UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): December 7, 2006
SHORE
BANCSHARES, INC.
(Exact
name of registrant as specified in its charter)
|
Maryland
|
0-22345
|
52-1974638
|
|
(State
or other jurisdiction of
|
(Commission
file number)
|
(IRS
Employer
|
|
incorporation
or organization)
|
|
Identification
No.)
|
18
East Dover Street, Easton, Maryland 21601
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: (410)
822-1400
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions:
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
INFORMATION
TO BE INCLUDED IN THE REPORT
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers
(b)
Retirement of Director; Retirement of Officer.
On
December 7, 2006, Daniel T. Cannon announced that he will retire from the Board
of Directors of Shore Bancshares, Inc. (the “Company”) and as Executive Vice
President of the Company and as President and Chief Executive Officer of The
Centreville National Bank of Maryland (the “Bank”), a wholly-owned subsidiary of
the Company, effective January 1, 2007. Mr. Cannon will continue to serve on
the
Bank’s Board of Directors until his successor is duly elected and qualifies.
The
Bank’s Board has begun its search for Mr. Cannon’s replacement. Carol I.
Brownawell, 42, will serve as the interim Chief Executive Officer of the Bank
beginning January 1, 2007 and until the Bank’s Board names a permanent
replacement. Ms. Brownawell is the Secretary of the Company, a position she
has
held since 2000, and Executive Vice President and Chief Financial Officer of
the
Bank, positions she has held since 1997.
(e) Entry
into Severance Agreement; Termination of Employment Agreement.
The
Company, the Bank and Mr. Cannon are currently parties to an employment
agreement dated November 30, 2000, which will continue through December 31,
2006
(see Appendix XIII of Exhibit 2.1 to the Company's 8-K filed on July 21,
2000).
In
connection with Mr. Cannon’s retirement announcement, the Company, the Bank and
Mr. Cannon entered into an Employment Termination Agreement (the “Termination
Agreement”), a copy of which is filed herewith as Exhibit 10.1. The Termination
Agreement requires Mr. Cannon to provide up to 20 hours per month of transition
services between January 1, 2007 and May 31, 2007 and up to 10 hours per month
of transition services thereafter until December 31, 2008, as and when requested
by the Company. As severance benefits, Mr. Cannon will receive $205,000 during
each of 2007 and 2008 (for a total of $410,000), paid in accordance
with the Bank’s normal payroll practices, subject to any waiting period
required by law. The Termination Agreement provides that Mr. Cannon’s retirement
will not effect his vested benefits under his Director Indexed Fee Continuation
Plan Agreement, as amended, and a related Life Insurance Endorsement Method
Split Dollar Plan Agreement, both originally dated January 7, 1999 (copies
of
which are filed herewith as Exhibits 10.2 and 10.3, respectively), or his
Supplemental Executive Retirement Plan Agreement, as amended (see Exhibit 10.4
of the Company’s Quarterly Report on Form 10-Q for the period ended June 30,
2003) and its related Life Insurance Endorsement Method Split Dollar Plan
Agreement (see Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for
the period ended June 30, 2003), both dated January 1, 1999. The Termination
Agreement prohibits Mr. Cannon, until December 7, 2009, from serving as a
director, an officer, or an employee of, or a consultant to, any federal
or
state
financial institution operating in Queen Anne’s, Kent, Caroline, Talbot,
Dorchester or Anne Arundel Counties in Maryland or in Kent County, Delaware
that
is unaffiliated with the Company.
Item
9.01 Exhibits
(d) Exhibits.
| Exhibit
10.1 |
Employment
Termination Agreement dated December 7, 2006 among Shore Bancshares,
Inc.,
Centreville National Bank of Maryland and Daniel T. Cannon (filed
herewith).
|
| Exhibit
10.2 |
Director
Indexed Fee Continuation Plan Agreement dated January 7, 1997 by
and
between Centreville National Bank of Maryland and Daniel T. Cannon,
as
amended (filed herewith).
|
| Exhibit
10.3 |
Form
of Centreville National Bank Life Insurance Endorsement Split Dollar
Plan
Agreement dated January 7, 1997 (filed
herewith).
|
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by
the undersigned, thereunto duly authorized.
SHORE
BANCSHARES, INC.
Dated:
December 11, 2006
By:
/s/
W.
Moorhead Vermilye
W.
Moorhead Vermilye
President
and CEO
EXHIBIT
INDEX
| 10.1 |
Employment
Termination Agreement dated December 7, 2006 among Shore Bancshares,
Inc.,
Centreville National Bank of Maryland and Daniel T. Cannon (filed
herewith). |
| 10.2 |
Director
Indexed Fee Continuation Plan Agreement dated January 7, 1997 by
and between Centreville National Bank of Maryland and Daniel T. Cannon,
as
amended (filed herewith). |
| 10.3 |
Form
of Centreville National Bank Life Insurance Endorsement Split Dollar
Plan
Agreement dated January 7, 1997 (filed herewith). |