Document:

Exhibit 10.26

 

CHANGE IN CONTROL AGREEMENT

 

AGREEMENT made as of this                day of                           , 2010 by and among Danvers Bancorp, Inc., a Delaware company (the “Company”), and its subsidiary, Danversbank, a Massachusetts savings bank with its main office in Danvers, Massachusetts (the “Bank”) (the Bank and the Company shall be hereinafter collectively referred to as the “Employers”), and Michael W. McCurdy (the “Executive”).

 

1.             Purpose.  The Company considers it essential to the best interests of its stockholders to promote and preserve the continuous employment of key management personnel.  The Board of Directors of the Company (the “Board”) recognizes that, as is the case with many corporations, the possibility of a Change in Control (as defined in Section 2 hereof) exists and that such possibility, and the uncertainty and questions that it may raise among management, may result in the departure or distraction of key management personnel to the detriment of the Company and its stockholders.  Therefore, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Employers’ key management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control.  Nothing in this Agreement shall be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Employers, the Executive shall not have any right to be retained in the employ of the Employers.

 

2.             Change in Control.  A “Change in Control” shall be deemed to have occurred upon the occurrence of any one of the following events:

 

(a)           any “Person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its subsidiaries), together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Act) of such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 25 percent or more of the combined voting power of the Company’s then outstanding securities having the right to vote in an election of the Company’s Board of Directors (“Voting Securities”) (in such case other than as a result of an acquisition of securities directly from the Company); or

 

(b)           persons who, as of the date hereof, constitute the Board (the “Incumbent Directors”) cease for any reason, including, without limitation, as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a majority of the Board, provided that any person becoming a director of the Company subsequent to the date hereof shall be considered an Incumbent Director if such person’s election was approved by or such person was nominated for election by either (A) a vote of at least a majority of the Incumbent Directors or (B) a vote of at least a majority of the Incumbent Directors who are members of a nominating committee comprised, in the majority, of Incumbent Directors; but provided further, that any such person whose initial assumption of office is in connection with an actual or threatened

 

 

election contest relating to the election of members of the Board of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation, shall not be considered an Incumbent Director; or

 

(c)           the consummation of (A) any consolidation or merger of the Company where the stockholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate more than 50 percent of the voting shares of the Company issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any), or (B) any sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company; or

 

(d)           the approval by the Company’s stockholders of any plan or proposal for the liquidation or dissolution of the Company.

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred for purposes of the foregoing clause (a) solely as the result of an acquisition of securities by the Company that, by reducing the number of shares of Voting Securities outstanding, increases the proportionate number of shares of Voting Securities beneficially owned by any person to 25 percent or more of the combined voting power of all then outstanding Voting Securities; provided, however, that if any person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns 25 percent or more of the combined voting power of all then outstanding Voting Securities, then a “Change in Control” shall be deemed to have occurred for purposes of the foregoing clause (a).

 

3.             Terminating Event.  A “Terminating Event” shall mean any of the events provided in this Section 3:

 

(a)           Termination by the Employers.  Termination by the Employers of the employment of the Executive with the Employers for any reason other than for Cause, death or Disability.  For purposes of this Agreement, “Cause” shall mean:

 

(i)            conduct by the Executive constituting a material act of willful misconduct in connection with the performance of his duties, including, without limitation, misappropriation of funds or property of the Employers other than the occasional, customary and de minimis use of Employers’ property for personal purposes; or

 

(ii)           the commission by the Executive of any felony or a misdemeanor involving moral turpitude, deceit, dishonesty or fraud, or any conduct by the Executive that would reasonably be expected to result in material injury to the Employers if he were retained in his position; or

 

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(iii)          continued, willful and deliberate non-performance by the Executive of his duties to the Employers (other than by reason of the Executive’s physical or mental illness, incapacity or disability) which has continued for more than 30 days following written notice of such non-performance from the Chief Executive Officer; or

 

(iv)          a violation by the Executive of the Employers’ employment policies which has continued following written notice of such violation from the Chief Executive Officer; or

 

(v)           willful failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Employers to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the willful inducement of others to fail to cooperate or to produce documents or other materials; or

 

(vi)          removal or prohibition of the Executive from participating in the conduct of the Employers’ affairs by order issued under applicable law and regulations by a federal or state banking agency having authority over the Employers.

 

A Terminating Event shall not be deemed to have occurred pursuant to this Section 3(a) solely as a result of the Executive being an employee of any direct or indirect successor to the business or assets of the Company, rather than continuing as an employee of the Company following a Change in Control.  For purposes of clauses (i), (iii) and (v) hereof, no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive without reasonable belief that the Executive’s act, or failure to act, was in the best interests of the Employers.  For purposes hereof, the Executive will be considered “Disabled” if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from his duties to the Employers on a full-time basis for 180 calendar days in the aggregate in any 12-month period.

 

(b)           Termination by the Executive for Good Reason.  Termination by the Executive of the Executive’s employment with the Employers for Good Reason.  For purposes of this Agreement, “Good Reason” shall mean that the Executive has complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following events:

 

(i)            a material diminution, not consented to by the Executive, in the Executive’s responsibilities, authorities or duties, from the responsibilities, authorities or duties exercised by the Executive immediately prior to the Change in Control; or

 

(ii)           a material diminution in the Executive’s annual base salary as in effect on the date hereof or as the same may be increased from time to time hereafter except for across-the-board reductions similarly affecting all or substantially all management employees; or

 

(iii)          the relocation of the Employers’ offices at which the Executive is principally employed immediately prior to the date of a Change in Control (the “Current Offices”) to any other location more than 50 miles from the Current Offices, or the

 

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requirement by the Employers for the Executive to be based at a location more than 50 miles from the Current Offices, except for required travel on the Employers’ business to an extent substantially consistent with the Executive’s business travel obligations immediately prior to the Change in Control; or

 

(iv)          the material breach of this Agreement by the Employers.

 

“Good Reason Process” shall mean that (i) the Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) the Executive notifies the Employers in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition; (iii) the Executive cooperates in good faith with the Employers’ efforts, for a period not less than 30 days following such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) the Executive terminates his employment within 60 days after the end of the Cure Period.  If the Employers cure the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

 

4.             Change in Control Payment.  In the event a Terminating Event occurs within 12 months after a Change in Control, the following shall occur:

 

(a)           the Employers shall pay to the Executive an amount equal to three times the sum of (i) the Executive’s annual base salary in effect immediately prior to the Terminating Event (or the Executive’s annual base salary in effect immediately prior to the Change in Control, if higher) and (ii) the greater of Executive’s target cash bonus for the year of termination or the Executive’s highest cash bonus earned in the three years preceding the Change in Control, payable in one lump-sum payment no later than three days following the Date of Termination; and

 

(b)           subject to the Executive’s copayment of premium amounts at the active employees’ rate, the Executive shall continue to participate in the Employers’ group health, dental and vision program for 36 months; provided, however, that the continuation of health benefits under this Section shall reduce and count against the Executive’s rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).

 

(c)           Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the Executive is considered a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment or benefit that the Executive becomes entitled to under this Agreement is considered deferred compensation subject to interest, penalties and additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable or benefit shall be provided prior to the date that is the earlier of (i) six months and one day after the Executive’s separation from service, or (ii) the Executive’s death.  The parties intend that this Agreement will be administered in accordance with Section 409A of the Code.  The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits

 

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provided hereunder without additional cost to either party.  Notwithstanding anything in this Agreement to the contrary, to the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall only be payable upon the Executive’s “separation from service.”  The term “separation from service” shall mean the Executive’s “separation from service” from the Bank or the Company, an affiliate of the Bank or the Company or a successor entity within the meaning set forth in Section 409A of the Code, determined in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).  The Employers make no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

 

5.             Additional Limitation.   Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Employers to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Severance Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the benefits payable under this Agreement shall be reduced (but not below zero) to the extent necessary so that the maximum Severance Payments shall not exceed the Threshold Amount.  To the extent that there is more than one method of reducing the payments to bring them within the Threshold Amount, the Severance Payments shall be reduced in the following order:  (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits.  To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order.

 

For the purposes of this Section 5, “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00); and “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by the Executive with respect to such excise tax.

 

6.             Term.  This Agreement shall take effect on the date first set forth above and shall terminate upon the earliest of (a) the termination by the Employers of the employment of the Executive for Cause or the failure by the Executive to perform his full-time duties with the Employers by reason of his death or Disability, (b) the resignation or termination of the Executive’s employment for any reason prior to a Change in Control, (c) the termination of the Executive’s employment with the Employers after a Change in Control for any reason other than the occurrence of a Terminating Event, or (d) the date which is 12 months after a Change in Control.

 

7.             Withholding.  All payments made by the Employers under this Agreement shall be net of any tax or other amounts required to be withheld by the Employers under applicable law.

 

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8.             Notice and Date of Termination.

 

(a)           Notice of Termination.  After a Change in Control and during the term of this Agreement, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with this Section 8.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and the Date of Termination.

 

(b)           Date of Termination.  “Date of Termination,” with respect to any purported termination of the Executive’s employment after a Change in Control and during the term of this Agreement, shall mean the date specified in the Notice of Termination.  In the case of a termination by the Employers other than a termination for Cause (which may be effective immediately), the Date of Termination shall not be less than 30 days after the Notice of Termination is given.  In the case of a termination by the Executive, the Date of Termination shall not be less than 30 days from the date such Notice of Termination is given.  Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Employers, the Employers may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Employers for purposes of this Agreement.

 

9.             No Mitigation.  The Employers agree that, if the Executive’s employment by the Employers is terminated during the term of this Agreement, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Employers pursuant to Section 4 hereof.  Further, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Employers or otherwise.

 

10.           Arbitration of Disputes.  Any controversy or claim arising out of or relating to this Agreement or the breach thereof or otherwise arising out of the Executive’s employment or the termination of that employment (including, without limitation, any claims of unlawful employment discrimination whether based on age or otherwise) shall, to the fullest extent permitted by law, be settled by arbitration in any forum and form agreed upon by the parties or, in the absence of such an agreement, under the auspices of the American Arbitration Association (“AAA”) in Boston, Massachusetts in accordance with the Employment Dispute Resolution Rules of the AAA, including, but not limited to, the rules and procedures applicable to the selection of arbitrators.  In the event that any person or entity other than the Executive or the Employers may be a party with regard to any such controversy or claim, such controversy or claim shall be submitted to arbitration subject to such other person or entity’s agreement.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  This Section 10 shall be specifically enforceable. Notwithstanding the foregoing, this Section 10 shall not preclude either party from pursuing a court action for the sole purpose of obtaining a temporary restraining order or a preliminary injunction in circumstances in which such relief is appropriate; provided that any other relief shall be pursued through an arbitration proceeding pursuant to this Section 10.

 

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11.           Consent to Jurisdiction.  To the extent that any court action is permitted consistent with or to enforce Section 10 of this Agreement, the parties hereby consent to the jurisdiction of the Superior Court of the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts.  Accordingly, with respect to any such court action, the Executive (a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

 

12.           Integration.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes in all respects all prior agreements between the parties concerning such subject matter.

 

13.           Successor to the Executive.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees.  In the event of the Executive’s death after a Terminating Event but prior to the completion by the Employers of all payments due him under Section 4 of this Agreement, the Employers shall continue such payments to the Executive’s beneficiary designated in writing to the Employers prior to his death (or to his estate, if the Executive fails to make such designation).

 

14.           Enforceability.  If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

15.           Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

16.           Notices.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by registered or certified mail, postage prepaid, to the Executive at the last address the Executive has filed in writing with the Employers, or to the Employers at its main office, attention of the Board of Directors.

 

17.           Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and by duly authorized representatives of the Employers.

 

18.           Effect on Other Plans.  An election by the Executive to resign after a Change in Control under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Employers’ benefit plans, programs or policies.  Nothing in this Agreement shall be construed to limit the rights of the Executive under the Employers’ benefit plans, programs or policies except

 

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as otherwise provided in Section 5 hereof, and except that the Executive shall have no rights to any severance benefits under any Company or Bank severance pay plan.  In the event that the Executive is party to an employment agreement with the Employers providing for change in control payments or benefits, the Executive shall receive the benefits under only one agreement, which shall be the agreement pursuant to which the Executive would receive the greatest aggregate amount (calculated on an after-tax basis).

 

19.           Governing Law.  This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of laws principles of such Commonwealth.  With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the First Circuit.

 

20.           Successors to Company.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.  Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a breach of this Agreement and shall constitute Good Reason if the Executive elects to terminate employment.

 

21.           Gender Neutral.  Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.

 

22.           Allocation of Obligations Between Employers.  The obligations of the Employers under this Agreement are intended to be the joint and several obligations of the Bank and the Company, and the Employers shall, as between themselves, allocate these obligations in a manner agreed upon by them.

 

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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company by its duly authorized officer, and by the Executive, as of the date first above written.

 

	
 
    	
DANVERS   BANCORP, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DANVERSBANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Michael   W. McCurdy
    

 

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  Exhibit 10.12    
    

Eagle Bancorp, Inc.

Senior Executive Annual Incentive Plan  

 January 2010  

 Eagle Bank Executive Annual Incentive Plan

Plan Document and Administrative Guidelines  

        This Annual Incentive Plan is for the Executive Management Team of EGBN. The annual incentive plan is designed to compensate plan
participants for the attainment of specified overall bank and individual goals. The objective is to align the interests of senior executives with the interests of the Bank in obtaining superior
financial results. 

        The
Plan operates on a calendar year basis (January 1st to December 31st). This same calendar year is the performance-period for
determining the amount of incentive awards to be paid following year end. 

 PERFORMANCE CRITERIA  

	•
	Bank Performance—For all plan participants eighty percent
(80%) of the annual incentive will be based on overall bank performance. The Compensation Committee will approve bank wide goals for each senior staff member on an annual basis. In addition, they will
review the Bank's annual incentive programs to ensure they do not encourage risky behavior.   

	•
	Individual Performance—For participants in
tiers II-V, individual performance as determined by annual performance evaluations will be used to determine twenty percent (20%) of the plan participant's incentive payout. 

 PERFORMANCE STANDARDS  

        For each performance factor (Overall Bank, and Individual), an appropriate standard of performance must be established with three
essential performance points: 

	•
	Threshold
Performance:  That level of performance for each factor below which no award will be given. Threshold performance will be 85% of target
expectations.   

	•
	Target
Performance:  The level of performance for each factor at budgeted goals. The budgeted, or expected, level of performance is based upon
historical data, and management's best judgment as to expected performance during the upcoming performance period. The Compensation Committee will approve bank wide goals on an annual basis.  

	•
	Maximum Expected
Performance:  The maximum performance level is 125% of target. There will be no payouts above the maximum level. In addition, while a
TARP participant, maximum payouts may be reduced to ensure no payout exceeds 1/3 of total compensation. 

 PLAN PAYOUTS  

        The Net Operating Income, Threshold level, must be met for there to be any payment made for the Bank Performance category. Participants
will still be eligible to receive a payout for Individual Performance. 

        After
all performance results are available at year-end, the awards will be calculated for each Plan participant and approved by the CEO, Compensation Committee and Board of
Directors. The Compensation Committee will reserve the discretion to pay out annual incentives in cash or stock. While EGBN is a TARP participant, stock payouts will be made solely in restricted stock
which will not fully vest until EGBN is no longer a TARP participant. In addition, while a TARP participant, maximum payouts may be reduced to ensure no payout exceeds 1/3 of total
compensation or as specified in final guidance from the Treasury. 

        The
actual award payouts will be calculated using a ratable approach, where award payouts are calculated as a proportion of minimum, target and maximum award opportunities. If actual
performance falls between a performance level, the payout will also fall between the pre-defined performance level on a pro-rated basis. A Plan participant must be an employee
at the time of the award payout in order to receive a payout. The result of the performance criteria is calculated as a percent of base salary for 

participants
during the current Plan year. Plan payouts will be made no later than 2.5 months after the year end. 

        EGBN
has the right to recover any incentive payments that were made based on material misstatements or inaccurate performance metrics. 

 PLAN ADMINISTRATION  

         Responsibilities of the Compensation Committee and the Board of Directors:    The Compensation Committee and the Board has the
responsibility to
approve, amend, or terminate the Plan as necessary. The actions of the Compensation Committee and the Board shall be final and binding on all parties. The Board shall also review the operating rules
of the Plan on an annual basis and revise these rules if necessary. The Board also has the sole ability to decide if an extraordinary event(1) totally outside of management's influence, be it a
windfall or a shortfall, has occurred during the current Plan year, and whether the figures should be adjusted to neutralize the effects of such events. After approval by the Board, management shall,
as soon as practical, inform each of the Plan participants under the Plan of their potential award under the operating rules adopted for the Plan year. 

	(1)
	An
extraordinary event may include a merger, acquisition or divestiture that was not outlined in strategic plan, investment gains or losses, changes in
capital cost structure, unplanned branch openings, unexpected and strong sales oriented addition to staff, and increase of 50% or more of collection expenses. 

         Responsibilities of the CEO:    The CEO of the Company administers the program directly and provides liaison to the Compensation Committee
and the
Board, including the following specific responsibilities: recommend the Plan participants to be included in the Plan each year. This includes determining if additional employees should be added to the
Plan and if any Plan participants should be removed from participating in the Plan. Provide recommendations for the award opportunity amounts at target and maximum for tiers II and below. The
CEO will review the objectives and evaluations, adjust guideline awards for performance and recommend final awards to the Compensation Committee. Provide other appropriate recommendations that may
become necessary during the life of the plan. This could include such items as changes to Plan provisions. 

         Amendments and Plan Termination:    The Company has developed the Plan 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, the Company may add to, amend, modify or discontinue any of the terms
or conditions of the Plan at any time with approval from the Compensation Committee and the Board of Directors. The Compensation Committee and the Board of Directors may, at its sole discretion,
terminate, change or amend any of the Plan as it deems appropriate. 

 MISCELLANEOUS  

         Reorganization:    If the Company shall merge into or consolidate with another company, or reorganize, or sell substantially all of its
assets to
another company, firm, or person such succeeding or continuing company, firm, or person shall succeed to, assume and discharge the obligations of the Company under this Plan. Upon the occurrence of
such event, the term "Company" as used in this Plan shall be deemed to refer to the successor or survivor company. 

         Tax Withholding:    The Company shall withhold any taxes that are required to be withheld from the benefits provided under this Plan.

         Designated Fiduciary:    The Company shall be the named fiduciary and Plan Administrator under the Plan. The named fiduciary may delegate
to others
certain aspects of the management and operation responsibilities of the Plan including the employment of advisors and the delegation of ministerial duties to qualified individuals. 

         No Guarantee of Employment:    This Plan is not an employment policy or contract. It does not give the Plan participant the right to
remain an employee
of the Company, nor does it interfere with the Company's right to discharge the Plan participant. 

 INCENTIVE RANGES, AND AWARD OBJECTIVES  

 Eagle Bancorp, Inc.  

 

 

																					
	 
	 	 
	 	 
	 	Proposed Incentive Ranges 	 	Award Objectives 	 
	Tier

 
	 	Name 	 	Position 	 	Threshold 	 	Target 	 	Maximum 	 	Bank 	 	Ind* 	 
	 I
	 	Ron Paul	 	CEO	 	 	17.5	%	 	35.0	%	 	70.0	%	 	65	%	 	35	%
	 II
	 	Susan Riel	 	Sr. EVP & COO of the Bank	 	 	10.0	%	 	20.0	%	 	40.0	%	 	80	%	 	20	%
	 III
	 	Martha Foulon-Tonat	 	EVP & Chief Lending Officer	 	 	12.5	%	 	25.0	%	 	40.0	%	 	80	%	 	20	%
	 IV
	 	Thomas Murphy	 	President of Retail Banking	 	 	10.0	%	 	20.0	%	 	30.0	%	 	80	%	 	20	%
	 V
	 	Janice Williams	 	Chief Credit Officer	 	 	10.0	%	 	20.0	%	 	30.0	%	 	80	%	 	20	%
	 VI
	 	James Langmead	 	Chief Financial Officer	 	 	5.0	%	 	10.0	%	 	15.0	%	 	80	%	 	20	%
	 VII
	 	Michael Flynn	 	COO of Eagle Bancorp	 	 	5.0	%	 	10.0	%	 	15.0	%	 	80	%	 	20	%
	 
	 	 	 	 	 	 	Percent of Salary	 	 	Weighting of Award	 

 

 	NOTE:
	Threshold, Target and Maximum levels are based on the type of responsibility the
members of senior management have and the comparisons made to peers in the Overall Compensation Review previously provided and reviewed by the Compensation Committee. Additionally, these percentages
have been used to bring certain members of senior management's base salary to competitive levels.

        Threshold,
target and maximum payout thresholds have been established for each tier in order to budget costs associated with this program. 

        Individual
goals may reflect a discretionary factor from the Board's review of performance. 

 2010 Proposed Senior Management Incentive Measurements  

 

 

																										
	 
	 	CEO 	 	COO 	 	President

Retail

Banking 	 	COO/

HC 	 	CLO 	 	CFO 	 	CCO 	 	Target 	 
	 Net Operating Income
	 	 	50	%	 	12	%	 	12	%	 	20	%	 	10	%	 	16	%	 	12	%	$	15,283,626	 
	 Net Interest Margin
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	16	%	 	 	 	 	3.97	%
	 Interest Rate on Loans
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	15	%	 	 	 	 	 	 	 	*	 
	 Interest on Investments
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	10	%	 	 	 	 	3.63	%
	 Interest paid on Liabilities
	 	 	 	 	 	 	 	 	8	%	 	15	%	 	 	 	 	12	%	 	 	 	 	*	 
	 Total Loan Growth
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	17	%	 	 	 	 	 	 	 	*	 
	 Core Deposit Growth from Lenders
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	10	%	 	 	 	 	 	 	 	*	 
	 DDAs/Total Deposits
	 	 	 	 	 	 	 	 	16	%	 	 	 	 	 	 	 	 	 	 	 	 	 	*	 
	 MMAs/Total Deposits
	 	 	 	 	 	 	 	 	16	%	 	 	 	 	 	 	 	 	 	 	 	 	 	*	 
	 Service Charge Income
	 	 	 	 	 	16	%	 	16	%	 	 	 	 	 	 	 	 	 	 	 	 	$	3,551,940	 
	 Non Interest Loan Income
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	15	%	 	 	 	 	 	 	$	1,467,227	 
	 ALLL
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	14	%	 	*	 
	 Salaries/Benefit Expense
	 	 	 	 	 	20	%	 	8	%	 	 	 	 	 	 	 	 	 	 	 	 	$	24,566,789	 
	 Other expenses
	 	 	 	 	 	16	%	 	4	%	 	 	 	 	 	 	 	10	%	 	8	%	$	13,580,659	 
	 Charge Offs
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	23	%	 	*	 
	 NPAs
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	15	%	 	 	 	 	23	%	 	*	 
	 Efficiency Ratio
	 	 	15	%	 	16	%	 	 	 	 	 	 	 	 	 	 	16	%	 	 	 	 	58.73	%
	 Annual Average Individual Deposit Goals
	 	 	 	 	 	 	 	 	 	 	 	20	%	 	 	 	 	 	 	 	 	 	 	*	 
	 New Fee Income Products
	 	 	 	 	 	 	 	 	 	 	 	25	%	 	 	 	 	 	 	 	 	 	$	200,000	 
	 Discretionary
	 	 	35	%	 	20	%	 	20	%	 	20	%	 	18	%	 	20	%	 	20	%	 	 	 
	 TOTAL
	 	 	 100	%	 	100	%	 	100	%	 	100	%	 	100	%	 	100	%	 	100	%	 	 	 

 

 

	*
	Target
for these metrics is not disclosed in order to prevent competitive harm to the Company. Target levels for all metrics are based upon the Company's
budget goals, which are established by determining the expected financial position and results of operations of the Company at the end of the budget year, in light of the available resources of the
Company, market conditions, anticipated interest rates, competitive factors and other anticipated economic and financial conditions, and adjusting the budgeted results of operation, deposit and loan
totals and performance ratios to reflect improvement. The Committee and Board of Directors considers these goals aggressive in regards to expected performance and industry standards, particularly in
light of the difficult economic climate during 2010. The establishment of budget goals and performance targets for compensation plan purposes in one year, and the changes in such goals and targets
from year to year, is not intended to provide any guidance or indication as to operating performance or results in any future period, and readers should not extrapolate past goals to predict future
performance goals or targets. 

 

 

QuickLinks

Exhibit 10.12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00186-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00186-of-00352.parquet"}]]