<PAGE>
As filed with the Securities and Exchange Commission on June , 1999
Registration Statement No. 333-
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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)
Maryland 52-1532952
(State or Other Jurisdiction of (IRS Employer I.D. Number)
Incorporation or Organization)
17801 Georgia Avenue, Olney, Maryland 20832
(Address of Principal Executive Offices)
(Zip Code)
Sandy Spring Bancorp 1999 Option Plan
(Full Title of Plan)
Hunter R. Hollar
Sandy Spring Bancorp, Inc.
17801 Georgia Avenue
Olney, Maryland 20832
(Name, Address, and Telephone Number of Agent
for Service)
Copies to:
James I. Lundy, III, Esquire
Noel M. Gruber, Esquire
Kennedy, Baris & Lundy, L.L.P.
Suite 300
4719 Hampden Lane
Bethesda, Maryland 20814
___________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered(1) Offering per Share(1) Aggregate Offering Price(1) Registration Fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 400,000 $27.25 $10,900,000 $3,030.20
$ 1.00 par value shares
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based upon the average of the high and low prices of the Common Stock
reported in the consolidated reporting system on June 15, 1999, in
accordance with Rule 457(c) under the Securities Act of 1933, as amended
(the "Securities Act"), solely for purposes of calculating the registration
fee pursuant to Rule 457(h) under the Securities Act.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Certain Documents by Reference.
The following documents filed by Sandy Spring Bancorp, Inc.("Sandy Spring")
with the Securities and Exchange Commission are hereby incorporated by reference
in this Registration Statement:
(1) Annual Report on Form 10-K for the year ended December 31, 1998;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
(3) Current Report on Form 8-K filed April 7, 1999;
(4) The Description of Capital Stock contained in Item 5 of the Annual
Report on Form 10-K for the year ended December 31, 1997; and
(5) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act by Sandy Spring Bancorp, Inc. since the end of the year
covered in its Annual Report referred to in (1) above.
All documents filed by Sandy Spring Bancorp, Inc. 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 these capacities. The Maryland General
Corporation Law provides, in pertinent part, as follows:
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, 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
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(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 in 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 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
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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 stockholders.
(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 stockholders
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
(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
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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
stockholders with the notice of the next stockholders' meeting or
prior to the meeting.
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-8 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 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 June 17, 1999.
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.
Signature Title Date
/s/ John Chirtea* Director June 17, 1999
- -----------------
John Chirtea
/s/ Susan D. Goff* Director June 17, 1999
- ------------------
Susan D. Goff
/s/ Solomon Graham* Director June 17, 1999
- -------------------
Solomon Graham
/s/ Gilbert L. Hardesty* Director June 17, 1999
- ------------------------
Gilbert L. Hardesty
/s/ Joyce R. Hawkins* Director June 17, 1999
- ---------------------
Joyce R. Hawkins
/s/ Thomas O. Keech* Director June 17, 1999
- --------------------
Thomas O. Keech
/s/ Charles F. Mess* Director June 17, 1999
- --------------------
Charles F. Mess
/s/ Robert L. Mitchell* Director June 17, 1999
- -----------------------
Robert L. Mitchell
- ----------------------- Director
Robert L. Orndorff, Jr.
/s/ David E. Rippeon* Director June 17, 1999
- ---------------------
David E. Rippeon
/s/ Lewis R. Schumann* Director June 17, 1999
- ----------------------
Lewis R. Schumann
/s/ W. Drew Stabler* Director, Chairman of the June 17, 1999
- -------------------- Board
W. Drew Stabler
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/s/ James H. Langmead Vice President, Treasurer and June 17, 1999
- -------------------------- Principal Financial and
James H. Langmead Accounting Officer
*By: /s/ Marjorie S. Holsinger
---------------------------------
Marjorie S. Holsinger, Attorney in Fact
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Index to Exhibits
Exhibit Number Description
- -------------- -----------
4 Stock Option Plan
5 Opinion of Kennedy, Baris & Lundy, L.L.P.
23.1 Consent of Kennedy, Baris & Lundy, L.L.P., included in Exhibit 5
23.2 Consent of Stegman & Company
24 Power of Attorney
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EXHIBIT 4
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Sandy Spring Bancorp
1999 Stock Option Plan
1. Purpose of the Plan.
The purpose of this Sandy Spring Bancorp 1999 Stock Option Plan (the "Plan")
is to advance the interests of Sandy Spring Bancorp, Inc. ("Bancorp") by
providing directors and selected key employees of the Bank, Bancorp, and their
affiliates with the opportunity to acquire shares of Bancorp's common stock. By
encouraging stock ownership, Bancorp seeks to attract, retain and motivate the
best available personnel for positions of substantial responsibility; to provide
additional incentive to directors and key employees of Bancorp, the Bank and
their affiliates to promote the success of the business as measured by the value
of its shares; and generally to increase the commonality of interests among
directors, key employees, and other shareholders.
The Plan is intended to replace the Sandy Spring Bancorp 1992 Stock Option
Plan (the "1992 Plan") upon this Plan's approval by shareholders of Bancorp.
Options issued under the 1992 Plan will continue in effect and will be subject
to the requirements of the 1992 Plan, but no new options will be granted under
the 1992 plan after this Plan is approved by shareholders.
The Plan is not intended as an agreement or promise of employment. Neither
the Plan, nor any Option granted pursuant to the Plan, confers on any person any
right to continue in the employ of Bancorp. The right of Bancorp, the Bank, or
any of their affiliates to terminate the employment of an Employee is not
limited by the Plan or by any Option granted pursuant to the Plan unless such
right is specifically described by the terms of any such Option.
2. Definitions.
(a) "Affiliate" means any "parent corporation" or "subsidiary
corporation" of Bancorp as such terms are defined in Section 424(e) and
(f), respectively, of the Code.
(b) "Agreement" means a written agreement entered into in accordance with
Paragraph 5(c).
(c) "Bank" means the Sandy Spring National Bank of Maryland.
(d) "Board" means the Board of Directors of Bancorp.
(e) "Change in Control" means any one of the following events occurring
after the Effective Date: (1) the acquisition of ownership of, power to vote, or
control of 25% or more of any class of voting securities of Bancorp or the Bank;
(2) the exercise of a controlling influence over the management or policies of
the Bank or Bancorp by any person or by persons acting as a "group" (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934), or (3) the
failure of Continuing Directors to constitute at least two-thirds of the Board
of Directors of Bancorp or the Bank (the "Company Board") during any period of
two consecutive years. A "change in control" does not include acquisition of
ownership of, control of or power to vote voting securities of Bancorp by an
employee benefit plan sponsored by Bancorp or the Bank; acquisition of voting
securities by Bancorp through share repurchase or otherwise; or acquisition by
an exchange of voting securities with a successor to Bancorp in a
reorganization, such as a re-incorporation, that does not have the purpose or
effect of significantly changing voting power or control. For purposes of this
definition, only, "Continuing Directors" includes only those individuals who
were members of Bancorp Board at the Effective Date and those other individuals
whose election or nomination for election as a member of Bancorp Board was
approved by a vote of at least two-thirds of the Continuing Directors then in
office, and "person" refers to an individual or a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity. The decision of the
Committee as to whether a Change in Control has occurred shall be conclusive and
binding.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means the Stock Option Committee appointed by the Board
in accordance with Paragraph 5(a) hereof.
(h) "Common Stock" means the common stock, par value $1.00 per share, of
Bancorp.
(i) "Company" means Sandy Spring Bancorp, Inc., a Maryland corporation.
(j) "Continuous Service" means the absence of any interruption or
termination of employment by Bancorp or any present or future Affiliate.
Employment shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by Bancorp or in the
case of transfers between locations of Bancorp or among Bancorp, the Bank,
or any other Affiliate.
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(k) "Director" means any member of the Board of Directors of Bancorp.
(l) "Effective Date" means the date specified in Paragraph 14 hereof.
(m) "Employee" means any person employed by Bancorp or by the Bank or any
other present or future Affiliate.
(n) "Exercise Price" means the price per Optioned Share at which an
Option may be exercised.
(o) "ISO" means an option to purchase Common Stock that meets the
requirements set forth in the Plan, and which is intended to be and is
identified as an "incentive stock option" within the meaning of Section 422
of the Code.
(p) "Market Value" means the fair market value of the Common Stock, as
determined under Paragraph 7(b) hereof.
(q) "Non-Employee Director" means any member of the Board who, at the
time discretion under the Plan is exercised, is a "Non-Employee Director"
within the meaning of Rule 16b-3.
(r) "Non-ISO" means an option to purchase Common Stock that meets the
requirements set forth in the Plan but which is not intended to be, and is
not identified as, an ISO.
(s) "Offer to Effect a Change in Control" means any offer to buy or
acquire, solicitation of an offer to sell, tender offer for, or request of
invitation for tenders of, 25% or more of any class of voting securities of
Bancorp for value. The decision of the Committee as to whether an Offer to
Effect a Change in Control has been made shall be conclusive and binding.
(t) "Option" means an option to purchase Shares, granted by the Committee
pursuant to this Plan, whether the option is an ISO or a Non-ISO.
(u) "Optioned Shares" means Shares subject to an Option granted pursuant to
this Plan.
(v) "Optionee" means any person who receives an Option pursuant to this
Plan.
(w) "Outstanding Shares" means the total shares of Common Stock which
have been issued and which (a) are not held as treasury shares, and (b)
have not been cancelled or retired by Bancorp.
(x) "Parent" shall mean any present or future corporation that would be a
"parent corporation" as defined in Subsections 424(e) and (g) of the Code.
(y) "Plan" means the Sandy Spring Bancorp 1999 Stock Option Plan.
(z) "Rule 16b-3" means Rule 16b-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Act").
(aa) "Share" shall mean a share of Common Stock.
(bb) "Subsidiary" shall mean any present or future corporation which would
be a "subsidiary corporation" as defined in Subsections 424(f) and (g) of
the Code.
(cc) "Transaction" means (i) the liquidation or dissolution of Bancorp,
(ii) a merger or consolidation in which Bancorp is not the surviving entity; or
(iii) the sale or disposition of all or substantially all of Bancorp's assets.
3. Term of the Plan and Options.
(a) Term of the Plan. The Plan shall continue in effect for a term of
ten years from the Effective Date unless sooner terminated pursuant to Paragraph
17. No Option may be granted under the Plan after ten years from the Effective
Date.
(b) Term of Options. The Committee shall establish the term of each
Option granted under the Plan. No Option may have a term that exceeds 10 years.
No ISO granted to an Employee who owns Shares representing more than 10% of the
outstanding shares of Common Stock at the time an ISO is granted may have a term
that exceeds five years.
4. Shares Subject to the Plan.
(a) Except as otherwise required by Paragraph 11, the aggregate number of
Shares deliverable upon the exercise of Options pursuant to the Plan shall not
exceed 400,000 Shares. Such Shares may either be authorized but unissued Shares
or Shares held in treasury to the extent allowed by Maryland law.
(b) If Options should expire, become unexercisable, or be forfeited for
any reason without having been exercised in full, the Optioned Shares shall,
unless the Plan shall have been terminated, be available for the grant of
additional Options under the Plan.
5. Administration of the Plan.
(a) Composition of Committee. The Plan shall be administered by the
Committee, which shall consist of not less than three (3) Directors appointed by
the Board. Members of the Committee may be Employee Directors or Non-Employee
Directors, and shall serve at the pleasure of the Board. In the absence at any
time of a duly appointed Committee, the Plan shall be administered by the Board.
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(b) Powers of the Committee. Except as limited by the express provisions
of the Plan or by resolutions adopted by the Board, the Committee shall have
sole and complete authority and discretion (i) to select Optionees and grant
Options, (ii) to determine the form and content of Options to be issued in the
form of Agreements under the Plan, (iii) to interpret the Plan, (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan, and (v)
to make other determinations necessary or advisable for the administration of
the Plan. The Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to time. A majority
of the entire Committee shall constitute a quorum and the action of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee without a meeting, shall be
deemed the action of the Committee.
(c) Agreement. Each Option shall be evidenced by a written agreement
containing such provisions as may be approved by the Committee. Each such
Agreement shall constitute a binding contract between Bancorp and the Optionee,
and every Optionee, upon acceptance of such Agreement, shall be bound by the
terms and restrictions of the Plan and of such Agreement. The terms of each
such Agreement shall be in accordance with the Plan, but each Agreement may
include such additional provisions and restrictions determined by the Committee,
in its discretion, provided that such additional provisions and restrictions are
not inconsistent with the terms of the Plan. In particular, the Committee shall
set forth in each Agreement (i) the Exercise Price of an Option, (ii) the number
of Shares subject to, and the expiration date of, the Option, (iii) the manner,
time and rate (cumulative or otherwise) of exercise or vesting of such Option,
and (iv) the restrictions, if any, to be placed upon such Option, or upon Shares
which may be issued upon exercise of such Option. The Chairman of the Committee
and such other officers as shall be designated by the Committee are hereby
authorized to execute Agreements on behalf of Bancorp and to cause them to be
delivered to the recipients of Options.
(d) Effect of the Committee's Decisions. All decisions, determinations,
and interpretations of the Committee shall be final and conclusive on all
persons affected thereby.
(e) Indemnification. In addition to such other rights of indemnification
as they may have, the members of the Committee shall be indemnified by Bancorp
in connection with any claim, action, suit or proceeding relating to any action
taken or failure to act under or in connection with the Plan or any Option,
granted hereunder to the full extent provided for under Bancorp's Articles of
Incorporation or Bylaws with respect to the indemnification of Directors.
6. Grant of Options.
(a) General Rule. The Committee, in its sole discretion, may grant ISO's
or Non-ISOs to Employees of Bancorp or its Affiliates and may grant Non-ISOs to
Directors or directors of Affiliates.
(b) Special Rules for ISOs. The aggregate Market Value, as of the date
the Option is granted, of the Shares with respect to which ISOs are exercisable
for the first time by an Employee during any calendar year (under all incentive
stock option plans, as defined in Section 422 of the Code, of Bancorp or any
present or future "parent" or "Subsidiary" of Bancorp) shall not exceed
$100,000. Notwithstanding the prior provisions of this paragraph, the Committee
may grant Options in excess of the foregoing limitations, in which case such
Options granted in excess of such limitation shall be Options which are Non-
ISOs.
7. Exercise Price for Options.
(a) Limits on Committee Discretion. The Exercise Price as to any
particular Option granted under the Plan shall not be less than the Market Value
of the Optioned Shares on the date of grant. In the case of an Employee who owns
Shares representing more than 10% of Bancorp's Outstanding Shares of Common
Stock at the time an ISO is granted, the Exercise Price shall not be less than
110% of the Market Value of the Optioned Shares at the time the ISO is granted.
(b) Standards for Determining Exercise Price. If the Common Stock is
listed on a national securities exchange (including the NASDAQ National Market)
on the date in question, then the Market Value per Share shall be not less than
the average of the highest and lowest selling price on such exchange on such
date, or if there were no sales on such date, then the Exercise Price shall be
not less than the mean between the bid and asked prices on such date. If the
Common Stock is traded otherwise than on a national securities exchange on the
date in question, then the Market Value per Share shall be not less than the
mean between the bid and asked price on such date, or, if there is no bid and
asked price on such date, then on the next prior business day on which there was
a bid and asked price. If no such bid and asked price is available, then the
Market Value per Share shall be its fair market value as determined by the
Committee, in its sole and absolute discretion.
(c) Reissuance of Options. Notwithstanding anything herein to the
contrary, the Committee shall have the authority to cancel outstanding Options
with the consent of the Optionee and to grant new Options at a lower Option
Price equal to the then fair market value per share of Common Stock in the event
that the fair market value per share of Common Stock at
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<PAGE>
any time prior to the date of exercise of outstanding Options falls below the
Option Price of such Options.
8. Exercise of Options.
(a) Generally. Any Option shall be exercisable at such times and under
such conditions as shall be permissible under the terms of the Plan and of the
Agreement. An Option may not be exercised for a fractional Share.
(b) Procedure for Exercise. An Optionee may exercise Options, subject to
provisions relative to its termination and limitations on its exercise, only by
(1) written notice of intent to exercise the Option with respect to a specified
number of Shares, and (2) payment to Bancorp (contemporaneously with delivery of
such notice) in cash, in Common Stock, or a combination of cash and Common
Stock, of the amount of the Exercise Price for the number of Shares with respect
to which the Option is then being exercised. Each such notice (and payment
where required) shall be delivered, or mailed by prepaid registered or certified
mail, addressed to the Treasurer of Bancorp at Bancorp's executive offices.
Common Stock utilized in full or partial payment of the Exercise Price for
Options shall be valued at its Market Value at the date of exercise.
(c) Notwithstanding the provisions of any Option that provides for its
exercise in installments as designated by the Committee, such Option shall
become immediately exercisable upon the Optionee's death or Permanent and Total
Disability.
(d) Period of Exercisability-ISOs. An ISO may be exercised by an Optionee
only while the Optionee is an Employee and has maintained Continuous Service
from the date of the grant of the ISO, or within three months after termination
of such Continuous Service (but not later than the date on which the Option
would otherwise expire), except if the Employee's Continuous Service terminates
by reason of -
(1) "Just Cause" which for purposes hereof shall have the meaning set
forth in any unexpired employment or severance agreement between the
Optionee and Bancorp or any Affiliate (and, in the absence of any such
agreement, means termination because of the Employee's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease-and-desist
order), then the Optionee's rights to exercise such ISO shall expire
on the date of such termination;
(2) Death, then an ISO of the deceased Optionee may be exercised
within two years from the date of his death (but not later than the
date on which the Option would otherwise expire) by the personal
representatives of his estate or person or persons to whom his rights
under such ISO shall have passed by will or by laws of descent and
distribution;
(3) Permanent and Total Disability (as such term is defined in
Section 22(e)(3) of the Code), then an ISO may be exercised within one
year from the date of such Permanent and Total Disability, but not
later than the date on which the ISO would otherwise expire.
(e) Period of Exercisability-Non-ISOs. Except to the extent otherwise
provided in the terms of an Agreement, a Non-ISO may be exercised by an Optionee
only while such Optionee is an Employee, a Director, or a director of an
Affiliate, or within three months after termination of such service (but not
later than the date on with the Option would otherwise expire), except if the
Optionee's service terminates by reason of -
(1) "Just Cause" which for purposes hereof shall have the meaning set
forth in any unexpired employment or severance agreement between the
Optionee and Bancorp or any Affiliate (and, in the absence of any such
agreement, means termination because of the Optionee's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease-and-desist
order), then the Optionee's rights to exercise such Non-ISO shall
expire on the date of such termination; or
(2) Removal from the Board or the Bank Board pursuant to the
respective Articles of Incorporation, then the Optionee's rights to
exercise such Non-ISO shall expire on the date of such removal.
(3) Death, then a Non-ISO of the deceased Optionee may be exercised
within two years from the date of his death (but not later than the
date on which the Option would otherwise expire) by the personal
representatives of his estate or person or persons to whom his rights
under such Non-ISO shall have passed by will or by laws of descent and
distribution or otherwise shall have transferred pursuant to this
Plan;
(4) Permanent and Total Disability (as such term is defined in
Section 22(e)(3) of the Code), then a Non-ISO may be exercised within
one year from the date of such Permanent and Total Disability, but not
later than the date on which the ISO would otherwise expire.
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<PAGE>
(f) Effect of the Committee's Decisions. The Committee's determination
whether an Optionee's Continuous Service or service as a Director or director of
an Affiliate has ceased, and the effective date thereof shall be final and
conclusive on all persons affected thereby.
9. Conditions Upon Issuance of Shares.
(a) Compliance with Securities Laws. Shares of Common Stock shall not be
issued with respect to any Option unless the issuance and delivery of such
Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Shares may then be listed.
The Plan is intended to comply with Rule 16b-3, and any provision of the Plan
than the Committee determines in its sole and absolute discretion to be
inconsistent with said Rule shall, to the extent of such inconsistency, be
inoperative and null and void, and shall not affect the validity of the
remaining provisions of the Plan.
(b) Special Circumstances. The inability of Bancorp to obtain approval
from any regulatory body or authority deemed by Bancorp's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder shall relieve
Bancorp of any liability with respect to the non-issuance or sale of such
Shares. As a condition to the exercise of an Option, Bancorp may require the
person exercising the Option to make such representations and warranties as the
Committee determines may be necessary to assure the availability of an exemption
from the registration requirements of federal or state securities law.
(c) Committee Discretion. The Committee shall have the discretionary
authority to impose in Agreements such restrictions on Shares as it may deem
appropriate or desirable, including but not limited to the authority to impose a
right of first refusal or to establish repurchase rights or both of these
restrictions.
10. Restrictions on Sale of Shares
(a) Six-Month Restriction. Shares of Common Stock that have been acquired
upon exercise of an Option may not be sold or otherwise disposed of before the
end of a six-month period beginning on the date the Option was granted. This
restriction is in addition to any other restriction imposed by this Plan or by
the Committee pursuant to this Plan.
(b) Exceptions. The six-month restriction imposed by subparagraph (a)
shall not apply to dispositions by bona fide gifts or to transfers by will or
the laws of descent or distribution.
11. Effect of Changes in Control and Changes in Common Stock Subject to the
Plan.
(a) Effects of Change in Control.
(1) Notwithstanding the provisions of any Option that provides for
its exercise or vesting in installments, all Options shall be
immediately exercisable and fully vested upon a Change in Control or
the receipt of an Offer to Effect a Change in Control.
(2) At the time of a Change in Control or receipt of an Offer to
Effect a Change in Control, the Optionee shall, at the sole and
absolute discretion of the Committee, be entitled to receive a cash
payment in an amount equal to the excess of the Market Value of the
Shares subject to such Option over the Exercise Price of such Option,
provided that in no event may an Option be cancelled in exchange for
cash within the six-month period following the date of its grant. For
purposes of calculating this payment, the Market Value shall be the
Market Value at the date of the Change in Control or the highest
Market Value in the five trading days after public announcement of an
Offer to Effect a Change in Control, as determined by the Committee.
(3) In the event there is a Transaction, all outstanding Options
shall be surrendered. With respect to each Option so surrendered, the
Committee shall in its sole and absolute discretion determine whether
the holder of each Option so surrendered shall receive--
(A) For each Share then subject to an outstanding Option, an
Option for the number and kind of shares into which each
Outstanding Share (other than Shares held by dissenting
shareholders) is changed or exchanged, together with an
appropriate adjustment to the Exercise Price; or
(B) The number and kind of shares into which each Outstanding
Share (other than Shares held by dissenting shareholders) is
changed or exchanged in the Transaction that are equal in market
value to the excess of the Market Value on the date of the
Transaction of the Shares subject to the Option, over the
Exercise Price of the Option; or
(C) A cash payment (from Bancorp or the successor corporation),
in an amount equal to the excess of the Market Value on the date
of the Transaction of the Shares subject to the Option, over
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<PAGE>
the Exercise Price of the Option.
(4) The decision of the Committee as to whether a Change in Control
has occurred, or an Offer to Effect a Change in Control has been made
shall be conclusive and binding.
(b) Recapitalizations, Stock Splits, Etc. The number and kind of shares
reserved for issuance under the Plan, and the number and kind of shares subject
to outstanding Options and the Exercise Price thereof, shall be proportionately
adjusted for any increase, decrease, change or exchange of Shares for a
different number or kind of shares or other securities of Bancorp which results
from a merger, consolidation, recapitalization, reorganization,
reclassification, stock dividend, split-up, combination of shares, or similar
event in which the number or kind of shares is changed without the receipt or
payment of consideration by Bancorp.
(c) Special Rule for ISOs. Any adjustment made pursuant to subparagraphs
(a)(3)(A) or (b) of this Paragraph shall be made in such a manner as not to
constitute a modification, within the meaning of Section 424(h) of the Code, of
outstanding ISOs.
(d) Conditions and Restrictions on New, Additional, or Different Shares or
Securities. If, by reason of any adjustment made pursuant to this Paragraph, an
Optionee becomes entitled to new, additional, or different shares of stock or
securities, such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions which were
applicable to the Shares pursuant to the Option before the adjustment was made.
(e) Other Issuances. Except as expressly provided in this Paragraph, the
issuance by Bancorp or an Affiliate of shares of stock of any class, or of
securities convertible into Shares or stock of another class, for cash or
property or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect, and no adjustment
shall be made with respect to, the number, class, or Exercise Price of Shares
then subject to Options or reserved for issuance under the Plan.
12. Non-Transferability of Options.
(a) ISOs may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent and
distribution, or pursuant to the terms of a "qualified domestic relations order"
(within the meaning of Section 414(p) of the Code and the regulations and
rulings thereunder).
(b) Non-ISO's may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent and distribution, pursuant to the terms of a "qualified domestic
relations order" (within the meaning of Section 414(p) of the Code and the
regulations and rulings thereunder), or, in the sole discretion of the
Committee, in connection with a transfer for estate or retirement planning
purposes to a trust established for such purposes.
13. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the later of the date on which the Committee makes the
determination of granting such Option and the Effective Date. Notice of the
determination shall be given to each Optionee to whom an Option is so granted
within a reasonable time after the date of such grant.
14. Effective Date. The Plan shall be effective as of February 24, 1999.
Option grants may be made before approval of the Plan by the shareholders of
Bancorp, if the exercise of Options is conditioned upon shareholder approval of
the Plan.
15. Approval by Shareholders. The Plan shall be approved by shareholders of
Bancorp within twelve (12) months before or after the Effective Date.
16. Modification of Options. At any time, and from time to time, the Board may
authorize the Committee to direct execution of an instrument providing for the
modification of any outstanding Option, provided no such modification shall
confer on the holder of said Option any right or benefit which could not be
conferred on the Optionee by the grant of a new Option at such time, or impair
the Option without the consent of the holder of the Option.
17. Amendment and Termination of the Plan. The Board may from time to time
amend the terms of the Plan and, with respect to any Shares at the time not
subject to Options, suspend or terminate the Plan; provided that shareholder
approval shall be required to increase the number of Shares subject to the Plan
provided in Paragraph 4 or to extend the term of the Plan. No amendment,
suspension, or termination of the Plan shall, without the consent of any
affected holders of an Option, alter or impair any rights or obligations under
any Option theretofore granted.
18. Reservation of Shares. During the term of the Plan, Bancorp will reserve
and keep available a number of Shares
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<PAGE>
sufficient to satisfy the requirements of the Plan.
19. Withholding Tax. Bancorp's obligation to deliver Shares upon exercise of
Options (or such earlier time that the Optionee makes an election under Section
83(b) of the Code) shall be subject to the Optionee's satisfaction of all
applicable federal, state, and local income and employment tax withholding
obligations. The Committee, in its discretion, may permit the Optionee to
satisfy the obligation, in whole or in part, by irrevocably electing to have
Bancorp withhold Shares, or to deliver to Bancorp Shares that the Optionee
already owns, having a value equal to the amount required to be withheld. The
value of Shares to be withheld, or delivered to Bancorp, shall be based on the
Market Value of the Shares on the date the amount of tax to be withheld is to be
determined. As an alternative, Bancorp may retain, or sell without notice, a
number of such Shares sufficient to cover the amount required to be withheld.
20. No Employment or Other Rights. In no event shall eligibility to be granted
an Option or the grant of an Option create or be deemed to create any legal or
equitable right of a Director, Employee, director of any Affiliate, or any other
party to continue service with Bancorp, the Bank, or any other Affiliate. No
person shall have a right to be granted an Option or, having received an Option,
the right to be granted an additional Option.
21. Governing Law. The Plan shall be governed by and construed in accordance
with the laws of the State of Maryland, except to the extent that federal law
shall be deemed to apply.
22. Successors and Assigns. The Plan shall be binding upon Bancorp's successors
and assigns.
* * * *
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EXHIBIT 5
<PAGE>
KENNEDY, BARIS & LUNDY, L.L.P.
ATTORNEYS AT LAW
SUITE 300
4719 HAMPDEN LANE
BETHESDA, MD 20814
TEXAS OFFICE: (301) 654-6040 WASHINGTON DC OFFICE:
SUITE 1775 FAX: (301) 654-1733 SEVENTH FLOOR
112 EAST PECAN STREET 1225 NINETEENTH STREET, NW
SAN ANTONIO, TX 78205 WASHINGTON, DC 20036
(210) 228-9500 (202) 835-0313
FAX: (210) 228-0781 FAX: (202) 835-0319
June 17, 1999
Board of Directors
Sandy Spring Bancorp, Inc.
17801 Georgia Avenue
Olney, MD 20832
Ladies and Gentlemen:
As special legal counsel to Sandy Spring Bancorp, Inc. (the "Sandy
Spring"), we have participated in the preparation of Sandy Spring'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 Sandy Spring's Common Stock pursuant to the exercise of
options outstanding under the Sandy Spring Bancorp 1999 Stock Option Plan (the
"Plan").
As counsel to Sandy Spring, we have examined such corporate records,
certificates and other documents of Sandy Spring, and made such examinations of
law and other inquiries of such officers of Sandy Spring, 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 Sandy Spring.
We hereby consent to the inclusion of this opinion as an exhibit to
the Registration Statement on Form S-8 filed by Sandy Spring and to the
reference to our firm contained therein.
Very truly yours,
/s/ Kennedy, Baris & Lundy, L.L.P.
<PAGE>
EXHIBIT 23.2
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Form S-8 of Sandy Spring
Bancorp, Inc. of our report, dated January 29, 1999, relating to the
consolidated balance sheets of Sandy Spring Bancorp, Inc. as of December 31,
1998 and 1997, and the related consolidated statements of income, cash flows,
and changes in stockholders' equity for the years ended December 31, 1998, 1997,
and 1996, which report appears on page 48 of the 1998 Sandy Spring Bancorp, Inc.
Annual Report to Shareholders incorporated by reference in the Sandy Spring
Bancorp, Inc. 1998 Annual Report on Form 10-K.
/s/ STEGMAN & COMPANY
Baltimore, Maryland
June 17 ,1999
<PAGE>
EXHIBIT 24
<PAGE>
POWER OF ATTORNEY
We, the undersigned directors of the Registrant, hereby severally
constitute and appoint Marjorie S. Holsinger our true and lawful attorney and
agent, to do any and all things in our names in the capacities indicated below
which said person 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 Sandy Spring Bancorp 1999
Stock Option Plan, 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.
Signature Title Date
/s/ John Chirtea Director May 26, 1999
- ----------------
John Chirtea
/s/ Susan D. Goff Director May 26, 1999
- -----------------
Susan D. Goff
/s/ Solomon Graham Director May 26, 1999
- ------------------
Solomon Graham
/s/ Gilbert L. Hardesty Director May 26, 1999
- -----------------------
Gilbert L. Hardesty
/s/ Joyce R. Hawkins Director May 26, 1999
- --------------------
Joyce R. Hawkins
/s/ Thomas O. Keech Director May 26, 1999
- -------------------
Thomas O. Keech
/s/ Charles F. Mess Director May 26, 1999
- -------------------
Charles F. Mess
/s/ Robert L. Mitchell Director May 26, 1999
- ----------------------
Robert L. Mitchell
Director
- -------------------------
Robert L. Orndorff, Jr.
/s/ David E. Rippeon Director May 26, 1999
- --------------------
David E. Rippeon
/s/ Lewis R. Schumann Director May 26, 1999
- ---------------------
Lewis R. Schumann
/s/ W. Drew Stabler Director, Chairman of the May 26, 1999
- ------------------- Board
W. Drew Stabler
