As filed
with the Office of the Securities and Exchange Commission on February 27,
2009
Registration
No. 333-____________
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________________________
FORM
S-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
___________________________
FIRST
UNITED CORPORATION
(Exact
Name of Registrant as Specified in Its Charter)
|
Maryland
|
52-1380770
|
|
|
(State or Other Jurisdiction of Incorporation or Organization
|
|
(I.R.S. Employer Identification Number)
|
19 South Second Street, Oakland,
Maryland 21550
(Address
of Principal Executive Offices)
________________________________
William
B. Grant, Esquire
Chairman
and Chief Executive Officer
First
United Corporation
19
South Second Street, Oakland, Maryland 21550
(888)
692-2654
(Name,
Address and Telephone Number of Agent for Service)
________________________________
Copies
to:
Andrew
D. Bulgin, Esquire
Gordon,
Feinblatt, Rothman, Hoffberger & Hollander, LLC
The
Garrett Building
233
East Redwood Street
Baltimore,
Maryland 21202
(410)
576-4280
________________________________
Approximate date of commencement of
proposed sale to the public: As soon as practicable after the
effective date of this Registration Statement.
If the only securities being registered
on this Form are being offered pursuant to dividend or interest reinvestment
plans, please check the following box. o
If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment plans, check
the following box. R
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. o _________
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o _________
If this Form is a registration
statement pursuant to General Instruction I.D. or a post-effective amendment
thereto that shall become effective upon filing with the Commission pursuant to
Rule 462(e) under the Securities Act, check the following box. o
If this Form is a post-effective
amendment to a registration statement filed pursuant to General Instruction I.D.
filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box. o
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company. See definition of “large accelerated
filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
|
Large accelerated filer o
|
Accelerated filer R
|
|
|
Non-accelerated filer o (Do not check if a smaller reporting company)
|
Smaller reporting company o
|
CALCULATION
OF REGISTRATION FEE
|
Title of each class of
securities to be registered
|
Amount
to be
registered
|
Proposed maximum
offering price
per share
|
Proposed maximum
aggregate offering
price
|
Amount of
registration fee
|
||||||||||||
|
Fixed
Rate Cumulative Perpetual Preferred Stock, Series A,
having no par value
|
30,000 | $ | 1,000 | (1) | $ | 30,000,000.00 | $ | 1,179.00 | ||||||||
|
Warrant
to Purchase Common Stock, par value $.01 per share,
and underlying shares of Common Stock (2)
|
326,323 | $ | 13.79 | (3) | $ | 4,499,994.17 | $ | 176.85 | ||||||||
|
TOTAL
|
$ | 34,499,994.17 | $ | 1,355.85 | ||||||||||||
|
(1)
|
Calculated
in accordance with Rule 457(a) under the Securities Act of 1933 (the
“Securities Act”) and, pursuant to Rule 416 under the Securities Act,
includes such additional number of shares of Fixed Rate Cumulative
Perpetual Preferred Stock, Series A, of a currently indeterminable amount,
as may from time to time become issuable by reason of stock splits, stock
dividends or similar transactions.
|
|
(2)
|
In
addition to the Fixed Rate Cumulative Perpetual Preferred Stock, Series A,
there are being registered hereunder (a) a warrant for the purchase of
326,323 shares of common stock with an initial exercise price of $13.79
per share, (b) the 326,323 shares of Common Stock issuable upon exercise
of such warrant and (c) such additional number of shares of Common Stock
of a currently indeterminable amount as may from time to time become
issuable by reason of stock splits, stock dividends and certain
anti-dilution provisions set forth in such warrant, which shares of Common
Stock are registered hereunder pursuant to Rule
416.
|
|
(3)
|
Calculated
in accordance with Rule 457(i) with respect to the per share exercise
price of $13.79 for the Common Stock underlying the
warrant.
|
The Registrant hereby amends this
Registration Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further amendment that
specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until this Registration Statement shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may
determine.
The
information contained in this Prospectus is not complete and may be changed. Our
selling security holders may not sell these securities until the Registration
Statement filed with the Securities and Exchange Commission becomes effective.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
Subject
to completion, dated February 27, 2009
Prospectus
30,000
SHARES OF FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A
WARRANT
TO PURCHASE 326,323 SHARES OF COMMON STOCK
326,323
SHARES OF COMMON STOCK
This prospectus relates to the
potential resale from time to time by selling security holders of some or all of
the shares of our Fixed Rate Cumulative Perpetual Preferred Stock, Series A, or
the Series A Preferred Stock, a warrant to purchase 326,323 shares of common
stock, or the warrant, and any shares of common stock issuable from time to time
upon exercise of the warrant. In this prospectus, we refer to the
shares of Series A Preferred Stock, the warrant and the shares of common stock
issuable upon exercise of the warrant, collectively, as the
securities. The Series A Preferred Stock and the warrant were
originally issued by us pursuant to a Letter Agreement dated January 30, 2009,
and the related Securities Purchase Agreement – Standard Terms, between us and
the United States Department of the Treasury, which we refer to as the initial
selling security holder, in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended, or the Securities
Act.
The initial selling security holder and
its successors, including transferees, which we collectively refer to as the
selling security holders, may offer the securities from time to time directly or
through underwriters, broker-dealers or agents and in one or more public or
private transactions and at fixed prices, prevailing market prices, at prices
related to prevailing market prices or at negotiated prices. If these
securities are sold through underwriters, broker-dealer or agents, the selling
security holders will be responsible for underwriting discounts or commissions
or agents’ commissions.
We will not receive any proceeds from
the sale of the securities by the selling security holders.
The Series A Preferred Stock is not
listed on an exchange and, unless requested by the initial selling security
holder, we do not intend to list the Series A Preferred Stock on any
exchange. The warrant is not listed on an exchange and we do not
intend to list the warrant on any exchange.
Our common stock is listed on the
NASDAQ Global Select Market under the symbol “FUNC”. On February 26,
2009, the closing price of our common stock on the NASDAQ Global Select Market
was $9.82 per share. You are urged to obtain current market
quotations of our common stock.
Investing in our securities involves
certain risks. See “RISK FACTORS” beginning on page 5 of this
prospectus.
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF
THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT
DEPOSIT OR SAVINGS ACCOUNTS OR OTHER OBLIGATIONS OF ANY BANK OR NON-BANK
SUBSIDIARY OF FIRST UNITED CORPORATION, AND THEY ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OR
INSTRUMENTALITY.
Our principal executive offices are
located at 19 South Second Street, Oakland, Maryland 21550 and our telephone
number is (888) 692-2654.
The
date of this Prospectus is _________, 2009
TABLE
OF CONTENTS
|
ABOUT
THIS PROSPECTUS
|
3
|
|
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
|
3
|
|
A
WARNING ABOUT FORWARD-LOOKING STATEMENTS
|
4
|
|
RISK
FACTORS
|
5
|
|
The
shares of Series A Preferred Stock, the warrant, and the shares of common
stock underlying the warrant are not insured
|
5
|
|
There
is no market for the Series A Preferred Stock or the warrant; our common
stock is not heavily traded
|
5
|
|
Because
of our participation in the Troubled Asset Relief Program, we are subject
to several restrictions relating to shares of our capital stock, including
restrictions on our ability to declare or pay dividends on and repurchase
such shares, as well as restrictions on compensation paid to
executives
|
6
|
|
Our
ability to pay dividends is also subject to the terms of our outstanding
debentures
|
6
|
|
ABOUT
FIRST UNITED CORPORATION
|
7
|
|
SUPERVISION
AND REGULATION
|
7
|
|
USE
OF PROCEEDS
|
7
|
|
RATIO
OF EARNINGS TO FIXED CHARGES
|
8
|
|
DESCRIPTION
OF SECURITIES TO BE REGISTERED
|
8
|
|
PLAN
OF DISTRIBUTION
|
17
|
|
SELLING
SECURITY HOLDERS
|
19
|
|
INDEMNIFICATION
OF OUR DIRECTORS AND OFFICERS
|
20
|
|
LEGAL
MATTERS
|
21
|
|
EXPERTS
|
21
|
|
WHERE
YOU CAN FIND MORE INFORMATION
|
21
|
ABOUT
THIS PROSPECTUS
This prospectus is part of a
registration statement on Form S-3 that we filed with the Securities and
Exchange Commission, or SEC, using a “shelf” registration
process. Under this shelf registration process, the selling security
holders may, from time to time, offer and sell, in one or more offerings, the
securities described in this prospectus.
We may provide a prospectus supplement
containing specific information about the terms of a particular offering by the
selling security holders. The prospectus supplement may also add to,
update or change information contained in this prospectus. If the
information in this prospectus is inconsistent with a prospectus supplement, you
should rely on the information in that prospectus supplement. You should read
both this prospectus and, if applicable, any prospectus
supplement. See “WHERE YOU CAN FIND MORE INFORMATION” below for more
information.
We have not authorized anyone to
provide you with information different from that contained or incorporated by
reference in this prospectus. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of the
time of delivery of this prospectus or any sale of the securities. We
are not making an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted.
You should carefully read this entire
prospectus, especially the section entitled “RISK FACTORS” beginning on page 5,
before making a decision to invest in any of the securities. You
should also carefully read the additional information described below under the
headings “INCORPORATION OF CERTAIN INFORMATION BY REFERENCE” and “WHERE YOU CAN
FIND MORE INFORMATION” before buying any of the securities.
Unless otherwise mentioned or unless
the context requires otherwise, all references in this prospectus to “First
United”, “the Company”, “we”, “us”, “our” and similar terms refer to First
United Corporation.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC’s rules allow us to incorporate
by reference information into this prospectus. This means that we can
disclose important information to you by referring you to another
document. Any information referred to in this way is considered part
of this prospectus from the date we file the document. Any reports
filed by us with the SEC after the date of this prospectus and before the date
that the offering of the securities by means of this prospectus is terminated
will automatically update and, where applicable, supersede any information
contained in this prospectus or incorporated by reference in this
prospectus.
We incorporate by reference into this
prospectus the following documents and information filed with the SEC (other
than, in each case, documents or information deemed to have been furnished and
not filed in accordance with SEC rules):
(i) Annual
Report on Form 10-K for the year ended December 31, 2007 filed on March 12,
2008;
(ii) Quarterly
Reports on Form 10-Q for the three-month periods ended March 31, 2008, June 30,
2008 and September 30, 2008;
(v)
Current Reports on Form 8-K filed on June 23, 2008, October 16, 2008 (except for
the information contained in Items 2.02 and 7.01 thereof), November 24, 2008,
February 2, 2009 and February 9, 2009; and
(viii)
Description of our common stock which appears in our Registration Statement on
Form 8-A filed on February 19, 1986, or any description of the common stock that
appears in any prospectus forming a part of any subsequent registration
statement of the Corporation or in any registration statement filed pursuant to
Section 12 of the Exchange Act, including any amendments or reports filed for
the purpose of updating such description.
-3-
In addition, all documents that we file
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of the registration statement to which this prospectus relates and prior to
the termination of the offering of the securities to which this prospectus
relates will automatically be deemed to be incorporated by reference into this
prospectus. In no event, however, will any of the information that we
“furnish” to the SEC in any Current Report on Form 8-K from time to time be
incorporated by reference into, or otherwise be included in, this
prospectus. Any statement contained in a document incorporated or
deemed to be incorporated by reference in this prospectus shall be deemed to be
modified or superseded to the extent that a statement contained in this
prospectus or in a document subsequently filed modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus.
We will promptly provide without charge
to each person to whom this prospectus is delivered a copy of any or all
information that has been incorporated herein by reference (not including
exhibits to the information that is incorporated by reference unless such
exhibits are specifically incorporated by reference into such information) upon
the written or oral request of such person. Written requests should
be directed to: First United Corporation, Corporate Secretary, 19
South Second Street, Oakland, Maryland 21550. Telephone requests
should be directed to the Corporate Secretary at (888) 692-2654.
A
WARNING ABOUT FORWARD-LOOKING STATEMENTS
Some of
the statements contained, or incorporated by reference, in this prospectus may
include projections, predictions, expectations or statements as to beliefs or
future events or results or refer to other matters that are not historical
facts. Such statements constitute “forward-looking information”
within the meaning of Section 21E of the Exchange Act, and the Private
Securities Litigation Reform Act of 1995. Those statements are
subject to known and unknown risks, uncertainties and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The forward-looking statements are based on various
factors and were derived using numerous assumptions. In some cases,
you can identify these forward-looking statements by words like “may”, “will”,
“should”, “expect”, “plan”, “anticipate”, intend”, “believe”, “estimate”,
“predict”, “potential”, or “continue” or the negative of those words and other
comparable words. You should be aware that those statements reflect
only our predictions. If known or unknown risks or uncertainties should
materialize, or if underlying assumptions should prove inaccurate, actual
results could differ materially from past results and those anticipated,
estimated or projected. You should bear this in mind in reading this
prospectus. Factors that might cause such differences include, but
are not limited to:
|
|
·
|
general
business and economic conditions in the markets we serve may be less
favorable than anticipated which could decrease the demand for loan,
deposit and other financial services and increase loan delinquencies and
defaults;
|
|
|
·
|
changes
in market rates and prices may adversely impact the value of securities,
loans, deposits and other financial instruments and the interest rate
sensitivity of our balance sheet;
|
|
|
·
|
our
liquidity requirements could be adversely affected by changes in our
assets and liabilities;
|
|
|
·
|
the
effect of legislative or regulatory developments, including changes in
laws concerning taxes, banking, securities, insurance and other aspects of
the financial services industry;
|
|
|
·
|
competitive
factors among financial services organizations, including product and
pricing pressures and our ability to attract, develop and retain qualified
banking professionals;
|
|
|
·
|
the
effect of changes in accounting policies and practices, as may be adopted
by the Financial Accounting Standards Board, the SEC, the Public Company
Accounting Oversight Board and other regulatory agencies;
and
|
-4-
|
|
·
|
the
effect of fiscal and governmental policies of the United States federal
government.
|
We undertake no obligation to publicly
update forward-looking statements, whether as a result of new information,
future events or otherwise. You are advised, however, to consult any
further disclosures we make on related subjects in our periodic and current
reports that we file with the SEC. Also note that we provide
cautionary discussion of risks, uncertainties and possibly inaccurate
assumptions relevant to our businesses in our periodic and current reports to
the SEC incorporated by reference herein and in prospectus supplements and other
offering materials. These are factors that, individually or in the
aggregate, management believes could cause our actual results to differ
materially from expected and historical results.
We note these factors for investors as
permitted by the Private Securities Litigation Reform Act of
1995. You should understand that it is not possible to predict or
identify all such factors. Consequently, you should not consider such
disclosures to be a complete discussion of all potential risks or
uncertainties.
RISK
FACTORS
An investment in our securities
involves certain risks. You should carefully consider the risks
described below and the risk factors incorporated in this prospectus by
reference, as well as the other information included or incorporated by
reference in this prospectus, before making an investment
decision. Certain risks related to us, our business and our common
stock are described under the heading “Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2007 and in our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2008. Our business,
financial condition and/or results of operations could be materially adversely
affected by any of these risks. The trading price of our common stock
and the market values of the Series A Preferred Stock and the warrant could
decline due to any of these risks, and you may lose all or part of your
investment. This prospectus also contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including the risks faced by us described below and
elsewhere in this prospectus and the documents incorporated by reference
herein.
The
shares of Series A Preferred Stock, the warrant, and the shares of common stock
underlying the warrant are not insured.
The shares of the Series A Preferred
Stock, the warrant, and the shares of common stock for which the warrant may be
exercised are not deposits and are not insured against loss by the Federal
Deposit Insurance Corporation or any other governmental or private
agency.
There
is no market for the Series A Preferred Stock or the warrant; our common stock
is not heavily traded.
There is no established trading market
for the shares of the Series A Preferred Stock or the warrant. We do
not intend to apply for listing of the Series A Preferred Stock on any
securities exchange or for inclusion of the Series A Preferred Stock in any
automated quotation system unless requested by the initial selling
shareholder. Our common stock is listed on the NASDAQ Global Select
Market but shares of our common stock are not heavily
traded. Securities that are not heavily traded can be more volatile
than stock trading in an active public market. Factors such as our
financial results, the introduction of new products and services by us or our
competitors, and various factors affecting the banking industry generally may
have a significant impact on the market price of the shares our common
stock. Management cannot predict the extent to which an active public
market for any of our securities will develop or be sustained in the
future. Accordingly, purchasers of the Series A Preferred Stock, the
warrant and/or the shares of common stock for which the warrant may be exercised
may not be able to sell such securities at the volumes, prices, or times that
they desire.
-5-
Because
of our participation in the Troubled Asset Relief Program, we are subject to
several restrictions relating to shares of our capital stock, including
restrictions on our ability to declare or pay dividends on and repurchase our
shares, as well as restrictions on compensation paid to our
executives.
On January 30, 2009, pursuant to the
Securities Purchase Agreement – Standard Terms, or Purchase Agreement, we issued
the following securities to the initial selling security holder for an aggregate
consideration of $30,000,000: (i) 30,000 shares of the Series A
Preferred Stock, having no par per share; and (ii) the warrant to purchase
326,323 shares of our common stock, par value $.01 per
share. Pursuant to the terms of the Purchase Agreement, our ability
to declare or pay dividends on shares of our capital stock is
limited. Specifically, we are unable to declare dividends on common
stock, other stock ranking junior to the Series A Preferred Stock, or junior
stock, or preferred stock ranking on a parity with the Series A Preferred Stock,
or parity stock, if we are in arrears on the dividends on the Series A Preferred
Stock. Further, we are not permitted to increase dividends on our
common stock above the amount of the last quarterly cash dividend per share
declared prior to October 14, 2008 without the initial selling security holder’s
approval until January 30, 2012 unless all of the Series A Preferred Stock has
been redeemed or transferred. In addition, our ability to repurchase
our capital stock is restricted. The initial selling security
holder’s consent generally is required for us to make any stock repurchase until
January 30, 2012 unless all of the Series A Preferred Stock has been redeemed or
transferred. Further, shares of common, junior or parity stock may
not be repurchased if we are in arrears on the Series A Preferred Stock
dividends.
In addition, pursuant to the terms of
the Purchase Agreement, we adopted the initial selling security holder’s
standards for executive compensation and corporate governance for the period
during which the initial selling security holder holds the equity issued
pursuant to the Purchase Agreement, including the common stock which may be
issued pursuant to the warrant. On February 17, 2009, the American
Recovery and Reinvestment Act of 2009, or the Recovery Act, was signed into
law. The Recovery Act imposes additional compensation and corporate
governance standards on us for so long as the initial selling security holder
holds any of the Series A Preferred Stock. Each of our “senior
executive officers”, which term includes our Chairman and Chief Executive
Officer, our Chief Financial Officer and the three next most highly compensated
executive officers, and, in some cases, additional employees are subject to
these standards. The standards include: (i) ensuring that
incentive compensation for senior executive officers does not encourage
unnecessary and excessive risks that threaten the value of the financial
institution; (ii) required clawback of any bonus, retention award or incentive
compensation paid to a senior executive officer and certain other employees
based on statements of earnings, gains or other criteria that are later proven
to be materially inaccurate; (iii) prohibition on making certain “golden
parachute payments” to senior executive officers or the next five highest paid
employees; (iv) prohibition on paying or accruing any bonus, retention award, or
incentive compensation to our five most highly compensated employees except for
long-term restricted stock that meets certain conditions; and (v) agreement not
to deduct for tax purposes executive compensation in excess of $500,000 for each
senior executive officer. These
restrictions, coupled with the competition we face from other institutions, may
make it more difficult for us to attract and/or retain exceptional senior
executive officers and other key employees. Moreover, the change to the
deductibility limit on executive compensation could increase the overall cost of
our compensation programs in future periods. The Recovery Act
requires the initial selling security holder to adopt regulations to implement
these standards and restrictions, and these regulations may impose additional
restrictions on us and our compensation practices.
Our
ability to pay dividends is also subject to the terms of our outstanding
debentures.
In March
2004, we issued approximately $30.9 million of junior subordinated debentures to
First United Statutory Trust I and First United Statutory Trust II, or the
Trusts. The Trusts are Connecticut statutory business trusts, with
all outstanding common stock owned by us, that issued mandatorily redeemable
preferred capital securities to third party investors. In December
2004, we issued an additional $5.0 million of debentures. The terms
of the debentures require us to make quarterly payments of interest to the
holders of the debentures, although we have the ability to defer payments of
interest for up to 20 consecutive quarterly periods. Should we make
such a deferral election, however, we would be prohibited from paying dividends
or distributions on, or from repurchasing, redeeming or otherwise acquiring any
shares of our capital stock, including the common stock and the Series A
Preferred Stock. Although we have no present intention of deferring
payments of interest on our debentures, there can be no assurance that we will
not elect to do so in the future.
-6-
ABOUT
FIRST UNITED CORPORATION
First United Corporation is a Maryland
corporation that was incorporated in 1985 and is a registered financial holding
company under the federal Bank Holding Company Act of 1956, as
amended. Our primary business activity is acting as the parent
company of First United Bank & Trust, a Maryland trust company, OakFirst
Loan Center, Inc., a West Virginia finance company, OakFirst Loan Center, LLC, a
Maryland finance company, the Trusts, and First United Insurance Group, LLC, a
full service insurance provider organized under Maryland
law. OakFirst Loan Center, Inc. has one subsidiary, First United
Insurance Agency, Inc., which is a Maryland insurance agency. First
United Bank & Trust provides a complete range of retail and commercial
banking services to a customer base serviced by a network of 26 offices and 32
automated teller machines in Allegany County, Frederick County, Garrett County,
and Washington County in Maryland, and in Berkeley County, Mineral County, and
Monongalia County in West Virginia. A detailed discussion of our
business is contained in Item 1 of Part I of our Annual Report on Form 10-K for
the year ended December 31, 2007, and any subsequent reports that we file with
the SEC, which are incorporated by reference in this prospectus. See
“WHERE YOU CAN FIND MORE INFORMATION” below for information on how to obtain a
copy of our annual report and any subsequent reports.
Our principal executive offices are
located at 19 South Second Street, Oakland, Maryland 21550 and our telephone
number is (888) 692-2654. We maintain an Internet site at http://www.mybankfirstunited.com
on which we make available free of charge our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments
to the foregoing as soon as reasonably practicable after these reports are
electronically filed with, or furnished to, the SEC.
At September 30, 2008, we had
consolidated total assets of approximately $1.63 billion, total loans (net of
the allowance for credit losses) of approximately $1.09 billion, total deposits
of approximately $1.14 billion, and shareholders’ equity of approximately $89.87
million.
SUPERVISION
AND REGULATION
We are a financial holding company
registered under the federal Bank Holding Company Act of 1956, as
amended. We and First United Bank & Trust are extensively
regulated under federal and state laws. The regulation of financial
holding companies and banks is intended primarily for the protection of
depositors and the deposit insurance fund and not for the benefit of security
holders. For a discussion of the material elements of the extensive
regulatory framework applicable to us and First United Bank & Trust, please
refer to Item 1 of Part I of our Annual Report on Form 10-K for the year ended
December 31, 2007 under the heading “Supervision and Regulation” and any
subsequent reports that we file with the SEC, which are incorporated by
reference in this prospects. See “WHERE YOU CAN FINE MORE
INFORMATION” below for information on how to obtain a copy of our Form 10-K and
any subsequent reports.
USE
OF PROCEEDS
We will not receive any proceeds from
any sale of the securities by the selling security holders.
-7-
RATIO
OF EARNINGS TO FIXED CHARGES
|
Nine Months
Ended
September 30,
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
2008
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||||||||||
|
Ratio
of Earnings to Combined Fixed Charges
|
||||||||||||||||||||||||
|
Including
interest on deposits
|
1.41 | 1.38 | 1.47 | 1.64 | 1.45 | 1.65 | ||||||||||||||||||
|
Excluding
interest on deposits
|
2.44 | 2.60 | 2.53 | 2.81 | 1.87 | 2.41 | ||||||||||||||||||
DESCRIPTION
OF CAPITAL STOCK AND SECURITIES
The following is a summary of the
general terms of our capital stock and the securities being registered in the
registration statement that contains this prospectus. The full terms
of our capital stock and the securities being registered are set forth in
Exhibit 3.1(i) through Exhibit 4.4 to the registration statement that contains
this prospectus and incorporated by reference herein. The following
summary does not give effect to provisions of applicable statutory or common
law.
Capital
Stock
We are authorized by our Amended and
Restated Articles of Incorporation, or Charter, to issue up to 27,000,000 shares
of capital stock. Of these shares, 25,000,000 shares are classified
as common stock, par value $.01 per share, and 2,000,000 shares are classified
as preferred stock, having no par value per share, which may be issued in one or
more series having such voting powers, designations, preferences and other
rights, qualifications, limitations and restrictions as may be fixed by the
Board from time to time. The Board of Directors has designated 30,000
shares of our preferred stock as Fixed Rate Cumulative Perpetual Preferred
Stock, Series A.
In addition to the power to issue
shares of our authorized preferred stock in one or more series as discussed
above, our Charter permits the Board, without general stockholder approval but
subject to the rights of any preferred stock, to classify and reclassify
authorized but unissued shares of capital stock of any class or series by
setting or changing in any one or more respects the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of the shares of
stock.
Series
A Preferred Stock
As of January 30, 2009, we had 30,000
shares of Series A Preferred Stock issued and outstanding held by one owner of
record. The following is a brief description of the terms of the
Series A Preferred Stock that may be resold by the selling security
holders. This summary does not purport to be complete in all
respects. This description is subject to and qualified in its
entirety by reference to our Charter and the Certificate of Designations with
respect to the Series A Preferred Stock, copies of which have been filed with
the SEC and are also available upon request from us.
General
Pursuant to the Certificate of
Designations that was filed, as part of a Certificate of Notice, with the State
Department of Assessments and Taxation of Maryland on January 28, 2009, our
Board of Directors designated 30,000 shares of our authorized but unissued
preferred stock as Series A Preferred Stock, all of which were issued to the
initial selling security holder in a transaction exempt from the registration
requirements of the Securities Act. The issued and outstanding shares
of Series A Preferred Stock are validly issued, fully paid and
non-assessable.
-8-
Dividends
Payable on Shares of Series A Preferred Stock
Holders of shares of Series A Preferred
Stock are entitled to receive if, as and when declared by our Board of
Directors, out of assets legally available for payment, cumulative cash
dividends at a rate per annum of 5% per share on a liquidation preference of
$1,000 per share of Series A Preferred Stock with respect to each dividend
period from January 30, 2009 to, but excluding, February 15,
2014. From and after February 15, 2014, holders of shares of Series A
Preferred Stock are entitled to receive cumulative cash dividends at a rate per
annum of 9% per share on a liquidation preference of $1,000 per share of Series
A Preferred Stock with respect to each dividend period thereafter.
Dividends are payable quarterly in
arrears on each February 15, May 15, August 15 and November 15, each a dividend
payment date, starting on May 15, 2009. If any dividend payment date
is not a business day, then the next business day will be the dividend payment
date for that dividend, and no additional dividends will accrue as a result of
the postponement of that dividend payment date. Dividends payable
during any dividend period are computed on the basis of a 360-day year
consisting of twelve 30-day months. Dividends payable with respect to the Series
A Preferred Stock are payable to holders of record of shares of Series A
Preferred Stock on the date that is 15 calendar days immediately preceding the
applicable dividend payment date or such other record date as the Board of
Directors or any duly authorized committee of the Board determines, so long as
such record date is not more than 60 nor less than 10 days prior to the
applicable dividend payment date.
If we determine not to pay any dividend
or a full dividend with respect to the Series A Preferred Stock, we are required
to provide written notice to the holders of shares of Series A Preferred Stock
prior to the applicable dividend payment date.
We are subject to various bank
regulatory policies and requirements relating to the payment of dividends,
including requirements to maintain adequate capital above regulatory
minimums. Our ability to pay dividends to holders of the Series A
Preferred Stock is largely dependent upon our receipt of dividends from our bank
subsidiary, First United Bank & Trust. Both federal and state
laws impose restrictions on the ability of banks to pay
dividends. Federal law prohibits the payment of a dividend by an
insured depository institution if the depository institution is considered
“undercapitalized” or if the payment of the dividend would make the institution
“undercapitalized”. Maryland state-chartered banks may pay dividends
only out of undivided profits or, with the prior approval of the Maryland
Commissioner, from surplus in excess of 100% of required capital
stock. If, however, the surplus of a Maryland bank is less than 100%
of its required capital stock, then cash dividends may not be paid in excess of
90% of net earnings. In addition to these specific restrictions, bank
regulatory agencies have the ability to prohibit a proposed dividend by a
financial institution that would otherwise be permitted under applicable law if
the regulatory body determines that the payment of the dividend would constitute
an unsafe or unsound banking practice.
As a general corporate law matter, the
Maryland General Corporation Law, or the MGCL, prohibits us from paying
dividends on our capital stock, including the Series A Preferred Stock, unless,
after giving effect to a proposed dividend, (i) we will be able to pay our debts
as they come due in the normal course of business and (ii) our total assets will
be greater than our total liabilities plus, unless our Charter permits
otherwise, the amount that would be needed, if we were to be dissolved at the
time of the dividend, to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights on dissolution are superior to those
receiving the dividend. Currently, we have no outstanding class of
capital stock with preferential rights upon dissolution that are superior to the
Series A Preferred Stock.
As discussed above in the section of
this prospectus entitled “RISK FACTORS”, the terms of our outstanding debentures
issued to the Trusts permit us to defer payments of the interest thereon for up
to 20 consecutive quarterly periods. Should we make such a deferral
election, we would be prohibited from paying dividends or distributions on, or
from repurchasing, redeeming or otherwise acquiring any shares of the Series A
Preferred Stock.
-9-
Priority
of Dividends
With respect to the payment of
dividends and the amounts to be paid upon liquidation, the Series A Preferred
Stock will rank:
|
|
·
|
senior
to our common stock and all other equity securities designated as junior
stock; and
|
|
|
·
|
at
least equally with all other equity securities designated as parity stock
with respect to the payment of dividends and distribution of assets upon
any liquidation, dissolution or winding-up of First
United.
|
So long as any shares of Series A
Preferred Stock remain outstanding, unless all accrued and unpaid dividends for
all prior dividend periods have been paid or are contemporaneously declared and
paid in full, no dividend can be paid or declared on our common stock or other
junior stock, other than a dividend payable solely in common
stock. We and our subsidiaries also may not purchase, redeem or
otherwise acquire for consideration any shares of our common stock or other
junior stock unless we have paid in full all accrued dividends on the Series A
Preferred Stock for all prior dividend periods, other than:
|
|
·
|
purchases,
redemptions or other acquisitions of our common stock or other junior
stock in connection with the administration of our employee benefit plans
in the ordinary course of business and consistent with past practice
(including purchases pursuant to a publicly announced repurchase plan to
offset the increase in diluted shares outstanding resulting from the
grant, vesting or exercise of equity-based
compensation);
|
|
|
·
|
purchases
or other acquisitions by broker-dealer subsidiaries of First United solely
for the purpose of market-making, stabilization or customer facilitation
transactions in junior stock or parity stock in the ordinary course of its
business;
|
|
|
·
|
purchases
or other acquisitions by broker-dealer subsidiaries of First United for
resale pursuant to an offering by First United of its stock that is
underwritten by the related broker-dealer
subsidiary;
|
|
|
·
|
any
dividends or distributions of rights or junior stock in connection with
any shareholders’ rights plan or repurchases of rights pursuant to any
shareholders’ rights plan;
|
|
|
·
|
acquisition
of record ownership of junior stock or parity stock for the beneficial
ownership of any other person who is not First United or one of its
subsidiaries, including as trustee or custodian;
and
|
|
|
·
|
the
exchange or conversion of junior stock for or into other junior stock or
of parity stock for or into other parity stock or junior stock but only to
the extent that such acquisition is required pursuant to binding
contractual agreements entered into before January 30, 2009 or any
subsequent agreement for the accelerated exercise, settlement or exchange
thereof for common stock.
|
If we repurchase shares of Series A
Preferred Stock from a holder other than the initial selling security holder, we
must offer to repurchase a ratable portion of the Series A Preferred Stock then
held by the initial selling security holder.
On any dividend payment date for which
full dividends are not paid, or declared and funds set aside therefor, on the
Series A Preferred Stock and any other parity stock, all dividends paid or
declared for payment on that dividend payment date (or, with respect to parity
stock with a different dividend payment date, on the applicable dividend date
therefor falling within the dividend period and related to the dividend payment
date for the Series A Preferred Stock), with respect to the Series A Preferred
Stock and any other parity stock will be declared ratably among the holders of
any such shares who have the right to receive dividends, in proportion to the
respective amounts of the undeclared and unpaid dividends relating to the
dividend period.
-10-
Subject to the foregoing, such
dividends (payable in cash, stock or otherwise) as may be determined by our
Board of Directors (or a duly authorized committee of the board) may be declared
and paid on our common stock, any other junior stock and parity stock from time
to time out of any funds legally available for such payment, and the Series A
Preferred Stock will not be entitled to participate in any such
dividend.
Redemption
The Recovery Act provides that we may
redeem any shares of Series A Preferred Stock held by the initial selling
security at any time, subject only to the prior approval of the Federal Reserve
Board, in which case the initial selling security holder would be required to
liquidate a proportionate amount of the warrant at the current market
price. With respect to shares of Series A Preferred Stock that are
held by someone other than the initial security holder, they are redeemable as
set forth below.
The Series A Preferred Stock may not be
redeemed prior to January 30, 2012, the third anniversary of the issue date,
unless we have received aggregate gross proceeds from one or more qualified
equity offerings (as described below) equal to $7,500,000, which equals 25% of
the aggregate liquidation amount of the Series A Preferred Stock on the date of
issuance. In such a case, we may redeem the Series A Preferred Stock,
subject to the approval of Federal Reserve Board, in whole or in part, upon
notice as described below, up to a maximum amount equal to the aggregate net
cash proceeds received by us from such qualified equity offerings. A
“qualified equity offering” is a sale and issuance for cash by us, to persons
other than us or our subsidiaries after January 30, 2009, of shares of perpetual
preferred stock, common stock or a combination thereof, that in each case
qualify as Tier 1 capital of First United at the time of issuance under the
applicable risk-based capital guidelines of the Federal Reserve
Board. Qualified equity offerings do not include issuances made in
connection with acquisitions, issuances of trust preferred securities and
issuances of common stock and/or perpetual preferred stock made pursuant to
agreements or arrangements entered into, or pursuant to financing plans that
were publicly announced, on or prior to October 13, 2008.
After January 30, 2012, the Series A
Preferred Stock may be redeemed at any time, subject to the approval of the
Federal Reserve Board, in whole or in part, subject to notice as described
below.
In any redemption, the redemption price
is an amount equal to the per share liquidation amount plus accrued and unpaid
dividends to but excluding the date of redemption.
The Series A Preferred Stock will not
be subject to any mandatory redemption, sinking fund or similar
provisions. Holders of shares of Series A Preferred Stock have no
right to require the redemption or repurchase of the Series A Preferred
Stock. If fewer than all of the outstanding shares of Series A
Preferred Stock are to be redeemed, the shares to be redeemed will be selected
either pro rata from the holders of record of shares of Series A Preferred Stock
in proportion to the number of shares held by those holders or in such other
manner as our Board of Directors or a committee thereof may determine to be fair
and equitable.
We will mail notice of any redemption
of Series A Preferred Stock by first class mail, postage prepaid, addressed to
the holders of record of the shares of Series A Preferred Stock to be redeemed
at their respective last addresses appearing on our books. This
mailing will be at least 30 days and not more than 60 days before the date fixed
for redemption. Any notice mailed or otherwise given as described in
this paragraph will be conclusively presumed to have been duly given, whether or
not the holder receives the notice, and failure duly to give the notice by mail
or otherwise, or any defect in the notice or in the mailing or provision of the
notice, to any holder of Series A Preferred Stock designated for redemption will
not affect the redemption of any other Series A Preferred Stock. Each
notice of redemption will set forth the applicable redemption date, the
redemption price, the place where shares of Series A Preferred Stock are to be
redeemed, and the number of shares of Series A Preferred Stock to be redeemed
(and, if less than all shares of Series A Preferred Stock held by the applicable
holder, the number of shares to be redeemed from the holder).
-11-
Shares of Series A Preferred Stock that
are redeemed, repurchased or otherwise acquired by us will revert to authorized
but unissued shares of preferred stock.
Liquidation
Rights
In the event that we voluntarily or
involuntarily liquidate, dissolve or wind up our affairs, holders of Series A
Preferred Stock will be entitled to receive an amount per share, referred to as
the total liquidation amount, equal to the fixed liquidation preference of
$1,000 per share, plus any accrued and unpaid dividends, whether or not
declared, to the date of payment. Holders of the Series A Preferred
Stock will be entitled to receive the total liquidation amount out of our assets
that are available for distribution to shareholders, after payment or provision
for payment of our debts and other liabilities but before any distribution of
assets is made to holders of our common stock or any other shares ranking, as to
that distribution, junior to the Series A Preferred Stock.
If our assets are not sufficient to pay
the total liquidation amount in full to all holders of Series A Preferred Stock
and all holders of any shares of outstanding parity stock, then the amounts paid
to the holders of Series A Preferred Stock and shares of parity stock will be
paid pro rata in accordance with the respective total liquidation amount for
those holders. If the total liquidation amount per share of Series A
Preferred Stock has been paid in full to all holders of Series A Preferred Stock
and shares of parity stock, then the holders of our common stock or any other
shares ranking, as to such distribution, junior to the Series A Preferred Stock
will be entitled to receive all of our remaining assets according to their
respective rights and preferences.
For purposes of the liquidation rights,
neither the sale, conveyance, exchange or transfer of all or substantially all
of our property and assets, nor the consolidation or merger by us with or into
any other corporation or by another corporation with or into us, will constitute
a liquidation, dissolution or winding-up
of our
affairs.
Voting
Rights
Except as indicated below or otherwise
required by law, the holders of Series A Preferred Stock have no voting
rights.
Election of Two Directors upon
Non-Payment of Dividends. If the dividends on the Series A
Preferred Stock have not been paid for an aggregate of six quarterly dividend
periods or more (whether or not consecutive), the authorized number of directors
then constituting our Board of Directors will be increased by
two. Holders of Series A Preferred Stock, together with the holders
of any outstanding parity stock with like voting rights, referred to as voting
parity stock, voting as a single class, will be entitled to elect the two
additional members of our Board of Directors, referred to as the preferred stock
directors, at the next annual meeting (or at a special meeting called for the
purpose of electing the preferred stock directors prior to the next annual
meeting) and at each subsequent annual meeting until all accrued and unpaid
dividends for all past dividend periods have been paid in full. The
election of any preferred stock director is subject to the qualification that
the election would not cause us to violate the corporate governance requirement
of the NASDAQ Global Select Market (or any other exchange on which our
securities may be listed) that listed companies must have a majority of
independent directors.
Upon the termination of the right of
the holders of Series A Preferred Stock and voting parity stock to vote for
preferred stock directors, as described above, the preferred stock directors
will immediately cease to be qualified as directors, their term of office shall
terminate immediately and the number of authorized directors of First United
will be reduced by the number of preferred stock directors that the holders of
Series A Preferred Stock and voting parity stock had been entitled to
elect. The holders of a majority of shares of Series A Preferred
Stock and voting parity stock, voting as a class, may remove any preferred stock
director, with or without cause, and the holders of a majority of the shares
Series A Preferred Stock and voting parity stock, voting as a class, may fill
any vacancy created by the removal of a preferred stock director. If
the office of a preferred stock director becomes vacant for any other reason,
the remaining preferred stock director may choose a successor to fill such
vacancy for the remainder of the unexpired term.
-12-
Other Voting
Rights. So long as any shares of Series A Preferred Stock are
outstanding, in addition to any other vote or consent of shareholders required
by law or by our Charter, the vote or consent of the holders of at least
two-thirds of the shares of Series A Preferred Stock at the time outstanding,
voting separately as a single class, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose, will
be necessary to effect or validate:
|
|
·
|
any
amendment or alteration of our Charter to authorize or create or increase
the authorized amount of, or any issuance of, any shares of, or any
securities convertible into or exchangeable or exercisable for shares of,
any class or series of capital stock ranking senior to the Series A
Preferred Stock with respect to payment of dividends and/or distribution
of assets on our liquidation, dissolution or winding
up;
|
|
|
·
|
any
amendment, alteration or repeal of any provision of the Certificate of
Designations for the Series A Preferred Stock so as to adversely affect
the rights, preferences, privileges or voting powers of the Series A
Preferred Stock; or
|
|
|
·
|
any
consummation of a binding share exchange or reclassification involving the
Series A Preferred Stock or of a merger or consolidation of First United
with another entity, unless the shares of Series A Preferred Stock remain
outstanding following any such transaction or, if First United is not the
surviving entity, are converted into or exchanged for preference
securities and such remaining outstanding shares of Series A Preferred
Stock or preference securities have rights, references, privileges and
voting powers that are not materially less favorable than the rights,
preferences, privileges or voting powers of the Series A Preferred Stock,
taken as a whole.
|
To the extent of the voting rights of
the Series A Preferred Stock, each holder of Series A Preferred Stock will have
one vote for each such share on any matter on which holders of Series A
Preferred Stock are entitled to vote, including any action by written
consent.
The foregoing voting provisions will
not apply if, at or prior to the time when the vote or consent would otherwise
be required, all outstanding shares of Series A Preferred Stock have been
redeemed or called for redemption upon proper notice and sufficient funds have
been set aside by us for the benefit of the holders of Series A Preferred Stock
to effect the redemption.
Warrant
to Purchase Common Stock
The following is a brief description of
the terms of the warrant that may be resold by the selling security
holders. This summary does not purport to be complete in all
respects. This description is subject to and qualified in its
entirety by reference to the warrant, a copy of which has been filed with the
SEC and is also available upon request from us.
Shares
of Common Stock Subject to the Warrant
The warrant is initially exercisable
for 326,323 shares of our common stock. If we complete one or more
qualified equity offerings on or prior to December 31, 2009 that result in our
receipt of aggregate gross proceeds of not less than $30,000,000, which is equal
to 100% of the aggregate liquidation preference of the Series A Preferred Stock,
then the number of shares of common stock underlying the warrant then held by
the selling security holders will be reduced by 50% to 163,161.5
shares. The number of shares subject to the warrant are subject to
the further adjustments described below under the heading “Adjustments to the
Warrant”.
-13-
Exercise
of the Warrant
The initial exercise price applicable
to the warrant is $13.79 per share of common stock for which the warrant may be
exercised. The warrant may be exercised at any time on or before
January 30, 2019 by surrender of the warrant and a completed notice of exercise
attached as an annex to the warrant and the payment of the exercise price for
the shares of common stock for which the warrant is being
exercised. The exercise price may be paid either by the withholding
by First United of such number of shares of common stock issuable upon exercise
of the warrant equal to the value of the aggregate exercise price of the warrant
determined by reference to the market price of our common stock on the trading
day on which the warrant is exercised or, if agreed to by us and the holder of
the warrant, by the payment of cash equal to the aggregate exercise
price. The exercise price applicable to the warrant is subject to the
further adjustments described below under the heading “Adjustments to the
Warrant”.
Upon exercise of the warrant,
certificates for the shares of common stock issuable upon exercise will be
issued to the holder of the warrant. We will not issue fractional
shares upon any exercise of the warrant. Instead, the holder of the
warrant will be entitled to a cash payment equal to the market price of our
common stock on the last day preceding the exercise of the warrant (less the
pro-rated exercise price of the warrant) for any fractional shares that would
have otherwise been issuable upon exercise of the warrant. We will at
all times reserve the aggregate number of shares of our common stock for which
the warrant may be exercised.
We have listed the shares of common
stock issuable upon exercise of the warrant with the NASDAQ Stock
Market.
Rights
as a Shareholder
The holder of the warrant has no rights
or privileges of the holders of our common stock, including any voting rights,
until (and then only to the extent) the warrant has been exercised.
Transferability
The initial selling security holder may
not transfer a portion of the warrant with respect to more than 163,161.5 shares
of common stock until the earlier of the date on which we have received
aggregate gross proceeds from a qualified equity offering of at least
$30,000,000 and December 31, 2009. The warrant, and all rights under
the warrant, are otherwise transferable.
Adjustments
to the Warrant
Adjustments in Connection with Stock
Splits, Subdivisions, Reclassifications and Combinations. The
number of shares for which the warrant may be exercised and the exercise price
applicable to the warrant will be proportionately adjusted in the event we pay
dividends of or otherwise make distributions of our common stock, or subdivide,
combine or reclassify outstanding shares of our common stock.
Anti-dilution
Adjustment. Until the earlier of January 30, 2012 and the date
the initial selling security holder no longer holds any portion of the warrant
(and other than in certain permitted transactions described below), if we issue
any shares of common stock (or securities convertible or exercisable into common
stock) for less than 90% of the market price of the common stock on the last
trading day prior to pricing such shares, then the number of shares of common
stock for which the warrant is exercisable and the exercise price will be
adjusted. Permitted transactions include issuances of common stock and/or
securities convertible or exercisable into common stock:
|
|
·
|
as
consideration for or to fund the acquisition of businesses and/or related
assets;
|
|
|
·
|
in
connection with employee benefit plans and compensation related
arrangements in the ordinary course and consistent with past practice
approved by our Board of Directors;
|
-14-
|
|
·
|
in
connection with public or broadly marketed offerings and sales of common
stock or convertible securities for cash conducted by us or our affiliates
pursuant to registration under the Securities Act, or Rule 144A thereunder
on a basis consistent with capital-raising transactions by comparable
financial institutions (but do not include other private transactions);
and
|
|
|
·
|
in
connection with the exercise of preemptive rights on terms existing as of
January 30, 2009.
|
Other
Distributions. If we declare any dividends or distributions
other than our historical, ordinary cash dividends, then the exercise price of
the warrant will be adjusted to reflect such distribution.
Certain
Repurchases. If we effect a pro rata repurchase of common
stock, then both the number of shares issuable upon exercise of the warrant and
the exercise price will be adjusted.
Business
Combinations. In the event of a merger, consolidation or
similar transaction involving First United and requiring shareholder approval,
the warrant holder’s right to receive shares of our common stock upon exercise
of the warrant shall be converted into the right to exercise the warrant for the
consideration that would have been payable to the warrant holder with respect to
the shares of common stock for which the warrant may be exercised, as if the
warrant had been exercised prior to such merger, consolidation or similar
transaction.
Common
Stock
As of January 30, 2009, we had
6,112,940 shares of common stock issued and outstanding held by approximately
1,988 owners of record.
The following section describes the
material features and rights of our common stock. The summary does
not purport to be exhaustive and is qualified in its entirety by reference to
our Charter, Certificate of Designations, or Amended and Restated Bylaws, as
amended, each of which is filed as an exhibit to the registration statement of
which this prospectus is a part, and to applicable Maryland law, including the
MGCL.
General
The holders of our common stock are
entitled to one vote for each share held of record on all matters submitted to a
vote of shareholders. Holders of shares of common stock are not
entitled to cumulative voting rights in the election of
directors. Subject to preferences that may be applicable to any
outstanding preferred stock, holders of common stock are entitled to receive
ratable dividends which are declared by our Board of Directors out of funds
legally available for such a purpose. Our ability to pay dividends on
the shares of common stock is subject to federal and state bank and corporate
law limitations as discussed above for the Series A Preferred
Stock. In the event of our liquidation, dissolution or winding up,
holders of common stock are entitled to share ratably in all assets remaining
after payment of liabilities and liquidation preferences, if any, on any
outstanding shares of preferred stock. Holders of common stock have
no preemptive rights and have no rights to convert their common stock into any
other securities. The common stock is not redeemable. All
of the outstanding shares of our common stock are fully paid and
non-assessable.
The Transfer Agent for the common stock
is StockTrans, Inc.
-15-
Anti-Takeover
Provisions under Maryland Law, Our Charter and Our Bylaws
The provisions of Maryland law and our
Charter and Bylaws we summarize below may have an anti-takeover effect and may
delay, defer or prevent a tender offer or takeover attempt that a shareholder
might consider in his or her best interest, including those attempts that might
result in a premium over the market price for the common stock.
Business Combinations under Maryland
Law. The Maryland Business Combination Act generally prohibits
corporations from being involved in any “business combination” (defined as a
variety of transactions, including a merger, consolidation, share exchange,
asset transfer or issuance or reclassification of equity securities) with any
“interested shareholder” for a period of five years following the most recent
date on which the interested shareholder became an interested
shareholder. An interested shareholder is defined generally as a
person who is the beneficial owner of 10% or more of the voting power of the
outstanding voting stock of the corporation after the date on which the
corporation had 100 or more beneficial owners of its stock or who is an
affiliate or associate of the corporation and was the beneficial owner, directly
or indirectly, of 10% percent or more of the voting power of the then
outstanding stock of the corporation at any time within the two-year period
immediately prior to the date in question and after the date on which the
corporation had 100 or more beneficial owners of its stock.
A business combination that is not
prohibited must be recommended by the board of directors and approved by the
affirmative vote of at least 80% of the votes entitled to be cast by outstanding
shares of voting stock of the corporation, voting together as a single voting
group and two-thirds of the votes entitled to be cast by holders of voting stock
other than voting stock held by the interested shareholder who will (or whose
affiliate will) be a party to the business combination or by an affiliate or
associate of the interested shareholder, voting together as a single voting
group, unless, among other things, the corporation’s shareholders receive a
minimum price, as defined in the Maryland Business Combination Act for their
shares, in cash or in the same form as paid by the interested shareholder for
its shares. These provisions will not apply if the board of directors
has exempted the transaction in question or the interested shareholder prior to
the time that the interested shareholder became an interested
shareholder. In addition, the board of directors may adopt a
resolution approving or exempting specific business combinations, business
combinations generally, or generally by type, as to specifically identified or
unidentified existing or future shareholders or their affiliates from the
business combination provisions of the Maryland Business Combination
Act.
Control Share
Acquisitions. The Maryland Control Share Acquisition Act
generally provides that “control shares” of a corporation acquired in a “control
share acquisition” have no voting rights except to the extent approved by the
shareholders at a meeting by the affirmative vote of two-thirds of all the votes
entitled to be cast on the matter, excluding all interested
shares. “Control shares” are shares of stock that, if aggregated with
all other shares of stock of the corporation previously acquired by a person or
in respect of which that person is entitled to exercise or direct the exercise
of voting power, except solely by virtue of a revocable proxy, entitle that
person, directly or indirectly, to exercise or direct the exercise of the voting
power of shares of stock of the corporation in the election of directors within
any of the following ranges of voting power: one-tenth or more, but
less than one-third of all voting power; one-third or more, but less than a
majority of all voting power or a majority or more of all voting
power. “Control share acquisition” means the acquisition, directly or
indirectly, of control shares, subject to certain exceptions. If
voting rights or control shares acquired in a control share acquisition are not
approved at a shareholders’ meeting, then, subject to certain conditions, the
issuer may redeem any or all of the control shares for fair value. If
voting rights of such control shares are approved at a shareholders’ meeting and
the acquiror becomes entitled to vote a majority of the shares of stock entitled
to vote, all other shareholders may exercise appraisal rights.
Preference Stock
Authorization. As noted above under the heading “Capital
Stock”, the Charter gives our Board of Directors the authority to, without the
approval of the holders of our common stock, issue our authorized preferred
stock in one or more series and to classify and reclassify any class or series
of our authorized but unissued capital stock. A series of preferred
stock and any other shares of capital stock that the Board classifies or
reclassifies may possess rights superior to the rights of the holders of our
common stock. As a result, this “blank check” stock, while not
intended as a defensive measure against takeovers, could be issued quickly and
easily, could adversely affect the rights of holders of common stock and could
be issued with terms calculated to delay or prevent a change of control of the
Company or make removal of management more difficult.
-16-
Advance Notice Procedure for
Director Nominations by Shareholders. Our Bylaws allow
shareholders to submit director nominations. For nominations to
properly come before the meeting, however, the nominating shareholder must have
given timely written notice of the nomination to either the Chairman of the
Board or the President of First United. To be timely, a nomination
must be given not less than 150 days nor more than 180 days prior to the date of
the meeting of shareholders called for the election of directors which, for
purposes of this requirement, is deemed to be on the same day and month as the
annual meeting of shareholders for the preceding year. The notice
must contain the following information to the extent known by the notifying
shareholder:
|
|
·
|
the
name and address of each proposed
nominee;
|
|
|
·
|
the
principal occupation of each proposed
nominee;
|
|
|
·
|
the
number of shares of capital stock of First United owned by each proposed
nominee;
|
|
|
·
|
the
name and residence address of the notifying
shareholder;
|
|
|
·
|
the
number of shares of capital stock of First United owned by the notifying
shareholder;
|
|
|
·
|
the
consent in writing of the proposed nominee as to the proposed nominee’s
name being placed in nomination for director;
and
|
|
|
·
|
all
information relating to the proposed nominee that would be required to be
disclosed by Regulation 14A under the Exchange Act and Exchange Act Rule
14a-11, assuming such provisions would be applicable to the solicitation
of proxies for the proposed
nominee.
|
Classified Board; Removal of
Directors. Our Charter provides that the members of our Board
of Directors are divided into three classes as nearly equal as
possible. Each class is elected for a three-year term. At
each annual meeting of shareholders, approximately one-third of the members of
the Board are elected for a three-year term and the other directors remain in
office until their three-year terms expire. Our Charter and Bylaws
provide that no director may be removed without cause, which term is defined as
a final unappealable felony conviction, unsound mind, adjudication of
bankruptcy, or action that causes material injury to First
United. Any removal for cause requires either the affirmative vote of
the entire Board or the affirmative vote of the holders of at least a majority
of the outvoting voting stock of First United. Further, shareholders
may attempt to remove a director for cause after service of specific charges,
adequate notice and a full opportunity to refute the charges. Thus,
control of the Board of Directors cannot be changed in one year without removing
the directors for cause as described above; rather, at least two annual meetings
must be held before a majority of the members of the Board could be
changed. An amendment or repeal of these provisions requires the
approval of at least two-thirds of the outstanding voting power of First United
entitled to vote on the matter.
PLAN
OF DISTRIBUTION
The selling security holders and their
successors, including their transferees, may sell the securities directly to
purchasers or through underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, concessions or commissions from the
selling security holders or the purchasers of the securities. These
discounts, concessions or commissions as to any particular underwriter,
broker-dealer or agent may be in excess of those customary in the types of
transactions involved.
-17-
The securities may be sold in one or
more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated
prices. These sales may be effected in transactions that may involve
crosses or block transactions.
If underwriters are used in an offering
of the securities, then the offered securities will be acquired by the
underwriters for their own account and may be resold in one of more
transactions:
|
|
·
|
on
any national securities exchange or quotation service on which the Series
A Preferred Stock, the warrant or the common stock may be listed or quoted
at the time of sale, including, as of the date of this prospectus, the
NASDAQ Global Select Market in the case of the common
stock;
|
|
|
·
|
in
the over-the-counter market;
|
|
|
·
|
in
transactions otherwise than on these exchanges or services or in the
over-the-counter market; or
|
|
|
·
|
through
the writing of options, whether the options are listed on an options
exchange or otherwise.
|
In addition, any securities that
qualify for sale pursuant to Rule 144 under the Securities Act may be sold under
Rule 144 rather than pursuant to this prospectus.
In connection with the sale of the
securities or otherwise, the selling security holders may enter into hedging
transactions with broker-dealers, which may in turn engage in short sales of the
common stock issuable upon exercise of the warrant in the course of hedging the
positions they assume. The selling security holders may also sell
short the common stock issuable upon exercise of the warrant and deliver common
stock to close out short positions, or loan or pledge the Series A Preferred
Stock or the common stock issuable upon exercise of the warrant to
broker-dealers that in turn may sell these securities.
The aggregate proceeds to the selling
security holders from the sale of the securities will be the purchase price of
the securities less discounts and commissions, if any.
In effecting sales, broker-dealers or
agents engaged by the selling security holders may arrange for other
broker-dealers to participate. Broker-dealers or agents may receive
commissions, discounts or concessions from the selling security holders in
amounts to be negotiated immediately prior to the sale.
In offering the securities covered by
this prospectus, the selling security holders and any broker-dealers who execute
sales for the selling security holders may be deemed to be “underwriters” within
the meaning of Section 2(a)(11) of the Securities Act in connection with such
sales. Any profits realized by the selling security holders and the
compensation of any broker-dealer may be deemed to be underwriting discounts and
commissions. Selling security holders who are “underwriters” within
the meaning of Section 2(a)(11) of the Securities Act will be subject to the
prospectus delivery requirements of the Securities Act and may be subject to
certain statutory and regulatory liabilities, including liabilities imposed
pursuant to Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under
the Exchange Act.
To comply with the securities laws of
certain jurisdictions, if applicable, the securities must be sold in such
jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain jurisdictions the securities may not
be sold unless they have been registered or qualified for sale in the applicable
jurisdiction or an exemption from the registration or qualification requirement
is available and complied with.
The anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of securities pursuant to
this prospectus and to the activities of the selling security
holders. In addition, we will make copies of this prospectus
available to the selling security holders for the purpose of satisfying the
prospectus delivery requirements of the Securities Act, including Rule 153 under
the Securities Act.
-18-
At the time a particular offer of
securities is made, if required, a prospectus supplement will set forth the
number and type of securities being offered and the terms of the offering,
including the name of any underwriter, dealer or agent, the purchase price paid
by any underwriter, any discount, commission and other item constituting
compensation, any discount, commission or concession allowed or reallowed or
paid to any dealer, and the proposed selling price to the public.
We do not intend to apply for listing
of the Series A Preferred Stock on any securities exchange or for inclusion of
the Series A Preferred Stock in any automated quotation system unless requested
by the initial selling shareholder. We likewise do not intend to
apply for listing of the warrant on any securities exchange or for inclusion of
the warrant in any automated quotation system. No assurance can be
given as to the liquidity of the trading market, if any, for the Series A
Preferred Stock or the warrant.
We have agreed to indemnify the selling
security holders against certain liabilities, including certain liabilities
under the Securities Act. We have also agreed, among other things, to bear
substantially all expenses (other than underwriting discounts and selling
commissions) in connection with the registration and sale of the securities
covered by this prospectus.
SELLING
SECURITY HOLDERS
On January 30, 2009, we issued the
securities covered by this prospectus to the United States Department of
Treasury, which is the initial selling security holder under this prospectus, in
a transaction exempt from the registration requirements of the Securities
Act. The initial selling security holder, or its successors,
including transferees, may from time to time offer and sell, pursuant to this
prospectus or a supplement to this prospectus, any or all of the securities they
own. The securities to be offered under this prospectus for the
account of the selling security holders consist of:
|
|
·
|
30,000
shares of Series A Preferred Stock, representing beneficial ownership of
100% of the shares of Series A Preferred Stock outstanding on the date of
this prospectus;
|
|
|
·
|
a
warrant to purchase 326,323 shares of our common stock;
and
|
|
|
·
|
326,323
shares of our common stock issuable upon exercise of the warrant, which
shares, if issued, would represent ownership of approximately 5.34% of our
outstanding common stock as of January 30,
2009.
|
Beneficial ownership is determined in
accordance with the rules of the SEC and includes voting or investment power
with respect to the securities. To our knowledge, the initial selling
security holder has sole voting and investment power with respect to the
securities.
For purposes of this prospectus, we
have assumed that, after completion of the offering, none of the securities
covered by this prospectus will be held by the selling security
holders. It must be noted, however, that we do not know when or in
what amounts the selling security holders may offer the securities for
sale. The selling security holders might not sell any or all of the
securities offered by this prospectus. Because the selling security
holders may offer all or some of the securities pursuant to this offering, and
because currently no sale of any of the securities is subject to any agreements,
arrangements or understandings, we cannot estimate the number of the securities
that will be held by the selling security holders after completion of the
offering.
Other than with respect to the
acquisition of the securities, the initial selling security holder has not had a
material relationship with us.
Information about the selling security
holders may change over time, and changed information will be set forth in
supplements to this prospectus if and when necessary.
-19-
INDEMNIFICATION
OF OUR DIRECTORS AND OFFICERS
Our Charter provides that no director
or officer of First United will be personally liable for monetary damages
except: (1) to the extent that the person actually received an
improper benefit or profit in money, property, or services; or (2) to the extent
that a judgment or other final adjudication adverse to the person is entered in
a proceeding based on a finding that the person’s action, or failure to act, was
the result of active and deliberate dishonesty and was material to the cause of
action adjudicated in the proceeding. An amendment or repeal of this
Charter provision requires the approval of at least two-thirds of the
outstanding voting power of First United entitled to vote on the
matter. This provision may have the practical effect in certain cases
of eliminating the ability of our shareholders to collect monetary damages from
directors and executive officers. We believe that this provision is
necessary to attract and retain qualified persons as directors and executive
officers.
Our Bylaws obligate us to indemnify and
advance expenses to a director or an officer in connection with a proceeding to
the fullest extent permitted by and in accordance with MGCL Section
2-418. However, we may not indemnify a director or an officer in
connection with a proceeding commenced by such director or officer against First
United or one of its directors or officers unless the Board authorized the
proceeding. We may indemnify and advance expenses to employees and
agents, other than directors and officers, as determined by and in the
discretion of the Board, in connection with a proceeding to the extent permitted
by and in accordance with MGCL Section 2-418.
MGCL Section 2-418 permits us to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that the
person was a director, officer, employee or agent of First United if he or she
(1) acted in good faith, (2) reasonably believed her actions to be in or not
opposed to the best interests of First United, (3) did not actually receive an
improper personal benefit in money, property, or services, and (4) in a criminal
proceeding, had no reasonable cause to believe her conduct was
unlawful.
Under MGCL Section 2-418,
indemnification may be against judgments, penalties, fines, settlements, and
reasonable expenses actually incurred by the director in connection with the
proceeding. Indemnification may not be made unless authorized for a
specific proceeding after a determination has been made that the director has
met the applicable standard of conduct. This determination is
required to be made: (1) by the board of directors; (2) by special
legal counsel selected by the board of directors or a committee of the board by
vote; or (3) by the shareholders.
We may pay, before final disposition,
the expenses, including attorneys’ fees, incurred by a director, officer,
employee or agent in defending a proceeding when the director of officer gives
and undertaking to First United to repay the amounts advanced if it is
ultimately determined that he or she is not entitled to
indemnification. First United is required to indemnify any director
who has been successful on the merits or otherwise, in defense of a proceeding
for reasonable expenses incurred in connection with the proceeding.
These indemnification and advancement
of expenses provisions are not exclusive of any other rights to which a person
seeking indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of shareholders, vote of directors or
otherwise.
-20-
LEGAL
MATTERS
The validity of the securities offered
pursuant to this prospectus has been passed upon for us by Gordon, Feinblatt,
Rothman, Hoffberger & Hollander, LLC, Baltimore, Maryland. If
legal matters in connection with offerings made pursuant to this prospectus are
passed upon by counsel for the underwriters, dealers or agents, if any, such
counsel will be named in the prospectus supplement relating to such
offering.
EXPERTS
The financial statements as of December
31, 2007 and 2006 and for the years then ended and the effectiveness of internal
control over financial reporting as of December 31, 2007 incorporated by
reference in this Prospectus have been so incorporated in reliance on the
reports of Beard Miller Company LLP, an independent registered public accounting
firm, incorporated herein by reference, given on the authority of said firm as
experts in auditing and accounting.
The consolidated statements of income,
shareholders’ equity, and cash flows of First United for the year ended December
31, 2005 appearing in our Annual Report on Form 10-K for the year ended December
31, 2007 have been audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their report thereon, included therein
and incorporated herein by reference. Such consolidated financial
statements are incorporated in this prospectus by reference in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We have filed a registration statement
on Form S-3 with the SEC covering the securities that may be sold under this
prospectus. This prospectus is only a part of that registration
statement and does not contain all the information in the registration
statement. Because this prospectus may not contain all the
information that you may find important, and because references to contracts and
other documents of First United made in this prospectus are only summaries of
those contracts and other documents, you should review the full text of the
registration statement and the exhibits that are a part of the registration
statement. We have included copies of these contracts and other
documents as exhibits to the registration statement that contains this
prospectus.
We are subject to the information
requirements of the Exchange Act, which means we are required to file annual
reports, quarterly reports, current reports, proxy statements and other
information with the SEC. You may read and copy any document we file
with the SEC at the SEC’s public reference room in Washington, D.C., located at
100 F Street, N.E., Washington D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference
room. Our SEC filings are also available to the public from the SEC’s
Internet site at http://www.sec.gov
and from our Internet site at http://www.mybankfirstunited.com. However,
information found on, or otherwise accessible through, these Internet sites is
not incorporated into, and does not constitute a part of, this prospectus or any
other document we file or furnish to the SEC. You should not rely on
any of this information in deciding whether to purchase the
securities.
-21-
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14.
Other Expenses of Issuance and Distribution.
The following table itemizes the
expenses incurred by First United Corporation (the “Corporation”) in connection
with the offering of the securities being registered hereby. All
amounts shown are estimates.
|
Registration
Fee - Securities and Exchange Commission
|
$ | 1,356 | ||
|
Accounting
Fees and Expenses
|
7,300 | |||
|
Legal
Fees and Expenses
|
25,000 | |||
|
Printing
Fees and Expenses
|
2,500 | |||
|
Miscellaneous
|
2,000 | |||
|
Total
|
$ | 38,156 |
|
Item
15.
|
Indemnification
of Directors and Officers.
|
The Maryland General Corporation Law
permits a Maryland corporation to indemnify its present and former directors,
among others, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which
they may be made a party by reason of their services in those capacities, unless
it is established that:
|
|
(1)
|
the
act or omission of the director was material to the matter giving rise to
such proceeding and
|
|
|
(A)
|
was
committed in bad faith or
|
|
|
(B)
|
was
the result of active and deliberate
dishonesty;
|
|
|
(2)
|
the
director actually received an improper personal benefit in money,
property, or services; or
|
|
|
(3)
|
in
the case of any criminal proceeding, the director had reasonable cause to
believe that the act or omission was
unlawful.
|
Maryland
law permits a Maryland corporation to indemnify a present and former officer to
the same extent as a director.
In addition to the foregoing, a court
of appropriate jurisdiction: (1) shall order indemnification of
reasonable expenses incurred by a director who has been successful, on the
merits or otherwise, in the defense of any proceeding identified above, or in
the defense of any claim, issue or matter in the proceeding; and (2) may under
certain circumstances order indemnification of a director or an officer who the
court determines is fairly and reasonably entitled to indemnification in view of
all of the relevant circumstances, whether or not the director or officer has
met the standards of conduct set forth in the preceding paragraph or has been
declared liable on the basis that a personal benefit improperly received in a
proceeding charging improper personal benefit to the director or the officer,
provided, however, that if the proceeding was an action by or in the right of
the corporation or involved a determination that the director or officer
received an improper personal benefit, no indemnification may be made if the
director or officer is adjudged liable to the corporation, except to the extent
of expenses approved by a court of appropriate jurisdiction.
II-1
The Maryland General Corporation Law
also permits a Maryland corporation to pay or reimburse, in advance of the final
disposition of a proceeding, reasonable expenses incurred by a present or former
director or officer made a party to the proceeding by reason of his or her
service in that capacity, provided that the corporation shall have
received:
|
|
(1)
|
a
written affirmation by the director or officer of his good faith belief
that he has met the standard of conduct necessary for indemnification by
the corporation; and
|
|
|
(2)
|
a
written undertaking by or on behalf of the director to repay the amount
paid or reimbursed by the corporation if it shall ultimately be determined
that the standard of conduct was not
met.
|
The
Corporation has provided for indemnification of directors and officers in
ARTICLE VIII of its Amended and Restated Bylaws, as amended (the
“Bylaws”). The relevant provisions of the Bylaws read as
follows:
“SECTION
1. As used in this Article VIII, any word or words that are defined
in Section 2-418 of the Corporations and Associations Article of the Annotated
Code of Maryland (the ‘Indemnification Section’), as amended from time to time,
shall have the same meaning as provided in the Indemnification
Section.
SECTION
2. Indemnification of Directors and Officers. The
Corporation shall indemnify and advance expenses to a director or officer of the
Corporation in connection with a proceeding to the fullest extent permitted by
and in accordance with the Indemnification Section. Notwithstanding the
foregoing, the Corporation shall be required to indemnify a director or officer
in connection with a proceeding commenced by such director or officer against
the Corporation or its directors or officers only if the proceeding was
authorized by the Board of Directors.”
The
Maryland General Corporation Law authorizes a Maryland corporation to limit by
provision in its Articles of Incorporation the liability of directors and
officers to the corporation or to its shareholders for money damages except to
the extent:
|
|
(1)
|
the
director or officer actually receives an improper benefit or profit in
money, property, or services, for the amount of the benefit or profit
actually received, or
|
|
|
(2)
|
a
judgment or other final adjudication adverse to the director or officer is
entered in a proceeding based on a finding in the proceeding that the
director’s or officer’s action, or failure to act, was the result of
active and deliberate dishonesty and was material to the cause of action
adjudicated in the proceeding.
|
The
Corporation has limited the liability of its directors and officers for money
damages in Article NINTH of its Charter. This provision reads as
follows:
“NINTH: No
Director or officer of the Corporation shall be liable to the Corporation or to
its shareholders for money damages except (i) to the extent that it is proved
that such Director or officer actually received an improper benefit or profit in
money, property or services, for the amount of the benefit or profit in money,
property or services actually received, or (ii) to the extent that a judgment or
other final adjudication adverse to such Director or officer is entered in a
proceeding based on a finding in the proceeding that such Director’s or
officer’s action, or failure to act, was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding. No amendment of these Articles of Incorporation or repeal
of any of its provisions shall limit or eliminate the benefits provided to
directors and officers under this provision with respect to any act or omission
which occurred prior to such amendment.”
II-2
As permitted under Section 2-418(k) of
the Maryland General Corporation Law, the Corporation has purchased and
maintains insurance on behalf of its directors and officers against any
liability asserted against such directors and officers in their capacities as
such, whether or not the Corporation would have the power to indemnify such
persons under the provisions of Maryland law governing
indemnification.
Section 8(k) of the Federal Deposit
Insurance Act (the “FDI Act”) provides that the Federal Deposit Insurance
Corporation (the “FDIC”) may prohibit or limit, by regulation or order, payments
by any insured depository institution or its holding company for the benefit of
directors and officers of the insured depository institution, or others who are
or were “institution-affiliated parties,” as defined under the FDI Act, to pay
or reimburse such person for any liability or legal expense sustained with
regard to any administrative or civil enforcement action which results in a
final order against the person. The FDIC has adopted regulations
prohibiting, subject to certain exceptions, insured depository institutions,
their subsidiaries and affiliated holding companies from indemnifying officers,
directors or employees for any civil money penalty or judgment resulting from an
administrative or civil enforcement action commenced by any federal banking
agency, or for that portion of the costs sustained with regard to such an action
that results in a final order or settlement that is adverse to the director,
officer or employee.
|
Item
16.
|
Exhibits.
|
The exhibits filed with this
Registration Statement are listed in the Exhibit Index which immediately follows
the signatures hereto and which is incorporated herein by
reference.
|
Item
17.
|
Undertakings.
|
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration statement;
II-3
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
Provided, however, that
paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement,
or is contained in a form of prospectus filed pursuant to Rule 424(b) that is
part of the registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof;
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering;
(4) N/A;
(5) That,
for the purpose of determining liability under the Securities Act to any
purchaser:
(i) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to
be part of this registration statement as of the date the filed prospectus was
deemed part of and included in this registration statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of this registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act shall
be deemed to be part of and included in this registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or
the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of this registration statement relating to the
securities in this registration statement to which that prospectus relates, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no
statement made in a registration statement or prospectus that is part of this
registration statement or made in a document incorporated or deemed incorporated
by reference into this registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale
prior to such effective date, supersede or modify any statement that was made in
this registration statement or prospectus that was part of this registration
statement or made in any such document immediately prior to such effective
date;
(6) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities, the
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
II-4
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(b) The
undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant’s annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan’s annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time will be deemed to be the initial bona fide offering
thereof.
(c)–(g) N/A.
(h) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by
the final
adjudication of such issue.
(i)-(l) N/A.
II-5
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, the registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oakland, State of
Maryland, on February 25, 2009.
|
FIRST
UNITED CORPORATION:
|
||
|
By:
|
/s/ William B. Grant
|
|
|
William
B. Grant
|
||
|
Chairman
and CEO
|
||
KNOW ALL MEN BY THESE PRESENTS, that
each person whose signature appears below constitutes and appoints William B.
Grant and Carissa L. Rodeheaver, and each of them (with full power to each of
them to act alone), his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this registration statement,
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the
Securities Act of 1933, this registration statement has been signed by the
following persons in the capacities and on February 25, 2009.
|
/s/ William B. Grant
|
/s/ David J. Beachy
|
|
|
William
B. Grant, Director, Chairman and
|
David
J. Beachy, Director
|
|
|
Chief
Executive Officer
|
||
|
/s/ M. Kathryn Burkey
|
/s/ Faye E. Cannon
|
|
|
M.
Kathryn Burkey, Director
|
Faye
E. Cannon, Director
|
|
|
/s/ Paul Cox, Jr.
|
||
|
Paul
Cox, Jr., Director
|
Raymond
F. Hinkle, Director
|
|
|
/s/ Robert W. Kurtz
|
/s/ John W. McCullough
|
|
|
Robert
W. Kurtz, Director, President,
|
John
W. McCullough, Director
|
|
|
Chief
Risk Officer
|
II-6
|
/s/ Elaine L. McDonald
|
||
|
Elaine
L. McDonald, Director
|
Donald
E. Moran, Director
|
|
|
/s/ Carissa L. Rodeheaver
|
/s/ Gary R. Ruddell
|
|
|
Carissa
L. Rodeheaver, Exec. Vice President
|
Gary
R. Ruddell, Director
|
|
|
and
Chief Financial Officer/Principal
|
||
|
Accounting
Officer
|
||
|
I.
Robert Rudy, Director
|
Richard
G. Stanton, Director
|
|
|
/s/ Robert G. Stuck
|
/s/ H. Andrew Walls, III
|
|
|
Robert
G. Stuck, Director
|
H.
Andrew Walls, III,
Director
|
II-7
EXHIBIT
INDEX
|
Exhibit No.
|
Description
|
|
|
3.1(i)
|
Amended
and Restated Articles of Incorporation (incorporated by reference to
Exhibit 3.1 of the Corporation’s Quarterly Report on Form 10-Q for the
period ended June 30, 1998)
|
|
|
3.2(i)
|
Amended
and Restated Bylaws (incorporated by reference to Exhibit 3.2(i) of the
Corporation’s Annual Report on Form 10-K for the year ended December 31,
2007)
|
|
|
3.2(ii)
|
First
Amendment to Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2(ii) of the Corporation’s Annual Report on Form 10-K for the
year ended December 31, 2007)
|
|
|
3.2(iii)
|
Second
Amendment to Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2 of the Corporation’s Current Report on Form 8-K filed on
February 9, 2009)
|
|
|
4.1
|
Letter
Agreement, including the related Securities Purchase Agreement – Standard
Terms, dated January 30, 2009 by and between the Corporation and the U.S.
Department of Treasury (incorporated by reference to Exhibit 10.1 of the
Corporation’s Form 8-K filed on February 2, 2009)
|
|
|
4.2
|
Certificate
of Notice, including the Certificate of Designations incorporated therein,
relating to the Fixed Rate Cumulative Perpetual Preferred Stock, Series A
(incorporated by reference Exhibit 4.1 of the Corporation’s Form 8-K filed
on February 2, 2009)
|
|
|
4.3
|
Sample
Stock Certificate for Series A Preferred Stock for the Series A Preferred
Stock (incorporated by reference Exhibit 4.3 of the Corporation’s Form 8-K
filed on February 2, 2009)
|
|
|
4.4
|
Common
Stock Purchase Warrant dated January 30, 2009 issued to the U.S.
Department of Treasury (incorporated by reference to Exhibit 4.2 of the
Corporation’s Form 8-K filed on February 2, 2009)
|
|
|
5.1
|
Opinion
of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC (filed
herewith)
|
|
|
12.1
|
Computation
of Ratio of Earnings to Fixed Charges (filed herewith)
|
|
|
23.1
|
Consent
of Beard Miller Company LLP, Independent Registered Public Accounting Firm
(filed herewith)
|
|
|
23.2
|
Consent
of Ernst & Young LLP, Independent Registered Public Accounting Firm
(filed herewith)
|
|
|
23.3
|
Consent
of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC (contained
in Exhibit 5.1)
|
|
|
24.1
|
Power
of Attorney (included in the signature page to this Registration
Statement)
|
II-8