SHORE BANCSHARES INC (Form: 8-K, Received: 07/03/2023 06:07:03)

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): July 3, 2023 (July 1, 2023)

SHORE BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Maryland	000-22345	52-1974638
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

18 E. Dover St., Easton, Maryland	21601
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (410) 763-7800

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 obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	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))

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, par value $0.01 per share	SHBI	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 ¨

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. ¨

Item 2.01.

Completion of Acquisition or Disposition of Assets.

Effective July 1, 2023, Shore Bancshares, Inc., a Maryland corporation (“SHBI” or the “Company”), completed its merger of equals (the “Merger”) with The Community Financial Corporation, a Maryland corporation (“TCFC”), pursuant to the terms of an Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 14, 2022, by and between SHBI and TCFC. At the effective time of the Merger (the “Effective Time”), TCFC was merged with and into SHBI, with SHBI as the surviving corporation, which was promptly followed by the merger of TCFC’s wholly-owned bank subsidiary, Community Bank of the Chesapeake, a Maryland-chartered commercial bank (“CBC”), with and into Shore United Bank, N.A. (“Shore United”), which is the wholly-owned subsidiary of SHBI, with Shore United as the surviving bank.

Pursuant to the terms of the Merger Agreement, each share of TCFC common stock, par value $0.01 per share (“TCFC Common Stock”), outstanding immediately prior to the Effective Time was converted into 2.3287 shares (the “Exchange Ratio”) of SHBI common stock, par value $0.01 per share (“SHBI Common Stock”), with an amount in cash, without interest, to be paid in lieu of fractional shares (the “Merger Consideration”).

At the Effective Time, and pursuant to the Merger Agreement, (i) each award in respect of a share of TCFC Common Stock subject to vesting, repurchase or other lapse restriction (a “TCFC Restricted Stock Award”) that was outstanding immediately prior to the Effective Time was automatically converted into a restricted stock award (a “SHBI Restricted Stock Award”) in respect of that number of shares of SHBI Common Stock, equal to the product of the total number of shares of TCFC Common Stock subject to the TCFC Restricted Stock Award multiplied by the Exchange Ratio; (ii) each time-vesting restricted stock unit award in respect of a share of TCFC Common Stock (a “TCFC RSU Award”) that was outstanding immediately prior to the Effective Time was automatically converted into a time-vesting restricted stock unit award (a “SHBI RSU Award”) in respect of that number of shares of SHBI Common Stock, equal to the product of the total number of shares of TCFC Common Stock subject to the TCFC RSU Award multiplied by the Exchange Ratio; and (iii) each performance-vesting restricted stock unit award in respect of a share of TCFC Common Stock (a “TCFC PSU Award”) that was outstanding immediately prior to the Effective Time was automatically converted into a SHBI RSU Award in respect of that number of shares of SHBI Common Stock equal to the product of the total number of shares of TCFC Common Stock subject to the TCFC PSU Award multiplied by the Exchange Ratio. The number of shares of TCFC Common Stock subject to a TCFC PSU Award immediately prior to the Effective Time was determined assuming performance goals were satisfied based on target performance. Each outstanding share of SHBI Common Stock remained outstanding and was unaffected by the Merger.

The total aggregate consideration delivered to holders of TCFC Common Stock was approximately 13,296,910 shares of SHBI Common Stock. The issuance of shares of SHBI Common Stock in connection with the Merger was registered under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Registration Statement on Form S-4 (File No. 333-271273) initially filed by SHBI with the Securities and Exchange Commission (the “SEC”) on April 14, 2023 and declared effective on May 8, 2023 (the “Registration Statement”).

The foregoing description of the transactions contemplated by the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to SHBI’s Current Report on Form 8-K filed with the SEC on December 14, 2022, and incorporated into this Item 2.01 by reference.

Item 2.03.

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

In connection with the completion of the Merger, on July 1, 2023, SHBI assumed TCFC’s obligations as required by the indentures and certain related agreements with respect to TCFC’s outstanding trust preferred securities and subordinated notes, consisting of: (i) 4.75% fixed-to-floating rate subordinated notes due 2030 with an aggregate principal amount not in excess of $20,000,000 (the “2030 Notes”), (ii) floating rate junior subordinated debt securities due 2034 in an aggregate principal amount not in excess of $7,217,000 (the “2034 Debentures”) and (iii) floating rate junior subordinated deferrable interest debentures due 2035 in an aggregate principal amount not in excess of $5,155,000 (the “2035 Debentures,” and together with the 2030 Notes and the 2034 Debentures, the “Notes”), each previously issued or assumed by TCFC.

The supplemental indentures pursuant to which SHBI assumed each series of Notes, as well as the original indentures pursuant to which each such series of Notes was issued, have not been filed herewith pursuant to Item 601(b)(4)(v) of Regulation S-K under the Securities Act. SHBI agrees to furnish a copy of such indentures to the SEC upon request.

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Board of Directors

At the Effective Time, in accordance with the terms of the Merger Agreement, SHBI and Shore United expanded the size of the SHBI Board of Directors (the “SHBI Board”) and the Shore United Board of Directors (the “Shore United Board”), respectively, to 20 directors, including 12 of the directors of SHBI and Shore United immediately prior to the Effective Time and eight former directors of TCFC and CBC immediately prior to the Effective Time.

Resignation of Directors

As previously disclosed, in connection with the transactions contemplated by the Merger Agreement, Lloyd L. Beatty, Jr. and Jeffrey E. Thompson tendered their resignations as a member of the SHBI Board and Shore United Board and from all committees of the SHBI Board and Shore United Board, in each case effective as of the Effective Time. Such resignations did not involve any disagreement with SHBI management or the SHBI Board on any matter relating to SHBI’s operations, policies or practices.

Continued Service of Directors; Appointment of Directors

The 12 directors of SHBI and Shore United designated by SHBI and Shore United, respectively, pursuant to the Merger Agreement, each of whom previously served, and continues to serve, as a member of the SHBI Board and Shore United Board, are as follows: Alan J. Hyatt, William E. Esham, III, John A. Lamon, Frank E. Mason, III, Esther A. Streete, David S. Jones, Clyde V. Kelly, III, David W. Moore, Dawn M. Willey, R. Michael Clemmer, Jr., James A. Judge and Konrad M. Wayson.

As previously disclosed, the eight directors designated by TCFC pursuant to the Merger Agreement, each of whom previously served as a member of the board of directors of TCFC and CBC, and were appointed by the SHBI Board and the Shore United Board, in each case effective as of the Effective Time, are as follows: Mary Todd Peterson, Rebecca M. McDonald to Class I, Michael B. Adams, James M. Burke, Austin J. Slater, Jr., Louis P. Jenkins, Jr. to Class II and Joseph V. Stone, Jr. and E. Lawrence Sanders, III to Class III (each, a “New Director” and, collectively, the “New Directors”). Biographical information related to the New Directors can be found in the annual report on Form 10-K/A filed by TCFC with the SEC on March 2, 2023 (the “TCFC 10-K/A”).

With the exception of Mr. Burke, each of the New Directors will receive the same compensation as currently paid to other SHBI Board and Shore United Board members. A description of SHBI’s standard non-employee director compensation arrangement is contained under the heading “Compensation of Non-Employee Directors” in SHBI’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 12, 2023. Biographical information for Mr. Burke and Mr. Capitani can be found in the TCFC 10-K/A.

Other than as previously described above and in the Registration Statement, there are no arrangements or understandings between any of the New Directors and any other person pursuant to which any of the New Directors have been designated to serve on the SHBI Board and Shore United Board. Additionally, there have been no transactions nor are there any proposed transactions between SHBI and any of the TCFC Director Nominees that would require disclosure pursuant to Item 404(a) of Regulation S-K.

Appointment of Vice Chairman

As previously disclosed, pursuant to the Merger Agreement and the Bylaws Amendment (as defined below), effective as of the Effective Time, Austin J. Slater, Jr., the former chairman of the TCFC board of directors, was appointed as the Vice Chairman of the SHBI Board and the Shore United Board.

Board Committee Assignments after the Merger

The Audit Committee, Compensation Committee, Nominating & Governance Committee, Risk Management Committee and Executive Committee of the SHBI Board are comprised of the following members, in each case effective as of the Effective Time:

Audit Committee	Compensation Committee	Nominating & Governance Committee	Risk Management Committee	Executive Committee
Mary Todd Peterson (Chair)	Louis P. Jenkins, Jr. (Chair)	Clyde V. Kelly, III (Chair)	R. Michael Clemmer, Jr. (Chair)	Alan J. Hyatt (Chair)
James M. Burke (ex-officio)	James M. Burke (ex-officio)	James M. Burke (ex-officio)	James M. Burke (ex-officio)	Michael B. Adams
Alan J. Hyatt (ex-officio)	William E. Esham, III	Alan J. Hyatt (ex-officio)	Alan J. Hyatt (ex-officio)	James M. Burke (ex-officio)
James A. Judge	Alan J. Hyatt (ex-officio)	Louis P. Jenkins, Jr.	James A. Judge	R. Michael Clemmer, Jr.
Rebecca M. McDonald	David S. Jones	David S. Jones	Frank E. Mason	William E. Esham, III
Austin J. Slater, Jr. (ex-officio)	Clyde V. Kelly, III	John A. Lamon	Rebecca M. McDonald	Louis P. Jenkins, Jr.
Esther A. Streete	John A. Lamon	Frank E. Mason	E. Lawrence Sanders, III	Clyde V. Kelly, III
Konrad M. Wayson	David W. Moore	Austin J. Slater, Jr. (ex-officio)	Austin J. Slater, Jr. (ex-officio)	Mary Todd Peterson
Dawn M. Willey	Mary Todd Peterson	Joseph V. Stone, Jr.	Konrad M. Wayson	Austin J. Slater, Jr. (ex-officio)
	Austin J. Slater, Jr. (ex-officio)		Dawn M. Willey	Esther A. Streete

Officer Appointments and Compensatory Arrangements

Officer Appointments

As previously disclosed, pursuant to the terms of the Merger Agreement, effective as of the Effective Time, James M. Burke, the former President and Chief Executive Officer of TCFC, was appointed as President and Chief Executive Officer of SHBI and Shore United and Todd L. Capitani, the former Chief Financial Officer of TCFC, was appointed as the Chief Financial Officer of SHBI and Shore United.

Other than with respect to the Employment Agreements, the Burke Retention Agreement, the Capitani Retention Agreement (each defined below) and the Merger Agreement, there are no arrangements or understandings between Mr. Burke or Mr. Capitani and any person to which each was appointed as the President and Chief Executive Officer of SHBI and Chief Financial Officer of SHBI, respectively. There are no family relationships between any of Mr. Burke, Mr. Capitani and any of SHBI’s directors or executive officers or persons nominated or chosen by SHBI to become a director of executive officer. Mr. Burke and Mr. Capitani are not a party to any transactions requiring disclosure under Item 404(a) of Regulation S-K.

Resignation of Chief Executive Officer

As previously disclosed, pursuant to the terms of the Merger Agreement, effective as of the Effective Time, Lloyd L. Beatty, Jr., the President and Chief Executive Officer of SHBI and Shore United, resigned from his positions as President and Chief Executive Officer of SHBI and Shore United. In connection with his resignation, Mr. Beatty received the benefits pursuant to his existing change in control agreement with SHBI, as described in the Registration Statement under the section titled “The Merger — Interests of Certain SHBI Directors and Executive Officers in the Merger — Change in Control Agreements” and SHBI’s definitive proxy statement, filed with the SEC on April 12, 2023 under the section titled “Compensation Discussion and Analysis — Change in Control Agreements.” Mr. Beatty executed a separation agreement, which includes a general release of claims in connection with the payment under his Change in Control Agreement with SHBI, which includes non-competition and non-solicitation covenants for one year following his termination of employment. Mr. Beatty’s resignation is not due to a disagreement with SHBI management or the SHBI Board on any matter relating to SHBI’s operations, policies or practices.

Termination of Chief Financial Officer

Pursuant to the terms of the Merger Agreement, effective as of the Effective Time, Vance W. Adkins, SHBI’s and Shore United’s Chief Financial Officer, terminated his employment with SHBI. Mr. Adkins received the benefits pursuant to his existing change in control agreement with SHBI, as described in the Registration Statement under the section titled “The Merger — Interests of Certain SHBI Directors and Executive Officers in the Merger — Change in Control Agreements.” Mr. Adkins executed a separation agreement, which includes a general release of claims in connection with the payments under his change in control agreement with SHBI, which includes non-competition and non-solicitation covenants for one year following his termination of employment.

Assumption of Employment Agreements

As described in the Registration Statement, pursuant to the terms of the Merger Agreement, effective as of the Effective Time, Mr. Burke and Mr. Capitani entered into an Assumption and Amendment of Employment Agreement (each an “Employment Agreement” and, collectively, the “Employment Agreements”) pursuant to which SHBI agreed to assume all of the rights and obligations under each of their employment agreements with TCFC, which are described in the TCFC 10-K/A and attached thereto as Exhibits 10.57 and 10.56, respectively. Pursuant to the Employment Agreements, following the expiration of each of Mr. Burke’s and Mr. Capitani’s Employment Agreements on the second anniversary of the Effective Time, Mr. Burke and Mr. Capitani will be eligible to enter into a change of control agreement with SHBI, the form which was agreed upon prior to the Effective Time.

The foregoing description of the Employment Agreements do not purport to be complete and are qualified in their entirety by reference to the full text of the Employment Agreements, which are attached hereto as Exhibits 10.1 and 10.2 and incorporated into this Item 5.02 by reference.

Retention Bonus Agreements

As previously described in the Registration Statement in the sections titled “The Merger — Interests of Certain SHBI Directors and Executive Officers in the Merger” and “The Merger — Interests of Certain TCFC Directors and Executive Officers in the Merger,” effective as of the Effective Time, SHBI entered into retention agreements with each of Mr. Burke (the “Burke Retention Agreement”), Mr. Capitani (the “Capitani Retention Agreement”) and Ms. Donna Stevens (the “Stevens Retention Agreement”).

The Burke Retention Agreement, Capitani Retention Agreement and Stevens Retention Agreement provide for a one-time cash retention award of $200,000, $43,998 and $45,566, respectively, and an equity grant of SHBI Restricted Stock Units (“RSUs”), with respect to 13,409, 10,727 and 3,942 shares of SHBI Common Stock, respectively, under the Company’s 2016 Stock and Incentive Compensation Plan, which will vest 50% on each of the first and second anniversaries of the Effective Date subject to continued employment through such dates. If Mr. Burke’s, Mr. Capitani’s or Ms. Steven’s employment is terminated by SHBI without “Cause” (as defined in the applicable agreement), prior to the applicable vesting date, the unvested RSUs shall vest and be paid within 30 days following the applicable termination date. In consideration of their continued employment, Mr. Burke, Mr. Capitani and Ms. Stevens waived “good reason” for terminations under their existing employment agreements that arise from changes in their responsibilities or duties pursuant to the Merger.

The foregoing descriptions of the Burke Retention Agreement, the Capitani Retention Agreement and the Stevens Retention Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, which are attached hereto as Exhibits 10.3, 10.4 and 10.5, respectively and incorporated into this Item 5.02 by reference.

Beatty Consulting Agreement

Effective as of the Effective Time, Shore United entered into a consulting agreement with Mr. Beatty (the “Consulting Agreement”). The term of the Consulting Agreement commenced as of the Effective Time of the Merger and continues for six months thereafter, unless terminated earlier in accordance with the terms of the Consulting Agreement. Mr. Beatty will not receive consideration for his services under the Consulting Agreement.

Item 5.03.

Amendments To Articles of Incorporation or Bylaws; Change in Fiscal Year.

In connection with the consummation of the Merger, SHBI filed Articles of Amendment with the Maryland State Department of Assessments and Taxation for the purposes of amending its Amended and Restated Articles of Incorporation to increase the number of authorized shares of SHBI Common Stock from 35,000,000 to 50,000,000 (the “Articles of Amendment”). The Articles of Amendment became effective on July 1, 2023, immediately prior to the Effective Time.

Effective immediately prior to the Effective Time, SHBI’s Amended and Restated By-Laws were amended to provide for the position of Vice Chairman of the SHBI Board and set forth the duties and responsibilities of the Vice Chairman of the SHBI Board.

The foregoing descriptions of the Articles of Amendment and SHBI’s Amended and Restated By-Laws do not purport to be complete and are qualified in their entirety by reference to the full text of the Articles of Amendment and Second Amended and Restated By-Laws, copies of which are attached hereto as Exhibits 3.1 and 3.2, respectively, to this Current Report and incorporated into this Item 5.03 by reference.

Item 7.01.

Regulation FD Disclosure.

On July 3, 2023, SHBI and TCFC issued a joint press release announcing the completion of the Merger. A copy of the press release is attached as Exhibit 99.1 to this Current Report and incorporated into this Item 7.01 by reference.

Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, as amended, and such information and Exhibit shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.

Financial Statements and Exhibits.

(a) Financial statements of businesses or funds acquired.

The financial statements of TCFC required by Item 9.01(a) of Form 8-K will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.

(b) Pro forma financial information

The pro forma financial information required by Item 9.01(b) of Form 8-K will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.

(d) Exhibits

Exhibit Number
2.1		Agreement and Plan of Merger, dated as of December 14, 2022, by and between Shore Bancshares, Inc. and The Community Financial Corporation (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on December 14, 2022)
3.1		Articles of Amendment of the Amended and Restated Articles of Incorporation of Shore Bancshares, Inc., effective as of July 1, 2023
3.2		Second Amended and Restated By-Laws of Shore Bancshares, Inc., dated July 1, 2023
10.1		Assumption and Amendment of Employment Agreement, dated as of July 1, 2023, by and between Shore Bancshares, Inc. and James M. Burke
10.2		Assumption and Amendment of Employment Agreement, dated as of July 1, 2023, by and between Shore Bancshares, Inc. and Todd L. Capitani
10.3		Retention Agreement, dated as of July 1, 2023, by and between Shore Bancshares, Inc. and James M. Burke
10.4		Retention Agreement, dated as of July 1, 2023, by and between Shore Bancshares, Inc. and Todd L. Capitani
10.5		Retention Agreement, dated as of July 1, 2023, by and between Shore Bancshares, Inc. and Donna Stevens
99.1		Joint Press release, dated July 3, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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: July 3, 2023	By:	/s/ James M. Burke
		James M. Burke
		President and Chief Executive Officer

Exhibit 3.1

Articles of Amendment of Shore Bancshares, Inc.

Shore Bancshares, Inc., a Maryland corporation, (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

Section (a) of Article FIFTH of the Corporation’s Amended and Restated Articles of Incorporation is hereby amended and restated in its entirety as follows:

(a) The total number of shares of stock of all classes which the Corporation has authority to issue is 50,000,000 shares of capital stock (par value $.01 per share), amounting in aggregate par value to $500,000. All of such shares are initially classified as “Common Stock”. The Board of Directors may classify and reclassify any unissued shares of capital stock by setting or changing in any one or more respects the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such shares of capital stock. A majority of the entire Board of Directors, without action by the stockholders, may amend the Charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class that the Corporation has authority to issue.

The amendment to the Corporation’s Amended and Restated Articles of Incorporation was approved by a majority of the Corporation’s Board of Directors as required by Section 2-105(a)(13) of the Maryland General Corporation Law.

The Corporation has only one class of shares of authorized common stock.

Immediately before the amendment, the Corporation had authority to issue 35,000,000 shares of capital stock, par value $.01 per share, amounting in aggregate par value to $350,000.

As amended, the total number of shares of capital stock which the Corporation has authority to issue is 50,000,000, $.01 par value per share, amounting in aggregate par value to $500,000.

These Articles of Amendment shall become effective on July 1, 2023 at 12:01 a.m. upon the acceptance for record by the State Department of Assessments and Taxation of Maryland.

* * *

[Signature Page Follows]

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed in its name on its behalf by its President and attested to by its Secretary on this 1^st day of July, 2023.

	SHORE BANCSHARES, INC.


	By:	/s/ Lloyd L. Beatty, Jr.
		Lloyd L. Beatty, President and Chief
		Executive Officer

ATTEST:


/s/ Andrea E. Colender
Andrea E. Colender, Corporate Secretary

[Signature Page to Articles of Amendment]

Exhibit 3.2

SHORE BANCSHARES, INC.

SECOND AMENDED AND RESTATED BY-LAWS

(As of July 1, 2023)

ARTICLE I

STOCKHOLDERS

SECTION 1. Annual Meeting. A meeting of the stockholders of the Corporation for the election of directors and for the transaction of any other business of the Corporation shall be held annually at such date and time as the Board of Directors may determine.

SECTION 2. Special Meetings. Special meetings of the stockholders may be called at any time for any purpose or purposes by the Chairman, the Vice Chairman, the President, or by a majority of the Board of Directors. Subject to the procedures set forth in Article II, Section 4 and this Section, special meetings of the stockholders shall be called by the Secretary upon the request in writing of holders of a majority of all the shares outstanding and entitled to vote on the business to be transacted at such meeting. Such request shall state the purpose or purposes of the meeting and the matters proposed to be acted upon at it. The Secretary shall provide an estimate of the cost of preparing and mailing and, upon payment of such cost; the notice of the meeting shall be mailed by the Corporation. Business transacted at all special meetings of stockholders shall be confined to the purpose or purposes stated in the notice of the meeting. The Board of Directors shall have the sole power to fix the date and time of the special meeting Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at a special meeting of stockholders (a) only pursuant to the Corporation's notice of meeting and, (b) in the case of nominations of persons for election to the Board of Directors, (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation (A) who was a stockholder of record at the time of giving notice provided for in Article II, Section 4, (B) who is entitled to vote at the meeting and (C) who complied with the notice procedures set forth in Article II, Section 4.

SECTION 3. Place of Holding Meetings. All meetings of stockholders shall be held at the principal office of the Corporation or elsewhere in the United States as designated by the Board of Directors.

SECTION 4. Notice of Meetings: Waiver of Notice. Written notice of each meeting of the stockholders shall be mailed, postage pre-paid by the Secretary, to each stockholder entitled to vote thereat at the stockholder's post office address, as it appears upon the books of the Corporation, at least ten (10) days but not more than ninety (90) days before, the meeting. Each such notice shall state the place, day, and hour at which the meeting is to be held and, in the case of any special meeting, shall state briefly the purpose or purposes thereof. Notwithstanding the foregoing provisions, each person who is entitled to notice waives notice if he or she before or after the meeting signs a waiver of the notice which is filed with the records of stockholders' meetings, or is present at the meeting in person or by proxy.

SECTION 5. Quorum. The presence in person or by proxy of the holders of record of a majority of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote thereat shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by law, by the Charter or by these By-laws. Whether or not a quorum shall be in attendance at the time for which the meeting shall have been called, the meeting may be adjourned from time to time by a majority vote of the stockholders present or represented to a date not more than 120 days after the original date, without any notice other than by announcement at the meeting. At any adjourned meeting at which a quorum shall attend, any business may be deferred and transacted which might have been transacted if the meeting had been held as originally called.

SECTION 6. Organization. Meetings of stockholders shall be presided over by the Chairman of the Board of Directors or, if the Chairman is not present, the Vice Chairman of the Corporation, or if the Vice Chairman is not present, by the President or a Vice President, or, if none of said officers is present, by a chairman to be elected at the meeting. The Secretary of the Corporation, or if the Secretary is not present, any Assistant Secretary shall act as Secretary of such meetings; in the absence of the Secretary and any Assistant Secretary, the presiding officer may appoint a person to act as Secretary of the meeting.

SECTION 7. Voting. Unless the Charter provides otherwise, at all meetings of stockholders, every stockholder entitled to vote thereat shall have one (1) vote for each share of stock standing in the stockholder's name on the books of the Corporation on the date for the determination of stockholders entitled to vote at such meeting. Such vote may be either in person or by proxy appointed by an instrument in writing subscribed by such stockholder or the stockholder's duly authorized attorney, bearing a date not more than eleven (11) months prior to said meeting, unless said instrument provides for a longer period. Such proxy shall be dated, but need not be sealed, witnessed or acknowledged. All elections shall be had and all questions shall be decided by a majority of the votes cast at a duly constituted meeting, except as otherwise provided by law, in the Charter or by these By-laws. Notwithstanding, a plurality of all the votes cast at a meeting at which a quorum is present is sufficient to elect a director.

SECTION 8. Advance Notice Provisions for Business to be Transacted at Annual Meeting. No business may be transacted at an annual meeting of stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the annual meeting by any stockholder of the Corporation (i) who is stockholder of record on the date of the giving of the notice provided for in this Section and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section. A stockholder's notice must be delivered to or mailed and received by the Secretary at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the preceding year's annual meeting, notice by the stockholder must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60^th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. A stockholder's notice to the Secretary must be in writing and set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address of such stockholder as they appear on the Corporation's books and of the beneficial owner, if any, on whose behalf the proposal is made, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder and such beneficial owner, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in Article II, Section 4 or in this Section, provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures, nothing in Article II, Section 4 nor in this Section shall be deemed to preclude discussion by any stockholder of any such business. If the chairman of an annual meeting determines that business was not properly brought before the annual meeting in accordance with the foregoing procedures, the chairman of the meeting shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted No adjournment or postponement of a meeting of stockholders shall commence a new period for the giving of notice of a stockholder proposal hereunder.

ARTICLE II

BOARD OF DIRECTORS

SECTION 1. General Powers. The property and business of the Corporation shall be managed by the Board of Directors of the Corporation. The Board of Directors shall annually elect a Chairman of the Board of Directors from among its members and shall designate, when present, either the Chairman of the Board of Directors, Vice Chairman or the President to preside at its meetings.

SECTION 2. Number of Directors. The Corporation shall have at least one director. The Corporation shall have the number of directors provided in the Charter until changed as herein provided. Two-thirds of the entire Board of Directors may alter the number of directors set by the Charter to not exceeding 25 nor less than the minimum number then permitted herein, but the action may not affect the tenure of office of any director.

SECTlON 3. Election and Term of Office. The Board of Directors shall be divided into classes as described in the Charter. Each Director shall hold office until the expiration of the term for which the Director is elected, except as otherwise stated in these By-laws, and thereafter until his or her successor has been elected and qualifies. If the number of Directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of Directors in each class as nearly equal as possible, and any additional Director of any class shall, subject to Article II, Section 5 of these By-Laws and to any requirements or restrictions imposed by the Maryland General Corporation Law, hold office for a term that shall coincide with the remaining term of that class, but in no case shall a decrease in the number of Directors shorten the term of any incumbent Director. Election of Directors need not be by written ballot, unless required by these By-Laws.

SECTION 4. Nomination of Directors. Nomination for election of members of the Board of Directors may be made by the Board of Directors or by any stockholder of any outstanding class of capital stock of the Corporation entitled to vote for the election of Directors and who complies with the notice provisions in this Section. Notice by a stockholder of intention to make any nominations shall be made in writing and shall be delivered or mailed to the Secretary at the principal executive offices of the Corporation (a) in the case of an annual meeting, not less than 120 days nor more than 180 days prior to the date of the meeting of stockholders called for the election of Directors which, for purposes of this provision, shall be deemed to be on the same date as the annual meeting of stockholders for the preceding year; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the preceding year's annual meeting, notice by the stockholder must be so delivered not earlier than the 180th day prior to such annual meeting and not later than the close of business on the later of the 120th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such annual meeting is first made; and (b) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth day following the day on which notice of the date of the special meeting was mailed or public announcement of the date of the special meeting was made, whichever first occurs. Such notification shall contain the following information (a) the name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the number of shares of capital stock of the Corporation owned by each proposed nominee; (d) the name and residence address of the notifying stockholder; ( e) the number of shares of capital stock of the Corporation owned by the notifying stockholder; (f) the consent in writing of the proposed nominee as to the proposed nominee's name being placed in nomination for Director; (g) a description of all arrangements or understandings between such notifying stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such notifying stockholder, (h) a representation that such notifying stockholder intends to appear in person or by proxy at the meeting to nominate the persons named m its notice; and (i) all information relating to such proposed nominee that would be required to be disclosed by Regulation 14A under the Securities Exchange Act of 1934, as amended, and Rule 14a-11 promulgated thereunder, assuming such provisions would be applicable to the solicitation of proxies for such proposed nominee. Nominations not made in accordance herewith shall be disregarded and, upon the chairman's instructions, the teller shall disregard all votes cast for each such nominee.

SECTION 5. Vacancies; Removal of Director. A vacancy on the Board of Directors may be filled only in accordance with the provisions of the Charter, Any director or the entire Board of Directors may be removed only in accordance with the provisions of Maryland law.

SECTION 6. Place of Meeting. The Board of Directors may hold their meetings and have one or more offices, and keep the books of the Corporation, either within or outside the State of Maryland, at such place or places as they may from time to time determine by resolution or by written consent of all the directors. The Board of Directors may hold their meetings by conference telephone or other similar electronic communications equipment in accordance with the provisions of Maryland General Corporation Law

SECTION 7. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by resolution of the Board, provided that notice of every resolution of the Board fixing or changing the time or place for the holding of regular meetings of the Board shall be mailed to each director at least three (3) days before the first meeting held in pursuance thereof. The annual meeting of the Board of Directors shall be held immediately following the annual stockholders' meeting at which a Board of Directors is elected. Any business may be transacted at any regular meeting of the Board.

SECTION 8. Special Meetings. Special meetings of the Board of Directors shall be held whenever called by direction of the Chairman, or the Vice Chairman, and must be called by the Chairman, the Vice Chairman, the President or the Secretary upon written request of a majority of the Board of Directors, by mailing the same at least two (2) days prior to the meeting, or by personal delivery, facsimile transmission, telegraphing or telephoning the same on the day before the meeting, to each director; but such notice may be waived by any director. A special meeting of the Board of Directors shall be held on such date and at any place as may be designated from time to time by the Board of Directors. Unless otherwise indicated in the notice thereof, any and all business may be transacted at any special meeting. At any meeting at which every director shall be present, even though without notice, any business may be transacted and any director may in writing waive notice of the time, place and objects of any special meeting.

SECTION 9. Quorum. A majority of the whole number of directors shall constitute a quorum for the transaction of business at all meetings of the Board of Directors, but, if at any meeting less than a quorum shall be present, a majority of those present may adjourn the meeting from time to time, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by law or by the Corporation's Charter or by these By-laws.

SECTION 10. Compensation of Directors. Directors may receive a fixed sum and expenses for attendance at regular and special meetings and committee meetings, or any combination of the foregoing as may be determined from time to time by the Board of Directors, and nothing contained herein shall be construed to preclude any Director from serving the Corporation in any other capacity and receiving compensation therefore.

SECTION 11. Advisory Directors. The Board of Directors may by resolution appoint advisory directors to the Board of Directors, who may also serve as directors emeriti, and shall have such authority and receive such compensation and reimbursement as the Board of Directors shall provide. Advisory directors or directors emeriti shall not have the authority to participate by vote in the transaction of business.

SECTION 12. Committees. The Board of Directors may appoint from among its members an Executive Committee, an Audit Committee, a Compensation Committee, a Nominating Committee, and other committees composed of one or more directors and delegate to these committees any of the powers of the Board of Directors, except the power to authorize dividends on stock, elect directors, issue stock other than as provided in the next sentence, recommend to the stockholders any action which requires stockholder approval, amend these By-Laws, or approve any merger or share exchange which does not require stockholder approval. If the Board of Directors has given general authorization for the issuance of stock providing for or establishing a method or procedure for determining the maximum number of shares to be issued, a committee of the Board of Directors, in accordance with that general authorization or any stock option or other plan or program adopted by the Board of Directors, may authorize or fix the terms of stock subject to classification or reclassification and the terms on which any stock may be issued, including all terms and conditions required or permitted to be established or authorized by the Board of Directors.

SECTION 13. Committee Procedure. Each committee may fix rules of procedure for its business. A majority of the members of a committee shall constitute a quorum for the transaction of business and the act of a majority of those present at a meeting at which a quo mm is present shall be the act of the committee. The members of a committee present at any meeting, whether or not they constitute a quorum, may appoint a director to act in the place of an absent member. Any action required or permitted to be taken at a meeting of a committee may be taken without a meeting, if a unanimous written consent which sets forth the action is signed by each member of the committee and filed with the minutes of the committee.

SECTION 14. Emergency. In the event of a state of disaster of sufficient severity to prevent the conduct and management of the affairs and business of the Corporation by its directors and officers as contemplated by the Charter and these By-Laws, any two or more available members of the then incumbent Executive Committee shall constitute a quorum of that Committee for the full conduct and management of the affairs and business of the Corporation in accordance with the provisions of Article II, Section 13. In the event of the unavailability, at such time, of a minimum of two members of the then incumbent Executive Committee, the available directors shall elect an Executive Committee consisting of any two members of the Board of Directors, whether or not they be officers of the Corporation, which two members of the Board of Directors, whether or not they be officers of the Corporation, which two members shall constitute the Executive Committee for the full conduct and management of the affairs of the Corporation in accordance with the foregoing provisions of this Section. This Section shall be subject to implementation by resolution of the Board of Directors passed from time to time for that purpose, and any provisions of these By-Laws (other than this Section) and any resolutions which are contrary to the provisions of this Section or to the provisions of any such implementary resolutions shall be suspended until it shall be determined by any Interim Executive Committee acting under this Section that it shall be to the advantage of the Corporation to resume the conduct and management of its affairs and business under all the other provisions of these By-Laws.

ARTICLE III

OFFICERS

SECTION 1. Election, Tenure, and Compensation. The officers of the Corporation shall be a President, one or more Vice-Presidents (if so elected by the Board of Directors), a Secretary, and a Treasurer. The Board of Directors may elect such other officers as it may from time to time consider necessary or appropriate for the proper conduct of the business of the Corporation. The Board may also have a Chairman and Vice Chairman of the Board. The officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of the stockholders and shall have such powers and duties as may be set forth in these By-Laws or conferred upon or assigned to them from time to time by the Board of Directors. The Chairman or Vice Chairman, if one or both are elected, shall be a director and the other officers may, but need not be, directors. Any two or more of the above officers, except those of Chairman and Vice Chairman and President and Vice President, respectively, may be held by the same person, but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law or by these By-Laws to be executed, acknowledged or verified by any two or more officers. The compensation or salary paid all officers of the Corporation shall be fixed by resolutions adopted by the Board of Directors.

Except where otherwise expressly provided in a contract duly authorized by the Board of Directors, all officers of the Corporation shall be subject to removal at any time by the affirmative vote of a majority of the Board of Directors. All employees and agents of the Corporation shall hold such positions at the discretion of the Board of Directors or of the officers appointing them.

SECTION 2. Powers and Duties of the Chairman and the Vice Chairman. The Chairman, if one be elected, shall preside at all meetings of the stockholders and of the Board of Directors. The Chairman shall be ex-officio a member of all the standing committees of the Board of Directors. The Chairman shall do and perform such other duties as may from time to time be assigned to the Chairman by the Board of Directors. The Vice Chairman, if one be elected, in the absence of the Chairman, shall assume the duties of the Chairman and preside at all meetings of the stockholders and of the Board of Directors, and shall perform such other duties and have such other powers as are from time to time assigned to him or her by the Chairman or the Board of Directors.

SECTION 3. Powers and Duties of the President. The President shall, unless the Board of Directors so empowers another person, be the chief executive officer of the Corporation and shall supervise the carrying out of the policies adopted or approved by the Board of Directors. The President shall have general executive powers and duties, including, without limitation, general charge and control of the Corporation’s business affairs and properties and general powers and duties of supervision and management usually vested in the office of President of a corporation. The President shall also have such specific powers and duties as may be conferred upon or assigned to the President from time to time by the Board of Directors. The President may sign and execute all authorized bonds, contracts, obligations and other instruments and documents in the name of the Corporation.

SECTION 4. Powers and Duties of the Vice President. The Board of Directors may elect one or more Vice Presidents. Any Vice President (unless otherwise provided by resolution of the Board of Directors) may sign and execute all authorized bonds, contracts, or other obligations in the name of the Corporation. Each Vice President shall have such other powers and shall perform such other duties as may be assigned to the Vice President by the Board of Directors or by the Chairman or the President. In case of the absence or disability of the President, the duties of that office shall be performed by any Vice President, and the taking of any action by such Vice President in place of the President shall be conclusive evidence of the absence or disability of the President.

SECTION 5. Secretary. The Secretary shall give, or cause to be given, notice of all meetings of stockholders and directors and all other notices required by law or by these By-laws, and in case of the Secretary's absence or refusal or neglect to do so, any such notice may be given by any person thereunto directed by the Chairman or the President, or by the directors or stockholders upon whose written requisition the meeting is called as provided in these By-laws. The Secretary shall record all the proceedings of the meetings of the stockholders and of the directors in books provided for that purpose, and shall perform such other duties as may be assigned to him by the directors, the Chairman, or the President. The Secretary shall have custody of the seal of the Corporation and shall affix the same to all instruments requiring it, when authorized by the Board of Directors, the Chairman, or the President, and attest the same. In general, the Secretary shall perform all the duties generally incident to the office of Secretary, subject to the control of the Board of Directors, the Chairman, and the President.

SECTION 6. Treasurer. The Treasurer shall have custody of all the funds and securities of the Corporation, and shall keep full and accurate account of receipts and disbursements in books belonging to the Corporation, The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation in such depository or depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements. The Treasurer shall render to the Chairman, the President and the Board of Directors, whenever any of them so requests, an account of all transactions as Treasurer and of the financial condition of the Corporation. The Treasurer shall give the Corporation a bond, if required by the Board of Directors, in a sum, and with one or more sureties, satisfactory to the Board of Directors, for the faithful performance of the duties of the office and for the restoration to the Corporation in case of the Treasurer's death, resignation, retirement or removal from office of all books, papers, vouchers, moneys, and other properties of whatever kind in the Treasurer's possession or under the Treasurer's control belonging to the Corporation. The Treasurer shall perform all the duties generally incident to the office of the Treasurer, subject to the control of the Board of Directors, the Chairman, and the President.

SECTION 7. Assistant Secretary. The Board of Directors may appoint an Assistant Secretary or more than one Assistant Secretary. Each Assistant Secretary shall (except as otherwise provided by resolution of the Board of Directors) have power to perform all duties of the Secretary in the absence or disability of the Secretary and shall have such other powers and shall perform such other duties as may be assigned by the Board of Directors, the Chairman, or the President. In case of the absence or disability of the Secretary, the duties of the office shall be performed by any Assistant Secretary, and the taking of any action by any such Assistant Secretary in place of the Secretary shall be conclusive evidence of the absence or disability of the Secretary.

SECTION 8. Assistant Treasurer. The Board of Directors may appoint an Assistant Treasurer or more than one Assistant Treasurer. Each Assistant Treasurer shall (except as otherwise provided by resolution of the Board of Directors) have power to perform all duties of the Treasurer in the absence or disability of the Treasurer and shall have such other powers and shall perform such other duties as may be assigned by the Board of Directors, the Chairman or the President. In case of the absence or disability of the Treasurer, the duties of the office shall be performed by any Assistant Treasurer, and the taking of any action by any such Assistant Treasurer in place of the Treasurer shall be conclusive evidence of the absence or disability of the Treasurer.

ARTICLE IV

CAPITAL STOCK

SECTION 1. Issue of Certificates of Stock. The certificates for shares of the stock of the Corporation shall be of such form not inconsistent with the Charter, or its amendments, as shall be approved by the Board of Directors. All certificates shall be signed by the Chairman, the Vice Chairman, the President or by any Vice President and counter-signed by the Secretary, an Assistant Secretary, Treasurer or Assistant Treasurer, and sealed with the seal of the Corporation. All certificates for each class of stock shall be consecutively numbered. The name of the person owning the shares issued and the address of the holder, shall be entered in the Corporation's books. All certificates surrendered to the Corporation for transfer shall be canceled and subject to SECTION 3 of ARTICLE IV, no new certificates representing the same number of shares shall be issued until the former certificate or certificates for the same number of shares shall have been so surrendered, and canceled, unless a certificate of stock be lost or destroyed, in which event another may be issued in its stead upon proof of such loss or destruction and the giving of a satisfactory bond of indemnity not exceeding an amount double the value of the stock. Both such proof and such bond shall be in a form approved by the general counsel of the Corporation and by the Transfer Agent of the Corporation and by the Registrar of the stock.

SECTION 2. Transfer of Shares. Subject to SECTION 3 of this ARTICLE IV, shares of the capital stock of the Corporation shall be transferred on the books of the Corporation only by the holder thereof in person or by the holder's attorney upon surrender and cancellation of certificates for a like number of shares as hereinbefore provided.

SECTION 3. Uncertificated Stock. Notwithstanding any other provision of these By-laws, the Board of Directors may adopt a system of issuance, recordation and transfer of shares of stock of the Corporation by electronic or other means not involving any issuance of certificates, including provisions for notice to purchasers in substitution for any required statements on certificates, and as may be required by applicable corporate securities laws, which system has been approved by the United States Securities and Exchange Commission. Any system so adopted shall not become effective as to issued and outstanding certificated shares until the certificates therefor have been surrendered to the Corporation.

SECTION 4. Registered Stockholders. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share in the name of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the Laws of Maryland.

SECTION 5. Closing Transfer Books. The Board of Directors may fix the period, not exceeding twenty (20) days, during which time the books of the Corporation shall be closed against transfers of stock, or, in lieu thereof, the Directors may fix a date not less than ten (10) days nor more than sixty (60) days preceding the date of any meeting of stockholders or any dividend payment date or any date for the allotment of rights, as a record date for the determination of the stockholders entitled to notice of and to vote at such meeting or to receive such dividends or rights as the case may be; and only stockholders of record on such date shall be entitled to notice of and to vote at such meeting or to receive such dividends or rights as the case may be.

SECTION 6. Lost Stock Certificates. The Board of Directors may determine the conditions for issuing a new stock certificate in place of one which is alleged to have been lost, stolen, or destroyed, or the Board of Directors may delegate such power to any officer or officers of the Corporation. In their discretion, the Board of Directors or such officer or officers may require the owner of the certificate to give bond, with sufficient surety, to indemnify the Corporation against any loss or claim arising as a result of the issuance of a new certificate. In their discretion, the Board of Directors or such officer or officers may refuse to issue such new certificate save upon the order of some court having jurisdiction in the premises.

SECTION 7. Exemption from Control Share Acquisition Statute. The provisions of Sections 3-701 to 3-709 of the Maryland General Corporation Law shall not apply to any share of the capital stock of the Corporation. Such shares of capital stock are exempted from such Sections to the fullest extent permitted by Maryland law.

ARTICLE V

BANK ACCOUNTS AND LOANS

SECTION 1. Bank Accounts. Such officers or agents of the Corporation as from time to time shall be designated by the Board of Directors shall have authority to deposit any funds of the Corporation in such banks or trust companies as shall from time to time be designated by the Board of Directors and such officers or agents as from time to time authorized by the Board of Directors may withdraw any or all of the funds of the Corporation so deposited in any bank or trust or trust company, upon checks, drafts or other instruments or orders for the payment of money, drawn against the account or In the name or behalf of this Corporation, and made or signed by such officers or agents; and each bank or trust company with which funds of the Corporation are so deposited is authorized to accept, honor, cash and pay, without limit as to amount, all checks, drafts or other instruments or orders for the payment of money, when drawn, made or signed by officers or agents so designated by the Board of Directors until written notice of the revocation of the authority of such officers or agents by the Board of Directors shall have been received by such bank or trust company. There shall from time to time be certified to the banks or trust companies in which funds of the Corporation are deposited, the signature of the officers or agents of the Corporation so authorized to draw against the same. In the event that the Board of Directors shall fail to designate the persons by whom checks, drafts and other instruments or orders for the payment of money shall be signed, as hereinabove provided in this Section, all of such checks, drafts and other instruments or orders for the payment of money shall be signed by the Chairman, the President or a Vice President and counter-signed by the Secretary or Treasurer or an Assistant Secretary or an Assistant Treasurer of the Corporation.

SECTION 2. Loans. Such officers or agents of the Corporation as from time to time shall be designated by the Board of Directors shall have authority to effect loans, advances or other forms of credit at any time or times for the Corporation from such banks, trust companies, institutions, corporations, firms or persons as the Board of Directors shall from time to time designate, and as security for the repayment of such loans, advances, or other forms of credit to assign, transfer, endorse, and deliver, either originally or in addition or substitution, any or all stock, bonds, rights, and interests of any kind in or to stocks or bonds, certificates of such rights or interests, deposits, accounts, documents covering merchandise, bills and accounts receivable and other commercial paper and evidences or debt at any time held by the Corporation; and for such loans, advances, or other forms of credit to make, execute and deliver one or more notes, acceptances or written obligations of the Corporation on such terms, and with such provisions as to the security or sale or disposition thereof as such officers or agents shall deem proper; and also to sell to, or discount or rediscount with, such banks, trust companies, institutions, corporations, firms or persons any and all commercial paper, bills receivable, acceptances and other instruments and evidences of debt at any time held by the Corporation, and to that end to endorse, transfer and deliver the same. There shall from time to time be certified to each bank, trust company, institution, corporation, firm or person so designated the signature of the officers or agents so authorized; and each bank, trust company, institution, corporation, firm or person is authorized to rely upon such certification until written notice of the revocation by the Board of Directors of the authority of such officers or agents shall be delivered to such bank, trust company, institution, corporation, firm or person.

ARTICLE VI

MISCELLANEOUS PROVISIONS

SECTION 1. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January of each year.

SECTION 2. Notices. Whenever, under the provisions of these By-laws, notice is required to be given to any director, officer or stockholder, unless otherwise provided in these By-laws, such notice shall be deemed given if in writing, and personally delivered, or sent by telefax, or telegram, or by mail, by depositing the same in a post office or letter box, in a postpaid sealed wrapper, addressed to each stockholder, officer or director, as the case may be, at such address as appears on the books of the Corporation, and such notice shall be deemed to be given at the time the same is so personally delivered, telefaxed, telegraphed or so mailed. Any stockholder, director or officer may waive any notice required to be given under these By-laws.

SECTION 3. Voting Upon Stocks. Unless otherwise ordered by the Board of Directors, the President and the Vice President, or any of them, shall have full power and authority on behalf of the Corporation to attend and to vote and to grant proxies to be used at any meetings of stockholders of any corporation in which the Corporation may hold stock. The Board of Directors, however, may by resolution appoint some other person to vote such shares, in which case such person shall be entitled to vote such shares upon the production of a certified copy of such resolution.

ARTICLE VII

AMENDMENT OF BY-LAWS

In accordance with the Charter, these By-Laws may be repealed, altered, amended or rescinded and new by-laws may be adopted (a) by the stockholders of the Corporation (considered for this purpose as one class) by the affirmative vote of not less than a majority of all the votes entitled to be cast by the outstanding shares of capital stock of the Corporation generally in the election of directors which are cast on the matter at any meeting of the stockholders called for that purpose (provided that notice of such proposal is included in the notice of such meeting) or (b) by the Board of Directors by the affirmative vote of not less than two-thirds of the Board of Directors at a meeting held in accordance with the provisions of these By-Laws.

ARTICLE VIII

INDEMNIFICATION

SECTION 1. Definitions. As used in this Article VIII, any word or words that are defined in Section 2-418 of the Corporations and Associations Article of the Annotated Code of Maryland (the "Indemnification Section"), as amended from time to time, shall have the same meaning as provided in the Indemnification Section.

SECTION 2. Indemnification of Directors and Officers. The Corporation shall indemnify and advance expenses to a director or officer of the Corporation in connection with a proceeding to the fullest extent permitted by and in accordance with the Indemnification Section. Notwithstanding the foregoing, the Corporation shall be required to indemnify a director or officer in connection with a proceeding commenced by such director or officer against the Corporation or its directors or officers only if the proceeding was authorized by the Board of Directors.

SECTION 3. Indemnification of Other Agents and Employees. With respect to an employee or agent, other than a director or officer of the Corporation, the Corporation may, as determined by and in the discretion of the Board of Directors of the Corporation, indemnify and advance expenses to such employees or agents in connection with a proceeding to the extent permitted by and in accordance with the Indemnification Section.

Exhibit 10.1

SHORE BANCSHARES, INC.

ASSUMPTION AND AMENDMENT OF EMPLOYMENT AGREEMENT

This Assumption and Amendment of Employment Agreement (the “Agreement”) is made as of June 30, 2023, by and between Shore Bancshares, Inc., a Maryland corporation (the “Company”) and James M. Burke (“Employee”).

WHEREAS, Employee, Community Bank of the Chesapeake (“CBC”) and The Community Financial Corporation (“TCFC”) are parties to an Employment Agreement dated April 30, 2018, regarding the employment relationship between Employee, CBC and TCFC (the “Employment Agreement”).

WHEREAS, it is anticipated that the Company and TCFC will complete a business combination whereby TCFC will be merged with and into the Company (the “Merger”); and

WHEREAS, the Company wishes to retain the services of Employee following the Merger, and Employee wishes to be employed by the Company following the Merger, on the terms and subject to the conditions set forth in the Employment Agreement as amended by this Agreement.

NOW, THEREFORE, the parties agree as follows:

1.                     Assumption of Employment Agreement. The Company hereby assumes the Employment Agreement and employs Employee on all of the terms and subject to the conditions set forth in the Employment Agreement, as amended by this Agreement, effective as of the closing date of the Merger. Except as set forth herein, after the assumption, all references to the “Company” in the Employment Agreement will mean the Company, and all references to the “Bank” in the Employment Agreement will mean Shore United Bank.

2.                     Amendment to Employment Agreement. Section 2 of the Employment Agreement shall be amended to read as follows:

“2. EFFECTIVE DATE AND TERM. The term of the Agreement (the “Term”) shall begin on the Effective Date and end on the second (2^nd) anniversary of the date of the closing of the merger between The Community Financial Corporation and Shore Bancshares, Inc. (the “Merger”) (provided, however, that subject to any rights of the Employee under this Agreement including, without limitation and as applicable, rights to benefits under Sections 10.2 and 10.3, the Term shall end on such earlier date as may be specifically provided in this Agreement in the event of the Employee’s death, voluntary termination, Disability or termination by the Company with or without Cause). Upon the expiration of the Term, provided that the Employee is still employed with the Company, the Employee and the Company shall enter into a Change in Control Agreement in substantially the form agreed upon by the Company and The Community Financial Corporation prior to the closing of the Merger.”

3.                     Agreement Subject to Consummation of Merger. The effectiveness of this Agreement is subject to the closing of the Merger. In the event that the Agreement and Plan of Merger by and between the Company and TCFC dated as of December 14, 2022 is terminated and the Merger is not consummated as a result, this Agreement shall be void.

4.                     Integration. This Agreement, the Employment Agreement and any other documents referenced herein or in the Employment Agreement, represent the entire agreement and understanding between Employee and the Company concerning Employee’s employment relationship with the Company or any of its subsidiaries, and supercede and replace any and all prior agreements and understandings concerning Employee’s employment relationship with the Company or any of its subsidiaries. This Agreement may not be amended except by a written instrument signed by both parties.

5.                     Counterparts. This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party will constitute a valid and binding execution and delivery of the Agreement by such party. Such facsimile copies will constitute enforceable original documents.

6.                     Governing Law. This Agreement will be governed by the laws of the State of Maryland (with the exception of its conflict of laws provisions).

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, this Agreement has been entered into as of the date first set forth above.

SHORE BANCSHARES, INC.		EMPLOYEE

/s/ Donna J. Stevens		/s/ James M. Burke
By:		James M. Burke
Name: Donna J. Stevens
Title: EVP/COO

[Assumption Agreement]

Exhibit 10.2

SHORE BANCSHARES, INC.

ASSUMPTION AND AMENDMENT OF EMPLOYMENT AGREEMENT

WHEREAS, it is anticipated that the Company and TCFC will complete a business combination whereby TCFC will be merged with and into the Company (the “Merger”); and

NOW, THEREFORE, the parties agree as follows:

2.                     Amendment to Employment Agreement. Section 2 of the Employment Agreement shall be amended to read as follows:

3.                    Agreement Subject to Consummation of Merger. The effectiveness of this Agreement is subject to the closing of the Merger. In the event that the Agreement and Plan of Merger by and between the Company and TCFC dated as of December 14, 2022 is terminated and the Merger is not consummated as a result, this Agreement shall be void.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, this Agreement has been entered into as of the date first set forth above.

SHORE BANCSHARES, INC.		EMPLOYEE

/s/ Donna J. Stevens		/s/ Todd Capitani
By:		Todd Capitani
Name: Donna J. Stevens
Title: EVP/COO

[Assumption Agreement]

Exhibit 10.3

June 30, 2023

James M. Burke

[REDACTED]

Dear James:

This retention and award agreement (this “Agreement”) is entered into by James M. Burke (the “Executive”) and Shore Bancshares, Inc. (the “Company”) in connection with the transactions contemplated by the Agreement and Plan of Merger by and between the Company and The Community Financial Corporation ( “TCFC”), dated as of December 14, 2022 (the “Merger Agreement”), pursuant to which TCFC will be merged with and into the Company in a merger of equals transaction (the “Merger”).

Effectiveness and Definitions

This agreement shall be effective upon the effective time of the Merger (the “Effective Time” and such date, the “Closing Date”). If the Executive’s employment with TCFC or Community Bank of the Chesapeake (the “Bank”) or the Company and its subsidiaries, as applicable, terminates for any reason prior to the Effective Time, or if the Board of Directors of TCFC and the Company determine that the Merger will not become effective, this Agreement will automatically terminate and be of no further force or effect and neither of the parties will have any obligations hereunder. Except as specifically set forth in this Agreement or in another written agreement between the Executive and TCFC, the Bank, or the Company or one of its subsidiaries, no amount paid or due to Executive under this Agreement shall be deemed to be in lieu of other compensation to which Executive is entitled.

Cash Retention Payment

TCFC or the Company shall pay the Executive a retention payment of $200,000, less required tax withholding, in cash as a single lump sum no later than the first regular payroll period following the Closing Date, provided that the Executive remains in continuous employment with TCFC or the Company or one of their subsidiaries until the Closing Date.

Equity Retention Grant

On the Closing Date, the Company will grant Executive a grant of Restricted Stock Units (RSUs) with respect to shares of Company Common Stock under the Company’s 2016 Stock and Incentive Compensation Plan (the “Plan”) that have a value (based on the closing price on the Closing Date) equal to $155,000, which will vest 50% on each of the first and second anniversaries of the Closing Date if Executive remains employed until such vesting dates; provided, however, if the Executive’s employment is terminated by the Company without Cause prior to the vesting date, the unvested RSUs shall vest and be paid to Executive within 30 days following the Executive’s termination date. The RSUs will be evidenced by a separate award agreement to be provided by the Company and executed by the Executive and the Company, and will be subject to the terms and conditions set forth in such award agreement and the Plan.

For purposes of this Agreement, “Cause” shall mean any of the following reasons: (i) Executive's conviction of a felony or a crime of moral turpitude; (ii) Executive’s willful violation of any final cease and desist or consent order; (iii) a knowing violation by Executive of federal and state banking laws or regulations which is likely to have a material adverse effect on the Company, as determined by the Board of Directors of the Company; (iv) Executive's material breach of any of the Company’s written policies that he or she has failed to cure within a reasonable period (but in no event more than thirty (30) days) after written notice specifying in reasonable detail the nature of the breach; or (v) the issuance of any order by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, or any other supervisory agency with jurisdiction over the Company permanently prohibiting the continued service of the Executive with the Company. No act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act or failure to act that is based upon authority given pursuant to a resolution duly adopted by the Board of Directors of the Company, or upon the advice of legal counsel for the Company, shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interest of the Company.

Waiver of Good Reason.

In consideration of Executive’s continued employment with the Company and its subsidiaries (the “Company Group”) following the Effective Time, Executive agrees that, notwithstanding anything to the contrary in the definition of Good Reason (or similar or related rights or definitions of “good reason” or “constructive dismissal” or the like) set forth in any agreement or arrangement between Executive and the Company Group (including agreements with TCFC or the Bank assumed in the Merger) including, for the avoidance of doubt, that certain Employment Agreement, by and between Executive and TCFC and the Bank, dated as of April 30, 2018 (collectively, the “Existing Agreements”), neither (i) the closing of the Merger, nor (ii) any actual changes to Executive’s role, title, position, status, level, reporting relationship, authority, duties and/or responsibilities in connection with the Merger as clearly communicated to Executive in writing prior to the Effective Time will constitute Good Reason under the Existing Agreements. For the avoidance of doubt, Executive is not waiving Executive’s right to terminate Executive’s employment for Good Reason (or similar or related rights or definitions of “good reason” or “constructive dismissal” or the like) for changes to Executive’s role, title, position, status, level, reporting relationship, authority, duties and/or responsibilities that occur subsequent to the Merger and that were not clearly communicated to Executive prior to the Effective Time.

Governing Law

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Maryland, without reference to conflicts of law principles, except to the extent governed by federal law in which case federal law shall govern.

Amendments

This Agreement may not be altered, modified or amended except by written instrument signed by the parties.

Section 409A

The parties intend that the benefits and rights provided under this Agreement be exempt from Section 409A as short-term deferrals or comply with Section 409A, and the provisions of this Agreement shall be construed in a manner consistent with that intent and the requirements for avoiding taxes or penalties under Section 409A. If either party believes, at any time, that any such benefit or right that is subject to Section 409A does not so comply, it shall promptly advise the other parties and all parties shall negotiate reasonably and in good faith to amend or clarify the terms of such benefits and rights such that they do not violate Section 409A (with the intent and effect of avoiding any adverse economic effect for Executive). No party, individually or in combination, may accelerate any payment or benefit that is subject to Section 409A, except in compliance with Section 409A and the provisions of this Agreement, and no amount that is subject to Section 409A shall be paid prior to the earliest date on which it may be paid without violating Section 409A. To the extent required to comply with Section 409A, no payment or benefit required to be paid under this Agreement on account of termination of Executive’s employment shall be made unless and until Executive incurs a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “separation” or like terms shall have the meaning set forth in Section 409A. For purposes of applying the provisions of Section 409A to this Agreement, each amount to be paid or benefit to be provided to Executive pursuant to this Agreement, and each individual installment in a series of payments, shall be construed as a separate identified payment for purposes of Section 409A.

Miscellaneous

The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision hereof, and this Agreement will be construed as if the invalid and unenforceable provision were omitted (but only to the extent that such provision cannot be appropriately reformed or modified).

Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto will survive such expiration or other termination to the extent necessary to carry out the intentions of the parties hereunder. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

[Signature Page Follows]

If this Agreement correctly describes our understanding, please execute and deliver a counterpart of this signature page, which will become a binding agreement on our receipt.

	Sincerely,
	Shore Bancshares, Inc.

	By:	/s/ Donna J. Stevens
	Duly Authorized Officer

	Accepted and Agreed

	I hereby agree with and accept the terms and conditions of this Agreement:

	/s/ James M. Burke
	Name: James M. Burke
	Date: 6/30/2023

[Signature Page to Retention and Award Agreement]

Exhibit 10.4

June 30, 2023

Todd L. Capitani

[REDACTED]

Dear Todd:

This retention and award agreement (this “Agreement”) is entered into by Todd L. Capitani (the “Executive”) and Shore Bancshares, Inc. (the “Company”) in connection with the transactions contemplated by the Agreement and Plan of Merger by and between the Company and The Community Financial Corporation ( “TCFC”), dated as of December 14, 2022 (the “Merger Agreement”), pursuant to which TCFC will be merged with and into the Company in a merger of equals transaction (the “Merger”).

Effectiveness and Definitions

Cash Retention Payment

TCFC or the Company shall pay the Executive a retention payment of $43,998, less required tax withholding, in cash as a single lump sum no later than the first regular payroll period following the Closing Date, provided that the Executive remains in continuous employment with TCFC or the Company or one of their subsidiaries until the Closing Date.

Equity Retention Grant

On the Closing Date, the Company will grant Executive a grant of Restricted Stock Units (RSUs) with respect to shares of Company Common Stock under the Company’s 2016 Stock and Incentive Compensation Plan (the “Plan”) that have a value (based on the closing price on the Closing Date) equal to $123,998, which will vest 50% on each of the first and second anniversaries of the Closing Date if Executive remains employed until such vesting dates; provided, however, if the Executive’s employment is terminated by the Company without Cause prior to the vesting date, the unvested RSUs shall vest and be paid to Executive within 30 days following the Executive’s termination date. The RSUs will be evidenced by a separate award agreement to be provided by the Company and executed by the Executive and the Company, and will be subject to the terms and conditions set forth in such award agreement and the Plan.

Waiver of Good Reason.

Governing Law

Amendments

This Agreement may not be altered, modified or amended except by written instrument signed by the parties.

Section 409A

Miscellaneous

[Signature Page Follows]

If this Agreement correctly describes our understanding, please execute and deliver a counterpart of this signature page, which will become a binding agreement on our receipt.

	Sincerely,
	Shore Bancshares, Inc.

	By:	/s/ Donna J. Stevens
	Duly Authorized Officer

	Accepted and Agreed

	I hereby agree with and accept the terms and conditions of this Agreement:

	/s/ Todd L. Capitani
	Name: Todd L. Capitani
	Date: 6/30/2023

[Signature Page to Retention and Award Agreement]

Exhibit 10.5

June 29, 2023

Donna Stevens

[REDACTED]

Dear Ms. Stevens:

This retention and award agreement (this “Agreement”) is entered into by Donna Stevens (the “Executive”) and Shore Bancshares, Inc. (the “Company”) in connection with the transactions contemplated by the Agreement and Plan of Merger by and between the Company and The Community Financial Corporation (“TCFC”), dated as of December 14, 2022 (the “Merger Agreement”), pursuant to which TCFC will be merged with and into the Company in a merger of equals transaction (the “Merger”).

Effectiveness and Definitions

Cash Retention Payment

TCFC or the Company shall pay the Executive a retention payment of $45,566, less required tax withholding, in cash as a single lump sum no later than the first regular payroll period following the Closing Date, provided that the Executive remains in continuous employment with TCFC or the Company or one of their subsidiaries until the Closing Date.

Equity Retention Grant

On the Closing Date, the Company will grant Executive a grant of Restricted Stock Units (RSUs) with a value of $45,566 under the Company’s 2016 Stock and Incentive Compensation Plan (the “Plan”), which will vest 50% on each of the first and second anniversaries of the Closing Date if Executive remains employed until such vesting dates; provided, however, if the Executive’s employment is terminated by the Company without Cause prior to the vesting date, the unvested RSUs shall vest and be paid to Executive within 30 days following the Executive’s termination date. The RSUs will be evidenced by a separate award agreement to be provided by the Company and executed by the Executive and the Company, and will be subject to the terms and conditions set forth in such award agreement and the Plan.

Waiver of Good Reason.

In consideration of Executive’s continued employment with the Company and its subsidiaries (the “Company Group”) following the Effective Time, Executive agrees that, notwithstanding anything to the contrary in the definition of Good Reason (or similar or related rights or definitions of “good reason” or “constructive dismissal” or the like) set forth in any agreement or arrangement between Executive and the Company Group (including agreements with TCFC or the Bank assumed in the Merger) including, for the avoidance of doubt, that certain Change in Control Agreement, by and between Executive and the Company, dated as of November 1, 2018 (collectively, the “Existing Agreements”), neither (i) the closing of the Merger, nor (ii) any actual changes to Executive’s role, title, position, status, level, reporting relationship, authority, duties and/or responsibilities in connection with the Merger as clearly communicated to Executive prior to the Effective Time will constitute Good Reason under the Existing Agreements. For the avoidance of doubt, Executive is not waiving Executive’s right to terminate Executive’s employment for Good Reason (or similar or related rights or definitions of “good reason” or “constructive dismissal” or the like) for changes to Executive’s role, title, position, status, level, reporting relationship, authority, duties and/or responsibilities that occur subsequent to the Merger and that were not clearly communicated to Executive prior to the Effective Time.

Governing Law

Amendments

This Agreement may not be altered, modified or amended except by written instrument signed by the parties.

Section 409A

Miscellaneous

[Signature Page Follows]

If this Agreement correctly describes our understanding, please execute and deliver a counterpart of this signature page, which will become a binding agreement on our receipt.

	Sincerely,
	Shore Bancshares, Inc.

	By:	/s/ Lloyd L. Beatty, Jr.
	Duly Authorized Officer

	Accepted and Agreed

	I hereby agree with and accept the terms and conditions of this Agreement:

	/s/ Donna Stevens
	Name: Donna Stevens
	Date: June 29, 2023

[Signature Page to Retention and Award Agreement]

Exhibit 99.1

Shore Bancshares, Inc. and The Community Financial Corporation
Complete Merger

Easton, MD., - July 3, 2023 – Shore Bancshares, Inc. (NASDAQ: SHBI) (“SHBI”), the financial holding company of Shore United Bank, N.A. (“Shore United”), and The Community Financial Corporation (“TCFC”), the bank holding company of Community Bank of the Chesapeake (“CBC”), announced today the closing of their previously announced merger of equals, combining the two premier banks to create one of Maryland’s top community banks.

Lloyd L. “Scott” Beatty, Jr., former President and Chief Executive Officer of SHBI, commented, “Bringing together two of Maryland’s leading community banks is a historic achievement and holds enormous potential to benefit our customers and the communities we serve, as well as to drive shareholder value and our company’s long-term growth. I’m especially proud of our organizations’ management teams whose hard work, perseverance, and truly collaborative spirit made this combination of like-minded banks possible.”

“We have great respect for Scott, his management team and the significant organic and strategic growth built through his tenure,” said James M. Burke, President and Chief Executive Officer of the combined company. “I am proud to succeed Scott and to lead the combined management team. We have a tremendous opportunity to deliver enhanced shareholder returns by building upon our combined bank’s commitment to the success and prosperity of all our stakeholders. We will execute a business strategy with a focus on delivering exceptional customer service and increasing shareholder value while continuing to honor our community values.”

The combined organization has approximately $6.0 billion in assets with approximately $4.5 billion in loans and $5.1 billion in deposits throughout its operations through locations spanning Maryland, Virginia and Delaware. All branches of the combined company will operate under the Shore United banner once the integration is completed. SHBI’s and Shore United’s corporate headquarters remain in Easton, Maryland. The combined company will trade under SHBI’s ticker symbol (SHBI) on the Nasdaq Global Select Stock Market.

Customers Should Continue to Bank as They Normally Do

CBC will initially operate under both the CBC and Shore United brands, and customers will continue to conduct business through their respective CBC and Shore United branches, websites and mobile apps. The combined company expects to combine its systems and services in the third quarter of 2023. CBC customers can find additional information at http://www.cbtc.com/landing-pages/sub-merge/, and Shore United customers can find additional information at www.shoreunitedbank.com.

Board of Directors

The combined company’s Board of Directors consists of 20 members, with 12 directors from SHBI and eight directors from TCFC:

· Alan J. Hyatt (Chair)

· Austin J. Slater, Jr. (Vice Chair)

· Michael B. Adams

· James M. Burke

· R. Michael Clemmer, Jr.

· William E. Esham, III

· Louis P. Jenkins, Jr.

· David S. Jones

· James A. Judge

· Clyde V. Kelly, III

· John A. Lamon

· Frank E. Mason, III

· Rebecca M. McDonald

· David W. Moore

· Mary Todd Peterson

· E. Lawrence Sanders, III

· Joseph V. Stone, Jr.

· Esther A. Streete

· Konrad M. Wayson

· Dawn M. Willey

Closing Details

At the effective time of the merger on July 1, 2023, each share of TCFC common stock was converted in the right to receive 2.3287 shares of SHBI common stock, with TCFC shareholders receiving cash in lieu of fractional shares. Former TCFC shareholders collectively represent approximately 40% of the combined company. Shares of TCFC common stock ceased trading prior to the opening of the Nasdaq Global Select Stock Market on July 3, 2023.

Advisors

Keefe, Bruyette & Woods, A Stifel Company, acted as financial advisor to SHBI in the transaction and delivered a fairness opinion to the Board of Directors of SHBI. Holland & Knight LLP served as legal counsel to SHBI. Piper Sandler & Co. acted as financial advisor to TCFC and delivered a fairness opinion to the Board of Directors of TCFC. Kilpatrick Townsend & Stockton LLP served as legal counsel to TCFC.

About Shore Bancshares, Inc.

SHBI is the largest independent financial holding company headquartered on the Eastern Shore of Maryland. It is the parent company of Shore United. Shore United operates 30 full-service branches, 32 ATMs, 5 loan production offices, and provides a full range of commercial and consumer banking products and services to individuals, businesses, and other organizations in Anne Arundel County, Baltimore County, Caroline County, Dorchester County, Howard County, Kent County, Queen Anne’s County, Talbot County and Worcester County in Maryland, Kent County and Sussex County in Delaware and in Accomack County, Virginia. SHBI engages in trust and wealth management services through Wye Financial Partners, a division of Shore United.

FORWARD-LOOKING STATEMENTS

This Press Release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of SHBI. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “could,” “may,” “should,” “will” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on SHBI’s current expectations and assumptions regarding SHBI’s and TCFC’s business, the economy, and other future conditions. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; geopolitical concerns, including the ongoing war in Ukraine; the possibility that the anticipated benefits of the Merger are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where SHBI and TCFC do business; the possibility that revenues following the Merger may be lower than expected; the ability to complete integration of SHBI and TCFC successfully; the dilution caused by SHBI’s issuance of additional shares of its capital stock in connection with the Merger; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; the transition away from USD LIBOR and uncertainty regarding potential alternative reference rates, including SOFR; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; and other factors that may affect our future results. Further information regarding SHBI, TCFC and factors which could affect the forward-looking statements contained herein can be found in SHBI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, its Quarterly Report on Form 10-Q for the period ended March 31, 2023, and its other filings with the SEC, and in TCFC’s Annual Report on Form 10-K and Amendment No. 1 to TCFC’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2022, TCFC’s Quarterly Report on Form 10-Q for the period ended March 31, 2023 and its other filings with the SEC. SEC filings are available free of charge on the SEC's website at www.sec.gov.

For additional information or questions, please contact:

Donna J. Stevens

Chief Operating Officer

Shore Bancshares, Inc.

(410) 763-7800