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 applicab
