SHORE BANCSHARES INC

Deferred Compensation Plan – Participants in the plan who receive an employer discretionary contribution will fully vest in all employer discretionary contributions upon the occurrence of any of the following events: death, disability, attainment of age 66, or a change in control. All employer discretionary contributions, whether vested or unvested, will be forfeited upon termination due to cause.

Supplemental Executive Retirement Plans – James M. Burke, Todd L. Capitani, and Christy Lombardi

In the event of a change in control (which occurred as a result of the merger of The Community Financial Corporation with the company) prior to Mr. Burke’s, Mr. Capitani’s, or Ms. Lombardi’s (1) attaining age 65, (2) death, (3) disability, (4) retirement, or (5) separation from service (as defined in the SERPs), the executive’s SERP benefit will equal the accrued benefit calculated as of any subsequent separation from service following the change in control with 36 months of additional service for purposes of calculating the accrued benefit. Payments will commence at the earliest of an executive’s attainment of age 65 or death. However, if the executive experiences a separation from service within 24 months following a change in control, payments will commence on the first day of the second month following the executive’s separation from service (or, if the executive is a specified employee, on the first day of the seventh month following the executive’s separation from service). If the executive dies while actively employed by the company, his or her beneficiary will receive the executive’s accrued benefit in 15 annual installments beginning in the second month following the month in which the executive dies. If the executive becomes disabled, the executive will receive his or her accrued benefit paid in 15 annual installments beginning on the first day of the month following normal retirement age or death, whichever occurs first. If the executive experiences a separation from service prior to normal retirement age, death or disability, the executive will receive his or her accrued benefit paid in 15 annual installments beginning in the second month following the month in which the executive achieves normal retirement age. If an executive’s employment is terminated for cause, the executive will not be entitled to any benefits under the SERPs.