EXHIBIT 4
EAGLE BANCORP,
INC.
2006 STOCK PLAN
[As amended through May 21,
2009]
1.
Purpose of the Plan.
The purpose of this Eagle
Bancorp, Inc. 2006 Stock Plan (the “Plan”) is to
advance the interests of the Company by providing directors and
selected employees of the Bank, the Company, and their Affiliates
with the opportunity to acquire Shares. By encouraging stock
ownership, the Company seeks to attract, retain and motivate the
best available personnel for positions of substantial
responsibility; to provide additional incentive to directors and
selected employees of the Company, the Bank and their Affiliates to
promote the success of the business as measured by the value of its
shares; and generally to increase the commonality of interests
among directors, employees, and other shareholders.
Upon approval of this Plan by
shareholders of the Company, the Plan shall replace the
Company’s 1998 Stock Option Plan (the “1998
Plan”), which shall be terminated as of that time.
Following such termination, Options granted under the 1998 Plan
shall continue in effect, and shall be subject to the provisions of
the 1998 Plan, but no new options may be granted under the 1998
Plan.
2.
Definitions.
In this Plan:
(a) “Affiliate” means any “parent
corporation” or “subsidiary corporation” of the
Company as such terms are defined in Section 424(e) and
(f), respectively, of the Code.
(b) “Agreement” means a written
agreement entered into in accordance with
Section 5(c).
(c) “Awards” means, collectively
Options, SARs and Restricted Stock, unless the context clearly
indicates a different meaning.
(d) “Bank” means EagleBank.
(e) “Board” means the Board of Directors
of the Company.
(f) “Bank Board” means the Board of
Directors of the Bank.
(g) “Change in Control” means any one of
the following events occurring after the Effective Date:
(1) the acquisition of ownership, holding or power to vote
more than 50% of the Bank’s or Company’s voting stock,
(2) the acquisition of the power to control the election of a
majority of the Bank’s or Company’s directors,
(3) the exercise of a controlling influence over the
management or policies of the Bank or the Company by any person or
by persons acting as a “group” (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934), or
(4) the failure of Continuing Directors to constitute at least
two-thirds of the Board of Directors of the Company or the Bank
(the “Company Board”) during any period of two
consecutive years. For purposes of this Plan, “Continuing
Directors” shall include only those individuals who were
members of the Company Board at the Effective Date and those other
individuals whose election or nomination for election as a member
of the Company Board was approved by a vote of at least two-thirds
of the Continuing Directors then in office. For purposes of this
subsection only, the term “person” refers to an
individual or a corporation, partnership, trust, association, joint
venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed
herein. The decision of the Committee as to whether a Change
in Control has occurred shall be conclusive and binding.
(h) “Code” means the Internal Revenue
Code of 1986, as amended.
(i) “Committee” means the Stock Option
Committee appointed by the Board in accordance with
Section 5(a) hereof.
(j) “Common Stock” means the common
stock, par value $0.01 per share, of the Company.
(k) “Company” means Eagle
Bancorp, Inc.
(l) “Continuous Service” means the
absence of any interruption or termination of service as an
Employee of the Company or an Affiliate. Continuous Service
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Company or in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate or a
successor.
(m) “Disability” means permanent and
total disability as defined in Section 22(e)(3) of the
Code.
(n) “Effective Date” means the date
specified in Section 17 hereof.
(o) “Employee” means any person employed
by the Company, the Bank, or by an Affiliate, other than in the
capacity as a director, advisory director or comparable
status.
(p) “Exercise Price” means the price per
Optioned Share at which an Option or SAR may be
exercised.
(q) “Independent Director” means an
independent director as defined for purposes other than audit
committee service in the listing standards and regulations of the
Nasdaq Stock Market, or if the Company’s Common Stock is
primarily traded on a national securities exchange other than the
Nasdaq Stock Market (including any level or submarket thereof),
then the listing standards and regulations of such other national
securities exchange. Not in limitation of the foregoing, all
Independent Directors must be Non-Employee Directors.
(r) “ISO” means an option to purchase
Common Stock that meets the requirements set forth in the Plan, and
which is intended to be and is identified as an “incentive
stock option” within the meaning of Section 422 of the
Code.
(s) “Market Value” means the fair market
value of the Common Stock, as determined under
Section 7(b) hereof.
(t) “Non-Employee Director” means any
member of the Board who, at the time discretion under the Plan is
exercised, is a “Non-Employee Director” within the
meaning of Rule 16b-3.
(u) “Non-ISO” means an option to
purchase Common Stock that meets the requirements set forth in the
Plan but which is not intended to be, and is not identified as, an
ISO, or an option which meets the circumstances of
Section 6(b) hereof.
(v) “Option” means an ISO or
Non-ISO.
(w) “Optioned Shares” means Shares
subject to an Option, SAR or grant of Restricted Stock granted
pursuant to this Plan.
(x) “Outstanding Shares” means the total
shares of Common Stock which have been issued and which
(a) are not held as treasury shares, and (b) have not
been cancelled or retired by the Company.
(y) “Parent” means any present or future
entity which would be a “parent corporation “ of the
Company as defined in Section 424(e) and
Section 424(g) of the Code.
(z) “Participant” means any person who
receives an Award pursuant to the Plan.
(aa) “Plan” means the Eagle
Bancorp, Inc. 2006 Stock Plan.
(bb) “Performance Based Award” means an
Award, the vesting, exercise or retention of which is subject to or
based upon specific corporate, individual or individual performance
or achievement standards or goals set forth in an
Agreement.
(cc) “Restricted Stock” means Common
Stock that is subject to forfeiture, restrictions against transfer,
specific corporate, divisional or individual performance or
achievement standards or goals, or other conditions or restrictions
set forth in an Agreement.
(dd) “Retirement” means normal retirement
from employment with the Company or any Parent or Subsidiary,
after five (5) or more years of Continuous Service or
such shorter period as may be specified in an Award, and upon or
after achieving the age of 65.
(ee) “Rule 16b-3” means
Rule 16b-3 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended.
(ff) “SAR” means a right to receive all
or a specified portion of the increase in value over the Market
Value on the date of grant of a specified number of Shares of
Common Stock.
(gg) “Share” means one share of Common
Stock.
(hh) “Subsidiary” means any present or
future entity which would be a “subsidiary corporation
“ of the Company as defined in Section 424(f) and
Section 424(g) of the Code.
(ii) “Transaction” means (i) the
liquidation or dissolution of the Company, (ii) a merger or
consolidation in which the Company is not the surviving entity, or
(iii) the sale or disposition of all or substantially all of
the Company’s assets.
3.
Term of the Plan and
Awards.
(a)
Term of the Plan.
The Plan shall continue in
effect for a term of ten (10) years from the Effective Date
unless sooner terminated pursuant to Section 20. No
Award may be granted under the Plan after ten (10) years from
the Effective Date.
(b)
Term of Options and
SARs . The
Committee shall establish the term of each Option and SAR granted
under the Plan. No Option or SAR may have a term that exceeds ten
(10) years. No ISO granted to an Employee who owns Shares
representing more than ten percent (10%) of the outstanding shares
of Common Stock, as determined in accordance with the Code, at the
time an ISO is granted may have a term that exceeds five
(5) years.
4.
Shares Subject to the
Plan.
(a)
General. Except as otherwise required by the provisions
of Section 14, the aggregate number of Shares deliverable upon
the exercise of Awards shall be 1,215,000. Optioned Shares
may either be authorized but unissued Shares or Shares held in
treasury to the extent allowed by Maryland law. If Awards should
expire, become unexercisable or be forfeited for any reason without
having been exercised or become vested in full, the Optioned Shares
shall be available for the grant of additional Awards under the
Plan, unless the Plan shall have been terminated.
(b)
Special Rule for
SARs. Not in limitation
of the provisions of Section 4(a), the number of Shares with
respect to which a SAR is granted, and not the number of Shares
delivered upon the exercise of the SAR, shall be charged against
the aggregate number of Shares remaining available under the Plan,
provided, however, that in the case of a SAR granted in tandem with
an Option, under circumstances where the exercise of the Option
results in the termination of the SAR, or vice versa , only
the number of Shares subject to the Option shall be charged against
the aggregate number of Shares remaining available under the
Plan. The Shares related to an Option as to which Option
rights have been terminated as a result of the exercise of a
related SAR shall not be available for the grant of additional
Awards.
5.
Administration of the
Plan.
(a)
Composition of the
Committee. The
Plan shall be administered by the Committee, which shall consist of
not less than three (3) members of the Board. All
members of the Committee shall be Independent Directors, and shall
serve at the pleasure of the Board. In the absence at any
time of a duly appointed Committee, the Plan shall be administered
by the members of the Board who are Independent
Directors.
(b)
Powers of the
Committee. Except
as limited by the express provisions of the Plan or by resolutions
adopted by the Board, the Committee shall have sole and complete
authority and discretion (i) to select Participants and grant
Awards, (ii) to determine the form and content of Awards to be
issued in the form of Agreements under the Plan, including but not
limited to the corporate, divisional or individual performance or
achievement standards or goals of Performance Based Awards, which
need not be identical among Participants granted Awards at the same
time, (iii) to interpret the Plan, (iv) to prescribe,
amend and rescind rules and regulations relating to the Plan,
and (v) to make other determinations necessary or advisable
for the administration of the Plan. The Committee shall have
and may exercise such other power and authority as may be delegated
to it by the Board from time to time. A majority of the
entire Committee shall constitute a quorum and the action of a
majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the Committee
without a meeting, shall be deemed the action of the
Committee.
(c)
Agreement.
Each Award shall be evidenced
by a written agreement containing such provisions as may be
approved by the Committee. Each such Agreement shall
constitute a binding contract between the Company and the
Participant, and every Participant, upon acceptance of such
Agreement, shall be bound by the terms and restrictions of the Plan
and of such Agreement. The terms of each such Agreement
shall be in accordance with the Plan, but each Agreement may
include such additional provisions and restrictions determined by
the Committee, in its discretion, provided that such additional
provisions and restrictions are not inconsistent with the terms of
the Plan. In particular, the Committee shall set forth in
each Agreement (i) the Exercise Price of an Option or SAR,
(ii) the number of Shares subject to, and the expiration date
of, the Award, (iii) the manner, time and rate (cumulative or
otherwise) of exercise or vesting of such Award, and (iv) the
restrictions, including Performance Based Awards standards, if any,
to be placed
upon such Award, or upon Shares which may be
issued in respect of such Award. The Chairman of the Committee and
such other officers as shall be designated by the Committee are
hereby authorized to execute Agreements on behalf of the Company
and to cause them to be delivered to the recipients of
Awards.
(d)
Effect of the Committee’s
Decisions . All
decisions, determinations, and interpretations of the Committee
shall be final and conclusive on all persons affected thereby. The
Committee’s determination whether a Participant’s
Continuous Service has ceased, the effective date thereof, and
whether a Performance Based Award standard or condition shall have
been met in the event of the Death, Disability or Retirement shall
be final and conclusive on all persons affected thereby.
(e)
Indemnification.
In addition to such other
rights of indemnification as they may have, the members of the
Committee shall be indemnified by the Company in connection with
any claim, action, suit or proceeding relating to any action taken
or failure to act under or in connection with the Plan or any
Option, granted hereunder to the full extent provided for under the
Company’s Articles of Incorporation or Bylaws with respect to
the indemnification of directors.
6.
Grant of Options.
(a)
General Rule.
The Committee, in its sole
discretion, may grant ISO’s or Non-ISOs to Employees of the
Company or its Affiliates and may grant Non-ISOs to members of the
Board, members of the Bank Board, members of Bank advisory boards,
and members of the boards of directors of Affiliates.
(b)
Special Rules for
ISOs . The
aggregate Market Value, as of the date the Option is granted, of
the Shares with respect to which ISOs are exercisable for the first
time by an Employee during any calendar year (under all incentive
stock option plans, as defined in Section 422 of the Code, of
the Company, or any Parent or Subsidiary), shall not exceed
$100,000. Notwithstanding the prior provisions of this
Section, the Committee may grant Options in excess of the foregoing
limitations, in which case such Options granted in excess of such
limitation shall be Options which are Non-ISOs.
7.
Exercise Price for
Options.
(a)
Limits on Committee
Discretion. The
Exercise Price as to any particular Option granted under the Plan
shall not be less than the Market Value of the Optioned Shares on
the date of grant. In the case of an Employee who owns Shares, as
determined in accordance with the Code, representing more than 10%
of the Company’s Outstanding Shares of Common Stock at the
time an ISO is granted, the Exercise Price shall not be less than
110% of the Market Value of the Optioned Shares at the time the ISO
is granted.
(b)
Standards for Determining
Exercise Price . If
the Common Stock is listed on a national securities exchange
(including the Nasdaq National Market or Nasdaq Capital Market) on
the date in question, then the Market Value per Share shall be not
less than the average of the highest and lowest selling price on
such exchange on such date, or if there were no sales on such date,
then the Exercise Price shall be not less than the mean between the
bid and asked prices on such date. If the Common Stock is traded
otherwise than on a national securities exchange on the date in
question, then the Market Value per Share shall be not less than
the mean between the bid and asked price on such date, or, if there
is no bid and asked price on such date, then on the next prior
business day on which there was a bid and asked price. If no
such bid and asked price is available, then the Market Value per
Share shall be its fair market value as determined in good faith by
the Committee, in its sole and absolute discretion.
8.
Exercise of
Options.
(a)
Generally.
Any Option shall be
exercisable at such times and under such conditions as shall be
permissible under the terms of the Plan and of the Agreement.
An Option may not be exercised for a fractional Share. In the event
that any adjustment of an Option pursuant to Section 14 or
otherwise would result in an Optionee being entitled to exercise
for a fractional Share, then upon such adjustment, the number of
Shares which may be acquired upon exercise of such Option shall be
rounded down to the next whole share, and the Optionee shall not be
entitled to any payment, compensation or alternative Award in lieu
thereof.
(b)
Procedure for
Exercise. A
Participant may exercise Options, subject to provisions relative to
its termination and limitations on its exercise, only by
(1) written notice of intent to exercise the Option with
respect to a specified number of Shares, and (2) payment to
the Company (contemporaneously with delivery of such notice) in
cash, in Common Stock, or a combination of cash and Common Stock,
of the amount of the Exercise Price for the number of
Shares with respect to which the Option is then
being exercised. Each such notice (and payment where
required) shall be delivered, or mailed by prepaid registered or
certified mail, addressed to the Treasurer of the Company at the
Company’s executive offices. Common Stock utilized in
full or partial payment of the Exercise Price for Options shall be
valued at its Market Value at the date of exercise. Notwithstanding
the foregoing, a Share acquired upon the exercise of an Option (or
otherwise directly acquired from the Company) may not be
surrendered in payment of any portion of the exercise price of an
Option unless such Share shall have been held for at least six
months, or the Committee shall have determined that the use of such
Share shall not result in adverse tax or accounting consequences to
the Company.
(c)
Period of
Exercisability-ISOs. An
ISO may be exercised by a Participant only while the Participant is
an Employee and has maintained Continuous Service from the date of
the grant of the ISO, or within three months after termination of
such Continuous Service (but not later than
