Exhibit 10.2

CHANGE IN CONTROL AGREEMENT

          THIS CHANGE IN CONTROL AGREEMENT, made and entered into this 4th day
of March, 2005, by and between Summit Financial Group, Inc. (the “Company”) and
H. Charles Maddy, III (“Maddy”);

          WHEREAS, Company recognizes that Maddy’s contribution to the growth,
success and continued operation of Company has been substantial, and

          WHEREAS, Company believes it is in the best interest of Company to
grant Maddy a level of security to preserve key management and to assure fair
consideration of any affiliation opportunities that arise.

          NOW, THEREFORE, in consideration of the promises and respective
covenants and agreements of the parties herein contained, Company and Maddy
agree as follows:

A.   Definitions. For purposes of this Change in Control Agreement, the
following definitions shall apply:

  (1)   “Change of Control” means

  (a)   a change of ownership of the Company that would have to be reported to
the Securities and Exchange Commission as a Change of Control, including but not
limited to the acquisition by any “person” and/or entity as defined by
securities regulations and law, of direct or indirect “beneficial ownership” as
defined, of twenty-five percent (25%) or more of the combined voting power of
the Company’s then outstanding securities; or     (b)   the failure during any
period of three (3) consecutive years of individuals who at the beginning of
such period constitute the Board for any reason to constitute at least a
majority thereof, unless the election of each director who was not a director at
the beginning of such period has been approved in advance by directors
representing at least two-thirds (2/3) of the directors at the beginning of the
period; or     (c)   the consummation of a “Business Combination” as defined in
the company’s Articles of Incorporation.

  (2)   “Company” shall mean Summit Financial Group, Inc.

 

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  (3)   “Employment Agreement” shall mean the Employment Agreement dated as of
March 4, 2005, by and between Summit Financial Group, Inc. and H. Charles Maddy,
III.     (4)   “Salary” means Maddy’s Base Salary as defined in the Employment
Agreement in effect on the date of termination of Maddy’s employment under this
Agreement, or if no Employment Agreement is in effect, Maddy’s Base Salary on
the date of termination of employment hereunder, corresponding to the definition
of Base Salary in the most recent Employment Agreement.     (5)   For purposes
of this Change in Control Agreement, “Good Cause” shall mean: (i) excessive
absenteeism without approval of Summit not caused by disability; (ii) gross or
willful neglect of duty resulting in substantial harm to Summit after Maddy has
been given written direction and reasonable time to perform such duties; or
(iii) any acts or omissions on the part of Maddy which when proven constitute
fraud or commission of any criminal act involving the person or property of
others or the public generally.     (6)   “Disability” means a physical or
mental condition rendering Maddy substantially unable to perform the duties of
an officer and director of a banking organization.     (7)   “Retirement” means
termination of employment by Maddy in accordance with Company’s (or its
successor’s) retirement plan, including early retirement as approved by the
Board of Directors.     (8)   “Good Reason” means

  (a)   A Change of Control in the Company (as defined above) and:

  (i)   a decrease in Maddy’s overall compensation (including, without
limitation, salary, perquisites, bonuses and other earnings reported on IRS Form
W-2, but excluding a diminution in board fees) below its level in effect
immediately prior to the date of consummation of the Change of Control, without
Maddy’s prior written consent; or     (ii)   a material reduction in the
importance of Maddy’s job responsibilities or assignment of job responsibilities
inconsistent with Maddy’s responsibility prior to the Change of Control without
Maddy’s prior written consent; or     (iii)   a geographical relocation of Maddy
to an office more than 20 miles from Maddy’s location at the time of the Change
of Control or the imposition of travel requirements inconsistent with those

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      existing prior to the Change of Control without Maddy’s prior written
consent; or

  (b)   Failure of the Company to obtain assumption of this Change in Control
Agreement by its successor as required by Paragraph M(1) below; or     (c)   Any
removal of Maddy from, or failure to re-elect Maddy to any of Maddy’s positions
with Company immediately prior to a Change of Control (except in connection with
the termination of Maddy’s employment for Good Cause, death, Disability or
Retirement) without Maddy’s prior consent.

  (8)   “Wrongful Termination” means termination of Maddy’s employment by the
Company or its affiliates for any reason other than at Maddy’s option, Good
Cause or the death, Disability or Retirement of Maddy prior to the expiration of
twelve (12) months after consummation of the Change of Control.

  B.   Retention of Maddy After Change of Control. In order to facilitate
management continuity and to promote an orderly transition of ownership, Company
and Maddy agree that after a Change of Control, Maddy shall be employed by the
acquiring company for a period of one (1) year (the “Transition Period”),
commencing upon the date of consummation of the transaction resulting in a
Change of Control. During the Transition Period, Maddy may terminate his
employment for Good Reason, and the Company may terminate the employment of
Maddy for Good Cause. If Company terminates Maddy in a manner constituting
Wrongful Termination, or Maddy terminates for Good Reason, Maddy shall be
entitled to receive the compensation set forth in paragraph E below.         If
the Employment Agreement is still in effect, Maddy shall be employed pursuant to
the terms of Article II and Article V, A-E of the Employment Agreement. All
other terms of Maddy’s employment, including without limitation his right to
receive termination payments and the term of his employment, will be controlled
by this Agreement.     C.   Compensation of Maddy for Death or Disability During
the Transition Period. In the event of the Death or Disability of Maddy during
the Transition Period, Maddy shall be entitled to three times the greater of
(a) Maddy’s Salary in effect immediately prior to the date of consummation of a
Change of Control or (b) Maddy’s Salary in effect on the date of termination of
Maddy’s employment under this Agreement.

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  D.   Compensation of Maddy Upon Expiration of the Transition Period. Within a
period of thirty (30) days after expiration of the Transition Period, Maddy
shall be entitled to be paid an amount equal to three (3) times the greater of
(a) Maddy’s Salary in effect immediately prior to the date of consummation of a
Change of Control or (b) Maddy’s Salary in effect on the date of expiration of
the Transition Period.     E.   Compensation of Maddy Upon Termination for Good
Reason or Wrongful Termination during the Transition Period. Except as
hereinafter provided, if Maddy terminates his employment with the Company for
Good Reason or the Company terminates Maddy’s employment in a manner
constituting Wrongful Termination, the Company agrees as follows:

  (1)   The Company shall pay Maddy a cash payment equal to three (3) times the
greater of (a) Maddy’s Salary in effect immediately prior to the date of
consummation of a Change of Control or (b) Maddy’s Salary in effect on the date
of termination of Maddy’s employment under this Agreement.     (2)   Maddy will
be entitled to receive his reasonable share of the Company’s cash bonuses, if
any, allocated in accordance with existing principles and authorized by the
Board of Directors. The amount of Maddy’s cash incentive award shall not be
reduced due to Maddy not being actively employed for the full year.     (3)  
Maddy will continue to participate, without discrimination, for the number of
months between the Date of Termination and the date that is thirty-six
(36) months after the date of the consummation of the Change of Control in
benefit plans (such as retirement, disability and medical insurance) maintained
after any Change of Control for Maddy, in general, of the Company, or any
successor organization, provided Maddy’s continued participation is possible
under the general terms and conditions of such plans. In the event Maddy’s
participation in any such plan is barred, the Company shall arrange to provide
Maddy with benefits substantially similar to those which Maddy would have been
entitled had his participation not been barred. However, in no event will Maddy
receive from the Company the employee benefits contemplated by this subparagraph
if Maddy receives comparable benefits from any other source.     (4)  
Paragraph F of this Agreement and Section VII of the Employment Agreement shall
not apply.

  F.   Termination at Maddy’s Option. During the Transition Period, Maddy may
terminate his employment without reason at his option by giving written notice
of termination within six (6) months of consummation of any Change of Control;

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      provided that notice shall be given at least thirty (30) days prior to the
effective time for termination. In such event, Maddy shall be entitled to
receive a lump sum payment equal to 75% of the greater of (a) Maddy’s Salary in
effect immediately prior to the date of consummation of a Change of Control or
(b) Maddy’s Salary in effect on the date of termination of Maddy’s employment
under this Agreement.     G.   Noncompetition and Nonsolicitation. In
consideration of the covenants set forth herein, including but not limited to
the payment set forth in paragraphs C, D and E hereof, Maddy agrees as follows:

  (1)   For a period of three (3) years after expiration of the Transition
Period, provided Maddy’s employment under this Agreement is not sooner
terminated, Maddy shall not, directly or indirectly engage in the business of
banking, in the entire State of West Virginia, in any county or location in
which Summit has operating offices at the time of termination , in the following
designated locations in Virginia (See Exhibit to Paragraphs G(1) and
(2) attached, which is incorporated herein by reference This Exhibit was molded
to included the counties where the municipalities are located.), or in any
location identified by Summit in its three-year strategic plan as a location for
future expansion to be adopted by the Board and reviewed and updated at regular
intervals.     (2)   For a period of one (1) year after Maddy’s employment with
Summit is terminated for any reason other than Maddy’s Disability, Retirement,
Good Reason or termination at Maddy’s option as provided in paragraph E hereof,
Maddy shall not, directly or indirectly, engage in the business of banking in
the entire State of West Virginia, in any county or location in which Summit has
operating offices at the time of termination, , in the following designated
locations in Virginia (See Exhibit to Paragraphs G (1) and (2)) attached, which
is incorporated herein by reference This Exhibit was molded to included the
counties where the municipalities are located.), or in any location identified
by Summit in its three-year strategic plan as a location for future expansion to
be adopted by the Board and reviewed and updated at regular intervals.     (3)  
For purposes of Paragraphs G(1) - (2), being engaged in the business of banking
shall mean Maddy’s engaging in any business or activity of any nature that is
competitive with the business of Summit or its affiliates in the specified
geographic area or Maddy’s solicitation of business from clients with a primary
or principal office in the specified geographic area.     (4)   In the event
that this provision shall be deemed by any Court or body of competent
jurisdiction to be unenforceable in whole or in part by reason of its

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      extending for too long a period of time, or too great a geographical area
or over too great a range of activities, or is overly broad in any other respect
or for any other reason, then in such event this Employment Agreement shall be
deemed modified and interpreted to extend over only such maximum period of time,
geographical area, or range of activity or otherwise, so as to render these
provisions valid and enforceable, and as so modified, these shall be enforceable
and enforced.

  H.   Other Employment. Maddy shall not be required to mitigate the amount of
any payment provided for in this Change in Control Agreement by seeking other
employment. The amount of any payment provided for in this Change in Control
Agreement shall not be reduced by any compensation earned or benefits provided
(except as set forth in Paragraph E(3) above) as the result of employment by
another employer after the Date of Termination.     I.   Rights of Company Prior
to the Change of Control. This Change in Control Agreement shall not affect the
right of the Company or Maddy to terminate the foregoing Employment Agreement or
the employment of Maddy in accordance thereof; provided, however, that any
termination or reduction in salary or benefits that takes place after
discussions have commenced that result in a Change of Control shall be presumed
(without clear and convincing evidence to the contrary) to be Good Reason and a
violation of this Change in Control Agreement entitling Maddy to the benefits
hereof, so that any termination by Company shall be deemed to be a Wrongful
Termination, and all references in this Change in Control Agreement to Salary
shall be deemed to mean the Salary, as defined herein, based on the earnings
Maddy would have had prior to any reduction thereof.     J.   Confidentiality.
Maddy shall not, during the term of this Agreement or at any time thereafter,
directly or indirectly, publish or disclose to any person or entity any
confidential information (other than a Company employee entitled to know such
confidential information) concerning the assets, customer/client lists, business
or affairs of Company, and its affiliates, including but not limited to any
trade secrets, financial data, employee or customer/client information or
organizational structure. Notwithstanding the foregoing, nothing herein shall
prevent Maddy from utilizing the knowledge and experience he has acquired in the
banking industry including without limitation the knowledge of producer bonus
plans.         All files, records, documents, information, letters, notes, media
lists, notebook and similar items relating to the business of Company shall
remain the exclusive property of Company. Upon the expiration or earlier
termination of this Agreement, or when requested by Company, Maddy shall
immediately deliver to

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      Company all such files, computer data files, records, documents,
information and other items in the possession of or under the control of Maddy.
        All business produced by Maddy while in the employ of is the exclusive
property of Company unless specifically excluded elsewhere in this Agreement.
Maddy shall not, during the term of this Agreement or any time thereafter,
intentionally interfere with any business or contractual relationship of Summit.
    K.   Gross-Up Payment. Notwithstanding anything in this Agreement to the
contrary, in the event it shall be determined that any payment or distribution
by Company and any of its subsidiaries and affiliates to or for the benefit of
Maddy (whether paid or payable or distributed or distributable pursuant to this
Agreement, the Supplemental Retirement Agreement between Company and Maddy, the
Employment Agreement between Company and Maddy, or any other agreement,
contract, plan or arrangement, but determined without regard to any additional
payments required under this Paragraph J) (any such payments and distributions
collectively referred to as “Payments”), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, or any
similar tax that may hereinafter be imposed or any interest and penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”), then
Company shall pay to Maddy an additional payment (the “Gross-Up Payment”) equal
to one hundred percent (100%) of the Excise Tax and one hundred percent (100%)
of the amount of any federal, state and local income taxes and Excise Tax
imposed on the Gross-Up Payment.         All determinations required to be made
under this Paragraph J, including whether a Gross-Up Payment is required and the
amount of such Gross-Up Payment, shall be made by the firm of independent
accountants selected by Company to audit its financial statements (the
“Accounting Firm”) which shall provide detailed supporting calculations both to
Company and Maddy in good faith within a reasonable time period. In the event
that the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting a “change in control,” Maddy shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the “Accounting
Firm” hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by Company. Any Gross-Up Payment, as determined pursuant to this
Paragraph J, shall be paid to Maddy within 30 days of the receipt of the
Accounting Firm’s determination.     L.   Arbitration. Any dispute between the
parties arising out of or with respect to this Agreement or any of its
provisions or Maddy’s employment with Company, whether sounding in tort or
contract, shall be resolved by the sole and exclusive remedy of

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      binding arbitration. Maddy hereby waives his right to a jury trial and his
right to receive noneconomic damages. Arbitration shall be conducted in
Moorefield, West Virginia, in accordance with the rules of the American
Arbitration Association (“AAA”). The parties agree each to select one arbitrator
from an AAA employment panel. Within ten days after selection of the second
arbitrator, the two arbitrators shall select a third arbitrator. The arbitration
shall be conducted in accordance with the West Virginia Rules of Evidence and
all discovery issues shall be decided by the arbitrator. The panel of
arbitrators shall supply a written opinion and analysis of the matter submitted
for arbitration along with the decision. The arbitration decision shall be final
and subject to enforcement in the local circuit court.       In any arbitration
proceeding between the parties, the losing party shall pay to the prevailing
party all reasonable expenses and costs including attorneys’ fees incurred by
the prevailing party. A party shall be considered a prevailing party if:

  (i)   it initiated the arbitration and substantially obtained the relief it
sought, either through a judgment or the losing party’s voluntary action before
arbitration (after it is scheduled) or judgment;     (ii)   the other party
withdraws its action without substantially obtaining the relief it sought, or  
  (iii)   it did not initiate the arbitration and judgment is entered for either
party, but without substantially granting the relief sought.

  M.   Successors; Binding Agreement.

  (1)   The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
satisfactory to Maddy, to expressly assume and agree to perform this Change in
Control Agreement. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of the this Change in
Control Agreement and shall entitle Maddy to compensation from the Company in
the same amount and on the same terms as he would be entitled to hereunder if he
terminated his employment for Good Reason hereunder.     (2)   This Change in
Control Agreement and all rights of Maddy hereunder shall inure to the benefit
of and be enforceable by Maddy’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If
Maddy should die while any amounts would still be payable to him hereunder if he
had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this

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      Amended and Restated Agreement to Maddy’s devisee, legatee, or other
designee or, if there be no such designee, to Maddy’s estate.

  N.   Indemnification. To the fullest extent permitted under West Virginia law
and federal banking law, Summit agrees that it will indemnify and hold harmless
Maddy from and against all costs and expenses, including without limitation, all
court costs and attorney’s fees, incurred by him in defending any and all
claims, demands, proceedings, suits or actions, actually instituted or
threatened, by third parties, involving this Agreement, its validity or
enforceability or with respect to any payments to be made pursuant thereto.    
O.   Survival of Change in Control Agreement. This Change in Control Agreement
shall survive the expiration of the Employment Agreement.

          IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed as of the day first written above:

              SUMMIT FINANCIAL GROUP, INC.
 
       

  By:   /s/ Oscar M. Bean

       
 
       

  Its:   Chairman of the Board
 
               /s/ H. Charles Maddy, III           H. CHARLES MADDY, III

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Exhibit to Paragraphs G(1) and (2) of Change in Control Agreement

By and Between Summit Financial Group, Inc. and H. Charles Maddy, III, dated
March 4, 2005

Designated Virginia Locations

     

  Ashburn
 
   

  Charlottesville
 
   

  Fredericksburg
 
   

  Leesburg
 
   

  Purcellville
 
   

  Warrenton

*   The designation of the municipality expressly includes the county in which
the municipality is located.