EXHIBIT 2
TRUST AGREEMENT
TRUST AGREEMENT dated as of June 14, 1994 (the "Agreement"), by and
among Xxxxxxx X. Xxxxxxxx; the X.X. Xxxxxxxx Trust, Xxxxxxx X. Xxxxxxxx,
Xxxxxx X. Xxxx and Xxxx X. Xxxxxxxx, Trustees; the X.X. Xxxxxxxx, Xx.
Trust, I. Xxxxxx Xxxxxx and Xxxxxx X. Xxxx, Trustees; X.X. Xxxxxxxx, Xx.;
Xxxxxx X. Xxxxxxxx; the Xxxxxxxxx Xxx Xxxxxxxx Xxxxxxxx Trust, Xxxxxx X.
Xxxx and I. Xxxxxx Xxxxxx, Trustees; Xxxxxxxx Group, Inc. (individually, a
"Grantor" and, collectively, the "Grantors"); and The Bank of New York, as
trustee (the "Trustee").
WHEREAS the Grantors have committed to the Board of Governors of the
Federal Reserve System (the "Board") to place in trust, on the terms and
conditions stated in this Agreement, all of the shares (the "Shares") of
the common stock (the "Common Stock") of First United Bancshares, Inc.
("First United") to be received by the Grantors in connection with the
merger of Investark Bankshares, Inc. with and into First United (the
"Merger"); and
WHEREAS the Grantors have created the trust arrangement described
herein for such purpose, and the Trustee has agreed to perform the duties
assigned to it herein on the terms and conditions provided.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, it is agreed as
follows:
1. Creation and Purpose of Trust.
(a) Subject to the terms and conditions hereof, a
trust with respect to the Shares is hereby created and
established for the purpose of satisfying the
commitment described above.
(b) The Trustee accepts the trust created by this
Agreement, and agrees to serve as trustee hereunder,
subject to the terms and conditions hereof and with the
express limitation that the Trustee shall have no power
or authority to sell or encumber the Shares except as
expressly provided in Section 3 hereof.
(c) Each Grantor agrees to deposit with the
Trustee, as soon as reasonably practicable following
consummation of the Merger, one or more certificates
duly endorsed for transfer to the Trustee evidencing
the number of Shares set forth opposite the Grantor's
signature below, such Shares being all of the Common
Stock received by the Grantor in connection with the
Merger.
(d) The certificates for the Shares shall be
surrendered by the Trustee to First United for
cancellation, and new stock certificates therefor
promptly shall be issued to and registered in the name
of the Trustee, as trustee under this Agreement. Each
certificate issued to the Trustee pursuant to this
Section shall bear a legend to the effect that it is
held subject to this Agreement.
(e) Promptly upon receipt of the new stock
certificates delivered pursuant to Section l(d), the
Trustee shall issue and deliver to the Grantors
receipts therefor.
(f) Subject to Sections 4 and 5 hereof, the trust
created hereunder shall be irrevocable.
2. Dividends and Distributions. The Trustee shall receive and hold,
subject to the terms of this Agreement, all dividends and distributions
declared and paid on the Shares deposited with it hereunder. The Trustee
shall distribute to the Grantors all dividends and other distributions of
property (except securities of First United that have voting rights on any
matter, absolute or contingent ("Other Voting Securities")) that are
declared and paid on the Shares or Other Voting Securities deposited
hereunder. Such distributions shall be made by the Trustee as soon as
practicable after the receipt of the dividends or other distributions.
3. Sales of Shares by the Grantors.
(a) The Grantors and the Trustee acknowledge and
agree that each Grantor may from time to time direct
the Trustee to sell to any third party unaffiliated
with the Grantors all or a portion of the Shares and/or
any Other Voting Securities held hereunder for the
Grantor's benefit (a "Sale"). Upon receipt of such
direction, the Trustee shall use its reasonable best
efforts to sell the subject Shares and/or Other Voting
Securities promptly and in the manner specified by the
Grantor; provided that the Grantor shall have sole
responsibility for negotiating the terms and conditions
of any Sale with the purchaser(s) of the Shares and/or
any brokerdealer or other intermediary handling the
Sale.
(b) Any Sale shall comply with the requirements of
the Bank Holding Company Act (the "BHCA") and all other
applicable statutory and regulatory requirements.
(c) The Grantors will not sell shares of First
United Common Stock, including the Shares, which in the
aggregate total five percent (5%) or more of First
United's outstanding Common Stock to a purchaser or
group of purchasers without first obtaining the prior
written approval of the Board; provided that such
approval need not be obtained if the sale of such
Common Stock is transacted in connection with an
acquisition of fifty percent (50%) or more of First
United's outstanding Common Stock (excluding the Shares
and any other outstanding shares of Common Stock
beneficially owned by the Grantors) that is approved by
its Board of Directors, whether such acquisition is
effected by merger, consolidation, tender offer,
exchange offer or otherwise. (It is understood and
agreed that the Grantors may not circumvent the
foregoing prohibition by selling less than five percent
(5%) of First United's outstanding Common Stock to a
purchaser or group of purchasers, terminate this
Agreement pursuant to Section 4(a), and then sell
additional shares of Common Stock to the same purchaser
or group of purchasers if the aggregate number of
shares sold in all such transactions would equal or
exceed five percent (5%) of First United's outstanding
Common Stock.) For purposes of this Section 3 (c), the
term "group" shall have the meaning assigned it under
Regulation 13D promulgated under the Securities
Exchange Act of 1934, as amended.
(d) At the closing of any Sale, the Trustee shall
cause the certificates representing the Shares and/or
any Other Voting Securities to be delivered to the
purchaser(s) in the Sale, properly endorsed, if
necessary, for transfer to such purchaser(s), and shall
take all other actions reasonably necessary to
effectuate the transfer to such purchaser(s) of title
thereto in accordance with any agreement providing for
the Sale.
4. Termination of Agreement. This Agreement shall
terminate upon the earlier to occur of either of the following
events:
(a) The total number of shares of Common Stock
owned by the Grantors, including but not limited to the
Shares, shall constitute less than ten percent (10%) of
the total number of shares of Common Stock outstanding;
provided that the Grantors shall provide the Board
written notice of termination pursuant to this Section
4(a) prior to effecting distribution of the Trust
Assets pursuant to Section 5 hereof.
(b) The filing and receipt of approval from the
Board of a Notice of Change in Bank Control allowing
the Grantors to own and vote directly the Shares and
any Other Voting Securities.
5. Distribution of Trust Assets.
(a) Upon receipt of written notice from the
Grantors of the termination of this Agreement, the
Trustee shall promptly cause the certificates
representing the Shares and any Other Voting Securities
registered in its name to be delivered to the Grantors,
properly endorsed, if necessary, for transfer to the
Grantors, and shall take all other actions reasonably
necessary to effectuate the transfer to the Grantors of
title thereto.
(b) In the event of the dissolution or total
liquidation of First United, whether voluntary or
involuntary, a merger or consolidation involving a
change in control of First United, a sale of all or
substantially all of the assets of First United, or the
sale of the Shares or any Other Voting Securities in
accordance with the terms of Section 3 hereof, the
Trustee shall receive the monies, securities, rights or
property to which the holder of the Shares or any Other
Voting Securities are entitled, and, after paying (or
reserving for the payment of) any expenses incurred
pursuant to this Agreement, shall distribute the same,
along with any dividends and distributions of property,
and any interest or dividends paid thereon, received
and held by the Trustee in accordance with Section 2
hereof, to the Grantors.
(c) Upon distribution of all trust assets as
provided in Paragraphs (a) and/or (b) of this Section,
all further obligations or liabilities of the Trustee
in respect of such monies, securities, rights or
property so received shall cease and this Agreement and
the trust created hereunder shall terminate. Any
distribution in partial liquidation of First United
shall be governed by Section 2 hereof.
6. Maintenance of Records. The Trustee shall keep records reflecting
(i) the Shares and any Other Voting Securities held by it for the benefit
of each of the Grantors and (ii) any distributions made by it pursuant to
Sections 2 and 5 hereof. Such records shall also reflect the nature and
ownership of any other property received by the Trustee pursuant to the
terms of this Agreement. Such records shall be open at all reasonable times
to the inspection of Grantors and the Board.
7. Resignation of Trustee. The trustee may at any time resign by
providing to the Grantors and the Board written notice of the resignation,
which shall take effect sixty (60) days thereafter or upon the prior
acceptance thereof; provided that such resignation will not be effective
until a successor Trustee has been appointed in conformity with Section 8
hereof.
8. Successor Trustee. In the event of the resignation of the Trustee,
the vacancy so occurring shall be filled by the Grantors with the approval
of the Board. The rights, powers and privileges of the Trustee named
hereunder shall be possessed by any successor Trustees (hereinafter a
"Successor Trustee").
9. Voting Rights/Beneficial Interest.
(a) The Trustee shall vote the Shares and any other
Voting Securities deposited with it hereunder or give
written consents in lieu of voting thereon, in person
or by proxy at any and all meetings of the shareholders
of First United, or when such consents are given in
lieu of such meetings, for whatsoever purpose called or
held, and in any and all proceedings, whether at a
meeting of the shareholders or otherwise, wherein the
vote or written consent of shareholders may be required
or authorized by law.
(b) The Trustee shall vote the Shares and any Other
Voting Securities "for" and/or "against" any proposal
or other matter submitted to First United shareholders
for approval, including the election of directors, in
the same proportion as the votes cast "for" and
"against" such proposal or other matter by all other
shareholders, not counting abstentions. The Trustee
shall not abstain from voting any of the Shares and any
Other Voting Securities.
(c) No person other than the Trustee shall have any
voting right in respect of the Shares and any Other
Voting Securities so long as this Agreement is in
effect.
(d) The Shares and any Other Voting Securities
shall be held by the Trustee for the benefit of the
Grantors subject to the terms of this Agreement. The
Trustee shall have no beneficial interest in any such
securities, which interest shall reside with the
Grantors.
10. Expenses of Trustee. The Trustee shall have the right to incur and
pay such reasonable expenses and charges and to employ such professional
advisors and legal counsel as is appropriate to facilitate the performance
of its duties hereunder. Any such charges or expenses incurred may be
charged to the Grantors. In addition, the Trustee reserves the right to
deduct its fees and expenses associated with this Agreement from any funds
held by the Trustee for the benefit of the Grantors.
11. Liability of Trustee. The Trustee shall not be liable by reason of
any matter or thing in any way arising out of or in relation to this
Agreement except for such loss or damage as the Grantors may suffer by
reason of the Trustee's willful misconduct or gross negligence; and the
Trustee when acting hereunder shall not be required to give a bond or other
security for the faithful performance of its duties as such.
12. Indemnity, Etc. The Trustee shall be indemnified by the Grantors
from and against any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claims whatsoever) (the
"Indemnified Claims") arising out of or based upon this Agreement or the
actions or failures to act of the Trustee hereunder, except to the extent
such Indemnified Claims are caused by or result from the Trustee's gross
negligence or willful misconduct (as determined by a final and unappealable
order of a court of competent jurisdiction). The Grantors' obligation
hereunder shall survive the transfer of all or any portions of their
respective interests in the trust assets, the termination of the trust, or
the resignation or removal of the Trustee.
The Trustee shall be entitled to the prompt reimbursement by the
Grantors for the Trustee's out-of-pocket expenses (including reasonable
attorneys' fees and expenses) incurred in investigating, preparing or
defending against any litigation, commenced or threatened, arising out of
or based upon this Agreement, or the actions or failures to act of the
Trustee hereunder, without regard to the outcome of such litigation;
provided, however, that the Trustee shall be obligated to return any such
reimbursement if it is subsequently determined by a final and unappealable
order of a court of competent jurisdiction that the Trustee was grossly
negligent or engaged in willful misconduct in the matter in question.
13. Compensation for Services. During the period of its service as
Trustee hereunder, the Trustee shall receive from the Grantors the fees
described in Schedule A hereof, payable in the amounts and on the dates
specified therein. The Grantors hereby unconditionally agree to pay such
fees to the Trustee, which shall be in addition to, and not in lieu of, the
reimbursement of expenses provided for by Section 10 hereof. In addition,
the Trustee reserves the right to deduct its fees and expenses associated
with this Agreement from any funds held by the Trustee for the benefit of
the Grantors.
14. Dealings Between Trustee and the Grantors. Nothing herein
contained shall disqualify the Trustee from dealing or contracting with the
Grantors as a lender, borrower or otherwise, nor shall any transaction or
contract be affected or invalidated by reason of the fact that the Trustee
is in any way interested in such transaction or contract; nor shall the
Trustee be liable to account to the Grantors for any profits realized by,
from or through any transaction or contract by reason of the fact that the
Trustee is interested in such transaction or contract.
15. Construction. The term "Trustee" as used herein shall be deemed to
mean the Trustee named herein or any Successor Trustee.
16. Counterparts; Entire Agreement. This Agreement may be executed in
counterparts and shall be deemed to be an original. This Agreement
expresses the entire agreement between the parties and is irrevocable
except as expressly provided herein.
17. Notices. Any notice to or communication with any of the Grantors,
the Trustee or the Board shall be deemed sufficiently given or made when
received and shall be given in writing, and delivered in person or sent by
certified mail, postage prepaid, or by private courier service or by
telecopy or telex, to such person at its address set forth below or at such
other address as such person may hereafter furnish in writing to the
others.
If to the Grantors, to:
Xxxxxxx X. Xxxxxxxx
X.X. Xxxxxxxx Trust
X.X. Xxxxxxxx, Xx. Trust
X.X. Xxxxxxxx, Xx.
Xxxxxx X. Xxxxxxxx
Xxxxxxxxx Xxx Xxxxxxxx Xxxxxxxx Trust
Xxxxxxxx Group, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Board, to:
Board of Governors of the
Federal Reserve System
00xx & X Xxxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: J. Xxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Trustee, to:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000 or 5917
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without reference to
its choice of law provisions.
IN WITNESS WHEREOF, the parties have hereunto set their hands, and in
the case the Grantors set opposite their signatures the number of Shares
initially deposited by them hereunder.
Number of Shares to
be deposited hereunder
/s/ Xxxxxxx X. Xxxxxxxx
--------- -------------------------------
XXXXXXX X. XXXXXXXX
--------- X.X. XXXXXXXX TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxx, Trustee
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Xxxxxx X. Xxxx, Trustee
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Xxxx X. Xxxxxxxx, Trustee
--------- X.X. XXXXXXXX XX. TRUST
By: /s/ I. Xxxxxx Xxxxxx
-------------------------------
I. Xxxxxx Xxxxxx, Trustee
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Xxxxxx X. Xxxx, Trustee
--------- X.X. XXXXXXXX, XX. REVOCABLE TRUST
/s/ X.X. Xxxxxxxx
--------------------------------------
X.X. Xxxxxxxx, Xx., Trustee
--------- XXXXXX X. XXXXXXXX TRUST
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx, Trustee
--------- XXXXXXXXX XXX XXXXXXXX XXXXXXXX
REVOCABLE TRUST
By: /s/ Xxxxxxxxx Xxx Xxxxxxxx Xxxxxxxx
------------------------------------
Xxxxxxxxx Xxx Xxxxxxxx
Xxxxxxxx, Trustee
--------- XXXXXXXX GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx, Vice President
THE BANK OF NEW YORK, AS TRUSTEE
By: /s/ I.A. Xxxxxxx
-----------------------------------
Name: I.A. Xxxxxxx
Title: Assistant Vice President
APPENDIX A
Set forth below are the name and position of each of the directors and
executive officers of Xxxxxxxx Group, Inc. The business address of each
such person is 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 and each
person is a citizen of the United States.
Directors and Executive Officers of Xxxxxxxx Group, Inc.
--------------------------------------------------------
Xxxxxxx X. Xxxxxxxx
Chairman of the Board
Xxxxxx X. Xxxxxxxx
President, Director
Xxxxxx X. Xxxxxxxx, Xx.
Director, Senior Vice President
Xxxx Xxxxxx Xxxxxxxx
Director
Xxxxxx X. Xxxx
Director
Xxxxx X. Xxxxxxxx
Director
Xxx X.X. Xxxxxx
Director, Executive Vice President, Chief Financial
Officer
Xxxxxxx X. Xxxxxx
Director, Chairman of Xxxxxxxx Production Company
I. Xxxxxx Xxxxxx, Xx.
Director, Asst. Secretary/Treasurer
Xxxxxxxxx Xxx Xxxxxxxx Xxxxxxxx
Registered Broker - Xxxxxxxx Inc.