UNITED STATES
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): March 7, 2013
SANDY SPRING BANCORP, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 000-19065 | 52-1532952 |
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
17801 Georgia Avenue, Olney, Maryland 20832
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (301) 774-6400
Not Applicable
(Former name or former address, if changed since last report)
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 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On March 7, 2013, Sandy Spring Bancorp, Inc. (the “Company”) and its wholly owned subsidiary, Sandy Spring Bank (the “Bank”), entered into an amendment to the employment agreement with Daniel J. Schrider, President and Chief Executive Officer, that removed the provision that entitled him to receive an additional tax indemnification payment (a “gross-up” payment) if payments under his employment agreement or any other payments trigger liability under Sections 280G and 4999 of the Internal Revenue Code for an excise tax on “excess parachute payments” and replaced it with a provision that entitles Mr. Schrider to receive the greater of the following, whichever gives him the highest net after-tax amount: (a) the full payments and benefits provided for under the agreement, in which case he would be responsible for any resulting excise tax, or (b) one dollar less than the amount that would subject him to the excise tax.
Also on March 7, 2013, the Company and the Bank entered into amendments to the employment agreements with Philip J. Mantua and Joseph J. O’Brien, Jr. and to the Change in Control Agreements with Jeffrey A. Welch and R. Louis Caceres that modified the definition of “Good Reason” under the agreements. The amendment deletes the provision that permits the executive to resign for any reason during the sixty day period immediately following the first six months after a change in control and receive a severance benefit.
The foregoing description of the amendments to the Employment Agreements and Change in Control Agreements does not purport to be complete and is qualified in its entirety by reference to the amendments, which are attached hereto as Exhibit 10.1 through 10.5 and incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits |
Exhibits
| Number | Description |
| 10.1 | Second Amendment to Employment Agreement Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and Daniel J. Schrider Dated January 1, 2009 |
| 10.2 | Amendment to Employment Agreement Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and Philip J. Mantua Dated January 13, 2012 |
| 10.3 | Amendment to Employment Agreement Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and Joseph J. O’Brien, Jr. Dated January 13, 2012 |
| 10.4 | Amendment to Change in Control Agreement Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and R. Louis Caceres Dated March 9, 2012 |
| 10.5 | Amendment to Change in Control Agreement Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and Jeffrey A. Welch Dated March 9, 2012 |
| 2 |
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. | ||
| ( Registrant ) | ||
| Date: March 7, 2013 | By: | /s/ Ronald E. Kuykendall |
| Ronald E. Kuykendall | ||
| General Counsel and Secretary | ||
| 3 |
Second Amendment to Employment Agreement
Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and Daniel J. Schrider
Dated January 1, 2009
THIS AMENDMENT, made and entered into as of the 7th day of March, 2013, by and between Sandy Spring Bancorp, Inc. (the “Bancorp”), Sandy Spring Bank (the “Bank”) and Daniel J. Schrider (the “Executive”).
WHEREAS, the Bancorp, the Bank and the Executive entered into an employment agreement, dated as of January 1, 2009 (the “Agreement”); which was amended by the parties as of November 1, 2009; and
WHEREAS, the Bancorp, the Bank and the Officer desire to amend the Agreement to eliminate the gross-up provision related to excess parachute payments potentially made in connection with a change in control; and
WHEREAS, Section 8.8 of the Agreement provides that the parties may amend the Agreement by a written instrument from time to time.
ACCORDINGLY, the Agreement is hereby amended, effective as of the date first set forth above as follows:
Section 5.3 of the Agreement is deleted in its entirety and replaced with the following new Section 5.3:
“5.3 Contingent Reduction of Parachute Payments .
If there is a change in ownership or control that would cause any payment or distribution by the Bancorp or the Bank or any other person or entity to Executive or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) to be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (such excise tax, together with any interest or penalties incurred by Executive with respect to such excise tax, the “Excise Tax”), then Executive will receive the greatest of the following, whichever gives Executive the highest net after-tax amount (after taking into account federal, state, local and social security taxes): (a) the Payments or (b) one dollar less than the amount of the Payments that would subject Executive to the Excise Tax (the “Safe Harbor Amount”). If a reduction in the Payments is necessary so that the Payments equal the Safe Harbor Amount and none of the Payments constitutes a “deferral of compensation” within the meaning of and subject to Section 409A of the Code (“Nonqualified Deferred Compensation”), then the reduction shall occur in the manner Executive elects in writing prior to the date of payment. If any Payment constitutes Nonqualified Deferred Compensation or if Executive fails to elect an order, then the Payments to be reduced will be determined in a manner which has the least economic cost to Executive and, to the extent the economic cost is equivalent, will be reduced in the inverse order of when payment would have been made to Executive, until the reduction is achieved. All determinations required to be made under this Section 5.3, including whether and when the Safe Harbor Amount is required and the amount of the reduction of the Payments and the assumptions to be utilized in arriving at such determination, shall be made by a certified public accounting firm designated by Bancorp or the Bank (the “Accounting Firm”). All fees and expenses of the Accounting Firm shall be borne solely by Bancorp and the Bank. Any determination by the Accounting Firm shall be binding upon Bancorp, the Bank and Executive.”
IN WITNESS WHEREOF , the parties have caused this amendment to the Agreement to be duly executed and delivered, as of the date first indicated above.
| SANDY SPRING BANCORP, INC. | ||
| By: | /s/ Robert L. Orndorff | |
| Robert L. Orndorff | ||
| Chairman of the Board | ||
| SANDY SPRING BANK | ||
| By: | /s/ Robert L. Orndorff | |
| Robert L. Orndorff | ||
| Chairman of the Board | ||
| EXECUTIVE | ||
| /s/ Daniel J. Schrider | ||
| Daniel J. Schrider | ||
Amendment to Employment Agreement
Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and Philip J. Mantua
Dated January 13, 2012
THIS AMENDMENT, made and entered into as of the 7th day of March, 2013, by and between Sandy Spring Bancorp, Inc. (the “Bancorp”), Sandy Spring Bank (the “Bank”) and Philip J. Mantua (the “Officer”).
WHEREAS, the Bancorp, the Bank and the Officer entered into an employment agreement, dated as of January 13, 2012, (the “Agreement”); and
WHEREAS, the Bancorp, the Bank and the Officer desire to amend the Agreement to make certain changes to the potential severance triggers under the Agreement; and
WHEREAS, Section 21 of the Agreement provides that the parties may amend the Agreement by a written instrument from time to time.
ACCORDINGLY, the Agreement is hereby amended, effective as of the date first set forth above as follows:
Section 10.g.iii. of the Agreement is deleted in its entirety and replaced with the following new Section 10.g.iii.:
| “iii. | “Good Reason” shall be deemed to exist at the time that any of the following events occurs without the Officers express written consent: |
| (1) | A material reduction in the Officer’s responsibilities or authority in connection with the Officer’s employment with the Bank or the Bancorp; |
| (2) | 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; |
| (3) | A reduction in salary or benefits, or, following a Change in Control, (x) any reduction in salary or a material reduction in benefits below the amounts to which the Officer was entitled prior to the Change in Control or (y) the Officer is not offered a comparable executive level position, which for purposes of this provision shall mean an executive officer position with respect to which the total authorities, responsibilities, compensation and benefits are comparable with the authorities, responsibilities, compensation and benefits associated with the Officer’s position immediately preceding the Change in Control; |
| (4) | Termination of incentive and benefit plans, programs, or arrangements, or a 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’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 the assignment to the Officer of duties that would reasonably require such a relocation; |
| (6) | A requirement that the Officer spend more than thirty (30) normal working days away from any county in which the Bank has its main office, its branches, or its deposit taking Automatic Teller Machines during any consecutive twelve-month period; or |
| (7) | Failure to provide office facilities, secretarial services, and other administrative services to the 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). |
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.”
[Signature page follows]
IN WITNESS WHEREOF , the parties have caused this amendment to the Agreement to be duly executed and delivered, as of the date first indicated above.
| SANDY SPRING BANCORP, INC. | ||
| By: | /s/ Daniel J. Schrider | |
| Daniel J. Schrider | ||
| President and Chief Executive Officer | ||
| SANDY SPRING BANK | ||
| By: | /s/ Daniel J. Schrider | |
| Daniel J. Schrider | ||
| President and Chief Executive Officer | ||
| OFFICER | ||
| /s/ Philip J. Mantua | ||
| Philip J. Mantua | ||
Amendment to Employment Agreement
Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and Joseph J. O’Brien, Jr.
Dated January 13, 2012
THIS AMENDMENT, made and entered into as of the 7th day of March, 2013, by and between Sandy Spring Bancorp, Inc. (the “Bancorp”), Sandy Spring Bank (the “Bank”) and Joseph J. O’Brien, Jr. (the “Officer”).
WHEREAS, the Bancorp, the Bank and the Officer entered into an employment agreement, dated as of January 13, 2012, (the “Agreement”); and
WHEREAS, the Bancorp, the Bank and the Officer desire to amend the Agreement to make certain changes to the potential severance triggers under the Agreement; and
WHEREAS, Section 21 of the Agreement provides that the parties may amend the Agreement by a written instrument from time to time.
ACCORDINGLY, the Agreement is hereby amended, effective as of the date first set forth above as follows:
Section 10.g.iii. of the Agreement is deleted in its entirety and replaced with the following new Section 10.g.iii.:
| “iii. | “Good Reason” shall be deemed to exist at the time that any of the following events occurs without the Officers express written consent: |
| (1) | A material reduction in the Officer’s responsibilities or authority in connection with the Officer’s employment with the Bank or the Bancorp; |
| (2) | 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; |
| (3) | A reduction in salary or benefits, or, following a Change in Control, (x) any reduction in salary or a material reduction in benefits below the amounts to which the Officer was entitled prior to the Change in Control or (y) the Officer is not offered a comparable executive level position, which for purposes of this provision shall mean an executive officer position with respect to which the total authorities, responsibilities, compensation and benefits are comparable with the authorities, responsibilities, compensation and benefits associated with the Officer’s position immediately preceding the Change in Control; |
| (4) | Termination of incentive and benefit plans, programs, or arrangements, or a 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’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 the assignment to the Officer of duties that would reasonably require such a relocation; |
| (6) | A requirement that the Officer spend more than thirty (30) normal working days away from any county in which the Bank has its main office, its branches, or its deposit taking Automatic Teller Machines during any consecutive twelve-month period; or |
| (7) | Failure to provide office facilities, secretarial services, and other administrative services to the 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). |
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.”
[Signature page follows]
IN WITNESS WHEREOF , the parties have caused this amendment to the Agreement to be duly executed and delivered, as of the date first indicated above.
| SANDY SPRING BANCORP, INC. | ||
| By: | /s/ Daniel J. Schrider | |
| Daniel J. Schrider | ||
| President and Chief Executive Officer | ||
| SANDY SPRING BANK | ||
| By: | /s/ Daniel J. Schrider | |
| Daniel J. Schrider | ||
| President and Chief Executive Officer | ||
| OFFICER | ||
| /s/ Joseph J. O’Brien, Jr. | ||
| Joseph J. O’Brien, Jr. | ||
Amendment to Change in Control Agreement
Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and R. Louis Caceres
Dated March 9, 2012
THIS AMENDMENT, made and entered into as of the 7th day of March, 2013, by and between Sandy Spring Bancorp, Inc. (the “Bancorp”), Sandy Spring Bank (the “Bank”) and R. Louis Caceres (the “Officer”).
WHEREAS, the Bancorp, the Bank and the Officer entered into a change in control agreement, dated as of March 9, 2012, (the “Agreement”); and
WHEREAS, the Bancorp, the Bank and the Officer desire to amend the Agreement to make certain changes to the potential severance triggers under the Agreement; and
WHEREAS, Section 13 of the Agreement provides that the parties may amend the Agreement by a written instrument from time to time.
ACCORDINGLY, the Agreement is hereby amended, effective as of the date first set forth above as follows:
Section 1.c. of the Agreement is deleted in its entirety and replaced with the following new Section 1.c.:
| “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 the Officer’s employment with the Bank or the Bancorp; |
| 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 benefits, or, following a Change in Control, (x) any reduction in salary or a material reduction in benefits below the amounts to which the Officer was entitled prior to the Change in Control or (y) the Officer is not offered a comparable executive level position, which for purposes of this provision shall mean an executive officer position with respect to which the total authorities, responsibilities, compensation and benefits are comparable with the authorities, responsibilities, compensation and benefits associated with the Officer’s position immediately preceding the Change in Control; |
| iv. | Termination of incentive and benefit plans, programs, or arrangements, or a 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; |
| v. | 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 the assignment to the Officer of duties that would reasonably require such a relocation; |
| vi. | A requirement that the Officer spend more than thirty (30) normal working days away from any county in which the Bank has its main office, its branches, or its deposit taking Automatic Teller Machines during any consecutive twelve-month period; or |
| vii. | Failure to provide office facilities, secretarial services, and other administrative services to the 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). |
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.”
[Signature page follows]
IN WITNESS WHEREOF , the parties have caused this amendment to the Agreement to be duly executed and delivered, as of the date first indicated above.
| SANDY SPRING BANCORP, INC. | ||
| By: | /s/ Daniel J. Schrider | |
| Daniel J. Schrider | ||
| President and Chief Executive Officer | ||
| SANDY SPRING BANK | ||
| By: | /s/ Daniel J. Schrider | |
| Daniel J. Schrider | ||
| President and Chief Executive Officer | ||
| OFFICER | ||
| /s/ R. Louis Caceres | ||
| R. Louis Caceres | ||
Amendment to Change in Control Agreement
Between Sandy Spring Bancorp, Inc., Sandy Spring Bank and Jeffrey A. Welch
Dated March 9, 2012
THIS AMENDMENT, made and entered into as of the 7th day of March, 2013, by and between Sandy Spring Bancorp, Inc. (the “Bancorp”), Sandy Spring Bank (the “Bank”) and Jeffrey A. Welch (the “Officer”).
WHEREAS, the Bancorp, the Bank and the Officer entered into a change in control agreement, dated as of March 9, 2012, (the “Agreement”); and
WHEREAS, the Bancorp, the Bank and the Officer desire to amend the Agreement to make certain changes to the potential severance triggers under the Agreement; and
WHEREAS, Section 13 of the Agreement provides that the parties may amend the Agreement by a written instrument from time to time.
ACCORDINGLY, the Agreement is hereby amended, effective as of the date first set forth above as follows:
Section 1.c. of the Agreement is deleted in its entirety and replaced with the following new Section 1.c.:
| “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 the Officer’s employment with the Bank or the Bancorp; |
| 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 benefits, or, following a Change in Control, (x) any reduction in salary or a material reduction in benefits below the amounts to which the Officer was entitled prior to the Change in Control or (y) the Officer is not offered a comparable executive level position, which for purposes of this provision shall mean an executive officer position with respect to which the total authorities, responsibilities, compensation and benefits are comparable with the authorities, responsibilities, compensation and benefits associated with the Officer’s position immediately preceding the Change in Control; |
| iv. | Termination of incentive and benefit plans, programs, or arrangements, or a 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; |
| v. | 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 the assignment to the Officer of duties that would reasonably require such a relocation; |
| vi. | A requirement that the Officer spend more than thirty (30) normal working days away from any county in which the Bank has its main office, its branches, or its deposit taking Automatic Teller Machines during any consecutive twelve-month period; or |
| vii. | Failure to provide office facilities, secretarial services, and other administrative services to the 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). |
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.”
[Signature page follows]
IN WITNESS WHEREOF , the parties have caused this amendment to the Agreement to be duly executed and delivered, as of the date first indicated above.
| SANDY SPRING BANCORP, INC. | ||
| By: | /s/ Daniel J. Schrider | |
| Daniel J. Schrider | ||
| President and Chief Executive Officer | ||
| SANDY SPRING BANK | ||
| By: | /s/ Daniel J. Schrider | |
| Daniel J. Schrider | ||
| President and Chief Executive Officer | ||
| OFFICER | ||
| /s/ Jeffrey A. Welch | ||
| Jeffrey A. Welch | ||