Exhibit 10.4


 


AMENDED AND RESTATED


EMPLOYMENT AGREEMENT


 


This Amended and Restated Employment Agreement effective December 31st, 2008 by and between Nevada
Security Bank, a Nevada corporation (“Bank”) and David A. Funk (“Executive”)
amends and restates the original employment agreement (“Original Agreement”) dated
November 18, 2002, by and between Bank and Executive.


 


The Bank and Executive desire to amend and revise the Original
Agreement to incorporate the changes required by Section 409A of the
Internal Revenue Code of 1984, as amended and make other changes to clarify the
Original Agreement.


 


Bank desires to employ Executive to devote Executive’s full time to the
business of the Bank, and Executive desires to be so employed.


 


The parties agree as follows:


 


I.


EMPLOYMENT TERM


 


Bank agrees to employ Executive, and Executive agrees to be so
employed, in the capacity of President. 
Employment shall begin November 18, 2002 and continue until
termination in accordance with this Agreement.


 


II.


TIME AND EFFORTS


 


Executive shall diligently and conscientiously devote his full and
exclusive time and attention and best efforts in discharging his duties as the
Bank’s President.


 


III.


BOARD OF DIRECTORS


 


Executive shall be a member of the Board of Directors by election by
the Bank’s shareholder or by appointment by the Bank’s Board of Directors, as
determined in the discretion of the Bank’s shareholder or Board of Directors, and
Executive shall at all times discharge his duties as President in consultation
with and under the supervision of the Bank’s Board of Directors and/ or the Chief
Executive Officer.  In the performance of
his duties, Executive shall make his principal office in such place as the Bank’s
Board of Directors and/or the Chief Executive Officer and Executive may from
time to time agree.


 


IV.


COMPENSATION


 


Bank shall pay to Executive as compensation for his services the sum of
$140,000 per year payable semi-monthly.


 


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V.


EXPENSES


 


(a)           Business.  The Bank shall reimburse Executive for all
reasonable and necessary business expenses incurred in carrying out his duties
under this Agreement.  Executive shall
present to the Bank from time to time an itemized account of such expenses in
any form required by the Bank.  All
reimbursements shall be made in accord with Bank reimbursement policies, on a
timely basis, but in all events no later than the end of the calendar year
following the year in which reimbursed expenses are incurred.


 


(b)           Memberships.  The Bank shall pay or reimburse Executive for
social, professional and community membership fees, including but not limited
to, Hidden Valley Country Club, Prospectors Club, Western Industrial of Nevada,
Economic Development of Western Nevada, American Bankers Association, Western
Independent Bankers and Nevada Bankers. 
The reimbursement to Executive of such paid memberships shall be made in
accord with Bank reimbursement policies, on a timely basis, but in all events
no later than the end of the calendar year following the year in which
reimbursed expenses are incurred.


 


(c)           Automobile.  The Bank shall pay Executive a car allowance
of $750.00 a month payable semi-monthly during the term of employment.


 


VI.


EXECUTIVE BENEFITS


 


Executive shall receive the following during the time the Executive is
employed by the Bank:


 


(a)           Insurance.  Bank paid medical, vision, short and long
term disability as provided under the Bank’s group insurance coverage and a
$525,000 life insurance policy with the Executive to designate the beneficiary.


 


(b)           Vacation.  Five weeks paid vacation per calendar year
commencing January 1, 2003 accruing at the rate of one week every 2.4
months.  Upon termination Executive shall
be paid for accrued and unused vacation. 
At the end of the year, any accrued and unused vacation in excess of
twenty-five (25) days shall be paid out to the Executive in lieu of accrued
vacation.


 


(c)           Holidays.  All paid holidays the Bank observes.


 


(d)           Sick leave.  Ten paid sick leave days per year accruing at
the rate 2.5 days every three months. 
Unused sick days can be accumulated up to 120 days; provided however,
Executive shall not be entitled to any cash or other compensation for unused
sick days.


 


(e)           401K.  Executive is eligible to participate in Bank’s
401K Plan following 90 days of initial employment.


 


(f)            Stock options.  15,000
shares of Bank stock at an option price of $10 a share subject to the
conditions of the Bank’s Stock Option Plan. 
The option to purchase the stock shall vest as follows: 3,000 shares
vest immediately on the first day of employment; thereafter an additional 3,000
shares vest yearly on the anniversary date of employment for 4 years.


 


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(g)           Participation
in other executive and/or employee-benefit plans.  Nothing in this Agreement shall in any manner
modify, impair, or affect the existing or future rights or interests of the
Executive (a) to receive any executive and/or employee-benefits to which
he would otherwise be entitled, or (b) as a participant in the present or
any future incentive profit-sharing or bonus plan, stock option plan or pension
plan of the Bank.  The rights and
interests of the Executive to any executive and/or employee benefits or as a
participant or beneficiary in or under any or all such plans shall continue in
full force and effect.  The Executive
shall have the right at any future time to become a participant or beneficiary
under or pursuant to any and all such plans.


 


(h)           Retirement
Benefits.  Upon Executive’s
termination of employment for retirement at an age after Executive attains age
sixty-two, the Bank, at its expense, will provide the Executive and his
eligible dependents the maximum medical and health benefit available through
the Bank’s Group Insurance program that will not result in federal taxable
income for the Executive for a period equal to the maximum applicable
continuation coverage period under the Consolidated Omnibus Budget
Reconciliation Act of 1985 after Executive’s retirement (“Post-Employment
Covered Period”).  If the Executive or
any of his or her covered dependent is eligible to qualify for governmental
healthcare benefits (including, but not limited to, Medicare benefits) during
the Post-Employment Covered Period, then upon eligibility of such person to qualify
for such governmental benefits the Bank’s obligation to provide the group
insurance benefits aforementioned shall cease and the Bank will, at its
expense, provide such person additional insurance benefits to supplement the
governmental healthcare benefits to provide the maximum medical and health
benefits that will not result in federal taxable income for the Executive for
which Executive is eligible to qualify for the remainder of the Post-Employment
Covered Period.


 


These retirement benefits of the aforementioned paragraph shall not under
such paragraph be provided Executive, if Executive’s employment is terminated (i) by
the Bank for cause, (ii) by the Bank without cause, (iii) termination
of this agreement by any bank supervisory authority, or (iv) due to a
Change of Control covered under Article X of this agreement.


 


VII.


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


 


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


 


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


 


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(d)           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


 


(e)           The Executive dies.


 


VIII.


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, the Executive shall be paid as and for severance and
in lieu of any and all other compensation, remedy or damages, within 10
business days of such termination (except if Executive is a Specified Employee
in which case Executive shall be paid at such time as set forth in Article XXIV),
a non-discounted lump-sum equal to twelve (12) months compensation at the then
current base salary of the Executive, plus any accrued and unused vacation days
and any accrued but unpaid Bonus Compensation. 
In addition, the Bank, at its expense will provide the Executive and his
dependent family with medical and health benefits coverage available through
the Bank’s Group Insurance program for a period of six (6) months
following the Executive’s termination. 
Upon such payment and provision of insurance coverage, 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.


 


IX.


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.


 


X.


CHANGE IN CONTROL


 


Change in Control:  For purposes of this Agreement, a change in
control (“Change in Control”) shall mean the earliest occurrence of one of the
following events:


 


A.            A Change In
Ownership of The Bank Holdings or the Bank.


 


A change in ownership of The Bank Holdings (“Company”)
or the Bank occurs on the date that any person (or group of persons) acquires
ownership of stock of the Company or the Bank that, together with stock held by
such person or group, constitutes more than fifty percent (50%) of the total
fair market value or total voting power of the stock of the Company or the
Bank, respectively.


 


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B.                                    A
Change in Effective Control of the Company or the Bank.


 


A change in effective control of the Company
or the Bank occurs on the date that:


 


1.                                     Any
person (or group of persons) acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition by such person
or persons) ownership of stock of the Company or the Bank possessing
thirty-five percent (35%) or more of the total voting power of the stock of the
Company or the Bank, respectively; or


 


2.                                     A
majority of members of the Company’ or Bank’s Board is replaced during any
twelve (12) month period by directors whose appointment or election is not
endorsed by a majority of the members of the Company’ or the Bank’s Board,
respectively prior to the date of the appointment or election.


 


C.                                    A
Change in Ownership of a Substantial Portion of the Company’s or the Bank’s
Assets.


 


A change in the ownership of a substantial
portion of the Company’s or the Bank’s assets occurs on the date that any
person (or group of persons) acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company or the Bank, respectively that have a total
gross fair market value equal to, or more than, forty percent (40%) of the
total gross fair market value of all of the assets of the Company or the Bank,
respectively immediately prior to such acquisition or acquisitions.


 


For the purpose of this Agreement, transfers of the outstanding voting
securities of the Company or the Bank made on account of deaths or gifts,
transfers between family members, former spouses or transfers to a qualified
retirement plan maintained by the Company or the Bank shall not be considered
in determining whether there has been a Change in Control.


 


In the event of any Change in Control and
subject to any limitation of payments to officers and directors under
applicable Federal and State law, the Executive shall be paid within 10
business days of the effective date of such Change in Control, as and for
severance payment and in lieu of any and all other compensation, remedy or
damages under this Agreement, a lump-sum equal to 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 accrued to the end of the
month immediately prior to the month in which the Change in Control occurs.


 


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In the event of a Change in Control, the Executive may terminate this
Agreement.  In the event of such
termination, the Executive shall be paid, as and for severance and in lieu of
any and all other compensation remedy or damages, within 10 business days of
such termination (except if Executive is a Specified Employee in which case Executive
shall be paid at such time as set forth in Article XXIV), a non-discounted
lump-sum amount equal to 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 accrued and unused vacation days and any accrued but
unpaid Bonus Compensation.  In addition,
the Bank at its expense will provide the Executive and his eligible dependents
with medical and health benefits coverage under the Bank’s Group Insurance
program for a period of twelve (12) months following the Executive’s
termination.  Upon such payment and
provision of insurance coverage, 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.


 


XI.


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 and shall be paid such amount entitled within 10 days of
termination of employment, except if Executive is a Specified Employee and any
part of the bonus or other benefits compensation is considered deferred
compensation under Section 409A of the Code in which case Executive shall
be paid such deferred compensation at such time as set forth in Article XXIV
in this amended Agreement.  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.


 


XII.


INDEMNIFICATION


 


The Bank shall indemnify the Executive to the maximum extent allowed by
Nevada law and federal banking laws and regulations against liability or loss
arising out of the Executive’s actual or asserted negligence, misfeasance or
malfeasance in the performance of the Executive’s duties or out of any actual
or asserted wrongful act or omission against, or by, the Bank including, but
not limited to, judgments, fines, settlements, expenses, attorney fees and
costs 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.


 


XIII.


NOTICES


 


Any written notice required or desired to be given under this Agreement
shall be given in writing and delivered, personally or by certified mail to the
Executive’s residence or to the Bank’s principal office, as the case may be.


 


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XIV.


WAIVER OF BREACH


 


The Bank’s waiver of a breach of any provision of this Agreement by the
Executive shall not operate or be construed as a waiver of any subsequent
breach by the Executive.  No waiver shall
be valid unless in writing and signed by an authorized officer of the Bank.


 


XV.


ASSIGNMENT


 


The Executive acknowledges that his services are unique and
personal.  Accordingly, the Executive may
not assign his rights or delegate his duties or obligations under this
Agreement.  The Bank’s rights and
obligations under this Agreement shall inure to the benefit or and shall be binding
upon the Bank’s successors and assigns.


 


XVI.


ATTORNEYS’ FEES AND COSTS


 


If either party brings an action or a proceeding, including
arbitration, to enforce, protect, or establish any right or remedy under the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys’ fees and costs, and the fees and expenses or the arbitrators in any
arbitration proceeding.


 


XVII.


ENTIRE AGREEMENT


 


This Agreement contains the entire understanding of the parties.  It may not be changed orally but only by an
Agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.


 


XVIII.


GOVERNING LAW


 


This Employment Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada in effect from time to time.


 


XIX.


SEVERABILITY


 


The severability, unenforceability, invalidity, or illegality of any
provision of this Employment Agreement shall not render any other provisions
unenforceable, invalid, or illegal, and the Employment Agreement shall be
construed in all respects as if the unenforceable, invalid or illegal
provisions were omitted.


 


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XX.


HEADINGS


 


Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.


 


XXI.


COUNTERPARTS


 


This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.


 


XXII.


GENDER AND NUMBER


 


As used in this Employment Agreement, the masculine, feminine, or
neuter gender, and singular or plural number, shall each be considered to
indicate the others whenever the context so indicates.


 


XXIII.


AGREEMENT TO BE CONSTRUED IN ACCORDANCE WITH
ITS INTENT


 


This Agreement shall be construed in accordance with its intent and
without regard to any presumption or other rule requiring construction
against the party causing the same to be drafted.


 


XXIV.


DELAYED PAYMENTS FOR SPECIFIED EMPLOYEES


 


In the event that §409A of the Code applies
to any compensation paid to Executive with respect to a Separation of Service
and no exception under §409A is applicable as determined by Bank counsel,
payment of that compensation shall be delayed if Executive is a “specified
employee,” as defined in § 409A(a)(2)(B)(i) of the Code.  Such delay shall last six months from the
date of Separation of Service.  On the
day following the end of the six-month period, the Bank shall make a catch-up
payment to Executive equal to the total amount of such payments that would have
been made during the six-month period but for this Article XXIV.


 


The term “Separation from Service” means the termination of the
Executive’s employment with the Bank for reasons other than death or
Disability.  Whether a Separation from
Service takes place is determined based on the facts and circumstances
surrounding the termination of the Executive’s employment and whether the Bank
and the Executive intended for the Executive to provide significant services
for the Bank following such termination. 
A termination of employment and Separation of Service is presumed to
have occurred if the level of bona fide services provided by the Executive permanently
decreases to no more than 20% of the average level of services rendered during
the previous 36 months of employment (or if employed less than 36 months, such
lesser period), and no Separation of Service is presumed to have occurred if
the Executive continues to provide services to the Bank at the level that is
50% or more of the average level of services provided during the previous 36
months of employment (or if employed less than 36 months, such lesser period).


 


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XXV.


COMPLIANCE WITH SECTION 409A.


 


This Agreement shall at all times be
administered in compliance with the requirements of §409A of the
Code and any and all regulations thereunder, including such regulations as may
be promulgated after the date of the Agreement.


 


IN WITNESS WHEREOF the parties have executed this Agreement effective
the day first above written.


 


	
  NEVADA SECURITY BANK

  	
   

  	
  DAVID FUNK

  
	
   

  	
   

  	
  “Executive”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ed Allison

  	
   

  	
  By:

  	
  /s/ David A. Funk

  
	
   

  	
   Ed Allison

  	
   

  	
  Address:

  	
  3290 Piazzo Circle

  
	
   

  	
   Chairman of the Board

  	
   

  	
  Reno, NV 89502

  
						



 


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