Item 3.02 Unregistered Sales of Equity Securities
On April 15, 2021, Summit Financial Group, Inc. ("Summit") sold in a private
placement $9.7 million of a new series of 6% Fixed-Rate Non-Cumulative Perpetual
Preferred Stock, Series 2021, $1.00 par value, with a liquidation preference of
$10,000 per share (the "Preferred Stock"), based on the private placement
exemption under Section 4(2) of the Securities Act of 1933 (the "Securities
Act") and Rule 506 of Regulation D. Pursuant to the terms of the private
placement, Summit issued 970 shares of the Preferred Stock on April 15, 2021.
Summit extended the offering period until April 30, 2021, and may sell the
remaining 230 unsold shares of Preferred Stock in a subsequent closing to take
place no later than April 30, 2021.
The terms of the Preferred Stock are more fully described in Exhibit A to the
Articles of Amendment to the Articles of Incorporation filed with the West
Virginia Secretary of State on April 15, 2021, designating the Preferred Stock
having the voting and other powers, preferences and relative, participating,
optional and other rights, and the qualifications limitations and restrictions
thereof. The Preferred Stock will qualify as Tier 1 capital for regulatory
capital purposes. The proceeds of the sale of the Preferred Stock will be used
to augment Summit's regulatory capital and for other general corporate purposes,
which may include (i) repayment, redemption or refinancing of indebtedness, (ii)
capital expenditures, (iii) making contributions to the capital of Summit
Community Bank, to support its lending, investing and other financial services
activities, (iv) funding of possible acquisitions, (v) working capital, (vi)
satisfaction of other obligations of Summit and its subsidiaries and (vii)
repurchase of Summit's outstanding equity securities.
The Preferred Stock is non-convertible and will pay noncumulative dividends, if
and when declared by the Summit board of directors, at a rate of 6.0% per annum.
Dividends declared will be payable quarterly in arrears on the 15th day of
March, June, September and December of each year.
This Current Report on Form 8-K does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall it constitute an offer
to sell, solicitation or sale in any jurisdiction in which such offer,
solicitation or sale would be unlawful. These securities have not been
registered under the Securities Act or any state securities laws and, unless so
registered, may not be offered or sold in the United States or to U.S. persons
except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state laws.. This
Current Report on Form 8-K is being filed pursuant to and in accordance with
Rule 135c of the Securities Act.
Item 3.03. Material Modification to Rights of Security Holders
Under the Articles of Amendment to Summit's Articles of Incorporation filed on
April 15, 2021, the Preferred Stock will rank senior to Summit's common stock,
par value $2.50 per share, and will rank senior to each other class or series of
capital stock Summit may issue in the future the terms of which do not expressly
provide that it ranks on a parity with or senior to the Preferred Stock as to
dividend rights and rights on liquidation, dissolution or winding-up of the
Except as provided below, holders of the Preferred Stock will have no voting
rights, except as otherwise required by law or Summit's Articles of
Incorporation and are not entitled to any preemptive or preferential rights to
purchase any of Summit's securities. So long as any shares of Series 2021
preferred stock remain outstanding, Summit will not, without the affirmative
vote or consent of the holders of at least two-thirds (2/3) of the outstanding
shares of the Preferred Stock and any then-outstanding parity stock entitled to
vote thereon, voting together as a single class:
• amend or alter the provisions of Summit's Articles of Incorporation or
Articles of Amendment so as to authorize or create, or increase the authorized
amount of, any class or series of stock ranking senior to the Preferred Stock
with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding-up of Summit;
• amend, alter or repeal the provisions of Summit's Articles of Incorporation
or Articles of Amendment so as to materially and adversely affect the special
rights, preferences, privileges and voting powers of the Preferred Stock, taken
as a whole; or
• consummate a binding share exchange or reclassification involving the
Preferred Stock or a merger or consolidation of Summit with another corporation
or other entity, unless in each case (i) the shares of Preferred Stock remain
outstanding or, in the case of any such merger or consolidation with respect to
which we are not the surviving or resulting entity, are converted into or
exchanged for preferred securities of the surviving or resulting entity or its
ultimate parent, and (ii) such shares remaining outstanding or such preferred
securities, as the case may be, have such rights, preferences, privileges and
voting powers, taken as a whole, as are not materially less favorable to the
holders thereof than the rights, preferences, privileges and voting powers of
the Preferred Stock, taken as a whole.
For so long as any Preferred Stock is outstanding, no dividends may be declared
or paid on junior preferred stock, preferred stock ranking pari passu with the
Preferred Stock, or common stock (other than in the case of pari passu preferred
stock and dividends on a pro rata basis with the Preferred Stock), nor may
Summit repurchase or redeem any junior preferred shares, preferred shares
ranking pari passu with the Preferred Stock or common shares, unless the full
dividend for the latest completed dividend period has been paid or declared and
a sum sufficient for the payment of those dividends has been set aside.
The Preferred Stock is perpetual and has no maturity date and is not subject to
any mandatory redemption, sinking fund, or other similar provisions. Except for
the redemption upon the occurrence of a regulatory capital treatment event, the
shares of Preferred Stock are not redeemable prior to April 15, 2026. The
holders of the Preferred Stock will not have any right to require the redemption
or repurchase of their shares of Preferred Stock.
In addition to the foregoing, the information set forth under "Item 3.02
Unregistered Sales of Equity Securities" is incorporated herein by reference.
Item 5.03. Amendment to Articles of Incorporation or Bylaws; Change in Fiscal
On April 15, 2021, Summit filed Articles of Amendment to its Articles of
Incorporation with the West Virginia Secretary of State's Office for the purpose
of designating the Preferred Stock's voting and other powers, preferences and
relative, participating, optional and other rights, and the qualifications
limitations and restrictions.
A copy of the Articles of Amendment to the Articles of Incorporation setting
forth the terms of the Preferred Stock is attached as Exhibit 3.1, and is
incorporated by reference herein.
This Current Report on Form 8-K includes forward-looking statements regarding
the potential sale of the remaining  unsold shares of Preferred Stock in a
subsequent closing. The words "anticipate," "believe," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "target," "potential," "will,"
"would," "could," "should," "continue," and similar expressions are intended to
identify forward-looking statements, although not all forward-looking statements
contain these identifying words. Each forward-looking statement is subject to
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied in such statement.
Because forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified and some of which
are beyond Summit's control, you should not rely on these forward-looking
statements as predictions of future events. The events and circumstances
reflected in Summit's forward-looking statements may not be achieved or occur
and actual results could differ materially from those projected in the
forward-looking statements. Except as required by applicable law, Summit does
not plan to publicly update or revise any forward-looking statements contained
herein, whether as a result of any new information, future events, changed
circumstances or otherwise.
Item 9.01. Financial Statements and Exhibits
Exhibit Number Description
3.1 Articles of Amendment to Articles of Incorp oration
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