SFG 8-K emp agree 1-6-06
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 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):
December
30, 2005
Summit
Financial Group, Inc.
(Exact
name of registrant as specified in its charter)
|
West
Virginia
|
|
No.
0-16587
|
|
55-0672148
|
|
(State
or other jurisdiction of
|
|
(Commission
File Number)
|
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
|
|
|
Identification
No.)
|
300
North Main Street
Moorefield,
West Virginia 26836
(Address
of Principal Executive Offices)
(304)
530-1000
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[
] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
1 - Registrant’s Business and Operations
ITEM
1.01. Entry
Into A Material Definitive Agreement
On
December 30, 2005, Summit Financial Group, Inc. and its subsidiaries, Summit
Community Bank, Inc. and Shenandoah Valley National Bank, amended certain
Directors’ Deferral Plans (the “Plans”). The purpose of the amendments is to
conform the Plans to administrative guidance and regulations recently issued
by
the Internal Revenue Service under Section 409A of the Internal Revenue Code
(“Code”). These Plans were amended to provide for (i) a requirement that all
elections under the Plans for a particular calendar year are made before the
end
of the previous calendar year, (ii) a requirement that newly eligible directors
make an election under the Plans no later than thirty (30) days after initial
eligibility, and (iii) an amendment permitting use of a transition rule under
Code section 409A guidance issued by the Internal Revenue Service clarifying
that elections for services performed and fees received in 2005 following the
date of an election and before December 31, 2005, were permitted no
later
than March 15, 2005.
B. Employment
Agreements
On
January 3, 2006, Summit Financial Group, Inc. (“Summit”) entered into Employment
Agreements (referred to herein as either the “Employment Agreement” or the
“Employment Agreements”) with three of its executive officers, Patrick N. Frye,
Scott C. Jennings and Robert S. Tissue (referred to herein as either the
“Executive Officer” or the “Executive Officers”). Mr. Frye is the Chief Credit
Officer of Summit; Mr. Jennings is the Chief Operating Officer of Summit; and
Mr. Tissue is the Chief Financial Officer of Summit. Mr. Frye’s Employment
Agreement supersedes his Employment Agreement dated as of April 1, 1999, as
amended. The Employment Agreements are substantially identical in all material
respects.
The
term
of each Employee Agreement is three years, commencing on January 3, 2006, and
ending on January 3, 2009. Under the terms of the Employment Agreement, the
term
shall automatically extend for unlimited additional one (1) year renewals,
unless terminated by one of the parties as provided in the Employment Agreement.
Under
each Employment Agreement, the Executive Officers will receive a base salary
of
not less than $150,000 (the “Base Salary”). The Executive Officer is also
entitled to receive incentive pay in accordance with bonus plans adopted by
Summit’s Board of Directors, fringe benefits, club and organization memberships
and dues, and reimbursement for business expenses.
The
Employment
Agreements may be terminated based on one of the following
|
•
|
Termination
for Good Cause (as defined by the Employment Agreement)
|
|
•
|
Termination
Not for Good Cause (as defined by the Employment Agreement)
|
|
•
|
Termination
upon a Change of Control (as defined by the Employment
Agreement)
|
The
Executive Officer is required to perform all of the duties and responsibilities
that may be assigned to him from time to time by the Chief Executive Officer
and/or the Board of Directors of Summit. Any material changes to the Executive
Officer’s duties or obligations must have been determined by the Board of
Directors and/or the Chief Executive Officer, in their reasonable discretion,
to
be commensurate with duties and obligations that might be assigned to other
similarly-situated executive officers of the Summit. No later than five (5)
days
after Summit materially changes the Executive Officer’s duties or obligations,
the Executive Officer must give Summit written notice if he believes a breach
of
this provision has occurred, and Summit has a reasonable opportunity to cure
the
cause of the possible breach. Failure by the Executive Officer to give the
required notice constitutes a waiver of his rights to claim a breach of this
provision arising from the specific duties or obligations then at issue. If
it
is determined through arbitration that Summit breached this provision, then
any
damages received by the Executive Officer are limited to the amount the
Executive Officer would be entitled to had he been terminated not for Good
Cause
(as defined in the Employment Agreement).
The
Executive Officers are entitled to certain termination payments under the
Employment Agreements. If the Executive Officer is terminated not for Good
Cause
(as defined by the Employment Agreement), the Executive Officer is entitled
to a
payment from Summit equal to the base salary compensation set forth in the
Employment Agreement for the remaining term of the Employment Agreement or
severance pay equal to 100% of his then current annual base salary, whichever
is
greater.
If
the
Executive Officer’s employment is terminated upon a Change in Control, then the
Executive Officer would be entitled to compensation under certain circumstances.
If the Executive Officer terminates for Good Reason (as defined in the
Employment Agreement) or are terminated under circumstances constituting
Wrongful Termination (as defined in the Employment Agreement), then the
terminated Executive Officer would be entitled to a payment equal to his Salary
(as defined in the Employment Agreement) multiplied by the number of months
between the effective date of termination and the date that is twenty four
(24)
months after the date of consummation of Change of Control, provided in no
event
shall the Executive Officer receive a lump sum payment that is less than 100%
of
his Salary.
Under
the
Change in Control provisions, the Executive Officers have the option to
terminate within six months of a Change of Control in the Employment Agreement.
In this case, the Executive Officer would be entitled to a lump sum payment
equal to seventy-five percent (75%) of his Salary in effect immediately prior
to
the date of consummation of the Change of Control (as defined in the Employment
Agreement).
Under
the
Employment Agreement, the Executive Officer is subject to noncompetition and
nonsolicitation clauses. For a period of three (3) years after the Executive
Officer’s employment with Summit is terminated for any reason, the Executive
Officer shall not: (i) within a seventy-five (75) mile radius of Summit
and/or its affiliates directly or indirectly engage in any business or activity
of any nature whatsoever that is competitive with the business of Summit or
its
affiliates, or (ii) sell or solicit the sale of, any services or products
related thereto, directly or indirectly, to any of Summit’s or its affiliates’
customers or clients within the State of West Virginia, the Commonwealth of
Virginia or any other states in which Summit and/or its affiliates conduct
such
business or sell services in the future. Notwithstanding the foregoing, this
noncompetition covenant shall not apply to the business and activities conducted
by Summit Mortgage, a division of Shenandoah Valley National Bank, unless such
business and activities are conducted in the State of West Virginia, Virginia
or
any other state in which other affiliates of Summit also engage in any business
or activity or sell or solicit services in the future.
A
copy of
the Employment Agreement is attached to this Current Report on Form 8-K as
Exhibit 10.1 and is incorporated by reference as though fully set forth herein.
The foregoing summary description of the Employment Agreement is not intended
to
be complete and is qualified in its entirety by the complete text of the
Employment Agreement.
ITEM
9.01. Financial
Statements and Exhibits
(c) The
following exhibit is being filed herewith:
| |
10.1
|
Form
of Employment Agreement between Summit Financial Group, Inc. and
Messrs.
Frye, Jennings and Tissue,
respectively.
|
SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
SUMMIT
FINANCIAL
GROUP, INC.
Date:
January
6, 2006 By: /s/
Julie R. Cook
Julie
R. Cook
Vice
President &
Chief
Accounting
Officer