On March 30, 2009, Summit Financial Group, Inc. issued subordinated debt in the amount of $5,000,000 to Allegheny Wood Products, Inc. Under the terms of the subordinated debt, Summit will pay the principal sum of $5,000,000 to Allegheny on March 31, 2019. Summit will pay interest on the subordinated debt at a rate of 10% per annum. The subordinated debt may be redeemed at Summit’s option on any interest payment date on or after April 1, 2014.
Mr. Crites and his spouse transferred a total of 227,240 shares to eight subtrusts created to support the future health, maintenance, and education of their grandchildren. Mr. Crites and his spouse are co-trustees for six of the eight subtrusts and have also retained the power to vote the shares of all Summit stock owned by the eight subtrusts, including the two subtrusts for which they are not acting as co-trustees.
On October 13, 2010 Mr. Crites and his spouse transferred a total of 282,276 shares to The Patricia A. Crites 2010 Grantor Retained Annuity Trust for which Mr. Crites is the trustee.
On October 31, 2011 Mr. and Mrs. Crites purchased 2,000 shares of Summit Financial Group, Inc. 8% Non-Cumulative Convertible Preferred Stock, Series 2011. The Series 2011 Preferred Stock does not have voting rights. Under the terms of the Series 2011 Preferred Stock, Mr. and Mrs. Crites have the right to convert the Series 2011 Preferred Stock on any dividend payment date, at their option, into shares of Common Stock based on a conversion rate determined by dividing $500 by $4.00. The dividend payment dates are March 1, June 1, September 1 and December 1 of each year (each "Dividend Payment Date"). Mr. and Mrs. Crites will be deemed to have beneficial ownership of 250,000 shares of Summit Common Stock on the date that is sixty days prior to each Dividend Payment Date.
On or after June 1, 2014, the Company may at its option on any dividend payment date, convert some or all of the Series 2011 Preferred Stock into shares of Summit Common Stock at the then applicable conversion rate. Summit may exercise this conversion right if, for 20 trading days during the 30 consecutive trading dates immediately proceeding the date they give notice of conversion, the closing price of the Common Stock exceeds 135% of the greater of (i) $4.00 or (ii) the consolidated closing bid price of its Common Stock as quoted on the NASDAQ Capital Market immediately preceding the closing of the offering. Accordingly, on or after June 1, 2014, the Company may convert some or all of Mr. and Mrs. Crites shares into a maximum of 250,000 shares of Summit Common Stock.
On January 24, 2012, the Patricia A. Crites 2010 Grantor Retained Annuity Trust distributed 99,951 shares of Summit common stock to Patricia A. Crites. On January 31, 2012, Mrs. Crites transferred these shares to the Patricia A. Crites 2012 Grantor Retained Annuity Trust, for which John W. Crites acts as trustee. On January 31, 2012, John W. Crites and Patricia A. Crites also transferred 12,000 shares of Summit common stock jointly owned by them to the Patricia A. Crites 2012 Grantor Retained Annuity Trust.
On June 18, 2013, The Patricia A. Crites 2010 Grantor Retained Annuity Trust distributed 63,732 shares of Summit common stock to Patricia A. Crites. On June 18, 2013, The Patricia A. Crites 2012 Grantor Retained Annuity Trust distributed 13,054 shares of Summit common stock to Patricia A. Crites.
On February 5, 2014, The Patricia A. Crites 2010 Grantor Retained Annuity Trust distributed 47,534 shares of Summit common stock to Patricia A. Crites.
