Exhibit 10.2

PACIFIC MERCANTILE BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

FOR

RAYMOND E. DELLERBA

Pacific Mercantile Bank, a California corporation (the “Company”), hereby
establishes this restated Supplemental Executive Retirement Plan (the “Plan”),
restated to comply with Internal Revenue Code (“Code”) Section 409A and
applicable authorities promulgated thereunder effective January 1, 2005, for the
purpose of attracting and retaining Raymond E. Dellerba (the “Participant”) and
promoting his increased efficiency and an interest in the successful operation
of the Company. All prior vested and unvested accrued benefits shall be made
subject to this restatement and the new rules. This Plan as amended and restated
is intended to and shall be interpreted to comply in all respects with Code
Section 409A and those provisions of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”) applicable to an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
“management or highly compensated employees.”

ARTICLE 1

DEFINITIONS

1.1 Administrator shall mean the person or persons appointed by the Board of
Directors of the Company to administer the Plan pursuant to Article 7 of the
Plan.

1.2 Beneficiary shall mean the person(s) or entity designated as such in
accordance with Article of the Plan.

1.3 Code shall mean the Internal Revenue Code of 1986, as amended and Treasury
regulations and applicable authorities promulgated thereunder.

1.4 Company shall mean Pacific Mercantile Bank.

1.5 Change in Control shall mean the occurrence of any of the following:

(a) the consummation of any merger or consolidation (hereinafter a “Merger”) of
the Company with another corporation or business entity in which the holders of
the outstanding voting securities of the Company immediately prior to such
Merger hold, in the aggregate, immediately after the consummation of such
Merger, less than fifty percent (50%) of the outstanding voting securities of
(i) the surviving party in such Merger (whether that surviving party is the
Company or another party to such Merger), or (ii) of such surviving party’s
Parent (as hereinafter defined) in case the surviving party has a Parent
immediately after the consummation of such Merger; or

(b) the consummation of any Merger of the Parent (if any) of the Company with
another corporation or business entity in which the holders of the outstanding
voting securities of the Company’s Parent immediately prior to such Merger hold,
in the aggregate, immediately after consummation of such Merger, less than fifty
percent (50%) of the outstanding voting securities (i) of the surviving party in
such Merger (whether that surviving party is the Parent or another party to such
Merger) or (ii) of such surviving party’s Parent in any case in which the
surviving party has a Parent immediately after the consummation of such Merger;
or

(c) the consummation of any Sale of Assets Transaction (as hereinafter defined)
by the Company to a Purchasing Party (as hereinafter defined), if the holder or
holders of the outstanding voting securities of the Company immediately prior to
Sale of Assets Transaction hold, in the aggregate, immediately after
consummation of such Transaction, less than fifty percent (50%) of the
outstanding voting securities (i) of the Purchasing Party, or (ii) of the
Purchasing Party’s Parent in any case in which the Purchasing Party has a Parent
immediately following consummation of such Sale of Assets Transaction; or

 

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(d) the consummation of any Sale of Assets Transaction by the Company’s Parent
(if any) to a Purchasing Party (as hereinafter defined), if the holders of the
outstanding voting securities of the Company’s Parent immediately prior to the
consummation of such Sale of Assets Transaction hold, in the aggregate,
immediately after the consummation of such Transaction, less than fifty percent
(50%) of the outstanding voting securities (i) of the Purchasing Party, or
(ii) of the Purchasing Party’s Parent in any case in which the Purchasing Party
has a Parent immediately following consummation of such Sale of Assets
Transaction; or

(e) the shareholders of the Company or its Parent approve any plan or proposal
for the liquidation or dissolution of the Company or of the Parent, unless, in
the case of a liquidation or dissolution solely of the Company, the Parent
acquires the assets, and continues thereafter to operate the business, of the
Company; or

(f) any person or group (as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), shall
become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of 50% or more of the outstanding shares of Common Stock of the Company or
its Parent, other than (i) any such person or persons who has record or
beneficial ownership of more than 10% of the Company’s or Parent’s outstanding
shares of Common Stock on the date of the establishment of this Plan, or
(ii) any such person or persons whose ownership of the outstanding shares of
Common Stock in the Company or Parent has increased to or above 50% by reason of
such person or persons’ purchase of shares in a firmly underwritten public stock
offering the Company or Parent (as the case may be); or

(g) during any period of two consecutive years during the term of this
Agreement, individuals who at the beginning of the two year period constituted
the entire Board of Directors of the Company or of its Parent do not for any
reason constitute a majority thereof unless the election, or the nomination for
election by the Company’s shareholders or the Parent’s shareholders (as the case
may be), of each new director was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the beginning of the
period.

Notwithstanding the foregoing, no event shall constitute a “Change in Control”
for purposes of acceleration of distributions under Article 5 of this Plan if it
is not a “change in the ownership or effective control of the corporation,” or
“in the ownership of a substantial portion of the assets of the corporation,”
“corporate dissolution,” or “with approval of a bankruptcy court pursuant to 11
U.S.C. Section 503(b)(1)(A)” within the meaning of Code Section 409A and
applicable Treasury Regulations.

1.6 Disability shall mean that the Participant (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii) is, by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of the Participant’s employer. The Administrator may require that the
Participant submit evidence of such qualification for disability benefits in
order to determine that the Participant is disabled under this Plan.

1.7 Employment Agreement shall mean the Employment Agreement between the Company
and the Participant entered into April 23, 1999, as amended and restated
January 1, 2006, and as in may be amended from time to time thereafter.

1.8 ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended.

1.9 Financial Hardship shall mean a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s
spouse, or the Participant’s dependent (as defined in Code Section 152(a)), loss
of the Participant’s property due to casualty, or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the control
of the Participant (but shall in all events correspond to the meaning of the
term “unforeseeable emergency” under Code Section 409A).

 

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1.10 Months of Service shall mean the cumulative consecutive calendar months of
continuous full-time employment with the Company, beginning on April 23, 1999
and counting the 23d of each consecutive calendar month thereafter as the
commencement of another Month of Service.

1.11 Normal Retirement Benefit shall mean the Normal Retirement Benefit
described in Article 2 of the Plan.

1.12 Parent of a corporation or other business entity shall mean any
corporation, business entity or other Person that holds shares or ownership
interests of such other corporation or other business entity possessing at least
a majority of the voting power of that other corporation or business entity. As
of the date of this Plan, Pacific Mercantile Bancorp owns shares of the Company
possessing 100% of the voting power of the Company and, therefore, is the Parent
of the Company.

1.13 Participant shall mean Raymond E. Dellerba.

1.14 Person shall mean any natural person, corporation, limited liability
company, partnership (general or limited), trust, estate or other business
entity or unincorporated association.

1.15 Plan Year shall mean the calendar year.

1.16 Purchasing Party shall mean the Person that acquires ownership of
substantially all of the assets of the Company or its Parent (as the case may
be) in a Sale of Assets Transaction described in Section 1.18 below.

1.17 Retirement Age shall mean the date on which the Participant attains age
sixty-five (65).

1.18 Sale of Assets Transaction shall mean any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company or its Parent.

1.19 Termination of Employment shall mean the date of the cessation of the
Participant’s employment with the Company for any reason whatsoever, whether
voluntary or involuntary, including as a result of the Participant’s retirement,
death or Disability.

1.20 Termination Without Cause shall mean a termination of the Participant’s
employment by the Company without “Cause” as such term is defined in
Section 6(a) of the Employment Agreement.

1.21 Termination With Good Reason shall mean termination of the Participant’s
employment with the Company for “Good Reason” as such term is defined in
Section 7(b) of the Employment Agreement.

ARTICLE 2

RETIREMENT BENEFIT

2.1 Normal Retirement Benefit. Subject to Sections 2.2 and 2.3 below, the Normal
Retirement Benefit shall equal sixty percent (60%) of the Participant’s final
average compensation and shall be calculated by averaging the annual base salary
of the Participant during the three (3) completed Plan Years immediately
preceding the earlier of the Participant’s Termination of Employment or the
Participant’s attaining Retirement Age, and dividing the annual figure by twelve
(12) to arrive at a monthly benefit amount. The Normal Retirement Benefit shall
commence on the first day of the month following the month in which Retirement
Age occurs and shall be paid by the Company to the Participant in level monthly
installments (less withholding for applicable taxes) for a period of 180 months.

 

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2.2 Vesting of Retirement Benefit. The Participant shall vest in an amount equal
to one and one half (1.5) monthly Normal Retirement Benefit payments for each
Month of Service. Notwithstanding the foregoing, in the event of the
Participant’s Termination Without Cause by the Company or Termination With Good
Reason by the Participant, the Participant shall be vested in an additional
amount equal to the lesser of twenty-four (24) months of Normal Retirement
Benefit payments or the remainder of the Normal Retirement Benefit payments. The
Normal Retirement Benefit shall immediately become fully vested upon
consummation of a Change in Control or Termination of Employment by reason of
the Participant’s death.

2.3 Payment of Partially Vested Retirement Benefits. If the Participant is
vested in at least one hundred twenty (120) months of Normal Retirement Benefit
payments, then such payments shall commence on the same day and be payable in
the same amount as such payments would have been paid under Section 2.1 had the
Participant been fully vested in the Normal Retirement Benefit except that such
payments shall terminate early after all vested payments have been made. In the
event that a Participant is vested in less than one hundred twenty (120) months
of Normal Retirement Benefit payments, the actuarially determined equivalent of
the vested retirement benefits shall spread over one hundred twenty (120) level
monthly installments commencing on the first day of the month following the
month in which Retirement Age occurs. The actuarial assumptions and methodology
used in the recalculation of the vested retirement benefits shall be mutually
agreed to by the parties.

ARTICLE 3

DEATH BENEFIT

3.1 Survivor Benefit. In the event of the Participant’s death prior to
commencement of benefits under Article 2, the Normal Retirement Benefit payments
shall commence on the first day of the month following the month in which the
Participant’s death is established by reasonable documentation and shall be
payable over the same period of months and in the same amount as such benefit
would have been payable under Article 2. In the event of the Participant’s death
after benefits have commenced under Article 2, the Company shall pay to the
Participant’s Beneficiary the remaining benefits payable to the Participant
under the Plan over the same period such remaining benefits would have been paid
to the Participant.

ARTICLE 4

FINANCIAL HARDSHIP DISTRIBUTION

4.1 Financial Hardship Distribution. Upon a finding that the Participant (or,
after the Participant’s death, a Beneficiary) has suffered a Financial Hardship,
subject to Treasury Regulations promulgated under Code Section 409A, the
Administrator may, at the request of the Participant, accelerate distributions
of vested benefits under the Plan in the amount reasonably necessary to
alleviate such Financial Hardship plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause
severe Financial Hardship). The actuarial assumptions and methodology used in
the acceleration benefits shall be mutually agreed to by the parties.

ARTICLE 5

AMENDMENT OR TERMINATION OF PLAN

5.1 Amendment or Termination of Plan. The Company may, at any time, direct the
Administrator to amend or terminate the Plan, except that no such amendment or
termination may reduce a Participant’s Normal Retirement Benefit, delay the
vesting thereof without the written consent of the Participant, or accelerate
distributions under the Plan in violation of Code Section 409A. Notwithstanding
the foregoing, to the extent permitted under Code Section 409A and applicable
authorities, the Company may, in its complete and sole discretion, accelerate
distributions upon Plan termination in the event of a Change in Control or under
such other circumstances as may be specifically permitted under Code
Section 409A. If the Company terminates the Plan or otherwise amends the Plan in
any manner which has the effect of accelerating the payment of benefits to the
Participant, the Company shall gross the benefit payments up to fully

 

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compensate the Participant for any federal, state and local taxes, (including
any excise taxes imposed under Code Sections 280G and/or 409A without regard to
any limits included in the Participant’s Employment Agreement), payable by the
Participant as a result of the payment of such benefits.

ARTICLE 6

BENEFICIARIES

6.1 Beneficiary Designation. The Participant shall have the right, at any time,
to designate any person or persons as Beneficiary (both primary and contingent)
to whom payment under the Plan shall be made in the event of the Participant’s
death. The Beneficiary designation shall be effective when it is submitted in
writing to and acknowledged by the Administrator during the Participant’s
lifetime on a form prescribed by the Administrator.

6.2 Revision of Designation. The submission of a new Beneficiary designation
shall cancel all prior Beneficiary designations. Any finalized divorce or
marriage (other than a common law marriage) of a Participant subsequent to the
date of a Beneficiary designation shall revoke such designation, unless in the
case of divorce the previous spouse was not designated as Beneficiary and unless
in the case of marriage the Participant’s new spouse has previously been
designated as Beneficiary.

6.3 Successor Beneficiary. If the primary Beneficiary dies prior to complete
distribution of the benefits provided in Article 3, the remaining benefits shall
be paid over the same period such remaining benefits would have been paid to the
primary Beneficiary.

6.4 Absence of Valid Designation. If a Participant fails to designate a
Beneficiary as provided above, or if the Beneficiary designation is revoked by
marriage, divorce, or otherwise without execution of a new designation, or if
every person designated as Beneficiary predeceases the Participant or dies prior
to complete distribution of the Participant’s benefits, then the Administrator
shall direct the distribution of such benefits to the Participant’s estate.

ARTICLE 7

ADMINISTRATION/CLAIMS PROCEDURES

7.1 Administration. The Administrator shall administer the Plan and interpret,
construe and apply its provisions in accordance with its terms. The
Administrator shall further establish, adopt or revise such rules and
regulations as it may deem necessary or advisable for the administration of the
Plan. All decisions of the Administrator shall be final and binding, subject
only to a determination otherwise by the Board of Directors of the Company. No
member of the Administrator shall be liable for any determination, decision, or
action made in good faith with respect to the Plan. The Company will indemnify
and hold harmless the members of the Administrator from and against any and all
liabilities, costs, and expenses incurred by such persons as a result of any
act, or omission, in connection with the performance of such persons’ duties,
responsibilities, and obligations under the Plan, other than such liabilities,
costs, and expenses as may result from the bad faith, willful misconduct, or
criminal acts of such persons.

7.2 Claims Procedure. Any Participant, former Participant or Beneficiary may
file a written claim with the Administrator setting forth the nature of the
benefit claimed, the amount thereof, and the basis for claiming entitlement to
such benefit. The Administrator shall determine the validity of the claim and
communicate a decision to the claimant promptly and, in any event, not later
than ninety (90) days after the date of the claim. The claim may be deemed by
the claimant to have been denied for purposes of further review described below
in the event a decision is not furnished to the claimant within such ninety
(90) day period. Every claim for benefits which is denied shall be denied by
written notice setting forth in a manner calculated to be understood by the
claimant (i) the specific reason or reasons for the denial, (ii) specific
reference to any provisions of the Plan (including any internal rules,
guidelines, protocols, criteria, etc.) on which the denial is based,
(iii) description of any additional material or information that is necessary to
process the claim, and (iv) an explanation of the procedure for further
reviewing the denial of the claim (including applicable time limits and a
statement of the claimant’s right to bring a civil action under section 502(a)
of ERISA following an adverse determination on review) or voluntary arbitration
as provided in Section 9.11.

 

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7.3 Review Procedures. Within sixty (60) days after the receipt of a denial on a
claim, a claimant or his/her authorized representative may file a written
request for review of such denial. Such review shall be undertaken by the
Administrator and shall be a full and fair review. The claimant shall have the
right to review all pertinent documents. The claimant may submit written
comments, documents, records and other information relating to the claim for
benefits, and such information shall be taken into account for purposes of the
review without regard to whether such information was submitted or considered in
the initial benefit determination. The Administrator shall issue a decision not
later than sixty (60) days after receipt of a request for review from a claimant
unless special circumstances require a longer period of time for processing, in
which case written notice of the extension, indicating the special circumstances
requiring an extension of time and the date by which the Plan expects to render
the determination on review, shall be furnished to the claimant prior to the
termination of the initial 60-day period. In no event shall such extension
exceed a period of sixty (60) days from the end of the initial period. The
decision on review shall be in writing and shall include specific reasons for
the decision written in a manner calculated to be understood by the claimant,
with specific reference to any provisions of the Plan on which the decision is
based, and an explanation of the claimant’s right to bring a civil action under
section 502(a) of ERISA following an adverse determination on review) or
voluntary arbitration as provided in Section 9.11.

ARTICLE 8

CONDITIONS RELATED TO BENEFITS

8.1 Nonassignability. The benefits provided under the Plan may not be alienated,
assigned, transferred, pledged or hypothecated by any person, at any time, or to
any person whatsoever. Those benefits shall be exempt from the claims of
creditors or other claimants of the Participant or Beneficiary and from all
orders, decrees, levies, garnishments or executions to the fullest extent
allowed by law.

8.2 No Right to Company Assets. The benefits paid under the Plan shall be paid
from the general funds of the Company or from a grantor trust (as contemplated
by Section 8.5 below), and the Participant and any Beneficiary shall be no more
than unsecured general creditors of the Company with no special or prior right
to any assets of the Company for payment of any obligations hereunder.

8.3 Protective Provisions. The Participant shall cooperate with the Company by
furnishing any and all information requested by the Administrator, in order to
facilitate the payment of benefits hereunder, taking such physical examinations
as the Administrator may deem necessary and taking such other actions as may be
requested by the Administrator. If the Participant refuses to so cooperate, the
Company shall have no obligations to the Participant under the Plan, which
obligations shall terminate without liability to the Company.

8.4 Withholding. The Participant shall make appropriate arrangements with the
Company for satisfaction of any federal, state or local income tax withholding
requirements and Social Security or other employee tax requirements applicable
to the payment of benefits under the Plan. If no other arrangements are made,
the Company may provide, at its discretion, for such withholding and tax
payments as may be required, including, without limitation, by the reduction of
payments under this plan or other amounts payable to the Participant.

8.5 Trust. The Company shall be responsible for the payment of all benefits
under the Plan. At its discretion, the Company may establish one or more grantor
trusts for the purpose of providing for payment of benefits under the Plan. Such
trust or trusts may be irrevocable, but the assets thereof shall be subject to
the claims of the Company’s creditors. Benefits paid to the Participant from any
such trust or trusts or which are available for payment but are not paid due to
the action or decision of the Participant or any agent thereof that has
authority to issue instructions to the trustee or trustees with respect to
distributions or payments from any such or trusts, shall be considered paid by
the Company for purposes of meeting the obligations of the Company under the
Plan.

 

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ARTICLE 9

MISCELLANEOUS

9.1 Successors of the Company. The rights and obligations of the Company under
the Plan shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the Company.

9.2 Employment Not Guaranteed. Nothing contained in the Plan nor any action
taken hereunder shall be construed as a contract of employment or as giving any
Participant any right to continued employment with the Company.

9.3 Gender, Singular and Plural. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, or neuter, as the identity of the
person or persons may require. As the context may require, the singular may be
read as the plural and the plural as the singular.

9.4 Captions and Certain other Terms. The captions of the articles, paragraphs
and sections of the Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions. The term
“including” wherever it may appear in this Plan shall mean “including without
limitation” and the words hereunder, hereof, hereto, hereinabove or any similar
terms shall refer to this Plan as a whole, and not to any particular section,
paragraph or provision of this Plan unless the context clearly indicates
otherwise.

9.5 Validity. In the event any provision of the Plan is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provisions of the Plan.

9.6 Waiver of Breach. The waiver by the Company of any breach of any provision
of the Plan shall not operate or be construed as a waiver of any subsequent
breach by that Participant or any other Participant.

9.7 Notice. Any notice or filing required or permitted to be given to the
Company or the Participant under this Agreement shall be sufficient if in
writing and hand-delivered, or sent by registered or certified mail, in the case
of the Company, to the principal office of the Company, directed to the
attention of the Administrator, and in the case of the Participant, to the last
known address of the Participant indicated on the employment records of the
Company. Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification. Notices to the Company may be permitted by
electronic communication according to specifications established by the
Administrator.

9.8 Errors in Benefit Statement or Distributions. In the event an error is made
in a benefit statement, such error shall be corrected on the next benefit
statement following the date such error is discovered. In the event of an error
in a distribution, the Participant’s Account shall, immediately upon the
discovery of such error, be adjusted to reflect such under or over payment and,
if possible, the next distribution shall be adjusted upward or downward to
correct such prior error. If the remaining amounts payable to a Participant
under this Plan are insufficient to cover an erroneous overpayment, the Company
may, at its discretion, offset other amounts payable to the Participant from the
Company (including but not limited to salary, bonuses, expense reimbursements,
severance benefits or other employee compensation benefit arrangements, as
allowed by law) to recoup the amount of such overpayment(s).

9.9 ERISA Plan. The Plan is intended to be an unfunded plan maintained primarily
to provide deferred compensation benefits for a select group of “management or
highly compensated employees” within the meaning of Sections 201, 301 and 401 of
ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I of ERISA.

9.10 Applicable Law. The Plan shall be governed and construed in accordance with
federal law. If any issue should arise with respect to the Plan in a context
where state law is not fully preempted by ERISA, the laws of the State of
California shall govern.

9.11 Arbitration. Company and Participant agree that should claims, disputes and
controversies arise out of, or come into existence which are related to or in
any way associated with this Plan or breach of this Plan, Participant shall have
the option of resolving such claims, disputes and/or controversies by the
selection of any legal or administrative

 

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forum available for the resolution of such claims, disputes and/or
controversies, including the submission of such claims, disputes and/or
controversies to final and binding arbitration under the Federal Arbitration
Act, in conformity with the procedures of the California Arbitration Act,
including its discovery provisions. Participant shall make such election in
writing in accordance with the notice provision of Section 9.7 and such election
shall be irrevocable except by mutual agreement once proceedings have commenced.
If Participant elects to proceed by way of arbitration, each party hereto
voluntarily and knowingly irrevocably waives any rights to have any such dispute
heard or adjudicated in any other forum, including the right to trial by jury.
The selected arbitrator shall be a neutral, licensed, California attorney
experienced in Labor and Employment law. The arbitrator shall have the authority
to decide whether a particular dispute is subject to arbitration under this
Plan, and to grant all monetary or equitable relief, including, without
limitation, ancillary costs and fees, punitive damages, and attorneys’ fees and
costs, as provided in Section 9.12 (“Attorneys’ Fees”), and available under
state and federal law. The arbitrator shall not have the authority to add to,
subtract from, or modify any of the terms of this arbitration agreement, nor
shall the arbitrator have the power to decide the justice or propriety of any
specific provision of this arbitration agreement or any matter reserved solely
to the discretion of the Company. The arbitrator shall render his or her
decision in writing, setting forth therein findings of fact, conclusions of law
and a final determination. Judgment on any award rendered by the arbitrator may
be entered and enforced by any court having jurisdiction thereof. The fees of
the arbitrator and all other costs that are unique to arbitration shall be paid
by the Company. Further costs for the arbitration, including, but not limited
to, attorneys’ fees and/or its own witnesses’ fees will be paid as provided in
Section 9.12 (“Attorney Fees”)

9.12 Attorneys’ Fees. The Company shall pay all of Participant’s reasonable fees
and expenses (including reasonable attorneys’ fees) incurred in litigation or
arbitration of any claim, dispute or other matter in question of any kind
relating to this Plan unless the court finds that Participant acted in bad faith
in bringing the action, or, if the action was brought by the Company,
Participant acted in bad faith in breaching the provisions of the Plan.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed this 6th day
of April, 2006.

 

Pacific Mercantile Bank, a California corporation By:  

/s/ GEORGE H. WELLS

Its:   Chairman of the Board

 

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