Exhibit 10.39


FIRST
NATIONAL BANK OF NORTHERN CALIFORNIA


SPLIT
DOLLAR LIFE INSURANCE AGREEMENT


          THIS
SUPPLEMENTAL LIFE INSURANCE AGREEMENT (the “Agreement”) is adopted this 1st
day of January, 2008, by and between FIRST NATIONAL BANK OF
NORTHERN CALIFORNIA, a bank located in South San Francisco, California (the “Bank”), and DAVID
A. CURTIS (the “Executive”).  


          The
purpose of this Agreement is to retain and reward the Executive, by dividing
the death proceeds of certain life insurance policies which are owned by
the Bank on the life of the Executive with the designated beneficiary of the
Executive. The Bank will pay the life insurance premiums from its general
assets. 


          Death
proceeds payable under this Agreement shall be paid solely by the Insurer from
the proceeds of any Policy(ies) on the life of the Insured. In no event shall
the Bank be obligated to pay a death benefit under this Agreement from its
general funds. Should an Insurer refuse or be unable to pay death proceeds
endorsed to Insured under the express terms of this Agreement, or should the
Bank cancel the Policy(ies) for any reason, Executive’s Beneficiary(ies) shall
not be entitled to a death benefit.


Article 1
Definitions


	
 

	
 


	
 

	
Whenever used in this Agreement, the following terms
 shall have the meanings specified:


	
 

	
 


	
1.1

	
“Bank’s Interest” means the benefit set forth
 in Section 2.1.


	
 

	
 


	
1.2

	
“Beneficiary” means each designated person,
 or the estate of the deceased Executive, entitled to benefits, if any, upon
 the death of the Executive.


	
 

	
 


	
1.3

	
“Beneficiary Designation Form” means the form
 established from time to time by the Plan Administrator that the Executive
 completes, signs and returns to the Plan Administrator to designate one or
 more Beneficiaries.


	
 

	
 


	
1.4

	
“Board” means the
 Board of Directors of the Bank as from time to time constituted.


	
 

	
 


	
1.5

	
“Effective
 Date” shall mean January 1, 2008.


	
 

	
 


	
1.6

	
“Executive’s Interest” means the benefit set
 forth in Section 2.2.


	
 

	
 


	
1.7

	
“Insurer” means the insurance company issuing
 the Policy on the life of the Executive.


	
 

	
 


	
1.8

	
“Net Death Proceeds”
 means the total death proceeds of the Policy minus the greater of 





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(i) the cash surrender value or (ii) the aggregate
 premiums paid by the Bank.


	
 

	
 


	
1.9

	
“Normal Retirement Age” means the Executive
 attaining age 65.


	
 

	
 


	
1.10

	
“Policy” or “Policies” means the
 individual insurance policy or policies adopted by the Bank for purposes of
 insuring the Executive’s life under this Agreement.


	
 

	
 


	
1.11

	
“Separation from Service” shall mean that the
 Executive’s service, as an employee and independent contractor, to the Bank
 and any member of a controlled group as defined in Section 414 of the Code to
 which the Bank belongs, has terminated for any reason, other than by reason
 of a leave of absence approved by the Bank or the death of the Executive.





Article 2

Policy
Ownership/Interests/Insurer/Assignment


	
 

	
 


	
2.1

	
Bank’s Interest. The Bank shall
 own the Policies and shall have the right to exercise all incidents of
 ownership, including the right to terminate the Policy(ies) without the
 consent of the Executive. The Bank shall be the beneficiary of the remaining
 death proceeds of the Policies after the Executive’s Interest is determined
 according to Section 2.2 below.


	
 

	
 


	
2.2

	
Executive’s Interest. Upon
 Executive’s death prior to a Separation from Service, the Executive, or the
 Executive’s assignee, shall have the right to designate the Beneficiary of
 One Million Eight Hundred Thirty-Seven Thousand Nine Hundred and Eleven
 Dollars ($1,837,911), not to exceed the Net Death Proceeds of the Policy. The
 Executive shall also have the right to elect and change settlement options
 with respect to the Executive’s Interest by providing written notice to the
 Bank and the Insurer, provided such change to settlement options is not in
 conflict with Section 409A of the Internal Revenue Code of 1986, as amended
 (the “Code”). Executive shall not have an interest in the Policy upon a
 Separation from Service.


	
 

	
 


	
2.3

	
Offer to Purchase. If the Bank
 discontinues a Policy during the course of this Agreement, the Bank shall
 give the Executive at least thirty (30) days to purchase such Policy. The
 purchase price shall be the fair market value of the Policy, as determined
 under Treasury Reg. §1.61-22(g)(2) or any subsequent applicable authority.
 Such notification shall be in writing.


	
 

	
 


	
2.4

	
Insurer. The Insurer shall be
 bound only by the terms of the Policy. Any payments the Insurer makes or
 actions it takes in accordance with the Policy shall fully discharge it from
 all claims, suits and demands of all entities or persons. The Insurer shall
 not be bound by or be deemed to have notice of the provisions of this
 Agreement.


	
 

	
 


	
2.5

	
Assignment. The Executive may
 assign without consideration all of the Executive’s interests in the Policy
 and in this Agreement to any person, entity or trust. In the event the
 Executive transfers all of the Executive’s interest in the Policy, then all
 of the Executive’s interest in the Policy and in the Agreement shall be
 vested in the Executive’s transferee, who shall be substituted as a party
 hereunder and the Executive shall have no further interest in the Policy or
 in this Agreement.





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Article 3
Premiums and Imputed Income


	
 

	
 


	
3.1

	
Premium Payment. The Bank shall
 pay all premiums due on all Policies. 


	
 

	
 


	
3.2

	
Economic Benefit. The Bank shall determine the economic
 benefit attributable to the Executive based on the life insurance premium
 factor for the Executive’s age multiplied by the aggregate death benefit
 payable to the Beneficiary. The “life insurance premium factor” is the
 minimum factor applicable under guidance published pursuant to Treasury Reg.
 § 1.61-22(d)(3)(ii) or any subsequent authority.


	
 

	
 


	
3.3

	
Imputed Income. The Bank shall
 impute the economic benefit to the Executive on an annual basis, by adding
 the economic benefit to the Executive’s W-2, or if applicable, Form 1099.





Article 4
General
Limitations


	
 

	
 


	
4.1

	
Termination for Cause. Notwithstanding any provision of this
 Agreement to the contrary, the Executive shall forfeit any right to a benefit
 under this Agreement if the Bank terminates the Executive’s employment for
 cause. Termination of the Executive’s employment for “Cause” shall mean
 termination because of personal dishonesty, willful misconduct, breach of
 fiduciary duty involving personal profit, intentional failure to perform
 stated duties, willful violation of any law, rule or regulation (other than
 traffic violations or similar offenses) or final cease-and-desist order or
 material breach of any provision of the Agreement. For purposes of this
 paragraph, no act or failure to act on the Executive’s part shall be
 considered “willful” unless done, or omitted to be done, by the Executive not
 in good faith and without reasonable belief that the Executive’s action or
 omission was in the best interest of the Bank.


	
 

	
 


	
4.2

	
Removal. Notwithstanding any provision of this
 Agreement to the contrary, the Executive’s rights in the Agreement shall
 terminate 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 (“FDIA”).


	
 

	
 


	
4.3

	
Suicide or Misstatement. No benefits shall be payable if the
 Executive commits suicide within two years after the date of this Agreement,
 or if the insurance company denies coverage (i) for material misstatements of
 fact made by the Executive on any application for life insurance purchased by
 the Bank, or (ii) for any other reason; provided, however that the Bank shall
 evaluate the reason for the denial, and upon advice of legal counsel and in
 its sole discretion, consider judicially challenging any denial.





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Article 5
Beneficiaries


	
 

	
 


	
5.1

	
Beneficiary. The Executive shall
 have the right, at any time, to designate a Beneficiary(ies) to receive any
 benefits payable under the 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 Agreement of the Bank in
 which the Executive participates.


	
 

	
 


	
5.2

	
Beneficiary Designation; Change.
 The Executive shall designate a Beneficiary by completing and signing the
 Beneficiary Designation Form, and delivering it to the Bank or its designated
 agent. 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 Bank’s rules and procedures, as in effect from time to time. Upon the
 acceptance by the Bank of a new Beneficiary Designation Form, all Beneficiary
 designations previously filed shall be cancelled. The Bank shall be entitled
 to rely on the last Beneficiary Designation Form filed by the Executive and
 accepted by the Bank prior to the Executive’s death.


	
 

	
 


	
5.3

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


	
 

	
 


	
5.4

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


	
 

	
 


	
5.5

	
Facility of Payment. If the Bank
 determines in its discretion that a benefit is to be paid to a minor, to a
 person declared incompetent, or to a person incapable of handling the
 disposition of that person’s property, the Bank may direct payment of such
 benefit to the guardian, legal representative or person having the care or
 custody of such minor, incompetent person or incapable person. The Bank may
 require proof of incompetence, minority or guardianship as it may deem
 appropriate prior to distribution of the benefit. Any payment of a benefit
 shall be a payment 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 payment amount.





Article 6
Claims And Review Procedure


	
 

	
 

	
 


	
6.1

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


	
 

	
 

	
 


	
 

	
6.1.1

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


	
 

	
 

	
 


	
 

	
6.1.2

	
Timing of Bank Response. The Bank
 shall respond to such claimant within 90 days after receiving the claim. If
 the Bank determines that special circumstances require additional time for
 processing the claim, the Bank 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 Bank expects to render its decision.





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6.1.3

	
Notice of Decision. If the Bank
 denies part or all of the claim, the Bank shall notify the claimant in
 writing of such denial. The Bank 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.


	
 

	
 

	
 

	
 








	
 

	
 

	
 

	
 


	
6.2

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


	
 

	
 

	
 

	
 


	
 

	
6.2.1

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


	
 

	
 

	
 

	
 


	
 

	
6.2.2

	
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 Bank
 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.


	
 

	
 

	
 

	
 


	
 

	
6.2.3

	
Considerations on Review. In
 considering the review, the Bank 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.


	
 

	
 

	
 

	
 


	
 

	
6.2.4

	
Timing of Bank’s Response. The
 Bank shall respond in writing to such claimant within 60 days after receiving
 the request for review. If the Bank determines that special circumstances
 require additional time for processing the claim, the Bank 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 Bank expects to render its decision.


	
 

	
 

	
 

	
 


	
 

	
6.2.5

	
Notice of Decision. The Bank shall
 notify the claimant in writing of its decision on review. The Bank 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;





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(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 7
Amendments And Termination


	
 

	
 


	
 

	
                      This
 Agreement may be amended or terminated only by a written agreement signed by
 the Company and the Executive. In the event that the Bank decides to maintain
 the Policy after termination of the Agreement, the Bank shall be the direct
 beneficiary of the entire death proceeds of the Policy.





Article 8
Administration


	
 

	
 


	
8.1

	
Plan Administrator Duties. This
 Agreement shall be administered by a Plan Administrator which shall consist
 of the Board, or such committee or persons as the Board may choose. 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
 this Agreement, provided that such amendments and interpretations are made at
 all times in compliance with Section 409A of the Code.


	
 

	
 


	
8.2

	
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.


	
 

	
 


	
8.3

	
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 this Agreement and the rules and regulations promulgated
 hereunder shall be final and conclusive and binding upon all persons having
 any interest in this Agreement, provided that such decisions or actions are
 in compliance with Section 409A of the Code.


	
 

	
 


	
8.4

	
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.


	
 

	
 


	
8.5

	
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 Base
 Salary of the Executive, 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.





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Article 9
Miscellaneous


	
 

	
 


	
9.1

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


	
 

	
 


	
9.2

	
No Guarantee of Employment. This
 Agreement is not an employment policy or contract. It does not give the
 Executive the right to remain an Executive 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 Executive nor interfere with the Executive’s right
 to terminate employment at any time.


	
 

	
 


	
9.3

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


	
 

	
 


	
9.4

	
Reorganization. The Bank shall not
 merge or consolidate into or with another company, or reorganize, or sell
 substantially all of its assets to another company, firm or person unless
 such succeeding or continuing company, 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 company.


	
 

	
 


	
9.5

	
Notice. Any notice or filing
 required or permitted to be given to the Bank 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 94080


	
 








	
 

	
 


	
 

	
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 or 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.


	
 

	
 


	
9.6

	
Entire Agreement. This Agreement,
 along with the Executive’s Beneficiary Designation Form, constitutes the
 entire agreement between the Bank and the Executive as to the subject matter
 hereof. No rights are granted to the Executive under this Agreement other
 than those specifically set forth herein.





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          IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
indicated above.


	
 

	
 

	
 


	
DAVID A. CURTIS:

	
FIRST NATIONAL BANK OF NORTHERN CALIFORNIA


	 	 	 
	
/s/ David A. Curtis

	
By: 

	
/s/ Thomas C. McGraw


	


	 	



	
Executive

	
Title: 

	
Chief Executive Officer


	
 

	
Date:

	
March 3, 2008





25








	
 

	
 


	
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 this 3rd day of March, 2008  


	
 

	
 


	
By:

	
Thomas C. Mc
 Graw


	
 

	 


	
 

	
 


	
Title:

	
Chief
 Executive Officer


	
 

	 





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Insurer: Beneficial Life Insurance Company


POLICY ENDORSEMENT


Owner: First
National Bank of Northern California 

Insured: David A. Curtis

Policy number: BL2184740


          Pursuant
to the terms of the First National Bank of Northern California SPLIT DOLLAR
LIFE INSURANCE AGREEMENT dated January 1, 2008, the undersigned
Owner requests that the above-referenced policy issued by the Insurer provide
for the following beneficiary designation and limited contract ownership rights
to the Insured:  


          1.
Upon the death of the Insured, Insurer shall pay proceeds in one sum to the
Owner, its successors or assigns, to the extent of its interest in the policy.
It is hereby provided that the Insurer may rely solely upon a statement from
the Owner as to the amount of proceeds it is entitled to receive under this
paragraph. 


          2.
Any proceeds at the death of the Insured in excess of the amount paid under the
provisions of the preceding paragraph shall be paid in one sum to: 


Esther D. Curtis, wife 





PRIMARY BENEFICIARY,
RELATIONSHIP/SOCIAL SECURITY NUMBER


	
 


	



	
CONTINGENT BENEFICIARY,
 RELATIONSHIP/SOCIAL SECURITY NUMBER





The exclusive right to change the beneficiary
for the proceeds payable under this paragraph, to elect any optional method of
settlement for the proceeds paid under this paragraph which are available under
the terms of the policy and to assign all rights and interests granted under
this paragraph are hereby granted to the Insured. The sole signature of the
Insured shall be sufficient to exercise said rights. The Owner retains all
contract rights not granted to the Insured under this paragraph.


          3.
It is agreed by the undersigned that this designation and limited assignment of
rights shall be subject in all respects to the contractual terms of the policy.


          4.
Any payment directed by the Owner under this endorsement shall be a full
discharge of the Insurer, and such discharge shall be binding on all parties
claiming any interest under the policy.


The undersigned for the Owner is signing in a
representative capacity and warrants that he or she has the authority to bind
the entity on whose behalf this document is being executed.


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Signed at 975 El Camino Real, South San
Francisco, CA this 3rd day of March, 2008.  


	
 

	
 

	
 


	
INSURED:

	
 

	
OWNER:


	
 

	
 

	
 


	
 

	
 

	
First
 National Bank of Northern California 


	
 

	
 

	
 


	
/s/ David A. Curtis 

	
 

	
/s/ Thomas C. McGraw


	


	
 

	



	
David A. Curtis

	
 

	
Thomas C. McGraw, CEO


	
 

	
 

	
 


	
 

	
 

	
March 3, 2008


	
 

	
 

	



	
 

	
 

	
Date





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