HERITAGE BANK OF COMMERCE DEFERRED FEE AGREEMENT

Exhibit 10.13

HERITAGE BANK OF COMMERCE
DEFERRED FEE AGREEMENT

THIS AGREEMENT is made effective as of June 30, 1997 by and between HERITAGE BANK OF COMMERCE (the "Bank"), and Jack Peckham, (the "Director").

RECITALS

WHEREAS, to encourage the Director to remain a member of the Bank's Board of Directors, the Bank desires to provide to the Director an opportunity to defer fees and obtain certain benefits related thereto.

NOW, THEREFORE, in consideration of the services to be rendered by the Director to the Bank in the future and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

Article I. Definitions

1.1 Definitions Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

1.1.1 Change in Control The term "Change in Control" shall mean (i) when any "person", as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act") (other than the Employer, a subsidiary thereof or an employee benefit plan of Employer, including any trustee of such plan acting as trustee) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Employer representing fifty percent (50%) or more of the combined voting power of the Employer's then outstanding securities, where such person's beneficial ownership of the Employer's securities was not initiated by the Employer or approved by the Employer's Board of Directors; or (ii) the occurrence of a transaction requiring shareholder approval, and involving the sale of all or substantially all of the assets of the Employer or the merger of the Employer with or into another corporation, where such merger was not initiated by the Employer and in which Employer is not the surviving entity; or (iii) a change in the composition of the Board of Directors of the Employer, as a result of which fewer than a majority of the directors are Incumbent Directors (which "Incumbent Directors" shall mean directors who either (A) are directors of the Employer as of the date hereof, or (B) are elected, or nominated for election, to the Board of Directors of the Employer with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Employer)); or (iv) any liquidation or dissolution of the Employer.

1.1.2 Code The term "Code" shall mean the Internal Revenue Code of 1986, as amended. References to a Code section shall be deemed to be to that section as it now exists and to any successor provision.

1.1.3 Distribution Date The term "Distribution Date" means the earlier of ten (10) years after the date of this Agreement or upon the Director's Termination of Service as defined below.

1.1.4. Deferral Account The term "Deferral Account" means the account established by the Bank on its books to record the amount of fees deferred by the Director and interest accrued thereon.

1.1.5 Deferral Period The term "Deferral Period" means the period of time beginning with the date of this Agreement and ending with the earlier of the Distribution Date or the Director's Termination of Service.

1.1.6 Benefit Period The term "Benefit Period" means the period of time beginning with the earlier of the Distribution Date or the Director's Termination of Service and ending with payment in full of the Director's Deferral Account balance.

1.1.7 Election Form The term "Election Form" means the Form attached as Exhibit A.

1.1.8 Fees. The term "Fees" means the total fees payable to the Director.

1.1.9 Termination of Service The term "Termination of Service" means the Director's ceasing to be a member of the Bank's Board of Directors for any reason whatsoever.

Article 2. Deferral Election

2.1 Initial Deferral Election The Director shall make an initial deferral election under this Agreement by completion and delivery to the Bank of the Election Form attached hereto as Exhibit A. The Election Form shall set forth the amount of Fees to be deferred, the form of benefit payment and designation of beneficiary. The Election Form shall be delivered to the Bank not later than June 30, 1997 and effective to defer only those Fees earned for services performed after June 30, 1997.

2.2 Deferred Election Changes The Director may modify the amount of Fees to be deferred and/or form of benefit payment under Section 2.1 by filing a subsequent signed Election Form with the Bank within twenty (20) days prior to the end of a calendar year preceding the calendar year in which the Fees are to be deferred and/or the change in benefit payment is to apply and in each case by obtaining written approval of the Board of Directors of the Bank. Such modified deferrals and/or form of benefit payment shall not be effective until the calendar year following the year in which the subsequent Election Form is received by the Bank.

Article 3. Deferral Account

3.1 Deferral Account The Bank shall establish a Deferral Account on its books for the Director, and shall credit to the Deferral Account the following amounts:

3.1.1 Deferrals The Fees deferred by the Director on the first day of the month following the month in which the Fees were earned.

3.1.2 Interest On the last day of each calendar month during the Deferral Period only, and immediately prior to the payment of any benefits, the Deferral Account will be credited with interest earned during that month. The applicable interest rate shall be eight percent (8%) per annum through December 31, 2006 and at the same rate for each year thereafter unless changed prior to the beginning of each subsequent year by resolution of the Bank's Board of Directors, in its sole discretion. Interest earned will be calculated by taking the applicable rate of interest multiplied by the principal balance on the last day of each month, divided by 365 days, multiplied by the number of days in the month. At the end of each calendar year, the interest earned during the year will be posted to the account and only then become principal and entitled to future interest accrual.

3.2 Statement of Accounts The Bank shall provide to the Director at each regularly scheduled Board of Directors meeting, a monthly statement setting forth the Deferral Account balance.

3.3 Unsecured Creditor Status The Deferral Account is solely an accounting device for measuring amounts to be paid under this Agreement. The Deferral Account is not a trust fund of any kind and the director has no rights greater than those of a general unsecured creditor of the Bank for purposes of the payment of benefits under this Agreement. The Director's rights are not subject in any manner to the anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by the Director or the Director's creditors or beneficiaries.

Article 4. Deferral Benefits

4.1 Termination of Service Benefit Upon the earlier of the Director's Termination of Service or the Distribution Date, the Bank shall pay to the Director the balance in the Deferral Account in the manner elected by the Director on the Election Form.

4.2 Change in Control Benefit Upon termination of the Director's service in connection with and either prior to or following a Change in Control, the Bank shall pay to the Director the balance in the Deferral Account within thirty (30) days after such occurrence.

4.3 Death During Deferral Period If the Director dies during the Deferral Period, the Bank shall pay to the Director's beneficiary the balance in the Deferral Account and the amount which would have been deferred by the Director for the entire ten (10) years from the date of this Agreement, at the same time and in the same amounts that would have been paid to the Director had the Director survived.

4.4 Death During Benefit Period If the Director dies after benefit payments have commenced under this Agreement but