First United Corp DEFA14A, filed May 27, 2020
First United Corp (FUNC)
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FIRST UNITED CLARIFIES DRIVER’S MISLEADING STATEMENTS REGARDING REGULATORY ACTIONS
Driver Mischaracterizes Settlement with Regulator that Found Sufficient Evidence of Violations of Maryland Law
Vote on the BLUE Proxy Card Today for First United’s Highly Qualified Candidates: John W. McCullough; John F. Barr; Brian R. Boal; and Marisa A. Shockley
First United Reminds Shareholders to Revoke Votes on Driver’s WHITE Card by Voting on First United’s BLUE Card
OAKLAND, MARYLAND – MAY [XX], 2020 – First United Corporation (NASDAQ: FUNC) (“First United” or the “Company”), a bank holding company and the parent company of First United Bank & Trust (the “Bank”), today issued the below statement in response to Driver Management Company LLC’s (“Driver”) press release filed on May 26, 2020:
Driver has issued another misleading message to shareholders of First United. Yesterday, Driver inaccurately characterized its negotiated Settlement Agreement and Consent Order with the Maryland Commissioner of Financial Regulation (the "Maryland Commissioner") as an exoneration, or proof that it did not violate Maryland law. The settlement Driver references is one in which the regulator simply agreed not to take enforcement action against Driver, as long as Driver, among other things, agreed to not violate Maryland law going forward.
Importantly, shareholders should be aware of the actual facts: on May 14, 2020, the Maryland Commissioner notified Driver that the Maryland Commissioner had concluded his investigation and that his staff found sufficient evidence to find that Driver violated Maryland’s stock acquisition statute, the remedy for which is a five-year prohibition on Driver voting its shares. This letter noted that a copy was being sent to First United so that First United could consider the impact of the Maryland Commissioner’s conclusion on the upcoming annual meeting of shareholders. This voting prohibition is required by statute if a violation of Maryland’s stock acquisition statute is found to exist.
Driver’s settlement agreement with the Maryland Commissioner does not resolve the issue of whether Driver’s violation of the stock acquisition statute prohibits it from voting its shares for a period of five years, including at the upcoming annual meeting. Nor does it resolve the issue of whether Driver’s nominations are valid under First United’s bylaws or Maryland law. We asked a Maryland State Court last week for declaratory relief to provide clarification on these two issues, after Driver threatened to sue us. We will continue to seek this determination in order to provide the clarity that is needed for our shareholders.
The Maryland Commissioner’s letter to Driver and their settlement are attached to this release.
YOUR VOTE IS IMPORTANT
VOTE FOR FIRST UNITED’S NOMINEES ON THE BLUE PROXY CARD TODAY
If you have already voted a WHITE proxy card, you may revoke that vote by voting the enclosed BLUE proxy card today.
If you have any questions or require any assistance with respect to voting your shares, please contact the Company’s proxy solicitor, Morrow Sodali LLC:
509 Madison Avenue, Suite 1206
New York, NY 10022
Toll Free: (800) 662-5200
E-mail: FirstUnitedCorp@MorrowSodali.com
Shareholder Contact
Morrow Sodali LLC
Mike Verrechia/Bill Dooley
(800) 662-5200
FirstUnitedCorp@MorrowSodali.com
Media Contact
Prosek Partners
Brian Schaffer / Josh Clarkson / Kristen Duarte
(646) 818-9229 / (646) 818-9259 / (646) 818-9074
bschaffer@prosek.com / jclarkson@prosek.com / kduarte@prosek.com
ABOUT FIRST UNITED CORPORATION
First United Corporation is the parent company of First United Bank & Trust, a Maryland trust company with commercial banking powers, and two statutory trusts that were used as financing vehicles. The Bank has four wholly-owned subsidiaries: OakFirst Loan Center, Inc., a West Virginia finance company; OakFirst Loan Center, LLC, a Maryland finance company; First OREO Trust, a Maryland statutory trust that holds and services real estate acquired by the Bank through foreclosure or by deed in lieu of foreclosure; and FUBT OREO I, LLC, a Maryland company that likewise holds and services real estate acquired by the Bank through foreclosure or by deed in lieu of foreclosure. The Bank also owns 99.9% of the limited partnership interests in Liberty Mews Limited Partnership; a Maryland limited partnership formed for the purpose of acquiring, developing and operating low-income housing units in Garrett County, Maryland. The Corporation’s website is www.mybank.com.
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FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but are statements about management’s beliefs, plans and objectives about the future, as well as its assumptions and judgments concerning such beliefs, plans and objectives. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports that First United Corporation files with the Securities and Exchange Commission (the “SEC”) entitled “Risk Factors”.
IMPORTANT ADDITIONAL INFORMATION
First United, its directors and certain of its executive officers will be deemed to be participants in the solicitation of proxies from First United’s shareholders in connection with the Annual Meeting. First United has filed a definitive proxy statement and a BLUE proxy card with the SEC in connection with any such solicitation of proxies from First United shareholders. SHAREHOLDERS OF FIRST UNITED ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING BLUE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY AS THEY CONTAIN IMPORTANT INFORMATION. Information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, are set forth in the definitive proxy statement and other materials filed with the SEC in connection with the Annual Meeting. Shareholders can obtain the definitive proxy statement, any amendments or supplements to the proxy statement and other documents filed by First United with the SEC at no charge at the SEC’s website www.sec.gov. Copies are also available at no charge at First United’s website at http://investors.mybank.com/.
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OFFICE OF THE OMMISSIONER OF FINANCIAL REGULATION BALTIMORE, MARYLAND 21202 ANTONIO P. SALAZAR, COMMISSIONER |
May 14, 2020
VIA ELECTRONIC MAIL
J. Abbott R. Cooper, individually and as Managing Member of
Driver Management Company LLC, General Partner of
Driver Opportunity Partners, LP
c/o Jason R. Scherr, Partner
Morgan, Lewis & Bockius LLP
jr.scherr@morganlewis.com
Re: Driver Opportunity Partners, LP - Share acquisition - First United Corporation - Results of Investigation
Dear Mr. Cooper:
As you are aware, on January 21, 2020, the Enforcement Unit of the Office of the Commissioner of Financial Regulation commenced an investigation into the acquisition, by Driver Opportunity Partners, LP and certain other individuals (collectively, “Driver”), of over five percent (5%) of the shares of voting stock of First United Corporation (“Corporation”) which owns First United Bank and Trust of Oakland, Maryland, a Maryland-chartered banking institution. The Corporation and the Bank are subject to supervision by my Office under Md. Code Ann. Fin. Inst. (“FI”) Titles 3 and 5. The investigation has been completed and staff has concluded that there is sufficient evidence to find that Driver’s failure to apply for prior approval of the referenced stock purchase constituted a violation of the requirements of Maryland Annotated Code FI §3-314. Since it appears that a violation of law has occurred in this instance, I am in consultation with counsel from the Office of the Maryland Attorney General to determine what, if any, would be appropriate next steps under FI §§ 2-115 and 2-116 for our Office to take.
While our Office has discretion in determining what, if any, of the remedies set forth in FI §§ 2-115 and 2-116 may be pursued under these circumstances, FI §3-314(e) contains a consequence to a violation of FI §3-314 that has been mandated by the General Assembly. Specifically, pursuant to FI §3-314(e), voting stock that is acquired in violation of the FI §3-314 may not be voted for a period of five (5) years. Prior approval of the acquisition was not sought, and so, the stock acquisition was not approved by my Office. In light of the law’s voting prohibition and the Corporation’s upcoming annual meeting, I am sending a copy of this letter to the Corporation’s counsel for their consideration.
Should there be any additional questions, please do not hesitate to have your counsel contact my counsel, Assistant Attorney General Milena Trust, by e-mail at milena.trust@maryland.gov or by telephone at (410) 230-6139.
Regards,
Antonio P. Salazar
Commissioner
| cc: | Jedd Bellman, Assistant Commissioner |
Dana Allen, Director of Enforcement
Milena Trust, Assistant Attorney General, Principal Counsel
Andrew Bulgin, Esq.
www.labor.maryland.gov/finance/ | 410-230-6100 | www.labor.maryland.gov
LARRY HOGAN, GOVERNOR | BOYD K. RUTHERFORD, LT. GOVERNOR
