EMPLOYMENT AGREEMENT

THIS AGREEMENT(the “Agreement”), made as of this 13th day of January, 2012, by
and among Sandy Spring Bancorp, Inc., a registered bank holding company ( the
“Bancorp”), Sandy Spring Bank, a Maryland corporation and wholly-owned
subsidiary of the Bancorp with its main office in Olney, Maryland (the “Bank”),
and Philip J. Mantua (the “Officer”).

WITNESSETH

WHEREAS, the Officer is employed as Executive Vice President and Chief Financial
Officer of the Bank and the Bancorp.

WHEREAS, as a result of the skill, knowledge, and experience of the Officer, the
Boards of Directors of the Bank and the Bancorp desire to continue to retain the
services of the Officer.

WHEREAS, the Officer desires to continue to serve as Executive Vice President
and Chief Financial Officer of the Bank and the Bancorp.

WHEREAS, the Officer and the Boards of Directors of the Bank and Bancorp desire
to enter into a new Agreement setting forth the terms of conditions of the
continuing employment of the Officer
and the related rights and obligations of each of the parties.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed as follows:

1.           Employment.  The Officer is employed as Executive Vice President
and Chief Financial Officer of the Bank and the Bancorp.  The Officer shall
perform all duties and shall have all powers which are commonly incident to the
office of Executive Vice President and Chief Financial Officer or which,
consistent with that office, are assigned to the Officer.  In addition to the
major job accountabilities set forth in the job description maintained by the
Human Resources Division, the Officer’s duties include, but are not limited to:

 
a.
Making recommendations concerning the strategies, policies, and tactics of the
Bank;

 
b.
Management oversight of the day-to-day activities of the Finance and Mergers and
Acquisitions Group, including management oversight of the Finance Division,
Mergers and Acquisitions, and Investor Relations and supervision of the officers
and employees engaged in these functions;

 
c.
Promoting the Bank and its services;

 
d.
Managing the efforts of the Bank to comply with applicable laws and regulations
related to the activities of the Finance and Merger and Acquisitions Group; and

 
e.
Providing complete, timely, and accurate reports, as required, regarding the
activities of the Finance and Merger and Acquisitions Group.

2.           Location and Facilities.  The Officer will be furnished with the
working facilities and staff customary for executive officers with the title and
duties set forth in Section 1 of this Agreement and as are necessary for the
Officer to perform the duties of the position.  The location of such facilities
and staff shall be at the principal administrative offices of the Bank, or at
such other site or sites customary for such offices.
 
 
 

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3.
Term.

 
a.
The term of this Agreement shall be (i) the initial term, consisting of the
period commencing on the date of this Agreement (the “Effective Date”) and
ending on June 30, 2013, plus (ii) any and all extensions of the initial term
made pursuant to this Section 3.

 
b.
Commencing as of July 1, 2012, and continuing on each July 1 thereafter, the
disinterested members of the boards of directors may extend the term of the
Agreement  for an additional one-year period beyond the then effective
expiration date so that the remaining term of the Agreement extends to a period
of twenty-four (24) months, unless the Officer shall have given written notice
at least sixty (60) days prior to the applicable July 1 anniversary date of his
desire that the term not be extended.  The Officer’s performance and the
advisability of extending the term of this Agreement shall be reviewed by the
Compensation Committee of the Board of Directors of the Bank, and the boards of
directors shall, based on that review, determine whether or not to extend the
term of this Agreement at a meeting or meetings at least ninety (90) days prior
to each applicable July 1 anniversary date.

 
c.
At the Effective Date, this Agreement shall supersede any prior employment
agreement, which shall be deemed terminated by agreement of the parties
immediately prior to the Effective Date.

 
4.
Base Compensation.

 
a.
The Bank and the Bancorp agree to pay the Officer during the term of this
Agreement a salary at the rate of $265,000 per annum, payable in cash not less
frequently than monthly, as may be adjusted in accordance with this Section 4.

 
b.
The Compensation Committee of the Board of Directors of the Bank shall perform
an annual analysis of the Officer’s performance and of the compensation of
officers performing similar functions at independent financial institutions of
comparable assets and performance, and based upon this review, the
recommendations of the President and Chief Executive Officer, and on such other
factors as it deems pertinent, shall recommend to the boards of directors the
annual salary rate to be paid to the Officer following the review.  The boards
of directors, based upon this recommendation of the Compensation Committee and
other factors they deem relevant, may maintain, increase or decrease the
Officer’s salary, provided that no such action shall (i) reduce the rate of
salary below the amount set forth in Section 4.a. or (ii) reduce the rate of
salary paid to the Officer for any months prior to the month in which notice of
the reduction is provided in writing to the Officer.

 
c.
In the absence of action by the boards of directors, the Officer shall continue
to receive salary at the amount set forth in Section 4.a. specified herein or,
if another rate has been established under the provisions of this Section 4, the
rate last properly established by action of the board of directors under the
provisions of this Section 4.

 
 
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5.           Bonuses.  Unless the Officer agrees otherwise, the Officer shall be
entitled to participate in discretionary bonuses that the boards of directors
may award from time to time to senior management employees pursuant to bonus
plans or otherwise.  The Officer also shall participate in any other fringe
benefits which are or may become available to senior management employees of the
Bank or the Bancorp, including for example: any stock option or incentive
compensation plans and any other benefits that are commensurate with the
responsibilities and functions to be performed by the Officer under this
Agreement.  No other compensation provided for in this Agreement shall be deemed
a substitute for the Officer’s right to participate in such discretionary
bonuses or fringe benefits.

6.           Benefit Plans.  The Officer shall be entitled to participate in any
life insurance, medical, dental, pension, profit sharing, and retirement plans
and other programs and arrangements as may be approved from time to time by the
Bank or the Bancorp for the benefit of the employees of the Bank or the
Bancorp.  In addition, the Officer shall be entitled to participate in the Group
Term Replacement Plan (“GTRP”) established for the Officer.  The Bank will pay
the club dues for the Officer’s use of corporate membership at the Manor Country
Club.

 
7.
Paid Time Off.

 
a.
The Officer shall be entitled to thirty (30) working days of paid time off, as
defined in the Bank’s personnel policies, during each calendar year during the
term of this Agreement, to be taken at reasonable times and in reasonable
periods as the Officer and the Bank and the Bancorp shall mutually determine,
and provided that no paid time off shall interfere with the duties required to
be rendered by the Officer hereunder.  Any paid time off not used during a
twelve-month period shall carry over and be useable during the succeeding
twelve-month period, but not thereafter.  The Officer shall not receive any
additional compensation from the Bank or the Bancorp on account of the Officer’s
failure to take paid time off.

 
b.
In addition to paid time off, the Officer shall be entitled, without loss of
pay, to voluntarily take time off from work for such additional periods of time
and for such valid and legitimate reasons as the President and Chief Executive
Officer may in his discretion determine.  Further, the Officer may request and
be granted a leave or leaves of absence, with or without pay, at such time or
times and upon such terms and conditions as the President and Chief Executive
Officer in his discretion may determine.

8.           Expense Payments and Reimbursement.  The Officer shall be
reimbursed for all reasonable out-of-pocket business expenses incurred in
connection with the Officer’s services under this Agreement upon substantiation
of such expenses in accordance with applicable policies of the Bank and the
Bancorp.

 
9.
Loyalty and Confidentiality.

 
a.
During the term of this Agreement the Officer: (i) shall devote all the
Officer’s time, attention, skill, and efforts to the faithful performance of the
Officer’s duties hereunder; provided, however, that from time to time, the
Officer may serve on the boards of directors of, and hold any other offices or
positions in, companies or organizations which will not present any conflict of
interest with the Bank or the Bancorp or any of their subsidiaries or
affiliates, unfavorably affect the performance of Officer’s duties pursuant to
this Agreement, or violate any applicable statute or regulation; and (ii) shall
not engage in any business or activity contrary to the business affairs or
interests of the Bank or the Bancorp.

 
 
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b.
Nothing contained in this Agreement shall prevent or limit the Officer’s right
to invest in the capital stock or other securities of any business dissimilar
from that of the Bank or the Bancorp, or, solely as a passive, minority
investor, in any business.

 
c.
The Officer agrees to maintain the confidentiality of any and all information
concerning the operation or financial status of the Bank and the Bancorp; the
names or addresses of any of their borrowers, depositors and other customers;
any information concerning or obtained from such customers; and any other
information concerning the Bank or the Bancorp to which the Officer may be
exposed during the course of employment.  The Officer further agrees that,
unless required by law or specifically permitted by the Bank or the Bancorp in
writing, the Officer will not disclose to any person or entity, either during or
subsequent to the officer’s employment, any of the above-mentioned information
which is not generally known to the public, nor shall the Officer employ such
information in any way other than for the benefit of the Bank and the Bancorp.

10.         Termination and Termination Pay.  Subject to Section 11 of this
Agreement, the Officer’s employment under this Agreement may be terminated in
the following circumstances:

 
a.
Death.  The Officer’s employment under this Agreement shall terminate upon the
Officer’s death during the term of this Agreement, in which event the Officer’s
estate shall be entitled to receive the compensation due to the Officer through
the last day of the calendar month in which the Officer’s death occurred.

 
b.
Retirement.  This Agreement shall be terminated upon the early or normal
retirement of the Officer under the benefit plan(s) in which the Officer
participates pursuant to Section 6 of this Agreement.

 
c.
Disability.  The Bank or the Bancorp or the Officer may terminate the Officer’s
employment after having established the Officer’s Disability.  For purposes of
this Agreement, “Disability” means a physical or mental infirmity that impairs
the Officer’s ability to substantially perform duties assigned to the Officer
under this Agreement and that results in the Officer’s becoming eligible for
long-term disability benefits under the Bank’s or the Bancorp’s long-term
disability plan (or, if the Bank or the Bancorp has no such plan in effect, that
impairs the Officer’s ability to substantially perform duties assigned to the
Officer under this Agreement for a period of one-hundred-eighty (180)
consecutive days).  In the event of such Disability, the Officer’s obligation to
perform services under this Agreement will terminate.  If the Officer’s
employment with either the Bank or the Bancorp terminates on account of the
Officer’s Disability, his employment with the other shall also terminate at the
same time.  In the event of such termination, the Officer shall be entitled to
receive the following:

 
i.
The compensation and benefits provided for under this Agreement for any period
during the term of this Agreement and prior to the date of termination pursuant
to this Section 10.c. during which the Officer is unable to work due to physical
or mental infirmity (less any amounts that the Officer receives under any
disability insurance maintained by the Bank or the Bancorp with respect to that
period);

 
ii.
For the period beginning upon the date of termination pursuant to this Section
10.c. and continuing for the remaining term of this Agreement, (A) salary at the
highest rate paid pursuant to Section 4 of this Agreement during the twelve (12)
months prior to the establishment of the Disability under this Section 10.c.,
reduced by any payments received by the Officer during that same period
following termination under a long-term disability plan or policy maintained by
the Bank or the Bancorp, and (B) benefits pursuant to Section 6 of this
Agreement.

 
 
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The boards of directors shall determine whether or not the Officer is and
continues to be permanently disabled for purposes of this Agreement in good
faith, based upon competent medical advice and other factors that he reasonably
believe to be relevant.  As a condition to any benefits, the boards of directors
may require the Officer to submit to a physical or mental evaluations and tests
as they deem reasonably appropriate.

 
d.
Just Cause.

 
i.
The boards of directors may, by written notice to the Officer in the form and
manner specified in this paragraph, immediately terminate the Officer’s
employment with the Bank or the Bancorp at any time for Just Cause.  The Officer
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause.  If the Officer’s employment with either the
Bank or the Bancorp terminates for Just Cause, the Officer’s employment with the
other shall also terminate at the same time.  Termination for “Just Cause” shall
mean termination because of, in the good faith determination of the boards of
directors, the Officer’s:

 
(1)
Personal dishonesty;

 
(2)
Willful misconduct;

 
(3)
Breach of fiduciary duty involving personal profit;

 
(4)
Intentional failure to perform duties under this Agreement;

 
(5)
Other, continuing material failure to perform duties assigned to the Officer
under this Agreement after reasonable notification (which shall be stated in
writing and given at least fifteen (15) days prior to termination) by the boards
of directors of such failure;

 
(6)
Willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or final cease-and-desist order; or

 
(7)
Material breach by the Officer of any provision of this Agreement.

 
ii.
Notwithstanding the foregoing, the Officer shall not be deemed to have been
terminated for Just Cause unless there shall have been delivered to the Officer
a copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the board of directors at a meeting called
and held for the purpose (after reasonable notice to the Officer and an
opportunity for the Officer to be heard before the board of directors), finding
that in the good faith opinion of the board of directors the Officer was guilty
of conduct described above and specifying the particulars thereof.

 
iii.
Notwithstanding the foregoing, it is expected that Officer will perform all
duties and responsibilities described herein, and Officer shall have the right
to cure non-performance, to the extent such performance is reasonably capable of
being cured, and shall promptly upon receipt of written notice of
nonperformance, comply with the requirements of such notice, and further if
Officer shall not comply with such notice to the satisfaction of the Bank or the
Bancorp within forty-eight (48) hours after delivery thereof, (except if such
compliance cannot be reasonably completed within forty-eight (48) hours, if the
Officer shall not commence to comply within such period and thereafter proceed
to completion with due diligence) the Bank or the Bancorp shall have the right
to proceed with the board of directors meeting specified in the preceding
paragraph.

 
 
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e.
Certain Regulatory Events.

 
i.
If the Officer is removed and/or permanently prohibited from participating in
the conduct of the Bank’s affairs by an order issued under Sections 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 USC. §§ 1818(e)(4) and
(g)(1)), all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the parties shall not be
affected.

 
ii.
If the Bank is in default (as defined in Section 3(x)( I) of FDIA), all
obligations of the Bank under this Agreement shall terminate as of the date of
default, but vested rights of the parties shall not be affected.

 
iii.
If a notice served under Sections 8(e)(3) or (g)(1) of the FDIA (12 U.S.C.
§§1818(e)(3) and (g)(1)) suspends and/or temporarily prohibits the Officer from
participating in the conduct of the Bank’s affairs, the Bank’s obligations under
this Agreement shall be suspended as of the date of such service, unless stayed
by appropriate proceedings.  If the charges in the notice are dismissed, the
Bank may, in its discretion, (i) pay the Officer all or part of the compensation
withheld while its contract obligations were suspended, and (ii) reinstate (in
whole or in part) any of its obligations which were suspended.

The occurrence of any of the events described in paragraphs i, ii, and iii above
may be considered by the boards of directors in connection with a termination
for Just Cause.

 
f.
Voluntary Termination by Officer.  In addition to the Officer’s other rights to
terminate under this Agreement, the Officer may voluntarily terminate employment
with the Bank and the Bancorp during the term of this Agreement upon at least
sixty (60) days’ prior written notice to the Bank or the Bancorp, in which case
the Officer shall receive only compensation, vested rights and employee benefits
up to the date of termination.  If the Officer voluntarily terminates his
employment with either the Bank or the Bancorp, his employment with the other
shall also be deemed to have been voluntarily terminated at the same time as
well.

 
g.
Without Just Cause or With Good Reason.

 
i.
In addition to termination pursuant to Section 10.a. through 10.f., the boards
of directors may, by written notice to the Officer, immediately terminate the
Officer’s employment with the Bank or the Bancorp at any time for a reason other
than Just Cause (a termination “Without Just Cause”); and the Officer may, by
written notice to the boards of directors, immediately terminate this Agreement
at any time within ninety (90) days following an event of “Good Reason,” as
defined below (a termination “With Good Reason”).  If the Officer’s employment
terminates with either the Bank or the Bancorp pursuant to this Section 10.g.,
his employment with the other shall terminate at the same time.

 
 
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ii.
Subject to Section 11 hereof, in the event of termination under this Section
10.g., the Officer shall be entitled to receive the salary for the remaining
term of the Agreement, including any renewals or extensions thereof, at the
highest annual rate in effect pursuant to Section 4 of this Agreement for any of
the twelve (12) months immediately preceding the date of such termination, plus
annual cash bonuses for each year (prorated in the event of partial years)
remaining under the term of the Agreement at the amount received by the Officer
in the calendar year preceding the termination.  The sum due under this Section
10.g. shall be paid in one lump sum within ten (10) calendar days of the
Officer’s termination of employment, or as soon as permitted by law or
regulation (see Section 26), pursuant to this Section 10.g.

 
iii.
“Good Reason” shall exist if, without the Officer’s express written consent, the
Bank or the Bancorp materially breach any of its respective obligations under
this Agreement.  Without limitation, a breach shall be deemed to occur upon any
of the following:

 
(1)
A material reduction in the Officer’s responsibilities or authority in
connection with the Officer’s employment with the Bank or the Bancorp;

 
(2)
Assignment to the Officer of duties of a nonexecutive nature or duties for which
the Officer is not reasonably equipped by the Officer’s skills and experience;

 
(3)
A reduction in salary or benefits contrary to the terms of this Agreement, or,
following a Change in Control as defined in Section 11 of this Agreement, any
reduction in salary or a material reduction in benefits below the amounts to
which the Officer was entitled prior to the Change in Control;

 
(4)
Termination of incentive and benefit plans, programs, or arrangements, or a
reduction of the Officer’s participation to such an extent as to materially
reduce their aggregate value below their aggregate value as of the Effective
Date;

 
(5)
A requirement that the Officer’s principal business office or principal place of
residence be relocated outside any county in which the Bank has its main office,
its branches, or its deposit taking Automatic Teller Machines; or the assignment
to the Officer of duties that would reasonably require such a relocation;

 
(6)
A requirement that the Officer spend more than thirty (30) normal working days
away from any county in which the Bank has its main office, its branches, or its
deposit taking Automatic Teller Machines during any consecutive twelve-month
period; or

 
(7)
Failure to provide office facilities, secretarial services, and other
administrative services to the Officer which are substantially equivalent to the
facilities and services provided to the Officer on the Effective Date (excluding
brief periods during which office facilities may be temporarily unavailable due
to fire, natural disaster, or other calamity).

Also, in the event of a Change in Control, as applicably defined in Section 11
of this Agreement, the Officer shall have the right to resign for any reason
during the first sixty (60) days immediately following the first six (6) months
after the closing date of a definitive purchase and assumption agreement (as
defined in such agreement), the execution of which brought about a Change in
Control.
 
 
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Notwithstanding the foregoing, it is expected that the Bank and the Bancorp will
perform all agreements on its part to be performed herein, and the Bank and the
Bancorp shall have the right to cure non-performance, to the extent such
performance is reasonably capable of being cured, and shall promptly upon
receipt of written notice of nonperformance, comply with the requirement of such
notice, and further if Bank or the Bancorp shall not comply with such notice to
the satisfaction of the Officer within forty-eight (48) hours after delivery
thereof, (except if such compliance cannot be reasonably completed within
forty-eight (48) hours, if the Bank or the Bancorp shall not commence to comply
within such period and thereafter proceed to completion with due diligence) the
Officer shall have the right to proceed with notice of a “with Good Reason”
termination as specified above.

 
iv.
Notwithstanding the foregoing: (A) a reduction or elimination of the Officer’s
benefits under one or more benefit plans maintained by the Bank or the Bancorp
as part of a good faith, overall reduction or elimination of such plan or plans
or benefits thereunder applicable to all participants in a manner that does not
discriminate against the Officer (except as such discrimination may be necessary
to comply with law) shall not constitute an event of Good Reason or a material
breach of this Agreement, provided that benefits of the type or to the general
extent as those offered under such plans prior to such reduction or elimination
are not available to other officers of the Bank or the Bancorp or any company
that controls either of them under a plan or plans in or under which the Officer
is not entitled to participate, and receive benefits, on a fair and
nondiscriminatory basis; and (B) a requirement that the Officer report to and be
subject to the direction or supervision of a senior officer of Bancorp or the
Bank other than the President and Chief Executive Officer shall not constitute
an event of Good Reason or a material breach of this Agreement.

 
h.
Continuing Covenant not to Compete or Interfer with Relationships.  Regardless
of anything herein to the contrary, following a termination (i) upon retirement
pursuant to Section 10.b., (ii) due to Disability pursuant to Section 10.c.,
(iii) for Just Cause pursuant to Section 10.d., or (iv) by the Officer pursuant
to Section 10.f:

 
i.
The Officer’s obligations under Section 9.c of this Agreement will continue in
effect; and

 
ii.
During the remaining term of this Agreement (determined immediately before the
termination of employment), the Officer shall not serve as an officer or
director or employee of any bank holding company, bank, savings association,
savings and loan holding company, or mortgage company (any of which, a
“Financial Institution”), which Financial Institution offers products or
services competing with those offered by the Bank or the Bancorp from offices in
any county in the State of Maryland or of any other state in which the Bank,
Bancorp or any of their subsidiaries has a branch, and shall not interfere with
the relationship of the Bank or the Bancorp and any of its employees, agents, or
representatives; provided, however, that the provisions of this noncompetition
clause shall only apply to termination of the Officer “before” a Change in
Control as defined in Section 11.  (It being the intent of the parties that the
noncompetition clause shall not apply to terminations resulting from or due to a
Change in Control.)

 
 
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11.
Termination in Connection with a Change in Control.

 
a.
For purposes of this Agreement, a “Change in Control” means a change in control
as defined in Internal Revenue Section 409A of the Code and rules, regulations,
and guidance of general application thereunder issued by the Department of the
Treasury, including:

 
i.
Change in Ownership: a change in ownership of the Bancorp occurs on the date any
one person or group accumulates ownership of the Bancorp stock constituting more
than 50% of the total fair market value or total voting power of the Bancorp
stock,

 
ii.
Change in Effective Control: (x) any one person or more than one person acting
as a group acquires within a 12-month period ownership of the Bancorp stock
possessing 30% or more of the total voting power of the Bancorp stock, or (y) a
majority of the Bancorp’s board of directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed in advance by
a majority of the Bancorp’s board of directors, or

 
iii.
Change in Ownership of a Substantial Portion of Assets: a change in ownership of
a substantial portion of the Bancorp’s assets occurs if in a 12-month period any
one person or more than one person acting as a group acquires from the Bancorp
assets having a total gross fair market value equal to or exceeding 40% of the
total gross fair market value of all of the Bancorp’s assets immediately before
the acquisition or acquisitions.  For this purpose, gross fair market value
means the value of the Bancorp’s assets, or the value of the assets being
disposed of, determined without regard to any liabilities associated with the
assets.

 
b.
Termination.  If within the period beginning six (6) months prior to and ending
two (2) years after a Change in Control, (i) the Bank or the Bancorp shall
terminate the Officer’s employment without Just Cause, or (ii) the Officer shall
voluntarily terminate employment With Good Reason, the Bank or the Bancorp
shall, within ten (10) calendar days of the termination of Officer’s employment,
or as soon as permitted by law or regulation (see Section 26), make a lump-sum
cash payment to the Officer equal to 2.99 times the sum of (x) the Officer’s
annual salary at the highest annual rate in effect for any of the twelve (12)
months immediately preceding the date of the termination, plus (y) the amount of
any cash bonus paid during the twelve (12) months immediately preceding the date
of the termination.  This cash payment is subject to adjustment pursuant to
Section 14 of this Agreement, and shall be made in lieu of any payment also
required under Section 10.g. of this Agreement because of a termination in such
period.  The Officer’s rights under Section 10.g. of this Agreement are not
otherwise affected by this Section 11.  Also, in such event, the Officer shall,
for three (3) calendar years following the Officer’s termination of employment,
continue to participate in any benefit plans of the Bank or the Bancorp that
provide health (including medical and dental), life or disability insurance, or
similar coverage upon terms no less favorable than the most favorable terms
provided to executive officers of the Bank or the Bancorp during such period.

 
 
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c.
Funding of Trust upon Change in Control.  In order to assure payment to the
Officer of amounts that may become payable by the Bank or the Bancorp pursuant
to this Section 11, unless and to the extent the Officer has previously provided
a written release of any claims under Section 11 of this Agreement, not later
than ten (10) business days after a Change in Control, the Bank or the Bancorp
shall (i) establish a valid trust under the law of the State of Maryland with an
independent trustee that has or may be granted corporate trust powers under
Maryland law, (ii) deposit in such trust an amount equal to 2.99 times the
Officer’s “base amount” as defined in Section 280G(b)(3) of the Code and
regulations promulgated thereunder (Section 280G and related regulations
hereinafter referred to as Section 280G), at the time of the Change of Control,
and (iii) provide the trustee of the trust with a written direction to hold said
amount and any investment return thereon in a segregated account, and to pay
such amounts as demanded by the Officer from the trust upon written demand from
the Officer stating the amount of the payment demanded from the trust and the
basis for the Officer’s rights to such payment under Section 11 of this
Agreement and in accordance with the required time of the payment pursuant to
Section 11 of this Agreement.  Upon the earlier of the final payment of all
amounts demanded by the Officer under this Section 11 or the date thirty-six
(36) months after the Change in Control, the trustee of the trust shall pay to
the Bank or the Bancorp, as applicable, the entire balance remaining in the
trust.  Payments from the trust to the Officer shall be considered payments made
by the Bank or the Bancorp for purposes of this Agreement.  Payment of such
amounts to the Officer from the trust, however, shall not relieve the Bank or
the Bancorp from any obligation to pay amounts in excess of those paid from the
trust, or from any obligation to take actions or refrain from taking actions
otherwise required by this Agreement.  Unless and until a termination of or by
the Officer as described in Section 11.b.(i) or (ii), the Officer’s rights under
this Agreement shall be those of a general, unsecured creditor, the Officer
shall have no claim against the assets of the trust, and the assets of the trust
shall remain subject to the claims of creditors of the Bank or the
Bancorp.  Upon the termination of the trust as specified herein, the Officer
shall have no further interest in the trust.

 
12.
Indemnification and Liability Insurance.

 
a.
Indemnification.  The Bank and the Bancorp agree to indemnify the Officer (and
the Officer’s heirs, executors, and administrators) to the fullest extent
permitted under applicable law and regulations against any and all expenses and
liabilities reasonably incurred by the Officer in connection with or arising out
of any action, suit, or proceeding in which the Officer may be involved by
reason of having been a director or officer of the Bank or the Bancorp or any of
their affiliates (whether or not the Officer continues to be a director or
officer at the time of incurring any such expenses or liabilities) such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorney’s fees and the cost of reasonable settlements, such settlements to be
approved by the boards of directors of the Bank or the Bancorp, if such action
is brought against the Officer in the Officer’s capacity as an officer or
director of the Bank or the Bancorp or any of their affiliates.  Indemnification
for expense shall not extend to matters for which the Officer has been
terminated for Just Cause.  Nothing contained herein shall be deemed to provide
indemnification prohibited by applicable law or regulation.  Notwithstanding
anything herein to the contrary, the obligations of this Section 12 shall
survive the term of this Agreement by a period of seven years.

 
b.
Insurance.  During the period in which indemnification of the Officer is
required under this Section 12, the Bank or the Bancorp shall provide the
Officer (and the Officer’s heirs, executors, and administrators) with coverage
under a directors’ and officers’ liability policy at the expense of the Bank or
the Bancorp, at least equivalent to such coverage provided to directors and
senior officers of the Bank or the Bancorp, whichever is more favorable to the
Officer.

 
 
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13.         Reimbursement of Officer’s Expenses to Enforce this Agreement.  The
Bank or the Bancorp shall reimburse the Officer for all out-of-pocket expenses,
including, without limitation, reasonable attorney’s fees, incurred by the
Officer in connection with successful enforcement by the Officer of the
obligations of the Bank or the Bancorp to the Officer under this
Agreement.  Successful enforcement shall mean the grant of an award of money or
the requirement that the Bank or the Bancorp take some action specified by this
Agreement (i) as a result of court order; or (ii) otherwise by the Bank or the
Bancorp following an initial failure of the Bank or the Bancorp to pay such
money or take such action promptly after written demand therefore from the
Officer stating the reason that such money or action was due under this
Agreement at or prior to the time of the demand.

14.         Adjustment of Certain Payments and Benefits.  Notwithstanding any
other provision of this Agreement, in the event that the aggregate payments or
benefits to be made or afforded to the Officer under this Agreement or
otherwise, which are deemed to be parachute payments as defined in Section 280G
of the Code or any successor thereof, (the “Covered Benefits”) would be deemed
to include an “excess parachute payment” under Section 280G of the Code, then
the Covered Benefits shall be reduced to an amount, the value of which is one
dollar ($1.00) less than an amount equal to three (3) times the Officer’s “base
amount,” as determined in accordance with Section 280G of the Code.  The
allocation of the reduction required hereby among the Covered Benefits shall be
determined by the Officer  The Bank’s independent public accountants will
determine the value of any reduction in the payments and benefits; the Bank or
the Bancorp will pay for the accountants’ opinion.

15.         Injunctive Relief.  If there is a breach or threatened breach of
Section 10.h. of this Agreement or the prohibitions upon disclosure contained in
Section 9.c. of this Agreement, the Bank or the Bancorp and the Officer agree
that there is no adequate remedy at law for such breach, and that the Bank or
the Bancorp each shall be entitled to injunctive relief restraining the Officer
from such breach or threatened breach, but such relief shall not be the
exclusive remedy hereunder for such breach.  The parties hereto likewise agree
that the Officer shall be entitled to injunctive relief to enforce the
obligations of the Bank and the Bancorp under Section 11 of this Agreement.

 
16.
Successors and Assigns.

 
a.
This Agreement shall inure to the benefit of and be binding upon any corporate
or other successor of the Bank and the Bancorp which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank or the Bancorp.

 
b.
Since the Bank and the Bancorp are contracting for the unique and personal
skills of the Officer, the Officer’s rights or duties hereunder shall be
precluded from assignment or delegation without first obtaining the written
consent of the Bank and the Bancorp.

17.         No Mitigation.  The Officer shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Officer in any subsequent employment.

18.         Notices.  All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or 48 hours after mailing at any general
or branch United States Post Office, by registered or certified mail, postage
prepaid, addressed as follows, or to such other address as shall have been
designated in writing by the addressee:
 
 
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a.
If to the Bank or the Bancorp:

Sandy Spring Bancorp, Inc.
Sandy Spring Bank
1780 I Georgia Avenue
Olney, Maryland 20832
Attention:  R. E. Kuykendall, General Counsel

 
b.
If to the Officer:

Philip J. Mantua
16816 Melbourne Drive
Laurel, Maryland 20707

19.         Joint and Severally Liability; Payments by the Bank and the
Bancorp.  To the extent permitted by law, except as otherwise provided herein,
the Bank and the Bancorp shall be jointly and severally liable for the payment
of all amounts due under this Agreement.  The Bank and the Bancorp hereby agree
that they shall be jointly and severally liable for the payment of all amounts
due under this Agreement.

20.         No Plan Created by this Agreement.  The Officer, the Bank and the
Bancorp expressly declare and agree that this Agreement was negotiated among
them and that no provision or provisions of this Agreement are intended to, or
shall be deemed to, create any plan for purposes of the Employee Retirement
Income Security Act or any other law or regulation, and, the Bank, the Bancorp
and the Officer each expressly waives any right to assert the contrary.  Any
assertion in any judicial or administrative filing, hearing, or process by or on
behalf of the Officer or the Bank or the Bancorp that such a plan was so created
by this Agreement shall be deemed a material breach of this Agreement by the
party making such an assertion.

21.         Amendments.  No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.

22.         Applicable Law.  Except to the extent preempted by Federal law, the
laws of the State of Maryland shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.

23.         Severability.  The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

24.         Headings.  Headings contained herein are for convenience of
reference only.

25.         Entire Agreement.  This Agreement, together with any understanding
or modifications thereof as agreed to in writing by the parties, shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, other than written agreements with respect to specific
plans,  programs, or arrangements described in Sections 5 and 6 of this
Agreement, and supersedes all prior agreements other than with respect to such
specific plans, programs, or arrangements.
 
 
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26.
Section 409A.

 
i.
The Officer will be deemed to have a termination of employment for purposes of
determining the timing of any payments that are classified as deferred
compensation only upon a “separation from service” within the meaning of Section
409A.

 
ii.
If at the time of the Executive’s separation from service, (a) the Officer is a
“specified employee” (within the meaning of Section 409A and using the
methodology selected by the Bank and the Bancorp) and (b) the Bank and the
Bancorp make a good faith determination that an amount payable or the benefits
to be provided hereunder constitutes deferred compensation (within the meaning
of Section 409A), the payment of which is required to be delayed pursuant to the
six-month delay rule of Section 409A in order to avoid taxes or penalties under
Section 409A, then the Bank and the Bancorp will not pay the entire amount on
the otherwise scheduled payment date but will instead pay on the scheduled
payment date the maximum amount permissible in order to comply with Section 409A
(i.e., any amount that satisfies an exception under the Section 409A rules from
being categorized as deferred compensation) and will pay the remaining amount
(if any) in a lump sum on the first business day after such six month period.

 
iii.
To the extent the Officer would be subject to an additional 20% tax (and any
penalties) imposed on certain deferred compensation arrangements pursuant to
Section 409A as a result of any provision of this Agreement, such provision
shall be deemed amended to the minimum extent necessary to avoid application of
such tax and the parties shall promptly execute any amendment reasonably
necessary to implement this Section 26.  The Officer and the Bank and the
Bancorp agree to cooperate to make such amendment to the terms of this Agreement
as may be necessary to avoid the imposition of penalties and taxes under Section
409A; provided, however, that the Officer agrees that any such amendment shall
provide the Officer with economically equivalent payments and benefits, and the
Officer agrees that any such amendment will not materially increase the cost to,
or liability of, the Bank and the Bancorp with respect to any payment.

 
iv.
For purposes of the this Agreement, Section 409A shall refer to Section 409A of
the Internal Revenue Code of 1986, as amended, and the Treasury regulations and
any other.

[Signature page follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.

 
SANDY SPRING BANK
       
By:
/s/ Daniel J. Schrider
       
Title:
Daniel J. Schrider, President and CEO
       
SANDY SPRING BANCORP, INC.
       
By:
/s/ Daniel J. Schrider
       
Title:
Daniel J. Schrider, President and CEO
       
OFFICER
       
By:
/s/ Philip J. Mantua
   
Philip J. Mantua

 
 
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