Document:

exv10wj

 

Exhibit 10(j)

SANDY SPRING BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

Amendment

     THIS AMENDMENT (the “Amendment”) to the Sandy Spring Bank Supplemental
Retirement Agreement by and between Sandy Spring Bank, a Maryland corporation
with its main office in Olney, Maryland (the “Bank”), and      (the
“Executive”), is made this                      day of January, 2004.

The Agreement hereby is amended in order to provide the Executive with an
optional form of payment of benefits as stated below.

1.     In the case of benefits under the Agreement payable upon Normal Retirement
pursuant to Section 2.1, Early Retirement pursuant to Section 2.2, Disability
pursuant to Section 2.3, Termination of Employment following a Change in
Control pursuant to Section 2.4, or following other Terminations pursuant to
Section 2.5, the Executive may elect either of the following forms of payment:

		
	 	(i) “Single Annuity Payments” consisting of the payments calculated as
set forth in the Agreement prior to this amendment; or
	 
	 	(ii) “Joint and Survivor Annuity Payments” equal to the monthly payments
that would be payable under a straight-life, maximum monthly payment,
lifetime joint and survivor annuity for the Executive and the Executive’s
spouse, that could be purchased from an issuer rated superior by A.M.
Best (or, in the Bank’s discretion, with an equivalent rating from
another rating organization of similar reputation) for cash equal to the
cost of an annuity with payments equal to the applicable Single Annuity
Payments or, if the cost of such an annuity is not practically
determinable, the actuarial present value of the applicable Single
Annuity Payments as calculated in good faith by the Bank. Joint and
Survivor Annuity Payments terminate upon the payment for the month of
death of the survivor of the Executive and the Executive’s spouse.

2.     Article 3, Death Benefits, shall be amended in its entirety to read as
follows:

“Article 3

Death Benefits

		
	 	3.1 Death During Active Service. If the Executive dies while in the
active service of the Bank, the Bank shall pay to the Executive’s
beneficiary the benefit described in this Section 3.1.

		
	 	3.1.1 Insurance Policy in Effect. If the Executive dies while the
Insurance Policy is validly in effect, the benefit under Section 3.1 is
the greater of (i) the lifetime benefit that would have been paid to the
Executive under Section 2.1 calculated as if the date of the Executive’s
death were the Normal Retirement Date, or (ii) the straight life,
maximum monthly payment, fifteen-year annuity for the Executive
(calculated as if he or she were not deceased), or if elected by the
Executive, the straight life, maximum monthly payment, lifetime annuity
for the Executive’s surviving spouse (a “Spousal Annuity”), for payments
beginning the month following the Executive’s death, that could be
purchased from an issuer rated superior by A.M. Best (or, in the Bank’s
discretion, with an equivalent rating from another rating organization
of similar reputation) for cash equal to three times the Executive’s
Final Average Pay.

		
	 	3.1.2 Insurance Policy Not in Effect. If the Executive dies while the
Insurance Policy is not validly in effect, the benefit under Section 3.1
is the Accrued Benefit at the date of the Executive’s death divided by
one-hundred and eighty.

		
	 	     3.1.3 Payment of Benefit.

		
	 	          3.1.3.1. If the Executive dies while the Insurance Policy is in
effect, the Bank shall pay the benefit to the Beneficiary on the first
day of each month commencing with the month following the Executive’s
death and (i) if the benefit amount calculated in Section 3.1.1 is not
based upon a Spousal Annuity, under the “Single Annuity Method,”
commencing with the month following the Executive’s death

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	 	and continuing for one-hundred and seventy-nine additional months,
(ii) if the benefit amount calculated in Section 3.1.1 is a Spousal
Annuity under the “Spousal Annuity Method,” in payments equal to the
monthly payments that would be payable under such an annuity, commencing
with the month following the Executive’s death and continuing until the
payment for the month of death of the Executive’s spouse.
	 
	 	     3.1.3.2 If the Executive dies while the Insurance Policy is not in
effect, the Executive may elect either of the following forms of
payment: (i) “Single Annuity Payments” consisting of equal monthly
payments on the first day of each month commencing with the month
following the Executive’s death and continuing for one-hundred and
seventy-nine additional months, or (ii) “Spousal Annuity Payments” equal
to the monthly payments that would be payable under a straight-life,
maximum monthly payment, lifetime annuity for the Executive’s Spouse,
that could be purchased from an issuer rated superior by A.M. Best (or,
in the Bank’s discretion, with an equivalent rating from another rating
organization of similar reputation) for cash equal to the cost of an
annuity with payments equal to the amounts payable under alternative
(i), or, if the cost of such an annuity is not practically determinable,
the actuarial present value of the applicable Single Annuity Payments as
calculated in good faith by the Bank. Spousal Annuity Payments terminate
upon the payment for the month of death of the Executive’s spouse.

3.     The right of the Bank to purchase an annuity issued by a third party for or
to transfer ownership rights in such an annuity to the Executive in settlement
of its obligations set forth in Section 2.5.3 applies to both Single Annuity
Payments and Joint and Survivor Annuity Payments.

4.     The Bank may require that the Executive and the beneficiary provide
information reasonably necessary to calculate the amount of Joint and Survivor
Annuity Payments or Spousal Annuity Payments as a condition of receipt of such
benefits in that form. If such information is not provided to the reasonable
satisfaction of the Bank, the Bank may, in its discretion, (i) calculate the
Joint and Survivor Annuity Payments or Spousal Annuity Payments based upon
assumptions it deems reasonable, or (ii) pay benefits as if the Executive had
elected to be paid in Single Annuity Payments.

5.     Elections of form of payment may be made prior to or within ten days
following termination.

6.     Notwithstanding anything in the Agreement or this Amendment to the contrary,
the Joint and Survivor Annuity Payment method or Spousal Annuity Payment method
may not be elected, and the Single Annuity Payment form shall be used, unless
the Executive has validly designated his living spouse as his primary
beneficiary prior to the earlier of (i) the Executive’s death, and (ii) the
expiration of ten days of the Executive’s termination of employment, and such
designation remains in effect at such time.

7.     The Agreement is not amended except as explicitly provided herein.

IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer have
signed this Agreement.

	 	 	 	 	 
	EXECUTIVE	 	SANDY SPRING BANK
	 
	 	
By
	 	 

	 	 	 	 	 
	 	 	
Title
	 	 

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SANDY SPRING BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

BENEFICIARY DESIGNATION

     THIS BENEFICIARY DESIGNATION is made this      day of
     ,      by the undersigned (the “Executive”), pursuant to the
Supplemental Executive Retirement Agreement (the “Agreement”) by and between
Sandy Spring Bank and the Executive, and is subject to the terms, requirements,
and conditions of the Agreement.

     I hereby designate the following as my beneficiary under the Agreement:

	 	 	 
	Primary Beneficiary:	 	

	 	 	

	 	 	 
	Secondary Beneficiary:	 	

	 	 	

	 	 	 
	SIGNED:	 	

	 	 	
(Print or Type Name on the Above Line)
	 	 	 
	 	 	

	 	 	
(Signature)

FORM OF PAYMENT ELECTION

     THIS FORM OF PAYMENT ELECTION is made this      day of
     ,      by the undersigned (the “Executive”), pursuant to the
Supplemental Executive Retirement Agreement (the “Agreement”) by and between
Sandy Spring Bank and the Executive, and is subject to the terms, requirements,
and conditions of the Agreement.

               Singe Annuity Payments

               Joint and Survivor Annuity Payments/Spousal Annuity Payments*

	 	 	 
	SIGNED:	 	

	 	 	
(Print or Type Name on the Above Line)
	 	 	 
	 	 	

	 	 	
(Signature)

*Use of these methods is subject to terms and conditions set forth in the
Agreement. Selection of these method is valid only if the Executive has
properly designated the Executive’s spouse as his or her beneficiary under the
terms of the Agreement. The Spousal Annuity Payment method is available only
for the payment of benefits payable by reason of the Executive’s death during
active service.

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SANDY SPRING BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

     THIS AGREEMENT is made this
       
     day of
                
     ,                by and
between Sandy Spring Bank, a Maryland corporation with its main office in
Olney, Maryland (the “Bank”), and                   (the “Executive”).

INTRODUCTION

     To encourage the Executive to remain a senior officer of the Bank, the
Bank is willing to provide salary continuation benefits to the Executive. The
Bank will pay the benefits from its general assets.

AGREEMENT

     The Executive and the Bank agree as follows:

Article 1

Definitions

     1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:

		
	 	     1.1.1 “Accrued Benefit” means the amount of liability for benefits
to be paid under this Agreement recorded on the books of the Bank in
accordance with Generally Accepted Accounting Principles and without
reduction for any income tax benefit related thereto.

		
	 	     1.1.2 “Benefit Percentage” means 65%.

		
	 	     1.1.3 “Change in Control” means the earliest of:

	 	a.	 	The acquisition by any entity, person or
group (other than the acquisition by a
tax-qualified retirement plan sponsored
by Sandy Spring Bancorp, Inc. (“Bancorp”)
or the Bank) of beneficial ownership, as
that term is defined in Rule 13d-3 under
the Securities Exchange Act of 1934, of
more than 25% of the outstanding capital
stock of Bancorp or the Bank entitled to
vote for the election of directors
(“Voting Stock”);
	 
	 	b.	 	The commencement by any entity, person,
or group (other than Bancorp or the Bank,
a subsidiary of Bancorp or the Bank, or a
tax-qualified retirement plan sponsored
by Bancorp or the Bank) of

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	 	 	 	a tender offer or an exchange offer for
more than 20% of the outstanding Voting
Stock of Bancorp or the Bank;
	 
	 	c.	 	The effective time of (i) a merger or
consolidation of Bancorp or the Bank with
one or more other corporations as a
result of which the holders of the
outstanding Voting Stock of Bancorp or
the Bank immediately prior to such merger
exercise voting control over less than
80% of the Voting Stock of the surviving
or resulting corporation, or (ii) a
transfer of substantially all of the
property of Bancorp or the Bank other
than to an entity of which Bancorp or the
Bank owns at least 80% of the Voting
Stock;
	 
	 	d.	 	Upon the acquisition by any entity,
person, or group of the control of the
election of a majority of the Bank’s or
Bancorp’s directors;
	 
	 	e.	 	At such time that, during any period of
two consecutive years, individuals who at
the beginning of such period constitute
the Board of Bancorp or the Bank (the
“Continuing Directors”) cease for any
reason to constitute at least two-thirds
thereof, provided that any individual
whose election or nomination for election
as a member of the Board was approved by
a vote of at least two-thirds of the
Continuing Directors then in office shall
be considered a Continuing Director.

		
	 	     1.1.4 “Code” means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provisions.

		
	 	     1.1.5 “Disability” means a physical or mental infirmity that impairs
the Executive’s ability to substantially perform the Executive’s duties
under this Agreement and that results in the Executive’s becoming
eligible for long-term disability benefits under a long-term disability
plan maintained for Bank employees (or, if the Bank has no such plan in
effect, that impairs the Executive’s ability to substantially perform job
duties for a period of one-hundred and eighty consecutive days). The
Board of Directors of the Bank shall determine whether or not the
Executive is and continues to be permanently disabled for purposes of
this Agreement in good faith, based upon competent medical advice and
other factors that it reasonably believes to be relevant. As a condition
to any benefits, the Bank may require the Executive to submit to such
physical or mental evaluations and tests as the Bank’s Board of Directors
deems appropriate.

		
	 	     1.1.6 “Early Retirement Date” means the date on which the Executive
has both (a) attained age sixty and (b) completed ten Years of Service.

		
	 	     1.1.7 “Effective Date” means the date of the Agreement as set forth
in paragraph one of this Agreement.

		
	 	     1.1.8 “Final Average Pay” means the Executive’s three-year average
cash compensation, determined by adding (a) the total base salary paid to
the Executive for the thirty-six months preceding the date of termination
(or other date specified in this Agreement) divided by three, and (b)
one-third of the total cash bonuses (including, without limitation,
bonuses awarded under the Bank’s Stakeholders Program and similar
programs) awarded to the Executive during the three calendar years
preceding the date of termination (or other date specified in this
Agreement). Final Average Pay shall not be reduced for any pay reduction
contributions (x) to cash or deferred arrangements under Section 401(k)
of the Code, (y) to a cafeteria plan under Section 125 of the Code, or
(z) to a nonqualified deferred compensation plan. Final Average Pay
shall not be increased by any reimbursed expenses, credits, or benefits
under any plan of deferred compensation to which the Bank contributes, or
any additional cash compensation or compensation payable in a form other
than cash.

		
	 	     1.1.9 “Good Reason” means the occurrence of any of the following
without Executive’s express written consent:

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	 	(a)	 	A material reduction in the Officer’s
responsibilities or authority in connection with the
Officer’s employment with Bancorp or the Bank;
	 
	 	(b)	 	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;
	 
	 	(c)	 	A reduction in salary or benefits
contrary to the terms of this Agreement, or, following a
Change in Control as defined in Section 1.1.3 of this
Agreement, any reduction in salary or material reduction
in benefits below the amounts to which the Officer was
entitled prior to the Change in Control;
	 
	 	(d)	 	Termination of incentive and benefit
plans, programs, or arrangements, or 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;
	 
	 	(e)	 	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;
	 
	 	(f)	 	A requirement that the Officer spend
more than thirty 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
	 
	 	(g)	 	Failure to provide office facilities,
secretarial services, and other administrative services
to 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).
	 
	 	(h)	 	In the event of a Change in Control
as defined in Section 1.1.3 of this Agreement, Officer
shall have the right to resign for any reason during the
first sixty (60) days immediately following the first
six 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.

		
	 	     Notwithstanding the foregoing: (i) a reduction or elimination of the
Executive’s benefits under one or more benefit plans maintained by the
Bank 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 Executive (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 any company that controls either of them
under a plan or plans in or under which the Executive is not entitled to
participate, and receive benefits, on a fair and nondiscriminatory basis;
and (ii) a requirement that the Executive report to and be subject to the
direction or supervision of a senior officer of the Bank other than the
President and Chief Executive shall not constitute an event of Good
Reason or a material breach of this Agreement. This provision shall not
affect the rights of the Executive to enforce this Agreement.

		
	 	     A termination with Good Reason means a Termination of Employment by
the Executive by written notice to the Bank, which notice may be
immediately effective, given within ninety days of the event of Good
Reason.

		
	 	     1.1.10 “Insurance Policy” means a single premium life insurance
policy which may be acquired by the Bank, in its sole discretion, as sole
owner, on the life of the Executive in connection with this Agreement.

		
	 	     1.1.11 “Just Cause” means, as determined in good faith by the Bank’s
Board of Directors, the Executive’s:

	 	(a)	 	Personal dishonesty;
	 
	 	(b)	 	Willful misconduct;
	 
	 	(c)	 	Breach of fiduciary duty involving
personal profit;

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	 	(d)	 	Intentional failure to perform duties
under this Agreement;
	 
	 	(e)	 	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 days prior
to termination) by the Board of such failure;
	 
	 	(f)	 	Willful violation of any law, rule or
regulation (other than traffic violations or similar
offenses) or final cease-and-desist order; or
	 
	 	(g)	 	Material breach by the Officer of any
provision of this Agreement or an Employment Agreement
to which the Officer and the Bank are parties.

		
	 	     1.1.12 “Normal Retirement Date” means the date on which the
Executive has both (a) attained age sixty-five and (b) completed ten
Years of Service.

		
	 	     1.1.13 “Termination of Employment” means the Executive’s ceasing to
be employed by the Bank for any reason whatsoever, voluntary or
involuntary, other than by reason of an approved leave of absence.

		
	 	     1.1.14 “Years of Service” means the total number of twelve-month
periods during which the Executive is employed on a full-time basis by
the Bank prior to and after the date of this Agreement, inclusive of any
approved leaves of absence.

Article 2

Lifetime Benefits

     2.1 Normal Retirement Benefit. If the Executive terminates employment on
or after the Normal Retirement Date for reasons other than death, the Bank
shall pay the Executive the benefit described in this Section 2.1.

		
	 	     2.1.1. Amount of Benefit. The benefit under this Section 2.1 is
one-twelfth of the Executive’s Final Average Pay multiplied by the
Benefit Percentage, which product is reduced by:

		
	 	     2.1.1.1 Social Security Benefits. One-half of the amount of
monthly unreduced primary (not family) retirement benefits under
the United States Social Security Act that the Executive would be
eligible for if application were made as of the Executive’s
sixty-fifth birthday, assuming that the Executive had earnings at
or above the maximum contribution and benefit base under Section
230 of the United States Social Security Act for the Executive’s
working career; and

		
	 	     2.1.1.2 Bank’s Qualified Pension Plan Benefits. The straight
life, monthly payment, annuity benefit the Executive would be
entitled to receive under the Bank’s qualified pension plan as of
the Executive’s Termination of Employment.

		
	 	     2.1.1.3 Prior Employer’s Pension Plan Benefits. The straight
life, monthly payment, annuity benefit the Executive would be
entitled to receive as of the Executive’s Termination of Employment
because of employment by any and all other banks or companies prior
to the Executive’s full time employment by the Bank under any and
all qualified, defined benefit pension plans maintained by any and
all such other banks or companies.

		
	 	     2.1.1.4 Bank’s Qualified 401(k) and Profit Sharing Plan. The
straight life, maximum monthly payment, fifteen-year annuity that
may be purchased at the date of Termination from an issuer rated
superior by A.M. Best (or, in the Bank’s discretion, with an
equivalent rating from another rating organization of similar
reputation) for cash equal to the value of the Executive’s account
at the date of Termination under the Bank’s Cash and Deferred
Profit Sharing Plan and Trust (or any successor plan) attributable
to Bank contributions, including the earnings thereon.

		
	 	     2.1.2 Payment of Benefit. The Bank shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Termination of Employment and continuing until the later of
the Executive’s death or the payment of one-hundred and seventy-nine
additional monthly payments.

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     2.2. Early Retirement Benefit. If the Executive terminates employment on
or after the Early Retirement Date but before the Normal Retirement Date, and
for reasons other than death or Disability, the Bank shall pay to the Executive
the benefit described in this Section 2.2.

		
	 	     2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
amount of the Accrued Benefit at the date of such early retirement
divided by one-hundred and eighty.

		
	 	     2.2.2 Payment of Benefit. The Bank shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Executive’s Termination of Employment and continuing until
the later of the Executive’s death or the payment of one-hundred and
seventy-nine additional monthly payments.

     2.3 Disability Benefit. If the Executive’s employment is terminated for
Disability prior to the Normal Retirement Date, the Bank shall pay to the
Executive the benefit described in this Section 2.3.

		
	 	     2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
amount of the Accrued Benefit at the date of such early retirement
divided by one-hundred and eighty.

		
	 	     2.3.2 Payment of Benefit. The Bank shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Executive’s Termination of Employment and continuing until
the later of the Executive’s death or the payment of one-hundred and
seventy-nine additional months.

     2.4 Change in Control Benefits. If within the period beginning six months
prior to and ending two years after a Change in Control, (a) the Bank shall
terminate the Executive’s employment without Just Cause, or (b) the Executive
shall terminate his employment with Good Reason, the Bank shall pay to the
Executive the benefit described in this Section 2.4 in lieu of any other
benefit under this Agreement.

		
	 	     2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the
Normal Retirement Benefit described in Section 2.1 calculated as if the
date of Termination of Employment were the Executive’s Normal Retirement
Date, or, if elected by the Executive pursuant to Section 2.4.2.1, the
Early Retirement Benefit described in Section 2.4.1 calculated as if the
date of Termination of Employment were the Executive’s Early Retirement
Date.

		
	 	     2.4.2 Payment of Benefits.

		
	 	     2.4.2.1 Approved Change in Control. If the Change in Control
was approved in advance by a majority of the Continuing Directors,
the Bank shall pay the benefit to the Executive on the first day of
each month commencing with the month following the day on which:
(i) the Executive attains age sixty-five, or, if the Executive so
elects in writing within ten days of Termination of Employment,
(ii) the Executive attains age sixty, and, in either case,
continuing until the later of the Executive’s death or the payment
of one-hundred and seventy-nine additional monthly payments.

		
	 	     2.4.2.2 Unapproved Change in Control. If the Change in Control
was not approved in advance by a majority of the Continuing
Directors, the Bank shall pay the benefit to the Executive on the
first day of each month commencing with the month following the
Termination of Employment and continuing until the later of the
Executive’s death or one-hundred and seventy-nine (179) additional
monthly payments.

     2.5. Vested Benefits following Other Terminations. Subject to Section 2.4,
if (i) the Executive voluntarily terminates employment before the Early
Retirement Date for reasons other than Death or Disability, or (ii) the Bank
terminates the Executive’s Employment without Just Cause, the Bank shall pay to
the Executive the benefits described in this section.

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	 	          2.5.1 Amount of Benefit. The benefit under this Section 2.5 is the
straight life, maximum monthly payment, fifteen-year annuity beginning on
the first day of the month following the date on which (i) the Executive
attains age sixty-five, or, if the Executive so elects in writing within
ten days of Termination of Employment, (ii) the Executive attains age
sixty, that may be purchased in the two months following the date of
Termination from an issuer rated superior by A.M. Best (or, in the Bank’s
discretion, with an equivalent rating from another rating organization of
similar reputation) for cash equal to the amount of the vested Accrued
Benefit at the date of such termination.
	 
	 	          2.5.2 Vested Accrued Benefit. For purposes of this section 2.5,
only, the Accrued Benefit shall vest in accordance with the following
schedule:

	 	 	 	 	 	 	 	 	 
	Years of	 	Percentage of Accrued
	Service	 	Benefit That Is Vested
	
	 	

	 	 	 	<4	 	 	 	0	%
	 
	 	 	4	 	 	 	20	%
	 
	 	 	5	 	 	 	25	%
	 
	 	 	6	 	 	 	30	%
	 
	 	 	7	 	 	 	35	%
	 
	 	 	8	 	 	 	40	%
	 
	 	 	9	 	 	 	45	%
	 
	 	 	10	 	 	 	50	%
	 
	 	 	11	 	 	 	60	%
	 
	 	 	12	 	 	 	70	%
	 
	 	 	13	 	 	 	80	%
	 
	 	 	14	 	 	 	90	%
	 
	 	 	15	 	 	 	100	%

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	 	          2.5.3 Payment of Benefit. The Bank shall pay the monthly benefit
(or cause such benefit to be paid) to the Executive, or his beneficiary
after the Executive’s death, on the first day of each month commencing
with the month following the month in which the Executive attains (i) age
sixty-five, or if elected by the Executive pursuant to section 2.5.2.
(ii) age sixty. The Bank may, in its sole discretion, purchase such an
annuity for or transfer its ownership rights to the Executive in
settlement of this obligation, in which case all of the Bank’s
obligations under this Agreement shall immediately terminate.

Article 3

Death Benefits

     3.1 Death During Active Service. If the Executive dies while in the
active service of the Bank, the Bank shall pay to the Executive’s beneficiary
the benefit described in this Section 3.1.

		
	 	     3.1.1 Insurance Policy in Effect. If the Executive dies while the
Insurance Policy is validly in effect, the benefit under Section 3.1 is
the greater of (i) the lifetime benefit that would have been paid to the
Executive under Section 2.1 calculated as if the date of the Executive’s
death were the Normal Retirement Date, or (ii) the straight life, maximum
monthly payment, fifteen-year annuity, for payments beginning the month
following the Executive’s death, that could be purchased from an issuer
rated superior by A.M. Best (or, in the Bank’s discretion, with an
equivalent rating from another rating organization of similar reputation)
for cash equal to three times the Executive’s Final Average Pay.

		
	 	     3.1.2 Insurance Policy Not in Effect. If the Executive dies while
the Insurance Policy is not validly in effect, the benefit under Section
3.1 is the Accrued Benefit at the date of the Executive’s death divided
by one-hundred and eighty.

		
	 	     3.1.3 Payment of Benefit. The Bank shall pay the benefit to the
Beneficiary on the first day of each month commencing with the month
following the Executive’s death and continuing for one-hundred and
seventy-nine additional months.

Article 4

Beneficiaries

     4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Bank. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Bank during the Executive’s lifetime. The Executive’s beneficiary
designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary
and the marriage is subsequently dissolved. If the Executive dies without a
valid beneficiary designation, all payments shall be made to the Executive’s
surviving spouse, if any, and if none, to the Executive’s surviving children
and to the descendants of any deceased child by right of representation, and if
no children or descendants survive, to the Executive’s estate.

     4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Bank may pay such benefit to the guardian, legal
representative, or person having the care or custody of such minor, incompetent
person, or incapable person. The Bank may require proof of incompetency,
minority, or guardianship as it may deem appropriate prior to the distribution
of the benefit. Such distribution shall completely discharge the Bank from all
liability with respect to such benefit.

Article 5

Adjustment of Certain Payments and Benefits

     The Bank shall indemnify and hold the Officer harmless from any and all
loss, expense, or liability that the Officer may ever incur under Code § 4999,
or any successor provision, as the result of payments or benefits that the
Officer receives from the Bank or any successor to any of its interests. The
Bank shall have this obligation with respect to any excise taxes (and any
federal, state, and local income taxes on those excise taxes) for which the
Officer is liable under Code § 4999, or any successor provision, pursuant to a
tax return on which the Officer reports such excise tax

10

 

liability based on a reasonable analysis (that the Officer need not file with
the return) prepared by the Officer’s legal counsel. This paragraph shall
survive termination or expiration of this Agreement for any reason.

Article 6

General Limitations

     Notwithstanding any provision of this Agreement to the contrary, the Bank
shall not pay any amount of any benefit under this Agreement:

     5.1 Termination for Cause. If the Bank terminates the Executive’s
employment for Just Cause.

     5.2 Suicide. No benefits shall be payable if the Executive commits
suicide within two years after the date of this Agreement, or if the Executive
has made any material misstatement of fact on any application for the Insurance
Policy.

Article 7

Claims and Review Procedures

     6.1 Claims Procedures. The Bank shall notify the Executive’s beneficiary
in writing, within ninety days of his or her written application for benefits,
of his or her eligibility or noneligibility for benefits under the Agreement.
If the Bank determines that the beneficiary is not eligible for benefits or
full benefits, the notice shall set forth (a) the specific reasons for such
denial, (b) a specific reference to the provisions of the Agreement on which
the denial is based, (c) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (d) an explanation of the Agreement’s
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Bank
determines that there are special circumstances requiring additional time to
make a decision regarding eligibility for benefits, the Bank shall notify the
beneficiary of the special circumstances and the date by which a decision is
expected to be made, and may extend the time by which notice may be given of
such decision for up to an additional ninety-day period.

     6.2 Review Procedure. If the beneficiary is determined by the Bank not to
be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Bank by filing a petition for
review with the Bank within sixty days after receipt of the notice issued by
the Bank. Such petition shall state the specific reasons that the beneficiary
believes entitle him or her to benefits or to greater or different benefits.
Within sixty days after receipt by the Bank of the petition, the Bank shall
afford the beneficiary (and counsel, if any) an opportunity to present his or
her position to the Bank orally or in writing, and the beneficiary (or counsel)
shall have the right to review the pertinent documents. The Bank shall notify
the beneficiary of its decision in writing within the sixty-day period, stating
specifically the basis of its decision, written in a manner calculated to be
understood by the beneficiary, and the specific provisions of the Agreement on
which the decision is based. If, because of the need for a hearing, the
sixty-day period is not sufficient, notice of such decision may be deferred for
up to another sixty-day period at the election of the Bank, but notice of this
deferral shall be given to the beneficiary.

Article 8

Amendments and Termination

     This Agreement may be amended or terminated only by a written agreement
signed by the Bank and the Executive. This Agreement shall supersede any
prior Agreement, which shall be deemed terminated by agreement of the parties
immediately prior to the Effective Date.

Article 9

Miscellaneous

     8.1 Binding Effect. This Agreement shall bind the Executive and the Bank,
and their beneficiaries, survivors, executors, administrators, and transferees.

11

 

     8.2 No Guaranty of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Bank, nor does it interfere with the Bank’s right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive’s right to terminate employment at any time.

     8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached, or encumbered in any manner.

     8.4 Tax Withholding. The Bank shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.

     8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of Maryland, except to the extent preempted
by the laws of the United States of America.

     8.6 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Bank to pay such
benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. The Insurance Policy and any other
insurance on the Executive’s life in which the Bank has an interest is a
general asset of the Bank to which neither the Executive nor any beneficiary
has any preferred or secured claim of any kind, and does not represent funding
for the benefit under this Agreement. Any representation or assertion contrary
to this section 8.6 is a material breach of this Agreement by the representing
or asserting party, which, if such party is the Executive or, following his
death, a beneficiary, shall immediately result in the cessation of any and all
payments and the elimination of any liability hereunder for any payment not
made prior to such assertion or representation, and, if such party is the Bank,
shall subject it to liability for actual damages for such breach.

     8.7 Non-Competition Provisions. Regardless of anything herein to the
contrary, except in the case of a Termination of Employment by the Bank without
Just Cause, a Termination of Employment by the Executive with Good Reason, or
with the permission of the Bank, during the two years immediately following the
Executive’s Termination of Employment, the Executive 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 from offices in any county
in the State of Maryland or of any other State in which the Bank or any of its
affiliates has a branch, and shall not interfere with the relationship of the
Bank 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
1.1.3. (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). In
the event of any breach by the Executive of this Covenant Not to Compete, the
Board of Directors of the Bank shall direct that any unpaid balance of any
payments to the Executive under this Agreement be suspended, and shall
thereupon notify the Executive of such suspension, in writing. Thereupon, if
the Board of Directors of the Bank shall determine that such breach by the
executive exists at any time after a period of one month following notification
of the such suspension, all rights of the Executive and his beneficiary under
this agreement, including rights to any and all further payments hereunder,
shall thereupon terminate.

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

     IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer have
signed this Agreement.

	 	 	 	 	 	 	 
	EXECUTIVE	 	 	 	SANDY SPRING BANK
	 	 	 	 	 	 	 
	 	 	
By	 	 	 	 
	
	 	 	

	 	 	 	 	Title	 	 
	 	 	 	 	 	 	

12

 

SANDY SPRING BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

BENEFICIARY DESIGNATION

     THIS BENEFICIARY DESIGNATION is made this      day of
     ,      by the undersigned (the “Executive”), pursuant to the
Supplemental Executive Retirement Agreement (the “Agreement”) by and between
Sandy Spring Bank and the Executive, and is subject to the terms, requirements,
and conditions of the Agreement.

     I hereby designate the following as my beneficiary under the Agreement:

	 	 	 
	Primary Beneficiary:	 	

	 	 	

	 	 	 
	Secondary Beneficiary:	 	

	 	 	

	 	 	 
	SIGNED:	 	

	 	 	
(Print or Type Name on the Above Line)
	 	 	 
	 	 	

	 	 	
(Signature)

13exv10wu

 

Exhibit 10 (u)

SANDY SPRING BANCORP, INC.

DIRECTORS’ STOCK PURCHASE PLAN

1.     PURPOSE OF THE PLAN. The purpose of the Sandy Spring Bancorp, Inc.
Directors’ Stock Purchase Plan is to provide a convenient means for Directors
of Bancorp to acquire shares of Bancorp’s Common Stock at market value in lieu
of all or a portion of their annual retainers for Board service. The Plan is
effective December 31, 2003 for retainers payable in 2004 and thereafter.

2.     DEFINITIONS.

	 	a.	 	“Board” means the Board of Directors of the Bancorp.
	 
	 	b.	 	“Business Day” means a day on which the New York Stock
Exchange is open for regular trading.
	 
	 	c.	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	d.	 	“Committee” means the Directors’ Stock Purchase Plan
Committee appointed by the Board.
	 
	 	e.	 	“Common Stock” means Bancorp’s Common Stock, par value $1.00
per share.
	 
	 	f.	 	“Director” means a member of Bancorp’s Board.
	 
	 	g.	 	“Bancorp” means Sandy Spring Bancorp, Inc.
	 
	 	h.	 	“Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
	 
	 	i.	 	“Fair Market Value” means, with respect to a share of Common
Stock, the last sales price (or average of the quoted closing bid
and asked prices if there is no closing sales price reported) of a
share of Common Stock as reported by the Nasdaq National Market (or
by the principal national stock exchange on which the Common Stock
is then listed) on the Purchase Date, if such date is a Business
Day, or the immediately preceding Business Day, if such date is not
a Business Day. In the absence of an established market for Common
Stock, the Fair Market Value of a share of Common Stock shall be
determined in good faith by the Board.
	 
	 	j.	 	“Plan” means the Sandy Spring Bancorp, Inc. Directors’ Stock
Purchase Plan.
	 
	 	k.	 	“Plan Start Date” means December 31, 2003.
	 
	 	l.	 	“Purchase Date” means the date that checks for the Retainer
are issued by Bancorp, or if no such checks are issued, the date of
the May meeting of the Board.
	 
	 	m.	 	“Retainer” means the annual retainer paid to Directors for
service on the Board.
	 
	 	n.	 	“Rule 16b-3” means Rule 16b-3 under the Exchange Act.

3.     ELECTION.

     a.     Subject to other limitations provided in this Plan, a Director may
elect to receive from 50% to 100% of his or her annual retainer in shares of
Stock. Elections shall be made, on a form supplied by Bancorp, on or before
December 31 of each year applicable to the Retainer received in the following
year, provided that an election may be made within thirty days after the date
that a Director first takes office with respect to the next Retainer payable to
the Director.

     b.     A Director may not revoke his or her election.

     c.     The Plan is not intended to provide a deferral of Director compensation
for state or federal income tax purposes. Amounts of fees that a Director has
elected to defer pursuant to a Director’s Fee Deferral Agreement may not be
used to purchase shares under this Plan. An election under this Plan to
purchase shares under this Plan does not act to revoke an election made
pursuant to a Director’s Fee Deferral Agreement.

4.     PURCHASE PRICE, AND NUMBER OF SHARES ISSUED. The purchase price of each
share of Common Stock sold pursuant this Plan shall be the Fair Market Value of
the Common Stock on the

Effective December 31, 2003

1

 

Purchase Date. The number of shares issued to a Director with respect to a
Retainer shall be determined by dividing the dollar amount of the percentage of
the Retainer elected under the Plan, rounded down to the nearest whole share.
No fractional shares shall be issued under the Plan.

5.     DELIVERY. The Plan will not hold shares on behalf of any Director. All
Shares of Common Stock issued under this plan will be evidenced by certificates
containing a legend in a form satisfactory to Bancorp stating that the shares
have been issued to an affiliate of Bancorp.

6.     TAX WITHHOLDING. At the time the Common Stock is issued to a Director under
the Plan, the Director must make adequate provision for Bancorp’s federal,
state or other tax withholding obligations, if any, that may arise upon such
issuance. At any time, Bancorp may, but shall not be obligated to, withhold
from a Director’s compensation the amount necessary for Bancorp to meet
applicable withholding obligations, including any withholding required to make
available to Bancorp any tax deductions attributed to the issuance of the
shares of Stock under this Plan.

7.     NO ASSIGNMENT OF DIRECTOR’S INTEREST IN PLAN. A Director may not assign,
sell, transfer, pledge, hypothecate or alienate any rights or interests in or
under the Plan. A Director’s death will act to revoke an election under this
Plan with respect to any Retainer not yet paid.

8.     VESTING, RIGHTS, AND PRIVILEGES. All Directors shall have the same rights
and privileges under the Plan. Directors shall have no interest or voting
rights in shares of Common Stock covered by this Plan until such shares have
been issued to the Director. Each Director will immediately acquire full
ownership of all shares of Common Stock at the time such shares are issued.

9.     NO INTEREST OR FEES PAID. No fees will be payable by any Director with
respect to participation in this Plan. No interest will be paid to or credited
to the a Director under this Plan.

10.     CONDITIONS UPON ISSUANCE OF COMMON STOCK.

     a.     The issuance of shares to each Director pursuant to this Plan shall be
subject to the annual approval of the Board in the manner required to qualify
for an exemption pursuant to Rule 16b-3 under the Exchange Act.

     b.     Notwithstanding anything herein to the contrary, Bancorp’s obligation
to issue shares of Common Stock under the Plan is subject to the approval
required of any governmental authority in connection with the authorization,
issuance, sale or transfer of such shares, to any requirements of Nasdaq or any
national securities exchange applicable thereto, and to compliance by Bancorp
with other applicable legal requirements in effect from time to time.,
including without limitation any applicable tax withholding requirements.

     c.     As a condition to the issuance of shares to a Director under this Plan,
Bancorp may require the Director to represent and warrant at the time of such
exercise that the shares are being purchased only for investment and without
any present intention to sell or distribute such shares if, in the opinion of
counsel of Bancorp, such representation is appropriate under applicable law.

11.     THE COMMITTEE. The Plan shall be administered by the Committee, which shall
consist of not less than three (3) Directors appointed by the Board. Members of
the Committee shall be Non-Employee Directors within the meaning of Rule 16b-3,
and shall serve at the pleasure of the Board. A majority of the entire
Committee shall constitute a quorum and the action of a majority of the members
present at any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee without a meeting, shall be deemed the
action of the Committee. In the absence at any time of a duly appointed
Committee, the Plan shall be administered by the Board. The Committee shall be
entitled to adopt and apply guidelines and procedures consistent with the
purposes of the Plan. In order to effectuate the purposes of the Plan, the
Committee shall have the discretionary authority to construe and interpret the
Plan, to supply any omissions therein, to reconcile and correct any errors or
inconsistencies, to decide any questions in the administration and application
of the Plan, and to make equitable adjustments for any mistakes or errors made
in the administration of the Plan, and all such actions or determinations made
by the Committee, and the application of rules and regulations to a particular
case or issue by the Committee, in good faith, shall not be subject to review
by anyone, but shall be final, binding and conclusive on all persons ever
interested hereunder.

12.     SHARES ISSUABLE UNDER THE PLAN. The maximum number of shares which shall be
issued under the Plan, subject to adjustment upon changes in Common Stock as
described in this Section,

Effective December 31, 2003

2

 

shall be 15,000 shares. If, on a given Purchase Date, the number of shares to
be issued under this Plan exceeds the number of shares available under the
Plan, Bancorp shall make a pro rata allocation of the shares remaining
available for purchase in as uniform a manner as shall be practicable and it
shall determine to be equitable, and the balance of the Retainer shall paid to
the Director as promptly as possible. If any change is made in the Common Stock
(through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, revise stock
split, liquidating dividend, combination of shares, exchange of shares, change
incorporate structure or otherwise), the Committee may make appropriate
adjustments in (a) the number of shares and price per share of Common Stock
subject to the Plan, and (b) the number of shares of Common Stock that have
been authorized under the Plan but not yet issued.

13.     AMENDMENT, SUSPENSION, OR TERMINATION OF PLAN Bancorp, acting through the
Committee, reserves the right to amend, suspend, or terminate the Plan at any
time or times; provided, however, any amendment that would require the consent
of stockholders under applicable law, rule or regulation (including, without
limitation, the Code, the Exchange Act or any self regulatory organization such
as a national securities exchange), will not be made unless such stockholders’
consent is obtained. In addition, the Plan shall terminate automatically on the
tenth anniversary of the Plan Start Date, or on any Purchase Date on which
Directors elect to purchase a number of shares greater than the number of
reserved shares remaining available for issuance, subject to the allocation of
remaining shares pursuant to Section 12.

14.     COMPANY’S RIGHT TO RESTRUCTURE, ETC. This Plan shall not affect in any way
the right or power of Bancorp to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part
of its business or assets.

15.     NO EFFECT ON BOARD SERVICE. No provision of this Plan shall provide any
right to a Director to serve as a Director for any specified period.

16.     GOVERNING LAW. The Plan shall be governed by and construed in accordance
with the laws of the State of Maryland, except to the extent that federal law
shall be deemed to apply.

17.     SEVERABILITY OF PROVISIONS. If any provision of this Plan is determined to
be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect the remaining provisions of this Plan, but
such invalid, illegal or unenforceable provisions shall be fully severable, and
the Plan shall be construed and enforced as if such provision had never been
inserted herein.

18.     SUCCESSORS AND ASSIGNS. The Plan shall be binding upon Bancorp’s successors
and assigns.

***

Effective December 31, 2003

3

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