Document:

exv10w41w2

 

Exhibit 10.41.2

September 9, 2002

P. Chrisman Iribe

4608 Rockwood Pkwy, N.W.

Washington, D.C. 20016

Dear Chris:

As you are aware, Standard & Poor’s and Moody’s Investors Service recently
downgraded the credit ratings of the PG&E National Energy Group (the “Company”)
and two of its subsidiaries to below investment grade. While disappointing,
these downgrades are in keeping with the rating agencies’ larger overall review
of the energy sector. In response to the downgrades and the challenging market
conditions affecting our sector of the energy industry, the Company has
embarked upon a major cost reduction effort with the goal of achieving a
reduction of at least $40 million in annual operating expenses.

In order to encourage you to continue your contribution to the success of the
Company amidst these challenging and disruptive business conditions, you are
being provided with a retention award subject to the terms and conditions set
forth in this letter (the “Letter”) and the PG&E National Energy Group
Management Retention Program (the “Program”).

	1.	 	Retention Award

	 	a.	 	Retention Award Amount - Your award will be an amount equal
to twenty-five percent (25%) of your base salary as of the first
business day of September 2002 (the “Retention Award”).
	 
	 	b.	 	Timing of Payment – One third of the Retention Award is
payable as soon as reasonably practicable after January 15, 2003.
The remaining two thirds is payable on the earlier of on the first
business day in October 2003 or should your employment with the
Company cease through no fault of your own, as soon as reasonably
practicable following any such event.
	 
	 	c.	 	Forfeiture of Retention Award - You will not be entitled to
any Retention Award and shall forfeit any claim to the Retention
Award if any of the following occur:

	 	(i)	 	voluntary termination, or termination of
employment for cause; or
	 
	 	(ii)	 	retirement.

 

 

P. Chrisman Iribe

September 9, 2002

Page 2

	2.	 	Other Benefits - The opportunity to earn the Retention Award is in
addition to other compensation and benefits for which you otherwise may be
eligible under any plan in which you are eligible to participate during or
at the time of your termination of employment. Because this Retention
Award represents a unique payment to you, this amount will not be
considered in calculating salary-related benefits (e.g., 401(k) plan
deferrals and retirement plan benefits).
	 
	3.	 	Withholding - All federal, state, city or other taxes that are required
to be withheld pursuant to any applicable law or regulation, will be
deducted from your Retention Award payment.
	 
	4.	 	Resolution of Disputes - The Plan Administrator (as defined in the
Program) or its designee, is responsible for the interpretation of this
Letter and the Program. The Plan Administrator shall have sole and
absolute discretion to resolve any questions, ambiguities or disputes
arising under this Letter and the Program, and its decision shall be final
and binding.
	 
	5.	 	Disclosure - As a condition of receipt of the Retention Award, you agree
that you will not disclose, publicize, or circulate to anyone in whole or
in part, any information concerning the existence, terms, and/or
conditions of this Program without the express written consent of the
Chief Legal Officer of the Company unless required by court order or law.
Notwithstanding the preceding sentence, you may disclose the terms and
conditions of this program to your immediate family members, and any
attorneys or tax advisors, if any, to whom there is a bona fide need for
disclosure in order for them to render professional services to you,
provided that you first instruct each affected family member, attorney,
and tax advisor that he/she must keep the information confidential and may
not make any disclosure of the terms and conditions of this Program,
unless required by court order or law.
	 
	6.	 	No Guarantee of Employment - Nothing in this Letter guarantees you any
specific term of employment or specific assignment. Nothing in this
Letter shall constitute a contract of employment, implied or otherwise,
for a specified duration. Additionally, the Company is an
employment-at-will company, unless otherwise specified in a written
individual employment contract or collective bargaining agreement. Under
employment-at-will, either the Company and/or the employee may terminate
the employment relationship at any time, for any reason, with or without
notice or cause.

Sincerely,

Thomas G. Boren

Executive Vice Presidentexv10w41w3

 

Exhibit 10.41.3

September 9, 2002

Lyndell E. Maddox

11513 Dalyn Terrace

Potomac, MD 20854

Dear Lyn:

As you are aware, Standard & Poor’s and Moody’s Investors Service recently
downgraded the credit ratings of the PG&E National Energy Group (the “Company”)
and two of its subsidiaries to below investment grade. While disappointing,
these downgrades are in keeping with the rating agencies’ larger overall review
of the energy sector. In response to the downgrades and the challenging market
conditions affecting our sector of the energy industry, the Company has
embarked upon a major cost reduction effort with the goal of achieving a
reduction of at least $40 million in annual operating expenses.

In order to encourage you to continue your contribution to the success of the
Company amidst these challenging and disruptive business conditions, you are
being provided with a retention award subject to the terms and conditions set
forth in this letter (the “Letter”) and the PG&E National Energy Group
Management Retention Program (the “Program”).

	1.	 	Retention Award

	 	a.	 	Retention Award Amount - Your award will be an amount equal
to one hundred percent (100%) of your base salary as of the first
business day of September 2002 (the “Retention Award”).
	 
	 	b.	 	Timing of Payment – One third of the Retention Award is
payable as soon as reasonably practicable after January 15, 2003.
The remaining two thirds is payable on the earlier of on the first
business day in October 2003 or should your employment with the
Company cease through no fault of your own, as soon as reasonably
practicable following any such event.
	 
	 	c.	 	Forfeiture of Retention Award - You will not be entitled to
any Retention Award and shall forfeit any claim to the Retention
Award if any of the following occur:

	 	(i)	 	voluntary termination, or termination of
employment for cause; or
	 
	 	(ii)	 	retirement.

 

 

Lyndell E. Maddox

September 9, 2002

Page 2

	2.	 	Other Benefits - The opportunity to earn the Retention Award is in
addition to other compensation and benefits for which you otherwise may be
eligible under any plan in which you are eligible to participate during or
at the time of your termination of employment. Because this Retention
Award represents a unique payment to you, this amount will not be
considered in calculating salary-related benefits (e.g., 401(k) plan
deferrals and retirement plan benefits).
	 
	3.	 	Withholding - All federal, state, city or other taxes that are required
to be withheld pursuant to any applicable law or regulation, will be
deducted from your Retention Award payment.
	 
	4.	 	Resolution of Disputes - The Plan Administrator (as defined in the
Program) or its designee, is responsible for the interpretation of this
Letter and the Program. The Plan Administrator shall have sole and
absolute discretion to resolve any questions, ambiguities or disputes
arising under this Letter and the Program, and its decision shall be final
and binding.
	 
	5.	 	Disclosure – As a condition of receipt of the Retention Award, you agree
that you will not disclose, publicize, or circulate to anyone in whole or
in part, any information concerning the existence, terms, and/or
conditions of this Program without the express written consent of the
Chief Legal Officer of the Company unless required by court order or law.
Notwithstanding the preceding sentence, you may disclose the terms and
conditions of this program to your immediate family members, and any
attorneys or tax advisors, if any, to whom there is a bona fide need for
disclosure in order for them to render professional services to you,
provided that you first instruct each affected family member, attorney,
and tax advisor that he/she must keep the information confidential and may
not make any disclosure of the terms and conditions of this Program,
unless required by court order or law.
	 
	6.	 	No Guarantee of Employment - Nothing in this Letter guarantees you any
specific term of employment or specific assignment. Nothing in this
Letter shall constitute a contract of employment, implied or otherwise,
for a specified duration. Additionally, the Company is an
employment-at-will company, unless otherwise specified in a written
individual employment contract or collective bargaining agreement. Under
employment-at-will, either the Company and/or the employee may terminate
the employment relationship at any time, for any reason, with or without
notice or cause.

Sincerely,

Thomas G. Boren

Executive Vice Presidentexv10xjy

 

Exhibit 10(j)

SANDY SPRING BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

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

INTRODUCTION

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

AGREEMENT

     The Executive and the Bank agree as follows:

Article 1

Definitions

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

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

		
	 	     1.1.2 “Benefit Percentage” means 65%.

		
	 	     1.1.3 “Change in Control” means the earliest of:

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

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

		
	 	     1.1.4 “Code” means the Internal Revenue Code of 1986, as amended. References
to a Code section shall be deemed to be to that section as it now exists
and to any successor provisions.
	 
	 	     1.1.5 “Disability” means a physical or mental infirmity that impairs the
Executive’s ability to substantially perform the Executive’s duties under
this Agreement and that results in the Executive’s becoming eligible for
long-term disability benefits under a long-term disability plan maintained
for Bank employees (or, if the Bank has no such plan in effect, that
impairs the Executive’s ability to substantially perform job duties for a
period of one-hundred and eighty consecutive days). The Board of Directors
of the Bank shall determine whether or not the Executive is and continues
to be permanently disabled for purposes of this Agreement in good faith,
based upon competent medical advice and other factors that it reasonably
believes to be relevant. As a condition to any benefits, the Bank may
require the Executive to submit to such physical or mental evaluations and
tests as the Bank’s Board of Directors deems appropriate.
	 
	 	     1.1.6 “Early Retirement Date” means the date on which the Executive has both
(a) attained age sixty and (b) completed ten Years of Service.
	 
	 	     1.1.7 “Effective Date” means the date of the Agreement as set forth in
paragraph one of this Agreement.

2

 

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

	 	(a)	 	A material reduction in the Officer’s
responsibilities or authority in connection with the
Officer’s employment with Bancorp or the Bank;
	 
	 	(b)	 	Assignment to the Officer of duties
of a nonexecutive nature or duties for which the Officer
is not reasonably equipped by the Officer’s skills and
experience;
	 
	 	(c)	 	A reduction in salary or benefits
contrary to the terms of this Agreement, or, following a
Change in Control as defined in Section 1.1.3 of this
Agreement, any reduction in salary or material reduction
in benefits below the amounts to which the Officer was
entitled prior to the Change in Control;
	 
	 	(d)	 	Termination of incentive and benefit
plans, programs, or arrangements, or reduction of the
Officer’s participation to such an extent as to
materially reduce their aggregate value below their
aggregate value as of the Effective Date;
	 
	 	(e)	 	A requirement that the Officer’s
principal business office or principal place of
residence be relocated outside any county in which the
Bank has its main office, its branches, or its deposit
taking Automatic Teller Machines; or the assignment to
the Officer of duties that would reasonably require such
a relocation;
	 
	 	(f)	 	A requirement that the Officer spend
more than thirty normal working days away from any
county in which the Bank has its main office, its
branches, or its deposit taking Automatic Teller
Machines during any consecutive twelve-month period; or
	 
	 	(g)	 	Failure to provide office facilities,
secretarial services, and other administrative services
to Officer which are substantially equivalent to the
facilities and services provided to the Officer on the
Effective

3

 

	 	 	 	Date (excluding brief periods during which office facilities may be
temporarily unavailable due to fire, natural disaster, or other calamity).
	 
	 	(h)	 	In the event of a Change in Control
as defined in Section 1.1.3 of this Agreement, Officer
shall have the right to resign for any reason during the
first sixty (60) days immediately following the first
six months after the closing date of a definitive
purchase and assumption agreement (as defined in such
agreement), the execution of which brought about a
Change in Control.

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

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

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

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

	 	(a)	 	Personal dishonesty;
	 
	 	(b)	 	Willful misconduct;
	 
	 	(c)	 	Breach of fiduciary duty involving
personal profit;
	 
	 	(d)	 	Intentional failure to perform duties
under this Agreement;
	 
	 	(e)	 	Other, continuing material failure to
perform duties assigned to the Officer under this
Agreement after reasonable notification (which shall be
stated in writing and given at least fifteen days prior
to termination) by the Board of such failure;
	 
	 	(f)	 	Willful violation of any law, rule or
regulation (other than traffic violations or similar
offenses) or final cease-and-desist order; or

4

 

	 	(g)	 	Material breach by the Officer of any
provision of this Agreement or an Employment Agreement
to which the Officer and the Bank are parties.

		
	 	     1.1.12 “Normal Retirement Date” means the date on which the Executive has
both (a) attained age sixty-five and (b) completed ten Years of Service.
	 
	 	     1.1.13 “Termination of Employment” means the Executive’s ceasing to be employed
by the Bank for any reason whatsoever, voluntary or involuntary, other
than by reason of an approved leave of absence.
	 
	 	     1.1.14 “Years of Service” means the total number of twelve-month periods during
which the Executive is employed on a full-time basis by the Bank prior to
and after the date of this Agreement, inclusive of any approved leaves of
absence.

Article 2

Lifetime Benefits

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

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

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

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

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

		
	 	     2.1.1.4 Bank’s Qualified 401(k) and Profit Sharing Plan. The straight
life,

5

 

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

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

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

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

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

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

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

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

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

		
	 	     2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the Normal
Retirement Benefit described in Section 2.1 calculated as if the date of
Termination of

6

 

		
	 	Employment were the Executive’s Normal Retirement Date, or, if elected by the
Executive pursuant to Section 2.4.2.1, the Early Retirement Benefit
described in Section 2.4.1 calculated as if the date of Termination of
Employment were the Executive’s Early Retirement Date.

		
	 	     2.4.2 Payment of Benefits.

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

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

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

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

		
	 	     2.5.2 Vested Accrued Benefit. For purposes of this section 2.5, only, the
Accrued Benefit shall vest in accordance with the following schedule:

	 	 	 	 	 	 
	Years of	 	Percentage of Accrued
	Service	 	Benefit That Is Vested
	
	 	

	 	4
	 	 	0	%
	 	4
	 	 	20	%
	 	5
	 	 	25	%
	 	6
	 	 	30	%

7

 

	 	 	 	 	 	 
	Years of	 	Percentage of Accrued
	Service	 	Benefit That Is Vested
	
	 	

	 	7
	 	 	35	%
	 	8
	 	 	40	%
	 	9
	 	 	45	%
	 	10
	 	 	50	%
	 	11
	 	 	60	%
	 	12
	 	 	70	%
	 	13
	 	 	80	%
	 	14
	 	 	90	%
	 	15
	 	 	100	%

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

Article 3

Death Benefits

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

		
	 	     3.1.1 Insurance Policy in Effect. If the Executive dies while the Insurance
Policy is validly in effect, the benefit under Section 3.1 is the greater
of (i) the lifetime benefit that would have been paid to the Executive
under Section 2.1 calculated as if the date of the Executive’s death were
the Normal Retirement Date, or (ii) the straight life, maximum monthly
payment, fifteen-year annuity, for payments beginning the month following
the Executive’s death, that could be purchased from an issuer rated
superior by A.M. Best (or, in the Bank’s discretion, with an equivalent
rating from another rating organization of similar reputation) for cash
equal to three times the Executive’s Final Average Pay.
	 
	 	     3.1.2 Insurance Policy Not in Effect. If the Executive dies while the
Insurance Policy is not validly in effect, the benefit under Section 3.1
is the Accrued Benefit at the date of the Executive’s death divided by
one-hundred and eighty.
	 
	 	     3.1.3 Payment of Benefit. The Bank shall pay the benefit to the Beneficiary
on the first day of each month commencing with the month following the
Executive’s death and continuing for one-hundred and seventy-nine
additional months.

Article 4

Beneficiaries

     4.1 Beneficiary Designations. The Executive shall designate a beneficiary by
filing a written designation with the Bank. The Executive may revoke or modify
the designation at any

8

 

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

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

Article 5

Adjustment of Certain Payments and Benefits

     The Bank shall indemnify and hold the Officer harmless from any and all
loss, expense, or liability that the Officer may ever incur under Code § 4999,
or any successor provision, as the result of payments or benefits that the
Officer receives from the Bank or any successor to any of its interests. The
Bank shall have this obligation with respect to any excise taxes (and any
federal, state, and local income taxes on those excise taxes) for which the
Officer is liable under Code § 4999, or any successor provision, pursuant to a
tax return on which the Officer reports such excise tax liability based on a
reasonable analysis (that the Officer need not file with the return) prepared
by the Officer’s legal counsel. This paragraph shall survive termination or
expiration of this Agreement for any reason.

Article 6

General Limitations

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

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

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

9

 

Article 7

Claims and Review Procedures

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

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

Article 8

Amendments and Termination

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

Article 9

Miscellaneous

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

10

 

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

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

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

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

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

     8.7 Non-Competition Provisions. Regardless of anything herein to the contrary,
except in the case of a Termination of Employment by the Bank without Just
Cause, a Termination of Employment by the Executive with Good Reason, or with
the permission of the Bank, during the two years immediately following the
Executive’s Termination of Employment, the Executive shall not serve as an
officer or director or employee of any bank holding company, bank, savings
association, savings and loan holding company, or mortgage company (any of
which, a “Financial Institution”) which Financial Institution offers products
or services competing with those offered by the Bank from offices in any county
in the State of Maryland or of any other State in which the Bank or any of its
affiliates has a branch, and shall not interfere with the relationship of the
Bank and any of its employees, agents, or representatives; provided, however,
that the provisions of this noncompetition clause shall only apply to
termination of the Officer “before” a Change in Control as defined in Section
1.1.3. (It being the intent of the parties that the noncompetition clause shall
not apply to terminations resulting from or due to a Change in Control). In
the event of any breach by the Executive of this Covenant Not to Compete, the
Board of Directors of the Bank shall direct that any unpaid balance of any
payments to the

11

 

Executive under this Agreement be suspended, and shall thereupon notify the
Executive of such suspension, in writing. Thereupon, if the Board of Directors
of the Bank shall determine that such breach by the executive exists at any
time after a period of one month following notification of the such suspension,
all rights of the Executive and his beneficiary under this agreement, including
rights to any and all further payments hereunder, shall thereupon terminate.

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

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

	 	 	 	 	 
	 	 	 	 	 
	EXECUTIVE	 	SANDY SPRING BANK
	 	 	 	 	 
	 	 	
By	 	 
	
	 	 	 	

	 	 	 	 	 
	 	 	
Title	 	 
	 	 	 	 	

12

 

SANDY SPRING BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

BENEFICIARY DESIGNATION

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

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

	 	 	 
	Primary Beneficiary:	 	

	 
	 	 	

	 
	Secondary Beneficiary:	 	

	 
	 	 	

	 	 	 
	 	 	 
	SIGNED:	 	 
	 	 	

	 	 	
(Print or Type Name on the Above Line)
	 	 	 
	 	 	

	 	 	
(Signature)

13

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