EXHIBIT 10.3
NOTICE OF STOCK-SETTLED STOCK APPRECIATION RIGHTS GRANT
Participant:
____________________             

Notice:
You have been granted the following stock-settled stock appreciation rights (the
“SARs”) in accordance with the terms of the Summit Financial Group, Inc. 2014
Long-Term Incentive Plan (the “Plan”) and the Stock-Settled Stock Appreciation
Right Agreement (the “Agreement”) attached hereto.    

Type of Award:
Stock-Settled Stock Appreciation Rights

Grant Date:
February 7, 2019             

Strike Price per Share:
$23.94             

Number of SARs Granted:
____________

        
Vesting Schedule:
The exercise of your SARs is subject to the terms of the Plan and this
Agreement. Beginning on each of the following dates, which shall be no earlier
than one year from the Grant Date, you may exercise your SARs with respect to
the corresponding increase in Vesting percentage of the total number of Shares
subject to your SARs in accordance with the schedule set forth below.

Vesting Date
 
Vested Percentage
February 7, 2020
 
20
%
February 7, 2021
 
40
%
February 7, 2022
 
60
%
February 7, 2023
 
80
%
February 7, 2024
 
100
%

Termination:
You must remain continuously employed by Summit Financial Group, Inc. or its
affiliates. In the event of your termination of employment, including due to
death or Disability, the exercisability and vesting of the SARs will be governed
by Paragraph 5 of the Agreement, all subject to the terms and conditions of the
Plan.

Expiration Date:
The SARs will expire ten years from the Grant Date, subject to earlier
termination as set forth in the Plan and the attached Agreement.

SUMMIT FINANCIAL GROUP, INC. 2014 LONG-TERM INCENTIVE PLAN
STOCK-SETTLED STOCK APPRECIATION RIGHTS AGREEMENT
This Stock-Settled Stock Appreciation Right Agreement (this “Agreement”),
effective as of the Grant Date set forth in the Notice of Stock-Settled Stock
Appreciation Rights Grant attached hereto (the “Grant Notice”) is made between
the Summit Financial Group, Inc. (the “Company”), and the Participant set forth
in the Grant Notice. The Grant Notice is included in and made part of this
Agreement.
WHEREAS, the Company desires to grant an award of stock appreciation rights to
the Participant under and pursuant to the Summit Financial Group, Inc. 2014
Long-Term Incentive Plan (the “Plan”);
WHEREAS, the Company desires to evidence the award of a stock appreciation right
to the Participant and to have the Participant acknowledge the terms and
conditions of the stock appreciation right by this Agreement; and
WHEREAS, the Committee (as defined in the Plan) or its delegate, as applicable,
has approved this stock appreciation right award.

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NOW, THEREFORE, IT IS AGREED:
1.Definitions. For purposes of this Agreement, all capitalized terms shall have
the meaning as set forth in the Plan unless otherwise defined herein.

(a)“Common Stock” shall mean the common stock of the Company, $2.50 par value.

(b)Termination by “Disability” If a Participant’s continuous employment
terminates prior to the Termination Date by reason of a permanent disability, as
defined in Internal Revenue Code Section 22(e)(3) (the “Code”), as amended from
time to time, and as determined by the Committee in its discretion based upon
such documentation and information as the Committee may require the Participant
to submit for purposes of establishing permanent disability pursuant to this
Agreement.

(c)“For Cause Termination” shall mean termination for the conviction of
Participant for commission of a felony against the Company or any affiliate.  In
the alternative, if Participant is permitted to resign due to conviction of a
felon as described above, the Board of Directors may vote to immediately
terminate all SARs of such Participant under this Agreement and no SARs shall be
exercisable as of the date of such termination, regardless of
whether any SAR was vested and exercisable prior to the date of such
termination. A majority decision by the Board of Directors is required for
termination and forfeiture of the Participant's SARs under the preceding
sentence.

2.Grant of the SARs. Subject to the provisions of this Agreement and the
provisions of the Plan, the Company hereby grants to the Participant, the right
to receive from the Company an award of stock equal to the excess, if any, of
the Fair Market Value of a share of Common Stock of the Company (each, a
“Share”) on the date of exercise over the Strike Price (as defined in the Grant
Notice, provided that in no event shall the Strike Price be less than the Fair
Market Value as defined in the Plan on the Date of Grant) per Share (such
difference, the “Spread”) multiplied by the number of Shares subject to the SARs
with respect to which the SARs shall have been exercised. The Spread shall be
payable by the Company only in Shares of Common Stock; provided that to the
extent a fractional share is earned, the number of Shares paid shall be rounded
down to the nearest whole number and no fractional Share shall be issued.

3.Exercisability of the SARs. The SARs shall become exercisable in accordance
with the Vesting Schedule and other terms set forth in the Grant Notice. The
SARs shall terminate on the tenth anniversary of the Grant Date stated in the
Grant Notice (the “Expiration Date”), subject to earlier termination as set
forth in the Plan and this Agreement.

4.Method of Exercise of the SARs. The Participant may exercise the SARs, to the
extent then vested and exercisable, by delivering an electronic notice to the
Company’s stock plan administrator in a form satisfactory to the Committee and
in accordance with the procedures established by the Company and the stock plan
administrator, specifying the number of Shares with respect to which the SARs
are being exercised. The SARs may be exercised at any time as to all or any of
the SARs then vested hereunder; provided, however, that the SARs may be
exercised only with respect to whole Shares. The Participant hereby acknowledges
that his or her ability to exercise the SARs may be restricted by the Company’s
Insider Trading Policy.

5. Termination. Except as provided below, the SARs shall terminate and be
forfeited upon termination of the Participant’s employment. Notwithstanding
anything contained in this Agreement, the SARs shall not be exercised after the
Expiration Date.

(a)Death or Disability. The Committee has determined that an acceleration of
vesting up to one calendar year is appropriate in the event of a Participant’s
death or termination of employment due to Disability, as herein provided. If the
Participant’s employment with the Company is terminated due to death or
Disability, then the Participant shall immediately vest in the additional
percentage of SARs, if any, that would have vested at the Vesting Date which
falls after the date of death or date of termination of employment of
Participant due to Disability, but within the calendar year in which the
Participant died or terminated employment due to Disability, as if, for purposes
of Vesting percentage only, the Participant had not died or terminated
employment due to Disability, and had continued employment to such Vesting Date.
All vested SARs shall be exercisable for a period of two years from the date of
death or termination of employment due to Disability; all vested SARs not
exercised within said two year period shall be forfeited in their entirety. All
unvested SARs, shall be forfeited in their entirety.

(b)For Cause Termination - Regardless of Vesting. If the Participant undergoes a
For Cause Termination by the Company, then the SARs shall immediately terminate
and no SARs shall be exercisable as of the date of such termination, regardless
of whether any SAR was vested and exercisable prior to date of such termination.

(c) Other Terminations. Upon termination of the Participant’s employment by the
Company or by the Participant other than under the circumstances described in
Paragraphs 5(a) or 5(b), the SARs, to the extent vested and

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exercisable as of the date of such termination, shall thereafter be exercisable
only for a period of ninety (90) days from the date of such termination, and any
SAR that was not exercisable as of the date of such termination shall be
immediately forfeited.

6.Recapitalization. In the event that the outstanding Common Stock of the
Company is changed by reason of a stock dividend, stock split, recapitalization,
merger, consolidation, or a combination or exchange of shares, the number of
Shares subject to the SARs shall be adjusted in compliance with Section 5 of the
Plan.

7.Compliance with Laws and Regulations. The Company shall not be obligated to
make any payments pursuant to this Agreement unless the Shares subject to SARs
are at that time effectively registered or exempt from registration under the
Securities Act of 1933, as amended, and, as applicable, local laws.
Notwithstanding the foregoing, the Company is under no obligation to register
any Shares to be issued under this Agreement pursuant to federal or state
securities laws. In addition, legal counsel for the Company must be satisfied at
the time of exercise that the issuance of the shares of Stock upon exercise will
be in compliance with the Securities Act and applicable United States Federal,
state, local and foreign laws.

8.Administration. By accepting any benefit under this Agreement, the Participant
and any person claiming under or through the Participant shall be conclusively
deemed to have indicated his or her acceptance and ratification of, and consent
to, all of the terms and conditions of the Plan and this Agreement and any
action taken under the Plan by the Committee or the Company, in any case in
accordance with the terms and conditions of the Plan. Unless defined herein,
capitalized terms are used herein as defined in the Plan. In the event of any
conflict between the provisions of the Plan and this Agreement, the provisions
of the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. This Agreement is subject to all the terms, provisions and
conditions of the Plan, which are incorporated herein by reference, and to such
rules, policies and regulations as may from time to time be adopted by the
Committee. All determinations and interpretations made by the Committee with
regard to any question arising hereunder or under the Plan shall be binding and
conclusive on the Participant and on his legal representatives and
beneficiaries. This Agreement and the Plan and the other related agreements
expressly referred to herein set forth the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof. The headings of sections
and subsections herein are included solely for convenience of reference and
shall not affect the meaning of any of the provisions of this Agreement.

9. Tax Withholding.

(a)Participant shall pay to the Company or a designated Subsidiary, promptly
upon request, an amount equal to the taxes the Company determines it is required
to withhold under applicable tax laws with respect to the SARs.

(b)The Participant acknowledges that the tax laws and regulations applicable to
the SARs and the disposition of the shares following the excise of SARs are
complex and subject to change. At the time of receipt of a stock award upon the
exercise of all or any portion of the SARs, and in any event at the time the
Participant recognizes taxable income with respect to the SARs, the Participant
shall pay to the Company in cash, or make other arrangements, in accordance with
Section 13 of the Plan, for the satisfaction of, any taxes of any kind and
social security payments due or potentially payable or required to be withheld
with respect to such payment. Regardless of any action the Company takes with
respect to any or all tax withholding (including social insurance contribution
obligations, if any), the Participant acknowledges that the ultimate liability
for all such taxes is and remains the Participant’s responsibility (or that of
the Participant’s beneficiary), and that the Company does not: (a) make any
representations or undertakings regarding the treatment of any tax withholding
in connection with any aspect of the SARs, including the grant or vesting
thereof; or (b) commit to structure the terms of the SARs or any aspect of the
SARs to reduce or eliminate the Participant’s (or his or her beneficiary’s)
liability for such tax. In the event, the tax withholding obligations are
settled in Shares, the Company will only withhold whole Shares and therefore the
Participant also authorizes deduction without notice from salary or other
amounts payable to the Participant of cash in an amount sufficient to satisfy
the Participant’s remaining tax withholding obligation.

10.Non-Transferability. The SARs shall not be transferable otherwise than by
will or the laws of descent and distribution, and is exercisable, during the
lifetime of the Participant, only by him or her; provided, however, that the
Committee may, in its discretion, permit the SARs to be transferred subject to
such conditions and limitations as the Committee may impose.

11.No Right to Continued Employment. The Company is not obligated by or as a
result of the Plan or this Agreement to continue the Participant’s employment,
and neither the Plan nor this Agreement shall interfere in any way with the
right of the Company to terminate the employment of the Participant at any time.
The SARs are not part of normal or expected compensation or salary for any
purposes, including, but not limited to, calculating any severance, resignation,
termination, redundancy, dismissal, end of service payments, bonuses,
long-service awards, pension or retirement or welfare benefits or similar
payments and in no event should be considered as compensation for, or relating
in any way to, past services for the Company.

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12.No Rights as a Stockholder. Neither the Participant nor any other person
shall have any rights to dividends or other rights as a stockholder under this
Agreement.

13.Consent to Transfer Personal Data. By accepting the SARs, the Participant
voluntarily acknowledges and consents to the collection, use, processing and
transfer of personal data as described in this paragraph. The Participant is not
obliged to consent to such collection, use, processing and transfer of personal
data. However, failure to provide the consent may affect the Participant’s
ability to participate in the Plan. The Company, holds certain personal
information about the Participant, that may include his or her name, home
address and telephone number, date of birth, social security number or other
Participant identification number, salary grade, hire data, salary, nationality,
job title, any shares of stock held in the Company, or details of all stock
options, restricted stock awards or any other entitlement to shares of stock
awarded, canceled, purchased, vested, or unvested, for the purpose of managing
and administering the Plan (“Data”). The Company will transfer Data amongst
itself as necessary for the purpose of implementation, administration and
management of the Participant’s participation in the Plan, and the Company may
further transfer Data to any third parties assisting Company in the
implementation, administration and management of the Plan. The Participant
authorizes such recipients to receive, possess, use, retain and transfer the
Data, in electronic or other form, for the purposes of implementing,
administering and managing the Participant’s participation in the Plan,
including any requisite transfer of such Data as may be required for the
administration of the Plan, and/or the subsequent holding of shares of stock on
the Participant’s behalf by, a broker or other third party with whom the
Participant may elect to deposit any shares of stock acquired pursuant to the
Plan. The Participant may, at any time, review Data, require any necessary
amendments to it or withdraw the consents herein in writing by contacting the
Company; provided, however, that withdrawing consent may affect the
Participant’s ability to participate in the Plan.

14.Notices. Notices hereunder shall be mailed or delivered to the Company at its
principal place of business and shall be mailed or delivered to the Participant
at the address on file with the Company or, in either case, at such other
address as one party may subsequently furnish to the other party in writing.

15.Other Plans. The Participant acknowledges that any income derived from the
exercise of the SARs shall not affect the Participant’s participation in, or
benefits under, any other benefit plan or other contract or arrangement
maintained by the Company.

16. Counterpart Execution. This Agreement has been executed in two counterparts,
each of which shall be deemed an original and both of which constitute one and
the same document.

17.Section 409A. The SARs are intended to be exempt from the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated and other official guidance issued thereunder (“Section
409A”). The Plan and this Agreement shall be administered and interpreted in a
manner consistent with this intent. If the Company determines that the Agreement
is subject to Section 409A and that it has failed to comply with the
requirements of Section 409A, the Company may, in its sole discretion, and
without the Participant’s consent, amend this Agreement to cause it to comply
with or be exempt from Section 409A.

18.Beneficiary. The Participant may designate a beneficiary in accordance with
Section 11 of the Plan. If at the time of Participant’s death, there is not an
effective beneficiary designation on file or the Participant is not survived by
the Participant’s designated beneficiary, Participant’s rights, if any, under
the Plan and this Agreement shall be exercisable by the legal representative of
Participant’s estate.

19.Governing Law. This Agreement shall be governed by the laws of the State of
West Virginia and construed in accordance therewith without giving effect to
principles of conflicts of laws.

20.Restrictive Covenant; Clawback.

(a)If, at any time within (A) the ten-year term of this grant; (B) two years
after the termination of employment; or (C) two years after the Participant
exercises any portion of this grant, whichever is the latest, the Participant,
in the determination of the Committee of the Company, engages in any activity in
competition with any activity of the Company, or inimical, contrary or harmful
to the interests of the Company, including, but not limited to:

i.Conduct related to his or her employment for which either criminal or civil
penalties against him or her may be sought;

ii.Material violation of Company policies, including, without limitation, the
Company’s Insider Trading Policy;

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iii.Solicit, cause or induce any current contract holder or customer of Company
or any affiliate to purchase services or products that compete directly or
indirectly, with services or products offered by Company or any affiliate;

iv.Do anything to cause, persuade or encourage any contract holder or customer
of Company or any affiliate to reduce, discontinue or terminate any Company
policy, contract, product or service of any kind;

v.Do anything to cause, persuade or encourage any employee or agent of Company
or any affiliate to terminate their affiliation with Company or any affiliate;

vi.Disclose or misuse any trade secret, Confidential Information or other
non-public confidential or proprietary material concerning the Company or any
affiliate; or

vii.Without the prior written consent of the Company, directly or indirectly,
and whether as principal or investor or as an employee, officer, director,
manager, partner, consultant, agent, or otherwise, alone or in association with
any other person, firm, corporation, or other business organization, become
involved in a competing business, as reasonably determined by the Board, within
a seventy-five (75) mile radius of any office or branch owned by the Company or
any of its Subsidiaries or affiliates, or engage during such period in any of
the activities that comprise a competing business in said geographic area;
provided, however, that the provisions of this Section shall apply solely to
those activities of a competing business, with which the Participant was
personally involved or for which the Participant was responsible while employed
by the Company or its Subsidiaries or affiliates during the twelve (12) month
period preceding termination of the Participant’s employment;

then this SAR Award and all grants of stock appreciation rights under this
Agreement held by the Participant shall terminate effective as of the date on
which the Participant enters into such activity, unless terminated sooner by
operation of another term or condition of this Agreement or the Plan, and the
total of the gain realized by the Participant from the exercise of all or a
portion of any grant of stock appreciation rights under this Agreement shall be
repaid by the Participant to the Company. Such gain shall be calculated for each
date on which SARs have been exercised based on the Spread for such date
multiplied by the number of Shares subject to the SARs exercised on such date,
plus interest measured from the first date the Participant engaged in any of the
prohibited activities set forth above at the rate of interest on judgments and
decrees for the payment of money as set by the administrative office of the
Supreme Court of Appeals of West Virginia on an annual basis in accordance with
West Virginia Code Section 56-6-31. The total of the sum of the gain for each
such date of exercise, plus the total of the sum of all such interest, shall be
the amount to be repaid by the Participant to the Company.
(b)For purposes of this Paragraph 20, the phrase “current contract holder or
customer of Company or any affiliate” means any contract holder or customer of
Company or of Summit that becomes known to Participant during his or her
employment with the Company. The term “Company Information” means (i) any
secret, proprietary or confidential information or data, including without
limitation information received from third parties under confidential
conditions; (ii) confidential customer data, including but not limited to
customer names, addresses, phone numbers, insurance coverage, expiration dates,
risk characteristics, premium rates, commission rates, insurance-loss data,
business and personal financial statements, investment data, employee-census
data, health information and the like; (iii) established business relationships
with Company and its affiliates; and (iv) software and other technical,
business, or financial information, the use or disclosure of which might
reasonably be construed to be contrary to the interest of Company, its
affiliates or their clients.

(c)The Participant acknowledges that Participant’s engaging in activities and
behavior in violation of Paragraph 20(a) above will result in a loss to the
Company which cannot reasonably or adequately be compensated in damages in an
action at law, that a breach of this Agreement will result in irreparable and
continuing harm to the Company and that therefore, in addition to and cumulative
with any other remedy which the Company may have at law or in equity, the
Company shall be entitled to injunctive relief for a breach of this Agreement by
the Participant. The Participant acknowledges and agrees that the requirement in
Paragraph 20(a) above that Participant disgorge and pay over to the Company any
gain realized by the Participant is not a provision for liquidated damages. The
Participant agrees to pay any and all costs and expenses, including reasonable
attorneys’ fees, incurred by the Company in enforcing any breach of any covenant
in this Agreement.

21.Waiver / Unsecured. By accepting the grant of the SARs or exercising it, the
Participant waives any right to compensation or damages in consequence of the
termination of his or her office or employment with the Company or any
Subsidiary for any reason (and whether or not such termination is lawful)
insofar as those rights arise or may arise, from his or her ceasing to have
rights under or be entitled to exercise any SAR under the Plan as a result of
such termination or from the loss or diminution in value of such rights or
entitlement. Prior to the distribution of any shares hereunder, this Grant
represents an unsecured obligation, payable only from the general assets of the
Company.

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22.Change in Control. Upon the occurrence of a Change in Control, as defined in
the Plan, this Agreement and the SARs granted hereunder shall be governed by
Section 11 of the Plan.

23.Representations. The Participant has reviewed with his own tax advisors the
applicable tax (U.S., foreign, state, and local) consequences of the
transactions contemplated by this Agreement. The Participant is relying solely
on such advisors and not on any statements or representations of the Company or
any of its agents. The Participant understands that he or she (and not the
Company) shall be responsible for any tax liability that may arise as a result
of the transactions contemplated by this Agreement.

24.Binding Effect. This Agreement shall be binding upon and inure to the benefit
of any successors and assigns to the Company and all persons lawfully claiming
under Participant.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has executed this Agreement as of the date first
above written. The Participant has accepted and executed this Agreement as of
the date written below.
 
 
 
SUMMIT FINANCIAL GROUP, INC.
 
 
 
 
 
 
 
 
By:     _______________________________
 
 
 
Its:    _______________________________

    
Participant acknowledges receipt of a copy of the Plan, a copy of which is
attached, and represents that he or she is familiar with the terms and
provisions of the Plan. Participant hereby accepts this SAR subject to all the
terms and provisions of the Plan. Participant hereby agrees to accept as
binding, conclusive, and final all decisions and interpretations of the
Committee, and, where applicable, the Board, upon any questions arising under
the Plan.
 
 
 
PARTICIPANT
 
 
 
 
 
 
 
 
            _______________________________
 
 
 
Dated: _______________________________