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EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of day of [_], 2018 (the "Effective Date"), by and among Curt A.
Christianssen (thethis"Executive"), on the one hand, and Pacific Mercantile
Bank, a Califomia banking corporation (the"Bank"), on the other hand (Executive
and the Bank collectively, the "Parties"). RECITALS WHEREAS, Pacific Mercantile
Bancorp ("PMB") is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended, subject to the primary supervision and
regulation ofthe Board ofGovemors ofthe Federal Reserve System ("FRB"). WHEREAS,
the Bank is a Califomia chartered commercial bank and wholly-owned subsidiary
ofPMB, subject to the primary supervision and regulation ofthe Califomia
Department ofBusiness Oversight ("CDBQ") and the FRB by virtue ofits membership
in the Federal Reserve Bank of San Francisco. WHEREAS, it is the intention ofthe
Parties to enter into an employment agreement for the purposes of assuring the
services of Executive as the Executive Vice President, Chief Financial Officer
ofthe Bank and PMB on the terms and subject to the conditions set forth in this
Agreement. NOW, THEREFORE, based on the foregoing premises and in consideration
ofthe mutual covenants and representations contained herein, the Parties hereto
agree as follows: 1. Term. The Bank (the "Em^loyer") hereby employs Executive,
and Executive hereby accepts employment with Employer, under the terms ofthis
Agreement. The term ofthis Agreement shall be for a period of three (3) years
(the "Initial Term") commencing as of the Effective Date, subject to the
termination provisions ofparagraph 4. The term ofthis Agreement, as in effect
from time to time in accordance with the foregoing, shall be referred to herein
as the "Term". The period oftime between the Effective Date and the termination
ofthe Executive's employment hereunder shall be referred to herein as the
"Employment Period." 2. Employment. (a) Positions and Reporting. Executive shall
be employed as the Executive Vice President, Chief Financial Officer of the
Bank. During the Employment Period, Executive shall report directly to the
ChiefExecutive Officer ofthe Bank. (b) Authoritv and Duties. Executive shall
exercise such authority, perform such executive duties and functions and
discharge such responsibilities as are reasonably associated with Executive's
position as Executive Vice President, Chief Financial Officer, commensurate with
the authority vested in Executive pursuant to this Agreement and consistent with
the bylaws ofthe Bank and ofPMB. During the Employment Period, Executive shall
devote his full business time, skill and efforts to the business of Employer and
shall not during the Employment Period engage in any other business activities,
duties, or pursuits whatsoever, or directly or indirectly render any services of
a business, commercial, or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of the SMRH:485126413.3 1

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Board ofDirectors ofEmployer (the "Board"). Notwithstanding the foregoing.
Executive may (i) serve in any capacity with any civic, educational or
charitable organization, or any trade association, without seeking or obtaining
approval by the Board, provided such activities and service do not materially
interfere or conflict with the performance ofhis duties hereunder and (ii) with
the approval ofthe Board serve on the boards ofdirectors ofother corporations
that are not involved in commercial banking or similar business activities;
provided, however, Executive shall not directly or indirectly acquire, hold, or
retain any beneficial interest in any business competing with or similar in
nature to the business of Employer except passive shareholder investments in
other financial institutions and their respective affiliates which do not exceed
three percent (3%) of the outstanding voting securities in the aggregate in any
single financial institution and its affiliates on a consolidated basis. (c)
Notwithstanding provisions of Section 2(b) to the contrary, following approval
ofthis Agreement by the Compensation Committee ofthe Board ofDirectors, the Bank
consents to the provision ofservices by the Executive to Carpenter & Company and
its subsidiaries and affiliates as described in and pursuant to the terms ofthat
certain Reimbursement Agreement dated January 1, 2015 by and between the Bank
and Carpenter & Company. (d) Executive hereby represents and agrees that the
services to be performed hereunder are of a special, unique, unusual,
extraordinary, and intellectual character that gives them a peculiar value, the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law. Executive therefore expressly agrees that Employer, in addition
to any other rights or remedies that Employer may possess, shall be entitled to
injunctive and other equitable reliefto prevent or remedy a breach ofthis
Agreement by Executive. 3. Compensation and Benefits. (a) Salary. During the
Initial Term Executive shall receive an annual base salary of $300,000 payable
in equal semimonthly payments (the "Base Salary"). Such Base Salary shall be
subject to review in the eleventh (llth) month after the Effective Date, and at
each anniversary of the Effective Date thereafter, or during Executive's normal
officer review period, for possible adjustment by the Chief Executive Offlcer in
concurrence with the Compensation Committee ofthe Bank based on various factors
including, but not limited to, market conditions, the consolidated results
ofoperations ofthe Bank and PMB and the performance ofExecutive, but shall in no
event be decreased from the level set forth above during the Initial Term. All
payments ofBase Salary shall be subject to applicable adjustments for
withholding taxes, pro-rations for any partial payment periods and such other
applicable payroll procedures ofthe Bank. (b) Salary Continuation During
Disability. IfExecutive 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) ofthis Agreement, reduced by
the amounts received by Executive from state disability insurance, or worker's
compensation or other similar insurance benefits through policies provided by
Employer, for a period of six (6) months from the date ofdisability. For
purposes ofthis paragraph 3(b), "disability" shall be defined as provided in the
Employer's disability insurance program. SMRH:485126413.3

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(c) Cash Incentive Payments. Executive shall be eligible to participate in the
Management Annual Incentive Plan. Executive's bonus, if any, shall be paid in
one lump sum to Executive at such time as other executive bonuses are paid. The
Chief Executive Officer retains the discretion to determine whether a pro-rata
bonus is appropriate ifthe Executive is terminated or leaves the employ ofthe
Bank prior to the annual determination ofbonuses. All cash incentive payments
shall be subject to applicable adjustments for applicable withholding and
payroll taxes. Notwithstanding any provision of any incentive plan or
arrangement, no right of continued employment or any modification ofthe "at
will" nature ofExecutive's employment with Employer shall be conferred upon
Executive thereunder or result therefrom. (d) Insurance Benefits. such group
During the Employment Period, Executive shall and health (including medical,
dental, vision andreceive life, disability, hospitalization), accident and
disability insurance coverage and other beneflts which Employer extends, as a
matter of policy, to all of its executive employees, except as otherwise
provided herein, and shall be entitled to participate in all benefit and other
incentive plans ofthe Employer, on the same basis as other like employees
ofEmployer. (e) Vacation. Executive shall be entitled to four (4) weeks ofannual
vacation during the Employment Period at his then existing rate of Base Salary,
which shall be scheduled in Executive's discretion, subject to and taking into
account applicable banking laws and regulations and business needs. Vacation
will accrue in accordance with the Bank's personnel policies. (f) Business
Expenses. During the Employment Period, Employer shall promptly reimburse the
Executive for all documented ordinary and necessary business expenses incurred
by Executive in the performance ofhis duties under this Agreement. Executive
shall also be reimbursed for reasonable expenses incurred in activities
associated with promoting the business ofEmployer, including expenses for
entertainment, travel, conventions, and educational programs. All such expenses
described above will be subject to compliance with applicable policies of
Employer. All such reimbursements shall be made upon presentation and approval
of receipts, invoices or other appropriate evidence of such expense in
accordance with the policies Employer in effect from time to time. (g)
Professional License Expenses. During the Employment Period, Employer shall
reimburse the Executive for all documented ordinary and necessary expenses
incurred by Executive in maintaining professional business licenses and
certifications that he possesses as of the date ofthis Agreement. All such
expenses described above will be subject to compliance with applicable policies
of Employer. All such reimbursements shall be made upon presentation and
approval of receipts, invoices or other appropriate evidence of such expense in
accordance with the policies Employer in effect from time to time. (h) Car
Allowance. The Bank shall provide the Executive with a monthly automobile
allowance of $950.00 per month during the Employment Period. Executive shall (A)
obtain and maintain public liability insurance and property damage insurance
policies with insurer(s) acceptable to Employer and with such coverage in such
amounts as may be reasonably acceptable to Employer, and (B) provide copies of
such policies, endorsements or other evidence ofinsurance acceptable to
Employer. SMRH:485126413.3

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4. Termination ofEmployment. (a) Termination for Cause. The Board of Bank may
terminate Executive's employment hereunder for "Cause" or without "Cause." For
purposes of this Agreement termination for "Cause" shall mean (i) conviction of
a crime directly related to his employment hereunder, (ii) conviction of a crime
involving moral turpitude, (iii) willful and gross mismanagement of the business
and affairs of Employer, (iv) willful and intentional violation of any state or
federal banking or securities laws, or of the bylaws, rules, policies or
resolutions of Bank, or the rules or regulations ofor any final order issued by
the FRB, the CDBO, or the Federal Deposit Insurance Corporation (the "FDIC"),
(v) any violation of the Employer's policy against harassment, equal employment
opportunity policy, drug and alcohol policy and/or the confldentiality agreement
that shall Employee shall execute at the commencement of his employment and (vi)
breach of any material provision of this Agreement. For purposes of this
Agreement, no act, or the failure to act, on Executive's part shall be
considered "willful" unless done, or omitted to be done, not in good faith and
without reasonable belief that the action or omission was in the best interests
of Employer. Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a notice oftermination.
In the event employment ofExecutive is terminated pursuant to this subparagraph
4(a), Employer shall have no further liability to Executive other than for
compensation accrued and for reimbursement ofbusiness expenses incurred through
the date oftermination but not yet paid. Termination under this subparagraph
4(a) shall not prejudice any remedy that the Employer may have at law, in
equity, or under this Agreement. (b) Termination by Employer Without Cause or by
Executive for Good Reason. Employer may tenninate the employment of Executive
without "Cause" (as defined in subparagraph 4(a)) at any time during the
Employment Period by giving written notice to Executive specifying therein the
effective date of termination. Executive shall have the right at any time to
terminate his employment with the Bank for any reason or for no reason. For
purposes of this Agreement, and subject to Employer's opportunity to cure as
provided in Section 4(c) hereof, Executive shall have "Good Reason" to terminate
his employment hereunder if such termination shall be the result of: (i) a
material diminution during the Employment Period in the Executive's title,
duties or responsibilities as set forth in Section 2 hereof without Executive's
consent; (ii) a material breach by Employer of the compensation and benefits
provisions set forth in Section 3 hereof; Agreement; or (iii) a material breach
by Employer of any material terms of this (iv) the relocation of Executive's
principal place of employment to any location more than 50 miles from the Bank's
headquarters at the Effective Date. (c) Notice and Opportunity to Cure.
Notwithstanding the foregoing, it shall be a condition precedent to Employer's
right to terminate this Agreement under subparagraph 4(a)(iv) SMRH:485126413.3 4

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and Executive's right to terminate his employment for "Good Reason" that (1) the
party alleging a breach shall first have given the other party written notice
stating with specificity the reason for the termination ("breach") and (2)
ifsuch breach is susceptible ofcure or remedy, a period of30 days from and after
the giving of such notice to cure the breach. Ifthe breach cannot reasonably be
cured or remedied within 30 days, the period for remedy or cure shall be
extended for a reasonable time (not to exceed 30 days), provided the party
against whom a breach is alleged has made and continues to make a diligent
effort to effect such remedy or cure. (d) Termination Upon Death or Permanent
Disability. This Agreement shall terminate automatically upon: (i) the death of
Executive, and (ii) the "permanent disability" of Executive as such term is
defined in the disability insurance provided by Employer, or if such insurance
is not provided by Employer, the term shall mean that Executive has been deemed
by a medical care provider to indefinitely be unable to perform the essential
functions of Executive's position with or without accommodation. If the
Employment Period is terminated by reason of the permanent disability ofthe
Executive, Employer shall give 30-days' advance written notice to that effect to
the Executive or his representative. Employer and Employee shall comply with any
obligations they may respectively have, under state or federal law, to interact
regarding reasonable accommodations. 5. Consequences of Termination. The
following are the benefits to which Executive is entitled upon termination
ofemployment in all positions with Employer, and such payments and benefits
shall be the exclusive payments and benefits to which Executive is entitled upon
such termination. Except in the case oftermination ofemployment by Employer for
Cause, or due to death, the post-termination payments (other than those required
by law) and benefits shall only be provided if the Executive first enters into a
form of general release agreement reasonably satisfactory to Employer releasing
Employer from any and all claims, known and unknown, related to the Executive's
employment with the Bank. (a) Termination Without Cause or for Good Reason. In
the event oftermination ofExecutive's employment (i) by Employer without "Cause"
(other than upon death or permanent disability), or (ii) by Executive for "Good
Reason", Executive shall be entitled to the following severance pay: (i)
Severance Pay - a lump sum amount equal to twelve (12) months of the Executive's
annual Base Salary. (b) Termination Upon Disability. In the event of termination
of Executive's employment hereunder by Employer on account of permanent
disability, Employer shall pay to Executive the accrued Base Salary and accrued
and unused vacation eamed through the date of disability. Such payment shall be
made no later than sixty (60) days after the date ofdisability. (c) Termination
Upon Death. In the event of termination of Executive's employment hereunder on
account of Executive's death. Employer shall pay to Executive's beneflciary or
beneficiaries or his estate, as the case may be, the accrued Base Salary and
accrued and unused vacation eamed through the date of death. Such payment shall
be made no later than sixty (60) days after the date of death. In addition,
Executive's beneficiary(ies) or his estate shall be entitled to the payment of
benefits pursuant to any life insurance policy of Executive, as SMRH:485126413.3

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provided for in Section 3(c) above. Executive's beneficiary or estate shall not
be required to remit to Employer any payments received pursuant to any life
insurance policy purchased pursuant to Section 3(c) above. (d) Termination for
Cause or Due to End of the Term. In the event the employment ofExecutive is
terminated by Employer for Cause, no severance payment or benefit shall be
provided. In the event the employment of Executive is terminated as a result of
the expiration ofthe Term, Executive shall be entitled to no severance payment
or benefit ofany kind notwithstanding any provision to the contrary in the
Employer's employee manual or policies then in effect, except as to matters such
as coverage under The Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") and unused vacation required by law without reference to such manual
or policies. (e) Accrued Rights. Notwithstanding the foregoing provisions of
this Section 5, in the event oftermination ofExecutive's employment hereunder
for any reason or for no reason, Executive shall be entitled to payment of any
unpaid portion of his Base Salary through the effective date oftermination,
payment ofany unreimbursed expenses incurred pursuant to Sections 3(f) or 3(g)
above, and payment ofany accrued but unpaid benefits solely in accordance with
the terms ofany incentive bonus or employee beneflt plan or program ofEmployer.
(f) Non-assignability. Neither Executive nor any other person or entity acting
on his behalf or as his representative shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage, commute, modify, or
otherwise encumber in advance any ofthe rights or benefits of Executive under
this Section 5, nor shall any of said rights or benefits be subject to seizure
for the payment of any debts, judgments, alimony or separate maintenance, owed
by Executive or any other person or entity, or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise. The terms of this
Section 5(f) shall not affect the interpretation ofany other provision ofthis
Agreement. (g) Regulatory Restrictions. Notwithstanding anything to the contrary
contained in this Agreement: (i) If Executive is removed and/or permanently
prohibited from participating in the conduct of Employer's affairs by an order
issued under Section 8(e)(4) or 8(g)(l) ofthe Federal Deposit Insurance Act
("FDIA") (12 U.S.C. 1818(e)(4) and (g)(l)), all obligations of Employer under
this Agreement shall terminate, as of the effective date of such order, except
for the payment of Base Salary due and owing on the effective date of said
order, reimbursement of business expenses incurred as of the effective date of
termination and such matters required by law. (ii) If Executive is suspended
and/or temporarily prohibited from participating in the conduct of Employer's
affairs by a notice served under Section 8(e)(3) or 8(g)(l) ofthe FDIA (12
U.S.C. 1818(e)(3) and (g)(l)), all obligations ofEmployer under this Agreement
shall be suspended as ofthe date ofservice, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, Employer shall (i) pay
Executive all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate (in whole or in part) any ofits
obligations which were suspended. SMRH:485126413.3

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(iii) If Bank is in default (as defmed in Section 3(x)(l) ofthe FDIA), all
obligations under this Agreement shall terminate as ofthe date ofdefault, but
the vested rights of the parties shall not be affected. (iv) All obligations
under this Agreement shall be terminated, except to the extent a determination
is made that continuation ofthe contract is necessary for the continued
operation ofEmployer (i) by the director ofthe FDIC or his or her designee (the
"Director"), at the time the FDIC enters into an agreement to provide assistance
to or on behalf of Employer under the authority contained in 13(c) ofthe FDIA;
or (ii) by the Director, at the time the Director approves a supervisory merger
to resolve problems related to operation of Employer when the Employer is
determined by the Director to be in an unsafe and unsound condition. Any rights
of the Executive that have already vested, however, shall not be affected by
such action. (v) No payments shall be made pursuant to this paragraph 5 or any
other provision herein in violation of the requirements of Section 18(k) of the
FDIA (12 U.S.C. §1828(k)). (h) IRC Section 280G. In no event shall the
payment(s) described in this paragraph 5 exceed the amount pennitted by Section
280G ofthe Intemal Revenue Code of 1986, as amended f"Section 280G"). Therefore,
ifthe aggregate present value (determined as ofthe date ofthe change ofcontrol
in accordance with the provisions ofSection 280G) ofboth the severance payment
and all other payments to Executive in the nature of compensation which are
contingent on a change in ownership or effective control ofBank or PMB or in the
ownership ofa substantial portion of the assets of the Bank (the "Aggresate
Severance") would result in a "parachute payment," as defined under Section
280G, then the Aggregate Severance shall not be greater than an amount equal to
2.99 multiplied by Executive's "base amount" for the "base period," as those
terms are deflned under Section 280G. In the event the Aggregate Severance is
required to be reduced pursuant to this subparagraph 5(h), the last payments in
time shall be reduced first. (i) Conditions to Severance Benefits. The Bank
shall have the right to seek repayment ofthe severance payments and benefits or
to terminate payments or benefits provided by this paragraph 5 (i) in the event
that the Executive fails to honor, in accordance with their terms, the
provisions ofparagraphs 6 or 9 hereofor (ii) to the extent such payments or
benefits would violate Section 18(k) ofthe FDIA (12 U.S.C. §1828(k)). 6.
Confidentialitv. Executive agrees that he will not at any time during the
Employment Period or at any time thereafter for any reason, in any fashion, form
or manner, except as required by law to comply with legal process, either
directly or indirectly, divulge, disclose or communicate to any person, firm,
corporation or other business entity, in any manner whatsoever, any financial
information or trade or business secrets, including, without limiting the
generality of the foregoing, the techniques, methods or systems ofits operation
or management, any information regarding its financial matters, customer lists,
computer software, or any other information conceming the business or operations
of Employer, its subsidiaries, affiliates and any of its customers, govemmental
relations, customer contacts, underwriting methodology, loan program
configuration and qualiflcation strategies, marketing strategies and proposals,
its manner of operation, its plans or other material data, or any other
information conceming the business ofthe Employer, its subsidiaries or
affiliates, and the Employer's goodwill (the "Busmess"). The SMRH:485126413.3 7

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provisions of this Section 6 shall not apply to (i) information disclosed in the
performance of Executive's duties to Employer based on his good faith beliefthat
such a disclosure is in the best interests ofEmployer; (ii) information that is,
at the time ofthe disclosure, public knowledge; (iii) information disseminated
by Employer to third parties in the ordinary course of business; (iv)
information lawfully received by Executive from a third party who, based upon
inquiry by Executive, is not bound by a confidential relationship to Employer or
otherwise improperly received the information; or (v) information disclosed
under a requirement of law or as directed by applicable legal authority
havingjurisdiction over Executive. In the event Executive is required by law to
disclose such information described above, Executive will provide Employer and
their counsel with immediate notice ofsuch request so that they may consider
seeking a protective order. Notwithstanding the foregoing, Executive may
disclose such information conceming the business or operations of Employer and
its subsidiaries and affiliates as may be required by the FRB, CDBO, FDIC or
other regulatory agency having jurisdiction over the operations of Employer in
connection with an examination ofBank or PMB or other proceeding conducted by
such regulatory agency. Executive agrees that all written, printed or electronic
material, notebooks and records including, without limitation, computer disks,
used and/or developed by Executive for Employer during the Term of this
Agreement, other than Executive's personal address lists, telephone lists, notes
and diaries, are solely the property of Employer, and that Executive has no
right, title or interest therein. Upon termination of Executive's employment,
Executive or Executive's representative shall promptly deliver possession of all
such materials (including any copies thereof) to the Bank. 7. Key-man Life
Insurance. Employer shall have the right to obtain and hold a "key- man" life
insurance policy on the life of Executive with the Bank as beneficiary of the
policy. Executive agrees to provide any information required for the issuance of
such policy and submit himselfto any physical examination required for such
policy. 8. Unsecured General Creditor. Neither Executive nor any other person or
entity shall have any legal right or equitable rights interests or claims in or
to any property or assets of Employer under the provisions ofthis Agreement. No
assets ofEmployer shall be held under any trust for the beneflt of Executive or
any other person or entity or held in any way as security for the fulfllling
ofthe obligations ofEmployer under this Agreement. All ofEmployer's assets shall
be and remain the general, unpledged, unrestricted assets of Employer.
Employer's obligations under this Agreement are unfunded and unsecured promises,
and to the extent such promises involve the payment ofmoney, they are promises
to pay money in the future. Executive and any person or entity claiming through
him shall be unsecured general creditors with respect to any rights or benefits
hereunder. 9. Business Protection Covenants. (a) Covenant Not to Compete.
Executive agrees that he will not, during the Employment Period, voluntarily or
involuntarily, directly or indirectly, (i) engage in any banking or financial
products or service business, loan origination or deposit-taking business or any
other business competitive with that ofthe Bank or its subsidiaries or
affiliates ("Competitive Business") within Orange County, Los Angeles County,
San Diego County and San Bernardino County (the SMRH:485126413.3

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"Market Area"), (ii) directly or indirectly own any interest in (other than less
than three percent (3%) ofany publicly traded company or mutual fund), manage,
operate, control, be employed by, or provide management or consulting services
in any capacity to any firm, corporation, or other entity (other than Employer
or its subsidiaries or affiliates) engaged in any Competitive Business in the
Market Area, or (iii) directly or indirectly solicit or otherwise intentionally
cause any employee, offlcer, or member ofthe Board or any ofits subsidiaries or
affiliates to engage in any action prohibited under (i) or (ii) ofthis paragraph
9(a). (b) Inducing Employees To Leave The Bank: Employment ofEmployees. Any
attempt on the part of the Executive to induce others to leave Employer's
employ, or the employ of any of its subsidiaries or affiliates, or any effort by
Executive to interfere with Employer's relationship with its other employees
would be harmful and damaging to Employer. Executive agrees that during the
Employment Period and for a period of twelve (12) months thereafter, Executive
will not in any way, directly or indirectly: (i) induce or attempt to induce any
employee of the Employer or any of its subsidiaries of affiliates to quit
employment with Employer or the relevant subsidiary or affiliate; (ii) otherwise
interfere with or dismpt the relationships between Employer and its subsidiaries
and affiliates and their respective employees; (iii) solicit or recruit any
employee of Employer or any subsidiary or affiliate or any former employee of
Employer or any subsidiary or affiliate. (c) Nonsolicitation ofBusiness. For a
period oftwelve (12) months from the date of termination of employment,
Executive will not, using Employer's trade secrets or confidential information,
divert or attempt to divert from Employer or any of its subsidiaries or
affiliates, any business Employer or a relevant subsidiary or affiliate had
enjoyed or solicited from its customers, borrowers, depositors or investors
during the twelve (12) months prior to termination ofhis employment. (d) Bank's
Ownership of Inventions. To the extent that Executive has intellectual property
rights of any kind in any pre-existing works which are subsequently incorporated
in any work or work product produced in rendering services to Bank, PMB or any
their subsidiaries or affiliates, Executive hereby grants Bank a royalty-free,
irrevocable, world- wide, perpetual non-exclusive license (with the right to
sublicense), to make, have made, copy, modify, use, sell, license, disclose,
publish or otherwise disseminate or transfer such subject matter. Similarly,
Executive agrees that all inventions, discoveries, improvements, trade secrets,
original works of authorship, developments, formulae, techniques, processes, and
know-how, whether or not patentable, and whether or not reduced to practice,
that are conceived, developed or reduced to practice during Executive's
employment with Employer, either alone orjointly with others, if on Employer's
time, using Employer's facilities, or relating to Employer shall be owned
exclusively by the Bank, and Executive hereby assigns to the Bank all of
Executive's right, title and interest throughout the world in all such
intellectual property. Executive agrees that the Bank shall be the sole owner of
all domestic and foreign patents or other rights pertaining thereto, and further
agrees to execute all documents that the Bank reasonably determines to be
necessary or convenient for use in applying for, prosecuting, perfecting, or
enforcing patents or other intellectual property rights, including the execution
of any assignments, patent applications, or other documents that the Bank may
reasonably request. This provision is intended to apply to the extent permitted
by applicable law and is expressly limited by Section 2870 ofthe Califomia Labor
Code, which is set forth in its entirety in Exhibit A to this Agreement. By
signing this Agreement, SMRH:485126413.3

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Executive acknowledges that this Paragraph shall constitute written notice of
the provisions of Section 2870. (e) Bank's Ownership of Copvrights. Executive
agrees that all original works of authorship not otherwise within the scope of
paragraph 9(d) above that are conceived or developed during Executive's
employment with Employer, either alone or jointly with others, if on Employer's
time, using Employer facilities, or relating to Employer, or its subsidiaries or
affiliates, are "works for hire" to the greatest extent permitted by law and
shall be owned exclusively by the Bank, and Executive hereby assigns to the Bank
all of Executive's right, title, and interest in all such original works of
authorship. Executive agrees that the Bank shall be the sole owner of all rights
pertaining thereto, and further agrees to execute all documents that the Bank
reasonably determines to be necessary or convenient for establishing in the
Bank's name the copyright to any such original works of authorship. 10.
Resignations. The Executive agrees that upon termination ofemployment, for any
reason, he will submit his resignations from all offices with the Bank and PMB
and all of their respective subsidiaries and affiliates. 11. Other Agreements.
The Parties further agree that to the extent ofany inconsistency between this
Agreement and any employee manual or policy of Employer, that the terms of this
Agreement shall supersede the terms of such employee manual or policy. 12.
Notice. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
personally delivered or (unless otherwise specified) mailed by United States
certified or registered mail, retum receipt requested, postage prepaid, or sent
by facsimile, provided that the facsimile cover sheet contains a notation ofthe
date and time oftransmission, and shall be deemed received: (i) if personally
delivered, upon the date ofdelivery to the address ofthe person to receive such
notice, (ii) ifmailed in accordance with the provisions ofthis Section 12, two
(2) business days affcer the date placed in the United States mail, (iii) if
mailed other than in accordance with the provisions ofthis Section 12 or mailed
from outside the United States, upon the date ofdelivery to the address of the
person to receive such notice, or (iv) if given by facsimile, when sent. Notices
shall be addressed as follows: IftotheEmployer: Ifto the Executive, to: Pacific
Mercantile Bank 949 South Coast Drive Third Floor Costa Mesa, Califomia, 92626
Attn: ChiefExecutive Offlcer Mr. Curt A. Christianssen 3 Williamsburg Irvine, CA
92620 or to such other respective addresses as the Parties hereto shall
designate to the other by like notice, provided that notice of a change of
address shall be effective only upon receipt thereof. SMRH:485126413.3 10

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13. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement, the inception or tennination of the Executive's employment, or
any alleged discrimination or tort claim related to such employment, including
issues raised regarding the Agreement's formation, interpretation or breach,
shall be settled exclusively by binding arbitration. The only exception to the
requirement ofbinding arbitration shall be for claims arising under the National
Labor Relations Act which are brought before the National Labor Relations Board,
claims for medical and disability benefits under the Califomia Workers'
Compensation Act, Employment Development Department claims, or as may otherwise
be required by state or federal law. However, nothing herein shall prevent the
Executive from filing and pursuing proceedings before the Califomia Department
of Fair Employment and Housing, or the United States Equal Employment
Opportunity Commission (although ifExecutive chooses to pursue a claim following
the exhaustion ofsuch administrative remedies, that claim would be subject to
the provisions of this Agreement). In addition to any other requirements imposed
by law, the arbitrator selected shall be a retired Califomia Superior Court
Judge, or an othenvise qualified individual to whom the parties mutually agree,
and shall be subject to disqualiflcation on the same grounds as would apply to
ajudge ofsuch court. All rules ofpleading (including the right ofdemurrer), all
rules of evidence, all rights to resolution of the dispute by means of motions
for summary judgment, judgment on the pleadings, andjudgment under Code ofCivil
Procedure Section 631.8 shall apply and be observed. The arbitrator shall have
the immunity ofajudicial officer from civil liability when acting in the
capacity of an arbitrator, which immunity supplements any other existing
immunity. Likewise, all communications during or in connection with the
arbitration proceedings are privileged in accordance with Cal. Civil Code
Section 47(b). As reasonably required to allow full use and benefit of this
agreement's modifications to the Act's procedures, the arbitrator shall extend
the times set by the Act for the giving of notices and setting of hearings.
Awards shall include the arbitrator's written reasoned opinion. Resolution of
all disputes shall be based solely upon the law goveming the claims and defenses
pleaded, and the arbitrator may not invoke any basis (including but not limited
to, notions of "just cause") other than such controlling law. By this binding
arbitration provision, both Executive and Employer give up their respective
right to trial by jury of any claim one may have against the other. 14. Waiver
of Breach. Any waiver of any breach of this Agreement shall not be construed to
be a continuing waiver or consent to any subsequent breach on the part either
ofthe Executive or of Employer. No delay or omission in the exercise of any
power, remedy, or right herein provided or otherwise available to any party
shall impair or affect the right of such party thereafter to exercise the same.
Any extension of time or other indulgence granted to a party hereunder shall not
otherwise alter or affect any power, remedy or right of any other party, or the
obligations of the party to whom such extension or indulgence is granted except
as speciflcally waived. 15. Non-Assignment: Successors. Neither party hereto may
assign his or its rights or delegate his or its duties under this Agreement
without the prior written consent ofthe other party; provided, however, that:
(i) this Agreement shall inure to the beneflt of and be binding upon the
successors and assigns of Employer upon any sale of all or substantially all of
Employer's assets, or upon any merger, consolidation or reorganization of Bank
with or into any other corporation, all as though such successors and assigns
ofthe Bank and their respective successors and assigns were the Bank; and (ii)
this Agreement shall inure to the benefit ofand be binding upon the heirs,
assigns or designees of Executive to the extent of any payments due to them
hereunder. As used SMRH:485126413.3 11

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in this Agreement, the term "Bank" or "Employer" shall be deemed to refer to any
such successor or assign ofthe Bank or Employer referred to in the preceding
sentence. 16. Withholding of Taxes. All payments required to be made by Employer
to the Executive under this Agreement shall be subject to the withholding and
deduction ofsuch amounts, if any, relating to tax, and other payroll deductions
as Employer may reasonably determine it should withhold and/or deduct pursuant
to any applicable law or regulation (including, but not limited to, Executive's
portion of social security payments and income tax withholding) now in effect or
which may become effective any time during the term ofthis Agreement. 17.
Section 409A. IfExecutive determines, in good faith, that any compensation or
benefits provided by this Agreement may result in the application of Section
409A ofthe Intemal Revenue Code of 1986, as amended (the "Code"). Executive
shall provide written notice thereof (describing in reasonable detail the basis
therefor) to Employer, and Employer shall, in consultation with Executive,
modify this Agreement in the least restrictive manner necessary in order to
exclude such compensation from the definition of "deferred compensation" within
the meaning of such Section 409A of the Code or in order to comply with the
provisions of Section 409A ofthe Code, other applicable provision(s) ofthe Code
and/or any rules, regulations or other regulatory guidance issued under such
statutory provisions and without any diminution in the value ofthe payments to
Executive. Any payments that, under the terms ofthis Agreement, qualify for the
"short-term" deferral exception under Treasury Regulations Section 1.409A-
l(b)(4), the "separation pay" exception under Treasury Regulations Section
1.409A-l(b)(9)(iii) or another exception under Section 409A of the Code will be
paid under the applicable exceptions to the greatest extent possible. Each
payment under this Agreement shall be treated as a separate payment for purposes
of Section 409A ofthe Code. Anything in this Agreement to the contrary
notwithstanding, ifat the time ofExecutive's separation from service within the
meaning ofSection 409A ofthe Code, Executive is considered a "specified
employee" within the meaning ofSection 409A(a)(2)(B)(i) of the Code, and if any
payment that Executive becomes entitled to under this Agreement is considered
deferred compensations subject to interest, penalties and additional tax imposed
pursuant to Section 409A of the Code as a result of the application of Section
409A(a)(2)(B)(i) of the Code, then no such payment shall be payable prior to the
date that is the earlier of (i) six months and one day Executive's separation
from service or (ii) Executive's death. In no event shall the date of
termination of Executive's employment be deemed to occur until Executive
experiences a "separation from service" within the meaning of Section 409A of
the Code, and notwithstanding anything contained herein to the contrary, the
date on which such separation from service takes place shall be the Date
ofTermination. All reimbursements provided under this Agreement shall be
provided in accordance with the requirements of Section 409A of the Code,
including, where applicable, the requirement that (A) the amount of expenses
eligible for reimbursement during one calendar year will not affect the amount
of expenses eligible for reimbursement in any other calendar year; (B) the
reimbursement of an eligible expense will be made no later than the last day of
the calendar year following the calendar year in which the expense is incurred;
and (C) the right to any reimbursement will not be subject to liquidation or
exchange for another benefit. Notwithstanding the foregoing, Employer makes no
representation or covenant to ensure that the payments and beneflts under this
Agreement are exempt from, or compliant with, Section 409A ofthe Code.
SMRH:485126413.3 12

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18. Indemnification. To the fullest extent permitted by law, regulation, and the
Articles oflncorporation and Bylaws ofBank and PMB, the Bank and/or PMB as
appropriate shall pay as and when incurred all expenses, including legal and
attomey costs, incurred by, or shall satisfy as and when entered or levied a
judgment or fine rendered or levied against, Executive in an action brought by a
third party against Executive (whether or not the Bank isjoined as a party
defendant) to impose a liability or penalty on Executive for an act alleged to
have been committed by Executive while an officer ofthe Bank and/or PMB;
provided, however, that Executive was acting in good faith, within what
Executive reasonably believed to be the scope of Executive's employment or
authority and for a purpose which the Executive reasonably believed to be in the
best interests of the Bank or the Bank's shareholders and the best interests of
PMB or PMB's shareholders, and in the case ofa criminal proceeding, that the
Executive had no reasonable cause to believe that Executive's conduct was
unlawful. Payments authorized hereunder include amounts paid and expenses
incurred in settling any such action or threatened action. All rights hereunder
are limited by any applicable state or Federal laws. Anything herein to the
contrary notwithstanding, this Agreement is subject to the requirements and
limitations set forth in state and federal laws, rules, regulations or orders
regarding the indemniflcation and prepayment of legal expenses, including
Section 18(k) of the FDIA and Part 359 of the FDIC's Rules and Regulations or
any successor regulation thereto. Further, and to the extent that there is any
conflict between state and federal law, federal law shall supersede and control.
19. Severabilitv. To the extent any provision ofthis Agreement or portion
thereof shall be invalid or unenforceable, it shall be considered deleted
therefrom (but only for so long as such provision or portion thereofshall be
invalid or unenforceable) and the remainder ofsuch provision and ofthis
Agreement shall be unaffected and shall continue in full force and effect to the
fullest extent permitted by law ifenforcement would not frustrate the overall
intent ofthe Parties (as such intent is manifested by all provisions ofthe
Agreement including such invalid, void, or otherwise unenforceable portion). 20.
Payment. All amounts payable by the Bank to Executive under this Agreement shall
be paid promptly on the dates required for such payment in this Agreement
without notice or demand. Any salary, benefits or other amounts paid or to be
paid to Executive or provided to or in respect of the Executive pursuant to this
Agreement shall not be reduced by amounts owing from Executive to Bank. 21.
Expenses. Each party shall pay his or its own fees and expenses incurred by him
or it in the drafting, review and negotiation ofthis Agreement. 22. Authority.
Each of the Parties hereto hereby represents that each has taken all actions
necessary in order to execute and deliver this Agreement. 23. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument. 24. Goveming Law. This Agreement shall be construed,
inteq^reted and enforced in accordance with the laws of the State of Califomia,
without giving effect to the choice of law principles thereof. SMRH:485126413.3
13

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25. Entire Agreement: Amendments. This Agreement and written agreements, ifany,
entered into concurrently herewith constitute the entire agreement by Employer,
on the one hand, and Executive on the other hand with respect to the subject
matter hereof and merges and supersedes any and all prior discussions,
negotiations, agreements or understandings between Executive and Employer with
respect to the subject matter hereof, whether written or oral. This Agreement
may be amended or modified only by a written instmment executed by Executive and
Employer. With regard to such amendments, alterations, or modifications,
facsimile signatures shall be effective as original signatures. Any amendment,
alteration, or modiflcation requiring the signature ofmore than one party may be
signed in counterparts. 26. Further Actions. Each party agrees to perform any
further acts and execute and deliver any further documents reasonably necessary
to carry out the provisions ofthis Agreement. 27. Time of Essence. Time is of
the essence of each and every term, condition, obligation and provision hereof.
28. No Third Party Beneficiaries. This Agreement and each and every provision
hereof is for the exclusive benefit ofthe Parties and not for the benefit ofany
third party. 29. Headings. The headings in this Agreement are inserted only as a
matter of convenience, and in no way define, limit, or extend or interpret the
scope ofthis Agreement or of any particular provision hereof. 30. Regulatorv
Approval ofthis Agreement. The Parties acknowledge and agree that entry into
this Agreement is and payment ofseverance under paragraph 5 may be subject to
receipt of approval from the FRB pursuant to Section 1828(k) and Part 359 of the
FDIC Rules and Regulations, the FDIC and the CDBO. If such approval is required
but not obtained or if such approval is conditioned upon modifications specified
by the FRB, the FDIC or the CDBO the Parties agree to negotiate in good faith to
amend this Agreement to provide for substantially equivalent terms consistent
with regulatory requirements. [signature page follows] SMRH:485126413.3 14

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IN WITNESS WHEREOF, the Parties have executed this Agreement as ofthe date first
written above. PACIFIC MERCANTILE BANK By: Name: TITomasVertin Title: President
and ChiefExecutive Officer EXECUT SMRH:485126413.3 15

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EXHIBIT A California Labor Code §2870 Employment agreements; assignment of
rights (a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any ofhis or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either: (1) Relate at the time ofconception or reduction to
practice ofthe invention to the employer's business, or actual or demonstrably
anticipated research or development ofthe employer; or (2) Result from any work
performed by the employee for the employer. (b) To the extent a provision in an
employment agreement purports to require an employee to assign an invention
otherwise excluded from being required to be assigned under subdivision (a), the
provision is against the public policy ofthis state and is unenforceable.
SMRH:485126413.3 16

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