Exhibit 10.5


 


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


 


 


NEVADA SECURITY BANK


 


NONQUALIFIED STOCK OPTION AGREEMENT


 


 


This
Nonqualified Stock Option Agreement (the “Agreement”) is made and entered into
as of the 21st day of November, 2002, by and between Nevada
Security Bank, a Nevada corporation (the “Bank”), and David A. Funk (“Optionee”);


 


WHEREAS,
pursuant to the Nevada Security Bank 2002 Stock Option Plan (the “Plan”), a
copy of which is attached hereto, the Board of Directors of the Bank has
authorized granting to Optionee, a nonqualified stock option to purchase all or
any part of Fifteen Thousand,  (15,000) authorized but unissued shares 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 conditions hereinafter stated;


 


NOW,
THEREFORE, it is hereby agreed:


 


1.             Grant of Option.  Pursuant to said action of the Board of
Directors and pursuant to authorizations granted by all appropriate regulatory
and governmental agencies, the Bank hereby grants to Optionee the option to
purchase, upon and subject to the terms and conditions of the Plan, which is
incorporated in full herein by this reference, all or any part of Fifteen Thousand (15,000) shares of the
Bank’s common 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 fair
market value of the Common Stock as of the date of action of the Board of
Directors granting this option.


 


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


 




	
  3,000 Shares

  	
   

  	
  Upon Grant, November 21, 2002

  
	
  3,000 Shares

  	
   

  	
  After November 21, 2003

  
	
  3,000 Shares

  	
   

  	
  After November 21, 2004

  
	
  3,000 Shares

  	
   

  	
  After November 21, 2005

  
	
  3,000 Shares

  	
   

  	
  After November 21, 2006

  






 


This option shall remain
exercisable as to all of such shares until November 21, 2012 (but not later than ten (10) years
from the date this option is granted) unless this option has expired or
terminated earlier in accordance with the provisions hereof.  Shares as to which this option becomes
exercisable pursuant to the foregoing provision may be purchased at any time
prior to expiration of this option.


 


3.             Exercise of Option.  This option may be exercised by written
notice delivered to the Bank stating the number of shares with respect to which
this option is being exercised, together with cash or qualifying 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 purchased at any one time, and in no event may the option be exercised with
respect to fractional shares. Upon exercise, Optionee shall be responsible for
providing Bank with that information necessary for the payment of any federal
and state taxes then due, as provided in the Plan.   Notwithstanding the foregoing or anything to the contrary
contained herein or in the Plan, benefits in the form of payment of taxes by
the Bank shall not be payable under this section or under the Plan to the
extent the benefit would be an excess parachute payment under Section 280G
of the Internal Revenue Code of 1986, as amended


 


4.             Cessation of
Directorship or Employment. 
Except as provided in Paragraphs 2 and 5 hereof, if Optionee shall cease
to be a director or an employee of the Bank or a subsidiary corporation for any
reason other 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 option


 


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shall be exercisable only as to
those installments, if any, which had accrued as of the date when the Optionee
ceased to be a director or an employee of the Bank or a subsidiary corporation.


 


5.             Termination of
Employment for Cause.  If
Optionee is an employee of the Bank or a subsidiary corporation and Optionee’s
employment with the Bank or a subsidiary corporation is terminated for cause,
this option shall expire immediately, unless reinstated by the Board of
Directors within thirty (30) days of such termination by giving written notice
of such reinstatement to Optionee at his or her last known address.  In the event of such reinstatement, Optionee
may exercise this option only to such extent, for such time, and upon such
terms and conditions as if Optionee had ceased to be an employee of the Bank or
a subsidiary corporation upon the date of such termination for a reason other
than cause, death or disability. 
Termination for cause shall include, but not be limited to, termination
for malfeasance or gross misfeasance in the performance of duties or conviction
of a crime involving moral turpitude, and, in any event, the determination of
the 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 the
applicable laws of descent and distribution and shall be exercisable during
Optionee’s lifetime only by Optionee. 
If Optionee dies while serving as a director or an employee of the Bank
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 in Paragraph 2 hereof, whichever is
earlier.  After Optionee’s death but
before such expiration, the persons to whom Optionee’s rights under this option
shall have passed by will or by the applicable laws of descent and distribution
or the executor or administrator of Optionee’s estate shall have the right to
exercise this option as to those shares for which installments had accrued
under Paragraph 2 hereof as of the date on which Optionee ceased to be a
director or an employee of the Bank or a subsidiary corporation.


 


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


 


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


 


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


 


8.             Privileges of
Stock Ownership.  Optionee shall
have no rights as a shareholder with respect to the Common Stock subject to
this option until the date of issuance of stock certificates to Optionee.  Except as provided in the Plan, no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such stock certificates are issued.


 


9.             Modification and
Termination.  The rights of
Optionee are subject to modification and termination upon the occurrence of
certain events as provided in Sections 13 and 14 of the Plan.


 


10.          Notification of Sale.  Optionee agrees that Optionee, or any person
acquiring shares upon exercise of this option, will notify the Bank not more
than five (5) days after any sale or other disposition of such shares.  No shares issuable upon the exercise of this
option shall be issued and delivered unless and until the Bank has fully
complied with all applicable requirements of any regulatory agency having
jurisdiction over the Bank, and all applicable requirements of any exchange
upon which the Common Stock of the Bank may be listed.


 


11.          Notices.  Any notice to the Bank provided for in this
Agreement shall be addressed to it in care of its President at its main office
and any notice to Optionee shall be addressed to Optionee’s address on file
with the Bank or a subsidiary corporation, or to such other address as either
may designate to the other in writing. 
Any notice shall be deemed to be duly given if and when enclosed in a
properly sealed envelope and addressed as stated above and deposited, postage
prepaid, with the United States Postal Service.  In lieu of giving notice by mail as aforesaid, any written notice
under this Agreement may be given to Optionee in person, and to the Bank by
personal delivery to its President.


 


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IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.


 


 


	
  OPTIONEE

  	
   

  	
   

  	
  NEVADA SECURITY BANK

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/David A. Funk

  	
   

  	
  By

  	
  /s/Hal Giomi

  	
   

  	
   

  
	
  David A. Funk

  	
  Hal Giomi, CEO

  	
   

  



 


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