First United Corporation
Extract: Update, Proxy Fight Director Nomination from a 8-K on 02/19/2021   Download
SEC Document
SEC Filing

First United Corporation (“First United”) is filing this report to respond to, and provide clarifying information regarding, a letter dated February 10, 2021 that Driver Management LLC (“Driver”) filed with the Securities and Exchange Commission (the “SEC”) relating to shares of First United common stock (the “Common Stock”) that were acquired and are held by the First United Corporation noncontributory defined benefit pension plan (the “Pension Plan”), for which the trust department (the “Trust Department”) of First United Bank & Trust (the “Bank”) serves as the administrator.


On November 25, 2019, First United filed a Current Report on Form 8-K (the “November 25 Form 8-K”) with the SEC in which it disclosed, among other things, that it had authorized the Trust Department to use up to 10% of the Pension Plan’s assets to purchase up to 150,000 shares of Common Stock to be held as an investment.  In March 2020, the Trust Department purchased 97,128 shares of Common Stock on behalf of the Pension Plan.  Information about this purchase was inadvertently omitted from the section of First United’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (the “March 2020 Form 10-Q”) relating to issuer purchases of equity securities.  Promptly after discovering this oversight, on September 4, 2020, First United updated the March 2020 Form 10-Q by filing an Amendment No. 1 thereto on Form 10-Q/A (as amended, the “Amended March 2020 Form 10-Q”).


On January 25, 2021 and January 29, 2021, in response to prior inquiries by Driver, Tonya Sturm, Senior Vice President and Chief Financial Officer of First United, provided Driver with information regarding the beneficial ownership of the shares held by the Pension Plan.


First United believes that its authorization and the Trust Department’s subsequent purchases of shares complied with all applicable laws and regulations, including Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Employee Retirement Income Security Act.


The Trust Department has adopted policies and procedures that apply to every account at the Bank in which shares of Common Stock are to be acquired and held. These policies and procedures require the account holder to execute a written authorization pursuant to which the account holder expressly (i) authorizes the Trust Department to purchase the shares, (ii) authorizes the Trust Department to retain such shares until the account holder directs the Trust Department otherwise, and (iii) relieves the Trust Department from any liability arising from such purchase or retention. The Trust Department required First United to execute such an authorization in connection with the Pension Plan’s purchase of shares of Common Stock. In addition, the instruments governing the Pension Plan prohibit the Trust Department from exercising any investment or voting discretion with respect to any assets that are purchased by the Pension Plan at the direction of First United, including the shares of Common Stock; these instruments provide that all voting and investment discretion with respect to such assets shall be vested in First United.


Accordingly, the Bank does not beneficially own the shares of Common Stock that are held in the Pension Plan, including for purposes of Section 13(d) or Section 13(f) of the Exchange Act. As disclosed in the Explanatory Note to the Bank’s Amendment No. 9 to Schedule 13G on Schedule 13G/A, filed with the SEC on January 25, 2021, the Bank’s Amendment No. 8 to such Schedule 13G in which it reported beneficial ownership of Pension Plan shares was promptly updated to reflect this fact.


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The shares purchased for the Pension Plan in March 2020, of which First United is deemed to be the beneficial owner, represented approximately 1.4% of the issued and outstanding shares of Common Stock as of the record date for the 2020 annual meeting of shareholders, which was well below the disclosure threshold imposed by Item 6(d) of Schedule 14A and Item 403 of the SEC’s Regulation S-K. First United believes that the information regarding the beneficial ownership of shares of Common Stock set forth in its definitive proxy statement filed with respect to the 2020 annual meeting of shareholders was accurate, complete, and complied in all material respects with the Exchange Act and the rules promulgated thereunder.


Information regarding (i) First United’s stock purchase plans, including authorizations relating to the Pension Plan, and (ii) purchases of shares of Common Stock by First United and by the Trust Department during 2020 was disclosed in the November 25 Form 8-K, the Amended March 2020 Form 10-Q, First United’s Quarterly Report on Form 10-Q, as amended by Amendment No. 1 on Form 10-Q/A, for the quarter ended June 30, 2020, First United’s Current Report on Form 8-K, filed with the SEC on August 28, 2020, and First United’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.  Information about any future purchases will be disclosed if, as, and when required by the Exchange Act.