RABBI TRUST FOR THE DIRECTORS DEFERRAL PLAN Benmark, Inc.
EXHIBIT
10.16
RABBI
TRUST FOR THE
DIRECTORS
DEFERRAL PLAN
Benmark,
Inc.
0000
Xxxxxx 00 Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
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RABBI
TRUST FOR THE
This
Trust Agreement effective as of 4th day of April, 2000 by and between Summit
Financial Group, Inc., a Company having its principal place of business in
Moorefield, West Xxxxxxxx (hereinafter referred to as the, “Company”), and the
trust department of South Branch Valley National Bank, a banking corporation
with its principal place of business in West Virginia (hereinafter referred to
as the, “Trustee”).
WITNESSETH:
WHEREAS, the Company has
adopted a Directors Deferral Plan (hereinafter referred to as the, “Benefit
Plan”), and such Benefit Plan constitutes a non-qualified deferred compensation
plan. A copy of the Directors Deferral Plan setting forth the
specific Benefit Plan terms is attached hereto and marked as Exhibit “A”
(hereinafter referred to as the, “Benefit Plan”).
WHEREAS, the Company has
incurred, or expects to incur, liability under the terms of the Benefit Plan
with respect to the individuals participating in such Benefit Plan;
WHEREAS, the Company wishes to
establish a trust (hereinafter referred to as the, “Trust”) and to contribute to
the Trust assets that shall be held therein, subject to the claims of Company’s
creditors in the event of the Company’s Insolvency, as herein defined, until
paid to the Benefit Plan participants, and their beneficiaries as set forth in
the Benefit Plan;
WHEREAS, it is the intention
of the parties that this Trust shall constitute an unfunded arrangement and
shall not affect the status of the Benefit Plan as an unfunded plan, maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees, for purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended;
WHEREAS, it is the intention
of the Company to make contributions to the Trust to provide itself with a
source of funds to assist it in the meeting of the its’ liabilities under the
Benefit Plan (hereinafter referred to as the “Contributions”);
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NOW, THEREFORE, the parties do
hereby establish the Trust and agree that the Trust shall be comprised, held and
disposed of as follows:
SECTION
I
ESTABLISHMENT
OF TRUST
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(a)
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This
trust is hereby established as the Rabbi Trust for the Directors Deferral
Plan.
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(b)
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The
Company hereby deposits with Trustee in trust, assets which shall become
the principal of the Trust to be held, administered and disposed of by the
Trustee as provided in this Trust
Agreement.
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(c)
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The
Trust hereby established shall be irrevocable, but may be amended as
provided under (and only as provided under) Section
XII.
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(d)
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The
Trust is intended to be a grantor trust, of which the Company is the
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
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(e)
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The
principal of the Trust, and any earnings thereon shall be held separate
and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of the Benefit Plan participants and general
creditors as herein set forth. The Benefit Plan participants
and their beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any
rights created under the Benefit Plan and this Trust Agreement shall be
mere unsecured contractual rights of the Benefit Plan participants and
their beneficiaries against the Company. Any assets held by the
Trust will be subject to the claims of the Company’s general creditors
under federal and state law in the event of Insolvency, as defined in
Section III (a) herein.
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(f)
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The
Trustee shall be accountable for all property and Contributions received,
but the Trustee shall have no duty to see that the Contributions received
are sufficient to provide for the retirement, disability, or death
benefits, nor shall the Trustee be obligated to enforce or collect any
Contribution from the Company. Notwithstanding the foregoing,
in the event of a Change in Control, the Trustee
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shall have the right to
monitor, enforce and/or collect any Contributions due and owing from the Company
or to give notice of any default in making Contributions to any
person.
SECTION II
PAYMENTS
TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
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(a)
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The
Company shall deliver to Trustee a schedule (the “Payment Schedule”) that
indicates the amounts payable in respect to each Benefit Plan participant
(and his or her beneficiaries), that provides a formula or other
instructions acceptable to the Trustee for determining the amounts so
payable, the form in which such .amount is to be paid (as provided for or
available under the Benefit Plan), and the time for commencement of
payment of such amounts. The Company shall be deemed to be in
default if it fails to fulfill its payment obligations required under the
Benefit Plan and shall fail to cure any such failure within thirty (30)
days after receiving written notice of such failure from any affected
Benefit Plan participant or beneficiary. Upon the Trustee’s
receipt of a written certification of such default from the affected
Benefit Plan participant or beneficiary, the Trustee shall make payments
in accordance with such Payment Schedule and the Trustee shall provide to
the Company a copy of such certification and notice or its commencement of
such payments. The Trustee shall then continue to make such
payments until such time, if any, as it may receive written instructions
to the contrary signed by the affected participant or
beneficiary.
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(b)
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The
Trustee shall, in accordance with the written instructions of the Company,
in the event of a Change in Control of the Company, or in accordance with
the written instructions of the Benefits Determiner (as defined in Article
)(III), withhold and report any federal, state or local taxes that may be
required to be withheld and reported with respect to the payment of
benefits pursuant to the terms of the Benefit Plan and shall pay amounts
withheld to the appropriate taxing authorities. In addition,
the Trustee shall be authorized to pay any federal, state or local taxes
to any government body that presents a tax deficiency notice to the
Trustee with respect to income or assets of the Trust. The
Company shall deliver to the Trustee each year a schedule which specifies
the amount of taxes to be withheld, if any, with respect to benefit
payments to be
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made
hereunder. The Trustee shall be entitled to rely conclusively
on the written instructions of the Company, or in the event of a Change of
Control, the Benefits Determiner, as to all tax reporting and withholding
requirements.
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(c)
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The
entitlement of a Benefit Plan participant or his or her beneficiaries to
benefits under the Benefit Plan, shall be determined by the Company or
such party (other than the Trustee), shall designated under the Benefit
Plan, and any claim for such benefits shall be considered and reviewed
under the procedures set out in the Benefit
Plan.
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(d)
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The
Company may make payment of benefits directly to Benefit Plan participants
or their beneficiaries if they become so payable under the Benefit Plan to
such participants or beneficiaries. The Company shall notify
the Trustee of its decision to make payment of benefits directly, prior to
the time amounts are payable to participants or their
beneficiaries. In addition, if the principal of the Trust, and
any earnings thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Benefit Plan, the Company shall make the
balance of each such payment as it falls due. Trustee shall
notify the Company if and when such principal and earnings are not
sufficient to discharge obligations currently due under the Payment
Schedule and shall have no further obligation hereunder to anyone
interested in the Trust.
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(e)
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In
the event of a Change in Control, Trustee shall rely on the written
direction of the Benefits Determiner who shall confirm the accuracy of the
Payment Schedule or who shall deliver to the Trustee a new Payment
Schedule upon which Trustee may
rely.
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SECTION
III
TRUSTEE
RESPONSIBILITY REGARDING PAYMENTS TO
TRUST
BENEFICIARY WHEN THE COMPANY IS INSOLVENT
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(a)
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The
Trustee shall cease payment of benefits to the Benefit Plan participants
and their beneficiaries if the Company is Insolvent. The
Company shall be considered “Insolvent” for purposes of this trust
Agreement if (i) The Company states to it in writing that it is unable to
pay its debts as they
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become due, or (ii) The Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. |
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(b)
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At
all times during the continuance of this Trust, as provided in Section I
(e) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Company under federal and state law as
set forth below.
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(1)
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The
Board of Directors and the Chief Executive Officer of the Company shall
have the duty to inform the Trustee in writing of the Company’s
Insolvency. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is Insolvent
and, pending such determination, the Trustee shall discontinue payment of
benefits to the Benefit Plan participants or their
beneficiaries.
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(2)
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Unless
the Trustee has actual knowledge of the Company’s Insolvency, or has
received notice from the Company or a person claiming to be a creditor
alleging that the Company is Insolvent, the Trustee shall have no duty to
inquire whether the Company is Insolvent. The Trustee may in
all events rely on such evidence concerning the Company’s solvency as may
be furnished to the Trustee and that provides the Trustee with a
reasonable basis for making a determination concerning the Company’s
solvency. The Trustee shall have no liability for any payments
to the Benefit Plan participants or their beneficiaries after the
occurrence of an Insolvency but prior to its actual knowledge
thereof.
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(3)
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If
at any time the Trustee has determined that the Company is Insolvent, the
Trustee shall discontinue payments to the Benefit Plan participants or
their beneficiaries and shall hold the assets of the Trust for the benefit
of the Company’s general creditors. Nothing in this Trust
Agreement shall in any way diminish any rights of the Benefit Plan
participants or their beneficiaries to pursue their rights as general
creditors.
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(4)
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The
Trustee shall resume the payment of benefits to the Benefit Plan
participants or their beneficiaries in accordance with Section II of this
Agreement only after the Trustee has determined that the Company is not
(or is no longer) Insolvent.
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(c)
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Provided
that there are sufficient assets, if the Trustee discontinues the payment
of benefits from the Trust pursuant to Section III (b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to
the Benefit Plan participants or their beneficiaries under the terms of
the Benefit Plan Agreement for the period of such discontinuance, less the
aggregate amount of any payments made to the Benefit Plan participants or
their beneficiaries in lieu of the payments provided for hereunder during
any such period of discontinuance.
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SECTION
IV
PAYMENTS
TO COMPANY
Except as
provided in Sections III or XII hereof, the Company shall have no right or power
to direct the Trustee to return to the Company or to divert to others any of the
Trust assets before all payment of benefits have been made to the Benefit Plan
participants and their beneficiaries pursuant to the terms of the Benefit
Plan.
SECTION V
THE
TRUSTEE’S POWERS
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(a)
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All
rights associated with assets of the Trust shall be exercised by the
Company or the Trustee, as hereinafter set forth, and shall in no event be
exercisable by or rest with the Benefit Plan participants. The
participant may, however, direct the fictitious investment of the
participant’s deferred compensation account as set forth in the Benefit
Plan Agreement. The Company shall have the right at any time,
and from time to time in its sole discretion, to substitute assets of
equal fair market value for any asset held by the Trust. This
right is exercisable by the Company in a non-fiduciary capacity without
the approval or consent of any person in a fiduciary
capacity.
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(b)
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Subject
to the foregoing, the Trustee shall have the following powers and
authority in the administration of the assets of the Trust, in addition to
those vested in it elsewhere in this Trust Agreement or by
law:
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(i)
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Subject
to investment direction issued by the Company, to invest and reinvest the
assets of the Trust, without distinction between principal and income, in
any kind of property, real, personal or mixed, tangible or intangible, and
in any kind of investment, security or obligation suitable for the
investment of the Trust assets, including federal, state and municipal
tax-free obligations and other tax-free investment vehicles, insurance
policies and annuity contracts, and any common trust fund, group trust,
pooled fund, or other commingled investment fund maintained by the Trustee
or any other Company or entity for trust investment purposes in which the
Trust is eligible to invest and the provisions governing such fund shall
be part of the Trust Agreement as though fully restated
herein;
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(ii)
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To
purchase, and maintain as owner, a life insurance policy or policies with
respect to participants; provided; however; that the Trustee shall not be
required to purchase or take any action under a life insurance policy or
policies with respect to participants unless directed to do so by the
Company, which shall designate the face amount of said policy or policies,
the terms of the policy or policies and the insurance
company.
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(iii)
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To
sell for cash or on credit, to grant options, convert, redeem, exchange
for other securities or other property, or otherwise to dispose of, any
security or other property at any time held except that the Trustee shall
have no right or obligation to take any action with respect to any
insurance contract or policy unless so directed by the Company, or in the
event of a Change in Control, by the Benefits
Determiner;
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(iv)
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At
the direction of the Company, to settle, compromise or submit to
arbitration, any claims, debts or damages, due to or owning to or from the
Trust, to commence or defend suits or legal proceedings and to represent
the Trust in all suits or
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legal
proceedings provided, however, the Trustee shall not be expected or
required to undertake any of the foregoing unless there are sufficient
assets in the Trust with which to do so, or the Trustee has received
assurances by a party to this Trust, satisfactory to the Trustee, of the
payment or reimbursement of the expenses connected
therewith;
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(v)
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To
exercise any conversion privilege (other than conversion privileges with
respect to any insurance policy, which shall be exercised only upon
direction of the Company, or in the event of a Change in Control, by the
Benefits Determiner) and/or subscription right available in connection
with securities or other property at any time held, to oppose or to
consent to the reorganization, consolidation, merger or readjustment of
the finances of any corporation, Company or association or to the sale,
mortgage, pledge or lease of the property of any corporation, Company or
association any of the securities of which may at any time be held and to
do any act with reference thereto, including the exercise of options,
making of agreement or subscription, which may be deemed necessary or
advisable in connection therewith, and to hold and retain any securities
or other properties so acquired;
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(vi)
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To
hold cash uninvested for a reasonable period of time under the
circumstances without liability for interest, pending investment thereof
or the payment of expenses or making distributions
therewith;
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(vii)
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To
form corporations and to create trusts to hold title to any securities or
other property, all upon such terms and conditions as may be deemed
advisable;
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(viii)
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To
employ suitable agents and counsel and to pay their reasonable expenses
and compensation;
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(ix)
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To
register any securities held hereunder in the name of the Trustee or in
the name of a nominee with or without the addition of words indicating
that such securities are held in a fiduciary capacity and to hold any
securities in bearer form and to combine
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certificates
representing such securities with certificates of the same issue held by
the Trustee in other fiduciary or representative capacities, or to deposit
securities in any qualified central depository where such securities may
be held in bulk in the name of the nominee of such depository with
securities deposited by other depositors, or deposit securities issued by
the United States Government, or any agency or instrumentality’s thereof,
with a Federal Reserve Bank;
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(x)
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To
make, execute and deliver, as trustee, any and all conveyances, contracts,
waivers, releases or other instruments in writing necessary or proper for
the accomplishment of any of the foregoing
powers;
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(xi)
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To
have any and all other powers or authority, under the laws of the state in
which the Trustee’s principal executive offices are located, relevant to
performance in the capacity as the Trustee;
and
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(xii)
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To
settle, compromise or submit to arbitration, any claims, debts or damages,
due or owing to or from the Trust, to commence or defend suits or legal
proceedings and to represent the Trust in all suits or legal proceedings;
provided, however, the Trustee shall not be expected or required to
undertake any of the foregoing unless there are sufficient assets in the
Trust with which to do so, or the Trustee has received assurances by a
party to this Trust, satisfactory to the Trustee, of the payment or
reimbursement of the expenses connected
therewith.
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SECTION
VI
DISPOSITION
OF INCOME
During
the term of this Trust, all income received by the Trust, net of distributions,
expenses and taxes, shall be accumulated and reinvested.
SECTION
VII
ACCOUNTING
BY THE TRUSTEE
The
Trustee shall keep accurate and detailed records of all investments, receipts,
disbursements, and all other transactions required to be made, including such
specific records as shall be agreed upon in writing between the Company and the
Trustee. Within ninety (90) days
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following the close of each calendar year and within sixty (60)
days after the removal or resignation of the Trustee, the Trustee shall deliver
to the Company a written account of its administration of the Trust during such
year or during the period from the close of the last preceding year to the date
of such removal or resignation, setting forth all investments, receipts, disbursements
and other transactions effected by it, including a description of all securities
and investments purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable being shown separately),
and showing all cash, securities and other property held in the Trust at the end
of each year or as of the date of such removal or resignation, as the case may
be.
SECTION
VIII
RESPONSIBILITY
OF THE TRUSTEE
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(a)
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The
Trustee shall act with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like goals provided, however, that
the Trustee shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by the Company which is
contemplated by, and in conformity with, the terms of the Benefit Plan or
this Trust and is given in writing by the Company. In the event of a
dispute between the Company and a party, the Trustee may apply at the
expense of the Trust to a court of competent jurisdiction (located in West
Virginia, if possible) to resolve the
dispute.
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(b)
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If
the Trustee undertakes or defends any litigation arising in connection
with this Trust, except where it is finally determined by a court of
competent jurisdiction that the Trustee breached its duties under this
Agreement, the Company agrees to indemnify the Trustee against the
Trustee’s costs, expenses and liabilities (including, without limitation,
attorneys’ fees and expenses) relating thereto and to be primarily liable
for such payments. If the Company does not pay such costs,
expenses and liabilities in a reasonably timely manner, then the Trustee
may obtain payment from the Trust.
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(c)
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The
Trustee may consult with legal counsel (who may also be counsel for the
Company generally) with respect to any
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of its duties or obligations hereunder and charge their fees to the Trust if they are not paid in a timely manner by Company. |
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(d)
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The
Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals
to assist it in performing any of the duties or obligations
hereunder.
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(e)
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The
Trustee shall have, without exclusion, all powers conferred on trustees by
applicable law, unless expressly provided otherwise herein, provided,
however, that if an insurance policy is acquired or held at the direction
of the Company as an asset of the Trust, the Trustee shall have no power
to name a beneficiary of the policy other than the Trust, to assign the
policy other than to a successor trustee, or to loan any person (including
the Company) the proceeds of any borrowing against such
policy.
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(f)
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Notwithstanding
any powers granted to the Trustee pursuant to this Agreement or to
applicable law, the Trustee shall not have any power that could give this
Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue
Code.
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(g)
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The
Trustee shall be entitled to conclusively rely upon written notice,
direction, instruction, certificate or other communication believed by it
to be genuine and to be signed by the proper person or
persons.
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(h)
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Nothing
contained in this Trust Agreement shall require the Trustee to risk or
expend its own funds in the performance of its duties
hereunder. In the acceptance and performance of its duties
hereunder, the Trustee acts solely as trustee of the Trust and not in its
individual capacity, and all persons, other than the Company, having any
claim against the Trustee related to this Trust Agreement or the actions
or agreements of the Trustee contemplated hereby shall look solely to the
Trustee for the payment or satisfaction thereof, except to the extent that
the Trustee has engaged in willful misconduct or gross negligence, or the
Trustee has willfully breached its obligation under this Trust
Agreement.
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(i)
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The
Trustee shall not be responsible for determining whether a Change in
Control (as hereinafter defined) has
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occurred. The
Company will notify the Trustee of the occurrence of a Change in Control,
and the Trustee shall be entitled to rely conclusively upon such
notification for all purposes of a Change in Control hereunder without any
liability or further duty with respect
thereto.
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(j)
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Any
amendment or amendments that are or may be made to the Benefit Plan shall
not increase the Trustee’s duties hereunder without the express written
consent of the Trustee.
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SECTION
IX
COMPENSATION
AND EXPENSES OF TRUSTEE
The
Company shall pay all administrative and the Trustee’s fees and
expenses. If not paid by the Company, the fees and expenses shall be
paid from the Trust.
SECTION
X
RESIGNATION
AND REMOVAL OF TRUSTEE
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(a)
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The
Trustee may resign at any time by written notice to the Company, which
shall be effective thirty (30) days after receipt of such notice unless
the Company and the Trustee agree otherwise, whether or not a successor
has been appointed and qualifies. The Trustee shall pay or
deliver property to the successor trustee or the Company (in further
trust, pending the appointment of a successor) as the case may be, at the
end of such period.
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(b)
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The
Trustee may be removed by the Company on sixty (60) days notice to the
Trustee or upon shorter notice accepted by the Trustee. A
successor trustee may be removed by Company on ninety (90) days notice to
such successor trustee or upon shorter notice accepted by the successor
trustee.
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(c)(1)
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If,
at the time of a Change in Control (as defined herein) the then acting
trustee is an individual or entity not independent of the Company, the
Board of Directors of the Company as in existence immediately prior to the
Change in Control, shall designate an independent third party with
corporate trustee powers to act as successor trustee and upon such
appointment, the trustee acting prior to such Change in Control shall
resign. The successor trustee appointed by the Board of Directors may not
be removed by the Company for two (2) years following the date of such
Change in Control.
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(2)
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If,
at the time of a Change in Control (as defined herein), the Trustee is,
other than serving as Trustee hereunder, an independent party with respect
to the Company, the Trustee may not be removed by Company for the two (2)
years following
the date of such a Change in Control. Such Trustee also may not be removed
by the Company in anticipation of a Change in
Control.
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(d)
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If
the Trustee resigns at any time following a Change in Control, or if the
Trustee is removed by the Company at any time following the expiration of
the two (2) year period (as described in Subpart (c) above) following a
Change in Control, the President of the Company, as in existence
immediately prior to a Change in Control, or in the event such person is
deceased, the Benefits Determiner, shall select a successor trustee in
accordance with the provisions of XI (a) hereof and such selection shall
be made on or before the effective date of the Trustee’s resignation or
removal. In all other instances of resignation or removal, the Company
shall select a successor trustee in accordance with the provisions of XI
(a) hereof, with such selection being made on or before the effective date
of the Trustee’s resignation or
removal.
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(e)
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Upon
resignation or removal of the Trustee and appointment of a successor
trustee, all assets shall subsequently be promptly transferred to the
successor trustee, in accordance with subsection (a)
hereof.
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(f)
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If
the Trustee resigns or is removed under paragraph (a), (b), or (d) of this
Section X, a successor shall be appointed in accordance with Section XI
hereof, with such selection being made on or before the effective date of
resignation or removal. If no such appointment has been made, the Company
or the Trustee (as applicable) may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. Should
the Trustee be required to apply to a court of competent jurisdiction for
such purpose, all expenses of the Trustee in connection with the
proceeding shall be allowed as administrative expenses of the
Trust.
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SECTION
XI
APPOINTMENT
OF SUCCESSOR
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(a)
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If
the Trustee resigns or is removed pursuant to the provisions of Section X
hereof, the Company may appoint any third party, such as a Company trust
department or other party that may be granted corporate trustee powers
under state law, to serve as successor trustee hereunder. The appointment
of a successor trustee
shall be effective when
accepted in writing by the new trustee. The new trustee shall have all of
the rights and powers of the former trustee, including ownership rights in
the Trust assets. The former trustee shall execute any instrument
necessary or reasonably requested by the successor trustee to evidence the
transfer.
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(b)
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The
successor trustee need not examine the records and acts of any prior
Trustee and may retain or dispose of existing Trust assets, subject to
Sections VII and VIII hereof. The successor trustee shall not be
responsible for and the Company shall indemnify and defend the successor
trustee from any claim or liability resulting from any action or inaction
of any prior trustee from any other past event, or any condition existing
at the time it becomes successor
trustee.
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SECTION
XII
AMENDMENT
OR TERMINATION
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(a)
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This
Trust Agreement may be amended by a written instrument executed by the
Trustee and the Company. Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Benefit Plan or shall make the Trust
revocable.
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(b)
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The
Trust shall not terminate until Benefit Plan participants and their
beneficiaries are no longer entitled to any benefits pursuant to the terms
of the Benefit Plan. Upon termination of the Trust, any assets remaining
in the trust shall be returned to the Company. Notwithstanding the
foregoing, if at any time prior to the termination of the Trust pursuant
to the provisions set forth herein, the Trust has distributed its entire
corpus, the trust shall terminate unless within sixty (60) days of
notification to the Company by trustee that all assets of the Trust have
been distributed, the Company makes additional contributions to the Trust
for purposes of paying the benefits set forth
herein.
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(c)
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Upon
written approval of the Benefit Plan participants or beneficiaries
entitled to payment of benefits pursuant to the
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terms
of the Benefit Plan, the Company may terminate this Trust prior to the
time all benefit payments under the Benefit Plan have been made. All
assets in the Trust at termination shall, after payment of all amounts due
to the Trustee and all fees, taxes, expenses chargeable to the Trust, be
distributed returned to the Company.
|
|
|
(d)
|
Section(s)
I (one), II (two), VI (six), X (ten) and XII (twelve) of this trust
Agreement may not be amended by the Company (i) in anticipation of or (ii)
for two (2) years following a Change of Control, as defined
herein.
|
SECTION
XIII
MISCELLANEOUS
|
|
(a)
|
Any
provision of this Trust Agreement prohibited by law shall be ineffective
to the extent of any such prohibition, without invalidating the remaining
provisions hereof.
|
|
|
(b)
|
Benefits
payable to the Benefit Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable
process.
|
|
|
(c)
|
This
Trust Agreement shall be governed by and constructed in accordance with
the laws of the State of West Virginia. Nothing in this Trust Agreement
shall be construed to subject the Trust to the Employee Retirement
Security Act of 1974, as amended.
|
|
|
(d)
|
For
purposes of this Trust, Change in Control shall mean and include the
following with respect to (i) the Company or any successor
thereto:
|
|
|
(1)
|
a
change in control of a nature that would be required to be reported in
response to Item 1(a) of the current report on Form 8-K, as in effect on
the date hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (hereinafter the “Exchange Act”);
or
|
|
|
(2)
|
a
change in control of the Company within the meaning of 12 C.F.R. §225.41
of Regulation Y of the Federal Reserve Board;
or
|
|
|
(3)
|
at
such time as:
|
16
|
|
(i)
|
any
“person” (as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing Twenty Five Percent (25%) or more of the combined
voting
|
|
|
power
of the Company’s outstanding securities ordinarily having the right to
vote at the elections of directors, except for any stock purchased by the
Company’s Employee Stock Ownership Plan and/or the trust under such plan;
or
|
|
|
(ii)
|
individuals
who constitute the board of directors of the Company on the date hereof
(hereinafter the “Incumbent Board”) cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at
least three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Company’s nominating committee which
is comprised solely of members of the Incumbent Board, shall be, for
purposes of this clause (ii), considered as though he were a member of the
Incumbent Board; or
|
|
|
(iii)
|
merger,
consolidation, or sale of all substantially all the assets of the Company
occurs; or
|
|
|
(iv)
|
a
proxy statement is issued soliciting proxies from the stockholders of the
Company by someone other than the current management of the Company,
seeking stockholder approval of a plan of reorganization, merger, or
consolidation of the Company with one or more corporations as a result of
which the outstanding shares of the class of the Company’s securities are
exchanged for or converted into cash or property or not issued by the
Company.
|
|
|
(e)
|
The
Company shall be required to notify the Trustee of a Change in Control or
imminent Change in Control (for these purposes, a Change in Control shall
be imminent if it shall occur within sixty (60) days from the date of said
notice). The Trustee shall not be charged with actual knowledge of a
Change in Control until it has received
|
17
|
|
notice,
in writing, of such Change in Control or imminent Change in
Control.
|
|
|
(f)
|
Every
direction or notice authorized hereunder shall be deemed delivered to the
Company or the Trustee as the case may
be:
|
|
(i)
|
on
the date it is personally delivered to the Company or the Trustee at its
respective principal executive offices,
or
|
|
|
(ii)
|
three
(3) business days after it is sent by registered or certified mail,
postage prepaid, addressed to the Company, the Trustee or the benefits
determiner at such principal executive
offices.
|
|
|
(g)
|
The
Trustee shall be fully protected in relying upon a certification of an
authorized representative of the Company with respect to any instruction,
direction or approval of the Company required or permitted hereunder, and
protected also in relying upon the certification until a subsequent
certification is filed with the Trustee. The Trustee shall be fully
protected in acting upon any instrument, certificate, or paper believed by
it to be genuine and to be signed or presented by the proper person or
persons, and the Trustee shall be under no duty to make any investigation
or inquiry as to any statement contained in any such writing, but may
accept the same as conclusive evidence of the trust and accuracy contained
therein.
|
|
|
(h)
|
The
Company has appointed Benmark, Inc. as the “Benefits Determiner” to
determine the manner and amount of payments to be made to the participant
and/or the beneficiary under the Agreement. The Company may remove the
Benefits Determiner at any time by giving at least thirty (30) days prior
written notice to the Benefits Determiner. In the event that the Benefits
Determiner fails to act or resigns, a successor benefits determiner shall
be:
|
|
|
(i)
|
selected
by the Company, if no Change in Control has occurred at the Company,
or,
|
|
|
(ii)
|
selected
jointly by the participant (or beneficiary, if the participant is
deceased) and the Trustee, if a Change in Control has occurred at the
Company.
|
|
|
(i)
|
Communications
under this Agreement shall be in writing and shall be sent to the
following addresses:
|
18
Trustee: Xxxx Xxxxxxx, Trust
Officer
The Trust
Department of South Branch Valley Bank
000 Xxxxx
Xxxx Xxxxxx
Xxxxxxxxxx,
Xxxx Xxxxxxxx 00000
Company: Summit Financial
Group, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
|
Benefits
Determiner:
|
Benmark,
Inc.
|
0000
Xxxxxx 00
Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx
00000
|
|
(j)
|
This
Trust Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which shall together
constitute only one agreement.
|
SECTION
XIV
EFFECTIVE
DATE
The
effective date of this Trust Agreement shall be the 4th day of April,
2000.
IN
WITNESS WHEREOF, this instrument has been executed as of the day and year first
above written.
ATTEST: SUMMIT FINANCIAL GROUP,
INC.
__/s/ Xxxxx X.
Xxxxxxxx ________
By:___/s/ Xxxxxx X.
Tissue_______________
_________________________
Vice President &
CFO _____________
(Title)
ATTEST: TRUSTEE
_/s/ Xxxx X.
Whetzel__________
By:__/s/ Xxxxxxx X.
Xxxxxxx Xx. ____________
(Trustee)
19
EXHIBIT
“A”
THE
SUMMIT FINANCIAL GROUP, INC.
DIRECTORS
DEFERRAL PLAN
By a vote
of the Summit Financial Group, Inc.’s Board of Directors, (hereinafter referred
to as the, “Company”) on the 25th day
of April, 2000, the Company has established The Summit Financial Group, Inc.’s
Company Directors Deferral Plan (hereinafter referred to as the, “Benefit Plan”)
to allow eligible Directors the opportunity to participate in the Plan and defer
all or a portion of their fees in accordance therewith;
It is the
intent of the Company that this Benefit Plan be considered an unfunded
arrangement maintained primarily to provide supplemental retirement benefits,
and to be considered a non-qualified benefit plan for purposes of the Employee
Retirement Security Act of 1974, as amended (“ERISA”).
I. DIRECTOR’S
SERVICES
So long
as the Director shall continue to be a director of the Company the Director
shall devote best efforts to the
performance of duties as a member of the Board of Directors and of any of its
committees to which the Director is appointed.
II. FEES
The fees
covered under this Benefit Plan shall be any and all amounts paid to the
Director for services as a Director, including but not limited to annual fees,
meeting fees, and committee fees. The fees covered under this
Benefit Plan shall be credited to the Director in the manner and on the terms
and conditions specified in Paragraph IV subject to the election requirement of
Paragraph M.
III. ELECTION
OF DEFERRED COMPENSATION AND INVESTMENTS
The
Director shall at the same time as entering into this Benefit Plan file a
written statement with the Company notifying them as to the percent (%) or
dollar amount of fees as defined in Paragraph II that is to be deferred.
The election to defer fees may only be made for fees not yet earned as of
the date of said election. Signed written statements filed under this section,
unless modified or revoked in writing, shall be valid for all succeeding years.
In addition, the Director may file with the Company quarterly investment
elections setting forth the percentage that should hypothetically be invested in
each particular investment vehicle. (A copy of said investment election form is
attached hereto, marked as Exhibit “A-1” and fully incorporated herein by
reference). Said amounts shall not actually be invested in said
investments, and said investment elections are merely for the purpose of
calculating interest and returns on the Deferred Compensation Account as set
forth in Paragraph V. The Company shall not be under any duty to advise a
participant or beneficiary with respect to any said hypothetical investment.
Said investment elections must be received by the Company on or before the 25th
day of the month prior to the end of the quarter.
20
IV. RABBI
TRUST AND CREDITS TO DEFERRED COMPENSATION ACCOUNT
The
Company shall establish a Rabbi Trust for the Benefit Plan. The Company shall
pay all deferral amounts to the Rabbi Trust. The Trustee shall establish a
bookkeeping account for the Director (hereinafter called the, “Directors
Deferred Compensation Account”) which shall be credited on the dates such fees,
as defined in Paragraph II, would otherwise have been paid with the percentage
or dollar amount that the Director has notified the Company in writing, pursuant
to Paragraph III, that the Director elected to have deferred.
|
V.
|
INTEREST AND
RETURNS ON THE DEFERRED COMPENSATION
ACCOUNT
|
Once each
calendar quarter, the Directors Deferred Compensation Account shall be credited
with an amount that is in addition to the fees credited under Paragraph W. Such
amount shall be determined by multiplying the balance of the Directors Deferred
Compensation Account by a rate of interest equal to the total return for such
quarter of the investments chosen by the Director pursuant to Paragraph III.
Such amount shall be credited as long as there is a balance in the Directors
Deferred Compensation Account and shall be credited on the last day of each
calendar quarter.
|
VI.
|
NATURE OF THE
DEFERRED COMPENSATION ACCOUNT
|
The
Directors Deferred Compensation Account shall be utilized solely as a device for
the measurement and determination of the amount of deferred compensation to be
paid to the Director at the times hereinafter specified. On the contrary, it is
understood that all amounts credited to the Directors Deferred Compensation
Account shall be for the sole purpose of bookkeeping and that the Director shall
have no ownership rights of any nature with respect thereto. The
Director’s rights are limited to the rights to receive payments as hereinafter
provided and the Director’s position with respect thereto is that of a general
unsecured creditor of the Company.
VII. PAYMENT OF DIRECTOR’S
DEFERRED COMPENSATION
Subject
to Subparagraphs VII (A) and (B) hereinbelow, the amounts in the Directors
Deferred Compensation Account shall be paid, at the election of the Director, in
a lump sum, or five (5), ten (10), fifteen (15), or twenty (20) equal annual
installments, plus or minus each year the annual interest gained or market value
lost during the year. The Director shall make said election no later than
one (1) year prior to receiving the first payment. In the event the Director
fails to make said election, then the Director shall receive the payments in ten
(10) equal annual installments. The amount payable would be the balance of
the Director’s Deferred Compensation Account as defined in Section IV, including
all interest and returns credited pursuant to Paragraph V. The payments
set forth herein shall commence thirty (30) days after the end of the calendar
quarter following the Director’s retirement.
(A)
The end of the Director’s term of office other than retirement: Subject to
Subparagraph VII (B) hereinbelow, if the Director’s term of office ends due to
resignation, removal, or failure to be elected to the Board prior to retirement,
then the Director shall receive the account balance’ in a lump sum within thirty
(30) days after the end of the calendar quarter following the Director’s end of
term of office.
21
|
|
(B)
The
end of the Director’s term of office or the Director’s termination of the
Plan within three (3) years of the Director’s participation in the Plan:
Notwithstanding the provisions set forth in Paragraph VII
hereinabove, if the Director’s office ends due to resignation, removal, or
failure to be re-elected to the Board, prior to retirement, or the
Director terminates the Plan within the first three (3) years of the
Director’s participation in the Plan, then the Directors account
balance1 shall be paid in two (2) equal
installments on the first and last day of the calendar year following the
year in which
the Director would have participated in the Plan for three (3) full
years.
|
|
VIII.
|
DEATH
OF DIRECTOR PRIOR TO TERMINATION OF SERVICE OR COMMENCEMENT OF
PAYMENTS
|
In the
event of the death of the Director prior to termination of service or
commencement of payments, the Director’s account balance shall be paid in a lump
sum within thirty (30) days after the end of the calendar quarter following the
Director’s death and shall be made to a beneficiary or beneficiaries designated
by the Director in writing and delivered to the Company. In the event no
designation is made, the Director’s account balance shall be paid in a lump sum
to the Director’s estate. The lump sum payment to be made under this
Paragraph shall be the Director’s account balance1
as determined at the quarterly evaluation following the Director’s
death.
|
IX.
|
DIRECTOR’S
DEATH
|
In the
event of the death of the Director after commencement of payments, but prior to
receiving all payments due under this Benefit Plan, the Directors’s account
balance shall be paid in a lump sum within thirty (30) days after the end of the
calendar quarter following the Director’s death and shall be made to a
beneficiary or beneficiaries designated by the Director in writing and delivered
to the Company. In the event no designation is made, the Director’s
account balance shall be paid in a lump sum to the Director’s estate. The
lump sum payment to be made under this Paragraph shall be the Director’s account balance1
as determined at the quarterly evaluation following the Director’s
death.
|
X.
|
FUNDING
|
The
Company’s obligation under this Benefit Plan shall be an unfunded and unsecured
promise to pay. The Company shall not be obligated under any circumstances
to fund its obligations,
the Company may, however, at its sole and exclusive option, elect to fund this
Benefit Plan in whole or in part.
22
Should
the Company elect to fund this Benefit Plan informally, in whole or in part, the
manner of such informal
funding, and the continuance or discontinuance of such informal funding shall be
the sole and exclusive decision of the Company.
Should
the Company determine to informally fund this Benefit Plan, in whole or in part,
through the medium of life
insurance or annuities, or both, the Company shall be the owner and beneficiary
of the policy. The Company reserves the absolute right to terminate such
life insurance or annuities, as well as any other funding at any time, either in
whole or in part.
Any such
life insurance or annuity policy purchased by the Company shall not in any way
be considered
to be security for the performance of the obligations for this Benefit Plan. It
shall be, and remain, a general, unpledged, unrestricted asset of the Company
and the Director shall have no interest in such policy whatsoever.
|
XI.
|
EFFECT
ON OTHER COMPANY BENEFIT PLANS
|
Nothing
contained in this Benefit Plan shall affect the right of the Director to
participate in or be covered by any qualified or non-qualified pension, profit
sharing, group bonus or their supplemental compensation or fringe benefit plans
constituting a part of the Company’s existing or future compensation
structure.
|
XII.
|
ASSIGNMENT
OR PLEDGE
|
The
Directors Deferred Compensation Account and any payment payable at any time to
this Benefit Plan shall not be assignable or subject to pledge or hypothecation
nor shall said payments be subject to seizure for the payment of any debts,
judgments, alimony or separate maintenance, or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise except to the extent as
provided by law.
|
XIII.
|
CONTINUATION
AS DIRECTOR
|
Neither
this Benefit Plan nor the payments of any benefits thereunder shall be construed
as giving to the Director any right to be retained as a member of the Board of
Directors of the Company.
|
XIV.
|
NAMED
FIDUCIARY
|
The Named
Fiduciary for this Benefit Plan for purposes of claim procedures under this
Benefit Plan is Xxxx Xxxxxxx, or any other successor Trust Officer at South
Branch Valley Bank. The business address and telephone number of the Named
Fiduciary under this Benefit Plan is as follows:
23
|
Name
|
Xxxx
Xxxxxxx, Trust Officer
|
|
Bank
|
South
Branch Valley National Bank
|
|
Main
Street
|
000
Xxxxx Xxxx Xxxxxx
|
|
Xxxx,
Xxxxx
|
Xxxxxxxxxx,
Xxxx Xxxxxxxx
|
|
Phone
Number
|
(000)
000-0000
|
The Named
Fiduciary under this Benefit Plan may be changed at any time with the written
consent of the Director.
|
XV.
|
CLAIMS
PROCEDURE AND ARBITRATION
|
In the
event that benefits under this Benefit Plan are not paid to the Director (or to
his beneficiary in the
case of the Director’s death) and such claimants feel they are entitled to
receive such benefits, then a written claim must be made to the Plan Fiduciary
and Administrator named above within sixty (60) days from the date payments are
refused. The Plan Fiduciary and Administrator and the Company shall review
the written claim and if the claim is denied, in whole or in part, they shall
provide in writing within ninety (90) days of receipt of such claim provisions
of this Benefit Plan upon which the denial is based and any additional material
or information necessary to perfect the claim. Such written notice shall
further indicate the additional steps to be taken by claimants if a further
review of the claim denial is desired. A claim shall be deemed denied if
the Plan Fiduciary and Administrator fails to take any action within the
aforesaid ninety-day period.
If
claimants desire a second review, they shall notify the Plan Fiduciary and
Administrator in writing within sixty (60) days of the first claim denial.
Claimants may review this Benefit Plan or any other documents relating thereto
and submit any written issues and comments they may feel appropriate. In
its sole discretion the Plan Fiduciary and Administrator shall then review the
second claim and provide a written decision within sixty (60) days of receipt of
such claim. This decision shall likewise state the specific reasons for
the decision and shall include reference to specific provisions of this Benefit
Plan upon which the decision is based.
If
claimants continue to dispute the benefit denial based upon completed
performance of this Benefit Plan or the meaning and effect of the terms and
conditions thereof, then claimants may submit the dispute to a Board of
Arbitration for final arbitration. Said Board shall consist of one member
selected by the claimant, one member selected by the Company, one member
selected by the first two members. The Board shall operate under any
generally recognized set of arbitration rules. The parties hereto agree
that they and their heirs, personal representatives, successors and assigns
shall be bound by the decision of such Board with respect to any controversy
properly submitted to it for determination.
24
XVI.
MISCELLANEOUS
A. Amendment or
Revocation:
It is
understood that, during the lifetime of the Participant, this Benefit Plan may
be amended or revoked at any time or times, in whole or in part, by the mutual
written consent of the Participant, the Company, and the Trustee.
B. Gender:
Whenever
in this Benefit Plan words are used in the masculine or neuter gender, they
shall be read and construed as in the masculine, feminine or neuter gender,
whenever they should so apply.
C. Effect on Other Company
Benefit Plans:
Nothing
contained in this Benefit Plan shall affect the right of the Participant to
participate in or be covered by any qualified or non-qualified pension,
profit-sharing, group, bonus or other supplemental compensation or fringe
benefit plan constituting a part of the Company’s existing or future
compensation structure.
D. Headings:
Headings
and subheadings in this Benefit Plan are inserted for reference and convenience
only and shall not be deemed a part of this Benefit Plan.
E. Partial
Invalidity:
If any
term, provision, covenant, or condition of this Benefit Plan is determined by an
arbitrator or a court, as the case may be, to be invalid, void, or
unenforceable, such determination shall not render any other term, provision,
covenant, or condition invalid, void, or unenforceable, and this Benefit Plan
shall remain in full force and effect notwithstanding such partial
invalidity.
SUMMIT
FINANCIAL GROUP, INC.
By:_______________
Chairman
of the Board
25
EXHIBIT
“A-1”
SUMMIT
FINANCIAL GROUP, INC.
DEFERRAL
AND DISTRIBUTION ELECTION FORM
PERSONAL
DATA
Last Name First Name M.I. Social Security Number
Permanent Mailing Address
|
Hire
Date
|
Birth
Date
|
Single Married
|
DEFERRAL
ELECTION
B. I
do not wish to participate in the Plan.
CREDITING
OPTIONS
All funds
are to be allocated among the following Crediting Options. Said options are
hypothetical and not actual, and are used merely for purposes of calculating
interest and returns on the Deferred Compensation Account pursuant to paragraph
V of the Directors
Deferral Plan.
|
FUND
|
TYPE
|
||
|
%
|
Option
1
|
Fidelity
VIP Fund II Contrafund
|
Capital
Appreciation
|
|
%
|
Option
2
|
Fidelity
VIP Fund Growth Port.
|
Long-Term
Growth
|
|
%
|
Option
3
|
Fidelity
VIP Fund III Growth Opportunities
|
Capital
Appreciation
|
|
%
|
Option
4
|
NSAT
Total Return Fund
|
Growth
& Income/tocks & Bonds
|
|
%
|
Option
5
|
Dreyfus
Stock Index Fund
|
Specialty
|
|
%
|
Option
6
|
American
Century Income & Growth
|
Growth
& Income
|
|
%
|
Option
7
|
Janus
Global Technology Portfolio
|
Specialty
|
|
%
|
Option
8
|
Fidelity
VIP High Income
|
High
Current Income
|
|
%
|
Option
9
|
American
Century VP
|
International
Stock
|
|
%
|
Option
10
|
Salomon
Brothers Asset Management
|
Balanced
Fund
|
|
%
|
Option
11
|
Nationwide
Separate Account Trust (NSAT)
|
Government
Bond
|
|
%
|
Option
12
|
NSAT
Money Market
|
Money
Market
|
|
%
|
Option
13
|
Nationwide
Fixed Account
|
Fixed
Interest
|
NOTE: Total
of percentages MUST equal 100%
26
REMEMBER
|
|
1.On a quarterly basis,
you may change the contribution percentage to these Crediting Options for
future contributions.
|
|
|
2.On
a quarterly basis, you may also reallocate the distribution of your
existing funds between these Crediting
Options.
|
|
|
3.The
deadline for receipt
of the above changes by Corporate Compensation is 10 calendar days before
a quarter end.
|
DISTRIBUTION
ELECTION - TIMING AND FORM
Distribute
the amounts deferred or credited to my account after the date of this deferral
election as follows:
Upon
retirement, I want the payments to last for the following number of
years:
BENEFICIARY
DESIGNATION
The
following beneficiary shall receive any payments from this account in the event
of my death:
Beneficiary: __________________________________ Soc.
Sec. #: ____ - ____
Primary
Beneficiary: __________________________________ Soc.
Sec. #: ____ - ____
Contingent
AUTHORIZATION
& ACKNOWLEDGMENT
I
authorize the Company to effect the elections specified on this Deferral and
Payment Election Form. I have read the instructions attached to this Form, and I
understand that my Deferral Election to this Plan is irrevocable for the entire
Plan Year. I also understand that my Payment Election will remain in effect
until I submit a change according to the provisions of the Plan.
I
acknowledge that I have received sufficient information on the Investment
Crediting Options to make an informed election and that I have had answered to
my satisfaction those questions that I may have had. I further understand that
each of these choices involves differing levels of risk and that neither Summit
Financial Group, Inc., nor any of its employees, is providing any assurances of
returns or of preservation of principle.
__________________________ ________________________________
Date
Participant Signature
You must
sign the Deferral and Payment Election Form. The Company will not effect your
elections without your authorization. Your elections on this form will remain in
effect until you make a change according to the provisions of the
Plan.
27
