SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 15, 2005
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Sandy Spring Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Maryland 0-19065 52-1532952
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(State or other jurisdiction (Commission file (IRS Employer
of incorporation) number) Identification Number)
17801 Georgia Avenue, Olney, Maryland 20832
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (301) 774-6400
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Item 1.02. Termination of a Material Definitive Agreement.
Item 7.01 Regulation FD Disclosure.
On September 15, 2005, Sandy Spring Bancorp, Inc. ("Bancorp") and its wholly
owned subsidiary, Sandy Spring Bank, (the "Bank") entered into a Separation
Agreement and General Release with Lawrence T. Lewis. Mr. Lewis previously
served as the Executive Vice President and Chief Investment Officer of Bancorp
and the Bank. Pursuant to that Separation Agreement, the Employment Agreement
among Bancorp, the Bank, and Mr. Lewis dated December 18, 2002, is deemed
terminated as of October 11, 2004, the date of Mr. Lewis's departure.
The Employment Agreement, which replaced an earlier agreement with similar
terms, had an initial term of two years, subject to automatic one-year
extensions of such term on December 19th of each year, provided that neither
Bancorp nor Mr. Lewis had given written notice at least 60 days prior to the
renewal date of intention not to renew. The Employment Agreement provided for
the payment of cash and other benefits to Mr. Lewis, including a fixed salary,
reviewed annually, which was $225,000 on October 11, 2004. Mr. Lewis was
entitled to participate in bonus and fringe benefit, incentive compensation,
life insurance, medical, profit sharing and retirement plans, and to
participation in a supplemental retirement arrangement. With minor exceptions,
the Agreement would have terminated, and there would have been no additional
payments due under it, upon termination based upon death, retirement, or just
cause (as defined) by Bancorp, or upon voluntary termination by Mr. Lewis
without good reason (as defined). Upon termination for disability, Mr. Lewis
would have been entitled to receive his salary through the term of the
Agreement, reduced by payments under any disability plan maintained by Bancorp,
plus regular employee benefits. Upon termination of Mr. Lewis without just cause
by Bancorp, or with good reason by Mr. Lewis, Mr. Lewis was entitled to salary
and bonuses for the remaining term of the Agreement, payable in a lump-sum based
upon his salary at the highest rate paid during any of the preceding twelve
months and bonus paid in the calendar year preceding the year of termination.
Mr. Lewis was prohibited from conflicts of interest, and was required to
maintain the confidentiality of nonpublic information regarding Bancorp and its
customers. Mr. Lewis also was bound by a covenant not to compete and not to
interfere with other employees of Bancorp if Mr. Lewis's employment were
terminated for just cause, disability, or retirement or if he resigned without
good reason. Under the Agreement, Bancorp and the Bank agreed to indemnify Mr.
Lewis against expenses and liabilities reasonably incurred by him in connection
with his service as an officer or director of Bancorp or the Bank, and to
provide directors' and officers' liability insurance covering Mr. Lewis, for a
period ending seven years after the termination of the Employment Agreement.
In the Employment Agreement Bancorp and the Bank agreed to provide Mr. Lewis
with certain benefits if, within six months prior to, or two years after, a
change-in-control, Bancorp had terminated Mr. Lewis's employment without good
cause, or Mr. Lewis had voluntarily terminated employment for good reason (as
defined in the Agreement). In that case, Mr. Lewis would receive a lump-sum cash
payment equal to 2.99 times the sum of Mr. Lewis's annual salary at the highest
rate in effect during the preceding twelve months and bonuses based upon the
amount paid in the preceding calendar year. Mr. Lewis also would be entitled to
continued participation for a three-year period in certain Bancorp-sponsored
health and welfare plans, and would be held harmless from the federal excise tax
assessable to him if such payments and benefits exceeded the amount allowable as
a deduction under Section 280G of the Internal Revenue Code.
The terms of the Separation Agreement include the delivery of a cash payment of
$643,250, $478,200 of which was paid during 2004; the payment of health benefit
costs through December 31, 2005; termination and settlement of the obligations
of Bancorp and the Bank to Mr. Lewis under a supplemental retirement agreement;
broad, mutual releases and waivers; agreements by Mr. Lewis to maintain the
confidentiality of confidential information of Bancorp and the Bank and, for a
period ending December 31, 2005, not to hire any officer or employee of the Bank
or its affiliates; acknowledgement of the obligations of Bancorp and the Bank to
continue to provide the indemnification and directors' and officers' insurance
coverage required by the Employment Agreement described above and to pay change
in control benefits under the Employment Agreement described above if a change
in control had occurred on or before April 11, 2005. The effectiveness of the
Separation Agreement is subject to Mr. Lewis's right to revoke it on or before
September 22, 2005.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired. Not applicable.
(b) Pro forma financial information. Not applicable.
(c) Exhibits Not applicable.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SANDY SPRING BANCORP, INC.
By: Hunter R. Hollar
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Hunter R. Hollar
President and
Chief Executive Officer
Dated: September 22, 2005