Document:

ex_456905.htm

 

Exhibit 10.1

 

EXECUTION VERSION

 

SETTLEMENT AGREEMENT AND RELEASE

 

This Settlement Agreement and Release (this “Agreement”), dated December 14, 2022 (the “Effective Date”), is by and among Rocky Mountain Chocolate Factory, Inc. (“RMCF,” “Plaintiff,” or the “Company”), Bradley L. Radoff (“Radoff”), Andrew T. Berger (“Berger”), AB Value Partners, LP (“AB Value Partners”), AB Value Management LLC (“AB Value Management” and, together with AB Value Partners, “AB Value”), and Mary Bradley (“Bradley”) (each a “Party” and, collectively, the “Parties”). Radoff and AB Value are collectively referred to herein as the “ABV-Radoff Defendants.” The ABV-Radoff Defendants, Berger, and Bradley are collectively referred to herein as “Defendants.”

 

RECITALS

 

WHEREAS the Company held its 2021 Annual Stockholders’ Meeting on October 6, 2021 (the “2021 Annual Meeting”);

 

WHEREAS AB Value filed a lawsuit on or about September 23, 2021, in the Court of Chancery of the State of Delaware, Case No. 2021-0819, against Bryan J. Merryman (“Merryman”), Rahul Mewawalla (“Mewawalla”), Franklin E. Crail (“Crail”), Brett P. Seabert (“Seabert”), and Jeffrey R. Geygan (“Geygan” and, together with Merryman, Mewawalla, Crail, and Seabert, the “2021 Defendant Directors”) and the Company, alleging wrongdoing regarding the 2021 Annual Meeting (the “2021 Lawsuit”);

 

WHEREAS the Company has moved to dismiss the 2021 Lawsuit;

 

WHEREAS on August 13, 2022, the Company and the ABV-Radoff Defendants entered into a “Cooperation Agreement”;

 

WHEREAS on August 15, 2022, the Company’s attorneys provided the ABV-Radoff Defendants with notice alleging that the Company believed it had been fraudulently induced into executing the Cooperation Agreement and that the Cooperation Agreement was therefore null and void;

 

WHEREAS the Company held its 2022 Annual Stockholders’ Meeting on August 18, 2022;

 

WHEREAS the Company filed a lawsuit on September 28, 2022, in the Court of Chancery of the State of Delaware, Case No. 2022-0866, against Defendants, alleging wrongdoing regarding Defendants’ 2022 proxy campaign and the Cooperation Agreement (the “2022 Lawsuit”);

 

WHEREAS Defendants have moved to dismiss the 2022 Lawsuit;

 

WHEREAS the Parties wish to resolve all claims between them in accordance with the terms and conditions contained herein and without any admission or determination of culpability;

 

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NOW, THEREFORE in consideration of, and reliance upon, the promises, representations, mutual covenants, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

 

	
			1.

				
			Board Representation and Board Matters

			

 

	 	
			(a)

				
			The Company and each of the ABV-Radoff Defendants agree as follows:

			

 

i.    [Intentionally Deleted.]

 

ii.    the ABV-Radoff Defendants, by the ABV-Radoff Defendants Representative (as defined below), may together designate a female director candidate (the “New Director”) with at least 5 years of fast-moving consumer goods franchise operational experience and 3 years of prior public company board experience who qualifies as an independent director under Rule 5605 of the Nasdaq Listing Rules (the “Applicable Criteria”). Subject to the Company’s board of director’s (“Board”) reasonable approval of the New Director (such approval not to be unreasonably withheld), the Board shall take all action necessary to appoint the New Director to serve as a member of the Board with a term expiring at the Company’s 2023 annual meeting of stockholders (the “2023 Annual Meeting”) within ten (10) business days following the New Director’s satisfactory completion of the requirements of Section 1(b);

 

iii.    if during the Standstill Period (as defined below), the New Director is unable to serve on the Board for any reason or the Board determines, in the good faith exercise of the directors’ fiduciary duties, to not nominate her for election at the 2023 Annual Meeting and/or the 2024 annual meeting of stockholders (“2024 Annual Meeting”), the ABV-Radoff Defendants shall be entitled to identify a replacement female director candidate who meets the Applicable Criteria (any such director appointed to the Board in connection with such replacement right, a “Replacement Director”) and who is reasonably acceptable to the Nominating Committee of the Board and the Board (such acceptance not to be unreasonably withheld, and subject to such Replacement Director providing the items and information set forth in Section 1(b) of this Agreement), and such Replacement Director shall be appointed to the Board. It being understood, for the avoidance of doubt, that such Replacement Director shall thereafter be deemed the “New Director” for the purposes of this Agreement and be entitled to the same rights and subject to the same requirements under this Agreement applicable to the replaced director prior to such person ceasing to be a director, and such person shall be (i) appointed to the Board to serve the unexpired term, if any, of such replaced director, and (ii) appointed to serve on all applicable committees on which such replaced director was a member immediately prior to such director’s resignation or removal, subject to (i) the Board’s reasonable approval (such approval not to be unreasonably withheld), and (ii) the Nasdaq Listing Rules and applicable law. Any Replacement Director designated pursuant to this Section 1(a)(iii) prior to the mailing of the Company’s definitive proxy statement for the 2023 Annual Meeting shall stand for election at the 2023 Annual Meeting. Any Replacement Director designated pursuant to this Section 1(a)(iii) after the 2023 Annual Meeting and prior to the mailing of the Company’s definitive proxy statement for the 2024 Annual Meeting shall stand for election at the 2024 Annual Meeting together with the Company’s other director nominees;

 

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iv.    promptly following the appointment of the New Director to the Board, the Board shall take the necessary steps to appoint the New Director to the Company’s Nominating and Corporate Governance Committee and its Audit Committee, subject to (i) the Board’s reasonable approval (such approval not to be unreasonably withheld), and (ii) the New Director’s qualification to serve on such committee(s) under the Nasdaq Listing Rules and the applicable U.S. Securities and Exchange Commission (“SEC”) rules and regulations, and the New Director shall serve on these committees for so long as the New Director serves as a member of the Board and remains qualified to serve on such committee(s) under the Nasdaq Listing Rules and the applicable SEC rules and regulations;

 

v.    following the appointment of the New Director, the New Director shall have the same rights and limitations with respect to those rights, as any other director with respect to attending meetings of, or receiving information provided to, any Board committees on which the New Director is not appointed;

 

vi.    the Parties agree that the Board’s power to determine the number of directors and increase or decrease the number of directors is not limited by this Agreement other than the Company must cause the number of directors to be sufficient to permit the appointment of the New Director at the time required in Section 1(a)(ii) above and, subject to Section 1(b) below, the election of the New Director at the 2023 Annual Meeting and the 2024 Annual Meeting; and

 

vii.    the Company agrees to nominate the New Director for election at the 2023 Annual Meeting and the 2024 Annual Meeting and use its reasonable efforts to cause the election of the New Director at such meetings (including, but not limited to, soliciting on behalf of the New Director and recommending that the Company’s stockholders vote in favor of the election of the New Director) and otherwise supporting the election of the New Director in a manner no less rigorous and favorable than the manner in which the Company supports, and has historically supported, its other nominees in the aggregate.

 

(b)          As a condition to the New Director’s appointment as a director of the Company pursuant to Section 1(a)(ii), the New Director shall

 

(i)    meet the Applicable Criteria,

 

(ii)    have provided to the Company a completed and executed D&O questionnaire (substantially in the form completed by the Company’s incumbent, non-management directors and in the form previously provided to the ABV-Radoff Defendants by the Company), and (iii) have provided to the Company an executed consent from the New Director to be named as a nominee in the Company’s proxy statement(s) and to serve as a director if so elected. As a further condition to the New Director’s appointment as a director of the Company pursuant to Section 1(a)(ii), the New Director shall, as promptly as practicable upon request of the Company, provide (i) any information required to be or customarily disclosed for all applicable directors and candidates for directors in a proxy statement or other filings under applicable law or stock exchange rules or listing standards, (ii) reasonable information in connection with assessing eligibility, independence, and other criteria applicable to all directors or satisfying compliance and legal obligations applicable to all directors, and (iii) such other information as reasonably requested by the Company from time to time with respect to the ABV-Radoff Defendants or the New Director as required to be provided under the Company’s Amended and Restated Certificate of Incorporation and Bylaws (as defined below), as each may be amended from time to time (together, the “Company Organizational Documents”).

 

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(c)         Each Party acknowledges that the New Director must, at all times while serving as a member of the Board, comply with all policies, procedures, processes, codes, rules, standards, and guidelines applicable to all Board members, including, without limitation, the Company’s Code of Conduct, securities trading policies, anti-hedging policies, Regulation FD-related policies, director confidentiality policies, and other corporate governance policies (each, a “Policy”) and will be required to strictly adhere to the Company’s policies on confidentiality imposed on all members of the Board. The Company agrees that it will not amend any Policy or the Company Organizational Documents or take any other similar action for the express purpose of disqualifying the New Director from service on the Board. The Company agrees to indemnify, compensate, and reimburse the New Director in the same manner as other directors are indemnified, compensated, and reimbursed in connection with their service on the Board or any committee thereof.

 

	
			2.

				
			Voting Commitment

			

 

During the Standstill Period, each of the ABV-Radoff Defendants shall cause all shares of common stock of the Company, par value $0.001 (the “Common Stock”), that it Beneficially Owns, or is Beneficially Owned by any of their Affiliates or Associates over which it exercises or has voting authority, to be present for quorum purposes and to be voted as recommended by the Board on each matter to be voted on at any meetings of stockholders or at any adjournments or postponements thereof during the Standstill Period, including, without limitation, with respect to the election of directors; provided, however, that notwithstanding anything herein to the contrary, with respect to (a) any proposal relating to an Extraordinary Transaction (as defined herein), (b) stockholder proposed amendments to the Company Organizational Documents that limit stockholder votes, or (c) other than the election of directors, matters on which Institutional Shareholder Services, Inc. and Glass Lewis & Co., LLC have made recommendations that differ from any recommendation of the Board, each of the ABV-Radoff Defendants and their Affiliates and Associates may vote their shares of Common Stock in the sole discretion of such ABV-Radoff Defendant or their Affiliates or Associates, as applicable.

 

No fewer than three (3) business days prior to any meeting of stockholders during the Standstill Period, including any adjournments or postponements thereof, each of the ABV-Radoff Defendants shall deliver to the Company sufficient evidence that it has voted all shares of Common Stock that it Beneficially Owns, or is Beneficially Owned by any of their Affiliates or Associates over which it exercises or has voting authority, consistent with this Section 2.

 

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			3.

				
			No Litigation

			

 

(a)    Each Defendant covenants and agrees that, during the Standstill Period, it shall not, and shall not permit any of his, her or its Affiliates or Associates, or Representatives acting on his, her or its behalf, to, alone or in concert with others, knowingly encourage or pursue, or knowingly assist any other person to threaten, initiate or pursue, any lawsuit, claim or proceeding before any court or governmental, administrative, or regulatory body (collectively, a “Legal Proceeding”) against the Company or any of its Affiliates, Associates, or Representatives; provided, however, that the foregoing shall not prevent any Defendant or any of its Representatives from responding to oral questions, interrogatories, requests for information or documents, subpoenas, civil investigative demands, or similar processes (collectively, a “Legal Requirement”) in connection with any Legal Proceeding if: (i) such Legal Proceeding has not been initiated by, or on behalf of, or with the knowing material assistance of, any of the ABV-Radoff Defendants or any of their Affiliates, Associates, or Representatives; or (ii) the Company has Materially Breached (as defined herein) this Agreement; provided, further, that in the event that any of the Defendants or any of his, her or its Affiliates, Associates, or Representatives receives such Legal Requirement, such Defendant shall, unless prohibited by applicable law, give prompt written notice of such Legal Requirement to the Company. Notwithstanding the foregoing, nothing in this Section 3(a) shall prevent or restrict any Defendant from enforcing the terms of this Agreement.

 

(b)    The Company covenants and agrees that, during the Standstill Period, it shall not, and shall not permit any of its Affiliates or Associates, or Representatives acting on its behalf, to, alone or in concert with others, knowingly encourage or pursue, or knowingly support or assist any other person to threaten, initiate or pursue, any Legal Proceedings against any Defendant or any Defendant’s Affiliates, Associates or Representatives; provided, however, that the foregoing shall not prevent the Company or any of its Representatives from responding to a Legal Requirement in connection with any Legal Proceeding if: (i) such Legal Proceeding has not been initiated by, or on behalf of, or with the knowing material assistance of, the Company or any of its Affiliates, Associates, or Representatives; or (ii) a Defendant has Materially Breached this Agreement; provided, further, that in the event that the Company or any of its Representatives receives such Legal Requirement, the Company shall, unless prohibited by applicable law, give prompt written notice of such Legal Requirement to Defendants. Notwithstanding the foregoing, nothing in this Section 3(b) shall prevent or restrict the Company from enforcing the terms of this Agreement.

 

(c)    AB Value, as well as its current, former, and future Affiliates, Associates, partners, managers, affiliates, subsidiaries, parents, officers, directors, owners, representatives, agents, attorneys, trustees, successors, and assigns (collectively, the “ABV Releasors”), in consideration of the terms agreed to in this Agreement, hereby fully releases and discharges the Company, Merryman, Mewawalla, Crail, Seabert, and Geygan (each as defined herein), and each of their respective Affiliates, Associates, and Representatives, from all actions, liabilities, proceedings, obligations, losses, costs, expenses, incidental damages, consequential damages, fines, penalties, charges, fees, awards, attorneys’ fees or expenses, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, liens, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty, and/or equity, whether known or unknown, which the ABV Releasors ever had, now have, have asserted, or could have asserted, from the beginning of time to the date of this Agreement (the “ABV Released Claims”).

 

(d)    AB Value, on behalf of the ABV Releasors, represents and warrants that the ABV Releasors have not and will not solicit any person or entity to bring, or assist or participate in bringing, any action or proceeding, judicial or otherwise, related to or arising out of the ABV Released Claims.

 

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(e)    Berger, as well as his current, former, and future Affiliates, Associates, partners, managers, affiliates, subsidiaries, parents, officers, directors, owners, representatives, agents, attorneys, trustees, successors, and assigns (collectively, the “Berger Releasors”), in consideration of the terms agreed to in this Agreement, hereby fully releases and discharges the Company, Merryman, Mewawalla, Crail, Seabert, and Geygan, and each of their respective Affiliates, Associates, and Representatives, from all actions, liabilities, proceedings, obligations, losses, costs, expenses, incidental damages, consequential damages, fines, penalties, charges, fees, awards, attorneys’ fees or expenses, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, liens, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty, and/or equity, whether known or unknown, which the Berger Releasors ever had, now have, have asserted, or could have asserted, from the beginning of time to the date of this Agreement (the “Berger Released Claims”).

 

(f)    Berger, on behalf of the Berger Releasors, represents and warrants that the Berger Releasors have not and will not solicit any person or entity to bring, or assist or participate in bringing, any action or proceeding, judicial or otherwise, related to or arising out of the Berger Released Claims.

 

(g)    Radoff, as well as his current, former, and future Affiliates, Associates, representatives, agents, attorneys, trustees, successors, and assigns (collectively, the “Radoff Releasors”), in consideration of the terms agreed to in this Agreement and except as otherwise set forth herein, hereby fully releases and discharges the Company, Merryman, Mewawalla, Crail, Seabert, and Geygan, and each of their respective Affiliates, Associates, and Representatives, from all actions, liabilities, proceedings, obligations, losses, costs, expenses, incidental damages, consequential damages, fines, penalties, charges, fees, awards, attorneys’ fees or expenses, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, liens, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty, and/or equity, whether known or unknown, which the Radoff Releasors ever had, now have, have asserted, or could have asserted, from the beginning of time to the date of this Agreement (the “Radoff Released Claims”).

 

(h)    Radoff, on behalf of the Radoff Releasors, represents and warrants that the Radoff Releasors have not and will not solicit any person or entity to bring, or assist or participate in bringing, any action or proceeding, judicial or otherwise, related to or arising out of the Radoff Released Claims.

 

(i)    Bradley, as well as her current, former, and future Affiliates, Associates, representatives, agents, attorneys, trustees, successors, and assigns (collectively, the “Bradley Releasors”), in consideration of the terms agreed to in this Agreement, hereby fully releases and discharges the Company, Merryman, Mewawalla, Crail, Seabert, and Geygan, and each of their respective Affiliates, Associates, and Representatives, from all actions, liabilities, proceedings, obligations, losses, costs, expenses, incidental damages, consequential damages, fines, penalties, charges, fees, awards, attorneys’ fees or expenses, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, liens, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty, and/or equity, whether known or unknown, which the Bradley Releasors ever had, now have, have asserted, or could have asserted, from the beginning of time to the date of this Agreement (the “Bradley Released Claims”).

 

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(j)    Bradley, on behalf of the Bradley Releasors, represents and warrants that the Bradley Releasors have not and will not solicit any person or entity to bring, or assist or participate in bringing, any action or proceeding, judicial or otherwise, related to or arising out of the Bradley Released Claims.

 

(k)    The Company, as well as its current, former, and future Affiliates, Associates, partners, managers, affiliates, subsidiaries, parents, officers, directors, owners, representatives, agents, attorneys, trustees, successors, and assigns (collectively, the “Company Releasors”), in consideration of the terms agreed to in this Agreement, hereby fully releases and discharges AB Value, Berger, Radoff, and Bradley, and each of their respective Affiliates, Associates, and Representatives, from all actions, liabilities, proceedings, obligations, losses, costs, expenses, incidental damages, consequential damages, fines, penalties, charges, fees, awards, attorneys’ fees or expenses, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, liens, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty, and/or equity, whether known or unknown, which the Company Releasors ever had, now have, have asserted, or could have asserted, from the beginning of time to the date of this Agreement, (the “Company Released Claims”).

 

(l)    The Company, on behalf of the Company Releasors, represents and warrants that the Company Releasors have not and will not solicit any person or entity to bring, or assist or participate in bringing, any action or proceeding, judicial or otherwise, related to or arising out of the Company Released Claims.

 

(m)    Notwithstanding the foregoing provisions of this Section 3 or anything to contrary contained elsewhere in this Agreement, each of the ABV Released Claims, the Berger Released Claims, the Company Released Claims, and the Radoff Released Claims shall not include (i) the delivery of that certain demand for books and records and other materials pursuant to Section 220 of the General Corporation Law of the State of Delaware (“DGCL”) by Radoff to the Company dated November 9, 2022 (the “November Demand”) or (ii) any claims, counterclaims, causes of action, defenses, or other rights or obligations related to or arising from the November Demand.

 

(n)    The Parties agree that the Cooperation Agreement is rescinded, null, void, and unenforceable.

 

(o)    Counsel for the Parties shall execute the Stipulation of Dismissal with Prejudice in the form attached hereto as Exhibit “A”. Counsel for AB Value shall file the Stipulation of Dismissal with Prejudice in the 2021 Lawsuit promptly after the Agreement is fully executed.

 

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(p)         Counsel for all Parties shall execute the Stipulation of Dismissal with Prejudice in the form attached hereto as Exhibit “B”. Counsel for the Company shall file the Stipulation of Dismissal with Prejudice in the 2022 Lawsuit promptly after the Agreement is fully executed.

 

(q)         This Agreement is not and shall not constitute, nor be interpreted, construed, or used as evidence of, any admission of liability, wrongdoing, or fact of any kind by any Party, and such liability is expressly denied by each Party. This Agreement is entered into solely to avoid the expense and inconvenience of litigating the Parties’ disputes.

 

	
			4.

				
			Standstill

			

 

(a)         For purposes of this Agreement, the “Standstill Period” shall mean the period commencing on the Effective Date and ending on the date that is forty-five (45) days prior to the beginning of the Company’s advance notice period for the nomination of directors at the Company’s 2025 annual meeting of stockholders as set forth in Section 2.3 of the Bylaws. Notwithstanding anything to the contrary in this Agreement, the Company agrees that during the Standstill Period and for so long as the New Director is serving on the Board, the Board shall promptly notify the ABV-Radoff Defendants in writing of any decision not to nominate the current New Director for re-election to allow the ABV-Radoff Defendants to designate a Replacement Director in accordance with this Agreement.

 

(b)         Each of the ABV-Radoff Defendants agrees that, during the Standstill Period, it shall not (unless specifically consented to in writing by the Company, acting through a resolution of a majority of the Company’s directors), directly or indirectly, and agrees to cause their Affiliates and Associates, to not, directly or indirectly, in any manner:

 

i.    (A) make, engage in, or in any way participate in, directly or indirectly, any “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), but without regard to the exclusion set forth in Rule 14a- 1(l)(2)(iv) of the Exchange Act) or consents to vote or advise, (B) encourage or influence any person other than any such ABV-Radoff Defendant’s Affiliate or Associate with respect to the voting of any Voting Securities (as defined herein) for the election of individuals to the Board or to approve stockholder proposals (including by initiating, encouraging or participating in any “withhold” or similar campaign), (C) conduct any type of binding or nonbinding referendum with respect to any Voting Securities of the Company, or become a “participant” in any contested “solicitation” for the election of directors with respect to the Company (as such terms are defined in the Exchange Act), other than a “solicitation” or acting as a “participant” in support of all of the nominees of the Board at any annual or special meeting of stockholders or in connection with any solicitation of stockholder action by written consent, or (D) make, nominate, or be the proponent of any stockholder proposal (pursuant to Rule 14a-8 under the Exchange Act or otherwise) or any “nominee” (as defined in Section 2.3(c)(i) of the Bylaws) or “Access Nominee” (as defined in the Section 2.13(a)(i) of the Bylaws);

 

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ii.    form, join, encourage, influence, advise, or in any way participate in any “group” (as such term is defined in Section 13(d)(3) of the Exchange Act) with any persons (excluding, for the avoidance of doubt, any group composed solely of certain or all of the Defendants, their Affiliates and Associates and the New Director) with respect to any Voting Securities or otherwise in any manner agree, attempt, seek, or propose to deposit any Voting Securities in any voting trust or similar arrangement (including lending any Voting Securities to any person for the purpose of allowing such person to vote such Voting Securities in connection with any stockholder vote of the Company), or subject any Voting Securities to any arrangement or agreement with respect to the voting thereof (including by granting any proxy, consent, or other authority to vote), except as expressly permitted by this Agreement;

 

iii.    acquire, offer, or propose to acquire, or agree to acquire, directly or indirectly, whether by purchase, tender, or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate, or other group (including any group of persons that would be treated as a single “person” under Section 13(d) of the Exchange Act), through swap or hedging transactions or otherwise, any securities of the Company, or any rights decoupled from the underlying securities of the Company that would result in either AB Value (together with the its Affiliates and Associates) owning, controlling or otherwise having any Beneficial Ownership or other ownership interest in 10.0% or more of Common Stock outstanding at such time or Radoff (together with his Affiliates and Associates) owning, controlling or otherwise having any Beneficial Ownership or other ownership interest in 12.5% or more of Common Stock outstanding at such time; provided, however, that nothing herein will require Common Stock to be sold to the extent that AB Value, Radoff or either of their Affiliates or Associates, collectively, exceed the ownership limit under this clause (iii) as the result of a share repurchase or other Company action that reduces the number of outstanding shares of Common Stock;

 

iv.    other than in Rule 144 open market broker sale transactions where the identity of the purchaser is not known and in underwritten widely dispersed public offerings, sell, offer, or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, the securities of the Company or any rights decoupled from the underlying securities of the Company held by any ABV-Radoff Defendant to any person or entity other than the Company or the ABV-Radoff Defendants (a “Third Party”) that, to the ABV-Radoff Defendants’ knowledge (after due inquiry in connection with a private, non-open market transaction, it being understood that such knowledge shall be deemed to exist with respect to any publicly available information, including information in documents filed with the SEC), would result in such Third Party, together with its Affiliates and Associates, owning, controlling, or otherwise having any Beneficial Ownership or other ownership interest in the aggregate of more than 4.9% of the shares of Common Stock outstanding at such time, or would increase the Beneficial Ownership or other ownership interest of any Third Party who, together with its Affiliates and Associates, has a Beneficial Ownership or other ownership interest in the aggregate of more than 4.9% of the shares of Common Stock outstanding at such time, it being understood that Section 4(b)(vi) and not this Section 4(b)(iv) shall govern with respect to any Extraordinary Transaction (as defined herein);

 

v.    arrange, or in any way participate in, any financing for the purchase by any Third Party of securities of the Company or assets or businesses of the Company or any of its Affiliates without the prior written consent of the Company or its Affiliates, as applicable;

 

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vi.    effect or seek to effect, offer or propose to effect, cause or participate in, or in any way assist or facilitate any other person to effect or seek, offer, or propose to effect or participate in, any tender or exchange offer, merger, consolidation, going private transaction, acquisition, sale of all or substantially all assets or sale, spinoff, split off, or other similar separation of one (1) or more business units, scheme of arrangement, plan of arrangement or other business combination, recapitalization, reorganization, sale or acquisition of material assets, liquidation, dissolution or other extraordinary transaction involving the Company or any of its subsidiaries or joint ventures or any of their respective securities or a material amount of any of their respective assets or businesses (each, an “Extraordinary Transaction”), or encourage, initiate, or support any other Third Party in any such activity; provided, however, that nothing in this Section 4 shall preclude the tender (or action not to tender) by any of the ABV-Radoff Defendants or any of their Affiliates or Associates of any securities of the Company into any tender or exchange offer or vote for or against any transaction by any of the ABV-Radoff Defendants or any of their Affiliates or Associates of any securities of the Company with respect to any Extraordinary Transaction, in each case provided such offer or transaction was not made or initiated by any of the ABV-Radoff Defendants or any of their Affiliates or Associates;

 

vii.    engage in any short sale or any purchase, sale, or grant of any option, warrant, convertible security, stock appreciation right, or other similar right (including any put or call option or “swap” transaction with respect to any security (other than a broad-based market basket or index)) that includes, relates to, or derives any significant part of its value from a decline in the market price or value of the securities of the Company;

 

viii.    (A) call or request the calling of any meeting of stockholders of the Company, including by written consent, (B) publicly seek representation on, or nominate any candidate to, the Board, except as expressly set forth in this Agreement, (C) publicly seek the removal of any member of the Board, (D) solicit consents from stockholders or otherwise to act or seek to act by written consent, (E) conduct a referendum of stockholders, (F) present information adverse to the Company at any annual meeting or any special meeting of the Company’s stockholders, or (G) make a request for any stockholder list or other Company books and records, whether pursuant to Section 220 of the DGCL or otherwise;

 

ix.    take any public action, or private action involving any Third Party, in support of or make any public proposal, or private proposal involving any Third Party, or public request, or private request involving any Third Party, that constitutes: (A) advising, controlling, changing, or influencing the Board or management of the Company, including any plans or proposals to change the number or term of directors or the removal of any directors or to fill any vacancies on the Board, except as expressly set forth in this Agreement; (B) any material change in the capitalization, stock repurchase programs and practices, capital allocation programs, and practices or dividend policy of the Company; (C) any other material change in the Company’s management, business, or corporate structure; (D) seeking to have the Company waive or make amendments or modifications to the Company Organizational Documents, or other actions, that may impede or facilitate the acquisition of control of the Company by any person; (E) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange; or (F) causing a class of securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act. Notwithstanding the foregoing, in no way shall any of the ABV-Radoff Defendants be prevented from taking any private action in support of or making any private proposal or private request under the foregoing subclauses (A)-(F) above that is limited to private actions, proposals, or requests through non-public communications with the Company that would not be reasonably likely to trigger public disclosure obligations for any Party;

 

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x.    make any public disclosure, announcement, or statement regarding any intent, purpose, arrangement, plan, or proposal with respect to the Board, the Company, its management, policies, or affairs, any of its securities or assets, or this Agreement that is inconsistent with the provisions of this Agreement;

 

xi.    commence, encourage, or support any derivative action in the name of the Company, or any class action against the Company or any of its officers or directors;

 

xii.    take any action which could cause or require the Company or any Affiliate of the Company to make a public announcement regarding any of the foregoing, or publicly seek or request permission to do any of the foregoing;

 

xiii.    enter into any discussions, negotiations, agreements, or understandings with any Third Party to take or otherwise participate with any Third Party in any action or cause any action with respect to any of the foregoing, or advise, assist, facilitate, finance, knowingly encourage, seek to persuade any Third Party to take any action, or make any statement with respect to any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing; or

 

xiv.    make any request or submit any proposal, directly or indirectly, to amend or waive the terms of this Section 4 or for the Board to specifically invite any of the ABV-Radoff Defendants to take any actions prohibited by the terms of this Section 4, in each case, other than through non-public communications with the Company that would not be reasonably likely to trigger public disclosure obligations for any Party.

 

The foregoing subclauses (i)-(xiv) of this Section 4(b) shall not be deemed to prohibit any of the ABV-Radoff Defendants or their Representatives from (X) communicating privately regarding or privately advocating in favor of or against any of the matters described in subclauses (i)-(xiv) of this Section 4(b) with, or (Y) privately requesting a waiver of any of the foregoing provisions of subclauses (i)-(xiv) of this Section 4(b) from the Company’s directors or officers, so long as such communications, advocacy or requests described in clauses (X) or (Y) are not intended to, and would not reasonably be expected to, require any public disclosure of such communications, advocacy, or requests. Further, subclause (xi) of this Section 4(b) shall not be deemed to prohibit any of the ABV-Radoff Defendants or their Representatives from taking any action(s) in connection with or related to or arising out of the November Demand.

 

(c)         Notwithstanding anything to the contrary contained elsewhere in this Section 4, the provisions of this Section 4 shall not prevent any of the ABV-Radoff Defendants or their Affiliates or Associates from freely voting its shares of Common Stock; provided that each of the ABV-Radoff Defendants complies with its obligations set forth in Section 2 of this Agreement.

 

(d)         Notwithstanding anything to the contrary contained in this Agreement, nothing in this Section 4 shall prohibit any of the ABV-Radoff Defendants or their Affiliates or Associates from (i) commenting publicly about any publicly disclosed Third Party proposal to acquire the Company so long as such ABV-Radoff Defendant has shared its views privately with the Company prior to making such public comments or (ii) having reasonable access to and participating in the Company’s earnings calls, investor calls or investor meetings, in the case of each of clause (i) and (ii), so long as such Party does not violate Section 5(b) of this Agreement.

 

11

 

 

	
			5.

				
			Mutual Non-Disparagement

			

 

(a)         During the Standstill Period, neither the Company nor any of its Affiliates or Associates, shall in any manner, directly or indirectly, in any capacity or manner, make or cause to be made, or in any way encourage any other person to make or cause to be made, any public statement or public announcement, including in any document or report filed with or furnished to the SEC or through the press, media, analysts, or other persons, that constitutes an ad hominem attack on or otherwise disparages, defames, libels, or slanders the New Director, any of the Defendants or any Defendant’s Affiliates or Associates, or any of their respective successors or current or former members, partners, officers, directors or employees (it being understood and agreed that the restrictions in this Section 5(a) shall not apply to any member of the Board based upon discussions solely among other members of the Board and/or management of the Company); provided, that the limitations set forth in this Section 5(a) shall not prevent the Company or any of its Affiliates or Associates from (i) communicating publicly any and all terms and conditions of this Agreement, (ii) responding to any public statement or announcement made by any of the Defendants or their Affiliates or Associate that was made in breach of Section 5(b) below or (iii) if solicited by a person not a Party to this Agreement, making objective statements that reflect the Company’s view with respect to factual matters concerning specific acts or determinations of any Defendant and/or Defendants’ Affiliate or Associate (or their respective current or former Representatives) occurring after the Effective Date. For the avoidance of doubt, a public statement or announcement shall only be deemed to be made by the Company if such public statement or announcement is made by (X) an executive officer or a member of the Board (other than the New Director or a Replacement Director) or (Y) an employee or Representative of the Company authorized to make such statement or announcement on behalf of the Company.

 

(b)          During the Standstill Period, no Defendant and no Affiliate or Associate of any Defendant, shall in any manner, directly or indirectly, in any capacity or manner, make or cause to be made, or in any way encourage any other person to make or cause to be made, any public statement or public announcement, including in any document or report filed with or furnished to the SEC or through the press, media, analysts, or other persons, that constitutes an ad hominem attack on or otherwise disparages, defames, libels or slanders the Company, any of its Affiliates or Associates, or any of their respective successors or current or former members, partners, officers, directors or employees; provided, that, the limitations set forth in this Section 5(b) shall not prevent any Defendant or Defendants’ Affiliates or Associates from (i) communicating publicly any and all terms and conditions of this Agreement, (ii) responding to any statement made by the Company or any of its Affiliates, Associates, or Representatives that was made in breach of Section 5(a) above or (iii) if solicited by a person not a Party to this Agreement, making objective statements that reflect the Defendant’s view with respect to factual matters concerning specific acts or determinations of the Company or any of its Affiliates or Associates (or their respective current or former Representatives) occurring after the Effective Date. For the avoidance of doubt, a public statement or announcement shall only be deemed to be made by a Defendant or an Affiliate or Associate thereof if such public statement or announcement is made by (W) an AB Value partner or executive officer; (X) Bradley Radoff; (Y) Mary Bradley; or (Z) an employee or Representative of any Defendant authorized to make such statement or announcement on behalf of such Defendant.

 

12

 

 

	
			6.

				
			Public Announcements

			

 

(a)          Promptly following the execution of this Agreement, and, no later than two (2) business days following the Effective Date, the Company shall file a Current Report on Form 8-K reporting entry into this Agreement and appending or incorporating by reference this Agreement (the “Public Filing”). The Company and the ABV-Radoff Defendants shall mutually agree to any summary description of this Agreement used to describe this Agreement in the Public Filing. The Company shall provide the ABV-Radoff Defendants with a reasonable opportunity to review and comment on the Public Filing prior to it being filed with the SEC and consider in good faith any comments of the ABV-Radoff Defendants. Prior to the issuance of the Public Filing, neither the Company nor the ABV-Radoff Defendants nor any of their respective Affiliates or Associates shall issue any press release or public announcement regarding this Agreement or take any action that would require public disclosure thereof without the prior written consent of the other Party. Neither the Company nor the ABV-Radoff Defendants nor any of their respective Affiliates or Associates shall make or cause to be made any public announcement or statement that is inconsistent with or contrary to the statements made in the Public Filing, except as required by law or the rules of any stock exchange or with the prior written consent of the other Party; provided, however, that unless prohibited under applicable law, such Party must provide written notice to the other Party at least two (2) business days prior to making any such statement or disclosure required under the federal securities laws or other applicable laws or stock exchange regulations that would otherwise be prohibited by the provisions of this Section 6, and reasonably consider any comments of such other Party. For the avoidance of doubt, this Section 6 will not apply in connection with any actual or threatened Legal Proceeding to enforce the terms of this Agreement.

 

(b)          No later than two (2) business days following the Effective Date, each of the ABV-Radoff Defendants shall file with the SEC a Schedule 13D in compliance with Section 13 of the Exchange Act reporting its entry into this Agreement and appending this Agreement as an exhibit thereto or incorporating this Agreement by reference to the Public Filing. The Schedule 13D shall be consistent with the terms of this Agreement. Each of the ABV-Radoff Defendants shall provide the Company with a reasonable opportunity to review and comment on the Schedule 13D prior to being filed with the SEC and consider in good faith any comments of the Company.

 

	 	
			7.

				
			Representations

			

 

(a)          Radoff hereby represents and warrant to each of the other Parties that he Beneficially Owns shares of Common Stock, totaling, in the aggregate, 621,600 shares, or approximately 9.96%, of the Common Stock outstanding as of the Effective Date.

 

(b)          Berger and AB Value, jointly and severally, each represent and warrant to the Company, Radoff, and Bradley that they and their Affiliates Beneficially Own (as defined below) shares of Common Stock, totaling, in the aggregate, 477,847 shares, or approximately 7.7%, of the Common Stock outstanding as of the Effective Date.

 

13

 

 

(c)    Each of the Parties represents and warrants to the other Party that: (a) such Party has all requisite corporate or limited liability company power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (b) this Agreement has been duly and validly authorized, executed, and delivered by it and is a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms; and (c) this Agreement will not result in a violation of or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) any terms or conditions of any agreements to which such person is a party or by which such Party may otherwise be bound or of any law, rule, license, regulation, judgment, order or decree governing or affecting such Party.

 

(d)    Each Party represents and warrants that it has not relied on any statement or representation by any other Party other than the express representations contained herein.

 

	
			8.

				
			ABV-Radoff Defendants Representative

			

 

The ABV-Radoff Defendants hereby appoint, authorize, and empower Radoff (the “ABV-Radoff Defendants Representative”) to act as a representative, exclusive agent, and attorney-in-fact for the ABV-Radoff Defendants in connection with this Agreement, which shall include the power and authority:

 

(a)    to name a New Director and/or a Replacement Director;

 

(b)    to execute and deliver any contract, certificate, or other document in connection with this Agreement;

 

(c)    to execute and deliver waivers and consents in connection with this Agreement;

 

(d)    to enforce and protect the rights and interests of the ABV-Radoff Defendants and to enforce and protect the rights and interests of ABV-Radoff Defendants under or related to this Agreement; and

 

(e)    to refrain from enforcing any right of any of the ABV-Radoff Defendants under or related to this Agreement.

 

	
			9.

				
			Confidentiality / Board Communication

			

 

The ABV-Radoff Defendants acknowledge and agree that the Company’s directors (including the New Director) shall be subject to confidentiality obligations under Delaware law and under the Company Organizational Documents, and the Policies, and shall have access to information concerning the Company that constitutes confidential information (including material non-public information under applicable federal and state securities laws), and the Company’s directors (including the New Director) may not be able to share any such confidential information (including material non-public information) pursuant to such confidentiality obligations with the ABV-Radoff Defendants or any Third Party without the Company’s prior written consent, which consent may be withheld by the Company in its sole discretion. The ABV-Radoff Defendants acknowledge and agree that this Agreement does not create any obligation for the Company or its directors to share any information with the ABV-Radoff Defendants that is not shared with the Company’s other stockholders. The ABV-Radoff Defendants acknowledge and agree that all communications with the Company’s independent directors regarding the Company shall be made through (a) the Company Secretary, (b) the Chair of the Board, or (c) the entire Board.

 

14

 

 

	
			10.

				
			Remedy

			

 

The Parties hereto recognize and agree that if for any reason any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached or threatened to be breached, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy. Accordingly, each Party agrees that, without prejudice to any other rights and remedies otherwise available to the Parties under this Agreement, the other Party shall be entitled to specific performance of this Agreement, including, but not limited to, interim and/or emergency injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement without the necessity of posting a bond or other security. Such remedy shall not be deemed to be the exclusive remedy for a breach of this Agreement, but shall be in addition to all other remedies available at law or equity to the non-breaching Party.

 

	
			11.

				
			Governing Law; Jurisdiction; Attorneys’ Fees and Costs

			

 

The Parties agree that any action to enforce the terms and provisions of this Agreement or relating to the transactions contemplated by this Agreement shall be brought exclusively in the state courts of the State of Delaware or, if such courts shall not have jurisdiction, any federal court sitting in the State of Delaware. In the event that any action shall be brought in equity to enforce the provisions of this Agreement, no Party shall allege, and each Party hereby waives the defense, that there is an adequate remedy at law. Furthermore, each of the Parties hereto (a) consents to submit itself to the personal jurisdiction of the federal or state courts sitting in the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (b) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the federal or state courts sitting in the State of Delaware, and EACH OF THE PARTIES IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY, (d) agrees to waive any bonding requirement if such a waiver is enforceable under any applicable law, in the case any other Party seeks to enforce the terms by way of equitable relief, and (e) irrevocably consents to service of process by certified mail, signature required, to the address of such Party’s principal place of business or as otherwise provided by applicable law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.

 

15

 

 

In addition to any relief, order, or judgment that is entered by a court with respect to any Legal Proceeding resulting from or arising out of this Agreement, any and all Parties found to be the substantially losing party(-ies) in any legal action shall be required, jointly and severally, to pay the reasonable attorneys’ fees and costs of any Party(-ies) determined to be the substantially prevailing party. In the context of this Agreement, reasonable attorneys’ fees and costs shall include, but not be limited to, the actual and documented: (i) legal fees and costs, the fees and costs of witnesses, accountants, experts, and other professionals, and any other forum costs incurred during, or in preparation for, a legal action; (ii) all of the foregoing whether incurred before or after the initiation of the proceeding, and (iii) all such fees and costs incurred in obtaining specific performance including, but not limited to, injunctive relief. It is understood that time entries that may appear in the billing records of such Party’s legal counsel may be redacted to protect attorney-client or work-product privilege, and this will not prevent recovery for the associated billings (and if necessary, the court may require that such records be submitted to the court for in camera review).

 

	
			12.

				
			No Waiver

			

 

No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. Any waiver by any Party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a Party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

	
			13.

				
			Entire Agreement

			

 

This Agreement contains the sole and entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to the subject matter. This Agreement may be amended only by an agreement in writing executed by the Company, on one hand, and the ABV-Radoff Representative, on the other; provided that any amendment of this Agreement adversely affecting Bradley or any of her present or future Affiliates or Associates, representatives, agents, attorneys, trustees, successors, or assigns, shall also be signed Bradley.

 

	
			14.

				
			Notices

			

 

All notices, consents, requests, instructions, approvals and other communications provided for herein shall be in writing and shall be deemed validly given, if (a) given by email, on the date sent by email (with email or telephonic confirmation of receipt) if sent during normal business hours of the Company, or on the next business day if sent after normal business hours of the Company, or (b) if given by any other means, when actually received during normal business hours at the address specified in this subsection:

 

16

 

 

	
			If to the Company:

				
			Rocky Mountain Chocolate Factory, Inc.

			265 Turner Drive, Durango, Colorado 81303

			Attention: Robert J. Sarlls

			Email: RobSarlls@rmcf.net

			 

			With a copy to (which shall not constitute notice):

			Venable LLP, 750 East Pratt Street, Suite 900,

			Baltimore, Maryland 21202

			Attention: W. Bryan Rakes and Kostas D. Katsiris

			Email: WBRakes@Venable.com and KDKatsiris@Venable.com

			 

			
	
			If to the

			Defendants:

				
			Bradley L. Radoff

			2727 Kirby Dr., Unit 29L, Houston, Texas 77098

			Email: brad@fondrenlp.com

			 

			AB Value Management LLC

			208 Lenox Ave., # 409, Westfield, New Jersey 07090

			Attention: Andrew Berger

			Email: Andrew@abvalue.com

			 

			Mary Bradley

			103 E. St. Andrew’s Place

			Newtown, Pennsylvania 18940

			Email: mrbradley103@gmail.com

			 

			With a copy to (which shall not constitute notice):

			Olshan Frome Wolosky LLP

			1325 Avenue of the Americas New York, New York 10019

			Attention: Ryan P. Nebel and Rebecca L. Van Derlaske

			Email: rnebel@olshanlaw.com and rvanderlaske@olshanlaw.com

			 

			Vinson & Elkins LLP

			114 Avenue of the Americas, 32nd Floor New York, New York 10036

			Attention: Lawrence S. Elbaum

			Email: lelbaum@velaw.com

			Morris Nichols Arsht & Tunnell

			 

			1201 North Market Street, 16th Floor, PO Box 1347,

			Wilmington, Delaware 19899-1347

			Attention: Kenneth J. Nachbar

			Email: knachbar@morrisnichols.com

			

 

	
			15.

				
			Severability

			

 

If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void, or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement.

 

17

 

 

	
			16.

				
			Counterparts

			

 

This Agreement may be executed in two (2) or more counterparts either manually or by electronic or digital signature (including by facsimile or email transmission), each of which are hereby deemed an original and all of which together shall constitute a single agreement.

 

	
			17.

				
			Successors and Assigns

			

 

This Agreement shall not be assignable by any of the Parties to this Agreement without prior written consent of the other Parties, provided that each Party may assign any of its rights and delegate any of its obligations hereunder to any person or entity that acquires substantially all of that Party’s assets, whether by stock sale, merger, asset sale, or otherwise. This Agreement, however, shall be binding on and inure to the benefit of successors and permitted assignees of the Parties hereto.

 

	
			18.

				
			No Third-Party Beneficiaries

			

 

This Agreement is solely for the benefit of the Parties hereto and their respective successors and permitted assigns and is not enforceable by any other persons.

 

	
			19.

				
			Fees and Expenses

			

 

Other than as described in Section 11 above, each Party shall be responsible for its own fees and expenses incurred in connection with the negotiation, execution, and effectuation of this Agreement and the transactions contemplated hereby; provided, however, that the Company shall reimburse the ABV-Radoff Defendants for their expenses in connection with such matters in the amount of one million and seventy-five thousand dollars ($1,075,000.00). Such reimbursement shall be remitted to the ABV-Radoff Defendants Representative no later than five (5) business days after the Effective Date.

 

	
			20.

				
			Termination

			

 

(a)    This Agreement is effective as of the date hereof and shall remain in full force and effect until the date that is earliest of (i) the end of the Standstill Period, and (ii) five days after a Party that has Materially Breached this Agreement receives notice from the non-breaching Party providing notice of termination of this Agreement. For avoidance of doubt, none of the ABV-Radoff Defendants may claim that a breach by another of the ABV-Radoff Defendants gives the first ABV-Radoff Defendant any right to terminate this Agreement.

 

(b)    The provisions of Section 10 through Section 21 shall survive the termination of this Agreement. No termination pursuant to this section shall relieve any Party from liability for any breach of this Agreement prior to such termination.

 

	
			21.

				
			Certain Definitions

			

 

For purposes of this Agreement, the terms:

 

(a)    “Affiliate” and “Associate” shall have the meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act, provided, that any references to “Associate” herein shall be deemed to be preceded by the word “controlled.”

 

18

 

 

(b)    “Beneficial Ownership” and “Beneficially Own” shall have the meaning set forth in Section 13(d) of the Exchange Act.

 

(c)    “Bylaws” means the Company’s Second Amended and Restated Bylaws, as may be amended from time to time.

 

(d)    “Materially Breached” means a material breach by the applicable Party of its material obligations under this Agreement which is not cured within fifteen (15) days after receipt by the applicable Party of written notice from the other Party specifying the material breach and reasonably required cure thereof.

 

(e)    “person” or “persons” shall mean any individual, corporation (including not-for- profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization, or other entity of any kind or nature.

 

(f)    “Representatives” of a person shall mean such person’s directors, officers, partners, employees, members, or agents (acting in such capacity).

 

(g)    “Voting Securities” shall mean the Common Stock, and any other securities of the Company entitled to vote in the election of directors, or securities convertible into, or exercisable or exchangeable for Common Stock or other securities, whether or not subject to the passage of time or other contingencies.

 

	
			22.

				
			Interpretation and Construction

			

 

Each of the Parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged between the Parties shall be deemed the work product of both of the Parties and may not be construed against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is hereby expressly waived by each of the Parties hereto, and any controversy over interpretations of this Agreement shall be decided without regard to events of drafting or preparation.

 

The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The term “including” shall be deemed to mean “including without limitation” in all instances.

 

[Signature Pages Follow]

 

 

19

 

 

 

IN WITNESS WHEREOF, each of the Parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative, as of the Effective Date.

 

 

	
			 

				
			ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Robert J. Sarlls

				
			 

			
	
			 

				
			 

				
			Robert J. Sarlls

				
			 

			
	
			 

				
			 

				
			Chief Executive Officer

				
			 

			

 

20

 

 

	 	AB VALUE PARTNERS, LP	 
	 	 	 	 
	 	By: 	AB Value Management LLC	 
	 	 	General Partner	 
	 	 	 	 
	 	By:	/s/ Andrew T. Berger	 
	 	Name:	Andrew T. Berger	 
	 	Title:	Manager	 
	 	 	 	 
	 	 	 	 
	 	AB VALUE MANAGEMENT LLC	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Andrew T. Berger	 
	 	Name:	Andrew T. Berger	 
	 	Title:	Manager	 
	 	 	 	 
	 	 	 	 
	 	/s/ Andrew T. Berger	 
	 	Andrew T. Berger	 
	 	 	 	 
	 	 	 	 
	 	Bradley L. Radoff	 
	 	Bradley L. Radoff	 
	 	 	 	 
	 	 	 	 
	 	/s/ Mary Bradley                                12.14.22	 
	 	Mary Bradley	 

 

21

 

 

Exhibit A

 

2021 Lawsuit Stipulation of Dismissal with Prejudice

 

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

	
			AB VALUE PARTNERS, LP and AB

			VALUE MANAGEMENT LLC,

			 

			                 Plaintiffs,

			 

			v.

			 

			ROCKY MOUNTAIN CHOCOLATE FACTORY, INC., BRYAN J. MERRYMAN, RAHUL MEWAWALLA, FRANKLIN E. CRAIL, BRETT P. SEABERT, and JEFFREY R. GEYGAN,

			 

			                Defendants.

				 	
			 

			 

			 

			C.A. No. 2021-0819-LWW

			

 

STIPULATION OF DISMISSAL WITH PREJUDICE

 

Pursuant to Court of Chancery Rule 41(a)(1)(ii), Plaintiffs AB Value Partners, LP and AB Value Management LLC and Defendants Rocky Mountain Chocolate Factory, Inc., Bryan J. Merryman, Rahul Mewawalla, Franklin E. Crail, Brett P. Seabert, and Jeffrey R. Geygan, by and through their undersigned counsel, hereby stipulate and agree that the above-captioned action and all claims asserted therein are dismissed with prejudice. Each party shall bear its own fees and costs.

 

[Signature Blocks and Date]

 

22

 

 

Exhibit B

 

2022 Lawsuit Stipulation of Dismissal with Prejudice

 

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

	
			ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.,

			 

			                 Plaintiff,

			 

			v.

			 

			BRADLEY L. RADOFF, ANDREW T. BERGER, AB VALUE PARTNERS, L.P., AB VALUE MANAGEMENT LLC, and MARY BRADLEY,

			 

			                 Defendants.

				 	
			 

			 

			C.A. No. 2021-0819-LWW

			

 

STIPULATION OF DISMISSAL WITH PREJUDICE

 

Pursuant to Court of Chancery Rule 41(a)(1)(ii), Plaintiff Rocky Mountain Chocolate Factory, Inc., and Defendants Bradley L. Radoff, Andrew T. Berger, AB Value Partners, L.P., AB Value Management LLC, and Mary Bradley, by and through their undersigned counsel, hereby stipulate and agree that the above-captioned action and all claims asserted therein are dismissed with prejudice. Each party shall bear its own fees and costs.

 

[Signature Blocks and Date]

 

 

23Document

SANDY SPRING BANCORP, INC. 

EXECUTIVE SEVERANCE PLAN

1.Name, Purpose and Effective Date

1.1    Name and Purpose of Plan. The purpose of this Sandy Spring Bancorp, Inc. Executive Severance Plan (the “Plan”) is to provide severance benefits to certain senior executives and key employees of the Company and its affiliates in the event their employment is terminated in certain circumstances, including certain terminations related to a Change in Control. The Plan is intended to secure the continued services of executive and key employees of the Company and its affiliates and to ensure their continued dedication to their duties in the event of any threat or occurrence of a Change in Control. The Plan is also intended to provide a level of security to executive and key employees who are terminated without Cause, notwithstanding that such termination has occurred outside of a Covered Period.

1.2    Effective Date. The Plan became effective on December 14, 2022 (the “Effective Date”). 

1.3    ERISA Status. The Plan is intended to be an unfunded plan that is maintained primarily to provide severance compensation and benefits to a select group of “management or highly compensated employees” within the meaning of Sections 201, 301 and 401 of ERISA, and therefore to be exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.

2.Definitions

The following words and phrases will have the following meanings unless a different meaning is plainly required by the context:

2.1    “Base Salary” means the annualized gross base salary payable to a Participant, before any deductions, exclusions, deferrals or contributions on a tax-qualified or non-tax-qualified basis under any plan or program of the Company or any of its affiliates.

2.2    “Board” means the Board of Directors of the Company.

2.3    “Cause” means a Participant’s (a) dishonesty, willful misconduct, bad faith or a lack of complete integrity or candor (including, but not limited to, any acts of embezzlement or misappropriation of funds), breach of or dereliction of fiduciary duty, or fraud, in each case in connection with the performance of services on behalf of the Company or any of its affiliates or otherwise in connection with the Participant’s position with the Company or any of its affiliates, (b) intentional failure to perform the duties assigned to or expected of the Participant after reasonable notification (which shall be stated in writing and given at least fifteen (15) days prior to termination) by the Board of such failure, (c) conviction of a felony, plea of guilty or nolo contendere or finding of liability of or under any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, (d) engaging in behavior that would constitute grounds for liability (the Company’s and/or the Participant’s) for harassment, retaliation or discrimination (as proscribed by the U.S. Equal Employment Opportunity Commission or applicable state or local law) or other egregious conduct violative of laws 

governing the workplace, or (e) material violation of any of the rules of conduct or behavior of the Company or any of its affiliates, such as may be provided in any employee handbook or code of ethics as the Company or any of its affiliates may promulgate from time to time, following notice and a reasonable opportunity to cure in the sole discretion of the Company (if such violation is capable of cure).

For purposes of this Section 2.3, no act or failure to act will be considered “willful” or “intentional” unless done or omitted to be done in bad faith and without reasonable belief that the Participant’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company or upon the instructions of the Company’s chief executive officer or another senior officer of the Company will be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company. “Cause” will not exist unless and until the Company has delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of a majority of the entire Board (excluding the Participant if the Participant is a Board member) at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an opportunity for the Participant to be heard before the Board), finding that in the good faith opinion of the Board an event set forth in Section 2.3 has occurred and specifying the particulars thereof in detail.

2.4    “Change in Control” means the occurrence of any of the following events:

(a)       the acquisition by any “person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) of direct or indirect beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then-outstanding securities of the Company entitled to vote in the election of directors of the Company; provided, however, that the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its affiliates; or (iv) any acquisition pursuant to a transaction that complies with clauses (c)(i), (ii) and (iii) below;

 (b)      the individuals who, as of the Effective Date, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided that any individual becoming a director subsequent to the Effective Date whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such individual is named as a nominee for director, without written objection to such nomination) shall be considered an Incumbent Director, unless such individual is initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or behalf of a person other than the Board, including by reason of any agreement intended to avoid or settle any election contest or proxy solicitation; 

(c)        the consummation of a merger, consolidation, reorganization, statutory share exchange or similar form of corporation transaction involving the Company or involving the issuance of securities by the Company or the acquisition of assets or stock of another entity by the Company (each, a “Business Combination”), unless immediately following such Business Combination: 

(i)        the shareholders of the Company immediately prior to such Business Combination own directly or indirectly at least 60% of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) (the “Surviving Company”) in substantially the same proportion as their ownership of voting securities of the Company immediately prior to such Business Combination; 

(ii)       at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the Surviving Company were Incumbent Directors at the time of the execution of the initial agreement or action of the Board providing for such Business Combination; and

(iii)      no person other than (A) the Surviving Company or (B) any employee benefit plan (or related trust) sponsored or maintained by the Company immediately prior to such Business Combination beneficially owns, directly or indirectly, 25% or more of the combined voting power of the Surviving Company’s then-outstanding voting securities entitled to vote in the election of directors; 

(d)       the sale of all or substantially all the assets of the Company (other than to an affiliate of the Company); or

(e)        the Company’s shareholders approve a plan of dissolution or complete liquidation of the Company.

To the extent necessary to comply with Section 409A of the Code, a Change in Control will be deemed to have occurred only if the event also constitutes a change in the effective ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company, in each case within the meaning of Treasury Regulation section 1.409A-3(i)(5).

2.5    “Code” means the Internal Revenue Code of 1986, as amended.

2.6    “Committee” means the Compensation Committee of the Board, or any successor thereto or other committee designated by the Board to assume the obligations of the Committee hereunder.

2.7    “Company” means Sandy Spring Bancorp, Inc., a Maryland corporation, and any successor or assignee as provided in Section 6.3.

2.8    “Competitive Business” means any business enterprise that either (a) engages in any activity that competes with the business of the Company or any of its affiliates or (b) holds a five percent (5%) or greater equity, voting or profit participation interest in any enterprise that engages in such a competitive activity.

2.9    “Confidential Information” means any information relating to the Company or any of its affiliates, or their respective products, services, borrowers, depositors and other clients that is not generally known or available to the general public, including, but not limited to, (a) operation or financial information, such as information with respect to costs, fees, profits, sales, sales margins, capital structure, operating results, borrowing arrangements, strategies and plans for future business, pending projects and proposals and potential acquisitions or divestitures, (b) product and technical information, such as new and innovative product ideas, subjects of research and development, investigations, data, software, software codes, computer models and research and development projects, (c) marketing information, such as new marketing ideas, markets, mailing lists, the identity, including the names or addresses, of the borrowers, depositors and other clients of the Company or any of its affiliates, the financial arrangement between the Company or any of its affiliates and such clients, specific client needs and requirements and leads and referrals to prospective clients, (d) vendor, supplier and any other business partner information, including the financial arrangement between the Company or any of its affiliates and such persons, and (e) any information concerning or obtained from the clients of the Company or any of its affiliates.

2.10    “Covered Period” means the period commencing with the Company’s initial public announcement, in a report or proxy solicitation materials filed under the Exchange Act, of the agreements or other actions by the Company or the Board that are expected or intended to result in a Change in Control and ending twenty-four (24) months following the occurrence of such Change in Control. In the case of a tender or exchange offer that results in a Change in Control, the Covered Period shall commence on the date that the Company or the Board publicly announces acceptance or support of the offer or, if acceptance or support is never announced, the date that the person making the offer publicly announces that the person knows or believes that the offer has sufficient support among Company shareholders to succeed in causing a Change in Control. The Covered Period will be extended by one additional month if the cure period in Section 2.13 is triggered in the 23rd or 24th month following a Change in Control.

2.11    “Disability” means a physical or mental infirmity that impairs the Participant’s ability to substantially perform duties assigned to the Participant and that results in the Participant’s becoming eligible for long-term disability benefits under the Company’s or its successor’s long-term disability plan or from the U.S. Social Security Administration. A Participant shall not be deemed to have a Disability until the date on which the insurer 

or the administrator of the Company’s long-term disability insurance program notifies the Participant that the Participant is eligible to commence benefits under such insurance or the date on which the U.S. Social Security Administration notifies the Participant that the Participant is eligible to commence disability benefits from such agency.

2.12    “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

2.13    “Good Reason” means, without the Participant’s consent, the occurrence of any of the following events:
(a)        a material diminution in the Participant’s title, authority, duties or responsibilities;

(b)       any (i) reduction in the Participant’s Base Salary or (ii) material reduction in the Participant’s aggregate annual compensation opportunity (including Base Salary and annual and long-term target incentive compensation opportunities);

(c)        any requirement of the Company that the Participant be based anywhere more than fifty (50) miles from the office where the Participant is located as of immediately prior to the Change in Control; or

(d)       the failure of the Company to obtain the assumption of the Plan from any successor.

Notwithstanding the forgoing, the Participant will only have Good Reason if the Participant provides notice to the Company of the existence of the event or circumstance constituting Good Reason specified in any of the preceding clauses within ninety (90) days of the initial existence of such event or circumstances and such event or circumstance is not cured within thirty (30) days after the Company’s receipt of such notice. If the Participant initiates termination with Good Reason, the actual termination must occur within sixty (60) days after the date of the notice of termination. The Participant’s failure to timely give notice of termination with respect to the occurrence of a specific event that would otherwise constitute Good Reason will not constitute a waiver of the Participant’s right to give notice of any new subsequent event that would constitute Good Reason that occurs after such prior event (regardless of whether the new subsequent event is of the same or different nature as the preceding event).

2.14    “Participant” means a senior executive or key employee of the Company or any of its affiliates who has been chosen by the Committee to participate in the Plan and who is a party to a Participation Agreement that has not been terminated in accordance with the terms of the Plan. 

2.15    “Participation Agreement” means an agreement to participate in the Plan substantially in the form of Exhibit B hereto.

2.16    “Pro-Rata Bonus” means an amount equal to the product of a (a) Participant’s Target Bonus for the year in which the Participant’s Termination Date occurs and (b) a fraction, the numerator of which is the number of days elapsed from the beginning of the 

applicable calendar year through the Participant’s Termination Date and the denominator of which is the number of days in the applicable calendar year.

2.17    “Qualifying Termination” means any termination of a Participant’s employment with the Company or any of its affiliates (or its successor) following the Effective Date (a) by the Company or any of its affiliates (or its successor) other than for Cause or (b) during a Covered Period, by the Participant for Good Reason. For the avoidance of doubt, termination of the Participant’s employment on account of death or Disability, or by the Company or any of its affiliates for Cause, or by the Participant for other than Good Reason, shall not be treated as a Qualifying Termination. Notwithstanding the foregoing, the death of the Participant after notice of termination for Good Reason or without Cause has been validly provided shall be deemed to be a Qualifying Termination. 

2.18    “Severance Multiple” means, for each Participant, the applicable multiple set forth on Exhibit A hereto corresponding to such individual’s level of participation as designated in writing by the Committee and communicated to the Participant by the Company.

2.19    “Target Bonus” means a Participant’s target annual bonus under the annual incentive plan applicable to such Participant.

2.20    “Termination Date” means the date on which a Participant experiences a Qualifying Termination.

3.Participation and Severance Benefits

3.1    Participants. From time to time the Committee may select, in its discretion, those senior executives and key employees to be offered participation in the Plan. The Committee will determine, in its discretion, the Severance Multiple for each Participant. No senior executive or other employee has any right to participate in the Plan, and no Participant has any right to any particular Severance Multiple. The list of Participants is set forth in Exhibit A. The Committee may update Exhibit A at any time to reflect the then current Participants, without formally amending the Plan. Each individual selected to participate will become a Participant when, and only when, he or she executes and delivers a Participation Agreement. 

3.2    Termination of Participant. A Participant shall cease to be a Participant in the Plan and, therefore, shall cease to be eligible to receive severance benefits under the Plan on the date on which the Participant ceases to be an employee of the Company or any of its affiliates other than by a Qualifying Termination. Unless the Participant otherwise agrees after receiving notice, the Committee may terminate the participation of any Participant at any time, but the Participant’s removal from the Plan will not be effective until the later of (a) twenty-four (24) months after the Company gives notice to the Participant of the Committee’s action and of its effective date or (b) the end of any Covered Period for the Participant that commenced before the Committee’s action and that was ongoing at the time of such action.

3.3    Non-Change in Control Severance Benefits. If a Participant experiences a Qualifying Termination during a time that is not a Covered Period, the Participant will be entitled to the following payments under the Plan (subject to the terms and conditions hereof), in addition to any amounts due by the Company to the Participant in connection with services performed by the Participant prior to the Participant’s Termination Date:

(a)    lump sum cash payment equal to the Participant’s Pro-Rata Bonus;

(b)    cash severance in an amount equal to the Participant’s Severance Multiple, multiplied by the Participant’s Base Salary as in effect on the Participant’s Termination Date;

(c)    if the Participant elects COBRA continuation coverage, a cash payment equal to the amount obtained by multiplying (i) the monthly cost for COBRA continuation coverage (as in effect as of the Participant’s Termination Date) for group medical, dental and vision coverage for the Participant and his or her dependents (to the extent that they are covered by the Company’s health and welfare plans) immediately before the Participant’s Termination Date by (ii) the number of months represented by the Participant’s Severance Multiple.

3.4    Change in Control Severance Benefits. If a Participant experiences a Qualifying Termination during a Covered Period, the Participant will be entitled to the following payments under the Plan (subject to the terms and conditions hereof), in addition to any amounts due by the Company to the Participant in connection with services performed by the Participant prior to the Participant’s Termination Date:

(a)        a lump sum cash payment equal to the Participant’s Pro-Rata Bonus;

(b)       a lump sum cash payment equal to the Participant’s Severance Multiple, multiplied by the sum of (i) the greater of (x) the Participant’s Base Salary as in effect immediately before the applicable Change in Control occurred or (y) the Participant’s Base Salary as in effect on the Participant’s Termination Date and (ii) the Participant’s Target Bonus for the fiscal year in which the Participant’s Termination Date occurs; and

(c)        if the Participant elects COBRA continuation coverage, a lump sum cash payment equal to the amount obtained by multiplying (i) the monthly cost for COBRA continuation coverage (as in effect as of the Participant’s Termination Date) for group medical, dental and vision coverage for the Participant and his or her dependents (to the extent that they are covered by the Company’s health and welfare plans) immediately before the Participant’s Termination Date by (ii) the number of months represented by the Participant’s Severance Multiple.

3.5    Timing of Severance Payments. Except as provided below in Section 6.14, the cash payments specified in Sections 3.3(a) and 3.4 shall be paid on a regular payday within thirty (30) days following the date on which the Release described in Section 3.7 becomes effective and irrevocable pursuant to its terms (provided that such payments shall be made no later than March 15th of the calendar year following the calendar year in 

which the Participant’s Termination Date occurs). Except as provided below in Section 6.14, the cash payments specified in Sections 3.3(b) and 3.3(c) shall be paid in equal installments in accordance with the Company’s regular payroll practices, starting on a regular payday within thirty (30) days following the date on which the Release described in Section 3.7 becomes effective and irrevocable pursuant to its terms. The first installment payment shall include all amounts that would otherwise have been paid to the Participant during the period beginning on the Participant’s Termination Date and ending on the first payment date.

3.6    Company Automobile. If a Participant experiences a Qualifying Termination during a Covered Period and, at the time of the Termination Date, the Participant has the use of an automobile provided at the expense of the Company or is otherwise provided an automobile allowance by the Company, the Participant will have the right, for ninety (90) days following the Termination Date: (a) to continue to use the automobile on the same basis on which such Participant used it immediately before the Termination Date; or (b) to purchase the automobile from the Company for its lowest wholesale Kelley Blue Book value from a range determined based on the actual mileage, condition and features of the applicable automobile, or, if the Company has leased the automobile, to assume the lease.

3.7    Conditions to Severance Benefits. A Participant’s receipt of payments under the Plan will be conditioned on (a) the execution of a general release of all actual and potential claims that the Participant may have against the Company or any of its affiliates in the form provided to the Participant by the Company (the “Release”) and (b) such Release becoming effective and irrevocable not later than the sixtieth (60th) day following the Participant’s Termination Date. The terms and conditions of the Release will be substantially identical for all Participants similarly situated in connection with a Change in Control. The Company will provide the Release to the Participant within five (5) days following the Participant’s Termination Date. If the Participant does not execute and deliver the Release, or if the effective date of the Release does not occur within the sixty (60) days following the Participant’s Termination Date, the Participant will not be entitled to any payments provided for under the Plan.

3.8    No Duplication of Severance Benefits. If a Participant experiences a Qualifying Termination, the Participant will not be paid any amount, or receive any benefit, under or pursuant to any other plan or program calling for severance benefits, including special severance benefits related to a change in control event (as defined in the Plan or in such other plan or program). To the extent that a Participant is a party to any written and legally binding employment, retention, retirement or severance agreement with the Company or any of its affiliates and that a provision in such agreement (including a provision calling for special severance benefits related to a change in control event (as defined in the Plan or in such agreement)) is inconsistent with any provision of the Plan, then (a) if the agreement is entered into after the Participant becomes a Participant in the Plan, and if the agreement expressly provides that its inconsistent provision is intended to supersede, override, or settle matters under the Plan for that Participant, the agreement’s provision will govern and control, but (b) in any other circumstances, the provision of the Plan will govern and control. For the avoidance of doubt, amounts awarded under a retention bonus that pays out in connection with a Qualifying Termination during a 

Covered Period shall not be considered duplicative of the severance benefits provided under Section 3.4 or 3.4 of the Plan.

3.9    Other Benefits Not Affected. None of the following benefits, programs, or other employment-related matters is enhanced, diminished or otherwise affected by the Plan, none is considered a benefit of the Plan, and none is waived, released, or otherwise affected by a Participant’s Release unless expressly so provided in that Release:

(a)    A Participant’s accounts in a savings plan, nonqualified deferred compensation plan, or other similar deferral plan or program of the Company or any of its affiliate, including any rights to require a rabbi trust or other similar funding protection; 

(b)    A Participant’s rights under a pension or other funded defined-benefit retirement plan of the Company or any of its affiliates;

(c)    A Participant’s rights under any award of restricted stock, restricted stock units, stock options, stock appreciation rights, or other equity incentive awards, in each case whether or not associated with performance conditions, under the Sandy Spring Bancorp, Inc. 2015 Omnibus Incentive Plan or other equity plan sponsored by the Company and/or award agreements issued thereunder; 

(d)    A Participant’s rights under any life or disability insurance plan or program of the Company or any of its affiliates, including any split-dollar life insurance agreement and the right to continue coverage after termination of employment, whether or not at the Participant’s cost; and

(e)    A Participant’s rights to obtain or continue health, dental or similar insurance coverage after termination of employment (so-called COBRA continuation rights).

3.10    Golden Parachute Provisions. In the event that any benefits payable to a Participant pursuant to the Plan or otherwise (“Payments”) (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 3.10 would be subject to the excise tax imposed by Section 4999 of the Code or any comparable successor provisions (the “Excise Tax”), then the Participant’s Payments hereunder will be either (x) provided to the Participant in full or (y) provided to the Participant as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax and any other applicable taxes, results in the receipt by the Participant, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax. In the event that the Payments are to be reduced pursuant to this Section 3.10, and none of such Payments are “deferred compensation” subject to Section 409A of the Code, then the reduction will occur in the manner elected by the Participant in writing prior to the date of payment. If any Payment constitutes “deferred compensation” subject to Section 409A of the Code or if the Participant fails to elect an order, then the Payments to be reduced will be 

determined in a manner which has the least economic cost to the Participant and, to the extent the economic cost is equivalent, will be reduced in the inverse order of when payment would have been made, until the reduction is achieved. Unless the Company and the Participant otherwise agree in writing, any determination required under this Section 3.10 will be made in writing in good faith by a nationally recognized accounting firm or other independent advisors selected by the Company (the “Accountants”) which will provide detailed supporting calculations both to the Company and the Participant within fifteen (15) business days of the receipt of notice from the Company or the Participant that there has been a payment that may be subject to Section 4999 of the Code, or such earlier time as is requested by the Company, and whose determination will be final, conclusive and binding upon the Participant and the Company for all purposes (and the Company will report such payments consistently and will reasonably defend such calculations). For purposes of making the calculations required by this Section 3.10, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Participant agree to furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this provision. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 3.10.

4.Restrictive Covenants

4.1    Non-Disclosure of Confidential Material. During employment and thereafter, the Participant shall hold in a fiduciary capacity for the benefit of the Company and its affiliates all trade secrets and Confidential Information relating to the Company or any of its affiliates that have been obtained by the Participant during his or her employment by the Company or any of its affiliates. Except as may be required or appropriate in connection with the Participant carrying out his or her duties as an employee, he or she will not, without the prior written consent of the Company or as may otherwise be required by law or any legal process, any statutory obligation or order of any court or statutory tribunal of competent jurisdiction, or as is necessary in connection with any adversarial proceeding against the Company or any of its affiliates (in which case the Participant will use his or her reasonable best efforts in cooperating with the Company in obtaining a protective order against disclosure by a court of competent jurisdiction), communicate or divulge any such trade secrets or Confidential Information to anyone other than the Company and those designated by the Company or on behalf of the Company in the furtherance of its business or to perform duties hereunder. Notwithstanding anything to the contrary in the Plan or otherwise, nothing shall limit the rights of a Participant under applicable law to provide truthful information to any governmental entity or to file a charge with or participate in an investigation conducted by any governmental entity. Participants are hereby notified that the immunity provisions in Section 1833 of title 18 of the United States Code provide that an individual cannot be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that is made: (1) in confidence to federal, state or local government officials, either directly or indirectly, or to an attorney, and is solely for the purpose of reporting or investigating a suspected violation of the law, (2) under seal in a complaint or other document filed in a lawsuit or other proceeding or (3) to an attorney in 

connection with a lawsuit for retaliation for reporting a suspected violation of law (and the trade secret may be used in the court proceedings for such lawsuit) as long as any document containing the trade secret is filed under seal and the trade secret is not disclosed except pursuant to court order.

4.2    Non-Solicitation of Employees. Each Participant agrees that, during his or her employment, and for a twelve (12) month period following the Termination Date, the Participant will not take any action, directly or indirectly (without the prior written consent of the Company), that causes or could reasonably be expected to cause any person who is then an employee of the Company or any of its affiliates to resign from the Company or any of its affiliates or to apply for or accept employment with any other business or enterprise.

4.3    Non-Solicitation of Clients. Each Participant agrees that, during his or her employment, and for a twelve (12) month period following the Participant’s Termination Date, the Participant will not, in any manner, directly or indirectly (without the prior written consent of the Company): (1) take any action that causes or could reasonably be expected to cause any client or prospective client of the Company or any of its affiliates to whom such Participant provided services or with whom such Participant otherwise had contact to become a client of or transact any business with a Competitive Business or reduce or refrain from doing any business with the Company or any of its affiliates, (2) transact business with any client or prospective client that would cause the Participant to be a Competitive Business or (3) interfere with or damage any relationship between the Company or any of its affiliates and a client or prospective client.

4.4    Non-Disparagement. Each Participant agrees and covenants that he or she will not at any time make, publish, or communicate to any person or entity or in any public forum any defamatory, maliciously false, or disparaging remarks, comments, or statements concerning the Company or any of its affiliates or their respective businesses, or any of their respective employees, officers, or directors. The preceding sentence does not in any way restrict or impede the Participant from exercising protected rights, to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order.

4.5    Validity. The terms and provisions of this Section 4 are intended to be separate and divisible provisions and if, for any reason, any one or more of them is held to be invalid or unenforceable, neither the validity nor the enforceability of any other provision set forth herein will thereby be affected. If for any reason any court of competent jurisdiction finds any provision of this Section 4 unreasonable in duration or geographic scope or otherwise, the Participant and the Company agree that the restrictions and prohibitions contained herein will be effective to the fullest extent allowed under applicable law in such jurisdiction.

4.6    Injunctive Relief. Without limiting any remedies available to the Company, by acceptance of payments and benefits under the Plan, a Participant will be deemed to have agreed and acknowledged that a breach of the covenants contained in this Section 4 will 

result in injury to the Company and its affiliates for which there is no adequate remedy at law and that it will not be possible to measure damages for such injuries precisely, and that therefore, in the event of such a breach or threat thereof, the Company will be entitled to seek a temporary restraining order and a preliminary and permanent injunction, without bond or other security, restraining the Participant from engaging in activities prohibited by this Section 4 or such other relief as may be required specifically to enforce any of the covenants in Sections 4.1, 4.2 and 4.3 herein. This provision will not, however, be construed as a waiver of any of the rights that the Company may have for damages under the Plan or otherwise, and, except as limited in Section 6.10, all of the Company’s rights and remedies will be unrestricted.

5.Claims for Benefits Under the Plan

5.1    Claims for Benefits under the Plan. If a Participant believes that he or she should have been eligible to participate in the Plan or disputes the amount of benefits under the Plan, such individual may submit a claim for benefits in writing to the Committee within sixty (60) days after the individual’s termination of employment. If such claim for benefits is wholly or partially denied, the Committee will within a reasonable period of time, but no later than ninety (90) days after receipt of the written claim, notify the individual of the denial of the claim. If an extension of time for processing the claim is required, the Committee may take up to an additional ninety (90) days; provided that the Committee sends the individual written notice of the extension before the expiration of the original 90-day period. The notice provided to the individual will describe why an extension is required and when a decision is expected to be made. If a claim is wholly or partially denied, the denial notice: (1) will be in writing, (2) will be written in a manner calculated to be understood by the individual and (3) will contain (a) the reasons for the denial, including specific reference to those Plan provisions on which the denial is based; (b) a description of any additional information necessary to complete the claim and an explanation of why such information is necessary; (c) an explanation of the steps to be taken to appeal the adverse determination; and (d) a statement of the individual’s right to request arbitration as set forth in Section 6.10, in lieu of bringing a civil action under Section 502(a) of ERISA, following an adverse decision after appeal. The Committee will have full discretion to deny or grant a claim in whole or in part. If notice of denial of a claim is not furnished in accordance with this Section 5.1, the claim will be deemed denied and the claimant will be permitted to exercise his or her rights to review pursuant to Sections 5.2 and 5.3.

5.2    Right to Request Review of Benefit Denial. Within sixty (60) days of the individual’s receipt of the written notice of denial of the claim, the individual may file a written request for a review of the denial of the individual’s claim for benefits. In connection with the individual’s appeal of the denial of his or her benefit, the individual may submit comments, records, documents or other information supporting the appeal, regardless of whether such information was considered in the prior benefits decision. Upon request and free of charge, the individual will be provided reasonable access to and copies of all documents, records and other information relevant to the claim.

5.3    Disposition of Claim. The Committee will deliver to the individual a written decision on the claim promptly, but not later than sixty (60) days after the receipt of the 

individual’s written request for review, except that if there are special circumstances which require an extension of time for processing, the sixty (60)-day period will be extended to one hundred twenty (120) days; provided that the appeal reviewer sends written notice of the extension before the expiration of the original sixty (60)-day period. If the appeal is wholly or partially denied, the denial notice will: (1) be written in a manner calculated to be understood by the individual, (2) contain references to the specific Plan provision(s) upon which the decision was based, (3) contain a statement that, upon request and free of charge, the individual will be provided reasonable access to and copies of all documents, records and other information relevant to the claim for benefits and (4) contain a statement of the individual’s right to request arbitration as set forth in Section 6.10, in lieu of bringing a civil action under Section 502(a) of ERISA.

5.4    Exhaustion. An individual must exhaust the Plan’s claims procedures prior to proceeding with arbitration as set forth in Section 6.10.

6.Administration of the Plan

6.1    Administration. The Plan will be administered by the Committee or such other persons designated by the Board. The Committee will have the authority to select the Participants to be eligible for benefits under the Plan. The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan; provided that any action permitted to be taken by the Committee may be taken by the Board, in its discretion. The Committee may correct any defect or omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or desirable. Any decision of the Committee in the interpretation and administration of the Plan during the Covered Period will be subject to de novo review without any presumption of correctness. The Committee may delegate to one or more employees of the Company or any of its affiliates the authority to take actions on its behalf pursuant to the Plan.

6.2    Amendment; Termination. 
(a)    The Plan may be amended at any time, provided, however, that unless the Participant otherwise agrees after being given notice of the Plan amendment, an amendment to the Plan pursuant to this paragraph that adversely and materially changes a benefit to a Participant is not effective as to that Participant until immediately after the end of the later of (i) twenty-four (24) months after the Company gives notice to the Participant of the change and of its effective date or (ii) the end of any Covered Period for the Participant that commenced before amendment of the Plan and that was ongoing at the time of amendment.

(b)       The Plan may be amended at any time and in any manner necessary to comply with, or to avoid a material and adverse outcome for the Company or the Participants under, ERISA or Section 409A of the Code. Any such amendment will be effective immediately, or otherwise as provided by the Committee, without the consent of any Participant. If any such amendment is expected to have a material and adverse effect upon one or more Participants, the Company will 

give notice of the change to those Participants within thirty days after effectiveness.

(c)       The Plan may be terminated at any time. If the Plan is terminated, new Participants may not be added, but the Plan will continue in effect for each then-current Participant until immediately after the later of (i) twenty-four (24) months after termination of the Plan or (ii) the end of any Covered Period that commenced before termination of the Plan. 

(d)       Termination or amendment of the Plan will not affect any obligation of the Company under the Plan which has accrued and is unpaid as of the effective date of the termination or amendment.

6.3    Successors. The Company will require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company, expressly and unconditionally to assume and agree to perform the Company’s obligations under the Plan, in the same manner and to the same extent that the Company would be required to perform if no succession or assignment had taken place. In such event, the term “Company,” as used in the Plan, will mean (from and after, but not before, the occurrence of such event) the Company as herein before defined and any successor or assignee to the business or assets which by reason hereof becomes bound by the terms and provisions of the Plan.

6.4    Third Party Beneficiaries. The Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs and assigns.

6.5    FDIC Limitations. If any payment or benefit under the Plan would otherwise be a golden parachute payment within the meaning of section 18(k) of the Federal Deposit Insurance Act (a “Golden Parachute Payment”) that is prohibited by applicable law, then the payments and benefits will be reduced to the greatest amount that can be paid to the Participant without there being a prohibited Golden Parachute Payment. To the extent reasonably practicable, the Company shall seek the approval of the Federal Deposit Insurance Corporation, the Maryland Department of Labor - Office of the Commissioner of Financial Regulation and any other bank regulatory body, as necessary, to make any payment to the Participant that would otherwise constitute a Golden Parachute Payment.

6.6    Creditor Status of Participants. In the event that any Participant acquires a right to receive payments from the Company under the Plan, such right will be no greater than the right of any unsecured general creditor of the Company.

6.7    Notice of Address. Each Participant entitled to benefits under the Plan must file with the Company, in writing, his or her post office address and each change of post office address. Any communication, statement or notice addressed to such Participant at such address will be deemed sufficient for all purposes of the Plan, and there will be no obligation on the part of the Company to search for or to ascertain the location of such Participant.

6.8    Headings. The headings of the Plan are inserted for convenience and reference only and will have no effect upon the meaning of the provisions hereof.
6.9    Choice of Law. TO THE EXTENT NOT PREEMPTED BY THE LAWS OF THE UNITED STATES, THE LAWS OF THE STATE OF MARYLAND WILL BE THE CONTROLLING LAW IN ALL MATTERS RELATING TO THE PLAN, REGARDLESS OF THE CHOICE-OF-LAW RULES OF THE STATE OF MARYLAND OR ANY OTHER JURISDICTION.

6.10    Arbitration. 
(a)    Subject to the provisions of Section 4.6, any controversy or claim between a Participant and the Company arising out of or relating to or concerning the Plan (including the covenants contained in Section 4) and any dispute regarding such Participant’s employment or the termination thereof or any dispute regarding the application, interpretation or validity of the Plan will be finally settled by arbitration in a location determined by the Participant (which location must be located within the county in which the Participant primarily works) and administered by the American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules then in effect. In the event of any conflict between the Plan and the rules of the AAA, the provisions of the Plan will be determinative. If the parties are unable to agree upon an arbitrator, they will select a single arbitrator from a list of seven (7) arbitrators designated by the office of the American Arbitration Association having responsibility for the location selected by the Participant, all of whom will be retired judges who are actively involved in hearing private cases or members of the National Academy of Arbitrators, and who, in either event, are residents of such forum. If the parties are unable to agree upon an arbitrator from such list, they will each strike names alternatively from the list, with the first to strike being determined by lot. After each party has used three (3) strikes, the remaining name on the list will be the arbitrator. The AAA’s Commercial Arbitration Rules will be modified in the following ways: (i) each arbitrator will agree to treat as confidential evidence and other information presented to them, (ii) there will be no authority to award punitive damages, (iii) there will be no authority to amend or modify the terms of the Plan and (iv) a decision must be rendered within ten (10) business days of the parties’ closing statements or submission of post-hearing briefs. The Participant or the Company may bring an action or special proceeding in a state or federal court of competent jurisdiction sitting in Montgomery County, Maryland or such other jurisdiction as the Participant may determine in his or her discretion to enforce any arbitration award under this Section 6.10.

(b)    To the extent permitted by law, the Company shall reimburse the Participant on a current basis for all reasonable legal fees, costs of litigation and other related expenses incurred in good faith by the Participant as a result of the Company’s refusal to provide the severance benefits to which the Participant becomes entitled under the Plan, or as a result of the Company’s contesting the validity, enforceability or interpretation of the Plan; provided, however, that the Participant shall reimburse the Company for all such fees and expenses if an arbitration panel issues a final and non-appealable order setting forth the 

determination that the position taken by the Participant was frivolous or advanced by the Participant in bad faith.
 
6.11    Withholding. All payments under the Plan will be subject to all applicable withholding of state, local, provincial and federal taxes.

6.12    No Implied Employment Contract. The Plan does not constitute a contract of employment or impose on a Participant any obligation to remain in the employ of the Company, nor does it impose on the Company or any of its affiliates any obligation to retain a Participant in his or her present or any other position, nor does it change the status of a Participant’s employment as an employee at will. Nothing in the Plan will in any way affect the right of the Company or any of its affiliates in its absolute discretion to change or reduce a Participant’s compensation at any time, or to change at any time one or more benefit plans, dental plans, health care plans, savings plans, bonus plans, vacation pay plans, disability plans and the like.

6.13    No Assignment. The rights of a Participant to payments or benefits under the Plan will not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor’s process, and any action in violation of this Section 6.13 will be void.

6.14    Section 409A.
(a)        General. The Plan is intended to comply with the requirements of Section 409A of the Code or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A of the Code, will in all respects be administered in accordance with Section 409A of the Code. The right to a series of payments under the Plan will be treated as a right to a series of separate payments. Each payment under the Plan that is made within 2-1⁄2 months following the end of the year that contains the Termination Date is intended to be exempt from Section 409A of the Code as a short-term deferral within the meaning of the final regulations under Section 409A of the Code. Each payment under the Plan that is made later than 2-1⁄2 months following the end of the year that contains the Participant’s Termination Date is intended to be exempt from Section 409A under the two-times exception of Treasury Reg. § 1.409A-1(b)(9)(iii), up to the limitation on the availability of that exception specified in the regulation. Then, each payment that is made after the two-times exception ceases to be available shall be subject to delay, in accordance with subsection (c) below. To the extent necessary to comply with Section 409A of the Code, all payments to be made upon a Participant’s Termination Date may only be made upon a “separation from service” within the meaning of Section 409A of the Code.

(b)       In-Kind Benefits and Reimbursements. Notwithstanding anything to the contrary in the Plan, to the extent that any reimbursement or in-kind benefit provided under the Plan constitutes a “deferral of compensation” within the meaning of Section 409A of the Code (a “Reimbursement”), such Reimbursement will be made or provided in accordance with the requirements of Section 409A of 

the Code, including, where applicable, the requirement that: (a) any Reimbursement is for expenses incurred during the Participant’s lifetime (or during a shorter period of time specified in the Plan or in any applicable Company expense reimbursement policy), (b) the amount of expenses eligible for Reimbursement during a calendar year may not affect the expenses eligible for Reimbursement in any other calendar year, (c) the Participant must submit a request for Reimbursement along with a supporting invoice at least ten (10) days before the end of the calendar year following the calendar year in which such fees and expenses were incurred, (d) subject to any shorter time period provided in any Company expense reimbursement policy or specifically provided otherwise in the Plan, the Reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred, and (e) the right to Reimbursement is not subject to liquidation or exchange for another benefit.

(c)       Specified Employees. Notwithstanding anything in the Plan to the contrary, if the Participant is considered a “specified employee” (as such term is defined under Section 409A(a)(2)(B)(i) of the Code or any successor or comparable provision) on the date of the Participant’s “separation from service” (within the meaning of Section 409A of the Code), any payment that is subject to Section 409A of the Code and payable due to the Participant’s termination of employment will not be made to the Participant until the earlier of the six-month anniversary of the Participant’s “separation from service” within the meaning of Section 409A of the Code or the date of the Participant’s death and will be accumulated and paid on such date.

(d)       No Participant Designation of Year of Payment. To the extent necessary to comply with Section 409A of the Code, in no event may a Participant, directly or indirectly, designate the taxable year of payment. In particular, to the extent necessary to comply with Section 409A of the Code, if any payment to a Participant under the Plan is conditioned upon the Participant’s executing and not revoking a Release and if the designated payment period for such payment begins in one taxable year and ends in the next taxable year, the payment will be made in the later taxable year.

EXHIBIT A
PARTICIPANTS AND SEVERANCE MULTIPLES															
	Participant	Severance Multiple
	Not During a
Covered Period	During a
Covered Period
	Section 3.3(b)	Section 3.3(c)	Section 3.4(b)	Section 3.4(c)
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					
					

Exhibit B
PARTICIPATION AGREEMENT
Reference is made to the Sandy Spring Bancorp, Inc. (“Company”) Executive Severance Plan (as the same may be amended or modified from time to time, the “Plan”). The Plan is incorporated in this Participation Agreement and is deemed to be a part hereof for all purposes. Unless otherwise defined herein, capitalized terms used in this Participation Agreement shall have the meanings set forth in the Plan.

Upon your execution and delivery to the Company of this Participation Agreement, you will become a Participant in the Plan. Your participation in the Plan is subject to the terms and conditions of the Plan. Pursuant to your participation in the Plan, you are eligible to receive severance benefits in accordance with the terms of the Plan. 

Your severance multiple for change in control severance benefits under Section 3.4 of the Plan is “__.”  Your severance multiple for non-change in control severance benefits under Section 3.3 of the Plan is “__.”

By signing below, you expressly agree to be bound by, and you promise to abide by, the terms of the Plan. You agree that the terms of the Plan are reasonable in all respects. You further acknowledge that receipt of severance benefits under the Plan is contingent upon your execution, delivery and non-revocation of a general release of claims as provided in the Plan.

You acknowledge and agree that the Plan and this Participation Agreement supersede all prior change‐in‐control and/or severance benefit policies, plans and arrangements of the Company, if any (and supersede all prior oral or written communications by the Company with respect to change‐in‐control benefits or severance benefits, if any), and any such prior policies, plans, arrangements and communications are hereby null and void and of no further force and effect with respect to your participation therein.

You further acknowledge and agree that before signing this Participation Agreement (a) you have fully read and you understand the Plan, (b) you have fully read, and you understand and voluntarily enter into, this Participation Agreement, and (c) you have had sufficient opportunity to consult with your personal tax, financial planning advisor and attorney about the tax, financial and legal consequences of your participation in the Plan.

This Participation Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. This Participation Agreement shall be valid, binding, and enforceable against a party when executed by means of (a) an electronic signature; (b) an original manual signature; or (c) a faxed, scanned or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall have for all purposes the same validity, legal effect and admissibility in evidence as an original manual signature.

IN WITNESS WHEREOF, each of the parties has executed this Participation Agreement (in the case of the Company, by its duly authorized officer), as set forth below.

																					
	SANDY SPRING BANCORP, INC.		PARTICIPANT:

																					
							
	By:				By:		
	Name:				Name:		
	Title:				Date:		
	Date:

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