**Exhibit 10.3**

 

**NOTWITHSTANDINGANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF NEVADA SECURITY BANK’SSTOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE NEVADA SECURITY BANK 2002STOCK OPTION PLAN SHALL HAVE FIRST BEEN APPROVED BY THE SHAREHOLDERS OF NEVADASECURITY BANK.**

 

 

**NEVADA SECURITY BANK**

 

**NONQUALIFIED STOCK OPTION AGREEMENT**

 

 

ThisNonqualified Stock Option Agreement (the “Agreement”) is made and entered intoas of the **18th** day of **July, 2002**, by and between Nevada SecurityBank, a Nevada corporation (the “Bank”), and **HalGiomi**(“Optionee”);

 

WHEREAS,pursuant to the Nevada Security Bank 2002 Stock Option Plan (the “Plan”), acopy of which is attached hereto, the Board of Directors of the Bank hasauthorized granting to Optionee, a nonqualified stock option to purchase all orany part of **Twenty-Two Thousand Five Hundred,****(22,500)**authorized but unissuedshares of the Bank’s common stock for cash at the price of **Ten**Dollars and **No** Cents **($10.00)**per share, such option to be for the term and upon the terms and conditionshereinafter stated;

 

NOW,THEREFORE, it is hereby agreed:

 

**1.****                                      Grantof Option.**  Pursuant to saidaction of the Board of Directors and pursuant to authorizations granted by allappropriate regulatory and governmental agencies, the Bank hereby grants toOptionee the option to purchase, upon and subject to the terms and conditionsof the Plan, which is incorporated in full herein by this reference, all or anypart of **Twenty-Two Thousand Five Hundred,****(22,500)**shares of the Bank’scommon stock (hereinafter called “Common Stock”) at the price of **Ten**Dollars and **No** Cents **($10.00)**per share, which price is not less than one hundred percent (100%) of the fairmarket value of the Common Stock as of the date of action of the Board ofDirectors granting this option.

 

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

 

| **4,500 Shares** |   | **Upon Grant, July 18, 2002** |
|------------------|--------|------------------------------------|
| **4,500 Shares** |   | **After July 18, 2003**       |
| **4,500 Shares** |   | **After July 18, 2004**       |
| **4,500 Shares** |   | **After July 18, 2005**       |
| **4,500 Shares** |   | **After July 18, 2006**       |

 

This option shall remainexercisable as to all of such shares until **July 18,2012** (but not later than ten (10) years from the date this option isgranted) unless this option has expired or terminated earlier in accordancewith the provisions hereof.  Shares asto which this option becomes exercisable pursuant to the foregoing provisionmay be purchased at any time prior to expiration of this option.

 

**3.****                                      Exerciseof Option.**  This option may beexercised by written notice delivered to the Bank stating the number of shareswith respect to which this option is being exercised, together with cash orqualifying shares of the Bank’s stock, as applicable,  in the amount of the purchase price of such shares.  Not less than one (1) share may be purchasedat any one time, and in no event may the option be exercised with respect tofractional shares. Upon exercise, Optionee shall be responsible for providingBank with that information necessary for the payment of any federal and statetaxes then due, as provided in the Plan.  Notwithstanding the foregoing or anything to the contrary containedherein or in the Plan, benefits in the form of payment of taxes by the Bankshall not be payable under this section or under the Plan to the extentthe benefit would be an excess parachute payment under Section 280G of theInternal Revenue Code of 1986, as amended

 

**4.****                                      Cessationof Directorship or Employment.** Except as provided in Paragraphs 2 and 5 hereof, if Optionee shall ceaseto be a director or an employee of the Bank or a subsidiary corporation for anyreason other than Optionee’s death or disability [as defined inSection 22(e)(3) of the Internal Revenue Code of 1986, as amended fromtime to time (the “Code”)], this 

 

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option shall expire three (3)months thereafter.  During the three (3)month period this option shall be exercisable only as to those installments, ifany, which had accrued as of the date when the Optionee ceased to be a directoror an employee of the Bank or a subsidiary corporation.

 

**5.****                                      Terminationof Employment for Cause.**  IfOptionee is an employee of the Bank or a subsidiary corporation and Optionee’semployment with the Bank or a subsidiary corporation is terminated for cause,this option shall expire immediately, unless reinstated by the Board ofDirectors within thirty (30) days of such termination by giving written noticeof 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 Bank ora subsidiary corporation upon the date of such termination for a reason otherthan 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 except by will or by theapplicable laws of descent and distribution and shall be exercisable duringOptionee’s lifetime only by Optionee. If Optionee dies while serving as a director or an employee of the Bankor a subsidiary corporation, or during the three (3) month period referred toin Paragraph 4 hereof, this option shall expire one (1) year after the date ofOptionee’s death or on the day specified in Paragraph 2 hereof, whichever isearlier.  After Optionee’s death butbefore such expiration, the persons to whom Optionee’s rights under this optionshall have passed by will or by the applicable laws of descent and distributionor the executor or administrator of Optionee’s estate shall have the right toexercise this option as to those shares for which installments had accruedunder Paragraph 2 hereof as of the date on which Optionee ceased to be adirector or an employee of the Bank or a subsidiary corporation.

 

If Optioneeterminates his or her directorship or employment because of disability,Optionee may exercise this option to the extent he or she is entitled to do soat the date of 

 

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termination, at any time withinone (1) year of the date of termination, or before the expiration datespecified in Paragraph 2 hereof, whichever is earlier.

 

**7.****                                      Employment.**  This Agreement shall not obligate the Bankor a subsidiary corporation to employ Optionee for any period, nor shall itinterfere in any way with the right of the Bank or a subsidiary corporation toreduce Optionee’s compensation.

 

**8.****                                      Privilegesof Stock Ownership.**  Optioneeshall have no rights as a shareholder with respect to the Common Stock subjectto this option until the date of issuance of stock certificates toOptionee.  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 Bank not more than five (5) days after any sale or other dispositionof such shares.  No shares issuable uponthe exercise of this option shall be issued and delivered unless and until theBank has fully complied with all applicable requirements of any regulatoryagency having jurisdiction over the Bank, and all applicable requirements ofany exchange upon which the Common Stock of the Bank may be listed.

 

**11.****                               Notices.**  Any notice to the Bank provided for in thisAgreement shall be addressed to it in care of its President at its main officeand any notice to Optionee shall be addressed to Optionee’s address on filewith the Bank or a subsidiary corporation, or to such other address as eithermay designate to the other in writing. Any notice shall be deemed to be duly given if and when enclosed in aproperly sealed envelope and addressed as stated above and deposited, postageprepaid, with the United States Postal Service.  In lieu of giving notice by mail as aforesaid, any written noticeunder this Agreement may be given to Optionee in person, and to the Bank bypersonal delivery to its President.

 

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IN WITNESSWHEREOF, the parties hereto have executed this Agreement as of the day and yearfirst above written.

 

 
| **OPTIONEE** |               |   | **NEVADA SECURITY BANK** |
|--------------|--------------------|--------|--------------------------|
|         |               |   |                     |
|         |               |   |                     |   |
| By           |  /s/Hal Giomi |   | By                       | /s/Ed Allison |   |
|         | **Hal Giomi**      |   |                     | **Ed Allison, Chairman of the Board** |

 

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