Document:

Exhibit 10.1

 

THE BANK HOLDINGS

 

STOCK OPTION PLAN

 

1.             Purpose

 

The purpose of
The Bank Holdings Stock Option Plan (the “Plan”) is to strengthen The Bank
Holdings (the “Holding Company”) and those corporations which are or hereafter
become subsidiary corporations [as that term is defined in Section 424(f) of
the Internal Revenue Code of 1986, as amended from time to time  (the “Code”)] of the Holding Company by
providing an additional means of attracting and retaining competent directors,
officers, and key employees and by providing to such persons added incentive
for high levels of performance.  The
plan also rewards founders and incorporators for their financial commitment to
the organization. The Plan seeks to accomplish these purposes and achieve these
results by providing a means whereby such persons may purchase shares of the
common stock of the Holding Company pursuant to options granted in accordance
with the Plan.

 

Options
granted pursuant to the Plan are intended to be either “incentive stock options”
within the meaning of Section 422 of the Code, or “nonqualified stock options”,
as shall be determined and designated upon the grant of each option hereunder.

 

2.             Administration

 

The Plan shall
be administered by the Stock Option Committee of the Board of Directors (the
“Committee”), which shall consist of at least three Directors appointed by the
Holding Company’s Board of Directors. 
In the event such Committee has not been appointed, the Board of
Directors shall act as the Committee.  
Any action of the Committee with respect to the administration of the
Plan shall be taken pursuant to a majority vote, or the unanimous written
consent, of its members.

 

 

Subject to the express
provisions of the Plan, the Committee shall have the authority to construe and
interpret the Plan, define the terms used therein, prescribe, amend and
rescind, the rules and regulations relating to administration of the Plan, and
make all other determinations necessary or advisable for administration of the
Plan.

 

All decisions,
determinations, interpretations or other actions by the Committee shall be
final, conclusive and binding on all persons, optionees, grantees, subsidiary
corporations of the Holding Company and any successors-in-interest to such
parties.

 

3.             Incentive Stock
Options

 

All options
granted which are designated at the time of grant as an “incentive stock
option” shall be deemed an incentive stock option.

 

(a)           Incentive stock options
granted under the Plan are intended to be qualified under Section 422 of the
Code.

 

(b)           Officers and key
employees of the Holding Company or a subsidiary corporation shall be eligible
for selection to participate in the incentive stock option portion of the
Plan.  No director, founder or
incorporator of the Holding Company, who is not also an officer or employee of
the Holding Company or a subsidiary corporation, may be granted an incentive
stock option hereunder.  Subject to the
express provisions of the Plan, the Committee shall (i) select from the
eligible class of employees to whom incentive stock options shall be granted
and make appropriate grants of incentive stock options to those selected, (ii)
determine the discretionary terms and provisions of the respective incentive
stock option agreements (which need not be identical), (iii) determine the
times at which such incentive stock options shall be granted, and (iv)
determine the number of shares subject to each incentive stock option.  An individual who has been granted an
incentive stock option 

 

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may, if he or she is otherwise
eligible under the Plan, be granted additional incentive stock options if the
Committee shall so determine.

 

(c)           Except as described in
subsection (e) below, the Committee shall not grant an incentive stock option
to purchase shares of the Holding Company’s common stock to any individual who,
at the time of the grant, owns stock possessing more than ten percent (10%) of
the total combined voting power or value of all classes of stock of the Holding
Company or a subsidiary corporation. 
The attribution rules of Section 424(d) of the Code shall apply in the
determination of ownership of stock for these purposes.

 

(d)           The aggregate fair
market value (determined as of the time the incentive stock option is granted)
of stock with respect to which incentive stock options are exercisable for the
first time by an individual during any calendar year (under all plans of the
Holding Company and its subsidiary corporations, if any) shall not exceed
$100,000, plus any greater amount as may be permitted under subsequent
amendments to the Code.

 

(e)           The purchase price of
stock subject to each incentive stock option shall be determined by the
Committee, but shall not be less than one hundred percent (100%) of the fair
market value of such stock at the time such option is granted, except, in the
case of optionees who at the time of the grant own more than ten percent (10%)
of the total combined voting power of all classes of stock of the Holding
Company or a subsidiary corporation, in which case the purchase price of the
stock shall not be less than one hundred ten percent (110%) of the fair market
value of such stock at the time such option is granted. The fair market value
of such stock shall be determined in accordance with any reasonable valuation
method, including the valuation methods described in Treasury Regulation
Section 20.2031-2.

 

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4.             Nonqualified Stock
Options

 

(a)           All options granted
which are (i) in excess of the aggregate fair market value limitations set
forth in Section 3(d) hereof, (ii) designated at the time of the grant as
“nonqualified”, or (iii) intended to be incentive stock options but do not meet
the requirements of incentive stock options, shall be deemed nonqualified stock
options.  Nonqualified stock options
granted hereunder shall be so designated in the nonqualified stock option
agreement entered into between the Holding Company and the optionee.

 

(b)           Directors, founders,
incorporators, executive officers and key employees of the Holding Company
or a subsidiary corporation shall be eligible for selection to participate in
the nonqualified stock option portion of the Plan.

 

Subject to the
express provisions of the Plan, the Committee shall (i) select from the
eligible class of individuals to whom nonqualified stock options shall be
granted and make appropriate grants of nonqualified stock options to those
selected, (ii) determine the discretionary terms and provisions of the
respective nonqualified stock option agreements (which need not be identical),
(iii) determine the times at which such nonqualified stock options shall be
granted, and (iv) determine the number of shares subject to each nonqualified
stock option.  An individual who has
been granted a nonqualified stock option may, if he or she is otherwise
eligible under the Plan, be granted additional nonqualified stock options if
the Committee shall so determine.

 

(c)           The purchase price of
stock subject to each nonqualified stock option shall be determined by the
Committee, but shall not be less than one hundred percent (100%) of the fair
market value of such stock at the time such option is granted. The fair market
value of such stock shall be determined in accordance with any reasonable
valuation method, including the valuation methods described in Treasury
Regulation 20.2031-2.

 

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(d)           The Holding Company
shall make a cash payment to the director,  founder, incorporator), executive officer,
or key employee covered thereby equal to the aggregate of the amount of
federal, state, and local taxes which such individual would be required to pay
attributable to the realization of taxable income, if any, as a result of the
receipt of shares pursuant to the exercise of options granted under the Plan.
In computing the amount of such payment, it shall be assumed that every
director, founder, incorporator, executive officer, or key employee granted an
option under the Plan is subject to tax by each taxing authority at the highest
marginal tax rate in the respective taxing jurisdiction, giving effect to the
tax benefit, if any, which such director, founder, incorporator, executive
officer, or key employee may enjoy to the extent that any such tax is
deductible in determining the tax liability of any other taxing jurisdiction.

 

5.             Stock Subject to
the Plan

 

Subject to
adjustments as provided in Section 12, hereof, the stock to be offered under
the Plan shall be shares of the Holding Company’s authorized but unissued common
stock (hereinafter called “stock”) and the aggregate amount of stock to be
delivered upon exercise of all options granted under the Plan shall not exceed
281,166 shares.  If any option shall be
canceled, surrendered or expire for any reason without having been exercised in
full, the underlying shares subject thereto shall again be available for
purposes of the Plan.

 

6.             Continuation of
Employment

 

Nothing
contained in the Plan (or in any option agreement) shall obligate the Holding
Company or a subsidiary corporation to employ any optionee for any period or
interfere in any way with the right of the Holding Company or a subsidiary
corporation to reduce the optionee’s 

 

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compensation.  However, the Holding Company may not reduce
the terms of any option without the approval of the optionee.

 

7.             Exercise of
Options

 

No option
shall be exercisable until all necessary regulatory and shareholder approvals
of the Plan are obtained.  Except as
otherwise provided in this section, each option shall be exercisable in such
installments, which need not be equal, and upon such contingencies as the
Committee shall determine; provided, however, that if an optionee shall not in
any given installment period purchase all of the shares which the optionee is
entitled to purchase in such installment period, the optionee’s right to
purchase any shares not purchased in such installment period shall continue
until expiration or termination of such option.

 

Fractional
share interests shall be disregarded and they may not be accumulated.  Not less than one (1) share may be purchased
at any one time.  Options may be
exercised by written notice delivered to the Holding Company stating the number
of shares with respect to which the option is being exercised, together with
the full purchase price for such shares. 
Payment of the option price in full, for the number of shares to be
delivered, must be made in cash or by cashier’s check.  If the option is being exercised by any
person other than the optionee, said notice shall be accompanied by proof,
satisfactory to counsel for the Holding Company, of the right of such person to
exercise the option.  Optionees will
have no rights as shareholders with respect to stock of the Holding Company subject
to their stock option agreements until the date of issuance of the stock
certificate to them.

 

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8.             Nontransferability
of Options

 

Each option
shall, by its terms, be nontransferable by the optionee other than by will or
the applicable laws of descent and distribution, and shall be exercisable
during his or her lifetime only by the optionee.

 

9.             Cessation of
Directorship or Employment

 

Except as
provided in Sections 10 and 20 hereof, if an optionee ceases to be a director
or an employee of the Holding Company or a subsidiary corporation for any
reason other than his or her disability (as defined in Section 22(e) (3) of the
Code) or death, the optionee’s option shall expire three (3) months after the date
of termination of such directorship or employment.  During the period after cessation of directorship or employment,
such option shall be exercisable only as to those installments, if any, which
have accrued and/or vested as of the date on which the optionee ceased to be a
director or an employee of the Holding Company or a subsidiary corporation.

 

10.          Termination of
Employment for Cause

 

If the stock
option agreement so provides and if an optionee’s employment by the Holding
Company or a subsidiary corporation is terminated for cause, the optionee’s
option shall expire immediately; provided, however, the Committee may, in its
sole discretion, within thirty (30) days of such termination, reinstate the
option by giving written notice of such reinstatement to the optionee at the
optionee’s last known address.  In the
event of reinstatement, the optionee may exercise the option only to such
extent, for such time, and upon such terms and conditions as if he or she had ceased
to be employed by the Holding Company or a subsidiary corporation upon the date
of such termination for a reason other than cause, disability or death.  Termination for cause shall include, but not
be limited to, termination for malfeasance or gross misfeasance in the
performance of duties 

 

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or conviction of a crime
involving moral turpitude, and, in any event, the determination of the
Committee with respect thereto shall be final and conclusive.

 

11.          Disability or Death
of Optionee

 

If any
optionee dies while serving as a director, incorporator, founder or an employee
of the Holding Company or a subsidiary corporation, the option shall expire one
(1) year after the date of such death, except as provided in Section 20 hereof.  After such death but before such expiration,
the persons to whom the optionee’s rights under the option shall have passed by
will or the applicable laws of descent and distribution or the executor or
administrator of optionee’s estate shall have the right to exercise such option
to the extent that installments, if any, had accrued and/or vested as of the
date on which the optionee ceased to be a director or an employee of the
Holding Company or a subsidiary corporation.

 

If the
optionee shall terminate his or her directorship or employment because of
disability (as defined in Section 22(e) (3) of the Code), the optionee may
exercise this option to the extent he or she is entitled to do so at the date
of termination, at any time within one (1) year of the date of termination,
except as provided in Section 20 hereof.

 

If any
optionee dies during the three (3) month period referred to in Section 9
hereof, the option shall expire one (1) year after the date of such death,
except as provided in Section 20 hereof.

 

12.          Adjustment upon
Changes in Capitalization

 

If the
outstanding shares of the stock of the Holding Company are increased,
decreased, changed into or exchanged for a different number or kind of shares
or securities of the Holding Company through reorganization, merger,
recapitalization, reclassification, stock split, stock dividend, stock
consolidation or otherwise, without consideration to the Holding Company, an 

 

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appropriate and proportionate
adjustment shall be made in the number and kind of shares as to which options
may be granted.  At the initiation of
this plan, 1,405,830 shares are authorized and outstanding.  A corresponding adjustment changing the
number or kind of shares and the exercise price per share allocated to
unexercised options or portions thereof, which shall have been granted prior to
any such change shall likewise be made. 
Any such adjustment, however, in an outstanding option shall be made
without change in the total price applicable to the unexercised portion of the
option, but with a corresponding adjustment in the price for each share subject
to the option.  Any adjustment under
this Section 12 shall be made by the Committee, whose determination as to what
adjustments shall be made, and the extent thereof, shall be final and
conclusive.  No fractional shares of
stock shall be issued or made available under the Plan on account of any such
adjustment, and fractional share-interests shall be disregarded.

 

13.          Terminating Events

 

A Terminating
Event shall be defined as any one of the following events: (i) a dissolution or
liquidation of the Holding Company; (ii) a reorganization, merger or
consolidation of Holding Company with one or more corporations, the result of
which (A) the Holding Company is not the surviving corporation, or (B) the
Holding Company 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 Holding Company); (iii) a sale of substantially all the
assets of the Holding Company to another corporation; or (iv) a sale of the
equity securities of the Holding Company representing more than 25% of the
aggregate voting power of all outstanding equity securities of the Holding
Company to any person or entity, or any group of persons and/or entities acting
in concert.  Notwithstanding the
foregoing, a Terminating Event shall not include a bank holding company
reorganization wherein the shareholders who 

 

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control at least 80% of the
shares of the Holding Company prior to the reorganization will control at least
80% of the shares of the bank holding company in substantially the same
proportion following the bank holding company reorganization. When the Holding
Company knows that a Terminating Event will occur (i) the Holding Company shall
deliver to each optionee no less than thirty (30) days prior to the Terminating
Event, written notification of the Terminating Event and the optionee’s right
to exercise all options granted pursuant to the Plan, whether or not vested
under the Plan or applicable stock option agreement, and (ii) all outstanding
options granted pursuant to the Plan shall completely vest and become
immediately exercisable as to all shares granted pursuant to the option
immediately prior to such Terminating Event. 
This right of exercise shall be conditional upon execution of a final
plan of dissolution or liquidation or the consummation of a consolidation or
merger.  Upon the occurrence of the
Terminating Event all outstanding options and the Plan shall terminate;
provided, however, that any outstanding options not exercised as of the
occurrence of the Terminating Event shall not terminate if there is a successor
corporation which assumes the outstanding options or substitutes for such
options, new options covering the stock of the successor corporation with
appropriate adjustments as to the number and kind of shares and prices.

 

14.          Amendment and
Termination

 

The Board may
at any time suspend or terminate the Plan. 
The Committee may amend the Plan at any time and may, with the consent
of the optionee, make such modification of the terms and conditions of the
option as it shall deem advisable; provided that, except as permitted under the
provisions of Sections 12 and 13 hereof, no amendment or modification which
would:

 

(a)           increase the maximum number of shares which
may be purchased pursuant to options granted under the Plan either in the
aggregate or by an individual;

 

(b)           change the minimum option price;

 

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(c)           increase the maximum term of options
provided for herein; or

 

(d)           permit options to be granted to anyone other
than directors, incorporators, founders, officers or key employees of the
Holding Company or a subsidiary corporation;

 

may be adopted without the
Holding Company having first obtained any necessary regulatory and shareholder
approvals required by law.

 

No option may
be granted during any suspension or after termination of the Plan.  Amendment, suspension or termination of the
Plan shall not (except as otherwise provided in Section 12 hereof), without the
consent of the optionee, alter or impair any rights or obligations under any
option theretofore granted.

 

15.          Time of Granting
Options

 

The time an
option is granted, sometimes referred to as the date of grant, shall be the day
of the action of the Committee described in Sections 3(b) and 4(b) hereof; provided,
however, that if appropriate resolutions of the Committee indicate that an
option is granted as of and on some future date, the time such option is
granted shall be such future date.  If
action by the Committee is taken by unanimous written consent of its members,
the action of the Committee shall be deemed to be at the time the last
Committee member signs the consent.

 

16.          Privileges of Stock
Ownership; Securities Law Compliance; Notice of Sale

 

No optionee
shall be entitled to the privileges of stock ownership as to any shares of
stock not actually issued.  No shares
shall be purchased upon the exercise of any option unless and until the Holding
Company has fully complied with all applicable requirements of any regulatory
agency having jurisdiction over the Holding Company , and all applicable
requirements of any exchange upon which stock of the Holding Company may be
listed.  The optionee shall give the
Holding 

 

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Company notice of any sale or
disposition of any such shares not more than five (5) days after such sale or
disposition.

 

17.          Effective Date of the
Plan

 

The Plan shall
be deemed adopted by the Board as of July 18, 2002 and shall be effective
immediately subject to approval by the shareholders of the Holding Company
within twelve months of the date the Plan is adopted, by the vote of a majority
of the outstanding shares represented and voting at a meeting of shareholders
at which a quorum is present, or by the written consent vote of the holders of
a majority of the outstanding shares of the Holding Company’s stock.

 

18.          Termination

 

Unless
previously terminated by the Board, the Plan shall terminate at the close of
business on July 18, 2012.  No options
shall be granted under the Plan thereafter, but such termination shall not
affect any option theretofore granted.

 

19.          Option Agreement

 

Each option
shall be evidenced by a written stock option agreement executed by the Holding
Company and the optionee and shall contain each of the provisions and
agreements herein specifically required to be contained therein, and such other
terms and conditions as are deemed desirable and are not inconsistent with the
Plan.  Each incentive stock option
agreement shall contain such terms and provisions as the Committee may
determine to be necessary in order to qualify such option as an incentive stock
option within the meaning of Section 422 of the Code.

 

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20.          Option Period

 

Each option
and all rights and obligations thereunder shall expire on such date as the
Committee may determine, but not later than ten (10) years from the date such
option is granted, and shall be subject to earlier termination as provided
elsewhere in the Plan.

 

21.          Exculpation and
Indemnification

 

To the extent
permitted by applicable law in effect from time to time, no member of the Board
shall be liable for any act or omission of any other member of the Board nor
for any act or omission on the member’s own part, except the member’s own willful
misconduct or gross negligence.  The
Holding Company and its subsidiary corporations shall pay expenses incurred by,
and satisfy a judgment or fine rendered or levied against, a present or former
member of the Board in any action brought by a third party against such person
(whether or not the Holding Company is joined as a party defendant) to impose a
liability or penalty on such person while a member of the Board arising with
respect to the Plan or administration thereof or out of membership on the Board
, or all or any combination of the preceding; provided, the Board determines in
good faith that such member of the Board was acting in good faith, within what
such member of the Board reasonably believed to be the scope of his or her
employment or authority, and for a purpose which he or she reasonably believed
to be in the best interests of the Holding Company or its shareholders.  Payments authorized hereunder include
amounts paid and expenses incurred in settling any such action or threatened
action.  This Section 21 does not apply
to any action instituted or maintained in the right of the Holding Company by a
shareholder or holder of a voting trust certificate representing shares of the
Holding Company or a subsidiary corporation thereof.  The provisions of this Section 21 shall apply to the estate,
executor, administrator, heirs, legatees or devisees of a member of the Board,
and 

 

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the term “person” as used in
this Section 21 shall include the estate, executor, administrator, heirs,
legatees or devisees of such person.

 

22.          Regulatory Capital
Requirements

 

Notwithstanding
the foregoing provisions, in the event the Holding Company’s capital falls
below the minimum requirements as determined by the Nevada Division of
Financial Institutions or the Holding Company’s primary federal regulator, the
Holding Company’s primary federal regulator may direct the Holding Company to
require the optionees to either exercise or forfeit their options.

 

Adopted
by Nevada Security Bank on July 18, 2002 and approved by shareholders on
September 19, 2002; Assumed by The Bank Holdings on August 29, 2003 as a result
of the Plan of Merger and Reorganization dated April 17, 2003 and approved by
shareholders on July 9, 2003.

 

14Exhibit 10.2

 

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 Hal G. Giomi (the “Executive”), whose
residence address is  315 Ute Way,
Zephyr Cove, NV  89448.

 

RECITALS

 

WHEREAS, the Bank
desires to employ the Executive as its President and 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, the
furtherance of the foregoing, the Bank submitted to and received approval of the name of the Executive as its choice for
President and Chief Executive 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.

 

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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 President and 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 

 

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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  One- Hundred  Fifty Thousand Dollars ($150,000) 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.

 

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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 Twenty-two Thousand Five Hundred
(22,500) 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

 

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sum of Seven Hundred
Fifty ($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 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.

 

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4.5           Club Memberships:  The Executive shall be provided paid
membership in clubs selected by the Executive and approved by the Board of
Directors.

 

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 7th day of
 November, 2002.

 

 

	
  The “Bank”

  	
  The “Executive”

  
	
  Nevada Security Bank

  	
  Hal G. Giomi

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
     /s/
  Ed Allison

  	
   

  	
  By:

  	
     /s/
  Hal Giomi

  	
   

  
	
  465 S. Meadows Pkwy,
  Suite 18

  	
  315 Ute Way

  
	
  Reno, NV  89521

  	
  Zephyr Cove, NV  89448

  
						

 

11

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