compliance with Section 16(a) of the Securities Exchange Act of 1934................ 8
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS................................... 8
PROPOSAL TO AMEND ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF THE COMPANY FROM 12,000,000 SHARES TO 24,000,000 SHARES................... 9
PROPOSAL TO APPROVE THE FIRST UNITED BANCSHARES, INC. 1994 EQUITY PARTICIPATION
PLAN................................................................................ 9
EXECUTIVE COMPENSATION
Report of Compensation, ESOP and Benefits Committee
Compensation Policy.............................................................. 14
Measures of Performance.......................................................... 14
1993 Executive Compensation...................................................... 15
Compensation of Chief Executive Officer.......................................... 15
Stock Performance................................................................... 16
Compensation of Management.......................................................... 17
Security Ownership of Executive Officers............................................ 19
Compensation Agreements............................................................. 20
TRANSACTIONS WITH MANAGEMENT AND OTHERS............................................... 20
ANNUAL REPORT......................................................................... 22
OTHER MATTERS......................................................................... 23
STOCKHOLDER PROPOSALS................................................................. 23
</TABLE>
<PAGE> 4

PRELIMINARY COPIES

FIRST UNITED BANCSHARES, INC.
MAIN AND WASHINGTON STREETS
EL DORADO, ARKANSAS 71730

PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 24, 1994

SOLICITATION OF PROXIES

Each holder of record of Common Stock of First United Bancshares, Inc.
("the Company") as of the close of business on March 17, 1994, is entitled to
vote at the Annual Meeting of Stockholders to be held in the First National Bank
Building, Main and Washington Streets, El Dorado, Arkansas on Tuesday, May 24,
1994 at 2:00 p.m., and any adjournment thereof (the "Meeting"). A proxy card is
enclosed for use at such Meeting if you are unable to attend in person. The
persons named therein as proxies were selected by the Board of Directors of the
Company and the proxy is solicited on behalf of the Board of Directors of the
Company.

This Proxy Statement and the accompanying Proxy Card are first being mailed
to stockholders on or about April 22, 1994. Such solicitation is being made by
mail and may also be made in person or by telephone or telegraph by officers,
directors or regular employees of the Company who will not be specially
compensated for such additional solicitation, if necessary. All expenses
incurred in such solicitation, including the reimbursement of certain
fiduciaries for expenses incurred by them in forwarding the proxy solicitation
materials to the beneficial owners of the Company's Common Stock held of record
by such fiduciaries, will be borne by the Company.

REVOCATION OF PROXY

The Company encourages the personal attendance of stockholders at the
Meeting, and the giving of the Proxy does not preclude the right to vote in
person should the person giving the Proxy so desire. THE PERSON GIVING THE PROXY
HAS THE POWER TO REVOKE THE SAME BEFORE THE PROXY IS EXERCISED BY GIVING WRITTEN
NOTICE OF REVOCATION PRIOR TO THE ANNUAL STOCKHOLDERS MEETING TO ROBERT G.
DUDLEY, SECRETARY, AT FIRST UNITED BANCSHARES, INC., MAIN AND WASHINGTON
STREETS, EL DORADO, ARKANSAS 71730. FURTHERMORE, A PROXY WILL BE SUSPENDED IF
THE STOCKHOLDER WHO EXECUTED IT IS PRESENT AT THE MEETING AND ELECTS TO VOTE IN
PERSON.

VOTING RIGHTS OF THE COMPANY'S SECURITIES

GENERAL

The Common Stock of the Company is its only class of voting securities. At
the Meeting, each Stockholder will be entitled to one vote, in person or by
proxy, for each share of Common Stock owned of record as of the close of
business on March 17, 1994. The stock transfer books of the Company will not be
closed.
<PAGE> 5

CUMULATIVE VOTING FOR ELECTION OF DIRECTORS

With respect to the election of directors, every Stockholder of the Company
has cumulative voting rights. Such rights provide that every Stockholder
entitled to vote at such election should have the right to vote, in person or by
proxy, the number of shares owned by him for as many persons as there are
directors to be elected, or to cumulate his votes by giving one nominee as many
votes as the number of such directors multiplied by the number of his shares
shall equal, or by distributing such votes on the same principle among any
number of such nominees as the Stockholder may desire. IF A STOCKHOLDER DESIRES
TO EXERCISE HIS CUMULATIVE VOTING RIGHTS, THAT STOCKHOLDER OR HIS DULY APPOINTED
REPRESENTATIVE MUST ATTEND THE MEETING AND VOTE IN PERSON.

METHOD OF VOTING

The enclosed Proxy Card provides a method for Stockholders to withhold
authority to vote for any one or more of the nominees while granting authority
to the proxies to vote for the remaining nominees. The names of all nominees are
listed on the Proxy Card. If you wish to grant the proxies authority to vote for
all nominees, check the box marked "FOR" above the names of the nominees. If you
wish to withhold authority to vote for all nominees, check the box marked
"WITHHOLD AUTHORITY" above the names of the nominees. If you wish your shares to
be voted for some nominees and not for one or more of the nominees, indicate the
name(s) of the nominee(s) for whom you are withholding the authority to vote by
drawing a line through such name(s). The Board of Directors anticipates that
this method of electing directors will make the voting process more meaningful
to the Stockholders of the Company.

The enclosed Proxy Card also provides a method for Stockholders to abstain
from voting on each matter. By abstaining, shares will not be voted for or
against such particular matter but will be counted for quorum purposes. If you
wish to abstain from voting on any matter, check the box marked "ABSTAIN". While
there may be instances in which a Stockholder will wish to abstain, the Board of
Directors encourages all Stockholders to vote their shares in their best
judgment and to participate in the voting process to the fullest extent
possible.

OUTSTANDING VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

At the close of business on March 17, 1994, the record date for the
Meeting, the Company had issued and outstanding 4,272,276 shares of $1.00 Par
Value, Common Stock. Listed in the following table are those Stockholders known
to the Company's management, as of March 17, 1994, who own beneficially 5% or
more of the Company's Common Stock.

<TABLE>
<CAPTION>
AMOUNT
AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP PERCENT OF CLASS
- ----------------------- ----------------------------------- --------- ----------------
<S> <C> <C> <C>
Common Stock, First Land & Timber Corporation(1) 214,632 5.02%
Par Value $1.00 Main and Washington Streets
El Dorado, Arkansas 71730
</TABLE>

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NOTE:

(1) All shares of Common Stock are beneficially owned with voting and investment
power unless otherwise stated. See Note (3) on page 5 of this Proxy
Statement.

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<PAGE> 6

ELECTION OF DIRECTORS

GENERAL

At the Meeting, twenty (20) directors, constituting the entire Board of
Directors of the Company, will be elected to hold office until the next Annual
Meeting of Stockholders or until their successors have been duly elected and
qualified. Should any of the nominees listed below become unavailable for
election for any reason, presently unknown, or be unable to serve, the persons
named as proxies in the enclosed Proxy Card will vote for the election of such
other person or persons as the Board of Directors may recommend.

If the enclosed Proxy Card is duly executed, dated and received in time for
the Meeting, it will be voted in accordance with the instructions of the
stockholder(s). IF NO INSTRUCTIONS ARE INDICATED, THEN IT IS THE INTENTION OF
THE PERSONS NAMED AS PROXIES TO VOTE THE SHARES REPRESENTED THEREBY TO ELECT THE
TWENTY PERSONS NOMINATED FOR ELECTION AS DIRECTORS OF THE COMPANY.

VOTE REQUIRED FOR ELECTION

THE ELECTION OF EACH DIRECTOR WILL REQUIRE THE AFFIRMATIVE VOTE OF THE
HOLDERS OF A MAJORITY OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK OF
THE COMPANY REPRESENTED, EITHER IN PERSON OR BY PROXY, AT THE ANNUAL MEETING.

NOMINEES FOR DIRECTORS

The following table represents certain information with respect to each
nominee for director of the Company, naming them, and beneficial ownership of
the Company's Common Stock for all nominees for director and executive officers
as a group, without naming them, as of February 1, 1994.

3
<PAGE> 7

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND BUSINESS EXPERIENCE DIRECTOR BENEFICIAL OF
FOR THE LAST FIVE YEARS AGE SINCE(1) OWNERSHIP(2) CLASS
------------------------------------------- --- -------- ------------ -------
<S> <C> <C> <C> <C>
James V. Kelley............................ 44 1985 3,984 .09%
Chairman of the Board, President and
Chief Executive Officer of the Company;
Chairman of the Board and Chief Executive
Officer of First National Bank of El
Dorado
Roy E. Ledbetter........................... 64 1984 10,317(9) .24%
President and Chief Executive Officer of
Highland Industrial Park, Inc., A
Subsidiary of Highland Resources, Inc.,
principally engaged in Industrial
Development
Michael F. Mahony(10)...................... 49 1981 46,574(11)(3) 1.09%
Partner of Mahony & Yocum,
Attorneys at Law
Richard H. Mason........................... 56 1983 1,054 .02%
President of Gibraltar Energy Company,
principally engaged in Oil and Gas
Exploration and Production
Jack W. McNutt............................. 59 1990 8,000 .19%
Director, President and Chief Executive
Officer of Murphy Oil Corporation,
principally engaged in Oil and Gas
Exploration and Production
William E. Morgan.......................... 67 1987 11,428 .27%
President of Warnock Furniture, Inc.,
principally engaged in Furniture and
Appliance Retailing
R. Madison Murphy(6)....................... 36 1989 57,478(12) 1.35%
Director, Executive Vice President and
Chief Financial & Administrative Officer
of Murphy Oil Corporation, principally
engaged in Oil and Gas Exploration and
Production
Robert C. Nolan(6)......................... 52 1982 161,662(13)(3) 3.78%
Managing Partner of Munoco Company,
principally engaged in Oil and Gas
Exploration and Production
Paula M. O'Connor.......................... 78 1983 38,193(14) .89%
Investments
</TABLE>

4
<PAGE> 8

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND BUSINESS EXPERIENCE DIRECTOR BENEFICIAL OF
FOR THE LAST FIVE YEARS AGE SINCE(1) OWNERSHIP(2) CLASS
------------------------------------------- --- -------- ------------ -------
<S> <C> <C> <C> <C>
Katherine Patton Ozment.................... 70 1987 129,000(15) 3.02%
Investments
Cal Partee, Jr.(5)......................... 49 1983 13,124 .31%
Partner of Partee Flooring Mill, Oil and
Timber Investments, principally engaged
in Oil and Lumber Production
W. C. Partee(5)............................ 84 1983 145,068 3.40%
Senior Partner of Partee Flooring Mill,
Oil and Timber Investments, principally
engaged in Oil and Lumber Production;
Chairman of the Board of First National
Bank of Magnolia
Chesley Pruet.............................. 79 1983 41,722 .98%
President and Chief Executive Officer of
Chesley Pruet Drilling Co., principally
engaged in Contract Drilling of Oil and
Gas Wells
John D. Trimble, Jr........................ 62 1983 28,972 .68%
Managing Partner of Trimble Properties,
principally engaged in Real Estate
Development and Investment
Ralph C. Weiser............................ 69 1986 38,544 .90%
Partner of Weiser-Brown Operating
Company, principally engaged in Oil and
Gas Exploration and Production
Dr. David M. Yocum, Jr..................... 72 1982 23,260(16)(3) .54%
Managing Partner of Alice-Sidney Oil
Company, principally engaged in Oil
Exploration and Production
All Nominees for Director and Executive Officer
as a Group (25 Persons)................................... 919,326 21.52%
</TABLE>

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

NOTES:

(1) All nominees have served as directors of the Company during their current
term since May 25, 1993.

(2) All shares of Common Stock are beneficially owned with investment and
voting power, unless otherwise stated.

(3) Share totals exclude 214,632 shares owned of record by First Land & Timber
Corporation. Messrs. Mahony, Nolan and Yocum are directors and stockholders
of First Land & Timber Corporation with five other directors of First Land
& Timber Corporation, including Robert G. Dudley who serves as Secretary of
the Company and President of First National Bank of El Dorado. Messrs.
Mahony, Nolan, Yocum and Dudley expressly disclaim beneficial ownership of
such shares.

(4) Share totals exclude 124,034 shares owned of record by First Land &
Investment Company. Mr. Burrow is a director and stockholder of First Land
& Investment Company along with eight other directors of

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<PAGE> 9

First Land & Investment Company, including Robert G. Dudley who serves as
Secretary of the Company and President of First National Bank of El Dorado.
Messrs. Burrow and Dudley expressly disclaim beneficial ownership of such
shares.

(5) E. Larry Burrow is the son-in-law of W. C. Partee and the brother-in-law of
Cal Partee, Jr. W. C. Partee is the father of Cal Partee, Jr. Winston
Wilson, a director of First National Bank of Magnolia, is the
brother-in-law of W. C. Partee and the uncle of Cal Partee, Jr.

(6) Claiborne P. Deming, R. Madison Murphy and Robert C. Nolan are first
cousins of each other.

(7) Claiborne P. Deming owned of record 118,060 shares; of such shares 9,224
were held by Mr. Deming as sole trustee of trusts for the benefit of his
children who all live in his household and in which he disclaims any
beneficial interest.

(8) All 8,368 shares were held by Mr. DuPriest as trustee of the DuPriest
Family Revocable Living Trust.

(9) 33,516 shares were held by Highland Industrial Park, Inc. Roy E. Ledbetter,
who is an officer of Highland Industrial Park, Inc., expressly disclaims
beneficial interest in such shares.

(10) Michael F. Mahony is the brother of Emon A. Mahony, Jr. who is a director
of The City National Bank, Fort Smith, Arkansas.

(11) Michael F. Mahony and his wife owned either indirectly or of record 7,914
shares; 4,000 shares were held by Mr. Mahony as trustee for the benefit of
his children, in which Mr. Mahony disclaims any beneficial interest; 21,970
shares were owned by Mr. Mahony's mother which Mr. Mahony controls by
virtue of a durable power of attorney and in which Mr. Mahony disclaims any
beneficial interest; and 12,690 shares were owned by the estate of Mr.
Mahony's father, of which Mr. Mahony is executor and a residual
beneficiary.

(12) R. Madison Murphy owned of record 54,593 shares; of such shares 6,525
shares were held by R. Madison Murphy as trustee of trusts for the benefit
of minor children; 690 shares were held by Mr. Murphy as trustee of trusts
for the benefit of his minor nieces and nephews; 2,205 shares were held by
others as trustees of trusts for the benefit of Mr. Murphy's minor
children; 2,885 shares are owned of record by Mr. Murphy's wife; beneficial
interest in all of such shares is expressly disclaimed by Mr. Murphy.
Additionally, Mr. Murphy beneficially owns 4,380 shares by virtue of an
interest in a trust of which he is not a trustee.

(13) Robert C. Nolan owned of record 43,548 shares; Mr. Nolan as Trustee (with
shared voting and investment power) controlled 118,074 shares; 13,356
shares of the indicated total are owned by Mr. Nolan's adult children,
beneficial interest in which is expressly disclaimed by Mr. Nolan.

(14) Paula M. O'Connor owned of record 37,139 shares; 1,056 shares were owned of
record by Mrs. O'Connor, as trustee.

(15) Katherine Patton Ozment owned of record 408 shares; 128,592 shares that
Mrs. Ozment has the right to vote were owned by her adult children and
their children.

(16) Dr. David M. Yocum, Jr. owned 22,034 shares; of such shares 3,056 shares
were held by Dr. Yocum and his wife as joint trustees for the benefit of
their son; 1,226 shares were owned of record by Dr. Yocum's wife; 6,392
shares were owned of record by Alice-Sidney Oil Company.

DIRECTOR NOMINATION AND QUALIFICATION

The Company's Bylaws currently provide that the Board of Directors may
annually designate a standing nominating committee ("Nominating Committee").
Names of all proposed nominees for election at the next annual meeting of
Stockholders are referred to the Nominating Committee for its consideration. The

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<PAGE> 10

Nominating Committee makes such inquiry into the qualification of proposed
nominees as it deems appropriate and annually reports its findings to the Board
of Directors concerning the qualifications of proposed nominees and submits its
recommended slate of nominees. In making such recommendations, the Nominating
Committee does not discriminate based upon the sex, race or religion of any
proposed nominee. If approved by the Board of Directors, the Nominating
Committee's recommended slate of nominees becomes the Board of Directors'
recommended slate of nominees. It is the policy of the Nominating Committee to
consider nominees recommended by Stockholders. The procedure to be followed by
any stockholder who desires to recommend a nominee for consideration by the
Nominating Committee is the same as that procedure disclosed under the caption
"Stockholders Proposals" on page 23 of this Proxy Statement.

MEETINGS AND COMMITTEES OF THE BOARD

During fiscal year 1993, the Company's Board of Directors held twelve (12)
meetings. With the exception of Director Chesley Pruet, each incumbent director
attended more than 75% of the meetings of the Board or meetings of the
committees of the Board held during the periods in which they served as members
of the Company's Board of Directors.

Executive Committee. The Board of Directors has a standing Executive
Committee which is authorized to exercise all authority of the Board of
Directors in the intervals between the meetings of the Board of Directors with
respect to the business affairs of the Company. The members of the Executive
Committee are Directors Grady E. DuPriest, James V. Kelley, Roy E. Ledbetter,
Robert C. Nolan, Cal Partee, Jr., W. C. Partee, John D. Trimble, Jr., and Dr.
David M. Yocum, Jr. During fiscal year 1993, the Executive Committee met
thirteen (13) times.

Compensation, ESOP and Benefits Committee. The Board of Directors has a
standing Compensation, ESOP and Benefits Committee which formulates policies and
procedures with respect to compensation and benefits. The members of the
Compensation, ESOP and Benefits Committee are Directors E. Larry Burrow,
Claiborne P. Deming, Richard H. Mason and Robert C. Nolan. The functions of this
Committee are (1) to review, approve and recommend to the Board salaries of all
officers of the Company and of its wholly-owned banking subsidiaries; (2) to
review, approve and recommend to the Board annually the aggregate amount to be
expended as annual bonuses to executive officers of the Company and its
wholly-owned banking subsidiaries; and (3) to review, oversee and approve the
employee benefit plans of the Company. During fiscal year 1993, the Committee
met four (4) times.

Audit Committee. The Board of Directors has a standing Audit Committee
which oversees the internal and external audit functions. The members of the
Audit Committee are Directors E. Larry Burrow, Michael F. Mahony, William E.
Morgan, R. Madison Murphy, and John D. Trimble, Jr. The functions of the Audit
Committee are (1) to review and examine the internal control, compliance and
accounting operating systems of the Company and its subsidiary banks; (2) to
recommend to the Board any changes in policy deemed necessary as a result of
this review; and (3) to recommend to the Board and Stockholders the appointment
of the Company's external audit firm. During fiscal year 1993, the committee met
four (4) times

Nominating Committee. The Board of Directors has a standing Nominating
Committee, the sole function of which is to nominate candidates to the Board of
Directors. The members of the Nominating Committee are Directors William A.
Eckert, Jr., John D. Trimble, Jr., Ralph C. Weiser, and Dr. David M. Yocum, Jr.
During fiscal year 1993, the Nominating Committee met one (1) time.

Asset-Liability Committee. The Board of Directors has a standing
Asset-Liability Committee which reviews and examines the asset-liability
sensitivity of each subsidiary bank and reports its findings to the

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<PAGE> 11

Board. The members of the Asset-Liability Committee are Directors James V.
Kelley, Richard H. Mason, and John D. Trimble, Jr. During fiscal year 1993, the
Asset-Liability Committee did not meet.

COMPENSATION OF DIRECTORS

All members of the Board of Directors of the Company other than executive
officers are paid a retainer of $300.00 per month in addition to a fee of
$200.00 per meeting for all regular and special meetings of the Board which they
attend. Members of the Board serving on Board committees are paid a fee of
$75.00 for each meeting they attend.

Directors receive no other cash or cash-equivalent forms of remuneration
solely in their capacities as directors of the Company or its subsidiaries.
Officers of the Company and its subsidiaries who also serve on the Company's
Board are not paid a fee for serving in the capacity of director. The total cost
to the Company for such fees during 1993 was $110,625.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

The Company's executive officers, directors and persons who own more than
ten percent (10%) of the Company's Common Stock must file reports of ownership
and changes of ownership in the Company with the Securities Exchange Commission
pursuant to Section 16(a) of the Securities and Exchange Act of 1934 (the
"Exchange Act"). Additionally, Item 405 of Regulation S-K under the Act requires
the Company to identify in its proxy statement those individuals for whom one of
the above referenced reports was not filed on a timely basis during the most
recent fiscal year or prior fiscal years. Based exclusively on information
provided to the Company by individual executive officers and directors, the
Company believes that before and during fiscal year 1993, all filing
requirements applicable to executive officers and directors have been made in
compliance with Section 16(a) and the rules promulgated thereunder.

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

Arthur Andersen & Co., certified public accountants, serve as the Company's
independent auditors for the fiscal year ending December 31, 1994, and the Board
of Directors has directed that such appointment be submitted to the Stockholders
at the Meeting for their ratification and approval thereof. The Company has been
advised by Arthur Andersen & Co. that neither it nor any of its partners or
associates has any relationship with the Company other than the usual
relationship that exists between independent public accountants and clients. If
the foregoing appointment is rejected by the Stockholders, the Board of
Directors will appoint an independent auditor to serve for the fiscal year
ending December 31, 1994, whose appointment to serve for any period subsequent
to the 1995 Annual Meeting shall be subject to Stockholders' approval at such
Annual Meeting.

Representatives of Arthur Andersen & Co. will be present at the Meeting,
will have an opportunity to make a statement to the Stockholders, if desired,
and will be available to respond to appropriate questions from Stockholders.

In connection with its audit of the books and accounts of the Company for
the fiscal year ended December 31, 1993, Arthur Andersen & Co. examined the
Company's annual consolidated financial statements, performed a review of its
consolidated annual and quarterly filings with the Securities Exchange
Commission, and consulted with the Company concerning other accounting and
certain tax matters.

THE BOARD OF DIRECTORS RECOMMENDS THE RATIFICATION AND APPROVAL OF THE
APPOINTMENT OF ARTHUR ANDERSEN & CO. AS INDEPENDENT AUDITORS.

8
<PAGE> 12

PROPOSAL TO AMEND ARTICLES OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF THE COMPANY FROM
12,000,000 SHARES TO 24,000,000 SHARES

The Board of Directors has determined that it is in the best interest of
the Company to amend the Company's Articles of Incorporation ("Articles") to
increase the number of authorized shares of Common Stock, $1.00 par value from
12,000,000 shares to 24,000,000 shares. On March 17, 1994, First United had
4,272,276 shares of its authorized Common Stock issued and outstanding. The
Common Stock is traded on the National Association Securities Dealers Automated
Quotations-National Market System under the symbol of "UNTD". The Common Stock
does not entitle Stockholders to preemptive rights. However, ownership of the
Common Stock does entitle Stockholders the right to receive dividends, said
dividends are declared at the discretion of the Company's Board of Directors,
and the right to vote on all matters that require stockholder approval under the
Arkansas Business Corporation Act of 1987, as amended. Unless otherwise
required, the Company does not intend to seek additional authorization to issue
the shares of Common Stock authorized by this proposal.

Over the past year, First United has actively sought to acquire additional
banks or bank holding companies through acquisition of both stock and assets.
The Company currently is a party to an acquisition agreement which, if
consummated, will result in the issuance of additional Common Stock. The Company
expects this activity to continue and a portion of the increase in the
authorized shares of Common Stock may be used in future acquisitions by First
United.

The Board of Directors also believes that additional shares of its Common
Stock should be authorized to provide for the issuance of shares for the First
United Bancshares, Inc. 1994 Equity Participation Plan ("Equity Participation
Plan"). The Equity Participation Plan contains a provision for the issuance of
shares of First United Common Stock and is one method by which the Company seeks
to acquire, retain and reward its employees for their service to the Company.
The Board of Directors has recommended that Stockholders adopt the Equity
Participation Plan (see the discussion of the plan below).

APPROVAL OF THE AMENDMENT WILL REQUIRE THE AFFIRMATIVE VOTE OF THE HOLDERS OF
TWO-THIRDS ( 2/3) OF ALL ISSUED AND OUTSTANDING SHARES OF COMMON STOCK OF THE
COMPANY. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
AMENDMENT OF THE ARTICLES OF INCORPORATION.

PROPOSAL TO APPROVE THE FIRST UNITED BANCSHARES, INC.
1994 EQUITY PARTICIPATION PLAN

The Board of Directors has determined that it is in the best interest of
the Company to begin the practice of making certain equity participation awards
available to those key employees responsible for the continued growth of the
Company's business. The Board, as well as the Compensation, ESOP and Benefits
Committee ("Compensation Committee"), believes that providing such employees
with an opportunity to acquire a proprietary interest in the Company creates in
such key employees an increased interest in and greater concern for the welfare
of the Company and its Stockholders. Accordingly, on March 21, 1994, the Board
of Directors upon the recommendation of both the Compensation Committee and the
Executive Committee adopted the First United Bancshares, Inc. 1994 Equity
Participation Plan (the "Equity Participation Plan") and directed that it be
submitted to the Company's Stockholders for consideration and approval. Assuming
approval by the Stockholders at the Meeting, the effective date of the Equity
Participation Plan will be the date the Equity Participation Plan was approved
by the Board.

9
<PAGE> 13

The following is a brief summary of the proposed Equity Participation Plan.

ADMINISTRATION

The Equity Participation Plan shall be administered by the Board of
Directors of the Company, which, to the extent it shall determine, may delegate
its powers with respect to administration of the Equity Participation Plan to
the Compensation Committee, composed of not less than three members of the Board
of Directors, whose members are ineligible to participate in the Equity
Participation Plan and who are "disinterested persons" within the meaning of
Rule 16b-3 of the Exchange Act of 1934. The Board of Directors or Committee, in
its discretion, determines among other things; (i) the key employees eligible to
participate in the Equity Participation Plan; (ii) the number of shares to be
optioned or stock appreciation rights to be granted to individuals under the
Equity Participation Plan; (iii) the manner and periods in which such options or
stock appreciation rights shall vest and become exercisable, and (iv) such other
terms and provisions thereof, including but not limited to, provisions relating
to the effect upon the ability to exercise an option or stock appreciation right
in case of death or termination of employment of a key employee, and any change
in the vesting of options or stock appreciation rights upon the occurrence of a
"change in control" of the Company. Notwithstanding the foregoing, no member of
the Board may exercise discretion with respect to, or participate in, the
administration of the Equity Participation Plan if, at any time within one year
prior to such exercise of discretion or participation, the director has received
stock, stock options, stock appreciation rights or any other derivative security
(as defined under the appropriate provisions of the Exchange Act) pursuant to
the Equity Participation Plan or any other plan of the Company or its
subsidiaries as to which any discretion by such director is exercised.

ELIGIBILITY

All officers and executive personnel of the Company and its subsidiaries
determined in the discretion of the Board of Directors or Compensation Committee
to be "key employees" are eligible to participate in the Equity Participation
Plan. The term "key employee" generally means an employee who renders services
which tend to contribute materially to the success of the Company or which
reasonably may be anticipated to contribute materially to the success of the
Company. Members of the Board of Directors of the Company who are not employed
as regular employees may not participate in the Equity Participation Plan. As of
March 21, 1994, the Board of Directors and the Compensation Committee granted
Restricted Options covering 546 shares and Non-Statutory Options covering 4,918
shares to James V. Kelley. As of this date, Mr. Kelley had been designated as
the only key employee eligible to participate in the Equity Participation Plan.
The following table discloses this grant of benefits:

10
<PAGE> 14

NEW PLAN BENEFITS(1)

<TABLE>
<CAPTION>
1994 EQUITY PARTICIPATION PLAN
---------------------------------------------------------
DOLLAR NUMBER OF SHARES UNDERLYING
NAME AND POSITION VALUE ($)(2) OPTION
- ------------------------------------------ ------------- --------------------------------------
<S> <C> <C>
James V. Kelley $ -0-(3) Nonstatutory Option - 4,918 shares(5)
President, Chairman, Chief Executive $15,288(4) Restricted Option - 546 shares(6)
Officer of Company and
Director of Company
Executive Officer Group $15,288 same as above(7)
Non-Employee Director Group $ -0- none
Non-Executive Employee Group $ -0- none
</TABLE>

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

Notes:

(1) The Board of Directors of the Company adopted the 1994 Equity Participation
Plan ("Plan") effective March 21, 1994, subject to subsequent Company
stockholder approval. Participation in the Plan, and the grant of Options
and/or SARs under the Plan is at the sole discretion of the Board. Any
benefits to be realized under the Plan are not yet determinable, with the
exception of those shown in this table.

(2) Dollar values as of March 21, 1994.

(3) On March 21, 1994, a Nonstatutory Option for 4,918 shares of Company stock
was granted to the indicated executive officer. Such grant was made at 100%
of such stock's current fair market value. Therefore, no current dollar
value is attributable to such grant.

(4) On March 21, 1994, a Restricted Option for 546 shares of Company stock was
granted to the indicated executive officer. Shares of Company stock subject
to the Restricted Option may be acquired at no cost by the executive
officer. Based on a $28 fair market value per share on March 21, 1994, the
shares subject to the Restricted Option had the indicated dollar value.

(5) Shares subject to the Nonstatutory Option may be acquired by paying the
grant price per share, which was 100% of the fair market value of Company
stock on the date of grant. No shares of Common stock subject to the
Nonstatutory Option may be exercised within one year from the date of
grant. Thereafter, the shares vest cumulatively 25% per year, up to 100%
vesting four years from the date of grant.

(6) Shares of Company stock subject to the Restricted Option may be acquired at
no cost by the indicated executive officer after a 5-year period from the
date of grant.

(7) Participation in the Plan is at the discretion of the Board of Directors of
the Company. As of the date of this Proxy Statement, only the executive
officer shown participates in the Plan.

SHARES AVAILABLE FOR EQUITY PARTICIPATION PLAN AWARDS

Options or stock appreciation rights may be granted until March 21, 2004,
for a maximum of 100,000 shares of Common Stock, par value $1.00, which may be
authorized but unissued shares or treasury shares, as the Board of Directors may
determine. Common Stock subject to unexercised options or stock appreciation
rights that expire will again become available for the grant of options or stock
appreciation rights under the Equity Participation Plan. As of March 17, 1994
the market value of the Common Stock underlying the options was $295,000.

11
<PAGE> 15

TYPE OF OPTIONS

The Equity Participation Plan provides for the granting of stock options
(the "Options") to purchase shares of the Company's Common Stock. Under the
Equity Participation Plan, each Option gives the key employee thereof the right
to acquire one share of Common Stock for the price and on terms set forth
therein. The Equity Participation Plan will enable the Company to grant either
incentive stock options ("Incentive Options") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code") or Options that do
not meet the requirements of Incentive Options ("Non-Statutory Options").
Furthermore, the Equity Participation Plan will enable the Company to grant
restricted stock Options ("Restricted Options"), which grant the employee an
Option to acquire shares of Common Stock at no cost over a period of time.

VESTING AND TERMINATION OF OPTIONS

No Incentive Option or Non-Statutory Option shall be exercisable prior to
the date of one (1) year, or after the date of ten (10) years, from the date the
Option was granted. No Restricted Option shall be exercisable prior to the date
five (5) years, or after the date ten (10) years, from the date the Option was
granted. Both Incentive Options and Non-Statutory Options vest cumulatively over
a four-year period, beginning one year following the date of the grant. Vesting
occurs 25% per year, up to 100% vesting four years after the date of the grant.

Unless the Board of Directors or Committee, in its discretion, determines
otherwise at the time of grant, the Equity Participation Plan provides that upon
termination of employment of a key employee the right to exercise any non-vested
option will terminate at the date the key employee's employment is terminated.
However, in the event of a change of control of the Company, in the event of age
65 retirement (or retirement prior to age 65 with the consent of the Board of
Directors) or upon the total disability of a key employee, each such key
employee shall immediately become one hundred percent (100%) vested in any award
granted to him under the Equity Participation Plan.

OPTION PRICE

The exercise price per share for each Incentive Option may not be less than
the fair market value of the underlying shares on the date of the grant. The
exercise price per share for each Non-Statutory Option may not be less than 95%
of fair market value of the underlying shares on the date of the grant. A
Restricted Option may be exercised at no cost to the key employee.

PAYMENT FOR SHARES

Options may be exercised upon notice to the Company and payment of the
Option exercise price either (i) in cash, or (ii) through tender of one or more
shares of the Company's Common Stock already owned (with fair market value of
the stock at the date of exercise considered payment).

ASSIGNABILITY OF OPTIONS

No Option shall be assignable or transferrable by the key employee except
by will or by the laws of descent and distribution, and each Option is
exercisable during the lifetime of the key employee only by such key employee
and at death by his or her heirs, executors or administrators.

12
<PAGE> 16

STOCK APPRECIATION RIGHTS

In addition to Options, the Equity Participation Plan provides for the
grant of stock appreciation rights ("SARs") which, if granted, must be granted
simultaneously with the grant of an Option (either Incentive or Non-Statutory)
in conjunction therewith. An SAR is limited in that the Board may only grant up
to two SARs for every three shares of Common Stock subject to any Incentive or
Non-Statutory Option. SARs must be exercised in tandem with the Incentive or
Non-Statutory Option to which they relate. An SAR entitles the holder, upon
exercise of such SAR, to receive from the Company cash based upon the changes in
the Company's Common Stock price having an aggregate value equal to the product
of (i) the excess of the fair market value on the date of exercise over the
exercise price per share specified in such SAR or its related Option, multiplied
by (ii) the number of shares for which such SAR shall be exercised. SARs are
subject to the same provisions regarding transferability, termination of
employment and adjustability upon changes in the capital structure of the
Company as applicable to the related Options.

TAX CONSEQUENCES

Under currently applicable provisions of the Code, as amended, a key
employee will not be deemed to receive any income for federal income tax
purposes upon the grant of any Option or SAR under the Equity Participation
Plan, nor will the Company be entitled to a tax deduction at that time. Upon the
exercise of a Non-Statutory Option or SAR, the key employee will be deemed to
have received ordinary income in the amount equal to the difference between the
exercise price and the market price of shares on the exercise date. The Company
will be allowed an income tax deduction equal to the excess of market value of
the shares on the date of exercise over the cost of such shares to the key
employee. Upon the exercise of an Incentive Option, there is no income
recognized by the key employee at the time of exercise. If the stock is held at
least one year following the exercise date and at least two years from the date
of grant of the Option, the key employee will realize a capital gain or loss
upon sale, measured at the difference between the exercise price and the sales
price. If both of these holding period requirements are not satisfied, ordinary
income tax treatment will apply to the amount of gain or sale or exercise,
whichever is less. If the actual gain exceeds the amount of ordinary income, the
excess will be considered short-term or long-term capital gain depending on how
long the shares are actually held. No income tax deduction will be allowed by
the Company with respect to shares purchased by a key employee upon the exercise
of an Incentive Option, provided such shares are held for the required period as
described above.

Under the Code, as amended, an Option will generally be disqualified from
receiving Incentive Option treatment if it is exercised more than three months
following termination of employment. However, if the key employee is disabled,
such statutory treatment is available for one year following termination. If the
key employee dies while employed by the Company or within three months
thereafter, the statutory time limit is waived altogether. In no event do these
statutory provisions extend the rights to exercise an Option beyond those
provided by its terms.

TERMINATIONS AND AMENDMENT

Subject to any required action by the Stockholders, the number of shares
authorized for grant under the Equity Participation Plan may be apportionately
adjusted by the Board of Directors for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, stock dividend,
spinoff, reorganization, recapitalization, merger, consolidation, exchange of
shares or the like. The Board of Directors may suspend, amend or terminate the
Equity Participation Plan at its discretion. The Board will not be required to
obtain Stockholder approval of any amendment to the Equity Participation Plan
where such amendment is necessary to assure continued qualification of the
Equity Participation Plan under Rule 16b-3 of

13
<PAGE> 17

the Exchange Act, as amended; or is required by the Code or the rules and
regulations of NASDAQ National Market System. However, Stockholder approval of
an amendment is required if such amendment materially increases the total number
of shares of Common Stock available for grant under the Equity Participation
Plan; materially modifies the class of eligible employees under the Equity
Participation Plan or materially increases benefits to any key employee who is
subject to the restrictions of Section 16 of the Exchange Act. Termination or
amendment of the Equity Participation Plan will not materially affect the rights
of any key employee with respect to Options previously granted.

APPROVAL OF THE EQUITY PARTICIPATION PLAN WILL REQUIRE THE AFFIRMATIVE VOTE OF
THE HOLDERS OF A MAJORITY OF THE VOTES CAST AT THE ANNUAL MEETING IN PERSON OR
BY PROXY. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
EQUITY PARTICIPATION PLAN.

EXECUTIVE COMPENSATION

REPORT OF THE COMPENSATION, ESOP AND BENEFITS COMMITTEE

In order to enhance disclosure of the Company's policy toward executive
compensation and to comply with the rules of the Securities and Exchange
Commission, the Compensation, ESOP and Benefits Committee ("Committee"), in
their capacity as such Committee, submits the following report addressing the
Company's policy toward executive compensation as it relates to the named
executive officers for fiscal year 1993.

Compensation Policy

The executive compensation policy of the Company is to compensate
executives in a manner where a reasonable relationship exists between the
maximization of corporate earnings and executive pay. The Company's compensation
program creates an incentive to improve overall performance relative to other
financial institutions within the Company's peer group. However, the Company
does not seek to provide executives with incentives to take undue risk and
thereby impair the Company's financial strength. The goal of the Company's
policy is to retain and motivate key employees with bonuses based upon
individual bank performance and initiatives as well as the Company's
performance. The Company's performance is primarily measured by internal goals
and performance levels compared to industry peers. If the Company achieves or
exceeds internal goals and industry performance levels, executive compensation
normally will be higher than in years where such goals and levels are not
achieved. In order to attract and retain highly qualified executives the Company
maintains an Employee Stock Ownership Plan which ensures that such executives
will have a long-term stake in the success of the Company.

Measures of Performance

The Committee measures the Company's performance by examining earnings per
share, return on assets and the level of non-performing loans and assets. A
further analysis is done by comparing these factors with the Company's internal
goals, prior year's performance and peer group averages. The Company's revenues
in fiscal year 1993 were derived almost exclusively from the commercial banking
industry. Therefore, the Company measured its performance against a peer
industry average index comparing itself and its banks to commercial banks which
most closely resemble the Company's banks in asset size.

14
<PAGE> 18

Executive Compensation

The Company's executive compensation program for fiscal year 1993 consisted
of (1) annual base salary, adjusted from fiscal year 1992, (2) executive bonus
based on the performance measures described above, (3) contributions to the
Company's Employee Stock Ownership Plan and (4) contributions to whole life
insurance policies for selected executives. The Committee feels that the above
named types of compensation provide an effective incentive for executives.

The Company's management was focused in their pursuit of maximizing
earnings and maintaining a low level of non-performing assets which resulted in
a significantly better 1993 performance. Notwithstanding the performance-based
criterion noted in the preceding paragraph, various other factors are considered
in determining the appropriate level of executive compensation. Other factors
may include cost of living adjustments, as well as the individual's past
performance and potential with the Company.

The Committee has awarded executive compensation based upon the Company's
performance and believes that this correlation results in an enhanced synergy
between corporate goals and the interests of stockholders. As performance goals
are met or exceeded, resulting in increased value to stockholders, executives
are rewarded commensurately. The Committee believes that the level of executive
compensation in fiscal year 1993 is reflective of the foregoing compensation
policy and performance goals of the company.

Compensation of Chief Executive Officer

The Company increased Mr. Kelley's base salary to $180,000 in 1993. Mr.
Kelley's salary is considered appropriate by the Committee based upon his years
of experience in this position. Additionally, the Committee considered Mr.
Kelley's salary to be competitive when compared to other financial institutions
within the Company's peer group.

Mr. Kelley was awarded an annual bonus of $70,000 for 1993. The Committee
considered the 13% increase in market value of the Company's Common Stock during
1993 as well as the14% increase in earnings per share, the 13.92% return on
equity and the 1.27% return on assets sufficient to merit the granting of his
bonus.

Respectfully Submitted,

Compensation, ESOP and Benefits
Committee

/s/ Robert C. Nolan, Chairman
/s/ E. Larry Burrow
/s/ Richard H. Mason
/s/ Claiborne P. Deming

15
<PAGE> 19

STOCK PERFORMANCE

The following graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1993, as amended, or under the Exchange Act,
except to the extent the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts. The graph
compares the yearly percentage change in the cumulative total stockholder return
on the Company's Common Stock during the five fiscal years ended December 31,
1993 with the cumulative total returns on the S&P 500 Index and the Dow Jones
Regional Bank Index. The comparison assumes $100.00 was invested on December 31,
1988, in the Company's Common Stock and in each of the foregoing indices with
reinvestment of the dividends.

<TABLE>
<CAPTION>
First United Dow Jones
Measurement Period Bancshares, Regional Bank
(Fiscal Year Covered) Inc. S&P 500 Index Index
<S> <C> <C> <C>
1988 100 100 100
1989 109.10 130.94 117.01
1990 103.51 125.80 82.24
1991 123.71 166.61 143.73
1992 245.43 180.95 192.14
1993 251.67 198.94 202.21
</TABLE>

16
<PAGE> 20

COMPENSATION OF MANAGEMENT

The Company does not directly compensate the officers and management for
serving in that capacity. Compensation is provided by First National Bank of El
Dorado, El Dorado, Arkansas ("El Dorado"), First National Bank of Magnolia,
Magnolia, Arkansas ("Magnolia"), The Merchants and Planters Bank, N.A., Camden,
Arkansas ("Camden"), The City National Bank, Ft. Smith, Arkansas ("Ft. Smith"),
and Commercial Bank at Alma, Alma, Arkansas ("Alma"), the wholly-owned banking
subsidiaries of the Company. However, the Company does reimburse each such
wholly-owned or controlled banking subsidiary for the Company's officer
remuneration, which amount of reimbursement is set by the Company's Board of
Directors. The Company does compensate its directors for serving in that
capacity as discussed below. The following information reflects compensation,
remuneration and transactions with the Company, El Dorado, Magnolia, Camden, Ft.
Smith or Alma for the period beginning January 1, 1993, and ending December 31,
1993. The following table sets forth the compensation paid by the Company, El
Dorado, Magnolia, Camden, Ft. Smith or Alma during the fiscal year 1993 to the
highest paid executive officers of the Company:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------------------
FISCAL OTHER
YEAR ANNUAL ALL OTHER
NAME AND ENDED COMPENSATION COMPENSATION
PRINCIPAL POSITION JANUARY 31, SALARY ($) BONUS ($) (2)($) (3)(4)(5)($)
- ---------------------------------------- ----------- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
James V. Kelley 1993 180,000 70,000 3,403 13,523
President, Chairman, Chief 1992 170,000 50,000 3,403 12,946
Executive Officer of the Company 1991 160,000 30,000 3,403 9,456
and Director of the Company
Robert L. Jones 1993 127,350 25,600 1,170 7,310
President, Chief Executive Officer 1992 122,000 25,600 N/A 7,892
and Director of Magnolia 1991 90,000 16,350 N/A 5,679
Robert G. Dudley 1993 94,500 13,000 8,027 6,134
President of El Dorado; 1992 90,500 12,650 8,027 6,442
Secretary of the Company 1991 88,750 8,750 8,027 4,871
Jim N. Harwood 1993 117,200 11,900 N/A 6,134
President and Chief Executive 1992 85,000 11,900 N/A 5,501
Officer of Ft. Smith 1991 -- -- -- --
Harold E. Henson, Jr. (1) 1993 86,370 27,500 9,120 32,350
Former President, Chairman, 1992 170,000 50,000 3,912 12,946
Chief Executive Officer of Ft. Smith 1991 160,000 30,000 3,912 9,456
James R. Jordan 1993 81,000 18,000 N/A 4,627
President and Chief Executive 1992 76,500 16,100 N/A 4,951
Officer of Camden 1991 60,000 10,500 N/A 3,409
</TABLE>

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

NOTES:

(1) Harold E. Henson, Jr. retired as President and Chief Executive Officer of
Ft. Smith effective February 16, 1993. Jim N. Harwood was appointed by the
board of directors as President and Chief Executive Officer of Ft. Smith
upon Mr. Henson's retirement. Mr. Henson remained at Ft. Smith and served
as Chairman until July 1, 1993.

(2) El Dorado provides whole life insurance policies for the benefit of Messrs.
Kelley and Dudley and Ft. Smith provides a whole life insurance policy for
the benefit of Mr. Henson. For the year ended December 31, 1993 the amounts
paid by El Dorado and Ft. Smith for the policies for Messrs. Kelley,

17
<PAGE> 21

Henson and Dudley were, respectively, $3,403; $3,912; and $8,027. This
compensation is included within the Other Annual Compensation Column.
Magnolia provides a cost of life insurance policy for Mr. Jones. For the
year ended December 31, 1993, the amount paid on behalf of Mr. Jones was
$1,170. This compensation is included within the Other Annual Compensation
Column. Ft. Smith paid Mr. Henson $5,082 under a deferred compensation
agreement, which is included within the other Annual Compensation Column.

(3) Amounts representing certain personal benefits are not included in this
table. The Company and its subsidiaries have a policy of providing country
club services and automobiles to certain officers. The key employees of
these benefits are selected by the respective subsidiaries' Boards of
Directors. In the Company's estimation, the dollar amount of such items for
the personal benefit of each named individual does not exceed ten percent
(10%) of the aggregate compensation for any individual.

(4) The Company contributed cash contributions to an employee stock ownership
plan ("ESOP") during fiscal year 1993 which is included as All Other
Compensation. The Company makes cash contributions to the ESOP for the
purchase of the Company's Common Stock for the benefit of covered
employees. All employees over 20 and one-half years of age who have six
months service with the Company and work 1,000 hours or more per year are
covered by the ESOP. Contributions to the ESOP are discretionary. The Board
of Directors determines the contribution each year up to a maximum of 15%
of covered compensation. Each covered employee is allocated the same
percentage of covered compensation. For the year ended December 31, 1993,
the amount of the Company's contribution allocated to the accounts of
Messrs. Kelley, Jones, Dudley, Henson, Harwood and Jordan were,
respectively $13,523, $7,310, $6,134, $4,051, $6,726 and $4,627.

(5) Contributions for officers to the Company's pension plan are not included in
the above table since they cannot readily be individually calculated by the
regular actuaries for the plan. However, current compensation covered by
the plan does not differ by more than ten percent (10%) from the covered
compensation set forth in the annual compensation columns of the Summary
Compensation Table for any named executive officer. Covered compensation
covers basic compensation and bonuses or incentive compensation paid to all
plan participants. The following table sets forth the annual life annuity,
payable under the qualified pension plan to participating employees in the
specified remuneration and years of service classification. The benefits
provided by the pension plan are computed on a straight life annuity basis
and are subject to a deduction for social security benefits.

<TABLE>
<CAPTION>
PENSION PLAN TABLE
SCHEDULE OF ESTIMATED ANNUAL RETIREMENT
BENEFITS
YEARS OF SERVICE
FINAL AVERAGE -----------------------------------------------
COMPENSATION 10 15 20 25 30
----------------------------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 20,000................................. $ 2,400 $ 3,600 $ 4,800 $ 6,000 $ 7,200
$ 30,000................................. $ 3,930 $ 5,859 $ 7,860 $ 9,825 $11,789
$ 50,000................................. $ 7,719 $11,579 $15,438 $19,298 $23,157
$ 80,000................................. $13,705 $20,588 $27,410 $34,263 $41,115
$100,000................................. $17,705 $26,558 $35,410 $44,263 $53,115
$150,000................................. $27,705 $41,558 $55,410 $69,263 $83,115
</TABLE>

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

The final average compensation is averaged over the highest three (3)
consecutive years of employment. Benefits commence at age 65, the normal
retirement date, and continue for the lifetime of the participant, with 120
payments guaranteed. The estimated credited years of service for Mr.
Kelley, Mr. Jones, Mr. Dudley, Mr. Harwood, and Mr. Jordan are 9, 10, 33, 5
and 8, respectively. Mr. Henson retired effective July 1, 1993 and received
$28,299 as a distribution from the pension plan for fiscal year 1993, which
is included in the Other Annual Compensation column.

18
<PAGE> 22

SECURITY OWNERSHIP OF EXECUTIVE OFFICERS

The following table sets forth the nature and extent of ownership of the
Common Stock of the Company by the normal executive officers as of February 1,
1994 and other information regarding the named executive officers of the
Company.

EXECUTIVE OFFICERS OF THE COMPANY

<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND OFFICER OF BENEFICIAL OF
PRINCIPAL POSITION AGE SINCE(2) OWNERSHIP(3) CLASS
- ----------------------------------------------------- --- -------- ----------------- -------
<S> <C> <C> <C> <C>
James V. Kelley...................................... 44 1987 3,984(4) *
President, Chairman, Chief Executive Officer of the
Company
Robert L. Jones...................................... 58 1984 3,015(5) *
President, Chief Executive Officer of Magnolia
Robert G. Dudley..................................... 61 1983 4,590(6) *
President of El Dorado; Secretary of the Company
Jim N. Harwood....................................... 54 1993 574(7) *
President and Chief Executive Officer of Ft. Smith
Harold E. Henson, Jr.(1)............................. 65 1988 74 *
Former President, Chairman, Chief Executive Officer
of Ft. Smith
James R. Jordan...................................... 49 1991 1,757(8) *
President and Chief Executive Officer of Camden
</TABLE>

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

* Percentage of shares of Common Stock held is less than one percent (1%) of
the issued and outstanding shares of Common Stock of the Company.

NOTES:

(1) Harold E. Henson, Jr. retired as President and Chief Executive Officer of
Ft. Smith effective February 16, 1993. Jim N. Harwood was appointed by the
Board of Directors as President and Chief Executive Officer of Ft. Smith
upon Mr. Henson's retirement. Mr. Henson remained at Ft. Smith and served
as Chairman until July 1, 1993.

(2) The year indicated represents the year in which the officer commenced
service in his present position. All officers of the Company have served in
such capacity, as disclosed, since May 25, 1993.

(3) All shares listed represent Common Stock held in the company and are owned
of record with beneficial ownership thereof except as described in certain
of the following notes.

(4) James V. Kelley owned of record 200 shares; 3784 shares were owned of record
by the Company's Employee Stock Ownership Plan in which such shares Mr.
Kelley had a beneficial interest.

(5) Robert L. Jones owned of record 200 shares; 2,815 shares were owned of
record by the Company's Employee Stock Ownership Plan in which such shares
Mr. Jones had a beneficial interest.

(6) Robert G. Dudley owned of record 1,320 shares; 2,970 shares were owned of
record by the Company's Employee Stock Ownership Plan in which Mr. Dudley
had a beneficial interest; 300 shares were owned of record by Mr. Dudley's
wife, beneficial interest in such shares is expressly disclaimed by Mr.
Dudley. See

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<PAGE> 23

footnotes (3) and (4) on page 5 of this Proxy Statement regarding shares
owned of record by First Land & Timber Corporation and First Land &
Investment Company, respectively. Mr. Dudley expressly disclaims beneficial
ownership in such shares.

(7) Jim N. Harwood had beneficial interest in 574 shares, all of such shares are
owned of record by the Company's Employee Stock Ownership Plan.

(8) James R. Jordan owned of record 200 shares; 1,557 shares were owned of
record by the Company's Employee Stock Ownership Plan in which such shares
Mr. Jordan had a beneficial interest.

COMPENSATION AGREEMENTS

DEFERRED COMPENSATION AGREEMENT. Under a 1982 Agreement between Ft. Smith
and Mr. Henson, Mr. Henson or his wife is entitled to receive total deferred
compensation of $125,000 paid on a monthly basis over a 10 year period beginning
upon Mr. Henson's retirement upon reaching age 65 or death. The right to such
payments shall end upon the earlier of (i) payment of $125,000, (ii) the death
of both Mr. Henson and his wife or (iii) the termination of Mr. Henson's
employment prior to retirement. Mr. Henson's retirement became effective on July
1, 1993. Ft. Smith paid Mr. Henson $5,208 under the Agreement from July 1, 1993
to December 31, 1993.

SEVERANCE AGREEMENT. A 1992 Severance Agreement between the Company and El
Dorado and James V. Kelley provides for severance payments to Mr. Kelley in the
event his employment terminates under certain conditions within two years of a
change in control of the Company, as defined in the Agreement. In the event of a
covered termination Mr. Kelley shall be entitled to receive total cash payments
equal to twice his annual salary plus normal bonuses. Such payments shall be
payable in equal monthly installments for twenty-four months, with an additional
amount equal to the monthly payment times an annual increase in the Urban
Consumer Price Index payable during the second twelve month period. Mr. Kelley
would also be entitled to receive in twenty-four monthly installments cash
payments equal to (i) the amount of any accrued but unvested benefits under any
defined benefit or defined contribution employee benefit plan forfeited as a
result of the termination, (ii) the increase in Mr. Kelley's accrued benefit
under any defined benefit plan during the plan year preceding termination and
(iii) the average of contributions allocated to Mr. Kelley's account under any
defined contribution plan during the two plan years preceding termination. The
Company would be obligated for twenty-four months after termination to provide
insurance coverages for Mr. Kelley and his beneficiaries equivalent to those
provided by the Company and in effect at the time of termination.

TRANSACTIONS WITH MANAGEMENT AND OTHERS

The Company and its subsidiaries have had, and expect to have in the
future, banking transactions in the ordinary course of business with officers of
the Company and El Dorado, Magnolia, Camden, Ft. Smith and Alma; directors of
the Company and El Dorado, Magnolia, Camden, Ft. Smith and Alma; associates of
such persons and principal Stockholders. Loans made to this group, including
companies in which they are principal owners (10% or more ownership interest)
amounted to approximately $13,466,000 as of December 31, 1993, which represents
14.7% of the Company's equity capital. Such transactions have been on similar
terms, including interest rates and collateral on loans, as those prevailing at
the same time for comparable transactions with others not affiliated with the
Company, involved no more than the normal risk of collectibility and did not
include any favorable features.

Michael F. Mahony is a partner in the law firm of Mahony & Yocum, El
Dorado, Arkansas. The Company retained such law firm as counsel for El Dorado
during fiscal year 1993. Such firm received legal fees from El Dorado based upon
an hourly basis at rates comparable to those prevailing in the market.

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<PAGE> 24

William A. Eckert is a partner in the law firm of Keith, Clegg & Eckert.
Magnolia retained such law firm as counsel during fiscal year 1993. Such firm
received legal fees from Magnolia based upon an hourly basis at rates comparable
to those prevailing in the market.

First Land & Timber Corporation ("FLT"), of which Robert G. Dudley serves
as President and director and Michael F. Mahony, Robert C. Nolan and Dr. David
M. Yocum also serve as directors, rents on a month-to-month basis and leases
certain real property to El Dorado on an annual basis. During fiscal year 1993,
El Dorado paid to FLT a total of approximately $24,000 in rental for real
property composed of the parking lot at the Main Branch; ground leases on real
property occupied by the East and West Motor Bank Branch locations.

Paula and Ann Company, a general partnership composed of Paula Pruet James
and Ann Pruet Calhoon, adult daughters of Chesley Pruet, (a director of the
Company) made an unsecured loan to the Company on August 15, 1988 in order to
provide a portion of the funds necessary to acquire First City Corp. (which was
the holding company that owned The City National Bank of Ft. Smith). The loan is
for five million dollars ($5,000,000), at an annual interest rate equal to
three-eighths of one percent (.375%) below the Citibank, N.A. Prime Interest
Rate. Interest is payable in quarterly installments until August 15, 1994, at
which time the full amount of principal and interest is due and payable. The
Company solicited, received and considered alternative loan proposals from no
less than two commercial lending institutions. Upon comparison with other loan
proposals, a disinterested Board of Directors of the Company resolved that the
loan proposal of Paula and Ann Company was in the best interest of, and fair to,
the Company. Mr. Pruet owns no interest, direct or indirect, in Paula and Ann
Company, nor did Mr. Pruet participate in the discussion, consideration or
voting pertaining to this loan.

Highland Industrial Park, Inc. ("Highland"), of which Roy E. Ledbetter is
an officer, leases land to Camden on which its East Camden Branch is located.
During fiscal year 1993, Camden paid rental to Highland of approximately $7,000.

Parsimonious, Inc., an Arkansas corporation, of which Ralph C.Weiser is a
beneficial owner of more than ten percent (10%) of the corporation's issued and
outstanding common stock received a line of credit from Magnolia on April 1,
1992 in the principal amount of six hundred thousand dollars ($600,000.00). The
largest amount of indebtedness outstanding during fiscal year 1993 was $590,000
at an annual interest rate of seven percent (7%). On December 31,1993 the
outstanding indebtedness was $590,000. The line of credit was made on similar
terms, including interest rates and collateral requirements as those prevailing
at the same time for comparable transactions with others not affiliated with the
Company, involved no more than the normal risk of collectibility and did not
include any favorable features to Parsimonious, Inc.

John-Clai Company, a general partnership in which Claiborne Deming is a
general partner received a loan from El Dorado on October 29, 1987 in the
principal amount of $544,395 at a variable rate of interest tied to the First
National Bank of El Dorado Base Rate for the purpose of financing a transaction
in which John-Clai Company acquired real estate. The largest amount of
indebtedness outstanding at any time during fiscal year 1993 was $504,395 and as
of December 31, 1993 the outstanding indebtedness was $464,395. The loan was
made on similar terms, including interest rates and collateral requirements, as
those prevailing at the same time for comparable transactions with others not
affiliated with the Company, involved no more than the normal risk of
collectibility and did not include any other features favorable to John-Clai
Company.

Robert L. Jones, the chief executive officer of Magnolia, received a loan
from Magnolia for the purchase of a residence. The largest amount of
indebtedness outstanding at any time during fiscal year 1993 was $81,586.19 and
as of December 31, 1993, the outstanding indebtedness was $78,763.07. The loan
was made on similar terms, including 6.625% as the rate of interest charged
thereon and being collateralized by a first

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<PAGE> 25

mortgage lien on Mr. Jones' residence, as those prevailing at the same time for
comparable transactions with others not affiliated with the Company, involved no
more than the normal risk of collectibility and did not include any other
features favorable to Mr. Jones.

R. Madison Murphy, a director of the Company, received a loan from El
Dorado for the purchase of a residence. The largest amount of indebtedness
outstanding at any time during fiscal year 1993 was $243,965 and as of December
31, 1993, the outstanding indebtedness was $177,505.07. The loan was made on
similar terms, including a variable rate of interest tied to the First National
Bank of El Dorado Base Rate charged thereon and being collateralized by a first
mortgage lien on Mr. Murphy's residence, as those prevailing at the same time
for comparable transactions with others not affiliated with the Company,
involved no more than the normal risk of collectibility and did not include any
other features favorable to Mr. Murphy.

Harold E. Henson, Jr., the former President, Chairman, Chief Executive
Officer of Ft. Smith, who retired as President and Chief Executive Officer of
Ft. Smith effective February 16, 1993 and as Chairman effective July 1, 1993,
received various loans from Ft. Smith during fiscal year 1993. The largest
amount of aggregate indebtedness outstanding at any time during fiscal year 1993
was $255,850 and as of December 31, 1993, the aggregate outstanding indebtedness
was $251,800. The indebtedness consists of a loan in the principal amount of
$10,000 at 6.75% for the purchase of a residence, a loan in the principal amount
of $72,500 at 7.75% for the consolidation of prior loans granted for expenses
associated with the education of Mr. Henson's children and a loan in the
principal amount of $68,300 at 7.75% for the consolidation of personal loans
previously granted to Mr. Henson. All loans were made on similar terms as those
prevailing at the same time for comparable transactions with others not
affiliated with the Company, involved no more than the normal risk of
collectibility and did not include any other features favorable to Mr. Henson.

ANNUAL REPORT

The Annual Report to Stockholders for the fiscal year ended December 31,
1993, including financial
statements and other matters of interest to Stockholders accompanies this Proxy
Statement or has been previously mailed to you. Stockholders are referred to
such Report for financial information about the activities of the Company, but
such report is not incorporated into this Proxy Statement and is not to be
deemed a part of the proxy soliciting material.

THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO ANY PERSON RECEIVING A COPY OF
THIS PROXY STATEMENT, UPON ORAL OR WRITTEN REQUEST, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1993, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSIONER. SUCH A REQUEST SHOULD BE ADDRESSED TO JOHN
E. BURNS, CHIEF FINANCIAL OFFICER, FIRST UNITED BANCSHARES, INC., MAIN AND
WASHINGTON STREETS, EL DORADO, ARKANSAS 71730, TELEPHONE (501) 863-3181.

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OTHER MATTERS

So far as is now known to the management of the Company, there is no
business other than that described herein to be presented to the Stockholders
for action at the Meeting. Should other business properly come before the
Meeting, votes may be cast pursuant to proxies with respect to any such business
in the best judgment of the person acting under the proxies.

STOCKHOLDER PROPOSALS

The 1995 Annual Meeting of Stockholders is presently scheduled to be held
May 23, 1995. Any stockholder of the Company who wishes to have a proposal
presented in the Company's Proxy Statement for such Meeting must deliver such
proposal in writing in accordance with Rule 14a-8 promulgated under the Exchange
Act, addressed to Mr. Robert G. Dudley, to the Company at its office at Main and
Washington Streets, El Dorado, Arkansas 71730, not later than December 26, 1994.

STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO SIGN,
DATE AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE ENCLOSED ADDRESSED
ENVELOPE WHICH REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES.

By Order of the Board of Directors of
FIRST UNITED BANCSHARES, INC.

/s/ ROBERT G. DUDLEY

ROBERT G. DUDLEY
Secretary

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<PAGE> 27

FIRST UNITED BANCSHARES, INC.
1994 EQUITY PARTICIPATION PLAN

SECTION 1
PURPOSE

1.1 PURPOSE. The purpose of this Equity Participation Plan (the "Plan")
is to give officers and executive personnel ('Key Employees') of First United
Bancshares, Inc., an Arkansas corporation (the 'Company'), and corporations
with respect to which the Company directly or indirectly controls 50% or more
of the combined voting power ('Subsidiaries'), an opportunity to acquire shares
of the Common Stock of the Company, $1.00 par value ('Common Stock'), to
provide an incentive for Key Employees to continue to promote the best
interests of the Company and enhance its long-term performance, and to provide
an incentive for Key Employees to join or remain with the Company and its
Subsidiaries.

SECTION 2
ADMINISTRATION

2.1 BOARD OF DIRECTORS. The Plan shall be administered by the Board of
Directors of the Company (the 'Board'), which, to the extent it shall
determine, may delegate its powers with respect to the administration of the
Plan (except its powers under Section 12.3) to a committee (the 'Committee')
appointed by the Board and composed of not less than three members of the
Board. If the Board chooses to appoint a Committee, references hereinafter to
the Board (except in Section 13.3) shall be deemed to refer to the Committee.

Notwithstanding the preceding provisions of this Section 2.1, no
member of the Board may exercise discretion with respect to, or participate in,
the administration of the Plan if, at any time within one year prior to such
exercise of discretion or participation, he or she has received stock, stock
options, stock appreciation rights or any other derivative security (as defined
under appropriate provisions of the Securities Exchange Act of 1934) pursuant
to the Plan or any other plan of the Company or Subsidiary as to which any
discretion by such Board members is exercised.

2.2 Powers. In accordance with the express provisions of the Plan, the
Board shall determine:

(i) the Key Employees to whom awards hereunder shall be granted,
(ii) the time or times at which such awards shall be granted,
(iii) the form and amounts of the awards, and
(iv) the limitations, restrictions and conditions applicable to
any such award.

In making such determinations, the Board may take into account the
nature of the services rendered by such Key Employees, or classes of Key
Employees, their present and potential contributions to the Company's and
Subsidiaries' success and such other factors as the Board in its sole
discretion shall deem relevant.

2.3 INTERPRETATION. Subject to the express provisions of the Plan, the
Board may interpret the Plan, prescribe, amend and rescind rules and
regulations relating to it, determine the terms and provisions of the
respective awards and make all other determinations it deems necessary or
advisable for the administration of the Plan.

2.4 DETERMINATIONS. The determinations of the Board on all matters
regarding the Plan shall be conclusive. A member of the Board shall only be
liable for any action taken or determination made in bad faith.

2.5 NONUNIFORM DETERMINATIONS. The Board's determinations under the
Plan, including without limitations, determinations as to the persons to
receive awards, the terms and provisions of such awards and the agreements
evidencing the same, need not be uniform and may be made by it selectively
among persons who receive or are eligible to receive awards under the Plan,
whether or not such persons are similarly situated.

<PAGE> 28
SECTION 3
AWARDS UNDER THE PLAN

3.1 FORM. In the sole discretion of the Board, awards (hereinafter,
collectively, 'Equity Participation Awards') under the Plan may be granted in
any or all of the following forms:

(i) Incentive Stock Options, as described in Section 4,
(ii) Nonstatutory Stock Options, as described in
Section 5,
(iii) Restricted Stock Options, as described in 6, and
(iv) Stock Appreciation Rights, as described in
Section 7.

3.2 MAXIMUM LIMITATIONS. The aggregate number of shares of Common
Stock available for grant under the Plan is 100,000, subject to adjustment
pursuant to Section 3.3. Shares of Common Stock issued pursuant to the Plan
may be either authorized but unissued shares or shares now or hereafter held in
the treasury of the Company. In the event that, prior to the end of the period
during which any Equity Participation Awards may be granted under the Plan, any
Equity Participation Awards under the Plan expire unexercised or are
terminated, surrendered or canceled without being exercised, in whole or in
part, for any reason, the number of shares theretofore subject to such Equity
Participation Awards, or the unexercised, terminated, forfeited or unearned
portion thereof, shall be added to the remaining number of shares of Common
Stock available for grant as Equity Participation Awards under the Plan. Such
Equity Participation Awards shall be available for a grant to a future or
former holder of such Equity Participation Awards, upon such terms and
conditions as the Board shall determine (and which may be more or less
favorable than those applicable to any Equity Participation Award previously
awarded).

3.3 ADJUSTMENT PROVISIONS. The aggregate number of shares of Common
Stock with respect to which Equity Participation Awards may be granted, the
aggregate number of shares of Common Stock subject to each outstanding Equity
Participation Award, and the option or other price per share of each such
Equity Participation Award, may all be appropriately adjusted as the Board may
determine for any increase or decrease in the number of shares of issued Common
Stock resulting from a subdivision or consolidation of shares, whether through
reorganization, recapitalization, stock split-up, stock distribution or
combination of shares, or the payment of a share dividend or other increase or
decrease in the number of such shares outstanding effected without receipt of
consideration by the Company. Adjustments under this Section 3 shall be made
according to the sole discretion of the Board, and its decision shall be
binding and conclusive.

SECTION 4
INCENTIVE STOCK OPTIONS

4.1 INCENTIVE STOCK OPTIONS. Incentive Stock Options may be granted
under the Plan for the purchase of shares of Common it is intended that
Incentive Stock Options granted under the Plan shall constitute Incentive Stock
Options within the meaning of Section 422 of the Internal Revenue Code
('Code'). Incentive Stock Options may be granted under the Plan for the
purchase of shares of Common Stock. Incentive Stock Options shall be in such
form and upon such conditions as the Board shall from time to time determine,
subject to the specific provisions in this Section 4 and other provisions of
the Plan.

4.2 OPTION PRICE. The option price of each Incentive Stock Option
shall be equal, on the date of the grant, to at least 100% of the fair market
value of the Common Stock subject to such Incentive Stock Option. Fair market
value shall be determined in accordance with Section 12.9.

4.3 TERM OF INCENTIVE STOCK OPTIONS. Each Incentive Stock Option shall
become exercisable at the time, and for the number of shares of Common Stock,
fixed by the Board in the Incentive Stock Option Agreement. However, no
Incentive Stock Option shall be exercisable prior to the date one year, or
after the date ten years, from the date such Incentive Stock Option is granted.

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<PAGE> 29
4.4 VESTING OF INCENTIVE STOCK OPTIONS. Unless otherwise provided in
the Incentive Stock Option Agreement, a Plan participant's right to any number
of shares of Common Stock granted under the Plan through Incentive Stock
Options shall vest cumulatively over a 4-year period as follows:

(i) 25% become vested on the first anniversary date of the grant;
(ii) 50% become vested on the second anniversary date of the
grant;
(iii) 75% become vested on the third anniversary date of the grant;
and
(iv) 100% become vested on the fourth anniversary date of the
grant.

4.5 LIMITATION ON AMOUNTS. The aggregate fair market value of the
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by a Key Employee during any calendar year (under this Plan or
any other similar plan of the Company or any Subsidiary) shall not exceed
$100,000. Such determination of aggregate fair market value with respect to
each Incentive Stock Option shall be made at the time such Incentive Stock
Option is granted.

4.6 TEN PERCENT SHAREHOLDER. Notwithstanding any other provision
herein contained, no Key Employee may receive an Incentive Stock Option under
the Plan if such Key Employee, at the time the award is granted, owns (as
defined in Section 424(d) of the Code), stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company, or any
Subsidiary, unless the option price for such Incentive Stock Option is at least
110% of the fair market value of the Common Stock subject to such Incentive
Stock Option on the date of grant and such Option is not exercisable after the
date ten years from the date such Option is granted.

4.7 EXERCISE. lncentive Stock Options shall be subject to such terms
and conditions,- shall be exercisable at such time or times, and shall be
evidenced by such form of written option agreement ('Incentive Stock Option
Agreement') between the Plan participant and the Company, as the Board shall
determine; provided, that such determinations shall not be inconsistent with
the provisions of the Plan or with Section 422 of the Code or regulations
thereunder. Incentive Stock Option Agreements need not be identical.

4.8 MANNER OF EXERCISE OF OPTIONS AND PAYMENT FOR COMMON STOCK.
Incentive Stock Options may be exercised by a Plan participant by giving
written notice to the Secretary of the Company stating the number of shares of
Common Stock with respect to which the Incentive Stock Option is being
exercised and tendering payment therefor. At the time that an Incentive Stock
Option granted under the Plan is exercised, payment for the Common Stock
issuable thereupon shall be made in full in cash or by certified check or, if
the Board in its discretion agrees to accept, in shares of Common Stock of the
Company. If shares of Common Stock of the Company are accepted as payment, the
number of shares paid for each share of Common Stock subject to the Incentive
Stock Option being exercised shall be determined by dividing the Incentive
Stock Option grant price by the fair market value per share of the Common Stock
on the date of exercise. Fair market value shall be determined in accordance
with Section 12.9.

As soon as reasonably possible following such exercise, a
certificate representing shares of Common Stock purchased, registered in the
name of the Plan participant shall be delivered to the Plan participant.

SECTION 5
NONSTATUTORY STOCK OPTIONS

5.1 NONSTATUTORY STOCK OPTIONS. Nonstatutory Stock Options may be
granted under the Plan for the purchase of shares of Common Stock. Nonstatutory
Stock Options shall be in such form and upon such terms and conditions as the
Board shall from time to time determine, subject to the specific provisions of
this Section 5. Nonstatutory Stock Options are not intended to qualify under
Section 422 of the Code.

5.2 OPTION PRICE. The per share exercise price of each Nonstatutory
Stock Option shall be fixed by the Board in the Nonstatutory Stock Option
Agreement, but shall be equal, on the date of grant, to not less than 95% of
the fair

3
<PAGE> 30
market value of the Common Stock subject to such Nonstatutory Stock Option.
Fair market value shall be determined in accordance with Section 12.9.

5.3 TERM OF NONSTATUTORY STOCK OPTIONS. Each Nonstatutory Stock Option
shall become exercisable at the time, and for the number of shares of Common
Stock, fixed by the Board in the Nonstatutory Stock Option Agreement. However,
no Nonstatutory Stock Option shall be exercisable prior to the date one year,
or after the date ten years, from the date such Nonstatutory Stock Option is
granted .
5.4 VESTING OF NONSTATUTORY STOCK OPTIONS. Unless otherwise
provided in the Nonstatutory Stock Option Agreement, a Plan participant's right
to any number of shares of Common Stock granted under the Plan through
Nonstatutory Stock Options shall vest cumulatively over a 4-year period as
follows:

(i) 25% become vested on the first anniversary date of the grant;
(ii) 50% become vested on the second anniversary date of the grant;
(iii) 75% become vested on the third anniversary date of the grant;
and
(iv) 100% become vested on the fourth anniversary date of the
grant.

5.5 EXERCISE. Nonstatutory Stock Options shall be subject to such
terms and conditions, shall be exercisable at such time or times, and shall be
evidenced by such form of written option agreement ("Nonstatutory Stock Option
Agreement') between the Plan participant and the Company, as the Board shall
determine; provided, that such determinations shall not be inconsistent with
provisions of the Plan. Nonqualified Stock Option Agreements need not be
identical.

5.6 MANNER OF EXERCISE OF OPTIONS AND PAYMENT FOR COMMON STOCK.
Nonstatutory Stock Options may be exercised by a Plan participant by giving
written notice, to the Secretary of the Company stating the number of shares of
Common Stock with respect to which the Nonstatutory Stock Option is being
exercised and tendering payment therefor. At the time that a Nonstatutory Stock
Option granted under the Plan is exercised, payment for the Common Stock
issuable thereupon shall be made in full in cash or by certified check or, if
the Board in its discretion agrees to accept, in shares of Common Stock of the
Company. If shares of Common Stock of the Company are accepted as payment, the
number of shares paid for each share of Common Stock subject to the
Nonstatutory Stock Option being exercised shall be determined by dividing the
Nonstatutory Stock Option grant price by the fair market value per share of the
Common Stock on the date of exercise. Fair market value shall be determined in
accordance with Section 12.9.

As soon as reasonably possible following such exercise, a
certificate representing shares of Common Stock purchased, registered in the
name of the optionee shall be delivered to the Plan participant.

SECTION 6
RESTRICTED STOCK OPTIONS

6.1 RESTRICTED STOCK OPTIONS. Restricted Stock Options may be granted
under the Plan which provide a Plan participant the right to acquire a stated
number of shares of Common Stock without payment. The award of Restricted
Stock Options shall be in such form and upon such terms and conditions as the
Board shall from time to time determine, subject to the specific provisions of
this Section 6 and other provisions of the Plan.

6.2 EXERCISE PRICE. The per share exercise price of each Restricted
Stock Option shall be fixed by the Board in the Restricted Stock Option
Agreement. However, unless otherwise modified in such Restricted Stock Option
Agreement, the per share exercise price shall be equal, on the date of the
grant, to 0% of the fair market value of the Common Stock subject to such
Restricted Stock Option.

6.3 TERM OF RESTRICTED STOCK OPTIONS. Each Restricted Stock Option
shall become exercisable at the time, and for the number of shares of Common
Stock, fixed by the Board in the Restricted Stock Option Agreement. However,
no

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<PAGE> 31
Restricted Stock Option shall be exercisable prior to the date five years, or
after the date ten years, from the date such Restricted Stock Option is
granted.

6.4 VESTING OF RESTRICTED STOCK OPTIONS. Unless otherwise provided in
the Restricted Stock Option Agreement, a Plan participant's right to any number
of shares of Common Stock granted pursuant to a such Restricted Stock Option
Agreement shall vest 100% on the fifth anniversary date of the grant.

6.5 EXERCISE. Restricted Stock Options shall be subject to such terms
and conditions, shall be exercisable at such time or times, and shall be
evidenced by such form of written option agreement ("Restricted Stock Option
Agreement") between the Key Employee and the Company, as the Board shall
determine; provided, that such determinations are not inconsistent with
provisions of the Plan. Restricted Stock Option Agreements need not be
identical.

SECTION 7
STOCK APPRECIATION RIGHTS

7.1 STOCK APPRECIATION RIGHTS. If deemed by the Board to be in the
best interests of the Company, any Incentive Stock Option or Nonstatutory Stock
Option granted under the Plan may include a stock appreciation right ("Stock
Appreciation Right"), either at the time of the grant or thereafter while the
Incentive Stock Option or Nonstatutory Stock Option is outstanding.

7.2 TERMS OF RIGHTS. Each Stock Appreciation Right shall relate to a
specific Incentive Stock Option or Nonstatutory Stock Option under the Plan,
and shall be awarded to a Participant concurrently with the grant of such
Option, or at such later date as may be deemed appropriate by the Board. The
Company shall have sole discretion to grant up to two Stock Appreciation Rights
for every three shares of Common Stock subject to any Incentive Stock Option or
Nonstatutory Stock Option granted under the Plan.

7.3 VESTING OF STOCK APPRECIATION RIGHTS. Unless otherwise provided in
the Stock Appreciation Right Agreement, a Plan participant's right to exercise
any number of Stock Appreciation Rights granted under the Plan shall vest in
accordance with the same vesting schedule applicable to the Incentive Stock
Option or Nonstatutory Stock Option to which the Stock Appreciation Right
relates.

7.4 EXERCISE. Stock Appreciation Rights shall be subject to such terms
and conditions, shall be exercisable at such time or times, and shall be
evidenced by such form of written agreement ("Stock Appreciation Right
Agreement") between the Key Employee and the Company, as the Board shall
determine; provided, that such determinations shall not be inconsistent with
provisions of the Plan. Stock Appreciation Right Agreements need not be
identical.

7.5 MANNER OF EXERCISE. A Plan participant shall exercise a Stock
Appreciation Right by giving written notice of such exercise to the Company.
The date upon which such written notice is received by the Company shall be the
exercise date for the Stock Appreciation Right.

Unless otherwise provided in the Stock Appreciation Right
Agreement, a Plan participant may exercise a Stock Appreciation Right for cash
only in conjunction with the exercise of the Incentive Stock Option or
Nonstatutory Stock Option to which the Stock Appreciation Right relates. Stock
Appreciation Rights may be exercised only at such times and by such persons as
may exercise the Options to which such Stock Appreciation Rights relate.

7.6 PAYMENT. Each Stock Appreciation Right shall entitle a participant
to the following amount of payment: the excess of the fair market value of a
share of Common Stock on the exercise date over the option price per share of
Common Stock subject to the related Incentive Stock Option or Nonstatutory
Stock Option. Fair market value shall be determined in accordance with Section
12.9 of the Plan.

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<PAGE> 32
The total payment to be made to a Plan participant upon the
exercise of a Stock Appreciation Right shall be equal to the number of Stock
Appreciation Rights being exercised, multiplied by the amount of payment per
Right determined under this Section 7.6. The payment to be made to a Plan
participant upon the exercise of a Stock Appreciation Right shall be made in
cash or by check within a reasonable period of time following the exercise of
such Stock Appreciation Right.

SECTION 8
CHANGE IN CONTROL

8.1 CHANGE IN CONTROL. Notwithstanding the vesting schedules found in
Sections 4.4, 5.4,6.4 and 7.3 of the Plan, should a Change in Control of the
Company be anticipated, not less than ten days prior to such Change in Control,
each participant under the plan shall immediately become one hundred percent
(100%) vested in any Equity Participation Award granted to him or her under the
Plan. For these purposes, the term "Change in Control" shall apply if the
Company, or any Subsidiary at which the Plan participant is employed, is merged
with or acquired by another financial institution, or undergoes any other
change in its corporate structure as follows:

(i) any "person", including a"group" as determined in
accordance with Section 13(d)(3) of the Securities
Exchange Act of 1934 (the "Exchange Act"), but
excluding a retirement plan qualified under Section 401
of the Internal Revenue Code (and excluding the
Company), is or becomes the beneficial owner, directly
or indirectly, of Common Stock representing 51% or more
of the combined voting power of the Company's then
outstanding voting stock, or of the outstanding voting
stock of any Subsidiary at which a Plan participant is
employed;

(ii) as a result of, or in connection with, any tender offer
or exchange offer, merger or other business
combination, sale of assets or contested election, or
any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the
Company before the Transaction shall cease to
constitute a majority of the Board of Directors of the
Company or any successor to the Company;

(iii) the Company (or any Subsidiary at which a Plan
participant is employed) is merged or consolidated with
another Corporation and, as a result of the merger or
consolidation, less than 80% of the outstanding voting
stock of the surviving or resulting Corporation shall
then be owned in the aggregate by the former
stockholders of the Company (or by stockholders of any
Subsidiary at which a Plan participant is employed),
excluding stockholders who are (a) a party to the
merger or consolidation within the meaning of the
Exchange Act, or (b) an affiliate of such party;

(iv) a tender offer or exchange offer is made and
consummated for the ownership of securities of the
Company (or any Subsidiary at which the a Plan
participant is employed) representing 51% or more of
the combined voting power of the Company's (or the
Subsidiary which the Key Employee is employed) then
outstanding voting stock; or

(v) the Company (or any Subsidiary at which a Plan
participant is employed) transfers substantially all of
its assets to another corporation which is not a
Subsidiary of the Company.

SECTION 9
TRANSFERABILITY

9.1 TRANSFERABILITY. No Equity Participation Award may be transferred,
assigned, pledged or hypothecated (whether by operation of law or otherwise),
except as provided by will or the applicable laws of descent or distribution,
and any such levy or attachment or similar process upon the Equity
Participation Award not specifically permitted herein shall be null and void
and without effect. An Equity Participation Award may be exercised only by a
Plan participant during his or her lifetime,

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<PAGE> 33
or by his or her estate or the person who acquires the right to exercise such
Equity Participation Award upon his or her death by bequest or inheritance.

SECTION 10
EXPIRATION OF AWARDS

10.1 EXPIRATION OF AWARDS. Upon a Change in Control of the Company in
accordance with Section 8.1, each Equity Participation Award granted hereunder
shall expire as of the effective date of such Change in Control.

SECTION 11
TERMINATION OF EMPLOYMENT

11.1 TERMINATION OF EMPLOYMENT. Except as otherwise provided in this
Section 11, if a Plan participant ceases to be employed by the Company or any
Subsidiary, any rights to the nonvested portion of his or her Equity
Participation Awards shall terminate immediately. If, however, a Participant's
cessation of employment with the Company or any Subsidiary is due to his or her
age 65 retirement, or retirement prior to age 65 with the consent of the
Company, then the Equity Participation Awards then granted to such Plan
participant shall become 100% vested and nonforfeitable.

Following the date of cessation of employment, the Plan participant
may at any time within 120 days exercise the vested portion of his or her
Equity Participation Awards to the extent that he or she was entitled to
exercise them on the date of cessation of employment Should a Plan participant
die within this 120 day period, the exercise of such Equity Participation
Awards may be made within the 120 days period by the executors or
administrators, or legatees or heirs, of the Plan participant's estate. In no
event, however, shall any Equity Participation Award be exercisable more than
10 years from the date it was granted.

11.2 TERMINATION DUE TO DISABILITY. If a Plan participant's cessation
of employment with the Company or any Subsidiary is due to total disability (as
defined for Social Security purposes), then any Equity Participation Awards
granted to the Plan participant shall become 100% vested and nonforfeitable.
Following the date of cessation of employment due to total disability, the Plan
participant may at any time within 12 months exercise such Equity Participation
Awards to the extent that the Plan participant was entitled to exercise them on
the date of cessation of employment. However, in no event shall any Equity
Participation Award be exercisable more than 10 years from the date it was
granted.

11.3 DEATH PRIOR TO TERMINATION OF EMPLOYMENT. If a Plan participant
dies while employed by the Company or any Subsidiary without fully exercising
the Equity Participation Awards to which the Plan participant was entitled to
exercise, then the executors or administrators, or legatees or heirs, of the
Plan participant's estate shall have the right during the 12-month period
following the Plan participant's death to exercise such Equity Participation
Awards to the extent that such deceased Plan participant was entitled to
exercise them on the date of his or her death. However, in no event shall such
Equity Participation Awards be exercisable more than 10 years from the date
they were granted.

SECTION 12
MISCELLANEOUS

12.1 LEGAL AND OTHER REQUIREMENTS. The obligation of the Company to sell
and deliver Common Stock under the Plan shall be subject to all applicable
laws, regulations, rules and approvals, including, but not by way of
limitation, the effectiveness of a registration statement under the Securities
Act of 1933, if deemed necessary or appropriate by the Company. Certificates
for shares of Common Stock issued hereunder may be legended as the Board shall
deem appropriate.

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<PAGE> 34
12.2 NO OBLIGATION TO EXERCISE OPTIONS. The granting of any Equity
Participation Award shall impose no obligation upon a Plan participant to
exercise such Equity Participation Award.

12.3 TERMINATION AND AMENDMENT OF PLAN. The Board, without further
action on the part of the shareholders of the Company, may from time to time
alter, amend or suspend the Plan or any Equity Participation Award granted
hereunder or may at any time terminate the Plan, except that it may not,
without the approval of the shareholders of the Company:

(i) Materially increase the total number of shares of
Common Stock available for grant under the Plan
(except as provided in Section 3.3);
(ii) Materially modify the class of eligible employees
under the Plan;
(iii) Materially increase benefits to any Key Employee
who is subject to the restrictions of Section 16
of the Securities Exchange Act of 1934; or
(iv) Effect a change relating to Incentive Stock
Options granted hereunder which is inconsistent
with Section 422 of the Code or regulations issued
thereunder.

No action taken by the Board under this Section, either with or
without the approval of the shareholders of the Company, may materially or
adversely affect any outstanding Equity Participation Award without the
consent of the holder thereof.

12.4 APPLICATION OF FUNDS. The proceeds received by the Company from
the sale of Common Stock pursuant to any Equity Participation Award will be
used for general corporate purposes.

12.5 WITHHOLDING TAXES. Upon the exercise of any Nonstatutory Stock
Option, Restricted Stock Option or Stock Appreciation Right, the Company shall
have the right to require the optionee to remit to the Company an amount
sufficient to satisfy a federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for shares of Common
Stock. Such tax withholding requirements may be met through either a cash
payment by a Plan participant or through the relinquishment by a Plan
participant of Common Stock or cash payable to the Plan participant through
the, exercise of any Nonstatutory Stock Option, Restricted Stock Option or
Stock Appreciation Right.

In the event that a Plan participant disposes of any Common Stock
acquired by the exercise of an Incentive Stock Option within the 2-year period
following grant, or within the 1 -year period following exercise of the
Incentive Stock Option, then the Company shall have the right to require the
Plan participant to remit to the Company an amount sufficient to satisfy all
federal, state and local tax requirements as a condition to the registration of
the transfer of such Common Stock on its books.

Whenever under the Plan payments are to be made by, the Company in
cash or by check, such payments shall be net of any amounts sufficient to
satisfy all federal, state and local withholding tax requirements.

12.6 RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or any
agreement entered into pursuant to the Plan shall confer upon any Plan
participant the right to continue in the employment of the Company or any
Subsidiary or affect any right which the Company or any Subsidiary may have to
terminate the employment of such Plan participant.

12.7 RIGHTS AS A SHAREHOLDER. No Plan participant shall have any
right as a Company shareholder pursuant to any Equity Participation Award
granted unless and until certificates for shares of Common Stock are issued to
such Plan participant.

12.8 LEAVES OF ABSENCE AND DISABILITY. The Board shall be entitled to
make such rules, regulations and determinations as it deems appropriate under
the Plan with respect to any leave of absence taken by or disability of any
Plan participant. Without limiting the generality of the foregoing, the Board
shall be entitled to determine:(i) whether or not any such leave of absence
shall constitute a termination of employment within the meaning of the Plan,
and (ii) the impact, if any, of any such leave of absence or Equity
Participation Awards previously made to any Plan participant who takes such
leave of absence.

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<PAGE> 35
12.9 FAIR MARKET VALUE. Whenever the fair market value of Common Stock
is to be determined under the Plan as of a given date, such fair market value
shall be determined as follows:

(i) If the Common Stock is traded on the
over-the-counter market, the average of the mean
between the bid and the asked price for the Common
Stock at the close of trading for the 10
consecutive trading days immediately preceding
such given date;

(ii) If the Common Stock is listed on a national
securities exchange, the average of the closing
prices of the Common Stock on the Composite Tape
for the 10 consecutive trading days immediately
preceding such given date; or

(iii) If the Common Stock is neither traded on the
over-the-counter market nor listed on a national
securities exchange, such value as the Board, in
good faith, shall determine. For such purposes,
the Board may, in its sole discretion, rely or
make use of an outside appraisal performed for
purposes of an employee benefit plan sponsored by
the Company or any Subsidiary, or may make use of
those factors found in Revenue Ruling 59-60.

Notwithstanding this or any other provision of the Plan, no
determination made with respect to the fair market value of Common Stock
subject to an Incentive Stock Option shall be inconsistent with Section 422 of
the Code or regulations thereunder.

12.10 NOTICES. Every direction, revocation or notice authorized or
required by the Plan shall be deemed delivered to the Company: (i) on the date
it is personally delivered to the Secretary of the Company at its principal
executive office, or (ii) three business days after it is sent by registered or
certified mall, postage prepaid, addressed to the Secretary at such office.
Every direction, revocation or notice authorized or required by the Plan and
delivered to a Plan participant shall be deemed delivered: (i) on the date it
is personally delivered to the Plan participant, or (ii) three business days
after it is sent by registered or certified mail, postage prepaid, addressed to
the Plan participant's address as shown on the records of the Company.

12.11 APPLICABLE LAW. All questions pertaining to the validity,
constructions and administration of the Plan and Equity Participation Awards
granted hereunder shall be determined in conformity with the laws of the State
of Arkansas, and, with respect to Incentive Stock Options, with Section 422 of
the Code and regulations thereunder.

12.12 ELIMINATION OF FRACTIONAL SHARES. If any provision of the Plan
requires the issuance of a stated number of shares of Common Stock, and the
computation of such number of shares results in fractional share, such number
of shares of Common Stock shall be rounded down to the next whole number.

12.13 STOCK RESTRICTION AGREEMENT. Notwithstanding anything to the
contrary contained in the Plan, the Company shall be under no obligation to
sell or deliver Common Stock under the Plan to a Plan participant unless such
Plan participant shall execute a stock restriction agreement with respect to
such Common Stock, substantially in the form of Exhibit A attached hereto.

SECTION 13
JUST CAUSE TERMINATION

13.1 JUST CAUSE TERMINATION. If a Plan participant is discharged for
Just Cause at any time, any Equity Participation Awards unexercised within 60
days prior to such date of termination shall be considered null and void with
neither the Plan participant nor any beneficiary or other individual acting
through such Plan participant having any claim or right to exercise such Equity
Participation Awards.

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<PAGE> 36
The term Just Cause includes, but is not limited to, theft, fraud,
embezzlement, willful misconduct causing significant property damage to the
Company (or any Subsidiary) or personal injury to a Company or Subsidiary
employee, or willful malfeasance or gross negligence in a manner of material
importance to the Company (or Subsidiary).

For purposes of determining Just Cause, an action (or inaction)
need not constitute an actual violation of law. In addition, the Company shall
have sole discretion in making its determination that an event constituting.
Just Cause has occurred, provided, however, that such determination must be
made in a reasonable and good faith manner. If the Company is of the opinion
that an event has occurred which constitutes Just Cause, the Company shall
provide the Plan participant written notice of its decision that an event
constituting Just Cause has occurred. The Plan participant shall then be
provided a period of 30 days (from the date of such notice) within which to
respond to such notice. After the lapse of such 30-day period, if the
Corporation still believes that an event constituting Just Cause has occurred,
then any unexercised Equity Participation Awards outstanding 30 days prior to
the original date of such Company notice shall become null and void in
accordance with the provisions of this Section 13.

SECTION 14
EFFECTIVE DATE AND TERM OF PLAN

14.1 EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on
the date of its approval by the Company's Board of Directors, subject to a
requirement that it be approved by the holders of a majority of the shares of
Common Stock of the Company by the earlier of: (i)the date twelve months after
the date of adoption by the Board, or (ii) the date of the next regular annual
shareholder's meeting of the Company following adoption by the Board. The Plan
shall be null and void and of no effect if the foregoing condition is not
fulfilled, and in such event, each Equity Participation Award granted hereunder
shall, notwithstanding any of the preceding provisions of the Plan, be null and
void and of no effect.

No grant or award shall be made under the Plan more than 5 years
from the earlier of the date of adoption of the Plan by the Board or
shareholder approval hereof; provided, however, that any Equity Participation
Award granted under the Plan prior to such date shall remain in effect and be
subject to adjustment and amendment as herein provided until they have been
exercised or terminated in accordance with the terms of the respective grants
or awards and related agreements.

Date of Adoption by Board:_____________________________________________

Date of Adoption by Company Shareholders: ________________________________

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<PAGE> 37
FIRST UNITED BANCSHARES, INC.
EQUITY PARTICIPATION PLAN

EXHIBIT A

SHARE CERTIFICATE LEGEND

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY OR MAY NOT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"). SUCH
SECURITIES MAY THUS REPRESENT 'RESTRICTED SECURITIES' AS DEFINED UNDER THE ACT.
THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS; (A) THEY HAVE BEEN
REGISTERED UNDER SAID ACT, OR (B) THEY ARE SOLD OR TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF RULE 144.

11
<PAGE> 38

FIRST UNITED BANCSHARES, INC.
MAIN AND WASHINGTON STREETS EL DORADO, ARKANSAS 71730

ANNUAL STOCKHOLDERS MEETING, MAY 24, 1994

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of FIRST UNITED BANCSHARES, INC., hereby
constitutes and appoints ROBERT G. DUDLEY and JAMES V. KELLEY, or either of
them, the true and lawful agent and attorney-in-fact for the undersigned, with
full powers of substitution, and hereby authorizes them to represent and to
vote, as designated below, all of the shares of common stock owned by the
undersigned or registered in the name of the undersigned on March 17, 1994, at
the Annual Meeting of Stockholders to be held on May 24, 1994, at 2:00 p.m., or
at any and all adjournments thereof.

1. Proposal to elect the following nominees as directors of the Company.

/ / FOR / / WITHHOLD AUTHORITY / / ABSTAIN

E. Larry Burrow, Claiborne P. Deming, Grady E. DuPriest, William A. Eckert,
Jr., James V. Kelley, Roy E. Ledbetter, Michael F. Mahony, Richard H. Mason,
Jack W. McNutt, William E. Morgan, R. Madison Murphy, Robert C. Nolan, Paula
M. O'Connor, Katherine Patton Ozment, Cal Partee, Jr., W. C. Partee, Chesley
Pruet, John D. Trimble, Jr., Ralph C. Weiser and Dr. David M. Yocum, Jr.

THE UNDERSIGNED STOCKHOLDER(S) MAY WITHHOLD AUTHORITY TO VOTE FOR ANY SINGLE
NOMINEE BY LINING THROUGH OR OTHERWISE STRIKING OUT THE NAME OF ANY NOMINEE. IF
THIS PROXY IS EXECUTED BY THE UNDERSIGNED STOCKHOLDER(S) AS NOT TO WITHHOLD
AUTHORITY TO VOTE FOR THE ELECTION FOR ANY NOMINEE, THIS SHALL BE DEEMED TO
GRANT SUCH AUTHORITY.

2. Proposal to ratify the appointment of Arthur Andersen & Co. as the
independent auditors of the Company.

/ / FOR / / AGAINST / / ABSTAIN
3. Proposal to amend the Articles of Incorporation to increase the number of
authorized shares of the Company from 12,000,000 shares to 24,000,000 shares;

/ / FOR / / AGAINST / / ABSTAIN

4. Proposal to consider and adopt the First United Bancshares, Inc. 1994 Equity
Participation Plan; and

/ / FOR / / AGAINST / / ABSTAIN

5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting of Stockholders or
any and all adjournments thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3 AND 4.
Dated:

----------------------------------
(Signature)

----------------------------------
(Signature if jointly held)

PLEASE SIGN EXACTLY AS THE NAME
APPEARS ON YOUR STOCK
CERTIFICATE(S). WHEN SHARES ARE
HELD BY JOINT TENANTS, BOTH SHOULD
SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE
OR GUARDIAN, PLEASE SIGN IN FULL
CORPORATE NAME AND HAVE SIGNED BY
THE PRESIDENT OR OTHER DULY
AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY THE AUTHORIZED
PERSON.

PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY, USING
THE ENCLOSED ENVELOPE.

IF YOU PLAN ON ATTENDING THE ANNUAL STOCKHOLDER'S MEETING IN PERSON, PLEASE
INDICATE SO BY CHECKING THE FOLLOWING BOX: / /