Exhibit 10.1
Exhibit A
VOTING
AGREEMENT
VOTING
AGREEMENT, dated as of October 10, 2006 (this “
Agreement ”), among SANDY SPRING BANCORP, INC., a
Maryland corporation and a registered bank holding company (“
Bancorp ”), and each shareholder who is a signatory
hereto (each a “ Potomac Shareholder ”, and
collectively, the “ Potomac Shareholders
”).
WHEREAS,
concurrently with the execution and delivery of this Agreement,
Bancorp, Sandy Spring Bank, a Maryland bank and trust company and a
wholly owned subsidiary of Bancorp (the “ Bank
”), and Potomac Bank of Virginia, a Virginia bank (“
Potomac ”) are entering into an Agreement and Plan of
Merger dated as of the date hereof (the “ Merger
Agreement ”), which provides, among other things, that
Potomac will merge with and into the Bank (the “
Merger ”). Capitalized terms used and not defined
herein have the respective meanings ascribed to them in the Merger
Agreement.
WHEREAS,
as of the date hereof, each Potomac Shareholder is the record and
Beneficial Owner of the number of Shares and Potomac Options set
forth opposite such Potomac Shareholder’s name on Schedule
I hereto.
WHEREAS,
as an inducement and a condition to entering into the Merger
Agreement, Bancorp has required that the Potomac Shareholders
agree, and the Potomac Shareholders have agreed, to enter into this
Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements
contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
SECTION
1. Definitions . For purposes of this Agreement:
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(a) “
Beneficially Own ” or “ Beneficial
Ownership ” with respect to any securities shall mean
having “beneficial ownership” of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the “ Exchange Act ”)),
including pursuant to any agreement, arrangement or understanding,
whether or not in writing. Without duplicative counting of the same
securities by the same holder, securities Beneficially Owned by a
Person shall include securities Beneficially Owned by all other
Persons with whom such Person would constitute a
“group” as within the meanings of Section 13(d)(3) of
the Exchange Act.
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(b) “
Potomac Options ” shall mean all outstanding options
to purchase shares of Potomac Common Stock under the Potomac Stock
Option Plan or otherwise.
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(c) “
Material Adverse Effect ” shall mean any change,
event, circumstance, occurrence or effect that (i) either
individually or in the aggregate with all other such changes,
effects, events and occurrences is materially adverse to the Merger
and/or the transactions contemplated by this Agreement and/or the
Merger Agreement or (ii) does or is reasonably likely to adversely
effect the ability of any Person to perform its obligations under
this Agreement and/or the Merger Agreement or to consummate the
transactions contemplated hereby or thereby.
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(d) “
Shares ” shall mean all of the shares of Potomac
Common Stock Beneficially Owned by a Potomac Shareholder on the
date hereof, together with any additional shares of Potomac Common
Stock acquired by a Potomac Shareholder after the date hereof and
prior to the Effective Time (including, without limitation, shares
acquired by way of exercise of Potomac Options or other rights to
purchase shares of Potomac Common Stock or by way of dividend,
distribution, exchange, merger, consolidation, recapitalization,
reorganization, stock split or otherwise). In the event of a stock
dividend or distribution, or any change in the Potomac Common Stock
by reason of any stock dividend, split-up, recapitalization,
combination, exchange of shares or the like, the term “
Shares ” shall be deemed to refer to and include the
Shares as well as all such stock dividends and distributions and
any shares into which or for which any or all of the Shares may be
changed or exchanged. Schedule I hereto sets forth opposite
each Potomac Shareholder’s name the number of Shares and
Potomac Options Beneficially Owned by such Potomac
Shareholder.
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SECTION
2. Agreement to Vote Shares . Each Potomac Shareholder
hereby agrees that during the period commencing on the date hereof
and continuing until the termination of this Agreement, at any
meeting of the shareholders of Potomac, however called, or in
connection with any written consent of the shareholders of Potomac,
such Potomac Shareholder shall vote (or cause to be voted) all
Shares held of record or Beneficially Owned by such Potomac
Shareholder, whether currently owned or hereafter acquired, (i) in
favor of the Merger, the execution and delivery by Potomac of the
Merger Agreement, and the approval of the terms thereof and each of
the other actions contemplated by the Merger Agreement and this
Agreement and any actions required in furtherance thereof and
hereof; (ii) against any action or agreement that would result in a
breach of any covenant, representation or warranty or any other
obligation or agreement of Potomac under the Merger Agreement; and
(iii) except as otherwise agreed to in writing in advance by
Bancorp, against the following actions (other than the Merger and
the transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving Potomac; (B)
a sale, lease or transfer of a material amount of assets of
Potomac, or a reorganization, recapitalization, dissolution or
liquidation of Potomac; (C) (1) any change in a majority of the
persons who constitute the board of directors of Potomac; (2) any
change in the present capitalization of Potomac or any amendment of
Potomac’s Articles of Incorporation or Bylaws; (3) any other
material change in Potomac’s corporate structure or business;
or (4) any other action which is intended, or could reasonably be
expected, to impede, interfere with, delay or postpone the Merger
or otherwise have a Material Adverse Effect. Each Potomac
Shareholder agrees that it shall not enter into any agreement or
understanding with any Person the effect of which would be
inconsistent with or violate any of the provisions and agreements
contained in this Section 2. Each Potomac Shareholder acknowledges
receipt and review of a copy of the Merger
Agreement.
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SECTION
3. Grant of Proxy . Each Potomac Shareholder hereby grants
to Bancorp a proxy to vote the Shares of such Potomac Shareholder
solely as to the matters set forth in Section 2(i) through (iii).
Each Potomac Shareholder intends such proxy to be irrevocable and
coupled with an interest and will take such further action or
execute such other instruments as may be necessary to effectuate
the intent of such proxy. All authority herein conferred or agreed
to be conferred shall survive the death or incapacity of any
Potomac Shareholder, and any obligation of the Potomac Shareholders
under this Agreement shall be binding upon the heirs, personal
representatives, successors and assigns of such Potomac
Shareholders.
SECTION
4. Representations and Warranties; Other Covenants . Each
Potomac Shareholder hereby represents and warrants to Bancorp and
Bank as follows:
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(a)
Ownership of Shares and Potomac Options . Such Potomac
Shareholder is either (i) the record and Beneficial Owner of, or
(ii) the Beneficial Owner but not the record holder of, the number
of Shares and Potomac Options set forth opposite such Potomac
Shareholder’s name on Schedule I hereto. On the date
hereof, the Shares and Potomac Options set forth opposite such
Potomac Shareholder’s name on Schedule I hereto
constitute all of the Shares and Potomac Options (or other rights
to acquire shares of Potomac Common Stock) owned of record and/or
Beneficially Owned by such Potomac Shareholder. Such Potomac
Shareholder has the requisite voting power and the requisite power
and authority to issue instructions with respect to the matters set
forth in Sections 2 and 3 hereof, the sole power of disposition,
the sole power of conversion, the sole power to demand appraisal
rights and the sole power to agree to all of the matters set forth
in this Agreement, in each case with respect to all of the Shares
and Potomac Options set forth opposite such Potomac
Shareholder’s name on Schedule I hereto, with no
limitations, qualifications or restrictions on such rights, subject
to applicable securities laws and the terms of this
Agreement.
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(b)
Power; Binding Agreement . Such Potomac Shareholder has the
legal capacity, power and authority to enter into and perform all
of such Potomac Shareholder’s obligations under this
Agreement. This Agreement has been duly authorized and has been
duly and validly executed and delivered by such Potomac Shareholder
and constitutes a valid and binding agreement of such Potomac
Shareholder, enforceable against such Potomac Shareholder in
accordance with its terms. There is no beneficiary or holder of a
voting trust certificate or other interest of any trust of which
such Potomac Shareholder is trustee whose consent is required for
the execution and delivery of this Agreement or the consummation by
such Potomac Shareholder of the transactions contemplated
hereby.
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(c)
No Conflicts . That (i) no filing with, and no permit,
authorization, consent or approval of, any third party (including,
without limitation, any Governmental Authority) is necessary for
the execution of this Agreement by such Potomac Shareholder and the
consummation by such Potomac Shareholder of the transactions
contemplated hereby and (ii) none of the execution and delivery of
this Agreement by such Potomac Shareholder, the consummation by
such Potomac Shareholder of the transactions contemplated hereby or
compliance by such Potomac Shareholder with any of the provisions
hereof shall (A) conflict with or result in any breach of any
applicable organizational documents applicable to such Potomac
Shareholder, (B) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind to which
such Potomac Shareholder is a party or by which such Potomac
Shareholder or any of such Potomac Shareholder’s properties
or assets may be bound, or (C) violate any
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