Exhibit 10.3


 


EMPLOYMENT
AGREEMENT


 


This Employment Agreement
(“Agreement”) is made as of the 27th day of December, 2007, by and
between Nevada Security Bank (“Bank”), and Jack Buchold (“Executive”).


 


RECITALS


 


WHEREAS, the
Bank desires to employ the Executive as its Executive Vice President and Chief
Financial Officer 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 from December 27, 2007 (the “Effective Date”), the following terms
and conditions shall apply to the Executive’s 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 whether terminated
earlier as hereinafter provided.   The
Employment Term shall automatically renew for subsequent three-year (3) periods,
unless at least ninety (90) days prior to the ending of the Employment Term,
either party to the Agreement provides written notice of the party’s intent to
terminate the Agreement.


 


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2.             DUTIES OF THE EXECUTIVE:


 


2.1           Duties:  The Executive shall hold the office of
Executive Vice President and Chief Financial Officer of the Bank 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 shareholders 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, 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.  


 


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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 Fifty-Seven Thousand Dollars ($157,000) 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 sole discretion of the Chief Executive Officer.  The parties understand and agree that
pursuant to applicable federal law the Bank is prohibited from compensating the
Executive for any services rendered to The Bank Holdings and that The Bank
Holdings shall reimburse the Bank a portion of the Executive’s salary for all
services rendered to The Bank Holdings by the Executive.


 


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:  Pursuant to “The Bank Holdings Stock Option
Plan,” the Executive has been granted
the option to purchase a minimum of Fifty-Two Thousand Four Hundred Sixty-Three
(52,463) shares of The Bank Holdings Common 


 


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Stock.  All of the terms, conditions, vesting rights,
qualifications, eligibility requirements and other provisions of “The Bank
Holding Stock Option Plan” are incorporated into this Agreement by this
reference.  The Executive acknowledges
that he has received, reviewed and understood the provision of “The Bank
Holdings Stock Option Plan.”  Any increase
in the number of options granted to the Executive pursuant to this Agreement
shall be made at the sole discretion of the Board of Directors.


 


4.             EXECUTIVE BENEFITS


 


4.1           Vacation:  The Executive will be entitled to five (5) 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 five (5) weeks vacation during
each year, the unused vacation shall accrue and be taken the following
year.  The Executive may accumulate
twenty-five (25) days of vacation in excess of his current year’s
entitlement.  At the end of the year, any
vacation not used in excess of such twenty-five (25) 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
Seven Hundred Fifty Dollars ($750) 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
Reno service 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, 


 


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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 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 approved by the Chief Executive Officer.


 


4.6           Retirement Benefits:   Retirement age shall be at a minimum
Sixty-two (62) years of age.  Upon
retirement Bank, at its expense, will provide the Executive and his eligible
dependents the equivalent maximum benefit available through the Bank’s Group
Insurance program for an employee of the Executive’s salary level.  


 


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This group insurance
benefit shall continue until the Executive is eligible to qualify for
governmental healthcare benefits (including, but not limited to, Medicare
benefits).  Upon eligibility to qualify
for such governmental benefits the Bank’s obligation to provide the group
insurance benefits noted above shall cease and the Bank will, at its expense,
provide the Executive and his eligible dependents additional insurance benefits
to supplement the governmental healthcare benefits for which Executive is
eligible to qualify.  This supplemental
insurance plan benefits shall include, at a minimum, Medicare supplemental,
vision, dental, and prescription drug benefits.


 


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:


 


5.1.1        The Executive commits an act or acts of
malfeasance or misfeasance in his duties; or


 


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


 


5.1.3        The Executive is convicted of a felony or misdemeanor involving moral
turpitude; or State and/or Federal regulators request or order
termination of this Agreement; or


 


5.1.4        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


 


5.1.5        The Executive dies.


 


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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 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 Twenty-four (24) months compensation at the then current base
salary of the Executive, plus an additional severance payment of one (1) month
of the Executive’s then current base salary for each year of service to the
Bank, 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, following the
Executive’s termination for a period of time not less than twelve (12) months
plus one (1) additional month for every year of service provided by the
Executive to the Bank.  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 any of the following
occurrences, the Executive may terminate this Agreement:  (i) a dissolution or 


 


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liquidation of the Bank
or The Bank Holdings; (ii) a reorganization, merger, or consolidation of
the Bank or The Bank Holdings with one or more corporations, the result of
which (A) the Bank or The Bank Holdings is not the surviving corporation
or (B) the Bank or The Bank Holdings becomes a subsidiary of another
corporation (which shall be deemed to have occurred if another corporation
shall own, directly or indirectly, over 25% of the aggregate voting power of
all outstanding equity securities of the Bank or The Bank Holdings); (iii) a
sale of substantially all the assets of the Bank or The Bank Holdings to
another corporation; or (iv) a sale of the equity securities of the Bank
or The Bank Holdings representing more than 25% of the aggregate voting power
of all outstanding equity securities of the Bank or The Bank Holdings to any
person or entity or any group of persons and/or entities acting in
concert.  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 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 an
additional severance payment of one (1) month of the Executive’s then
current base salary for each year of service to the Bank, 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, following the Executive’s termination for a
period of not less than Twelve (12) months plus one (1) additional month
for every year of service provided by the Executive to the Bank.  Upon such payment, any and all obligations of
Bank to the Executive shall have been fully and completely satisfied and the
Executive 


 


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shall be entitled to no
additional compensation, claim, right or benefit hereunder or otherwise.  Any stock options shall only be exercised in accordance with “The Bank
Holdings Stock Option Plan” referenced and incorporated in this Agreement.


 


5.5           Termination by the
Executive:   The Executive
may terminate his employment hereunder at any time upon ninety (90) days
written 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.  Any stock options shall only be exercised in
accordance with “The Bank Holdings Stock Option Plan” referenced and
incorporated in this Agreement.


 


6.             GENERAL PROVISIONS:


 


6.1           IRS Section 280G.  If any portion of the amounts payable to the
Executive under this Agreement as a result of a Merger or Corporate Dissolution
defined in Section 5.4 above, either alone or together with other payments
or benefits which are “contingent on change in ownership or control” would
constitute “excess parachute payments” that are subject to the excise tax
imposed by section 4999 (or similar tax and/or assessments) of the Internal
Revenue Code of 1986, as amended (Code) then such payments shall either be (i) paid
in full, or (ii) reduced to an amount equal to two hundred ninety-nine
percent (299%) of the Executive’s “base amount”, whichever of the foregoing
payments, taking into account the applicable federal, state and local income
taxes and the excise tax imposed by Code section 4999, results in the receipt
by the Executive on an after-tax basis of the greatest amount of benefits.  If any such payments under this Agreement are
“excess parachute payments”, Executive shall be responsible for the payment of
any excise taxes and Bank (or its successor) shall be responsible for 


 


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any loss of deductibility
related thereto.  If, at a later date, it
is determined that the amount of excise taxes payable by the Executive is
greater than the amount initially so determined, then the Executive shall pay
an amount equal to the sum of such additional excise taxes and any interest,
fines and penalties resulting from such underpayment.


 


Any determination
required under this Section 6.1 shall be made in writing by the Bank’s
independent public accountants immediately prior to a Merger or Corporate
Dissolution (“Accountants”), whose determination shall be conclusive and
binding upon the Executive and the Bank for all purposes.  For purposes of making the calculations
required by this Section 6.1, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Code
sections 280G and 4999.  The Executive
and the Bank shall furnish the Accountants with such information and documents
as the Accountants may reasonably request in order to make a determination (or
determinations) under this Section.  The
Bank shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 6.1.


 


The terms “contingent on
change in ownership or control”, “excess parachute payments” and “base amount”,
are defined in Code section 280G and Treasury Regulations section
1.280G-1.  This Section 6.1 shall
apply and be interpreted in accordance with Code section 280G and the Treasury
regulations promulgated thereunder effective January 1, 2004, or the
Treasury regulations then in effect.


 


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6.2           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 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.


 


6.3           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 parties’ last known address
contained in the records at the Bank. 
Either party may change address by written notice in accordance with
this paragraph.


 


6.4           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.


 


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


 


6.6           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.


 


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


 


6.8           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, notwithstanding any compensation and/or benefits
provided under Section 4.8 concerning the Nevada Security Bank Executive Supplemental Compensation
Agreement, the Nevada Security Bank Split Dollar Agreement and the Nevada
Security Bank Excess Plan and any amendments to such agreements and plans.  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, notwithstanding the
agreements and plans previously referenced. 
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.


 


6.9           Arbitration:  Any dispute, controversy or claim arising out
of or relating to this Agreement, or the breach thereof, or the employment
relationship between the parties shall be submitted to final and binding
arbitration in accordance with the rules 


 


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of
the American Arbitration Association, and judgment upon the award rendered by
the arbitrator(s) may be entered into any court having jurisdiction
thereof.


 


6.10         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.


 


6.11         Receipt of Agreement:  Each of the parties hereto acknowledges that
he has read this Agreement and any referenced or incorporated documents in
their entirety and does hereby acknowledge receipt of fully-executed copies
thereof.  A fully-executed copy of this
Agreement shall be an original for all purposes and is a duplicate original.


 


IN WITNESS WHEREOF,
the parties have executed this Agreement as of the 31st day of
December, 2008.


 


 


	
  The “Bank”

  	
   

  	
  The “Executive”

  
	
  Nevada Security Bank

  	
   

  	
  Jack Buchold

  
	
  Ed Allison, Chairman of the
  Board

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ed Allison

  	
   

  	
  By:

  	
  /s/ Jack Buchold

  
					



 


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