EXHIBIT 10.98

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made effective as of April 17, 2013
(“Commencement Date”), by and between RAYMOND DELLERBA (hereinafter “Executive”)
and PACIFIC MERCANTILE BANCORP, a California corporation and parent holding
company of the Bank (“Bancorp”) and PACIFIC MERCANTILE BANK, a California state
chartered banking corporation, (hereinafter “the Bank”, Bancorp and the Bank
jointly referred to as the “Bank Entities”).

RECITALS

A. The Bank and Executive originally entered into a written Employment
Agreement, effective as of April 23, 1999 and amended and restated effective
April 1, 2011 (hereinafter referred to as “the Original Agreement”). A true and
correct copy of the Original Agreement is attached hereto as Exhibit 1 and
incorporated herein by reference.

B. On August 24, 2012, Executive and the Bank Entities made and entered into an
agreement (hereinafter referred to as “the Subsequent Agreement”) pursuant to
which, inter alia, as of the close of business on that day, Executive resigned
and relinquished his position as President of the CEO of the Bank, and thus
relinquished his duties and powers, including, without limitation his signing
and lending authority, as President and CEO of the Bank. Concurrent with such
resignation and relinquishment by Executive, the Bank appointed Executive as,
and Executive agreed to and did assume the position and duties of Vice Chairman
of the Bank. A true and correct copy of the Subsequent Agreement is attached
hereto as Exhibit 2 and incorporated herein by reference.

C. Pursuant to the concurrently executed Agreement Regarding Employment
Agreement, the Bank Entities and Executive terminated the Original Agreement,
the Subsequent Agreement and any other outstanding employment and/or
compensation contracts and/or agreements and in its stead entered into this
Employment Agreement.

D. Pursuant to the concurrently executed Agreement Regarding Employment
Agreement, Executive retired, resigned and relinquished his position as
President and Chief Executive Officer (“CEO”) of Bancorp effective April 17,
2013.

E. The Bank Entities desire to continue their right to the services of Executive
in the capacities described below, on the terms and conditions hereinafter set
forth, and Executive is willing to continue such employment on such terms and
conditions.

NOW THEREFORE, the parties enter into this Agreement and agree as follows:

1. Effective April 17, 2013, Executive continues as an officer with the Bank
Entities in the position of Founder and CEO Emeritus, with the title of Vice
Chairman. The position of Founder and CEO Emeritus will carry the duties of
business development and strategic counsel to the Board, all as directed by the
Chief Executive Officer and the Chairman of the Boards of the Bank Entities, for
a period of two (2) years (hereinafter, “Period of Employment.”)

2. The Period of Employment shall not be continued beyond two (2) years without
the express, mutual agreement of Bancorp and Executive.

3. Executive shall continue to serve as a member of the Bank and Bancorp’s
Boards of Directors. Unless otherwise agreed by the parties, if Executive
resigns from his employment or is terminated for any reason, or when the Period
of Employment set forth is Paragraph 2 of this Agreement expires, Executive
agrees to resign immediately from the Board of Directors and all committees or
other positions held with the Bank Entities or their affiliates, effective as of
the last date of employment.

4. Compensation.

(a) Base Salary. Executive will receive an annualized, gross base salary of
$150,000, subject to all applicable deductions and withholdings, and payable in
installments in accordance with Bancorp’s regular payroll schedule. Executive’s
salary shall be reviewed annually, and in no event be reduced below $150,000.

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(b) Bonus. The Executive will be eligible to receive incentive compensation for
business development activities on the same terms and conditions as other
employees of the Bank, as defined in Bank policies and procedures as amended
from time to time. In addition, the Executive may be considered for a
performance bonus on an annual basis, as determined by and in the discretion of
the Chief Executive Officer of the Bank Entities and the Boards of Directors.

(c) Stock Options. Stocks options previously granted to Executive will continue
to vest pursuant to the terms and conditions of the respective grant instruments
and the Company’s stock option plans.

(d) Automobile Benefit. Executive will continue the use of the automobile owned
or leased by the Bank Entities that is currently in use by the Executive during
the Term of this Agreement. In addition to providing Executive with the use of
the automobile purchased by the Bank Entities, the Bank Entities shall reimburse
Executive for all reasonable automobile related expenses incurred by him in the
performance of his duties.

(e) Health & Welfare Benefits. During the Period of Employment, Executive shall
be entitled to participate, on the same terms and at the same level as other
executives, in all health and welfare benefit plans and programs and all
retirement, deferred compensation, life insurance, and similar plans and
programs generally available to other executives or employees of the Bank as in
effect from time to time, subject to any legally required restrictions specified
in such plans and programs provided, however, that nothing contained in this
section shall be interpreted to require the Bank to maintain any specific health
or welfare plan.

(f) Supplemental Executive Retirement Plan. Executive will continue to receive
benefits pursuant to the Supplemental Executive Retirement Plan (“SERP”), a copy
of which is attached hereto as Exhibit 3. The parties expressly acknowledge and
agree that the Executive is fully vested under the SERP, and executive’s
retirement benefit is $25,562.50 per month for 180 months commencing on
February 1, 2013.

g. Vacation. During the Period of Employment, the Executive shall be entitled to
six (6) weeks paid vacation per year, provided, however that such vacation shall
accrue and be scheduled and taken in accordance with the Company’s standard
vacation policies applicable to Company’s executives. Executive shall also be
entitled to all other holiday and leave pay generally available to other
executives of the Company.

h. Club Membership. As of July 1, 2013, the Executive shall offer for sale his
membership in Shady Canyon Golf Club, the proceeds of which sale shall be paid
to the Bank Entities pursuant to prior agreement. Executive shall provide the
Bank Entities with prompt written notice of all offers to purchase the
membership, and the Bank Entities shall decide whether any offers should be
accepted. Dues and reasonable business expenses at the Shady Canyon Golf Club
shall be reimbursed until the sale is complete.

5. Executive shall be provided an office in addition to assistance by a
secretary, reimbursement for reasonable business related expenses incurred in
the completion of his duties as assigned by the Chief Executive Officer, and
reimbursement for the expense of annual continuing education at Sheshunoff
Affiliation Group.

6. Executive shall be indemnified to the fullest extent permitted by law against
claims asserted against him personally arising out of or related to the business
of the Company or Executive’s services for the Company. Company shall provide
directors’ and officers’ liability insurance coverage, including indemnification
as Director, in an amount reasonably determined by the Board of Directors for
all officers and directors.

7. Approval, enforcement and viability of this Agreement is expressly
conditioned upon review and approval by the Federal Deposit Insurance
Corporation (“FDIC”), the Federal Reserve System by and through the Federal
Reserve Bank of San Francisco and any other appropriate agencies upon which
approval is required.

8. Continuation During Disability. If Executive for any reason (except as
expressly provided below) becomes temporarily or permanently disabled so that he
is unable to perform the duties under this Agreement, Executive shall be paid
the Base Salary otherwise payable to Executive pursuant to subparagraph 3(a) of
this Agreement, reduced by the amounts received by Executive from disability
insurance benefits through policies provided by Employer, for a period of six
(6) months from the date of disability. For purposes of this paragraph 3(b),
“disability” shall be defined as provided in the Employer’s disability insurance
program.

 

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9. Termination Upon Death or Permanent Disability. Except as required by law and
as provided in Section 4e above, and Section 8 above, and in this section, the
employment of Executive and all benefits and any other rights of Executive shall
be terminated by the death or permanent disability of Executive. For the
purposes of this Agreement, “permanent disability” is defined as (i) the
Executive being absent from work for 180 calendar days in any 12 month period by
reason of illness or incapacity (whether physical or otherwise) or (ii) the
Board of Directors, in consideration of the advice of a qualified physician
licensed in the state of California, reasonably determines that the Executive is
unable to perform his duties, services and responsibilities hereunder by reason
of illness or incapacity (whether physical or otherwise) for a total of 90
calendar days in any 12 month period during the Period of Employment. The
employment of Executive shall terminate upon the expiration of not less than
thirty (30) days’ written notice from Bancorp to Executive unless, prior to the
expiration of such period, Executive shall have recommenced his duties hereunder
on a full time basis and has produced to Bancorp a doctor’s release confirming
his fitness to fulfill such duties for the foreseeable future. For the purposes
of this Agreement, termination by reason of death or permanent disability shall
be deemed to be for Cause. Upon termination for death or permanent disability,
Executive or his estate shall (a) be paid a lump sum cash payment, payable
within 10 days, equal to the sum of (i) any accrued but unpaid base salary,
(ii) any earned but unpaid incentive or bonus compensation in respect of the
most recent fiscal year preceding Executive’s termination and (iii) a pro-rated
portion of the target annual incentive for the current fiscal year, if any, and
(b) be entitled to receive such employee benefits, if any, to which Executive
may be entitled under the employee benefit plans and arrangements of the
Company. In the event Executive’s employment is terminated for Permanent
Disability, he shall, so long as his Permanent Disability continues, remain
eligible for all benefits provided under any long-term disability programs of
the Company in effect at the time of such termination, subject to the terms and
conditions of any such programs, as the same may be changes, modified, or
terminated with respect to all senior management personnel of the Company.

10. Confidentiality and Non-Competition. Executive acknowledges and recognizes
the highly competitive nature of the businesses of the Company and its
affiliates, and accordingly agrees as follows:

(a) During the Period of Employment, Executive will not, directly or indirectly,
(i) engage in any business for Executive’s own account that competes with the
business of the Company or its affiliates (including, without limitation,
businesses which the Company or its affiliates have specific plans to conduct in
the future and as to which Executive is aware of such planning), (ii) enter the
employ of, or render any services to, any person engaged in any business that
competes with the business of the Company or its affiliates, (iii) acquire a
financial interest in any person engaged in any business that competes with the
business of the Company or its affiliates, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent, trustee
or consultant, or (iv) interfere with business relationships (whether formed
before or after the date of this Agreement) between the Company or any of its
affiliates and customers, suppliers, partners, members, or investors of the
Company or its affiliates.

(b) Notwithstanding anything to the contrary in this Agreement, Executive may,
directly or indirectly, own, solely as an investment, securities of any person
in the business of the Company or its affiliates which are publicly traded on a
national or regional stock exchange or over the counter market if Executive
(i) is not a controlling person of, or a member of a group which controls, such
person and (ii) does not, directly or indirectly, own five percent (5%) of any
class of securities of such person.

(c) Executive will not at any time (whether during or after his employment with
the Company), unless compelled by lawful process, disclose or use for his own
benefit or purposes or the benefit or purposes of any other person, firm,
partnership, joint venture, association, corporation, or affiliates, any trade
secrets, or other confidential data or information relating to customers,
development programs, costs, marketing, trading., investment, sales activities,
promotion, credit and financial data, financing methods or plans of the Company
or of any subsidiary or affiliate of the Company; provided that the foregoing
shall not apply to information that is not unique to the Company, or which is
generally known to the industry or the public other than as a result of
Executive’s breach of this covenant. Executive agrees that upon termination of
his employment with the Company for any reason, he will return to the Company
immediately all memorandum, books, papers, plans, information, letters, and
other data, and all copies thereof or therefrom, in any way relating to the
business of the Company and its affiliates, except that he may retain personal
notes, notebooks and diaries that do not contain confidential information of the
type described in the preceding sentence.

 

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11. Executive has been advised to seek the advice of an attorney regarding the
legal effect of this Agreement prior to signing it. Executive specifically
acknowledges that the Executive is entering into this Agreement voluntarily and
has not been coerced into signing this Agreement.

12. This Agreement is personal in its nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this agreement or
any rights or obligations hereunder; provided, however that in the event of a
merger, consolidation, or transfer or sale of all or substantially all of the
assets of the Company with or to any other individual(s) or entity, this
Agreement shall, subject to the provisions hereto, be binding upon and inure to
the benefit of such successor and such successor shall discharge and perform all
the promises, covenants, duties and obligations of the Bank Entities hereunder.

13. This Agreement may be amended, changed, or modified only by a written
document signed by all parties hereto. No waiver of this Agreement or of any of
the promises, obligations, terms, or conditions hereof shall be valid unless it
is written and signed by the party against whom the waiver is to be enforced.

14. This Agreement is made and entered into in the State of California, and
shall in all respects be interpreted, enforced and governed under the laws of
said State. The language of all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning, and not strictly for or
against any of the parties, by virtue of the identity, interest or affiliation
of its preparer.

15. Should any provision of this Agreement be declared or be determined by any
court to be illegal or invalid, the validity of the remaining parts, terms or
provisions shall not be affected thereby and said illegal or invalid part, term
or provision shall be deemed not to be part of this Agreement.

16. Executive specifically acknowledges that Bancorp has advised Executive to
retain counsel to have this Agreement reviewed and explained to him.

17. This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. Signatures obtained via facsimile and/or scanned and obtained
via e-mail shall be deemed valid as if they were inked originals.

18. All notices under this Agreement shall be in writing and shall be either
personally delivered or mailed postage prepaid by certified mail, return receipt
requested:

 

If to the Bank Entities:    Pacific Mercantile Bank    Attention: Chief
Executive Officer    949 South Coast Drive, 3rd Floor    Costa Mesa, California
92626 If to the Executive:    Executive’s address as set forth in the Company’s
records.

[Signatures on Next Page]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
on the day indicated, with all rights and obligations created hereby being
effective as of the Commencement Date of this Amendment.

 

Bancorp:    PACIFIC MERCANTILE BANCORP       By:   

/s/ EDWARD J. CARPENTER

      Name:    Edward J. Carpenter       Title:    Chairman of the Board of
Directors    The Bank    PACIFIC MERCANTILE BANK       By:   

/s/ EDWARD J. CARPENTER

      Name:    Edward J. Carpenter       Title:    Chairman of the Board of
Directors    Executive:   

/s/ RAYMOND E. DELLERBA

      Raymond E. Dellerba   

 

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