On February 6, 2020, the Compensation and Nominating Committee of the Board of Directors of Summit Financial Group, Inc. (the “Company”) (the “Committee”) approved the Eleventh Amendment to the Amended and Restated Employment Agreement of H. Charles Maddy, III, the Company’s Chief Executive Officer, to extend the term of Mr. Maddy’s Employment Agreement dated March 4, 2005, for an additional year until March 4, 2023. A copy of the Eleventh Amendment to the Amended and Restated Employment Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

On February 6, 2020, the Committee adopted the Executive Officer Management Incentive Plan for 2020. The Executive Officer Management Incentive Plan for 2020 provides executive officers of the Company with the opportunity to earn a bonus payment varying between 15 to 35 percent of the executive officer’s base salary as of January 1, 2020 multiplied by a multiplier based on the Company’s return on average tangible equity (“ROATE”) for 2020. The targeted range for the Company’s ROATE for 2020 is 11.50 to 12.49 percent. If the Company’s actual ROATE for 2020 is within this targeted range, each executive officer will receive an incentive payment varying between 15 to 35 percent of their respective annual base salary as of January 1, 2020 (the “Targeted Incentive”).

If the Company’s actual ROATE for 2020 is greater than the targeted range, executive officers will be eligible to receive an incentive that is greater than the Targeted Incentive; conversely, if the Company’s actual ROATE for 2020 is less than the targeted range, executive officers will be eligible to receive an incentive that is less than the Targeted Incentive. No incentive payments will be made if the Company’s actual ROATE is less than 9.50%.

No incentives may be made under the Executive Officer Management Incentive Plan for 2020 if at December 31, 2020 through the time of payment of the incentive in 2021, the Company or any affiliate is subject to any active or pending, formal or informal, agreement or enforcement action to which any bank regulatory authority is a party, including, but not limited to a memorandum of understanding, written agreement, or order of cease and desist.

A copy of the Executive Officer Management Incentive Plan for 2020 is included as Exhibit 10.2 and is incorporated herein by reference. The above summary is qualified in its entirety by reference to the Executive Officer Management Incentive Plan for 2020 attached as Exhibit 10.2.

On February 6, 2020, the Committee also adopted a supplemental executive retirement plan for the named executive officers of the Company in order to incent these officers to remain employed by the Company to age 65. The supplemental executive retirement plan will provide the following annual defined retirement benefit payable for the life of the named executive officer: H. Charles Maddy, III: $73,000; Robert S. Tissue: $25,000; Patrick N. Frye: $10,000; Scott C. Jennings: $25,000; and Bradford E. Ritchie: $50,000. This plan is in addition to the existing executive salary continuation agreements between the Company and the named executive officers. H. Charles Maddy, III and Scott C. Jennings are fully vested in the benefits under the existing executive salary continuation agreements. Robert S. Tissue and Patrick N. Frye will fully vest in two years and Bradford E. Ritchie will fully vest in nine years. Under the new supplemental executive retirement plan, the named executive officers will vest in the benefits upon attaining age 65.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) The following exhibits are filed as part of this Form 8-K.

SUMMIT FINANCIAL GROUP INC Exhibit
EX-10.1 2 exhibit101.htm EXHIBIT 10.1 Exhibit Exhibit 10.1ELEVENTH AMENDMENT TOAMENDED AND RESTATED EMPLOYMENT AGREEMENTTHIS ELEVENTH AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”),…
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About Summit Financial Group, Inc. (NASDAQ:SMMF)

Summit Financial Group, Inc. (Summit) is a financial holding company. The Company provides community banking services primarily in the Eastern Panhandle and South Central regions of West Virginia and the Shenandoah Valley, and Northern region of Virginia. The Company provides these services through its community bank subsidiary, Summit Community Bank (Summit Community or the Bank). The Company operates through two segments: community banking, and insurance & financial services. The community banking segment consists of its full service banks, which offer customers traditional banking products and services through various delivery channels. The insurance & financial services segment includes three insurance agency offices that sell insurance products. The Company also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia, which provides insurance brokerage services to individuals and businesses.