Shore Bancshares adopts new deferred compensation plan for non-employee directors

Shore Bancshares, Inc. (NASDAQ: SHBI) has adopted a Deferred Compensation Plan for Non-employee Directors, effective September 30, 2026. The company's Board of Directors approved the plan to create a supplemental source of retirement income through pre-tax deferrals of eligible compensation.

The new plan is designed to comply with Section 409A of the Internal Revenue Code of 1986. It allows non-employee directors to make annual elections to defer a specified percentage of their director fees and vested equity awards. Under the terms of the plan, participants are always 100% vested in their own elective deferrals and any earnings associated with those deferrals.

The structure of the deferrals distinguishes between equity awards and cash compensation. Elective deferrals of equity awards are credited to a bookkeeping account established in the participant's name, corresponding to an equivalent number of shares of Shore Bancshares stock. Conversely, elective deferrals of cash compensation are credited to a separate bookkeeping account and are deemed invested in shares of Company stock. The company noted that this summary is qualified by the full text of the plan, which was attached as Exhibit 10.1 to the filing.

Simultaneously, the Board amended the company's existing Deferred Compensation Plan to eliminate the participation of non-employee directors after the 2026 plan year. This amendment effectively transitions non-employee directors from the legacy plan to the newly adopted plan. The amended and restated Deferred Compensation Plan was filed as Exhibit 10.2.

Shore Bancshares is a Maryland corporation headquartered in Easton, Maryland. The company's common stock, with a par value of $0.01 per share, trades on the NASDAQ Global Select Market under the ticker symbol SHBI. The Form 8-K was signed by James M. Burke, President and Chief Executive Officer, on October 1, 2026.