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): March 28, 2007
SHORE
BANCSHARES, INC.
(Exact
name of registrant as specified in its charter)
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Maryland
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0-22345
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52-1974638
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(State
or other jurisdiction of
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(Commission
file number)
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(IRS
Employer
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incorporation
or organization)
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Identification
No.)
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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))
| Item
5.02. |
Departure
of Directors or Principal Officers; Election of Directors;
Appointment
of Certain Officers; Compensatory Arrangements of Certain
Officers.
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On
March
28, 2007, the Compensation Committee (the “Committee”) of the Board of Directors
of Shore Bancshares, Inc. (the “Company”) approved and adopted the 2007
Management Incentive Plan (the “Plan”), a copy of which is filed herewith as
Exhibit 10.1. The Plan contemplates annual awards of cash compensation to
certain executive officers of the Company and its subsidiaries if the Company
meets its net income goal for the Plan year and the executives meet their
assigned performance targets for the Plan year. The target awards are expressed
as a percentage of each participating executive’s year-end annual salary; thus,
awards for Plan year 2007 will be based on the salaries paid in 2006. Target
awards are weighted between the Company’s net income and individual executive
performance, and each component is subject to an upward adjustment (up to 150%)
when performance exceeds targeted expectations and to a downward adjustment
(down to 0%) when performance falls below targeted expectations, all as
described in the Plan. The Company’s annual net income target and the individual
annual performance target for each participant will be approved by the Committee
at or prior to the start of each Plan year after reviewing the recommendations
of the Company’s President/CEO and the Chairman of the Committee.
Awards
earned in a Plan year will be paid no later than March 15th
of the
following year. If a participating executive dies, suffers a permanent
disability, retires or an involuntary termination for a reason other than cause,
the executive or his or her estate will be eligible to receive a pro rated
award
for the Plan year when all other awards are paid.
The
Plan
is administered by the Committee, and executives chosen to participate in the
Plan will be recommended by the Company’s President/CEO and approved by the
Committee. The Plan will continue unless and until discontinued by the
Committee. The Committee may amend or terminate the Plan at any time by giving
participants 30 days’ written notice. In the event of a Plan termination,
participants will be eligible for awards for the Plan year to the extent earned,
calculated as of the date of Plan termination and paid as soon as practicable
after the end of the Plan year.
Each
of
the Company’s named executive officers (as defined in Item 402 of the Securities
and Exchange Commission’s Regulation S-K) has been selected to participate in
the Plan for 2007. For W. Moorhead Vermilye, President/CEO, the 2007 incentive
award is 75% of annual salary, weighted 80%/20% between the Company net income
target and individual performance, respectively. For Lloyd L. Beatty, COO,
the
2007 incentive award is 40% of annual salary, weighted 80%/20% between the
Company net income target and individual performance, respectively. For Susan
E.
Leaverton, CFO, the 2007 incentive award is 40% of annual salary, weighted
40%/60% between the Company net income target and individual performance,
respectively. For William W. Duncan, Jr., President/CEO of The Talbot Bank
of
Eason, Maryland, the 2007 incentive award is 50% of annual salary, weighted
30%/70% between the Company net income target and individual performance,
respectively.
The
following table provides information about the possible award payouts to the
named executive officers for 2007:
GRANTS
OF PLAN-BASED AWARDS
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Estimated
Possible Payouts Under
Non-Equity
Incentive Plan Awards
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Name
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Threshold
($)
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Target
($)
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Maximum
($)
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Mr.
Vermilye
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19,125
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191,250
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286,875
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Mr.
Beatty
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8,600
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86,000
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129,000
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Ms.
Leaverton
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11,000
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55,000
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82,500
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Mr.
Duncan
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18,375
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122,500
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183,750
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| Item
9.01. |
Financial
Statements and Exhibits.
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(c)
Exhibits:
Exhibit
10.1—Shore
Bancshares, Inc. 2007 Management Incentive Plan (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.
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SHORE
BANCSHARES,
INC. |
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| Dated:
April 2, 2007 |
By: |
/s/
W.
Moorhead Vermilye |
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W.
Moorhead Vermilye |
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President
and
CEO |
EXHIBIT
INDEX
| 10.1 |
Shore
Bancshares, Inc. 2007 Management Incentive Plan (filed
herewith).
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