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Section 1: SC 13D/A (AMENDMENT NO. 13 TO THE SCHEDULE 13D)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 13)1

First United Corporation

(Name of Issuer)

Common Stock, $0.01 par value

(Title of Class of Securities)

33741H107

(CUSIP Number)

J. ABBOTT R. COOPER

DRIVER MANAGEMENT COMPANY LLC

250 Park Avenue

7th Floor

New York, NY 10177

(212) 572-4811

 

with copies to:

 

ANDREW FREEDMAN, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

 

EITAN HOENIG, ESQ.

KLUK FARBER LAW PLLC

166 Mercer Street, Suite 6B
New York, New York 10012
(646) 850-5009

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

January 9, 2020

(Date of Event Which Requires Filing of This Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

 

 

 

1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

CUSIP No. 33741H107

  1   NAME OF REPORTING PERSON  
         
        Driver Opportunity Partners I LP  
  2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ☒
        (b) ☐
           
  3   SEC USE ONLY    
           
           
  4   SOURCE OF FUNDS  
         
        WC, OO  
  5   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)     ☐
       
           
  6   CITIZENSHIP OR PLACE OF ORGANIZATION  
         
        Delaware  
NUMBER OF   7   SOLE VOTING POWER  
SHARES          
BENEFICIALLY         360,637  
OWNED BY   8   SHARED VOTING POWER  
EACH          
REPORTING         - 0 -  
PERSON WITH   9   SOLE DISPOSITIVE POWER  
         
          360,637  
    10   SHARED DISPOSITIVE POWER  
           
          - 0 -  
  11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON  
         
        360,637  
  12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES     ☐
       
           
  13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)  
         
        5.07%  
  14   TYPE OF REPORTING PERSON  
         
        PN  

  

2

CUSIP No. 33741H107

  1   NAME OF REPORTING PERSON  
         
        Driver Management Company LLC  
  2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ☒
        (b) ☐
           
  3   SEC USE ONLY    
           
           
  4   SOURCE OF FUNDS  
         
        AF, OO  
  5   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)     ☐
       
           
  6   CITIZENSHIP OR PLACE OF ORGANIZATION  
         
        Delaware  
NUMBER OF   7   SOLE VOTING POWER  
SHARES          
BENEFICIALLY         360,637  
OWNED BY   8   SHARED VOTING POWER  
EACH          
REPORTING         - 0 -  
PERSON WITH   9   SOLE DISPOSITIVE POWER  
         
          360,637  
    10   SHARED DISPOSITIVE POWER  
           
          - 0 -  
  11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON  
         
        360,637  
  12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES     ☐
       
           
  13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)  
         
        5.07%  
  14   TYPE OF REPORTING PERSON  
         
        OO  

  

3

CUSIP No. 33741H107

 

  1   NAME OF REPORTING PERSON  
         
        J. Abbott R. Cooper  
  2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ☒
        (b) ☐
           
  3   SEC USE ONLY    
           
           
  4   SOURCE OF FUNDS  
         
        AF, OO  
  5   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)     ☐
       
           
  6   CITIZENSHIP OR PLACE OF ORGANIZATION  
         
        United States of America  
NUMBER OF   7   SOLE VOTING POWER  
SHARES          
BENEFICIALLY         360,637  
OWNED BY   8   SHARED VOTING POWER  
EACH          
REPORTING         - 0 -  
PERSON WITH   9   SOLE DISPOSITIVE POWER  
         
          360,637  
    10   SHARED DISPOSITIVE POWER  
           
          - 0 -  
  11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON  
         
        360,637  
  12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES     ☐
       
           
  13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)  
         
        5.07%  
  14   TYPE OF REPORTING PERSON  
         
        IN  

  

4

CUSIP No. 33741H107

 

  1   NAME OF REPORTING PERSON  
         
        Michael J. Driscoll  
  2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ☒
        (b) ☐
           
  3   SEC USE ONLY    
           
           
  4   SOURCE OF FUNDS  
         
        PF  
  5   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)     ☐
       
           
  6   CITIZENSHIP OR PLACE OF ORGANIZATION  
         
        United States of America  
NUMBER OF   7   SOLE VOTING POWER  
SHARES          
BENEFICIALLY         3,500  
OWNED BY   8   SHARED VOTING POWER  
EACH          
REPORTING         - 0 -  
PERSON WITH   9   SOLE DISPOSITIVE POWER  
         
          3,500  
    10   SHARED DISPOSITIVE POWER  
           
          - 0 -  
  11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON  
         
        3,500  
  12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES     ☐
       
           
  13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)  
         
        Less than 1%  
  14   TYPE OF REPORTING PERSON  
         
        IN  

  

5

CUSIP No. 33741H107

 

  1   NAME OF REPORTING PERSON  
         
        Lisa Narrell-Mead  
  2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ☒
        (b) ☐
           
  3   SEC USE ONLY    
           
           
  4   SOURCE OF FUNDS  
         
        PF  
  5   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)     ☐
       
           
  6   CITIZENSHIP OR PLACE OF ORGANIZATION  
         
        United States of America  
NUMBER OF   7   SOLE VOTING POWER  
SHARES          
BENEFICIALLY         650  
OWNED BY   8   SHARED VOTING POWER  
EACH          
REPORTING         - 0 -  
PERSON WITH   9   SOLE DISPOSITIVE POWER  
         
          650  
    10   SHARED DISPOSITIVE POWER  
           
          - 0 -  
  11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON  
         
        650  
  12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES     ☐
       
           
  13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)  
         
        Less than 1%  
  14   TYPE OF REPORTING PERSON  
         
        IN  

  

6

CUSIP No. 33741H107

 

  1   NAME OF REPORTING PERSON  
         
        Ethan C. Elzen  
  2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ☒
        (b) ☐
           
  3   SEC USE ONLY    
           
           
  4   SOURCE OF FUNDS  
         
        PF  
  5   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)     ☐
       
           
  6   CITIZENSHIP OR PLACE OF ORGANIZATION  
         
        United States of America  
NUMBER OF   7   SOLE VOTING POWER  
SHARES          
BENEFICIALLY         425  
OWNED BY   8   SHARED VOTING POWER  
EACH          
REPORTING         - 0 -  
PERSON WITH   9   SOLE DISPOSITIVE POWER  
         
          425  
    10   SHARED DISPOSITIVE POWER  
           
          - 0 -  
  11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON  
         
        425  
  12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES     ☐
       
           
  13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)  
         
        Less than 1%  
  14   TYPE OF REPORTING PERSON  
         
        IN  

  

7

CUSIP No. 33741H107

The following constitutes Amendment No. 13 to the Schedule 13D filed by the undersigned (“Amendment No. 13”). This Amendment No. 13 amends the Schedule 13D as specifically set forth herein.

 

Item 4.Purpose of Transaction.

Item 4 is hereby amended to add the following:

On January 6, 2020, Driver delivered a letter by e-mail to certain shareholders of the Issuer (the “January 6 Letter”) and on January 9, 2020, Driver delivered a letter to the Issuer’s Lead Director John McCullough (the “January 9 Letter”). Also on January 9, 2020, Driver delivered a letter to the Issuer’s Independent Directors (the “Shareholder List Letter”). The January 6 Letter, the January 9 Letter and the Shareholder List Letter are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated herein by reference.

Item 7.Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibits:

99.1The January 6 Letter, dated January 6, 2020.
99.2The January 9 Letter, dated January 9, 2020.
99.3The Shareholder List Letter, dated January 9, 2020.
8

CUSIP No. 33741H107

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: January 10, 2020

  Driver Opportunity Partners I LP
   
  By: Driver Management Company LLC
    its general partner
     
  By: /s/ J. Abbott R. Cooper
    Name: J. Abbott R. Cooper
    Title: Managing Member

 

  Driver Management Company LLC
   
  By:

/s/ J. Abbott R. Cooper

    Name: J. Abbott R. Cooper
    Title: Managing Member

 

 

 
 

/s/ J. Abbott R. Cooper

  J. Abbott R. Cooper

 

   
 

/s/ Michael J. Driscoll

  Michael J. Driscoll

 

   
 

/s/ Lisa Narrell-Mead

  Lisa Narrell-Mead

 

   
 

/s/ Ethan C. Elzen

  Ethan C. Elzen

 

9

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Section 2: EX-99.1 (JANUARY 6 LETTER)

Exhibit 99.1

 

 

 

What’s Wrong With This Picture?

 

Part 1—Where Are the Analyses?

 

January 6th, 2020

Fellow Shareholders,

 

Driver Management Company LLC (together with Driver Opportunity Partners I LP, “Driver” or “us” or “we”) currently owns more than 5% of the outstanding shares of First United Corporation (NASDAQ: FUNC) (“First United” or the “Company”), making us one of the Company’s five largest shareholders. Driver’s ownership of more than 360,000 First United shares exceeds the combined shareholdings of all of First United’s directors and officers.1 Driver’s interests are directly aligned with shareholders, which we believe stands in stark contrast to First United’s current leadership, some of whom enjoy the benefits of questionable related party transactions. Together, as First United’s independent owners, we would all benefit from First United’s board of directors (the “Board”) taking action to maximize the Company’s share price and unlocking the full value of our investment. We question whether the Board’s conflicts are preventing it from acting with our best interests in mind.

 

Driver has spent the past nine months trying to initiate a dialogue with Carissa Rodeheaver, First United’s Chairman and Chief Executive Officer, about pursuing a sale that can deliver a meaningful premium for shareholders. We sought to demonstrate to Ms. Rodeheaver that shareholders will be far better served if the Company initiates a sale process rather than remaining committed to a standalone path that is unsupported by a viable strategy or credible business plan. We have also attempted to engage with John McCullough, First United’s Lead Director, without success. In response to our efforts to initiate the type of candid discussion that a major shareholder should be able to have with a lead independent director, Mr. McCullough – always through First United’s Corporate Secretary or external legal counsel – only offered vague indications of potential meetings that were conditioned upon Driver satisfying requests for information that we considered to be irrelevant to our concerns.

 

Today we are writing to make you aware that, following Driver’s offer to present its own analysis to the Board in August 2019, Ms. Rodeheaver responded to us in an e-mail dated September 2, 2019 and stated that:

 

“The Board constantly evaluates opportunities and other measures that might increase shareholder value, and, as part of that process has decided to conduct additional analyses regarding its current strategy and any potential alternatives to that strategy.”2

 

Driver is still waiting for the outcome of the Board’s “analyses” after repeated inquiries about its progress.


1 As of November 30, 2019, based on ownership reported in Exhibit 99.1 to the Form 8-K filed by First United with the SEC on December 16, 2019: https://www.sec.gov/Archives/edgar/data/763907/000110465919073043/tm1926282d1_ex99-1.htm

2 Email from Carissa Rodeheaver to Abbott Cooper, dated September 2, 2019.

 

 

 

WHERE ARE THE BOARD’S “ANALYSES”?

 

It has been more than four months since Ms. Rodeheaver told Driver that the Board would assess its strategy and analyze alternatives. During this same time period, the following world events have occurred:

 

1.WeWork’s parent company, The We Company, watched its valuation disintegrate, abandoned an initial public offering and fired its founder;
2.At least five candidates abandoned their pursuit of the Democratic nomination in the 2020 U.S. Presidential election, while two more candidates entered the race and four debates were held;
3.A general election was called and held in the United Kingdom that will likely hasten its long awaited exit from the European Union; and
4.The U.S. House of Representatives launched an impeachment probe of the President, held public hearings and impeached a sitting President for only the third time in U.S. history.

 

Given the speed at which these momentous events unfolded, it seems reasonable to expect that the Board would have been able to complete its analysis of its strategy and potential alternatives over the same period, leaving only one question: what were the results?

 

At this point, we question whether the Board has actually conducted any credible and objective “analyses” at all. If a truly thoughtful process was commenced, we believe that any capable set of directors would have concluded that First United lacks the scale, resources and ability to deliver sale-level value as a standalone bank. Moreover, we believe any board with a good sense of its fiduciary duties would have determined that it should heed shareholders’ calls and initiate an exploratory sale process led by qualified advisors. Three sizable shareholders have made public calls for a sale over the course of a 90-day period this past fall.

 

Since First United indicated to Driver through public and private interactions that the Company is not pursuing a sale, we can only conclude that any “analyses” must have led the Board to believe that it is already taking the best path to increase shareholder value. We view this conclusion as misguided.

 

IT IS TIME TO HOLD THE BOARD ACCOUNTABLE FOR ITS INACTION

 

Many of you have reached out to us in recent months to not only express your agreement that a sale is the best way to increase shareholder value, but to also add that you have shared similar views – very bluntly in many cases – with Ms. Rodeheaver. Multiple shareholders have publicly echoed our call for a sale over the past several months, representing a rather remarkable occurrence in the banking industry. Despite our investment team’s many years of experience in the industry, we have never encountered such a shareholder uprising.

 

Given what appears to be growing shareholder unrest, First United should immediately make public any “analyses” performed by the Board. Shareholders have a right to know the outcome of any assessments of First United’s current strategy and potential alternatives. Shareholders deserve to understand what methodologies, assumptions and potential alternatives were used and considered by the Board while it conducted any “analyses.” Our view is that if First United maintained customary shareholder communication through quarterly earnings calls or research coverage, there would be no excuse for concealing such information.

 

 

 

The bottom line for shareholders is that the Board must be held accountable. If the Board continues to dismiss shareholders’ calls for a sale, we believe there is heightened risk of value destruction.

If you agree with us, please communicate your views to the Board by calling or mailing Tonya Sturm, Corporate Secretary and Chief Financial Officer. First United has represented to shareholders that Ms. Strum “will deliver all shareholder communications directly to [the Board] for consideration.”3

 

DRIVER HAS NOMINATED THREE HIGHLY-QUALIFIED, INDEPENDENT NOMINEES FOR ELECTION TO THE BOARD AT FIRST UNITED’S 2020 ANNUAL MEETING

 

Due to First United’s refusal to heed shareholders’ calls for a sale process, we were left with no choice but to nominate three highly-qualified, independent director candidates – Michael J. Driscoll, Ethan C. Elzen and Lisa Narrell-Mead – for election to the Board at the upcoming annual meeting.


Driver is committed to transparency and effective information sharing. This is why we invite all shareholders to visit www.RenovateMyBank.com to learn more about our case for change and sign up for e-mail updates.

 

Sincerely,

 

J. Abbott R. Cooper
Managing Member
Driver Management Company LLC

***

 

About Driver Management Company

 

Driver employs a valued-oriented, event-driven investment strategy that focuses exclusively on equities in the U.S. banking sector. The firm’s leadership has decades of experience advising and engaging with bank management teams and boards of directors on strategies for enhancing shareholder value. For information, visit www.drivermanagementcompany.com.

 

CERTAIN INFORMATION CONCERNING THE PARTICIPANTS

 

Driver Management Company LLC, together with the other participants named herein (collectively, “Driver”), intend to file a preliminary proxy statement and accompanying WHITE proxy card with the Securities and Exchange Commission (“SEC”) to be used to solicit votes for the election of its slate of highly-qualified director nominees at the 2020 annual meeting of stockholders of First United Corporation, a Maryland corporation (the “Corporation”).

 

DRIVER STRONGLY ADVISES ALL STOCKHOLDERS OF THE CORPORATION TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.


3https://www.sec.gov/Archives/edgar/data/763907/000114420419015122/tv516747_def14a.htm

 

 

 

Participants in the Solicitation

 

The participants in the proxy solicitation are anticipated to be Driver Management Company LLC (“Driver Management”), Driver Opportunity Partners I LP (“Driver Opportunity”), J. Abbott R. Cooper, Michael J. Driscoll, Ed.D, Lisa Narrell-Mead and Ethan C. Elzen.

 

As of the date hereof, the participants in the proxy solicitation beneficially own in the aggregate 365,212 shares of Common Stock, par value $0.01 per share, of the Corporation (the “Common Stock”). As of the date hereof, Driver Opportunity beneficially owns directly 360,637 shares of Common Stock. Driver Management, as the general partner of Driver Opportunity, may be deemed to beneficially own the shares of Common Stock directly beneficially owned by Driver Opportunity. Mr. Cooper, as the Managing Member of Driver Management, may be deemed to beneficially own the shares of Common Stock directly beneficially owned by Driver Opportunity. As of the date hereof, Dr. Driscoll directly beneficially owns 3,500 shares of Common Stock. As of the date hereof, Ms. Narrell-Mead directly beneficially owns 650 shares of Common Stock. As of the date hereof, Mr. Elzen directly beneficially owns 425 shares of Common Stock.

 

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Section 3: EX-99.2 (JANUARY 9 LETTER)

Exhibit 99.2

 

Driver Management Company LLC

January 9, 2020

Mr. John McCullough, Lead Director
c/o Ms. Tonya Sturm, Secretary
First United Corporation
19 South Second Street
Oakland, MD 21150

Via email

Mr. McCullough,

I read with interest your January 3, 2020 letter to shareholders of First United Corporation (“First United” or the “Company”). Given the upcoming election contest at the Company’s rapidly approaching 2020 Annual Meeting of Shareholders (the “2020 Annual Meeting”), it is important for shareholders to understand whether the board of directors (the “Board”) and senior management of First United are running the Company for the benefit of shareholders or for its customers. While we acknowledge that customer satisfaction can drive shareholder value, First United has provided little evidence or analysis demonstrating that its customer-focused (or any other) initiatives are the product of rigorous cost/benefit analysis, or that their actual economic and operational benefits are measured and compared to forecasted results or that their potential shareholder value would compare favorably to the immediate shareholder value that could be obtained in a sale, particularly when taking into account the risks and uncertainties in realizing the expected results.

A perfect example of First United prioritizing an unfocused “mission of enriching the lives of…customers” untethered to bottom line results is the “full modernization of branch network,” or, as I like to call it, “Carissa’s Folly.” Despite repeated requests, it appears that Ms. Rodeheaver has been unwilling or unable to provide tangible evidence of how this vanity project—which turned serviceable branches into We Work knock-offs—is increasing shareholder value. Based on my discussions with Ms. Rodeheaver, it seems that this initiative was undertaken without any regard to the return to shareholders on the investment of their capital and is justified solely by the invocation of “serving customers.”

Before shareholders cast their votes for directors at the 2020 Annual Meeting, we deserve to know whether you and the other Class I directors up for re-election will prioritize increasing shareholder value or if we should expect more initiatives like Carissa’s Folly.

It is past time for you and the rest of the Board to justify First United’s independence to shareholders—the only constituency voting for directors—and your January 3rd letter, along with the Company’s public statements since we first publicly called for a sale nine months ago, fall woefully short of the mark.

/s/ Abbott Cooper

J. Abbott R. Cooper
Managing Member
Driver Management Company LLC

 

 

CERTAIN INFORMATION CONCERNING THE PARTICIPANTS

Driver Management Company LLC, together with the other participants named herein (collectively, “Driver”), intend to file a preliminary proxy statement and accompanying WHITE proxy card with the Securities and Exchange Commission (“SEC”) to be used to solicit votes for the election of its slate of highly-qualified director nominees at the 2020 annual meeting of stockholders of First United Corporation, a Maryland corporation (the “Corporation”).

DRIVER STRONGLY ADVISES ALL STOCKHOLDERS OF THE CORPORATION TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.

Participants in the Solicitation

The participants in the proxy solicitation are anticipated to be Driver Management Company LLC (“Driver Management”), Driver Opportunity Partners I LP (“Driver Opportunity”), J. Abbott R. Cooper, Michael J. Driscoll, Ed.D, Lisa Narrell-Mead and Ethan C. Elzen.

As of the date hereof, the participants in the proxy solicitation beneficially own in the aggregate 365,212 shares of Common Stock, par value $0.01 per share, of the Corporation (the “Common Stock”). As of the date hereof, Driver Opportunity beneficially owns directly 360,637 shares of Common Stock. Driver Management, as the general partner of Driver Opportunity, may be deemed to beneficially own the shares of Common Stock directly beneficially owned by Driver Opportunity. Mr. Cooper, as the Managing Member of Driver Management, may be deemed to beneficially own the shares of Common Stock directly beneficially owned by Driver Opportunity. As of the date hereof, Dr. Driscoll directly beneficially owns 3,500 shares of Common Stock. As of the date hereof, Ms. Narrell-Mead directly beneficially owns 650 shares of Common Stock. As of the date hereof, Mr. Elzen directly beneficially owns 425 shares of Common Stock.

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Section 4: EX-99.3 (SHAREHOLDER LIST LETTER)

Exhibit 99.3

Driver Management Company LLC

January 9, 2020

First United Corporation
19 South Second Street
Oakland, MD 21150
c/o Ms. Tonya Sturm, Secretary
Attn: Mmes. Kathryn Burkey, Elaine McDonald and Marisa Shockley, and Messrs. John Barr, Brian Boal, Robert Kurtz, Gary Ruddell, Robert Rudy and Andrew Walls

Via email

Ladies and Gentlemen,

Thank you for both acknowledging and rectifying one of the many obstacles that First United Corporation (“First United” or the “Company”) placed in the way of allowing shareholders to fully exercise their fundamental right to elect the directors of their choosing by implementing a plurality voting standard for the upcoming contested election at the Company’s 2020 Annual Meeting of Shareholders (the “2020 Annual Meeting”). Aside from this, however, we do not understand why First United chose to address this issue only with respect to the 2020 Annual Meeting and through a board resolution, rather than by eliminating this threat to the shareholder franchise permanently with a bylaw amendment. We do not believe this type of slapdash, “stick a band-aid on it” like approach to correcting the Company’s pervasive corporate governance shortcomings inspires shareholder confidence in First United’s board of directors (the “Board”), nor does it address the perceived disregard for shareholders’ rights.

There remain other opportunities for the Board to demonstrate that it is committed to “addressing changing shareholder expectations and evolving corporate governance practices,” and to allow shareholders the full exercise of their franchise at the 2020 Annual Meeting. Indeed, one such immediate opportunity is for First United to promptly provide us with a complete list of the Company’s record and beneficial shareholders (the “Shareholder Lists”), as we previously requested in our prior letters to First United’s CFO and Secretary Tonya Strum. This would level the playing field by providing us with the same access to shareholders as First United currently enjoys.

While we acknowledge that we cannot legally compel First United to provide us with the Shareholder Lists under Maryland law, we note that the law also does not prohibit the Company from voluntarily granting us access to the Shareholder Lists. This is a fundamental question of fairness and respect for shareholder rights. You have retained experienced advisors (at shareholders’ expense) who have likely explained the inherent advantage afforded to a Maryland corporation facing a proxy contest because, unlike in Delaware and other shareholder-friendly jurisdictions, Maryland corporate law severely limits shareholders’ ability to request and receive, as a legal right, a copy of the shareholder list. First United can choose to exploit this inequitable outcome for its own benefit in the upcoming proxy contest, but there is nothing that prevents the Company from voluntarily providing us with a copy of the Shareholder Lists. Doing so would allow First United to signal a commitment to a fair election process and begin to demonstrate that the Board places sound corporate governance ahead of its own self-interests.

 

 

We hope to bypass the avoidable back-and-forth that typically would accompany such a request, such as a prolonged exchange of letters to and from our respective counsels laying out the contours of Maryland corporate law or suggesting that First United has the option of mailing Driver’s solicitation materials under Rule 14a-7 of the Securities Exchange Act of 1934, as amended. To be clear, we have no interest in giving the Company control over the mailing of our proxy materials, and we therefore request that your response indicate only whether First United will indeed provide us with access to the Shareholder Lists. We would view any refusal to provide the Shareholder Lists as a clear sign that the Board will seek to exploit every available advantage afforded under Maryland law, regardless of how such tactics would impact the fairness of the director election process.

Similarly, please spare us any empty rhetoric suggesting that granting us access to the Shareholder Lists would somehow prejudice other shareholders. Given our view that the Board has little care to address shareholders’ rights and concerns, such an argument would not only be disingenuous, but deeply offensive. To the extent that any real concerns exist, they can no doubt be addressed. We stand ready and willing to work with First United to fashion any appropriate solution that would provide us access to the Shareholder Lists and allow First United to demonstrate its respect for shareholder rights. For the avoidance of doubt, we are prepared to compensate the Company for the reasonable costs associated with the production of the Shareholder Lists and to sign an appropriate confidentiality agreement covering the information included therein.

Thank you in advance for your prompt response,

/s/ Abbott Cooper

J. Abbott R. Cooper
Managing Member
Driver Management Company LLC


CERTAIN INFORMATION CONCERNING THE PARTICIPANTS

Driver Management Company LLC, together with the other participants named herein (collectively, “Driver”), intend to file a preliminary proxy statement and accompanying WHITE proxy card with the Securities and Exchange Commission (“SEC”) to be used to solicit votes for the election of its slate of highly-qualified director nominees at the 2020 annual meeting of stockholders of First United Corporation, a Maryland corporation (the “Corporation”).

DRIVER STRONGLY ADVISES ALL STOCKHOLDERS OF THE CORPORATION TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.

 

 

Participants in the Solicitation

The participants in the proxy solicitation are anticipated to be Driver Management Company LLC (“Driver Management”), Driver Opportunity Partners I LP (“Driver Opportunity”), J. Abbott R. Cooper, Michael J. Driscoll, Ed.D, Lisa Narrell-Mead and Ethan C. Elzen.

As of the date hereof, the participants in the proxy solicitation beneficially own in the aggregate 365,212 shares of Common Stock, par value $0.01 per share, of the Corporation (the “Common Stock”). As of the date hereof, Driver Opportunity beneficially owns directly 360,637 shares of Common Stock. Driver Management, as the general partner of Driver Opportunity, may be deemed to beneficially own the shares of Common Stock directly beneficially owned by Driver Opportunity. Mr. Cooper, as the Managing Member of Driver Management, may be deemed to beneficially own the shares of Common Stock directly beneficially owned by Driver Opportunity. As of the date hereof, Dr. Driscoll directly beneficially owns 3,500 shares of Common Stock. As of the date hereof, Ms. Narrell-Mead directly beneficially owns 650 shares of Common Stock. As of the date hereof, Mr. Elzen directly beneficially owns 425 shares of Common Stock.

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