Document:

Exhibit 10.3

 

Exhibit 10.3

	 
	Summit Financial Group, Inc.

Board Attendance and Compensation Policy

I. Retainer and Fees for Subsidiary Board Members

     Members of the board of directors of the subsidiaries of Summit Financial Group, Inc.
(“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 $50 Million
	 	$1,000	 	$125 per meeting attended
	$51 Million -$100 Million
	 	$2,000	 	$125 per meeting attended
	$101 Million
- $199 Million
	 	$3,000	 	$125 per meeting attended
	$200 Million and Over
	 	$4,000	 	$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.

II. Retainer and Fees for Summit Board Members

	 	   	Summit board members will be paid as follows:
	 
	 	•  	$1,000 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 may 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.

III. Meeting Fees for Division Board Members

     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.

IV. 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.

V. 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 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.

VI. 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.

VII. 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

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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.

VIII. 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.

IX. 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.

X. 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.

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XI. 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.

XII. 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 the Office of the Comptroller of the Currency (the
“OCC”) and West Virginia law set forth the minimum number of shares that must be owned by
each director. Qualifying share ownership for directors of Shenandoah Valley National Bank is
governed by the OCC regulations. Accordingly, the directors of Shenandoah Valley National Bank are
subject to different minimum ownership requirements than the directors of Summit, Capital State
Bank and Summit Community Bank, which 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, Capital State Bank and Shenandoah Valley National Bank.

     The requirements for each bank 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.

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     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

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or her own right with a minimum value (calculated by the par value, shareholder’s
equity or fair market value) of at least $500.

	 	•  	Shenandoah Valley National Bank

     The OCC requires that each director of Shenandoah Valley National Bank own in
his or her own right, shares of common or preferred stock of Summit which has not
less than:

	 	(i)  	an aggregate par value of $1,000;
	 
	 	(ii)  	an aggregate shareholder’s equity of $1,000; or
	 
	 	(iii)  	an aggregate fair market value of $1,000.

     The value of the common or preferred stock held by the director is valued as of
the date purchased or the date on which the individual became a director, whichever
is greater.

     This policy imposes more stringent requirements on directors of Shenandoah
Valley National Bank than imposed by West Virginia state law and the bylaws of
Shenandoah Valley National Bank. This policy requires that each member of the board
of directors of Shenandoah Valley National Bank own, in his or her own right, a
minimum of one-thousand (1,000) shares of common stock of Summit.

     The OCC has established by the following rules for determining whether shares
are “held by a director in his or her own right”:

     • Joint Ownership and Tenancy in Common. Shares held jointly or as a tenant in
common are qualifying shares held by a director in his or her own right only to the
extent of the aggregate value of the shares which the director would be entitled to
receive on dissolution of the joint tenancy or tenancy in common.

     • Shares in a Living Trust. Shares deposited by a director in a living trust
(inter-vivos trust) as to which the director is a trustee and retains an absolute
power of revocation are shares owned by the director in his or her own right.

     • Shares Held Through Retirement Plans or Similar Arrangements. A director may
hold his or her qualifying shares through a profit-sharing plan, individual
retirement account, retirement plan, or similar arrangement, if the director retains
beneficial ownership and legal control over the shares.

     • Shares held Subject to Buyback Agreements. A director may acquire and hold
his or her qualifying interest pursuant to a stock repurchase or buyback agreement
with a transferring shareholder under which the director purchases the qualifying
 shares subject to an agreement that the transferring shareholder will repurchase the
 shares when, for any reason, the director ceases to serve in that capacity. The
agreement may

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give the transferring shareholder a right of first refusal to repurchase the
qualifying shares if the director seeks to transfer ownership of the shares to a
third person.

     • Assignment of Right to Dividends or Distributions. A director may assign the
right to receive all dividends or distributions on his or her qualifying shares to
another, including a transferring shareholder, if the director retains beneficial
ownership and legal control over the shares.

     • Execution of Proxy. A director may execute a revocable or irrevocable proxy
authorizing another, including a transferring shareholder, to vote his or her
qualifying shares, provided the director retains beneficial ownership and legal
control over the shares.

     The
OCC has determined that the following are not shares held by a
director in “his or her own right”:

     (a) Shares pledged by the holder to secure a loan. However, all or part of the
funds used to purchase the required qualifying equity interest may be borrowed from
any party, including the bank or its affiliates;

     (b) Shares purchased subject to an absolute option vested in the seller to
repurchase the shares within a specified period; and

     (c) Shares deposited in a voting trust where the depositor surrenders: (1)
legal ownership (depositor ceases to be registered owner of the stock); (2) power to
vote the stock or to direct how it shall be voted; or (3) power to transfer legal
title to the stock.

     In addition to the above rules established by the OCC, the following shares
shall be deemed owned by a director in his or her own right: (1) shares held through
Summit’s employee stock ownership plan, (ii) shares held through the Director
Deferred Compensation Plan; (iii) shares owned by a company where the director owns
a controlling interest; and (iv) convertible preferred shares known as the
Rockingham National Bank Series issued to directors of Shenandoah Valley National
Bank.

7<PAGE>
                                                                  EXHIBIT 10.7.4

                  SIXTH AMENDMENT TO RECEIVABLES SALE AGREEMENT

      THIS SIXTH AMENDMENT (the "Amendment"), dated as of December 22, 2004, is
entered into among Swift Receivables Corporation (the "Seller"), Swift
Transportation Corporation (the "Collection Agent"), Amsterdam Funding
Corporation, a Delaware corporation ("Amsterdam"), ABN AMRO Bank N.V., as
Amsterdam's program letter of credit provider (the "Enhancer"), the Liquidity
Provider listed on the signature page hereof (the "Liquidity Provider") and ABN
AMRO Bank N.V., as agent for Amsterdam, the Enhancer and the Liquidity Provider
(the "Agent");

                                   WITNESSETH:

      WHEREAS, the Seller, Collection Agent, Amsterdam, Enhancer, Liquidity
Provider and Agent have heretofore executed and delivered a Receivables Sale
Agreement dated as of December 30, 1999 (as amended, supplemented or otherwise
modified through the date hereof, the "Sale Agreement"); and

      WHEREAS, the parties hereto desire to amend the Sale Agreement as provided
herein;

      NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree that
the Sale Agreement shall be and is hereby amended as follows:

     Section 1. The defined term "Aggregate Commitment" appearing in Schedule I
to the Sale Agreement is hereby amended in its entirety and as so amended shall
read as follows:

                  "Aggregate Commitment" means $255,000,000, as such amount may
         be reduced pursuant to Section 1.6.

     Section 2. The defined term "Liquidity Termination Date" appearing in
Schedule I to the Sale Agreement is hereby amended by deleting the date
"December 22, 2004" appearing in clause (d) thereof and inserting in its place
the date "December 21, 2005".

     Section 3. The defined term "Purchase Limit" appearing in Schedule I to the
Sale Agreement is hereby amended in its entirety and as so amended shall read as
follows:

                  "Purchase Limit" means $250,000,000.

     Section 4. The defined term "Termination Date" appearing in Schedule I to
the Sale Agreement is hereby amended by deleting the date "December 22, 2004"
appearing in clause (c)(ii) thereof and inserting in its place the date
"December 21, 2005".

     Section 5. Schedule II to the Sale Agreement is hereby amended in its
entirety and as so amended shall read as set forth on Schedule II to this
Amendment.
<PAGE>
     Section 6. Exhibit F to the Sale Agreement is hereby amended in its
entirety and as so amended shall read as set forth on Exhibit F to this
Amendment.

     Section 7. This Amendment shall become effective once the Agent has
received (i) counterparts hereof executed by the Seller, Collection Agent, each
Purchaser and the Agent, (ii) a $50,000 non-refundable arranger fee and (iii)
the acknowledgment and consent in the form set forth below duly executed and
delivered by the Swift Transportation Co., Inc.

     Section 8. The Seller shall deliver to the Agent within 45 days of this
Amendment an executed Lock-Box Letter from US Bank, National Association.

     Section 9. To induce the Agent and the Purchasers to enter into this
Amendment, the Seller and Collection Agent represent and warrant to the Agent
and the Purchasers that: (a) the representations and warranties contained in the
Transaction Documents, are true and correct in all material respects as of the
date hereof with the same effect as though made on the date hereof (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date); (b) no Potential Termination
Event exists; (c) this Amendment has been duly authorized by all necessary
corporate proceedings and duly executed and delivered by each of the Seller and
the Collection Agent, and the Sale Agreement, as amended by this Amendment, and
each of the other Transaction Documents are the legal, valid and binding
obligations of the Seller and the Collection Agent, enforceable against the
Seller and the Collection Agent in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency or other
similar laws of general application affecting the enforcement of creditors'
rights or by general principles of equity; and (d) no consent, approval,
authorization, order, registration or qualification with any governmental
authority is required for, and in the absence of which would adversely effect,
the legal and valid execution and delivery or performance by the Seller or the
Collection Agent of this Amendment or the performance by the Seller or the
Collection Agent of the Sale Agreement, as amended by this Amendment, or any
other Transaction Document to which they are a party.

    Section 10. This Amendment may be executed in any number of counterparts and
by the different parties on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Amendment.

    Section 11. Except as specifically provided above, the Sale Agreement and
the other Transaction Documents shall remain in full force and effect and are
hereby ratified and confirmed in all respects. The execution, delivery, and
effectiveness of this Amendment shall not operate as a waiver of any right,
power, or remedy of any Agent or any Purchaser under the Sale Agreement or any
of the other Transaction Documents, nor constitute a waiver or modification of
any provision of any of the other Transaction Documents. All defined terms used
herein and not defined herein shall have the same meaning herein as in the Sale
Agreement. The Seller agrees to pay on demand all costs and expenses (including
reasonable fees and expenses of counsel) of or incurred by the Agent and each
Purchaser Agent in connection with the negotiation, preparation, execution and
delivery of this Amendment.

                                      -2-
<PAGE>
    Section 12. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the law of
the State of Illinois.

                                      -3-
<PAGE>
      IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and delivered by their duly authorized officers as of the date first above
written.

                                       ABN AMRO BANK N.V., as the Agent, as the
                                         Liquidity Provider and as the Enhancer

                                       By:    /s/ Kevin G. Pilz
                                              --------------------------------
                                       Title: Vice President
                                              --------------------------------

                                       By:    /s/ Thomas J. Educate
                                              --------------------------------
                                       Title: SVP
                                              --------------------------------

                                       AMSTERDAM FUNDING CORPORATION

                                       By:    /s/ Bernard J. Angelo
                                              --------------------------------
                                       Title: Vice President
                                              --------------------------------

                                       SWIFT RECEIVABLES CORPORATION

                                       By:    /s/ William F. Riley
                                              --------------------------------
                                       Title: Vice President
                                              --------------------------------

                                       SWIFT TRANSPORTATION CORPORATION

                                       By:    /s/ William F. Riley
                                              --------------------------------
                                       Title: Senior Executive VP
                                              --------------------------------

                                      -4-
<PAGE>
                     GUARANTOR'S ACKNOWLEDGMENT AND CONSENT

      The undersigned, Swift Transportation Co., Inc., has heretofore executed
and delivered the Limited Guaranty dated as of December 30, 1999 (the
"Guaranty") and hereby consents to the Sixth Amendment to the Sale Agreement as
set forth above and confirms that the Guaranty and all of the undersigned's
obligations thereunder remain in full force and effect. The undersigned further
agrees that the consent of the undersigned to any further amendments to the Sale
Agreement shall not be required as a result of this consent having been
obtained, except to the extent, if any, required by the Guaranty referred to
above.

                                       SWIFT TRANSPORTATION CO., INC.

                                       By:    /s/ William F. Riley
                                              --------------------------------
                                       Title: Senior Executive VP
                                              --------------------------------
<PAGE>
                                   SCHEDULE II

           LIQUIDITY PROVIDERS AND COMMITMENTS OF COMMITTED PURCHASERS

NAME OF LIQUIDITY PROVIDER                             COMMITMENT

ABN AMRO Bank N.V.                                    $229,500,000

NAME OF ENHANCER                                       COMMITMENT

ABN AMRO Bank N.V.                                     $25,500,000
<PAGE>
                                    EXHIBIT F

                          LOCK BOXES AND LOCK-BOX BANKS

            BANK                   LOCK-BOX NUMBER          COLLECTION ACCOUNT

US Bank, National Association       153655310032             ________________

        Bank One, NA                   70406                    55-92771

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