Sec Form 4 Filing - CANNON DANIEL T @ SHORE BANCSHARES INC - 2006-12-07

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person CANNON DANIEL T 2. Issuer Name and Ticker or Trading Symbol SHORE BANCSHARES INC [ SHBI] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X __ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) Executive Vice President (Last) (First) (Middle) P.O. BOX 566 3. Date of Earliest Transaction (MM/DD/YY) 12/07/2006 (Street) CENTREVILLE, MD21617 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 12/07/2006 M 420 A $ 13.17 8,437 D Common Stock 12/07/2006 M 250 ( 1 ) A $ 21.33 ( 1 ) 8,687 D Common Stock 12/07/2006 M 750 ( 1 ) A $ 14 ( 1 ) 9,437 D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Stock Option $ 21.33 ( 2 ) 12/07/2006 M 250 ( 2 ) 01/31/2000( 3 ) 01/31/2009 Common Stock 250 $ 0 500 D Stock Option $ 14 ( 4 ) 12/07/2006 M 750 ( 4 ) 01/31/2001( 5 ) 01/31/2010 Common Stock 750 $ 0 0 D Stock Option $ 13.17 12/07/2006 M 420 05/09/2003( 6 ) 05/09/2012 Common Stock 420 $ 0 600 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other CANNON DANIEL T P.O. BOX 566 CENTREVILLE, MD21617 X Executive Vice President Signatures By: /s/ Daniel T. Cannon 12/07/2006 Signature of Reporting Person Date

Explanation of Responses:

( 1 )This amount has been adjusted to reflect the 3-for-2 stock split in the form of a stock dividend that was payable on June 5, 2006 to holders of record on May 22, 2006. ( 2 )This option was previously reported as covering 500 shares at an exercise price of $32.00 per share, but was adjusted to cover 750 shares at an exercise price of $21.33 per share effective May 22, 2006 pursuant to the anti-dilution provisions of the underlying stock option plan to reflect the 3-for-2 stock split in the form of a stock dividend that is payable to holders of record as of May 22, 2006. ( 3 )20% vest each January 31, beginning January 31, 2000 ( 4 )This option was previously reported as covering 500 shares at an exercise price of $21.00 per share, but was adjusted to cover 750 shares at an exercise price of $14.00 per share effective May 22, 2006 pursuant to the anti-dilution provisions of the underlying stock option plan to reflect the 3-for-2 stock split in the form of a stock dividend that is payable to holders of record as of May 22, 2006. ( 5 )20% vest each January 31, beginning January 31, 2001 ( 6 )20% vest each May 9, beginning May 9, 2003

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