Document:

Exhibit

                        
Exhibit 10.22.3

SECOND AMENDMENT TO TERM LOAN AGREEMENT

THIS SECOND AMENDMENT TO TERM LOAN AGREEMENT (this “Amendment”) dated as of December 18, 2017, by and among CORPORATE OFFICE PROPERTIES, L.P., a limited partnership formed under the laws of the State of Delaware (the “Borrower”), CORPORATE OFFICE PROPERTIES TRUST, a real estate investment trust formed under the laws of the State of Maryland (the “Parent”), the Lenders, and CAPITAL ONE, NATIONAL ASSOCIATION, as Administrative Agent (the “Agent”).

WHEREAS, the Borrower, the Parent, the Lenders, the Agent and the other parties thereto have entered into that certain Term Loan Agreement dated as of December 17, 2015, as amended by that certain First Amendment to Term Loan Agreement dated as of September 15, 2016 (as amended, supplemented, restated or otherwise modified from time to time, the “Term Loan Agreement”); and

WHEREAS, the Borrower, the Parent, the Lenders and the Agent desire to amend certain provisions of the Term Loan Agreement on the terms and conditions contained herein; 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

Section 1.    Definitions.  Capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings given such terms in the Term Loan Agreement.  

Section 2.  Specific Amendment to Term Loan Agreement.  Upon the effectiveness of this Amendment, the parties hereto agree that the Term Loan Agreement is amended as follows by replacing the table in the definition of “Applicable Margin” contained in Section 1.1 thereof in its entirety with the following:

	
				
	

Level
	Borrower’s Credit Rating
(S&P/Moody’s or equivalent)
	Applicable Margin for Loans that are LIBOR Loans
	Applicable Margin for Loans that are Base Rate Loans

	1
	A-/A3 or higher
	0.90%
	0.00%

	2
	BBB+/Baa1
	0.95%
	0.00%

	3
	BBB/Baa2
	1.10%
	0.10%

	4
	BBB-/Baa3
	1.35%
	0.35%

	5
	Lower than BBB-/Baa3
	1.75%
	0.75%

Section 3.    Conditions Precedent.  The effectiveness of this Amendment is subject to receipt by the Agent of each of the following, each in form and substance satisfactory to the Agent:

(a)    a counterpart of this Amendment duly executed by the Borrower, the Parent and each of the Lenders; 

(b)    the Reaffirmation of Obligations substantially in the form of Exhibit A attached hereto duly executed by each Guarantor;
(c)    evidence that all fees, expenses and reimbursement amounts due and payable to the Agent, including without limitation, the reasonable fees and expenses of counsel to the Agent, have been paid; and
(d)    such other documents, instruments and agreements as the Agent may reasonably request.
Section 4.    Representations.  The Borrower and the Parent represent and warrant to the Agent and the Lenders that:

(a)    Authorization.  Each of the Parent and the Borrower has the right and power, and has taken all necessary action to authorize the execution and delivery of this Amendment and to perform its obligations thereunder and under the Term Loan Agreement, as amended by this Amendment, in accordance with their respective terms.  This Amendment has been duly executed and delivered by a duly authorized officer of the Parent and the Borrower or a general partner of the Borrower, as applicable, and both this Amendment and the Term Loan Agreement, as amended by this Amendment, are legal, valid and binding obligations of the Parent and the Borrower and are enforceable against such Persons in accordance with their respective terms except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors rights generally and the availability of equitable remedies for the enforcement of certain obligations (other than payment of principal) contained herein or therein and as may be limited by equitable principles generally.

(b)    Compliance with Laws, etc.  The execution, delivery and performance of this Amendment and the other Loan Documents to which any Loan Party is a party do not and will not, by the passage of time, the giving of notice, or both:  (i) require any Governmental Approval or violate any Applicable Law relating to any Loan Party; (ii) conflict with, result in a breach of or constitute a default under the organizational documents of any Loan Party, or any indenture, agreement or other instrument to which any Loan Party is a party or by which it or any of its respective properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any Loan Party.

(c)    No Default.  No Default or Event of Default has occurred and is continuing as of the date hereof nor will exist immediately after giving effect to this Amendment.

Section 5.    Reaffirmation of Representations.  Each of the Parent and the Borrower hereby represents, repeats and reaffirms all representations and warranties made by such Person to the Agent and the Lenders in the Term Loan Agreement and the other Loan Documents to which such Person is a party on and as of the date hereof with the same force and effect as if such representations and warranties were set forth in this Amendment in full except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and accurate on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

Section 6.    Certain References.  Each reference to the Term Loan Agreement in any of the Loan Documents shall be deemed to be a reference to the Term Loan Agreement as amended by this Amendment.  This Amendment shall constitute a Loan Document.

Section 7.    Expenses. The Borrower hereby agrees to reimburse the Agent upon demand for all costs and expenses (including attorneys’ fees) incurred by the Agent in connection with the preparation, 

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negotiation and execution of this Amendment and the other agreements and documents executed and delivered in connection herewith.

Section 8.    Benefits.  This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

Section 9.    GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

Section 10.    Effect.  Except as expressly herein amended, the terms and conditions of the Term Loan Agreement and the other Loan Documents remain in full force and effect.  Except as set forth in this Amendment, this Amendment shall not be construed to be a waiver or amendment of any of the other terms and conditions of the Term Loan Agreement and the other Loan Documents or to limit, impair or otherwise affect the rights and remedies of the Lenders under the Loan Documents. The amendments contained herein shall be deemed to have prospective application only, unless otherwise specifically stated herein.  

Section 11.  Counterparts.  This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.

[Signatures on Next Page]

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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Term Loan Agreement to be executed as of the date first above written.

        
	
		
	CORPORATE OFFICE PROPERTIES, L.P.

	By:  Corporate Office Properties Trust, its sole 
general partner

	 
	 

	By:
	/s/ Anthony Mifsud

	 
	Name: Anthony Mifsud

	 
	Title: Executive Vice President

	
		
	CORPORATE OFFICE PROPERTIES TRUST

	 
	 

	By:
	/s/ Anthony Mifsud

	 
	Name: Anthony Mifsud

	 
	Title: Executive Vice President

[Signatures Continued on Next Page]

[Signature Page to Second Amendment to Term Loan Agreement 
with Corporate Office Properties, L.P.]
	
		
	CAPITAL ONE, NATIONAL ASSOCIATION, as Agent and as a Lender

	By:
	/s/ Frederick H. Denecke 

	 
	Name: Frederick H. Denecke

	 
	Title: Senior Vice President

	
		
	PNC BANK, NATIONAL ASSOCIATION

	By:
	/s/ William R. Lynch III

	 
	Name: William R. Lynch III

	 
	Title: Senior Vice President

        	
		
	REGIONS BANK

	By:
	/s/ Kyle D. Upton

	 
	Name: Kyle D. Upton

	 
	Title: Vice President

        	
		
	U.S. BANK NATIONAL ASSOCIATION
 

	By:
	/s/ Timothy Tillman

	 
	Name: Timothy Tillman

	 
	Title: Senior Vice President

	
		
	TD BANK, N.A.

	By:
	/s/ Jireh Kore

	 
	Name: Jireh Kore

	 
	Title: Vice President

	
		
	Manufacturers and Traders Trust Company

	By:
	/s/ Isidoros Roros

	 
	Name: Isidoros Roros

	 
	Title: Vice President

            	
		
	Branch Banking and Trust Company
     

	By:
	/s/ Brad Bowen 

	 
	Name: Brad Bowen

	 
	Title: Vice President

                        

                    

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Exhibit A

REAFFIRMATION OF OBLIGATIONS

December 18, 2017

The undersigned (the “Guarantor”) hereby (a) reaffirms its continuing obligations owing under the Guaranty dated as of December 17, 2015, executed and delivered by the Guarantor (the “Guaranty”) and (b) agrees that the Second Amendment to Term Loan Agreement dated the date hereof (the “Amendment”) amending the Term Loan Agreement dated as of December 17, 2015, as amended by that certain First Amendment to Term Loan Agreement dated as of September 15, 2016 (as amended, restated, supplemented and/or otherwise modified from time to time and as in effect immediately prior to the date hereof, the “Term Loan Agreement”), by and among CORPORATE OFFICE PROPERTIES, L.P., a limited partnership formed under the laws of the State of Delaware (the “Borrower”), CORPORATE OFFICE PROPERTIES TRUST, a real estate investment trust formed under the laws of the State of Maryland (the “Parent”), each of the Lenders party thereto, and CAPITAL ONE, NATIONAL ASSOCIATION, as Administrative Agent (the “Agent”), and the transactions contemplated by the Amendment, do not in any way affect the validity and enforceability of the Guaranty, or reduce, impair or discharge the obligations of such Guarantor thereunder.

The Guarantor represents and warrants to the Agent and the Lenders that the execution, delivery, and performance of this Reaffirmation of Obligations has been authorized by all requisite action on the part of such Guarantor and will not violate such Guarantor’s organizational or governing documents.

The Guarantor further agrees that references to the Term Loan Agreement contained in any Loan Document (as defined in the Term Loan Agreement) shall be deemed to be references to the Term Loan Agreement, as amended by the Amendment.

This Reaffirmation of Obligations shall be construed in accordance with and be governed by the laws (without giving effect to the conflict of law principles thereof) of the State of New York.

[Signature on Next Page]

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IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Reaffirmation of Obligations as of the date first above written.

CORPORATE OFFICE PROPERTIES TRUST

By:     
Name:  
      Title:  

- 1 -Exhibit 10.1

 

 

Long-Term Incentive Plan

 

2018-2020

 

Adopted: February 2018

 

 

Long-Term Incentive Plan

 

Objectives

 

Eagle Bancorp, Inc. (the “Company”) is committed to rewarding executive officers of the Company and its principal subsidiary EagleBank for their contributions to the Company’s success. The Company’s long-term incentive plan (LTIP) is adopted under, and constitutes the basis under which the Company will establish the equity based compensation awarded to executive officers pursuant to the Company’s then-applicable, shareholder approved, equity compensation plan (the “Stock Plan”), and is part of a total compensation package, which includes base salary, annual cash incentives (under the Senior Executive Incentive Plan — “SEIP”), long-term equity incentives and benefits. The objectives of this Long-Term Incentive Plan are to:

 

·             Focus and reward participants for driving long-term, sustained performance.

·             Align executive officers with shareholder interests.

·             Enable the Company and its subsidiaries to attract and retain talent needed to drive the Company’s success.

·             Ensure sound risk management by providing a balanced view of performance and aligning rewards with the time horizon of risk.

·             Position EagleBank’s total compensation to be competitive with market for meeting performance goals.

·             Work with the SEIP to ensure a proper balance of performance goals and time horizons for overall performance and compensation.

 

Participation

 

·             Participants are the executive officers of the Company and EagleBank, as designated by the Board of Directors.

·             Time-Vested Awards: New participants hired July 1 or later will not be eligible to receive awards of RS for the year in which they are hired but will become eligible for the next cycle.

·             Performance-Vested Awards: New participants must be an executive officer on the first business day of the year to be eligible for performance-vested awards (made in the first quarter) relating to the forthcoming three-year period. [Participants must be an active employee as of the last day of the applicable performance period and on the date stock vests to receive the benefit of an award.

·             Participant’s performance must be in good standing (minimum rating of 3) for the PRSU Performance Period and for the year of grant for Restricted Shares..

 

Program Components

 

The LTIP provides the opportunity to receive shares of time vested restricted stock (“RS”) and performance-vested restricted stock units (“PRSU”), to balance goals to reward for performance, retain executives and align executives’ interests with shareholders. Each year, participants are eligible to receive:

 

·                  Performance Shares (PSRU) (for 2018 this will be 50% of award value); PRSUs are performance-based and align executives with shareholder interests since award value is based on Company performance-based metrics. PRSUs represent the right to receive shares of the Company’s common stock upon certification of the achievement of specified performance based metrics over a three year performance and vesting cycle (the “performance period”).

·                  Restricted Stock (RS) (for 2018 this will be 50% of award value); RS supports executive ownership and retention objectives since there is always some value retained (even if performance metric minimums are not met).

 

1

 

·                  PRSUs are granted at target, with the potential to achieve vesting at or above a lower (50% of target) “threshold” level, or to achieve vesting up to a “stretch/maximum” (150% of target) level (with the award value is focused on achievement of future performance based on predefined performance measures). RS awards may be granted at target or could vary to allow for recognition/variation of Company and Individual performance.

 

The number of Restricted Stock and PRSU shares will be determined by dividing the value of the compensation award by the stock price on the date of grant (utilizing the formula contained in the applicable Stock Plan then in effect). The number of Performance Shares (PRSUs) will be granted at target but will be settled in Common Stock after the three year performance and vesting period.

 

Performance units promote pay for performance alignment and are intended to reward future performance since the awards are only paid out when predefined performance goals are met. Performance units are earned and cliff vest after three years. Earned performance units are paid within 75 days after the end of the Performance Period or as soon as practicable thereafter if the measurement data was not yet readily available, and vest on the date the Compensation Committee certifies the performance data..

 

The grants of RS and PRSUs under this Plan are under and a part of the applicable Company Stock Plan and not outside thereof, and are subject to all terms and conditions of such Plan.

 

Individual grant agreements will be provided to each individual upon grant and will specify the terms and conditions of the grant.

 

Participation in the Plan does not guarantee an award at the target levels detailed in Appendix A. The Compensation Committee of the Company (the “Committee”) will have the discretion to grant above or below target for RS to allow for appropriate reflection of the Company’s performance, business environment, risk mitigating factors, affordability and individual performance and contribution.

 

Award Opportunities

 

Each participant will have a target equity award that reflects being a part of a competitive total compensation package for his/her role. LTIP targets will be communicated to each participant at the start of each performance period. (See Appendix A for current target opportunities.) LTIP targets are estimates only, subject to adjustment as set forth herein and are not committed amounts until awards are actually made and vested.

 

Restricted Stock (Time Vested) Shares — How They Work

 

RS grants are awarded based on a holistic view of performance that recognizes individual and Company performance. Actual awards can vary +/- 25% from target to reflect performance. Once awarded, RS vests one-third per year for three years, beginning on the first anniversary after the grant date.

 

Performance Shares — How they Work

 

Performance Period

 

Each performance cycle (i.e., performance period) is three years. Performance goals and target opportunities are communicated at the start of each performance period. For the 2018 Plan, the performance period will be January 1, 2018 to December 31, 2020. The payout of the award is contingent on actual performance of pre-defined measures at the end of the performance period. The result is a rolling series of annual awards, each earned over three years.

 

2

 

The diagram below shows how the annual award process results in overlapping cycles.

 

 

Performance Measures

 

The Committee shall establish one or more Performance Goals for each grant of PRSUs. The selected performance measures are intended to reflect the Company’s strategic plan as well as shareholder expectations.

 

It is intended that target goals will reflect performance that is attainable with reasonable stretch. Stretch (maximum) goals will reflect challenge goals that require superior performance. Performance of each goal is measured independently.

 

Actual payout after three years will be interpolated on a straight-line basis between threshold, target and maximum to reward incremental performance. Performance will range from 50% of target for achieving threshold performance to 150% of target for achieving stretch performance.

 

The table below establishes two performance goals and ranges for 2018.

 

	
Measures
    	
 
    	
Weight
    	
 
    	
Threshold
    	
 
    	
Target
    	
 
    	
Stretch/Maximum
    
	
Earnings Per   Share compared to approved Budget
    	
 
    	
50%
    	
 
    	
75% of Budget
    	
 
    	
At Budget
    	
 
    	
125% of Budget
    
	
Average Annual   Return on Average Assets compared to Index
    	
 
    	
50%
    	
 
    	
Median
    	
 
    	
62.5% Percentile
    	
 
    	
75% Percentile
    
	
Payout Range (%   of Target)
    	
 
    	
100%
    	
 
    	
50%
    	
 
    	
100%
    	
 
    	
150%
    

 

The Index is the KBW Regional Bank Index (KRX) .

 

EPS G shall be measured (after adjustment for intervening share issuances) by determining each year’s EPS and then averaging the comparisons to budget over three years.

 

ROAA shall be measured by determining each year’s ROAA and then averaging the three years.

 

3

 

Awards Payouts

 

The Company’s performance in respect of each of the performance measures will be calculated following the end of each performance cycle to determine the portion of an award of PRSUs that has vested. Vested PRSUs will be settled in the Company’s common stock.

 

In light of extraordinary regional economic or business circumstances of a force majeure nature (such as a result of a terrorist act or new government sequestration), the grant may provide that the Committee retains the right to apply positive discretion to vesting as appropriate to normalize for such extraordinary regional circumstance. The factors listed above will be considered before vesting is approved by the Committee.

 

Terms and Conditions

 

This section provides a general overview of the major terms and conditions for the Long-Term Incentive Plan. Information represented below is subject to change and does not constitute a binding agreement.

 

Effective Date

 

This LTIP is effective initially to reflect a performance period of January 1, 2018 to December 31, 2020. The LTIP will be reviewed annually by the Company’s Compensation Committee of the Board to ensure proper alignment with the Company’s business objectives. The Company retains the rights as described below to amend, modify or discontinue the Plan at any time during the specified period regarding future grants. The Plan will remain in effect until outstanding awards are vested.

 

Plan Administration

 

The LTIP is authorized by the Board and administered by the Compensation Committee. The Compensation Committee has the sole authority to interpret the LTIP and to make or nullify any rules and procedures, as necessary, for proper administration of the LTIP. The Compensation Committee will make all final determinations regarding long-term incentive awards to participants. Any determinations by the Compensation Committee will be final and binding on all participants. The Compensation Committee may, in its sole discretion, terminate or modify the LTIP, however, no amendment or termination of this LTIP will adversely affect an outstanding award.

 

Plan Changes or Discontinuance

 

The Company has developed the LTIP on the basis of existing business, market and economic conditions; current services; and staff assignments. If substantial changes occur that affect these conditions, services, assignments, or forecasts (for example, mergers, dispositions or other corporate transactions, changes in laws or accounting principles or other events that would in the absence of some adjustment, frustrate the intended operation of this arrangement), the Company may add to, amend, modify or discontinue any of the terms or conditions of the LTIP at any time regarding future grants.

 

Termination of Employment

 

To encourage executive retention, a participant must be an active employee of the Company or Bank on the vesting date. (See exceptions for death, disability, retirement, termination for good reason or without cause and change in control below). PRSUs will be forfeited by participants who terminate employment during the performance cycle except as otherwise set forth in this LTIP.

 

Death, Disability, Retirement

 

If a participant ceases to be employed by the Company or Bank due to death, disability or retirement (as defined in the applicable Stock Plan), his/her RS shares will immediately vest, and his/her performance-

 

4

 

vested PRSUs vesting will be the greater of (i) based on actual performance measured on the most recent completed fiscal quarter, without proration or (ii) based on an assumed “at target” performance for the entire Performance Period, but then prorated for the period between grant and DDR.  Pro ration shall be computed based on full months, including any partial month of service.

 

Change in Control (CIC)

 

Upon a change in control (as defined in, and subject to any conditions contained in, the Stock Plan then in effect), (a) an executive’s RS shares will vest and (b) his/her performance-vested PRSUs vesting will be the greater of (i) based on actual performance measured on the most recent completed fiscal quarter, without proration or (ii) based on an assumed “at target” performance for the entire Performance Period, but then prorated for the period between grant and CIC.  Pro ration shall be computed based on full months, including any partial month of service.

 

Clawback

 

All awards under this Plan are subject to clawback in accordance with the requirements of the applicable award agreement and applicable Stock plan, applicable law and regulation and the listing requirements of any exchange on which the Company’s common stock is listed for trading.

 

Ethics and Interpretation

 

If there is any ambiguity as to the meaning of any terms or provisions of the Plan or any questions as to the correct interpretation of any information contained therein, the interpretation expressed by the Compensation Committee will be final and binding.

 

The altering, inflating, and/or inappropriate manipulation of performance/financial results or any other infraction of recognized ethical business standard, will subject a participant to disciplinary action up to and including termination of employment. In addition, any incentive compensation under the Plan to which the participant would otherwise be entitled may be revoked.

 

Miscellaneous

 

The LTIP will not be deemed to give any participant the right to be retained in the employ of the Bank, nor will the LTIP interfere with the right of the Company or Bank to discharge any participant at any time for any reason. Receipt of an award in one year does not guarantee the eligibility of a participant to receive, or entitle a participant to receive, an award in any subsequent year.

 

Each provision in this LTIP is severable, and if any provision is held to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not, in any way, be affected or impaired thereby.

 

This incentive plan and the transactions and payments hereunder shall, in all respects, be governed by, and construed and enforced in accordance with the laws of the state of Maryland (without regard to its conflicts of laws provisions).

 

5

 

Appendix A
 2018 LTI Target Opportunity

 

	
Tier(1)
    	
 
    	
Target LTI
   RS and PRSU
   (% of Salary)
    	
 
    
	
Tier 1
    	
 
    	
300
    	
%
    
	
Tier 2
    	
 
    	
155
    	
%
    
	
Tier 3
    	
 
    	
145
    	
%
    
	
Tier 4
    	
 
    	
125
    	
%
    
	
Tier 5
    	
 
    	
110
    	
%
    

 

(1)           Tiers reflect SEIP Tiers.

 

6

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