(Name of Person(s) Filing Proxy Statement, if ~~Other Than~~other than the Registrant)

¨ ~~Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.~~FIRST UNITED CORPORATION

~~(2) Aggregate number of securities to which transaction applies: N/A~~MESSAGE FROM THE BOARD OF DIRECTORS

(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): N/ADear Fellow Shareholders –

~~(4) Proposed maximum aggregate value~~You are cordially invited to attend the 2020 Annual Meeting of ~~transaction: N/~~Shareholders (the “Annual Meeting”) of First United Corporation, a Maryland corporation (the “Corporation”), which is scheduled to be held on , 2020 at [a.m./p.m.] local time, and any adjournments or postponements thereof, at [●]. Shareholders of record of the Corporation at the close of business on , 2020 are entitled to notice of, and to vote at, the Annual Meeting. Details of the business to be conducted at the Annual Meeting are given in the accompanying Notice of Annual Meeting of Shareholders and the Proxy Statement. The Proxy Statement, accompanying BLUE Proxy Card, and 2019 Annual Report to Shareholders (including the Corporation’s Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2019) was first sent or given to our shareholders on or about , 2020. You should also have received aBLUEproxy card orBLUE voting instruction form and postage-paid return envelope, which are being solicited on behalf of our Board of Directors (the “Board”).

~~(5) Total fee paid: N/A~~Your vote will be especially important at the Annual Meeting. As you may know, Driver Management Company LLC, Driver Opportunity Partners I LP and J. Abbott R. Cooper (collectively, “Driver Management”) have notified the Corporation that they intend to nominate three candidates to the Board for election as directors at the Annual Meeting.

The Board doesNOTendorse the election of any of the nominees proposed by Driver Management Company LLC, Driver Opportunity Partners I LP and J. Abbott R. Cooper (collectively, “Driver Management”) and strongly and unanimously urges you toNOTsign or return any proxy card sent to you by Driver Management. Driver Management is currently being investigated by the Office of the Maryland Commissioner of Financial Regulation (the “Maryland Commissioner”) for acquiring shares of the Corporation’s stock in violation of Section 3-314 of the Financial Institutions Article of the Annotated Code of Maryland (the “Maryland Stock Acquisition Statute”). The Maryland Stock Acquisition Statute requires a person who desires to acquire the stock of a Maryland bank or bank holding company to file an application with ~~preliminary materials: N/A~~the Maryland Commissioner under certain circumstances and, if the Maryland Commissioner determines that such acquisition will constitute a “stock acquisition”, to obtain the Maryland Commissioner’s prior approval thereof. The Maryland Stock Acquisition Statute provides that stock acquired in violation of the statute cannot be voted for five years. If the Maryland Commissioner finds that Driver Management acquired shares of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”), in violation of the Maryland Stock Acquisition Statute, then, as noted above, the Maryland Stock Acquisition Statute provides that Driver Management will be prohibited from voting those shares for five years, including at the Annual Meeting. The Corporation’s Amended and Restated Bylaws, as amended to date (the “Bylaws”), permit a person to nominate director candidates only if that person is a shareholder who is entitled to vote for the election of directors. Consequently, if the Maryland Commissioner determines that Driver Management’s acquisition of its shares of Common Stock violated the Maryland Stock Acquisition Statute and Driver Management is therefore unable to vote its Common Stock for five years, then Driver Management would have failed to submit a nomination of director candidates for the election of directors in a manner consistent with the Bylaws, in which case Driver Management would not be entitled to nominate director candidates at the Annual Meeting.

¨ ~~Check box if any part~~If you have previously submitted a proxy card sent to you by Driver Management, you can revoke that proxy and have your shares voted for our Board’s nominees and on the other matters to be voted on at the Annual Meeting by signing, dating and returning the enclosedBLUE Proxy Card or by following the instructions provided on theBLUE Proxy Card to submit a proxy over the Internet or by telephone or by appearing at the Annual Meeting and voting your shares in person.

We are confident that our slate of Board candidates has the right mix of professional achievement, skills, experiences and reputations that qualify each of the ~~fee is offset~~Corporation’s candidates to serve as ~~provided by Exchange Act Rule 0-11(a)(2)~~shareholder representatives overseeing the management of the Corporation. We are committed to engaging with our shareholders and ~~identify~~continuing to respond to shareholder concerns about the ~~filing for which~~Corporation, and we believe we are in the ~~offsetting fee was paid previously. Identify~~best position to oversee the ~~previous filing by registration statement number, or~~execution of our long-term strategic plan to grow and realize shareholder value. The Board unanimously recommends that you vote “FOR” the ~~form or schedule~~re-election of Messrs. John F. Barr, Brian R. Boal and John W. McCullough and Ms. Marisa A. Shockley.

After reading the Notice of Annual Meeting of Shareholders and the ~~date of its filing.~~

~~(2) Form, Schedule~~Proxy Statement, please mark your votes on the accompanyingBLUE Proxy Card or ~~Registration Statement no.:~~

~~(4) Date Filed:~~voting instruction form, sign it and promptly return it in the accompanying postage-paid envelope. You may also vote by Internet or telephone as instructed in the proxy statement or on theBLUE Proxy Card or vote instruction form. Please vote by whichever method is most convenient for you to ensure that your shares are represented at the Annual Meeting.

You may receive proxy solicitation materials from Driver Management, including proxy statements and proxy cards. The Board recommends that you disregard them. We are not responsible for the accuracy of any information provided by or relating to Driver Management or the nominees contained in any proxy solicitation materials filed or disseminated by, or on behalf of, Driver Management or any other statements that Driver Management or its representatives have made or may otherwise make. The Board, including all of its independent directors, strongly urges you toNOT sign or return any proxy card sent to you by or on behalf of Driver Management. Again, if you have previously submitted a proxy card sent to you by or on behalf of Driver Management, you can revoke that proxy and vote for your Board’s nominees and on the other matters to be voted on at the Annual Meeting by using the enclosedBLUE Proxy Card or voting by Internet or telephone by following the instructions specified on theBLUE Proxy Card.

It is very important that your shares be represented and voted at the Annual Meeting. Whether or not you plan to attend, we hope you will vote as soon as possible. You may vote over the Internet, as well as by telephone, or by mailing theBLUE Proxy Card or voting instruction form. Returning the proxy or voting by Internet or telephone does not deprive you of your right to attend the Annual Meeting and to vote your shares in person.

We look forward to seeing you at the Annual Meeting. Your vote and participation, no matter how many or how few shares you own, are very important to us. Your cooperation is greatly appreciated.

Because of the uncertainties surrounding the impact of the coronavirus (COVID-19), we are planning for the possibility that the Annual Meeting may be held solely by means of remote communication. If we take this step, we will announce the decision to do so in advance of the Annual Meeting, and details on how to participate in the Annual Meeting will be set forth in a press release issued by the Corporation and available at http://investors.mybank.com/News.

The attached Notice of Annual Meeting of Shareholders and Proxy Statement are first being made available to shareholders of record beginning , 2020. If you have any questions or require assistance in authorizing a proxy or voting your shares of Common Stock, please contact the Corporation’s proxy solicitor at the contact listed below:

Shareholders Call Toll Free: (800) 662-5200
Banks, Brokers, Trustees and Other Nominees Call Collect: (203) 658-9400

Notice is hereby given that the 2020 Annual Meeting of ~~the~~ Shareholders (the “Annual Meeting”) of First United Corporation, a Maryland corporation (the “Corporation”) ~~will~~is scheduled to be held at . The ~~Wisp Resort, 296 Marsh Hill Road, McHenry, Maryland 21541. The meeting~~Annual Meeting is scheduled for:

Shareholders may also transact such other business as may be properly brought before the Annual Meeting or any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice of Annual Meeting of Shareholders. The Board recommends a vote “FOR” each of the four director nominees named in the accompanying Proxy Statement and a vote “FOR” each of Proposal 2 and 3 on the enclosedBLUE Proxy Card.

The Board ~~of Directors~~ has fixed ~~February 27, 2017~~, 2020 as the record date for purposes of determining shareholders who are entitled to notice of and to vote at the Annual Meeting. The Annual Meeting may be adjourned or postponed from time to time. At any adjourned or postponed meeting, action with respect to matters specified in this notice may be taken without further notice to shareholders, unless required by law or the Corporation’s Amended and Restated Bylaws, as amended to date (the “Bylaws”).

Whether or not you expect to attend the Annual Meeting in person, we encourage you to submit your proxy as soon as possible using one of ~~Shareholders.~~three convenient methods by (i) accessing the Internet site described in theBLUEProxy Card or voting instruction form provided to you, (ii) calling the toll-free number in theBLUEProxy Card or voting instruction form provided to you, or (iii) signing, dating and returning theBLUEProxy Card or instruction form provided to you. You are urged to complete and submit the enclosedBLUEProxy Card, even if your shares were sold after such date.

If your shares of Common Stock are held in a brokerage account or by a bank, trustee or other nominee (i.e., your shares are held in “street name”), then you will receive voting instructions from that nominee. To ensure that your nominee-held shares are voted in the manner that you desire, you must either provide voting instructions to your nominee or obtain a “legal proxy” authorizing you to vote those shares. If you choose to submit voting instructions, then we recommend that you instruct the broker, bank or other nominee holding your shares to vote your shares on the enclosedBLUEProxy Card. The Proxy is revocable and will not affect your right to vote in person if you attend the Annual Meeting, provided that you have obtained a legal proxy to do so.

Anyone acting as proxy agent for a shareholder must present a Proxy Card that has been properly executed by the shareholder, that authorizes the agent to so act, and that is in form and substance satisfactory to the judges of election and consistent with the Bylaws.

Your vote (in person or by proxy) will be especially important at the Annual Meeting. As you may know, Driver Management Company LLC, Driver Opportunity Partners I LP and J. Abbott R. Cooper (collectively, “Driver Management”) have notified the Corporation that they intend to nominate three candidates to the Board for election as directors at the Annual Meeting. Driver Management is currently being investigated by the Office of the Maryland Commissioner of Financial Regulation (the “Maryland Commissioner”) for acquiring shares of the Corporation’s ~~Amended~~stock in violation of Section 3-314 of the Financial Institutions Article of the Annotated Code of Maryland (the “Maryland Stock Acquisition Statute”). The Maryland Stock Acquisition Statute requires a person who desires to acquire the stock of a Maryland bank or bank holding company to file an application with the Maryland Commissioner under certain circumstances and, ~~Restated~~if the Maryland Commissioner determines that such acquisition will constitute a “stock acquisition”, to obtain the Maryland Commissioner’s prior approval thereof. The Maryland Stock Acquisition Statute provides that stock acquired in violation of the statute cannot be voted for five years. If the Maryland Commissioner finds that Driver Management acquired shares of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”), in violation of the Maryland Stock Acquisition Statute, then, as noted above, the Maryland Stock Acquisition Statute provides that Driver Management will be prohibited from voting those shares for five years, including at the Annual Meeting. The Bylaws permit a person to nominate director candidates only if that person is a shareholder who is entitled to vote for the election of directors. Consequently, if the Maryland Commissioner determines that Driver Management’s acquisition of its shares of Common Stock violated the Maryland Stock Acquisition Statute and Driver Management is therefore unable to vote its Common Stock for five years, then Driver Management would have failed to submit a nomination of director candidates for the election of directors in a manner consistent with the Bylaws, in which case Driver Management would not be entitled to nominate director candidates at the Annual Meeting. You may receive proxy solicitation materials from Driver Management, including proxy statements and proxy cards. The Board recommends that you disregard them. We are not responsible for the accuracy of any information provided by or relating to Driver Management or the nominees contained in any proxy solicitation materials filed or disseminated by, or on behalf of, Driver Management or any other statements that Driver Management or its representatives have made or may otherwise make.

The Board strongly and unanimously recommends that you vote on theBLUE Proxy Card or voting instruction form “FOR” the re-election of Messrs. John F. Barr, Brian R. Boal and John W. McCullough and Ms. Marisa A. Shockley.

The nominees of the Board for election as ~~amended.~~directors of the Corporation are listed in the accompanying Proxy Statement andBLUE Proxy Card.IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING, REGARDLESS OF WHETHER OR NOT YOU PLAN TO ATTEND. ACCORDINGLY, AFTER READING THE ACCOMPANYING PROXY STATEMENT, PLEASE FOLLOW THE INSTRUCTIONS ON THE ENCLOSED BLUE PROXY CARD AND PROMPTLY SUBMIT YOUR PROXY BY INTERNET, TELEPHONE OR MAIL AS DESCRIBED ON THE BLUE PROXY CARD. PLEASE NOTE THAT EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING, WE RECOMMEND THAT YOU VOTE USING THE ENCLOSED BLUE PROXY CARD PRIOR TO THE ANNUAL MEETING TO ENSURE THAT YOUR SHARES WILL BE REPRESENTED. EVEN IF YOU VOTE YOUR SHARES PRIOR TO THE ANNUAL MEETING, IF YOU ARE A RECORD HOLDER OF SHARES, OR A BENEFICIAL OWNER WHO OBTAINS A “LEGAL” PROXY FROM YOUR BROKER, BANK, TRUSTEE, OR OTHER NOMINEE, YOU STILL MAY ATTEND THE ANNUAL MEETING AND VOTE YOUR SHARES IN PERSON.

Regardless of the number of shares of Common Stock of the Corporation that you own, your vote will be important. Thank you for your continued support, interest and investment in First United.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON , 2020.

The Proxy Statement, the accompanyingBLUE Proxy Card, and the Corporation’s Annual Report to Shareholders (including its Annual Report on Form 10-K and Form 10-K/A for the year ended December 31, 2019) are available free of charge at http://www.edocumentview.com/FUNC. Information on this website, other than this Proxy Statement, is not a part of this Proxy Statement.

Please sign, date and promptly return the enclosedBLUEProxy Card in the envelope provided, or grant a proxy and give voting instructions by Internet or telephone, so that you may be represented at the Annual Meeting. Instructions are on yourBLUE Proxy Card or on the voting instruction form provided by your bank, broker, trust or other nominee.

The accompanying Proxy Statement provides a detailed description of the business to be conducted at the Annual Meeting. We urge you to read the accompanying Proxy Statement, including the appendices, carefully and in their entirety.

If you have any questions concerning the business to be conducted at the Annual Meeting, would like additional copies of the Proxy Statement or need help submitting a Proxy for your shares, please contact Morrow Sodali LLC, the Corporation’s proxy solicitor:

Shareholders Call Toll Free: (800) 662-5200
Banks,Brokers, Trustees and Other Nominees Call Collect: (203) 658-9400

This Proxy Statement and the accompanyingBLUE Proxy Card are being furnished in connection with the solicitation by the Board of Directors (the “Board”) of First United Corporation, a Maryland Corporation (the “Corporation”) of proxies to be voted at the 2020 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on ~~May 18, 2017,~~, 2020, at ~~10:00 a.m.~~[a.m./p.m.] local time at ~~The Wisp Resort, 296 Marsh Hill Road, McHenry, Maryland 21541,~~, and any adjournment or ~~postponements~~postponement thereof. The cost of soliciting proxies will be borne by the Corporation. In addition to solicitation by mail, proxies may be solicited by officers, Directors and regular employees of the Corporation personally or by telephone, electronic mail and/or facsimile. No additional remuneration will be paid to officers, Directors or regular employees who solicit proxies. The Corporation may reimburse brokers, banks, custodians, nominees and other fiduciaries for their reasonable out-of-pocket expenses in forwarding proxy materials to their principals. The approximate date on which this Proxy Statement andBLUE Proxy Card, along with the 2019 Annual Report to Shareholders (including the Corporation’s Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2019) will be sent or given to shareholders is ~~March 27, 2017.~~on or about , 2020.

Because of the uncertainties surrounding the impact of the coronavirus (COVID-19), the Corporation is planning for the possibility that the Annual Meeting may be held solely by means of remote communication. If the Corporation takes this step, it will announce the decision to do so in advance of the Annual Meeting, and details on how to participate in the meeting will be set forth in a press release issued by the Corporation and available at http://investors.mybank.com/News.

As used in this Proxy Statement, the terms “the Corporation”, “we”, “us”, and “our” refer to First United Corporation and, unless the context clearly requires otherwise, its consolidated subsidiaries.

The Board is soliciting your proxy vote to our Annual Meeting because you owned shares of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”), at the close of business on , (the “Record Date”) for the Annual Meeting, and therefore, are entitled to vote at the Annual Meeting on the following proposals:

You are receiving this Proxy Statement as a shareholder of the Corporation as of the Record Date for purposes of determining the shareholders entitled to receive notice of and vote at the Annual Meeting. As further described below, we request that you promptly use the enclosedBLUE Proxy Card to vote, by Internet, by telephone or by mail, in the event you desire to express your support of or opposition to the proposals.

THE BOARD UNANIMOUSLY RECOMMENDS VOTING “FOR” THE ELECTION OF EACH OF THE BOARD’S NOMINEES ON PROPOSAL 1, “FOR” PROPOSAL 2 AND “FOR” PROPOSAL 3,

THE BOARD URGES YOUNOT TO SIGN, RETURN OR VOTE ANY PROXY CARD SENT TO YOU BY DRIVER MANAGEMENT, EVEN AS A PROTEST VOTE, AS ONLY YOUR LATEST DATED PROXY CARD WILL BE COUNTED.

Your vote will be particularly important at the Annual Meeting. As you may know, the Corporation has received a notice from Driver Management Company LLC, Driver Opportunity Partners I LP and J. Abbott R. Cooper (collectively, “Driver Management”) regarding its intent to nominate a slate comprised of three candidates to the Board for election as directors, (collectively, the “Driver Nominees”), in opposition to the four nominees recommended by the Board. Driver Management is currently being investigated by the Office of the Maryland Commissioner of Financial Regulation (the “Maryland Commissioner”) for acquiring shares of the Corporation’s stock in violation of Section 3-314 of the Financial Institutions Article of the Annotated Code of Maryland (the “Maryland Stock Acquisition Statute”). The Maryland Stock Acquisition Statute requires a person who desires to acquire the stock of a Maryland bank or bank holding company to file an application with the Maryland Commissioner under certain circumstances and, if the Maryland Commissioner determines that such acquisition will constitute a “stock acquisition”, to obtain the Maryland Commissioner’s prior approval thereof. The Maryland Stock Acquisition Statute provides that stock acquired in violation of the statute cannot be voted for five years. If the Maryland Commissioner finds that Driver Management acquired shares of Common Stock, in violation of the Maryland Stock Acquisition Statute, then, as noted above, the Maryland Stock Acquisition Statute provides that Driver Management will be prohibited from voting those shares for five years, including at the Annual Meeting. The Corporation’s Amended and Restated Bylaws, as amended to date (the “Bylaws”), permit a person to nominate director candidates only if that person is a shareholder who is entitled to vote for the election of directors. Consequently, if the Maryland Commissioner determines that Driver Management’s acquisition of its shares of Common Stock violated the Maryland Stock Acquisition Statute and Driver Management is therefore unable to vote its Common Stock for five years, then Driver Management would have failed to submit a nomination of director candidates for the election of directors in a manner consistent with the Bylaws, in which case Driver Management would not be entitled to nominate director candidates at the Annual Meeting. The Board recommends a vote “FOR” the election of each of the director nominees named in this Proxy Statement on the enclosedBLUE Proxy Card, and strongly and unanimously urges youNOT to sign or return any proxy card(s) or voting instruction form(s) that you may receive from Driver Management.

To vote “FOR” all of the Board’s nominees, you must sign, date and return the enclosedBLUE Proxy Card or follow the instructions provided in theBLUE Proxy Card for submitting a proxy over the Internet or by telephone or vote in person at the Annual Meeting.

If you have previously signed any Proxy Card sent to you by Driver Management in respect of the Annual Meeting, you can revoke it by signing, dating and returning the enclosedBLUE Proxy Card or by following the instructions provided in theBLUE Proxy Card for submitting a proxy to vote your shares over the Internet or by telephone or voting in person at the Annual Meeting. Completing, signing, dating and returning any Proxy Card that Driver Management may send to you, even with instructions to vote “withhold” with respect to the Driver Nominees, will cancel any proxy you may have previously submitted to have your shares voted for the Board’s nominees as only your latest Proxy Card or voting instruction form will be counted. Beneficial owners who own their shares in “street name” should follow the voting instructions provided by their bank, broker, trustee or other nominee to ensure that their shares are represented and voted at the Annual Meeting, or to revoke prior voting instructions. The Board urges you to sign, date and return only the enclosedBLUE Proxy Card.

The Annual Meeting is scheduled to be held on , 2020, at [a.m./p.m.] local time, at .

The Board, on behalf of the Corporation, is soliciting your proxy to vote your shares of our Common Stock on all matters scheduled to come before the Annual Meeting, whether or not you attend in person. By completing, signing, dating and returning theBLUE Proxy Card or voting instruction form, or by submitting your proxy and voting instructions over the Internet or by telephone, you are authorizing the persons named as proxies to vote your shares of Common Stock at the Annual Meeting as you have instructed. Proxies will be solicited on behalf of the Board by the Corporation’s directors, director nominees, and certain executive officers and other employees of the Corporation. Such persons are listed in Appendix A to this Proxy Statement.

Additionally, the Corporation has retained Morrow Sodali LLC (“Morrow Sodali”), a proxy solicitation firm, which may solicit proxies on the Board’s behalf. You may also be solicited by press releases issued by us, postings on our corporate website or other websites or otherwise. Unless expressly indicated otherwise, information contained on our corporate website is not part of this Proxy Statement. In addition, none of the information on the other websites, if any, listed in this Proxy Statement is part of this Proxy Statement. Such website addresses are intended to be inactive textual references only.

Driver Management has nominated a slate of three individuals for election as directors to the Board at the Annual Meeting.The Driver Nominees haveNOT been endorsed by our Board. As noted above, Driver Management is currently being investigated by the Maryland Commissioner for acquiring shares of the Corporation’s stock in violation of the Maryland Stock Acquisition Statute. The Maryland Stock Acquisition Statute requires a person who desires to acquire the stock of a Maryland bank or bank holding company to file an application with the Maryland Commissioner under certain circumstances and, if the Maryland Commissioner determines that such acquisition will constitute a “stock acquisition”, to obtain the Maryland Commissioner’s prior approval thereof. The Maryland Stock Acquisition Statute provides that stock acquired in violation of the statute cannot be voted for five years. If the Maryland Commissioner finds that Driver Management acquired shares of Common Stock, in violation of the Maryland Stock Acquisition Statute, then, as noted above, the Maryland Stock Acquisition Statute provides that Driver Management will be prohibited from voting those shares for five years, including at the Annual Meeting. The Bylaws permit a person to nominate director candidates only if that person is a shareholder who is entitled to vote for the election of directors. Consequently, if the Maryland Commissioner determines that Driver Management’s acquisition of its shares of Common Stock violated the Maryland Stock Acquisition Statute and Driver Management is therefore unable to vote its Common Stock for five years, then Driver Management would have failed to submit a nomination of director candidates for the election of directors in a manner consistent with the Bylaws, in which case Driver Management would not be entitled to nominate director candidates at the Annual Meeting. You may receive proxy solicitation materials from Driver Management, including Proxy Statements and Proxy Cards.The Board recommends that you disregard them. We are not responsible for the accuracy of any information provided by or relating to Driver Management or the nominees contained in any proxy solicitation materials filed or disseminated by, or on behalf of, Driver Management or any other statements that Driver Management or its representatives have made or may otherwise make.

Our Board is pleased to nominate for election as director the following four persons—Messrs. Barr, Boal and McCullough and Ms. Shockley—named in this Proxy Statement and on the enclosedBLUE Proxy Card. We believe our four nominees have the breadth of relevant and diverse experiences, integrity and commitment necessary to continue to grow the Corporation for the benefit of all of the Corporation’s shareholders.

Our Board unanimously recommends that you vote by proxy using theBLUE Proxy Card with respect to the proposals as follows:

We describe each proposal and the Board’s reason for its recommendation with respect to each proposal on pages 18, 44 and 45 and elsewhere in this Proxy Statement.

The Board has set , 2020 as the Record Date for the Annual Meeting. You are entitled to notice and to vote if you were a shareholder of record of our Common Stock, as of the close of business on , 2020. You are entitled to one vote on each proposal for each share of Common Stock you held on the Record Date. Your shares may be voted at the Annual Meeting only if you are present in person or your shares are represented by a valid Proxy. At the close of business on the Record Date, there were shares of our Common Stock issued, outstanding and entitled to vote at the Annual Meeting.

What is the difference between a shareholder of “record” and a “street name” holder?

If your shares are registered directly in your name, then you are considered the shareholder of record with respect to those shares. The Corporation sent the proxy materials directly to you.

If your shares are held in a stock brokerage account or by a bank, trustee or other nominee, then the broker, bank, trustee or other nominee is considered to be the shareholder of record with respect to those shares. In that case, you are considered to be the beneficial owner of those shares and your shares are said to be held in “street name,” and the proxy materials will be forwarded to you by that nominee. Street name holders generally cannot submit a proxy or vote their shares directly and must instead instruct the broker, bank, trustee or other nominee how to vote their shares. If you do not provide voting instructions to your broker, then your shares will not be voted at the Annual Meeting on any proposal with respect to which your broker does not have discretionary authority. If you own your shares in street name, please instruct your bank, broker, trustee or other nominee how to vote your shares using theBLUE voting instruction form provided by your bank, broker, trustee or other nominee so that your vote can be counted. TheBLUE voting instruction form provided by your bank, broker, trustee or other nominee holding your shares may also include information about how to submit your voting instructions over the Internet or by telephone, if such options are available. TheBLUE Proxy Card accompanying this Proxy Statement will provide information regarding internet and telephone voting.

The presence in person or by proxy of holders of record of a majority of the shares of issued and outstanding Common Stock entitled to vote at the Annual Meeting constitutes a quorum, which is required to hold and conduct business at the Annual Meeting. At the close of business on the Record Date, shares of our Common Stock were outstanding and entitled to vote at the Annual Meeting. Shares are counted as present at the Annual Meeting if:

If you are a record holder and you submit your proxy, regardless of whether you abstain from voting on one or more matters, your shares will be counted as present at the Annual Meeting for the purpose of determining a quorum. If your shares are held in “street name,” your shares are counted as present for purposes of determining a quorum if you provide voting instructions to your broker, bank, trust or other nominee and such broker, bank, trust or other nominee submits a proxy covering your shares. In the absence of a quorum, the Annual Meeting may be adjourned, from time to time, by a majority vote of the shareholders present or represented, without any notice other than by announcement at the meeting, until a quorum shall attend.

Admission to the Annual Meeting is limited to shareholders and their duly appointed proxy holders as of the close of business on the Record Date. If your shares are held in “street name” and you plan to attend the Annual Meeting, you must present proof of your ownership of our Common Stock, such as a bank or brokerage account statement, as well as valid government-issued photo identification to be admitted to the Annual Meeting. Any holder of a proxy from a shareholder must present the Proxy Card, properly executed, and a copy of proof of ownership as well as valid government-issued photo identification.

We will be unable to admit anyone who does not present identification or refuses to comply with our rules of conduct for the Annual Meeting. These rules provide, among other things, that no cameras, recording equipment, electronic devices, large bags or packages will be permitted at the Annual Meeting. You are encouraged to submit aBLUE Proxy Card to have your shares voted regardless of whether or not you plan to attend the Annual Meeting.

Your vote is very important. Please submit your BLUE Proxy Card even if you plan to attend the Annual Meeting.

The process for voting your shares depends on how your Common Stock is held. Generally, you may hold Common Stock in your name as a “shareholder of record” or in an account with a broker, bank, trust or other nominee (i.e., in “street name”). If your shares are registered in your name, you may vote your shares in person at the Annual Meeting or by proxy whether or not you attend the Annual Meeting. You may vote using any of the following methods:

Even if you plan to attend the Annual Meeting, we recommend that you also submit your proxy or voting instructions by Internet, telephone, or mail so that your vote will be counted if you later decide not to attend the Annual Meeting. The Internet and telephone voting facilities will close at 11:59 p.m. ET for shareholders of record and for shares held beneficially in street name on , 2020. Shareholders who submit a proxy by Internet or telephone need not return a Proxy Card or the form forwarded by your broker, bank, trust or other holder of record by mail.

If you have any questions or require assistance in submitting a proxy for your shares, please call Morrow Sodali at (800) 662-5200 (toll free for shareholders) or (203) 658-9400 (call collect for banks, brokers, trustees or other nominees).

As a shareholder of record, if you submit a proxy, you may revoke that proxy at any time before it is voted at the Annual Meeting. Shareholders of record may revoke a proxy prior to the Annual Meeting by (i) delivering a written notice of revocation that is dated later than the date of your proxy to the attention of the Secretary at our offices at 19 South Second Street, Oakland, Maryland 21550-0009, (ii) signing and delivering a later-dated proxy over the Internet, by telephone or by mail, that we receive no later than or (iii) attending and voting in person at the Annual Meeting. Attendance at the Annual Meeting will not, by itself, revoke a proxy.

If your shares are held in the name of a broker, bank, trust or other nominee, you may change your voting instructions by following the instructions of your broker, bank, trust or other nominee. You may also vote in person at the Annual Meeting if you obtain a legal proxy from your broker, bank, trust or other nominee that holds your shares in street name.

If you have previously submitted a proxy card sent to you by Driver Management, you may change your vote by completing and returning the enclosedBLUE Proxy Card in the accompanying postage-paid envelope or by voting over the Internet or by telephone by following the instructions on yourBLUE Proxy Card. Submitting a proxy card sent to you by Driver Management will revoke votes you have previously made via the Corporation’sBLUE Proxy Card.

Has the Corporation received notice from one or more shareholders that they are intending to nominate director candidates or bring proposals at the Annual Meeting?

Yes. Based on its most recently available public filings, Driver Management has indicated that it beneficially owns an aggregate of 360,637 shares of our Common Stock (representing approximately 5.2% of our outstanding Common Stock), and has delivered notice to the Corporation of its intention to nominate three candidates to the Board for election as directors in opposition to the four nominees recommended by the Board. Driver Management is currently being investigated by the Maryland Commissioner for acquiring shares of the Corporation’s stock in violation of the Maryland Stock Acquisition Statute. The Maryland Stock Acquisition Statute requires a person who desires to acquire the stock of a Maryland bank or bank holding company to file an application with the Maryland Commissioner under certain circumstances and, if the Maryland Commissioner determines that such acquisition will constitute a “stock acquisition”, to obtain the Maryland Commissioner’s prior approval thereof. The Maryland Stock Acquisition Statute provides that stock acquired in violation of the statute cannot be voted for five years. If the Maryland Commissioner finds that Driver Management acquired shares of Common Stock, in violation of the Maryland Stock Acquisition Statute, then, as noted above, the Maryland Stock Acquisition Statute provides that Driver Management will be prohibited from voting those shares for five years, including at the Annual Meeting. The Bylaws permit a person to nominate director candidates only if that person is a shareholder who is entitled to vote for the election of directors. Consequently, if the Maryland Commissioner determines that Driver Management’s acquisition of its shares of Common Stock violated the Maryland Stock Acquisition Statute and Driver Management is therefore unable to vote its Common Stock for five years, then Driver Management would have failed to submit a nomination of director candidates for the election of directors in a manner consistent with the Bylaws, in which case Driver Management would not be entitled to nominate director candidates at the Annual Meeting.

What does it mean if I receive more than one notice from the Corporation or BLUE Proxy Card?

Because Driver Management has submitted the Driver Nominees to the Board in opposition to the slate proposed by our Board, we may conduct multiple mailings prior to the Annual Meeting to ensure shareholders have our latest proxy information and materials to vote. In that event, we will send you a newBLUE Proxy Card or voting instruction form with each mailing, regardless of whether you have previously voted. You may also receive more than one set of proxy materials, including multipleBLUE Proxy Cards, if you hold shares that are registered in more than one account—please vote theBLUEProxy Card for every account you own. The latest dated proxy you submit will be counted, andIF YOU WISH TO VOTE AS RECOMMENDED BY THE BOARD, THEN YOU SHOULD ONLY SUBMIT BLUE PROXY CARDS.

Driver Management has nominated a slate of three individuals for election as directors to the Board in opposition to the nominees proposed by our Board. We expect that you may receive proxy solicitation materials from Driver Management, including opposition proxy statements and proxy cards. You should know that Driver Management is currently being investigated by the Maryland Commissioner for acquiring shares of the Corporation’s stock in violation of the Maryland Stock Acquisition Statute. The Maryland Stock Acquisition Statute requires a person who desires to acquire the stock of a Maryland bank or bank holding company to file an application with the Maryland Commissioner under certain circumstances and, if the Maryland Commissioner determines that such acquisition will constitute a “stock acquisition”, to obtain the Maryland Commissioner’s prior approval thereof. The Maryland Stock Acquisition Statute provides that stock acquired in violation of the statute cannot be voted for five years. If the Maryland Commissioner finds that Driver Management acquired shares of Common Stock in violation of the Maryland Stock Acquisition Statute, then, as noted above, the Maryland Stock Acquisition Statute provides that Driver Management will be prohibited from voting those shares for five years, including at the Annual Meeting. The Bylaws permit a person to nominate director candidates only if that person is a shareholder who is entitled to vote for the election of directors. Consequently, if the Maryland Commissioner determines that Driver Management’s acquisition of its shares of Common Stock violated the Maryland Stock Acquisition Statute and Driver Management is therefore unable to vote its Common Stock for five years, then Driver Management would have failed to submit a nomination of director candidates for the election of directors in a manner consistent with the Bylaws, in which case Driver Management would not be entitled to nominate director candidates at the Annual Meeting.

The Board strongly and unanimously urges you NOT to sign or return any proxy cards or voting instruction forms that you may receive from Driver Management, including to vote “withhold” with respect to the Driver Nominees. We are not responsible for the accuracy of any information provided by or relating to Driver Management or the Driver Nominees contained in any proxy solicitation materials filed or disseminated by, or on behalf of, Driver Management or any other statements that Driver Management or its representatives have made or may otherwise make. If you have already voted using the proxy card provided by Driver Management, you have every right to change your vote by completing and returning the enclosedBLUE Proxy Card or by voting over the Internet or by telephone by following the instructions provided on the enclosedBLUE Proxy Card or voting instruction form. Only the latest proxy you submit will be counted. If you vote “withhold” on the Driver Nominees using the proxy card sent to you by Driver Management, your vote will not be counted as a vote for any of the director nominees recommended by our Board, but will result in the revocation of any previous vote you may have cast on theBLUE Proxy Card.If you wish to vote pursuant to the recommendation of our Board, you should disregard any proxy card that you receive other than the BLUE Proxy Card. If you have any questions or need assistance voting, please call Morrow Sodali at (800) 662-5200 (toll free for shareholders) or (203) 658-9400 (call collect for banks, brokers, trustees and other nominees).

Shareholders of record as of the close of business on , 2020, the Record Date, are entitled to one vote for each share of our Common Stock held on each matter to be voted upon at the Annual Meeting. All shares entitled to vote and represented by properly submitted proxies received before the polls are closed at the Annual Meeting, and not revoked or superseded, will be voted at the Annual Meeting in accordance with the instructions indicated on those proxies. Where a choice has been specified on theBLUE Proxy Card with respect to the proposals, the shares represented by theBLUE Proxy Card will be voted as you specify. If you return a validly executedBLUE Proxy Card without indicating how your shares should be voted on a matter and you do not revoke your proxy, your proxy will be voted: “FOR” the election of the four Board nominees set forth on theBLUEProxy Card (Proposal 1); “FOR” the non-binding, advisory resolution approving the compensation of the Corporation’s named executive officers (Proposal 2); and “FOR” the ratification of the appointment of Baker Tilly as our independent registered public accounting firm for the fiscal year ending December 31, 2020 (Proposal 3).

What happens if I do not specify how I want my shares voted? What is discretionary voting? What is a broker non-vote?

As a shareholder as of the close of business on the Record Date, if you properly complete, sign, date and return aBLUE Proxy Card or voting instruction form, then your shares of Common Stock will be voted as you specify. However, if you submit a signedBLUE Proxy Card or submit your proxy by telephone or Internet and do not specify how you want your shares voted, the persons named as proxies will vote your shares:

A “broker non-vote” occurs when the broker holding shares for a beneficial owner has not received voting instructions from the beneficial owner and does not have discretionary authority to vote the shares. If you own your shares in “street name” through a broker and do not provide voting instructions to your broker, then your broker will not have the authority to vote your shares on any proposal presented at the Annual Meeting unless it has discretionary authority with respect to that proposal. In that case, your shares will be considered to be broker non-votes and will not be voted on that proposal. Whether a broker has discretionary authority depends on your agreement with your broker and the rules of the various regional and national exchanges of which your nominee is a member (the “Broker Rules”). Accordingly, it is very important that you instruct your broker on how to vote shares that you hold in street name.

To the extent that Driver Management provides a proxy card to shareholders who own their shares in street name, the election of directors at the Annual Meeting is not considered a discretionary matter under the Broker Rules, which means that a broker that is subject to the Broker Rules will not have authority to vote shares held in street name. As a result, if you are a beneficial owner, then we encourage you to provide voting instructions to the broker that holds your shares by carefully following the instructions provided to you by that broker.

Abstentions will be counted as present at the Annual Meeting for the purpose of determining a quorum. Because each director nominee will require more “FOR” votes than the director nominee(s) who receive the least number of votes in order to be elected, “withhold” votes have no effect on the outcome of Proposal 1 and abstentions with respect to Proposals 2 and 3 will have no impact on the outcome of those proposals.

A broker non-vote occurs when the broker holding shares for a beneficial owner has not received voting instructions from the beneficial owner and does not have discretionary authority to vote the shares. If you own your shares in “street name” and do not provide voting instructions to your broker, then your shares will not be voted at the Annual Meeting on any proposal with respect to which your broker does not have discretionary authority. Whether a broker has discretionary authority depends on your agreement with that broker and any Broker Rules to which that broker is subject. The Broker Rules generally prohibit a broker from exercising discretionary voting authority (i.e., they cannot vote) on non-routine matters without specific instructions from their customers. Proposals are determined to be routine or non-routine matters based on the Broker Rules. However, in the case of meetings involving contested director elections, the Broker Rules generally prohibit a broker from exercising discretionary authority with respect to any proposals to be voted on at such meetings, whether routine or not. Because Driver Management has attempted to provide notice to the Corporation that it intends to nominate a competing slate of directors in opposition to the Board’s highly qualified director nominees, the Annual Meeting is expected to constitute a contested election. Accordingly, brokers that are subject to the Broker Rules generally will not be permitted to vote shares held by a beneficial owner at the Annual Meeting without instructions from that beneficial owner as to how to the shares are to be voted. Any shares held by such a broker who has not received instructions from the beneficial owner as to how such shares are to be voted will have no effect on the outcome of Proposals 1, 2 or 3, but the shares will be counted for establishing the presence of a quorum. We therefore encourage you to provide voting instructions on aBLUE Proxy Card or the voting instruction form provided by the broker that holds your shares, in each case by carefully following the instructions provided.

We do not expect that any other items of business will be presented for consideration at the Annual Meeting other than those described in this Proxy Statement. However, by completing, signing, dating and returning aBLUE Proxy Card or submitting your proxy or voting instructions over the Internet or by telephone, you will give to the persons named as proxies discretionary voting authority with respect to any matter that may properly come before the Annual Meeting, and of which we did not have notice at least by , 2020 and such persons named as proxies intend to vote on any such other matter in accordance with their best judgment.

All votes will be tabulated as required by Maryland law, the state of our incorporation, by the independent inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. Shares held by persons attending the Annual Meeting but not voting and shares represented by proxies that reflect abstentions as to one or more proposals and broker non-votes will be counted as present for purposes of determining a quorum.

The final voting results will be reported in a Current Report on Form 8-K, which will be filed with the SEC within four business days after the Annual Meeting. If our final voting results are not available within four business days after the Annual Meeting, we will file a Current Report on Form 8-K reporting the preliminary voting results and subsequently file the final voting results in an amendment to the Current Report on Form 8-K within four business days after the final voting results are known to us.

Election of Directors. If Driver Management is legally entitled to nominate the Driver Nominees, the vote by a plurality of the shares present in person (including by remote communication, if applicable) or represented by proxy at the Annual Meeting and entitled to vote thereon is required for the election of directors under Proposal 1 at the Annual Meeting. This means that, among the Board’s nominees and the Driver Nominees, the four nominees receiving the highest number of “FOR” votes of the shares entitled to be voted in the election of directors will be elected. You may vote “FOR ALL” Board nominees, “WITHHOLD ALL” as to all Board nominees, or “FOR ALL EXCEPT” to vote for Board nominees except the specific nominee from whom you “WITHHOLD” your vote. There is no “against” option.Shares voting “withhold” are counted for purposes of determining a quorum. However, if you withhold authority to vote with respect to the election of any or all of the four nominees, your shares will not be voted with respect to those nominees indicated. Therefore, “withhold” votes will not affect the outcome of the election of directors. Brokers and other nominees are generally prohibited from exercising discretionary authority to vote on the election of directors, and any shares held by such a nominee for which beneficial owners do not provide voting instructions will be considered “broker non-votes”. Broker non-votes and “withhold votes” will have no effect on the outcome of Proposal 1.Proxies may not be voted for more than four directors and shareholders cannot cumulate votes. If it is determined that Driver Management is not legally entitled to nominate the Driver Nominees, then the eligible director candidates will be elected by a majority of the votes cast in the election. In that case, a broker non-vote will have no impact on the vote, but a “withheld” vote will be treated as a vote against a director candidate.

Non-binding Resolution to Approve Compensation for Executive Officers. The approval of a non-binding, advisory resolution approving the compensation of the Corporation’s named executive officers requires the affirmative vote of the majority of votes cast at the Annual Meeting. You may vote “FOR,” “AGAINST” or “ABSTAIN.” Broker non-votes, if any, and abstention will not be treated as votes cast for approval of the compensation of the Corporation’s named executive officers, and therefore will have no effect on the results of the vote, although they will be considered present for the purposes of determining the presence of a quorum. While the vote on Proposal 2 is advisory, and will not be binding on the Corporation or our Board, the Board will review the results of the voting on this proposal and take it into consideration when making future decisions regarding executive compensation as we have done in this and previous years.

Ratification of Auditors. The ratification of the appointment of Baker Tilly requires the affirmative vote of the majority of votes cast at the Annual Meeting. You may vote “FOR,” “AGAINST” or “ABSTAIN.” Broker non-votes, if any, and abstentions will not be treated as votes cast for the appointment of Baker Tilly, and therefore will have no effect on the results of the vote, although they will be considered present for the purposes of determining the presence of a quorum.

The Corporation will bear the entire cost of solicitation of proxies, including preparation, assembly and mailing of this Proxy Statement, theBLUE Proxy Card, the Notice of Annual Meeting of Shareholders and any additional information furnished to shareholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding shares of our Common Stock in their names that are beneficially owned by others to forward to those beneficial owners. We may reimburse persons representing beneficial owners for their costs of forwarding the solicitation materials to the beneficial owners. Original solicitation of proxies may be supplemented by telephone, facsimile, electronic mail or personal solicitation by our directors, officers or staff members. Other than the persons described in this Proxy Statement, no general class of employee of the Corporation will be employed to solicit shareholders in connection with this proxy solicitation. However, in the course of their regular duties, employees may be asked to perform clerical or ministerial tasks in furtherance of this solicitation. No additional compensation will be paid to our directors, officers or staff members for such services. We have retained Morrow Sodali to act as a proxy solicitor in conjunction with the Annual Meeting. We have agreed to pay Morrow Sodali $[●], plus reasonable out-of-pocket expenses for proxy solicitation services. Morrow Sodali expects that approximately [●] of its employees will assist in the solicitation. The parties' engagement letter contains confidentiality, indemnification and other provisions that the Corporation believes are customary for this type of engagement.

Our aggregate expenses, including legal fees for attorneys, accountants, public relations and other advisors, printing, advertising, postage, transportation, litigation and other costs incidental to the solicitation, but excluding (i) costs normally expended for a solicitation for an election of directors in the absence of a proxy contest and (ii) costs represented by salaries and wages of Corporation employees and officers, are expected to be approximately $[●], of which $[●] has been incurred as of the date of this Proxy Statement.

Appendix A sets forth information relating to our directors, director nominees, as well as certain of our officers and employees who are considered “participants” in our solicitation under the rules of the SEC by reason of their position as directors and director nominees of the Corporation or because they may be soliciting proxies on our behalf.

None of the applicable Maryland law, our Certificate of Incorporation, as amended (the “Certificate of Incorporation”) nor our Bylaws, provide for appraisal or other similar rights for dissenting shareholders in connection with any of the proposals set forth in this Proxy Statement. Accordingly, you will have no right to dissent and obtain payment for your shares in connection with such proposals.

Morrow Sodali is assisting us with our effort to solicit proxies. If you have any questions concerning the business to be conducted at the Annual Meeting, would like additional copies of this Proxy Statement or need help submitting a proxy for your shares, please contact Morrow Sodali:

Shareholders Call Toll Free: (800) 662-5200
Banks, Brokers, Trustees and Other Nominees Call Collect: (203) 658-9400

OF THE BOARD’S NOMINEES ON PROPOSAL 1, “FOR” PROPOSAL 2 AND “FOR” PROPOSAL 3, USING THE ENCLOSED BLUE PROXY CARD OR VOTE INSTRUCTION FORM.

THE BOARD URGES YOU NOT TO SIGN, RETURN OR VOTE ANY PROXY CARD OR VOTE INSTRUCTION FORM SENT TO YOU BY DRIVER MANAGEMENT EVEN AS A PROTEST VOTE,

As early as May 2014, the Corporation first considered potential corporate governance enhancements to proactively refresh the Board, including the addition of Carissa Rodeheaver as Chairman of the Board and President and Chief Executive Officer of the Corporation in 2015, and creation of a Board Succession Plan by the Nominating and Governance Committee in July 2018.

On March 15, 2019, Driver Management sent a letter to Ms. Rodeheaver detailing its belief that the Corporation should immediately retain a qualified investment bank with experience in selling banking organizations and solicit acquisition proposals. The letter also stated Mr. Cooper’s desire to discuss this and other matters with the Board.

On each of March 26, March 28 and April 2, 2019, Driver Management filed notices of exempt solicitation (collectively, the “Notices of Exempt Solicitation”) in connection with the Corporation’s 2019 annual meeting of shareholders (the “2019 Annual Meeting”), urging shareholders to vote against the Corporation’s nominees for director and against approving the Corporation’s compensation to executive officers. The Notices of Exempt Solicitation also urged shareholders to demand the Corporation to immediately hire financial advisors and explore a sale.

On April 5, 2019, Mr. Cooper and Ms. Rodeheaver exchanged emails to schedule an in-person meeting, which took place on April 10, 2019 in New York, New York, between Mr. Cooper, Ms. Rodeheaver and Tonya Sturm, the Corporation’s Senior Vice President and Chief Financial Officer, Secretary and Treasurer. Following their meeting, Mr. Cooper sent Ms. Rodeheaver an email on April 13, 2019, in which he introduced Ms. Rodeheaver to an employment attorney and consultant to discuss the Corporation’s compensation and change of control arrangements.

On May 24, 2019, Mr. Cooper sent Ms. Rodeheaver an email explaining his reaction to the 2019 Annual Meeting, expressing his disagreement with the Corporation’s share repurchase program and urging the Corporation to evaluate strategic options.

On July 24, 2019, Mr. Cooper sent a letter to Ms. Rodeheaver detailing his belief that the Corporation could receive $26–$30 per share in a sale and should immediately run a sale process. The letter also stated Mr. Cooper’s desire to discuss this with the Board.

On August 20, 2019, Mr. Cooper sent Ms. Rodeheaver a copy of a presentation to be shared with the Board outlining Driver Management’s belief that the Corporation could be valued between $26–$33 per share in a sale and should immediately commence a sale process.

On September 2, 2019, after a review of Mr. Cooper’s presentation, Ms. Rodeheaver sent an email to Mr. Cooper explaining the Board’s belief that additional analyses would need to be conducted by the Corporation with respect to Mr. Cooper’s assertions.

On September 4, 2019, Mr. Cooper sent a response letter to Ms. Rodeheaver reiterating his belief that the Corporation’s shares were undervalued and a sale process would deliver uncaptured value to shareholders.

On September 5, 2019, Driver Management filed a Schedule 13D, disclosing a beneficial ownership of approximately 5.08% of the outstanding Common Stock. On that same day, the Corporation issued a public statement in response to Driver Management’s Schedule 13D, explaining that the Corporation’s management had promptly shared Driver Management’s view with the Board for consideration.

On September 6, 2019, Driver Management filed Amendment No. 1 to the Schedule 13D stating, among other things, that Driver Management had no intent to conduct a campaign to solicit proxies.

On September 9, 2019, Driver Management filed Amendment No. 2 to the Schedule 13D to attach an additional letter dated as of September 9, 2019 that Mr. Cooper sent to Ms. Rodeheaver. The letter contains further responses to the Corporation’s public statement issued on September 5, 2019, questioned what costly campaign could the Corporation possibly wish to avoid and reiterated Driver Management’s belief that the Corporation should start a sale process.

On September 13, 2019, Mr. Cooper sent another letter to Ms. Rodeheaver repeating his criticisms of the Corporation’s leadership, which was filed as an exhibit to Amendment No. 3 to the Schedule 13D on September 13, 2019.

On September 16, 2019, the Corporation issued a public statement in response to Driver Management’s Amendment No. 3 to the Schedule 13D, expressing disappointment in Driver Management’s failure to engage constructively with the Corporation and detailing both the Board’s and management team’s continued efforts to engage with Driver Management.

On September 26, 2019, Driver Management filed Amendment No. 4 to the Schedule 13D with an investor presentation and attached a press release, each again demanding the Corporation start a sale process.

On October 2, 2019, Mr. Cooper sent a letter to John McCullough, the Corporation’s independent lead director (the “Lead Director”), requesting that the Board appoint a special committee of independent directors.

On October 3, 2019, Mr. Cooper delivered a demand letter to Ms. Sturm, demanding to inspect, among other things, the Corporation’s shareholder list materials.

On October 10, 2019, Ms. Sturm sent a response letter to Mr. Cooper. The response letter stated that the Corporation would provide Driver Management with the records to which it is legally entitled once it makes a proper demand under Maryland law that applies to all shareholders and governs the demand for shareholder list materials made by Mr. Cooper.

On October 11, 2019, Mr. McCullough sent a response letter to Mr. Cooper regarding the potential nomination of directors and inviting Driver Management to explore a cooperation framework with the Corporation.

On October 16, 2019, the Corporation’s counsel met telephonically with Driver Management’s counsel to introduce the possibility of a cooperation framework. During these discussions, the Corporation’s counsel indicated that the Corporation would cooperate with Driver Management to identify director candidates to enhance the composition, skillset and experience of the Board as part of the Corporation’s ongoing refreshment process. Driver Management’s counsel stated that Driver Management was not willing to entertain a cooperation framework without a commitment by the Board to initiate a formal sale process as part of such framework.

On October 24, 2019, Mr. Cooper sent a letter to Ms. Sturm, and on October 29, 2019, Mr. Cooper sent another letter to Ms. Rodeheaver. Each letter reiterated similar criticisms of the Corporation and were filed as exhibits to Amendment No. 7 to the Schedule 13D on October 29, 2019.

On October 28, 2019, Mr. Cooper sent an email to Mr. McCullough that stated that Mr. Cooper would not consider a discussion with the Corporation regarding a cooperation framework unless the Board first committed to initiating a public sale process.

On October 30, 2019, Driver Management issued a press release and a related presentation regarding Driver Management’s call for the Corporation to explore a sale process. The press release and the presentation were filed as exhibits to Amendment No. 8 to the Schedule 13D on October 31, 2019.

Also on October 30, 2019, Mr. McCullough sent a response letter to Mr. Cooper’s October 28, 2019 email expressing disappointment that Driver Management refused to provide input on the Board absent an announcement of a public sale process, and the Corporation’s continued desire to establish a cooperation framework that would allow the Corporation and Driver Management to work together constructively.

On October 31, 2019, Mr. Cooper provided Mr. McCullough with a list of the individuals that Driver Management intends to nominate for election to the Board at the Annual Meeting, despite the fact that he had previously publicly stated he had no intention to conduct a campaign to solicit votes.

On November 6, 2019, Driver Management sent a letter to Mr. McCullough reiterating Driver Management’s criticism of the Corporation’s corporate governance. On that same day, Mr. McCullough sent a response letter to Mr. Cooper restating the Corporation’s desire to explore a possible cooperation framework to identify potential director candidates, and offering to interview Driver Management’s candidates once its candidates have had an opportunity to review, complete and deliver a D&O questionnaire as required by the Bylaws.

On November 8, 2019, Johnny Guerry, a shareholder of the Corporation, sent a letter to the Board, demanding that the Corporation immediately explore a sale process.

On November 13, 2019, Ms. Rodeheaver sent an email to Mr. Guerry, acknowledging the letter he recently issued as a press release and offering to schedule an introductory phone call with him to discuss his views. Mr. Guerry subsequently agreed to have a call with Mses. Rodeheaver and Sturm on November 26, 2019.

On November 19, 2019, Driver Management announced its intent to nominate directors to the Board at the Annual Meeting via a press release and launched a website related to its campaign. On that same day, the Corporation issued a press release acknowledging that, although a formal notice of nominations satisfying the requirements of the Bylaws had not yet been received, Driver Management had publicly announced its intent to nominate directors at the Annual Meeting.

On November 20, 2019, the Board authorized an increase in the number of shares that may be purchased under the Corporation’s share repurchase program (the “Repurchase Program”) from its initial announcement on April 30, 2019, and extended the term of the Repurchase Program through November 20, 2020.

On November 26, 2019, Mses. Rodeheaver and Sturm called Mr. Guerry for their scheduled introductory call. Mr. Guerry did not answer Mses. Rodeheaver’s and Sturm’s call and never responded to the message they left for him to reschedule the introductory meeting.

On December 3, 2019, Driver Management sent a letter to Mr. McCullough, criticizing, among other things, the Corporation’s decision to increase the Repurchase Program.

Also on December 3, 2019, Driver Management delivered a nomination notice to the Corporation regarding it intent to nominate Messrs. Driscoll and Elzen and Ms. Narrell-Mead to the Board at the Annual Meeting.

On December 4, 2019, Driver Management delivered a letter to its fund investors which provided a link to a podcast interview that Mr. Cooper gave and that was first published on November 27, 2019. The podcast covered Mr. Cooper’s general views on state regulation of soliciting proxies in the banking sector and specifically, his ongoing campaign with the Corporation.

On Friday, December 13, 2019, Driver Management sent a letter to the independent directors of the Board calling for a plurality voting standard in contested elections and a sale of the Corporation, and demanded that the Board respond to these demands by Monday, December 16, 2019. Between December 13, 2019 and December 15, 2019, the Corporation’s counsel and counsel for Driver Management discussed the Board’s proposal to (a) implement without any delay a plurality voting standard policy for the Annual Meeting in the event it was contested; and (b) formally amend the Corporation’s organizational documents to provide for a permanent plurality voting standard carveout for contested director elections as part of the suite of governance enhancements already being considered for implementation in connection with the Annual Meeting. During the course of these discussions, the Corporation’s counsel explained that the Board intended to address the lack of a plurality carveout in the Bylaws after the Board’s Nominating and Corporate Governance Committee had conducted a fulsome, holistic review of the Bylaws, with an eye toward addressing changing shareholder expectations and evolving corporate governance practices. However, while this review was ongoing, the Board would convene no later than December 16, 2019 for the purpose of voting on the approval of a plurality carveout with respect to the majority voting standard in the event there is a contested election at the Annual Meeting. Counsel for Driver Management stated in an email that it would discuss with its client, but that this “seem[ed] like a constructive approach given the timeframe” and on December 16, 2019, the Board adopted a plurality voting standard policy with respect to the Annual Meeting in the event a contested election were to take place at such meeting. The Board determined it would wait until the above-mentioned review was completed to make any formal amendments to the Bylaws.

On December 17, 2019, Driver Management delivered a letter to the independent directors of the Board reiterating criticisms of the Corporation and the Board. The letter was filed as an exhibit to Amendment No. 12 to the Schedule 13D.

On January 9, 2020, Mr. Cooper delivered a demand letter to certain members of the Board, demanding to inspect, among other things, the Corporation’s shareholder list materials that Driver Management previously sought in its demand letter dated October 3, 2019.

On January 15, 2020, Driver Management delivered a letter via email to the Corporation’s shareholders, which reiterated Driver Management’s criticisms of Ms. Rodeheaver.

On January 17, 2020, Ms. Sturm sent a response letter to Mr. Cooper again confirming that the Corporation would provide Driver Management with the Corporation’s shareholder list materials to which it is legally entitled once Driver Management makes a proper demand under the provisions of Maryland law governing Driver Management’s demand that apply equally to all shareholders, as set forth in Ms. Sturm’s letter dated October 10, 2019.

On January 21, 2020, Driver Management published a tweet incorrectly stating that Mr. Cooper had not heard back from the Corporation regarding Driver Management’s January 9, 2020 books and records demand, despite the fact that the Corporation had responded to Mr. Cooper. Subsequently, on January 27, 2020, counsel for the Corporation exchanged emails with counsel for Driver Management about the misleading tweet. The tweet was later removed and a corrective tweet was published on January 28, 2020.

Between January 27, 2020 and February 5, 2020, the Corporation’s counsel and Driver Management’s counsel coordinated an in-person meeting between Mr. McCullough, Ms. Kathryn Burkey, a current member of the Board, Ms. Rodeheaver, Ms. Sturm and Mr. Cooper scheduled for February 6, 2020. To accommodate Mr. Cooper’s preferences, the Corporation agreed to travel to meet at Driver Management’s counsel’s offices with Driver Management’s counsel present, and agreed to set aside time during the meeting for Mr. Cooper to meet with the independent directors without management present.

On January 27, 2020, counsel for Driver Management sent an email to counsel for the Corporation regarding the in-person meeting, stating that “[Ms. Rodeheaver’s] presence is not a non-starter, but rather a suggestion for a more productive assembly.” Once the Corporation’s counsel informed Driver Management’s counsel that Mses. Rodeheaver and Sturm would be present for a portion of the meeting, Driver Management’s counsel provided the Corporation’s counsel one day’s notice that the meeting would no longer take place, simply stating ”[m]y client says the meeting is off.”

On February 5, 2020, Driver Management delivered a letter to the Corporation’s shareholders via email containing criticisms about Ms. Burkey.

Also on February 5, 2020, the Corporation issued a press release in which the Corporation included a copy of Mr. McCullough’s letter to Mr. Cooper. Mr. McCullough described the Corporation’s numerous attempts to engage in a constructive dialogue with Driver Management and expressed disappointment that these attempts were not reciprocated.

On February 7, 2020, Driver Management issued a press release and letter to Mr. McCullough in response to Mr. McCullough’s February 6, 2020 letter. Driver Management reiterated similar criticisms of the Corporation, its management and the Board.

On February 10, 2020, Mr. Cooper sent a response letter to Ms. Sturm’s January 17, 2020 letter requesting the information relating to the shareholders of the Corporation that Driver Management previously sought in its letters dated October 3, 2019 and January 9, 2020.

On February 11, 2020, the Corporation issued a press release in which the Corporation announced that the Board had completed three strategic review processes with two independent financial advisors over the past five months and confirmed the Corporation will continue to execute its current strategy.

Also on February 11, 2020, Driver Management delivered a letter to the Corporation’s shareholders via email criticizing Mr. Robert Kurtz and Mr. Boal, two members of the Board.

Between January 16, 2020 and February 14, 2020, Driver Management published numerous tweets about the Corporation, certain Board members and the rejection of Driver Management’s non-compliant shareholder list demand.

On February 19, 2020, the Corporation’s counsel was interviewed in person by two representatives from the Maryland Commissioner’s enforcement division to discuss whether Driver Management’s acquisitions of Common Stock violated the Maryland Stock Acquisition Statute. The Maryland Stock Acquisition Statute provides that any person who desires to make a “stock acquisition” shall file an application with the Maryland Commissioner at least 60 days prior to such acquisition. A stock acquisition is defined to include, among other things, any acquisition of voting stock of a commercial bank or bank holding company in Maryland if the acquisition will affect the power to direct or to cause the direction of the management or policy of any banking institution or bank holding company. The Maryland Stock Acquisition Statute provides that any doubt as to whether an acquisition of stock of a Maryland bank or bank holding company will affect the power to direct or cause the direction of the management or policy of such banking institution shall be resolved in favor of filing an application with the Maryland Commissioner. Importantly, the Maryland Stock Acquisition Statute provides that stock acquired in violation of the Maryland Stock Acquisition Statute cannot be voted for five years.

Also on February 19, 2020, after preliminary discussions between the Corporation’s and Driver Management’s respective counsel, the Corporation received an initial proposed cooperation framework from Driver Management’s counsel, notwithstanding Driver Management’s previous refusal to consider a cooperation framework unless the Board first committed to initiating a public sale process. Notably, Driver Management’s proposed framework did not include a sale process announcement, which served as the barrier to settlement discussions five months prior. The proposed framework did, however, contain a provision pursuant to which Driver Management sought a covenant from the Corporation that it would not, among other things, take any adverse position with respect to Driver Management in connection with any regulatory proceedings (the “Regulatory Covenant”).

On February 28, 2020, counsel for each of the Corporation and Driver Management met telephonically to further discuss the terms of a possible cooperation framework. During such discussions, counsel for Driver Management communicated expressly that Driver Management was not under investigation or review by any regulatory agency or legal authority. At such time, however, as disclosed for the first time in its preliminary proxy statement on March 26, 2020, Driver Management was already, in fact, subject to an investigation by the Maryland Commissioner.

Also on February 28, 2020, in light of declining global markets, including the market for Common Stock, Driver Management issued a letter to Ms. Rodeheaver, requesting that the Corporation buy back some of its Common Stock under the Repurchase Program, a position contrary to Mr. Cooper’s May 24, 2019 criticisms of the Repurchase Program.

On March 3, 2020, counsel for the Corporation sent a revised term sheet to counsel to Driver Management, which, among other things, contemplated that Driver Management would make a representation to the Corporation that it was not being investigated by any regulatory authority (the “Regulatory Representation”).

On March 6, 2020, counsel for Driver Management sent a revised term sheet to the Corporation’s counsel from which both the Regulatory Covenant and the Regulatory Representation had been deleted.

On March 9, 2020, counsel for each of the Corporation and Driver Management again met telephonically to discuss the terms of a possible cooperation framework. During that meeting, counsel for Driver Management expressed to the Corporation’s counsel that it removed the Regulatory Representation from the draft term sheet because it did not find the Regulatory Representation to be relevant.

On March 10, 2020, counsel for Driver Management sent an email to the Corporation’s counsel, stating that it believed Driver Management could make the Regulatory Representation. The Corporation later realized that this could not have been possible, because Driver Management was already subject to a regulatory investigation. Despite several direct and repeated requests by the Corporation’s counsel about whether Driver Management was under regulatory investigation, at no point in time prior to Driver Management’s filing of its preliminary proxy statement did Driver Management or its counsel inform the Corporation that Driver Management was in fact under investigation.

On March 13, 2020, Mr. McCullough and Ms. Burkey met telephonically with Mr. Cooper to discuss the terms of a possible cooperation agreement, including, but not limited to, Mr. Cooper’s initial request to have $750,000 in proxy solicitation expenses reimbursed by the Corporation. These expenses include those incurred by Driver Management since the Corporation first introduced the idea of a possible cooperation framework in October 2019.

On March 14, 2020, Mr. McCullough and Ms. Burkey met telephonically with Mr. Cooper per his request for a follow-up discussion.

On March 17, 2020, Driver Management issued a letter to Mr. McCullough criticizing the Corporation’s recently-announced changes in executive compensation.

On March 24, 2020, Mr. Cooper confirmed to the Corporation that he would meet telephonically to discuss his concerns, limited to the terms of the Corporation’s final proposal for a cooperation framework sent on March 20, 2020, with Mr. McCullough and Ms. Burkey, and would send an agenda for the call.

On March 25, 2020, Mr. McCullough and Ms. Burkey met telephonically with Mr. Cooper per his request for a follow-up discussion. Despite Mr. Cooper’s confirmation the prior day that he would provide an agenda for the call, no such agenda was sent to the Corporation.

Also on March 25, 2020, Driver Management sent the Corporation a letter, announcing that it decided to suspend discussions of a possible cooperation agreement.

On March 26, 2020, Driver Management filed a preliminary proxy statement with the SEC. Driver Management disclosed in its preliminary proxy statement, for the first time, that Driver Management was being investigated by the Maryland Commissioner for possible violations of the Maryland Stock Acquisition Statute. Driver Management did not disclose this fact, or the possibility that a violation of the Maryland Stock Acquisition Statute would prohibit Driver Management from voting its shares of Common Stock at the Annual Meeting, in any of the soliciting materials that it filed with the SEC on and after January 21, 2020 (the date, according to Driver Management’s preliminary proxy statement, of the Maryland Commissioner’s initial investigatory letter to Driver Management). It likewise has not amended its Schedule 13D, or included such information in any of the previous 15 amendments to its Schedule 13D, to disclose this material and necessary information.

Also on March 26, 2020, the Corporation issued a press release, announcing Driver Management’s suspension of discussions regarding a possible cooperation agreement. Also on March 26, 2020, the Corporation issued an additional press release noting that the Corporation has been honored for its female representation on the Board.

On March 27, 2020, the Corporation made several announcements, including, among other things, that (i) the Board declared a cash dividend of $.13 per share, payable on May 1, 2020 to holders of Common Stock as of April 17, 2020, (ii) Robert Kurtz intends to retire from service on the Board in June 2020 as part of the Board’s ongoing refreshment strategy, and (iii) the Board amended the Bylaws to codify the Board’s mandatory director policy and adopted a Lead Director Policy to clarify the role and responsibilities of the Corporation’s Lead Director.

On March 30, 2020, the Corporation filed a preliminary proxy statement with the SEC.

On April 2, 2020, the Corporation filed an Amendment No. 1 to its preliminary proxy statement with the SEC.

On April 3, 2020, Driver Management filed an Amendment No. 1 to its preliminary proxy statement with the SEC.

On April 7, 2020, the Corporation filed an Amendment No. 2 to its preliminary proxy statement with the SEC.

OUR BOARD STRONGLY AND UNANIMOUSLY URGES YOU NOT TO SIGN OR RETURN ANY PROXY CARD OR VOTING INSTRUCTION FORM THAT YOU MAY RECEIVE FROM DRIVER MANAGEMENT, EVEN TO VOTE “WITHHOLD” WITH RESPECT TO THE ADDITIONAL DRIVER NOMINEES, AS DOING SO WILL CANCEL ANY PROXY YOU MAY HAVE PREVIOUSLY SUBMITTED TO HAVE YOUR SHARES VOTED FOR THE BOARD’S PROPOSED SLATE ON ABLUE PROXY CARD, AS ONLY YOUR LATEST PROXY CARD OR VOTING INSTRUCTION FORM WILL BE COUNTED.

The Corporation’s directors, director nominees and certain of its executive officers, will be deemed to be participants in the solicitation of proxies from the Corporation's shareholders in connection with the Annual Meeting. Information regarding these directors, director nominees and executive officers, including their direct and indirect interests, by securities holdings or otherwise, of the Corporation’s directors, director nominees and executive officers in the Corporation’s securities, is set forth in Appendix A to this Proxy Statement.

Shareholders of record as of the ~~close of business on February 27, 2017 (the “Record Date”)~~Record Date of issued and outstanding shares of ~~the Corporation’s common stock, par value $.01 per share (“~~Common ~~Stock”),~~Stock are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, ~~6,269,004~~ shares of the Common Stock were issued and ~~outstanding.~~outstanding, but the Corporation believes that Driver Management is prohibited from voting 365,212 shares of Common Stock at the Annual Meeting. Each share is entitled to one vote on each matter submitted to shareholders.

If you complete, sign and date the enclosedBLUE Proxy Card and return it before the Annual Meeting, the persons named will vote your shares as you specify in the proxy. If you complete, sign, date and return yourBLUE Proxy Card but do not indicate how you wish your shares voted, they will be voted in accordance with the Board’s recommendations. If you do not return a signed proxy, or submit your vote via Internet or by phone, then your shares will not be voted unless you attend the Annual Meeting and vote in person.

The presence in person or by proxy of ~~shareholders entitled to cast~~holders of record of a majority of ~~all votes~~the shares of issued and outstanding Common Stock entitled to ~~be cast~~vote at the Annual Meeting ~~shall constitute~~constitutes a quorum. ~~Withheld~~Withhold votes (in the case of the election of directors), abstentions and broker non-votes will all be counted for purposes of determining whether a quorum is present.

~~Directors~~Except in the case of a contested election, the Bylaws provide that directors are elected by the affirmative vote of a majority of all shares of Common Stock voted at the Annual ~~Meeting. Accordingly,~~Meeting In the ~~withholding~~case of a ~~vote~~contested election, the Bylaws provide that directors shall be elected by a plurality vote. A contested election is one in which there are more director nominees than there are directorships up for election. Accordingly, because Driver Management has submitted a ~~director nominee, as described~~nomination notice regarding its intent to nominate three individuals in ~~Proposal 1, will constitute a vote against that nominee, but a broker non-vote with respect~~addition to the four nominees proposed by the Board, and assuming that Driver Management is permitted by Maryland law to vote its shares of Common Stock at the Annual Meeting, the election will be contested and directors will be elected by a plurality of votes cast in the election. If Driver Management is prohibited from voting its shares of Common Stock, then directors will be elected by a majority of the votes cast in the election. In either case, broker non-votes and “withheld” votes will have no ~~impact~~effect on the outcome of ~~that vote.~~ Proposal 1.

The adoption of the non-binding advisory resolution approving the compensation paid to the Corporation’s named executive officers for ~~2016,~~2019, as described in Proposal 2, and the ratification of the appointment of the Corporation’s independent registered public accounting firm, as described in Proposal 3, each require the affirmative vote of a majority of ~~all shares of Common Stock voted~~votes cast at the Annual Meeting. Accordingly, an abstention or a broker non-vote with respect to Proposal 2 orwill have no impact on the outcome. Abstentions and broker non-votes with respect to Proposal 3 will have no impact on the ~~outcome of those proposals. Except in cases of certain extraordinary~~outcome. If other matters ~~for which the Corporation’s governing instruments or applicable law require a different proportion, the affirmative vote of a majority of all shares of Common Stock voted at~~should properly come before the Annual Meeting ~~is sufficient to approve~~or any ~~motion that comes before~~adjournment or postponement thereof, persons named in the ~~meeting pursuant to Proposal 4, as described in this Proxy Statement. Abstentions and broker non-votes~~enclosed proxy or their substitutes will vote with respect to ~~any motion that comes before the meeting pursuant to Proposal 4 (other than certain extraordinary~~such matters ~~as discussed above) will have no impact on the outcome of the vote on such motion.~~in accordance with their best judgment.

All properly executed ~~Proxies~~BLUE Proxy Cards received pursuant to this solicitation will be voted as directed by the shareholders in their ~~Proxies.~~BLUE Proxy Cards. If no direction is given in ~~your~~theBLUE Proxy Card, then, subject to the procedures governing broker non-votes (see “Methods of Voting” below), your shares will be voted ~~FOR~~“FOR” each of the nominees named in Proposal 1, ~~FOR~~“FOR” adoption of the non-binding advisory resolution approving the compensation paid to the Corporation’s named executive officers for ~~2015~~2019 as described in Proposal 2, ~~FOR~~and “FOR” ratification of the appointment of the Corporation’s independent registered public accounting firm named in Proposal ~~3, and in the discretion of the proxies as to any other matters that may properly come before the meeting, as described in Proposal 4.~~3.

Proxies may be revoked at any time before a vote is taken or the authority granted is otherwise exercised. Revocation may be accomplished by: (i) the execution of a later dated ~~Proxy;~~Proxy Card; (ii) the execution of a later casted Internet or telephone vote with regard to the same shares; (iii) giving written notice to Tonya K. Sturm, Secretary, First United Corporation, 19 S.South Second Street, Oakland, Maryland 21550-0009; or (iv) giving written notice to the Secretary in person at the ~~2017~~ Annual Meeting. The Internet and telephone voting facilities will close at 11:59 p.m. ET for shareholders of record and for shares held beneficially in street name on , 2020. Any shareholder who attends the ~~2017~~ Annual Meeting and revokes his/her proxy may vote in person. However, attendance by a shareholder at the ~~2017~~ Annual Meeting alone will not have the effect of revoking that shareholder’s validly executed ~~Proxy.~~proxy.

Shareholders may vote on matters that are properly presented at the ~~2017~~ Annual Meeting in four ways:

The Corporation is offering registered shareholders the opportunity to vote their shares electronically through the Internet or by telephone, in addition to following the traditional method of completing a paperBLUE Proxy Card and returning it by mail. Shareholders may vote by telephone or via the Internet by following the procedures described on theBLUE Proxy Card. To vote via telephone or the Internet, please have theBLUE Proxy Card in hand, and call the number or go to the website listed on theBLUEProxy Card and follow the instructions. The telephone and Internet voting procedures are designed to authenticate shareholders’ identities, to allow shareholders to give their voting instructions, and to confirm that shareholders’ instructions have been recorded properly. Shareholders voting through the Internet should understand that they may bear certain costs associated with Internet access, such as usage charges from their Internet service providers.

Please note that if you hold your shares in a stock brokerage account, ~~or if your shares are held by a bank or other nominee (that is, in street name),~~ your broker ~~bank or other nominee will~~may not be able to vote your shares of Common Stock ~~(a “broker non-vote”)~~on Proposals 1, 2 or 3 unless you provide voting instructions to your ~~broker, bank or other nominee. You should~~broker. Accordingly, it is very important that you instruct your broker ~~bank or other nominee~~ to vote your shares by following the instructions provided by ~~the broker, bank or~~that nominee when it sends this ~~proxy statement~~Proxy Statement to you. You may not vote shares held in street name by returning a ~~proxy card~~BLUE Proxy Card directly to the Corporation or by voting in person at ~~your annual meeting~~the Annual Meeting unless you provide a “legal proxy”, which you must obtain from your bank, broker, trust or other nominee.

~~IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 18, 2017~~

This Proxy Statement, the accompanying Proxy Card, and the Corporation’s Annual Report to Shareholders (including its Annual Report on Form 10-K for the year ended December 31, 2016) are available at http://www.edocumentview.com/FUNC. Information on this website, other than this Proxy Statement, is not a part of this Proxy Statement.

The following table sets forth information as of the ~~Record Date~~March 27, 2020 relating to the beneficial ownership of the Common Stock by (i) each person or group known by the Corporation to beneficially own more than five percent ~~(5%)~~ of the outstanding shares of Common Stock; (ii) each of the Corporation’s ~~Directors, Director~~directors, director nominees and named executive officers (as defined below under ~~“REMUNERATION OF EXECUTIVE OFFICERS”~~“Remuneration of Executive Officers”); and (iii) all ~~Directors, Director~~directors, director nominees and executive officers of the Corporation as a group. Generally, a person “beneficially owns” shares if he or she has, or shares with others, the right to vote those shares or to invest (or dispose of) those shares, or if he or she has the right to acquire such voting or investment rights, within 60 days of the Record Date (such as by exercising stock options or similar rights). The percentages shown for ~~2017~~2020 were calculated based on ~~6,269,004~~6,966,898 issued and outstanding shares of Common Stock, plus, for each named person, any shares that such person may acquire within 60 days of the Record Date. Except as otherwise noted, the address of each person named below is the address of the Corporation. So that shareholders can see how beneficial ownership has changed, the table also provides beneficial ownership as of February ~~26, 2016,~~28, 2019, which was the record date for the ~~2016 annual meeting of shareholders,~~2019 Annual Meeting, and was taken from the proxy statement for that meeting.

The number of ~~Directors~~directors who shall serve on the Board is set at ~~12,~~eleven members, and ~~Directors~~directors are divided into three classes, as nearly equal in number as possible, with respect to the time for which the ~~Directors~~directors may hold office. ~~Except for Preferred Stock Directors (as defined below), each Director~~Each director is elected to hold office for a term of three years, and the terms of one class of ~~Directors~~directors expire each year. The terms of Class I Directors expire this year, the terms of Class II Directors expire in ~~2018,~~2021, and the terms of Class III Directors expire in ~~2019.~~2022. In all cases, ~~Directors serve~~each director serves until ~~their successors are~~his or her successor is duly elected and ~~qualify.~~qualifies.

At this year’s Annual Meeting, ~~shareholders~~the Board will ~~be asked~~ask shareholders to vote on the election of John F. Barr, Brian R. Boal, John W. McCullough and Marisa A. Shockley to serve as Class I Directors until the ~~2020 annual meeting of shareholders~~2023 Annual Meeting and until their successors are duly elected and qualify. Each of the foregoing was elected by shareholders at the ~~2014 annual meeting of shareholders~~2017 Annual Meeting and is standing for re-election. In the event a Board nominee declines or is unable to serve as a ~~Director,~~director, which is not anticipated, the proxies will vote in their discretion with respect to a substitute nominee named by the ~~Board.~~Board, or the Board will reduce the total size of the Board, in its discretion. Proxies cannot be voted for a greater number of persons than the four ~~(4)~~ nominees named in this Proxy Statement and on theBLUE Proxy ~~card.~~

~~The holders of shares of the Corporation’s Fixed Rate Series A Preferred Stock, are entitled, if declared by the Corporation’s Board of Directors, to quarterly cash dividends on each February 15~~^th~~, May 15~~^th~~, August 15~~^th~~, and November 15~~^th. Although the Board is not required to declare such dividends, the terms of the Series A Preferred Stock provide that the number of Directors who shall serve on the Board will be automatically increased by two if dividends have not been paid for an aggregate of six quarterly dividend periods or more, whether or not consecutive. Thereafter, holders of the Series A Preferred Stock, together with holders of any outstanding stock having voting rights similar to the Series A Preferred Stock, voting as a single class, will be entitled to fill the vacancies created by the automatic increase by electing up to two additional Directors (the “Preferred Stock Directors”) at the next annual meeting (or at a special meeting called for the purpose of electing the Preferred Stock Directors prior to the next annual meeting) and at each subsequent annual meeting until all accrued and unpaid dividends for all past dividend periods have been paid in full (at which point the terms of the Preferred Stock Directors will terminate and the number of Directorships will be automatically reduced by two).Card.

Information about the principal occupations, business experience and qualifications of these nominees is provided below under the heading “QUALIFICATIONS OF DIRECTOR NOMINEES AND ~~CONTINUING~~CURRENT DIRECTORS”.

The Board of Directors unanimously recommends that shareholders vote “FOR” each of the ~~Director~~director nominees named above.

The following tables identify each ~~Director~~director of the Corporation whose term does not expire in ~~2017.~~2020. Information about the principal occupations, business experience and qualifications of these continuing ~~Directors~~directors is provided below under the heading “QUALIFICATIONS OF DIRECTOR NOMINEES AND ~~CONTINUING~~CURRENT DIRECTORS”.

In addition to bringing extensive knowledge of the communities served by the Corporation through their involvement with their communities, as business partners and volunteers, the Nominating and Governance Committee (the “Nominating Committee”) believes that all ~~Director~~director nominees and continuing ~~Directors possesses~~directors possess a diverse balance of skills, business experience and expertise necessary to provide leadership to the Corporation. The following discussion sets forth the specific experience, qualifications, other attributes and skills of each ~~Director~~director nominee and continuing ~~Director~~director that led the Nominating Committee to determine that such person should serve on the Board in light of ~~Directors.~~the Corporation’s business and structure. Each of the director nominees has consented to (i) serve as a nominee, (ii) serve as a director if elected, and (iii) to being named as a nominee in this Proxy Statement. All current ~~Directors~~directors also serve on the board of directors of First United Bank & Trust (the “Bank”), the Corporation’s wholly-owned subsidiary.

~~John F. Barr~~possesses board of director experience from his service of five years as a member of the Corporation’s Advisory Council before being elected to the Board in 2014. Mr. Barr has a vast amount of business experience as the President and sole stockholder of Ellsworth Electric, Inc. and Ellsworth Electric of PA, Inc., which provide comprehensive electrical contractor and insulation servicesDirector Nominees for residential, industrial and commercial customers throughout Maryland, Pennsylvania, Virginia, West Virginia and Delaware. He is very active in the Washington County, Maryland community, serving as a member of the Washington County Maryland Board of County Commissioners, member of the Maryland Association of Counties, being the immediate past president; serves on ten county boards as County Commissioner Representative and is a member of the Washington County Economic Development Council.Re-Election

~~Brian R. Boal~~served as an Advisory Council member for the Corporation for 4 years before his election to the Board in 2014. He has a vast amount of accounting and business experience through his education, his certification as a Certified Public Accountant, and his ownership and operation for the past 15 years of Boal and Associates, PC,~~Certified Public Accountants~~. Mr. Boal serves as a member of the American Institute of Certified Public Accountants and the Maryland Association of Certified Public Accountants. He serves as the Treasurer of many local organizations in his community of Garrett County.

~~M. Kathryn Burkey~~ possesses substantial accounting and business experience gained through her education, her certification as a Certified Public Accountant, and her ownership and operation for the past 28 years of M. Kathryn Burkey, CPA, an accounting firm. She has gained director experience through her service as past Chairman of the Board of Western Maryland Health System, where she also served on its Compensation Committee, Audit Committee, and Finance Committee, and through her service as a Director of the Corporation and the Bank since 2005. She is also the past president of Maryland Association of Certified Public Accountants.

John F. Barr

Age 66

Director Since: May 2014

Independent

Committees: Asset and Liability Management, Strategic Planning

Skills and Qualifications: extensive local and state civic expertise, business management, commercial and industrial knowledge, risk management, and strong knowledge of Washington County and Maryland markets.

Mr. Barr previously served as a member of the Corporation’s Advisory Council for five years prior to his election to the Board. Mr. Barr brings valuable business experience as the President and sole shareholder of Ellsworth Electric, Inc., which provides comprehensive electrical contractor and insulation services for residential, industrial and commercial customers throughout Maryland, Pennsylvania, Virginia, and West Virginia. Barr has served as President since 1991. He is very active in the Washington County, Maryland community. He is a former three-term Washington County Commissioner. He also served on the Maryland Association of Counties from 2010 to 2019, and as a member of their board of directors from 2014 to 2019, where he served as President in 2016. Mr. Barr is currently evaluating other community involvement having just stepped out of the political realm.

~~Robert W. Kurtz~~ has 37 years of banking experience through his service as past President, Chief Risk Officer, and CFO of the Corporation and its affiliates, as well as through his service as a Director of the Corporation and the Bank since 1990.Continuing Directors

~~John W. McCullough~~, a retired partner of Ernst & Young, LLP, possesses substantial accounting and auditing experience. He is a Certified Public Accountant and obtained his B.S. degree in accounting from the University of Maryland. Mr. McCullough has served as a Director of the Corporation and the Bank since 2004.

~~Elaine L. McDonald~~ brings valuable knowledge of the local real estate industry to the Board that she gained as a realtor with Long and Foster and Taylor-Made Realtors. She also possesses substantial business experience gained through her ownership and operation for 24 years of Alpine Village, Inc., a successful motel and restaurant. She also has knowledge with fundraising activities for national and community based non-profits. Mrs. McDonald has served as a Director of the Corporation and the Bank since 1995.

~~Carissa L. Rodeheaver~~, Class II Director, age 51. Mrs. Rodeheaver is the Chairman of the Board, President and Chief Executive Officer. She has served as President since November 2012 and as Chairman and Chief Executive Officer (“CEO”) since January 1, 2016 upon the retirement of William B. Grant from those positions. Prior to these appointments, Mrs. Rodeheaver served as the Chief Financial Officer (the “CFO”) of the Corporation and the Bank starting in January 2006 until May 2015 and as Secretary and Treasurer of the Corporation and the Bank starting in December 2009. She and has been employed by the Corporation since 2004 and by the Bank since 1992. During her tenure at First United and prior to her current appointments, she has served asTrust Officer of the Bank, Assistant Vice President and Officer of the Bank, Vice President and Trust Sales Officer of the Bank, Vice President and Trust Department Sales Manager of the Bank, Vice President and Assistant Chief Financial Officer of the Corporation and the Bank and Executive Vice President and Chief Financial Officer of the Corporation and the Bank. She has served as a director of the Corporation and the Bank since November 2012. Mrs. Rodeheaver is a Certified Public Accountant and a member of the Maryland Association of Certified Public Accountants and the American Institute for Certified Public Accountants, and she is a graduate of the Cannon Trust School, the Northwestern University Graduate Trust School, the Executive Development Institute for Community Banks and the Maryland Bankers School. She is currently serving in her second term on the board of directors of the Maryland Bankers Association, where she also serves on the Advisory Council of Professional Women in Banking and Finance. In addition, she serves on the American Bankers Association BankPAC Committee. Locally, Mrs. Rodeheaver serves on the Board of the Garrett College Foundation, the Board of the Garrett County Economic Development Corporation and she attends the Oak Grove Church of the Brethren. She continues her education and professional development by attending various conferences and workshops focused on strategic planning, regulations and management for the banking industry. In addition to her service with the Corporation and the Bank, Mrs. Rodeheaver owns and operates Rodeheaver Rentals, an unincorporated entity that owns and leases commercial and residential property, and several residential apartments that she leases to tenants.

~~Gary R. Ruddell~~ obtained a B.A. degree in marketing from the University of Maryland and has also attended a multitude of Maryland Banking sessions. His business experience includes service as the president and chief executive officer of Total Biz Fulfillment, a successful logistical and back-office support services business. Mr. Ruddell is involved in his community and holds director positions with various community organizations. He has served as a Director of the Corporation and the Bank since 2004.

~~I. Robert Rudy~~ has served as a Director of the Corporation and the Bank since 1992. His education includes a Bachelor of Business Administration degree from Ohio University. His vast business experience has been gained through his ownership and operation of I. R. Rudy’s, Inc., a retail apparel and sporting goods store. His director experience includes Chairman of the Board of Sports Specialists, Ltd, a national retail buying group, and as trustee of The Ohio University Foundation. He holds the office of Secretary of the Foundation and is a member of the Executive Committee. He chairs the Foundation’s Real Estate Committee and the Vice Chair of the Finance Committee. Other boards associated with Ohio University include: Russ Holdings LLC, Russ North Valley Road LLC, Russ Research Center LLC all located in Dayton, Ohio and Housing for Ohio/Courtyard Apartments, Athens, Ohio. Mr. Rudy is President of the Board of The Ohio University Inn and Conference Center located in Athens, Ohio. He also has leadership 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 through 2010 in Hungary and 2013 in Greece, Ohio University President’s CEO Roundtable, Maryland Fire Prevention Commission – Commissioner, Certified Level II Instructor for the Maryland Fire and Rescue Institute from 1978 to 1990, and Chairman of Oakland Planning and Zoning Commission.

Assuming that Driver Management is eligible to nominate director candidates at the Annual Meeting, the affirmativevote by a plurality of the shares present in person (including by remote communication, if applicable) or represented by proxy at the Annual Meeting and entitled to vote thereon is requiredtoelect the four Board nominees listed on theBLUE Proxy Card (i.e., Messrs. Barr, Boal and McCullough and Ms. Shockley) to serve on our Board for a three-year term of office expiring at the 2023 Annual Meeting of Shareholders. In that case, because each director nominee will require more “FOR” votes than the director nominee(s) who receive the least number of votes in order to be elected, “withhold” votes will have no effect on the outcome on Proposal 1,although they will be considered present for the purpose of determining the presence of a quorum. Broker non-votes with respect to the election of directors, as described in Proposal 1, will have no impact on the outcome of Proposal 1,although they will be considered present for the purpose of determining the presence of a quorum. If Driver Management is not entitled to vote its shares at the Annual Meeting and, thus, nominate directors at the Annual Meeting, then directors will be elected by a majority of votes cast. In such case, broker non-votes will have no effect on the outcome of Proposal 1, but “withheld” votes will be treated as votes against a director candidate.

The Board recommends that shareholders vote “FOR” the election of the four Board nominees listed on the BLUE Proxy Card (i.e., Messrs. Barr, Boal and McCullough and Ms. Shockley) to serve on our Board for a three-year term of office expiring at the 2023 Annual Meeting of Shareholders.

Board-driven engagement. The Board oversees the shareholder engagement process and regularly reviews and assesses shareholder input. Both the Chairman and the Lead Director play a central role in the Board’s shareholder engagement efforts. The directors regularly participate in meetings with shareholders.

Year-round engagement and Board reporting. The CEO and CFO, together with other executive management members and directors, conduct regular, year-round outreach to shareholders in-person and by phone to obtain their input on key matters and to inform management and the Board about the issues that shareholders tell us matter most to them. Our shareholder and investor outreach also typically includes investor road shows, analyst meetings, and investor conferences. We also continue to improve our engagement and communications with our retail shareholders, including employee shareholders.

~~Marisa A. Shockley~~~~served as a member of~~Transparent and informed governance enhancements. The Board routinely reviews and improves the Corporation’s ~~Advisory Council for two years before she was elected to~~governance practices and policies, including our shareholder engagement practices. Shareholder input is regularly shared with the Board, in 2014. She has significant business experience through her service as the owner of Shockley, Inc. in Frederick, MD, an automobile dealership. She has served as the President of the Maryland School for the Deaf Foundation since 2004its committees, and ~~was the Chairman for the Maryland Auto Dealers’ Association from 2011 to 2013. She was also recognized as~~management, facilitating a ~~TIME Quality Award regional finalist.~~

~~Robert G. Stuck~~ ~~has many years of business experience gained through his ownership~~dialogue that provides shareholders with transparency into our governance practices and operation of Oakview Motors, Inc., an automobile dealership. He also brings local real estate knowledge to the Board through his service as a real estate agent for Taylor-Made Realtors. Mr. Stuck has served as a Director of the Corporationconsiderations, and ~~the Bank since 1995.~~

~~H. Andrew Walls, III~~ has significant business experience gained as the owner and operator of Morgantown Printing & Binding, a large printing company, for 22 years. He is active in the Monongalia County, West Virginia community, one ofinforms the Corporation’s ~~market areas.~~enhancement of those practices. In addition to ~~serving as a Director~~shareholder sentiments, the Board considers trends in governance practices and regularly reviews the voting results of our meetings of shareholders, the ~~Corporation~~governance practices of our peers, and ~~the Bank since 2006, Mr. Walls has acquired director experience through his service on the boards of directors of the United Way, the Public Theatre, the Red Cross, and the Salvation Army.~~

The Board ~~of Directors~~ has the following Committees: an Audit Committee, an Asset and Liability Management Committee, ~~an Executive Committee,~~, a Strategic Planning Committee, a Compensation Committee, a Nominating and Governance Committee and a ~~Directors’~~ Risk and Compliance Committee. These committees are discussed below.

Audit Committee– The Audit Committee is a separately-designated standing committee established pursuant to Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and consists of ~~John F. Barr,~~ Brian R. Boal ~~(Chairperson)~~(Chairman), M. Kathryn Burkey, Robert W. Kurtz, John W. McCullough and Elaine L. ~~McDonald, and Robert G. Stuck.~~McDonald. The committee is responsible for the hiring, setting of compensation and oversight of the Corporation’s independent registered public accounting ~~firm, and it~~firm. The Audit Committee also assists the Board in monitoring (i) the integrity of the financial statements, ~~in monitoring~~(ii) the performance of the Corporation’s internal audit function and ~~in monitoring~~(iii) the Corporation’s compliance with legal and regulatory requirements. In carrying out its duties, the ~~committee~~Committee meets with the internal and independent auditors, with and without management present, to discuss the overall scope and plans for their respective audits, the results of their examinations, their evaluations of the Corporation’s internal controls, and the overall quality of the Corporation’s financial reporting. The Board has determined that all audit committee members are financially literate and that ~~Mrs.~~Ms. Burkey and Messrs. Boal, Kurtz and McCullough each qualify as an “audit committee financial expert” as ~~that term is~~ defined by the ~~Securities Exchange Commission (the “SEC”)~~SEC in Item 407 of Regulation S-K. This committee met nine times in ~~2016.~~2019. The Board ~~of Directors~~ has adopted a written charter for the Audit Committee, a copy of which is available on the Corporation’s website at www.mybank.com.

Asset and Liability Management Committee– The Asset and Liability Management Committee consists of John F. Barr, ~~Robert W. Kurtz,~~ John W. McCullough, Carissa L. Rodeheaver, Gary R. Ruddell, I. Robert Rudy and Marisa A. ~~Shockley, and Robert G. Stuck.~~Shockley. The committee reviews and recommends changes to the Corporation’s Asset and Liability, Investment, Liquidity, and Capital Plans. This ~~committee~~Committee met four times in ~~2016.~~2019.

Strategic Planning Committee– The Strategic Planning Committee consists of John F. Barr, Brian R. Boal, M. Kathryn Burkey, Robert W. Kurtz, John W. McCullough, Elaine L. McDonald, Carissa L. Rodeheaver, Gary R. Ruddell, I. Robert Rudy, Marisa A. Shockley ~~Robert G. Stuck~~ and H. Andrew Walls, III. The ~~committee~~Committee focuses on long-term planning to ~~insure~~ensure that management’s decisions take into account the future operating environment, the development of corporate statements of policy, and review of management’s internal and external information ~~and communications systems.~~through its Enterprise Risk Management framework. This committee met ~~two times~~twice in ~~2016.~~2019.

Compensation Committee – The Compensation Committee, which met ~~seven~~eight times in ~~2016,~~2019, consists of M. Kathryn Burkey (Chairman), Robert W. Kurtz, John W. McCullough, ~~Elaine L. McDonald, Marisa A. Shockley,~~I. Robert ~~G. Stuck~~Rudy and H. Andrew Walls, III. The ~~committee~~Committee is responsible for developing a compensation policy for the executive officers and for recommending to the Board a compensation policy for the ~~Directors~~directors of the Corporation and its subsidiaries, overseeing the Corporation’s various compensation plans and managing changes for executive compensation and recommending changes for ~~Director~~director compensation. The ~~committee~~Committee determines executive compensation pursuant to the principles discussed below under the heading ~~“REMUNERATION OF EXECUTIVE OFFICERS”~~“Renumeration of Executive Officers”. The Board reviews and, where appropriate, approves or ratifies committee recommendations. The Compensation Committee may not delegate its authority to any other person or corporate body without the authorization of the Board. The Compensation Committee has adopted a written charter, a copy of which is available on the Corporation’s website at www.mybank.com.

Nominating and Governance Committee– The Nominating Committee consists of ~~Brian R. Boal,~~ John W. McCullough (Chairman), Elaine L. McDonald, Marisa A. Shockley ~~Robert G. Stuck~~ and H. Andrew Walls, III. The ~~committee~~Committee is responsible for developing qualification criteria for ~~Directors,~~directors, reviewing ~~Director~~director candidates recommended by shareholders (see “Director Recommendations and Nominations” below), actively seeking, interviewing and screening individuals qualified to become ~~Directors,~~directors, recommending to the Board those candidates who should be nominated to serve as ~~Directors,~~directors and developing and recommending to the Board ~~the Corporate Governance Guidelines applicable to the Corporation~~for adoption corporate governance guidelines, codes of ethics and ~~its subsidiaries.~~similar policies. This Committee met ~~two times~~twice in ~~2016.~~2019. The Nominating Committee has a written charter, a copy of which is available on the Corporation’s website at ~~www.mybank.com.~~www.mybank.com.

~~Directors’~~ Risk and Compliance Committee. The ~~Directors~~Directors’ Risk and Compliance Committee consists of ~~John F. Barr, Brian R. Boal,~~ M. Kathryn Burkey, Robert W. Kurtz, John W. McCullough, Carissa L. Rodeheaver, Gary R. Ruddell ~~I. Robert Rudy,~~and H. Andrew Walls, III and is responsible for reviewing the Bank’s overall risk profile ~~including classified credits and management’s plans for those credits, reviewing and updating the Board regarding mandates imposed on the Corporation~~ and the ~~Bank by their regulators,~~alignment of the Corporation’s risk profile with the Corporation’s strategic plan, goals and ~~overseeing compliance with these mandates by the Corporation and the Bank.~~objectives. The Committee is also responsible for reviewing outstanding audit issues and compliance recommendations as identified by various internal or external parties, approving operational risk programs such as the Bank Protection Act Program, the Business Continuity Planning Program, Cybersecurity Program, the Information Security Program, Privacy Program, Identification Theft/Red Flag Program and Bank Secrecy Act Program. The Committee is responsible for the annual review of any significant vendor relationships, litigation or consumer complaints as well as the adequacy and effectiveness of the Compliance Program, and the Corporation’s insurance programs and policies in place. The Committee monitors classified credits and management’s plans for those credits. This Committee met ~~six~~five times during ~~2016.~~2019.

The Board is committed to setting a tone of the highest ethical standards and performance for our management, officers, and the Corporation as a whole. The Board believes that strong corporate governance practices are a critical element of doing business today. As such, the Board has adopted: (i) a Code of Ethics for directors; (ii) Corporate Governance Guidelines for directors; (iii) a Code of Ethics for senior financial officers, which applies to the Corporation’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; (iv) an Insider Trading Policy; and (v) a Luxury Expenditure Policy. These codes and policies are reviewed on a regular basis to ensure that they reflect the best interests of the Corporation and its shareholders. These codes and policies may be found on the Corporation’s website athttp://investors.mybank.com/govdocs.

Pursuant to Rule 5605(b)(1) of The NASDAQ Stock Market Rules (the “NASDAQ Rules”), a majority of the Corporation’s ~~Directors~~directors must be “independent directors” as that term is defined by NASDAQ Rule 5605(a)(2). The ~~Corporation’s~~ Board ~~of Directors~~ has determined that each of John F. Barr, Brian R. Boal, M. Kathryn Burkey, Robert W. Kurtz, John W. McCullough, Elaine L. McDonald, I. Robert Rudy, Gary R. Ruddell, Marisa A. Shockley ~~Robert G. Stuck~~ and H. Andrew Walls, III is an “independent director”, and these independent ~~Directors~~directors constitute a majority of the ~~Corporation’s Board of Directors.~~Board. Each of the members of the Audit Committee, Compensation Committee and of the Nominating Committee is an “independent director”. Each member of the Audit Committee also satisfies the independence requirements of NASDAQ Rule 5605(c)(2)(A). In making these independence determinations, the Board, in addition to the transactions described below under “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS”, considered the ~~Bank’s purchase of goods from a retailer affiliated with Mrs. Burkey, and the~~ fact that Mr. Kurtz previously served as an executive officer of the Corporation and the ~~Bank.~~Bank and the fact that Mr. Boal is Mr. Kurtz’s nephew. The amounts paid to Morgantown Printing & Binding (“MP&B”), a corporation owned by Mr. Walls and a trust established for the benefit of his minor children, in 2019 or any of the past three fiscal years did not exceed 5% of MP&B’s consolidated gross revenues for those years.

The ~~Corporation is a one-bank holding company and~~Bylaws provide that the parent of the Bank, a $1.3 billion community bank serving four counties in Maryland and three counties in West Virginia. Since its inception in 1984, the Corporation has had four CEOs, and each of these CEOs also served as Chairman of the ~~Board.~~Board shall be the CEO of the Corporation. The ~~Corporation’s predecessor, First United Bank of Oakland, also~~Board has employed this ~~form~~leadership structure since the Corporation’s formation in 1984 because it believes that a single, experienced leader, serving as both Chairman and CEO, is the most appropriate leadership structure for the Corporation. By having one person serve as both Chairman and CEO, the Board believes that the Corporation demonstrates to shareholders, customers, employees, vendors, regulators, and other stakeholders that we have strong leadership, with a single individual setting the tone and having primary responsibility for managing and leading the Corporation. Further, the Board believes that this structure reduces the potential for confusion or duplication of ~~governance for a number~~efforts and assures clarity of ~~years.~~leadership.

~~In 2010,~~The Board recognizes, however, that the operations of and issues faced by a highly-regulated, publicly-traded corporation such as the Corporation can be complex and that there is a need to ~~help~~rely from time to time on the leadership of a director who is independent of management. Accordingly, to strengthen ~~the Board’s oversight of~~ corporate governance, ~~issues,~~ the Board ~~determined to appoint~~appoints a Lead Director who is responsible for facilitating the resolution of issues relating to the performance of the Chairman and CEO and other members of management, or any other issue that a ~~Director,~~director, an officer or an employee believes should be addressed by someone other than the Chairman and CEO. In furtherance of that objective, the Board has adopted a Lead Director Policy, which provides that the duties and rights of the Lead Independent Director shall include: (i) presiding at (a) all Board meetings at which the Chairman of the Board is not present, and (b) all executive sessions of independent directors; (ii) serving as a liaison between the Chairman of the Board and the independent directors; (iii) pre-approving Board meeting agendas; (iv) pre-approving Board meeting schedules to assure that there is sufficient time for discussion of all agenda items; (v) the authority to convene meetings of the independent directors; and (vi) if reasonably requested by shareholders, making himself or herself reasonably available for consultation and direct communication with major shareholders. Because the Nominating Committee is charged with overseeing corporate governance matters, the Board believes that it ~~would be~~is most appropriate to appoint the Chairman of the Nominating Committee as the ~~lead~~Lead Director. John McCullough is the current Chairman of the Nominating Committee and, thus, the Lead Director.

In addition, the Board believes that it is important for the success of our leadership structure to have a strong, competent and independent Board. The Corporation has a well-developed and well-seasoned Board, ~~of Directors,~~ comprised of the ~~Chairman/~~Chairman and CEO and 11nine additional ~~Directors, 10 of whom~~directors who are “independent directors”, as defined by the NASDAQ Rules.

The Board believes that the Corporation has been well-served by this form of leadership. By having one person serve as both Chairman and CEO, the Board believes that the Corporation demonstrates to shareholders, customers, employees, vendors, regulators, and other stakeholders that we are under strong leadership, with a single individual setting the tone and having primary responsibility for managing and leading the Corporation. The Board believes this structure reduces the potential for confusion or duplication of efforts and assures clarity of leadership.

The Board believes that such a structure is viable when reinforced with a strong, competent and independent Board of Directors and the leadership and oversight of a Lead Director, as is the case with the Corporation. As noted above, 10 of the 12 Directors are independent. The Board believes that this high percentage of independence ~~coupled with the fact that only one Director – Mrs. Rodeheaver (the President and CEO) – is employed by the Corporation,~~ assures an objective and shareholder-based view of the Corporation’s operations.

Of these independent directors, four members qualify as “audit committee financial experts”, as defined by rules adopted by the SEC pursuant to the Sarbanes-Oxley Act of 2002. ~~While~~Although the credentials of ~~the entire Board~~each director are noted elsewhere in this Proxy Statement, it is worth illustrating the credentials of these ~~five~~four members that make them eligible for this distinction:

In an effort to hone their skills, and to assure their continued independence, members of the Board ~~of Directors~~ undertake regular training. A number of methods are employed to provide in-depth training. On frequent occasions, internal training is provided to familiarize the Board with regulatory requirements imposed on financial institutions by applicable laws such as the Bank Secrecy Act and the Community Reinvestment Act. Periodically, ~~Directors~~directors attend seminars related to banking issues, which offer them the additional benefit of meeting with directors of other financial institutions. All ~~Directors~~directors have direct access to the American Bankers Association, which enables them to keep abreast of issues pertinent to the banking industry and to research banking materials. The FDIC also has available a specific board education program which is periodically used for director training.

The strength of the Board, and a valuable counter balance to management, is found in the risk management practices employed by the Board, directly and through its various specialized committees and the Lead Director. The Board, as part of its oversight and governance functions, regularly reviews risks and appropriate modeling of Asset Liability Management, loan concentrations, liquidity, management succession and capital planning. ~~Consistent with this, the Corporation was one of the early institutions in its market area to name a Chief~~The Directors’ Risk ~~Officer, having done so in 2006. Further, in 2009, the Board created a special committee focused on the Corporation’s risk elements. This committee~~and Compliance Committee is responsible for reviewing the Bank’s overall risk profile ~~including classified credits and management’s plans for those credits, reviewing and updating the Board regarding regulatory compliance matters for both the Corporation~~ and the ~~Bank.~~alignment of the Corporation’s risk profile with the Corporation’s strategic plan, goals and objectives. The ~~committee~~Committee is also responsible for reviewing outstanding audit issues and compliance recommendations as identified by various internal or external parties, approving operational risk programs such as the Bank Protection Act Program, the Business Continuity Planning Program, Cybersecurity Program, the Information Security Program, Privacy Program, Identification Theft/Red Flag Program and Bank Secrecy Act Program. The ~~committee~~Committee is responsible for the annual review of any significant vendor relationships, litigation or consumer complaints as well as the adequacy and effectiveness of the Compliance Program, and the Corporation’s insurance programs and policies in place. The Committee monitors classified credits and management’s plans for those credits. An internal risk management committee, which comprised of the Director of Risk Management and various associates of the Corporation, oversees the Enterprise Risk Management system and reports to the Directors’ Risk and Compliance Committee.

To assist the Board with tracking and reviewing Board and Committee activities, all ~~Directors~~directors have 24/7 access to all policies and reports, the minutes of every meeting of the Board and its committees over the last five years and numerous other reports and models prepared by or for the Corporation.

To maintain a level of independence from management, the Board conducts regular executive ~~sessions.~~sessions of independent directors. These sessions are led by the independent ~~Chair~~Chairman of the Corporation’s Nominating Committee, John McCullough, who also serves as the Lead Director.

The ~~governance of the Corporation through a combination of the Chairman and CEO is appropriate also~~Board reviews our leadership structure from time to time in light of the ~~strength~~issues that we face and the qualities, experience, skills and education of the ~~Chairman/CEO. Since its beginning,~~directors who comprise the ~~Corporation~~Board. The Board has ~~had very experienced individuals in~~the power to revise this combined role. Courtney R. Tusing, the first to have the role, came to the Corporation with over 20 years of banking experience, the majority of which were with the Corporation. During his tenure, he also served as President of the Maryland Bankers Association. Richard G. Stanton held the position from 1987 to 1996. He had nearly three decades of experience prior to the position, and had served as Director forleadership structure should it deem such a number of years. During his tenure, he served on the Government Relations Committee of the American Bankers Association, which enabled him to help formulate banking policy. William B. Grant held the position from 1996 through December 31, 2015. Mr. Grant had over 30 years of banking experience and was past Chairman of the Maryland Bankers Association and was on the Board of Directors of the Baltimore Branch of the Federal Reserve Bank of Richmond as well as the America’s Community Bankers Council of the American Bankers Association. Effective January 1, 2016, upon Mr. Grant’s retirement, Carissa L. Rodeheaver became the Chairman and CEO. Mrs. Rodeheaver has 25 years of banking experience, is a Certifified Public Accountant and is also a director of the Maryland Bankers Association.revision necessary or appropriate.

In conclusion, the Board believes that a single leader, serving as Chairman and CEO, together with an overwhelmingly independent Board and a Lead Director, is the most appropriate leadership structure for the Corporation. The Board may, from time to time, review this structure under the guidance of the Nominating Committee, reporting up to the Board of Directors. The position is supported by academic research on board governance, which endorses such a structure so long as there exists an independent and well-seasoned board, which exists at the Corporation.¹

The Board ~~of Directors~~ held 1614 meetings in ~~2016.~~2019. Directors are expected to attend a combined minimum attendance of 75% of all board and committee meetings for which they are a member, the strategic planning meeting, and the annual shareholder meeting. Each ~~Director~~director who served as such during ~~2016~~2019 attended at least 75% of the aggregate of (i) the total number of meetings of the Board ~~of Directors~~ (held during the period served) and (ii) the total number of meetings held by all committees of the Board on which that person served (held during the period served)~~, except director Barr who attended 64% of the meetings during 2016 due to his prior commitment~~.

The Bylaws provide that no person may be elected to the ~~MACO.~~Board at any meeting of shareholders if he or she is or will be 72 years of age or older during the calendar year in which such meeting occurs. In 2018, the Nominating Committee began discussions about a formal director refreshment plan in light of upcoming director retirements. This plan was formalized in 2019 and identifies desired skillsets, industry expertise and encourages diversity of members.

The Nominating Committee will from time to time review and consider candidates recommended by shareholders. ~~Shareholder recommendations should be labeled “Recommendation~~A shareholder may nominate a director candidate by written notice to the Chairman of ~~Director Candidate” and be submitted in writing to: Tonya K. Sturm, Secretary First United Corporation, 19 S. Second Street, Oakland, Maryland 21550; and~~the Board or the President, which notice must ~~specify~~include: (i) the recommending shareholder’s contact information, including his or her name and address; (ii) the class and number of shares of the Corporation’s capital stock beneficially owned by the recommending ~~shareholder,~~shareholder; (iii) the name, address and credentials of the candidate for nomination, ~~(v)~~including the principal occupation of each proposed nominee; (iv) the number of shares of the Corporation’s capital stock beneficially owned by the candidate; ~~and (iv)~~(v) the candidate’s written consent to be considered as a ~~candidate.~~candidate; and (vi) all information relating to such proposed nominee that would be required to be disclosed by Regulation 14A under the Exchange Act promulgated thereunder, assuming such provisions would be applicable to the solicitation of proxies for such proposed nominee. Such recommendation must be ~~received by~~delivered or mailed to the ~~Corporate Secretary~~Chairman of the Board or the President no less than 150 days nor more than 180 days before the date of the Annual Meeting of Shareholders for which the candidate is being ~~recommended. For~~recommended, which, for purposes of this requirement, the date of the meeting shall be deemed to be on the same day and month as the Annual Meeting ~~of Shareholders~~ for the preceding year.

¹~~See~~ The Harvard Law School Forum on Corporate Governance and Financial Regulation “Drafting Disclosure Relating to Board Leadership and Risk Oversight”, Posting by Jeffrey Stein, King & Spaulding, January 3, 2010.

Candidates may come to the attention of the Nominating Committee from current ~~Directors,~~directors, executive officers, shareholders, or other persons. The Nominating Committee does not have a formal policy under which it considers the diversity of candidates for directorship when making nomination recommendations. The Nominating Committee periodically reviews its list of candidates available to fill Board vacancies and researches the talent, skills, expertise and general background of these candidates. In evaluating candidates for nomination, the Nominating Committee uses a variety of methods and regularly assesses the size of the Board, whether any vacancies are expected due to retirement or otherwise, the need for particular expertise on the Board, and whether the Corporation’s market areas are adequately represented by Board members. In nominating director candidates, the Nominating Committee generally seeks to choose individuals that have skills, education, experience and other attributes that will complement and/or broaden the strengths of the existing directors.

In ~~2003,~~2014, the Corporation created an ~~“Advisory Council”~~Advisory Council consisting of ~~local business owners in each of the geographic regions that we serve. In 2014, the Advisory Council was restructured into~~ five separate Advisory Groups, ~~representing~~which represent each of our market areas. The Advisory Groups consist of business owners and key individuals within each local market area. The purpose of these Advisory Groups is to foster open discussions that will enable us to enhance our understanding of the difference in each of these markets and the financial needs of the customer base. The meetings are led by local Market Presidents and are also attended by members of the management ~~team.~~team and directors. These meetings include topics of discussion such as local market analysis, changes in the market, new products and services, customer engagement, customer experiences, and ~~customer experiences.~~human talent. These meetings also provide a sounding board for our marketing and advertising plans and provide great opportunities to network with local businesses. From time to time, promising ~~Director~~director candidates come to the attention of the Nominating Committee through their service on these Advisory Groups, although such service is not a requirement of being considered for nomination.

Whether recommended by a shareholder or another third party, or recommended independently by the Nominating Committee, a candidate will be selected for nomination based on his or her talents and the needs of the Board. The Nominating Committee’s goal in selecting nominees is to identify persons that possess complementary skills and that can work well together with existing Board members at the highest level of integrity and effectiveness. A candidate, whether recommended by a Corporation shareholder or otherwise, will not be considered for nomination unless he or she maintains strong professional and personal ethics and values, has relevant management experience, and is committed to enhancing financial performance. The Corporation looks for diverse candidates that possess competencies that will support our long-term strategies. These competencies could include expertise in the banking industry, finance, risk management, real estate, marketing, regional geographic markets and economics, strategic planning, executive management, technology or other relevant qualifications. Certain Board positions, such as Audit Committee membership, may require other special skills, expertise or independence from the Corporation.

It should be noted that a ~~shareholder~~director recommendation is not a ~~nomination, and there is no guarantee that a candidate recommended by a shareholder will be approved by the Nominating Committee or nominated by the Board of Directors.~~nomination. A shareholder who is entitled to vote for the election of ~~Directors~~directors and who desires to nominate a candidate for election to be voted on at aan Annual Meeting ~~of Shareholders~~ may do so only in accordance with Section 4 of Article II of the ~~Corporation’s Amended~~Bylaws, and ~~Restated Bylaws, which provides that a shareholder may nominate a Director candidate by written notice to~~must specify (i) the ~~Chairman~~recommending shareholder’s contact information, including his or her name and address; (ii) the class and number of shares of the ~~Board or~~Corporation’s capital stock beneficially owned by the ~~President not less than 150 days nor more than 180 days prior to~~recommending shareholder; (iii) the ~~date~~name, address and credentials of the ~~meeting of shareholders called~~candidate for the election of Directors which, for purposes of this requirement, shall be deemed to be on the same day and month as the Annual Meeting of Shareholders for the preceding year. Such notice shall contain the following information to the extent known by the notifying shareholder: (i) the name and address of each proposed nominee; (ii)nomination, including the principal occupation of each proposed nominee; ~~(iii)~~(iv) the number of shares of the Corporation’s capital stock ~~of the Corporation owned by each proposed nominee; (iv) the name and residence address of the notifying shareholder; (v) the number of shares of capital stock of the Corporation~~beneficially owned by the ~~notifying shareholder;~~candidate; (v) the candidate’s written consent to be considered as a candidate; and (vi) ~~the consent in writing of the proposed nominee as to the proposed nominee’s name being placed in nomination for Director; and (vii)~~ all information relating to such proposed nominee that would be required to be disclosed by Regulation 14A under the Exchange Act ~~and Rule 14a-11~~ promulgated thereunder, assuming such provisions would be applicable to the solicitation of proxies for such proposed nominee. Such recommendation must be delivered or mailed to the Chairman of the Board or the President no less than 150 days nor more than 180 days before the date of the Annual Meeting of Shareholders for which the candidate is being recommended, which, for purposes of this requirement, the date of the meeting shall be deemed to be on the same day and month as the Annual Meeting for the preceding year. Accordingly, a shareholder who desires to recommend a person for consideration as a director nominee for the 2021 Annual Meeting of Shareholders (the “2021 Annual Meeting”) must submit such recommendation as provided above no earlier than , 2020 and no later than , 2020.

Shareholders may communicate with the Board, ~~of Directors,~~ including the non-employee ~~Directors~~directors,by sending a letter to First United Corporation Board of Directors, c/o Tonya K. Sturm, Secretary, First United Corporation, 19 S.South Second Street, Oakland, Maryland, ~~21550.~~21550-0009. The Secretary will deliver all shareholder communications directly to the Board ~~of Directors~~ for consideration.

The Corporation believes that the Annual Meeting ~~of Shareholders~~ is an opportunity for shareholders to communicate directly with ~~Directors~~directors and, accordingly, expects that all ~~Directors~~directors will attend each Annual ~~Meeting of Shareholders.~~Meeting. If you would like an opportunity to discuss issues directly with our ~~Directors,~~directors, please consider attending this year’s Annual ~~Meeting of Shareholders.~~Meeting. The ~~2016~~2019 Annual Meeting ~~of Shareholders~~ was attended by 11eight persons who served on the Board ~~of Directors~~ as of the date of that meeting.

The Corporation has not adopted any practices or policies regarding the ability of employees (including officers) or directors, or any of their designees, to purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Corporation’s equity securities (i) granted to the employee or director by the Corporation as part of his or her compensation or (ii) held, directly or indirectly, by the employee or director.

The following table provides information about compensation paid to or earned by the Corporation’s ~~Directors~~directors during ~~2016~~2019 who are not also ~~named~~“named executive ~~officers.~~officers” (as defined below under the heading, “Remuneration of Executive Officers”). The amounts set forth below include the compensation paid by both the Corporation and the Bank for service on ~~their respective boards~~the Board and the board of ~~directors.~~directors of the Bank, respectively.

The Compensation Committee of the Board ~~of Directors~~ is responsible for evaluating and recommending ~~Director~~director compensation to the Board for approval. In evaluating ~~Director~~director compensation, the Compensation Committee considers the legal responsibilities that ~~Directors~~directors owe to the Corporation and its shareholders in connection with their service on the Board and/or a committee of the Board, and the risks to the ~~Directors~~directors associated with their service, and reviews the fees and benefits paid to directors of similar institutions in and around the Corporation’s market areas. The Compensation Committee’s current ~~Director~~director compensation arrangement contemplates a mix of cash and equity awards, as discussed below.

For ~~most of 2016,~~2019, each ~~Director~~director who was not an employee of the Corporation or the Bank (a “Non-Employee Director”) received a cash retainer of $10,000, a grant ~~under the First United Corporation 2006 Omnibus Equity Compensation Plan (the “Omnibus Plan”)~~ of 1,000 fully-vested shares of Common Stock, having a grant date fair value of ~~$10,340,~~$18,300, and a ~~combined~~ cash fee of ~~$800~~$1,000 for each meeting of the ~~Corporation’s~~Board and/or the Bank’s ~~Board~~board of ~~Directors~~directors that he or she attended. The cash fee is reduced to $200 when special meetings are called and the meeting lasts less than two hours or is related to regulatory matters. Directors do not receive more than one cash fee when the Board and the board of directors of the Bank meet together. Directors who served on ~~the Audit Committee, Compensation Committee and/or Nominating Committee~~committees of the ~~Corporation’s Board~~Corporation also received a cash fee of ~~$400~~$500 for each committee meeting that they attended, and Directors who served on the Asset and Liability Management Committee and the Director’s Risk and Compliance Committee of the Corporation’s Board also received a cash fee of $300 for each committee meeting that they attended. ~~Effective in September 2016, the Board approved a change to the per-meeting fee, to $200, for short/call-in or regulatory related meetings of less than two hours.~~ The Chairperson of each of the Audit Committee (Mr. Boal), Compensation Committee ~~(Mrs.~~(Ms. Burkey) and Nominating ~~& Governance~~ Committee (Mr. McCullough) received an additional annual cash retainer of $2,500. All ~~Directors~~directors of the Corporation also served on the board of directors of the Bank and received a cash ~~in the amount~~fee of ~~$300~~$500 for attending each meeting of a committee of the Bank’s board of directors of the Bank ~~board~~ on which they served.

Non-Employee Directors may elect to receive some or all of their cash retainers in shares of ~~common stock. Shares~~Common Stock. The number of shares paid in lieu of cash retainers ~~are issued under the Omnibus Plan and the number of shares paid~~ is determined by dividing the portion of the cash retainer to be paid in stock by the mean between the high and low sales price of a share of Common Stock on the trading day immediately preceding the payment date, as reported on The NASDAQ Stock Market. In 2016, each of Messrs. Barr, McCullough and Walls elected to receive 967 shares of Common Stock, having an aggregate grant date fair value of $9,999, in lieu of that amount of their annual cash retainers, and Mrs. Shockley elected to receive 483 shares of Common Stock, having an aggregate grant date fair value of $4,994, in lieu of that amount of her cash retainer.

All ~~Directors~~directors are permitted to participate in the Corporation’s Amended and Restated Executive and Director Deferred Compensation Plan (the “Deferred Compensation Plan”). The material terms of the Deferred Compensation Plan are discussed below under the heading, ~~“REMUNERATION OF EXECUTIVE OFFICERS”~~“Remuneration of Executive Officers”. During 2019, Ms. McDonald participated in this plan and whereby all of her director’s fees during 2019 were deferred and placed into her Deferred Compensation account held in the Trust department.

The Audit Committee has (i) reviewed and discussed the Corporation’s audited consolidated financial statements for the year ended December 31, ~~2016~~2019 with the Corporation’s management; (ii) discussed with Baker Tilly, ~~Virchow Krause, LLP (“Baker Tilly”),~~ the Corporation’s independent auditors, the matters required to be discussed by the ~~statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU § 380),~~applicable requirements of the as adopted by the Public Company Accounting Oversight Board ~~in Rule 3200T,~~(the “PCAOB”) and the SEC, and (iii) received the written disclosures and the letter from Baker Tilly required by applicable requirements of the ~~Public Company Accounting Oversight Board~~PCAOB regarding Baker Tilly’s communications with the Audit Committee concerning its independence, and discussed with Baker Tilly its independence. Based on these reviews and discussions, the Audit Committee recommended to the Board ~~of Directors~~ that the audited consolidated financial statements for the fiscal year ended December 31, ~~2016~~2019 be included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019.

Information about the Corporation’s executive officers is set forth below. All officers are elected annually by the ~~Corporation’s~~ Board ~~of Directors~~ and hold office at its pleasure.

Carissa L. Rodeheaver, age ~~51,~~54, serves as the Chairman of the Board, President and CEO of both the Corporation and the Bank. She has served as President since November 2012 and as Chairman and CEO since January 1, 2016 upon the retirement of William B. Grant from those positions. Prior to these appointments, ~~Mrs.~~Ms. Rodeheaver served as the CFO of the Corporation and the Bank starting in January 2006 and as Secretary and Treasurer of the Corporation and the Bank starting in December 2009. Between March 19, 2008 and her appointment as President, ~~Mrs.~~Ms. Rodeheaver served as Executive Vice President of the Bank. Prior to ~~these times, Mrs.~~this, Ms. Rodeheaver served as Trust Officer of the Bank from 1992 to 2000, as Vice President and Trust Department Sales Manager of the Bank from 2000 to 2004, and as Vice President and Assistant CFO of the Corporation from 2004 to December 31, 2005. She is a Certified Public Accountant.

Tonya K. Sturm, age ~~49,~~52, serves as Senior Vice President and CFO of both the Corporation and the Bank. She has served as CFO since May 2015 and as Senior Vice President since June 2016. In May 2016, she was appointed Secretary and Treasurer of the Corporation and the Bank. Prior to the appointment of Senior Vice President, she served as Vice President since September 2008. Prior to her appointment as CFO and Vice President, ~~Mrs.~~Ms. Sturm served as Controller of the Corporation and the Bank starting in September 2008, as a Staff Auditor of the Bank from July 1996 to June 1998, as a Credit Analyst of the Bank from June 1998 to March 1999, as Staff Accountant of the Bank from April 1999 to May 2002, as a Senior Staff Accountant of the Bank June 2002 to December 2003, as the Finance Manager of the Bank from January 2004 to May 2006, and as Vice President and Director of Finance of the Bank from June 2006 to August 2008.

Information about the Bank’s executive officers, other than ~~Mrs.~~Mses. Rodeheaver and ~~Mrs.~~ Sturm, is set forth below. All officers are elected annually by the Bank’s ~~Board~~board of ~~Directors~~directors and hold office at its pleasure.

Robin M. Murray, age 58, serves as Senior Vice President and Director of Retail Banking. Mrs. Murray was appointed to this position in 2006. From 2003 until 2006, she served as the Bank’s Senior Vice President of Marketing and Retail Sales and as Vice President of Marketing and Retail Services Manager from 1998 to 2003.

Robert L. Fisher, II, age ~~48,~~51, serves as Senior Vice President and Chief Lending Officer. Mr. Fisher has been employed by the ~~corporation~~Corporation since September 2013. Mr. Fisher has ~~over~~more than 20 years of experience in the banking industry with the majority of his experience based in commercial banking. ~~Most recently,~~ Mr. Fisher held the ~~position~~positions of Senior Vice President of Commercial Banking, Managing Director of Commercial Banking, and Regional President at a large regional bank in the Mid-Atlantic ~~region.~~region from 2001 to 2013.

Jason B. Rush, age ~~46,~~49, serves as a Senior Vice President and Chief Operating Officer. Mr. Rush was appointed Senior Vice President and Chief Operating Officer in January 2017. Prior to this appointment, he served as Senior Vice President and Chief Risk Officer and Director of Operations and ~~Support.~~Support from 2006 to 2017. Mr. Rush has been employed by the First United organization since October 1993. Prior to his current position, Mr. Rush served as Vice President, Director of Operations & Support since March 2006, and before that as Vice President and Regional Manager/Community Office Manager from January 2005 to February 2006; Vice President and Community Office Manager/Manager of Cash Management from May 2004 to December 2004; Assistant Vice President and Community Office Manager from April 2001 to April 2004; Community Office Manager from August 1998 to April 2001; Customer Service Officer from March 1997 to July 1998; Assistant Compliance Officer from July 1995 to February 1997; and Management Trainee from October 1993 to July 1995. Mr. Rush also serves as the Treasurer of Rush Services, Inc., a family-owned business in which he has a fifty percent ownership interest. He also participates with his brother in farming and land investment.

Keith R. Sanders, age ~~47,~~50, serves as Senior Vice President and Senior Trust Officer. Mr. Sanders has been employed by the Corporation since August 2002. He served as Senior Trust Sales Officer from August 2002 until December 2005, and as Senior Trust/Investment Sales Manager from January 2006 until October 2011. He was named First Vice President and Senior Trust Officer on November 1, 2011 and Senior Vice President and Senior Trust Officer on May 22, 2013.

The Corporation is a “smaller reporting company” as defined in Item 10(f)(1) of the Regulation S-K, and the following discussion of the compensation paid to the Corporation’s named executive officers is intended to comply with the rules relating to the disclosure of executive compensation. Although these rules allow the Corporation to provide less detail about its executive compensation program than companies that are not smaller reporting companies, the Compensation Committee is committed to providing information that is necessary for shareholders to understand its executive compensation-related decisions. Accordingly, this discussion includes supplemental information that describe key decisions on the 2019 executive compensation program for the named executive officers, as well as key changes for the 2020 program.

The Corporation grew total assets by $58.3 million. Gross loans grew by $44.4 million and deposits grew by $74.5 million. Consolidated net income was $13.1 million for the year ended December 31, 2019 compared to $10.7 million for 2018. Basic and diluted net income per share for 2019 were both $1.85, compared to basic and diluted net income per common share of $1.51 for 2018, a 23% increase. The net interest margin declined slightly to 3.68% in 2019 from 3.74% in 2018.

~~Beverly A. Sines, age 59, serves~~The book value of the our Common Stock was $17.71 per share at December 31, 2019 compared to $16.52 per share at December 31, 2018. Capital levels remained strong with a total risk-based capital ratio of 16.29% at year end.

2019 was a year of significant achievement for the Corporation as ~~Senior Vice President~~we:

During 2019, we also continued our trend of strong performance in generating returns for our shareholders. The exhibit below shows our total shareholder return compared to SNL Financials’ U.S. Banks $1B - $5B index and the S&P 500 index over the five-year period from December 31, 2014 to December 31, 2019.

Source: FactSet as of December 31, 2019, and includes price change and reinvested cash dividends

The Compensation Committee of the Board is responsible for overseeing and administering the Corporation’s employee benefit plans and policies, and for annually reviewing and approving all compensation decisions relating to the executive officers, including the named executive officers. The compensation committee of the Bank’s board of directors has identical responsibilities with respect to executive officers of the Bank. Both the Compensation Committee and the Bank’s compensation committee are made of the same directors. The Compensation Committee submits its decisions regarding compensation to the independent directors of the Board. The Compensation Committee has the authority and resources to obtain, independent of management, advice and assistance from internal and external legal, human resource, accounting or other experts, advisors, or consultants as it deems desirable or appropriate.

The Compensation Committee is composed of at least three directors who are determined to be “independent directors” as that term is defined by NASDAQ Rule 5605(a)(2). The members of the Compensation Committee are appointed each year by the Board, after considering the recommendations and views of the CEO. Five members of the Board serve on the Compensation Committee, each of whom is an “independent director”. The Chairman of the Compensation Committee reports to the Board regarding all committee actions.

The Compensation Committee recognizes the importance of balancing the need to attract and retain qualified executive officers with the need to maintain sound principles for the development and administration of compensation and benefit programs. The Compensation Committee has taken steps to enhance the Compensation Committee’s ability to effectively carry out its responsibilities as well as ensure that the Corporation maintains strong links between executive pay and performance. Examples of procedures and actions that the Compensation Committee utilized in 2019 include:

The Compensation Committee believes that the compensation paid to executive officers should be closely tied to the Corporation’s performance on both a short and long-term basis. Overall, the Compensation Committee believes that a performance-based compensation program can assist the Corporation in attracting, motivating and retaining the quality executives critical to long-term success. Accordingly, when and to the extent permitted by law, the Compensation Committee generally seeks to structure executive compensation programs so that they are focused on enhancing overall financial performance.

In setting the CEO’s compensation, the Compensation Committee meets with the CEO to discuss her performance and compensation package. Decisions regarding her package are based upon the Compensation Committee’s independent deliberations and input from the Compensation Committee’s compensation consultant, if one is engaged for that purpose. In setting compensation for other named executive officers, the Compensation Committee considers the CEO’s recommendations, as well as any requested input and data from the Chief ~~Credit Officer. Mrs. Sines~~Financial Officer, Human Resources Department and outside consultants and advisors. The Compensation Committee occasionally requests one or more members of senior management to be present at Compensation Committee meetings where executive compensation and corporate or individual performance are discussed and evaluated. Only Compensation Committee members are allowed to vote on decisions regarding executive compensation, and such decisions occur only during its executive sessions.

In addition to reviewing competitive market values, the Compensation Committee also examines the total compensation mix, pay-for-performance relationship, and how all elements, in the aggregate, comprise each executive’s total compensation package. The Compensation Committee also examines all incentive compensation plans at least annually to ensure that such plans do not encourage employees to take unnecessary or excessive risks that threaten the Corporation’s value. All incentive plans contain “claw-back” provisions that require, in the event the Corporation is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under applicable securities laws or applicable accounting principles, each participant who received an award to return it to the extent the accounting restatement shows that a smaller award should have been paid. Further, all incentive plans contain ethics provisions that require a participant to repay an award in the event that the Corporation determines that the award was paid in a plan year in which the participant willfully engaged in any activity that was or is injurious to the Corporation and its affiliates. In general, the Board and/or its Compensation Committee may terminate, suspend or amend an incentive plan at any time.

For 2019, executive compensation consisted primarily of base salary, which is targeted to recognize each executive officer’s performance and contributions to success considering salary standards in the marketplace. No incentive awards were granted in 2019.

The Compensation Committee has ~~been~~the authority and resources necessary to engage independent consultants to aid and provide direction with respect to executive compensation and benefits. The Compensation Committee did not use the services of a compensation consultant with respect to any aspect of executive compensation paid or earned in 2019. However, in 2019, the Compensation Committee engaged McLagan, which is part of the Rewards Solutions practice at Aon plc, as its independent compensation consultant to provide advice and facilitate the Committee’s deliberations with respect to executive compensation to be paid in and after 2020.

McLagan repots directly and exclusively to the Compensation Committee and did not provide any other services to us, management or our affiliates. McLagan did not make compensation-related decisions for the Compensation Committee, as the Compensation Committee always retains the authority make all final compensation-related decisions. During 2019, and after taking into consideration the factors listed in Rule 5605(d)(3)(D) of the Nasdaq Manual, the Compensation Committee concluded that neither it nor the Corporation has any conflicts of interest with McLagan and that McLagan is independent from management.

McLagan reviewed the compensation program designs and pay levels of our executive officers relative to both typical market practices in the banking industry and industry best practice. In their review, McLagan found that the pay levels for our executive officers were below market median compared to a peer group of similarly-sized banks. The comparator bank peer group for that analysis is listed below.

The peer group was recommended by McLagan and consisted of banks traded on NYSE or NASDAQ that met the following parameters as of September 30, 2019:

Exceptions to the criteria above were made for Summit Financial Group, Orrstown Financial Services and Citizens Financial Services due to geographic and/or business model relevance.

Based on McLagan’s analysis, feedback from shareholders and the judgment of the Compensation Committee, the Compensation Committee determined to adopt new programs and policies for 2020. We believe these changes will enhance the at-risk nature of pay, increase alignment between corporate performance and executive rewards as well as between executive interests and shareholder interests, are consistent with typical market practice and are in the best interests of the Corporation. The key changes to executive compensation that will be provided through these new programs are summarized below.

In 2020, the Compensation Committee adopted a Short -Term Incentive Plan (“STIP”) to provide executives with the opportunity to earn cash incentives based on the achievement of pre-defined performance metrics for each calendar year. Although similar plans are common practice within the banking industry, we have not had a formal cash incentive plan or made significant cash incentive awards since before the 2008 financial crisis.

The STIP consists of four performance categories, each with defined threshold, target and maximum performance and payout levels. Performance and payouts under each performance category are calculated separately, and failure to meet an acceptable performance threshold for a given category will result in no incentive payout for that category. Similarly, payouts for performance above the defined maximum level for a given category are capped, which we believe limits the incentive to take unnecessary risks to receive ever-increasing incentive awards. In addition, 80% of the overall award potential is contingent on corporate performance, with the remaining 20% contingent on individual performance objectives.

The performance categories and weightings under the STIP for 2020 are shown below:

The STIP also includes a minimum performance hurdle that must be attained before any awards under the plan are paid. If the Corporation does not attain an acceptable level of net income in 2020, no awards will be paid regardless of performance in other categories. The use of this performance hurdle aligns with bank regulatory best practices intended to protect the safety and soundness of the bank, rather than representing stretch performance aspirations as with the four plan goals in the table above.

Also in 2020, the Compensation Committee adopted a Long-Term Incentive Plan, as a sub-plan of the First United Corporation’s 2018 Equity Compensation Plan, pursuant to which the Corporation will grant equity awards to reward executives for achieving long-term performance goals and provide an opportunity for them to further align with shareholders through increased share ownership. The two incentive plans are described below.

The LTIP was initially conceived as an award in 2019 that would be contingent on performance over the three-year period from 2019–2021. However, due to the timing of engaging McLagan as the Compensation Committee’s independent compensation consultant, the work of designing and implementing the LTIP was not completed until early 2020.

In March 2020, the Compensation Committee granted awards of performance-vesting restricted stock units (“RSUs”) to each executive having a value equal to 10% of the executive’s base salary on the date of grant. The RSUs will vest in 2023, provided that (i) the named executive officer is employed on the vesting date and (ii) the Corporation has met a pre-defined annual earnings per share (“EPS”) goal for the year ending December 31, 2021. The Compensation Committee selected EPS as the performance metric because of its close correlation with shareholder value over a multi-year timeframe. EPS also aligns with the Corporation’s strategic objective of increasing profitability over time, and the Compensation Committee believes that the targeted level of EPS performance reflects the Corporation’s multi-year strategic plan and will ultimately drive meaningful shareholder value. Both the EPS goal and the potential vesting levels have defined threshold, target and maximum levels. No awards will vest if performance falls below the threshold performance level, and performance above the maximum level will not result in ever-increasing awards.

Also in March 2020, the Compensation Committee granted to each executive both time-vesting RSUs, which will vest in 2023, and performance-vesting RSUs covering a performance period from January 1, 2020 to December 31, 2022. The time-vesting RSUs represent one-third of the total grant and will vest ratably over a three-year period provided that the executive is still employed on each vesting date. Time-vested RSUs will be utilized as part of the LTIP to strengthen the alignment between named executive officers and shareholders, allow executives to increase their share ownership over time, provide a retention incentive for named executive officers to remain with the company and align with typical banking industry practice.

Performance-vesting RSUs granted in 2020 under the LTIP will represent two-thirds of the total grant. Vesting will be contingent on the Corporation achieving pre-defined goals with respect to EPS and tangible book value per share. Each of the two goals will be measured over the three-year period from January 1, 2020 to December 31, 2022, and will include defined threshold, target and maximum performance and payout levels. No awards will vest for a given performance measure if the defined threshold performance level for that goal is not achieved. If the applicable performance metrics are achieved, awards will vest on the third anniversary of the grant date, provided the executive is still employed on the vesting date. Performance-vested awards will be utilized in order to motivate and reward named executive officers for long-term performance, align the interests of named executive officers and shareholders, allow for continued growth in executive share ownership provided performance conditions are achieved, and provide a retention incentive for named executive officers to remain with the Corporation throughout the three-year vesting period.

In conjunction with the adoption of the 2020 LTIP, we intend to adopt stock ownership guidelines and share retention requirements for our executive officers and directors. The purpose of the ownership guidelines will be to encourage our executive officers and directors to increase or maintain their holdings of our Common Stock, which will assist in aligning their interests with the interests of our shareholders.

With respect to executive officers, the ownership guidelines will be expressed as a multiple of each executive’s base salary. Our CEO will be expected to hold shares equal in value to three times her base salary, while our other named executive officers will be expected to hold shares equal in value to one time their base salary. With respect to directors other than the CEO, each director will be expected to hold shares worth at least $100,000 in value. In addition, each executive and director will be expected to hold 75% of all net shares granted to him or her by the Corporation ~~since March 1976. Prior~~until he or she has achieved ownership equal to ~~her recent positions, Mrs. Sines served as Vice President and Credit Administrator, Special Assets Manager, Community Office Manager, and Loan Officer. She was named~~ the ~~Chief Credit Officer in 2007 and promoted to Senior Vice President and Chief Credit Officer in May 2014.~~ownership guideline.

~~REMUNERATION OF EXECUTIVE OFFICERS~~Remuneration of Named Executive Officers in 2019

All of the Corporation’s executive officers are also executive officers of the Bank. Both the Corporation and the Bank maintain various compensation plans and arrangements for their respective executive officers, but, where appropriate, most of these plans and arrangements are structured to apply to executive officers of the consolidated group.

The following table sets forth, for each of the last two calendar years (which were also the Corporation’s last two fiscal years), the total remuneration awarded to, earned by, or paid to (i) each person who served as the Corporation’s principal executive officer at any time during ~~2016,~~2019, (ii) the Corporation’s two most highly compensated executive officers other than the principal executive officer who were serving as such as of December 31, ~~2016~~2019 and whose total compensation (excluding above-market and preferential earnings on nonqualified deferred compensation) exceeded $100,000 during ~~2016,~~2019, and (iii) up to two additional individuals for whom disclosure would have been provided pursuant to the foregoing item (ii) had they been serving as executive officers of the Corporation as of December 31, ~~2016 (the principal executive officer and~~2019 (all such ~~other~~ persons are referred to as the “named executive officers”). For this purpose, the term “executive officer” includes any executive officers of the Bank who performs a policy making function for the Corporation. The Corporation has determined that the named executive officers for purposes of this Proxy Statement include Carissa L. Rodeheaver, Robert L. Fisher, II and ~~Keith R. Sanders.~~Jason B. Rush. In calendar years ~~2016~~2019 and ~~2015,~~2018, executive compensation included annual base salary, a discretionary cash bonus (2018), and income related to certain employee benefit plans, and the table that follows reflects compensation paid by both the Corporation and the Bank.

~~Overview of Compensation Philosophy and Objectives~~Outstanding Equity Awards at 2019 Fiscal Year End

The Compensation Committee of the Corporation’s Board of Directors is responsible for overseeing and administering the Corporation’s employee benefit plans and policies, and for annually reviewing and approving all compensation decisions relatingAs noted above, due to ~~the~~timing issues we did not grant equity-based awards to our named executive officers ~~including~~during the 2019 year, and none of our named executive ~~officers. The Compensation Committee~~officers held any equity-based compensation awards as of December 31, 2019. Therefore we have not included an “Outstanding Equity Awards at 2019 Fiscal Year End” table. We intend to grant equity-based awards to our Named Executive Officers during the Bank’s Board of Directors has identical responsibilities with respect to executive officers of the Bank. Both Compensation Committees are made of the same directors. The Compensation Committee submits its decisions regarding compensation to the independent Directors of the Board. The Compensation Committee has the authority and resources to obtain, independent of management, advice and assistance from internal and external legal, human resource, accounting or other experts, advisors, or consultants2020 year, as ~~it deems desirable or appropriate.~~further described above.

The Compensation Committee is composed of at least three Directors who are determined to be “independent directors” as that term is defined by NASDAQ Rule 5605(a)(2). The members of the Compensation Committee are appointed each year by the Board of Directors, after considering the recommendations and views of the Chairman of the Board. Seven members of the Corporation’s Board of Directors serve on the Compensation Committee, each of whom is an “independent director”. The Chair of the Compensation Committee reports to the Corporation’s Board regarding all committee actions.

The Compensation Committee believes that the compensation paid to executive officers should be closely tied to the Corporation’s performance on both a short-term basis and a long-term basis. Overall, the Compensation Committee believes that a performance-based compensation program can assist the Corporation in attracting, motivating and retaining the quality executives critical to long-term success. Accordingly, when and to the extent permitted by law, the Compensation Committee generally seeks to structure executive compensation programs so that they are focused on enhancing overall financial performance. Prior to the Corporation’s 2009 participation in the United States Department of the Treasury’s Troubled Asset Relief Program Capital Purchase Program (“TARP CPP”), this objective was accomplished through the grant of cash award opportunities under the Corporation’s short-term incentive plan, known as the Executive Pay for Performance Plan (the “EPP Plan”), and the grant of equity award opportunities under the Corporation’s Long-Term Incentive Compensation Plan (the “LTIP”), which is a sub-plan of the Omnibus Plan. The regulations adopted under the TARP CPP prohibited the payment or accrual of most forms of incentive compensation, so the Corporation and the Bank suspended the EPP and LTIP. To date, based on extensive review and discussion, the Compensation Committee has not recommenced the granting of incentive awards.

In setting the CEO’s compensation, the Compensation Committee meets with the CEO to discuss her performance and compensation package. Decisions regarding her package are based upon the Compensation Committee’s independent deliberations and input from the Committee’s compensation consultant, if one is engaged for that purpose. In setting compensation for other executive officers, the Compensation Committee considers the CEO’s recommendations, as well as any requested input and data from the CFO, Human Resources Department and outside consultants and advisors. The Compensation Committee occasionally requests one or more members of senior management to be present at Compensation Committee meetings where executive compensation and corporate or individual performance are discussed and evaluated. Only Compensation Committee members are allowed to vote on decisions regarding executive compensation, and only during its executive sessions.

For 2016, executive compensation consisted primarily of base salary, which is targeted to recognize each executive officer’s performance and contributions to success in light of salary standards in the marketplace.

All of the named executive officers are employed on an at-will basis and are not parties to any written employment agreement with the Corporation or the Bank.

In addition to base salaries paid in ~~2016,~~2019, the named executive officers’ employment arrangements make them eligible to receive benefits under and/or participate in the 401(k) Profit Sharing Plan, the Pension Plan, the Split Dollar Life Insurance arrangements, the Deferred Compensation Plan, and, except for ~~Messrs.~~Mr. Fisher, ~~and Sanders,~~ the ~~SERP. Messrs.~~Defined Benefit Supplemental Executive Retirement Plan, described below. Mr. Fisher ~~and Sanders participate~~participates in the ~~SERP Alternative Plan~~Defined Contribution Agreement, described below. The material terms of these plans and arrangements and the compensation and benefits available thereunder are discussed below. In addition, all executive officers are entitled to employee benefits that the Corporation makes available to all eligible employees generally, including health, dental and vision insurance, long-term disability insurance, and group term life insurance. ~~Mrs.~~Ms. Rodeheaver and Mr. Fisher are also provided with the use of employer-owned automobiles.

In 2007, the Corporation adopted a plan that provides for cash payments and employee benefits continuation to executive officers if they experience aan involuntary separation from service in connection with a change in control of the Corporation, known as the Change in Control Severance Plan (the “Severance Plan”), and it has entered into change in control severance agreements under the Severance Plan ~~(each, a~~(a “Severance Agreement”) with certain executive officers, including ~~Mrs.~~Ms. Rodeheaver and Messrs. Fisher and ~~Sanders.~~Rush, as described below.

The Compensation Committee has set the following base salaries for 2017, which are subject to review and adjustment by the Compensation Committee: Mrs. Rodeheaver, $357,000; Mr. Fisher, $249,700 and Mr. Sanders, $185,000.

In furtherance of the Corporation’s belief that every employee should have the ability to accrue retirement benefits, the Corporation adopted the 401(k) Profit Sharing Plan, which is available to all employees, including executive officers. Employees are automatically entered in the plan on the first of the month following completion of 30 days of service to the Corporation and its subsidiaries. Employees have the opportunity to opt out of participation or change their deferral amounts under the plan at any time. In addition to contributions by participants, the plan contemplates employer matching and the potential of discretionary contributions to the accounts of participants. The Corporation believes that matching contributions encourage employees to participate and thereby plan for their post-retirement financial future. Beginning with the 2008 plan year, the Corporation enhanced the match formula to 100% on the first 1% of salary reduction and 50% on the next 5% of salary reduction. This match is accrued for all Participants, including executive officers, immediately upon entering the plan on the first day of the month following the completion of 30 days of employment. Additionally, the Corporation accrued a non-elective employer contribution during ~~2016~~2019 for all employees (other than employees who participate in the Defined Benefit SERP or the ~~SERP Alternative~~Defined Contribution Agreement Plans and those employees meeting the age plus service requirement in the Pension Plan), equal to 4% of each employee’s salary for those hired after January, 2010 and ~~.5%~~4.5% of each employee’s salary for those hired before January 1, 2010, which will be paid into the plan in the first quarter of ~~2017.~~2020 but which were reported as accrued for the 2019 year in the Summary Compensation Table above.

Prior to 2010, all employees were eligible to participate in the Pension Plan, which is a qualified defined benefit plan, upon completion of one year of service and the attainment of the age of 21. Each of our named executive officers is a participant in the Pension Plan. Retirement benefits are determined using an actuarial formula that takes into account years of service and average compensation. Normal retirement age for the defined benefit pension plan is 65 years of age with the availability of early retirement at age 55. Pension benefits are fully vested after five years of service. A year of service is defined as working at least 1,000 hours in a plan year. Effective April 30, 2010, the plan was amended, resulting in a “soft freeze”, the effect of which prohibits new entrants into the plan and ceases crediting of additional years of service after that date. Effective January 1, 2013, the plan was amended to unfreeze the plan for those employees for whom the sum of (i) their ages, at their closest birthday, plus (ii) years of service for vesting purposes equal 80 or greater. The “soft freeze” continues to apply to all other plan participants.

The Bank adopted ~~and designed~~ the ~~SERP~~First United Bank & Trust Defined Benefit Supplemental Executive Retirement Plan (the “Defined Benefit SERP” or “SERP”) so that executives could reach a targeted retirement income. The SERP is available only to a select group of management or highly compensated employees, including ~~Mrs. Rodeheaver. Messrs.~~Ms. Rodeheaver and Mr. Rush. Mr. Fisher ~~and Sanders do~~does not participate in the Defined Benefit SERP. The Defined Benefit SERP was created to overcome qualified plan regulatory limits or the “reverse discrimination” imposed on highly compensated executives due to IRS contribution and compensation limits. In connection with the adoption of the Severance Plan, the Compensation Committee decided to credit participants with 24 years of service, regardless of actual years of service, to minimize certain income taxes that could be imposed under Section 280G of the Internal Revenue Code upon a separation from service. In the event a ~~SERP~~ participant voluntarily terminates employment without good reason, his or her credited years of service will revert to actual years of service as of the date of termination. Future participants in the plan, if any, will be credited with actual years of service.

The Defined Benefit SERP benefit is equal to 2.5% of the executive’s Final Pay (defined below) for each year of service through age 60 (up to a maximum of 24 years) plus 1% of Final Pay for each year of service after age 60 (up to a maximum of 5 years), for a total benefit equal to 65% of Final Pay. The Compensation Committee chose this plan design to provide competitive retirement benefits and to encourage service. The Defined Benefit SERP was designed primarily to supplement benefits payable under the Pension Plan and, as such, it would be appropriate to measure Defined Benefit SERP benefits using an actuarial formula (i.e., years of service and final pay) similar to that used under the Pension Plan. Accordingly, the Defined Benefit SERP benefits are offset by any accrued benefits payable under the Pension Plan and 50% of the social security benefits received by the participant. For purposes of the Defined Benefit SERP, “Final Pay” means ~~the average of the three highest amounts of annual cash compensation actually paid~~an amount equal to the ~~Participant over the five years preceding the year in which the Participant’s Separation from Service occurs. For purposes of the foregoing, “cash compensation” means~~participant’s annual base salary ~~plus~~rate in effect immediately prior to his or her Separation from Service. A “Separation from Service” is defined as any ~~cash bonus or cash incentive compensation actually paid to~~termination of employment for any reason that satisfies the ~~Participant as remuneration for services rendered to~~separation from service rules of Section 409A of the Bank in a particular calendar year, and excludes imputed income, Bank contributions and any other income related to or benefit paid under any insurance policy, retirement plan or other employee benefit plan or arrangement.Code.

The normal retirement Defined Benefit SERP benefit is paid following Normal Retirement, which is defined as a Separation from Service (as defined in the Defined Benefit SERP) after attaining age 60 and providing at least 10 years of service. Each participant is entitled to elect, upon initial participation, whether to receive the benefit in a single lump sum or in the form of a ~~lifetime~~single life annuity, a ~~10-year~~leval payment single life annuity, a level payment single life annuity with 120 months of guaranteed ~~payment lifetime annuity,~~payments, a 50% joint and survivor level payment annuity, a 75% joint and survivor level payment annuity, or a 100% joint and survivor level payment annuity. Annuity payments will be made on a monthly basis and are subject to actuarial adjustments. Payments under a ~~lifetime~~life annuity will be determined based on the expected remaining number of years of life for the annuitant and actuarial tables as of the time the annuity begins. Payments under any form of annuity other than a ~~lifetime~~single life annuity will be determined using the same actuarial equivalent assumptions used for the Pension Plan. If a participant fails to make an election, he or she will receive the benefit as a ~~lifetime~~level payment single life annuity.

A participant vests in his or her accrued normal retirement Defined Benefit SERP benefit upon 10 years of service, upon Normal Retirement, upon a Separation from Service due to Disability (as defined in the Defined Benefit SERP), and upon the participant’s death. Upon a Separation from Service following a Change in Control (as defined in the Defined Benefit SERP) and a subsequent Triggering Event (as defined in the Defined Benefit SERP), a participant will vest in the greater of (i) 60% of Final Pay or (ii) his or her accrued normal retirement Defined Benefit SERP benefit through the date of the Separation from Service.

Generally, the distribution of a participant’s Defined Benefit SERP benefit will begin following the participant’s Normal Retirement. If the participant suffers a Separation from Service due to death or following a Disability, then the participant or his or her designated beneficiaries will receive a lump sum payment equal to the actuarial equivalent of his or her accrued Defined Benefit SERP benefit. If the participant suffers a Separation from Service other than due to ~~“Cause”~~Cause (as defined in the Defined Benefit SERP) after 10 years of service but prior to Normal Retirement, then he or she will receive the normal retirement Defined Benefit SERP benefit that has accrued through the date of the Separation from Service at age 60, in the form elected. If the participant suffers a Separation from Service following a Change in Control and subsequent Triggering Event, then the distribution of his or her normal retirement Defined Benefit SERP benefit that has accrued through the date of the Separation from Service will begin, in the form elected, once the participant reaches age 60. If the participant dies following the commencement of distributions but prior to the complete distribution of his or her vested and accrued SERP benefit, then distributions will be paid to his or her beneficiaries only if he or she chose a joint and survivor annuity form of distribution or a 10-year guaranteed payment lifetime annuity (and then only until the guaranteed payments have been made).

A participant will lose all Defined Benefit SERP benefits if he or she is terminated for ~~Cause (as defined in the SERP).~~Cause. In addition, each participant has agreed that the receipt of any Defined Benefit SERP benefits is conditioned upon his or her (i) refraining from competing with the Corporation and its subsidiaries in their market areas for a period of three years following his or her Separation from Service, (ii) refraining from disclosing the Corporation’s confidential information following a Separation from Service, and (iii) remaining available to provide up to six hours of ~~transition~~consultative services per month for twelve months after his or her Separation from Service. Items (i) and (iii) do not apply, however, if the Separation from Service results from a Change in Control and subsequent Triggering Event. If a participant breaches any of these conditions, then he or she is obligated to return all SERP benefits paid to date plus interest on such benefits at the rate of 10% per year.

The amounts that could be paid to ~~Mrs.~~Ms. Rodeheaver and Mr. Rush under the Defined Benefit SERP upon a separation from service is shown below in the table contained in the section entitled “Benefits Upon a Separation from Service”.

The Bank purchased policies of bank owned life insurance (“BOLI”) in the aggregate amounts of $18 million in 2001, $2.3 million in 2004, $2.8 million in 2006, $10 million in 2009 and $5.5 million in 2015 to help offset the costs of providing benefits under all benefit plans and arrangements. The Bank is the sole owner of these BOLI policies, has all rights with respect to the cash surrender values of these BOLI policies, and is the sole death beneficiary under these BOLI policies.

Because the Compensation Committee believes that it is important to reward officers for their loyalty and service, the Corporation has agreed, pursuant to Endorsement Split Dollar Agreements, to assign a portion of the cash benefits payable under these BOLI policies to the executive officers’ named beneficiaries in the event they die while employed. Participation under the Split-Dollar Life Insurance arrangements can be terminated for any reason, at any time, by either the Bank or the covered officer. The Bank terminates each covered officer’s participation when his or her employment is terminated. The current death benefits payable to the beneficiaries of the named executive officers under these arrangements are shown below in the table contained in the section entitled “Benefits Upon a Separation from Service”.

The Corporation’s directors and those executives selected by the Compensation Committee are permitted to participate in the Deferred Compensation Plan. Each of the named executive officers is entitled to ~~participate.~~participate in the Deferred Compensation Plan. The Deferred Compensation Plan permits directors and executives to elect, each year, to defer receipt of up to 100% of their directors’ fees, salaries and bonuses, as applicable, to be earned in the following year. The deferred amounts are credited to an account maintained on behalf of the participant (a “Deferral Account”) and are deemed to be invested in certain investment options established from time to time by the Investment Committee of the Bank’s Trust Department. Additionally, the Corporation may make discretionary contributions for the benefit of a participant to an Employer Contribution Credit Account (the “Employer Account”), which will be deemed to be invested in the same manner as funds credited to the Deferral Account. Each Deferral Account and Employer Account is credited with the gain or loss generated on the investments in which the funds in those accounts are deemed to be invested, less any applicable expenses and taxes.

A participant is ~~at all times~~always 100% vested in his or her Deferral Account. The Corporation is permitted to set a vesting date or event for the Employer Account, and such date may be based on the performance by the participant of a specified number of completed years of service with the Corporation, may be based on the participant’s performance of specified service goals with respect to the Corporation, may be limited to only certain termination of employment events (e.g., involuntary termination, those following a change of control, etc.), or may be based on any other standard, at the Corporation’s sole and absolute discretion. Notwithstanding the foregoing, a participant will become 100% vested in his or her Employer Account if he or she terminates employment (or, in the case of a participant who is a non-employee director, terminates membership on the ~~Board of Directors)~~Board) because of death or Total and Permanent Disability (as defined in the Deferred Compensation Plan). Each participant will also become 100% vested in his or her Employer Account in the event of a Change in Control (as defined in the Plan).

Generally, a participant is entitled to choose, pursuant to an election form, the date on which his or her account balances are to be distributed, subject to any restrictions imposed by the Corporation and the trustee under the ~~Rabbi Trust~~Deferred Compensation Plan in their sole and absolute discretion and applicable law. If a participant fails to select a distribution date, then distributions will begin on or about the date of the participant’s termination of employment or director status with the Corporation. The participant may choose whether his or her account balances are to be distributed in one lump sum or in ~~ten~~ equal annual installments selected by the participant between 2 and 10 installments. If a participant fails to elect a payment date or the method of payment, then the account balances will be distributed in one lump sum following termination of employment. If distributions are made in installments, then the undistributed balance will continue to be deemed invested in the chosen investment options, and the accounts will be credited or debited accordingly, until all amounts are distributed.

If a participant dies or experiences a Total and Permanent Disability before terminating his or her employment or director status with the Corporation and before the commencement of payments, then the entire balance of the participant’s accounts will be paid to the participant or to his or her named beneficiaries, as applicable, as soon as practicable following death or Total and Permanent Disability. If a participant dies after the commencement of payments but before he or she has received all payments to which he or she is entitled, then the remaining payments will be paid to his or her designated beneficiaries in the manner in which such benefits were payable to the participant. Upon a Change in Control, the entire balance of a participant’s accounts will be paid in a single lump sum payment.

The Deferred Compensation Plan provides for limited distributions in the event of certain financial hardships.

On January 9, 2015, the Corporation entered into a participation agreement under the Deferred Compensation Plan, styled as ~~a SERP Alternative Participation~~the First United Corporation Defined Contribution Agreement (the ~~“Participation~~“Defined Contribution Agreement”), with ~~each of Messrs.~~Mr. Fisher ~~and Sanders~~ pursuant to which the Corporation agreed, for each Plan Year (as defined in the Deferred Compensation Plan) in which it determines that it has been Profitable (as defined in the ~~Participation~~Defined Contribution Agreement), to make a discretionary contribution to the Employer ~~Accounts~~Account of ~~Messrs. Fishers and Sanders~~Mr. Fisher in an amount equal to 15% of ~~their~~his base ~~salaries~~salary for such Plan Year, with the first Plan Year being the year ending December 31, 2015. ~~Messrs.~~Mr. Fisher ~~and Sanders~~ received Employer Contribution Credits of ~~$36,540 and $27,000, respectfully,~~$39,157 for the ~~2015~~2018 Plan Year. For the ~~2016~~2019 Plan Year, ~~Messrs.~~Mr. Fisher ~~and Sanders~~ received Employer Contribution Credits of ~~$37,088 and $27,357, respectfully.~~$40,331. The ~~Participation Agreements provide~~Defined Contribution Agreement provides that ~~each of Messrs.~~Mr. Fisher ~~and Sanders~~ will become 100% vested in the amount maintained in his Employer Account upon the earliest to occur of the following events: (i) his Normal Retirement (as defined in the ~~Participation~~Defined Contribution Agreement); (ii) his Separation from Service (as defined in the ~~Participation~~Defined Contribution Agreement) following a Change of Control (as defined in the Deferred Compensation Plan) and subsequent Triggering Event (as defined in the ~~Participation~~Defined Contribution Agreement); (iii) his Separation from Service due to a Disability (as defined in the ~~Participation~~Defined Contribution Agreement); (iv) with respect to a particular award of Employer Contribution Credits, his completion of two consecutive Years of Service (as defined in the ~~Participation~~Defined Contribution Agreement) immediately following the Plan Year for which such award was made; or (v) his death. Notwithstanding the foregoing, however, ~~Messrs. Sanders and~~Mr. Fisher will lose ~~their~~his entitlement to the ~~amounts maintained in their~~amount credited to his Employer Account if ~~they are~~he is terminated for Cause (as defined in the ~~Participation Agreements)~~Defined Contribution Agreement). In addition, the ~~Participation~~Defined Contribution Agreement conditions ~~their~~his entitlement to the amounts ~~held in their~~credited to his Employer Account on ~~their~~his (a) refraining from engaging in Competitive Employment (as defined in the ~~Participation Agreements)~~Defined Contribution Agreement) for three years following ~~their~~his Separation from Service, (b) refraining from injurious disclosure of confidential information concerning the Corporation, and (c) remaining available, at the Corporation’s reasonable request, to provide at least six hours of transition services per month for 12 months following ~~their~~his Separation from Service (except in the case of death or Disability), except that only item (b) will apply in the event of a Separation from Service following a Change of Control and subsequent Triggering Event. In the event that ~~Mr. Sanders or~~ Mr. Fisher violates any of those conditions, then he will forfeit all then-unpaid amounts in his Employer Account and be obligated to reimburse the Corporation for all amounts theretofore paid to him, plus interest thereon at the rate of 10% per year.

As noted above, the Corporation has entered into Severance Agreements under the Severance Plan with ~~Mrs.~~Ms. Rodeheaver ~~Mr.~~and Messrs. Fisher and ~~Mr. Sanders;~~Rush; however, the Corporation has not made any payments under the Severance Agreements to date.

The Corporation’s obligations under the Severance Agreements would be triggered if the participating executive officer’s employment were to be terminated by the Corporation without Cause (as defined in the Severance Agreement) or by the executive for Good Reason (as defined in the Severance Agreement) during the period commencing on the date that is 90 days before a Change in Control (as defined in the Severance Plan) and ending on the first anniversary of a Change in Control (the “Protection Period”). In such case, the executive officer would be entitled to receive a lump sum cash payment equal to two times his or her Final Pay (as defined in the Severance Agreement), the immediate vesting of all equity-based compensation awards that have been granted to the executive, continued coverage for 24 months under the Corporation’s group health and dental plan (or, if the executive is not eligible for such coverage, a monthly cash payment equal to the monthly premium for a similar policy), and outplacement services for up to 12 months.

Each of the Severance Agreements provides that the amount of all severance benefits described above, plus the amount of all benefits under any other plan or arrangement, the payment of which is deemed to be contingent upon a change in the ownership or effective control of the Corporation (as determined under Section 280G of the Code), may not exceed 2.99 times the participant’s “annualized includable compensation for the base period” (i.e., the average annual compensation that was includable in his or her gross income for the last five taxable years ending before the date on which the Change in Control ~~occurs).~~occurs.

Each Severance Agreement has a one-year term, which automatically renews for additional one-year terms unless the Corporation provides the participant with six months’ prior notice of its intention not to renew the Severance Agreement, except that the Severance Agreement will automatically terminate at the expiration of the Protection Period.

The table that follows shows the estimated present value of benefits that could have been paid to the named executive officers as of December 31, ~~2016~~2019 under the Severance Plan, the SERP and the Split Dollar Life Insurance Arrangements upon aan applicable separation from ~~service.~~service and/or a change in control event. As discussed above, subject to certain conditions, participants in the SERP are entitled to receive their vested benefits (offset by Pension Plan benefits, 50% of social security benefits and, in the case of death, benefits paid under the Split Dollar Life Insurance arrangements described above) if they suffer a separation from service other than for cause. No SERP benefits are payable if a participant’s separation from service was for cause. Except in the cases of a separation from service due to death or disability, the payment of SERP benefits does not commence until the later of normal retirement or attainment of age 60 for the ~~SERP Plan.~~SERP.

~~The Compensation Committee has the authority and resources necessary to engage independent consultants to provide assistance and direction with respect to executive compensation and benefits.~~

In 2016, the Compensation Committee directly engaged the compensation consulting firm Pearl Meyer & Partners (PM&P”) to conduct a thorough review of executive and director compensation as compared to peers and market. In addition, their engagement also provided advice and information to facilitate the Committee’s deliberations. PM&P was also purposed with: (i) confirming/validating the appropriateness of the Corporation’s executive and director compensation as compared to the market and the Corporation’s performance; (ii) providing a market-based framework for managing compensation and benefits prospectively; and (iii) providing feedback and guidance with respect to the Compensation Committee’s discussions about potential pay/benefit decisions and/or changes to the current compensation structure for 2016. In this current survey project, PM&P provided the Compensation Committee with a compensation survey of peer banks in Maryland, Pennsylvania, Virginia and West Virginia with assets of between one-half to two times the assets of the Corporation. The Compensation Committee has concluded that PM&P’s engagement did not raise any conflict of interest.

During the last two fiscal years, the Bank has had banking transactions in the ordinary course of its business with certain ~~Directors~~directors and officers of the Corporation and with their affiliates. These transactions were on substantially the same terms, including interest rates, collateral, and repayment terms on loans, as those prevailing at the same time for comparable transactions with person who are not related to the Bank.

In addition to the foregoing, ~~Morgantown Printing & Binding, a corporation owned by Director H. Andrew Walls, III and a trust established for the benefit of his minor children,~~MP&B provides various printing services (marketing materials, account statements, and other routine items), document storage and warehouse services, and related services to the Corporation. Total fees paid by the Corporation to this corporation in ~~2016~~2019 and ~~2015~~2018 were ~~$294,840~~$186,334 and ~~$214,230,~~$206,887, respectively. The Corporation has again retained ~~Morgantown Printing & Binding~~MP&B to provide these services in ~~2017,~~2020, for which it expects to pay approximately $250,000. Management believes that all of the foregoing transactions with this corporation are or will be on terms that are substantially similar to those that would be available if a person unrelated to the Corporation were to provide these services.

During 2017, the Bank hired a general contractor for the completion of renovation projects in the Bank’s branch office locations. The general contractor is not affiliated with the Corporation, the Bank or any of their directors or executive officers. On its own initiative and without input from the Bank, the general contractor hired Rush Services as a subcontractor to provide electrical, HVAC and other services. Jason Rush, the Chief Operating Officer of the Corporation and the Bank, serves as the Secretary of, and is a 50% owner of Rush Services. Total fees paid by the Bank directly to Rush Services in 2019 and 2018 were $51,879 and $99,364, respectively. The general contractor paid Rush Services $0 and $6,239, in 2019 and 2018, respectively, for such services.

The Corporation and the Bank have adopted written policies and procedures to help ensure that the Corporation and the Bank comply with all legal requirements applicable to related party transactions. Among other policies and procedures, the Audit Committee of the Board ~~of Directors~~ must review and approve transactions with directors, executive officers and/or their respective related interests and submit such transactions to the full Board ~~of Directors~~ for approval. This review is intended to ensure compliance with Regulation O, which imposes requirements for extensions of credit to directors and executive officers, Sections 23A and 23B of the Federal Reserve Act, which governs transactions between the Bank and its affiliates, and Section 5-512 of the Financial Institutions Article of the Annotated Code of Maryland, which limits, and requires periodic review and approval of, extensions of credit to directors and executive officers.

The Corporation is providing its shareholders with the opportunity, by casting a non-binding advisory vote, to approve or disapprove the compensation paid to its named executive officers for ~~2016,~~2019, as discussed in this Proxy Statement pursuant to Item 402 of the ~~SEC’s~~ Regulation S-K (commonly referred to as the “Say-on-Pay Vote”). This advisory vote is required by ~~Section 14A of~~Rule 14a-21(a) under the Exchange Act, but the frequency of the vote (every year, every two years, or every three years) is at the discretion of the Board. Rule 14a-21(b) under the Exchange Act requires the Board to ask shareholders, at least every six years, to recommend the frequency of ~~Directors.~~the Say-on-Pay Vote. At the 2015 ~~annual meeting of shareholders, the~~Annual Meeting, shareholders recommended that future Say-on-Pay Votes take place every year, and the Board has determined to submit the Say-on-Pay Vote ~~be held~~to shareholders on an annual ~~basis, and that frequency was adopted by the Board of Directors.~~basis.

The Corporation’s goal for its executive compensation program is to attract, motivate and retain a talented team of executives who will provide leadership for the Corporation’s success in dynamic and competitive markets. The section of this Proxy Statement entitled ~~“REMUNERATION OF EXECUTIVE OFFICERS”~~“EXECUTIVE COMPENSATION” contains the information required by Item 402 of Regulation S-K with respect to the compensation paid to the named executive officers and discusses in detail the Corporation’s executive compensation program and the compensation that was earned by, awarded to or paid to the Corporation’s named executive officers for ~~2016.~~2019.

At the ~~2017~~ Annual Meeting, shareholders will be asked to adopt the following non-binding advisory resolution:

RESOLVED, that the compensation paid to the named executive officers of First United Corporation, as disclosed in its definitive proxy statement for the ~~2016~~2020 Annual Meeting of ~~Stockholders~~Shareholders pursuant to Item 402 of Regulation S-K, including in the section entitled “REMUNERATION OF EXECUTIVE OFFICERS”, is hereby approved.

Because this advisory vote relates to, and may impact, the Corporation’s executive compensation policies and practices, the Corporation’s executive officers, including its named executive officers, have an interest in the outcome of this vote.

Although the Board ~~of Directors~~ believes that it is important to seek the views of shareholders on the design and effectiveness of the Corporation’s executive compensation program, you should understand that your vote is advisory and, as a result, will not be binding upon the Board ~~of Directors~~ or ~~its~~the Compensation Committee, overrule any decision made by the Board ~~of Directors~~ or ~~its~~the Compensation Committee, or create or imply any additional fiduciary duty by the Board ~~of Directors~~ or ~~its~~the Compensation Committee. The Board and/or the Compensation Committee may, however, take into account the outcome of the vote when considering future executive compensation arrangements.

The Board ~~of Directors~~ and ~~its~~the Compensation Committee believe that the Corporation’s compensation policies and procedures applicable to the named executive officers are reasonable in comparison both to the Corporation’s peer group and to the Corporation’s performance during ~~2016.~~2019.

The affirmative vote of a majority of all of the votes cast at the Annual Meeting is required for thenon-binding, advisory resolution approving the compensation of the Corporation’s named executive officers. Abstentions and broker non-votes will not be counted as votes cast, and, therefore will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum.

The Board ~~of Directors~~ unanimously recommends that shareholders vote “FOR” adoption of the foregoing non-binding advisory resolution.

RATIFICATION OF APPOINTMENT OF BAKER TILLY ~~VIRCHOW KRAUSE, LLP~~ AS THE CORPORATION’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Proposal 3)

At the ~~2017~~ Annual Meeting, shareholders will also be asked to ratify the Audit Committee’s appointment of Baker Tilly to audit the books and accounts of the Corporation for the fiscal year ~~ended~~ending December 31, ~~2017.~~2020. Baker Tilly has served as the Corporation’s independent registered public accounting firm since October 1, 2014. Baker Tilly has advised the Corporation that neither the accounting firm nor any of its members or associates has any direct financial interest in or any connection with the Corporation other than as independent public auditors. A representative of Baker Tilly is not expected to be present at the ~~2017~~Annual Meeting. Accordingly, a representative of Baker Tilly is not expected to make a statement at the Annual Meeting ~~of Shareholders.~~or be available to respond to appropriate questions.

The affirmative vote of a majority of all of the votes cast at the Annual Meeting is required to ratify the appointment of our independent public accountant. Abstentions and broker non-votes will not be counted as votes cast, and, therefore will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum.

The Board ~~of Directors~~ recommends that shareholders vote “FOR” the ratification of the appointment of Baker Tilly Virchow Krause, LLP as the Corporation’s independent registered public accounting firm for ~~2017.~~2020.

Because your vote is advisory, it will not be binding upon the Audit Committee, overrule any decision made by the Audit Committee, or create or imply any additional fiduciary duty by the Audit Committee. The Audit Committee ~~may,~~may; however, take into account the outcome of the vote when considering future auditor appointments.

The following table shows the fees paid or accrued by the Corporation in ~~2016~~2019 and ~~2015~~2018 for the audit and other services provided by Baker Tilly for those years:

Audit Fees for ~~2016~~2019 and ~~2015~~2018 include fees associated with the annual audits, the reviews of the Corporation’s ~~quarterly reports~~Quarterly Reports on Form 10-Q, and the attestation of management’s reports on internal control over financial reporting contained in the Annual Reports on Form 10-K for those years.

Audit Related Fees for ~~2016 and 2015 also~~2018 include fees associated with reviews of registration statements filed with the SEC by the ~~Corporation.~~

~~The Audit Committee has reviewed summaries~~Corporation, while 2019 is in regards to the potential sale of ~~the services provided by Baker Tilly and the related fees and has determined that the provision of non-audit services was compatible with maintaining the independence of Baker Tilly.~~trust preferred securities.

It is the Audit Committee’s policy to pre-approve all audit services and permitted non-audit services (including the fees and terms thereof) to be performed for the Corporation by its independent registered public accounting firm, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(l)(B) of the Exchange Act, which, when needed, are approved by the Audit Committee prior to the completion of the independent registered public accounting firm’s audit. All of the ~~2016~~2019 and ~~2015~~2018 services described above were pre-approved by the Audit Committee.

Pursuant to Section 16(a) of the Exchange Act (“Section 16(a)”) and the rules promulgated thereunder, the Corporation’s executive officers and ~~Directors,~~directors, and persons who beneficially own more than 10% of the ~~Corporation’s~~ Common Stock, are required to file certain reports regarding their ownership of Common Stock with the SEC. Directors, executive officers and beneficial owners of more than 10% of the Common Stock are also required to furnish the Corporation with copies of all Section 16(a) reports that they file with the SEC. Based solely on a review of copies of such reports ~~furnished to~~and amendments thereto filed electronically with the ~~Corporation,~~SEC during the year ended December 31, 2019, or written representations that no reports were required, the Corporation believes that no Director, executive officer or other greater than 10% beneficial owner of either class of our Common Stock failed to timely file with the SEC one or more required reports on Form 3, 4 or 5, for 2018, with the exception of the inadvertent late filings for (i) Robert W. Kurtz who inadvertently filed one late Form 4 relating to a purchase of shares under a dividend reinvestment feature of a brokerage account and such ~~persons timely~~transactions were subsequently reported in a Form 4 that was filed with the SEC on May 24, 2019; (ii) Carissa L. Rodeheaver who inadvertently filed two late Form 4s, each relating to a purchase of shares under a dividend reinvestment feature of a brokerage account, and such transactions were subsequently reported in a Form 4 that was filed with the SEC on July 19, 2019 and November 6, 2019; (iii) Gary R. Ruddell who inadvertently filed two late Form 4s, each relating to a purchase of shares under a dividend reinvestment feature of a brokerage account, and such transactions were subsequently reported in a Form 4 that was filed with the SEC on May 28, 2019 and November 6, 2019; (iv) I. Robert Rudy who inadvertently filed two late Form 4s, each relating to a purchase of shares under a dividend reinvestment feature of a brokerage account, and such transactions were subsequently reported in a Form 4 that was filed with the SEC on May 28, 2019 and November 6, 2019; and (v) Marisa A, Shockley who inadvertently filed two late Form 4s, each relating to a purchase of shares under a dividend reinvestment feature of a brokerage account, and such transactions were subsequently reported in a Form 4 that was filed with the SEC on February 6, 2019 and November 6, 2019.

A shareholder who is entitled to vote for the election of directors and who desires to nominate a candidate for election to be voted on at an Annual Meeting of Shareholders may do so only in accordance with Section 4 of Article II of the Bylaws, which provides that a shareholder may nominate a director candidate by written notice to the Chairman of the Board or the President not less than 150 days nor more than 180 days prior to the date of the meeting of shareholders called for the election of directors which, for purposes of this requirement, shall be deemed to be on the same day and month as the Annual Meeting of Shareholders for the preceding year. Such notice shall contain the following information to the extent known by the notifying shareholder: (i) the name and address of each proposed nominee; (ii) the principal occupation of each proposed nominee; (iii) the number of shares of capital stock of the Corporation owned by each proposed nominee; (iv) the name and residence address of the notifying shareholder; (v) the number of shares of capital stock of the Corporation owned by the notifying shareholder; (vi) the consent in writing of the proposed nominee as to the proposed nominee’s name being placed in nomination for director; and (vii) all ~~reports~~information relating to such proposed nominee that would be required to be ~~filed~~disclosed by ~~Section 16(a) during~~Regulation 14A under the ~~year ended December 31, 2016.~~Exchange Act and Rule 14a-11 promulgated thereunder, assuming such provisions would be applicable to the solicitation of proxies for such proposed nominee. To be considered timely for the 2021 Annual Meeting, a shareholder nomination, and all supporting information, must be submitted no earlier than [●] and no later than [●].

A shareholder who desires to present a proposal pursuant to Rule 14a-8 under the Exchange Act to be included in the proxy statement for, and voted on by the shareholders at, the ~~2018~~2021 Annual Meeting ~~of Shareholders~~ must submit such proposal in writing, including all supporting materials, to the Corporation at its principal office no later than ~~November 27, 2017 (120~~[●], 2020, 120 days before the date of mailing based on this year’s ~~proxy statement date)~~Proxy Statement date, and meet all other requirements for inclusion in the proxy statement. Additionally, pursuant to Rule 14a-4(c)(1) under the Exchange Act, if a shareholder intends to present a proposal for business to be considered at the ~~2018~~2021 Annual Meeting ~~of Shareholders~~ but does not seek inclusion of the proposal in the Corporation’s proxy statement for such meeting, then the Corporation must receive the proposal by ~~February 10, 2018 (45~~[●], 2021, 45 days before the date of mailing based on this year’s ~~proxy statement~~Proxy Statement date) for it to be considered timely received. If notice of a shareholder proposal is not timely received, then the proxies will be authorized to exercise discretionary authority with respect to the proposal.

ANNUAL REPORT TO SHAREHOLDERS

A copy of the Corporation’s Annual Report on Form 10-K and Form 10-K/A for fiscal year ended December 31, 2019 as filed with the SEC is being mailed to shareholders together with this Proxy Statement. Copies of the Corporation’s Annual Report to Shareholders may also be obtained by shareholders without charge by directing the request to c/o Tonya K. Sturm, Secretary, 19 South Second Street, Oakland, Maryland 21550-0009 or (301) 533-2390 or by accessing http://www.edocumentview.com/FUNC. Information on this website, other than this Proxy Statement, is not a part of this Proxy Statement nor does it form any part of the material for soliciting proxies.

The SEC has adopted rules that permit companies and intermediaries (such as brokers, banks, trustees and other nominees) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies.

A number of banks, brokers, trustees and other nominees with account holders who are our shareholders may be householding our proxy materials. A single Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report to Shareholders be delivered to multiple shareholders sharing an address unless contrary instructions have been received from one or more of the affected shareholders. Once you have received notice from your bank, broker, trust or other nominee that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Notice of Annual Meeting of Stockholders, Proxy Statement and Annual Report to Shareholders please notify your bank, broker, trust or other nominee and direct your request to c/o Tonya K. Sturm, Secretary, 19 South Second Street, Oakland, Maryland 21550-0009 or (301) 533-2390. Shareholders who currently receive multiple copies of this Proxy Statement at their address and would like to request householding of their communications should contact their bank,broker, trust or other nominee.

As of the date of this ~~proxy statement,~~Proxy Statement, the Board is not aware of any matters, other than those stated above, that may properly be brought before the ~~meeting.~~Annual Meeting. If other matters should properly come before the ~~meeting~~Annual Meeting or any adjournment or postponement thereof, to the extent permitted by Rule 14a-4(c) of the Exchange Act, persons named in the enclosed proxy or their substitutes will vote with respect to such matters in accordance with their best judgment.

Under applicable SEC rules and regulations, members of the Board, the Board’s nominees and certain officers and other employees of the Corporation are “participants” with respect to the Corporation’s solicitation of proxies in connection with the Annual Meeting. The following sets forth certain information about such persons (the “Participants”).

The names and present principal occupation of our directors and director nominees, each a Participant, are set forth below. The business address for the Corporation’s current directors and director nominees is c/o First United Corporation, 19 South Second Street, Oakland, Maryland 21550-0009.

Executive officers and employees of the Corporation who are Participants are Robert L. Fisher and Jason B. Rush. The business address for each is c/o First United Corporation, 19 South Second Street, Oakland, Maryland 21550-0009. Their present principal occupations are stated below.

Information Regarding Ownership of the Corporation’s Securities by Participants

The number of the Corporation’s securities beneficially owned by certain of the Participants as of March 27, 2020 is set forth in the section entitled “Beneficial Ownership of Common Stock By Principal Shareholders and Management” in this Proxy Statement. In addition, Mr. Sanders beneficially owns 7,962 shares of Common Stock, and Ms. Sturm beneficially owns 3,725 shares of Common Stock, as of March 27, 2020.

Information Regarding Transactions in the Corporation’s Securities by Participants

The following table sets forth information regarding purchases and sales of the Corporation’s securities by the Participants within the past two years. No part of the purchase price or market value of these securities is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such securities.

Other than as set forth in this Appendix A or elsewhere in this Proxy Statement and based on the information provided by each Participant, none of the Participants or their associates (i) beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, or owns of record but not beneficially, any shares of Common Stock or other securities of the Corporation or any of its subsidiaries or (ii) has any substantial interest, direct or indirect, by security holdings or otherwise, in any matter to be acted upon at the Annual Meeting. In addition, neither the Corporation nor any of the Participants listed above is now or has been within the past year a party to any contract, arrangement, or understanding with any person with respect to any of the Corporation’s securities, including, but not limited to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies. No Participant has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) during the past ten years.

Other than as set forth in this Appendix A or elsewhere in this Proxy Statement and based on the information provided by each Participant, neither the Corporation nor any of the Participants listed above or any of their associates have or will have (i) any arrangements or understandings with any person with respect to any future employment by the Corporation or its affiliates or with respect to any future transactions to which the Corporation or any of its affiliates will or may be a party or (ii) a direct or indirect material interest in any transaction or series of similar transactions since the beginning of our last fiscal year or any currently proposed transactions, or series of similar transactions, to which the Corporation or any of its subsidiaries was or is to be a party in which the amount involved exceeds $120,000.

PRELMINARY COPY—SUBJECT TO COMPLETION—DATED APRIL 7, 2020 FIRST UNITED CORPORATION This proxy is solicited on behalf of the Board of Directors Annual Meeting of Shareholders [•] at [•] [a.m./p.m.] local time The shareholder(s) hereby acknowledges receipt of the Notice of the Annual Meeting and the Proxy Statement, hereby appoint(s) [•] and [•], or either of them, as proxies, each of them acting individually or in the absence of others, with the full power of substitution and re-substitution, and hereby authorizes them to represent and to vote, as that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held on [•], at [•] [a.m./p.m.], local time, at [•], and any adjournments or postponements thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Your Board of Directors unanimously recommends a vote “FOR” the nominees proposed by your Board of Directors on the enclosed BLUE proxy card. Your Board of Directors does NOT endorse the nominees put forth by Driver Management Company LLC, Driver Opportunity Partners I LP and J. Abbott R. Cooper (collectively, “Driver Management”) and strongly urges you to DISCARD all proxy cards or other materials sent to you by Driver Management. If you have previously submitted a proxy card sent to you by Driver Management, you can revoke that proxy (including any matter set forth therein, whether or not such matter is listed on the reverse side of this card) by signing and dating the enclosed BLUE proxy card and returning it in the postage-paid envelope provided or by voting via the Internet or by telephone by following the instructions provided on the enclosed BLUE proxy card. Continued and to be signed on reverse side SEE REVERSE SIDE 5 TO VOTE BY MAIL, PLEASE DETACH HERE, SIGN AND DATE PROXY CARD, AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED 5 BLUE PROXY CARD Important Notice Regarding the Availability of Proxy Materials for the www.proxyvoting.com/FUNC: The Notice and Proxy Statement and Annual Report are available at www.proxyvoting.com/FUNC

INSTRUCTIONS: To vote against an individual nominee, mark the “FOR ALL EXCEPT” box and write the name(s) of the nominee(s) on the line below: ______________________________________________________________________ Please mark vote as indicated in this example X Date (Signature) (Signature if held jointly) Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. FOR ALL WITHHOLD ALL PLEASE SIGN, DATE AND RETURN THIS BLUE PROXY CARD PROMPTLY USING THE ENCLOSED POSTAGE PAID ENVELOPE 5 TO VOTE BY MAIL, PLEASE DETACH HERE, SIGN AND DATE PROXY CARD, AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED5 The Board of Directors unanimously recommends you vote “FOR” the following: Corporation Proposal 1: The election of the four nominees named in this Proxy Statement to serve on the Board of Directors, each until the 2023 Annual Meeting of Shareholders and until his or her successor is duly elected and qualified; Nominees John F. Barr, Brian R. Boal, John W. McCullough, Marisa A. Shockley The Board of Directors unanimously recommends you vote “FOR” proposals 2 and 3: Corporation Proposal 2: The non-binding, advisory resolution approving the compensation of the Corporation’s named executive officers for 2019; Corporation Proposal 3: The ratification of the appointment of Baker Tilly Virchow Krause, LLP as the Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2020; NOTE: The proxies are authorized to vote, in their discretion, upon such other business as may properly come before the Annual Meeting of Shareholders or any postponements or adjournments thereof, to the extent permitted by Rule 14a-4(c) of the Securities Exchange Act of 1934, as amended. TO AUTHORIZE YOUR PROXY BY TELEPHONE OR INTERNET QUICK ★ ★ ★ EASY ★ ★ ★ IMMEDIATE ( : Your telephone or internet proxy authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your BLUE proxy card. AUTHORIZE YOUR PROXY BY INTERNET: THE WEB ADDRESS IS www.proxyvoting.com/FUNC. You will be asked to enter a CONTROL NUMBER which is located in the lower right hand corner of this form. AUTHORIZE YOUR PROXY BY PHONE: You will be asked to enter a CONTROL NUMBER which is located in the lower right hand corner of this form. OPTION A: You are encouraged to review each proposal and select a voting choice before you submit your proxy. Please press 0 in order to vote on each proposal separately. OPTION B: If you prefer not to select a voting choice with respect to each proposal you may press 1 to submit a proxy. If you select this option, your shares will be voted in accordance with the recommendations made by the Board of Directors. Call ★ ★ Toll Free ★ ★ (800) [ ] There is NO CHARGE to you for this call CONTROL NUMBER for Telephone/Internet Proxy Authorization Internet and Telephone voting is available through 11:59 P.M. Eastern Time on [ ]. FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR ALL EXCEPT PRELMINARY COPY—SUBJECT TO COMPLETION—DATED APRIL 7, 2020

	2017							2016		2020						2019
	Common Stock Beneficially Owned as of 02-27-2017				Percent of Outstanding Common Stock			Common Stock Beneficially Owned as of 02-26-2016		Common Stock Beneficially Owned as of 03-27-2020			Percent of Outstanding Common Stock			Common Stock Beneficially Owned as of 02-28-2019
Directors, Nominees and Named Executive Officers:
John F. Barr		9,221				*			7,254		18,093			*			16,547
Brian R. Boal		3,645				*			2,645		8,337			*			6,791
M. Kathryn Burkey		33,034	(1	)		*			32,034		43,675			*			41,229
Robert L. Fisher, II		5,751	(2	)							5,563	(1)		*			4,963
Robert W. Kurtz		11,221	(3	)		*			10,221		10,521	(2)		*			10,021
John W. McCullough		21,293				*			19,327		35,742			*			33,499
Elaine L. McDonald		25,782	(4	)		*			24,440		32,926	(3)		*			32,212
Carissa L. Rodeheaver		6,215	(5	)		*			6,215		15,810	(4)		*			9,165
Gary R. Ruddell		11,583	(6	)		*			10,583		18,533	(5)		*			15,316
I. Robert Rudy		47,767	(7	)		*			46,767		40,368	(6)		*			42,156
Keith R. Sanders		6,862				*			1,929
Jason B. Rush											11,083	(7)		*			10,751
Marisa A. Shockley		4,599				*			3,116		16,213			*			14,345
Robert G. Stuck		11,121				*			10,121
H. Andrew Walls	��	50,763	(8	)		*			48,796		57,106	(8)		*			55,560

Directors, Nominees & Executive Officers as a group (14 persons)		248,857				4.0	%		254,773
Directors, Nominees & Executive Officers as a group (13 persons)											313,970			4.5	%		292,555

M3 Partners, L.P.		471,272	(9	)		7.5	%		412,175
Jeffrey L. Gendell		350,693	(10	)		5.6	%

Driver Opportunity Partners I LP											365,212	(9)		5.2	%		0

Total											697,182			9.7	%

DIRECTOR COMPENSATION
Name	Fees earned or paid in cash ($)		Stock Awards ($)(1)		All other compensation ($)(2)		Total ($)		Fees earned or paid in cash ($)			Stock awards ($) (1)		All other compensation ($)		Total ($)
John F. Barr		13,801		20,339				34,140		33,900	(2)		18,300		-		52,200
Brian R. Boal		31,500		10,340				41,840		36,600	(2)		18,300		-		54,900
M. Kathryn Burkey		34,400		10,340		-		44,740		36,400	(2)		18,300		-		54,700
Robert W. Kurtz		31,300		10,340		-		41,640		34,350			18,300		-		52,650
John W. McCullough		24,901		20,339		-		45,240		33,300	(2)		18,300		-		51,600
Elaine L. McDonald		30,200		10,340		-		40,540		30,800	(2)		18,300		-		49,100
Gary R. Ruddell		28,800		10,340		-		39,140		33,900	(2)		18,300		-		52,200
I. Robert Rudy		29,600		10,340		-		41,702		35,350	(3)		18,300				53,650
Marisa A. Shockley		20,706		15,334		-		36,040		31,300	(2)		18,300		-		49,600
Robert G. Stuck		30,000		10,340		-		40,340
H. Andrew Walls, III		21,701		20,339		-		42,040		35,350	(2)		18,300		-		53,650

	1-Year	3-Year	5-Year
First United	54.4%	56.4%	191.7%
SNL Bank Index	21.6%	13.5%	82.9%
S&P 500 Index	31.5%	53.2%	73.9%

Summit Financial Group Inc.	Evans Bancorp Inc.
Orrstown Financial Services	Franklin Financial Services
ACNB Corp.	National Bankshares Inc.
MVB Financial Corp	AmeriServ Financial Inc.
Codorus Valley Bancorp Inc.	Salisbury Bancorp Inc.
C&F Financial Corp.	Riverview Financial Corp.
Chemung Financial Corp.	Old Point Financial Corp.
Citizens Financial Services	Fidelity D & D Bancorp Inc.
Penns Woods Bancorp Inc.	Union Bankshares Inc.
Citizens & Northern Corp.

Performance Category	Weighting
Return on Average Assets	40%
Efficiency Ratio	20%
Delinquencies	20%
Individual Executive Performance	20%

(1)	Title of each class of securities to which transaction applies:
(2)	Aggregate number of securities to which transaction applies:
(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4)	Proposed maximum aggregate value of transaction:
(5)	Total fee paid:

(1)	Amount Previously Paid:
(2)	Form, Schedule or Registration Statement No.:
(3)	Filing Party:
(4)	Date Filed:

•	Proposal 1: The election of the four nominees named in this Proxy Statement to serve on the Board, each until the 2023 Annual Meeting of Shareholders and until his or her successor is duly elected and qualified;
•	Proposal 2: To approve, by a non-binding advisory vote, the compensation paid to the Corporation’s named executive officers for 2019;
•	Proposal 3: To ratify the appointment of Baker Tilly Virchow Krause, LLP (“Baker Tilly”) as the Corporation’s independent registered public accounting firm for 2020; and
•	Such other business as may be properly brought before the meeting or any adjournment or postponement thereof.

•	“FOR” the election of Messrs. Barr, Boal and McCullough and Ms. Shockley to serve on our Board, each for a three-year term of office expiring at the 2023 Annual Meeting of Shareholders and until his or her respective successors is duly elected and qualified;
•	“FOR” the non-binding, advisory resolution approving the compensation of the Corporation’s named executive officers for 2020; and
•	“FOR” the ratification of the appointment of Baker Tilly as the Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2020.

•	you are present in person at the Annual Meeting; or
•	your shares are represented by a properly authorized and submitted proxy (submitted over the Internet, by telephone or by mail).

•	“FOR” the election of the four Board nominees listed on theBLUE Proxy Card (i.e., Messrs. Barr, Boal and McCullough and Ms. Shockley), each to serve on our Board for a three-year term of office expiring at the 2023 Annual Meeting of Shareholders and until his or her respective successor is duly elected and qualified;
•	“FOR”the approval of the non-binding, advisory resolution approving the compensation of the Corporation’s named executive officers; and
•	“FOR” the ratification of the appointment of Baker Tilly as the Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2020.

Name		~~Age~~
John F. Barr		63
Brian R. Boal		44
John W. McCullough		67
Marisa A. Shockley		52

	By:	AUDIT COMMITTEE

		~~John F. Barr~~
		~~Brian R. Boal~~
		~~M. Kathryn Burkey~~
		~~John W. McCullough~~
		~~Elaine L. McDonald~~
		~~Robert G. Stuck~~

Summary Compensation Table
Name and principal position	Year	Salary ($)		Nonqualified deferred compensation earnings ($)		All other compensation ($)(2)		Total ($)
Carissa L. Rodeheaver, Chairman,	2016		328,663		-		10,871		339,534
President and CEO (1)	2015		250,000		-		9,348		259,348

Robert L. Fisher II, Senior Vice	2016		249,765		-		46,586		296,351
President, Chief Lending Officer	2015		245,842		-		45,483		291,325
First United Bank & Trust

Keith R. Sanders, Senior Vice	2016		182,884		-		34,943		217,827
President, Senior Trust Officer	2015		180,000		-		35,300		215,300
First United Bank & Trust

Benefits Payable Upon a Termination of Employment
Name	Reason for Termination	Severance Plan Cash Benefit ($)		Severance Plan Benefit Continuation ($)(1)(1)		Estimated SERP Benefit ($)(2)		Estimated Split-Dollar Benefit ($)		Total ($)
Mrs. Rodeheaver	Change in control, disability, involuntary termination other than for cause, or voluntary termination for good reason		657,326		30,731		529,932		-		1,217,989

	Death		-		-		504,932		25,000		529,932

	Voluntary termination without good reason		-		-		529,932		-		529,932

Mr. Fisher	Change in control, disability, involuntary termination other than for cause, or voluntary termination for good reason		600,000		30,731		-		-		630,731

	Death		-		-		-		25,000		25,000

	Voluntary termination without good reason		-		-				-		-

Mr. Sanders	Change in control, disability, involuntary termination other than for cause, or voluntary termination for good reason		360,000		34,624		-		-		394,624

	Death		-		-		-		25,000		25,000

	Voluntary termination without good reason		-		-		-		-		-

	Ms. Rodeheaver		Mr. Fisher		Mr. Rush
Death⁽¹⁾:
Severance Plan – Cash Benefit		$ - ---	$	-	$	-
Severance Plan – Benefit Continuation⁽²⁾		-		-		-
Estimated SERP Benefit⁽³⁾		1,873,825		-		454,197
Deferred Compensation Plan or Contribution Agreement⁽⁴⁾		-		111,645		-
Estimated Split-Dollar Benefit		25,000		25,000		25,000
Total	$	1,898,825	$	136,645	$	479,197
Change in Control, Disability, Involuntary Termination other than for Cause, or Voluntary Termination for Good Reason⁽¹⁾:
Severance Plan – Cash Benefit	$	777,814	$	537,752	$	406,276
Severance Plan – Benefit Continuation⁽²⁾		33,515		33,515		2,633
Estimated SERP Benefit⁽³⁾		1,898,825		-		479,197
Deferred Compensation Plan or Contribution Agreement⁽⁴⁾		-		111,645		-
Estimated Split-Dollar Benefit		-		-		-
Total	$	2,710,154	$	682,912	$	888,106
Voluntary Termination Without Good Reason⁽¹⁾:
Severance Plan – Cash Benefit		$ - ---	$	-	$	-
Severance Plan – Benefit Continuation⁽²⁾		-		-		-
Estimated SERP Benefit⁽³⁾		1,898,825		-		479,197
Deferred Compensation Plan or Contribution Agreement⁽⁴⁾		-		111,645		-
Estimated Split-Dollar Benefit		-		-		-
Total	$	1,898,825	$	111,645	$	479,197

	FY 2016		FY 2015		FY 2019		FY 2018
Audit Fees	$	296,100	$	276,135	$	330,400	$	302,000
Audit Related Fees		-		-		3,300		3,875
Tax Fees		-		-		0		0
All Other Fees		-		-		0		0
Total	$	296,100	$	276,135	$	333,700	$	305,875

	By order of the Board of Directors,


	~~/s/ Tonya K. Sturm~~Oakland, Maryland
	~~TONYA K. STURM~~
	~~Secretary~~ , 2020

Name		Present Principal Occupation
Carissa L. Rodeheaver		Chairman of the Board, President and CEO of First United Corporation and First United Bank & Trust

John F. Barr		President, Ellsworth Electric, Inc.

Brian R. Boal		Owner, Boal and Associates, PC, Certified Public Accountants

M. Kathryn Burkey		Owner, M. Kathryn Burkey, CPA Owner, The Burkey Television and Appliance Co., Inc.

Robert W. Kurtz		Former (Retired) President, Chief Risk Officer, and Chief Financial Officer of First United Corporation and its affiliates

John W. McCullough		Former (Retired) Partner of Ernst & Young, LLP Lead Director of First United Corporation and First United Bank & Trust

Elaine L. McDonald		Former (Retired) Realtor with Long and Foster and Taylor-Made Realtors Owner, Alpine Village, Inc.

Gary R. Ruddell		President and CEO, Total Biz Fulfillment

I. Robert Rudy		Owner, I.R. Rudy’s Inc.
Marisa A. Shockley		Owner, Shockley, Inc.

H. Andrew Walls, III		Owner, Morgantown Printing & Binding

Name	Date	Title of Security	Number of Shares	Transaction
John F. Barr	05/24/2018 05/22/2019	Common Stock Common Stock	1,484 1,546	Grant, Award or Other Acquisition Grant, Award or Other Acquisition
			��
Brian R. Boal	05/24/2018 05/22/2019	Common Stock Common Stock	1,000 1,546	Grant, Award or Other Acquisition Grant, Award or Other Acquisition

Kathryn M. Burkey	05/24/2018 05/22/2019 03/18/2020	Common Stock Common Stock Common Stock	1,000 1,546 900	Grant, Award or Other Acquisition Grant, Award or Other Acquisition Open Market Purchase

Robert L. Fisher, II	03/20/2018 06/15/2018 06/15/2018 08/13/2018 12/03/2018 03/18/2020 03/26/2020 03/26/2020 03/26/2020	Phantom Stock Common Stock Common Stock Phantom Stock Phantom Stock Phantom Stock Common Stock Common Stock Common Stock	575 5,387 3,170 40 53 600 2,113¹ 1,088¹ 2,176¹	Deferred Compensation Plan Open Market Sale Open Market Purchase Deferred Compensation Plan Deferred Compensation Plan Deferred Compensation Plan Grant, Award or Other Acquisition Grant, Award or Other Acquisition Grant, Award or Other Acquisition

Robert W. Kurtz	05/01/2018 05/24/2018 08/01/2018 08/14/2018 08/15/2018 08/16/2018 08/16/2018 11/01/2018 05/22/2019 06/03/2019	Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock	.1 1,000 .1 420 297 500 203 .1 1,000 500	Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Open Market Sale Open Market Sale Open Market Sale Open Market Sale Open Market Purchase Grant, Award or Other Acquisition Open Market Sale

John W. McCullough	05/02/2018 05/24/2018 08/02/2018 11/02/2018 02/04/2019 05/02/2019 05/22/2019 08/01/2019 11/01/2019 02/03/2020	Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock	146 1,484 155 162 182 160 1,546 148 196 193	Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Open Market Purchase Open Market Purchase

Elaine L. McDonald	05/24/2018 12/13/2018 05/22/2019 10/24/2019 10/31/2019 11/07/2019 03/18/2020	Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock	1,000 365 1,546 900 600 500 1,505	Grant, Award or Other Acquisition Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase


Carissa L. Rodeheaver	08/02/2018 11/01/2018 02/01/2019 05/01/2019 07/18/2019 07/18/2019 07/18/2019 07/18/2019 07/18/2019 07/18/2019 07/18/2019 07/18/2019 07/18/2019 08/01/2019 09/16/2019 09/16/2019 10/15/2019 11/01/2019 11/04/2019 11/15/2019 12/16/2019 01/15/2020 02/03/2020 02/04/2020 02/18/2020 03/16/2020 03/16/2020 03/26/2020 03/26/2020 03/26/2020	Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock	27 28 31 27 417 100 100 100 1,783 1,000 250 1,249 1 24 1 172 171 33 28 167 164 166 35 28 166 47 200 3,056¹ 1,574¹ 3,148¹	Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Grant, Award or Other Acquisition Grant, Award or Other Acquisition Grant, Award or Other Acquisition

Gary R. Ruddell	05/01/2018 05/24/2018 08/01/2018 11/01/2018 02/01/2019 05/01/2019 05/22/2019 08/01/2019 11/01/2019 02/03/2020 03/18/2020	Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock	6 1,000 6 6 7 6 1,546 5 7 7 1,130	Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase

I. Robert Rudy	05/24/2018 06/11/2018 06/13/2018 11/01/2018 12/12/2018 02/01/2019 05/01/2019 05/22/2019 08/01/2019 11/01/2019 02/03/2020	Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock	1,000 1,200 539 10 1,500 12 10 1,273 9 12 12	Grant, Award or Other Acquisition Open Market Sale Open Market Sale Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Open Market Purchase Open Market Purchase


Jason B. Rush	05/01/2018 08/02/2018 11/01/2018 02/01/2019 05/01/2019 08/01/2019 11/01/2019 02/03/2020 03/26/2020 03/26/2020 03/26/2020	Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock	1 42 43 48 42 37 50 49 1,581¹ 829¹ 1,563¹	Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Grant, Award or Other Acquisition Grant, Award or Other Acquisition Grant, Award or Other Acquisition

Keith R. Sanders	03/18/2020 03/26/2020 03/26/2020 03/26/2020	Phantom Stock Common Stock Common Stock Common Stock	1,500 1,550¹ 798¹ 1,597¹	Deferred Compensation Plan Grant, Award or Other Acquisition Grant, Award or Other Acquisition Grant, Award or Other Acquisition

Marisa A. Shockley	05/02/2018 05/24/2018 08/01/2018 11/01/2018 02/01/2019 05/01/2019 05/22/2019 08/01/2019 11/01/2019 02/03/2020	Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock	61 1,484 70 74 81 70 1,546 69 92 90	Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Open Market Purchase Open Market Purchase Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Open Market Purchase Open Market Purchase

Tonya K. Sturm	03/22/2018 08/26/2019 03/18/2020 03/26/2020 03/26/2020 03/26/2020	Common Stock Phantom Stock Phantom Stock Common Stock Common Stock Common Stock	5 1,000 1,850 1,491¹ 781¹ 1,563¹	Open Market Sale Deferred Compensation Plan Deferred Compensation Plan Grant, Award or Other Acquisition Grant, Award or Other Acquisition Grant, Award or Other Acquisition

H. Andrew Walls, III	05/02/2018 05/24/2018 08/01/2018 05/22/2019	Common Stock Common Stock Common Stock Common Stock	68 1,484 71 1,546	Open Market Purchase Grant, Award or Other Acquisition Open Market Purchase Grant, Award or Other Acquisition