Document:

Exhibit
10.7

 

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

 

 

NEVADA SECURITY BANK

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

 

This Nonqualified Stock Option Agreement (the “Agreement”) is made and
entered into as of the 18th day of
July, 2002, by and between Nevada
Security Bank, a Nevada corporation (the “Bank”), and Joe Bourdeau (“Optionee”);

 

WHEREAS, pursuant to the Nevada Security Bank 2002 Stock Option Plan
(the “Plan”), a copy of which is attached hereto, the Board of Directors of the
Bank has authorized granting to Optionee, a nonqualified stock option to
purchase all or any part of Twenty-Two
Thousand Five Hundred,  (22,500) authorized
but unissued shares of the Bank’s common stock for cash at the price of Ten Dollars and No Cents ($10.00)
per share, such option to be for the term and upon the terms and conditions
hereinafter stated;

 

NOW, THEREFORE, it is hereby agreed:

 

1.             Grant
of Option.  Pursuant to said action of the Board of
Directors and pursuant to authorizations granted by all appropriate regulatory
and governmental agencies, the Bank hereby grants to Optionee the option to
purchase, upon and subject to the terms and conditions of the Plan, which is
incorporated in full herein by this reference, all or any part of Twenty-Two Thousand Five Hundred,  (22,500) shares of the Bank’s common stock
(hereinafter called “Common Stock”) at the price of Ten Dollars and No
Cents ($10.00) per share, which
price is not less than one hundred percent (100%) of the fair market value of
the Common Stock as of the date of action of the Board of Directors granting
this option.

 

1

 

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

 

	
  4,500
  Shares

  	
   

  	
  Upon
  Grant, July 18, 2002

  
	
  4,500
  Shares

  	
   

  	
  After
  July 18, 2003

  
	
  4,500
  Shares

  	
   

  	
  After
  July 18, 2004

  
	
  4,500
  Shares

  	
   

  	
  After
  July 18, 2005

  
	
  4,500
  Shares

  	
   

  	
  After
  July 18, 2006

  

 

This option shall remain exercisable as to
all of such shares until July 18, 2012
(but not later than ten (10) years from the date this option is granted) unless
this option has expired or terminated earlier in accordance with the provisions
hereof.  Shares as to which this option
becomes exercisable pursuant to the foregoing provision may be purchased at any
time prior to expiration of this option.

 

3.             Exercise
of Option.  This option may be exercised by written
notice delivered to the Bank stating the number of shares with respect to which
this option is being exercised, together with cash or qualifying shares of the
Bank’s stock, as applicable,  in the
amount of the purchase price of such shares. 
Not less than one (1) share may be purchased at any one time, and in no
event may the option be exercised with respect to fractional shares. Upon
exercise, Optionee shall be responsible for providing Bank with that
information necessary for the payment of any federal and state taxes then due,
as provided in the Plan.  
Notwithstanding the foregoing or anything to the contrary contained
herein or in the Plan, benefits in the form of payment of taxes by the Bank
shall not be payable under this section or under the Plan to the extent the
benefit would be an excess parachute payment under Section 280G of the Internal
Revenue Code of 1986, as amended

 

4.             Cessation
of Directorship or Employment.  Except as provided in
Paragraphs 2 and 5 hereof, if Optionee shall cease to be a director or an
employee of the Bank or a subsidiary corporation for any reason other than
Optionee’s death or disability [as defined in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended from time to time (the “Code”)], this 

 

2

 

option
shall expire three (3) months thereafter. 
During the three (3) month period this option shall be exercisable only
as to those installments, if any, which had accrued as of the date when the
Optionee ceased to be a director or an employee of the Bank or a subsidiary
corporation.

 

5.             Termination
of Employment for Cause.  If Optionee is an employee of
the Bank or a subsidiary corporation and Optionee’s employment with the Bank or
a subsidiary corporation is terminated for cause, this option shall expire
immediately, unless reinstated by the Board of Directors within thirty (30)
days of such termination by giving written notice of such reinstatement to
Optionee at his or her last known address. 
In the event of such reinstatement, Optionee may exercise this option
only to such extent, for such time, and upon such terms and conditions as if
Optionee had ceased to be an employee of the Bank or a subsidiary corporation
upon the date of such termination for a reason other than cause, death or
disability.  Termination for cause shall
include, but not be limited to, termination for malfeasance or gross
misfeasance in the performance of duties or conviction of a crime involving
moral turpitude, and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.

 

6.             Nontransferability;
Death or Disability of Optionee.  This option shall not be
transferable except by will or by the applicable laws of descent and distribution
and shall be exercisable during Optionee’s lifetime only by Optionee.  If Optionee dies while serving as a director
or an employee of the Bank or a subsidiary corporation, or during the three (3)
month period referred to in Paragraph 4 hereof, this option shall expire one
(1) year after the date of Optionee’s death or on the day specified in
Paragraph 2 hereof, whichever is earlier. 
After Optionee’s death but before such expiration, the persons to whom
Optionee’s rights under this option shall have passed by will or by the
applicable laws of descent and distribution or the executor or administrator of
Optionee’s estate shall have the right to exercise this option as to those
shares for which installments had accrued under Paragraph 2 hereof as of the date
on which Optionee ceased to be a director or an employee of the Bank or a
subsidiary corporation.

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

 

	
  OPTIONEE

  	
   

  	
   

  	
  NEVADA SECURITY BANK

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Joe Bourdeau

  	
   

  	
  By

  	
  /s/ Hal Giomi

  	
   

  
	
   

  	
  Joe
  Bourdeau

  	
   

  	
   

  	
  Hal Giomi, President & CEO

  

 

5Exhibit
10.8

 

EMPLOYMENT
AGREEMENT

 

This agreement is made as
of the 27th day of December, 2001, by and between Nevada Security Bank (the
“Bank”), having a principal place of business at 465 South Meadows Parkway,
Suite 18, Reno, Nevada, and Jack Buchold (the “Executive”), whose
residence address is 1130 Harvey Lane, Reno, NV  89509.

 

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, the
furtherance of the foregoing, the Bank submitted to and received approval of the name of the Executive as its choice for
Executive Vice President and Chief Financial Officer from the  State and Federal Regulators prior to
execution of this Agreement;

 

WHEREAS, the
Agreement was contingent upon and became effective when the aforementioned
approval was obtained from State and Federal Regulators and the Executive
commenced full time employment with the Bank; until such time as the Bank
received the aforementioned regulatory approval, the Bank engaged the Executive
in a consulting capacity;

 

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

 

1

 

NOW, THEREFORE, in
consideration of the covenants and conditions contained herein, it is agreed
that from and after the date the Bank commences formal operations (the
“Effective Date”), the following terms and conditions shall apply to the
Executive’s said employment:

 

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

 

2.             DUTIES
OF THE EXECUTIVE:

 

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 

 

2

 

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.

 

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 Ninety
Thousand Dollars ($90,000) per year each year of the Term, prorated for any
portion of a year, in which this Agreement is in effect.  The Executive’s salary shall be payable in
equal installments in conformity with the Bank’s normal payroll period.  Annual increases shall be made at the
recommendation of the President/Chief Executive Officer, subject to
ratification of the Board of Directors.

 

3

 

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

 

3.3           Stock Options:  Upon commencement of the Term, the Executive
shall be granted the option to purchase Fifteen Thousand (15,000) shares of the
Bank’s Common Stock, at a purchase price of Ten Dollars ($10.00) per share,
pursuant to the terms of the Bank’s stock option plan.  Twenty Percent (20%) of said shares will
immediately fully vest upon commencement with the Term, with the remaining
Eighty Percent (80%) vesting in equal amounts Twenty Percent (20%) annually
thereafter.

 

4.                                      EXECUTIVE
BENEFITS

 

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

 

4.2           Automobile Allowance:  The Bank shall pay the Executive the sum of
Seven Hundred Fifty ($750) per month as and for expenses to cover all costs 

 

4

 

of use, maintenance,
repair, upkeep, fuel, cleaning and operation of his automobile (except mileage
costs incurred to travel to locations outside of the Bank’s serving area) used
in the course and scope of his employment.

 

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

 

5

 

membership in clubs
selected by the Executive and approved by the President and Chief Executive
Officer.

 

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

 

5.             TERMINATION

 

5.1           Termination for Cause:  The Bank may terminate this Agreement at any
time by action of its Board of Directors, without further obligation or
liability to the Executive, in the event that:

 

(a)                                  The
Executive commits an act or acts of malfeasance or misfeasance in his duties;
or

 

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

 

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

 

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

 

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

 

6

 

a
whole; or

 

(f)                                    The Executive dies.

 

5.2           Termination Without Cause:  In the event the Board of Directors of the
Bank determines that either (i) the continued association of the Executive with
the Bank or (ii) the performance of his duties by the Executive is not in the
best interest of the Bank, then the Bank may terminate this Agreement by action
of its Board of Directors.   In the
event of such termination without cause, and subject to any limitation of
payments to Officers and Directors under applicable Federal and State law, the
Executive shall be paid as and for severance payments and in lieu of any and
all other Compensation, remedy or damages, a lump-sum equal to not less than
Twelve (12) months compensation at the then current base salary of the
Executive, plus any accrued but unpaid Bonus Compensation described elsewhere
in this Agreement.  In addition, the
Bank, at its expense will provide the Executive and his dependent family with
insurance Coverage, as described in Paragraph 4.3 above, for a period of not
less than Six (6) months following the Executive’s termination.  Upon such payment, any and all obligations
of the Bank to the Executive shall have been fully and completely satisfied and
the Executive shall be entitled to no additional compensation, claim, right or
benefit hereunder or otherwise.

 

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

 

5.4           Merger or Corporate Dissolution:  In the event of a merger where the Bank is
not the surviving corporation, in the event of a consolidation, in the 

 

7

 

event of a transfer of all or substantially all of the
assets of the Bank, in the event of any other corporate reorganization where
there is a change in ownership of at least Twenty Five Percent (25%) except as
may result from a transfer of the Bank’s stock to another corporation in
exchange for at least Sixty-Six and Two-Thirds Percent (66 2/3%) control of
that corporation, or in the event of the dissolution of the Bank, the Executive
may terminate this Agreement.  In the
event of such termination, and subject to any limitation of payments to
Officers and Directors under applicable Federal and State law, the Executive
shall be paid, as and for severance payments and in lieu of any and all other
compensation remedy or damages, a lump-sum equal to not less than Twenty Four
(24) months compensation at the then current base salary of the Executive, plus
any accrued  but unpaid Bonus
Compensation described elsewhere in this Agreement.  In addition, the Bank, at its expense, will provide the Executive
and his dependent family with insurance coverage, as described in Paragraph 4.3
above, for a period of not less than Twelve (12) months following the
Executive’s termination.  Upon such
payment, any and all obligations of the Bank to the Executive shall have been
fully and completely satisfied and the Executive shall be entitled to no
additional compensation, claim, right or benefit hereunder or otherwise.

 

5.5           Termination by the Executive:   The Executive may terminate his employment
hereunder at any time upon Ninety (90) days notice to the Bank.  In such event, the Executive shall be
entitled to all salary, bonus and other benefits (accrued vacation, etc.),
which have accrued prior
to the effective date of termination. 
All unvested options shall be forfeited and the Executive must exercise
his vested options within Sixty (60) days of termination.  If not so exercised, those options shall
also be 

 

8

 

forfeited.

 

6.                                      GENERAL
PROVISIONS:

 

6.1           Indemnification:  To the extent permitted by law, applicable
statutes, the Articles of Incorporation, the By-Laws and resolutions of the
Bank in effect from time to time, the Bank shall indemnify the Executive
against liability or loss arising out of the Executive’s actual or asserted misfeasance
of malfeasance in the performance of the Executive’s duties or out of any
actual or asserted wrongful act against, or by, the Bank including but not
limited to judgments, fines, settlements and expenses incurred in the defense
of actions, proceedings and appeals therefrom. 
The Bank shall provide Directors and Officers Liability Insurance to
indemnify and insure the Bank and the Executive from and against the
aforementioned liabilities.  The
provisions of this paragraph shall apply to the estate, executor,
administrator, heirs, legatees or devisees of the Executive.

 

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

 

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

 

6.4           Applicable Law:  This Agreement is to be governed by and

 

9

 

construed under the laws of the State of Nevada.

 

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

 

6.6           Invalid Provision:  Should any portion or provision of this
Agreement for any reasons be declared invalid, void, or unenforceable by a
court of competent jurisdiction, the validity and binding effect of all
remaining portions or provisions shall not be affected; and the remainder of
this Agreement shall remain in full force and effect as if this Agreement had
been executed with said portion or provision eliminated.

 

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

 

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

 

10

 

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

 

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

 

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of 11th day of November, 2002.

 

 

	
  The
  “Bank”

  	
   

  	
   

  	
  The
  “Executive”

  
	
  Nevada
  Security Bank

  	
   

  	
   

  	
  Jack
  Buchold

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Ed
  Allison

  	
   

  	
  By:

  	
  /s/
  Jack Buchold

  	
   

  
	
   

  	
  /s/
  Hal Giomi 

  	
   

  	
   

  
	
  465 S. Meadows Pkwy,
  Suite 18

  	
  1130
  Harvey Lane.

  
	
  Reno, NV  89511

  	
  Reno,
  NV  89509

  

 

11

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