EXHIBIT 10(o)
EMPLOYMENT AGREEMENT
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THIS AGREEMENT (the "Agreement"), made this 2nd day of April 1998 , by and
among Sandy Spring Bancorp, Inc., a registered bank holding company ("Bancorp"),
Sandy Spring National Bank of Maryland, a national banking association and
wholly owned subsidiary of Bancorp with its main office in Olney, Maryland (the
"Bank"), and Sara E. Watkins (the "Officer").
W I T N E S S E T H
WHEREAS, the Officer is employed as the Senior Vice President of the Bank.
WHEREAS, as a result of the skill, knowledge, and experience of the Officer,
the Board of Directors of the Bank (the "Board") desires to retain the services
of the Officer.
WHEREAS, the Officer desires to continue to serve as the Senior Vice President
of the Bank.
WHEREAS, the Officer and the Board and the Board of Directors of Bancorp
desire to enter into an Agreement setting forth the terms of conditions of the
continuing employment of the Officer and the related rights and obligations of
each of the parties.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed as follows:
1. Employment. The Officer is employed as the Senior Vice President of the
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Bank, reporting to the President and Chief Executive Officer. Subject to the
direction of the President and Chief Executive Officer, the Officer shall
perform all duties and shall have all powers which are commonly incident to the
office of Senior Vice President or which, consistent with that office, are
delegated to her by the President and Chief Executive Officer. The officer shall
serve as a member of the Executive Officer Policy Committee. The Officer's
duties include, but are not limited to:
a. Making recommendations to the President and Chief Executive Officer
concerning the strategies, policies, and tactics of the Bank;
b. Management oversight of the Strategic Planning and Marketing Division
of the Bank, including oversight of the Bank's Strategic Planning,
Marketing, Market Research, Product Management, and Public Relations
functions and supervision of the officers and employees engaged in
these functions;
c. Promoting the Bank and its services;
d. Managing the efforts of the Bank to comply with applicable laws and
regulations relating to the functions for which she is responsible;
and
e. Providing complete, timely, and accurate reports to the President and
Chief Executive Officer of Bancorp and the Bank regarding the
Strategic Planning and Marketing Division and the Bank's Strategic
Planning, Marketing, Market Research, Public Relations, and Product
Management functions.
2. Location and Facilities. The Officer will be furnished with the working
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facilities and staff customary for executive officers with the title and duties
set forth in Section 1 and as are necessary for her to perform her duties. The
location of such facilities and staff shall be at the principal administrative
offices of the Bank, or at such other site or sites customary for such offices.
3. Term.
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a. The term of this Agreement shall be (i) the initial term, consisting
of the period commencing on the date of this Agreement (the "Effective
Date") and ending immediately prior to the second anniversary of the
Effective Date, plus (ii) any and all extensions of the initial term
made pursuant to this Section 3.
b. On each anniversary of the Effective Date prior to a termination of
the Agreement, the term under this Agreement shall be extended for an
additional one-year period beyond the then effective expiration date
without action by any party, provided that neither the Bank nor the
Officer shall have given written notice at least sixty (60) days prior
to such anniversary date of its or her desire that the term not be
extended. The President and Chief Executive Officer will review the
Officer's performance and the advisability of extending the term of
this Agreement, and the Board shall, based on such review, determine
whether or not to extend the term of this Agreement at a meeting or
meetings at least ninety (90) days prior to each anniversary date.
4. Base Compensation.
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a. The Bank agrees to pay the Officer during the term of this Agreement a
salary at the rate of $83,200 per annum, payable in cash not less
frequently than monthly, as may be adjusted in accordance with this
Section 4.
b. The Human Resources Committee of the Bank (the "Committee") with the
advice of the President and Chief Executive Officer shall perform an
annual analysis of the Officer's performance and of the compensation
of officers performing similar functions at independent financial
institutions of comparable assets and performance, and based upon this
review, the recommendation of the President and Chief Executive
Officer, and on such other factors as it deems pertinent, shall
recommend to the Board the salary rate to be paid beginning on the
next April 1 following such review. The Board shall review annually
the rate of the Officer's salary based upon this recommendation of the
Committee and other factors they deem relevant, and may maintain,
increase or decrease her salary, provided that no such action shall
(i) reduce the rate of salary below $83,200 or (ii) reduce the rate
of salary paid to the Officer for any months prior to the month in
which notice of the reduction is provided in writing to the Officer.
c. In the absence of action by the Board, the Officer shall continue to
receive salary at the $83,200 per annum rate specified herein or, if
another rate has been established under the provisions of this Section
4, the rate last properly established by action of the Board under the
provisions of this Section 4 .
5. Bonuses. Unless the Officer agrees otherwise, she shall be entitled to
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participate in discretionary bonuses that the Board may award from time to time
to senior management employees pursuant to bonus plans or otherwise. The
Officer also shall participate in any other fringe benefits which are or may
become available to senior management employees of the Bank, including for
example: any stock option or incentive compensation plans and any other benefits
that are commensurate with the responsibilities and functions to be performed by
the Officer under this Agreement. No other compensation provided for in this
Agreement shall be deemed a substitute for the Officer's right to participate in
such discretionary bonuses or fringe benefits.
6. Benefit Plans. The Officer shall be entitled to participate in such life
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insurance, medical, dental, pension, profit sharing, and retirement plans and
other programs and arrangements as may be approved from time to time by Bancorp
or the Bank for the benefit of the employees of the Bank. In addition, the
Officer shall be entitled to participate in a nonstatutory supplemental
retirement plan or arrangement ("SERP") established for the Officer and in the
Executive Health Expense Reimbursement and Insurance Plans (together, the
"HERP") or a successor plan or plans that provide the same or greater level of
benefits as those provided to participants under the HERP as in effect on the
Effective Date. (The resolution of the Board of the Bank approving this
Agreement shall serve as a designation of eligibility to participate in the HERP
as of the Effective Time, if the Officer had not previously been designated as
eligible.)
7. Vacation and Leave.
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a. The Officer shall be entitled to six weeks (thirty working days) of
vacation with pay during each consecutive twelve-month period
commencing on January 1, 1998 and each January 1 thereafter during the
term of this Agreement, to be taken at reasonable times and in
reasonable periods as the Officer and the Bank shall mutually
determine, and provided that no vacation time shall interfere with the
duties required to be rendered by the Officer hereunder. Any vacation
time not used during a twelve-month period shall carry over and be
useable during the succeeding twelve-month period, but not thereafter.
The Officer shall not receive any additional compensation from the
Bank on account of her failure to take vacation.
b. In addition to paid vacations, the Officer shall be entitled, without
loss of pay, to absent herself voluntarily from the performance of her
employment for such additional periods of time and for such valid and
legitimate reasons as the President and Chief Executive Officer may in
his discretion determine. Further, the President and Chief Executive
Officer may grant to the Officer a leave or leaves of absence, with or
without pay, at such time or times and upon such terms and conditions
as the President and Chief Executive Officer in his discretion may
determine.
8. Expense Payments and Reimbursements. The Officer shall be reimbursed for
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all reasonable out-of-pocket business expenses which she shall incur in
connection with her services under this Agreement upon substantiation of such
expenses in accordance with applicable policies of the Bank.
9. Loyalty and Confidentiality.
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a. During the term of this Agreement the Officer: (i) shall devote all
her time, attention, skill, and efforts to the faithful performance of
her duties hereunder; provided, however, that from time to time, the
Officer may serve on the boards of directors of, and hold any other
offices or positions in, companies or organizations which will not
present any conflict of interest with Bancorp or the Bank or any of
their subsidiaries or affiliates, unfavorably affect the performance
of Officer's duties pursuant to this Agreement, or violate any
applicable statute or regulation; and (ii) shall not engage in any
business or activity contrary to the business affairs or interests of
Bancorp or the Bank.
b. Nothing contained in this Agreement shall prevent or limit the
Officer's right to invest in the capital stock or other securities of
any business dissimilar from that of Bancorp and the Bank, or, solely
as a passive, minority investor, in any business.
c. The Officer agrees to maintain the confidentiality of any and all
information concerning the operation or financial status of Bancorp
and the Bank; the names or addresses of any of their borrowers,
depositors and other customers; any information concerning or obtained
from such customers; and any other information concerning Bancorp or
the Bank to which she may be exposed during the course of her
employment. The Officer further agrees that, unless required by law
or
specifically permitted by Bancorp or the Bank in writing, she will not
disclose to any person or entity, either during or subsequent to her
employment, any of the above-mentioned information which is not
generally known to the public, nor shall she employ such information
in any way other than for the benefit of Bancorp and the Bank.
10. Termination and Termination Pay. Subject to Section 11 of this Agreement,
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the Officer's employment under this Agreement may be terminated in the following
circumstances:
a. Death. The Officer's employment under this Agreement shall terminate
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upon her death during the term of this Agreement, in which event the
Officer's estate shall be entitled to receive the compensation due to
the Officer through the last day of the calendar month in which her
death occurred.
b. Retirement. This Agreement shall be terminated upon the normal or
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early retirement of the Officer under the retirement benefit plan or
plans in which she participates pursuant to Section 6 of this
Agreement.
c. Disability. The Bank or the Officer may terminate the Officer's
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employment after having established the Officer's Disability. For
purposes of this Agreement, "Disability" means a physical or mental
infirmity that impairs the Officer's ability to substantially perform
her duties under this Agreement and that results in the Officer's
becoming eligible for long-term disability benefits under Bancorp's or
the Bank's long-term disability plan (or, if Bancorp or the Bank has
no such plan in effect, that impairs the Officer's ability to
substantially perform her duties under this Agreement for a period of
one-hundred-eighty consecutive days). In the event of such Disability,
the Officer's obligation to perform services under this Agreement will
terminate. In the event of such termination, the Officer shall be
entitled to receive the following:
i. The compensation and benefits provided for under this Agreement
for any period during the term of this Agreement and prior to the
date of termination pursuant to this Section 10.c. during which
the Officer is unable to work due to physical or mental infirmity
(less any amounts which the Officer receives under any disability
insurance maintained by Bancorp or the Bank with respect to such
period);
ii. For the period beginning upon the date of termination pursuant
to this Section 10.c. and continuing for the remaining term of
this Agreement, (A) salary at the highest rate paid pursuant to
Section 4 of this Agreement during the twelve months prior to the
establishment of such disability under this Section 10.c.,
reduced by any payments received by the Officer during such
period following termination under a long term disability plan or
policy maintained by Bancorp or the Bank, and (B) benefits
pursuant to Section 6 of this Agreement.
The Board shall determine whether or not the Officer is and continues to be
permanently disabled for purposes of this Agreement in good faith, based upon
competent medical advice and other factors that it reasonably believes to be
relevant. As a condition to any benefits, such Board may require the Officer to
submit to such physical or mental evaluations and tests as it deems reasonably
appropriate.
d. Just Cause.
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i. The Board may, by written notice to the Officer in the form and
manner specified in this paragraph, immediately terminate her
employment with the Bank at any time for Just Cause. The Officer
shall have no right to receive compensation or other benefits for
any period after termination for Just Cause. Termination for
"Just Cause" shall mean termination because of, in the good faith
determination of the Board, the Officer's:
(1) Personal dishonesty;
(2) Incompetence;
(3) Willful misconduct;
(4) Breach of fiduciary duty involving personal profit;
(5) Intentional failure to perform duties under this Agreement;
(6) Other, continuing material failure to perform her duties
under this Agreement after reasonable notification (which
shall be stated in writing and given at least fifteen days
prior to termination) by the Board of such failure;
(7) Willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease-and-
desist order; or
(8) Material breach by the Officer of any provision of this
Agreement.
ii. Notwithstanding the foregoing, the Officer shall not be deemed
to have been terminated for Just Cause unless there shall have
been delivered to the Officer a copy of a resolution duly adopted
by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting called and held for the
purpose (after reasonable notice to the Officer and an
opportunity for the Officer to be heard before the Board),
finding that in the good faith opinion of the Board the Officer
was guilty of conduct described above and specifying the
particulars thereof.
e. Certain Regulatory Events.
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i. If the Officer is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order
issued under Sections 8(e)(4) or 8(g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. (S)(S) 1818(e)(4) and (g)(1)),
all obligations of the Bank under this Agreement shall terminate
as of the effective date of the order, but vested rights of the
parties shall not be affected.
ii. If the Bank is in default (as defined in Section 3(x)(1) of FDIA),
all obligations of the Bank under this Agreement shall terminate
as of the date of default, but vested rights of the parties shall
not be affected.
iii. If a notice served under Sections 8(e)(3) or (g)(1) of the
FDIA (12 U.S.C. (S)(S) 1818(e)(3) and (g)(1)) suspends and/or
temporarily prohibits the Officer from participating in the
conduct of the Bank's affairs, the Bank's obligations under this
Agreement shall be suspended as of the date of such service,
unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Bank may, in its discretion, (i) pay the
Officer all or part of the compensation withheld while its
contract obligations were suspended, and (ii) reinstate (in whole
or in part) any of its obligations which were suspended.
The occurrence of any of the events described in paragraphs i, ii, and iii
above may be considered by the Board in connection with a termination for Just
Cause.
f. Voluntary Termination by Officer. In addition to her other rights to
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terminate under this Agreement, the Officer may voluntarily terminate
employment with the Bank during the term of this Agreement upon at
least sixty days' prior written notice to the Bank, in which case the
Officer shall receive only her compensation, vested rights and employee
benefits up to the date of her termination.
g. Without Just Cause or With Good Reason.
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i. In addition to termination pursuant to Section 10.a. through
10.f.: the Board may, by written notice to the Officer,
immediately terminate her employment with the Bank at any time for
a reason other than Just Cause (a termination "Without Just
Cause"); and the Officer may, by written notice to
the Board, immediately terminate this Agreement at any time within
ninety days following an event of "Good Reason" as defined below
(a termination "With Good Reason").
ii. Subject to Section 11 hereof, in the event of termination
under this Section 10.g., the Officer shall be entitled to receive
the salary for the remaining term of the Agreement, including any
renewals or extensions thereof, at the highest annual rate in
effect pursuant to Section 4 of this Agreement for any of the
twelve months immediately preceding the date of such termination,
plus annual cash bonuses for each year (prorated in the event of
partial years) remaining under such term at the amount received by
the Officer in the calendar year preceding the termination. The
sum due under this Section 10.g. shall be paid in one lump sum
within ten calendar days of such termination.
iii. "Good Reason" shall exist if, without Officer's express
written consent, Bancorp or the Bank materially breach any of its
respective obligations under this Agreement. Without limitation,
such a material breach shall be deemed to occur upon any of the
following:
(1) A material reduction in the Officers's responsibilities or
authority in connection with her employment with the Bank;
(2) Assignment to the Officer of duties of a nonexecutive nature
or duties for which she is not reasonably equipped by her
skills and experience;
(3) A reduction in salary or benefits contrary to the terms of
this Agreement, or, following a Change in Control as defined
in Section 11 of this Agreement, any reduction in salary or
material reduction in benefits below the amounts to which
she was entitled prior to the Change in Control;
(4) Termination of incentive and benefit plans, programs, or
arrangements, or reduction of the Officer's participation to
such an extent as to materially reduce their aggregate value
below their aggregate value as of the Effective Date;
(5) A requirement that the Officer relocate her principal
business office or her principal place of residence outside
Montgomery County, Maryland, or the assignment to the
Officer of duties that would reasonably require such a
relocation;
(6) A requirement that the Officer spend more than thirty normal
working days away from Montgomery County, Maryland during
any consecutive twelve-month period; or
(7) Failure to provide office facilities, secretarial services,
and other administrative services to Officer which are
substantially equivalent to the facilities and services
provided to the Officer on the Effective Date (excluding
brief periods during which office facilities may be
temporarily unavailable due to fire, natural disaster, or
other calamity).
iv. Notwithstanding the foregoing: (A) a reduction or elimination
of the Officer's benefits under one or more benefit plans
maintained by Bancorp or the Bank as part of a good faith, overall
reduction or elimination of such plan or plans or benefits
thereunder applicable to all participants in a manner that does
not discriminate against the Officer (except as such
discrimination may be necessary to comply with law) shall not
constitute an event of Good Reason or a material breach of this
Agreement, provided that benefits of the type or to the general
extent as those offered under such plans prior to such reduction
or elimination are not available to other officers of Bancorp or
the Bank or any company that controls either of them under a plan
or plans in or under which the Officer is not entitled to
participate, and receive benefits, on a fair and nondiscriminatory
basis; and (B) a requirement that the Officer report to and be
subject to the direction or supervision of a senior officer of
Bancorp or the Bank other than the President and Chief Executive
Officer shall not constitute an event of Good Reason or a material
breach of this Agreement.
h. Continuing Covenant not to Compete or Interfere with Relationships.
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Regardless of anything herein
to the contrary, following a termination (i) upon retirement pursuant
to Section 10.b., (ii) due to Disability pursuant to Section 10.c.,
(iii) for Just Cause pursuant to Section 10.d., or (iv) by the Officer
pursuant to Section 10.f.:
i. The Officer's obligations under Section 9.c. of this Agreement
will continue in effect; and
ii. During the remaining term of this Agreement (determined
immediately before such termination), the Officer shall not serve
as an officer or director or employee of any bank holding company,
bank, savings association, savings and loan holding company, or
mortgage company (any of which, a "Financial Institution"), which
Financial Institution offers products or services competing with
those offered by Bancorp or the Bank from offices in any county in
the State of Maryland or of any other State in which the Bank,
Bancorp or any of their subsidiaries has a branch, and shall not
interfere with the relationship of Bancorp or the Bank and any of
its employees, agents, or representatives.
11. Termination in Connection with a Change in Control.
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a. For purposes of this Agreement, a "Change in Control" shall be deemed
to occur on the earliest of:
i. The acquisition by any entity, person or group (other than the
acquisition by a tax-qualified retirement plan sponsored by
Bancorp or the Bank) of beneficial ownership, as that term is
defined in Rule 13d-3 under the Securities Exchange Act of 1934,
of more than 25% of the outstanding capital stock of Bancorp or
the Bank entitled to vote for the election of directors ("Voting
Stock");
ii. The commencement by any entity, person, or group (other than
Bancorp or the Bank, a subsidiary of Bancorp or the Bank or a tax-
qualified retirement plan sponsored by Bancorp or the Bank) of a
tender offer or an exchange offer for more than 20% of the
outstanding Voting Stock of Bancorp or the Bank;
iii. The effective time of (a) a merger or consolidation of
Bancorp or the Bank with one or more other corporations as a
result of which the holders of the outstanding Voting Stock of
Bancorp or the Bank immediately prior to such merger exercise
voting control over less than 80% of the Voting Stock of the
surviving or resulting corporation, or (b) a transfer of
substantially all of the property of Bancorp or the Bank other
than to an entity of which Bancorp or the Bank owns at least 80%
of the Voting Stock;
iv. Upon the acquisition by any entity, person, or group of the
control of the election of a majority of the Bank's or Bancorp's
directors,
v. At such time that, during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Bancorp or the Bank (the "Continuing Directors") cease
for any reason to constitute at least two-thirds thereof, provided
that any individual whose election or nomination for election as a
member of the Board was approved by a vote of at least two-thirds
of the Continuing Directors then in office shall be considered a
Continuing Director.
b. Termination. If within the period beginning six months prior to and
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ending two years after a Change in Control, (i) the Bank shall
terminate the Officer's employment Without Just Cause, or (ii) the
Officer shall voluntarily terminate her employment With Good
Reason, the Bank shall, within ten calendar days of the
termination of Officer's employment, make a lump-sum cash payment
to her equal to 2.99 times the sum of (x) her annual salary at the
highest annual rate in effect for any of the
twelve months immediately preceding the date of such termination,
plus (y) the amount of other compensation received by her during
the calendar year preceding the Change in Control. This cash
payment is subject to adjustment pursuant to Section 14 of this
Agreement, and shall be made in lieu of any payment also required
under section 10.g. of this Agreement because of a termination in
such period. The Officer's rights under Section 10.g. are not
otherwise affected by this Section 11. Also, in such event, the
Officer shall, for three calendar years following her termination
of employment, continue to participate in any benefit plans of
Bancorp and the Bank that provide health (including medical and
dental), life or disability insurance, or similar coverage upon
terms no less favorable than the most favorable terms provided to
senior officers of the Bank during such period.
c. Funding of Trust upon Change in Control. In order to assure payment to
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the Officer of amounts that may become payable by Bancorp or the Bank
pursuant to this Section, unless and to the extent the Officer has
previously provided a written release of any claims under Section 11 of
this Agreement, not later than ten business days after a Change in
Control, Bancorp or the Bank shall (i) establish a valid trust under
the law of the State of Maryland with an independent trustee that has
or may be granted corporate trust powers under Maryland law, (ii)
deposit in such trust an amount equal to 2.99 times her "base amount"
as defined in Section 280G(b)(3) of the Code and regulations
promulgated thereunder (Section 280G and related regulations
hereinafter referred to as Section 280G"), at the time of the Change of
Control, and (iii) provide the trustee of the trust with a written
direction to hold said amount and any investment return thereon in a
segregated account, and to pay such amounts as demanded by the Officer
from the trust upon written demand from the Officer stating the amount
of the payment demanded from the trust and the basis for her rights to
such payment under Section 11 of this Agreement. Upon the earlier of
the final payment of all amounts demanded by the Officer under this
Section 11 or the date thirty-six months after the Change in Control,
the trustee of the trust shall pay to Bancorp or the Bank, as
applicable, the entire balance remaining in the trust. Payments from
the trust to the Officer shall be considered payments made by Bancorp
or the Bank for purposes of this Agreement. Payment of such amounts to
the Officer from the trust, however, shall not relieve Bancorp or the
Bank from any obligation to pay amounts in excess of those paid from
the trust, or from any obligation to take actions or refrain from
taking actions otherwise required by this Agreement. Unless and until a
termination of or by the Officer as described in Section 11.b.(i) or
(ii), the Officer's rights under this Agreement shall be those of a
general, unsecured creditor, she shall have no claim against the assets
of the trust, and the assets of the trust shall remain subject to the
claims of creditors of Bancorp or the Bank. Upon the termination of the
trust as specified herein, the Officer shall have no further interest
in the trust.
12. Indemnification and Liability Insurance.
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a. Indemnification. Bancorp and the Bank agree to indemnify the Officer
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(and her heirs, executors, and administrators) to the fullest extent
permitted under applicable law and regulations against any and all
expenses and liabilities reasonably incurred by her in connection with
or arising out of any action, suit, or proceeding in which she may be
involved by reason of her having been a director or officer of the Bank
or any of their subsidiaries (whether or not she continues to be a
director or officer at the time of incurring any such expenses or
liabilities) such expenses and liabilities to include, but not be
limited to, judgements, court costs and attorney's fees and the cost of
reasonable settlements, such settlements to be approved by the Board of
Bancorp or the Bank, if such action is brought against the Officer in
her capacity as an officer or director of Bancorp or the Bank or any of
their subsidiaries. Indemnification for expense shall not extend to
matters for which the Officer has been terminated for Just Cause.
Nothing contained herein shall be deemed to provide indemnification
prohibited by applicable law or regulation. Notwithstanding anything
herein to the contrary, the obligations of this Section 12 shall
survive the term of this Agreement by a period of seven years.
b. Insurance. During the period in which indemnification of the Officer
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is required under this Section,
Bancorp or the Bank shall provide the
Officer (and her heirs, executors, and administrators) with coverage
under a directors' and officers' liability policy at the expense of
Bancorp or the Bank, at least equivalent to such coverage provided to
directors and senior officers of Bancorp or the Bank, whichever is more
favorable to the Officer.
13. Reimbursement of Officer's Expenses to Enforce this Agreement. Bancorp or
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the Bank shall reimburse the Officer for all out-of-pocket expenses, including,
without limitation, reasonable attorney's fees, incurred by the Officer in
connection with successful enforcement by the Officer of the obligations of
Bancorp or the Bank to the Officer under this Agreement up to a maximum of
$30,000. Successful enforcement shall mean the grant of an award of money or the
requirement that Bancorp or the Bank take some action specified by this
Agreement (i) as a result of court order; or (ii) otherwise by Bancorp or the
Bank following an initial failure of Bancorp or the Bank to pay such money or
take such action promptly after written demand therefor from the Officer stating
the reason that such money or action was due under this Agreement at or prior to
the time of such demand.
14. Adjustment of Certain Payments and Benefits.
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a. In the event that payments pursuant to this Agreement (including,
without limitation, any payment under any plan, program, or
arrangement referred to in Section 5 or 6 hereof) would result in the
imposition of a penalty tax pursuant to Section 280G, such payments
shall be reduced to equal the maximum amount which may be paid under
Section 280G without exceeding such limits. In the event any such
reduction in payments is necessary, the Officer may determine, in her
sole discretion, which categories of payments (including, without
limitation, the value of benefits or of acceleration of vesting or
receipt of benefits or amounts) are to be reduced or eliminated.
b. Payments made to the Officer pursuant to this Agreement or otherwise,
are subject to and conditioned upon their compliance with Section
18(k) of the FDIA (12 U.S.C. (S) 1828 (k), relating to "golden
parachute" and indemnification payments and certain other benefits.
15. Injunctive Relief. If there is a breach or threatened breach of Section
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10.h. of this Agreement or the prohibitions upon disclosure contained in Section
9.c. of this Agreement, Bancorp or the Bank and the Officer agree that there is
no adequate remedy at law for such breach, and that Bancorp and the Bank each
shall be entitled to injunctive relief restraining the Officer from such breach
or threatened breach, but such relief shall not be the exclusive remedy
hereunder for such breach. The parties hereto likewise agree that the Officer
shall be entitled to injunctive relief to enforce the obligations of Bancorp and
the Bank under Section 11 of this Agreement.
16. Successors and Assigns.
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a. This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of Bancorp or the Bank which shall
acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of Bancorp
or the Bank.
b. Since the Bank and Bancorp are contracting for the unique and personal
skills of the Officer, the Officer shall be precluded from assigning
or delegating her rights or duties hereunder without first obtaining
the written consent of the Bank and Bancorp.
17. No Mitigation. The Officer shall not be required to mitigate the amount
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of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Officer in any subsequent employment.
18. Notices. All notices, requests, demands and other communications in
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connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or 48 hours after mailing at any general
or branch United States Post Office, by registered or certified mail, postage
prepaid, addressed as follows, or to such other address as shall have been
designated in writing by the addressee:
a. If to Bancorp or the Bank:
Sandy Spring Bancorp, Inc.
Sandy Spring National Bank of Maryland
17801 Georgia Avenue
Olney, Maryland 20832
Attention: President and Chief Executive Officer
Copy to: Corporate Secretary
b. If to the Officer:
Sara E. Watkins
4407 Rosedale Avenue
Bethesda, MD 20814
19. Joint and Severally Liability; Payments by Bancorp and the Bank. To the
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extent permitted by law, except as otherwise provided herein, Bancorp and the
Bank shall be jointly and severally liable for the payment of all amounts due
under this Agreement. Bancorp hereby agrees that it shall be jointly and
severally liable with the Bank for the payment of all amounts due under this
Agreement and shall guarantee the performance of the Bank's obligations
thereunder, provided that Bancorp shall not be required by this Agreement to pay
to the Officer a salary or any bonuses or any other cash payments, except in the
event that the Bank does not fulfill the obligations to the Officer hereunder
for such payments. Bancorp may, however, pay salary and bonuses as deemed
appropriate by its Board in the exercise of its discretion.
20. No Plan Created by this Agreement. The Officer, Bancorp and the Bank
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expressly declare and agree that this Agreement was negotiated among them and
that no provision or provisions of this Agreement are intended to, or shall be
deemed to, create any plan for purposes of the Employee Retirement Income
Security Act or any other law or regulation, and Bancorp, the Bank and the
Officer each expressly waives any right to assert the contrary. Any assertion in
any judicial or administrative filing, hearing, or process by or on behalf of
the Officer or Bancorp or the Bank that such a plan was so created by this
Agreement shall be deemed a material breach of this Agreement by the party
making such an assertion.
21. Amendments. No amendments or additions to this Agreement shall be binding
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unless made in writing and signed by all of the parties, except as herein
otherwise specifically provided.
22. Applicable Law. Except to the extent preempted by Federal law, the laws
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of the State of Maryland shall govern this Agreement in all respects, whether
as to its validity, construction, capacity, performance or otherwise.
23. Severability. The provisions of this Agreement shall be deemed severable
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and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
24. Headings. Headings contained herein are for convenience of reference only.
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25. Entire Agreement. This Agreement, together with any understanding or
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modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof, other than written agreements with respect to specific plans, programs,
or arrangements described in Sections 5 and 6, and supersedes all prior
agreements other than with respect to such specific plans, programs, or
arrangements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.
SANDY SPRING NATIONAL BANK OF MARYLAND
By: /s/ Hunter R. Hollar
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Title: President and Chief Executive Officer
SANDY SPRING BANCORP, INC.
By: /s/ Hunter R. Hollar
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Title: President and Chief Executive Officer
OFFICER
/s/ Sara E. Watkins
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Sara E. Watkins