As filed with the Securities and Exchange Commission on May 14, 1999
Registration Statement No. 333-___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------------
EAGLE BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland 52-1943477
(State or Other Jurisdiction of (IRS Employer I.D. Number)
Incorporation or Organization)
7815 Woodmont Avenue, Bethesda, Maryland 20814
(Address of Principal Executive Offices) (Zip Code)
EAGLE BANCORP, INC.1998 STOCK OPTION PLAN
(Full Title of Plan)
Ronald D. Paul, President
Eagle Bancorp, Inc.
7815 Woodmont Avenue
Bethesda, Maryland 20814
(Name, Address, and Telephone Number of Agent for Service)
Copies to:
David H. Baris, Esquire
Noel M. Gruber, Esquire
Kennedy, Baris & Lundy, L.L.P.
Suite 300
4719 Hampden Lane
Bethesda, Maryland 20814
-----------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------ -------------- ------------------- ----------------------- -----------------
Title of Proposed Maximum Proposed Maximum
Securities to be Amount to be Offering per Aggregate Offering Amount of
Registered Registered(1) Share(2) Price(1) Registration Fee
- ------------------ -------------- ------------------- ----------------------- -----------------
<S> <C> <C> <C> <C>
Common Stock,
$1.00 par value $2,589,500 $11.00 $2,589,500 $719.88
- ------------------ -------------- ------------------- ----------------------- -----------------
</TABLE>
(1) Represents the aggregate exercise prices of the options to which this
Registration Statement relates, in accordance with the provisions of Rule
457(h)(1) under the Securities Act of 1933.
(2) Estimated in accordance with Rule 457(h)(1) under the Securities Act of
1933 solely for purposes of calculating the registration fee, based upon
the exercise price of outstanding options and warrants to purchase common
stock and, with respect to unissued options and warrants, the average of
the bid and ask prices for the common stock on May 10, 1999.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed with Securities and Exchange Commission
are hereby incorporated by reference herein:
(1) Eagle Bancorp, Inc.'s Annual Report on Form 10-KSB for the year
ended December 31, 1998;
(2) Eagle Bancorp, Inc.'s Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1999;
(3) The description of Eagle Bancorp, Inc.'s Common Stock contained
in its Registration Statement on Form 8-A filed April 30, 1999;
and
(4) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act by Eagle Bancorp, Inc. since the end of the year
covered in its Annual Report referred to in (1) above.
All documents filed by Eagle Bancorp, Inc. pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to the
date hereof, and prior to the filing of a post-effective amendment hereto which
indicates that all securities offered hereby shall have been sold or which
deregisters all securities remaining unsold, shall be deemed to be incorporated
by reference herein and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES
As the securities to be issued pursuant to this registration statement
are registered under Section 12 of the Securities Exchange Act of 1934, this
item is inapplicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article VI of the Company's Articles of Incorporation provides that
the Company shall, to the full extent permitted and in the manner prescribed by
the Maryland General Corporation Law and any other applicable law, indemnify a
director or officer of the Company who is or was a party to any proceeding by
reason of the fact that he is or was a director or officer, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise.
The Maryland General Corporation Law provides, in pertinent part, as
follows:
2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS. --
(a) In this section the following words have the meanings indicated.
(1) "Director" means any person who is or was a director of a
corporation and any person who, while a director of a corporation, is or was
serving at the request of the corporation as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, other enterprise, or employee benefit plan.
(2) "Corporation" includes any domestic or foreign predecessor entity
of a corporation in a merger, consolidation, or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(3) "Expenses" include attorney's fees.
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(4) "Official capacity" means the following:
(i) When used with respect to a director, the office of director in
the corporation; and
(ii) When used with respect to a person other than a director as
contemplated in sub-section (j), the elective or appointive office in the
corporation held by the officer, or the employment or agency relationship
undertaken by the employee or agent in behalf of the corporation.
(iii) "Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust, other
enterprise, or employee benefit plan.
(5) "Party" includes a person who was, is, or is threatened to be made
a named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative.
(b)(1) A corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it is established that:
(i) The act or omission of the director was material to the matter
giving rise to the proceeding; and
1. Was committed in bad faith; or
2. Was the result of active and deliberate dishonesty; or
(ii) The director actually received an improper personal benefit in
money, property, or services; or
(iii) In the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful.
(2)(i) Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding.
(ii) However, if the proceeding was one by or in the right of the
corporation, indemnification may not be made in respect of any proceeding in
which the director shall have been adjudged to be liable to the corporation.
(3)(i) The termination of any proceeding by judgment, order, or
settlement does not create a presumption that the director did not meet the
requisite standard of conduct set forth in this subsection.
(ii) The termination of any proceeding by conviction, or a plea of
nolo contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttal presumption that the director did not meet that
standard of conduct.
(c) A director may not be indemnified under subsection (B) of this
section in respect of any proceeding charging improper personal benefit to the
director, whether or not involving action in the director's official capacity,
in which the director was adjudged to be liable on the basis that personal
benefit was improperly received.
(d) Unless limited by the charter:
(1) A director who has been successful, on the merits or otherwise, in
the defense of any proceeding referred to in subsection (B) of this section
shall be indemnified against reasonable expenses incurred by the director in
connection with the proceeding.
(2) A court of appropriate jurisdiction upon application of a director
and such notice as the court shall require, may order indemnification in the
following circumstances:
(i) If it determines a director is entitled to reimbursement under
paragraph (1) of this subsection, the court shall order indemnification, in
which case the director shall be entitled to recover the expenses of securing
such reimbursement; or
(ii) If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances, whether
or not the director has met the standards of conduct set forth in subsection (b)
of this section or has been adjudged liable under the circumstances described in
subsection (c) of this section, the court may order such indemnification as the
court shall deem proper. However, indemnification with respect to any proceeding
by or in the right of the corporation or in which liability shall have been
adjudged in the circumstances described in subsection (c) shall be limited to
expenses.
(3) A court of appropriate jurisdiction may be the same court in which
the proceeding involving the director's liability took place.
(e)(1) Indemnification under subsection (b) of this section may not be
made by the corporation unless authorized for a specific proceeding after a
determination has been made that indemnification of the director is permissible
in the circumstances because the director has met the standard of conduct set
forth in subsection (b) of this section.
(2) Such determination shall be made:
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(i) By the board of directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the proceeding, or, if such
a quorum cannot be obtained, then by a majority vote of a committee of the board
consisting solely of two or more directors not, at the time, parties to such
proceeding and who were duly designated to act in the matter by a majority vote
of the full board in which the designated directors who are parties may
participate;
(ii) By special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in subparagraph (I) of this
paragraph, or, if the requisite quorum of the full board cannot be obtained
therefor and the committee cannot be established, by a majority vote of the full
board in which directors who are parties may participate; or
(iii) By the stockholders.
(3) Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner as the determination
that indemnification is permissible. However, if the determination that
indemnification is permissible is made by special legal counsel, authorization
of indemnification and determination as to reasonableness of expenses shall be
made in the manner specified in subparagraph (ii) of paragraph (2) of this
subsection for selection of such counsel.
(4) Shares held by directors who are parties to the proceeding may not
be voted on the subject matter under this subsection.
(f)(1) Reasonable expenses incurred by a director who is a party to a
proceeding may be paid or reimbursed by the corporation in advance of the final
disposition of the proceeding upon receipt by the corporation of:
(i) A written affirmation by the director of the director's good faith
belief that the standard of conduct necessary for indemnification by the
corporation as authorized in this section has been met; and
(ii) A written undertaking by or on behalf of the director to repay
the amount if it shall ultimately be determined that the standard of conduct has
not been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of
this subsection shall be an unlimited general obligation of the director but
need not be secured and may be accepted without reference to financial ability
to make the repayment.
(3) Payments under this subsection shall be made as provided by the
charter, bylaws or contract or as specified in subsection (e) of this section.
(g) The indemnification and advancement of expenses provided or
authorized by this section may not be deemed exclusive of any other rights, by
indemnification or otherwise, to which a director may be entitled under the
charter, the bylaws, a resolution of stockholders of directors, an agreement or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office.
(h) This section does not limit the corporation's power to pay or
reimburse expenses incurred by a director in connection with an appearance as a
witness in a proceeding at a time when the director has not been made a named
defendant or respondent in the proceeding.
(i) For purposes of this section:
(1) The corporation shall be deemed to have requested a director to
serve an employee benefit plan where the performance of the director's duties to
the corporation also imposes duties on, or otherwise involves services by, the
director to the plan or participants or beneficiaries of the plan:
(2) Excise taxes assessed on a director with respect to an employee
benefit plan pursuant to applicable law shall be deemed fined; and
(3) Action taken or omitted by the director with respect to an
employee benefit plan in the performance of the director's duties for a purpose
reasonably believed by the director to be in the interest of the participants
and beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the corporation.
(j) Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as and to the
extent provided in subsection (d) of this section for a director and shall be
entitled, to the same extent as a director, to seek indemnification pursuant to
the provisions of subsection (d);
(2) A corporation may indemnify and advance expenses to an officer,
employee, or agent of the corporation to the same extent that it may indemnify
directors under this section; and
(3) A corporation, in addition, may indemnify and advance expenses to
an officer, employee, or agent who is not a director to such further extent,
consistent with law, as may be provided by its charter, bylaws, general or
specific action of its board of directors or contract.
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<PAGE>
(k)(1) A corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise, or employee
benefit plan against any liability asserted against and incurred by such person
in any such capacity or arising out of such person's position, whether or not
the corporation would have the power to indemnify against liability under the
provisions of this section.
(2) A corporation may provide similar protection, including a trust
fund, letter of credit, or surety bond, not inconsistent with this section.
(3) The insurance or similar protection may be provided by a
subsidiary or an affiliate of the corporation.
(l) Any indemnification of, or advance of expenses to, a director in
accordance with this section, if arising out of a proceeding by or in the right
of the corporation, shall be reported in writing to the stockholders with the
notice of the next stockholders' meeting or prior to the meeting.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
As no restricted securities are to be reoffered or resold pursuant to
this registration statement, this item is inapplicable.
ITEM 8. EXHIBITS.
The exhibits required by Item 601 of Regulation S-K and this item are
included following the Exhibit Index at Page R-8 hereof.
ITEM 9. UNDERTAKINGS.
The Registrant hereby undertakes that it will:
(1) file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to: (i) include any
prospectus required by section 10(a)(3) of the Securities Act of 1933 (the
"Act"); (ii) reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information in the registration statement; and (iii)
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(2) for determining liability under the Act, treat each post-effective
amendment as a new registration statement relating to the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
(3) file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act") (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised
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that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Bethesda,
State of Maryland on May 14 , 1999.
EAGLE BANCORP, INC.
May 14, 1999 By: /s/ Ronald D. Paul
-------------------------
Ronald D. Paul, President
In accordance with the requirements of the Securities Act, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME POSITION DATE
<S> <C> <C>
/s/Leonard L. Abel Chairman of the Board of Directors May 14,1999
- ------------------------------
Leonard L. Abel
/s/ Eugene F. Ford, Sr. Director May 14,1999
- ------------------------------
Eugene F. Ford, Sr.
Director May __,1999
- ------------------------------
William A. Koier
/s/Ronald D. Paul President and Director May 14,1999
- ------------------------------ Principal Executive Officer
Ronald D. Paul
/s/ H.L. Ward Executive Vice President, May 14,1999
- ------------------------------ Director, President of EagleBank
/s/ Wilmer L. Tinley Senior Vice President of the May 14,1999
- ------------------------------ Bank, Chief Financial Officer of
Wilmer L. Tinley the Company Principal Financial
and Accounting Officer
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
4 Eagle Bancorp, Inc. 1998 Stock Option Plan
5 Opinion of Kennedy, Baris & Lundy, L.L.P.
23(a) Consent of Kennedy, Baris & Lundy, L.L.P., included in Exhibit
5
23(b) Consent of Stegman & Company
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EXHIBIT 4
<PAGE>
EAGLE BANCORP, INC.
1998 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. The purpose of this Eagle Bancorp, Inc. 1998 Stock
Option Plan (the "Plan") is to advance the interests of the Company by providing
directors and selected key 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 key 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, key employees, and other shareholders.
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
Paragraph 5(c).
(c) "Bank" means EagleBank.
(d) "Board" means the Board of Directors of the Company.
(e) "Bank Board" means the Board of Directors of the Bank.
(f) "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 subparagraph 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.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means the Stock Option Committee appointed by the Board in
accordance with Paragraph 5(a) hereof.
(i) "Common Stock" means the common stock, par value $0.01 per share, of the
Company.
(j) "Company" means Eagle Bancorp, Inc.
(k) "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.
(l) "Effective Date" means the date specified in Paragraph 14 hereof.
(m) "Employee" means any person employed by the Company, the Bank, or by an
Affiliate.
(n) "Exercise Price" means the price per Optioned Share at which an Option may
be exercised.
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(o) "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.
(p) "Market Value" means the fair market value of the Common Stock, as
determined under Paragraph 7(b) hereof.
(q) "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.
(r) "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.
(s) "Option" means an ISO or a Warrant or other Non-ISO.
(t) "Optioned Shares" means Shares subject to an Option granted pursuant to
this Plan.
(u) "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.
(v) "Participant" means any person who receives an Option pursuant to the Plan.
(w) "Plan" means the Eagle Bancorp, Inc. 1998 Stock Option Plan.
(x) "Rule 16b-3" means Rule 16b-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended.
(y) "Share" means one share of Common Stock.
(z) "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.
(aa) "Warrant" means a Non-ISO issued to a member of the Board or the Bank Board
and designated as a Warrant by the Committee.
(bb) "Warrant Certificate" means an Agreement issued with respect to a Warrant.
3. TERM OF THE PLAN AND OPTIONS.
(a) Term of the Plan. The Plan shall continue in effect for a term of ten
years from the Effective Date unless sooner terminated pursuant to Paragraph 18.
No Option may be granted under the Plan after ten years from the Effective Date.
(b) Term of Options. The Committee shall establish the term of each Option
granted under the Plan. No Option may have a term that exceeds 10 years. No ISO
granted to an Employee who owns Shares representing more than 10% of the
outstanding shares of Common Stock at the time an ISO is granted may have a term
that exceeds five years.
4. SHARES SUBJECT TO THE PLAN. Except as otherwise required by the provisions
of Paragraph 11, no more than 15% of Shares outstanding on the Effective Date
may be issued upon exercise of Options. Optioned Shares may either be authorized
but unissued Shares or Shares held in treasury to the extent allowed by Maryland
law. If Options 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 Options under the Plan,
unless the Plan shall have been terminated.
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 two (2) members of the Board and
up to three (3) additional members, who may be members of the Board, members of
the Bank Board, or non-director officers of the Company or the Bank. Members of
the Committee may be Employee Directors or Non-Employee 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 Board.
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<PAGE>
(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
Options, (ii) to determine the form and content of Options to be issued in the
form of Agreements under the Plan, (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 Option 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,
(ii) the number of Shares subject to, and the expiration date of, the Option,
(iii) the manner, time and rate (cumulative or otherwise) of exercise or vesting
of such Option, and (iv) the restrictions, if any, to be placed upon such
Option, or upon Shares which may be issued upon exercise of such Option. 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 Options.
(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.
(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 Warrants
and other Non-ISOs to Directors, Bank Directors or 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
present or future "parent" or "Subsidiary" of the Company) shall not exceed
$100,000. Notwithstanding the prior provisions of this paragraph, 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
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) 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
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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 by the
Committee, in its sole and absolute discretion.
(c) Reissuance of Options. Notwithstanding anything herein to the contrary,
the Committee shall have the authority to cancel outstanding Options with the
consent of the Participant and to reissue new Options at a lower Exercise Price
equal to the then Market Value per share of Common Stock in the event that the
Market Value per share of Common Stock at any time prior to the date of exercise
of outstanding Options falls below the Exercise Price.
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.
(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.
(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 the date on which the Option
would otherwise expire), except if the Employee's Continuous Service terminates
by reason of -
(1) "Just Cause" which for purposes hereof shall have the meaning set
forth in any unexpired employment or severance agreement between
the Participant and the Bank and/or the Company (and, in the
absence of any such agreement, means termination because of the
Employee's personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law,
rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order), then the
Participant's rights to exercise such ISO shall expire on the
date of such termination;
(2) death, then to the extent that the Participant would have been
entitled to exercise the ISO immediately prior to his death, such
ISO of the deceased Participant may be exercised within two years
from the date of his death (but not later than the date on which
the Option would otherwise expire) by the personal
representatives of his estate or person or persons to whom his
rights under such ISO shall have passed by will or by laws of
descent and distribution;
(3) Permanent and Total Disability (as such term is defined in
Section 22(e)(3) of the Code), then to the extent that the
Participant would have been entitled to exercise the ISO
immediately prior to his Permanent and Total Disability, such ISO
may be exercised within one year from the date of such Permanent
and Total Disability, but not later than the date on which the
ISO would otherwise expire.
Notwithstanding the provisions of any Option that provides for its exercise in
installments as designated by the Committee, such Option shall become
immediately exercisable upon the Participant's death or Permanent and Total
Disability.
(d) Period of Exercisability-Non-ISOs. Except to the extent otherwise
provided in the terms of an Agreement, a Non-ISO may be exercised by a
Participant, or the estate of a Participant, at any time before its expiration
date, except if the Participant's Service terminates by reason of -
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(1) "Just Cause" which for purposes hereof shall have the meaning set
forth in any unexpired employment or severance agreement between
the Participant and the Bank and/or the Company (and, in the
absence of any such agreement, means termination because of the
Participant's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation
of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order), then the
Participant's rights to exercise such Non-ISO shall expire on the
date of such termination; or
(2) Removal from the Board or the Bank Board pursuant to the
respective Articles of Incorporation, then the Participant's
rights to exercise such Non-ISO shall expire on the date of such
removal.
(e) Effect of the Committee's Decisions. The Committee's determination
whether a Participant's Continuous Service has ceased, and the effective date
thereof shall be final and conclusive on all persons affected thereby.
9. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Compliance with Securities Laws. Shares of Common Stock shall not be
issued with respect to any Option unless the issuance and delivery of such
Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Shares may then be listed. The
Plan is intended to comply with Rule 16b-3, and any provision of the Plan than
the Committee determines in its sole and absolute discretion to be inconsistent
with said Rule shall, to the extent of such inconsistency, be inoperative and
null and void, and shall not affect the validity of the remaining provisions of
the Plan.
(b) Special Circumstances. The inability of the Company to obtain approval
from any regulatory body or authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder shall relieve
the Company of any liability in respect of the non-issuance or sale of such
Shares. As a condition to the exercise of an Option, the Company may require the
person exercising the Option to make such representations and warranties as the
Committee determines may be necessary to assure the availability of an exemption
from the registration requirements of federal or state securities law.
(c) Committee Discretion. The Committee shall have the discretionary
authority to impose in Agreements such restrictions on Shares as it may deem
appropriate or desirable, including but not limited to the authority to impose a
right of first refusal or to establish repurchase rights or both of these
restrictions.
10. RESTRICTIONS ON SALE OF SHARES
(a) Six-Month Restriction. Shares of Common Stock that have been acquired
upon exercise of an Option may not be sold or otherwise disposed of before the
end of a six-month period beginning on the date the Option was granted. This
restriction is in addition to any other restriction imposed by this Plan or by
the Committee pursuant to this Plan.
(b) Exceptions. The six-month restriction imposed by subparagraph (a) shall
not apply to dispositions by bona fide gifts or to transfers by will or the laws
of descent or distribution.
11. EFFECT OF CHANGES IN CONTROL AND CHANGES IN COMMON STOCK SUBJECT TO THE
PLAN.
(a) Effects of Change in Control.
(1) Notwithstanding the provisions of any Option that provides for
its exercise or vesting in installments, all Options shall be
immediately exercisable and fully vested upon a Change in
Control.
(2) At the time of a Change in Control, the Participant shall, at the
sole and absolute discretion of the Committee, be entitled to
receive a cash payment in an amount equal to the excess of the
Market Value at the time of the Change in Control of the Shares
subject to such Option over the Exercise Price of such Shares, in
exchange for cancellation of such Options, provided that in no
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event may an Option be cancelled in exchange for cash within the
six-month period following the date of its grant.
(3) In the event there is a Transaction, all outstanding Options
shall be surrendered. With respect to each Option so surrendered,
the Committee shall in its sole and absolute discretion determine
whether the holder of each Option so surrendered shall receive--
(A) for each Share then subject to an outstanding Option, an
Option for the number and kind of shares into which each
Outstanding Share (other than Shares held by dissenting
stockholders) is changed or exchanged, together with an
appropriate adjustment to the Exercise Price; or
(B) the number and kind of shares into which each Outstanding
Share (other than Shares held by dissenting stockholders) is
changed or exchanged in the Transaction that are equal in
market value to the excess of the Market Value on the date
of the Transaction of the Shares subject to the Option, over
the Exercise Price of the Option; or
(C) a cash payment (from the Company or the successor
corporation), in an amount equal to the excess of the Market
Value on the date of the Transaction of the Shares subject
to the Option, over the Exercise Price of the Option.
(b) Recapitalizations; Stock Splits, Etc. The number and kind of shares
reserved for issuance under the Plan, and the number and kind of shares subject
to outstanding Options and the Exercise Price thereof, shall be proportionately
adjusted for any increase, decrease, change or exchange of Shares for a
different number or kind of shares or other securities of the Company which
results from a merger, consolidation, recapitalization, reorganization,
reclassification, stock dividend, split-up, combination of shares, or similar
event in which the number or kind of shares is changed without the receipt or
payment of consideration by the Company.
(c) Special Rule for ISOs. Any adjustment made pursuant to subparagraphs
(a)(3)(A) or (b) of this Paragraph shall be made in such a manner as not to
constitute a modification, within the meaning of Section 424(h) of the Code, of
outstanding ISOs.
(d) Conditions and Restrictions on New, Additional, or Different Shares or
Securities. If, by reason of any adjustment made pursuant to this Paragraph, a
Participant becomes entitled to new, additional, or different shares of stock or
securities, such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions which were
applicable to the Shares pursuant to the Option before the adjustment was made.
(e) Other Issuances. Except as expressly provided in this Paragraph, the
issuance by the Company or an Affiliate of shares of stock of any class, or of
securities convertible into Shares or stock of another class, for cash or
property or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect, and no adjustment
shall be made with respect to, the number, class, or Exercise Price of Shares
then subject to Options or reserved for issuance under the Plan.
12. NON-TRANSFERABILITY OF OPTIONS.
(a) ISOs may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent and
distribution, or pursuant to the terms of a "qualified domestic relations order"
(within the meaning of Section 414(p) of the Code and the regulations and
rulings thereunder).
(b) Warrants and other Non-ISO's may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution, pursuant to the terms of a "qualified
domestic relations order" (within the meaning of Section 414(p) of the Code and
the regulations and rulings thereunder), or, in the sole discretion of the
Committee, in connection with a transfer for estate or retirement planning
purposes to a trust established for such purposes.
13. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for all
purposes, be the later of the date on which the Committee makes the
determination of granting such Option and the Effective Date. Notice of the
determination shall be given to each Participant to whom an Option is so granted
within a reasonable time after the date of such grant.
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14. EFFECTIVE DATE. The Plan shall be effective as of December 9, 1998. Option
grants may be made prior to approval of the Plan by the stockholders of the
Company, if the exercise of Options is conditioned upon stockholder approval of
the Plan.
15. APPROVAL BY STOCKHOLDERS. The Plan shall be approved by stockholders of the
Company within twelve (12) months before or after the Effective Date.
16. MODIFICATION OF OPTIONS. At any time, and from time to time, the Board may
authorize the Committee to direct execution of an instrument providing for the
modification of any outstanding Option, provided no such modification shall
confer on the holder of said Option any right or benefit which could not be
conferred on him by the grant of a new Option at such time, or impair the Option
without the consent of the holder of the Option.
17. AMENDMENT AND TERMINATION OF THE PLAN. The Board may from time to time
amend the terms of the Plan and, with respect to any Shares at the time not
subject to Options, suspend or terminate the Plan; provided that shareholder
approval shall be required to increase the number of Shares subject to the Plan
provided in Paragraph 4 or to extend the terms of the Plan. No amendment,
suspension, or termination of the Plan shall, without the consent of any
affected holders of an Option, alter or impair any rights or obligations under
any Option theretofore granted.
18. RESERVATION OF SHARES. The Company, during the term of the Plan, will
reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
19. WITHHOLDING TAX. The Company's obligation to deliver Shares upon exercise
of Options (or such earlier time that the Participant makes an election under
Section 83(b) of the Code) shall be subject to the Participant's satisfaction of
all applicable federal, state and local income and employment tax withholding
obligations. The Committee, in its discretion, may permit the Participant to
satisfy the obligation, in whole or in part, by irrevocably electing to have the
Company withhold Shares, or to deliver to the Company Shares that he already
owns, having a value equal to the amount required to be withheld. The value of
Shares to be withheld, or delivered to the Company, shall be based on the Market
Value of the Shares on the date the amount of tax to be withheld is to be
determined. As an alternative, the Company may retain, or sell without notice, a
number of such Shares sufficient to cover the amount required to be withheld.
20. NO EMPLOYMENT OR OTHER RIGHTS. In no event shall a Director's or Employee's
eligibility to participate or participation in the Plan create or be deemed to
create any legal or equitable right of the Director or Employee or any other
party to continue service with the Company, the Bank, or any Affiliate of such
corporations. No Director or Employee shall have a right to be granted an Option
or, having received an Option, the right to be granted an additional Option.
21. GOVERNING LAW. The Plan shall be governed by and construed in accordance
with the laws of the State of Maryland, except to the extent that federal law
shall be deemed to apply.
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EXHIBIT 5
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[KENNEDY, BARIS & LUNDY, L.L.P. LETTERHEAD]
May 13, 1999
Board of Directors
Eagle Bancorp, Inc.
7815 Woodmont Avenue
Bethesda, Maryland 20814
Gentlemen:
As special legal counsel to Eagle Bancorp, Inc. (the "Company"), we have
participated in the preparation of the Company's Registration Statement on Form
S-8 to be filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, relating to the issuance of shares (the
"Shares") of the Company's Common Stock pursuant to the exercise of options
outstanding under the Eagle Bancorp, Inc. 1998 Stock Option Plan (the "Plan").
As counsel to the Company, we have examined such corporate records,
certificates and other documents of the Company, and made such examinations of
law and other inquiries of such officers of the Company, as we have deemed
necessary or appropriate for purposes of this opinion. Based upon such
examinations we are of the opinion that the Shares, when issued in accordance
with the provisions of the Plan and the options granted pursuant thereto, will
be duly authorized, validly issued, fully paid and non-assessable shares of the
Common Stock of the Company.
We hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement on Form S-8 filed by the Company and to the reference to
our firm contained.
Sincerely,
/s/ Kennedy, Baris & Lundy, L.L.P.
EXHIBIT 23(b)
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Form S-8 of Eagle Bancorp,
Inc. of our report, dated January 29, 1999, relating to the consolidated balance
sheets of Eagle Bancorp, Inc. as of December 31, 1998 and 1997, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the year ended December 31, 1998, and for the period from October 28,
1997 (date of inception) to December 31, 1997, which report appears on page 12
of the 1998 Eagle Bancorp, Inc. Annual Report to Shareholders incorporated by
reference in the Eagle Bancorp, Inc. 1998 Annual Report on Form 10-KSB.
/s/ STEGMAN & COMPANY
Baltimore, Maryland
May 14, 1999
