**Exhibit 10.4**

 

**EMPLOYMENT AGREEMENT**

 

This Agreementeffective November 18, 2002, by and between Nevada Security Bank, a Nevadacorporation (“Bank”), and David A. Funk (“Executive”).

 

Bank desiresto employ Executive to devote full time to the business of the Bank, andExecutive desires to be so employed.

 

The partiesagree as follows:

 

I.

 

*EMPLOYMENT TERM*

 

Bank agrees toemploy Executive, and Executive agrees to be so employed, in the capacity ofPresident.  Employment shall beginNovember 18, 2002 and continue until termination in accordance with thisAgreement.

 

II.

 

*TIME AND EFFORTS*

 

Executiveshall diligently and conscientiously devote his full and exclusive time andattention and best efforts in discharging his duties as the Bank’s President.

 

III.

 

*BOARD OF DIRECTORS*

 

Executiveshall be a member of the Board of Directors and at all times discharge hisduties in consultation with and under the supervision of the Bank’s Board ofDirectors.  In the performance of hisduties, Executive shall make his principal office in such place as the Bank’sBoard of Directors and Executive may from time to time agree.

 

1

----

 

IV.

 

*COMPENSATION*

 

Bank shall payto Executive as compensation for his services the sum of $140,000.00 per yearpayable semi-monthly.

 

V.

 

*EXPENSES*

 

(a)                                  *Business*.                                              The Bankshall reimburse Executive for all reasonable and necessary business expensesincurred in carrying out his duties under this Agreement.  Executive shall present to the Bank fromtime to time an itemized account of such expenses in any form required by thebank.

 

(b)                                 *Memberships*.                     The Bank shall pay or reimburseExecutive for social, professional and community membership fees, including butnot limited to, Hidden Valley County Club, Prospectors Club, Western Industrialof Nevada, Economic Development of Western Nevada, American BankersAssociation, Western Independent Bankers and Nevada Bankers.

 

(c)                                  *Automobile*.                              The Bank shall payExecutive a car allowance of $700.00 a month.

 

VI.

 

*EXECUTIVE BENEFITS*

 

Executiveshall receive the following:

 

(a)                                  *Insurance*.                                       Bank paidmedical, vision, short and long term disability and a $525,000 life insurancepolicy.

 

(b)                                 *Vacation*.                                           Four weekspaid vacation per calendar year commencing January 1, 2003 accruing at the rateof one week every three months.  For theremainder of the calendar year 2002, Executive shall be entitled to four dayspaid vacation.  Upon terminationExecutive shall be paid for accrued and unused vacation.

 

(c)                                  *Holidays*.                                            All paidholidays the Bank observes.

 

(d)                                 *Sick leave*.                                     Ten paid sickleave days per year accruing at the rate 2.5 days every three months.  Unused sick days can be accumulated up to120 days.

 

2

----

 

(e)                                  *401K*.               Executiveis eligible to participate in Bank’s 401K Plan following 90 days ofemployment.  There are currently no Bankmatching contributions.

 

(f)                                    *Stock options*.                  15,000 shares of Bank stock at anoption price of $10 a share subject to the conditions of the Bank’s StockOption Plan.  The option to purchase thestock shall vest as follows: 3,000 shares vest immediately on the first day ofemployment; thereafter an additional 3,000 shares vest yearly on theanniversary date of employment for 4 years.

 

(g)                                 *Participation in other executive and/oremployee-benefit plans*.

Nothing inthis Agreement shall in any manner modify, impair, or affect the existing orfuture rights or interests of the Executive (a) to receive any executive and/oremployee-benefits to which he would otherwise be entitled, or (b) as aparticipant in the present or any future incentive profit-sharing or bonusplan, stock option plan or pension plan of the Bank.  The rights and interests of the Executive to any executive and/oremployee benefits or as a participant or beneficiary in or under any or allsuch plans shall continue in full force and effect.  The Executive shall have the right at any future time to become aparticipant or beneficiary under or pursuant to any and all such plans.

 

VII.

 

*TERMINATION FOR CAUSE*

 

The Bank mayterminate this Agreement at any time by action of its Board of Directors,without further obligation or liability to the Executive, in the event that:

 

(a)                                  TheExecutive fails to abide by and/or enforce the Bank’s written safety andsoundness policies; or

 

(b)                                 TheExecutive is convicted of a felony or misdemeanor involving moral turpitude; or

 

(c)                                  Stateand/or Federal regulators request or order termination of this Agreement; or

 

(d)                                 TheExecutive commits any act which could cause termination of Coverage under theBank’s Blanket Bond as to the Executive, as distinguished from termination ofsuch coverage as to the Bank as a whole; or

 

(e)                                  TheExecutive dies.

 

3

----

 

VIII.

 

*TERMINATION WITHOUT CAUSE*

 

In the eventthe Board of Directors of the Bank determines that either (i) the continuedassociation of the Executive with the Bank or (ii) the performance of hisduties by the Executive is not in the best interest of the Bank, then the Bankmay terminate this Agreement by action of its Board of Directors.  In the event of such termination withoutcause, the Executive shall be paid as and for severance payments and in lieu ofany and all other Compensation, remedy or damages, a non-discounted lump-sumequal to not less than Twelve (12) months compensation at the then current basesalary of the Executive, plus any accrued and unused vacation days and anyaccrued but unpaid Bonus Compensation. In addition, the Bank, at its expense will provide the Executive and hisdependent family with medical and vision insurance coverage for a period of notless than six (6) months following the Executive’s termination.  Upon such payment and provision of insurancecoverage, any and all obligations of the Bank to the Executive shall have beenfully and completely satisfied and the Executive shall be entitled to noadditional compensation, claim, right or benefit hereunder or otherwise.

 

IX.

 

*ACTION BY SUPERVISORY AUTHORITY*

 

If the Bank isclosed or taken over by any banking supervisory authority, such bankingauthority may immediately terminate this Agreement without liability orobligation to the Executive.

 

X.

 

*MERGER OR CORPORATE DISSOLUTION*

 

In the eventof a merger where the Bank is not the surviving corporation, in the event of aconsolidation, in the event of a transfer of all or substantially all of theassets of the Bank, in the event of any other corporate reorganization wherethere is a change in ownership of at least Twenty Five Percent (25%) except asmay result from a transfer of the Bank’s stock to another corporation inexchange for at least Sixty-Six and Two/Thirds Percent (66 2/3%) control ofthat corporation, or in the event of the dissolution of the Bank, the Executivemay terminate this Agreement.  In the eventof such termination, the Executive shall be paid, as and for severance paymentsand in lieu of any and all other compensation remedy or damages, anon-discounted lump-sum equal to not less than Twenty Four (24) monthscompensation at the then current base salary of the Executive, plus any accruedand unused vacation days and any accrued but unpaid Bonus Compensation.  In addition, the Bank at its expense willprovide the Executive and

 

4

----

 

his dependent family with medical and vision insurance coverage for aperiod of not less than Twelve (12) months following the Executive’stermination.  Upon such payment andprovision of insurance coverage, any and all obligations of the Bank to theExecutive shall have been fully and completely satisfied and the Executiveshall be entitled to no additional compensation, claim, right or benefithereunder or otherwise.

 

XI.

 

*TERMINATION BY THE EXECUTIVE*

 

The Executivemay terminate his employment hereunder at any time upon Ninety (90) days noticeto the Bank.  In such event, theExecutive shall be entitled to all salary, bonus, and other benefits (accruedvacation, etc.), which have accrued prior to the effective date of termination.  All unvested options shall be forfeited andthe Executive must exercise his vested options within Sixty (60) days oftermination.  If not so exercised, thoseoptions shall also be forfeited.

 

XII.

 

*INDEMNIFICATION*

 

The Bank shallindemnify the Executive against liability or loss arising out of theExecutive’s actual or asserted negligence, misfeasance or malfeasance in theperformance of the Executive’s duties or out of any actual or asserted wrongfulact or omission against, or by, the Bank including, but not limited to,judgments, fines, settlements, expenses, attorney fees and costs incurred inthe defense of actions, proceedings and appeals therefrom.  The Bank shall provide Directors andOfficers Liability Insurance to indemnify and insure the Bank and the Executivefrom and against the aforementioned liabilities.  The provisions of this paragraph shall apply to the estate,executor, administrator, heirs, legatees or devisees of the Executive.

 

XIII.

 

*NOTICES*

 

Any writtennotice required or desired to be given under this Agreement shall be given inwriting and delivered, personally or by certified mail to the Executive’sresidence or to the Bank’s principal office, as the case may be.

 

5

----

 

XIV.

 

*WAIVER OF BREACH*

 

The Bank’swaiver of a breach of any provision of this Agreement by the Executive shallnot operate or be construed as a waiver of any subsequent breach by theExecutive. No waiver shall be valid unless in writing and signed by anauthorized officer of the Bank.

 

XV.

 

*ASSIGNMENT*

 

The Executiveacknowledges that his services are unique and personal.  Accordingly, the Executive may not assignhis rights or delegate his duties or obligations under this Agreement.  The Bank’s rights and obligations under thisAgreement shall inure to the benefit of and shall be binding upon the Bank’ssuccessors and assigns.

 

XVI.

 

*ATTORNEYS’ FEES AND COSTS*

 

If eitherparty brings an action or a proceeding, including arbitration, to enforce,protect, or establish any right or remedy under the terms of this Agreement,the prevailing party shall be entitled to reasonable attorneys’ fees and costs,and the fees and expenses of the arbitrators in any arbitration proceeding.

 

XVII.

 

*ENTIRE AGREEMENT*

 

This Agreementcontains the entire understanding of the parties.  It may not be changed orally but only by an Agreement in writingsigned by the party against whom enforcement of any waiver, change,modification, extension, or discharge is sought.

 

XVIII.

 

*GOVERNING LAW*

 

ThisEmployment Agreement shall be governed by and construed in accordance with thelaws of the State of Nevada in effect from time to time.

 

6

----

 

XIX.

 

*SEVERABILITY*

 

Theseverability, unenforceability, invalidity, or illegality of any provision ofthis Employment Agreement shall not render any other provisions unenforceable,invalid, or illegal, and the Employment Agreement shall be construed in allrespects as if the unenforceable, invalid or illegal provisions were omitted.

 

XX.

 

*HEADINGS*

 

Headings inthis Agreement are for convenience only and shall not be used to interpret orconstrue its provisions.

 

XXI.

 

*COUNTERPARTS*

 

This Agreementmay be executed in two or more counterparts, each of which shall be deemed anoriginal but all of which together shall constitute one and the sameinstrument.

 

XXII.

 

*GENDER AND NUMBER*

 

As used inthis Employment Agreement, the masculine, feminine, or neuter gender, andsingular or plural number, shall each be considered to indicate the otherswhenever the context so indicates.

 

XXIII.

 

*AGREEMENT TO BE CONSTRUED IN ACCORDANCE WITHITS INTENT*

 

This Agreementshall be construed in accordance with its intent and without regard to anypresumption or other rule requiring construction against the party causing thesame to be drafted.

 

7

----

 

IN WITNESSWHEREOF the parties have executed this Agreement effective the day first abovewritten.

 
| Nevada Security Bank | Executive      |
|----------------------|----------------|
|                 |           |
|                 |           |
| By:                  | /s/ Hal Giomi  |   | /s/ David A. Funk |   |
| President & CEO  |           | 3290 [ILLEGIBLE] |   |
|                 | address        |
| Board of Directors   | Reno, NV 89502 |   |

 

8

----

 

**NEVADA SECURITY BANK**

**EMPLOYMENT AGREEMENTADDENDUM**

**DAVID A. FUNK**

 

 

An employment agreement datedNovember 18, 2003, by and between Nevada Security Bank and David A. Funk, ishereby amended to include the following paragraph:

 

 

**EXECUTIVE BENEFITS**

 

 

**Retirement Benefits:**  The Executive shall be provided withmedical, dental and vision insurance benefits for himself and eligible familymembers equivalent to the maximum benefits available from time to time underthe Bank’s Group Insurance program for an employee of the Executive’s salarylevel at the Bank’s expense upon retirement from the Bank.  Retirement age shall be at a minimumSixty-two (62) years of age.

 

 

IN WITNESS WHEREOF the partieshave executed this Addendum to the Agreement effective on May 9, 2003.

 

 
| Nevada  Security Bank   | David A.  Funk, Executive |
|-------------------------|---------------------------|
|                    |                      |
|                    |                      |
| By:                     | /s/ Hal Giomi             |   | /s/ David A.  Funk |   |
| Chief  Executive Office |                      |
| Board of  Directors     |                      |
|                         |                           |  |  |  |

 

9

----

 

**NEVADA SECURITY BANK**

**EMPLOYMENT AGREEMENTADDENDUM NUMBER TWO**

**DAVID A. FUNK**

 

 

An employment agreement datedNovember 18, 2003, by and between Nevada Security Bank and David A. Funk, ishereby amended as follows:

 

 

**VI.**

 

**EXPENSES**

 

(C).  *Automobile.*            The Bank shall pay Executive a car allowance of $750.00 amonth.

 

 

 

IN WITNESS WHEREOF the partieshave executed this Addendum to the Agreement effective on July 2, 2003.

 

 
| Nevada  Security Bank   |          | David A.  Funk, Executive |
|-------------------------|---------------|---------------------------|
|                    |          |                      |
|                    |          |                      |
| By:                     | /s/ Hal Giomi |                      |   /s/  David A. Funk |   |
| Chief  Executive Office |          |                      |
|                         |               |                           |  |  |

 

10

----