Document:

Exhibit 4.1

 

Form of Common Stock
Purchase Warrant Issued to Purchasers of Promissory Notes

 

THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF SUCH
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

 

WARRANT TO PURCHASE COMMON STOCK

of

GeoPetro Resources Company

 

(void after                             )

 

1.                                       Number of Shares Subject to Warrant. 
FOR VALUE RECEIVED, on and after the Commencement Date (as defined
below), and subject to the terms and conditions herein set forth, Holder (as
defined below) is entitled to purchase from GeoPetro Resources Company, a
California corporation (the “Company”), at any time before 5:00 p.m.
California time on                                 
(“Termination Date”), at a price per share equal to the Warrant Price
(as defined below), the Warrant Stock (as defined below) upon exercise of this
Warrant as set forth herein.

 

2.                                       Definitions. 
As used in this Warrant, the following terms shall have the definitions
ascribed to them below:

 

(a)                                  “Commencement
Date” shall mean                                             .

 

(b)                                 “Holder”
shall mean                                                                                   ,
or any person or entity to whom it has assigned its rights hereunder pursuant
to the terms hereof and in whose name this Warrant shall be registered upon the
books to be maintained by the Company for that purpose.

 

(c)                                  “Warrant
Price” shall be equal to $              
per share, subject to adjustments as described in Section 3 below.

 

(d)                                 “Warrant
Stock” shall mean                     
shares of no par voting common stock of the Company (“Common Stock”) subject to
adjustment as described in Section 3 below.

 

3.                                       Adjustments and Notices. 
The Warrant Stock and the Warrant Price shall be subject to adjustment
from time to time in accordance with the following provisions:

 

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(a)                                  Subdivision,
Stock Dividends or Combinations.  In
case the Company shall at any time subdivide the outstanding shares of the
Common Stock or shall issue a stock dividend with respect to the Common Stock,
the Warrant Price in effect immediately prior to such subdivision or the
issuance of such dividend shall be proportionately decreased (and the number of
shares of Warrant Stock proportionately increased), and in case the Company
shall at any time combine the outstanding shares of the Common Stock, the
Warrant Price in effect immediately prior to such combination shall be
proportionately increased (and the number of shares of Warrant Stock shall be
proportionately decreased), effective at the close of business on the date of
such subdivision, dividend or combination, as the case may be.

 

(b)                                 Reclassification,
Exchange, Substitution, In-Kind Distribution.  Upon any reclassification, exchange,
substitution, or other event that results in a change of the number and/or
class of the Common Stock issuable upon exercise or conversion of this Warrant
or upon the payment of a dividend in Common Stock or property other than Common
Stock, the Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of Common Stock and property that Holder
would have received for the Warrant Stock if this Warrant had been exercised
immediately before the record date for such reclassification, exchange,
substitution, or other event or immediately prior to the record date for such
dividend.  The Company or its successor
shall promptly issue to Holder a new Warrant for such new Common Stock or other
property.  The new Warrant shall provide
for adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 3 including, without
limitation, adjustments to the Warrant Price and to the number of Common Stock
or property issuable upon exercise of the new Warrant.  The provisions of this Section 3(b) shall
similarly apply to successive reclassifications, exchanges, substitutions, or
other events and successive dividends.

 

(c)                                  No
Impairment.  The Company shall not,
by amendment of its Articles of Incorporation or through a reorganization, transfer
of assets, consolidation, merger, dissolution, issue, or sale of Common Stock
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed under this Warrant
by the Company, but shall at all times in good faith assist in carrying out of
all the provisions of this Section 3 and in taking all such action as may
be necessary or appropriate to protect the Holder’s rights under this Section 3
against impairment.  If the Company takes
any action affecting the Common Stock other than as described above that
adversely affects Holder’s rights under this Warrant, the Warrant Price shall
be adjusted downward by an amount that shall compensate Holder as nearly as may
be practicable for any such adverse effect.

 

(d)                                 Notice.  Upon any adjustment of the Warrant Price and
any increase or decrease in the number of shares of the Common Stock
purchasable upon the exercise or conversion of this Warrant, then, and in each
such case, the Company, as promptly as practicable thereafter, shall give
written notice thereof to the Holder of this Warrant at the address of such
Holder as shown on the books of the Company which notice shall state the
Warrant Price as adjusted and the increased or decreased number of shares
purchasable upon the exercise or conversion of this Warrant, setting forth in
reasonable detail the method of calculation of each.

 

(e)                                  Fractional
Shares.  No fractional shares shall
be issuable upon exercise or conversion of the Warrant and the number of shares
to be issued shall be rounded down to the 

 

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nearest whole
share.  If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying the Holder an amount
computed by multiplying the fractional interest by the fair market value of a
full share.

 

4.                                       Stockholder Rights. 
This Warrant, by itself, as distinguished from any shares of Warrant
Stock obtained hereunder, shall not entitle its Holder to any of the rights of
a stockholder of the Company.

 

5.                                       Reservation of Stock. 
On and after the Commencement Date, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Warrant Stock upon the exercise or conversion of this
Warrant.  Issuance of this Warrant shall
constitute full authority to the Company’s officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for shares of Warrant Stock issuable upon the exercise or
conversion of this Warrant. The Warrant Stock issuable upon exercise of the
Holder’s rights hereunder, when issued in accordance with the provisions of
this Warrant, will be validly issued, fully paid and non-assessable, and will
be free of any taxes, liens, charges or encumbrances of any nature whatsoever,
provided, however, that the Warrant Stock issuable pursuant to this Warrant may
be subject to restrictions on transfer under applicable state and/or federal
securities laws.

 

6.                                       Exercise of Warrant. 
This Warrant may be exercised in whole or part by the Holder, at any
time after the Commencement Date and prior to the Termination Date, by the
surrender of this Warrant, together with the Notice of Exercise and Investment
Representation Statement in the forms attached hereto as Attachments 1
and 2, respectively, duly completed and executed at the principal office of
the Company, specifying the portion of the Warrant to be exercised and
accompanied by payment in full of the Warrant Price in cash or by check with
respect to the shares of Warrant Stock being purchased.  This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above, and the person entitled to receive
the shares of Warrant Stock issuable upon such exercise shall be treated for
all purposes as Holder of such shares of record as of the close of business on
such date.  As promptly as practicable
after such date, the Company shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates for the number of
full shares of Warrant Stock issuable upon such exercise.  If the Warrant shall be exercised for less
than the total number of shares of Warrant Stock then issuable upon exercise,
promptly after surrender of the Warrant upon such exercise, the Company will
execute and deliver a new Warrant, dated the date hereof, evidencing the right
of the Holder to the balance of the Warrant Stock purchasable hereunder upon
the same terms and conditions set forth herein. 
The Company may require documentation from the Holder to establish the
accuracy of the representations and warranties contained in Attachments 1
and 2.

 

7.                                       Representations and Warranties of the
Holder.  In connection with the transactions provided
for herein, the Holder hereby represents and warrants to the Company that:

 

(a)                                  Authorization.  The Holder represents that it has full power
and authority to enter into this Warrant. 
This Warrant constitutes the Holder’s valid and legally binding
obligation, enforceable in accordance with its terms, except as may be limited
by (i) applicable bankruptcy, insolvency, reorganization, or similar laws
relating to or affecting the enforcement of 

 

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creditors’ rights
and (ii) laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.

 

(b)                                 Purchase
Entirely for Own Account.  The Holder
acknowledges that this Warrant is entered into by the Holder in reliance upon
such Holder’s representation to the Company that the Warrant and Warrant Stock
(collectively, the “Securities”) will be acquired for investment for the Holder’s
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Holder has no present intention
of selling, granting any participation in or otherwise distributing the same.  By acknowledging this Warrant, the Holder
further represents that the Holder does not have any contract, undertaking,
agreement, or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to the
Securities.

 

(c)                                  Disclosure
of Information.  The Holder
acknowledges that it has received all the information it considers necessary or
appropriate for deciding whether to acquire the Securities.

 

(d)                                 Investment
Experience.  The Holder is an
investor in securities of companies in a stage similar to that of the Company
and acknowledges that it is able to fend for itself, can bear the economic risk
of its investment, and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the
investment in the Securities.  If other
than an individual, the Holder also represents it has not been organized solely
for the purpose of acquiring the Securities.

 

(e)                                  Accredited
Investor.  The Holder is an “accredited
investor” within the meaning of Rule 501 of Regulation D, as presently in
effect, as promulgated by the Securities and Exchange Commission (the “SEC”)
under the U.S. Securities Act of 1933 (the “Act”) as it is a corporation,
partnership or limited liability company not formed for the specific purposing
of acquiring the Warrant with total assets in excess of $5,000,000.

 

(f)                                    Restricted
Securities.  The Holder understands
that the Securities are characterized as “restricted securities” under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act, only in certain limited circumstances. 
In this connection, the Holder represents that it is familiar with Rule 144,
as presently in effect, as promulgated by the Securities and Exchange
Commission under the Act (“Rule 144”), and understands the resale
limitations imposed thereby and by the Act.

 

8.                                       Transfer of Warrant. 
This Warrant may be transferred or assigned by the Holder hereof in
whole or in part, provided that the transferor complies with applicable federal
and state securities laws and provides, at the Company’s request, an opinion of
counsel reasonably satisfactory to the Company that such transfer does not
require registration under the Act and the securities law applicable with
respect to any other applicable jurisdiction and an investment representation
statement. In any such event the Company shall, without charge, and to the
extent the then Holder’s rights hereunder are so transferred or assigned,
execute and deliver a new Warrant in the name of such assignee and, if
applicable, a new Warrant in the name of the then 

 

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Holder for the
portion of the rights hereunder retained by the then Holder and this Warrant
shall promptly be cancelled.  The Company
shall have the right to refuse to transfer any portion of this Warrant to any
person who directly competes with the Company.

 

9.                                       Termination. 
This Warrant shall terminate at 5:00 p.m. California time on the
Termination Date.

 

10.                                 Legends.   The stock
issuable, directly or indirectly, upon exercise or conversion of the Warrant
shall be imprinted with a legend in substantially the following form:

 

THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

11.                                 Lock-Up.  The Holder
agrees that if so requested by an underwriter in connection with any public
offering of securities by the Company, the undersigned shall not sell, or make
any short sale of, any of the Company’s securities (including the Securities)
without the prior written consent of the underwriter for a period of 180 days
following the effective date of a registration statement or other governmental
filing made in connection with such public offering.

 

12.                                 Miscellaneous. 
This Warrant shall be governed by the laws of the State of California,
without regard for the conflicts of law provisions of the State of California
or of any other state.  The headings in
this Warrant are for purposes of convenience and reference only, and shall not
be deemed to constitute a part hereof. 
Neither this Warrant nor any term hereof may be changed or waived
orally, but only by an instrument in writing signed by the Company and the
Holder of this Warrant.  All notices and
other communications from the Company to the Holder of this Warrant shall be
delivered personally, couriered, or mailed via Federal Express or certified or
registered mail, postage prepaid, return receipt requested, to the address
furnished to the Company in writing by the last Holder of this Warrant who
shall have furnished an address to the Company in writing, and if mailed shall
be deemed given upon the date of delivery or first attempted delivery as shown
on the return receipt.

 

	
   

  	
  GeoPetro Resources Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

	
  ACKNOWLEDGED AND
  AGREED:

  	
   

  
	
   

  	
   

  
	
  HOLDER:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
					

 

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Attachment 1

 

NOTICE OF EXERCISE

 

TO:                            GEOPETRO
RESOURCES COMPANY

 

1.                                       The
undersigned hereby elects to purchase                                         
shares of the Warrant Stock of GeoPetro Resources Company pursuant to the terms
of the attached Warrant, and tenders herewith payment of the purchase price in
full, together with all applicable transfer taxes, if any.

 

2.                                       Please
issue a certificate or certificates representing said shares of Warrant Stock
in the name of the undersigned or in such other name as is specified below:

 

3.                                       The
undersigned represents and warrants to the Company that the representations and
warranties contained in Section 7 of the attached Warrant are true and
correct as of the date hereof.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  

 

 

	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
  (Name of Warrant
  Holder)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

1

 

Attachment 2

 

INVESTMENT REPRESENTATION STATEMENT

 

Shares of the Common Stock

(as defined in the attached Warrant) of

GeoPetro Resources Company

 

In connection with the purchase of the above-listed Common Stock, the
undersigned hereby represents to GeoPetro Resources Company (the “Company”) as
follows:

 

(a)                                  The
Common Stock to be received upon the exercise of the Warrant will be acquired
for investment for its own account, not as a nominee or agent, and not with a
view to the sale or distribution of any part thereof, and the undersigned has
no present intention of selling, granting participation in or otherwise
distributing the same, but subject, nevertheless, to any requirement of law
that the disposition of its property shall at all times be within its
control.  By executing this Statement,
the undersigned further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer, or
grant participations to such person or to any third person, with respect to any
Common Stock issuable upon exercise of the Warrant.

 

(b)                                 The
undersigned understands that the Common Stock issuable upon exercise of the
Warrant at the time of issuance may not be registered under the Securities Act
of 1933, as amended (the “Act”), and applicable state securities laws, on the
ground that the issuance of such Common Stock is exempt pursuant to Section 4(2) of
the Act and state law exemptions relating to offers and sales not by means of a
public offering, and that the Company’s reliance on such exemptions is
predicated on the undersigned’s representations set forth herein.

 

(c)                                  The
undersigned acknowledges that an investment in the Company is highly
speculative and represents that it is able to fend for itself in the
transactions contemplated by this Statement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investments, and has the ability to bear the economic risks
(including the risk of a total loss) of its investment.  The undersigned represents that it has had
the opportunity to ask questions of the Company concerning the Company’s
business and assets and to obtain any additional information which it
considered necessary to verify the accuracy of or to amplify the Company’s
disclosures, and has had all questions which have been asked by it satisfactorily
answered by the Company.

 

(e)                                  The
undersigned acknowledges that the Common Stock issuable upon exercise of the
Warrant must be held indefinitely unless subsequently registered under the Act
or an exemption from such registration is available.  The undersigned is aware of the provisions of
Rule 144 promulgated under the Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than one year after a party has
purchased and

 

1

 

paid for the security to be sold, the sale being
through a “broker’s transaction” or in transactions directly with a “market
makers” (as provided by Rule 144(f)) and the number of shares being sold
during any three-month period not exceeding specified limitations.

 

	
   

  	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Typed or Printed Name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Title)

  

 

2Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

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

 

RECITALS

 

WHEREAS, the
Bank desires to employ the Executive as its Chief Executive 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.

 

1

 

2.             DUTIES OF THE EXECUTIVE:

 

2.1           Duties:  The Executive shall hold the office of Chief Executive 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. 
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.

 

2

 

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 Two Hundred Sixty-Five Thousand Dollars ($265,000) 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 Board of Directors.  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 Eighty-Six Thousand and Twenty-Six (86,026)
shares of The Bank Holdings Common 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.

 

3

 

4.             EXECUTIVE BENEFITS

 

4.1           Vacation:  The Executive will be entitled to six (6) 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 six (6) weeks vacation during
each year, the unused vacation shall accrue and be taken the following
year.  The Executive may accumulate
thirty (30) 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 thirty (30) 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, 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 

 

4

 

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 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.  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 

 

5

 

qualify.  This supplemental insurance plan benefits
shall include, at a minimum, Medicare supplemental, vision, dental, and
prescription drug benefits.

 

4.7                               Nevada Security Bank Executive
Supplemental Compensation  Agreement,
Nevada Security Bank Split Dollar Agreement, Nevada Security Bank Excess Plan
and Nevada Security Bank Supplemental Director and Executive Insurance Plan

 

The
Bank has agreed to provide certain compensation and benefits to the Executive
pursuant to the Nevada Security Bank Executive Supplemental Compensation
Agreement and amendments thereto; the Nevada Security Bank Split Dollar
Agreement and amendments thereto; the Nevada Security Bank Excess Plan and
amendments thereto; and the Nevada Security Bank Supplemental Director and
Executive Insurance Plan and amendments thereto.  The Executive shall be entitled to any and
all benefits provided under these agreements and plans and in accordance with
any amendments thereto.

 

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

 

6

 

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.

 

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.

 

7

 

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 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 

 

8

 

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 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 

 

9

 

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 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.

 

10

 

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.

 

11

 

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.

 

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 4.7
concerning the Nevada Security Bank Executive Supplemental Compensation Agreement, the Nevada Security Bank
Split Dollar Agreement, the Nevada Security Bank Excess Plan and the Nevada
Security Bank Supplemental Director and Executive Insurance 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.

 

12

 

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 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

  	
   

  	
  Hal Giomi

  
	
  Ed Allison, Chairman of the
  Board

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ed Allison

  	
   

  	
  By:

  	
  /s/ Hal Giomi

  
					

 

13

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