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AMENDED AND RESTATEDEMPLOYMENT AGREEMENT THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (the "Agreement") "Effective is madeandenteredinto asofthis 3rd day
ofJanuary,2019(the Date"), "Executive"), by andamongThomasJ. Inserra(the on
theonehand,andPacificMercantileBank, "Bank"), a California banking corporation
(the on the other hand (Executive and the Bank collectively,the "Parties").
RECITALS WHEREAS, Pacific MercantileBancorp("PMB") is a bankholding
companyregistered underthe Bank Holding CompanyAct of 1956, as amended,subjectto
the primary supervision andregulationofthe BoardofGovernorsofthe
FederalReserveSystem("FRB"). WHEREAS, the Bank is a California
charteredcommercial bank and wholly-owned subsidiaryofPMB, subjectto theprimary
supervisionandregulationoftheCalifomiaDepartment ofBusinessOversight("CDBO")
andthe FRB by virtue ofits membershipin the FederalReserve Bank of SanFrancisco.
WHEREAS, Executive is currently employed by the Bank pursuant to that certain
"Prior EmploymentAgreementdatedasofMay 31, 2016 (the Agreement");and WHEREAS,the
Bankdesiresto continueto retaintheservicesofExecutiveandExecutive desiresto
continue to provide such servicesto the Bank, upon the terms and subject to the
conditions set forth in this Agreement,which amendsand restatesthe Prior
Agreementin its entirety. NOW, THEREFORE,basedon the foregoingpremisesandin
considerationofthemutual covenantsandrepresentationscontainedherein,the
Partiesheretoagreeas follows: "Em^loyer") 1. Tenn. The Bank (the hereby employs
Executive, and Executive herebyacceptsemploymentwith Employer,underthe
termsofthis Agreement. The term ofthis "Initial Agreementshall be for a period
of three (3) years (the Term") commencingas of the Effective Date,subjectto the
terminationprovisionsofparagraph4. Theterm ofthis Agreement shall be
automaticallyextendedfor one (1) additional year, unlesseither party gives the
other written noticeofnon-renewalnot lessthansix (6)
monthsbeforetheexpirationoftheInitial Term. Theterm ofthis Agreement,asin effect
from time to time in accordancevvith the foregoing,shall "Term". be refen-edto
herein as the The period of time betvveenthe Effective Date and the termination
of the Executive's employment hereundershall be referred to herein as the
"EmploymentPeriod." 2. Employment. (a) Positionsand Reporting. Executive shall
be employedas the Executive Vice President,ChiefCreditOfficer
andChiefRiskOfficer ofthe Bank. During theEmployment Period,Executiveshall
reportdirectly to the ChiefExecutiveOfficer oftheBank. SN'IRM:485961475.3 -1-

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(b) Authority andDuties. Executiveshallexercisesuchauthority,performsuch
executiveduties and functions and dischargesuch responsibilitiesas are
reasonablyassociated vvith Executive'sposition as Executive Vice President,Chief
Credit Officer and Chief Risk Officer, commensuratewith the authority vestedin
Executivepursuantto this Agreementand consistentwith the bylaws ofthe Bank and
ofPMB. During the EmploymentPeriod,Executive shalldevotehis full businesstime,
skill andeffortsto thebusinessofEmployerandits subsidiaries and shall not during
the EmploymentPeriodengagein any otherbusinessactivities, duties,or
pursuitswhatsoever,or directly or indirectly renderany servicesof a
business,commercial,or natureto any other or organization,whetherfor
compensationor otherwise, professional person "Board"). without the prior
written consent of the Board of Directors of Employer (the
Notvvithstandingtheforegoing,Executivemay(i) servein anycapacitywith anycivic,
educational or charitableorganization,or any tradeassociation,without seekingor
obtainingapprovalby the Board, provided such activities and service do not
materially interfere or conflict with the performanceofhis
dutieshereunderand(ii) with theapprovalofthe Boardserveon theboardsof
directorsof other corporationsthat are not involved in commercialbanking or
similar business activities;provided,however,Executiveshall not directly or
indirectly acquire,hold, or retainany beneficialinterestin
anybusinesscompetingwith or similar in natureto the businessofEmployer
exceptpassiveshareholderinvestmentsin otherfinancial institutionsandtheir
respectiveaffiliates which do not exceedthreepercent(3%) of the
outstandingvoting securitiesin the aggregatein anysinglefinancial institution
andits affiliates on a consolidatedbasis. (c) Executiveherebyrepresentsand
agreesthat the servicesto be performed hereunderare of a special,unique,
unusual,extraordinary,and intellectual characterthat gives them a peculiar
value, the loss of which cannotbe reasonablyor adequatelycompensatedin damagesin
an action at lavv. Executivethereforeexpresslyagreesthat Employer,in additionto
any otherrights or remediesthat Employermay possess,shall be entitledto
injunctive and other equitablereliefto preventor remedya breachofthis
Agreementby Executive. 3. CompensationandBenefits. (a) Salary. During the Term
Executiveshall receivean annualbasesalaryof "Base $330,000payablein
equalsemimonthlypayments(the Salary"). SuchBaseSalaryshall be subjectto review
in the eleventh(11th) monthafterthe EffectiveDate,andat eachanniversaryof the
Effective Date thereafter,or during Executive'snormal officer review period, for
possible adjustmentby the ChiefExecutiveOfficer in concurrencevvith the
CompensationCommitteeof theBankbasedon variousfactorsincluding,but not limited
to, marketconditions,theconsolidated resultsofoperationsoftheBankandPMB
andtheperformanceofExecutive,but shall in no event be decreasedfrom the level
set forth aboveduring the Term. All paymentsof BaseSalaryshall be subjectto
applicableadjustmentsfor withholding taxes,pro-rationsfor any partial payment
periodsand suchotherapplicablepayroll proceduresofthe Bank. (b)
SalaryContinuationDuring Disability. IfExecutivefor any reason(except
asexpresslyprovidedbelow) becomestemporarilyor permanentlydisabledso thathe is
unableto perform the duties under this Agreement,Executive shall be paid the
Base Salary otherwise payableto Executivepursuantto subparagraph3(a) ofthis
Agreement,reducedby the amounts receivedby Executivefrom statedisability
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insurancebenefitsthroughpoliciesprovidedby Employer,for a ofsix (6) monthsfrom
the "disability"period dateofdisability. For purposesofthis paragraph3(b), shall
be definedasprovidedin the Employer'sdisability insuranceprogram. (c)
CashIncentivePayments.Executiveshall be eligible to participatein the
ManagementAnnual IncentivePlan. Executive'sbonus,ifany, shall be paid in onelump
sumto Executiveat suchtime as otherexecutivebonusesarepaid. The
ChiefExecutiveOfficer retains the discretionto determinevvhethera
pro-ratabonusis appropriateif the Executiveis terminated or leavesthe
employoftheBankprior to the annualdeterminationofbonuses.All cashincentive
paymentsshall be subjectto applicableadjustmentsfor applicablewithholding
andpayroll taxes. Notwithstandingany provision of any incentive plan or
arrangement,no right of continued employmentor anymodificationofthe"at will"
natureofExecutive'semploymentwith Employer shall be
confen-eduponExecutivethereunderor resulttherefrom. (d) Insurance Benefits.
During the Employment Period, Executive shall receive such group life,
disability, and health (including medical, dental, vision and
hospitalization),accidentand disability insurancecoverageand other benefitswhich
Employer extends,as a matterof policy, to all of its executiveemployees,exceptas
otherwiseprovided herein,andshall be entitledto participatein all
benefitandotherincentiveplansofthe Employer, on the samebasisasotherlike
employeesofEmployer. (e) Vacation. Executiveshall be entitledto four (4) weeksof
annualvacation during the EmploymentPeriodat his thenexistingrate of
BaseSalary,which shall be scheduled in Executive'sdiscretion, subject to and
taking into account applicable banking laws and regulationsand businessneeds.
Vacationwill accruein accordancewith the Bank'spersonnel policies. (f) Business
Expenses. During the Employment Period, Employer shall promptly reimbursethe
Executivefor all documentedordinaryand necessarybusinessexpenses incurredby
Executivein theperformanceofhis dutiesunderthis Agreement.Executiveshall also be
reimbursedfor reasonableexpensesincurred in activities associatedwith promoting
the businessof Employer,including expensesfor entertainment,travel,
conventions,andeducational programs. All such expensesdescribedabove will be
subject to compliancewith applicable policiesof Employer. All
suchreimbursementsshall be madeuponpresentationandapprovalof receipts,invoicesor
otherappropriateevidenceof suchexpensein accordancewith the policies Employerin
effectfrom time to time. (g) Professional License Expenses. During the
Employment Period, Employer shall reimbursethe Executive for all
documentedordinary and necessaryexpenses incurred by Executive in maintaining
professionalbusinesslicensesand certificationsthat he possessesasofthe
dateofthis Agreement. All suchexpensesdescribedabovewill be subjectto
compliancewith applicablepolicies of Employer. All suchreimbursementsshall be
madeupon presentationand approvalof receipts,invoicesor
otherappropriateevidenceof suchexpensein accordancevvith the policies Employerin
effect from time to time. (h) Car Allovvance. The Bank shall provide the
Executive with a monthly automobileallowanceof $950.00per monthduring the
EmploymentPeriod. Executiveshall (A) SN'Dy4:485961475.3 -j-

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obtain and maintain public liability insuranceand property
damageinsurancepolicies with insurer(s)acceptableto Employerandwith
suchcoveragein suchamountsasmay be reasonably acceptableto Employer,and(B)
providecopiesof suchpolicies,endorsementsor otherevidence of
insuranceacceptableto Employer. Any amountspaid by Executive for excessinsurance
coveragerequiredby Employershall be reimbursed. (i) Incentive Compensation.
Executive shall have the opportunity to participatein an annualincentiveplan
uponthe termsandsubjectto the conditionsapprovedby theBoardofDirectors(or duly
authorizedcommitteethereof)ofPMB. Any suchannualincentive plan may be
amended,suspendedor terminated,in whole or in part, by the BoardofDirectors(or
duly authorizedcommitteethereof)of PMB in its solediscretion. 4. Terminationof
Employment. (a) Terminationfor Cause. The Board of Bank may terminateExecutive's
"Cause" "Cause." employment hereunderfor or without For purposesof this
Agreement "Cause" terminationfor shall mean(i) convictionof a crime directly
relatedto his employment hereunder, (ii) conviction of a crime involving moral
turpitude, (iii) willful and gross mismanagementof the businessand affairs of
Employer,(iv) willful and intentionalviolation of any stateor federalbankingor
securitieslaws, or of the bylaws, rules, policies or resolutionsof Bank, or
therulesor regulationsofor anyfinal orderissuedby the FRB, the CDBO, or
theFederal "FDIC"), DepositInsuranceCorporation(the (v) any violation ofthe
Employer'spolicy against harassment,equal employment opportunity policy, drug
and alcohol policy and/or the confidentiality agreementthat Employeeshall
executeat the commencementof his employment and(vi)
breachofanymaterialprovisionofthis Agreement. For puqiosesofthis Agreement,no
"willful" act, or the failure to act, on Executive'spart shall be considered
unlessdone,or omitted to be done,not in good faith and without
reasonablebeliefthatthe actionor omissionwas in the best interestsof Employer.
Executiveshall not be deemedto have beenterminatedfor Cause unlessand until
there shall have beendeliveredto him a notice of termination. In the event
employmentof Executiveis terminatedpursuantto this subparagraph4(a),
Employershall have no further liability to Executiveotherthan for
compensationaccruedand for reimbursementof businessexpensesincurredthroughthe
dateof terminationbut not yet paid. Terminationunder this
subparagraph4(a)shallnotprejudiceanyremedythattheEmployermayhaveat law, in
equity, or underthis Agreement. (b) Terminationby EmployerWithout Causeor by
Executivefor GoodReason. "Cause" Employer may terminate the employment of
Executive vvithout (as defined in subparagraph4(a)) at any time during the
Employment Period by giving written notice to Executivespecifyingthereinthe
effective dateof termination. Executiveshall havethe right at anytime to
terminatehis employmentwith theBankfor anyreasonor for no reason.For purposes of
this Agreement, and subject to Employer's opportunity to cure as provided in
Section4(c) hereof,Executiveshall have"GoodReason"to terminatehis
employmenthereunder if suchterminationshall be the resultof: (i) a material
diminution during the Employment Period in the Executive'stitle, duties or
responsibilitiesas set forth in Section2 hereofvvithout Executive's consent;
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(ii) a material breachby Employer of the compensationand benefits
provisionssetforth in Section3 hereof; (iii) a material breach by Employer of
any material terms of this Agreement;or (iv) the relocationof
Executive'sprincipal placeof employmentto any locationmorethan50 miles from the
Bank'sheadquartersat the Effective Date. (c) NoticeandOpportunityto Cure.
Notvvithstandingthe foregoing,it shall be aconditionprecedentto Employer'sright
to terminatethis Agreementundersubparagraph4(a)(vi) "Good andExecutive'sright to
terminatehis employmentfor Reason"that (1) the party alleging a breachshall
first havegiven the otherparty written noticestatingwith specificity the
reasonfor the termination("breach")and (2) ifsuch breachis susceptibleofcureor
remedy,a period of30 daysfrom and afterthe giving ofsuchnoticeto curethe breach.
Ifthe breachcannotreasonably be cured or remediedvvithin 30 days, the period for
remedyor cure shall be extendedfor a reasonabletime (not to exceed30
days),providedthe party againstwhom a breachis allegedhas madeandcontinuesto
makea diligent effort to effect suchremedyor cure. (d) TerminationUpon Death or
PermanentDisability. This Agreementshall "permanent terminateautomaticallyupon:
(i) the deathof Executive,and (ii) the disability" of Executiveas suchterm is
defined in the disability insuranceprovided by Employer, or if such insuranceis
not providedby Employer,the term shall meanthatExecutivehasbeendeemedby a
medical careproviderto indefinitely be unableto perform the
essentialfunctionsofExecutive's position with or without accommodation.If the
EmploymentPeriodis terminatedby reasonof thepermanentdisability
oftheExecutive,Employershall give 30-days'advancewritten noticeto thateffectto
the Executiveor his representative.EmployerandEmployeeshall comply vvith any
obligationstheymayrespectivelyhave,understateor federallaw, to
interactregardingreasonable accommodations. 5. Consequencesof Termination. The
following are the benefitsto vvhich Executive is
entitleduponterminationofemploymentin all positionsvvith
Employer,andsuchpaymentsand benefitsshall be the exclusivepaymentsand benefitsto
vvhich Executiveis entitled upon such termination. Exceptin the caseof
terminationofemploymentby Employerfor Cause,or dueto
death,thepost-terminationpayments(otherthanthoserequiredby law) andbenefitsshall
only be provided if the Executive first enters into a form of general
releaseagreementreasonably satisfactoryto EmployerreleasingEmployerfrom
anyandall claims,knownandunknown,related to the Executive'semploymentvvith the
Bank. (a) TerminationWithoutCauseor for GoodReason.In theeventoftermination
"Cause" ofExecutive'semployment(i) by Employerwithout (otherthanupondeathor
permanent "Good disability), or (ii) by Executivefor Reason",Executiveshall be
entitled to the following severancepay: (i) SeverancePay- a lump
sumamountequalto tvvelve (12) monthsof theExecutive'sannualBaseSalary. This lump
sumpaymentshall be paid no laterthanthirty (30) daysafterthe final day
ofExecutive'semploymentwith Employer. SMRH:485961475.3 -5-

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(b) TerminationUpon Disability. In the eventof terminationofExecutive's
employmenthereunderby Employeron accountof permanentdisability, Employershall
pay to Executivethe accruedBaseSalaryand accruedand
unusedvacationeamedthroughthe dateof disability. Suchpaymentshall be madeno
laterthansixty (60) daysafterthe dateofdisability. (c) TeiTnination Upon Death.
In the event of termination of Executive's employmenthereunderon account of
Executive'sdeath, Employer shall pay to Executive's beneficiaryor
beneficiariesor his estate,asthe casemay be, theaccruedBaseSalaryandaccrued
andunusedvacationeamedthroughthe dateof death. Suchpaymentshall be madeno
laterthan sixty (60) daysafterthe dateofdeath. In
addition,Executive'sbeneficiary(ies)or his estateshall be entitled to the
paymentof benefitspursuantto any life insurancepolicy of Executive, as
providedfor in Section3(d) above. Executive'sbeneficiaryor estateshallnot
berequiredto remit to Employerany paymentsreceivedpursuantto any life
insurancepolicy purchasedpursuantto Section3(d) above. (d) Termination for
Causeor Due to End of the Term. In the event the employmentof Executiveis
terminatedby Employerfor Cause,no severancepaymentor benefit shall be provided.
In the event the employmentof Executiveis terminatedas a result of the
expirationoftheTerm, Executiveshall be entitledto no severancepaymentor
benefitofanykind notwithstandinganyprovisionto thecontraryin the
Employer'semployeemanualor policiesthen in effect, except as to matters such as
coverageunder The ConsolidatedOmnibus Budget ReconciliationAct of 1985 ("COBRA")
andunusedvacationrequiredby law withoutreferenceto suchmanualor policies. (e)
Accrued Rights. Notwithstanding the foregoing provisions of this Section5, in
the eventof terminationofExecutive'semploymenthereunderfor any reasonor for no
reason,Executiveshall beentitledto paymentofanyunpaidportionofhis
BaseSalarythrough the effective date of termination,paymentof any
unreimbursedexpensesincurred pursuantto Sections3(f) or
3(g)above,andpaymentofany accruedbut unpaidbenefitssolely in accordance with
thetermsofany incentivebonusor employeebenefitplan or programofEmployer. (f)
Non-assignability.NeitherExecutivenor any otherpersonor entity acting on his
behalfor as his representativeshall haveany povveror right to
transfer,assign,anticipate, hypothecate,mortgage,commute,modify, or
othervviseencumberin advanceany of the rights or benefitsofExecutiveunderthis
Section5, nor shall any of said rights or benefitsbe subjectto seizurefor the
paymentof any debts,judgments,alimony or separatemaintenance,owed by Executiveor
any other personor entity, or be transferableby operationof law in the event of
bankruptcy, insolvency or othervvise. The terms of this Section 5(f) shall not
affect the interpretationofany otherprovisionofthis Agreement. (g) Regulatory
Restrictions. Notwithstanding anything to the contrary containedin this
Agreement: (i) If Executive is removed and/or permanently prohibited from
participating in the conductof Employer'saffairs by an order issuedunder Section
8(e)(4) or 8(g)(l) ofthe FederalDeposit InsuranceAct ("FDIA") (12 U.S.C.
1818(e)(4)and (g)(l)), all obligationsof Employer underthis Agreementshall
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order, exceptfor the paymentof BaseSalarydue and owing on the effectivedateof
said order, reimbursementof businessexpensesincurred as of the effective date of
terminationand such mattersrequiredby law. (ii) If Executive is suspendedand/or
temporarily prohibited from participating in the conductof Employer'saffairs by
a notice servedunder Section 8(e)(3) or 8(g)(l) ofthe FDIA (12 U.S.C.
1818(e)(3)and (g)(l)), all obligationsof Employer underthis Agreementshall be
suspendedasofthedateofservice,unlessstayedby appropriateproceedings. If the
chargesin the notice are dismissed,Employer shall (i) pay Executiveall or part
of the compensationvvithheld while its contractobligationswere suspendedand (ii)
reinstate(in whole or in part) any of its obligationswhich weresuspended. (iii)
If Bank is in default(asdefinedin Section3(x)(l) oftheFDIA), all
obligationsunderthis Agreementshall terminateasofthe dateofdefault,but the
vestedrights of thepartiesshall not be affected. (iv) All obligationsunderthis
Agreementshall be terminated,exceptto the extenta determinationis madethat
continuationofthecontractis necessaryfor the continued "Director"), operationof
Employer(i) by the directorof the FDIC or his or her designee(the at thetime
theFDIC entersinto anagreementto provideassistanceto or on behalfofEmployerunder
the authority containedin 13(c) of the FDIA; or (ii) by the Director, at the
time the Director approvesa supervisorymergerto resolveproblemsrelatedto
operationof Employer vvhen the Employeris determinedby the Directorto be in an
unsafeandunsoundcondition. Any rights of the
Executivethathavealreadyvested,hovvever,shall not be affectedby suchaction. (v)
No paymentsshallbemadepursuantto this paragraph5 or anyother provision herein in
violation of the requirementsof Section 18(k) of the FDIA (12 U.S.C. §1828(k)).
(h) IRC Section 280G. In no event shall the payment(s)describedin this
paragraph5 exceedthe amountpermittedby Section280GoftheIntemalRevenueCodeof
1986, asamendedf'Section280G"). Therefore,ifthe
aggregatepresentvalue(determinedasofthedate ofthechangeofcontrol in
accordancevvith theprovisionsof Section280G)ofboththe severance paymentandall
otherpaymentsto Executivein the natureof compensationvvhich are contingent on a
changein ownershipor effectivecontrolofBankor PMB or in the ownershipofa
substantial "Aggregate '"parachute portion of the assetsof the Bank (the
Severance")vvould result in a asdefinedunderSection280G,thenthe
AggregateSeveranceshall not be greaterthan payment," "base "base an
amountequalto 2.99 multiplied by Executive's amount"for the period," as those
terms are defined under Section280G. In the eventthe AggregateSeveranceis
requiredto be reducedpursuantto this subparagraph5(h), the lastpaymentsin time
shall be reducedfirst. (i) Conditionsto SeveranceBenefits. The Bank shall have
the right to seek repaymentof the severancepaymentsandbenefitsor to
terminatepaymentsor benefitsprovided by this paragraph5 (i) in
theeventthattheExecutivefails to honor,in accordancewith theirterms, the
provisionsofparagraphs6 or 9 hereofor(ii) to the extentsuchpaymentsor
benefitsvvould violate Section18(k) ofthe FDIA (12 U.S.C. §1828(k)).
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6. Confidentialitv. Executive agrees that he will not at any time during the
EmploymentPeriodor atanytime thereafterfor anyreason,in anyfashion,form or
manner,except as requiredby law to comply vvith legal process,eitherdirectly or
indirectly, divulge, discloseor communicateto anyperson,firm, corporationor
otherbusinessentity, in anymannerwhatsoever, any financial information or trade
or businesssecretsof Employer, its subsidiariesor affiliates including,without
limiting the generalityoftheforegoing,thetechniques,methodsor systemsof its
operationor management,any information regardingits financial
matters,customerlists, computersoftware,anyofits customerslists,
governmentalrelationsstrategiesandmethodologies, customercontacts,underwriting
methodology, loan program configuration and qualification
strategies,marketingstrategiesand its mannerof operation,its plansor
othermaterial "Busmess"). proposals, data(the Theprovisionsofthis Section6 shall
not apply to (i) informationdisclosed in the performanceofExecutive'sdutiesto
Employerbasedon his good faith beliefthatsucha disclosureis in
thebestinterestsofEmployer;(ii) informationthatis, atthetime ofthedisclosure,
public knowledge;(iii) infoiTnation disseminatedby Employer to third parties in
the ordinary courseofbusiness;(iv) informationlawfully receivedby Executivefrom
a third party who, based upon inquiry by Executive,is not boundby a
confidentialrelationshipto Employeror otherwise improperly receivedthe
information; or (v) informationdisclosedundera requirementof law or asdirectedby
applicablelegalauthorityhavingjurisdictionoverExecutive. In theeventExecutive is
requiredby lavv to disclosesuchinformationdescribedabove,Executivewill
provideEmployer and their counselvvith immediatenotice of such requestso that
they may considerseekinga protective order. Notwithstandingthe foregoing,
Executive may disclose such information concerningthe businessor operationsof
Employerand its subsidiariesand affiliates as may be required by the FRB, CDBO,
FDIC or other regulatory agencyhaving jurisdiction over the operationsof
Employerin connectionwith an examinationof Bank or PMB or otherproceeding
conductedby suchregulatoryagency. Executive agreesthat all written, printed or
electronicmaterial, notebooksand records including, without limitation,
computerdisks,usedand/ordevelopedby Executivefor Employer during the Term ofthis
Agreement,otherthanExecutive'spersonaladdresslists, telephonelists, notesand
diaries, are solely the property of Employer, and that Executivehas no right,
title or interest therein. Upon termination of Executive's employment, Executive
or Executive's representativeshall promptly deliver possessionof all such
materials (including any copies thereof)to the Bank. Notwithstandingany
otherprovision in this Agreement,Executiveshall not be held liable for a
disclosureof Employer'strade secret(s)that is made either (i) in
confidenceeither to a governmentofficial, either directly or indirectly, or to
an attorney solely for the purposeof reportingor investigatinga
suspectedviolation ofthelaw; or (ii) in a complaintor otherdocument filed in a
lawsuit so long asthe filing is madeunderseal. To the extentExecutivefiles a
lavvsuit allegingretaliationby the Employerfor reportinga suspectedviolation
ofthe lavv, Employeemay disclosethe trade secretto Executive'sattorneyand use
the tradesecretinformation in a court proceedingso long as Employeefiles any
documentcontainingthe trade secretunder seal and doesnot
disclosethetradesecretexceptpursuantto court order. 7. Key-manLife
Insurance.Employershall havethe right to obtainandhold a "key- man" life
insurancepolicy on the life of Executivevvith the Bank as beneficiaryof the
policy. SIVIRFI:485961475.3 -8-

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Executiveagreesto provide any infoi-mation requiredfor the issuanceof suchpolicy
and submit himselftoany physicalexaminationrequiredfor suchpolicy. 8.
UnsecuredGeneralCreditor. NeitherExecutivenor anyotherpersonor entity shall have
any legal right or equitablerights interestsor claims in or to any property or
assetsof Employerundertheprovisionsofthis Agreement.No assetsofEmployershall be
heldunderany trust for the benefitof Executiveor any otherpersonor entity or
held in any way as securityfor the fulfilling
oftheobligationsofEmployerunderthis Agreement.All ofEmployer'sassetsshall be and
remainthe general,unpledged,unrestrictedassetsofEmployer. Employer'sobligations
under this Agreementare unfi.inded and unsecuredpromises,and to the extent such
promises involve the paymentof money,they arepromisesto pay moneyin the future.
Executiveandany personor entity claiming throughhim shall be
unsecuredgeneralcreditorswith respectto any rights or benefitshereunder. 9.
BusinessProtectionCovenants. (a) CovenantNot to Compete. Executiveagreesthat he
will not, during the EmploymentPeriod,voluntarily or involuntarily, directly or
indirectly, (i) engagein any banking or financial productsor
servicebusiness,loan originationor deposit-takingbusinessor any other
businesscompetitivevvith thatoftheBankor its subsidiariesor
affiliates("CompetitiveBusiness") vvithin OrangeCounty, Los AngelesCounty,
SanDiego Countyand SanBernardinoCounty(the "Market Area"), (ii) directly or
indirectly own any interestin (other than lessthanthreepercent (3%)
ofanypublicly tradedcompanyor mutualfund), manage,operate,control,be employedby,
or provide managementor consultingservicesin any capacityto any firm,
coi-poration,or other entity (otherthan Employeror its subsidiariesor
affiliates) engagedin any CompetitiveBusiness in the Market Area, or (iii)
directly or indirectly solicit or otherwiseintentionally causeany
employee,officer, or memberofthe Boardor any ofits subsidiariesor affiliates to
engagein any actionprohibitedunder(i) or (ii) ofthis paragraph9(a). (b)
InducingEmployeesTo LeaveTheBank;EmploymentofEmployees.Any attempton the part
ofthe Executiveto induceothersto leaveEmployer'semploy, or the employ of any of
its subsidiariesor affiliates, or any effort by Executiveto interfere with
Employer's relationshipwith its other employeesvvould be harmful and damagingto
Employer. Executive agreesthat during the EmploymentPeriod and for a period of
twelve (12) monthsthereafter, Executivewill not in any vvay, directly or
indirectly: (i) induceor attemptto induceany employee ofthe Employeror any of
its subsidiariesofaffiliates to quit employmentwith Employeror the
relevantsubsidiaryor affiliate; (ii) otherwiseinterferewith or disrupt the
relationshipsbetween Employerand its subsidiariesand affiliates and their
respectiveemployees;(iii) solicit or recruit any employeeof Employeror any
subsidiaryor affiliate or any former employeeof Employeror any subsidiaryor
affiliate. (c) NonsolicitationofBusiness. For a period oftwelve (12) monthsfrom
the date of termination of employment, Executive vvill not, using Employer's
trade secretsor confidential information, divert or attemptto divert from
Employer or any of its subsidiariesor affiliates,anybusinessEmployeror a
relevantsubsidiaryor affiliate hadenjoyedor solicitedfrom its
customers,borrovvers,depositorsor investorsduringthetwelve(12) monthsprior to
termination ofhis employment. SN'IRFI:485961475.3 -9-

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(d) Bank's Ownership of Inventions. To the extent that Executive has
intellectual property rights of any kind in any pre-existing vvorks which are
subsequently incorporatedin any work or work productproducedin
renderingservicesto Bank, PMB or any their subsidiariesor affiliates,
ExecutiveherebygrantsBank a royalty-free, irrevocable,world- wide,
perpetualnon-exclusivelicense(with the right to sublicense),to
make,havemade,copy, modify, use, sell, license, disclose,publish or
othervvisedisseminateor transfer such subject matter. Similarly,
Executiveagreesthat all inventions,discoveries,improvements,tradesecrets,
original vvorks of authorship,developments,formulae, techniques,processes,and
knovv-hovv, whetheror not patentable,andwhetheror not reducedto practice,that
are conceived,developed or reducedto practiceduringExecutive'semploymentwith
Employer,eitheraloneorjointly with others,ifon Employer'stime,
usingEmployer'sfacilities, or relatingto Employershall be ovvned exclusivelyby
the Bank, and Executiveherebyassignsto the Bank all ofExecutive'sright, title
andinterestthroughoutthe world in all suchintellectualproperty.
Executiveagreesthatthe Bank shall be the soleownerof all domesticand
foreignpatentsor otherrights pertainingthereto,and further agreesto executeall
documentsthat the Bank reasonablydeterminesto be necessaryor convenient for use
in applying for, prosecuting, perfecting, or enforcing patents or other
intellectual property rights, including the executionof any
assignments,patentapplications,or otherdocumentsthattheBankmay
reasonablyrequest. This provision is intendedto apply to the extentpermittedby
applicablelavv andis expresslylimited by Section2870oftheCaliforniaLabor
Code,which is setforth in its entiretyin Exhibit A to this Agreement. By
signingthis Agreement, Executiveacknowledgesthat this Paragraphshall
constitutevvritten notice of the provisionsof Section2870. (e)
Bank'sOvvnershipofCopyrights. Executiveagreesthat all original works of
authorshipnot othervvise within the scope of paragraph9(d) above that are
conceivedor developedduring Executive'semploymentwith Employer,either
aloneorjointly with others,if on Employer'stime, using Employer facilities, or
relating to Employer, or its subsidiariesor "vvorks affiliates, are for hire" to
the greatestextent permitted by law and shall be ovvned exclusivelyby the Bank,
and Executiveherebyassignsto the Bank all ofExecutive'sright, title,
andinterestin all suchoriginal works ofauthorship. Executiveagreesthat the Bank
shall be the sole owner of all rights pertainingthereto,and further agreesto
executeall documentsthat the Bankreasonablydeterminesto be necessaryor
convenientfor establishingin the Bank'snamethe copyrightto any suchoriginal
vvorks ofauthorship. 10. Resignations.The
Executiveagreesthatuponterminationofemployment,for any reason,he will submit his
resignationsfrom all offices vvith the Bank and PMB and all of their
respectivesubsidiariesandaffiliates. 11.
OtherAgreements.ThePartiesfurtheragreethatto the extentofanyinconsistency
betvveenthis Agreementand any employeemanualor policy of Employer,that the
termsof this Agreementshall supersedethetermsof suchemployeemanualor policy. 12.
Notice. For the purposesof this Agreement,notices, demandsand all other
communicationsprovided for in this Agreementshall be in vvriting and shall be
personally delivered or (unlessothervvisespecified) mailed by United
Statescertified or registeredmail, return receiptrequested,postageprepaid,or
sentby facsimile,providedthat the facsimile cover SMRM:485961475.3 -10-

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sheetcontainsa notationofthedateandtime oftransmission,and shall be
deemedreceived:(i) if personallydelivered,uponthe dateofdeliveryto the
addressofthepersonto receivesuchnotice, (ii) ifmailed in accordancewith the
provisionsofthis Section12, two (2) businessdaysafterthe dateplacedin the United
Statesmail, (iii) if mailedotherthan in accordancewith the provisions ofthis
Section12 or mailedfrom outsidetheUnited States,uponthedateofdeliveryto
theaddress of the personto receivesuchnotice, or (iv) if given by facsimile,when
sent. Notices shall be addressedasfollows: IftotheEmployer: Pacific
MercantileBank 949 SouthCoastDrive Third Floor CostaMesa,Califomia, 92626 Attn:
ChiefExecutiveOfficer Ifto the Executive,to: Mr. ThomasJ. Inserra
30312ChapalaCourt LagunaNiguel,CA 92677 or to
suchotherrespectiveaddressesasthePartiesheretoshalldesignateto theotherby like
notice, providedthatnoticeofa changeofaddressshall be effectiveonly
uponreceiptthereof. 13. Arbitration. Any disputeor controversyarisingunderor in
cormectionvvith this Agreement, the inception or termination of the Executive's
employment, or any alleged discriminationor tort claim relatedto such
employment,including issuesraisedregardingthe Agreement'sformation,
inteipretation or breach, shall be settled exclusively by binding arbitration.
Theonly exceptionto therequirementofbindingarbitrationshall befor claimsarising
underthe National Labor RelationsAct which are broughtbeforethe National Labor
Relations Board, claims for medical and disability benefitsunderthe Califomia
Workers' Compensation Act, EmploymentDevelopmentDepartmentclaims,or as may
otherwisebe requiredby stateor federal law. Hovvever, nothing herein shall
prevent the Executive from filing and pursuing proceedingsbeforethe California
Departmentof Fair Employmentand Housing, or the United StatesEqual
EmploymentOpportunity Commission(althoughif Executivechoosesto pursuea claim
follovving the exhaustionofsuchadministrativeremedies,thatclaim would be
subjectto the provisionsofthis Agreement).In additionto
anyotherrequirementsimposedby law, thearbitrator selectedshall be a
retiredCalifomiaSuperiorCourtJudge,or an otherwisequalified individual to vvhom
the partiesmutually agree,and shall be subjectto disqualificationon the
samegroundsas vvould apply to ajudgeofsuchcourt. All rules ofpleading(including
the right ofdemurrer),all rules of evidence,all rights to resolution of the
dispute by meansof motions for summary judgmentjudgmenton the
pleadings,andjudgmentunderCodeofCivil ProcedureSection631.8 shall apply andbe
observed.The arbitratorshall havethe immunity ofajudicialofficer from civil
liability when acting in the capacity of an arbitrator, which immunity
supplementsany other existing immunity. Likewise, all communicationsduring or in
connectionwith the arbitration SMRH:485961475.3 -11-

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proceedingsare privileged in accordancewith Cal. Civil Code Section47(b). As
reasonably requiredto allow full useand benefitofthis agreement'smodificationsto
the Act's procedures, thearbitratorshall extendthetimessetby theAct for the
giving ofnoticesandsettingofhearings. Avvards shall includethe
arbitrator'swritten reasonedopinion. Resolutionofall disputesshall be
basedsolely uponthe lavv governingthe claimsanddefensespleaded,and the
arbitratormay not invoke any basis(includingbut not limited to,
notionsof'justcause")otherthansuchcontrolling law. By this binding
arbitrationprovision,both ExecutiveandEmployergive up their respective right to
trial byjury ofany claim onemayhaveagainstthe other. 14. Waiver of Breach. Any
vvaiver of any breachof this Agreementshall not be construedto be a
continuingvvaiver or consentto any subsequentbreachon the part eitherofthe
Executiveor of Employer. No delayor omissionin the exerciseof any power,
remedy,or right hereinprovidedor otherwiseavailableto any party shall impair or
affect the right of suchparty thereafterto exercisethe same. Any extensionof
time or other indulgencegrantedto a party hereundershall not othervvisealteror
affectany power,remedyor right of any otherparty, or the obligationsof the party
to whom suchextensionor indulgenceis grantedexceptas specifically waived. 15.
Non-Assignment;Successors.Neitherparty heretomay assignhis or its rights or
delegatehis or its dutiesunderthis Agreementwithout theprior written
consentoftheotherparty; provided,hovvever,that: (i) this Agreementshall inure to
the benefit of and be binding uponthe successorsandassignsofEmployeruponany
saleofall or substantiallyall ofEmployer'sassets, or upon any
merger,consolidationor reorganizationof Bank vvith or into any othercoiporation,
all as thoughsuchsuccessorsandassignsofthe Bank andtheir
respectivesuccessorsandassigns vvere the Bank; and(ii) this Agreementshall
inureto the benefitofandbe bindinguponthe heirs, assignsor
designeesofExecutiveto the extentofany paymentsdueto themhereunder.As used in
this Agreement,theterm "Bank" or "Employer" shall be deemedto referto any
suchsuccessor or assignofthe Bank or Employerreferredto in theprecedingsentence.
16. Withholding of Taxes. All paymentsrequiredto be madeby Employer to the
Executiveunderthis Agreementshallbesubjectto
thewithholdinganddeductionofsuchamounts, if any, relating to tax, and other
payroll deductionsas Employer may reasonablydetermineit shouldwithhold
and/ordeductpursuantto any applicablelavv or regulation(including, but not
limited to, Executive'sportion ofsocial securitypaymentsand incometax
withholding) now in effect or vvhich may becomeeffectiveany time during theterm
of this Agreement. 17. Section409A. If Executivedetermines,in good faith, that
any compensationor benefitsprovidedby this Agreementmayresultin the
applicationofSection409A ofthe Internal "Code"), RevenueCodeof 1986, as
amended(the Executiveshall provide written noticethereof (describing in
reasonabledetail the basis therefor) to Employer, and Employer shall, in
consultationwith Executive,modify this Agreementin the
leastrestrictivemannernecessaryin order to excludesuch compensationfrom the
definition of "deferredcompensation"within the meaningof suchSection409A of the
Codeor in orderto comply with the provisionsof Section 409A ofthe
Code,otherapplicableprovision(s)ofthe Codeand/orany rules,regulationsor other
regulatoryguidanceissuedundersuchstatutoryprovisionsandvvithoutanydiminutionin
thevalue ofthe paymentsto Executive. Any paymentsthat, underthe termsofthis
Agreement,qualify for SMRH:485961475.3 -12-

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the "short-term" defen-al exception under Treasury RegulationsSection
1.409A-l(b)(4), the "separation pay" exceptionunder TreasuryRegulationsSection
1.409A-l(b)(9)(iii) or another exceptionunder Section409A of the Code will be
paid underthe applicableexceptionsto the greatestextent possible. Each
paymentunder this Agreementshall be treated as a separate paymentfor purposesof
Section409A ofthe Code. Anything in this Agreementto the contrary
notwithstanding,if at the time of Executive'sseparationfrom service within the
meaningof Section409A ofthe Code,Executiveis considereda
"specifiedemployee"within the meaningof
Section409A(a)(2)(B)(i)oftheCode,andifany paymentthatExecutivebecomesentitledto
under this Agreementis considereddeferredcompensationssubjectto
interest,penaltiesandadditional tax imposedpursuantto Section409A of the Code as
a result of the application of Section 409A(a)(2)(B)(i)of the Code,thenno
suchpaymentshall be payableprior to the datethat is the earlierof(i) six
monthsandonedayExecutive'sseparationfrom serviceor (ii) Executive'sdeath. In no
event shall the date of terminationof Executive'semploymentbe deemedto occur
until Executiveexperiencesa "separationfrom service" vvithin the meaningof
Section409A of the Code, and notvvithstandinganything containedherein to the
contrary, the date on which such separationfrom
servicetakesplaceshallbetheDateofTermination.All reimbursementsprovided
underthis Agreementshall be providedin accordancevvith the requirementsof
Section409A of the Code,including, whereapplicable,the requirementthat (A) the
amountof expenseseligible for reimbursementduring one calendaryear vvill not
affect the amountof expenseseligible for reimbursementin any othercalendaryear;
(B) the reimbursementof an eligible expensevvill be madeno later than the last
day of the calendaryear following the calendaryear in which the expenseis
incurred;and (C) the right to any reimbursementwill not be subjectto liquidation
or exchangefor anotherbenefit. Notwithstandingthe foregoing,Employermakesno
representation or covenantto ensurethat the paymentsand benefitsunderthis
Agreementare exemptfrom, or compliantwith, Section409A ofthe Code. 18.
Indemnification.To thefullest extentpermittedby lavv, regulation,andtheArticles
of IncorporationandBylavvs ofBankandPMB, the Bank and/orPMB asappropriateshall
pay as andvvhenincurredall expenses,including legal andattorneycosts,incurredby,
or shall satisfyas and vvhen enteredor levied ajudgmentor fine renderedor levied
against,Executivein an action broughtby a third party againstExecutive(whetheror
not the Bankis joinedasa partydefendant) to impose a liability or penalty on
Executive for an act allegedto have been committed by Executivewhile an officer
oftheBankand/orPMB; provided,however,thatExecutivewasacting in good faith,
vvithin what Executive reasonablybelieved to be the scope of Executive's
employmentor authorityand for a purposewhich the Executivereasonablybelievedto
be in the best interestsof the Bank or the Bank's shareholdersand the best
interestsof PMB or PMB's shareholders,andin the caseofacriminal
proceeding,thatthe Executivehadno reasonablecause to believe that
Executive'sconduct vvas unlavvful. Paymentsauthorized hereunderinclude
amountspaid and expensesincurredin settling any suchactionor threatenedaction.
All rights hereunderare limited by any applicablestateor Federallavvs. Anything
hereinto the contrary notvvithstanding,this Agreementis subjectto the
requirementsand limitations set forth in state and federal laws, rules,
regulationsor ordersregardingthe indemnificationand prepaymentof legal
expenses,including Section 18(k) of the FDIA and Part 359 of the FDIC's Rules
and Regulationsor anysuccessorregulationthereto. Further,andto
theextentthatthereis anyconflict betvveenstateandfederallavv, federallaw shall
supersedeandcontrol. SMRH:485961475.3 -13-

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19. Severability. To theextentanyprovisionofthis Agreementor portionthereofshall
be invalid or unenforceable,it shall be considereddeletedtherefrom(but only for
so long as such provisionor portionthereofshallbe invalid or
unenforceable)andthe remainderofsuchprovision andofthis Agreementshall be
unaffectedand shall continuein full force andeffectto the fullest
extentpermittedby law ifenforcementwould not frustratetheoverall
intentoftheParties(assuch intent is manifestedby all
provisionsoftheAgreementincluding suchinvalid, void, or otherwise
unenforceableportion). 20. Payment. All amountspayableby the Bank to
Executiveunderthis Agreement shall bepaidpromptly on the datesrequiredfor
suchpaymentin this Agreementwithout noticeor demand. Any salary,benefitsor
otheramountspaid or to be paid to Executiveor providedto or in respectof the
Executivepursuantto this Agreementshall not be reducedby amountsowing from
Executiveto Bank. 21. Expenses.Eachparty shall pay his or its ovvn feesand
expensesincurredby him or it in the drafting, reviewandnegotiationofthis
Agreement. 22. Authority. Each of the Partiesheretoherebyrepresentsthat each has
taken all actionsnecessaryin orderto executeanddeliverthis Agreement. 23.
Counterparts.This Agreementmay be executedin oneor morecounterparts,each of
which shall be deemedto be an original but all of which togethervvill
constituteone and the sameinstrument. 24. GoverningLaw. This Agreementshall be
construed,interpretedand enforcedin accordancewith the lavvs of the Stateof
California, vvithout giving effect to the choiceof lavv principlesthereof. 25.
Entire Agreement;Amendments.This Agreementandwritten agreements,ifany,
enteredinto concurrentlyherewithconstitutethe entireagreementby Employer,on the
onehand, and Executive on the other hand with respectto the subject matter
hereofand mergesand supersedesany and all prior
discussions,negotiations,agreementsor understandingsbetween Executive and
Employer with respectto the subject matter hereof, whether vvritten or oral,
including the Prior Agreement. This Agreementmay be amendedor modified only by a
written instrumentexecutedby Executiveand Employer. With regardto
suchamendments,alterations, or modifications,facsimile signaturesshall be
effective as original signatures.Any amendment, alteration, or modification
requiring the signatureof more than one party may be signed in counterparts. 26.
FurtherActions. Eachparty agreesto perform any further acts and executeand
deliverany furtherdocumentsreasonablynecessaryto carry out theprovisionsofthis
Agreement. 27. Time of Essence. Time is of the essenceof each and every term,
condition, obligationandprovisionhereof. 28. No Third PartyBeneficiaries.This
Agreementandeachandeveryprovisionhereof is for the exclusivebenefitofthe
Partiesandnot for the benefitofanythird party. SMRM:485961475.3 -14-

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29. Headings. The headingsin this Agreementare inserted only as a matter of
convenience,andin no vvay define,limit, or extendor interpretthe scopeofthis
Agreementor of anyparticularprovisionhereof. 30. RegulatoryApproval ofthis
Agreement. The Partiesacknowledgeand agreethat entry into this Agreementis
andpaymentofseveranceunderparagraph5 maybe subjectto receipt of approval from
the FRB pursuantto Section 1828(k) and Part 359 of the FDIC Rules and
Regulations,the FDIC and the CDBO. If suchapproval is requiredbut not obtainedor
if such approval is conditionedupon modificationsspecifiedby the FRB, the FDIC
or the CDBO the Partiesagreeto negotiatein good faith to amendthis Agreementto
provide for substantially equivalenttermsconsistentwith regulatoryrequirements.
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IN WITNESS WHEREOF,the Partieshaveexecutedthis Agreementas ofthe datefirst
written above. PACIFIC MERCANTILE BANK By: ^ Name: ThomasM. Vertin Title:
PresidentandChiefExecutiveOfficer EXECUTIVE: ^j ThomasJ. Inserra
SMRJ-I:485961475.3 -16-

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EXHIBIT A CaliforniaLaborCode§2870 Employmentagreements;assignmentof rights (a)
Any provisionin an employmentagreementvvhich providesthatan employeeshall
assign,or offer to assign,any of his or her rights in an inventionto his or her
employershall not apply to an inventionthat the employeedevelopedentirely on his
or her own time without usin^ the employer's equipment, supplies, facilities, or
trade secret information except for those inventionsthat either: (1) Relateat
the time ofconceptionor reductionto practiceofthe inventionto the
employer'sbusiness,or actual or demonstrablyanticipatedresearchor developmentof
the employer;or (2) Resultfrom any work performedby the employeefor the
employer. (b) To the extent a provision in an employmentagreementpurports to
require an employeeto assignan invention otherwiseexcludedfrom being requiredto
be assignedunder subdivision(a), theprovisionis againstthe public policy ofthis
stateandis unenforceable. SMRH:485961475.3 -17-

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