Exhibit 10.13

Charles Key

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FIRST NATIONAL BANK OF NORTHERN CALIFORNIA

976 EL CAMINO REAL

SOUTH SAN FRANCISCO, CA 94080

 

May 27, 2016

 

Charles Key

Chief Information Officer

First National Bank of Northern California

 

Re: Amended and Restated Management Continuity Agreement (2016)

 

Dear [Name of Executive]:

 

This Management Continuity Agreement (“Agreement”) amends and restates in full
the original Management Continuity Agreement (“Prior Agreement”) entered into
between you and FIRST NATIONAL BANK OF NORTHERN CALIFORNIA, (the “Bank”) on July
20, 2000. The Prior Agreement is hereby terminated and has no force or effect.
Accordingly, the following terms and conditions shall apply under this new
Agreement.

 

FIRST NATIONAL BANK OF NORTHERN CALIFORNIA, a national banking association (“the
Bank”), considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best interests of the
Bank. The Bank recognizes that the possibility of a change in control of the
Bank may arise in the future and that the uncertainty and questions which such
possibility may raise among management may result in the departure or
distraction of management personnel to the detriment of the Bank. Accordingly,
the non-management members of the Bank’s Board of Directors (the “Board”) have
determined that it is imperative to be able to rely upon management’s
continuance and that appropriate steps should be taken to reinforce and
encourage your continued attention and dedication to your assigned duties
without distraction in the face of the potentially disturbing circumstances
arising from the possibility of a change in control.

 

In order to induce you to remain an employee until a Change in Control occurs,
this letter agreements sets forth the benefits which the Bank agrees will be
provided to you in the event that there is a “Change in Control” (as defined in
Section 1 hereof). Any termination of employment for any reason prior to a
Change in Control shall result in automatic termination of this Agreement and
loss of any benefit described herein.

 

1.Change in Control. No benefits shall be payable hereunder unless there shall
have been a Change in Control, as set forth below. For purposes of this
Agreement, a Change in Control shall mean a Change in Control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), or in response to any other form or report to the SEC or
any stock exchange on which the Bank’s shares are listed which requires the
reporting of a Change in Control; provided that, without limitation such a
Change in Control shall be deemed to have occurred if (i) any “person” (as such
term is used in the Exchange Act) is or becomes the beneficial owner, directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Bank’s then outstanding securities; or (ii) any
“person” (as such term is used in the Exchange Act), other than the Bank, is or
becomes the beneficial owner,directly or indirectly, of securities of the Bank
representing 25% or more of the combined voting power of the Bank’s then
outstanding securities; or (iii) in any one year period, individuals who at the
beginning of such period constitute the Board of Directors of the Bank cease for
any reason to constitute at least a majority thereof, unless the election, or
the nomination for election by the Bank’s shareholders, of each new director is
approved by a vote of at least three-quarters of the directors then still in
office who were directors at the beginning of the period; or (iv) a majority of
the members of the Board in office prior to the happening of any event
determines in its sole discretion that as a result of such event there has been
a Change in Control.

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Charles Key

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2.Term. The term of this Agreement shall commence immediately upon the date
hereof and, unless terminated earlier pursuant to Section 5(ii) hereof, shall
continue for two (2) years. Upon the occurrence of the first annual anniversary
date of this Agreement, and on each anniversary date thereafter, the term of
this Agreement shall be deemed automatically extended for an additional year,
unless written notice of the nonrenewal is furnished by you or by the Bank prior
to such anniversary date. Written notice of the nonrenewal of this Agreement
will take effect at the conclusion of the term of this Agreement. Such notice
shall be furnished in accordance with Section 6 of this Agreement.

 

3.Definitions.

 

i.Cause. In the event that Executive’s employment is terminated for Cause,
Executive shall forfeit all rights and benefits under this Agreement.

 

“Cause” shall mean (i) the Executive’s willful misconduct, usurpation of
business opportunity or gross negligence related to the Bank; provided that
Executive shall first be given ten (10) days following written notice from the
Board to cure any such breach (to the extent such breach is capable of being
cured); (ii) the Executive’s willful failure to adhere to the reasonable
policies of the Bank or any State of California or federal banking laws
(including the laws, rules, or regulations of the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System or the Office
of the Comptroller of the Currency); provided that Executive shall first be
given ten (10) days following written notice from the Board to commence
compliance with such policies or laws to the extent such failure is able to be
complied with subsequently; (iii) the Executive’s unauthorized disclosure to
third parties of any confidential information (including trade secrets) of the
Bank; or (iv) the Executive’s conviction of or entering of a guilty pleas or a
plea of no contest with respect to (A) a felony, (B) any crime involving fraud,
larceny, or embezzlement, or (C) any other crime involving moral turpitude which
is injurious to the reputation of the Bank. No act, or failure to act, by
Executive shall be “willful” unless committed without good faith and without a
reasonable belief that the act or omission was in the best interest of the Bank.

4.Benefit.

 

i.Amount of Benefit. The Bank shall pay you within ten days following a Change
in Control a benefit calculated as follows:

 

Change in Control benefit in dollars = Two x Base Annual Salary

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Charles Key

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For purposes of this Agreement, “Base Annual Salary” shall be the regular
compensation paid by the Bank to you which was included in gross income for
federal income tax purpose for the twelve (12) months ending immediately prior
to the Change in Control. Notwithstanding the previous sentence, “Base Annual
Salary” shall also include amounts deferred under any Bank-sponsored 401(k) plan
and Section 125 plan.

 

ii.Timing of Benefit. The Bank shall pay the benefit described in Subsection
4(i) in a single lump sum within ten (10) days of the date of Change in Control.

 

iii.Other Benefits Payable. The benefit described in subsection (i) above shall
be payable in addition to, or not in lieu of, all other accrued or vested or
earned but deferred compensation, rights, options, or other benefits which may
be owed to you following a Change in Control, including but not limited to
amounts or benefits payable under any employment agreement or any bonus or other
compensation plans, stock option plan, stock ownership plan, stock purchase
plan, life insurance plan, health plan, disability plan or similar plan.

 

iv.Payment Obligations Absolute. Upon the Change in Control, the Bank’s (and its
successor’s obligation to pay the benefits described herein shall be absolute
and unconditional and shall nt be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Bank (and its successor) may have against you or anyone else.

 

v.Legal Fees. In the event of arbitration or litigation concerning this
Agreement, the prevailing party shall be entitled to recover from the other
party all costs and expenses including reasonable attorney’s fees, incurred in
such arbitration or litigation.

 

vi.Mitigation. You shall not be required to mitigate the amount of any payment
provided for in this Section 4, nor shall the amount of any payment provided for
in this Section 4 be reduced or offset in any way whatsoever by any amount
received by you for any reason whatsoever from the Bank (or its successor) or
another employee or otherwise after the Change in Control.

 

vii.Indemnification. For claims made within one (1) year of the Date of
Termination, you shall be indemnified under the Bank’s Articles of Association
and Bylaws and covered by the directors’ and officers’ liability insurance, the
fiduciary liability insurance and the professional liability insurance policies
that are the same as, or provide coverage at least equivalent to, those the Bank
carries.

 

5.Successors; Termination of Agreement.

 

i.The Bank will require any successor (whether director or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Bank to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Bank would be
required to perform it if no such succession had taken place. Failure of the
Bank to obtain such agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement. As used in this Agreement, “Bank” shall
mean the Bank as hereinabove defined and any successor to its business and/or
assets as aforesaid which executes and delivers the agreement provided for in
this Section 5 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.

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Charles Key

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ii.This Agreement shall terminate automatically upon the occurrence of any of
the following events; (A) your termination of employment from the Bank, at any
time, for Cause or for any other reason prior to a Change in Control; or (B)
your death, except that if you should die while you are entitled to receive any
amounts under this Agreement but which are unpaid your date of death, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee, or other designee or, if there
be no such designee, to your estate and this Agreement shall inure to the
benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributes, devisees and
legatees.

 

6.Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid. All notices to the
Bank shall be directed to the Board and all notices to you shall be directed to
you at your address of residence on file with the Bank, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.

 

7.Excess Parachute Payments. If all or any portion of the amounts payable to you
under this Agreement, either alone or together with other payments which you
have the right to receive from the Bank, constitute “excess parachute payments”
within the meaning of Section 280g of the Internal Revenue Code of 1986, as
amended (the “Code”), that are subject to the excise tax imposed by Section 4999
of the Code (or similar tax and/or assessment), the Bank (and its successor)
shall increase the amounts payable hereunder to the extent necessary to place
you in the same after-tax position as you would have been in had no such excise
tax been imposed on the payments hereunder. The determination of the amount of
any such excise taxes shall initially be made by the independent accounting firm
employed by the Bank immediately prior to the Change in Control. Payment of any
amounts under this Section 7 shall be made, if not sooner, by the end of the
Executive’s taxable year next following the Executive’s taxable year in which
the related taxes are remitted to the taxing authority.

 

If at a later date it is determined (pursuant to final regulations or published
rulings of the IRS, final judgment of a court of competent jurisdiction or
otherwise) that the amount of excise taxes payable by you is greater than the
amount initially so determined, then the Bank (or is successor) shall pay you an
amount equal to the sum of such additional excise taxes, any interest, fines and
penalties resulting from such underpayment, plus an amount necessary to
substantially reimburse you for any income, excise or other taxes payable by you
with respect to such amounts.

 

8.Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by you and the Chairman of the Board of Directors or such officer as may
be specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. This Agreement shall not affect
your rights under any pension, welfare or fringe benefit arrangements or any
employment agreement of the Bank under which you are entitled to receive any
benefits. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California. The
provisions of this Agreement, and any payment provided for hereunder, shall not
reduce any amounts otherwise payable, or in any way diminish your existing
rights, or rights which would accrue solely as a result of the passage of time,
under any employment agreement or other contract, plan or arrangement with the
Bank.

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Charles Key

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9.Validity. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

 

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

 

11.Withholding of Taxes. The Bank may withhold from any amounts payable under
this Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or government regulation or ruling.

 

12.No Employment Right. Nothing contained in this Agreement shall confer upon
you the right to continue in the employ of or in the status as an officer of the
Bank, no limit in any way the right of the Bank to terminate your employment or
status as an officer at any time.

 

13.Nonassignability. This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder, except as provided in Section
5 above. Without limiting the foregoing, your right to receive payments
hereunder shall not be assignable or transferrable, whether by pledge, creation
of a security interest or otherwise, other than by a transfer by will or by the
laws of descent and distribution. In the event of any attempted assignment or
transfer contrary to this Section, the Bank shall have no liability to pay
amounts so attempted to be assigned or transferred.

 

14.Arbitration.

 

i.Any disagreement, dispute, controversy or claim arising out of or in any way
related to this Agreement or the subject matter thereof or the interpretation
hereof or any arrangements relating hereto or contemplated herein or the breach,
termination or invalidity hereof shall be settled exclusively and finally by
arbitration.

 

ii.The arbitration shall be conducted in accordance with the Commercial
Arbitration Rules (the “Arbitration Rules”) of the American Arbitration
Association (the “AAA”) then in effect.

 

iii.The arbitral tribunal shall consists of one arbitrator. The parties to the
arbitration jointly shall directly appoint such arbitrator within 30 days of
initiation of the arbitration. If the parties shall fail to appoint such
arbitrator as provided above, such arbitrator shall be appointed by the AAA as
provided in the Arbitration Rules and shall be a person who (A) maintains his or
her principal place of business or residence in Northern California and (B) is a
retired judge of the State of California.

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Charles Key

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iv.The arbitration shall be conducted in San Francisco, California, or in any
other city of the United States of America as the parties to the dispute may
designate by mutual written consent.

 

v.Any decision or award of the arbitral tribunal shall be final and binding upon
the parties to the arbitration proceeding. The parties hereto hereby waive to
the extent permitted by law any rights to appeal or to review of such award by
any court or tribunal. The parties hereto agree that the arbitral award may be
enforced against the parties to the arbitration proceeding or their assets
wherever they may be entered in any court having jurisdiction thereof.

 

15.Reimbursement. To the extent that the reimbursement of any expenses or the
provision of any in-kind benefits under this Agreement is subject to Section
409A, (i) the amount of such expenses eligible for reimbursement, or in-kind
benefits to be provided, during any one calendar year shall not affect the
amount of such expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year (provided, that, this clause (i) will not
be violated with regard to expenses reimbursed under any arrangement covered by
Code Section 105(b) solely because such expenses are subject to a limit related
to the period the arrangement is in effect); (ii) reimbursement of any such
expense shall be made by no later than December 31 of the year following the
calendar year in which such expense is incurred; and (iii) Employee’s right to
receive such reimbursements or in-kind benefits shall not be subject to
liquidation or exchange for another benefit.

 

16.Exemption from Section 409A. All payments hereunder are intended to be exempt
from Section 409A of the Code pursuant to the “short-term deferral rule” under
Treasury Regulation 1.409A-1(b)(4).

 

This amended and restated Agreement supersedes the Prior Agreement or any other
agreement on the same subject. If this letter correctly sets forth our agreement
on the subject matter hereof, kindly sign and return to the Bank the enclosed
copy of this letter which will then constitute our agreement on this subject.

 

[Signature Page Follows]

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Charles Key

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      Sincerely,                     FIRST NATIONAL BANK
OF NORTHERN CALIFORNIA                   By:                       Title:      
          Agreed to this _____ day of ________. 2016                     By:   
          (Name of Executive)        

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