Exhibit 10.38

FIRST NATIONAL BANK OF NORTHERN CALIFORNIA
EXECUTIVE SUPPLEMENTAL COMPENSATION
AGREEMENT

          Effective this 1st day of January, 2007, this EXECUTIVE SUPPLEMENTAL
COMPENSATION AGREEMENT (“Agreement”) is adopted by and between FIRST NATIONAL
BANK OF NORTHERN CALIFORNIA (“Bank”), a bank located in South San Francisco,
California, and DAVID A. CURTIS (“Executive”), a member of a select group of
management and highly compensated employees of the Bank. The purpose of this
Agreement is to further the growth and development of the Bank by providing
Executive with supplemental retirement income, and thereby encourage Executive’s
productive efforts on behalf of the Bank and the Bank’s shareholders, and to
align the interests of the Executive and those shareholders.

          It is intended that the Agreement be “unfunded” for purposes of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and not be
construed to provide income to the participant or beneficiary under the Internal
Revenue Code of 1986, as amended (the “Code”), particularly Section 409A of the
Code and guidance or regulations issued thereunder, prior to actual receipt of
benefits.

Article 1
Definitions and Construction

Where the following words and phrases appear in the Agreement, they shall have
the respective meanings set forth below, unless their context clearly indicates
to the contrary:

 

 

1.1

“Accrued Liability Balance” shall mean the amount accrued by the Bank to fund
the future benefit expense associated with this Agreement, using a reasonable
discount rate, as determined by the Board from time to time.

 

 

1.2

“Beneficiary” shall mean the designated person(s), or the estate of the deceased
Executive, entitled to benefits, if any, upon Executive’s death, as described
under Article 4. Such Beneficiary shall be designated on the Beneficiary
Designation Form attached hereto, and shall be signed and delivered to the Plan
Administrator from time to time, as required.

 

 

1.3

“Board” shall mean the Board of Directors of the Bank.

 

 

1.4

“Change in Control” shall mean a change in ownership or control of the Bank as
defined in Treasury Regulation §1.409A-3(i)(5) or any subsequently applicable
Treasury Regulation.

 

 

1.5

“Code” shall mean the United States Internal Revenue Code of 1986, as amended.

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1.6

“Disability” shall mean Executive: (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months; or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering employees of the Bank.
Medical determination of Disability may be made by either the Social Security
Administration or by the provider of an accident or health plan covering
employees of the Bank, provided that the definition of Disability applied under
such Disability insurance program complies with the requirements of Section
409A. Upon the request of the Plan Administrator, the Executive must submit
proof to the Plan Administrator of Social Security Administration’s or the
provider’s determination.

 

 

1.7

“Early Involuntary Termination” shall mean that the Bank terminates Executive’s
employment, in writing, at any time before Executive’s Normal Retirement Date
and such termination is not due to Disability, a Termination for Cause, or an
approved leave of absence. For purposes of this Agreement only, should Bank
require, compel, or otherwise coerce Executive into an Early Voluntary
Termination following a Change in Control, such termination shall be treated as
an Early Involuntary Termination.

 

 

1.8

“Early Voluntary Termination” shall mean that Executive terminates employment
with the Bank before the Normal Retirement Age and such termination is not due
to death, Disability, for Good Reason, or a Change in Control.

 

 

1.9

“Effective Date” shall mean January 1, 2007.

 

 

1.10

“Termination for Good Reason” shall mean, without the Executive’s express
written consent, the occurrence of any one or more of the following conditions
that results in a material negative change in the employment relationship
between the Bank and the Executive, and shall require an actual Separation from
Service by the Executive within the two-year period following the initial
occurrence of one or more of these conditions. In order for a Separation of
Service to qualify as a Termination for Good Reason, Executive must give notice
to the Bank within 90 days after the condition providing a basis for a
good-reason condition first exists, and Executive must give the Bank 30 days
from receipt of notice to cure the condition. The qualifying conditions are as
follows:

 

 

 

 

 

 

(a)

a material reduction in the Executive’s Base Salary;

 

 

 

 

 

 

(b)

Failing to maintain Executive’s amount of benefits under or relative level of
participation in the Bank’s employee benefit or retirement plans, policies,
practices, or arrangements in which the Executive participates as of the
Effective Date of this Agreement, including any perquisite program; provided,
however, that any such change that applies consistently to all executive
officers of the Bank or is required by applicable law shall not be deemed to
constitute Good Reason;

 

 

 

 

 

 

(c)

Failing to require any Successor Company to assume and agree to perform the
Bank’s obligations hereunder;

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(d)

The occurrence of any one or more of the following events on or after the
announcement of the transaction which leads to a Change of Control and up to
twenty–four (24) calendar months following the effective date of a Change in
Control:

 

 

 

 

 

 

 

(1)

Requiring Executive to be based at a location that requires the Executive to
travel at least an additional thirty-five (35) miles per day;

 

 

 

 

 

 

 

 

(2)

Requiring Executive to report to a position which is at a lower level than the
highest level to which Executive reported within the six (6) months prior to the
Change in Control;

 

 

 

 

 

 

 

 

(3)

Demoting Executive to a level lower than Executive’s level in the Bank as of the
Effective Date.

 

 

 

 

 

1.11

“Normal Retirement Date” shall mean the later of Separation from Service or the
Executive’s 65th birthday.

 

 

1.12

“Normal Retirement Age” shall mean age 65.

 

 

1.13

“Plan Administrator” shall mean the plan administrator described in Article 6.

 

 

1.14

“Plan Year” shall mean each twelve-month period commencing on January 1 and
ending on December 31 of each year. The initial Plan Year shall commence on the
Effective Date of this Plan and end on the following December 31.

 

 

1.15

“Separation from Service” shall mean Executive’s employment with Bank has
terminated and the Executive is not performing significant services for the
Bank. At all times, this definition of Separation from Service shall be applied
consistent with Section 409A of the Internal Revenue Code. For purposes of this
Agreement, whether a termination of employment or service has occurred is
determined based on whether the facts and circumstances indicate that the Bank
and Executive reasonably anticipated that no further services would be performed
after a certain date or that the level of bona fide services the Executive would
perform after such date (whether as an Executive or as an independent
contractor) would permanently decrease to no more than twenty percent (20%) of
the average level of bona fide services performed (whether as an Executive or an
independent contractor) over the immediately preceding thirty-six (36) month
period (or the full period of services to the Bank if the Executive has been
providing services to the Bank less than 36 months). Facts and circumstances to
be considered in making this determination include, but are not limited to,
whether the Executive continues to be treated as an Executive for other purposes
(such as continuation of salary and participation in Executive benefit
programs), whether similarly situated service providers have been treated
consistently, and whether the Executive is permitted, and realistically
available, to perform services for other service recipients in the same line of
business. An Executive will be presumed not to have separated from service where
the level of bona fide services performed continues at a level that is fifty
percent (50%) or more of the average level of service performed by the Executive
during the immediately preceding thirty-six (36) month period.

 

 

1.16

“Termination for Cause” has that meaning set forth in Article 5.

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Article 2
Distributions During Lifetime

 

 

 

2.1

Normal Retirement Benefit. Upon Executive’s Normal Retirement Date while in the
active service of the Bank, the Bank shall distribute to the Executive the
benefit described in this Section 2.1 in lieu of any other benefit under this
Article.

 

 

 

 

2.1.1

Amount of Benefit. The annual benefit under this Section 2.1 is One Hundred and
Seventy Thousand Dollars ($170,000).

 

 

 

 

2.1.2

Form and Timing of Benefit. Subject to Section 2.6, the Bank shall distribute
the annual benefit to the Executive in twelve (12) equal monthly installments,
commencing on the first day of the month following the Executive’s Separation
from Service. The annual benefit shall be distributed to the Executive for
twenty (20) years.

 

 

 

2.2

Early Voluntary Termination Benefit. Upon the Executive’s Early Voluntary
Termination, the Executive shall not be entitled to a benefit under this
Agreement.

 

 

2.3

Early Involuntary Termination Benefit. Upon the Executive’s Early Involuntary
Termination, the Bank shall distribute to the Executive the benefit described in
this Section 2.3 in lieu of any other benefit under this Article.

 

 

 

2.3.1

Amount of Benefit. The benefit under this Section 2.3 is the Accrued Liability
Balance, calculated as of the end of the Plan Year immediately preceding
Executive’s Separation from Service. This benefit is determined by calculating a
twenty-year fixed annuity from said Accrual Balance, crediting interest on the
unpaid balance at the annual plan discount rate, compounded monthly.

 

 

 

 

2.3.2

Form and Timing of Benefit. Subject to Section 2.6, the Bank shall distribute
the annual benefit to the Executive in twelve (12) equal monthly installments,
commencing on the first day of the month following the Separation from Service.
The annual benefit shall be distributed to the Executive for twenty (20) years.

 

 

 

2.4

Disability Benefit. Upon the Executive’s Separation from Service due to
Disability, the Bank shall distribute to the Executive the benefit described in
this Section 2.4 in lieu of any other benefit under this Article.

 

 

 

2.4.1

Amount of Benefit. The benefit under this Section 2.4 is the Accrued Liability
Balance, calculated as of the end of the Plan Year immediately preceding
Executive’s Separation from Service. This benefit is determined by calculating a
twenty-year fixed annuity from said Accrual Balance, crediting interest on the
unpaid balance at the annual plan discount rate, compounded monthly.

 

 

 

 

2.4.2

Form and Timing of Benefit. Subject to Section 2.6, the Bank shall distribute
the annual benefit to the Executive in twelve (12) equal monthly installments,
commencing on the first day of the month following the Separation from Service.
The annual benefit shall be distributed to the Executive for twenty (20) years.

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2.5

Change in Control Benefit. Upon a Change in Control followed by the Executive’s
Early Involuntary Termination or Termination for Good Reason, the Bank shall
distribute to the Executive the benefit described in this Section 2.5 in lieu of
any other benefit under this Article.

 

 

 

2.5.1

Amount of Benefit. The benefit under this Section 2.5 is the Normal Retirement
Benefit described in Section 2.1.1.

 

 

 

 

2.5.2

Form and Timing of Benefit. Subject to Section 2.6, the Bank shall distribute
the annual benefit to the Executive in twelve (12) equal monthly installments,
commencing on the first day of the month following the Separation from Service.
The annual benefit shall be distributed to the Executive for twenty (20) years.

 

 

 

 

2.5.3

Excess Parachute Payment Notwithstanding any provision of this agreement to the
contrary, the Bank will reduce any benefit under this agreement by an amount
necessary to avoid an excise tax under the excess parachute rules of Section
280G of the Code.

 

 

 

2.6

Restriction on Timing of Distribution. Notwithstanding any provision of this
Agreement to the contrary, distributions under this Agreement may not commence
earlier than six (6) months after the date of a Separation from Service. In the
event a distribution is delayed pursuant to this Section, the originally
scheduled distribution shall be delayed for 6 months, and shall commence instead
on the first day of the seventh month following Separation from Service. If
payments are scheduled to be made in installments, the first six months of
installment payments shall be delayed, aggregated, and paid instead on the first
day of the seventh month, after which all installment payments shall be made on
their regular schedule. If payment is scheduled to be made in a lump sum, the
lump sum payment shall be delayed for six months and instead be made on the
first day of the seventh month.

 

 

2.7

Certain Accelerated Payments. In certain limited circumstances the Bank may make
an accelerated distribution to the Executive of deferred amounts, solely to the
extent that such distribution meets the requirements of Section 1.409A-3(j)(4).
In order to make such accelerated payments, both Executive and Bank must sign a
written acknowledgement of the specific Section 1.409A-3(j)(4) exemption being
relied upon by the Bank in making the accelerated payments.

 

 

2.8

Subsequent Changes to Time and Form of Payment. The Bank may permit a subsequent
change to the time and form of benefit distributions. Any such change shall be
considered made only when it becomes irrevocable under the terms of the
Agreement. Any change will be considered irrevocable not later than 30 days
following acceptance of the change by the Plan Administrator, subject to the
following rules intended to comply with Treasury Regulation 1.409A:

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(a)

the subsequent deferral election may not take effect until at least 12 months
after the date on which the election is made (i.e. If a distribution event
occurs in the interim, the original distribution method must be followed);

 

 

 

 

(b)

the payment (except in the case of death, disability, or unforeseeable
emergency) upon which the subsequent deferral election is made is deferred for a
period of not less than five years from the date such payment would otherwise
have been paid; and

 

 

 

 

(c)

in the case of a payment made at a specified time, the election must be made not
less than 12 months before the date the payment is scheduled to be paid.

Article 3
Distribution Upon Death

 

 

3.1

Death During Active Service. If the Executive dies while in the active service
of the Bank there is no benefit payable under this agreement.

 

3.2

Death During Benefit Payout. If the Executive dies while receiving any
distributions described in Article 2, all such distributions under Article 2
shall cease and the Bank shall distribute to the Beneficiary the remaining
Accrued Liability Balance in a lump sum within 30 days of receiving Executive’s
death certificate.

Article 4
Beneficiaries

 

 

4.1

Beneficiary. The Executive shall have the right, at any time, to designate a
Beneficiary(ies) to receive any benefit distributions under this Agreement upon
the death of the Executive. The Beneficiary designated under this Agreement may
be the same as or different from the beneficiary designation under any other
plan of the Bank in which the Executive participates.

 

 

4.2

Beneficiary Designation: Change; Spousal Consent. The Executive shall designate
a Beneficiary by completing and signing the Beneficiary Designation Form, and
delivering it to the Plan Administrator or its designated agent. If the
Executive names someone other than his or her spouse as a Beneficiary, a spousal
consent, in the form designated by the Plan Administrator, must be signed by the
Executive’s spouse and returned to the Plan Administrator. The Executive’s
beneficiary designation shall be deemed automatically revoked if the Beneficiary
predeceases the Executive or if the Executive names a spouse as Beneficiary and
the marriage is subsequently dissolved. The Executive shall have the right to
change a Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Plan Administrator’s rules and
procedures, as in effect from time to time. Upon the acceptance by the Plan
Administrator of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled. The Plan Administrator shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Executive and accepted by the Plan Administrator prior to the Executive’s death.

 

 

4.3

Acknowledgment. No designation or change in designation of a Beneficiary shall
be effective until received, accepted and acknowledged in writing by the Plan
Administrator or its designated agent.

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4.4

No Beneficiary Designation. If the Executive dies without a valid beneficiary
designation, or if all designated Beneficiaries predecease the Executive, then
the Executive’s spouse shall be the designated Beneficiary. If the Executive has
no surviving spouse, the benefits shall be made to the personal representative
of the Executive’s estate.

 

4.5

Facility of Distribution. If the Plan Administrator determines in its discretion
that a benefit is to be distributed to a minor, to a person declared
incompetent, or to a person incapable of handling the disposition of that
person’s property, the Plan Administrator may direct distribution of such
benefit to the guardian, legal representative or person having the care or
custody of such minor, incompetent person or incapable person. The Plan
Administrator may require proof of incompetence, minority or guardianship as it
may deem appropriate prior to distribution of the benefit. Any distribution of a
benefit shall be a distribution for the account of the Executive and the
Executive’s Beneficiary, as the case may be, and shall be a complete discharge
of any liability under the Agreement for such distribution amount.

Article 5
General Limitations

 

 

 

5.1

Termination for Cause. Notwithstanding any provision of this Agreement to the
contrary, the Bank shall not distribute any benefit under this Agreement if
Executive’s service is terminated by the Board for:

 

 

 

 

(a)

Gross negligence or gross neglect of duties to the Bank; or

 

 

 

 

(b)

Conviction of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Executive’s employment with the Bank; or

 

 

 

 

(c)

Fraud, disloyalty, dishonesty or willful violation of any law or significant
Bank policy committed in connection with the Executive’s employment and
resulting in a material adverse effect on the Bank.

 

 

 

5.2

Suicide or Misstatement. No benefits shall be distributed if the Executive
commits suicide within two years after the Effective Date of this Agreement, or
if an insurance company which issued a life insurance policy covering the
Executive and owned by the Bank denies coverage (i) for material misstatements
of fact made by the Executive on an application for such life insurance, or (ii)
for any other reason.

 

 

 

5.3

Removal. Notwithstanding any provision of this Agreement to the contrary, the
Bank shall not distribute any benefit under this Agreement if the Executive is
subject to a final removal or prohibition order issued by an appropriate federal
banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

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Article 6
Administration of Agreement

 

 

6.1

Plan Administrator Duties. This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or person(s)
as the Board shall appoint. The Plan Administrator shall also have the
discretion and authority to (i) make, amend, interpret and enforce all
appropriate rules and regulations for the administra­tion of this Agreement and
(ii) decide or resolve any and all ques­tions including interpretations of this
Agreement, as may arise in connection with the Agreement, provided that such
amendments and interpretations are made at all times in compliance with Section
409A of the Code.

 

 

6.2

Agents. In the administration of this Agreement, the Plan Administrator may
employ agents and delegate to them such administrative duties as it sees fit,
(including acting through a duly appointed representative), and may from time to
time consult with counsel who may be counsel to the Bank.

 

 

6.3

Binding Effect of Decisions. The decision or action of the Plan Administrator
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Agreement and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Agreement, provided that such
decisions or actions are in compliance with Section 409A of the Code.

 

 

6.4

Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act with respect
to this Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its members.

 

 

6.5

Bank Information. To enable the Plan Administrator to perform its functions, the
Bank shall supply full and timely information to the Plan Administrator on all
matters relating to the date and circum­stances of the retirement, Disability,
death, or Separation from Service of the Executive, and such other pertinent
information as the Plan Administrator may reasonably require.

 

 

6.6

Annual Statement. The Plan Administrator shall provide to the Executive, within
one hundred twenty (120) days after the end of each Plan Year, a statement
setting forth the benefits to be distributed under this Agreement.

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6.7

Arbitration. All claims, disputes and other matters in question arising out of
or relating to this Agreement or the breach or interpretation thereof, other
than those matters which are to be determined by the Bank in its sole and
absolute discretion, shall be resolved by binding arbitration before a
representative member, selected by the mutual agreement of the parties, of the
Judicial Arbitration and Mediation Services, Inc. (“JAMS”), at the location
nearest the parties. In the event JAMS is unable or unwilling to conduct the
arbitration provided for under the terms of this paragraph, or has discontinued
its business, the parties agree that a representative member, selected by the
mutual agreement of the parties of the American Arbitration Association (“AAA”)
at the location nearest the parties, shall conduct the binding arbitration
referred to in this paragraph. Notice of the demand for arbitration shall be
filed in writing with the other party to this Agreement and with JAMS (or AAA,
if necessary). In no event shall the demand for arbitration be made after the
date when institution of legal or equitable proceedings based on such claim,
dispute or other matter in question would be barred by the applicable statute of
limitations. The arbitration shall be subject to such rules of procedure used or
established by JAMS, or if there are none, the rules of procedure used or
established by AAA. Any award rendered by JAMS or AAA shall be final and binding
upon the parties, and as applicable, their respective heirs, beneficiaries,
legal representatives, agents, successors and assigns, and may be entered in any
court having jurisdiction thereof. The obligation of the parties to arbitrate
pursuant to this clause shall be specifically enforceable in accordance with,
and shall be conducted consistently with, the provisions of California Law and
Civil Procedure. Any arbitration hereunder shall be conducted at the location
nearest the parties, unless otherwise agreed to by the parties.

 

 

6.8

Attorneys’ Fees. In the event of any arbitration or litigation concerning any
controversy, claim or dispute between the parties hereto, arising out of or
relating to this Agreement or the breach hereof, or the interpretation hereof,
(a) each party shall pay his own attorneys’ arbitration fees incurred; (b) the
prevailing party shall be entitled to recover from the other party reasonable
expenses, attorneys’ fees and costs incurred in the enforcement or collection of
any judgment or award rendered. The “prevailing party” means any party (one
party or both parties, as the case may be) determined by the arbitrator(s) or
court to be entitled to money payments from the other, not necessarily the party
in whose favor a judgment is rendered.

 

 

6.9

Trust. Notwithstanding the unfunded nature of this Agreement, the Bank and the
Executive acknowledge and agree that, in the event of a Change in Control, upon
request of the Executive, or in the Bank’s discretion if the Executive does not
so request and the Bank nonetheless deems it appropriate, the Bank may
establish, not later than the effective date of the Change in Control, a Rabbi
Trust or multiple Rabbi Trusts (the “Trust” or “Trusts”) upon such terms and
conditions as the Bank, in its sole discretion, deems appropriate and in
compliance with applicable provisions of the Code, in order to permit the Bank
to make contributions and/or transfer assets to the Trust or Trusts to discharge
its obligations pursuant to this Agreement. The principal of the Trust or Trusts
and any earnings thereon shall be held separate and apart from other funds of
the Bank to be used exclusively for discharge of the Bank’s obligations pursuant
to this Agreement and shall continue to be subject to the claims of the Bank’s
general creditors until paid to the Executive in such manner and at such times
as specified in this Agreement.

Article 7
Claims And Review Procedures

 

 

 

7.1

Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received
benefits under the Agreement that he or she believes should be distributed shall
make a claim for such benefits as follows:

 

 

 

 

7.1.1

Initiation – Written Claim. The claimant initiates a claim by submitting to the
Plan Administrator a written claim for the benefits.

 

 

 

 

7.1.2

Timing of Plan Administrator Response. The Plan Administrator shall respond to
such claimant within 90 days after receiving the claim. If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response period by
an additional 90 days by notifying the claimant in writing, prior to the end of
the initial 90-day period, that an additional period is required. The notice of
extension must set forth the special circumstances and the date by which the
Plan Administrator expects to render its decision.

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7.1.3

Notice of Decision. If the Plan Administrator denies part or all of the claim,
the Plan Administrator shall notify the claimant in writing of such denial. The
Plan Administrator shall write the notification in a manner calculated to be
understood by the claimant. The notification shall set forth:

 

 

 

 

 

 

(a)

The specific reasons for the denial;

 

 

 

 

 

 

(b)

A reference to the specific provisions of the Agreement on which the denial is
based;

 

 

 

 

 

 

(c)

A description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed;

 

 

 

 

 

 

(d)

An explanation of the Agreement’s review procedures and the time limits
applicable to such procedures; and

 

 

 

 

 

 

(e)

A statement of the claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

 

 

 

7.2

Review Procedure. If the Plan Administrator denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Plan
Administrator of the denial, as follows:

 

 

 

 

7.2.1

Initiation – Written Request. To initiate the review, the claimant, within 60
days after receiving the Plan Administrator’s notice of denial, must file with
the Plan Administrator a written request for review.

 

 

 

 

7.2.2

Additional Submissions – Information Access. The claimant shall then have the
opportunity to submit written comments, documents, records and other information
relating to the claim. The Plan Administrator shall also provide the claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

 

 

 

 

7.2.3

Considerations on Review. In considering the review, the Plan Administrator
shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.

 

 

 

 

7.2.4

Timing of Plan Administrator Response. The Plan Administrator shall respond in
writing to such claimant within 60 days after receiving the request for review.
If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the
response period by an additional 60 days by notifying the claimant in writing,
prior to the end of the initial 60-day period, that an additional period is
required. The notice of extension must set forth the special circumstances and
the date by which the Plan Administrator expects to render its decision.

 

 

 

 

7.2.5

Notice of Decision. The Plan Administrator shall notify the claimant in writing
of its decision on review. The Plan Administrator shall write the notification
in a manner calculated to be understood by the claimant. The notification shall
set forth:

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(a)

The specific reasons for the denial;

 

 

 

 

(b)

A reference to the specific provisions of the Agreement on which the denial is
based;

 

 

 

 

(c)

A statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits; and

 

 

 

 

(d)

A statement of the claimant’s right to bring a civil action under ERISA Section
502(a).

Article 8
Amendments and Termination

This Agreement may be amended or terminated only by a written agreement signed
by the Bank and the Executive. Provided, however, if the Board determines in
good faith that the Executive is no longer a member of a select group of
management or highly compensated employees, as that phrase applies to ERISA, for
reasons other than death, Disability, retirement, or following a Change in
Control, the Bank may terminate this Agreement. Additionally, the Bank may also
amend this Agreement to conform to written directives to the Bank from its
banking regulators.

Article 9
Miscellaneous

 

 

9.1

Binding Effect. This Agreement shall bind the Executive and the Bank, and their
beneficiaries, survivors, executors, administrators and transferees.

 

 

9.2

No Guarantee of Employment. This Agreement is not a contract for employment. It
does not give the Executive the right to remain as an employee of the Bank, nor
does it interfere with the Bank’s right to discharge the Executive. It also does
not require the Executive to remain an employee nor interfere with the
Executive’s right to terminate employment at any time.

 

 

9.3

Non-Transferability. Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.

 

 

9.4

Tax Withholding. The Bank shall withhold any taxes that are required to be
withheld from the benefits provided under this Agreement. The Executive
acknowledges that the Bank’s sole liability regarding taxes is to forward any
amounts withheld to the appropriate taxing authority(ies).

 

 

9.5

Applicable Law. The Agreement and all rights hereunder shall be governed by the
laws of the State of California, except to the extent preempted by the laws of
the United States of America.

 

 

9.6

Unfunded Arrangement. The Executive and Beneficiary are general unsecured
creditors of the Bank for the distribution of benefits under this Agreement. The
benefits represent the mere promise by the Bank to distribute such benefits. The
rights to benefits are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors. Any insurance on the Executive’s life or other informal funding asset
is a general asset of the Bank to which the Executive and Beneficiary have no
preferred or secured claim.

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9.7

Reorganization. The Bank shall not merge or consolidate into or with another
bank, or reorganize, or sell substantially all of its assets to another bank,
firm, or person unless such succeeding or continuing bank, firm, or person
agrees to assume and discharge the obligations of the Bank under this Agreement.
Upon the occurrence of such event, the term “Bank” as used in this Agreement
shall be deemed to refer to the successor or survivor bank.

 

 

9.8

Entire Agreement. This Agreement constitutes the entire agreement between the
Bank and the Executive as to the subject matter hereof. No rights are granted to
the Executive by virtue of this Agreement other than those specifically set
forth herein.

 

 

9.9

Interpretation. Wherever the fulfillment of the intent and purpose of this
Agreement requires, and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.

 

 

9.10

Alternative Action. In the event it shall become impossible for the Bank or the
Plan Administrator to perform any act required by this Agreement, the Bank or
Plan Administrator may in its discretion perform such alternative act as most
nearly carries out the intent and purpose of this Agreement and is in the best
interests of the Bank.

 

 

9.11

Headings. Article and section headings are for convenient reference only and
shall not control or affect the meaning or construction of any of its
provisions.

 

 

9.12

Validity. In case any provision of this Agreement shall be illegal or invalid
for any reason, said illegality or invalidity shall not affect the remaining
parts hereof, but this Agreement shall be construed and enforced as if such
illegal and invalid provision has never been inserted herein.

 

 

9.13

Notice. Any notice or filing required or permitted to be given to the Bank or
Plan Administrator under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:

 

First National Bank of Northern California

 

975 El Camino Real

 

South San Francisco, CA 94044

 

 

 

 

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

 

 

 

Any notice or filing required or permitted to be given to the Executive under
this Agreement shall be sufficient if in writing and hand-delivered, or sent by
mail, to the last known address of the Executive.

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9.14

Opportunity to Consult with Independent Advisors. The Executive acknowledges
that he has been afforded the opportunity to consult with independent advisors
of his choosing including, without limitation, accountants or tax advisors and
counsel regarding both the benefits granted to him under the terms of this
Agreement and the (i) terms and conditions which may affect the Executive’s
right to these benefits and (ii) personal tax effects of such benefits
including, without limitation, the effects of any federal or state taxes,
Section 280G of the Code, Section 409A of the Code and guidance or regulations
thereunder, and any other taxes, costs, expenses or liabilities whatsoever
related to such benefits, which in any of the foregoing instances the Executive
acknowledges and agrees shall be the sole responsibility of the Executive
notwithstanding any other term or provision of this Agreement. The Executive
further acknowledges and agrees that the Bank shall have no liability whatsoever
related to any such personal tax effects or other personal costs, expenses, or
liabilities applicable to the Executive and further specifically waives any
right for himself or herself, and his or her heirs, beneficiaries, legal
representatives, agents, successor and assign to claim or assert liability on
the part of the Bank related to the matters described above in this Section
9.14. The Executive further acknowledges that he has read, understands and
consents to all of the terms and conditions of this Agreement, and that he
enters into this Agreement with a full understanding of its terms and
conditions.

          IN WITNESS WHEREOF, the Executive and a duly authorized representative
of the Bank have signed this Agreement.

 

 

 

EXECUTIVE:

BANK:

 

 

 

FIRST NATIONAL BANK OF NORTHERN

 

CALIFORNIA

 

 

/s/ David A. Curtis

By:

/s/ Thomas C. McGraw

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

David A. Curtis

Title:

Chief Executive Officer

 

Date:

March 3, 2008

 

 

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x New Designation

o Change in Designation

I, David A. Curtis, designate the following as Beneficiary under the Agreement:

 

 

   Primary:

 

   Esther D. Curtis

100 %

 

 

   

   Contingent:

 

   ___________________________________________________________

_____%

 

 

   ___________________________________________________________

_____%

 

 

Notes:

 

 

 

 

•

Please PRINT CLEARLY or TYPE the names of the beneficiaries.

 

 

 

 

•

To name a trust as Beneficiary, please provide the name of the trustee(s) and
the exact name and date of the trust agreement.

 

 

 

 

•

To name your estate as Beneficiary, please write “Estate of [your name]”.

 

 

 

 

•

Be aware that none of the contingent beneficiaries will receive anything unless
ALL of the primary beneficiaries predecease you.

I understand that I may change these beneficiary designations by delivering a
new written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my death. I
further understand that the designations will be automatically revoked if the
Beneficiary predeceases me, or, if I have named my spouse as Beneficiary and our
marriage is subsequently dissolved.

 

 

 

Name:

David A. Curtis

 

 

 

 

 

 

 

Signature:

/s/ David A. Curtis

Date: March 3, 2008

 

--------------------------------------------------------------------------------

 

 

 

 

 

SPOUSAL CONSENT (Required if Spouse not named beneficiary):

 

 

 

 

I consent to the beneficiary designation above, and acknowledge that if I am
named Beneficiary and our marriage is subsequently dissolved, the designation
will be automatically revoked.

 

 

 

 

Spouse Name:

___________________________

 

 

 

 

 

 

Signature:

____________________________________

Date:

_______

Received by the Plan Administrator (Bank) this 3rd day of March, 2008.

By: /s/ Thomas C. McGraw

--------------------------------------------------------------------------------

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