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): December 8, 2022

Partners Bancorp

(Exact name of registrant as specified in its charter)

2245 Northwood Drive, Salisbury, Maryland 21801

(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (410) 548-1100

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):

Securities registered pursuant to Section 12(b) of the Act:

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

On December 8, 2022, Partners Bancorp (the “Company”) announced that, effective December 8, 2022, John W. Breda has succeeded Lloyd B. Harrison, III as the Company’s Chief Executive Officer (the “CEO Transition”). The CEO Transition was completed as contemplated in the employment agreements with the Company of each of Mr. Breda and Mr. Harrison, in each case dated December 13, 2018 and amended November 4, 2021 (with respect to Mr. Harrison, the “Harrison Agreement”).

Also effective December 8, 2022, the Board of Directors of the Company approved the Second Amendment to the Harrison Agreement, which modifies the definition of “Management Succession Date” in Section 1.20 of the Harrison Agreement to provide that Mr. Harrison shall serve as Senior Executive Vice President of the Company following the CEO Transition, and specifies certain duties of the Senior Executive Vice President role. The foregoing description of the Second Amendment to the Harrison Agreement is qualified in its entirety by the terms of such Second Amendment, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.

Following the CEO Transition, Mr. Breda and Mr. Harrison in their respective new roles as Chief Executive Officer and President, and Senior Executive Vice President, respectively, of the Company will work together on the Company’s review of all strategic alternatives available to the Company to enhance returns to shareholders and other special strategic projects. Mr. Breda continues to serve as President and Chief Executive Officer of The Bank of Delmarva, and Mr. Harrison continues to serve as Chief Executive Officer of Virginia Partners Bank.

Item 7.01 Regulation FD Disclosure

On December 8, 2022, the Company issued a press release announcing completion of the CEO Transition and that Mr. Harrison has been appointed as Senior Executive Vice President of the Company.

The information in this Item 7.01 and Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

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.

Exhibit 10.1

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT (“Second Amendment”) is made and entered into as of the 8th day of December 2022, by and between Partners Bancorp, formerly named Delmar Bancorp (the “Company”), Virginia Partners Bank (the “Bank”), and Lloyd B. Harrison, III (“Executive”), and is effective as of this date.

WHEREAS, the Company, the Bank, and Executive have entered into that certain Employment Agreement dated December 13, 2018, as subsequently amended by that certain First Amendment to Employment Agreement dated November 4, 2021 (such agreement as amended, the “Original Agreement”); and

WHEREAS, the Original Agreement contemplates that on the Management Succession Date (as defined in the Original Agreement), Executive will have a change in position, whereby he will depart his position as the Chief Executive Officer (“CEO”) of the Company, but will continue to be employed as CEO of the Bank; and

WHEREAS, the parties agree that it is in the best interests of all parties for Executive, following the above-referenced change in position, to continue to serve as Senior Executive Vice President of the Company in addition to serving as Chief Executive Officer of the Bank; and

WHEREAS, the Company, the Bank, and Executive desire to amend the Original Agreement as set forth herein.

NOW, THEREFORE, for and in consideration of the covenants and conditions hereinafter set forth, and the parties deeming that it is in their mutual best interests to do so, the Company, the Bank, and Executive, pursuant to Section 17 of the Original Agreement, which permits the parties to modify the Original Agreement in writing, hereby each consents and agrees to amend the Original Agreement as follows:

1.             Section 1.20 of the Original Agreement shall be amended by deleting the second sentence thereof and replacing it with the following:

“On the Management Succession Date, Executive shall depart the position of Chief Executive Officer of the Company but shall serve as Senior Executive Vice President of the Company and shall continue to serve as Chief Executive Officer of the Bank.”

2.             Section 4.1(b) of the Original Agreement shall be amended by adding the following as a new second sentence of Section 4.1(b):

“In addition, from and after the Management Succession Date, Executive shall have the duties and functions of Senior Executive Vice President of the Company as may be assigned by the Company Board or the Chief Executive Officer of the Company from time to time, including but not limited to the Company’s review of all strategic alternatives to enhance shareholder returns.”

3.            All provisions of the Original Agreement that have not been amended by this Second Amendment shall remain in full force and effect. Notwithstanding the foregoing, to the extent there is any inconsistency between the provisions of the Original Agreement and the Second Amendment, the provisions of this Second Amendment shall control.

4.             Each of the parties hereto will, from time to time, and at all times hereafter, upon every reasonable request to do so by any other party, make, do, execute and deliver, or cause to be made done, executed and delivered, all such further acts, deeds, assurances and things as may be reasonably required or necessary in order to further implement and carry out the terms and purpose of this Second Amendment.

5.             This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute the same agreement, document, or instrument. Any signature page of any such counterpart, or any electronic signature, PDF or facsimile thereof, may be attached or appended to any other counterpart to complete a fully executed counterpart of such agreement, document or instrument, and any electronic or facsimile transmission of any signature shall be deemed an original and shall bind such party.

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IN WITNESS WHEREOF, each of the parties hereto has caused this Second Amendment to be duly executed on its behalf, all as of the day and year first written above.

Exhibit 99.1

PRESS RELEASE

Partners Bancorp Announces Completion of CEO Transition

SALISBURY, MD - December 8, 2022 - Partners Bancorp (NASDAQ: PTRS) (the “Company”), the parent company of The Bank of Delmarva, Seaford, Delaware, and Virginia Partners Bank, Fredericksburg, Virginia, announced that, as planned, John W. Breda has succeeded Lloyd B. Harrison, III as Chief Executive Officer of the Company (the “CEO Transition”). In addition, the Company announced that Mr. Harrison will serve as Senior Executive Vice President of the Company. In these executive roles, Mr. Breda and Mr. Harrison will work together on the Company’s review of all strategic alternatives available to the Company to enhance returns to shareholders and other special strategic projects.

Mr. Breda continues to serve as President and Chief Executive Officer of The Bank of Delmarva, and Mr. Harrison continues to serve as Chief Executive Officer of Virginia Partners Bank. The CEO Transition was completed in accordance with the terms of Mr. Breda’s and Mr. Harrison’s employment agreements with the Company, as amended.

“On behalf of the Board of Directors, I want to thank Lloyd for his excellent service as the Company’s CEO and his leadership following the combination of Virginia Partners Bank and The Bank of Delmarva that created Partners Bancorp,” said Jeffrey F. Turner, Chairman of the Company’s Board of Directors. “The Company is very fortunate that Lloyd will continue as a senior executive of the Company focused on our strategic planning process.”

Mr. Turner continued, “We are confident that John Breda will serve the Company’s shareholders, customers and employees exceptionally well as CEO. John’s leadership and banking experience will be critical to the Company’s strategic planning process and then to executing on that strategic plan.”

About Partners Bancorp

Partners Bancorp is the holding company for The Bank of Delmarva and Virginia Partners Bank. The Bank of Delmarva commenced operations in 1896. The Bank of Delmarva’s main office is in Seaford, Delaware and it conducts full service commercial banking through eleven branch locations in Maryland and Delaware, and three branches, operating under the name Liberty Bell Bank, in the South Jersey/Philadelphia metro market. The Bank of Delmarva focuses on serving its local communities, knowing its customers and providing superior customer service. Virginia Partners Bank, headquartered in Fredericksburg, Virginia, was founded in 2008 and has three branches in Fredericksburg, Virginia and operates a full service branch and commercial banking office in Reston, Virginia. In Maryland, Virginia Partners Bank trades under the name Maryland Partners Bank (a division of Virginia Partners Bank), and operates a full service branch and commercial banking office in La Plata, Maryland and a Loan Production Office in Annapolis, Maryland. Virginia Partners Bank also owns a controlling stake in Johnson Mortgage Company, LLC, which is a residential mortgage company headquartered in Newport News, Virginia, with branch offices in Fredericksburg and Williamsburg, Virginia. For more information, visit www.partnersbancorp.com, www.bankofdelmarvahb.com and www.vapartnersbank.com.

For further information, please contact John W. Breda, Chief Executive Officer, President and Chief Operating Officer, at 410-548-1100 x10233, Lloyd B. Harrison, III, Senior Executive Vice President, at 540-899-2234, J. Adam Sothen, Chief Financial Officer, at 540-322-5521, or Betsy Eicher, Chief Accounting Officer, at 667-253-2904.

Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include, without limitation, projections, predictions, expectations, or beliefs about future events or results that are not statements of historical fact, including statements about the Company’s strategic planning process. These forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by, and information currently available to, the Company’s management. These statements are inherently uncertain, and there can be no assurance that the underlying assumptions will prove to be accurate. Actual results could differ materially from those anticipated or implied by such statements. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this release. For additional information on risk factors that could affect the forward-looking statements contained herein, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September 30, 2022, and other reports filed with the Securities and Exchange Commission.