Summit Financial Group and Kelly Insurance Agreement
UNITED
STATES
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):
April
27, 2007
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
corporation
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:
[
X
] 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
April 27, 2007, Summit Financial Group, Inc. (“Summit”), entered into an
Agreement and Plan of Reorganization (the “Agreement”) with Kelly Insurance
Agency, Inc. and Kelly Property and Casualty Inc. (collectively, the “Kelly
Agencies”) headquartered in Leesburg, Virginia.
Under
the terms of the Agreement, Summit will pay $6.2 million for the outstanding
common stock of the Kelly Agencies, subject to adjustment based on the Kelly
Agencies’ working capital as of the closing date. If, at closing, the Kelly
Agencies’ working capital, determined in accordance with the terms of the
Agreement, is less than $135,000, then the deal’s aggregate consideration will
be decreased dollar-for-dollar. If the Kelly Agencies’ working capital at
closing exceeds $135,000, then the deal’s aggregate consideration will be
increased dollar-for-dollar.
The
final
transaction consideration will be paid 100% in the form of Summit common stock.
The exchange ratio for determining the number of shares of Summit common stock
to be issued for each share of Kelly Agencies’ common stock will be based on the
average closing price of Summit’s common stock for the five trading days before
the closing date of the transaction (“Summit’s Average Closing Stock Price”).
The Kelly Insurance Agencies’ shareholders will receive shares of Summit’s
common stock based on an exchange ratio equal to the final per share transaction
consideration divided by Summit’s Average Closing Stock Price.
Consummation
of the Agreement is subject to approval of the shareholders of the Kelly
Agencies and the receipt of all required regulatory approvals, as well as other
customary conditions. The Agreement is attached hereto as Exhibit 2.1,
which is incorporated herein by reference.
On
April 27, 2007, Summit issued a press release announcing the acquisition of
the
Kelly Agencies. A copy of the press release is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
On
April 27,
2007, Summit Financial Group, Inc.’s (“Summit”) Board of Directors declared the
first half 2007 dividend. As a result, Summit issued on April 30, 2007 a News
Release announcing the dividend. This News Release is furnished as Exhibit
99.2
and is incorporated herein by reference.
(d) Exhibits
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2.1
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Agreement
and Plan of Reorganization dated as of April 27, 2007, by and among
Summit
Financial Group, Inc. and Kelly Insurance Agency, Inc. and Kelly
Property
and Casualty, Inc.
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99.1
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Press
Release, dated April 27, 2007, issued by Summit Financial Group,
Inc.
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99.2
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Press
Release, dated April 30, 2007, issued by Summit Financial Group,
Inc.
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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:
April
30,
2007 By:
/s/
Julie R. Cook
Julie R. Cook
Vice
President
&
Chief
Accounting Officer