SCHEDULE 14- INFORMATION REQUIRED IN PROXY
STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ( X )
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for use of the Commission Only (as permitted by Rule 14a6(e)
(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
FIRST UNITED CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
FIRST UNITED CORPORATION
------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
____________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11. (Set forth the amount
on which the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
______________________________________________________________
5) Total fee paid:
--------------------------------------------------------------
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
_________________________________________
2) Form, Schedule or Registration Statement No.:
_________________________________________
3) Filing Party:
_________________________________________
4) Date Filed
___________________________________________
(Amended by Sec Act Rel No. 7331; Exch Act Rel No. 37692 eff 10/07/96.)
<PAGE>
FIRST UNITED CORPORATION
19 South Second Street
P.O. Box 9
Oakland, Maryland 21550
March 28, 1997
PROXY STATEMENT
INFORMATION CONCERNING THE SOLICITATION
The enclosed proxy is solicited by the Board of Directors of First United
Corporation (the "Company") in connection with the Annual Meeting of
Shareholders to be held on April 29, 1997, and any adjournment or postponements
thereof. The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited by officers,
directors and regular employees of the Company personally or by telephone,
telegraph or facsimile. No additional remuneration will be paid to officers,
directors or regular employees who solicit proxies. The Company may reimburse
brokers, banks, custodians, nominees and other fiduciaries for their reasonable
out-of-pocket expenses in forwarding proxy materials to their principals. The
Company has also engaged ChaseMellon Securities Transfer, Inc. to assist in the
solicitation of proxies, at an estimated cost of $1,000 plus reasonable
expenses.
Please complete, sign the enclosed proxy and return it to our transfer
agent, ChaseMellon, promptly. Should you attend the meeting and desire to vote
in person, you may withdraw your proxy by written request delivered to the
Secretary of the Company, prior to its exercise by the named proxies. Also,
your proxy may be revoked before it is exercised, whether or not you attend the
meeting, by notifying Robert W. Kurtz, Secretary, First United Corporation, P.O.
Box 9, Oakland, Maryland 21550-0009, in writing prior to the Annual Meeting.
Your proxy may also be revoked by using a subsequently signed proxy. Your proxy
will be voted in accordance with the instructions on the proxy card; if no
instructions are given, your proxy will be voted FOR the director nominees
listed below, FOR the ratification of the appointment of independent auditors
and in the discretion of the persons named in the proxy with respect to any
other matter properly brought before the meeting. The proxy materials are first
being mailed to shareholders on or about March 28, 1997.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1998 Annual Meeting
of Shareholders must be received by the Company not later than November 29,
1997, in order to be eligible for inclusion in the Company's 1998 Proxy
Statement.
OUTSTANDING VOTING SECURITIES; VOTING RIGHTS
Only shareholders of record of the Company's Common Stock, par value $.01
per share ("Common Stock") at the close of business on February 28, 1997, (the
"Record Date") will be entitled to receive notice of and vote at the Annual
Meeting. As of the Record Date, there were 6,414,539 shares of Common Stock
outstanding and entitled to be voted at the Annual Meeting, except that an
aggregate of 730,508 shares, or 11.39%, held by the Trust Department of First
United National Bank & Trust ("FUNBT"), as sole trustee for the benefit of
various beneficiaries, may not be voted in the election of directors. Each share
of Common Stock is entitled to one vote. Directors are elected by a plurality of
the votes cast by the holders of shares of Common Stock present in person or
represented by proxy at the meeting, in which there is a quorum present.
Consequently, withholding of votes, abstentions and broker non-votes will not
affect the outcome of the plurality vote.
<PAGE>
STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned as of February 28, 1997, by directors and executive officers
and by each person that, to the Company's knowledge, beneficially owns more than
5% of the Company's outstanding Common Stock. Except as otherwise indicated and
except for shares held by members of an individual's family or in trust, all
shares are held with sole dispositive and voting power.
Common Stock Percent of
Beneficially Outstanding
DIRECTORS & EXECUTIVE OFFICERS: Owned Common Stock
David J. Beachy 7,403 .12%
Donald M. Browning 17,821 .28%
Rex W. Burton 9,119 .14%
Paul Cox, Jr. 1,294 .02%
Richard D. Dailey, Jr. 2,590 .04%
William B. Grant 5,804 .09%
Maynard G. Grossnickle 9,957 .16%
Raymond F. Hinkle 5,684 .09%
Robert W. Kurtz 8,002 .12%
Andrew E. Mance 46,120 .72%
Elaine L. McDonald 1,916 .03%
Donald E. Moran 100,560 1.57%
I. Robert Rudy 27,562 .43%
James F. Scarpelli, Sr. 96,340 (2) 1.50%
Karen F. Spiker 6,640 .10%
Richard G. Stanton 14,512 .23%
Robert G. Stuck 2,213 .03%
Frederick A. Thayer, III 53,589 .84%
Directors & Executive Officers as a group
(19 persons) 418,662 6.53%
OTHER BENEFICIAL OWNERS:
Firstoak & Company 629,368 (1) 9.81%
(1) Shares held in the name of Firstoak Co., a nominee, are administered by the
Trust Department of FUNBT in a fiduciary capacity. Firstoak & Co. disclaims
beneficial ownership of such shares.
(2) Includes 656 shares held in the James and Margaret Scarpelli Foundation
Trust which Mr. Scarpelli has a 1/4 interest.
ELECTION OF DIRECTORS (PROPOSAL NO. 1)
A Board of Directors of 18 persons is to be elected by the shareholders.
All of the nominees named below will be elected to serve as directors until the
1998 Annual Meeting of Shareholders and until their respective successors have
been elected and qualified. Unless authority to vote is withheld, the enclosed
proxy will be voted in favor of the nominees listed below. The Board of
Directors has no reason to believe that any nominee herein will be unable to
serve, but if any of them become unable to serve, the proxies may be voted with
discretionary authority for the election of other persons to serve as directors.
NAME Age (1) Occupation During Past Five Years Director
Since
David J. Beachy 56 Vice President, 1985
Fred E. Beachy Lumber Co., Inc.,
Building Supplies
Donald M. Browning 72 Chairman of the 1985
Board, Browning's, Inc.
Retail Groceries
Rex W. Burton 62 Owner & President, 1992
Burtons, Inc., Dry Goods
Paul Cox, Jr. 57 Owner, Pro-Tax 1993
Tax Consulting Firm
Richard D. Dailey, Jr. 40 President, Cumberland Electric
Company 1995
William B. Grant 43 Chairman of the Board and 1995
Chief Executive Officer ("CEO")
First United Corporation and
First United National Bank & Trust
(2)
<PAGE)
NAME Age (1) Occupation During Past Five Years Director
Since
Maynard G. Grossnickle 65 Farmer, Retired 1996
Raymond F. Hinkle 60 Tax Consultant 1996
Robert W. Kurtz 50 President, Chief Financial 1990
Officer, and Secretary
First United Corporation,
President and Chief Financial Officer
First United National Bank & Trust
Andrew E. Mance 82 Physician 1985
Elaine L. McDonald 49 Vice President, 1995
Alpine Village / Silver Tree Inn
Donald E. Moran 66 Secretary/Treasurer, 1988
Moran Coal Company
I. Robert Rudy 44 Owner, Rudy's Dept.Store, 1992
Dry Goods
James F. Scarpelli, Sr. 83 Owner, Scarpelli Funeral Home 1985
Karen F. Spiker 45 Real Estate Broker, A &A Realty/ 1992
Better Homes and Gardens
Richard G. Stanton 57 Banker, Retired 1985
Robert G. Stuck 51 Vice President,
Oakview Motors, Inc. 1995
Frederick A. Thayer, III 63 Judge, Retired 1996
(1) As of Record Date.
The Board of Directors recommends that shareholders vote "FOR" such nominees.
Attendance at Board Meetings
During 1996 the Board of Directors of the Company held ten meetings. All
incumbent directors who are nominees for reelection attended at least 75% of the
Board Meetings and meetings of each committee of the Board on which such
director served, with the exception of Donald E. Moran, who attended 50% of the
Board Meetings and 58% of meetings of the committees on which they served, and
Donald M. Browning, Rex W. Burton, Andrew E. Mance, Robert G. Stuck and James F.
Scarpelli, Sr., who attended 71%, 30%, 50%, 71% and 25% of meetings of the
committees on which they served, respectively. In addition, directors of the
Company's subsidiaries have met in accordance with guidelines established by the
Board of Directors.
Committees of the Board of Directors
In addition to meeting as a group, certain members of the Board also devote
their time to certain standing committees. Members of the Board of Directors of
the Company are also members of the Board of Directors of the lead subsidiary,
First United National Bank & Trust. These committees act on behalf of the
Company. Among those committees are the Audit, Asset and Liability Management,
Executive and Strategic Planning Committees. The Chairman of the Board and CEO
of the Company, William B. Grant, is an ex-officio member of all committees,
except the Audit Committee.
Audit Committee - The Audit Committee, which consists of David J. Beachy,
Andrew E. Mance, James F. Scarpelli, Sr. and Robert G. Stuck, reviews
significant audit and accounting principles, policies and practices, meets with
the Company's auditor to review the Company's internal auditing function, and
meets with the Company's independent auditors to review the results of the
annual audit. This committee met four times in 1996.
Asset and Liability Management Committee- The Asset and Liability
Management Committee, which consists of Rex W. Burton, Paul Cox, Jr., Elaine L.
McDonald, Karen F. Spiker, Richard G. Stanton, Robert G. Stuck, Frederick A.
Thayer, III, and director emeritus, Bowie Linn Grant, a non voting member,
reviews and recommends changes to the Company's Asset and Liability, Investment,
Liquidity, and Capital Plans. This committee met three times in 1996.
Executive Committee - This Executive Committee, which consists of David J.
Beachy, Donald M. Browning, Rex W. Burton, Paul Cox, Jr., Donald E. Moran, I.
Robert Rudy, and Richard G. Stanton, is responsible for reviewing and
recommending changes to the Company's Insurance Program, overseeing compliance
with the Company's By-Laws and Articles of Incorporation, supervising the
Company's CEO, recommending to the Board a compensation policy for the CEO and
other executive officers of the Company and its subsidiaries, recommending
changes to the CEO's compensation package based on performance reviews,
monitoring the performance of the Company and its subsidiaries, recommending
(3)
changes to the Company's and subsidiaries' personnel policies, serving as a
director nomination committee, and functions with the authority of the full
Board between meetings of the Board. This committee met seven times in 1996.
Strategic Planning Committee - The Strategic Planning Committee which
consists of Paul Cox, Jr., Elaine L. McDonald, Donald E. Moran, I. Robert Rudy,
Richard G. Stanton, director emeritus, Bowie Linn Grant, a non voting member,
and Advisory Board members, George C. Harne, William M. Kenny, and Gary R.
Ruddell focuses on long-term planning to insure that management's decisions
take into account the future operating environment, the development of corporate
statements of policy, review of overall management internal control procedures,
and review of management's internal and external information and communications
systems. This committee met five times in 1996.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS (PROPOSAL NO.2)
Subject to ratification by shareholders, the Board of Directors has
reappointed Ernst & Young LLP as independent auditors to audit the consolidated
financial statements of the Company and its subsidiaries. Ernst & Young LLP has
advised the Company that no one within the firm nor any of its members or
associates has any direct financial interest in or has any connection with the
Company or its subsidiaries other than as independent auditors. No
representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting.
The Board of Directors recommends that shareholders vote "FOR" such
ratification.
REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors' Fees
Directors' fees are paid only to directors who are not executive officers
of the Company. A director of the Company receives up to $350 for a Board
meeting and up to $175 for each committee meeting of the Board of which the
director is a member, depending on the length of the meeting. Directors of
subsidiaries of the Company are compensated for their attendance of meetings of
the subsidiaries' boards.
Summary Compensation Table
The following sets forth the total remuneration for services in all
capacities paid during each of the last three fiscal years to the chief
executive officer and each of the other executive officers of the Company as to
whom total remuneration exceeded $100,000 during the fiscal year ended December
31, 1996.
Name and All other
Principal Position Year Salary(1) Bonus(2) Compensation
(3)(4)(5)(6)
William B. Grant 1996 $114,763 $27,516 $10,714
Chairman of the Board and CEO 1995 107,196 0 10,478
1994 95,672 27,193 13,237
Robert W. Kurtz 1996 $111,276 $29,767 $ 7,050
President, Chief Operating Officer, 1995 107,196 0 7,296
and Secretary 1994 107,372 30,621 11,311
Richard G. Stanton 1996 $ 66,415 $0 $93,732
Former Chairman of the Board, 1995 157,596 0 14,929
President and CEO 1994 158,024 46,889 20,068
(1) Salary amounts for 1994 include directors fees. As of March 1, 1994
directors fees were no longer paid to directors who are executive officers
of the Company.
(2) The pay for performance for 1994 and 1996 was distributed in 1995 and 1997,
respectively.
(3) Includes (i) basic and matching contributions made by the Company for Mr.
Grant under the Company's Profit Sharing Plan of $10,151, $9,935, and
$12,430 for fiscal years 1996, 1995, and 1994, respectively, and (ii)
contributions made by the Company under the Employee Stock Ownership Plan
of $563, $543, and $807 for fiscal years 1996, 1995, and 1994,
respectively.
(4) Includes (i) basic and matching contributions made by the Company for Mr.
Kurtz under the Company's Profit Sharing Plan of $6,504, $6,742, and
$10,433 for fiscal years 1996, 1995, and 1994, respectively, and (ii)
contributions made by the Company under the Employee Stock Ownership Plan
of $546, $554, and $878 for fiscal years 1996, 1995, and 1994,
respectively.
(5) Includes (i) basic and matching contributions made by the Company for Mr.
Stanton under the Company's Profit Sharing Plan of $8,246 $14,119, and
$18,826 for fiscal years 1996, 1995, and 1994, respectively, and (ii)
contributions made by the Company under the Employee Stock Ownership Plan
of $526, $810, and $1,242 for fiscal years 1996, 1995, and 1994,
respectively. Includes payments in 1996 of $28,260 from Rabbi Trust fund,
$40,800 for health insurance, and $15, 900 for a car, as part of Mr.
Stanton's retirement package.
(6) Each of Messrs. Grant, Kurtz, and Stanton has in excess of seven years of
credited service under the respective plans, and is therefore 100% vested.
(4)
<PAGE>
Executive Committee Report
The basic philosophy of the Company's compensation program is to offer
competitive compensation for all executive employees which takes into account
both individual contributions and corporate performance. Compensation levels for
executives were recommended by the Executive Committee and approved by the non-
employee directors of the Board.
The principal elements of executive compensation are base salary, which is
not at risk, and a component of salary which is at risk and dependent upon
corporate performance. Base salaries are set at levels intended to foster a
career development among executives, consistent with the long-term nature of the
Company's business objectives. In setting base salary levels, consideration is
given to establishing salary levels that approximate the amounts paid for
similar executive positions at other comparable community banking organizations.
Salary adjustments and "at risk" amounts are determined in accordance with the
Annual Incentive Program established for executive officers and other members of
senior management. The incentive program, which was developed in consultation
with the Company's independent accountants, utilizes a targeted goal-oriented
approach whereby each year the committee establishes performance goals based on
the recommendation of the Chairman and CEO. The performance goals include
strategic financial measures such as return on equity, return on assets, and
efficiency ratio. Each of these elements is weighted approximately the same.
The measures are established annually at the start of each fiscal year and are
tied directly to the Company's business strategy, projected budgeted results and
competitive peer group performance.
The targeted goals are set at levels which only reward continued
exceptional Company performance. The incentive awards are expressed as a
percent of base pay and measured on a range around the targeted goals with a
fixed maximum incentive award. Performance below certain stated minimum
hreshold levels will result in no incentive payout to the executives. The goals
established at the beginning of fiscal year 1996 were met, and accordingly, the
portion of compensation which is "at risk" was awarded.
The committee considered a number of factors in evaluating the compensation
level of William B. Grant, Chairman and CEO of the Company and Robert W. Kurtz,
President of the Company. The committee took into consideration the additional
responsibilities that Mr. Grant and Mr. Kurtz incurred with their newly
appointed positions on June 1, 1996. The committee also recognized the ability
of the Company to achieve and exceed its 1996 net earnings objectives, including
return on assets and return on equity. After taking these items into
consideration, the committee opted to increase Mr. Grant's and Mr. Kurtz's base
pay for 1997.
EXECUTIVE COMMITTEE
BY: David J. Beachy
Donald M. Browning
Rex W. Burton
Paul Cox, Jr.
Donald E. Moran
I. Robert Rudy
Richard G. Stanton
(5)
<PAGE>
PERFORMANCE GRAPH
Set forth below is a graph showing 5 year cumulative total return of the
Common Stock as compared with the NASDAQ - listed bank index, as prepared by the
Center for Research in Securities Prices, and the NASDAQ total index. A list of
component companies within the NASDAQ - listed bank index will be provided upon
written request.
If a straight line is drawn between the years 1991 and 1996, the graph would
reflect a steady increase in the performance of the Company's stock. Management
believes the unusually high stock price in 1993 was an aberration resulting from
speculative trading at above-normal multiples, and that the successive declines
in 1994, 1995 and 1996 reflects a gradual correction in the market price.
Year Total NASDAQ First United Corp. NASQAQ Banks
- --------------------------------------------------------------------
1991 $100.00 $100.00 $100.00
1992 $116.38 $131.03 $145.55
1993 $133.60 $244.83 $166.00
1994 $130.59 $217.29 $165.39
1995 $184.67 $186.25 $246.32
1996 $227.16 $168.40 $325.60
Shareholder return is calculated and presented on the basis of $100.00 invested
at December 31, 1991.
PENSION AND PROFIT SHARING PLANS
The following table shows the maximum annual retirement benefits payable
under the Company Defined Benefit Pension Plan for various levels of
compensation during the year of service:
APPROXIMATE ANNUAL BENEFIT UPON RETIREMENT AT AGE 65 BASED ON YEARS OF CREDITED
SERVICE
FINAL ANNUAL
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
30,000 6,000 8,000 10,000 12,000 14,000
70,000 15,000 20,000 25,000 30,000 35,000
110,000 24,000 32,000 40,000 48,000 56,000
150,000 33,000 44,000 55,000 66,000 77,000
190,000 33,000 44,000 55,000 66,000 77,000
For purposes of this table, final average compensation shown is twelve
times the average of the highest salary during sixty consecutive months in the
last one hundred twenty months preceding normal retirement. Also, for purposes
of the table, benefits are payable for life with a minimum guarantee of ten
years. Benefits are computed on an actuarial basis. To convert the benefits at
normal retirement to a lifetime only benefit, the amounts would be increased by
a factor of 1.0677% during 1996. Social Security benefits are not shown on the
table and would not reduce retirement benefits under the plan.
(6)
<PAGE>
Projected Benefits for Highly Compensated Employees:
CURRENT COMPENSATION CREDITED SERVICE AT ESTIMATED ANNUAL
COVERED BY THE PLAN NORMAL RETIREMENT BENEFITS AT
RETIREMENT
William B. Grant $114,763 40 Years $64,766
Robert W. Kurtz $111,276 38 Years $63,039
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS
Some of the directors and officers of the Company and their associates were
customers of and had banking transactions with banking subsidiaries of the
Company in the ordinary course of business during 1996. All loans and loan
commitments included in such transactions were made on the same terms, including
interest rates and collateral, as those prevailing at the same time for
comparable transactions with others, and in the opinion of the management of the
Company, do not involve more than a normal risk of collectability or present
other unfavorable features.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules thereunder, the Company's executive officers and directors are required to
file with the Securities and Exchange Commission reports of their ownership of
Common Stock. Based solely on a review of copies of such reports furnished to
the Company, or written representations that no reports were required, the
Company believes that during the fiscal year ended December 31, 1996, its
executive officers and directors complied with the Section 16(a) requirements,
except that late filings were made with respect to the following reporting
persons: One report was filed approximately 3 days late by Mr. Beachy; three
reports were filed approximately 1, 2, and 5 days late by Mr. Rudy; and three
reports were filed approximately 3, 5, and 13 days late by Ms. Spiker.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors is not aware
of any matters, other than those stated above, that may properly be brought
before the meeting. In such event, persons named in the enclosed form of proxy
or their substitutes will vote with respect to any such matters in accordance
with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ ROBERT W. KURTZ
ROBERT W. KURTZ
Secretary
(7)
<PAGE>
FIRST UNITED CORPORATION
Oakland, Maryland
Notice of Annual Shareholders' Meeting
March 28, 1997
To Shareholders of
First United Corporation
Oakland, Maryland
Notice is hereby given that the Annual Meeting of the Shareholders of First
United Corporation (the "Company") will be held in the McHenry House, the Wisp
Ski Area, in McHenry, Maryland 21541. The meeting is scheduled for:
TUESDAY, APRIL 29, 1997, at 3:00 p.m.
The purposes of the meeting are to (i) elect eighteen (18) Directors to
serve for the ensuing year, (ii) to ratify the accounting firm of Ernst & Young,
LLP to act as the independent auditors of the Company and, (iii) to transact
such other business as may be properly brought before said meeting or any
adjournment thereof.
IT IS HOPED THAT YOU WILL PLAN TO ATTEND, BUT WHETHER OR NOT YOU
CONTEMPLATE ATTENDING THE MEETING, YOU ARE REQUESTED TO EXECUTE THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY. IF YOU SHOULD ATTEND THE MEETING, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON, SHOULD YOU SO DESIRE. ALL SHAREHOLDERS
OF RECORD AT THE CLOSE OF BUSINESS ON FEBRUARY 28, 1997, ARE ENTITLED TO VOTE AT
THIS MEETING.
Anyone acting as proxy agent for a Shareholder must present a proxy
properly executed by the Shareholder authorizing said agent in form and
substance satisfactory to the judges of election, and otherwise in accordance
with the Company's By-Laws.
Sincerely,
/S/ROBERT W. KURTZ
ROBERT W. KURTZ
Secretary
<PAGE>
March 28, 1997
To Our Shareholders:
On behalf of the Board of Directors and the whole First United Team, I
cordially invite you to attend the Annual Shareholders' Meeting to be held on
Tuesday, April 29, 1997, at 3:00 p.m. in the McHenry House at the Wisp Ski Area
in McHenry, Maryland 21541. The notice of meeting and proxy statement
accompanying this letter describe the specific business to be acted upon.
In addition to the specific matters to be acted upon, there will be a
report on the progress of your Company and an opportunity to ask questions on
matters of general interest to shareholders.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend in person, we would ask that you mark, sign, date and
promptly return the enclosed proxy in the envelope provided.
There will be a reception with light refreshments immediately following the
shareholders' meeting for all registered shareholders. I look forward to seeing
you there.
Sincerely yours,
/S/ WILLIAM B. GRANT
WILLIAM B. GRANT
Chairman of the Board &
Chief Executive Officer
<PAGE>
PROXY
FIRST UNITED CORPORATION
P.O. Box 9
Oakland, MD 21550-0009
The undersigned hereby appoints Naomi Oliver and Don Sincell,
and each of them, as Proxies, with the powers the undersigned would possess if
personally present, and with full power of substitution, and hereby authorizes
them to represent and to vote as designated on the reverse side, all the shares
of Common Stock of First United Corporation held of record by the undersigned on
February 28, 1997 at the annual meeting of shareholders to be held on April 29,
1997 or any adjournment thereof.
( Please sign reverse side and return immediately)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
SHAREHOLDER SURVEY
As a shareholder of First United Corporation, we want you to know that we are
committed to meeting your expectations as an investor. Please take a few
moments to complete this survey. Your opinions are very important to us, and
your completing this survey will help us to serve you in the future. Once you
have completed it, return the entire form, including the proxy and survey n the
envelope provided. Thank you for your time and input. It is appreciated.
1. How satisfied are you with your First United Corporation Investment?
____ Not Satisfied ____ Satisfied ____ Very Satisfied ____ No Opinion
2. How satisfied are you with the format and location of our Annual Meeting?
____ Not Satisfied ____ Satisfied ____ Very Satisfied ____ No Opinion
3. Are you satisfied with responsiveness of our current transfer agent,
ChaseMellon Shareholder Services?
____ Not Satisfied ____ Satisfied ____ Very Satisfied ____ No Opinion
4. Over the past 3 years, we have paid out in dividends approximately 46% of
earnings and have increased the dividend by approximately 14% each year.
Are you satisfied with our dividend payments and increases?
____ Not Satisfied ____ Satisfied ____ Very Satisfied ____ No Opinion
5. With your First United Investment, is your primary focus on the stock's long
term appreciation, or are you more concerned with the current income
provided by the dividend.
____ My primary focus is to see the value of my stock increase.
____ My primary focus is to maximize the current income yield provided by
the dividend.
6. Do you currently receive more than one Annual Report?
____ Yes ____ No If yes, how many do you receive? ____________
7. How long have you been a shareholder of First United?
____ Less than 1 year ____ 1 to 5 years ____ Greater than 5 years
8. Please rank in order of importance, the financial ratios which are relevant
to you.
____ Return on Equity ____ Price to earnings
____ Earnings per share ____ Share Price to Book Value
____ Dividend Yield ____ Other ____________________
____ Return on Assets ____ I do not review financial ratios.
<PAGE>
1. Election of Directors: (INSTRUCTION: To withhold authority to vote
for any individual nominee, strike a line
through the nominee's name in the list
below.)
FOR WITHHOLD
all nominees AUTHORITY David J. Beachy Richard D. Dailey Jr.
listed (except as to vote for Donald M. Moran James F.Scarpelli,Sr.
marked to the all nominees Donald M. Browning William B.Grant
contrary listed Raymond F. Hinkle Karen Spiker
Rex W. Burton Robert W. Kurtz
I. Robert Rudy Richard G.Stanton
Andrew E. Mance Robert G. Stuck
Frederick A. Thayer,III Paul Cox Jr.
Maynard G. Grossnickle Elaine L. McDonald
--------- ----------
2. Proposal to ratify the 3. In their discretion the Proxies are
Appointment of Ernst & Young authorized to vote upon such other business
LLP as the independent auditors as may properly come before the meeting and
of First United Corporation any adjournments thereof.
FOR AGAINST ABSTAIN
----- -------- --------
THIS PROXY WILL BE VOTED AS SPECIFIED.
HOWEVER, IN THE ABSENCE OF DIRECTION TO THE
CONTRARY, THE ATTORNEYS NAMED HEREIN INTEND TO
VOTE THIS PROXY "FOR" PROPOSALS 1 AND 2 HERON,AND
FOR MATTERS WHICH MAY BE PRESENTED AT THE
MEETING IN ACCORDANCE WITH RECOMMENDATIONS OF
THE BOARD OF DIRECTORS.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF
NOTICE OF THE AFORESAID ANNUAL MEETING OF
SHAREHOLDERS.
- ------------------------------------------
Signature(s)
- ------------------------------------------
Signature(s)
- ------------------------------------------
Date
NOTE: Please sign exactly as name appears heron. Joint holders should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
indicate the capacity in which you are signing. If a corporation or other entity
please sign in full corporate or entity name by authorized person.
- --------------------------------------------------------------------------------
SHAREHOLDER SURVEY (continued)
9. Please check the sections of the Annual Report which you read?
____ Chairman's letter ____ Consolidated Statements of Condition and Income
____ Profiles of Business ____ Form 10K (Booklet inserted in back of Report)
____ Financial Highlights
10. Please check below the services which you now use at "My Bank" First United
____ Mortgage ____ Trust ____ Other ____________
____ Home Equity Line ____ Brokerage ____ I do not currently
____ Certificate of Deposit ____ Auto Loan bank with First
____ Checking Account ____ Personal Credit Line Bank.
____ Savings Account ____ Telephone Banking
11. Would you like someone to contact you regarding these services available at
"My Bank" First United?
____ Yes ____ No
12. Which of our Shareholder services are you currently using?
_____ Dividend Reinvestment _____ Direct Deposit of Dividends
_____ Stock Repurchase Plan
_____ I do not currently use any of these services, but would be interested
in learning more about them.
_____ I do not use any of these services.
13. Would you be interested in voting your proxy by phone using an 800 number?
____ Would use ____ Would not use ____ Might use
14. Would you utilize Personal Computer (PC) Banking?
____ Yes ____ No
COMMENTS:_______________________________________________________________________
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