**Exhibit10.2**

 

**THE BANK HOLDINGS**

 

**INCENTIVE STOCK OPTION AGREEMENT**

 

This Incentive StockOption Agreement (the “Agreement”) is made and entered into as of the **18th**day of **September, 2003,** by and between The BankHoldings, a Nevada corporation (the “Holding Company”), and **John N. Donovan** (“Optionee”);

 

WHEREAS, pursuant to TheBank Holdings Stock Option Plan (the “Plan”), a copy of which is attachedhereto, the Board of Directors of the Holding Company has authorized grantingto Optionee, an incentive stock option to purchase all or any part of **Five Thousand (5,000)** authorized butunissued shares of the Holding Company’s common stock for cash at the price of **Eleven** Dollars and **No** Cents **($11.00)**per share, such option to be for the term and upon the terms and conditionshereinafter stated;

 

NOW, THEREFORE, it ishereby agreed:

 

**1.****                                      Grantof Option.**  Pursuant to saidaction of the Board of Directors and pursuant to authorizations granted by allappropriate regulatory and governmental agencies, the Holding Company herebygrants to Optionee the option to purchase, upon and subject to the terms andconditions of the Plan, which is incorporated in full herein by this reference,all or any part of **Five Thousand, (5,000)**shares of the Holding Company’s common stock (hereinafter called “CommonStock”) at the price of **Eleven**Dollars and **No** Cents (**$11.00**) per share, which price is not lessthan one hundred percent (100%) of the fair market value of the Common Stock(or not less than 110% of the fair market value for Optionee-shareholders whoown more than ten percent (10%) of the total combined voting power of allclasses of Common Stock of the Holding Company) as of the date of action of theBoard of Directors, granting this option.

 

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**2.****                                      Exercisability.**  This option shall be exercisable as to:

 
| **1,000  Shares** | ** ** | **Upon  Grant, September 18, 2003** |
|-------------------|------------|------------------------------------------|
| **1,000  Shares** | ** ** | **After  September 18, 2004**       |
| **1,000  Shares** | ** ** | **After  September 18, 2005**       |
| **1,000  Shares** | ** ** | **After  September 18, 2006**       |
| **1,000  Shares** | ** ** | **After  September 18, 2007**       |

 

This option shall remain exercisableas to all of such shares until **September 18,2013**, (but not later than ten (10) years from the date this optionis granted) unless this option has expired or terminated earlier in accordancewith the provisions hereof.  Shares as towhich this option becomes exercisable pursuant to the foregoing provision maybe purchased at any time prior to expiration of this option.

 

**3.****                                      Exerciseof Option.**  This option may beexercised by written notice delivered to the Holding Company stating the numberof shares with respect to which this option is being exercised, together withcash or qualifying shares of the Holding Company’s stock, as applicable, in theamount of the purchase price of such shares. Not less than one (1) share may be purchased at any one time, and in noevent may the option be exercised with respect to fractional shares.  Upon exercise, Optionee shall makeappropriate arrangements and shall be responsible for the payment of anyfederal and state taxes then due.

 

**4.****                                      Cessationof Employment.**  Except asprovided in Paragraphs 2 and 5 hereof, if Optionee shall cease to be anemployee of the Holding Company or a subsidiary corporation for any reasonother than Optionee’s death or disability [as defined in Section 22(e)(3)of the Internal Revenue Code of 1986, as amended from time to time (the“Code”)], this option shall expire three (3) months thereafter.  During the three (3) month period this optionshall be exercisable only as to those installments, if any, which had accruedas of the date when the Optionee ceased to be an employee of the HoldingCompany or a subsidiary corporation.

 

**5.****                                      Terminationof Employment for Cause.**  IfOptionee is an employee of the Holding Company or a subsidiary corporation andif Optionee’s employment with the Holding Company or a subsidiary corporationis terminated for cause, this option shall expire immediately, unlessreinstated by the Board of Directors within thirty (30) days of such

 

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termination by giving writtennotice of such reinstatement to Optionee at his or her last known address.  In the event of such reinstatement, Optioneemay exercise this option only to such extent, for such time, and upon suchterms and conditions as if Optionee had ceased to be an employee of the HoldingCompany or a subsidiary corporation upon the date of such termination for areason other than cause, death or disability. Termination for cause shall include, but not be limited to, terminationfor malfeasance or gross misfeasance in the performance of duties or convictionof a crime involving moral turpitude, and, in any event, the determination ofthe Board of Directors with respect thereto shall be final and conclusive.

 

**6.****                                      Nontransferability;Death or Disability of Optionee.**  This option shall not be transferable exceptby will or by the applicable laws of descent and distribution and shall beexercisable during Optionee’s lifetime only by Optionee.  If Optionee dies while serving as an employeeof the Holding Company or a subsidiary corporation, or during the three (3)month period referred to in Paragraph 4 hereof, this option shall expire one(1) year after the date of Optionee’s death or on the day specified inParagraph 2 hereof, whichever is earlier. After Optionee’s death but before such expiration, the persons to whomOptionee’s rights under this option shall have passed by will or by theapplicable laws of descent and distribution or the executor or administrator ofOptionee’s estate shall have the right to exercise this option as to thoseshares for which installments had accrued under Paragraph 2 hereof as of thedate on which Optionee ceased to be an employee of the Holding Company or asubsidiary corporation.

 

If Optionee terminateshis or her employment because of disability, Optionee may exercise this optionto the extent he or she is entitled to do so at the date of termination, at anytime within one (1) year of the date of termination, or before the expirationdate specified in Paragraph 2 hereof, whichever is earlier.

 

**7.****                                      Employment.**  This Agreement shall not obligate the HoldingCompany or a subsidiary corporation to employ Optionee for any period, norshall it interfere in any way with the right of the Holding Company or asubsidiary corporation to reduce Optionee’s compensation.

 

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**8.****                                      Privilegesof Stock Ownership.**  Optioneeshall have no rights as a shareholder with respect to the Holding Company’sstock subject to this option until the date of issuance of stock certificatesto Optionee.  Except as provided in thePlan, no adjustment will be made for dividends or other rights for which therecord date is prior to the date such stock certificates are issued.

 

**9.****                                      Modificationand Termination.**  The rights ofOptionee are subject to modification and termination upon the occurrence ofcertain events as provided in Sections 13 and 14 of the Plan.

 

**10.****                               Notificationof Sale**.  Optionee agrees thatOptionee, or any person acquiring shares upon exercise of this option, willnotify the Holding Company not more than five (5) days after any sale or otherdisposition of such shares.  No sharesissuable upon the exercise of this option shall be issued and delivered unlessand until the Holding Company has fully complied with all applicablerequirements of any regulatory agency having jurisdiction over the HoldingCompany, and all applicable requirements of any exchange upon which stock ofthe Holding Company may be listed.

 

**11.****                               Notices.**  Any notice to the Holding Company providedfor in this Agreement shall be addressed to it in care of its President at itsmain office and any notice to Optionee shall be addressed to Optionee’s addresson file with the Holding Company or a subsidiary corporation, or to such otheraddress as either may designate to the other in writing.  Any notice shall be deemed to be duly givenif and when enclosed in a properly sealed envelope and addressed as statedabove and deposited, postage prepaid, with the United States PostalService.  In lieu of giving notice bymail as aforesaid, any written notice under this Agreement may be given toOptionee in person, and to the Holding Company by personal delivery to itsPresident.

 

**12.****                               IncentiveStock Option.**  This Agreement isintended to be an incentive stock option agreement as defined inSection 422 of the Code.

 

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IN WITNESS WHEREOF, theparties hereto have executed this Agreement as of the day and year first abovewritten.

 

 
| **OPTIONEE** | **THE BANK HOLDINGS**     |
|--------------|---------------------------|
|         |                      |
|         |                      |
| By           | /s/  John N. Donovan      |   | By | /s/  Hal Giomi |   |
|         | ** John N. Donovan** | **Hal  Giomi, Chairman & Chief Executive Officer** |
|              |                           |  |  |  |  |

 

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