Exhibit 10.7
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this “Agreement”) made in duplicate originals this _
22nd _ day of _ December _, 2008, and effective as of
July 1, 2004 (unless specifically stated otherwise), is between
SUMMIT FINANCIAL GROUP, INC. (“Summit”), SUMMIT
COMMUNITY BANK, INC., successor in interest to Capital State Bank,
Inc., (the “Company”), and C. DAVID ROBERTSON
(“Employee”).
WHEREAS, the Company offers the terms and
conditions of employment hereinafter set forth and the Employee has
indicated his willingness to accept such terms and conditions in
consideration of his employment with the Company;
WHEREAS, Employee, Summit and Company executed
an amended and restated employment agreement on May 6, 2004,
effective July 1, 2004;
WHEREAS, under Paragraph 15 said amended and
restated employment agreement may be amended by a writing signed by
all the parties hereto; and
WHEREAS, the parties hereto, in the interests of
clarity and for other reasons stated herein, and for the purpose of
complying with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), wish to
amend and restate this Agreement, provided that all provisions
applicable to compliance under Code Section 409A shall be effective
as of January 1, 2005, and provided further that, notwithstanding
any other provisions of this amended and restated Agreement, this
amendment applies only to amounts that would not otherwise be
payable in 2006, 2007 or 2008 and shall not cause (i) an amount to
be paid in 2006 that would not otherwise be payable in such year,
(ii) an amount to be paid in 2007 that would not otherwise be
payable in such year, and (iii) an amount to be paid in 2008 that
would not otherwise be payable in such year, and to the extent
necessary to qualify under Transition Relief issued under said Code
Section 409A to not be treated as a change in the form and timing
of a payment under section 409A(a)(4) or an acceleration of a
payment under section 409A(a)(3), Employee, by executing this
Agreement, shall be deemed to have elected the timing and form
of
distribution provisions of this amended and restated Agreement, and
to otherwise further revise the Agreement all on or before December
31, 2008.
NOW, THEREFORE, in consideration of the mutual
promises and covenants made in this Amended and Restated Agreement,
the parties agree as follows:
1.
Employment . The Company hereby employs
Employee and Employee hereby accepts employment with the Company as
President and Chief Executive Officer of the Company and member of
the Board of Directors of the Company upon the terms and conditions
set forth herein effective July 1, 2004, or such earlier date as
the parties may mutually agree, and as Executive Officer of the
Company and Co-Chairman of the Board of Directors of the Company
effective June 20, 2007.
2.
Term . The term of this Amended and
Restated Agreement shall be for five (5) years from the original
effective date of July 1, 2004, unless one of the parties
terminates this Amended and Restated Agreement as provided
herein. Upon termination of the original term of the
Agreement, the Board of Directors of the Company shall review the
Agreement at least annually, and may, with the consent of the
Employee, extend this term of employment for additional one (1)
year term(s), in which case such term shall end one (1) year from
the date on which it is last renewed.
3.
Duties . Employee shall perform and have
all of the duties and responsibilities that may be assigned to him
from time to time by the Board of Directors of the
Company. Employee shall devote his best efforts on a
full-time basis to the performance of such duties.
4.
Compensation and Benefits . During the
term of employment, the Company agrees to pay Employee a base
salary and to provide benefits as set forth in Exhibit A, which is
attached hereto and incorporated herein by reference.
5.
Termination by the Company or Employee .
The employment of Employee with the Company may be
terminated by any one of the following means, in which case
Employee shall be entitled to such compensation as is described
below:
A.
Mutual Agreement . The Employee’s
employment may be terminated by mutual agreement of the parties
upon such terms and conditions as they may agree; provided ,
that if such mutual agreement provides for any payments or in-kind
benefits to be paid or granted to Employee it shall be in writing,
and provided further , that such written mutual agreement,
if required to be aggregated for Code Section 409A purposes with
this Agreement or any other agreement between Employee and Summit,
Company, or any affiliate, shall not cause this Agreement to
violate Code Section 409A or the regulations and guidance issued
thereunder.
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The
Employee’s employment may be terminated by the Company for
cause consisting of one or more of the reasons specified in
Paragraph 5(B)(2)(a) - (e) below; provided, however, that if the
cause of termination is for a reason specified in Paragraph
5(B)(2)(a) below, and if in the reasonable judgment of the Board of
Directors of the Company the damage incurred by the Company as a
result of Employee’s conduct constituting cause is damage of
a type that is capable of being substantially reversed and
corrected, the Company shall give Employee thirty (30) days advance
notice of the Company’s intention to terminate his employment
for cause and a reasonable opportunity to cure the cause of the
possible termination to the satisfaction of the Company.
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For purposes of
this Amended and Restated Agreement, the term “cause”
shall be defined as follows:
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Employee’s negligence, malfeasance or
misfeasance in the performance of Employee’s duties that can
reasonably be expected to have an adverse impact upon the business
and affairs of the Company, including but not limited to
(i) failure of Employee to ensure the overall quality of
the
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Company’s
loan portfolio is maintained at a level which is satisfactory to
the Board of Directors of the Company, and (ii) failure of the
Employee to ensure that the Company’s loan loss experience
remains at a level which is satisfactory to the Company’s
Board of Directors;
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Employee’s commission of any act
constituting theft, intentional wrongdoing or fraud;
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The conviction
of the Employee of a felony criminal offense in either state or
federal court;
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Any single act
by Employee constituting gross negligence or which causes material
harm to the reputation, financial condition or property of the
Company; or
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The death of
Employee during the term of this Amended and Restated Agreement, in
which event the Company shall pay to the estate of the Employee any
compensation for services rendered but unpaid prior to the
Employee’s date of death. Such payment shall be
made in a lump sum on the first day of the second month following
Employee’s date of death.
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The Board of
Directors of the Company shall determine, in its sole discretion,
whether any acts and/or omissions on the part of Employee
constitute “cause” as defined
above. Notwithstanding the foregoing, Employee shall be
entitled to arbitrate a finding of the Board of Directors of
“cause” in accordance with Paragraph 9
hereof.
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In the event
that Company terminates Employee’s employment for cause
(other than death) as defined above, which results in
Employee’s Separation from Service, Employee shall be
entitled to
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be paid his
regular salary and benefits up to the date of Separation from
Service, but not any additional compensation. Any
payment to Employee pursuant to this Paragraph 5(B)(4) shall be
paid in a lump sum on the date of Employee’s Separation from
Service, subject to the provisions of Paragraph 7(D) to the extent
applicable.
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Not for
Cause . Employee’s employment may be
terminated by the Company for any reason not specified in Paragraph
5(B) above so long as Employee is given thirty (30) days advance
written notice (or payment in lieu thereof). In the
event of a termination pursuant to this Paragraph 5(C) which
results in Employee’s Separation from Service, Employee shall
be entitled to payment from the Company equivalent to the base
salary compensation set forth in this Amended and Restated
Agreement for the remaining term of the Agreement or severance pay
equal to six (6) months of base salary payments, whichever is
greater. Any payment to Employee pursuant to this
Paragraph 5(C) shall be paid in a lump sum on the date of
Employee’s Separation from Service, subject to the provisions
of Paragraph 7(D) to the extent applicable.
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Change in
Control . Exhibit B hereto sets forth the
rights and responsibilities of the parties in the event of a change
in control, as defined therein, and is incorporated herein by
reference. Provided, that if Employee is entitled to
payments upon Separation from Service under this Agreement and also
under Exhibit B hereto, the provisions of Exhibit B shall apply in
lieu of the provisions of this Agreement.
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6.
Noncompetition and Nonsolicitation . In
consideration of the covenants set forth herein, including but not
limited to the severance pay set forth in Paragraph 5 and
Exhibit A, Employee agrees as follows:
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For a period of
three (3) years after Employee’s employment with the Company
is terminated by Employee for any reason other than
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Employee’s disability or Good Reason (as
that term is defined in Exhibit B hereto), Employee shall not,
directly or indirectly, engage in the business of banking in the
City of Charleston or the Counties of Kanawha and Greenbrier, West
Virginia, or in any other county in which the Company has operating
offices at the time of the termination. For purposes of
this Paragraph 6(A), being engaged in the business of banking shall
mean Employee’s presence or work in a bank office in the
specified geographic area or Employee’s solicitation of
business from clients with a primary or principle office in the
specified geographic area.
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During
Employee’s employment by the Company and for three (3) years
after Employee’s employment with the Company is terminated by
Employee for any reason other than Employee’s disability,
Employee shall not, on his own behalf or on behalf of any other
person, corporation or entity, either directly or indirectly,
solicit, induce, recruit or cause another person in the employ of
the Company or its affiliates to terminate his or her employment
for the purpose of joining, associating or becoming an employee
with any business which is in competition with any business or
activity engaged in by the Company or its affiliates.
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Employee
further recognizes and acknowledges that in the event of the
termination of Employee’s employment with the Company for any
reason other than Employee’s disability, (1) a breach of the
obligations and conditions set forth herein will irreparably harm
and damage the Company; (2) an award of money damages may not be
adequate to remedy such harm; and (3) considering Employee’s
relevant background, education and experience, Employee believes
that he will be able to earn a livelihood without violating the
foregoing restrictions. Consequently, Employee agrees
that, in the event that Employee breaches any of the covenants set
forth in this Paragraph 6, the Company and/or its affiliates shall
be entitled to both a preliminary and permanent injunction in order
to prevent the continuation of such harm and to recover money
damages,
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insofar as they
can be determined, including, without limitation, all costs and
attorneys’ fees incurred by the Company in enforcing the
provisions of this Paragraph 6. Such relief may be
sought notwithstanding the arbitration provision set forth in
Paragraph 10 below.
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7.
Definitions and Special Rules . For
purposes of this Agreement and its Exhibits, including the Change
in Control Agreement attached hereto as Exhibit B, the following
definitions and special rules shall apply:
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“
Disability ” shall mean a physical or mental condition
rendering Employee substantially and permanently unable to perform
the duties of an officer and director of a banking
organization.
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“
Separation from Service ” means the severance of
Employee’s employment with Summit, Company, or any other
affiliate for any reason. Employee separates from
service with Summit, Company or any other affiliate if he dies,
retires, separates from service because of Employee’s
Disability, or otherwise has a termination of employment with
Summit, Company or any other affiliate. However, the
employment relationship is treated as continuing intact while
Employee is on military leave, sick leave, or other bona
fide leave of absence if the period of such leave does not
exceed six months, or if longer, so long as Employee’s right
to reemployment with Summit, Company or any other affiliate is
provided either by statute or by contract. If the period
of leave exceeds six months and Employee’s right to
reemployment is not provided either by statute or by contract, the
employment relationship is deemed to terminate on the first date
immediately following such six-month
period. Notwithstanding the foregoing, where a leave of
absence is due to any medically determinable physical or mental
impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than six
months, where such impairment causes Employee to be unable to
perform the duties of his position of employment or any
substantially
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similar
position of employment, a 29-month period of absence may be
substituted for such six-month period. In addition,
notwithstanding any of the foregoing, the term “Separation
from Service” shall be interpreted under this Agreement in a
manner consistent with the requirements of Code Section 409A
including, but not limited to:
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an examination
of the relevant facts and circumstances, as set forth in Code
Section 409A and the regulations and guidance thereunder, in the
case of any performance of services or availability to perform
services after a purported Separation from Service,
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in any instance
in which Employee is participating or has at any time participated
in any other plan which is, under the aggregation rules of Code
Section 409A and the regulations and guidance issued thereunder,
aggregated with this Agreement and with respect to which amounts
deferred hereunder and under such other plan or plans are treated
as deferred under a single plan (hereinafter sometimes referred to
as an “Aggregated Plan” or together as the
“Aggregated Plans”), then in such instance Employee
shall only be considered to meet the requirements of a Separation
from Service hereunder if Employee meets (a) the requirements of a
Separation from Service under all such Aggregated Plans and (b) the
requirements of a Separation from Service under this Agreement
which would otherwise apply,
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in any instance
in which Employee is an employee and an independent contractor of
Summit, Company or any other affiliate or any combination
thereof, Employee must have a Separation from Service in all
such capacities to meet the requirements of a Separation from
Service hereunder, although, notwithstanding the foregoing, if
Employee provides services both as an employee and a member of the
Board of Directors of Summit, Company or any other affiliate or any
combination thereof, the services provided as a
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director are
not taken into account in determining whether Employee has had a
Separation from Service as an employee under this Agreement,
provided that no plan in which Employee participates or has
participated in his capacity as a director is an Aggregated Plan,
and
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a determination
of whether a Separation from Service has occurred shall be made in
accordance with Treasury Regulations Section 1.409A-1(h)(4) or any
similar or successor law, regulation or guidance of like import, in
the event of an asset purchase transaction as described
therein.
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Date
Payments Deemed Made . In accordance with Code Section
409A and to the extent permitted by said Code Section 409A and the
regulations and guidance issued thereunder, any payment to or on
behalf of Employee under this Agreement or its Exhibits A and B
shall be treated as having been made on a date specified in this
Agreement or in Exhibit A or B if it is made on a later date within
Employee’s same taxable year as the
designated date, or, if later, if made no later than the fifteenth
day of the third month after such designated date
provided that, in any event, Employee is not
permitted, directly or indirectly, to designate the taxable year of
any payment.
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Six-Month
Delay . Notwithstanding any other
provisions of this Agreement or its Exhibits, including the Change
in Control Agreement attached hereto as Exhibit B, if Employee
is a Specified Employee (within the meaning of Code Section 409A)
on Employee’s date of Separation from Service, then if any
payment of deferred compensation (within the meaning of Code
Section 409A) is to be made upon or based upon Employee’s
Separation from Service other than by death, under any provision of
this Agreement or of said Change in Control Agreement, and such
payment of deferred compensation is to be made within six months
after Employee’s date of Separation from Service, other than
by death,
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then such
payment shall instead be made on the date which is six months after
such Separation from Service of Employee (other than by death,)
provided further, however, that in the case of any payment of
deferred compensation which is to be made in installments, with the
first such installment to be paid on or within six
months
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