Sincerely
yours,
|
|
WILLIAM
B. GRANT
|
|
Chairman
of the Board &
|
|
Chief
Executive Officer
|
|
1.
|
To
vote on the election of the five (5) Director nominees named in the
attached Proxy Statement and form of Proxy to serve on the Board of
Directors until the 2013 Annual Meeting of Shareholders and until the
election and qualification of their
successors.
|
|
2.
|
To
approve a Charter amendment declassifying the Board of
Directors;
|
|
3.
|
To
ratify the appointment of ParenteBeard, LLC (formerly Beard Miller Company
LLP) as the Corporation’s independent auditors for fiscal year
2010.
|
|
4.
|
To
consider and approve a non-binding advisory vote on the Corporation’s
executive compensation program and policies;
and
|
|
5.
|
To
transact such other business as may be properly brought before the meeting
or any adjournment thereof.
|
|
·
|
By
completing the accompanying form of Proxy and returning it in the envelope
provided;
|
|
·
|
By
submitting your vote
telephonically;
|
|
·
|
By
submitting your vote electronically via the Internet;
or
|
|
·
|
By
attending the 2010 Annual Meeting and casting your vote in
person.
|
Common Stock
Beneficially
Owned
|
Percentage of
Outstanding
Common Stock
|
||||||||
Directors,
Nominees and Named Executive Officers:
|
|||||||||
David
J. Beachy
|
7,308 | .12 | % | ||||||
M.
Kathryn Burkey
|
5,653 |
(1)
|
.09 | % | |||||
Faye
E. Cannon
|
3,116 | .05 | % | ||||||
Paul
Cox, Jr.
|
2,993 | .05 | % | ||||||
William
B. Grant
|
10,513 |
(2)
|
.17 | % | |||||
Eugene
D. Helbig, Jr.
|
3,090 |
(3)
|
.05 | % | |||||
Robert
W. Kurtz
|
2,624 |
(4)
|
.04 | % | |||||
Steven
M. Lantz
|
1,839 |
(5)
|
.03 | % | |||||
John
W. McCullough
|
6,603 | .11 | % | ||||||
Elaine
L. McDonald
|
8,609 |
(6)
|
.14 | % | |||||
Donald
E. Moran
|
53,837 |
(7)
|
.88 | % | |||||
Robin
E. Murray
|
724 |
(8)
|
.01 | % | |||||
Carissa
L. Rodeheaver
|
1,214 |
(9)
|
.02 | % | |||||
Gary
R. Ruddell
|
2,389 | .04 | % | ||||||
I.
Robert Rudy
|
34,992 |
(10)
|
.57 | % | |||||
Richard
G. Stanton
|
15,625 |
(11)
|
.25 | % | |||||
Robert
G. Stuck
|
4,737 | .08 | % | ||||||
H.
Andrew Walls, III
|
752 | .01 | % | ||||||
Directors
& Executive Officers as a Group (20 persons)
|
181,293 | 2.95 | % | ||||||
5% Beneficial
Owners:
|
|||||||||
Firstoak
& Company
|
355,129 |
(12)
|
5.78 | % | |||||
P.O.
Box 557
|
|||||||||
Oakland,
Maryland 21550
|
|||||||||
United
States Department of the Treasury
|
326,323 |
(13)
|
5.31 | % | |||||
1500
Pennsylvania Avenue, NW
|
|||||||||
Washington,
D.C. 20220
|
|||||||||
Total
|
862,745 | 14.04 | % |
(1)
|
Includes
247 shares owned by spouse.
|
(2)
|
Includes
6,843 shares owned jointly with spouse, 6 shares owned jointly with
daughter, 231 shares owned by son, 5 shares owned by daughter, 2,425
shares held in a 401(k) plan account, 405 shares owned by spouse’s IRA,
and 218 shares owned by spouse and
daughter.
|
(3)
|
Includes
523 shares owned jointly with spouse and 2,213 held in a 401(k) plan
account.
|
(4)
|
Includes
2,295 shares held in a 401(k) plan account and 306 shares owned jointly
with spouse.
|
(5)
|
Includes
448 shares owned jointly with spouse, 6 shares owned by son and 1,130
shares held in a 401(k) plan
account.
|
(6)
|
Includes
230 shares held by spouse’s IRA and includes 1,000 shares held by Grantor
Trust of which Ms. McDonald is trustee and beneficiary, which shares are
pledged to secure a line of credit.
|
(7)
|
Includes 25,000
shares owned by spouse.
|
(8)
|
Includes
150 shares owned jointly with spouse and 574 shares held in a 401(k) plan
account.
|
(9)
|
Includes
406 shares held jointly with spouse, 16 shares held by spouse for benefit
of a minor child and 790 shares held in a 401(k) plan
account.
|
(10)
|
Includes
899 shares owned jointly with spouse, 6,771 shares owned by spouse, 4,215
shares owned by daughters, 15,575 shares owned by I.R. Rudy’s, Inc. of
which Mr. Rudy is owner.
|
(11)
|
Includes
9,008 shares owned jointly with spouse and 1,737 shares held in spouse’s
IRA.
|
(12)
|
Shares
held in the name of Firstoak & Company, as nominee, are administered
by the Trust Department of First United Bank & Trust in a fiduciary
capacity. Firstoak & Company disclaims beneficial ownership
of such shares.
|
(13)
|
Amount
represents shares subject to an immediately exercisable common stock
purchase warrant issued to Treasury in connection with the Corporation’s
participation in Treasury’s Capital Purchase Program. This
warrant is currently underwater, as the exercise price exceeds the current
market price of the Corporation’s common
stock.
|
Occupation
|
Director
|
|||||
Name
|
Age
|
During Past Five Years
|
Since
|
|||
M.
Kathryn Burkey
|
59
|
Certified
Public Accountant, Owner,
|
2005
|
|||
M.
Kathryn Burkey, CPA
|
||||||
I.
Robert Rudy
|
57
|
President,
Rudy’s Inc.,
|
1992
|
|||
Retail
Apparel and Sporting Goods.
|
||||||
Richard
G. Stanton
|
70
|
Retired. Served
as Chairman, President
|
1985
|
|||
and
Chief Executive Officer of First United
|
||||||
Corporation
and First United Bank & Trust
|
||||||
until
1996.
|
||||||
Robert
G. Stuck
|
63
|
Vice
President, Oakview Motors, Inc. - Retired.
|
1995
|
|||
Realtor,
Long & Foster Real Estate, Inc.
|
||||||
H.
Andrew Walls, III
|
49
|
President,
Morgantown Printing & Binding;
|
2006
|
|||
|
|
Member,
MEGBA, LLC.
|
|
Occupation
|
Director
|
|||||
Name
|
Age
|
During Past Five Years
|
Since
|
|||
David
J. Beachy
|
69
|
Fred
E. Beachy Lumber Co., Inc.
|
1985
|
|||
Building
Supplies – Retired.
|
||||||
Faye
E. Cannon
|
60
|
Former
Director, Dan Ryan Builders, Inc.,
|
2004
|
|||
Frederick
Maryland; Former Chief Executive
|
||||||
Officer
and President of F & M Bancorp,
|
||||||
Frederick,
Maryland – Retired.
|
||||||
Paul
Cox, Jr.
|
70
|
Owner,
Professional Tax Service.
|
1993
|
|||
William
B. Grant
|
56
|
Chairman
of the Board, Chief Executive
|
1995
|
|||
Officer
(“CEO”), and President of
|
||||||
the
Corporation and the Bank.
|
||||||
John
W. McCullough
|
60
|
Certified
Public Accountant. Retired in 1999
|
2004
|
|||
|
|
as
Partner of Ernst & Young, LLP.
|
|
Occupation
|
Director
|
|||||
Name
|
Age
|
During Past Five Years
|
Since
|
|||
Robert
W. Kurtz
|
63
|
Retired
President, Chief Risk Officer,
|
1990
|
|||
Secretary
and Treasurer of the Corporation
|
||||||
and
the Bank; retired director, Secretary and
|
||||||
Treasurer
of OakFirst Loan Center, Inc. and
|
||||||
OakFirst
Loan Center, LLC, both subsidiaries
|
||||||
of
the Bank.
|
||||||
Elaine
L. McDonald
|
61
|
Realtor,
Long & Foster Realtors
|
1995
|
|||
Donald
E. Moran
|
79
|
Acting
President, General Manager, Secretary
|
1988
|
|||
and
Treasurer, Moran Coal Corporation.
|
||||||
Gary
R. Ruddell
|
62
|
President,
Total Biz Fulfillment, provides
|
2004
|
|||
business
services; Member, Gary R. Ruddell LLC,
|
||||||
commercial
real estate; Member, MSG
|
||||||
|
|
Glendale
Properties LLC, residential real estate.
|
|
Director
|
Qualifications/Skills
|
|
David
J. Beachy
|
Business
experience gained through his ownership and operation of a successful
building supply company.
|
|
M.
Kathryn Burkey
|
Accounting
and business experience gained through her education and CPA certification
and through owning and operating a successful accounting firm; director
experience gained through her service as past Chairman of the Board of
Western Maryland Health System, including service on its Compensation
Committee, Audit Committee, and Finance Committee; and her experience as
past president of Maryland Association of Certified Public
Accountants;
|
|
Faye
E. Cannon
|
Banking
and business experience gained through her service as past President, CEO
and Director of F&M Bancorp; 30 years of experience in the banking
industry; and experience gained through banking industry affiliations and
prior director service with profit and non-profit boards of
directors.
|
|
Paul
Cox, Jr.
|
Active
community involvement in Washington County, a market area served by the
Corporation; and business and tax experience gained through owning and
operating a tax preparation business.
|
|
William
B. Grant
|
Thirty-two
years of banking experience; legal expertise gained through the practice
of law; education gained as a graduate of Stonier Graduate School of
Banking and as a graduate of Northwestern Trust Graduate School; and his
experience as a Certified Financial Planner.
|
|
Robert
W. Kurtz
|
Thirty-seven
years of banking experience gained through his service as past President,
Chief Risk Officer, and Chief Financial Officer of First United
Corporation and its affiliates, and service as a director of the
Corporation and the Bank since 1990.
|
|
John
W. McCullough
|
Financial
institution accounting experience gained as a former partner of Ernst
& Young, LLP; education gained through his B.S. degree in Accounting
from University of Maryland; and CPA certification.
|
|
Elaine
L. McDonald
|
Real
estate experience gained as a Realtor with Long and Foster; business
experience gained through her ownership and operation of Alpine Village
Inc. for 21 years; and experience with fundraising activities for national
and community based non-profits.
|
|
Donald
E. Moran
|
Education
gained through his B.A. degree in pre-law, with a split minor in History
and Geography, from the University of Maryland; business experience gained
as president, secretary, treasurer of Moran Coal Company since 1955; and
banking business experience gained as past president of First National
Bank of Piedmont.
|
Gary
R. Ruddell
|
Education
gained through his B.A. degree in marketing from University of Maryland
and attendance at various Maryland Banking sessions; business experience
gained as president and chief executive officer of a successful
logistical and back-office support services business; and community
involvement through his positions as officer and director of various
community organizations.
|
|
I
Robert Rudy
|
Education
gained through his Bachelor of Business Administration degree from Ohio
University; business experience gained through his ownership and operation
of Rudy’s, Inc. and as managing member of D.C. Development, LLC and
subsidiaries from 1993 to 2008; director experience gained as chairman of
the board of Sports Specialists, Ltd, Fairport, NY and as trustee of The
Ohio University Foundation; experience gained from and involvement with
various societies, boards and commissions, including the Ohio University
College of Business Society of Alumni and Friends from 2003 to 2006, Ohio
University College of Business Executive Advisory Board since 2006, Ohio
University College of Business Global Competitive Program during 2008 and
2009, Ohio University President’s CEO Roundtable, Maryland Fire Prevention
Commission – Commissioner, and Oakland Planning and Zoning
Commission.
|
|
Richard
G. Stanton
|
Banking
and business experience gained through 38 years of service with financial
institutions, including as past Chief Executive Officer of the
Corporation; and active community involvement in Garrett County, a key
market for the Corporation.
|
|
Robert
G. Stuck
|
Business
experience gained through ownership and operation of an automobile
dealership; and real estate experience gained as a real estate
agent.
|
|
H.
Andrew Walls, III
|
Business
experience gained as owner and operator of a large printing company for 15
years; active community involvement in Monongalia County, one of the
Corporation’s market areas; and director experience gained through his
service on the Board of the United Way, the Public Theatre, and the
Salvation Army.
|
|
1.
|
M.
Kathryn Burkey – Mrs. Burkey is a practicing Certified Public Accountant,
with significant experience in audit. She has also served as
chair of the board for Western Maryland Health System. She is
the past president of the Maryland Associates of CPA’s. Mrs. Burkey also
serves as chair of the Company’s Compensation
Committee.
|
|
2.
|
Faye
E. Cannon – Ms. Cannon is the former CEO of Farmers & Mechanics Bank,
which was headquartered in Frederick, Maryland. Prior to its merger with
Mercantile, Farmers & Mechanics had over $2 billion in
assets.
|
|
3.
|
Robert
W. Kurtz – Mr. Kurtz retired in December 2009 from First United, after
nearly four decades of service. For the last several years, Mr.
Kurtz had served as President & Chief Risk Officer of the
Company.
|
|
4.
|
John
W. McCullough – Mr. McCullough is a retired partner from the accounting
firm of Ernst & Young. During a significant portion of his
career, Mr. McCullough was heavily engaged in bank audits. Mr.
McCullough serves as chair of the Company’s Audit
Committee.
|
|
5.
|
Richard
G. Stanton – Prior to his retirement in 1996, Mr. Stanton served as
Chairman and CEO of the Company. Since that time, he has
remained on the Board of Directors, where he serves on numerous
committees.
|
DIRECTOR COMPENSATION
|
||||||||||||||||||||
Name
|
Fees earned or
paid in cash
($)
|
Stock Awards
($)(1)
|
Change in
pension
value and
nonqualified
deferred
compensation
earnings
($)
|
All other
compensation
($)(2)(3)
|
Total
($)
|
|||||||||||||||
David
J. Beachy
|
26,400 | 4,994 | - | 174 | 31,560 | |||||||||||||||
M.
Kathryn Burkey
|
32,100 | 4,994 | - | 274 | 37,368 | |||||||||||||||
Faye
E. Cannon
|
30,500 | 4,994 | - | 974 | 36,468 | |||||||||||||||
Paul
Cox, Jr.
|
28,800 | 4,994 | - | 1,274 | 35,068 | |||||||||||||||
Raymond
F. Hinkle
|
24,400 | 4,994 | - | 524 | 29,918 | |||||||||||||||
John
W. McCullough
|
33,900 | 4,994 | - | 174 | 39,068 | |||||||||||||||
Elaine
L. McDonald
|
24,500 | 4,994 | - | 174 | 29,668 | |||||||||||||||
Donald
E. Moran
|
31,900 | 4,994 | - | 699 | 37,593 | |||||||||||||||
Gary
R. Ruddell
|
24,400 | 4,994 | - | 174 | 29,568 | |||||||||||||||
I.
Robert Rudy
|
25,800 | 4,994 | - | 174 | 30,968 | |||||||||||||||
Richard
G. Stanton
|
26,900 | 4,994 | - | 174 | 32,068 | |||||||||||||||
Robert
G. Stuck
|
26,900 | 4,994 | - | 174 | 32,068 | |||||||||||||||
H.
Andrew Walls, III
|
28,000 | 4,994 | - | 749 | 33,743 |
(1)
|
The
amounts shown in this column relate to the grant of 435 fully-vested
shares of common stock to each non-employee director in 2009 and reflect
the aggregate grant date fair value of that award computed in accordance
with FASB ASC Topic 718, “Accounting for Stock
Compensation”. See Note 1 to the consolidated audited financial
statements contained in the Corporation’s Annual Report on Form 10-K for
the year ended December 31, 2009 regarding assumptions underlying
valuation of equity awards.
|
(2)
|
Certain
Directors are required to travel significantly greater distances than
others to attend Board and committee meetings. The amounts
shown include a travel allowance paid to these
Directors.
|
(3)
|
The
amounts shown also reflect $174 for each director, representing the cash
dividends paid in 2009 on the shares of common stock that were granted in
2009 and reflected in the "Stock Awards" column of this
table.
|
By:
|
AUDIT
COMMITTEE
|
|
M.
Kathryn Burkey
|
||
Faye
E. Cannon
|
||
Paul
Cox, Jr.
|
||
John
W. McCullough
|
||
Elaine
L. McDonald
|
||
Richard
G. Stanton
|
||
Robert
G. Stuck
|
|
·
|
Incorporating
executive sessions (without management present) into all Compensation
Committee meetings;
|
|
·
|
Using
an independent compensation consultant to advise on executive compensation
issues;
|
|
·
|
Reviewing
and realigning from time to time compensation structures based on
targeting median competitive pay;
|
|
·
|
Reviewing
peer group performance
comparisons;
|
|
·
|
Performing
annual reviews for all executive
officers;
|
|
·
|
Reviewing
and revising from time to time short-term incentive plan for members of
executive management to insure payments are aligned with corporate
performance;
|
|
·
|
Monitoring
established parameters for the long-term incentive plan for members of
executive management and insures the plan is aligned with shareholder
interests.
|
|
·
|
Performing
a semi–annual review of all employee incentive compensation
plans
|
|
·
|
Motivate
and reward senior management for increasing long-term shareholder
value.
|
|
·
|
Create
a strong focus on pay-for-performance by ensuring that a significant
portion of total compensation is subject to the risk of forfeiture if
performance goals are not
satisfied.
|
|
·
|
Position
total compensation to be competitive with the market for meeting defined
performance goals.
|
|
·
|
Enable
us to attract and retain talent needed to drive its
success.
|
|
–
|
Return
on shareholder’s
equity: 11.87%
|
|
–
|
Earnings
per share: $2.12
|
|
–
|
Efficiency
ratio: 63.27%
|
|
–
|
Operating
Income as a Percentage of Net
Revenue: 26.2%
|
|
–
|
Growth
of COBO
Relationships: 6.5%
|
Threshold %
|
Target %
|
Stretch %
|
||||||||||
William
B. Grant
|
20 | % | 40 | % | 50 | % | ||||||
Carissa
L. Rodeheaver
|
15 | % | 30 | % | 37.5 | % | ||||||
Steven
M. Lantz
|
10 | % | 20 | % | 25 | % | ||||||
Robin
E. Murray
|
10 | % | 20 | % | 25 | % | ||||||
Eugene
D. Helbig
|
10 | % | 20 | % | 25 | % | ||||||
Robert
W. Kurtz
|
15 | % | 30 | % | 37.5 | % |
–
|
Return
on shareholders’ equity
of -11.02%
|
|
–
|
Earnings
per common share
of -$2.08
|
|
–
|
Efficiency
ratio of 104.69%
|
|
–
|
Operating
Income as a % of Net Revenue, exclusive of securities losses
of 30.1%
|
|
–
|
Growth
of COBO Relationships
of 5.38%
|
ACNB
Corporation
|
Franklin
Financial Services
|
American
National Bankshares
|
Harleysville
National Corporation
|
First
Chester County Corporation
|
VIST
Financial Corporation
|
City
Holding Company
|
Orrstown
Financial Services
|
Citizens
& Northern Corporation
|
Peoples
Bancorp Inc.
|
Camco
Financial Corporation
|
Sandy
Spring Bancorp
|
First
Mariner Bancorp
|
Severn
Bancorp, Inc.
|
First
Community Bancshares
|
Shore
Bancshares, Inc.
|
CNB
Financial Corporation
|
Summit
Financial Group
|
Cardinal
Financial Corporation
|
Univest
Corporation of Pennsylvania
|
|
1.
|
It
has reviewed, with our senior risk officers, the senior executive officer
(as defined in 12 C.F.R. Part 30, the “SEOs”) compensation plans and has
made all reasonable efforts to ensure that these plans do not encourage
SEOs to take unnecessary and excessive risks that threaten the value of
First United Corporation;
|
|
2.
|
It has reviewed, with our senior risk officers, the employee compensation plans and has made all reasonable efforts to limit any unnecessary risks these plans pose to First United Corporation; and |
|
3.
|
It has reviewed the employee compensation plans to eliminate any features of these plans that would encourage the manipulation of reported earnings of First United Corporation to enhance the compensation of any employee. |
By:
|
COMPENSATION
COMMITTEE
|
|
M.
Kathryn Burkey, Chairman
|
||
David
J. Beachy
|
||
Faye
E. Cannon
|
||
Paul
Cox, Jr.
|
||
John
W. McCullough
|
||
Donald
E. Moran
|
||
Robert
G. Stuck
|
Name and principal
position
|
Year
|
Salary
($)
|
Stock
Awards
($)(2)
|
Non-equity
incentive plan
compensation
($)(3)
|
Change in
pension value
and non-qualified
deferred
compensation
earnings
($)(4)
|
All other
compensation
($)(5)
|
Total
($)
|
|||||||||||||||||||
William
B. Grant,
|
2009
|
257,500 | - | - | 29,017 | 8,404 | 294,921 | |||||||||||||||||||
Chairman/CEO/
|
2008
|
257,500 | 103,000 | - | 160,266 | 10,937 | 531,703 | |||||||||||||||||||
President
(1)
|
2007
|
250,000 | - | 100,000 | - | 9,705 | 359,705 | |||||||||||||||||||
Carissa
L.
|
2009
|
182,000 | - | 70,354 | 6,777 | 259,131 | ||||||||||||||||||||
Rodeheaver,
EVP /
|
2008
|
182,000 | 54,600 | - | 45,216 | 7,567 | 289,383 | |||||||||||||||||||
CFO
|
2007
|
145,796 | - | 29,500 | 58,620 | 5,360 | 239,276 | |||||||||||||||||||
Steven
M. Lantz,
|
2009
|
170,000 | - | 166,191 | 7,011 | 343,202 | ||||||||||||||||||||
SVP
/ Chief Lending
|
2008
|
170,000 | 34,000 | - | 73,749 | 8,057 | 285,806 | |||||||||||||||||||
Officer
|
2007
|
162,500 | - | 32,500 | - | 7,062 | 202,062 | |||||||||||||||||||
Eugene
D. Helbig
|
2009
|
140,000 | - | - | 99,636 | 6,835 | 246,471 | |||||||||||||||||||
SVP
/ Senior Trust
|
2008
|
140,000 | 28,000 | - | 138,014 | 7,419 | 313,433 | |||||||||||||||||||
Officer
|
2007
|
125,000 | - | 25,000 | - | 6,736 | 156,736 | |||||||||||||||||||
Robin
E. Murray,
|
2009
|
148,000 | - | - | - | 5,866 | 153,066 | |||||||||||||||||||
SVP
/ Director of
|
2008
|
148,000 | 29,600 | - | 39,342 | 6,736 | 223,678 | |||||||||||||||||||
Retail
Banking
|
2007
|
140,000 | - | 25,833 | 140,573 | 5,006 | 311,412 | |||||||||||||||||||
Robert
W. Kurtz,
|
2009
|
181,267 | - | - | 288,180 | 3,517 | 472,964 | |||||||||||||||||||
President/CRO
(6)
|
2008
|
176,000 | 52,800 | - | - | 3,279 | 232,079 | |||||||||||||||||||
2007
|
170,000 | - | 51,000 | - | 3,583 | 224,583 |
(1)
|
Mr.
Grant also serves as a director of the Corporation and of the Bank but
receives no separate remuneration for such
service.
|
(2)
|
The
amounts relate to the grant of performance based equity awards granted
under the LTIP and reflect the aggregate grant date fair value of those
awards computed in accordance with FASB ASC Topic 718, “Accounting for
Stock Compensation”. See Note 1 to the consolidated audited
financial statements contained in the Corporation’s Annual Report on Form
10-K for the year ended December 31, 2009 regarding assumptions underlying
valuation of equity awards. These awards were terminated and
reversed effective June 30, 2009 because the Corporation deemed it
unlikely that they would vest in
2010.
|
(3)
|
Represents
amounts earned during the year under the
EPP.
|
(4)
|
Amounts
represent changes in the present value of the accumulated benefit (PVAB)
under the Pension Plan and the SERP from the previous year
end. Changes in value for the Pension Plan were: Mr.
Grant, $63,975 for 2009, $67,518 for 2008, $50,828 for 2007; Ms.
Rodeheaver, $26,370 for 2009, $19,126 for 2008, $11,338 for 2007; Mr.
Lantz, $38,883 for 2009, $35,537 for 2008, $53,695 for 2007, Mr. Helbig,
$46,903 for 2009, $41,660 for 2008, and $70,169 for 2007; Ms Murray,
$44,084 for 2009, $33,097 for 2008, and $35,260 for 2007; and Mr. Kurtz,
$110,596 for 2009, $96,252 for 2008, and $126,461 for
2007. Changes in value for the SERP were: Mr. Grant,
-$40,194 for 2009, $92,748 for 2008, and $-501,990 for 2007;Ms.
Rodeheaver, $43,984 for 2009, $26,090 for 2008, and $47,282 for 2007; Mr.
Lantz, $126,297 for 2009, $38,212 for 2008, and -$174,148 for 2007; Mr.
Helbig, $52,733 for 2009, $96,354 for 2008, and -$248,733 for 2007; Ms
Murray, -$48,645 for 2009, $6,245 for 2008, and $105,313 for 2007; Mr.
Kurtz, $177,584 for 2009, -$361,709 for 2008, and -$182,001 for
2007. Mr. Grant and Mr. Lantz had non-qualified deferred
compensation plan earnings in 2009 of $5,236 and $1,012, respectively, in
2008 of $10,697 and $951 and in 2007 of $10,070 and
$590.
|
(5)
|
Amounts
include premiums related to BOLI and group term life insurance available
to all employees and matching contributions to the 401(k)
plan. The dollar value of premiums related to the BOLI benefits
plan and the Corporation’s group life insurance program available to all
employees is as follows: Mr. Grant, $1,601 for 2009, $2,887 for
2008, and $882 for 2007; Ms. Rodeheaver, $396 for 2009, $309 for 2008, and
$248 for 2007; Mr. Lantz, $1,025 for 2009, $1,017 for 2008, and $1,328 for
2007; Mr. Helbig, $1,778 for 2009, $1,634 for 2008 and $2,200 for 2007;
Ms. Murray, $763 for 2009, $798 for 2008, and $573 for 2007; Mr. Kurtz,
$3,517 for 2009, $3,583 for 2008, and $3,583 for 2007. Matching
contributions made by the Corporation for the named executive officers
under the 401(k) Profit Sharing Plan are as follows: Mr. Grant,
$6,803 for 2009, $8,050 for 2008, and $8,823 for 2007; Ms. Rodeheaver,
$6,381 for 2009, $7,258 for 2008, and $5,112 for 2007; Mr. Lantz, $5,986
for 2009, $7,040 for 2008, and $7,446 for 2007; Mr. Helbig, $5,057 for
2009, $5,785 for 2008 and $3,888 for 2007; Ms. Murray, $5,103 for 2009,
$5,938 for 2008, and $4,433 for 2007; Mr. Kurtz, $0 for 2009, $0 for 2008,
and $0 for 2007.
|
(6)
|
Mr.
Kurtz retired from the Company and the Bank on December 15, 2009 but
continues to serve on the Boards of Directors of those entities. The
amount shown in the "Salary" column reflects the amount of salary actually
earned through his retirement date plus $5,267 earned in 2009 for service
to the Boards after December 15, 2009, which amount includes $1,100 in
director’s fees and a pro-rated director retainer of
$4,167.
|
GRANTS OF PLAN-BASED AWARDS
|
||||||||||||||
Name
|
Grant
Date
|
Estimated Possible Payouts Under
Non-Equity Incentive Plan
Awards
|
||||||||||||
Threshold
($)
|
Target
($)
|
Maximum
($)
|
||||||||||||
Mr.
Grant
|
1/1/2009
|
$ | 51,500 | $ | 103,000 | $ | 128,750 | |||||||
Ms.
Rodeheaver
|
1/1/2009
|
27,300 | 54,600 | 68,250 | ||||||||||
Mr.
Lantz
|
1/1/2009
|
17,000 | 34,000 | 42,500 | ||||||||||
Mr.
Helbig
|
1/1/2009
|
14,000 | 28,000 | 35,000 | ||||||||||
Ms.
Murray
|
1/1/2009
|
14,800 | 29,600 | 37,000 | ||||||||||
Mr.
Kurtz
|
1/1/2009
|
26,400 | 52,800 | 66,000 |
PENSION BENEFITS
|
|||||||||||||
Name
|
Plan Name
|
Number of
years credited
service
(#) (1)
|
Present value of
accumulated
benefit
($) (2) (3)
|
Payments
during last
fiscal year
($)
|
|||||||||
Mr.
Grant
|
Pension
Plan
|
31
|
553,905 | - | |||||||||
SERP
|
24
|
694,605 | - | ||||||||||
Ms.
Rodeheaver
|
Pension
Plan
|
18
|
103,328 | - | |||||||||
SERP
|
24
|
154,290 | - | ||||||||||
Mr.
Lantz
|
Pension
Plan
|
23
|
309,924 | - | |||||||||
SERP
|
24
|
382,834 | - | ||||||||||
Mr.
Helbig
|
Pension
Plan
|
24
|
397,083 | ||||||||||
SERP
|
24
|
437,136 | |||||||||||
Ms.
Murray
|
Pension
Plan
|
27
|
185,012 | - | |||||||||
SERP
|
24
|
277,983 | - | ||||||||||
Mr.
Kurtz
|
Pension
Plan
|
37
|
1,090,453 | - | |||||||||
SERP
|
27
|
177,587 | - |
|
(1)
|
The
maximum number of credited years of services under the SERP is capped at
24 years until age 60, after which the participant may be credited with
additional years of service for each year worked thereafter, up to 29
years. The credited years of service under the SERP for Ms.
Rodeheaver and Mr. Lantz exceed their actual years of service by six years
and one year, respectively. The differences between the
credited years SERP value and the actual years SERP value for these
officers are: $145,122 for Ms. Rodeheaver; and $43,048 for Mr.
Lantz.
|
|
(2)
|
The
amounts listed as the present accumulated benefits for SERP reflect the
dollar for dollar offset for the accumulated benefits payable under the
Pension Plan and 50% of the estimated social security benefits to be
received by the participant and are based on actual years of service. In
calculating the present value of accumulated benefits for SERP, the
following assumptions were used: Mortality – 1994 GAR; discount rate of
6.0%; assumed retirement age of 60 or attained age if later; annuity
factor at retirement based on 5%
discount.
|
|
(3)
|
All
employees are eligible to participate in the pension plan upon completion
of one year of service and the attainment of the age 21. A year
of service is defined as the completion of twelve consecutive months of
employment during which the employee worked at least 1,000
hours. In calculating the present value of the accumulated
benefits for the pension plan, the following assumptions were used:
Mortality – RP-2000; discount rate of 6.00%; assumed retirement age of 65;
normal form of benefit – 10 year certain and continuous annuity.
Compensation limits under 401(a) (17) are taken into account for these
calculations.
|
NON-QUALIFIED DEFERRED COMPENSATION
|
||||||||||||||||||||
Name
|
Executive
contributions
in last FY
($)
|
Registrant
contributions
in last FY
($)
|
Aggregate
earnings in
last FY (1)
($)
|
Aggregate
withdrawals/
distributions
($)
|
Aggregate
balance at
last FYE
($)
|
|||||||||||||||
Mr.
Grant
|
- | - | 5,326 | - | 282,254 | |||||||||||||||
Ms.
Rodeheaver
|
- | - | - | - | - | |||||||||||||||
Mr.
Lantz
|
12,500 | - | 1,012 | - | 50,691 | |||||||||||||||
Mr.
Helbig
|
- | - | - | - | - | |||||||||||||||
Ms.
Murray
|
- | - | - | - | - | |||||||||||||||
Mr.
Kurtz
|
- | - | - | - | - |
(1)
|
This
column represents the investment income on the aggregate account balance
in the named officer’s account for the last fiscal
year. Balances are invested in various managed asset portfolio
[MAP] accounts, selected by the named officer, in the Trust department of
First United Bank & Trust.
|
Name
|
Reason for Termination
|
Severance
Plan Cash
Benefit
($)
|
Severance Plan
Benefit
Continuation
($) (3)
|
Estimated
SERP Benefit
($) (1) (2)
|
Estimated
BOLI
Benefit
($)
|
Total
($)
|
||||||||||||||||
Mr.
Grant
|
Change
in control, disability, involuntary termination other than for cause, or
voluntary termination for good reason
|
1,077,895 | 8,404 | 694,605 | - | 1,780,904 | ||||||||||||||||
Death
|
- | - | 239,605 | 455,000 | 734,799 | |||||||||||||||||
Voluntary
termination without good reason
|
- | - | 694,605 | - | 694,605 | |||||||||||||||||
Ms.
Rodeheaver
|
Change
in control, disability, involuntary termination other than for cause, or
voluntary termination for good reason
|
473,200 | 11,916 | 299,412 | - | 784,528 | ||||||||||||||||
Death
|
- | - | 173,871 | 125,541 | 299,412 | |||||||||||||||||
Voluntary
termination without good reason
|
- | - | 154,290 | - | 154,290 | |||||||||||||||||
Mr.
Lantz
|
Change
in control, disability, involuntary termination other than for cause, or
voluntary termination for good reason
|
408,000 | 11,916 | 425,882 | - | 845,798 | ||||||||||||||||
Death
|
- | - | 90,882 | 335,000 | 425,882 | |||||||||||||||||
Voluntary
termination without good reason
|
- | - | 382,834 | - | 382,834 | |||||||||||||||||
Mr.
Helbig
|
Change
in control, disability, involuntary termination other than for cause, or
voluntary termination for good reason
|
336,000 | 8,404 | 451,766 | - | 796,170 | ||||||||||||||||
Death
|
- | - | 161,766 | 290,000 | 451,766 | |||||||||||||||||
Voluntary
termination without good reason
|
- | - | 437,136 | - | 437,136 | |||||||||||||||||
Ms.
Murray
|
Change
in control, disability, involuntary termination other than for cause, or
voluntary termination for good reason
|
355,200 | 8,404 | 277,983 | - | 641,587 | ||||||||||||||||
Death
|
- | - | 27,983 | 250,000 | 277,983 | |||||||||||||||||
Voluntary
termination without good reason
|
- | - | 277,983 | - | 277,983 |
(1)
|
SERP benefits payable upon a separation from service due to death are reduced dollar for dollar by the BOLI benefits payable at death. Accordingly, the amounts shown as the Estimated SERP Benefit have been reduced to reflect the amounts shown in the column entitled “Estimated BOLI Benefit ($)”. |
(2)
|
The SERP benefit payable to any named executive officer who terminates his or her employment without good reason is based on actual years of service rather than 24 years of credited service. Accordingly, benefits shown for Ms. Rodeheaver and Mr. Lantz in connection with a voluntary termination without good reason are based on actual years of service of 18 and 23 respectively. Messrs. Grant and Helbig and Ms. Murray have over 24 years of service. |
(3)
|
Change of Control agreements provide for two years of continued coverage under the corporations health, dental & vision plans under the same provisions as if they were still employees. Benefits are calculated at current rates and current cost sharing formulas, as futures costs are unknown. Amounts reflect the value of two years of coverage. |
FY 2009
|
FY 2008
|
|||||||
Audit
Fees
|
$ | 269,558 | $ | 285,471 | ||||
Audit
Related Fees
|
7,600 | 5,800 | ||||||
Tax
Fees
|
- | 4,139 | ||||||
All
Other Fees
|
- | - | ||||||
Total
|
$ | 277,158 | $ | 293,410 |
By
order of the Board of Directors
|
|
CARISSA
L. RODEHEAVER
|
|
Secretary
|
Notice
of Internet Availability of Proxy Materials for
2010
Annual Meeting of
Shareholders
|
|
·
|
Call our toll-free number –
(866) 360-7311; or
|
|
·
|
Visit our website at
http://www.stocktrans.com/eproxy/firstunited2010;
or
|
|
·
|
Send us an e-mail at
proxynotice@stocktrans.com.
|
1.
|
Election
of the following five (5) Class III
Directors:
|
2.
|
Approval
of a Charter
amendment declassifying the Board of
Directors
|
|
3.
|
Ratification
of appointment of ParenteBeard LLC (formerly Beard Miller Company LLP) to
serve as the Corporation’s independent registered public accounting firm
for fiscal year 2010.
|
4.
|
Approval
of the Corporation’s executive compensation program and policies
(non-binding advisory vote).
|
5.
|
Such
other matters as may properly come before the
meeting.
|
By
Order of the Board of Directors,
|
|
William
B. Grant
|
|
Chairman
and CEO
|
The
Board of Directors recommends a vote “FOR ALL NOMINEES” in Proposal
1.
|
The
Board of Directors recommends a vote “FOR” Proposal 4.
|
|||||
1.
|
Election
of the following five (5) Class III Directors to serve until the 2013
Annual Meeting of Shareholders and until their successors are duly elected
and qualify.
|
4.
Approve the Corporation’s executive compensation program and policies
(non-binding advisory vote).
|
||||
Class
III (term expires 2013)
|
||||||
o
|
FOR
ALL NOMINEES
|
FOR o AGAINST
o ABSTAIN
o
|
||||
01
|
M.
Kathryn Burkey
|
|||||
02
|
I.
Robert Rudy
|
o
|
WITHHOLD
AUTHORITY
|
|||
03
|
Richard
G. Stanton
|
FOR
ALL NOMINEES
|
||||
04
|
Robert
G. Stuck
|
|||||
05
|
H.
Andrew Walls, III
|
o
|
FOR
ALL EXCEPT
(see
instruction below)
|
5.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournments or
postponements thereof.
|
||
INSTRUCTION: The
withholding of a vote will be counted as a vote against a
nominee. To withhold authority to vote for any individual
nominee, mark “FOR ALL EXCEPT” and strike a line through that nominee’s
name in the list above.
|
||||||
The
Board of Directors recommends a vote “FOR” Proposal 2.
2.
To approve a Charter amendment declassifying the Board of
Directors
FOR o AGAINST o ABSTAIN
o
|
THE
UNDERSIGNED ACKNOWLEDGES RECEIPT OF NOTICE OF THE AFORESAID ANNUAL MEETING
OF SHAREHOLDERS
Date: _______________________,
2010
_________________________________
Signature
_________________________________
Signature
NOTE: Please
sign exactly as name appears hereon. Joint holders should each
sign. When signing as attorney, executor, administrator,
trustee or guardian, please indicate the capacity in which you are
signing. If a corporation or other entity, please sign in full
corporate or entity name by authorized person.
|