SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<CAPTION>
<S> <C>
[ ] Preliminary Proxy Statement Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2)) [X]
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Eagle Bancorp, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): [X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
-----------------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5. Total Fee Paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] 1 Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3 Filing Party:
4. Date Filed:
<PAGE>
EAGLE BANCORP, INC.
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 24, 2000
<PAGE>
EAGLE BANCORP, INC.
7815 WOODMONT AVENUE
BETHESDA, MARYLAND 20814
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 2000
TO THE SHAREHOLDERS OF EAGLE BANCORP, INC.:
The Annual Meeting of Shareholders of Eagle Bancorp, Inc., a Maryland
corporation (the "Company"), will be held at the Bethesda Marriott Hotel, 5151
Pooks Hill Road, Bethesda, Maryland 20814, on Wednesday, May 24, 2000 at 3:00
p.m. for the following purposes:
1. To elect six (6) directors to serve until the next Annual
Meeting of Shareholders and until their successors are duly
elected and qualified;
2. To ratify the appointment of Stegman and Company as the
auditors for the Company; and
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Shareholders of record as of the close of business on April 14, 2000
are entitled to notice of and to vote at the Annual Meeting or any adjournment
or postponement thereof.
By Order of the Board of Directors
Michele Midlo, Corporate Secretary
April 19, 2000
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY, WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING IN PERSON. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE
MEETING, YOU MAY, IF YOU DESIRE, REVOKE YOUR PROXY AND VOTE IN PERSON.
<PAGE>
EAGLE BANCORP, INC.
7815 WOODMONT AVENUE
BETHESDA, MARYLAND 20814
-----------------------------
ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
-----------------------------
INTRODUCTION
This Proxy Statement is furnished to shareholders of Eagle Bancorp,
Inc., a Maryland corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders to be held at 3:00 p.m. on Friday, May 24, 2000
(the "Annual Meeting"), and at any adjournment or postponement thereof, for the
purposes of (1) electing six (6) directors to serve until the next Annual
Meeting of Shareholders and until their successors are duly elected and
qualified; (2) ratifying the appointment of Stegman and Company as the Company's
auditors; and (3) transacting such other business as may properly come before
the Annual Meeting or any adjournment or postponement thereof.
The Annual Meeting will be held at the Bethesda Marriott Hotel, 5151
Pooks Hill Road, Bethesda, Maryland 20814.
This Proxy Statement and the accompanying form of proxy are being sent
to shareholders of the Company on or about April 19, 2000. A copy of the
Company's Annual Report to Shareholders for the year ended December 31, 1999
also accompanies this Proxy Statement.
The cost of this proxy solicitation is being borne by the Company. In
addition to the use of the mail, proxies may be solicited personally or by
telephone by officers, regular employees or directors of the Company or its
subsidiary, EagleBank (the "Bank"), who will not be compensated for any such
services. The Company may also reimburse brokers, custodians, nominees and other
fiduciaries for their reasonable out-of-pocket and clerical costs for forwarding
proxy materials to their principals.
VOTING RIGHTS AND PROXIES
VOTING RIGHTS
Only shareholders of record at the close of business on April 14, 2000
(the "Record Date"), will be entitled to notice of and to vote at the Annual
Meeting or any adjournment or postponement thereof. On that date, the Company
had outstanding 2,062,500 shares of common stock, par value $.01 per share (the
"Common Stock"), the only class of stock outstanding, and held by approximately
490 shareholders of record and 750 beneficial shareholders. Each share of Common
Stock is entitled to one vote on all matters submitted to a vote of the
shareholders. Shareholders do not have the right to cumulate votes in the
election of directors. Nominees receiving a plurality of the votes cast at the
Annual Meeting in the election of directors will be elected as director, in the
order of the number of votes received. The presence, in person or by proxy, of
not less than a majority of the total number of outstanding shares of Common
Stock is necessary to constitute a quorum at the Annual Meeting. Members of the
Board of Directors of the Company having the power to vote or direct the voting
of 270,937 (13.14%) of the outstanding shares of Common Stock have indicated
their intention to vote "FOR" the election of all of the nominees for election
as director and "FOR" the ratification of Stegman and Company as the Company's
auditors.
PROXIES
Shares represented by proxies received by the Company will be voted in
accordance with the instructions contained therein. Shares represented by
proxies for which no instruction is given will be voted FOR the election of the
directors specified herein, FOR the ratification of Stegman and Company as the
Company's auditors, and in the discretion of the holders of the proxies on all
other matters properly brought before the meeting and any adjournment or
postponement thereof. The judges of election appointed by the Board of Directors
for the Annual Meeting will determine the presence of a quorum and will tabulate
the votes cast at the Annual Meeting. Abstentions will be treated
<PAGE>
as present for purposes of determining a quorum, but as unvoted for purposes of
determining the approval of any matter submitted to the vote of shareholders. If
a broker indicates that he or she does not have discretionary authority to vote
any shares of Common Stock as to a particular matter, such shares will be
treated as present for general quorum purposes, but will not be considered as
present or voted with respect to such matter.
Please sign, date, mark and return promptly the enclosed proxy in the
postage paid envelope provided for this purpose in order to assure that your
shares are voted. You may revoke your proxy at any time prior to its being voted
at the Annual Meeting by granting a later proxy with respect to the same shares,
by sending written notice to Michele Midlo, Corporate Secretary of the Company,
at the address noted above, at any time prior to the proxy being voted, or by
voting in person at the Annual Meeting. Attendance at the Annual Meeting will
not, in itself, revoke a proxy. If your shares are held in the name of your bank
or broker, you will need additional documentation to vote in person at the
meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
SECURITIES OWNERSHIP OF DIRECTORS, OFFICERS AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of April 1, 2000
concerning the number and percentage of whole shares of the Company's Common
Stock beneficially owned by its directors, nominees for director, executive
officers whose compensation is disclosed, and by its directors and all executive
officers as a group, as well as information regarding each other person known by
the Company to own in excess of 5% of the outstanding Common Stock. Except as
otherwise indicated, all shares are owned directly, and the named person
possesses sole voting and sole investment power with respect to all such shares.
Except as set forth below, the Company knows of no other person or persons, who
beneficially own in excess of 5% of the Company's Common Stock. Further, the
Company is not aware of any arrangement which at a subsequent date may result in
a change of control of the Company.
<TABLE>
<CAPTION>
Name Age Position Number of Shares Percentage(1)
- ---------------------------------- ------- ----------------------------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Chairman of Board of Company;
Leonard L. Abel 73 Director of Bank 93,250(2) 4.45%
Dudley C. Dworken 50 Director of the Company and Bank 37,780(3) 1.83%
Eugene F. Ford, Sr. (3) 70 Director of Company 31,312(4) 1.51%
William S. Korer 80 Director of Company and Bank 87,781(5) 4.21%
Ronald D. Paul 44 Vice Chairman, President and 113,281(6) 5.43%
Treasurer of Company; Chairman of
Board of Bank
H.L. Ward 53 Executive Vice President and Director 22,000(7) 1.06%
of Company; President, Chief Executive
Officer and Director of Bank
Thomas D. Murphy 52 Executive Vice President, Chief Operating 12,250(8) 0.59%
Officer and Director of Bank
All directors and executive
officers of Company as a group
(10 persons) 414,211(9) 18.83%
===================== ===============
All directors and executive
officers of Company and Bank as
a group (20 persons) 611,800(10) 27.30%
===================== ===============
</TABLE>
(1) Represents percentage of 2,062,500 shares issued and outstanding as of
April 1, 2000, except with respect to individuals holding options
exercisable within 60 days of said date, in which event, represents
percentage of shares issued and outstanding plus the number of the
number of shares with respect to which such person holds options
exercisable within 60 days of April 1, 2000, and except with respect to
all directors and executive officers of the Company and the Company and
the Bank as groups, in which case represents percentage of shares
issued and outstanding plus the number of the number of shares with
respect to which all such persons hold options exercisable within 60
days of April 1, 2000.
(2) Includes warrants to purchase 31,250 shares of Common Stock.
(3) Includes 31,250 shares held in a trust of which Mr. Dworken is
beneficiary and options to purchase 6,468 shares of Common Stock
(footnotes continued on following page)
2
<PAGE>
(footnotes continued from prior page)
(4) Includes warrants to purchase 12,562 shares of Common Stock. Eugene F.
Ford, Sr. is the father of Eugene F. Ford, Jr., a director of the Bank.
Beneficial ownership for Mr. Ford, Sr. does not include beneficial
ownership by Mr. Ford, Jr.
(5) Includes warrants to purchase 25,281 shares of Common Stock.
(6) Includes 81,250 shares held in trust for Mr. Paul's children. Includes
options to purchase 25,781 shares of Common Stock. Does not include
options to acquire 25,000 shares of Common Stock which are subject to
vesting in equal installments in December 2000 and 2001.
(7) Includes warrants to purchase 13,125 shares of Common Stock.
(8) Includes warrants to purchase 11,250 shares of Common Stock.
(9) Includes options and warrants to purchase 136,967 shares of Common
Stock.
(10) Includes options and warrants to purchase 178,650 shares of common
stock.
ELECTION OF DIRECTORS
The size of the Company's Board of Directors is currently set at six
(6) directors. The Board of Directors has nominated six (6) persons for election
as director at the Annual Meeting, for a one-year period until the 2001 Annual
Meeting of Shareholders and until their successors have been elected and
qualified. Each of the nominees for election as a director currently serves as a
member of the Board of Directors. Unless authority is withheld, all proxies in
response to this solicitation will be voted for the election of the nominees
listed below. Each nominee has indicated a willingness to serve if elected.
However, if any nominee becomes unable to serve, the proxies received in
response to this solicitation will be voted for a replacement nominee selected
in accordance with the best judgment of the proxy holders named therein.
The Board of Directors recommends that shareholders vote FOR each of
the nominees to the Company's Board of Directors.
NOMINEES FOR ELECTION AS DIRECTORS
Set forth below is certain information as of the Record Date concerning
the nominees for election as director of the Company. Except as otherwise
indicated, the occupation listed has been such person's principal occupation for
at least the last five years. Each of the directors of the Company, other than
Mr. Ford, also currently serves as a director of the Bank.
Leonard L. Abel. Mr. Abel is Chairman of the Board of
Directors of the Company, and has served in that position since the organization
of the Company. Until retiring in 1994, Mr. Abel was partner-in-charge of the
certified public accounting firm of Kershenbaum, Abel, Kernus and Wychulis,
Rockville, Maryland with which he served for forty five years. From October
1996, until resigning in September 1997, Mr. Abel was a member of the Board of
Directors of F&M National Corporation (NYSE) and its wholly owned subsidiary,
F&M Bank - Allegiance, Bethesda, Maryland, and prior to that time was Chairman
of the Board of Allegiance Bank, N.A. (collectively with F&M Bank - Allegiance,
"Allegiance") and its holding company Allegiance Banc Corporation, from their
organization until their acquisition by F&M National Corporation. Mr. Abel was
also Chairman of the Board of Directors of Central National Bank of Maryland
from 1968 until its acquisition in 1986 by Citizens Bank of Maryland (now Sun
Trust Banks, Inc.).
Dudley C. Dworken. Mr. Dworken has served as a director of the
Company since August 1999. Mr. Dworken is the owner of Curtis Chevrolet-Geo, an
automobile dealership in Washington, D.C. Mr. Dworken was a Director of
Allegiance from 1987 until October 1997, and a director of Allegiance Banc
Corporation from 1988 until its acquisition by F&M. In April 1997, Curtis
Chevrolet filed a petition under Section 11 of the Bankruptcy Code as a
protection against potential liability resulting from a jury verdict in excess
of the damages sought, against that company. Curtis Chevrolet emerged from
bankruptcy protection in January 2000. In November 1999, Mr. Dworken consented
to the entry of an order permanently enjoining him from violation of Section
10(b) of the Securities Exchange Act and Rule
3
<PAGE>
10b-5 under that act. The order was issued in connection with an investigation
of him in respect of trading in the shares of Allegiance Banc Corporation by his
uncle during the period during which Allegiance Banc Corporation was involved in
merger negotiations with F&M. Mr. Dworken is an active member of numerous
community, business, charitable and educational institutions in the Washington
D.C./Montgomery County area.
Eugene F. Ford, Sr. Mr. Ford has served as a director of the Company
since its organization. Mr. Ford is engaged in the business of property
management and development as Chairman of Mid-City Financial Corporation, an
apartment developer, of which he was also president until 1995. He is Chairman
of the Community Preservation and Development Corporation, a non-profit
organization in the business of preserving public purpose housing complexes and
providing social program support for residents thereof. Through his ownership of
Mid-City Financial, Mr. Ford is the largest owner of assisted housing units in
Maryland and the Washington metropolitan area. Mr. Ford has received numerous
awards for his work in the housing development field.
William A. Koier. Mr. Koier has served as a director of the Company
since its organization. Mr. Koier is a private investor involved in the
ownership, development and management of real estate properties, as well as
investment in debt and equity instruments. Mr. Koier served as a director of
Allegiance 1987 until October 1997, and Allegiance Banc Corporation from 1987
until its acquisition. He also served as a director of Central National Bank of
Maryland until its acquisition by Citizens Bank of Maryland (now Sun Trust
Banks, Inc.).
Ronald D. Paul. Mr. Paul is President and Vice Chairman of the Board of
Directors of the Company and Chairman of the Board of Directors of the Bank, and
has served in such positions since the organization of the Company and the Bank.
Mr. Paul is President of Ronald D. Paul Companies and RDP Management, which is
engaged in the business of real estate development and management activities.
Mr. Paul is also active in private investments. Mr. Paul was a director of
Allegiance from 1990 until September 1997, and a director of Allegiance Banc
Corporation from 1990 until its acquisition, including serving as Vice Chairman
of the Board of Directors from 1995. Mr. Paul is also active in various
charitable organizations, including serving as Vice Chairman of the Board of
Directors of the National Kidney Foundation from 1996 to 1997.
H. L. Ward. Mr. Ward has served as a director of the Company since
March 1999. Mr. Ward, the President and Chief Executive Officer of the Bank, was
President and Chief Executive Officer of Allegiance from December 1995 to
October 1997. Prior to that time he served in various executive lending
positions at Allegiance and its former sister bank Prince George's National
Bank, including Executive Vice President - Chief Lending Officer, from 1992 to
1995. Mr. Ward has over 29 years of experience in the commercial banking and
real estate development and finance industries.
ELECTION OF DIRECTORS OF THE BANK
If elected, the nominees for election as directors intend to vote for
Mr. Abel, Mr. Dworken, Mr. Koier, Mr. Paul, Mr. Ward and the following persons
to serve as directors of the Bank, each of whom currently serves as a director
of the Bank.
Arthur H. Blitz. Mr. Blitz, 58, an attorney engaged in private practice
since 1971, is a partner in the Bethesda, Maryland law firm of Paley, Rothman,
Goldstein, Rosenberg & Cooper. Mr. Blitz was a director of Allegiance at various
times from 1987 to October 1997.
Steven L. Fanaroff. Mr. Fanaroff, 40, is Vice President - Chief
Financial Officer of Magruder Holdings, Inc., a regional supermarket chain, with
which he has served since 1981. Mr. Fanaroff served on the Board of Directors of
Allegiance from 1990 until October 1997.
Eugene F. Ford, Jr. Mr. Ford, 47, engages in the business of property
management and apartment development. He has been president of Van Buren
Corporation, an apartment developer, since 1984, Chairman of Edgewood Management
Company, a property management company, and president of Mid-City Financial
Corporation, an apartment developer, since 1995. From 1992 to 1994, Mr. Ford was
a physical therapist with George Washington University Ambulatory Care.
4
<PAGE>
Harvey M. Goodman. Mr. Goodman, 44, has been with The Goodman, Gable, Gould
Company, the Maryland based public insurance adjusting firm where he serves as
President, since 1977. He is the current President of the National Association
of Public Insurance Adjusters, and is a director and principal of Adjusters
International, a national public adjusting firm.
Benson Klein. Mr. Klein, 54, has been an attorney in Montgomery County
since 1970, and a principal with Ward & Klein, Chartered, since 1978. Mr. Klein
is also engaged in real estate investment activities in Montgomery County. He
served as a director of F&M Bank - Allegiance from 1996 to 1997 and previously
served as a director of Lincoln National Bank. Mr. Klein is currently, and has
been, a member of a variety of community, business and charitable institutions
for the Washington, D.C./Montgomery County area.
David H. Lavine. Mr. Lavine, 41, has been President and Chief Executive
Officer of The American Bagel Company, Inc., franchisor of the Chesapeake Bagel
Bakery chain, and its related retail store operator since March 1997. Prior to
that time, he was a principal of the public accounting firm of Reznick, Fedder &
Silverman, CPA's, since 1987. Mr. Lavine is also engaged in real estate
development, private investment and providing consulting services. Mr. Lavine
was a director of Suburban Bank of Virginia and its holding company, Suburban
Bancshares, Inc., from 1991 to 1994.
Thomas D. Murphy. Mr. Murphy, 52, the Executive Vice President - Chief
Operating Officer of the Bank, served at Allegiance from September 1994,
including as Executive Vice President and Chief Operating Officer from December
1995 until November 1997. Prior to his service at Allegiance, he served in the
same position at First Montgomery Bank from August 1991 until its acquisition by
Sandy Spring National Bank of Maryland in December 1993, and he served as a Vice
President of that organization until September 1994. Mr. Murphy has 29 years
experience in the commercial banking industry.
Jan R. Phillips. Ms. Phillips, 53, is a Founding Director of Phillips
International, Inc. (publishing company) and currently serves as Corporate
Secretary. Ms. Phillips is a graduate of the Abbott-Northwestern Hospital School
of nursing in Minneapolis. She is a past President of the Woman's Club of
Potomac, Inc. and has served on the Board of Directors of the Montgomery County
Federation of Women's Clubs, Inc. and on the Board of Governors of Over 60
Counseling and Employment Service. Ms. Phillips also is a member of the Potomac
Women's Republican Club and former President of the Potomac Commons Garden Club.
Ms. Phillips served for seven years on the Parents Council of Georgetown
University. Ms. Phillips is a member of the Handbell Choir at Emmanuel Lutheran
Church in Bethesda, Maryland.
Donald R. Rogers. Mr. Rogers, 53, has been engaged in the private
practice of law since 1972 with the Rockville, Maryland based firm Shulman,
Rogers, Gandal, Pordy & Ecker, P.A., of which he is a partner. Mr. Rogers was a
member of the Board of Directors of Allegiance from 1987 until October 1997.
Worthington H. Talcott, Jr. Mr. Talcott, 48, an attorney engaged in
private practice since 1979, has been a partner in Shulman, Rodgers, Gandal,
Pordy & Ecker, P.A. since 1998. Previously, he was a shareholder in the Bethesda
law firm of Marsh, Fleischer & Quiggle, Chartered, since 1992, and from 1983 to
1992 was a partner in the firm of Ross, Marsh, Foster, Meyers and Quiggle. Mr.
Talcott has been an active member of the Juvenile Diabetes Foundation, serving
as a member of the Board of Directors for the Capital Chapter from 1992 to 1996,
and as President of the Capital Chapter from 1994 to 1995.
Leland M. Weinstein. Mr. Weinstein, 37, has served as president of
Syscom Services, Inc., an e-business workflow and internet consulting firm,
since 1997. Formerly, he spent thirteen years with Automated Digital Systems
(ADS), an integrator of fax technologies, where he rose to president and owner
of the company before joining Syscom, an early spin-off of ADS. Mr. Weinstein
serves on the advisory councils for Intel/Dialogic and AVT/RightFAX. He is a
member of the Inner Circle of the University of Maryland Dingman Center for
Entrepreneurship, and involved with numerous charities.
5
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company met twelve (12) times during
1999. All members of the Board of Directors attended at least 75% of the
meetings held by the Board of Directors and by all committees on which such
member served during the 1999 fiscal year or any portion thereof, except for Mr.
Koier, who was out of the country.
The Board of Directors does not have a standing Audit Committee. The
Audit Committee of the Bank serves as the Audit Committee for the Company. The
Audit Committee is responsible for the review and evaluation of the Company's
and Bank's internal controls and accounting procedures. It also periodically
reviews audit reports with the Company's independent auditors, and recommends
the annual appointment of such auditors. The Audit Committee is currently
comprised of Mr. Lavine, the Chairman, and Messrs. Abel, Paul, Blitz and Ford,
Jr. Mr. Murphy and Ms. Riel also serve on the committee as non-voting members.
During the 1999 fiscal year, the Audit Committee met four (4) times.
The Board of Directors does not have a standing Nominating Committee or
Compensation Committee, the functions of which are performed by the full Board
of Directors.
DIRECTORS' COMPENSATION
Director Compensation. Mr. Paul, President of the Company and Chairman
of the Board of Directors of the Bank, is entitled to receive an annual salary
of $18,000 from the Company in lieu of regular director fees from the Company.
In 1999, Mr. Paul also received an annual payment of $18,000 in lieu of regular
director fees from the Bank. Beginning in 2000, Mr. Paul will instead receive
options to purchase 781.25 (as adjusted for the 25% stock split paid on March
31, 2000) options per quarter in lieu of regular directors fees from the Bank.
Mr. Abel, the Chairman of the Board of Directors of the Company is entitled to
receive an annual payment of $24,000 in lieu of regular director fees from the
Company and the Bank. In 1999, each other director of the Company received a fee
of $200 for each meeting of the Board of Directors attended. Directors of the
Company did not receive any fee for committee meetings. In 1999, Bank directors
who are not employees received fees of $200 per meeting of the Board or its
committees. Beginning in 2000, each other director will receive options to
purchase 31.25 shares (as adjusted for the 25% stock split paid on March 31,
2000) for each meeting of the Board of Directors of the Company, the Board of
Directors of the Bank or a committee of the Board of the Company or the Bank,
attended. All options granted for meeting attendance or in lieu of regular
directors fees are issued under the Company's Option Plan, have a term of ten
years and an exercise price equal to the fair market value of the Common Stock
at the end of the quarter with respect to which they are granted. Directors of
both the Company and the Bank are eligible to receive grants of warrants or
options under the Company's Option Plan. In December 1999, Mr. Dworken was
granted options to purchase 6,250 shares of Common Stock (as adjusted) and the
non-employee directors of the Bank were granted options to purchase an aggregate
of 40,000 shares of Common Stock (as adjusted).
EXECUTIVE COMPENSATION
The following table sets forth a comprehensive overview of the
compensation for Mr. Paul, the President of the Company, and executive officers
of the Company (including offices of the Bank) who received total salary and
bonuses of $100,000 or more during the fiscal year ended December 31, 1999.
6
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation Awards
---------------------------------------------- ---------------------
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus Options(1) Compensation($)
<S> <C> <C> <C> <C> <C>
Ronald D. Paul, President 1999 $36,000(2) $0 0 $0
1998 $18,000(3) $0 50,000(4) $0
1997 $0 $0 $0 $0
H.L. Ward, President and
Chief Executive Officer of
the Bank, Executive Vice
President of the Company 1999 $165,784 $16,000 3,750 $14,700(5)
1998 $149,212 $16,000 9,375 $10,900(6)
1997 $ 26,196 $0 0 $1,200(7)
Thomas D. Murphy, Executive
Vice President- Chief
Operating Officer of the
Bank 1999 $132,956 $19,333 3,750 $13,463(8)
1998 $122,151 $11,555 7,500 $9,126(9)
1997 $23,615 $0 0 $1,000(7)
(1) As adjusted to reflect the 25% stock split in the form of a dividend paid on March 31, 2000.
(2) Represents payments in lieu of directors fees.
(3) Includes $16,500 of payments in lieu of director fees.
(4) Mr. Paul's options vest over a period of four years.
(5) Includes $7,200 car allowance, $2,500 insurance premiums, and $5,000 401(k) matching contribution.
(6) Includes $7,200 car allowance, $2,500 insurance premiums, and $1,200 401(k) matching contribution.
(7) Represents car allowance.
(8) Includes $6,000 car allowance, $2,151 insurance premiums, and $5,312 401(k) matching contribution.
(9) Includes $6,000 car allowance, $2,151 insurance premiums, $975 401(k) matching contribution.
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Percent of Total
Number of Securities Options Granted to
Underlying Options Employees in Fiscal Exercise Price Per
Name Granted(1) Year Share(1) Expiration Date
- -------------------- ------------------------- ----------------------- ---------------------- ------------------
Ronald D. Paul 0 N/A N/A N/A
H.L. Ward 3,750 50% $8.00 December 15, 2009
Thomas D. Murphy 3,750 50% $8.00 December 15, 2009
- --------------------
(1) Adjusted to reflect the 25% stock split in the form of a dividend paid on March 31, 2000
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR AND OPTION VALUES
Number of Securities
Underlying Unexercised Value of Unexercised
Options at December 31, In-The-Money Options at
Shares Acquired on 1999 December 31, 1999 (1)(2)
Name Exercise Value Realized Exercisable/Unexercisable(1)Exercisable/Unexercisable
- -------------------- ------------------------- --------------- --------------------------- -------------------------
Ronald D. Paul 0 $0 25,000/25,000 $25,000/$25,000
H.L. Ward 0 $0 13,125/0 $13,125/$0
Thomas D. Murphy 0 $0 11,250/0 $11,250/$0
- --------------------
</TABLE>
(1) Adjusted to reflect the 25% stock split in the form of a dividend paid
on March 31, 2000
(2) Based on the average of the inside bid and inside ask price on December
31, 1999
Employment Agreements. Mr. Ward and Mr. Murphy each has an employment
agreement with the Company pursuant to which they serve as President and Chief
Executive Officer of the Bank and Executive Vice
7
<PAGE>
President and Chief Operating Officer of the Bank, respectively. Mr. Ward,
pursuant to his agreement, which commenced as of October 1997 and runs until
December 31, 2000, is entitled to a current annual base salary of $177,500. He
is also entitled to a bonus, payable over three years, in the amount of $30,000,
$750,000 of Bank paid life insurance (at standard rates), a $7,200 annual car
allowance, warrants, exercisable for a 5 year term to purchase, at $10.00 per
share, 7,500 shares of Common Stock ("Warrants"), and participation in all other
health, welfare, benefit, stock, option and bonus plans, if any, generally
available to officers or employees of the Bank or the Company. Mr. Murphy,
pursuant to his agreement, which commenced as of October 1997 and runs until
October 20, 2000, is entitled to a current annual base salary of $145,000. He is
also entitled to a bonus, payable over three years, in the amount of $30,000,
$600,000 of Bank paid life insurance (at standard rates), a $6,000 annual car
allowance, and Warrants to purchase 6,000 shares of Common Stock, and
participation in all other health, welfare, benefit, stock, option and bonus
plans, if any, generally available to officers or employees of the Bank or the
Company.
Employee Benefit Plans. The Bank provides a benefit program which
includes health and dental insurance, life and long term and short term
disability insurance and a 401(k) plan under which the Company makes matching
contributions up to 3% of an employee's salary, for substantially all full time
employees.
Stock Option Plan. The Company maintains a stock option plan, adopted
by shareholders at the 1999 annual meeting, to attract, retain, and motivate key
officers of the Company and the Bank by providing them with a stake in the
success of the Company as measured by the value of its shares.
The 1998 Stock Option Plan (the "Option Plan") is administered by a
committee (the "Committee"), appointed by the Board of Directors of the Company,
consisting of not less than two (2) members of the Board and up to three (3)
additional members, who may be members of the Board of Directors, members of the
Bank's Board of Directors, or non-director officers of the Company or the Bank.
Members of the Committee may be Employee Directors or Non-Employee Directors,
and serve at the pleasure of the Board of Directors. In the absence at any time
of a duly appointed Committee, the Option Plan will be administered by the full
Board of Directors.
The purpose of the Option 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 of Common
Stock. By encouraging such stock ownership, the Company seeks to attract, retain
and motivate the best available personnel for positions of substantial
responsibility and to provide additional incentive to directors and key
employees of the Company, the Bank and any affiliate to promote the success of
the business as measured by the value of its shares, and to increase the
commonality of interests among directors, key employees and other shareholders.
Under the Option Plan, 309,375 shares of common stock (as adjusted for
the 25% stock split in the form of a dividend paid on March 31, 2000), are
available for issuance pursuant to the exercise of "Options" granted under the
Option Plan. Under the Option Plan, the Committee may grant incentive stock
options ("ISOs") or non-incentive stock options ("Non-ISOs") to such key
employees as the Committee may designate, and may grants warrants ("Warrants")
and other Non-ISOs to directors of the Company, the Bank and their affiliates.
ISOs, Non-ISOs and Warrants are collectively referred to as "Options." In the
event of any 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 receipt or
payment of consideration by the Company, the Committee will adjust both the
number and kind of shares of stock as to which Options may be awarded under the
Option Plan, the affected terms of all outstanding Options, and the aggregate
number of shares of Common Stock remaining available for grant under the Option
Plan. If any Option expires, becomes unexercisable or is forfeited for any
reason without having been exercised or becoming vested in full, the shares of
Common Stock subject to such Options will be available for the grant of
additional Options unless the Option Plan has expired or otherwise been
terminated.
The exercise price of Options may not be less than 100% of the fair
market value of the Common Stock on the date of grant. In the case of an
optionee who owns more than 10% of the outstanding Common Stock on the date of
grant, the option price of an ISO may not be less than 110% of fair market value
of the shares. As required by federal tax laws, to the extent that the aggregate
fair market value (determined when an ISO is granted) of the Common Stock with
respect to which ISOs are exercisable by an optionee for the first time during
any calendar year (under all plans of the Company and of any subsidiary) exceeds
$100,000, the Options will be treated as Non-ISOs, and not as ISOs. A
Participant may,
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under the 1998 Option Plan, receive additional options notwithstanding the
earlier grant of options and regardless of their having been exercised, expired,
or surrendered.
The Option Plan has a term of 10 years from December 9, 1998, its
effective date, after which date no Options may be granted. The maximum term for
an Option is 10 years from its date of grant, except that the maximum term of an
ISO may not exceed five years if the optionee owns more than 10% of the Common
Stock on the date of grant.
As of December 31, 1999, the Company had Options for the purchase of
218,750 shares of Common Stock issued and outstanding under the Option Plan (as
adjusted for the 25% stock split). Subsequent to December 31, 1999, Options to
purchase 781.25 shares of Common Stock, at an exercise price of $8.00 per
share, were granted to Mr. Paul, and Options to purchase an aggregate of 2,250
shares of Common Stock, at an exercise price of $8.00 per share, were issued to
non-employee directors of the Company and Bank. As of the date hereof, options
to acquire 87,593.75 shares of Common Stock are subject to issuance pursuant to
the Option Plan.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Set forth below is certain information regarding persons who are
executive officers of the Company or the Bank. For information regarding Mr.
Ward, please see "Nominees For Election as Director" at page 3. For information
for Mr. Murphy, please see "Election of Directors of the Bank" at page 4. Except
as otherwise indicated, the occupation listed has been such person's principal
occupation for at least the last five years.
Susan G. Riel. Ms. Riel, 50, Senior Vice President - Senior Operations
Officer of the Bank, previously served as Executive Vice President - Chief
Operating Officer of Columbia First Bank, FSB from 1989 until that institution's
acquisition by First Union Bancorp in 1995. Ms. Riel has over 23 years of
experience in the commercial banking industry.
Wilmer L. Tinley, Jr. Mr. Tinley, 61, Senior Vice President and Chief
Financial Officer of the Company and the Bank since June 1998, operated his own
tax, accounting and business services company from 1992 through 1998. Prior to
that time, he served as the President and Chief Executive Officer of Montgomery
National Bank (later Allegiance) from its organization in 1987 until 1992.
Martha Foulon-Tonat. Ms. Foulon-Tonat, 44, Senior Vice President and
Chief Lending Officer of the Bank, served at Allegiance Bank from January 1990
to December 1997. Her duties included being Senior Vice President and Chief
Lending Officer. Prior to her service at Allegiance Bank Ms. Foulon-Tonat served
at various commercial banks in the area. She has over 19 years experience in the
commercial banking industry.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Bank has had, and expects to have in the future, banking
transactions in the ordinary course of business with some of its and the
Company's directors, officers, and employees and their associates. In the past,
substantially all of such transactions have been on the same terms, including
interest rates, maturities and collateral requirements as those prevailing at
the time for comparable transactions with non-affiliated persons and did not
involve more than the normal risk of collectibility or present other unfavorable
features.
The maximum aggregate amount of loans (including lines of credit) to
officers, directors and affiliates of the Company during 1999 amounted to
$3,127,893, representing approximately 23% of the Company's total shareholders'
equity at December 31, 1999. In the opinion of the Board of Directors, the terms
of these loans are no less favorable to the Bank than terms of the loans from
the Bank to unaffiliated parties. On December 31, 1999, $1,656,032 of loans were
outstanding to individuals who, during 1999, were officers, directors or
affiliates of the Company. At the time each loan was made, management believed
that the loan involved no more than the normal risk of collectibility and did
not present other unfavorable features. None of such loans were classified as
Substandard, Doubtful or Loss.
During the organization of the Company and the Bank, certain of the
organizing directors of the Company made advances to the Company in the
aggregate amount of $475,000, which were repaid, with interest at the prime rate
(an aggregate of $5,010), from the proceeds of the offering. A portion of the
loans were converted to
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subscriptions for Common Stock in the offering. No interest was paid on these
funds. Certain directors also guaranteed a bank loan to the Company in the
aggregate amount of $350,000.
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Stegman & Company, independent
public accountants, to audit the Company's financial statements for the fiscal
year ending December 31, 2000. Stegman & Company has audited the financial
statements of the Company since its organization. Representatives of Stegman &
Company are expected to be present at the Annual Meeting and available to
respond to appropriate questions. The representatives also will be provided with
an opportunity to make a statement, if they desire.
FORM 10-KSB ANNUAL REPORT
The Company will provide, without charge, to any shareholder of record
entitled to vote at the Annual Meeting or any beneficial owner of Common Stock
solicited hereby, a copy of its 1999 Annual Report on Form 10-KSB filed with the
Securities and Exchange Commission, upon the written request of such
shareholder. Requests should be directed to Michele Midlo, Corporate Secretary,
at the Company's executive offices, 7815 Woodmont Avenue, Bethesda, Maryland
20814.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the Common Stock, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission, and
to provide the Company with copies of all Forms 3, 4, and 5 they file.
Based solely upon the Company's review of the copies of the forms which
it has received and written representations from the Company's directors,
executive officers and ten percent shareholders, the Company is not aware of any
failure of any such person to comply with the requirements of Section 16(a).
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters
to be presented for action by shareholders at the Annual Meeting. If, however,
any other matters not now known are properly brought before the meeting or any
adjournment thereof, the persons named in the accompanying proxy will vote such
proxy in accordance with their judgment on such matters.
SHAREHOLDER PROPOSALS
All proposals or nominations for election as directors by shareholders,
to be presented for consideration at the next annual meeting and to be included
in the Company's proxy materials must be received by the Company no later than
December 21, 2000.
By Order of the Board of Directors
Michele Midlo, Corporate Secretary
April 19, 2000
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FRONT REVOCABLE PROXY
EAGLE BANCORP, INC.
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby makes, constitutes and appoints Arthur H. Blitz
and Jan R. Phillips, and each of them (with the power of substitution), proxies
for the undersigned to represent and to vote, as designated below, all shares of
common stock of Eagle Bancorp, Inc. (the "Company ") which the undersigned would
be entitled to vote if personally present at the Company's Annual Meeting of
Shareholders to be held on May 24, 2000 and at any adjournment or postponement
thereof.
ELECTION OF DIRECTORS
|_| FOR all nominees listed below (except as noted to the contrary
below)
|_| WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees: Leonard L. Abel, Dudley C. Dworken, Eugene F. Ford, Sr.,
William A. Koier, Ronald D. Paul, H.L. Ward
(Instructions: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
|_| FOR |_| AGAINST |_| ABSTAIN the proposal to ratify the
appointment of Stegman and Company.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR all of the nominees set forth above and FOR the proposal to ratify
Stegman and Company as the Company's auditors. In addition, this proxy will be
voted at the discretion of the proxy holder(s) upon any other matter which may
properly come before the Annual Meeting or any adjournment or postponement
thereof.
BACK
Important: Please date and sign your name as addressed, and return this proxy in
the enclosed envelope. When signing as executor, administrator, trustee,
guardian, etc., please give full title as such. If the shareholder is a
corporation, the proxy should be signed in the full corporate name by a duly
authorized officer whose title is stated.
Signature of Shareholder
Signature of Shareholder
Dated: , 2000
-------------------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
[ ] Please check here if you plan to attend the Annual Meeting.
