EAGLE BANCORP INC
EXHIBIT 10.7
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<FILENAME>ex10_7.txt
<DESCRIPTION>EXHIBIT 10.7
<TEXT>
                                                                    Exhibit 10.7

                              EMPLOYMENT AGREEMENT
                              --------------------

         THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
the 13th day of January, 2004 ("Commencement Date"), by and between EagleBank, a
Maryland corporation ("Eagle"), and Martha Foulon-Tonat ("Tonat").

                                     RECITAL
                                     -------

     Eagle desires to retain Tonat as Executive Vice President and Chief Lending
Officer of Eagle and Tonat desires to accept such employment, all upon the terms
and conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the recital, the mutual covenants
and agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement, intending to be legally bound, agree as follows:

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

              1.1 "Commencement Date" means the date first written above.

              1.2 "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 state or other political subdivision of any of
              them having jurisdiction over Eagle or any transaction
              contemplated, undertaken or proposed to be undertaken by Eagle,
              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 Comptroller of the Currency,
              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.

              1.3 "Board" means the Board of Directors of Eagle.

              1.4 "Bylaws" means the Bylaws of Eagle as in effect from time to
              time.

              1.5 "EBI" means Eagle Bancorp, Inc., a Maryland corporation.

              1.6 "Person" means any individual, firm, association, partnership,
              corporation, limited liability company, group, governmental agency
              or other authority, or other organization or entity.

         2.   Employment; Term.
              -----------------

              2.1 Position. Eagle hereby employs Tonat to serve as Executive
              Vice President and Chief Lending Officer of Eagle.

              2.2 Term. The term of this Agreement and Tonat's employment
              hereunder shall commence with the Commencement Date and continue
              until December 31, 2006 (the "Term"), unless sooner terminated in
              accordance with the provisions of this Agreement.

         3.   Duties of Tonat.
              ----------------

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


                                       1
<PAGE>

              3.2 Performance of Services. Tonat agrees to devote her full
              business time and attention to the performance of her duties and
              responsibilities under this Agreement, and shall use her best
              efforts and discharge her duties to the best of her ability for
              and on behalf of Eagle and toward its successful operation. Tonat
              shall comply with all laws, statutes, ordinances, rules and
              regulations relating to her employment and duties. During the Term
              of this Agreement, Tonat shall not at any time or place directly
              or indirectly engage or agree to engage in any business or
              practice related to the banking business with or for any other
              Person to any extent whatsoever, other than to the extent required
              by the terms and conditions of this Agreement. Tonat agrees that
              while employed by Eagle she will not without the prior written
              consent of the Board, engage, or obtain a financial or ownership
              interest, in any other business, employment, consulting or similar
              arrangement, or other undertaking (an "Outside Arrangement") if
              such Outside Arrangement would interfere with the satisfactory
              performance of Tonat's duties to Eagle, present a conflict of
              interest with Eagle and/or EBI, breach Tonat's duty of loyalty or
              fiduciary duties to Eagle and/or EBI, or otherwise conflict with
              the provisions of this Agreement; provided, however, that Tonat
              shall not be prevented from investing Tonat's assets in such form
              or manner as would not require any services on the part of Tonat
              in the operation or the affairs of the entities in which such
              investments are made and provided such investments do not present
              a conflict of interest with Eagle and/or EBI. Tonat shall promptly
              notify the Board of any Outside Arrangement and provide Eagle with
              any written agreement in connection therewith.

         4.   Compensation Benefits. As full compensation for all services
              rendered pursuant to this Agreement and the covenants contained
              herein, Eagle shall pay to Tonat the following:

              4.1 Salary. Beginning on the Commencement Date, Tonat shall be
              paid a salary ("Salary") of One Hundred Thirty Five Thousand
              Dollars ($135,000.00) on an annualized basis. Effective January 1,
              2004, Tonat's Salary shall be One Hundred Forty-Eight Thousand
              Five Hundred Dollars ($148,500.00) on an annualized basis. Eagle
              shall pay Tonat's Salary in equal installments in accordance with
              Eagle's regular payroll periods as may be set by Eagle from time
              to time. Tonat's salary shall be further increased from time to
              time at the discretion of the Board. Tonat shall also be entitled
              to certain incentive bonus payments as determined by the Board in
              its sole discretion.

              4.2 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.

              4.3 Vacation and Leave. Tonat shall be entitled to such vacation
              and leave as may be provided for under the current and future
              leave and vacation policies of Eagle for executive officers.

              4.4 Office Space. Eagle will provide customary office space and
              office support to Tonat beginning on the Commencement Date.

              4.5 Car Allowance. Eagle will pay Tonat a monthly car allowance of
              Six Hundred Fifty Dollars ($650.00).

              4.6 Non-Life Insurance. Eagle will provide Tonat with group
              health, disability and other insurance as Eagle may determine
              appropriate for all employees of Eagle.

              4.7 Life Insurance.
                  ---------------

              4.7.1 Eagle will obtain, and maintain at all times while this
              Agreement is in effect, a term life insurance policy (the
              "Policy") on Tonat in the amount of Six Hundred Thousand
              ($600,000.00), the particular product and carrier to be chosen by
              Eagle in its discretion. Tonat shall have the right to designate
              the beneficiary of the Policy. Eagle will pay the premium for the
              Policy. In the event Tonat is rated and the premium exceeds the
              standard rate, the Policy amount shall be lowered to the maximum
              amount that can be purchased at the standard rate for a Six
              Hundred Thousand ($600,000.00) policy. For example, if Tonat is
              rated and the standard rate for a Six Hundred Thousand
              ($600,000.00) policy would acquire a Five Hundred Thousand
              ($500,000.00) policy, Eagle would only be required to purchase the
              Five Hundred Thousand ($500,000.00) policy.


                                       2
<PAGE>

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

              4.8 Expenses. Eagle shall promptly upon presentation of proper
              expense reports therefor reimburse Tonat, in accordance with the
              policies and procedures established from time to time by Eagle for
              its senior executive officers, for all reasonable and customary
              travel (other than local use of an automobile for which Tonat will
              be provided a car allowance) and other out-of-pocket expenses
              incurred by Tonat in the performance of her duties and
              responsibilities under this Agreement and promoting the business
              of Eagle, including appropriate membership fees, dues and the cost
              of attending meetings and conventions.

              4.9 Retirement Plans. Tonat shall be entitled to participate in
              any and all qualified pension or other retirement plans of Eagle
              which may be applicable to executive personnel of Eagle.

              4.10 Other Benefits. While this Agreement is in effect, Tonat
              shall be entitled to all other benefits that Eagle provides from
              time to time to its senior executive officers, including, but not
              limited to, any stock option plan and other incentive plans.

              4.11 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.

              4.12 Warrants. Tonat shall be issued warrants or options to
              acquire shares of EBI stock from time to time at the discretion of
              the Board of Directors of EBI following a recommendation by the
              Board. In that regard, it is acknowledged that concurrent with the
              execution of this Agreement Tonat will be granted stock options
              for five thousand (5,000) shares in accordance with the EBI 1998
              Stock Option Plan under a vesting schedule as determined by EBI.
              Additional options may be granted during the term of this
              Agreement.

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

              5.1 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 Eagle'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 Eagle.
              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 Eagle 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.

         6.   Termination of Agreement. This Agreement may be terminated prior
              to expiration of the Term as provided below.

              6.1  Definition of Cause. For purposes of this Agreement, "Cause"
              means:

                   (a) any act of theft, fraud, intentional misrepresentation or
                   similar conduct by Tonat in connection with or associated
                   with the services rendered by Tonat to Eagle under this
                   Agreement;

                   (b) any failure of this Agreement to comply with any Bank
                   Regulatory Agency requirement which is not cured in
                   accordance with Section 5.1 within a reasonable period of
                   time after written notice thereof;

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


                                       3
<PAGE>

                   (d) any of the following conduct on the part of Tonat that
                   Tonat has not been corrected or cured within thirty (30) days
                   after having received written notice from Eagle detailing and
                   describing such conduct:

                            (i)     the use of drugs, alcohol or other
                                    substances by Tonat to an extent which
                                    materially interferes with or prevents Tonat
                                    from performing Tonat's duties under this
                                    Agreement;

                            (ii)    failure by or the inability of Tonat to
                                    devote full time, attention and energy to
                                    the performance of Tonat's duties pursuant
                                    to this Agreement (other than by reason of
                                    her death or disability);

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

                            (iv)    willful or intentional misconduct on the
                                    part of Tonat that results in substantial
                                    injury to Eagle or any of its parent,
                                    subsidiaries or affiliates.

              6.2 Termination by Eagle.

                  6.2.1 For Cause. Eagle shall have the right to cancel and
                  terminate this Agreement and Tonat's employment for Cause
                  immediately on written notice, with Tonat's compensation and
                  benefits ceasing as of Tonat's last day of employment,
                  provided, however, that Tonat shall be entitled to benefits
                  through the last day of employment and accrued compensation to
                  that date.

                  6.2.2 Without Cause. Eagle shall have the right to cancel and
                  terminate this Agreement and Tonat's employment at any time on
                  written notice without Cause for any or no reason, with
                  Tonat's compensation and benefits ceasing as of Tonat's last
                  day of employment, subject to the provisions of Section 6.4.
                  and Article 8.

              6.3 Termination by Tonat. Tonat shall have the right to cancel and
              terminate this Agreement and her employment at any time on sixty
              (60) days prior written notice to the Board, with Tonat's
              compensation and benefits ceasing as of Tonat's last day of
              employment, provided, however, that Tonat shall be entitled to
              benefits through the last day of employment and accrued
              compensation to that date.

              6.4 Severance. Except as set forth below, if Tonat's employment
              with Eagle is terminated by Eagle or its successors during the
              Term without Cause, Eagle shall, for the balance of the Term,
              continue to pay Tonat, in the manner set forth below, Tonat's
              Salary at the rate being paid as of the date of termination;
              provided, however, that Tonat shall not be entitled to any such
              payments of Salary if (i) her employment is terminated due to her
              death or long-term disability, or (ii) this Agreement is rendered
              null and void pursuant to Section 5.1, or (iii) there is a Change
              in Control Termination (as defined in Section 8.2). Any Salary due
              Tonat to this Section 6.4 shall be paid to Tonat in installments
              on the same schedule as Tonat was paid immediately prior to the
              date of termination, each installment to be the same amount Tonat
              would have been paid under this Agreement if she had not been
              terminated. In the event Tonat breaches any provision of Article 7
              of this Agreement, Tonat's entitlement to any Salary payable
              pursuant to this Section 6.4, if and to the extent not yet paid,
              shall thereupon immediately cease and terminate.

         7.   Confidentiality; Non-Competition; Non-Interference.
              ---------------------------------------------------

              7.1 Confidential Information. Tonat, during employment by Eagle,
              will have access to and become familiar with various confidential
              and proprietary information of Eagle, its parent, subsidiaries
              and/or affiliates and/or relating to the business of Eagle, its
              parent, subsidiaries and/or affiliates ("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


                                       4
<PAGE>

              activities of Eagle, its parent, subsidiaries and/or affiliates
              which is made available only to employees with 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.

              7.2 Nondisclosure. Tonat hereby covenants and agrees that Tonat
              shall not at any time, directly or indirectly, disclose, divulge,
              reveal, report, publish, or transfer any Confidential Information
              to any Person, or use Confidential Information in any way or for
              any purpose, except as required in the course of Tonat's
              employment by Eagle. The covenant set forth in this Section 7.2
              shall not apply to information now known by the public or which
              becomes known generally to the public (other than as a result of a
              breach of this Article 7 by Tonat) or information that is
              customarily shown or disclosed. Tonat further covenants and agrees
              that Tonat shall not at any time, directly or indirectly, disclose
              to any Person, including but not limited to any other employee of
              EBI or Eagle, any of the terms of this Agreement.

              7.3 Documents. All files, papers, records, documents,
              compilations, summaries, lists, reports, notes, databases, tapes,
              sketches, drawings, memoranda, and similar items (collectively,
              "Documents"), whether prepared by Tonat, or otherwise provided to
              or coming into the possession of Tonat, that contain any
              proprietary information about or pertaining or relating to Eagle,
              its parent, subsidiaries and/or affiliates and/or their businesses
              ("Eagle Information") shall at all times remain their exclusive
              property. Promptly after a request by Eagle or the termination of
              Tonat's employment, Tonat shall take reasonable efforts to (i)
              return to Eagle all Documents in any tangible form (whether
              originals, copies or reproductions) and all computer disks
              containing or embodying any Document or Eagle Information and (ii)
              purge and destroy all Documents and Eagle Information in any
              intangible form (including computerized, digital or other
              electronic format) as may be requested in writing by the Chairman
              of the Board of Eagle, and Tonat shall not retain in any tangible
              form any such Document or any summary, compilation, synopsis or
              abstract of any Document or Eagle Information.

              7.4  Non-Competition.
                   ----------------

                   7.4.1 Tonat hereby acknowledges and agrees that, during the
                   course of employment by Eagle, Tonat will become familiar
                   with and involved in all aspects of the business and
                   operations of Eagle. Tonat hereby covenants and agrees that
                   from the Commencement Date until the earlier to occur of (a)
                   the date one hundred eighty (180) days after Tonat's last day
                   of employment with Eagle or (b) December 31, 2006, Tonat will
                   not at any time (except for Eagle), directly or indirectly,
                   in any capacity (whether as a proprietor, owner, agent,
                   officer, director, shareholder, partner, principal, member,
                   employee, contractor, consultant or otherwise) render any
                   services to a bank or savings and loan or a holding company
                   of a bank or savings and loan (in any case, a "Bank") with
                   respect to any Bank office, branch or other facility (in any
                   case, a "Branch") that is located within a thirty-five (35)
                   mile radius of the location of Eagle's headquarters on the
                   date hereof (including, without limitation, being involved in
                   any manner in the operations of or having any
                   responsibilities with respect to any Branch).

                   7.4.2 This Section 7.4 shall not apply if prior to December
                   31, 2006, there is a (i) merger or consolidation of Eagle
                   with a third party in which Eagle is not the survivor, (ii)
                   sale of a controlling interest in Eagle to a third party or
                   (iii) a sale of all or substantially all of the business or
                   assets of Eagle to a third party, and this Agreement is not
                   assigned to such third party or Tonat's employment hereunder
                   is otherwise terminated by such third party in connection
                   with such merger, consolidation or sale. Further, mere
                   ownership of less than two percent (2%) of the securities of
                   any publicly held corporation shall not constitute a
                   violation of this Section.

              7.5 Non-Interference. Tonat hereby covenants and agrees that
              during her employment and for a period of twelve (12) months after
              Tonat's last date of employment with, Tonat will not, directly or
              indirectly, for herself or any other Person (whether as a
              proprietor, owner, agent, officer, director, shareholder, partner,
              principal, member, employee, contractor, consultant or any other
              capacity), 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, Eagle or any of its parent, subsidiaries and
              affiliates to discontinue, terminate or reduce the extent of their
              relationship with Eagle and/or any such parent, subsidiary or
              affiliate or to take any action that would disrupt or otherwise be
              disadvantageous to any such relationship, nor will Tonat otherwise
              solicit any customer or employee of Eagle on behalf of himself or
              any other Person or entity.

                                       5
<PAGE>

              7.6 Injunction. In the event of any breach or threatened or
              attempted breach of any such provision by Tonat, Eagle 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 Tonat and
              each and every other Person concerned therein from the
              continuation of such volatile 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.

              7.7 Reasonableness.
                  ---------------

                  7.7.1 Tonat has carefully read and considered the provisions
                  of this Article 7 and, having done so, agrees that the
                  restrictions and agreements set forth in this Article 7 are
                  fair and reasonable and are reasonably required for the
                  protection of the interests of Eagle and its business,
                  shareholders, directors, officers and employees. Tonat further
                  agrees that the restrictions set forth in this Agreement will
                  not impair or unreasonably restrain Tonat's ability to earn a
                  livelihood.

                  7.7.2 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 7 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 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.

             8.   Change in Control.

                  8.1 Definition. "Change in Control" means and shall be deemed
                  to have occurred if:

                  (a) there shall be consummated any consolidation or merger of
                  EBI in which EBI is not the continuing or surviving
                  corporation or pursuant to which shares of EBI's capital stock
                  are converted into cash, securities or other property other
                  than a consolidation or merger of EBI in which the holders of
                  EBI's voting stock immediately before the consolidation or
                  merger shall, upon consummation of the consolidation or
                  merger, own at least 50% of the voting stock of the surviving
                  corporation, or any sale of all or substantially all of the
                  assets of EBI;

                  (b) any person (within the meaning of Sections 13(d) and
                  14(d)(2) of the Securities Exchange Act of 1934, as amended
                  (the "Exchange Act")) shall after the Commencement Date become
                  the beneficial owner (within the meaning of Rules 13d-3 and
                  13d-5 under the Exchange Act), directly or indirectly, of
                  securities of EBI representing fifty-one percent (51%) or more
                  of the voting power of then all outstanding securities of EBI
                  entitled to vote generally in the election of directors of EBI
                  (including, without limitation, any securities of EBI 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) individuals who at the Commencement Date constitute the
                  entire Board of Directors of EBI and any new directors whose
                  election by the Board of Directors of EBI, or whose nomination
                  for election by EBI's stockholders, shall have been approved
                  by a vote of at least a majority of the directors then in
                  office who either were directors at the Commencement Date or
                  whose election or nomination for election shall have been so
                  approved, shall cease for any reason to constitute at least a
                  majority of the Board of Directors of EBI.

                  8.2 Change in Control Termination. For purposes of this
                  Agreement, a "Change in Control Termination" means that while
                  this Agreement is in effect:

                  (a) Tonat's employment with Eagle is terminated without Cause
                  within one hundred twenty (120) days immediately (i) prior to
                  and in conjunction with a Change in Control or (ii) following
                  consummation of a Change in Control; or

                                       6
<PAGE>

                  (b) Tonat is notified within one hundred twenty (120) days
                  immediately prior to or immediately following consummation of
                  a Change in Control that, as a result of the Change in
                  Control, she will not be continued in a comparable position
                  (with comparable compensation and benefits) with Eagle to the
                  position Tonat holds at the time such notice is given if the
                  notice is given prior to the Change in Control or, if the
                  notice is given after a Change in Control, to the position
                  Tonat held immediately prior to the Change in Control, and
                  within fifteen (15) days after receiving such notification
                  Tonat notifies Eagle that she is terminating her employment
                  due to such change in her employment, with her last day of
                  employment to be mutually agreed to by Eagle and Tonat but
                  which shall be not more than sixty (60) days after such notice
                  is given by Tonat; or

                  (c) If at the expiration of the one hundred twenty (120) day
                  period immediately following consummation of a Change in
                  Control (the "Action Period") none of the events described in
                  Sections 8.2(a) and 8.2(b) above have occurred, Tonat, within
                  the thirty (30) day period immediately following the last day
                  of the Action Period, notifies Eagle that she is terminating
                  her employment due to the Change in Control, with her last day
                  of employment to be mutually agreed to by Eagle and Tonat but
                  which shall be not more than sixty (60) days after such notice
                  is given by Tonat.

                  8.3 Change in Control Payment. If there is a Change in Control
                  Termination, Tonat shall be paid a lump-sum cash payment (the
                  "Change Payment") equal to 2.99 times Tonat's Salary at the
                  highest rate in effect during the twelve (12) month period
                  immediately preceding her last day of employment, such Change
                  Payment to be made to Tonat within forty-five (45) days after
                  her last day of employment.

                  8.4  Adjustment.
                       -----------

                  (a) Notwithstanding anything in this Agreement to the
                  contrary, if the Determining Firm (as defined in Section
                  8.4(b)) determines that any portion of the Change Payment
                  and/or the portions, if any, of other payments or
                  distributions in the nature of compensation by Eagle to or for
                  the benefit of Tonat (including, but not limited to, the value
                  of the acceleration in vesting of restricted stock, options or
                  any other stock-based compensation) whether or not paid or
                  payable or distributed or distributable pursuant to the terms
                  of this Agreement (collectively with the Change Payment, the
                  "Aggregate Payment"), would cause any portion of the Aggregate
                  Payment to be subject to the excise tax imposed by Code
                  Section 4999 or would be nondeductible by Eagle pursuant to
                  Code Section 280G (such portion subject to the excise tax or
                  being nondeductible, the "Parachute Payment"), the Aggregate
                  Payment will be reduced, beginning with the Change Payment, to
                  an amount which will not cause any portion of the Aggregate
                  Payment to constitute a Parachute Payment.

                  (b) All determinations required to be made under this Section
                  8.4, will be made by a reputable law or accounting firm (the
                  "Determining Firm") selected by Eagle. All fees and expenses
                  of the Determining Firm will be obligations solely of Eagle.
                  The determination of the Determining Firm will be binding upon
                  Eagle and Tonat.

         9. Assignability. Tonat shall have no right to assign this Agreement or
         any of Tonat's rights or obligations hereunder to another party or
         parties.

         10. Governing Law. 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 to the
         choice of law rules thereof.

         11. 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
         (1) when hand delivered to the other party, or (2) when received when
         by facsimile at the address a number set forth below provided however,
         that notices given by facsimile shall no be effective unless either a
         duplicate copy of such facsimile notice is promptly given by depositing
         same in a States post office first-class postage prepaid and addressed
         to the parties as set forth below, or the receiving party delivers a
         written confirmation of receipt for such notice either by facsimile or
         any other method permitted under this sub additionally, any notice
         given by facsimile shall be deemed received on the next business day if
         such notice is received after 5:00 p.m. (recipient's time) or on a
         non-business day); or three (3) business days after the same have been
         deposited in a United States post office with first-class certified
         mail, return receipt, postage prepaid and addressed to the parties as
         set forth below; or (4) the next business day after same have been
         deposited with a national overnight delivery service reasonably
         approved by the parties (Federal Express and DHL


                                       7
<PAGE>

         WorldWide Express being deemed approved by the parties), postage
         prepaid, addressed to the parties as set forth below with
         next-business-day delivery guaranteed, provided that the sending party
         received a confirmation of delivery from the delivery service provider.
         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:      Martha Foulon-Tonat
                           829 Market Street East
                           Gaithersburg, MD 20878

                  To:      EagleBank
                           C/O Ronald D. Paul
                           7815 Woodmont Ave.
                           Bethesda, MD 20814

                  cc:      Fred S. Sommer, Esquire
                           Shulman, Rogers, Gandal, Pordy & Ecker, P.A.
                           11921 Rockville Pike, Third Floor
                           Rockville, MD  20852

         12. Entire Agreement. This Agreement contains all of the agreements and
         understandings between the parties hereto with respect to the
         employment of Tonat by Eagle, 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.

         13. 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.

         14. 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.

         15. 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.

         16. Gender and Tense. 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.

         17. Binding Effect. This Agreement is and shall be binding upon, and
         inures to the benefit of, Eagle, its successors and assigns, and Tonat
         and her heirs, executors, administrators, and personal and legal
         representatives.

                      [SIGNATURES APPEAR ON FOLLOWING PAGE]




                                       8
<PAGE>


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

EAGLEBANK


By:
    ----------------------------------
Title:
       -------------------------------



/s/ MARTHA FOULON-TONAT
---------------------------------------
Martha Foulon-Tonat




---------------------------------------
Date












                                       9

</TEXT>
</DOCUMENT>
