EXHIBIT 8
Opinion of Stegman & Company
[FORM OF FEDERAL INCOME TAX OPINION]
July ____
Sandy Spring Bancorp, Inc.
17801 Georgia Avenue
Olney, Maryland 20832
Annapolis Bancshares, Inc.
2024 West Street
Annapolis, maryland 21401
Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences to the stockholders of Annapolis Bancshares, Inc. ("ABI"), a
corporation organized under the laws of the State of Maryland, arising from the
merger of ABI with and into Sandy Spring Bancorp, Inc. ("Bancorp"), a
corporation organized under the laws of the State of Maryland, with Bancorp
being the surviving entity (the "Merger"), which shall occur in the manner and
according to the terms described in the Prospectus/Proxy Statement (the
"Prospectus") included in the Registration Statement on Form S-4 filed by
Bancorp with the Securities and Exchange Commission ("SEC") on June ___, 1996
(the "Registration Statement"). Terms used but not defined herein, whether
capitalized or not, shall have the same meaning as defined in said Prospectus
and Registration Statement and exhibits thereto.
For purposes of this opinion, we have examined such documents and
questions of law as we have considered necessary or appropriate, including but
not limited to the Agreement and Plan of Reorganization by and among ABI and
Bancorp dated as of April 16, 1996 (the "Merger Agreement"); the Affidavit of
Representations dated June ___, 1996 provided by Bancorp and the Affidavit of
Representations dated June ___, 1996 provided by ABI (collectively, the
"Affidavits"); and the Registration Statement (including the Prospectus). In
such examinations, we have assumed, and have not independently verified, the
genuineness of all signatures on original documents where due execution and
delivery are requirements to the effectiveness thereof.
You have informed us that in rendering our opinion we may rely upon the
following: (i) the representations as set forth in the Affidavits, and (ii)
there is no plan or intention by the shareholders of ABI who own five percent or
more of ABI stock, and to the best of the knowledge of the management of ABI,
there is no plan or intention on the part of the remaining shareholders of ABI
to sell, exchange, or otherwise dispose of a number of shares of Bancorp stock
received in the transaction that would reduce the ABI shareholders' ownership of
Bancorp to a number of shares having a value, as of the date of the transaction,
of less than 50 percent of the value of all of the formerly outstanding stock of
ABI as of the same date. For purposes of this representation, shares of ABI
stock exchanged for cash or other property, surrendered by dissenters, or
exchanged for cash in lieu of fractional shares of acquiring stock will be
treated as outstanding ABI stock on the date of the transaction. Moreover,
shares of ABI stock and shares of Bancorp stock held by shareholders and
otherwise sold, redeemed, or disposed of prior or subsequent to the transaction
will be considered in making this representation, and (iii) our understanding
that all of the facts and representations contained in the Registration
Statement (including the Prospectus) are accurate and complete. We have not
attempted to verify any of the factual matters relating to the above noted
transactions, whether in connection with or apart from this letter, and instead
we have relied entirely upon the accuracy and completeness of the facts and
representations set forth in the above referenced documents.
Based upon the foregoing, subject to the limitations, assumptions and
conditions set forth in the Prospectus under the headings "Summary Information -
The Merger - Certain Federal Income Tax Consequences" and "The Merger - Certain
Federal Income Tax Consequences," and provided that the transaction described
above is consummated in the manner and according to the terms provided in the
Merger Agreement, we are of the opinion that the description of the federal
income tax consequences of the Merger to ABI's stockholders enumerated in the
discussion under the heading "The Merger - Certain Federal Income Tax
Consequences" referred to above, as qualified by the seventh paragraph in such
discussion, to the extent it reflects matters of law or legal conclusions,
accurately reflects certain federal income tax consequences as therein stated.
Our opinion is limited to the federal income tax matters under the
heading "The Merger - Certain Federal Income Tax Consequences" referred to above
and does not address any other federal income tax considerations or any other
federal, state, local, or foreign tax considerations. If any of the information
upon which we have relied is incorrect, or if changes in the relevant facts
occur after the date hereof, our opinion could be affected thereby. Moreover,
our opinion is based on case law, Internal Revenue Code, Treasury Regulations
thereunder and Internal Revenue Service rulings as they now exist. These
authorities are all subject to change, and such change may be made with
retroactive effect. We can give no assurance that, after such change, our
opinion would not be different.
We undertake no responsibility to update or supplement our opinion.
This opinion is not binding on the Internal Revenue Service and there
can be no assurance, and none is hereby given, that the Internal Revenue Service
will not take a position contrary to one or more of the positions reflected in
the foregoing opinion, or that our opinion will be upheld by the courts if
challenged by the Internal Revenue Service.
We hereby consent to the filing of this opinion with the SEC as an
exhibit to the Registration Statement of which the Prospectus is a part and the
reference to our firm in the Prospectus under the headings "Summary Information
- - The Merger - Certain Federal Income Tax Consequences" and "The Merger -
Certain Federal Income Tax Considerations."
Sincerely,
STEGMAN & COMPANY
By:_______________________