UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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INFORMATION TO BE INCLUDED IN THE REPORT
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(e) Compensatory Arrangements.
On May 20, 2024, in connection with the annual grant of restricted stock units (“RSUs”) that include time-vesting RSUs and performance-vesting RSUs pursuant to the Long-Term Incentive Plan (the “LTIP”), which is a sub-plan of the 2018 Equity Compensation Plan, the Compensation Committee of the Board of Directors of First United Corporation (the “Corporation”) revised certain terms applicable to the performance-vesting RSUs. The revised terms are set forth in a new Appendix A to the LTIP, a copy of which is filed herewith as Exhibit 10.1.
An RSU contemplates the issuance of shares of common stock of the Corporation if and when the RSUs vest. The total values of awards are based on a specified percentage of the grantee’s base salary as of December 31, 2023 and are composed of time-vesting RSUs and performance-vesting RSUs.
The performance-vesting RSUs contemplate a three-year performance period ending on December 31, 2026. Under the revised terms, the performance goals are now return on average equity (“ROAE”) and growth in tangible book value per share (“TBVPSG”) as measured against the ROAE and TBVPSG of a custom peer group consisting of 123 publicly-traded banks with total assets of between $750 million and $4 billion at December 31, 2023. The performance goals, which may be individually achieved within the threshold, target and maximum performance levels, are now stated as percentiles of the peer group’s performance. The peer group is closed, provided that any peer that is acquired will be removed from the group and any peer that fails will be recorded with a -99% performance result for both goals.
The table below outlines the threshold, target and maximum performance goals and related payout rates.
| Performance Level | Performance Goal | Payout Rate (of total Award) | ||
| Threshold - ROAE | 25th Percentile | 25% | ||
| Threshold - TBVPSG | 25th Percentile | 25% | ||
| Target - ROAE | 50th Percentile | 50% | ||
| Target – TBVPSG | 50th Percentile | 50% | ||
| Maximum – ROAE | 75th Percentile | 75% | ||
| Maximum – TBVPSG | 75th Percentile | 75% |
The performance-vesting RSUs are evidenced by Restricted Stock Unit Award Agreements (Performance-Vesting) that contain customary terms and conditions for these types of equity awards, the forms of which were filed as Exhibit 10.1 to the Corporation’s Current Report on Form 8-K that was filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2020. A summary of the material terms of the LTIP can be found in Item 5.02 of the Corporation’s Current Report on Form 8-K, filed with the SEC on March 16, 2020 (the “2020 Form 8-K”), under the heading, “First United Corporation Long-Term Incentive Plan”, which summary is incorporated herein by reference. A copy of the LTIP was filed as Exhibit 10.1 to the 2020 Form 8-K. A summary of the material terms of 2018 Equity Compensation Plan can be found in the Corporation’s definitive proxy statement on Schedule 14A, filed with the SEC on March 20, 2018, under the heading, “APPROVAL OF THE EQUITY PLAN (Proposal 2)”, which summary is incorporated herein by reference. A copy of the 2018 Equity Compensation Plan was filed as Exhibit 10.1 to the Corporation’s Current Report on Form 8-K that was filed with the SEC on May 21, 2018.
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Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
The exhibits filed or furnished with this report are listed in the following Exhibit Index:
| Exhibit No. | Description | |
| 10.1 | Appendix A to the First United Corporation Long-Term Incentive Plan (filed herewith) | |
| 104 | Cover page interactive data file (embedded within the iXBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FIRST UNITED CORPORATION | ||
| Dated: May 23, 2024 | By: | /s/ Tonya K. Sturm |
| Tonya K. Sturm | ||
| Senior Vice President & CFO | ||
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