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): April 19, 2010
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:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR240.13e-4(c))
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Item
5.02
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Departure of Directors or
Certain Officers; Election of Directors;Appointment of Certain
Officers; Compensatory Arrangements of CertainOfficers.
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(e) Compensatory
Arrangements.
On April 19, 2010, the Compensation
Committee of the Board of Directors of Shore Bancshares, Inc. (the “Company”)
adopted a Management Incentive Plan to provide non-equity (cash) incentive
compensation opportunities for certain executive officers of the Company and its
subsidiaries (the “MIP”). The MIP, which will continue in effect
until terminated by the Compensation Committee, replaces the
previously-disclosed annual incentive plan that was adopted each
year. The terms of the MIP are identical in all material respects to
the terms of the annual plan.
The MIP is administered by the
Compensation Committee, and executives chosen to participate will be recommended
by the Company’s President/CEO and approved by the Committee. The
Compensation Committee may amend or terminate the MIP at any time by giving
participants 30 days’ written notice.
Under the MIP, a participating
executive officer will receive an award payout if the Company meets its net
income target for the plan year and the participant meets his or her performance
target for the plan year. Each award opportunity is expressed as a
percentage of the participant’s prior year-end annual salary
level. Target awards are weighted between the Company’s net income
and the participant’s individual performance (see Schedule A of the MIP), 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 (see Schedule B of the MIP), all
as described in the MIP. The Company’s annual net income target and
the participant’s individual performance target will be approved by the
Compensation Committee at the beginning of each plan year after reviewing the
recommendations of the Company’s President/CEO and the Chairman of the
Compensation Committee.
Awards earned for a plan year will be
paid no later than March 15th of the
following year. If a participant’s employment terminates because of death, a
permanent disability, retirement or involuntary termination other than for
cause, then the participant or his or her estate will be eligible to receive a
pro rated award for the plan year, which will be paid at the time all other
awards are paid. A participant will forfeit an award opportunity if
he or she voluntarily terminates employment or if the Company terminates his or
her employment for cause.
If the Compensation Committee
terminates the MIP, then participants will be eligible to receive awards for
that plan year to the extent earned, which will be calculated as of the date of
termination and paid as soon as practicable after the end of the plan
year.
At the time the Compensation Committee
adopted the MIP, it also granted 2010 award opportunities to each of the
Company’s named executive officers (as defined in Item 402 of the Securities and
Exchange Commission’s Regulation S-K). For W. Moorhead Vermilye,
President/CEO, the incentive award was set at 75% of annual salary, weighted
50%/50% between the Company net income target and individual performance,
respectively. For Lloyd L. Beatty, COO, the incentive award was set
at 40% of annual salary, weighted 50%/50% between the Company net income target
and individual performance, respectively. For Susan E. Leaverton,
CFO, the incentive award was set at 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 Easton, Maryland, the incentive award was set at 50% of annual salary,
weighted 40%/60% between the Company net income target and individual
performance, respectively. For F. Winfield Trice, Jr., President/CEO
of The CNB, the incentive award was set at 30% of annual salary, weighted
40%/60% between the Company net income target and individual performance,
respectively. The following table provides information about the
amounts that may be paid to the named executive officers for 2010:
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2010
GRANTS OF PLAN-BASED AWARDS
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Name
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Estimated
Possible Payouts Under
Non-Equity
Incentive Plan Awards
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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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121,500 |
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243,000 |
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364,500 |
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Mr.
Beatty
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58,800 |
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117,600 |
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176,400 |
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Ms.
Leaverton
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31,320 |
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62,640 |
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93,960 |
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Mr.
Duncan
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71,025 |
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142,050 |
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213,075 |
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Mr.
Trice
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33,345 |
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66,690 |
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100,035 |
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A copy of the MIP, the schedules to
which set forth the award opportunities for 2010, is attached hereto as Exhibit
10.1 and incorporated herein by reference.
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ITEM
9.01.
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Financial
Statements and Exhibits.
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(d) Exhibits.
10.1 Shore
Bancshares, Inc. 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
19, 2010
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By:
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/s/
W. Moorhead Vermilye |
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W.
Moorhead Vermilye |
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President
and CEO |
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EXHIBIT
INDEX
Exhibit
Number Description
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10.1
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Shore
Bancshares, Inc. Management Incentive Plan (filed
herewith).
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