Document:

Exhibit
10(h)

     

    EMPLOYMENT
AGREEMENT

    

    THIS EMPLOYMENT AGREEMENT
(“Agreement”) is made, entered into and effective as of January 1, 2009
(“Effective Date”) by, between and among SANDY SPRING BANCORP, INC., a
Maryland corporation and registered bank holding company (“Bancorp”), SANDY SPRING BANK, a Maryland
corporation and registered trust company and commercial bank and a wholly-owned
subsidiary of Bancorp (“Bank”), and DANIEL J. SCHRIDER,
(“Executive”).  Bancorp and the Bank are sometimes referred to
in this Agreement individually and together as the “Employers.”

    

    WHEREAS, Executive currently
serves in a position of substantial responsibility with Bancorp and the Bank;
and

    

    WHEREAS, Bancorp and the Bank
wish to set forth the terms of the Executive’s continued employment in a
position of substantial responsibility; and

    

    WHEREAS, Executive is willing
and desires to serve in this position with Bancorp and the Bank.

    

    NOW THEREFORE, in
consideration of these premises, the mutual covenants contained herein, and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows.

    

    ARTICLE
1 - EMPLOYMENT

    

    1.1          Employment. Bancorp and Bank hereby
employ the Executive to serve as President and Chief Executive Officer of
Bancorp and the Bank, each according to the terms and conditions of this
Agreement and for the period stated in Section 1.3 of this
Agreement.  The Executive hereby accepts employment according to the
terms and conditions of this Agreement and for the period stated in Section 1.3
of this Agreement.

    

    1.2          Duties. As President and Chief
Executive Officer of Bancorp and the
Bank, the Executive
shall serve under the direction and control of said boards.  The
Executive shall report directly to the boards of directors. The Executive shall
serve the Employers faithfully, diligently, competently, and to the best of the
Executive’s ability.  The Executive shall exclusively devote full
working time, energy, and attention to the business of the Employers and to the
promotion of the interests of the Employers throughout the term of this
Agreement.  Without the prior written consent of the board of
directors of Bancorp and the Bank, during the term of this Agreement, the
Executive shall not render services to or for any person, firm, corporation, or
other entity or organization in exchange for compensation, regardless of the
form in which the compensation is paid and regardless of whether it is paid
directly or indirectly to the Executive.  Nothing in this Section 1.2
shall prevent the Executive from managing personal investments and affairs,
provided that doing so does not interfere with the proper performance of the
Executive’s duties and responsibilities under this Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    1.3          Service
on the Boards of Directors.  The Executive
shall serve as a member of the board of directors of Bancorp and the
Bank.  The board of directors of Bancorp and the Bank shall undertake
every lawful effort to ensure that the Executive continues throughout the term
of his employment to be reelected as a director of Bancorp and the
Bank.  Notwithstanding anything in this Agreement to the contrary,
unless otherwise agreed to by the parties, the Executive shall be deemed to have
resigned as a director of Bancorp and the Bank effective immediately after
termination of the Executive’s employment under Article 3 of this Agreement,
regardless of whether the Executive submits a formal, written resignation as
director.

    

    1.4          Term.

    

    (a)           The
term of this Agreement shall include: (i) the initial term, consisting of the
period commencing on the Effective Date and ending on the third anniversary of
the Effective Date, plus (ii) any and all extensions of the initial term made
pursuant to this Section 1.4.

    

    (b)           Commencing
on the first anniversary of the Effective Date and continuing on each
anniversary of the Effective Date thereafter, the disinterested members of the
boards of directors may extend the Agreement term for an additional year, so
that the remaining term of the Agreement again becomes thirty-six (36) months,
unless the Executive elects not to extend the term of this Agreement by giving
proper written notice to the Employers at least 60 days prior to the anniversary
date of the Effective Date.  The boards of directors will review the
Agreement and the Executive’s performance annually (during the period of time
61-90 days prior to the anniversary of the Effective Date) for purposes of
determining whether to extend the Agreement term.  The boards of
directors will notify Executive as soon as possible after each annual review
(but not later than 60 days prior to the anniversary of the Effective Date)
whether they have determined to extend the Agreement.

    

    ARTICLE
2 - COMPENSATION AND BENEFITS

    

    2.1          Base
Salary. In
consideration of the Executive’s performance of the obligations under this
Agreement, the Employers shall pay or cause to be paid to the Executive a salary
at the annual rate of not less than Four Hundred and Fifty Thousand
Dollars ($450,000.00), payable according to the regular payroll practices
of the Bank. The Executive’s salary shall be subject to annual
review.  The Executive’s salary, as the same may be modified from time
to time, is referred to in this Agreement as the “Base Salary.” All compensation
under this Agreement shall be subject to customary income tax withholding and
such other employment taxes as are imposed by law.

    

    2.2          Benefit
Plans and Perquisites. For as long as the Executive
is employed by the Employers, the Executive shall be eligible (i) to participate
in any and all officer or employee compensation, incentive compensation and
benefit plans in effect from time to time, including without limitation plans
providing retirement, medical, dental, disability, and group life benefits and
including stock-based compensation, incentive, or bonus plans existing on the
date of this Agreement or adopted after the date of this Agreement, provided
that the Executive satisfies the eligibility requirements for any the plans or
benefits, and (ii) to receive any and all other fringe and other benefits
provided from time to time, including the specific items described in (a)-(d)
below.

    
      
         

      

      
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    (a)           Club
dues. In addition to any other
compensation provided for under this Agreement, the Employers shall pay the
Executive an amount sufficient, on an after-tax basis, to maintain a membership
at the Manor Country Club or similar club of the Executive’s
choice.

    

    (b)           Reimbursement
of business expenses. The Executive shall be
entitled to reimbursement for all reasonable business expenses incurred while
performing his obligations under this Agreement, including but not limited to
all reasonable business travel and entertainment expenses incurred while acting
at the request of or in the service of the Employers and reasonable expenses for
attendance at annual and other periodic meetings of trade
associations.  Expenses will be reimbursed if they are submitted in
accordance with the Employers’ policies and procedures.

    

    (c)           Automobile.  The Employers
shall provide the Executive with, and the Executive shall have the primary use
of, an automobile owned or leased by the Employers. The Employers shall pay (or
reimburse the Executive) for all expenses of insurance, registration, operation
and maintenance of the automobile.  The Executive shall comply with
reasonable reporting and expense limitations on the use of such automobile, as
the Employers may establish from time to time, and the Employers shall annually
include on the Executive’s Form W-2 any amount attributable to the Executive’s
personal use of such automobile.

    

    (d)           Facilities.  The Employers
will furnish the Executive with the working facilities and staff customary for
executive officers with the comparable titles and duties of the Executive as set
forth in Sections 1.1 and 1.2 of this Agreement and as are necessary for the
Executive to perform his duties.  The location of such facilities and
staff shall be at the principal administrative offices of the
Bancorp.

    

    2.3          Vacation;
Paid Time Off, Other Leave. The Executive shall be
entitled to at least thirty (30) days of combined sick leave, paid annual
vacation and other paid time off in accordance with policies established from
time to time by the Employers.  In addition to paid vacations and
other leave, the boards of directors may grant the Executive a leave or leaves
of absence, with or without pay, at such time or times and upon such terms and
conditions as the boards of directors may determine.

    

    2.4          Insurance. The Employers shall maintain
or cause to be maintained liability insurance in the form of directors and
officers insurance and such other forms of insurance as may be provided covering
the Executive throughout the term of this Agreement.

    

    ARTICLE
3 - EMPLOYMENT TERMINATION

    

    3.1          Termination
Because of Death or Disability.

    

    (a)           Death. The Executive’s employment
shall terminate automatically at the Executive’s death. If the Executive dies in
active service to the Employers, the Executive’s estate shall receive any sums
due to the Executive as base salary and reimbursement of expenses through the
end of the calendar month in which his death occurred.

    
      
         

      

      
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    (b)           Disability. By delivery of written
notice thirty (30) days in advance to the Executive, the Employers may terminate
the Executive’s employment if the Executive is disabled.  For purposes
of this Agreement the Executive shall be considered “disabled” if an independent
physician selected by the Employers and reasonably acceptable to the Executive
or the Executive’s legal representative determines that, because of illness or
accident, the Executive is unable to perform the Executive’s duties and will be
unable to perform the Executive’s duties for a period of ninety (90) consecutive
days.  The Executive shall not be considered disabled, however, if the
Executive returns to work on a full-time basis within thirty (30) days after the
Employers gives notice of termination due to disability.  If the
Executive is terminated by either of the Bancorp or the Bank because of
disability, the Executive’s employment with the other shall also terminate at
the same time.  During the period of incapacity leading up to the
termination of the Executive’s employment under this provision, the Employers
shall continue to pay the full Base Salary at the rate then in effect and all
perquisites and other benefits (other than bonus) until the Executive becomes
eligible for benefits under any disability plan or insurance program maintained
by the Employers, provided that the amount of the payments by the Employers to
the Executive under this Section 3.1(b) shall be reduced by the sum of the
amounts, if any, payable to the Executive for the same period under any
disability benefit or pension plan covering the Executive.

    

    3.2          Involuntary
Termination with Just Cause. The Employers may terminate
the Executive’s employment for Just Cause.  If the Executive’s
employment terminates for Just Cause, the Executive shall receive the Base
Salary through the date on which termination becomes effective and reimbursement
of expenses to which the Executive is entitled when termination becomes
effective.  If the Executive is terminated for Just Cause by either of
the Bancorp or the Bank, the Executive shall be deemed also to have been
terminated for Just Cause by the other.  The Executive shall not be
deemed to have been terminated for Just Cause under this Agreement unless and
until there is delivered to the Executive a copy of a resolution adopted at a
meeting of the board(s) of directors called and held for the purpose, which
resolution shall (x) contain findings that the Executive has committed an act
constituting Just Cause, and (y) specify the particulars thereof.  The
resolution of the boards of directors shall be deemed to have been duly adopted
if and only if it is adopted by the affirmative vote of a majority of the
directors of the Bancorp then in office or a majority of the directors of the
Bank then in office, in either case excluding the Executive.  Notice
of the meeting and the proposed termination for Just Cause shall be given to the
Executive a reasonable time before the meeting of the board of
directors.  The Executive and the Executive’s counsel (if the
Executive chooses to have counsel present) shall have a reasonable opportunity
to be heard by the board of directors at the meeting. For purposes of this
Agreement “Just Cause” means any of the following:

    

    
      	
               
      

            	
              (1)

            	
              Personal
      dishonesty;

            

    

    
      	
               
      

            	
              (2)

            	
              Willful
      misconduct;

            

    

    
      	
               
      

            	
              (3)

            	
              Breach
      of fiduciary duty involving personal
profit;

            

    

    
      	
               
      

            	
              (4)

            	
              Intentional
      failure to perform stated
duties;

            

    

    
      
         

      

      
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              (5)

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

            

    

    
      	
               
      

            	
              (6)

            	
              Material
      breach of any provision of this
Agreement.

            

    

    

    3.3          Voluntary
Termination by the Executive Without Good Reason. If the Executive terminates
employment without Good Reason, the Executive shall receive the Base Salary and
expense reimbursement to which the Executive is entitled through the date on
which termination becomes effective.

    

    3.4          Involuntary
Termination Without Just Cause and Voluntary Termination with Good
Reason. With
written notice to the Executive thirty (30) days in advance, the Employers may
terminate the Executive’s employment without Just Cause.  If the
Executive is terminated without Just Cause by either of the Bancorp or the Bank,
the Executive shall be deemed also to have been terminated without Just Cause by
the other.  Termination shall take effect at the end of the thirty
(30) day period.  With advance written notice to the Employers as
provided in clause (y), the Executive may terminate employment for Good
Reason.  If the Executive’s employment terminates involuntarily
without Just Cause or voluntarily but with Good Reason, the Executive shall be
entitled to the payments and benefits specified in Article 4 of this
Agreement.  For purposes of this Agreement a voluntary termination by
the Executive shall be considered a voluntary termination with Good Reason if
the conditions stated in both clauses (x) and (y) of this Section 3.4 are
satisfied:

    

    (x)           a
voluntary termination by the Executive shall be considered a voluntary
termination with Good Reason if any of the following occur without the
Executive’s written consent, and the term Good Reason shall mean the occurrence
of any of the following without the Executive’s written consent:

    

    (1)          a
material diminution of the Executive’s Base Salary,

    

    
      	
               
      

            	
              (2)

            	
              a
      material diminution of the Executive’s authority, duties,
      or   responsibilities,
or

            

    

    

    
      	
               
      

            	
              (3)

            	
              a
      change in the geographic location at which the Executive must perform
      services for the Employers by more than 35 miles from such location at the
      Effective Date.

            

    

    

    (y)           the
Executive must give notice to the Employers of the existence of one or more of
the conditions described in clause (x) within sixty (60) days after the initial
existence of the condition, and the Employers shall have thirty (30) days
thereafter to remedy the condition.  In addition, the Executive’s
voluntary termination because of the existence of one or more of the conditions
described in clause (x) must occur within six (6) months after the initial
existence of the condition.

    
      
         

      

      
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    ARTICLE
4 - SEVERANCE COMPENSATION

    

    4.1          Cash Severance after
Termination Without Just Cause or Termination for Good
Reason.

    

    (a)           Subject
to the possibility that cash severance after employment termination might be
delayed under Section 4.1(b), if the Executive’s employment terminates
involuntarily but without Just Cause or if the Executive voluntarily terminates
employment with Good Reason, the Executive shall for the unexpired term of this
Agreement and in accordance with the Employers’ regular pay practices continue
to receive the Base Salary in effect at employment.  However, the
Employers and the Executive acknowledge and agree that the compensation and
benefits under this Section 4.1 shall not be payable if compensation and
benefits are payable or shall have been paid to the Executive under Article 5 of
this Agreement.

    

    (b)           If
when employment termination occurs the Executive is a “specified employee”
within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) if the cash severance payment under Section 4.1(a) would be
considered deferred compensation under Section 409A of the Code, and if an
exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of
the Code is not available, the Executive’s continued Base Salary under Section
4.1(a) for the first six months after employment termination shall be paid to
the Executive in a single lump sum without interest on the first payroll date of
the seventh (7th) month
after the month in which the Executive’s employment terminates. References in
this Agreement to Section 409A of the Code include rules, regulations, and
guidance of general application issued by the Department of the Treasury under
Internal Revenue Section 409A of the Code.

    

    4.2          Post-Termination Insurance
Coverage.

    

    (a)           If
the Executive’s employment terminates involuntarily but without Just Cause or
voluntarily but with Good Reason, or because of disability, the Employers shall
continue or cause to be continued at the Employers’ expense medical insurance
benefits for the Executive and any of his dependents covered at the time of his
termination.  The medical insurance benefits shall continue until the
first to occur of (w) the Executive’s return to employment with the Employers or
another employer, (x) the Executive’s attainment of age 65, (y) the Executive’s
death, or (z) the end of the term remaining under this Agreement when the
Executive’s employment terminates.

    

    (b)           If
(x) under the terms of the applicable policy or policies for the insurance
benefits specified in section 4.2(a) it is not possible to continue coverage for
the Executive and his dependents, or (y) when employment termination occurs the
Executive is a “specified employee” within the meaning of Section 409A of the
Code, if any of the continued insurance coverage benefits specified in Section
4.2(a) would be considered deferred compensation under Section 409A of the Code,
and if an exemption from the six-month delay requirement of Section
409A(a)(2)(B)(i) of the Code is not available for that particular insurance
benefit, the Employers shall pay to the Executive in a single lump sum an amount
in cash equal to the present value of the Employers’ projected cost to maintain
that particular insurance benefit (and associated income tax gross-up benefit,
if applicable) had the Executive’s employment not terminated, assuming continued
coverage for 36 months. The lump-sum payment shall be made thirty (30) days
after employment termination or, if Section 4.1(b) applies, on the first payroll
date of the seventh (7th) month
after the month in which the Executive’s employment terminates.

    
      
         

      

      
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    ARTICLE
5 - CHANGE IN CONTROL BENEFITS

    

    5.1          Change in
Control Benefits.
If a Change in Control occurs during the term of this Agreement and, thereafter,
the Executive’s employment terminates involuntarily but without Just Cause or if
the Executive voluntarily terminates employment with Good Reason, the Employers
shall make or cause to be made a lump-sum payment to the Executive in an amount
in cash equal to three (3) times the Executive’s average annual
compensation.  For this purpose, average annual compensation means the
Executive’s taxable income reported by the Employers (or any affiliate of the
Employers) for the five (5) calendar years immediately preceding the calendar
year in which the Change in Control occurs.  Subject to Section 4.1(b)
of this Agreement, the payment required under this paragraph is payable no later
than five (5) business days after the Executive’s termination of
employment.  If the Executive receives payment under this Section 5.1,
the Executive shall not be entitled to any additional severance benefits under
Section 4.1 of this Agreement.  In addition, the Employers shall
provide the Executive with the post-termination insurance coverage described in
Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b) of
this Agreement.

    

    5.2          Change in
Control Defined.
For purposes of this Agreement “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:

    

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

    

    (b)           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 Bancorp stock possessing 30% or more of
the total voting power of 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

    

    (c)           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.

    
      
         

      

      
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    5.3          Excise
Taxes Under Certain Circumstances.

    

    (a)           Covered
Benefits.
“Covered Benefits” shall mean any payment or benefit paid or provided to the
Executive by the Employers or any affiliate or any successor in interest to the
Employers (whether pursuant to this Agreement or otherwise) that will be (or in
the opinion of Tax Counsel (as defined below) might reasonably be expected to
be) subject to any excise tax (the “Excise Tax”) imposed under Section 4999 of
the Internal Revenue Code of 1986, as amended.  In the event that at
any time during or after the Term of Employment the Executive shall receive any
Covered Benefits, the Employers shall pay to the Executive an additional amount
(the “Gross-Up Payment”) such that the net amount retained by the Executive from
the Gross-Up Payment, after deduction of any federal, state and local income
taxes, Excise Tax, and FICA and Medicare withholding taxes on the Gross-Up
Payment, shall be equal to the Excise Tax on the Covered
Benefits.  For purposes of determining the amount of such Excise Tax
on the Covered Benefits, the amount of the Covered Benefits that shall be taken
into account in calculating the Excise Tax shall be equal to (i) the Covered
Benefits, less (ii) the amount of such Covered Benefits that, in the opinion of
tax counsel selected by the Employers and reasonably acceptable to the Executive
(“Tax Counsel”), are not parachute payments (within the meaning of Section
280G(b)(1) of the Code).

    

    (b)           Certain
Assumptions. For
purposes of this Section 5.3, the Executive shall be deemed to pay federal
income taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Excise Tax is payable and state and local income
taxes at the highest marginal rate of taxation in the state and locality of the
Executive’s residence on the effective date of the Executive’s termination, net
of the reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.  Except as otherwise provided herein,
all determinations required to be made under this Section 5.3 shall be made by
Tax Counsel, which determinations shall be conclusive and binding on the
Executive and the Employers, absent manifest error.

    

    (c)           Tax
Indemnification.
The Employers shall indemnify and hold the Executive harmless from any
and all losses, costs and expenses (including without limitation, reasonable
attorney’s fees, reasonable accountant’s fees, interest, fines and penalties of
any kind) which the Executive incurs as a result of any administrative or
judicial review of the Executive’s liability under Section 4999 of the Code by
the Internal Revenue Service or any comparable state agency through and
including a final judicial determination or final administrative settlement of
any dispute arising out of the Executive’s liability for the Excise Tax or
otherwise relating to the classification for purposes of Section 280G of the
Code of any of the Covered Benefits or other payment or benefit in the nature of
compensation made or provided to the Executive by the Employers or any
affiliate.  The Executive shall promptly notify the Employers in
writing whenever the Executive receives notice of the commencement of any
judicial or administrative proceeding, formal or informal, in which the federal
tax treatment under Section 4999 of the Code of any amount paid or payable under
this Agreement or otherwise is being reviewed or is in dispute (including a
notice of audit or other inquiry concerning the reporting of the Executive’s
liability under Section 4999).  The Employers may assume control at
their expenses over all legal and account matters pertaining to such federal or
state tax treatment (except to the extent necessary or appropriate for the
Executive to resolve any such proceeding with respect to any matter unrelated to
the Covered Benefits or other payment or benefit in the nature of compensation
made or provided to the Executive by the Employers) and the Executive shall
cooperate fully with the Employers in any such proceeding.  The
Executive shall not enter into any compromise or settlement or otherwise
prejudice any rights the Employers may have in connection therewith without
prior consent of the Employers.  In the event that the Employers elect
not to assume all control over such matters, the Employers shall promptly
reimburse the Executive for all expenses related thereto as and when incurred
upon presentation of appropriate documentation relating
thereto.

    
      
         

      

      
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    ARTICLE
6 - CONFIDENTIALITY AND CREATIVE WORK

    

    6.1          Non-disclosure. The Executive covenants and
agrees not to reveal to any person, firm, or corporation any confidential
information of any nature concerning the Employers or their business, or
anything connected therewith. As used in this Article 6 the term “confidential
information” means all of the Employers’ and the Employers’ affiliates’
confidential and proprietary information and trade secrets in existence on the
date hereof or existing at any time during the term of this Agreement, including
but not limited to:

    

    (a)           the
whole or any portion or phase of any business plans, financial information,
purchasing data, supplier data, accounting data, or other financial
information,

    

    (b)           the
whole or any portion or phase of any research and development information,
design procedures, algorithms or processes, or other technical
information,

    

    (c)           the
whole or any portion or phase of any marketing or sales information, sales
records, customer lists, prices, sales projections, or other sales information,
and

    

    (d)           trade
secrets, as defined from time to time by the laws of Maryland.  This
Section 6.1 does not prohibit disclosure required by an order of a court having
jurisdiction or a subpoena from an appropriate governmental agency or disclosure
made by the Executive in the ordinary course of business and within the scope of
the Executive’s authority.

    

    6.2          Return of
Materials. The
Executive agrees to immediately deliver or return to the Employers upon
termination, upon expiration of this Agreement, or as soon thereafter as
possible, all written information and any other similar items furnished by the
Employers or prepared by the Executive in connection with the Executive’s
services hereunder and to immediately delete all electronically stored data of
the Employers maintained on the Executive’s personal computers and to return all
employer-provided computers or communication devices (i.e., laptop, Blackberry,
PDA, etc.).  The Executive will retain no copies thereof after
termination of this Agreement or termination of the Executive’s
employment.

    
      
         

      

      
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    6.3          Creative
Work. The
Executive agrees that all creative work and work product, including but not
limited to all technology, business management tools, processes, software,
patents, trademarks, and copyrights developed by the Executive during the term
of this Agreement, regardless of when or where such work or work product was
produced, constitutes work made for hire, all rights of which are owned by the
Employers.  The Executive hereby assigns to the Employers all rights,
title, and interest, whether by way of copyrights, trade secret, trademark,
patent, or otherwise, in all such work or work product, regardless of whether
the same is subject to protection by patent, trademark, or copyright
laws.

    

    6.4          Affiliates’
Confidential Information is Covered; Confidentiality Obligation Survives
Termination. For
purposes of this Agreement, the term “affiliate” of the Employers includes any
entity that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with the Bancorp or the
Bank. The rights and obligations set forth in this Article 6 shall survive
termination of this Agreement.

    

    6.5          Injunctive
Relief. The
Executive acknowledges that it is impossible to measure in money the damages
that will accrue to the Employers if the Executive fails to observe the
obligations imposed by this Article 6.  Accordingly, if the Employers
institutes an action to enforce the provisions hereof, the Executive hereby
waives the claim or defense that an adequate remedy at law is available to the
Employers, and the Executive agrees not to urge in any such action the claim or
defense that an adequate remedy at law exists.  The confidentiality
and remedies provisions of this Article 6 shall be in addition to and shall not
be deemed to supersede or restrict, limit, or impair the Employers’ rights under
applicable state or federal statute or regulation dealing with or providing a
remedy for the wrongful disclosure, misuse, or misappropriation of trade secrets
or proprietary or confidential information.

    

    ARTICLE
7 - COMPETITION AFTER EMPLOYMENT TERMINATION

    

    7.1          Covenant
Not to Solicit Employees. The Executive agrees not to,
directly or indirectly, solicit or employ the services of any officer or
employee of the Employers (including an individual who was an officer or
employee of the Employers during the one year period following the Executive’s
termination) for two years after the Executive’s employment
termination.

    

    7.2          Covenant
Not to Compete.

    

    (a)           The
Executive covenants and agrees not to compete directly or indirectly with the
Employers for one year after employment termination. For purposes of this
Section 7.2:

    

    (1)          the
term compete
means:

    

    
      	
               
      

            	
              (i)

            	
              providing
      financial products or services on behalf of any financial institution for
      any person residing in the
territory,

            

    

    

    
      	
               
      

            	
              (ii)

            	
              assisting
      (other than through the performance of ministerial or clerical duties) any
      financial institution in providing financial products or services to any
      person residing in the territory,
or

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (iii)

            	
              inducing
      or attempting to induce any person who was a customer of the Employers at
      the date of the Executive’s employment termination to seek financial
      products or services from another financial
  institution.

            

    

    

    (2)          the
words directly or indirectly mean:

    

    
      	
               
      

            	
              (i)

            	
              acting
      as a consultant, officer, director, independent contractor, or employee of
      any financial institution in competition with the Employers in the
      territory, or

            

    

    

    
      	
               
      

            	
              (ii)

            	
              communicating
      to such financial institution the names or addresses or any financial
      information concerning any person who was a customer of the Employers when
      the Executive’s employment
terminated.

            

    

    

    
      	
               
      

            	
              (3)

            	
              the
      term customer
      means any person to whom the Employers are providing financial products or
      services on the date of the Executive’s employment termination or within
      one year thereafter.

            

    

    

    
      	
               
      

            	
              (4)

            	
              the
      term financial
      institution means any bank, savings association, or bank or savings
      association holding company, or any other institution, the business of
      which is engaging in activities that are financial in nature or incidental
      to such financial activities as described in Section 4(k) of the Bank
      Holding Company Act of 1956, other than the Employers or any of their
      affiliated corporations.

            

    

    

    
      	
               
      

            	
              (5)

            	
              financial product or
      service means any product or service that a financial institution
      or a financial holding company could offer by engaging in any activity
      that is financial in nature or incidental to such a financial activity
      under Section 4(k) of the Bank Holding Company Act of 1956 and that is
      offered by the Employers or an affiliate on the date of the Executive’s
      employment termination, including but not limited to banking activities
      and activities that are closely related and a proper incident to
      banking.

            

    

    

    
      	
               
      

            	
              (6)

            	
              the
      term person means
      any individual or individuals, corporation, partnership, fiduciary or
      association.

            

    

    

    
      	
               
      

            	
              (7)

            	
              the
      term territory
      means the area within a 25-mile radius of any office of the Employers at
      the date of the Executive’s employment
  termination.

            

    

    

    (b)           If
any provision of this section or any word, phrase, clause, sentence or other
portion thereof (including, without limitation, the geographical and temporal
restrictions contained therein) is held to be unenforceable or invalid for any
reason, the unenforceable or invalid provision or portion shall be modified or
deleted so that the provisions hereof, as modified, are legal and enforceable to
the fullest extent permitted under applicable law.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (c)           The
Executive acknowledges that the Employers’ willingness to enter into this
Agreement and to make the payments contemplated by Articles 3 and 4 of this
Agreement is conditioned on the Executive’s acceptance of the covenants set
forth in Articles 6 and 7 of this Agreement and that the Employers would not
have entered into this Agreement without such covenants in force.

    

    7.3          Injunctive
and Other Relief.
Because of the unique character of the services to be rendered by the
Executive hereunder, the Executive understands that the Employers would not have
an adequate remedy at law for the material breach or threatened breach by the
Executive of any one or more of the Executive’s covenants in this Article
7.  Accordingly, the Executive agrees that the Employers’ remedies for
a breach of this Article 7 include, but are not limited to, (x) forfeiture of
any money representing accrued salary, contingent payments, or other fringe
benefits (including any amount payable pursuant to Article 4) due and payable to
the Executive during the period of any breach by Executive, and (y) a suit in
equity by the Employers to enjoin the Executive from the breach or threatened
breach of such covenants. The Executive hereby waives the claim or defense that
an adequate remedy at law is available to the Bank and the Executive agrees not
to urge in any such action the claim or defense that an adequate remedy at law
exists. Nothing herein shall be construed to prohibit the Employers from
pursuing any other or additional remedies for the breach or threatened
breach.

    

    7.4          Article 7
Survives Termination But Is Void After a Change in Control. The rights and obligations
set forth in this Article 7 shall survive termination of this
Agreement.  However, Article 7 shall become null and void effective
immediately upon a Change in Control.

    

    ARTICLE 8 - MISCELLANEOUS

    

    8.1          Successors
and Assigns.

    

    (a)           This
Agreement shall be binding upon the Employers and any successor to the
Employers, including any persons acquiring directly or indirectly all or
substantially all of the business or assets of the Employers by purchase,
merger, consolidation, reorganization, or otherwise.  But this
Agreement and the Employers’ obligations under this Agreement are not otherwise
assignable, transferable, or delegable by the Employers.  By agreement
in form and substance satisfactory to the Executive, the Employers shall require
any successor to all or substantially all of the business or assets of the
Employers expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Employers would be required to perform had no
succession occurred.

    

    (b)           This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, and legatees.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    (c)           Without
written consent of the other parties, no party shall assign, transfer, or
delegate this Agreement or any rights or obligations under this Agreement,
except as expressly provided herein.  Without limiting the generality
or effect of the foregoing, the Executive’s right to receive payments hereunder
is not assignable or transferable, whether by pledge, creation of a security
interest, or otherwise, except for a transfer by the Executive’s will or by the
laws of descent and distribution. If the Executive attempts an assignment or
transfer that is contrary to this Section 8.1, the Employers shall have no
liability to pay any amount to the assignee or transferee.

    

    8.2          Governing
Law, Jurisdiction and Forum. This Agreement shall be
construed under and governed by the internal laws of the State of Maryland,
without giving effect to any conflict of laws provision or rule that would cause
the application of the laws of any jurisdiction other than
Maryland.  By entering into this Agreement, the Executive acknowledges
that the Executive is subject to the jurisdiction of both the federal and state
courts in Maryland.

    

    8.3          Entire
Agreement. This
Agreement sets forth the entire agreement of the parties concerning the
employment of the Executive by the Employers.  Any oral or written
statements, representations, agreements, or understandings made or entered into
prior to or contemporaneously with the execution of this Agreement are hereby
rescinded, revoked, and rendered null and void by the parties.

    

    8.4          Notices. All notices, requests,
demands, and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand or mailed, certified or
registered mail, return receipt requested, with postage
prepaid.  Unless otherwise changed by notice, notice shall be properly
addressed to the Executive if addressed to the address of the Executive on the
books and records of the Employers at the time of the delivery of such notice,
and properly addressed to the Employers if addressed to the boards of directors
of the Bancorp and the Bank at the Bancorp’s executive offices.

    

    8.5          Severability. If there is a conflict
between any provision of this Agreement and any statute, regulation, or judicial
precedent, the latter shall prevail, but the affected provisions of this
Agreement shall be curtailed and limited solely to the extent necessary to bring
them within the requirements of law.  If any provisions of this
Agreement is held by a court of competent jurisdiction to be indefinite,
invalid, void or voidable, or otherwise unenforceable, the remainder of this
Agreement shall continue in full force and effect unless that would clearly be
contrary to the intentions of the parties or would result in an
injustice.

    

    8.6          Captions
and Counterparts.
The captions in this Agreement are solely for convenience. The captions do not
define, limit, or describe the scope or intent of this
Agreement.  This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.

    

    8.7          No Duty
to Mitigate.  The Executive
shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment. Moreover, provided the Executive is not
in breach of any obligation under Articles 6 and 7 of this Agreement, the amount
of any payment provided for in this Agreement shall not be reduced by any
compensation earned or benefits provided as the result of employment of the
Executive or as a result of the Executive being self-employed after employment
termination.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    8.8          Amendment
and Waiver. This
Agreement may not be amended, released, discharged, abandoned, changed, or
modified in any manner, except by an instrument in writing signed by each of the
parties hereto.  The failure of any party hereto to enforce at any
time any of the provisions of this Agreement shall not be construed to be a
waiver of any such provision, nor affect the validity of this Agreement or any
part thereof or the right of any party thereafter to enforce each and every such
provision.  No waiver or any breach of this Agreement shall be held to
be a waiver of any other or subsequent breach.

    

    8.9          Compliance
with Internal Revenue Code Section 409A. The Employers and the
Executive intend that their exercise of authority or discretion under this
Agreement shall comply with Section 409A of the Code.  If any
provision of this Agreement does not satisfy the requirements of Section 409A of
the Code, such provision shall nevertheless be applied in a manner consistent
with those requirements.  If any provision of this Agreement would
subject the Executive to additional tax or interest under Section 409A of the
Code, the Employers shall reform the provision.  However, the
Employers shall maintain to the maximum extent practicable the original intent
of the applicable provision without subjecting the Executive to additional tax
or interest, and the Employers shall not be required to incur any additional
compensation expense as a result of the reformed provision.

    

    8.10       Troubled Assets Relief
Program Capital Purchase Program

    

    (a)           No
Golden Parachute Payments. Notwithstanding anything herein to the
contrary, the Employers shall not make any golden parachute payment to the
Executive during any period (a “CPP Covered Period”) during which (A) the
Executive is a senior executive officer and (B) the United States
Department of the Treasury holds an equity or debt position acquired from the
Employers in the Troubled Assets Relief Program Capital Purchase Program
(“CPP”).  If the payments and benefits provided under any
compensation, bonus, incentive or other benefit plan, arrangement or agreement
(including golden parachute, severance or employment agreement) with the
Executive or in which the Executive participates (collectively, “Benefit Plans”)
would exceed the golden parachute limitations of the CPP, the payments and
benefits shall be reduced or revised, in the manner determined by the Executive
(subject to the next sentence), by the amount, if any, which is the minimum
necessary to result in no portion of the payments and benefits exceeding the
limitations.  The Employers, at their expense, will determine the
extent of any reduction in the payments and benefits to be made pursuant to this
paragraph.  In addition, the Employers are required to review the
Benefit Plans to ensure that they do not encourage senior executive officers to
take unnecessary and excessive risks that threaten the value of the Employers.
To the extent any such review requires revisions to any Benefit Plan with
respect to the Executive, the Executive and the Employers agree to negotiate
such changes promptly and in good faith.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (b)           Recovery
of Bonus and Incentive Compensation. Any bonus and incentive
compensation paid to the Executive during a CPP Covered Period is subject to
recovery or “clawback” by the Employers if the payments were based on materially
inaccurate financial statements or any other materially inaccurate performance
metric criteria.

    

    (c)           Definitions
and Interpretation. This Section 8.10 shall be interpreted as
follows:

     

    (i)           “Senior
executive officer” means the Employers’ “senior executive officers” as defined
in subsection 111(b)(3) of EESA and 31 C.F.R. § 30.2.

     

    (ii)          “Golden
parachute payment” has the meaning given to such term in
Section 111(b)(2)(C) of EESA and 31 C.F.R. § 30.9.

    

    (iii)         “EESA”
means the Emergency Economic Stabilization Act of 2008.

     

    (iv)         The
term “Employers” includes any entities treated as a single employer with the
Employers under 31 C.F.R. § 30.1(b).

     

    (v)          The
term “CPP Covered Period” shall be limited by, and interpreted in a manner
consistent with, 31 C.F.R. § 30.11.

     

    (vi)         Provisions
(a) and (b) of this Section 8.10 are intended to, and will be
interpreted, administered and construed to, comply with Section 111 of EESA
(and, to the maximum extent consistent with the preceding, to permit operation
of the Benefit Plans in accordance with their terms before giving effect to this
Section 8.10).

    

    8.11        Regulatory
Provisions.  In the event any
of the foregoing provisions of this Agreement conflict with the terms of this
Section 8.11, this Section 8.11 shall prevail.

    

    (a)           The
Bank’s Board of Directors may terminate the Executive’s employment at any time,
but any termination by the Bank, other than termination for Just Cause, shall
not prejudice the Executive’s right to compensation or other benefits under this
Agreement.  The Executive shall not have the right to receive
compensation or other benefits for any period after termination for Just Cause
as defined in Section 3.2 of this Agreement.

    

    (b)           If
the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served under
Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
Section 1818(e)(3) or (g)(1), the Bank’s obligations under this Agreement shall
be suspended as of the date of service, unless stayed by appropriate
proceedings.  If the charges in the notice are dismissed, the Bank
may, in its discretion:  (i) pay the Executive all or part of the
compensation withheld while its contract obligations were suspended; and (ii)
reinstate (in whole or in part) any of the obligations which were
suspended.

    

    (c)           If
the Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1818(e)(4) or
(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 contracting parties
shall not be affected.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    (d)           If
the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit
Insurance Act, 12 U.S.C. Section 1813(x)(1), all obligations under this
Agreement shall terminate  as of the date of default, but this
paragraph shall not affect any vested rights of the contracting
parties.

    

    (e)           Any
payments made to the Executive pursuant to this Agreement, or otherwise, are
subject to, and conditioned upon, their compliance with 12 U.S.C. Section
1828(k) and FDIC Regulation 12 C.F.R. Part 359, Golden Parachute and
Indemnification Payments.

    

    IN WITNESS WHEREOF, the
parties have executed this Employment Agreement as of the date first written
above.

    

    
      
        
          
            
              
                
                  
                    
                      	
                              SANDY
      SPRING BANCORP, INC.

                            
	 
      	 
      
	
                              By:

                            	
                              /s/ Hunter S. Hollar

                            
	 
      	
                              Chairman
      of the Board
      of Directors

                            
	 
      	 
      
	
                              SANDY
      SPRING BANK

                            
	 
      	 
      
	
                              By:

                            	
                              /s/ Hunter S. Hollar

                            
	 
      	
                              Chairman of the Board of
      Directors

                            
	 
      	 
      
	
                              EXECUTIVE

                            
	 
      	 
      
	
                              /s/ Daniel J. Schrider

                            
	
                              Daniel
      J.
Schrider

                            

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        16Exhibit
10(o)

     

    FORM
OF

    

    Amendment

    

    Directors’ Fee Deferral
Agreement 

    

    This
Amendment to the Directors’ Fee Deferral Agreement is entered into as of [date], by and between Sandy
Spring Bank (referred to as the “Bank”), and [name] (the
“Director”).

     

    WHEREAS,
the Director and the Bank previously entered into a Directors’ Fee Deferral
Agreement dated [date]
(the “Deferral Agreement”) pursuant to which the Director deferred the receipt
of directors’;

     

    WHEREAS,
the Director has not deferred director’s fees pursuant to the Deferral Agreement
for any period of time after December 31, 2004, and, thus the Deferral Agreement
is intended to be grandfathered for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended (the “pre-409A document”); and

    

    WHEREAS,
the Director has deferred director’s fees pursuant to another document since
January 1, 2005, which meet the requirements of Section 409A of the Internal
Revenue Code (the “post-409A document”); and

    

    WHEREAS,
the Director and the Bank desire to make an amendment to the Deferral Agreement
to coordinate benefits under the pre-409A and post-409A documents;
and

    

    WHEREAS,
the parties intend that this amendment not be considered “material” for purposes
of causing the pre-409A document to have to meet the requirements of Section
409A of the Internal Revenue Code.

     

    NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
the Deferral Agreement as follows:

    

    1.  Section
5.1.1 is deleted in its entirety and replaced with the following new Section
5.1.1 to read as follows:

    

    5.1.1    Insurance Policy in
Effect.  If the Director dies while the Insurance Policy is
validly in effect, the benefit under Section 5.1 is the greater of (a) the
applicable Projected Benefit for the payment method in effect at death as shown
on the last effective annual statement of insurance benefit prepared for
delivery to the Director under this plan, or (b) the sum of (i) the payout of
the Deferral Account balance at the date of the Director’s death under the
payment method in effect at death under this plan plus (ii) Deferral Account
balance at the date of the Director’s death under the Sandy Spring Bank
Directors’ Deferred Compensation Plan.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the parties have
duly executed and delivered this Amendment to the Deferral Agreement, or have
caused this Amendment to the Deferral Agreement to be duly executed and
delivered in their name and on their behalf, as of the day and year first above
written.

    

    SANDY
SPRING BANK

    

    
      
        
          
            
              
                
                  	
                          By:

                        	 
      
	 
      	 
      
	
                          Title:

                        	 
      
	 
      	 
      
	
                          DIRECTOR

                        
	 
      	 
      
	 
      	 
      
	
                          Name

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