Exhibit
10.1


 


EMPLOYMENT
AGREEMENT


 


This agreement is made as
of the 25th day of May, 2004, by and between Nevada Security Bank (the “Bank”),
having a principal place of business at 9990 Double R. Boulevard, Reno, Nevada,
89521 and John Donovan (the “Executive”), whose
residence address is Reno, Nevada, 89509.


 


RECITALS


 


WHEREAS,
the Bank desires to employ the Executive as its Senior Vice President/Credit
Administrator and SBA Division Manager as well as Executive Vice President and
Chief Credit Officer of The Bank Holdings and to avail itself of his skill,
knowledge and experience to ensure the successful management of its business;


 


WHEREAS,
the Executive wishes to be employed by the Bank in the above mentioned capacity
for the Term hereinafter described;


 


WHEREAS,
by execution of this Agreement the parties desire to specify the terms of the
Executive’s employment with the Bank.


 


NOW,
THEREFORE, in consideration of the covenants and conditions
contained herein, it is agreed that the following terms and conditions shall
apply to the Executive’s said employment:


 


1.                                      EMPLOYMENT
TERM:  The Bank hereby
employs the Executive and the Executive hereby accepts employment with the Bank
for a period of Three (3) years commencing with the Effective Date of this
agreement (the “Term), subject, however, to prior termination of this Agreement
as hereinafter provided.   As used in
this Agreement, the word “Term” shall refer to the entire period of employment
of the Executive by the Bank hereunder, whether for the period provided
hereunder, or


 


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whether terminated
earlier as hereinafter provided.  The
Employment Term shall automatically renew for subsequent three-year (3)
periods, subject, however, to prior termination of this Agreement as
hereinafter provided.


 


2.                                      DUTIES
OF THE EXECUTIVE:


 


Duties: 
The Executive shall hold the office of Senior Vice President/Credit
Administrator and SBA Division Manager of the Bank as well as Executive Vice
President and Chief Credit Officer of The Bank Holdings and will perform the
duties normally performed by such officer of a bank, including the general
supervision and operation of the business and affairs of the Bank, subject to
the powers vested in the Board of Directors of the Bank and in the Bank’s
shareholder pursuant to the Bank’s Charter and By-Laws, and by applicable
law.  During the Term, the Executive
shall perform exclusively the services herein contemplated to be performed by
him under this Agreement faithfully, diligently to the best of his ability,
consistent with the highest and best standards of the banking industry and in
compliance with all applicable laws and the Bank’s Articles of Incorporation
and By-Laws.


 


2.2.                              Place of Performance:  The Executive shall perform said duties
throughout the Bank’s service area and be located at the Bank’s principal
executive offices.  Except as provided
herein, the duties, positions and business location hereunder may only be
changed by written agreement of the parties.


 


2.3                                 Conflict of Interest:  Except with prior written consent of the
Board of Directors of the Bank, the Executive shall devote his entire
productive professional time, ability and attention to the business of the Bank
during the Term, and the Executive shall not directly or indirectly render any
services of a business,


 


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commercial or
professional nature to any other person, firm or corporation, whether for
compensation or otherwise, which are in conflict with the Bank’s interest.  Notwithstanding the foregoing, the Executive
may make investments of a passive nature in any business or venture; provided,
however, that such business or venture shall not be in competition, directly or
indirectly, in any manner with the Bank.


 


3.                                      COMPENSATION


 


3.1                                 Base Salary:  For the Executive’s services hereunder, the
Bank shall pay or cause to be paid, as a base salary to the Executive a minimum
of One Hundred and Fifteen Thousand Dollars ($115,000) per year each year of
the Term, prorated for any portion of a year, in which this Agreement is in
effect.  The Executive’s salary shall be
payable in equal installments in conformity with the Bank’s normal payroll
period.  Annual increases shall be made
at the recommendation of the Chief Executive Officer, subject to ratification
of the Board of Directors.


 


3.2                                 Bonuses:  Such a plan shall be within the complete and
sole discretion of the Board of Directors. The Executive shall be entitled to
participate in the Bank’s Executive Compensation Plan (“Bonus Plan”) which will
be developed by the Bank’s Board of Directors. 
It is understood that the terms, conditions, eligibility, benefits,
provisions and grants from such a plan shall be within the complete and sole
discretion of the Board of Directors.


 


3.3                                 Stock Options:  Upon commencement of the Term, the Executive
shall be granted the option to purchase Five Thousand (5,000) shares of the
Bank’s Common Stock, at a purchase price of Fourteen Dollars and Fifty-Six
Cents ($14.56) per share, pursuant to the terms of the Bank’s stock option
plan.  Twenty Percent (20%) of


 


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said shares will
immediately fully vest upon commencement with the Term, with the remaining
Eighty Percent (80%) vesting in equal amounts Twenty Percent (20%) annually
thereafter.


 


4.                                      EXECUTIVE
BENEFITS


 


4.1                                 Vacation:  The Executive will be entitled to Four (4)
weeks vacation during each year of the Term, prorated for any portion of a
year.  The Executive is required to and
shall take at least Two (2) weeks of vacation annually (the “Mandatory
Vacation”) which shall be taken consecutively. 
Should Executive not take the entire Four (4) weeks vacation during each
year, the unused vacation shall accrue and be taken the following year.  The Executive may accumulate Twenty (20) days
of vacation in excess of his current year’s entitlement.  Any vacation not used in excess of such
Twenty (20) days shall be paid out to the Executive in lieu of accrued
vacation.


 


4.2                                 Automobile Allowance:  The Bank shall pay the Executive the sum of
Five Hundred Dollars ($500) per month as and for expenses to cover all costs of
use, maintenance, repair, upkeep, fuel, cleaning and operation of his
automobile (except mileage costs incurred to travel to locations outside of the
Bank’s serving area) used in the course and scope of his employment.


 


4.3                                 Insurance Coverage:  The Bank, at the Bank’s expense, shall
provide for the Executive and his dependent family, medical, dental, and vision
coverage, and, for the Executive himself, life, accident, disability and the
like insurance benefits equivalent to the maximum benefits available from time
to time under the Bank’s Group Insurance program for an employee of the
Executive’s salary level during the Term. 
Additionally, the Bank, at its expense, shall provide the Executive with
term life


 


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insurance benefits in the
amount of not less that Five Hundred Thousand Dollars ($500,000) with
beneficiary to be of the Executive’s choice, provided that the Executive is
rated in the highest category by the Insurance Company.  If rated lower, the Bank will spend the
amount it would have spent for the highest rating and purchase the maximum
amount of insurance at the Executive’s lower rating.  Said coverage shall be in existence and take
effect as of the Effective Date and shall continue throughout the Term.  The Bank shall provide the Executive with
disability insurance providing for monthly disability payments.


 


4.4                                 Business Expenses:  The
Executive shall be entitled to reimbursement by the Bank for any ordinary and
necessary business expenses he incurs in the performance of his duties during
the Term, including, but not limited to, 
entertainment, dues, and other expenses, meals, travel expenses,
conventions, meetings,  seminars and the
like which are reasonable for the office of the Executive.


 


4.5                                   Club Memberships:  The Executive shall be provided paid
membership in clubs selected by the Executive and approved by the Chief
Executive Officer. 


 


4.6                                 Retirement Benefits:   The Executive shall be provided with medical,
dental and vision insurance benefits for himself and eligible family members equivalent to the maximum benefits available
from time to time under the Bank’s Group Insurance program for an employee of
the Executive’s salary level at the Bank’s expense upon retirement from
the Bank.  Retirement age shall be at a
minimum Sixty-two (62) years of age.


 


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5                                         TERMINATION


 


5.1                                 Termination for Cause:  The Bank may terminate 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)                                  The
Executive commits an act or acts of malfeasance or misfeasance in his duties;
or


 


(b)                                 The
Executive fails to abide by and/or enforce the Bank’s safety and soundness
policies; or


 


(c)                                  The Executive is convicted of a felony or
misdemeanor involving moral turpitude; or


 


(d)                                 State
and/or Federal regulators request or order termination of this Agreement; or


 


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


 


(f)                                    The
Executive dies.


 


5.2                                 Termination Without Cause:  In the event the Board of Directors of the
Bank determines that either (i) the continued association of the Executive with
the Bank or (ii) the performance of his duties by the Executive is not in the
best interest of the Bank, then the Bank may terminate this Agreement by action
of its Board of Directors.   In the event
of such termination without cause, and subject to any limitation of payments to
Officers and Directors under applicable Federal and State law, the


 


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Executive shall be paid
as and for severance payments and in lieu of any and all other Compensation,
remedy or damages, a lump-sum equal to not less than Twelve (12) months
compensation at the then current base salary of the Executive, plus any accrued
but unpaid Bonus Compensation described elsewhere in this Agreement.  In addition, the Bank, at its expense will
provide the Executive and his dependent family with insurance Coverage, as
described in Paragraph 4.3 above, for a period of not less than six (6) months
following the Executive’s termination. 
Upon such payment, any and all obligations of the Bank to the Executive
shall have been fully and completely satisfied and the Executive shall be
entitled to no additional compensation, claim, right or benefit hereunder or
otherwise.


 


5.3                                 Action by Supervisory Authority:  If the bank is closed or taken over by any
banking supervisory authority, such banking authority may immediately terminate
this Agreement without liability or obligation to the Executive.


 


5.4                                 Merger or Corporate Dissolution:  In the event of a merger where the Bank is
not the surviving corporation, in the event of a consolidation, in the event of
a transfer of all or substantially all of the assets of the Bank, in the event
of any other corporate reorganization where there is a change in ownership of
at least Twenty Five Percent (25%) except as may result from a transfer of the
Bank’s stock to another corporation in exchange for at least Sixty-Six and
Two-Thirds Percent (66 2/3%) control of that corporation, or in the event of
the dissolution of the Bank, the Executive may terminate this Agreement.  In the event of such termination, and subject
to any limitation of payments to Officers and Directors under applicable
Federal and State law, the Executive shall be paid, as and for severance
payments and in lieu of any and all other


 


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compensation remedy or
damages, a lump-sum equal to not less than Twenty Four (24) months compensation
at the then current base salary of the Executive, plus any accrued but unpaid
Bonus Compensation described elsewhere in this Agreement.  In addition, the Bank, at its expense, will
provide the Executive and his dependent family with insurance coverage, as
described in Paragraph 4.3 above, for a period of not less than Twelve (12)
months following the Executive’s termination. 
Upon such payment, any and all obligations of the Bank to the Executive
shall have been fully and completely satisfied and the Executive shall be
entitled to no additional compensation, claim, right or benefit hereunder or
otherwise.


 


5.5                                 Termination by the Executive:   The Executive may terminate his employment
hereunder at any time upon Thirty (30) days notice to the Bank.  In such event, the Executive shall be
entitled to all salary, bonus and other benefits (accrued vacation, etc.),
which have accrued prior to the
effective date of termination.  All
unvested options shall be forfeited and the Executive must exercise his vested
options within Sixty (60) days of termination. 
If not so exercised, those options shall also be forfeited.


 


6.                                      GENERAL PROVISIONS:


 


6.1                                 Indemnification:  To the extent permitted by law, applicable
statutes, the Articles of Incorporation, the By-Laws and resolutions of the
Bank in effect from time to time, the Bank shall indemnify the Executive
against liability or loss arising out of the Executive’s actual or asserted
misfeasance of malfeasance in the performance of the Executive’s duties or out
of any actual or asserted wrongful act against, or by, the Bank including but
not limited to judgments, fines, settlements and expenses incurred in


 


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the defense of actions,
proceedings and appeals therefrom.  The
Bank shall provide Directors and Officers Liability Insurance to indemnify and
insure the Bank and the Executive from and against the aforementioned
liabilities.  The provisions of this
paragraph shall apply to the estate, executor, administrator, heirs, legatees
or devisees of the Executive.


 


6.2                                 Notices:  Any notice, request, demand or other
communication required or permitted hereunder shall be deemed to be properly
given when personally served in writing, when deposited in the United States
mail, postage prepaid, or when communicated to public telegraph company for
transmittal, addressed to the party at the address appearing below the
signatures of each party at the end of this Agreement. Either party may change
address by written notice in accordance with this paragraph.


 


6.3                                 Benefits of Agreement:  This Agreement will inure to the benefits of
and be binding upon its parties and their respective executors, administrators,
successors and assigns.


 


6.4                                 Applicable Law:  This Agreement is to be governed by and
construed under the laws of the State of Nevada.


 


6.5                                 Captions and Headings:  Captions and headings are used in this
Agreement for convenience only, are not a part of this Agreement between the
parties and shall not be used in construing it.


 


6.6                                 Invalid Provision:  Should any portion or provision of this
Agreement for any reasons be declared invalid, void, or unenforceable by a
court of competent jurisdiction, the validity and binding effect of all
remaining portions or provisions shall not be affected; and the remainder of
this Agreement shall remain in


 


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full force and effect as
if this Agreement had been executed with said portion or provision eliminated.


 


6.7                                 Entire Agreement:  This Agreement contains the entire agreement
of the parties and supersedes all other agreements, either oral or in writing,
between the parties hereto with respect to the employment of the Executive by
the Bank.  Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements, oral
or otherwise, have been made by any party or anyone acting on behalf of any
party which are not embodied herein and that no other agreement, statement or
promise not contained in this Agreement shall be valid or binding.  This Agreement may not be modified or amended
by oral agreement but only by an agreement in writing signed by the Bank and
the Executive.


 


6.8                                 Arbitration:Any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, shall be submitted to
arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be
entered into any court having jurisdiction thereof.


 


6.9                                 Attorney’s Fees:  If any action, including arbitration, is
brought to enforce this Agreement or to determine the relative rights and
obligations for either of its parties, the prevailing party shall be entitled
to reasonable attorney’s fees.


 


6.10                           Receipt of Agreement:  Each of the parties hereto acknowledge that
he has read this Agreement in its entirety and does hereby acknowledge receipt
of a fully-executed copy thereof.  A
fully-executed copy shall be an original for all purposes and is a duplicate
original.


 


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IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement as of 25th day of May, 2004.


 


 


	
  The “Bank”

  	
  The “Executive”

  	 

	
  Nevada Security Bank

  	
  John Donovan

  	 

	
   

  	
   

  	 

	
  By:

  	
    /s/Hal
  Giomi

  	
   

  	
  By:

  	
    /s/John
  Donovan

  	
   

  
	
  Hal Giomi

  	
  Reno, NV  89509

  	 

	
  Chief Executive Officer of

  	
   

  	 

	
  Nevada Security Bank and

  	
   

  	 

	
  Chairman/Chief Executive
  Officer of

  	
   

  	 

	
  The Bank Holdings

  	
   

  	 

	
  9990 Double R. Boulevard

  	
   

  	 

	
  Reno, NV  89521

  	
   

  	 

							



 


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