SECURITIES AND EXCHANGE
COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
August 28,
2008
Eagle Bancorp, Inc.
(Exact name of registrant as specified in its
charter)
Maryland
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0-25923
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52-2061461
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(State or other jurisdiction
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(Commission file number)
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(IRS Employer
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of incorporation)
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Number)
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7815 Woodmont Avenue, Bethesda, Maryland 20814
(Address
of Principal Executive Offices) (Zip Code)
Registrants
telephone number, including area code:
301.986.1800
Check
the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (See General Instruction A.2. below):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item
1.01
Entry into A Material Definitive Agreement
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off
Balance Sheet Arrangement of a Registrant
On
August 28, 2008, Eagle Bancorp, Inc. (the Company) accepted
subscriptions for and sold, at 100% of their principal amount, an aggregate of
$12.15 million of subordinated notes (the Notes), on a private placement
basis, to seven parties, all of whom are directors of the Company, its wholly
owned subsidiary, EagleBank, Fidelity & Trust Financial Corporation (Fidelity)
or Fidelity & Trust Bank (F&T Bank). The issuance of the Notes, which are intended
to qualify as Tier 2 capital for regulatory purposes, to the extent permitted,
is intended to enable the Company to meet the requirement that the Company and
EagleBank be well capitalized for regulatory purposes at the consummation of
the transactions described below in response to Item 2.01 hereof. It is expected that the capital treatment of
the Notes will be phased out during the last 5 years of the Notes term, at a
rate of 20% of the original principal amount per year.
The
Notes bear interest, payable on the first day of each month, commencing in October 2008,
at a fixed rate of 10.0% per year. The
Notes have a term of approximately six years, and have a maturity of September 30,
2014. The Notes are redeemable at the option of the Company, in whole or in
part, on any interest payment date at the principal amount thereof, plus
interest to the date of redemption. The
Notes may also be utilized, on a dollar for dollar basis, in payment of the
subscription price of shares of capital stock in any future offering by the
Company. The payment of principal on the Notes may only be accelerated upon the
occurrence of certain bankruptcy or receivership related events relating to the
Company or a major bank subsidiary of the Company (acceleration events).
If:
(i) an acceleration event occurs; (ii) the Company defaults in the
payment of any interest upon any Notes, and such default continues for thirty
days; (iii) the Company defaults in the payment of all or any part of the
principal of (or premium, if any, on) any Notes as and when the same shall
become due and payable either at maturity, upon redemption, by declaration of
acceleration or otherwise; or (iv) the Company defaults in the performance
of, or breaches, any of its covenants or agreements in the Notes (other than a
covenant or agreement a default in whose performance or whose breach is
elsewhere in this Note specifically dealt with), and continuance of such
default or breach for a period of 60 days after there has been given a Notice
of Default, and such event of default shall be continuing, then the Company
shall not, and shall not allow any subsidiary of the Company to, (x) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Companys capital stock or
its subsidiaries capital stock (other than payments of dividends or
distributions to the Company) or make any guarantee payments with respect to
the foregoing or (y) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company or any subsidiary that rank pari passu in all respects with or junior
in interest to the Notes (other than, with respect to clauses (x) and (y) above:
(1) repurchases, redemptions or other acquisitions of shares of capital
stock of the Company in connection with any employment contract, benefit plan
or other similar arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into
prior to the applicable Event of Default, if any, (2) as a result of any
exchange or conversion of any class or series of the Companys capital stock
(or any capital stock of a subsidiary of the Company) for any class or series
of the Companys capital stock or of any class or series of the Companys
indebtedness for any class or series of the Companys capital stock, (3) the
purchase of fractional interests in shares of the Companys capital stock pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (4) any declaration of a dividend in
connection with any stockholders rights plan, or the issuance of rights, stock
or other property under any stockholders rights plan, or the redemption or
repurchase of rights pursuant thereto, or (5) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock and any cash payments in lieu of fractional shares issued
in connection therewith.
This
description of the Notes does not purport to be complete and is qualified in
its entirety by reference to the form of Subordinated Note, which is attached
as 10.2 hereto and is incorporated herein by reference.
2
Item
2.01
Completion of Acquisition or Disposition of Assets
On
August 31, 2008, the Agreement and Plan of Merger (the Agreement), dated
as of December 2, 2007, by and among the Company, Woodmont Holdings, Inc.
(Woodmont), Fidelity and F&T Bank, pursuant to which the Fidelity was to
be merged into the Woodmont, with Woodmont surviving the merger, followed by
the merger of Woodmont with and into the Company, with the Company surviving,
became effective. The merger of F&T
Bank with and into EagleBank, Eagles wholly owned subsidiary bank, with
EagleBank surviving the merger, also become effective following the merger of
Fidelity into Woodmont.
In
connection with the effectiveness of the transactions contemplated by the
Agreement, each of the 4,207,016 outstanding shares of common stock, $0.01 par
value, of Fidelity, was automatically converted into 0.3894 shares of common
stock, $0.01 par value of Eagle (the Final Conversion Ratio), resulting in
the issuance of approximately 1,638,212 shares of Eagle common stock. The Final
Conversion Ratio results from the final and complete application of the
adjustment provisions of the Agreement. In addition, each of the 503,570 options to
purchase shares of Fidelity common stock outstanding immediately prior to the
effective time of the merger of Fidelity into Woodmont was converted into an
option to purchase shares of Eagle common stock, adjusted for the Final Conversion
Ratio. Eagle shareholders will continue to hold one share of Eagle common stock
for each share of Eagle common stock held immediately prior to the
effectiveness of the transactions contemplated by the Agreement.
This
description of the Merger Agreement does not purport to be complete and is
qualified in its entirety by reference to the Merger Agreement, which is
attached as Exhibit 2.1 to the Companys Current Report on Form 8-K
filed on December 3, 2007, to which reference is made. A copy of the press release announcing the
consummation of the Agreement is attached as Exhibit 99.1 to this report,
and is incorporated herein by reference.
Each
of Robert P. Pincus and Norman R. Pozez, newly appointed directors of the
Company, participated in the purchase of Notes.
Mr. Pincus and Mr. Pozez each purchased $1.75 million of
Notes.
Item 3.03
Material Modification of Rights of Security Holders
Under
the approval of the merger of F&T Bank into EagleBank issued by the
Maryland Commissioner of Financial Regulation, for a period of one year
following consummation of such merger, EagleBank may not pay dividends to the
Company without the prior approval of the Maryland Commissioner.
Additionally,
please refer to the description of the dividend limitations upon the occurrence
or continuation of an Event of Default under the Notes described in response to
Items 1.01 and 2.03 hereof.
Item 5.02
Departure of Directors or Certain Executive Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers
In accordance with the Agreement, as of the effective time, Robert P. Pincus and Norman R. Pozez were appointed to fill newly created vacancies in the Companys Board of Directors. Mr. Pincus will serve as Vice Chairman of the Company and EagleBank. Mr. Pincus and Mr. Pozez are expected to be appointed to committees of the board of directors of the Company as follows:
Name
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Committees
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Mr. Pincus
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Director Loan Committee; Executive Compensation Committee; Options Committee
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Mr. Pozez
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Executive Compensation Committee; Options Committee
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In
connection with the Agreement, EagleBank and Mr. Pincus have entered into
an agreement pursuant to which he is retained to serve as Vice Chairman of the
board of directors of EagleBank. Under
that agreement, Mr. Pincus will receive an annual payment of $220,000,
subject to annual increase to reflect, at a minimum, the increase in the
consumer price index, in lieu of all other fees for service on the board of directors.
Mr. Pincus will also be eligible to receive incentive bonuses pursuant to
board approved plans, and to a car allowance of $1,250 per month. The agreement
has a term of three years. In the event of early
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termination
of the agreement by EagleBank without cause, or as a result of Mr. Pincus
death or disability, Mr. Pincus would be entitled to receive continued
payment of retainer compensation and car allowance for the remainder of the
term, subject to his continued compliance with the confidentiality, noncompete
and nonsolicitation provisions of the agreement. The agreement provides that
during the term and for a period of eighteen months after termination, Mr. Pincus
will not in any capacity (i) render any services to a bank or financial
services business, including but not limited to any consumer savings,
commercial banking, insurance or trust business, or a savings and loan or
mortgage business, or other business in which EagleBank has invested
significant resources in anticipation of commencing, or to any person or entity
that is attempting to form such a business if it operates any office, branch or
other facility that is (or is proposed to be) located within a thirty-five mile
radius of the location of any branch of the Company, EagleBank, Fidelity or F&T
Bank or their affiliates, or (ii) induce or attempt to induce any
customers, suppliers, officers, employees, contractors, consultants, agents or
representatives of, or any other person that has a business relationship with, the
Company, EagleBank, Fidelity or F&T Bank or their affiliates, to
discontinue, terminate or reduce the extent of their relationship with such
entity or to solicit any such customer for any competitive product or service,
or otherwise solicit any customer or employee of the Company, EagleBank,
Fidelity or F&T Bank or their affiliates.
Under the agreement, in
the event that (i) Mr. Pincus is terminated without cause after a
change in control, (ii) his title, duties or position are materially
reduced within twelve months after a change in control, without his consent,
such that he would not have materially comparable compensation benefits and
responsibilities, and not have his primary worksite moved more than twenty five
miles, and such change is not cured within thirty days of notice of
termination, or (iii) he voluntary terminates the agreement within the
thirty day period following twelve months after a change in control, Mr. Pincus
would be entitled to receive a lump sum payment equal to 2.99 times his highest
rate of base compensation in effect within the twelve months prior to
termination, subject to adjustment to avoid adverse tax consequences resulting
from characterization of such payment for tax purposes as a parachute
payment.
Item
9.01 Financial Statements and Exhibits
(a)
Financial Statements of Business Acquired
. The financial statements required by this
item will be filed by amendment to this Current Report on Form 8-K no
later than 71 days after the date on which this Current Report on Form 8-K
is required to be filed.
(b)
Pro Forma Financial Information
. The pro forma financial information required
by this item will be filed by amendment to this Current Report on Form 8-K
no later than 71 days after the date on which this Current Report on Form 8-K
is required to be filed.
(c)
Shell Company Transactions
. Not applicable.
(d)
Exhibits.
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2.1
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Agreement
and Plan of Merger, dated as of December 2, 2007 between and among Eagle
Bancorp, Inc., Woodmont Holdings, Inc, Fidelity & Trust
Financial Corporation and Fidelity & Trust Bank Incorporated by
reference to the Companys Current Report on Form 8-K filed on
December 3, 2007
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10.1
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Agreement
dated December 2, 2007 by and between EagleBank and Robert P. Pincus -
Incorporated by reference to Exhibit 10.3 to the Companys Registration
Statement on Form S-4 (Registration No. 333-150763)
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10.2
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Form of
Subordinated Notes
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10.3
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Form of
Subscription Agreement for Subordinated Notes
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99.1
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Press
release dated September 2, 2008
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99.2
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Letter
to former holders of Fidelity Common Stock
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4
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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EAGLE
BANCORP, INC.
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By:
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/s/ Ronald D. Paul
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Ronald
D. Paul, President, Chief Executive
Officer
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Dated:
September 2, 2008
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5
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