Exhibit
10.8


 


AMENDED AND RESTATED


EMPLOYMENT AGREEMENT


 


THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made
and entered into as of the 2nd day of December, 2008, by and between
EagleBank, a Maryland chartered commercial bank (the “Bank”), and Barry C.
Watkins (“Watkins”).


 


RECITALS:


 


WHEREAS, the Bank
and Watkins are parties to an Employment Agreement dated December 1, 2007
(the “Original Agreement”), pursuant to which Watkins serves as the Bank’s
President – District of Columbia and Northern Virginia Regions; and


 


WHEREAS,
the parties believe that amendment of the Original Agreement is appropriate in
order to ensure that Section 409A(a)(1)(B) of the Internal Revenue
Code does not impose additional tax and interest on payments to Watkins; and


 


WHEREAS, the parties believe that amendment of the Original Agreement
is appropriate in order to ensure that the provisions thereof do not impede the
ability of the Bank and its affiliates to receive funds from the U.S.
Department of Treasury pursuant to the Troubled Assets Relief Plan Capital
Purchase Program; and


 


WHEREAS,
to accomplish the foregoing, the parties desire to hereby enter into this
Agreement to supersede and replace the Original Agreement.


 


NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto agree as follows:


 


1.             Employment.  The Bank agrees to employ Watkins, and
Watkins agrees to be employed as the Bank’s President – District of Columbia
and Northern Virginia Regions, subject to the terms and provisions of this
Agreement.


 


2.             Certain
Definitions.  As used in this Agreement,
the following terms have the meanings set forth below:


 


2.1           “Affiliate” means, with respect to
any Person, (i) any Person directly or indirectly controlling, controlled
by or under common control with such Person, (ii) any Person owning or
controlling fifty percent (50%) or more of the outstanding voting interests of
such Person, (iii) any officer, director, general partner, managing
member, or trustee of, or Person serving in a similar capacity with respect to,
such Person, or (iv) any Person who is an officer, director, general
partner, member, trustee, or holder of fifty percent (50%) or more of the
voting interests of any Person described in clauses (i), (ii), or (iii) of
this sentence. For purposes of this definition, the terms “controlling,” “controlled
by,” or “under common control with” shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.


 


2.2           “Bancorp” means Eagle Bancorp, Inc.,
a Maryland corporation.


 


2.3           “Bank” is defined in the
Recitals.  If the Bank is merged into any
other Entity, or transfers substantially all of its business operations or
assets to another Entity, the term “Bank” shall be deemed to include such
successor Entity for purposes of applying Article 8 of this Agreement.


 


2.4           “Bank Entities” means and includes
any of the Bank, Bancorp and their Affiliates.


 


2.5           “Bank Regulatory Agency” means any
governmental authority, regulatory agency, ministry, department, statutory
corporation, central bank or other body of the United States or of any other
country or of any 


 


1

















 


state or other
political subdivision of any of them having jurisdiction over the Bank or any
transaction contemplated, undertaken or proposed to be undertaken by the Bank,
including, but not necessarily be limited to:


 


(a)           the Federal Deposit Insurance
Corporation or any other federal or state depository insurance organization or
fund;


 


(b)           the Federal Reserve System, the
Maryland Division of Financial Institutions, or any other federal or state bank
regulatory or commissioner’s office;


 


(c)           any Person established, organized,
owned (in whole or in part) or controlled by any of the foregoing; and


 


(d)           any predecessor, successor or
assignee of any of the foregoing.


 


2.6           “Board” means the Board of Directors
of the Bank.


 


2.7           “Code”
means the Internal Revenue Code of 1986, as amended.


 


2.8           “Competitive Business” means the
banking and financial services business, which includes, without limitation,
consumer savings, commercial banking, the insurance and trust business, the
savings and loan business and mortgage lending, or any other business in which
any of the Bank Entities is engaged or has invested significant resources
within the prior six (6) month period in preparation for becoming actively
engaged.


 


2.9           “Competitive Products or Services”
means, as of any time, those products or services of the type that any of the
Bank Entities is providing, or is actively preparing to provide, to its
customers.


 


2.10         “Disability” means a
mental or physical condition which, in the good faith opinion of the Board,
renders Watkins, with reasonable accommodation, unable or incompetent to carry
out the material job responsibilities which Watkins held or the material duties
to which Watkins was assigned at the time the disability was incurred, which
has existed for at least three (3) months and which in the opinion of a
physician mutually agreed upon by the Bank and Watkins (provided
that neither party shall unreasonably withhold such agreement) is expected to
be permanent or to last for an indefinite duration or a duration in excess of
nine (9) months.


 


2.11         “Expiration Date” means August 31,
2011.


 


2.12         “Person” means any individual or
Entity.


 


2.13         “Section 409A” means Section 409A
of the Code and the regulations and administrative guidance promulgated
thereunder.


 


2.14         “Termination Date” means the Expiration
Date or such earlier date on which the Term expires pursuant to Section 3.1
or is terminated pursuant to Section 7.2, 7.3, 7.4, or 7.5, as applicable.


 


Other
terms are defined throughout this Agreement and have the meanings so given
them.


 


3.             Term; Position.


 


3.1           Term.  Watkins’ employment hereunder shall continue
until the Expiration Date, unless extended in writing by both the Bank and
Watkins or sooner terminated in accordance with the provisions of this
Agreement (the “Term”).


 


3.2           Position.  The Bank shall employ Watkins to serve as the
Bank’s President – District of Columbia and Northern Virginia Regions.


 


2

















 


3.3           No Restrictions.  Watkins represents and warrants to the Bank
that Watkins is not subject to any legal obligations or restrictions that would
prevent or limit his
entering into this Agreement and performing his responsibilities hereunder.


 


4.             Duties
of Watkins.


 


4.1           Nature and Substance.  Watkins shall report directly to and shall be
under the direction of the Chief Executive
Officer. The specific powers and duties of Watkins shall be
established, determined and modified by and within the discretion of the Board.


 


4.2           Performance of
Services.  Watkins agrees to devote his full business time and attention
to the performance of his duties
and responsibilities under this Agreement, and shall use his best efforts and discharge his duties to the best of his ability for and on behalf of the
Bank and toward its successful operation. 
Watkins agrees that, without the prior written consent of the Board, he
will not during the Term, directly or indirectly, perform services for or
obtain a financial or ownership interest in any other Entity (an “Outside
Arrangement”) if such Outside Arrangement would interfere with the satisfactory
performance of his duties to the Bank, present a conflict of interest with the
Bank and/or Bancorp, breach his duty of loyalty or fiduciary duties to the Bank
and/or Bancorp, or otherwise conflict with the provisions of this Agreement.  Watkins shall promptly notify the Board of
any Outside Arrangement, provide the Bank with any written agreement in
connection therewith and respond fully and promptly to any questions that the
Board may ask with respect to any Outside Arrangement.  If the Board determines that Watkins’
participation in an Outside Arrangement would interfere with his satisfactory
performance of his duties to the Bank, present a conflict of interest with the
Bank and/or Bancorp, breach his duty of loyalty or fiduciary duties to the Bank
and/or Bancorp, or otherwise conflict with the provisions of this Agreement,
Watkins shall not undertake, or shall cease, such Outside Arrangement as soon
as feasible after the Board notifies him of such determination.  Notwithstanding any provision hereof to the
contrary, this Section 4.2 does not restrict Watkins’ right to own
securities of any Entity that files periodic reports with the Securities and
Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended; provided that his total ownership constitutes
less than two percent (2%) of the outstanding securities of such company.


 


4.3           Compliance with Law.  Watkins shall comply with all laws, statutes,
ordinances, rules and regulations relating to his employment and duties.


 


5.             Compensation; Benefits. As
full compensation for all services rendered pursuant to this Agreement and the
covenants contained herein, the Bank shall pay to Watkins the following:


 


5.1           Salary.  Through the end of the Term, Watkins shall be
paid a salary (“Salary”) of Two Hundred Fifty-one Thousand Seven Hundred
Forty-one Dollars ($251,741.00) on an annualized basis.  The Bank shall pay Watkins’ Salary in equal
installments in accordance with the Bank’s regular payroll periods as may be
set by the Bank from time to time. 
Watkins’ Salary may be further increased from time to time, at the
discretion of the Board. Watkins may also be entitled to certain incentive
bonus payments as determined by Board approved incentive plans.


 


5.2           Withholding.  Payments of Salary shall be subject to the
customary withholding of income and other employment taxes as is required with
respect to compensation paid by an employer to an employee.


 


5.3           Vacation and Leave.  Watkins shall be entitled to such vacation
and leave as may be provided for under the current and future leave and
vacation policies of the Bank for executive officers.


 


5.4           Office Space.  The Bank will provide customary office space
and office support to Watkins.


 


5.5           Parking.  Paid parking at Watkins’ regular worksite will
be provided by the Bank at its expense.


 


5.6           Car Allowance.  The Bank will pay Watkins a monthly car
allowance of One Thousand Five Hundred Dollars ($1,500.00).


 


5.7           Non-Life Insurance.  The Bank will provide Watkins with group
health, disability and other insurance as the Bank may determine appropriate
for all employees of the Bank.


 


3

















 


5.8           Life
Insurance.


 


5.8.1 The Bank will pay
the premiums, up to a maximum of Five Thousand Dollars ($5,000.00) per year,
for the cost of a term life insurance policy, provided Watkins submits all
appropriate documentation showing the amount of the premium.


 


5.8.2
The Bank may, at its cost, obtain and maintain “key-man” life insurance and/or
Bank-owned life insurance on Watkins in such amount as determined by the Board
from time to time. Watkins agrees to cooperate fully and to take all actions
reasonably required by the Bank in connection with such insurance.


 


5.9           Expenses.  The Bank shall, promptly upon presentation of
proper expense reports therefor, pay or reimburse Watkins, in accordance with
the policies and procedures established from time to time by the Bank for its
officers, for all reasonable and customary travel (other than local use of an
automobile for which Watkins is being 
provided the car allowance) and other out-of-pocket expenses incurred by
Watkins in the performance of his duties and responsibilities under this
Agreement and promoting the business of the Bank, including approved membership
fees, dues and the cost of attending business related seminars, meetings and
conventions.


 


5.10         Retirement
Plans.  Watkins shall be entitled to
participate in any and all qualified pension or other retirement plans of the
Bank which may be applicable to personnel of the Bank.


 


5.11         Other
Benefits.  While this Agreement is in
effect, Watkins shall be entitled to all other benefits that the Bank provides
from time to time to its officers.


 


5.12         Eligibility.  Participation in any health, life, accident,
disability, medical expense or similar insurance plan or any qualified pension
or other retirement plan shall be subject to the terms and conditions contained
in such plan. All matters of eligibility for benefits under any insurance plans
shall be determined in accordance with the provisions of the applicable
insurance policy issued by the applicable insurance company.


 


5.13         Equity
Compensation.  Watkins shall be
eligible to receive awards of options, SARs and /or Restricted Stock under the
2006 Stock Plan of Bancorp, from time to time, at the discretion of the 2006
Plan Committee or Compensation Committee of the Board of Directors of Bancorp.


 


6.             Conditions
Subsequent to Continued Operation and Effect of Agreement.


 


6.1           Continued
Approval by Bank Regulatory Agencies. 
This Agreement and all of its terms and conditions, and the continued
operation and effect of this Agreement and the Bank’s continuing obligations
hereunder, shall at all times be subject to the continuing approval of any and
all Bank Regulatory Agencies whose approval is a necessary prerequisite to the
continued operation of the Bank. Should any term or condition of this
Agreement, upon review by any Bank Regulatory Agency, be found to violate or
not be in compliance with any then-applicable statute or any rule, regulation,
order or understanding promulgated by any Bank Regulatory Agency, or should any
term or condition required to be included herein by any such Bank Regulatory
Agency be absent, this Agreement may be rescinded and terminated by the Bank if
the parties hereto cannot in good faith agree upon such additions, deletions or
modifications as may be deemed necessary or appropriate to bring this Agreement
into compliance.


 


7.             Termination
of Agreement.  Prior to the
Expiration Date, the Term of this Agreement may be terminated as provided below
in this Article 7.


 


7.1           Definition
of Cause.  For purposes of this
Agreement, “Cause” means:


 


(a) any act of theft, fraud, intentional misrepresentation,
personal dishonesty or breach of fiduciary duty involving personal gain or
similar conduct by Watkins with respect to the Bank Entities or the services to
be rendered by him under this Agreement;


 


4

















 


(b) any failure of this Agreement to comply with any Bank
Regulatory Agency requirement which is not cured in accordance with Section 6.1
within a reasonable period of time after written notice thereof;


 


(c) any Bank Regulatory Agency action or proceeding against
Watkins as a result of his negligence, fraud, malfeasance or misconduct;


 


(d) indictment of Watkins, or Watkins’ conviction or plea of nolo  contendere at
the trial court level, of a felony, or any crime of moral turpitude, or
involving dishonesty, deception or breach of trust;


 


(e) any of the following conduct on the part of Watkins that
Watkins has not corrected or cured within thirty (30) days after having
received written notice from the Bank detailing and describing such conduct
(provided, however, that the Bank shall not be required to provide Watkins with
notice and opportunity to cure more than two (2) times in any twelve (12)
month period):


 


(i)            habitual absenteeism,
or the failure by or the inability of Watkins to devote full time attention and
energy to the performance of Watkins’ duties pursuant to this Agreement (other
than by reason of his death or Disability);


 


(ii)           intentional material
failure by Watkins to carry out the explicit lawful and reasonable directions,
instructions, policies, rules, regulations or decisions of the Board which are
consistent with his position;


 


(iii)          willful or intentional
misconduct on the part of Watkins that results, or that the Board in good faith
determines may result, in substantial injury to the Bank or any of its
Affiliates; or


 


(iv)          any action (including
any failure to act) or conduct by Watkins in violation of a material provision
of this Agreement (including but not limited to the provisions of Article 8
hereof, which shall be deemed to be material); or


 


(f) the use of drugs, alcohol or other substances by Watkins to an
extent which materially interferes with or prevents Watkins from performing his
duties under this Agreement;


 


(g) the determination by the Board, in the exercise of its
reasonable judgment and in good faith, that Watkins’ job performance is
substantially unsatisfactory and that he has failed to cure such performance
within a reasonable period (but in no event more than thirty (30) days) after
written notice specifying in reasonable detail the nature of the unsatisfactory
performance; or


 


(h) Watkins’ commission of unethical business practices, acts of
moral turpitude, financial impropriety, fraud or dishonesty in any material
matter which the Board in good faith determines could adversely affect the
reputation, standing or financial prospects of the Bank or its Affiliates.


 


7.2           Termination
by the Bank for Cause.  After the
occurrence of any of the conditions specified in Section 7.1, the Bank
shall have the right to terminate the Term for Cause immediately on written
notice to Watkins.


 


7.3           Termination
by the Bank without Cause.  The Bank
shall have the right to terminate the Term at any time on written notice
without Cause, for any or no reason, such termination to be effective on the
date on which the Bank gives such notice to Watkins or such later date as may be
specified in such notice.


 


7.4           Termination
for Death or Disability.  The Term
shall automatically terminate upon the death of Watkins or upon the Board’s
determination that Watkins is suffering from a Disability.


 


5

















 


7.5           Termination by
Watkins.  Watkins shall have the
right to terminate the Term at any time, such termination to be effective on
the date ninety (90) days after the date on which Watkins gives such notice to
the Bank unless Watkins and the Bank agree in writing to a later date on which
such termination is to be effective. 
After receiving notice of termination, the Bank may require Watkins to
devote his good faith energies to transitioning his duties to his successor and
to otherwise helping to minimize the adverse impact of his resignation upon the
operations of the Bank.  If Watkins fails
or refuses to fully cooperate with such transition, the Bank may immediately
terminate Watkins, in which case it shall no longer have any obligation to pay
any Salary or provide any benefits to him, but solely for purposes of Sections
8.5 and 8.6 below, the Termination Date shall be the date ninety (90) days
after the date on which Watkins gives notice of termination to the Bank
pursuant to the first sentence of this Section 7.5, or the later date
referred to therein, whichever is later.


 


7.6           Pre-Termination
Salary and Expenses.  Without regard
to the reason for, or the timing of, the termination or expiration of the
Term:  (a) the Bank shall pay
Watkins any unpaid Salary due for the period prior to the Termination Date; and
(b) following submission of proper expense reports by Watkins, the Bank
shall reimburse Watkins for all expenses incurred prior to the Termination Date
and subject to reimbursement pursuant to Section 5.9 hereof.  These payments shall be made promptly upon
termination and within the period of time mandated by law.


 


7.7           Severance
if Termination by the Bank without Cause. 
Provided that Watkins signs and delivers to the Bank no later than
twenty-one (21) days after the Termination Date a General Release and Waiver in
the form attached to this Agreement as Exhibit A, and except as set
forth below, if the Term is terminated by the Bank during the Term without
Cause, the Bank shall, for a period of one (1) year following the
Termination Date, (i) continue to pay Watkins, in the manner set forth
below, Watkins’ Salary at the rate being paid as of the Termination Date, and (ii) if
Watkins timely elects to continue his health insurance benefits under COBRA,
pay to the insurer Watkins’ premiums for health insurance benefits continuation
(for so long as Watkins remains qualified for such continuation under COBRA);
provided, however, that Watkins shall not be entitled to any such payments if
he is otherwise entitled to payments pursuant to Section 9.4 in relation
to a Change in Control.   Any payments
due Watkins pursuant to this Section 7.7 shall be paid to Watkins in
installments on the same schedule as Watkins was paid immediately prior to the
Termination Date, each installment to be the same amount Watkins would have
been paid under this Agreement if he had not been terminated. In the event
Watkins breaches any provision of Article 8 of this Agreement, Watkins’
entitlement to any payments payable pursuant to this Section 7.7, if and
to the extent not yet paid, shall thereupon immediately cease and terminate as
of the date of such breach, with Watkins having the obligation to repay to the
Bank any payments that were paid to him and any payments for health insurance
benefits continuation pursuant to this Section 7.7 with respect to the
period after such breach occurred and before such breach became known to the
Bank.  Furthermore, if termination was
initially not for Cause but the Bank thereafter determines in good faith that,
during the Term, Watkins had engaged in conduct that would have constituted
Cause, Watkins’ entitlement to any payments pursuant to this Section 7.7
shall terminate retroactively to the Termination Date, with Watkins having the
obligation to repay to the Bank all payments that were paid to him and any
payments for health insurance benefits continuation pursuant to this Section 7.7,
and, upon the return of all such payments, said General Release and Waiver
shall be deemed rescinded and of no force or effect.   Notwithstanding anything to the contrary in
this Section 7.7, any payment pursuant to this Section shall be
subject to (i) any delay in payment required by Section 10.3 hereof
and (ii) any reduction required
pursuant to Section 10.2 hereof.


 


7.8           Termination
After Change in Control.  Sections
9.2 and 9.3 set out provisions applicable to certain circumstances in which the
Term may be terminated after Change in Control.


 


8.             Confidentiality;
Non-Competition; Non-Interference.


 


8.1           Confidential
Information.  Watkins, during
employment, will have, and has had, access to and become familiar with various
confidential and proprietary information of the Bank Entities and/or relating
to the business of the Bank Entities (“Confidential Information”), including,
but not limited to: business plans; operating results; financial statements and
financial information; contracts; mailing lists; purchasing information;
customer data (including lists, names and requirements); feasibility studies;
personnel related information (including compensation, compensation plans, and
staffing plans); internal working documents and communications; and other
materials related to the businesses or activities of the Bank Entities which is
made available only to employees with 


 


6

















 


a need to know or
which is not generally made available to the public.  Failure to mark any Confidential Information
as confidential, proprietary or protected information shall not affect its
status as part of the Confidential Information subject to the terms of this
Agreement.


 


8.2           Nondisclosure.  Watkins hereby covenants and agrees that he
shall not, directly or indirectly, disclose or use, or authorize any Person to
disclose or use, any Confidential Information (whether or not any of the
Confidential Information is novel or known by any other Person); provided
however, that this restriction shall not apply to the use or disclosure of
Confidential Information (i) to any governmental entity to the extent
required by law, (ii) which is or becomes publicly known and available
through no wrongful act of Watkins or any Affiliate of Watkins or (iii) in
connection with the performance of Watkins’ duties under this Agreement.


 


8.3           Nondisclosure
of this Agreement.  The terms,
conditions and fact of this Agreement are strictly confidential.  From and after the date of execution of this
Agreement, Watkins agrees not to disclose, directly or indirectly, the
existence of this Agreement or any of the terms and conditions herein to any
Person except that Watkins may disclose the existence of this Agreement or the
terms and conditions herein to Watkins’ immediate family, tax, financial or
legal advisers, prospective employers (with whom Watkins’ employment is not
prohibited by Section 8.5), any taxing authority, or as required by
law.  If Watkins is asked about the
existence and/or terms and conditions of this Agreement, Watkins is permitted
to state only that “the terms of my employment are a confidential matter that I
am not able to disclose.”  Watkins
acknowledges that the terms of this Section 8.3 are a material inducement
for the Bank to enter into this Agreement. 
Notwithstanding the foregoing, Watkins may disclose such information
regarding this Agreement as may be disclosed by the Bank Entities in any
document filed with the Securities and Exchange Commission.


 


8.4           Documents.  All files, papers, records, documents,
compilations, summaries, lists, reports, notes, databases, tapes, sketches,
drawings, memoranda, and similar items (collectively, “Documents”), whether
prepared by Watkins, or otherwise provided to or coming into the possession of
Watkins, that contain any proprietary information about or pertaining or
relating to the Bank Entities (the “Bank Information”) shall at all times
remain the exclusive property of the Bank Entities. Promptly after a request by
the Bank or the Termination Date, Watkins shall take reasonable efforts to (i) return
to the Bank all Documents in any tangible form (whether originals, copies or
reproductions) and all computer disks or other media containing or embodying
any Document or Bank Information and (ii) purge and destroy all Documents
and Bank Information in any intangible form (including computerized, digital or
other electronic format) as may be requested in writing by the Chief Executive
Officer  of the Bank or Chairman of the
Board of the Bank, and Watkins shall not retain in any form any such Document
or any summary, compilation, synopsis or abstract of any Document or Bank Information.


 


8.5           Non-Competition.  Watkins hereby acknowledges and agrees that,
during the course of employment, Watkins has become, and will become, familiar
with and involved in all aspects of the business and operations of the Bank
Entities. Watkins hereby covenants and agrees that from the Commencement Date
until the later to occur of (a) the date one (1) year after the
Termination Date, or (b) the Expiration Date (the “Restricted Period”),
Watkins will not at any time (except for the Bank Entities), directly or
indirectly, in any capacity (whether as a proprietor, owner, agent, officer,
director, shareholder, organizer, partner, principal, manager, member,
employee, contractor, consultant or otherwise) provide any advice, assistance
or services to any Competitive Business or to any Person that is attempting to
form or acquire a Competitive Business if such Competitive Business operates,
or is planning to operate, any office, branch or other facility (in any case, a
“Branch”) that is (or is proposed to be) located within a thirty-five (35) mile
radius of the Bank’s headquarters or any Branch of the Bank Entities.  Notwithstanding any provision hereof to the
contrary, this Section 8.5 does not restrict Watkins’ right to (i) own
securities of any Entity that files periodic reports with the Securities and
Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended; provided that his total ownership constitutes
less than two percent (2%) of the outstanding securities of such company.


 


8.6           Non-Interference.
Watkins hereby covenants and agrees that during the Restricted Period, he will
not, directly or indirectly, for himself or any other Person (whether as a
proprietor, owner, agent, officer, director, shareholder, organizer, partner,
principal, member, manager, employee, contractor, consultant or any other
capacity):


 


7

















 


(a)           induce
or attempt to induce any customer, supplier, officer, director, employee,
contractor, consultant, agent or representative of, or any other Person that
has a business relationship with any Bank Entity, to discontinue, terminate or
reduce the extent of its, his or her relationship with any Bank Entity or to
take any action that would disrupt or otherwise be disadvantageous to any such
relationship;


 


(b)           solicit
any customer of any of the Bank Entities for the purpose of providing any
Competitive Products or Services to such customer (other than any solicitation
to the general public that is not disproportionately directed at customers of
any Bank Entity); or


 


(c)           solicit any employee of
any of the Bank Entities to commence employment with, become a consultant or
independent contractor to or otherwise provide services for the benefit of any
other Competitive Business


 


In applying this Section 8.6:


 


(i)            the term “customer”
shall be deemed to include, at any time, any Person to which any of the Bank
Entities had, during the six (6) month period immediately prior to such
time, (A) sold any products or provided any services or (B) submitted,
or been in the process of submitting or negotiating, a proposal for the sale of
any product or the provision of any services;


 


(ii)           the term “supplier”
shall be deemed to include, at any time, any Person which, during the six (6) month
period immediately prior to such time, (A) had sold any products or
services to any of the Bank Entities or (B) had submitted to any of the
Bank Entities a proposal for the sale of any products  or services;


 


(iii)          for purposes of clause
(c), the term “employee” shall be deemed to include, at any time, any Person
who was employed by any of the Bank Entities within the prior six (6) month
period (thereby prohibiting Watkins from soliciting any Person who had been
employed by any of the Bank Entities until six (6) months after the date
on which such Person ceased to be so employed); and


 


(iv)          If during the Restricted
Period any employee of any of the Bank Entities accepts employment with or is
otherwise retained by any Competitive Business of which Watkins is an owner,
director, officer, manager, member, employee, partner or employee, or to which
Watkins provides material services, it shall be presumed that such employee was
hired in violation of the restriction set forth in clause (c) of this Section 8.6,
with such presumption to be overcome only upon Watkins’ showing by a
preponderance of the evidence that he was not directly or indirectly involved
in the hiring, soliciting or encouraging such employee to leave employment with
the Bank Entities.


 


8.7           Injunction.
In the event of any breach or threatened or attempted breach of any provision
of this Article 8 by Watkins, the Bank shall, in addition to and not to
the exclusion of any other rights and remedies at law or in equity, be entitled
to seek and receive from any court of competent jurisdiction (i) full
temporary and permanent injunctive relief enjoining and restraining Watkins and
each and every other Person concerned therein from the continuation of such
violative acts and (ii) a decree for specific performance of the
applicable provisions of this Agreement, without being required to furnish any
bond or other security.


 


8.8           Reasonableness.


 


8.8.1  Watkins has carefully read and considered the
provisions of this Article 8 and, having done so, agrees that the
restrictions and agreements set forth in this Article 8 are fair and
reasonable and are reasonably required for the protection of the interests of
the Bank Entities and their respective businesses, shareholders, directors,
officers and employees. Watkins further agrees that the restrictions set forth
in this Agreement will not impair or unreasonably restrain his ability to earn
a livelihood.


 


8.8.2  If any court of competent jurisdiction should
determine that the duration, geographical area or scope of any provision or
restriction set forth in this Article 8 exceeds the maximum duration,
geographic area or scope that is reasonable and enforceable under applicable
law, the parties agree that said provision shall automatically be modified and
shall be deemed to extend only over the maximum duration, geographical area
and/or scope as to 


 


8

















 


which such
provision or restriction said court determines to be valid and enforceable
under applicable law, which determination the parties direct the court to make,
and the parties agree to be bound by such modified provision or restriction.


 


9.             Change
in Control.


 


9.1           Definition.  “Change in Control” means and shall be deemed
to have occurred if:


 


(a)  there shall be consummated (i) any
consolidation, merger, share exchange, or similar transaction relating to
Bancorp, or pursuant to which shares of Bancorp’s capital stock are converted
into cash, securities of another Entity and/or other property, other than a
transaction in which the holders of Bancorp’s voting stock immediately before
such transaction shall, upon consummation of such transaction, own at least
fifty percent (50%) of the voting power of the surviving Entity, or (ii) any
sale of all or substantially all of the assets of Bancorp, other than a
transfer of assets to a related Person which is not treated as a change in
control event under §1.409A-3(i)(5)(vii)(B) of the U.S. Treasury
Regulations;


 


(b)  any person,
entity or group (each within the meaning of Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall
become the beneficial owner (within the meaning of Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of securities of Bancorp representing
more than fifty percent (50%) of the voting power of all outstanding securities
of Bancorp entitled to vote generally in the election of directors of Bancorp
(including, without limitation, any securities of Bancorp that any such Person
has the right to acquire pursuant to any agreement, or upon exercise of
conversion rights, warrants or options, or otherwise, which shall be deemed
beneficially owned by such Person); or


 


(c) 
over a twelve (12) month period, a majority of the members of the Board of
Directors of Bancorp are replaced by directors whose appointment or election
was not endorsed by a majority of the members of the Board of Directors of
Bancorp in office prior to such appointment or election.


 


Notwithstanding the
foregoing, if the event purportedly constituting a Change in Control under Section 9.1(a),
Section 9.1(b), or Section 9.1(c) does not also constitute a “change
in ownership” of Bancorp, a “change in effective control” of Bancorp, or a “change
in the ownership of a substantial portion of the assets” of Bancorp within the
meaning of Section 409A, then such event shall not constitute a “Change in
Control” hereunder.


 


9.2           Change
in Control Termination.  For purposes
of this Agreement, a “Change in Control Termination” means that while this
Agreement is in effect:


 


(a)           Watkins’
employment with the Bank is terminated without Cause (i) within one
hundred twenty (120) days immediately prior to and in conjunction with a Change
in Control or (ii) within twelve (12) months following consummation of a
Change in Control; or


 


(b)           Within
twelve (12) months following consummation of a Change in Control, Watkins’
title, duties and or position have been materially reduced such that Watkins is
not in a comparable position (with materially comparable compensation, benefits
and responsibilities and is located within twenty-five (25) miles of Watkins’
primary worksite) to the position he held immediately prior to the Change in
Control, and within thirty (30) days after notification of such reduction he notifies
the Bank that he is terminating his employment due to such change in his
employment unless such change is cured within thirty (30) days of such notice
by providing him with a comparable position (including materially comparable
compensation and benefits and is located within twenty-five (25) miles of
Watkins’ primary worksite).  If Watkins’
employment is terminated under this Section, his last day of employment shall
be mutually agreed to by Watkins and the Bank, but shall be not more than sixty
(60) days after such notice is given by Watkins.


 


9.3           Window
Period Resignation After Change in Control. 
If at the expiration of the twelve (12) month period following
consummation of a Change in Control (the “Action Period”), Watkins’ employment
by the Bank has not been terminated, Watkins may, by giving written notice to
the Bank within the thirty (30) day period immediately following the last day
of the Action Period, elect to terminate the Term, in which event his last day
of 


 


9

















 


employment will be
as mutually agreed to by the Bank and Watkins but which shall be not more than
sixty (60) days after such notice is given by Watkins.


 


9.4           Change
in Control Payment.  If there is a
Change in Control Termination pursuant to Section 9.2 or Watkins resigns
after the Action Period pursuant to Section 9.3, Watkins shall be paid a
lump-sum cash payment (the “Change Payment”) equal to 2.99 times Watkins’
Salary at the highest rate in effect during the twelve (12) month period
immediately preceding his Termination Date, such Change Payment to be made to
Watkins within forty-five (45) days after the later of (i) his Termination
Date or (ii) the date of the Change in Control, the exact date of payment
to be determined in the sole discretion of the Bank; provided, however, that
the Bank shall be relieved of its obligation to pay the Change Payment if
Watkins fails to sign and deliver to the Bank no later than twenty-one (21)
days after the Termination Date a General Release and Waiver in the form
attached to this Agreement as Exhibit A.  Notwithstanding anything to the contrary in
this Section 9.4, any payment pursuant to this Section shall be
subject to (i) any delay in payment required by Section 10.3  hereof and (ii) any reduction required pursuant to Section 10.2
hereof, as applicable.


 


10.           Compliance with Certain Restrictions.


 


10.1         Certain Defined Terms. For purposes of this Agreement, the
following terms are defined as follows:


 


(a)         “Additional 280G Payments”
means any distributions in the nature of compensation by any Bank Entity to or
for the benefit of Watkins (including, but not limited to, the value of
acceleration in vesting in restricted stock, options or any other stock-based
compensation), whether or not paid or payable or distributed or distributable
pursuant to this Agreement, which is required to be taken into consideration in
applying Section 280G(b)(2)(A) of the Code;


 


(b)         “Applicable Severance” means Watkins’ severance from employment by
reason of involuntary termination by the Bank or in connection with any
bankruptcy, liquidation or receivership of the Bank or any other entity that is
treated as the same employer under EESA, in each case as determined under the
regulations implementing Section 111(b) of EESA;


 


(c)         Authorities Period” means the period under which the authorities of Section 101
of EESA are in effect, as determined pursuant to Section 120 thereof;


 


(d)         “Determining Firm” means a reputable law or accounting firm selected by
the Bank to make a determination pursuant to this Article 10;


 


(e)         “EESA” means the Emergency Economic Stabilization Act of 2008, Public
Law 110-343, as implemented by any guidance or regulations thereunder;


 


(f)          “Incentive Compensation” means all bonus and other incentive-based compensation,
as those terms are applied under EESA;


 


(g)         “Parachute Payment” is defined as set forth in Section 280G(b)(2) of
the Code, with amounts payable during the Authorities Period upon Applicable
Severance being specifically included in applying such provision;


 


(h)         “Total Change in Control
Payments” means the total amount of the Change Payment together with all
Additional 280G Payments that are required to be paid because of a Change in
Control; and


 


(i)          “Total
Severance Payments” means the total amount of payments, including Additional
280G Payments, that are required to be paid to Watkins but that would not have
been payable to him if no Applicable Severance had occurred.


 


10
















 


10.2         Compliance
with Section 280G.


 


(a)           Notwithstanding
anything in this Agreement to the contrary, if any amount becomes payable to
Watkins because of an Applicable Severance and (ii) the Determining Firm
determines that any portion of the Total Severance Payments would otherwise
constitute a Parachute Payment, the amount payable to Watkins shall
automatically be reduced by the smallest amount necessary so that no portion of
the Total Severance Payments will be a Parachute Payment.  If Total Severance Payments are to be paid in
other than a lump sum, such reduction shall be applied in inverse order to the
time at which the payments are scheduled to be made (e.g., the last scheduled
payment will be the first such payment to be reduced).  If, despite the foregoing sentence, a payment
shall be made to Watkins that would constitute a Parachute Payment, Watkins
shall have no right to retain such payment, and, immediately upon being
informed of the impropriety of such payment, Watkins shall return such payment to
the Bank or other Bank Entity that was the payer thereof, together with
interest at the applicable federal rate determined pursuant to Section 1274(d) of
the Code.


 


(b)           Notwithstanding
anything in this Agreement to the contrary, other than Section 10.2(a) above,
if the Determining Firm determines that any portion of the Total Change in
Control Payments would otherwise constitute a Parachute Payment, the amount
payable to Watkins shall automatically be reduced by the smallest amount
necessary so that no portion of the Total Change in Control Payments will be a
Parachute Payment.  If Total Change in
Control Payments are to be paid in other than a lump sum, such reduction shall
be applied in inverse order to the time at which the payments are scheduled to
be made (e.g., the last scheduled payment will be the first such payment to be
reduced).  If, despite the foregoing
sentence, a payment shall be made to Watkins that would constitute a Parachute
Payment, Watkins shall have no right to retain such payment and, immediately
upon being informed of the impropriety of such payment, Watkins shall return
such payment to the Bank or other Bank Entity that was the payer thereof,
together with interest at the applicable federal rate determined pursuant to Section 1274(d) of
the Code.


 


10.3         Compliance with Section 409A.


 


(a)            It is the intention
of the parties hereto that this Agreement and the payments provided for
hereunder shall not be subject to, or shall be in accordance with, Section 409A,
and thus avoid the imposition of any tax and interest on Watkins pursuant to Section 409A(a)(1)(B) of
the Code, and this Agreement shall be interpreted and construed consistent with
this intent.  Watkins acknowledges and
agrees that he shall be solely responsible for the payment of any tax or
penalty which may be imposed or to which he may become subject as a result of
the payment of any amounts under this Agreement.


 


(b)           Notwithstanding any
provision of this Agreement to the contrary, if Watkins is a “specified
employee” at the time of his “separation from service”, any payment of “nonqualified
deferred compensation” (in each case as determined pursuant to Section 409A)
that is otherwise to be paid to Watkins within six (6) months
following  his separation from service,
then to the extent that such payment would otherwise be subject to interest and
additional tax under Section 409A(a)(1)(B) of the Code, such payment
shall be delayed and shall be paid on the first business day of the seventh
calendar month following Watkins’ separation from service, or, if earlier, upon
Watkins’ death.  Any deferral of payments
pursuant to the foregoing sentence shall have no effect on any payments that
are scheduled to be paid more than six (6) months after the date of
separation from service.


 


(c)            The parties hereto
agree that they shall take such actions as may be necessary and permissible
under applicable law, regulation and guidance to amend or revise this Agreement
in order to ensure that Section 409A(a)(1)(B) does not impose
additional tax and interest on payments made pursuant to this Agreement.


 


10.4         Clawback if
Material Inaccuracy.  If any
Incentive Compensation that is paid to Watkins by the Bank or any other Bank
Entity while the U.S. Treasury holds any equity securities in Bancorp is based
on any materially inaccurate financial statement or other materially inaccurate
performance metric criteria, as those terms are applied under EESA, Watkins
shall be required to disgorge and pay over to the Bank or such other Bank
Entity all such Incentive Compensation, together with interest at the
applicable federal rate determined pursuant to Section 1274(d) of the
Code.


 


11

















 


11.           Assignability.  Watkins shall have no right to assign this
Agreement or any of his
rights or obligations hereunder to another party or parties.  The Bank may assign this Agreement to any of
its Affiliates or to any Person that acquires a substantial portion of the
operating assets of the Bank.  Upon any
such assignment by the Bank, references in this Agreement to the Bank shall
automatically be deemed to refer to such assignee instead of, or in addition
to, the Bank, as appropriate in the context.


 


12.           Governing Law; Venue.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland applicable to
contracts executed and to be performed therein, without giving effect to the
choice of law rules thereof. Any
action to enforce any provision of this Agreement may be brought only in a
court of the State of Maryland or in the United States District Court for the
District of Maryland.  Accordingly, each
party (a) agrees to submit to the jurisdiction of such courts and to
accept service of process at its address for notices and in the manner provided
in Section 13 for the giving of notices in any such action or proceeding
brought in any such court and (b) irrevocably waives any objection to the
laying of venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient or inappropriate forum.


 


13.           Notices.  All notices, requests, demands and other
communications required to be given or permitted to be given under this
Agreement shall be in writing and shall be conclusively deemed to have been
given  as follows: (a) when hand
delivered to the other party; (b) when received by facsimile at the
facsimile number set forth below, provided, however, that any notice given by
facsimile shall not be effective unless either (i) a duplicate copy of
such facsimile notice is promptly given by depositing the same in a United
States post office first-class postage prepaid and addressed to the applicable
party as set forth below or (ii) the receiving party delivers a written
confirmation of receipt for such notice either by facsimile or by any other
method permitted under this Section; or (c) when deposited in a United
States post office with first-class certified mail, return receipt requested,
postage prepaid and addressed to the applicable party as set forth below; or (d) when
deposited with a national overnight delivery service reasonably approved by the
parties (Federal Express and DHL WorldWide Express being deemed approved by the
parties), postage prepaid, addressed to the applicable party as set forth below
with next-business-day delivery guaranteed; provided that the sending party
receives a confirmation of delivery from the delivery service provider. Any
notice given by facsimile shall be deemed received on the date on which notice
is received except that if such notice is received after 5:00 p.m.
(recipient’s time) or on a non-business day, notice shall be deemed given the
next business day).  Any notice sent by
Untied States mail shall be deemed given three (3) business days after the
same has been deposited in the United States mail.  Any notice given by national overnight
delivery service shall be deemed given on the first business day following
deposit with such delivery service.  For
purposes of this Agreement, the term “business day” shall mean any day other
than a Saturday, Sunday or day that is a legal holiday in Montgomery County,
Maryland.  The address of a party set
forth below may be changed by that party by written notice to the other from
time to time pursuant to this Article.


 


	
  To:

  	
  Barry C. Watkins

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Fax No.

  
	
   

  	
   

  
	
  To:

  	
  EagleBank

  
	
   

  	
  c/o Ronald D. Paul

  
	
   

  	
  7815 Woodmont Ave.

  
	
   

  	
  Bethesda, MD 20814

  
	
   

  	
  Fax No.: 301.986-8529

  
	
   

  	
   

  
	
   

  	
  cc:

  	
  Fred Sommer,
  Esquire

  
	
   

  	
   

  	
  Shulman, Rogers,
  Gandal, Pordy & Ecker, P.A.

  
	
   

  	
   

  	
  11921 Rockville
  Pike, 3rd Floor

  
	
   

  	
   

  	
  Rockville,
  Maryland 20852

  
	
   

  	
   

  	
  Fax No.:
  301-230-2891

  



 


12

















 


	
   

  	
  After August 1,
  2009 to:

  
	
   

  	
   

  
	
   

  	
   

  	
  Fred Sommer, Esquire

  
	
   

  	
   

  	
  Shulman, Rogers, Gandal, Pordy & Ecker,
  P.A.

  
	
   

  	
   

  	
  12505 Park Potomac Avenue, Sixth Floor

  
	
   

  	
   

  	
  Potomac, MD
  20854

  
	
   

  	
   

  	
  Fax No.:

  



 


14.           Entire Agreement.  This Agreement contains all of the agreements
and understandings between the parties hereto with respect to the employment of
Watkins by the Bank, and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof.  No oral agreements or written correspondence
shall be held to affect the provisions hereof. No representation, promise,
inducement or statement of intention has been made by either party that is not
set forth in this Agreement, and neither party shall be bound by or liable for
any alleged representation, promise, inducement or statement of intention not
so set forth. Not in limitation of the foregoing, this Agreement supersedes and
replaces the Original Agreement, except that Watkins shall remain entitled to
receive any compensation earned but not yet paid thereunder.


 


15.           Headings.  The Article and Section headings
contained in this Agreement are for reference purposes only and shall not in
any way affect the meaning or interpretation of this Agreement.


 


16.           Severability.  Should any part of this Agreement for any
reason be declared or held illegal, invalid or unenforceable, such
determination shall not affect the legality, validity or enforceability of any
remaining portion or provision of this Agreement, which remaining portions and
provisions shall remain in force and effect as if this Agreement has been
executed with the illegal, invalid or unenforceable portion thereof eliminated.


 


17.           Amendment; Waiver.  Neither this Agreement nor any provision
hereof may be amended, modified, changed, waived, discharged or terminated
except by an instrument in writing signed by the party against which
enforcement of the amendment, modification, change, waiver, discharge or
termination is sought. The failure of either party at any time or times to
require performance of any provision hereof shall not in any manner affect the
right at a later time to enforce the same. No waiver by either party of the
breach of any term, provision or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such breach, or a waiver
of the breach of any other term, provision or covenant contained in this
Agreement.


 


18.           Gender and Number.  As used in this Agreement, the masculine,
feminine and neuter gender, and the singular or plural number, shall each be
deemed to include the other or others whenever the context so indicates.


 


19.           Binding Effect.  This Agreement is and shall be binding upon,
and inures to the benefit of, the Bank, its successors and assigns, and Watkins
and his heirs,
executors, administrators, and personal and legal representatives.


 


[signatures on following
page]


 


13

















 


IN WITNESS
WHEREOF, the parties have executed this Amended and Restated Employment
Agreement as of the date first written above.


 


	
   

  	
  EAGLEBANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Ronald D.
  Paul

  
	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BARRY C. WATKINS

  
	
   

  	
   

  
	
   

  	
   

  



 


14

















 


Attachment A


 


Form of


General Release and Waiver of All Claims


 


Barry
C. Watkins (“you”) executes this General
Release And Waiver of All Claims (the “Release”) as a
condition of receiving certain payments and other benefits in accordance with
the terms of Section 7.7 of your Amended and Restated Employment Agreement
dated             ,
2008.  All capitalized terms used but not
otherwise defined herein shall have the same meaning as in your Employment
Agreement.


 


1.              RELEASE.


 


You
hereby release and forever discharge EagleBank and Eagle Bancorp, Inc. [modify to specifically  include
any additional Affiliates] and each and every one of their former or
current subsidiaries, parents, affiliates, directors, officers, employees,
agents, parents, affiliates, successors, predecessors, subsidiaries, assigns
and attorneys (the “Released Parties”)
from any and all charges, claims, damages, injury and actions, in law or
equity, which you or your heirs, successors, executors, or other
representatives ever had, now have, or may in the future have by reason of any
act, omission, matter, cause or thing through the date of your execution of
this Release. You understand that this Release is a general release of all
claims you may have against the Released Parties based on any act, omission,
matter, case or thing through the date of your execution of this Release.


 


2.              WAIVER.


 


You
realize there are many laws and regulations governing the employment
relationship. These include, but are not limited to, Title VII of the Civil
Rights Acts of 1964 and 1991; the Age Discrimination in Employment Act of 1967;
the Americans with Disabilities Act; the National Labor Relations Act; 42
U.S.C. § 1981; the Family and Medical Leave Act; the Employee Retirement Income
Security Act of 1974 (other than any accrued benefit(s) to which you have
a non-forfeitable right under any pension benefit plan); the Maryland Civil
Rights Act, the Maryland Wage Payment and Collection Law, Maryland Occupational
Safety and Health Act, the Maryland Collective Bargaining Law, and any other
state, local and federal employment laws; and any amendments to any of the
foregoing. You also understand there may be other statutes and laws of contract
and tort that also relate to your employment. By signing this Release, you
waive and release any rights you may have against the Released Parties under
these and any other laws based on any act, omission, matter, cause or thing
through the date of your execution of this Release. You also agree not to
initiate, join, or voluntarily participate in any action or suit in any court
or to accept any damages or other relief from any such proceeding brought by
anyone else based on any act, omission, matter, cause or thing through the date
of your execution of this Release.


 


15

















 


3.              NOTICE PERIOD.


 


This document is
important. We advise you to review it carefully and consult an attorney before
signing it, as well as any other professional whose advice you value, such as
an accountant or financial advisor. If you agree to the terms of this Release,
sign in the space indicated below for your signature. You will have twenty-one
(21) calendar days from the date you receive this document to consider whether
to sign this Release. If you choose to sign the Release before the end of that
twenty-one day period, you certify that you did so voluntarily for your own
benefit and not because of any coercion.


 


4.              RETURN OF PROPERTY.


 


You
certify that you have fully complied with Section 8.4 of your Employment
Agreement.


 


5.              REVOCATION.


 


You
should also understand that even after you have signed this Release, you still
have seven (7) days to revoke it. To revoke your acceptance of this
Release, the Chairman of the Bank’s Board of Directors must receive written
notice before the end of the seven (7)-day period. In the event you revoke or
do not accept this Release, you will not be entitled to any of the payments or
benefits that you would have been entitled to under your Employment Agreement
by virtue of executing this Release. If you do not revoke this Release within
seven (7) days after you sign it, it will be final, binding, and
irrevocable.


 


IN
WITNESS WHEREOF, the Parties have knowingly and voluntarily executed this
Release, as of the day and year first set forth below.


 


 


	
   

  	
   

  	
   

  
	
  Barry
  C. Watkins

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EagleBank

  	
   

  	
  Date

  



 


16