<PAGE>
As filed with the Securities and Exchange Commission on August 29, 1996
Registration Statement No. 33-___________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
Form S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
______________________
SANDY SPRING BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
Delaware 52-1532952
(State or Other Jurisdiction of (IRS Employer I.D. Number)
Incorporation or Organization)
</TABLE>
17801 Georgia, Avenue, Olney, Maryland 20832
(Address of Principal Executive Offices) (Zip Code)
SANDY SPRING BANCORP, INC. AMENDED AND RESTATED STOCK OPTION
PLAN FOR EMPLOYEES OF ANNAPOLIS BANCSHARES, INC.
(Full Title of Plan)
Hunter R. Hollar
SANDY SPRING BANCORP, INC.
17801 Georgia, Avenue
Olney,Maryland 20832
(301) 774-6400
(Name, Address, and Telephone Number of Agent for Service)
Copies to:
James I. Lundy, III, Esquire
Kennedy & Baris, L.L.P.
Suite 300
4719 Hampden Lane
Bethesda, Maryland 20814
___________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Title of Securities Amount Proposed Proposed Amount of
to be Registered to be Registered/(1)/ Maximum Offering Maximum Aggregate Registration Fee
Common Stock, Price per Share/(2)/ Offering Price/(2)/
$1.00 par value $85,740 $13.98 $85,740 $100.00
</TABLE>
(1) Represents the aggregate exercise prices of the options to which this
Registration Statement relates, in accordance with the provisions of Rule
457(h)(1) under the Securities Act of 1933.
(2) Represents the highest exercise price of any of the options to which this
Registration Statement relates, in accordance with the provisions of Rule
457(h)(1) under the Securities Act of 1933.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Certain Documents by Reference.
The following documents filed with Securities and Exchange Commission
are hereby incorporated by reference herein:
(1) Sandy Spring's Annual Report on Form 10-K for the year ended
December 31, 1995;
(2) Sandy Spring's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 and June 30, 1996;
(3) Sandy Spring's Current Report on Form 8-K dated April 16, 1996; and
(4) The description of Sandy Spring Common Stock contained in Sandy
Spring's Notice of Annual Meeting and Proxy Statement dated March
24, 1992 and Current Report on Form 8-K, dated May 13, 1992.
(5) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 since the end of the
fiscal year covered by the annual report referred to in (1) above;
All documents filed by Sandy Spring pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934 subsequent to the date
hereof, and prior to the filing of a post-effective amendment hereto which
indicates that all securities offered hereby shall have been sold or which
deregisters all securities remaining unsold, shall be deemed to be incorporated
by reference herein and to be a part hereof from the date of filing of such
documents.
ITEM 4. Description of Securities
As the securities to be issued pursuant to this registration statement
are registered under Section 12 of the Securities Exchange Act of 1934, this
item is inapplicable.
ITEM 5. Interest of Named Experts and Counsel.
Not Applicable.
ITEM 6. Indemnification of Directors and Officers
Sandy Spring's Articles of Incorporation generally provide for
indemnification to the extent authorized by applicable law. Section 2-418 of the
Maryland General Corporation Law sets forth circumstances under which directors,
officers, employees and agents of Sandy Spring may be insured or indemnified
against liability which they may incur in their capacities:
2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS. -- (a)
In this section the following words have the meanings indicated.
(1) "Director" means any person who is or was a director of a
corporation and any person who, while a director of a corporation, is or was
serving at the request of the corporation as a director, officer, partner,
trustee,
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employee, or agent of another foreign or domestic corporation, partnership,
joint venture, other enterprise, or employee benefit plan.
(2) "Corporation" includes any domestic or foreign predecessor entity of
a corporation in a merger, consolidation, or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(3) "Expenses" include attorney's fees.
(4) "Official capacity" means the following:
(i) When used with respect to a director, the office of director in the
corporation; and
(ii) When used with respect to a person other than a director as
contemplated in sub-section (j), the elective or appointive office in the
corporation held by the officer, or the employment or agency relationship
undertaken by the employee or agent on behalf of the corporation.
(iii) "Official capacity" does not include service for any other foreign
or domestic corporation or any partnership, joint venture, trust, other
enterprise, or employee benefit plan.
(5) "Party" includes a person who was, is, or is threatened to be made a
named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, or investigative.
(b)(1) A corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it is established that:
(i) The act or omission of the director was material to the matter
giving rise to the proceeding; and
1. Was committed in bad faith; or
2. Was the result of active and deliberate dishonesty; or
(ii) The director actually received an improper personal benefit in
money, property, or services; or
(iii) In the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful.
(2)(i) Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding.
(ii) However, if the proceeding was one by or in the right of the
corporation, indemnification may not be made in respect of any proceeding in
which the director shall have been adjudged to be liable to the corporation.
(3)(i) The termination of any proceeding by judgment, order, or
settlement does not create a presumption that the director did not meet the
requisite standard of conduct set forth in this subsection.
(ii) The termination of any proceeding by conviction, or a plea of nolo
contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttal presumption that the director did not meet that
standard of conduct.
(c) A director may not be indemnified under subsection (B) of this
section in respect of any proceeding charging improper personal benefit to the
director, whether or not involving action in the director's official capacity,
in which the director was adjudged to be liable on the basis that personal
benefit was improperly received.
(d) Unless limited by the charter:
(1) A director who has been successful, on the merits or otherwise, in
the defense of any proceeding referred to in subsection (B) of this section
shall be indemnified against reasonable expenses incurred by the director in
connection with the proceeding.
(2) A court of appropriate jurisdiction upon application of a director
and such notice as the court shall require, may order indemnification in the
following circumstances:
(i) If it determines a director is entitled to reimbursement under
paragraph (1) of this subsection, the court shall order indemnification, in
which case the director shall be entitled to recover the expenses of securing
such reimbursement; or
(ii) If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances, whether
or not the director has met the standards of conduct set forth in subsection (b)
of this section or has been adjudged liable under the circumstances described in
subsection (c) of this section, the court may order such indemnification as the
court shall deem proper. However, indemnification with respect
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to any proceeding by or in the right of the corporation or in which liability
shall have been adjudged in the circumstances described in subsection (c) shall
be limited to expenses.
(3) A court of appropriate jurisdiction may be the same court in which
the proceeding involving the director's liability took place.
(e)(1) Indemnification under subsection (b) of this section may not be
made by the corporation unless authorized for a specific proceeding after a
determination has been made that indemnification of the director is permissible
in the circumstances because the director has met the standard of conduct set
forth in subsection (b) of this section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote of a quorum consisting
of directors not, at the time, parties to the proceeding, or, if such a quorum
cannot be obtained, then by a majority vote of a committee of the board
consisting solely of two or more directors not, at the time, parties to such
proceeding and who were duly designated to act in the matter by a majority vote
of the full board in which the designated directors who are parties may
participate;
(ii) By special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in subparagraph (I) of this
paragraph, or, if the requisite quorum of the full board cannot be obtained
therefor and the committee cannot be established, by a majority vote of the full
board in which directors who are parties may participate; or
(iii) By the shareholders.
(3) Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner as the determination
that indemnification is permissible. However, if the determination that
indemnification is permissible is made by special legal counsel, authorization
of indemnification and determination as to reasonableness of expenses shall be
made in the manner specified in subparagraph (ii) of paragraph (2) of this
subsection for selection of such counsel.
(4) Shares held by directors who are parties to the proceeding may not
be voted on the subject matter under this subsection.
(f)(1) Reasonable expenses incurred by a director who is a party to a
proceeding may be paid or reimbursed by the corporation in advance of the final
disposition of the proceeding upon receipt by the corporation of:
(i) A written affirmation by the director of the director's good faith
belief that the standard of conduct necessary for indemnification by the
corporation as authorized in this section has been met; and
(ii) A written undertaking by or on behalf of the director to repay the
amount if it shall ultimately be determined that the standard of conduct has not
been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of
this subsection shall be an unlimited general obligation of the director but
need not be secured and may be accepted without reference to financial ability
to make the repayment.
(3) Payments under this subsection shall be made as provided by the
charter, bylaws or contract or as specified in subsection (e) of this section.
(g) The indemnification and advancement of expenses provided or
authorized by this section may not be deemed exclusive of any other rights, by
indemnification or otherwise, to which a director may be entitled under the
charter, the bylaws, a resolution of shareholders of directors, an agreement or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office.
(h) This section does not limit the corporation's power to pay or
reimburse expenses incurred by a director in connection with an appearance as a
witness in a proceeding at a time when the director has not been made a named
defendant or respondent in the proceeding.
(i) For purposes of this section:
(1) The corporation shall be deemed to have requested a director to
serve an employee benefit plan where the performance of the director's duties to
the corporation also imposes duties on, or otherwise involves services by, the
director to the plan or participants or beneficiaries of the plan:
(2) Excise taxes assessed on a director with respect to an employee
benefit plan pursuant to applicable law shall be deemed fined; and
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(3) Action taken or omitted by the director with respect to an employee
benefit plan in the performance of the director's duties for a purpose
reasonably believed by the director to be in the interest of the participants
and beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the corporation.
(j) Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as and to the
extent provided in subsection (d) of this section for a director and shall be
entitled, to the same extent as a director, to seek indemnification pursuant to
the provisions of subsection (d);
(2) A corporation may indemnify and advance expenses to an officer,
employee, or agent of the corporation to the same extent that it may indemnify
directors under this section; and
(3) A corporation, in addition, may indemnify and advance expenses to an
officer, employee, or agent who is not a director to such further extent,
consistent with law, as may be provided by its charter, bylaws, general or
specific action of its board of directors or contract.
(k)(1) A corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise, or employee
benefit plan against any liability asserted against and incurred by such person
in any such capacity or arising out of such person's position, whether or not
the corporation would have the power to indemnify against liability under the
provisions of this section.
(2) A corporation may provide similar protection, including a trust
fund, letter of credit, or surety bond, not inconsistent with this section.
(3) The insurance or similar protection may be provided by a subsidiary
or an affiliate of the corporation.
(l) Any indemnification of, or advance of expenses to, a director in
accordance with this section, if arising out of a proceeding by or in the right
of the corporation, shall be reported in writing to the shareholders with the
notice of the next shareholders' meeting or prior to the meeting.
Sandy Spring has purchased director and officer liability insurance that
insures directors and officers against certain liabilities in connection with
the performance of their duties as directors and officers, and that provides for
payment to Sandy Spring of costs incurred by it in indemnifying its directors
and officers.
ITEM 7. Exemption From Registration Claimed.
As no restricted securities are to be reoffered or resold pursuant to
this registration statement, this item is inapplicable.
ITEM 8. Exhibits.
The exhibits required by Item 601 of Regulation S-K and this item are
included following the Exhibit Index at Page R-7 hereof.
ITEM 9. Undertakings.
The Registrant hereby undertakes that it will:
(1) file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to: (i) include any
prospectus required by section 10(a)(3) of the Securities Act of 1933 (the
"Act"); (ii) reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information in the registration statement; and (iii)
include any material information with
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respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
(2) for determining liability under the Act, treat each post-effective
amendment as a new registration statement relating to the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
(3) file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act") (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Olney,
State of Maryland on August 28, 1996.
SANDY SPRING BANCORP, INC.
By: /s/ Hunter R. Hollar
------------------------------------
Hunter R. Hollar, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
We, the undersigned directors and officers of the registrant, hereby
severally constitute and appoint Marjorie S. Cook and Hunter R. Hollar, and each
of them, our true and lawful attorneys and agents, to do any and all things in
our names in the capacities indicated below which said person and/or persons may
deem necessary or advisable to enable the registrant to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with the registration
statement on Form S-8 relating to the offering of the registrant's Common Stock,
including specifically, but not limited to, power and authority to sign for us
in our names in the capacities indicated below the registration statement and
any all amendments (including post-effective amendments) thereto; and we hereby
approve, ratify and confirm all that said person and/or persons shall do or
cause to be done by virtue thereof.
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<S> <C> <C>
/s/ Andrew N. Adams, Jr. Director August 28, 1996
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Andrew N. Adams, Jr.
/s/ John Chirtea Director August 28, 1996
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John Chirtea
/s/ Willard H. Derrick Chairman of the August 28, 1996
- ------------------------------------------------
Willard H. Derrick Board of Directors
/s/ Susan D. Goff Director August 28, 1996
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Susan D. Goff
/s/ Solomon Graham, Jr. Director August 28, 1996
- ------------------------------------------------
Solomon Graham, Jr.
/s/ Joyce R. Hawkins Director August 28, 1996
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Joyce R. Hawkins
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ Hunter R. Hollar President, Chief Executive Officer August 28, 1996
- ------------------------------------------------
Hunter R. Hollar and Director
/s/ Thomas O. Keech Director August 28, 1996
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Thomas O. Keech
/s/ Charles F. Mess Director August 28, 1996
- ------------------------------------------------
Charles F. Mess
/s/ Robert L. Mitchell Director August 28, 1996
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Robert L. Mitchell
Director _______________, 1996
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Robert L. Orndorff, Jr.
/s/ Lewis R. Schumann Director August 28, 1996
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Lewis R. Schumann
/s/ W. Drew Stabler Director August 28, 1996
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W. Drew Stabler
/s/ James H. Langmead Vice President, Treasurer and August 28, 1996
- ------------------------------------------------
James H. Langmead Principal Financial and
Accounting Officer
</TABLE>
<PAGE>
Index to Exhibits
Exhibit Number Description
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4 Sandy Spring Bancorp, Inc. Amended and Restated Stock Option Plan
for Employees of Annapolis Bancshares, Inc. (formerly, the
Annapolis Bancshares, Inc. Incentive Stock Option Plan.) ........
5 Opinion of Kennedy & Baris, L.L.P. ..............................
23(a) Consent of Kennedy & Baris, L.L.P., included in Exhibit 5 .......
23(b) Consent of Stegman & Company ....................................
<PAGE>
EXHIBIT 4
SANDY SPRING BANCORP AMENDED AND RESTATED
STOCK OPTION PLAN FOR EMPLOYEES OF
ANNAPOLIS BANCSHARES, INC.
Sandy Spring Bancorp, Inc., ("Bancorp") a Maryland corporation, Sandy
Spring National Bank of Maryland (the "Bank"), a national banking organization
with its main office in Olney, Maryland, Annapolis Bancshares, Inc. ("ABI") a
Maryland corporation, and Bank of Annapolis ("BOA"), a trust company chartered
under the laws of the State of Maryland with its principal banking office in
Annapolis, Maryland, have entered into an Agreement and Plan of Reorganization
(the "Agreement") as of April 16, 1996. All capitalized terms used herein shall
have the meanings assigned to them in the Agreement unless otherwise defined
herein.
Under the terms of the Agreement:
(a) The ABI Incentive Stock Option Plan at the Effective Time each
outstanding ABI Option issued under the ABI Incentive Stock Option
Plan (from time to time hereinafter, as in existence prior to the
Effective Time of the Merger of ABI with and into the Bancorp, the
"ABI Plan") shall continue in place as an option to purchase, in
place of the purchase of each share of ABI common stock, the number
of shares (calculated to four decimal places and then rounded up or
down to the nearest whole share) of Bancorp common stock that would
have been received by the holder of such ABI Option in the Merger had
the option or warrant been exercised in full for shares of ABI common
stock immediately prior to the Effective Time, except for appropriate
pro rata adjustments as to the relevant option price for shares of
Bancorp common stock substituted therefor so that the aggregate
exercise price of shares subject to such ABI Options immediately
following the Effective Time shall be the same as the aggregate
exercise price for such shares immediately prior to the Effective
Time;
(b) The number of shares (or fraction thereof) of Bancorp common stock
into which each share of ABI common stock shall be so converted shall
be increased or decreased proportionally to reflect any stock split,
stock dividend, or reclassification of Bancorp common stock made or
declared between the date of this Agreement and the Effective Time,
and shall be subject to adjustment as set forth in paragraphs (f) and
(g) of Section 7.4 of this Agreement; and the number of shares of
Bancorp common stock issuable upon the exercise of the ABI Options
and ABI Warrants converted into options and warrants for shares of
Bancorp, and the exercise price therefor, shall similarly be
adjusted;
(c) The ABI Plan shall continue in effect but no additional options shall
be available for grant thereunder after the Effective Time;
(d) From time to time after the Effective Time, Bancorp shall reserve for
issuance such number of shares of Bancorp common stock as necessary
to permit the exercise of the ABI Options and the ABI Warrants that
have been converted into options or warrants for the purchase of
Bancorp common stock pursuant to this Agreement;
(e) Bancorp shall make all filings required under federal and state
securities laws so as to permit the exercise of the ABI Options so
converted and the sale of shares received by the optionees upon
exercise as contemplated by the ABI Plan; and
(f) Neither the Merger nor the terms of this Agreement shall limit any
periods in which the ABI Options and ABI Warrants may be exercised.
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The ABI Incentive Stock Option Plan as assumed by Bancorp will hereinafter
be referred to from time to time to time hereinafter as the "Plan". Attached
hereto as Exhibit A is a list of the outstanding options as of the Effective
Time. The entire Text of the Plan following the Effective Time is as follows:
1. PURPOSE. The Plan shall be known as the Sandy Spring Bancorp, Inc. Amended
and Restated Stock Option Plan for Employees of Annapolis Bancshares, Inc.
(formerly, the Annapolis Bancshares, Inc. Incentive Stock Option Plan). This
Plan amends and restates the Annapolis Bancshares, Inc. Incentive Stock Option
Plan. The purpose of the Plan is to advance the interest of Bancorp and its
shareholders by providing key employees of ABI and its affiliates, with options
under the terms set forth herein. The Plan is intended to provide for the grant
of only Incentive Stock Options.
2. DEFINITIONS.
(a) "Board of Directors" means the Board of Directors of Bancorp, sometimes
referred to as the "Board."
(b) "Committee" means the Option Committee of the Board of Directors of
Bancorp.
(c) "Affiliate" means (i) a member of a controlled group of corporations of
which the Bancorp is a member or (ii) an unincorporated trade or business which
is under common control with the Bancorp as determined in accordance with
Section 414(c) of the Internal Revenue Code (the "Code") and the regulations
issued thereunder. For purposes hereof, a "controlled group of corporations"
shall mean a controlled group of corporations as defined in Section 1563(a) of
the Code determined without regards to Section 1563(a)(4) and (e)(3)(c).
(d) "Award" means an Award of Non-qualified Stock Options, Incentive Stock
Options, and/or Limited Rights granted under the provisions of the Plan.
(e) "Plan Year or Years" means a calendar year or years commencing on or
after December 31, 1987.
(f) "Date of Grant" means the actual date on which an Award is granted by
the Committee.
(g) "Common Stock" means the common stock of the Bancorp, par value $1.00
per share.
(h) "Fair Market Value" means the fair market value of the Bancorp's stock
as determined by the Option Committee of the Board of Directors.
(i) "Limited Right" means the right to receive an amount of cash based upon
the terms set forth in Section 9.
(j) "Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of an employee to perform the work
customarily assigned to him. Additionally, a medical doctor selected or approved
by the Committee must advise the Committee that it is either not possible to
determine when such disability will terminate or that it appears probable that
such disability will be permanent during the remainder of such Participant's
lifetime.
(k) "Discharged for Cause" means the termination upon an intentional
failure to perform stated duties or breach of a fiduciary duty involving
personal dishonesty, which results in a substantial loss to the Bancorp or one
of its affiliates or the willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order
which results in substantial loss to the Bancorp.
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(l) "Participant" means an employee of ABI or its affiliates chosen by the
Personnel Committee of ABI to participate in the Plan.
(m) "Change in Control" of Bancorp means a Change in Control of a nature
that: (i) would be required to be reported in response to Item 1 of the current
report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); (ii) would
result in a Change in Control of Bancorp within the meaning of Section 407(q) of
the National Housing Act, and Section 574.4 of the Rules and Regulations for
Insurance of Accounts promulgated thereunder; or (iii) without limitation, such
a Change in Control shall be deemed to have occurred at such time as (a) any
"person" (as such term is used in Section 13(d) and 14(d) of the Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of Bancorp representing 10%
or more of the combined voting power of Bancorp's outstanding Common Stock
ordinarily having the right to vote at the election of directors (except for any
Common Stock purchased by the ESOP of Bancorp; or (b) individuals who constitute
the Board of Directors on the effective date of the Plan (the "Incumbent Board")
cease for any reason to constitute at least a majority thereof, provided that
any person becoming a director subsequent to the effective date of the Plan
whose election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for election by
Bancorp's shareholders was approved by Bancorp and Bancorp's Nominating
Committee, serving under the Incumbent Board, shall be, for purposes of this
clause (b), considered as though he were a member of the Incumbent Board; or (c)
a merger, consolidation or sale of all or substantially all of the assets of
Bancorp occurs unless such merger or consolidation shall have been affirmatively
recommended to Bancorp's shareholders by a majority of the Incumbent Board; or
(d) a proxy statement soliciting proxies from shareholders of Bancorp, by
someone other than the current management of Bancorp, seeking consolidation of
the Association with one or more corporations as a result of which the
outstanding shares of Bancorp's Common Stock then subject to the Plan are
exchanged for or converted into cash or property or securities not issued by
Bancorp, unless the reorganization, merger or consolidation shall have been
affirmatively recommended to Bancorp's shareholders by a majority of the
Incumbent Board.
3. ADMINISTRATION. The Plan shall be administered by the Option Committee of
the Board of Directors which shall consist of three or more directors, none of
whom shall be eligible to receive any Awards under the Plan. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it sees necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it sees as necessary or advisable. All determinations and interpretations made
by the Committee shall be binding and conclusive on all Participants in the Plan
and on their legal representatives and beneficiaries.
4. TYPES OF AWARDS. Awards under the Plan may be granted in any one or a
combination of:
(a) Incentive Stock Options;
(b) Non-qualified Stock Options;
(c) Limited Rights;
as defined below in paragraphs 7-9 of the Plan.
5. STOCK SUBJECT TO THE PLAN. Subject to adjustment as provided in Section
13, the maximum number of shares reserved for issuance under the Plan is 6,384
shares of Common Stock of Bancorp, par value $1.00 per share. These shares of
Common Stock may be either authorized but unissued shares or shares previously
issued and reacquired by Bancorp. To the extent that options or rights granted
under the Plan are exercised, the shares covered will be unavailable for future
grants under the Plan; to the extent that options together with any related
rights granted under the Plan terminate, expire or are cancelled without having
been exercised or, in the case of Limited Rights exercised for cash, new Awards
may be made with respect to these shares.
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6. ELIGIBILITY. Officers and other employees of Bancorp or its affiliates
shall be eligible to receive Incentive Stock Options, Non-qualified Stock
Options and/or Limited Rights under the Plan. Directors who are not employees
or officers of Bancorp or its affiliates shall not be eligible to receive Awards
under the Plan.
Participants as of the time the Merger is consummated shall be eligible to
participate in the Plan to the extent that such Participants held outstanding
options under the Annapolis Bancshares, Inc. Incentive Option Plan as of the
Effective Time of the Merger.
7. NON-QUALIFIED STOCK OPTIONS.
7.1 Grant of Non-qualified Stock Options. The Committee may, from time to time,
grant Non-qualified Stock Options to eligible employees. Non-qualified Stock
Options granted under this Plan are subject to the following terms and
conditions:
(a) Price. The purchase price per share of Stock deliverable upon the
exercise of each Non-qualified Stock Option shall be not less than 100% of the
Fair Market Value of Bancorp's Common Stock on the date the option is granted.
Shares may be purchased only upon full payment of the purchase price. Payment
of the purchase price may be made, in whole or in part, through the surrender of
shares of the Common Stock of Bancorp at the Fair Market Value of such shares
determined in the manner described in Section 2(h).
(b) Terms of Options. The term during which each Non-qualified Stock
Option may be exercised shall be determined by the Committee, but in no event
shall a Non-qualified Stock Option be exercisable in whole or in part more than
10 years and one day from the Date of Grant. The Committee shall determine the
date on which each Non-qualified Stock Option shall become exercisable in
installments. The shares comprising each installment may be purchased in whole
or in part at any time after such installment becomes purchasable. The
Committee may, in its sole discretion, accelerate the time at which any Non-
qualified Stock Option may be exercisable in whole or in part. Notwithstanding
the above, in the event of a Change of Control of Bancorp, all Non-qualified
Stock Options shall become immediately exercisable.
(c) Termination of Employment. Upon the termination of an employee's
service for any reason other than disability, death, retirement or cause, his
Non-qualified Stock Options shall be exercisable only as to those shares which
were immediately purchasable by him at the date of termination and only for a
period of three months following termination. If an employee is Discharged for
Cause all rights under his Non-qualified Stock Options shall expire upon
termination. In the event of the death, disability or retirement of any
employee, all Non-qualified Stock Options held by the employee, whether or not
exercisable at such time, shall be exercisable by his legal representatives or
beneficiaries for one year following the time of his death or cessation of
employment. In no event shall the period extend beyond the expiration of the
Non-qualified Stock Option term.
8. INCENTIVE STOCK OPTIONS
8.1 Grant of Incentive Stock Options. The Committee may, from time to time,
grant Incentive Stock Options to eligible employees. Incentive Stock Options
granted pursuant to the Plan shall be subject to the following terms and
conditions:
(a) Price. The purchase price per share of Stock deliverable upon the
exercise of each Incentive Stock Option shall be not less than 100% of the Fair
Market Value of Bancorp's Common Stock on the date the Incentive Stock Option is
granted. However, if an employee owns Common Stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Association, the purchase price per share of Common Stock deliverable upon the
exercise of each Incentive Stock Option shall not be less than 110% of the Fair
Market Value of Bancorp's Common Stock on the date the Incentive Stock Option is
granted. Shares may be purchased only upon payment of the full purchase price.
Payment of the purchase price may be made, in whole or
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in part, through the surrender of shares of the Common Stock of Bancorp at the
Fair Market Value of such shares determined in the manner described in Section
2(h).
(b) Amounts of Options. Incentive Stock Options may be granted to any
eligible employee in such amounts as determined by the Committee; provided that
the amount granted is consistent with the terms of Section 422A of the Code. In
the case of an option intended to qualify as an Incentive Stock Option, the
aggregate Fair Market Value (determined as of the time the option is granted) of
the Common Stock with respect to which Incentive Stock Options granted are
exercisable for the first time by the Participant during any calendar year
(under all plans of the Participant's employer corporation and its parent and
subsidiary corporations) shall not exceed $100,000. The provisions of this
Section 8.1(b) shall be construed and applied in accordance with Section
422A(b)(7) of the Code and the regulations, if any, promulgated thereunder.
(c) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than 10 years
from the Date of Grant. If any employee, at the time an Incentive Stock Option
is granted to him, owns Common Stock representing more than ten percent of the
total combined voting power of Bancorp (or, under Section 425(d) of the Code, is
deemed to own Bancorp Stock representing more than 10 percent of the total
combined voting power of all such classes of stock, by reason of the ownership
of such classes of stock, directly or indirectly, by or for any brother, sister,
spouse, ancestor or lineal descendant of such employee,or by or for any
corporation, partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), the Incentive Stock Option granted to him
shall not be exercisable after the expiration of five years from the Date of
Grant. No Incentive Stock Option granted under this Plan is transferrable
except by will or the laws of descent and distribution and is exercisable in his
lifetime only by the employee to which it is granted.
The Committee shall determine the date on which each Incentive Stock Option
shall become exercisable and may provide that an Incentive Stock Option shall
become exercisable in installments. The shares comprising each installment may
be purchased in whole or in part at any time after such installment becomes
purchasable, provided that the amount able to be first exercised in a given year
is consistent with the terms of Section 422A of the Code. The Committee may, in
its sole discretion, accelerate the time at which any Incentive Stock Option
may be exercised in whole or in part, provided that it is consistent with the
terms of Section 422A of the Code. Notwithstanding the above, in the event of a
Change in Control of Bancorp, all Incentive Stock Options then granted shall
become immediately exercisable.
(d) Termination of Employment. Upon the termination of an employee's
service for any reason other than disability, death, retirement or cause, his
Incentive Stock Options shall be exercisable only as to those shares which were
immediately purchasable by him at the date of termination and only for a period
of three months following termination. If an employee is Discharged for Cause
all rights under his Incentive Stock Options shall expire upon termination. In
the event of death or disability of any employee all Incentive Stock Options
held by such employee, whether or not exercisable at such time, shall be
exercisable by his legal representatives or beneficiaries for one year following
the date of his death or cessation of employment. Upon termination of an
employee's service due to retirement, all Incentive Stock Options held by such
employee, shall be exercisable for a period of three months following his
termination. In no event shall the period extend beyond the expiration of the
Incentive Stock Option term.
9. LIMITED RIGHTS.
(a) Grant of Limited Rights. The Committee may grant a Limited Right
simultaneously with or subsequent to the grant of any option, with respect to
all or some of the shares covered by such option. Limited Rights granted under
this plan are subject to the following terms and conditions:
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In no event shall a Limited Right be exercisable in whole or in part before
the expiration of six months from the Date of Grant of the Limited Right. A
Limited Right may be exercised only in the event of a Change in Control of
Bancorp.
The Limited Right may be exercised only when the underlying option is
eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
option.
Upon exercise of a Limited Right, the related option shall cease to be
exercisable. Upon exercise or termination of an option, any related Limited
Right shall terminate. The Limited Right may be for no more than 100% of the
difference between the exercise price and the market price of the stock subject
to the underlying option. The Limited Right is transferrable only when the
underlying option is transferrable and under the some conditions.
There are no Limited Rights outstanding at the Effective Time of the
Merger.
(b) Payment. Upon exercise of a Limited Right, the holder shall receive
from Bancorp an amount of cash equal to the difference between the Fair Market
Value on the Date of Grant of the related option and the Fair Market Value of
the underlying shares on the date the Limited Right is exercised, multiplied by
the number of shares with respect to which such Limited Right is being
exercised.
(c) Termination of Employment. Upon the termination of an employee's
service for any reason other than disability, death, retirement or cause, any
Limited Rights held by him shall be exercisable only as to those shares of the
related option which were immediately purchasable at the date of termination and
only for a period of three months following termination. If any employee is
Discharged for Cause, all Limited Rights held by him shall expire immediately.
In the event of death, disability or the retirement of any employee, all Limited
Rights held by such employee shall be exercisable by his legal representative or
beneficiaries for one year from the date of such termination. In no event shall
the period extend beyond the expiration of the term of the related option.
10. RIGHTS OF A SHAREHOLDER: NONTRANSFERABILITY. An optionee shall have no
rights as a shareholder with respect to any shares covered by a Non-qualified
and/or Incentive Stock Option until the date of issuance of a stock certificate
for such shares. Nothing in this Plan or in any Award granted confers on any
person any right to continue in the employ of Bancorp or its affiliates or to
continue to perform services for Bancorp or its affiliates or interferes in any
way with the right of Bancorp or its affiliates to terminate his services as an
officer or other employee at any time.
No award under the Plan shall be transferred by the optionee other than by
the laws of descent and distribution and may only be exercised during his
lifetime by the optionee, or by a guardian or legal representative.
11. AGREEMENT WITH GRANTEES. Each Award of options, and/or Limited Rights will
be evidenced by a written agreement, executed by the Participant and Bancorp or
its affiliates which describes the conditions for receiving the Award including
the date of Award, the purchase price if any, applicable periods, and any other
terms and conditions as may be required by the Committee or applicable
securities law.
The President and Chief Executive Officer of Bancorp and such other
officers as shall be designated by the Committee are hereby authorized to
execute instruments evidencing Options on behalf of Bancorp and to cause them to
be delivered to the Participants.
12. DESIGNATION OF BENEFICIARY. A Participant may, with the consent of the
committee, designate a person or persons to receive, in the event of death, any
stock option or Limited Rights Award to which he would then be entitled. Such
designation will be made upon forms supplied by and delivered to Bancorp and may
be revoked in writing. If a Participant fails effectively to designate a
beneficiary, then his estate will be deemed to be the beneficiary.
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13. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the
outstanding shares of Common Stock of Bancorp by reason of any stock dividend or
split, recapitalization, merger, consolidation, spin-off, reorganization,
combination or exchange of shares, or other similar corporate change, the
Committee will make such adjustments to previously granted Awards, to prevent
dilution or enlargement of the rights of the Participant, including any or all
of the following:
(a) adjustments in the aggregate number or kind of shares of Common Stock
which may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common Stock
covered by Awards already made under the Plan;
(c) adjustments in the purchase price of outstanding Incentive and/or Non-
qualified Stock Options, or any Limited Rights attached to such options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award.
14. WITHHOLDING. There will be deduction from each distribution of cash and/or
stock under the Plan the amount of tax required by any governmental authority to
be withheld.
15. AMENDMENT OF THE PLAN. The Board may at any time, and from time to time,
modify or amend the Plan in any respect; provided however, that unless also
approved by shareholders, any such modification or amendment shall not:
(a) increase the maximum number of shares for which options may be granted
under the Plan (subject, however, to the provisions of Section 13 hereof);
(b) reduce the option price at which Awards may be granted;
(c) extend the period during which options may be granted or exercised
beyond the times originally prescribed; or
(d) change the persons eligible to participate in the Plan.
Failure to ratify or approve amendments or modifications to subsections (a)
through (d) shall be effective only as to the specific amendment or modification
requiring such ratification. Other provisions, sections, and subsections of
this Plan will remain in full force and effect. No such termination,
modification or amendment may affect the rights of a Participant under an
outstanding Award.
16. EFFECTIVE DATE OF PLAN. The Plan shall be deemed adopted and effective
upon the Effective Time of the Merger of ABI with and into the Company. All
Options outstanding at the Effective Time were originally granted under the
Annapolis Bancshares, Inc. Incentive Stock Option Plan.
17. TERMINATION OF THE PLAN. The right to grant Awards under the Plan will
terminate upon the earlier of ten years after the effective date of the Plan or
the issuance of stock or the exercise of options or related rights equaling the
maximum number of shares reserved under the Plan as set forth in Section 5. The
Board of Directors has the right to suspend or terminate the Plan at any time,
provided that no such action will, without the consent of a Participant,
adversely affect his or her rights under a previously granted Award.
After consummation of the Merger, no further Options and no Limited Rights
shall be granted under the Plan.
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18. APPLICABLE LAW. The Plan will be administered in accordance with the laws
of the State of Maryland.
* * * *
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EXHIBIT 5
TEXAS OFFICE:
SUITE 1775
112 EAST PECAN STREET
SAN ANTONIO, TX 78205
(210) 228-9500
FAX: (210) 228-0781
KENNEDY & BARIS, L.L.P.
ATTORNEYS AT LAW
SEVENTH FLOOR
1225 NINETEENTH STREET, NW
WASHINGTON, DC 20036
(202) 835-0313
FAX: (202) 835-0319
MARYLAND OFFICE:
SUITE 300
4719 HAMPDEN LANE
BETHESDA, MD 20814
(301) 654-6040
FAX: (301) 654-1733
August 28, 1995
Board of Directors
Sandy Spring Bancorp, Inc.
17801 Georgia Avenue
Olney, Maryland 20832
Gentlemen:
As special legal counsel to Sandy Spring Bancorp, Inc. (the "Company"), we
have participated in the preparation of the Company's Registration Statement on
Form S-8 to be filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, relating to the issuance of shares (the
"Shares") of the Company's Common Stock pursuant to the exercise of options
outstanding under the Sandy Spring Bancorp, Inc. Amended and Restated Stock
Option Plan for Employees of Annapolis Bancshares, Inc. (formerly, the Annapolis
Bancshares, Inc. Incentive Stock Option Plan) (the "Plan").
As counsel to the Company, we have examined such corporate records,
certificates and other documents of the Company, and made such examinations of
law and other inquiries of such officers of the Company, as we have deemed
necessary or appropriate for purposes of this opinion. Based upon such
examinations we are of the opinion that the Shares, when issued in accordance
with the provisions of the Plan and the options granted pursuant thereto, will
be duly authorized, validly issued, fully paid and non-assessable shares of the
Common Stock of the Company.
We hereby consent to the inclusion of this opinion as an exhibit to
the Registration Statement on Form S-8 filed by the Company and to the reference
to our firm contained.
Sincerely,
/s/ Kennedy & Baris, L.L.P.
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Form S-8 of
Sandy Spring Bancorp, Inc. (the "Company") of our report dated February 8, 1996
which appears on page 43 of the Annual Report to Shareholders of the Company.
/s/ Stegman & Company
Towson, Maryland
August 29, 1996
