exhibit101offstockoptplan.htm


    Exhibit
10.1

    


    SUMMIT
FINANCIAL GROUP, INC. 2009 OFFICER STOCK OPTION PLAN

    FORM
OF NON-QUALIFIED STOCK OPTION GRANT AGREEMENT

    


    (Installment
Vesting)

    


    
      	
               
      

            	
              1.

            	
              Grant of Option. Subject
      to the terms and conditions of this Non-Qualified Stock Option Grant
      Agreement (“Agreement”) and the 2009 Officer Stock Option Plan (“Plan”),
      dated ____________, 2009, which has been adopted by SUMMIT FINANCIAL
      GROUP, INC., a West Virginia corporation (“Corporation”) and which is
      incorporated herein by reference, an Option to purchase a total of _____
      shares of $2.50 par value common stock of the Corporation’s Common Stock
      at a price of ___________________ Dollars and ___ Cents ($______) per
      share is hereby granted to _____________________ (“Participant”) as of the
      date of this Agreement as affixed below with its execution (“Date of
      Grant”).

            


    

     

    
      	
              2.

            	
              Inclusion of
      Parent, Subsidiary and Successor Corporations.  For purposes of this Agreement,
      employment by a parent and or subsidiary of the Corporation shall be
      considered employment by the Corporation.  As used in this
      Section, the term “Corporation” shall include the parent and all present
      and future subsidiaries of the Corporation as defined in Sections 424(e)
      and 424(f) of the Internal Revenue Code of 1986, as amended or replaced
      from time to time (“Code”).  This Agreement shall be binding
      upon any successor or successors of the Corporation and reference herein
      to the Corporation, unless clearly inapplicable, shall be deemed to
      include any such successor or successors of the
      Corporation.

            


    

     

    
      	
              3.

            	
              Non-Qualified
      Stock Option.  This Option is not of the type
      described in Section 422(b) or 423(b) of the Code (“Non-Qualified Stock
      Option”).

            


    

     

    
      	
              4.

            	
              Installment
      Exercise.  Subject to any limitations in the Plan and
      Agreement, the Non-Qualified Stock Option shall become vested and
      exercisable in five (5) installments for the following percentage of the
      total number of Common Stock shares under the Option, on or after the
      following Date of Vesting indicated, in cumulative
  fashion:

            


    

     

    
      	
              Number
      of Shares

            	
              Date
      of Vesting

            	
              Date
      of Termination

            	
              %
      Total Number of Common Stock Shares Under Option

            
	
              a.

            	 
      	 
      	 
      
	
              b.

            	 
      	 
      	 
      
	
              c.

            	 
      	 
      	 
      
	
              d.

            	 
      	 
      	 
      
	
              e.

            	 
      	 
      	 
      
	
              f.

            	 
      	 
      	 
      
	
              g.

            	 
      	 
      	 
      
	
              h.

            	 
      	 
      	 
      
	
              i.

            	 
      	 
      	 
      
	
              j.

            	 
      	 
      	 
      


    

    


    Participant
agrees to exercise the Option in increments of not less than fifty (50)
shares.

     

    
      	
              5.

            	
              Termination of
      Option.

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      Option and all rights granted under this Agreement with respect to the
      Option, to the extent not previously exercised, shall terminate and become
      null and void on and after the _______anniversary of the Date of Vesting
      (“Termination Date”).

            


    

     

    
      	
               
      

            	
              (b)

            	
              Continuous
      Employment Required.  Except
      as otherwise provided in this Section, a Participant may exercise Vested
      Options while he or she is an employee if he or she has maintained since
      the date of the grant of the Option continuous status as an
      employee.  An employment relationship will be treated as
      continuing while the Participant is on military leave, sick leave or other
      bona fide leave of absence if the period of leave does not exceed ninety
      (90) days, or, if longer, the Participant’s right to re-employment is
      guaranteed either by statute or by contract.  Employment shall
      be defined in accordance with the provisions of Section 1.421-1(h) of the
      Income Tax Regulations or any successor regulations, and if this Option
      shall be assumed or a new Option substituted therefore in a transaction to
      which Code Section 424(a) applies, employment by such successor
      corporation shall be considered for all purposes of this Option to be
      Employment by the Corporation.

            


    

     

    
      	
               
      

            	
              (c)

            	
              Termination.  In
      the event of termination of the employment of a Participant prior to the
      Termination Date by either the Participant or the Corporation to whom an
      Option has been granted under the Plan, other than a termination of
      employment by reason of retirement (as defined in subsection (d) of this
      Section 5), permanent disability (as defined in subsection (e) of this
      Section 5), or death, the Participant may exercise such Vested Options
      until the earlier of (i) the expiration of the stated term of the Option,
      or (ii) a period of one (1) year from the date of such
      termination.

            


    

     

    
      	
               
      

            	
              (d)

            	
              Retirement.  If a Participant’s continuous
      employment with the Corporation terminates by reason of his or her
      retirement, pursuant to the definition in the Plan, from the Corporation
      at a retirement date authorized by the Committee prior to the Termination
      Date, the retired
      Participant shall become one hundred percent (100%) Vested in any
      installment of the Option not yet one hundred percent
      (100%) Vested that Participant has been granted under the Plan as of his
      or her date of retirement in accordance with this subsection
      (d).  A
      Participant may exercise such Vested Options until the earlier of (i) the
      expiration of the stated term of the Option, or (ii) for a period of one
      (1) year from his or her retirement
date.

            


    

     

    
      	
               
      

            	
              (e)

            	
              Permanent
      Disability.  If a Participant’s continuous employment
      terminates prior to the Termination Date by reason of a permanent
      disability, as defined in Code Section 22(e)(3) of 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 subsection (e) of Section 5, then such Option
      of the Participant may be exercised with respect to the number of shares
      covered by the Participant’s Option that were Vested immediately prior to
      the date of such permanent disability as determined by the
      Committee.  Such Option of the permanently disabled Participant
      may be exercised during the period the Option would have been exercisable
      if the permanently disabled Participant had not been permanently disabled
      and had remained in employment.

            


    

     

    
      	
               
      

            	
              (f)

            	
              Death.  If
      a Participant’s continuous employment with the Corporation terminates by
      reason of his or her death prior to the Termination Date, then to the
      extent that the Participant would have been entitled to exercise the
      Option immediately prior to his or her death, such Option of the deceased
      Participant may be exercised during the period the Option would have been
      exercisable if the deceased Participant had not died and had remained in
      employment, by the person or persons (including his or her estate) to whom
      his or her rights under such Option shall have passed by will or by laws
      of descent and distribution.

            


    

     

    
      	
              6.

            	
              Exercise of
      Option.  Subject to Section 5 of this Agreement,
      Participant may exercise the Option with respect to all or any part of the
      number of shares then exercisable under this Agreement by giving the
      Committee written notice of intent to exercise, of the number of shares to
      be purchased, the exercise date, and making full payment of the Option
      price, all in accordance with Sections 8 and 9 of the
  Plan.

            


    

     

    
      	
              7.

            	
              Adjustment of and Changes in
      Stock of the Corporation.  Pursuant to Section 11 of the
      Plan, in the event of a reorganization, recapitalization, change of
      shares, stock split, spin-off, stock dividend, reclassification,
      subdivision or combination of shares, merger, consolidation, rights
      offering, or any other change in the corporate structure or shares of
      capital stock of the Corporation, the Committee shall make such adjustment
      as it deems appropriate in the number and kind of shares of stock subject
      to the Option or in the Option price.  However,
      in no event shall this Section 7 be construed to permit a modification
      (including a replacement) of an Option if such modification
      either:  (i) would result in accelerated recognition of income
      or imposition of additional tax under Code Section 409A; or (ii) would
      cause the Option subject to the modification (or cause a replacement
      Option) to be subject to Code Section 409A; and provided, further, that
      such adjustment shall be made in accordance with Code Section
      424(h).

            


    

     

    
      	
              8.

            	
              Change of
      Control.  Pursuant
      to Sections 11(b) and 12 of the Plan, in the event of a Change of
      Control, the Participant shall become one hundred percent (100%) Vested as
      of the date of such Change of Control in all Options granted hereunder and
      all such Options shall become exercisable regardless of the number of
      years that have passed since the Date of Grant and regardless of any
      vesting provisions in this Agreement to the contrary.  All
      provided that the Participant must be an employee on the date the Change
      of Control is deemed to have occurred in order to have the vesting of
      outstanding Options accelerated.  Notwithstanding any provision
      in this Section to the contrary, no extension to the Term of an Option
      shall be extended beyond the original Term of said
  Option.

            


    

     

    
      	
              9.

            	
              No Rights of
      Stockholders.  Neither Participant nor any personal
      representative of Participant shall be, or shall have any of the rights
      and privileges of, a stockholder of the Corporation with respect to any
      shares of stock purchasable or issuable upon the exercise of the Option,
      in whole or in part, prior to the date of exercise of the
      Option.

            


    

     

    
      	
              10.

            	
              Employment Not
      Affected.  Nothing contained in the Plan or this Option
      shall be construed or deemed by any person under any circumstances to bind
      the Corporation to continue the employment of the Participant for the
      period within which this Option may be
  exercised.

            


    

     

    
      	
              11.

            	
              Nontransferability of
      Option.  Except
      as provided in Section 5 of this Agreement, no rights granted under this
      Agreement or any Option hereunder may be transferred in any manner as this
      Option is personal and may be exercised only by Participant while
      he or she is an employee of the Corporation.  In the event of
      (i) any attempt by Participant to alienate, assign, pledge, hypothecate,
      or otherwise dispose of the Option, except as provided in this Agreement,
      or (ii) the levy of any attachment, execution, or similar process upon the
      rights or interests conferred by this Agreement, the Corporation may
      terminate the Option by notice to Participant and upon such notice the
      Option shall become null and void.  The terms of this Option
      shall be binding upon the executors, administrators, heirs, successors,
      and assigns of Participant.

            


    

     

    
      	
              12.

            	
              Amendment
      of Option. The Option may be amended by the
      Board or the Committee at any time (i) if the Board or the Committee
      determines, in its sole discretion, that amendment shall deem necessary or
      advisable, or to conform to any change in any law or regulation applicable
      thereto; or (ii)
      other than in the circumstances described in clause (i), with the consent
      of Participant.  All provided that
      (i) no such amendment or modification shall be effective if it would
      cause this Agreement
      to violate Code Sections 409A and/or 422 and the regulations and guidance
      thereunder and consequently cause this Agreement to be subject to
      409A.

            


    

     

    
      	
              13.

            	
              Notice. Any notice to the Corporation
      provided for in this instrument shall be addressed to it in care of its
      President at its principal office in West Virginia, and any notice to the
      Participant shall be addressed to the Participant at the current address
      shown on the payroll records of the Corporation.  Any notice
      shall be deemed to be duly given if and when properly addressed and posed
      by registered or certified mail, postage
  prepaid.

            


    

     

    
      	
              14.

            	
              Incorporation of Plan by
      Reference.  The Option is granted pursuant to 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 Committee shall interpret and construe the Plan and
      this instrument, and its interpretations and determinations shall be
      conclusive and binding on the parties to this Agreement and any other
      person claiming an interest under the Agreement, 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 and conditions
      of the Plan and this Agreement, the terms of the Plan shall
      control.  Any defined term used in this Agreement is, unless
      specifically defined otherwise, given the meaning as defined in the
      Plan.

            


    

     

    
      	
              15.

            	
              Construction.  If
      any provision of this Agreement is held to be illegal or void, such
      illegality or invalidity shall not affect the remaining provisions of the
      Agreement, but shall be fully severable, and the Agreement shall be
      construed and enforced as if the illegal or invalid provisions had never
      been inserted.  For all purposes of the Agreement, where the
      context permits, the singular shall include the plural, and the plural
      shall include the singular.  All decisions of the Board or the
      Committee upon questions regarding the Agreement shall be conclusive and
      binding on all persons.  The headings of the paragraphs of this
      Agreement have been included for convenience of reference only, are not to
      be considered a part hereof and shall in no way modify or restrict any of
      the terms of provisions hereof.

            


    

     

    
      	
              16.

            	
              Governing
      Law.  The validity, construction, interpretation, and
      effect of this instrument shall exclusively be governed by and determined
      in accordance with the law of the State of West Virginia, except to the
      extent preempted by federal law, which shall to that extent
      govern.

            


    

     

    IN
WITNESS WHEREOF, the Corporation has caused its duly authorized officers to
execute and attest this Non-Qualified Stock Option Grant Agreement, and to apply
the corporate seal hereto, and Participant has placed his or her signature,
effective as of the Date of Grant.

     

    CORPORATION:

                                    SUMMIT FINANCIAL
GROUP, INC.

    


    


                                    By:
_____________________________________

                                    Oscar
Bean

                                    Its:           Chairman
of the Board

    


    


                                    Attest:
___________________________________

    


                                    Title:
____________________________________

    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    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 Option 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.

     

    Dated:                      __________________________

    


    


    PARTICIPANT:

                                    __________________________________

    


    


    


                                    Sworn and subscribed
before me this _____ day of _________________, 20___.

    


    


                                    __________________________________

                                    Notary
Public