Attached files
| file | filename |
|---|---|
| 10-Q - SANDY SPRING BANCORP INC | v200957_10q.htm |
| EX-32.(B) - SANDY SPRING BANCORP INC | v200957_ex32-b.htm |
| EX-31.(B) - SANDY SPRING BANCORP INC | v200957_ex31-b.htm |
| EX-32.(A) - SANDY SPRING BANCORP INC | v200957_ex32-a.htm |
| EX-10.(B) - SANDY SPRING BANCORP INC | v200957_ex10-b.htm |
| EX-31.(A) - SANDY SPRING BANCORP INC | v200957_ex31-a.htm |
August 5,
2010
By Hand
Delivery
R. Louis
Caceres
15801
Thistlebridge Drive
Rockville,
MD 20853
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Re:
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Change-In-Control
Agreement dated August 5, 2010 and Amendment per U.S. Treasury Dept.’s
Troubled Asset Relief Program-Capital Purchase Program
(“TARP-CPP”)
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Dear
Lou,
Subject to the amendment noted
below, at its
meeting of October 28, 2009, the board of directors authorized Daniel J.
Schrider to execute and deliver to you the enclosed Change-In-Control Agreement
dated August 5, 2010 (“Agreement”).
Under the terms of Bancorp’s
participation in TARP-CPP, Bancorp and you previously agreed to amend
compensation agreements to make the agreements compliant with the laws,
regulations and rules promulgated under TARP-CPP and you waived the right to
receive any compensation arising out of any agreement or arrangement that is
determined to be non-compliant with the laws, regulations and rules of
TARP-CPP.
In
addition, since that time, additional regulations were issued which involved
further prohibitions on certain compensation
payments. Specifically, the change-in-control payment described
in the enclosed Agreement meets the definition of a “golden parachute” payment
that is now prohibited under TARP-CPP. As a result, any such payment
to you is prohibited so long as Bancorp remains a TARP-CPP
participant.
Therefore, the following paragraph is
specifically made a part of the enclosed Agreement:
18. As
a condition precedent to any contractual obligation or duty of Bancorp from, or
to, the identified Officer, the Secretary of the U.S. Dept. of the Treasury must
not currently hold an equity or debt position in Bancorp and Bancorp must have
been released from all statutory or regulatory obligations under TARP-CPP
relative to any prohibition on the compensation contemplated in this
Agreement.
R. Louis
Caceres
Sandy
Spring Bancorp, Inc.
August 5,
2010
Page
2
Assuming
this condition precedent will be eventually satisfied, the enclosed Agreement
provides for you to receive 2.99 times your total annual compensation in the
event of a change-in-control of Bancorp as defined in the
Agreement.
Please
sign and return one original Agreement and this letter amendment to me for
inclusion in your personnel file in Human Resources and kindly retain the second
original in your important records.
Thank you
for your attention to this matter.
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Sincerely
yours,
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/s/
Ronald E. Kuykendall
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Ronald
E. Kuykendall
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General
Counsel & Secretary
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REK/lsj
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cc:
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Daniel
J. Schrider, CEO
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Dawn
Weglein, Human Resources
Enc.
I hereby
acknowledge and agree to the above letter amendment to the
Change-In-Control
Agreement dated August 5, 2010.
/s/ R. Louis
Caceres
R. Louis
Caceres
CHANGE IN CONTROL
AGREEMENT
THIS AGREEMENT
(the "Agreement") made as of this 5th day of August, 2010 (the "Effective
Date") by and between Sandy
Spring Bancorp, Inc., a registered bank holding company and a Maryland
Corporation (“Bancorp”), Sandy
Spring Bank, a Maryland Corporation and wholly owned subsidiary of
Bancorp with its headquarters in Olney, Maryland
(collectively the "Bank") and R. Louis Caceres (the
“Officer").
WITNESSETH:
WHEREAS,
the Officer is employed as the Executive Vice President and Manager of
the Personal Banking & Investment Management Group of the Bank.
WHEREAS,
the Bank and the Officer each desire that the Officer be provided with
certain benefits in the event of a Change in Control, as
defined below.
NOW, THEREFORE,
in consideration of the premises and mutual covenants herein contained,
it is agreed as follows:
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1.
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Definitions:
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a. Change in
Control. A "Change in Control" shall be deemed to occur on the
earliest of any of the following events after the date of this
Agreement:
i. The
acquisition by any entity, person or group (other than the acquisition by a
tax-qualified retirement plan sponsored by Sandy Spring Bancorp, Inc.
("Bancorp") or the Bank of beneficial ownership, as that term is defined in Rule
13d-3 under the Securities Exchange Act of 1934, of more than 25% of the
outstanding capital stock of Bancorp or the Bank entitled to vote generally 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 Directors ("Board") of
Bancorp or the Board of the Bank (the "Continuing Directors") cease for any
reason to constitute at least two-thirds of such Board, 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 of
such Board then in office shall be considered a Continuing
Director.
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b. Covered Period. The "Covered
Period" shall mean the period beginning six months before a Change in Control
and ending at the end of the term specified in Section 2 hereof.
c. Good Reason. "Good Reason"
shall be deemed to exist at the time that any of the following events occurs
without the Officers express written consent:
i. A
material reduction in the Officer's responsibilities or authority in connection
with his employment by Bancorp or the Bank;
ii. Assignment
to the Officer of duties of a non-executive nature or duties for which the
officer is not reasonably equipped by the Officer’s skills and
experience;
iii. A
reduction in salary or material reduction in benefits;
iv. A
requirement that the Officer’s principal business office or principal place of
residence be relocated outside any county in which the Bank has its main office,
its branches, or its deposit-taking Automatic Teller Machines; or
v.
Failure to provide office facilities, secretarial services, and other
administrative services to Officer that are substantially equivalent to the
facilities and services provided to the Officer immediately after the Effective
Date (excluding brief periods during which office facilities may be temporarily
unavailable due to fire, natural disaster, or other calamity).
vi. The
Officer’s resignation for any reason during the first sixty (60) days
immediately following the first six (6) months after the closing date of a
definitive purchase and assumption agreement, the execution of which brought
about the Change in Control.
Notwithstanding
the foregoing, 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 plan or 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 to receive benefits on a fair and nondiscriminatory
basis.
Notwithstanding
the foregoing, it is expected that Bancorp and the Bank will perform all duties
and agreements to be performed herein, and they shall have the right to cure
non-performance, to the extent such performance is reasonably capable of being
cured, and shall promptly upon receipt of written notice of non-performance that
the Officer describes and alleges to be Good Reason, comply with the
requirements of such notice, and further if they shall not comply with such
notice to the satisfaction of the Officer within forty-eight (48) hours after
delivery thereof, (except if such compliance cannot be reasonably completed
within forty-eight (48) hours, if Bank shall not commence to comply with such
period and thereafter proceed to completion with due diligence) the Officer
shall have the right to proceed with notice of a “Good Reason” termination as
specified above.
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d. Just Cause. Termination for
"Just Cause" shall mean termination of employment by reason of the
Officer's:
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i.
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Personal
dishonesty;
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ii.
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Willful
misconduct;
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iii.
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Breach
of fiduciary duty involving personal
profit;
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iv.
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Intentional
failure to perform duties; or
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v.
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Willful
violation of any law, rule, or regulation (other than traffic violations
or similar offenses) or final cease-and-desist
order.
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Notwithstanding the foregoing, it is
expected that Officer will perform all duties and agreements to be performed
herein, and Officer shall have the right to cure non-performance, to the extent
such performance is reasonably capable of being cured, and shall promptly upon
receipt of written notice of non-performance that Bancorp or the Bank describes
and alleges to be Just cause, comply with the requirements of such notice, and
further if Officer shall not comply with such notice to the satisfaction of the
Bank within forty-eight (48) hours after delivery thereof, (except if such
compliance cannot be reasonably completed within forty-eight (48) hours, if
Officer shall not commence to comply within such period and thereafter proceed
to completion with due diligence) the Bank shall have the right to proceed with
a “Just Cause” termination as described above.
The Bank
shall determine if Just Cause exists with respect to its employment of the
Officer in the exercise of its good faith discretion.
e.
Total Annual Compensation.
For purposes of this Agreement, Total Annual Compensation shall
mean:
i. One-year's
base salary at the highest rate in effect in the period beginning six months
before the last Change in Control to occur before termination of the Officer's
employment; plus
ii. Other
compensation, including, without limitation, bonus payments, at the rate paid
for (i) the calendar year preceding such Change in Control, or (ii) the calendar
year preceding termination of the Officer's employment, whichever is greater,
but shall not include the value of benefits that are not subject to current
federal income taxation to the Officer. Such other compensation for a calendar
year shall be annualized on a monthly basis based upon the number of months in
the calendar year in which the Officer was employed.
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2.
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Term. The term
of this Agreement shall be the period commencing on the Effective Date and
ending on the last moment of the second anniversary of the Effective Date.
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 his desire that the term not be
extended.
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3.
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Termination in
Connection with a Change in
Control.
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a. If,
within the Covered Period, the Bank shall terminate the Officer's employment
without Just Cause or the Officer shall terminate his 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 him equal to 2.99 times his Total
Annual Compensation.
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b. Also
in the event of such a termination, the Officer shall, for three calendar years
following the Officer’s termination of employment, continue to participate in
any benefit plans of Bancorp and the Bank that provide health (including medical
and dental), life and disability insurance, or similar coverage upon terms no
less favorable than the most favorable terms provided to executive officers of
the Bank during such period.
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4.
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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 3 hereof) would result in the imposition of a penalty tax pursuant to
Section 28OG of the Internal Revenue Code, such payments shall be reduced to
equal the maximum amount that may be paid under such Section 28OG without
exceeding such limits. In the event any such reduction in payments is necessary,
the Officer may determine, in his sole discretion, which categories of payments
(including, without limitation, the value of benefits, 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 I (W) of the Federal Deposit
Insurance Act ("FDIA"), relating to "golden parachute" and indemnification
payments and certain other benefits.
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5.
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Reimbursement
of Officer’s Expenses to Enforce this Agreement. Bancorp or 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. 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 therefore 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.
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6.
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Confidentiality.
The Officer agrees to maintain the confidentiality of any and all
information concerning the operation or financial status of Bancorp,
the Bank, and
any of their subsidiaries; the names or addresses of any of the borrowers,
depositors, and other customers of any such companies; any information
concerning or obtained from such customers; and any other information
concerning Bancorp or the Bank or any of their subsidiaries to which he
may be exposed during the course of his employment. The Officer further
agrees that, unless required by law or specifically permitted by Bancorp
or the Bank in writing, he will not disclose to any person or entity,
either during or subsequent to his employment, any of the above-mentioned
information which is not generally known to the public, nor shall he
employ such information in any way other than for the benefit of Bancorp
and the Bank.
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7.
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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 the Bank that shall acquire, directly or indirectly, by
merger, consolidation, purchase or otherwise, all or substantially all of the
assets or stock of the Bank.
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b. Since
the Bank is contracting for the unique and personal skills of the Officer, the
Officer shall be precluded from assigning or delegating his rights or duties
hereunder without first obtaining the written consent of the Bank.
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8.
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No
Mitigation. The Officer shall not be required to
mitigate the amount 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.
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9.
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No Plan
Created. The Officer and the Bank 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 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 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 or on whose behalf such assertion was
made.
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10.
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No Additional Rights:
Third Party Beneficiary.
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a. This
Agreement does not confer any right to employment or any other right not
specifically stated herein. Any assertion in any judicial or administrative
filing, hearing, or process by or on behalf of the Officer or the Bank that it
does so shall be deemed a material breach of this Agreement by the party making
such an assertion or on whose behalf such assertion was made.
b. Bancorp
is a third party beneficiary, with notice thereof, to Section 5 of this
Agreement. This Agreement is for the benefit of the parties hereto, and, except
as expressly stated herein with respect to Bancorp, is not intended to be for
the benefit of, or to be enforceable by, any other person.
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11.
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Certain Regulatory
Events.
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a.
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 FDIA, 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.
b. 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.
c. If
a notice served under Sections 8(e)(3) or 8(g)(1) of the FDIA 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 that were suspended.
The
occurrence of any of the events described in paragraphs a, b, and c above may be
considered by the Bank in connection with a termination for Just
Cause.
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12.
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Notices. All
notices, requests, demands and other communications in 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:
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a.
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If
to the Bank:
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Sandy
Spring Bank
17801
Georgia Avenue
Olney,
Maryland 20832
Attention: Daniel
J. Schrider, President
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b.
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If
to the Officer:
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R. Louis
Caceres
15801
Thistlebridge Drive
Rockville,
MD 20853
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13.
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Amendments. No
amendments or additions to this Agreement shall be binding unless made in
writing and signed by all of the
parties.
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14.
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Applicable Law.
Except to the extent preempted by Federal law, the laws of the State of
Maryland, without regard to its conflict of laws principles, shall govern
this Agreement in all respects, whether as to its validity, construction,
capacity, performance or otherwise.
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15.
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Severability.
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions
hereof.
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16.
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Headings.
Headings contained herein are for convenience of reference
only.
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17.
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Entire
Agreement. This Agreement, together with any understanding or
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.
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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on the date first set forth
above.
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SANDY
SPRING BANCORP, INC.
/s/ Daniel J.
Schrider
Daniel
J. Schrider, President and Chief Executive Officer
SANDY
SPRING BANK
/s/ Daniel J.
Schrider
Daniel
J. Schrider, President and Chief Executive Officer
OFFICER
/s/
R. Louis
Caceres
R.
Louis Caceres
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