CHAIRMAN'S FEE AGREEMENT

 

                                                                    Exhibit 10.5

 

                            CHAIRMAN'S FEE AGREEMENT

 

         This Chairman's Fee Agreement. made as of this 31st day of December,

2003, between Eagle Bancorp, Inc., a Maryland corporation (the "Company") having

its principal executive offices at 7815 Woodmont Avenue, Bethesda, Maryland

20814, and Leonard L. Abel ("Abel"), an individual maintaining an office address

at 7815 Woodmont Avenue, Bethesda, Maryland 20814.

 

         WHEREAS, Abel's service as Chairman of the Board of Directors of the

Company and member of the Board of Directors of the Company's wholly owned

subsidiary, EagleBank (the "Bank") involves a more substantial commitment of

time and effort, than would ordinarily be required as a member of the Board of

Directors, and such service is valuable to the Company as a result of Abel's

extensive business and organizational knowledge, judgment, skills, acumen,

experience and expertise, particularly in connection with the conduct of the

business of managing and operating banking institutions; and

 

         WHEREAS, the Company desires to continue to receive the benefit of

Abel's service in the future, and to induce Abel to continue to serve as

Chairman of the Board of Directors of the Company and a member of the Board of

Directors of the Bank, in accordance with the terms and conditions of this

Agreement; and

 

         WHEREAS, Abel desires to continue to serve in such capacities, in

accordance with such terms and conditions;

 

         NOW, THEREFORE, in consideration of the premises and the mutual

promises and covenants contained herein, and other good and valuable

consideration, the receipt and sufficiency of which is hereby acknowledged, and

intending to be legally bound hereby, the parties hereto agree as follows:

 

         1. Abel hereby agrees to serve as Chairman of the Board of Directors of

the Company and Board member of the Bank. Notwithstanding anything to the

contrary contained herein, Abel's service as a director of the Company and the

Bank shall be subject to his election as such by the shareholders of the Company

and the Bank, as the case may be, and Abel's service as Chairman of the Board of

Directors of the Company shall be subject to his election as such by the Board

of Directors of the Company, and nothing contained herein shall constitute any

agreement, understanding or commitment of the Company to, nominate, appoint or

elect Abel, or cause Abel to be nominated appointed or elected to the Board of

Directors of the Company or the Bank. The termination of Abel's service as

Chairman of the Board of Directors, whether through his failure to be reelected,

declination to stand for reelection or otherwise, shall not constitute a breach

by Abel of his obligations under this agreement, or give rise to a right of

termination by Company, so long as Abel is a member of the Board of Directors of

the Company and/or the Bank.

 

         2. Term. The initial term of Abel's service hereunder shall commence as

of December 31, 2003 (the "Effective Date") and shall continue until December

31, 2006 (the "Initial Term"). Upon each anniversary of the commencement of the

Initial Term, unless (i) this agreement is earlier terminated in accordance with

the provisions of Section 6 hereof, or (ii) Abel shall have provided written

notice to the other party, not less than 60 days prior to the anniversary date,

of Abel's desire to terminate this Agreement upon expiration of the Initial Term

or such Renewed Term, as appropriate, this Agreement shall automatically be

extended for an additional period of one year (each a "Renewed Term"). For

example and for illustrative purposes only, on December 31, 2004, absent

termination or notice of termination as provided above, the term of this

Agreement shall automatically be extended for one year, and the Renewed Term of

this Agreement shall continue until December 31, 2007, and on December 31, 2005,

absent termination or notice of termination as provided above, the term of this

Agreement shall automatically be extended for one year, and the Renewed Term of

this Agreement shall continue until December 31, 2008.

 

         3. Compensation. (i) As compensation for Abel's services hereunder, the

Company shall pay Abel a fee of $48,000 per year (the "Compensation"). During

the term of this Agreement, and following the termination of this Agreement

during any period where payments hereunder are being made to Abel (or with

respect to which a lump sum payment has been made to Abel), Abel shall not be

entitled to receive any fees, payments or other compensation, whether in cash or

otherwise, for service as a member (including as Chairman or Vice Chairman) of

the Board of Directors of the Company, the Bank or other subsidiary of the

Company or Bank, if any, or for service

 

 

 

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on any committee of the Board of Directors of the Company, the Bank or other

subsidiary of the Company or Bank, if any.

 

         (ii) On the Effective Date of this Agreement, Abel shall be entitled to

receive options to purchase six thousand (6,000) shares of the Company's Common

Stock. Such options shall be immediately vested in full, shall have an exercise

price equal to the fair market value of the common stock as of such date (as

determined in accordance with Company's 1998 Stock Option Plan), and a term of

ten years.

 

         (iii) During the period of the Agreement periodic increases (but not

decreases) may be made by the Board of Directors of the Company on the

recommendation of the Benefits Committee of the Company or comparable Bank

committee serving such purpose for the Company (or if required by applicable

law, regulation or rules or listing requirements of The Nasdaq Stock Market or

other market or exchange on which the Company's securities trade, a committee of

independent member of the Board of Directors of the Company, or the independent

members of the Board of Directors of the Company). The Compensation shall be

paid in equal monthly installments, or such other installments as the Company

and Abel shall agree upon. Notwithstanding the foregoing, the Compensation

payable by the Company hereunder in any year shall be reduced by the amount paid

to Abel by the Bank (or any successor thereto).

 

             4. Benefits and Expenses.

 

         (a) Abel shall be entitled to participate in and receive all fringe

benefit programs and plans, if any as are generally available to directors of

the Company and the Bank.

 

         (b) Abel is authorized to incur reasonable expenses for conducting and

promoting the business and activities of the Company and the Bank, including

expenses for travel, business entertainment and similar expenses in accordance

with the policies of the Company and the Bank regarding the reimbursement of

expenses applicable to directors of the Company and the Bank generally, as such

policies may from time to time exist.

 

         (c) Abel shall be entitled to the use of his current office located in

the building in which the principal executive offices of the Company are

located, together with such secretarial and other office support services as he

may reasonably require.