FORM OF FIRST AMENDMENT TO NON-QUALIFIED STOCK OPTION GRANT AGREEMENT
FORM
OF FIRST
AMENDMENT TO NON-QUALIFIED STOCK OPTION GRANT AGREEMENT
THIS
FIRST
AMENDMENT TO NON-QUALIFIED STOCK OPTION GRANT AGREEMENT (this
“Amendment”), entered into as of the ___ day of May, 2006, and effective as of
December __, 2005, by and between SUMMIT FINANCIAL GROUP, INC., a West Virginia
corporation and bank holding company (“Summit”) and [name
of officer],
(“Participant”).
W
I T N E S
S E T H:
WHEREAS,
on
December 7, 2004, Summit and Participant entered into that certain Summit
Financial Group, Inc. Non Qualified Stock Option Grant Agreement (the “Option
Agreement”) whereby Summit granted Participant an option to purchase a total of
[number
of shares underlying option]
shares of
$2.50 par value common stock of Summit’s Common Stock at a price of Fifty-One
Dollars and Eighty-Five Cents ($51.85) (the “Option”), subject to the terms and
conditions of the Summit Financial Group, Inc. 1998 Officer Stock Option Plan
(the “Plan”), dated May 5, 1998, which was adopted by Summit and which was
incorporated by reference; and
WHEREAS,
on
December 15, 2004, Summit effectuated a two-for-one stock split of its Common
Stock which caused the number of shares underlying the Option to double and
the
exercise price of each share to decrease to Twenty-Five Dollars and Ninety-Three
Cents ($25.93); and
WHEREAS,
the
Financial Accounting Standards Board adopted SFAS 123R which requires companies
to recognize expense relative to options vesting after January 1, 2006;
and
WHEREAS,
based on the changes to the accounting rules, on December 6, 2005, the
Compensation and Nominating Committee accelerated the vesting schedule set
forth
in the Option Agreement so that all of the shares underlying the Option that
were not already vested became fully vested on December 6, 2005;
and
WHEREAS,
the
Compensation and Nominating Committee imposed a restriction on the sale of
the
stock underlying the Option that prohibits the Participant from selling any
portion of the stock underlying the Option until the original date on which
the
option would have vested had Summit not accelerated the vesting; and
WHEREAS,
Summit and the Participant desire to enter into this Amendment to evidence
the
Participant’s consent to the acceleration of the vesting schedule in the Option
Agreement and the restriction on the sale of stock underlying the Option.
NOW
THEREFORE, for in consideration of the Premises and mutual covenants, agreements
and undertakings, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties covenant and agree
as
follows:
1. Acceleration
of Vesting Schedule.
Effective
as of December 6, 2005, the vesting schedule in paragraph 2 of the Option
Agreement is hereby amended to provide that all of the shares underlying the
Option that were not already vested as of December 6, 2005, are fully vested
and
exercisable as of December 6, 2005.
2. Restrictions
on the Sale of Stock Underlying the Option.
Effective
as of December 6, 2005, the Participant hereby agrees not sell the stock
underlying the Option until the original date that that portion of the Option
would have become vested and exercisable (as set forth in paragraph 2 of the
Option Agreement). The Participant hereby agrees that this restriction is
reasonable in light of Summit’s acceleration of the vesting schedule applicable
to the Option.
3. Incorporation
of Plan by Reference.
The
Option
is granted pursuant the terms of the Plan, the terms of which are incorporated
herein by reference, and the Option shall in all respects be interpreted in
accordance with the Plan. The Compensation and Nominating Committee shall
interpret and construe the Plan, the Option Agreement and this Amendment, and
its interpretations and determinations shall be conclusive and binding on the
parties to this Amendment and any other person claiming an interest under the
Option Agreement as amended by this Amendment, with respect to any issue arising
under it or the Plan. Unless otherwise expressly stated herein, in the event
of
any inconsistency between the terms of the plan, the Option Agreement, and
this
Amendment, the terms of the Plan shall control.
4. Enforceable
Documents.
Except as
modified herein, all terms and conditions of the Option Agreement, as the same
may be supplemented, modified, amended or extended from time to time, are and
shall remain in full force and effect.
5. Authority.
The
undersigned are duly authorized by all required action or agreement to enter
into this Amendment.
6. Modifications
to Amendment.
This
Amendment may be amended or modified only by an instrument or document in
writing signed by the person or entity against whom enforcement is
sought.
7. Governing
Law.
This
Amendment, and any documents executed in connection herewith or as required
hereunder, and the rights and obligations of the undersigned hereto and thereto,
shall be governed by, construed and enforced in accordance with the laws of
the
State of West Virginia.
IN
WITNESS
WHEREOF, the parties hereto have duly executed and delivered this Agreement
as
of the date first written above.
SUMMIT
FINANCIAL GROUP, INC.
By: ___________________________________
Its: ________________________________
__________________________________________
[name
of Participant]