EXHIBIT 10.4
FORM OF FIRST
AMENDMENT TO NON-QUALIFIED STOCK OPTION GRANT
AGREEMENT
THIS FIRST AMENDMENT
TO NON-QUALIFIED STOCK OPTION GRANT AGREEMENT (this
“Amendment”), entered into as of the ___ day of May,
2006, and effective as of December __, 2005, by and between SUMMIT
FINANCIAL GROUP, INC., a West Virginia corporation and bank holding
company (“Summit”) and [ name of officer
] , (“Participant”).
W I T N E
S S E T H:
WHEREAS, on December
7, 2004, Summit and Participant entered into that certain Summit
Financial Group, Inc. Non Qualified Stock Option Grant Agreement
(the “Option Agreement”) whereby Summit granted
Participant an option to purchase a total of [ number of shares underlying
option ] shares of $2.50 par value common stock
of Summit’s Common Stock at a price of Fifty-One Dollars and
Eighty-Five Cents ($51.85) (the “Option”), subject to
the terms and conditions of the Summit Financial Group, Inc. 1998
Officer Stock Option Plan (the “Plan”), dated May 5,
1998, which was adopted by Summit and which was incorporated by
reference; and
WHEREAS, on December
15, 2004, Summit effectuated a two-for-one stock split of its
Common Stock which caused the number of shares underlying the
Option to double and the exercise price of each share to decrease
to Twenty-Five Dollars and Ninety-Three Cents ($25.93);
and
WHEREAS, the
Financial Accounting Standards Board adopted SFAS 123R which
requires companies to recognize expense relative to options vesting
after January 1, 2006; and
WHEREAS, based on
the changes to the accounting rules, on December 6, 2005, the
Compensation and Nominating Committee accelerated the vesting
schedule set forth in the Option Agreement so that all of the
shares underlying the Option that were not already vested became
fully vested on December 6, 2005; and
WHEREAS, the
Compensation and Nominating Committee imposed a restriction on the
sale of the stock underlying the Option that prohibits the
Participant from selling any portion of the stock underlying the
Option until the original date on which the option would have
vest
