policy.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit
10.10

    


    


    SUMMIT
FINANCIAL GROUP, INC.

    


    BOARD
ATTENDANCE AND COMPENSATION POLICY

    


    


    1.      PURPOSE AND
CONTENTS

    


    General

    


    This
section outlines the Summit Financial Group and its subsidiaries Board
Attendance and Compensation Policy, formalized by the Board of Directors of
Summit Financial Group, Inc. on the date indicated above.

    


    Topics
covered in this policy are:

    


    Retainer
and Fees for Subsidiary Board
Members                                                                                           Topic
2

    Retainer
and Fees for Summit Board
Members                                                                                               
 Topic 3

    Meeting
Fees for Division Board
Members                                                                                                  
   Topic 4

    Employee-Directors                                                                                                                                             
 Topic 5

    Expense
Reimbursement                                                                                                                                       Topic
6

    Payment
by Direct Deposit and Deferral of
Payments                                                                                    
Topic 7

    Attendance                                                                                                                                                             Topic 8

    Renomination                                                                                                                                                         Topic
9

    Mandatory
Retirement                                                                                                                                     
    Topic 10

    Benefits                                                                                                                                                                   Topic 11

    Deferred
Compensation
Plan                                                                                                                              
Topic 12

    Stock
Requirements                                                                                                                                             
Topic 13

    


    Effective
Date

    


    All
employees of Summit Financial Group, Inc., herein referred to as the “Summit”,
must comply with the terms of this policy immediately.  Managers,
employees and technical personnel must modify system configurations and
procedures, if necessary, to comply with the terms of this plan within 10
business days.

    


    2.      RETAINER AND FEES FOR
SUBSIDIARY BOARD MEMBERS

    


    Members
of the board of directors of the subsidiaries of Summit will be paid retainer
fees based on the asset size for each bank as of December 31st of the
prior year, as follows:

    


    Asset Size of
Bank                                                Annual
Retainer                                           Fee Per
Meeting

    Up to
$100
Million                                                  
 $2,000                                         
      $125 per meeting attended

    $101
Million - $250
Million                                      $3,000                                             
  $125 per meeting attended

    $250
Million and
Over                                             
$5,000                                        
       $125 per meeting attended

    


    In
addition to the above retainer fees and fees per board meeting attended, board
committee members will also be paid $100 per committee meeting
attended.  Members of board committees may attend committee meetings
in person or by video conference.  Any member of any board or
committee may attend meetings by telephone, but payment will be made for only
one board meeting and one committee meeting in any given year where attendance
is by telephone.

    


    3.      RETAINER AND FEES FOR
HOLDING COMPANY BOARD MEMBERS

    


    Summit
board members will be paid as follows:

    
      	
              ·  

            	
              $1,100
      per board meeting attended;

            


    

    
      	
              ·  

            	
              $150
      per committee meeting attended (other than Audit Committee and
      Compensation and nominating
Committee);

            


    

    
      	
              ·  

            	
              $750
      per Audit Committee meeting
attended;

            


    

    
      	
              ·  

            	
              $750
      per Compensation and Nominating Committee
  attended.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Members
of the board of directors of Summit may attend board meetings or committee
meetings in person or by video conference.  Any member of any board or
committee may attend meetings by telephone, but payment will be made for only
one (1) board meeting and one (1) committee meeting in any given year where
attendance is by telephone.  Notwithstanding the foregoing, members of
the Audit Committee should not attend meetings by telephone.  In
addition, Audit Committee members shall receive no other remuneration other than
the retainer fees and fees per meeting set forth herein for serving on the Audit
Committee.

    


    4.      MEETING FEES FOR DIVISION
BOARD MEETINGS

    


    The
Chairman of each division shall appoint individuals to serve as a member of the
division board of directors.  Each division board member shall serve
for a term of two (2) years and may be re-appointed for an additional two-year
term.  The division board of directors shall operate solely as an
advisory board and shall have no authority to manage the business and property
of Summit or its subsidiaries or to direct the operations of Summit or its
subsidiaries.  Members of each division board of directors shall not
be paid a retainer fee; however each member of the division board of directors
shall be paid $100 per division meeting attended.  The $100 fee per
meeting shall only be paid to the members of the division board of directors who
attend the division meetings in person and not by telephone.

    


    5.      EMPLOYEE-DIRECTORS

    


    If an
individual is a member of the board of directors of Summit or any of its
subsidiaries and is also an employee of Summit or any of its subsidiaries, then
such employee/director shall be paid the retainer fees and the fees for each
board meeting attended as set forth above; however, such employee/director shall
not be paid the fees for each committee meeting attended.

    


    6.      EXPENSE
REIMBURSEMENT

    


    Any
member of the board of directors of Summit or any of its subsidiaries who must
travel in excess of sixty (60) miles round trip from his primary residence or
place of business to attend a board meeting or committee meeting is eligible for
reimbursement of direct expenses including, but not limited to, mileage and
hotel expenses.  Requests must be filed within 90 days of meeting
date.  Forms are available from the Human Resources Department for
this purpose.

    


    7.      PAYMENT BY DIRECT DEPOSIT
AND DEFERRAL OF PAYMENTS

    


    The
retainer fees and per meeting fees described above may be paid by direct deposit
into each board member’s Summit Financial Group, Inc. subsidiary bank
account.  If the board member is on a subsidiary board and is a
participant in the Director Deferral Plan, then the compensation may be
deferred.  A direct deposit to a board member’s account will be made
on the last day of the month; however, if the last day of the month falls on a
weekend, the direct deposit will be made on the previous Friday.  If
the meeting date falls after the deadline for payroll, payments will be made the
following month for attendance at a meeting.

    


    8.      ATTENDANCE

    


    Summit
owns all of the shares of stock of each of its subsidiaries, and therefore,
Summit has the power to elect the directors of each of its
subsidiaries.   Members serving on the board of directors of each
of Summit’s subsidiaries serve at the will and pleasure of the board of
directors of Summit.  Serving on the board of directors of a financial
institution is a very serious commitment.  In order to do the job
properly, directors must set aside the time to attend the board and committee
meetings.  If a director fails to attend at least 70% of the board and
committee meetings of which he is a member for any given calendar year, then the
director will be placed on attendance probation.  If a director does
not attend at least 70% of the board and committee meetings for two consecutive
years, then the board will ask the individual to resign unless the director
submits a good reason for his or her absence.  Acceptable reasons for
failing to attend board and committee meetings include, but are not limited to,
public service, personal health problems, or family health
problems.  The Human Resources Department will send out an attendance
summary at the end of June and December of each calendar year detailing the
directors’ attendance at board and committee meetings.

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    9.      RENOMINATION

    


    Each
year, the Nominating Committee will meet to assess the performance of all board
members and make a recommendation to the full board of Summit as to which board
members should be renominated.  The Nominating Committee will assess
whether each member is continuing to fulfill his or her fiduciary duties to the
board.  Additionally the Nominating Committee will assess the
contribution by said board members to furthering the mission of their respective
bank.

    


    10.           MANDATORY
RETIREMENT

    


    Members
of the Board of Directors of Summit and its subsidiaries are subject to a
mandatory retirement age of 70.  When a Summit or subsidiary bank
board member reaches age 70, he/she will not be renominated.  The
following exceptions have been
made to this requirement:

    


    
      	
              1.  

            	
              Members
      of the board of directors of Summit Community Bank who were Potomac Valley
      Bank board members at the time of the merger of Potomac Valley Bank and
      South Branch Valley National Bank will not be renominated after obtaining
      age 80.

            


    

    


    
      	
              2.  

            	
              Harry
      Welton and Donald Biller, members of the board of directors of Summit
      Community Bank, will not be re-nominated after the age of
    80.

            


    

    


    
      	
              3.  

            	
              Members
      of the board of directors of Summit who were board members of Potomac
      Valley Bank and who were at the age of 60 at the time of the Potomac
      Valley Bank merger into Summit will not be re-nominated after obtaining
      age 80.

            


    

    


    
      	
              4.  

            	
              Any
      member of the board of directors of Summit or any of its subsidiaries who
      remains an active employee of Summit or any of its subsidiaries is not
      subject to mandatory retirement because of
age.

            


    

    


    
      	
              5.  

            	
              The
      division board members are not subject to mandatory retirement because of
      age.

            


    

    


    11.           BENEFITS

    


    Individuals
who were members of either the South Branch Valley National Bank board or
members of the Potomac Valley Bank board at the time of merger, will continue
benefits provided before the merger until their mandatory retirement from the
board.  At retirement, the board member may continue their benefits
through Summit provided the board member pays 100% of the premium of the
benefit.

    


    Any
future offer of benefits will be reviewed and approved by the Compensation
Committee before being offered to the board members.

    


    12.           DEFERRED COMPENSATION
PLAN

    


    A
deferred compensation plan (“Director Deferred Compensation Plan”) for the
members of the board of directors of the subsidiaries of Summit was established
to allow members of the board of directors of the subsidiaries of Summit to
apply their deferred compensation towards the purchase of shares of stock of
Summit.  As further described below in Section XII, the shares of
stock of Summit purchased through the Director Deferred Compensation Plan will
be counted towards the minimum requirement of stock that each member of the
board of directors of each subsidiary of Summit must own to maintain a seat on
the board of directors.

    


    13.           STOCK
REQUIREMENTS

    


    In order
to be elected to and maintain a seat on the board of directors of Summit or any
of its subsidiaries, a member must hold in his or her own right, a minimum
number of shares of the stock of Summit. Regulations promulgated by West
Virginia law set forth the minimum number of
shares that must be owned by each director.  Qualifying share
ownership for directors of Summit Community Bank are governed by West Virginia
law.  The bylaws of Summit set forth more stringent requirements than
established by West Virginia law.  In addition, this policy
establishes more stringent requirements than the requirements set forth in the
bylaws of Summit Community Bank..

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    The
requirements are as follows:

    


    •           Summit
Financial Group, Inc.

    


    West
Virginia law provides that each director of Summit must own in his or her own
right, common or preferred stock of Summit, in an amount equal to or greater
than any one of the following:

    


    (i)           aggregate
par value of $500.00;

    (ii)          aggregate
shareholders’ equity of $500.00; or

    (iii)         aggregate
fair market value of $500.00.

    


    Determination
of the fair market value of the director’s stock in Summit is based on the value
of the stock on the date it was purchased or on the date that the individual
become a director, whichever is greater.

    


    Directors
should be aware that although based on the current market value of Summit stock,
the minimum number of shares required to be owned under this policy exceeds the
regulatory minimum, a decrease in the market value of Summit stock could require
directors to purchase more shares to meet the regulatory minimums discussed
below.

    


    Summit’s
bylaws and this policy impose more stringent requirements on directors than
imposed by West Virginia law.  Summit’s bylaws and this policy require
that each director own in his or her own right, a minimum of 2,000 shares of
Summit’s common stock.  Summit’s bylaws specify that the following
shares are held in a director’s “own right”: (i) shares held solely in the
director’s name; (ii) shares held through the corporation’s employee stock
option plan, a profit-sharing plan, individual retirement account, retirement
plan or similar arrangement; and (iii) shares owned by a company where the
director owns a controlling interest.

    


    The West
Virginia Attorney General has interpreted the language “own in his own right” in
the West Virginia statute governing qualifying shares, W.Va. Code § 31A-4-8, to
exclude any shares that a director owns jointly.  Accordingly,
Summit’s bylaws and this policy allow shares held jointly by a director and his
or her spouse to be counted when determining whether the director owns 2,000
shares of common stock in his or her own right, as long as the director owns
stock in his or her own name with a minimum value (calculated by the par value,
shareholder’s equity or fair market value) of at least $500 (the minimum imposed
by West Virginia law).

    


    •           Summit
Community Bank

    


    West
Virginia state law and the bylaws of Summit Community Bank provide that each
director of Summit Community Bank must own in his or her own right, common or
preferred stock of Summit, in an amount equal to or greater than any one of the
following:

    


    (i)           aggregate
par value of $500.00;

    (ii)          aggregate
shareholders’ equity of $500.00; or

    (iii)         aggregate
fair market value of $500.00.

    


    Determination
of the fair market value of the director’s stock in Summit is based on the value
of the stock on the date it was purchased or on the date that the individual
become a director, whichever is greater.

    


    This
policy imposes more stringent requirements on directors of Summit Community Bank
than imposed by West Virginia state law and the bylaws of Summit Community
Bank.  This policy requires that each member of the board of directors
of Summit Community Bank own, in his or her own right, a minimum of one-thousand
(1,000) shares of common stock of Summit.  For purposes of
determining whether shares are owned by a director in his or her own right, the
following shares shall be deemed owned by a director in his or her own right:
(i) shares held solely in the director’s name; (ii) shares held through the
Summit’s employee stock ownership plan, the Director Deferred Compensation Plan,
a profit-sharing plan, individual retirement account, retirement plan or similar
arrangement; and (iii) shares owned by a company where the director owns a
controlling interest.  Shares held jointly by a director and his or
her spouse may also be counted when determining whether the director owns 1,000
shares of common stock in his or her own right as long as the director owns
stock in his or her own right with a minimum value (calculated by the par value,
shareholder’s equity or fair market value) of at least
$500.