On October 29, 2021, Shore United Bank, a Maryland chartered commercial bank and wholly-owned subsidiary of Shore Bancshares, Inc. (?SHBI?), converted to a national banking association under the title Shore United Bank, National Association ("Shore United"). Effective October 31, 2021, SHBI completed its acquisition (the ?Merger?) of Severn Bancorp, Inc. (?Severn?), pursuant to the terms of an Agreement and Plan of Merger (the ?Merger Agreement?), dated as of March 3, 2021, by and between SHBI and Severn. At the effective time of the Merger, Severn was merged with and into SHBI, with SHBI as the surviving corporation, which was immediately followed by the merger of Severn?s wholly-owned bank subsidiary, Severn Savings Bank, FSB, a federally-chartered savings bank ("SSB"), with and into Shore United, with Shore United as the surviving bank. The Merger Agreement requires SHBI to take all action necessary to appoint or elect, effective as of the effective time of the Merger, four individuals as directors of SHBI and Shore United, one of whom is required to be Alan J. Hyatt, Chairman, President and Chief Executive Officer of Severn and SSB. In addition, David S. Jones, John A. Lamon, III and Konrad M. Wayson, existing directors of Severn and SSB, were proposed as the other three directors (all four, collectively, the ?Director Nominees?). Pursuant to the terms of the Merger Agreement and in accordance with SHBI?s Amended and Restated By-laws, on October 26, 2021, SHBI?s Board of Directors (the ?Company Board?) and Shore United?s Board of Directors (the ?Bank Board?) increased the number of members of each of the Company Board and the Bank Board from ten members to fourteen members, appointed each of the Director Nominees to serve as directors of SHBI and Shore United, and appointed Mr. Hyatt as the Chairman of the Boards, each effective as of the effective time of the Merger. The Company Board appointed John A. Lamon, III to Class I, David S. Jones to Class II, and Alan J. Hyatt and Konrad M. Wayson to Class III of the Company Board to serve for a term that coincides with the remaining term of that class and until his successor is elected and qualified. Each of the Company Board and the Bank Board has not yet determined on which committees of the Company Board and the Bank Board the Director Nominees will serve. Each of David S. Jones, John A. Lamon, III and Konrad M. Wayson will receive the same compensation as currently paid to other Company Board and Bank Board members.