Shore Bancshares (SHBI) details new change in control severance protections

Rhea-AI Filing Summary

Shore Bancshares, Inc. reported that its President and CEO James M. Burke, Executive Vice President and CFO Charles S. Cullum, and Executive Vice President and COO Donna J. Stevens have become participants in a new Change in Control Severance Plan. The plan is designed to keep key leaders focused on their roles if there is a potential or actual change in control of the company.

Under the plan, an executive who experiences a "Qualifying Termination" within 24 months after a change in control—either being terminated without cause or resigning for defined "Good Reason" such as a material pay cut, reduced responsibilities, or a relocation of more than thirty miles—will receive severance benefits. These include a lump sum cash payment based on a severance multiplier applied to base pay plus target bonus, and a lump sum cash payment tied to COBRA health premiums for a defined period.

Mr. Burke has a severance multiplier of three, while Mr. Cullum and Ms. Stevens each have a multiplier of two. Mr. Burke is also subject to a one-year non-compete and one-year non-solicitation of employees and customers, while Mr. Cullum and Ms. Stevens are subject to a one-year non-solicitation. The new plan replaces severance rights under other individual arrangements for participating executives.

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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 17, 2025

SHORE BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Maryland

000-22345

52-1974638

(State or other jurisdiction of incorporation or organization)

(Commission file number)

(IRS Employer Identification No.)

18 E. Dover Street, Easton, Maryland 21601

(Address of principal executive offices) (Zip Code)

(410) 763-7800

(Registrant’s telephone number, including area code)

Not Applicable

(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 CFR 240.14d-2(b))
o						Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common stock, $0.01 par value per share

SHBI

The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On December 17, 2025, James M. Burke, President and Chief Executive Officer of Shore Bancshares, Inc. (the “Company”), Charles S. Cullum, Executive Vice President and Chief Financial Officer of the Company, and Donna J. Stevens, Executive Vice President and Chief Operating Officer of the Company, each became a participant in the Shore Bancshares, Inc. Change in Control Severance Plan (the “Plan”) by executing a participation agreement in accordance with the terms of the Plan. The Plan consolidates the Company’s change in control severance arrangements under a single plan document with individualized participation agreements. The Plan is intended to secure the continued services of certain executive officers and other key employees of the Company and its affiliates and to ensure their continued dedication to their duties in the event of any threat or occurrence of a change in control.

Under the Plan, a participant who undergoes a “Qualifying Termination,” which is defined in the Plan as termination of the participant’s service during the twenty-four (24) month period immediately following a change in control, either (a) by the Company or a subsidiary of the Company without cause or (b) by the participant for Good Reason (as defined below), is entitled to certain severance benefits, subject to the execution of a general release of claims and certain restrictive covenants set forth in the participant’s participation agreement. In no event will the termination of a participant’s employment as a result of any of the following circumstances result in a Qualifying Termination: the participant’s death or disability; a termination by the Company or a subsidiary of the Company of a participant’s employment for cause; or a termination by the participant of his or her employment for a reason other than for Good Reason.

Termination for “Good Reason” is defined in the Plan as a termination of employment by a participant as a result of the participant’s resignation from the Company or a subsidiary of the Company upon the occurrence of any of the following events: (i) a material reduction in the participant’s base salary or base compensation; (ii) a material diminution in the participant’s authority, duties or responsibilities without the written consent of the participant; or (iii) a change in the location of the participant’s principal workplace that exceeds thirty miles.

The individual participation agreements set forth the cash severance, health coverage and the restrictive covenants for each participant in connection with his or her participation in the Plan. In the event of a Qualifying Termination a participant will be eligible for a lump sum cash payment calculated by multiplying the participant’s severance multiplier by the sum of the participant’s base pay as of his or her termination date plus the participant’s target bonus for the year of the change in control. In the event of a Qualifying Termination, participants are also eligible to receive a lump sum cash payment equal to the monthly COBRA premium (employee and employer portion) for the health insurance coverage the participant has in place as of his or termination date multiplied by the number of months specified in the participant’s participation agreement. Mr. Burke is subject to a one-year non-competition agreement and a one-year restriction on soliciting employees and customers. Mr. Cullum and Ms. Stevens are subject to a one-year restriction on soliciting employees and customers.

Mr. Burke was designated as a participant in the Plan with a severance multiplier of three for a Qualifying Termination occurring during the covered period following a change in control. Mr. Cullum and Ms. Stevens were each designated as a participant in the Plan with a severance multiplier of two for a Qualifying Termination occurring during the covered period following a change in control. Other executive officers and key employees were also designated as participants in the Plan, subject to their execution of a participation agreement as required under the Plan. Severance benefits payable under the Plan will replace (and be paid in lieu of) any severance benefits that a participant otherwise is eligible to receive under any other agreements entered into between Company or subsidiary of the Company and the participant, and no participant will be entitled to severance benefits under both the Plan and any other severance arrangement maintained by the Company or a subsidiary of the Company.

This summary is qualified in its entirety by reference to the copy of the Plan and the form of participation agreement attached hereto as Exhibits 10.1 and 10.2, respectively, which are incorporated herein by reference.

Item 9.01 Exhibits

Exhibit No.						Description
10.1						Change in Control Severance Plan
10.2						Form of Participation Agreement for Change in Control Severance Plan
104						Cover Page Interactive Data File (embedded within the inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

						SHORE BANCSHARES, INC.
Dated: December 17, 2025						By:			/s/ James M. Burke
									James M. Burke
									President and Chief Executive Officer

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FAQ

What executive compensation change did Shore Bancshares (SHBI) disclose?

The company disclosed that its President and CEO James M. Burke, Executive Vice President and CFO Charles S. Cullum, and Executive Vice President and COO Donna J. Stevens became participants in a new Change in Control Severance Plan by signing individual participation agreements.

What triggers severance benefits under Shore Bancshares' change in control plan?

Severance benefits are triggered by a "Qualifying Termination" during the 24-month period after a change in control. This occurs if the executive is terminated without cause by the company or resigns for defined Good Reason, such as a material pay reduction, a material diminution in duties, or a relocation of the principal workplace by more than thirty miles.

How are severance payments calculated for Shore Bancshares (SHBI) executives?

In a Qualifying Termination, a participant receives a lump sum cash payment equal to the participant’s severance multiplier times the sum of their base pay at termination date plus their target bonus for the year of the change in control. They also receive a lump sum cash payment equal to the monthly COBRA health insurance premium multiplied by the number of months specified in their participation agreement.

What severance multipliers apply to Shore Bancshares’ CEO, CFO, and COO?

Under the plan, James M. Burke (President and CEO) has a severance multiplier of three for a Qualifying Termination during the covered period after a change in control, while Charles S. Cullum (EVP and CFO) and Donna J. Stevens (EVP and COO) each have a severance multiplier of two.

What non-compete or non-solicitation restrictions apply to Shore Bancshares executives under the plan?

Mr. Burke is subject to a one-year non-competition agreement and a one-year restriction on soliciting employees and customers. Mr. Cullum and Ms. Stevens are each subject to a one-year restriction on soliciting employees and customers under their participation agreements.

Does the new change in control plan replace other severance arrangements at Shore Bancshares?

Yes. The filing states that severance benefits payable under the plan replace any severance benefits a participant would otherwise receive under other agreements with the company or its subsidiaries, and no participant is entitled to severance under both the plan and any other severance arrangement.

Who else can participate in Shore Bancshares' Change in Control Severance Plan?

The plan is designed for certain executive officers and other key employees of Shore Bancshares and its affiliates. The filing notes that other executive officers and key employees were also designated as participants, subject to executing a participation agreement as required under the plan.