Exhibit
10.17  EMPLOYMENT AGREEMENT  This Employment Agreement (the Agreement)
is entered into by and between HERITAGE COMMERCE CORP, a California bank
holding company (the Company),
HERITAGE BANK OF COMMERCE, a California banking corporation (the Bank), and MARGARET INCANDELA, an individual (the Executive) as of September 1, 2009 (the Effective Date).  RECITALS  WHEREAS, the Company is a California corporation and a
bank holding Company registered under the Bank Holding Company Act of 1956, as
amended, subject to the supervision and regulation of the Board of Governors of
the Federal Reserve System,  WHEREAS, the Company is the parent holding company for
the Bank, which is a California banking association, subject to the supervision
and regulation of the California Department of Financial Institution and the
Federal Reserve Board,  WHEREAS, the Board of Directors of the Company and the
Bank has approved and authorized the entry into this Agreement with the
Executive; and  WHEREAS, the parties desire to enter into this
Agreement to set forth the terms and conditions for the employment relationship
of the Executive with the Company and the Bank.  AGREEMENT  NOW, THEREFORE, in consideration of the promises and
mutual covenants and agreements herein contained and intending to be legally
bound hereby, the Company, the Bank and the Executive hereby agree as follows:  1.Employment.  1.1Title.  The Executive
is employed as Sr. Vice President/Credit Risk Manager of the Bank and the
Company.  In this capacity, the Executive
shall have such duties and responsibilities as may be designated to her by the
President of the Bank and in accordance with the objectives or policies of the
Board of Directors, from time to time, in connection with the business activities
of the Bank and the Company.  1.2Devotion to Bank and Company Business. 
The Executive shall devote her full business time, ability, and
attention to the business of the Bank and the Company during the term of this
Agreement and shall not during the term of this Agreement 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 Board of Directors of the Bank and the
Company.  It shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executives  1


responsibilities as an employee of the Bank and the
Company in accordance with this Agreement. 
Nothing in this Agreement shall be interpreted to prohibit the Executive
from making passive personal investments. 
However, the Executive shall not directly or indirectly acquire, hold,
or retain any interest in any business competing with or similar in nature to
the business of the Bank and the Company, except as permitted by Company
policies or authorized by the Chief Executive Officer of the Company.  1.3Standard.  The Executive
will set a high standard of professional conduct given her role with the Bank
and the Company and her responsibility relative to the Banks and the Companys
presence and stature in the community. 
The Executive will, at all times, emulate this high professional
standard of conduct in order to develop and enhance the Banks and the Companys
reputation and image.  The Executives
and her familys eligibility and all other terms and conditions of the
Executives participation in the Banks or Companys benefit, insurance and
disability plans and programs will be governed by the official plan documents
which may change from year-to-year. 
Notwithstanding the foregoing, at a minimum the Executive shall be
entitled to the same benefits as all other executives in comparable positions
with the Bank or the Company.  The
Executive will comply with all applicable rules, policies and procedures of the
Company and Bank and any of its subsidiaries and all pertinent regulatory
standards as may affect the Bank and the Company.  1.4Location.  The Executive
shall provide services for the Bank and the Company at their principal
executive offices located in San Jose, California.  The Executive agrees that the Executive will
be regularly present at that location and that the Executive may be required to
travel from time to time in the course of performing the Executives duties for
the Bank and the Company.  1.5No Breach of Contract.  
The Executive hereby represents to the Company and the Bank that:  (i) the execution and delivery of this
Agreement by the Executive and the performance by the Executive of the
Executives duties hereunder shall not constitute a breach of, or otherwise
contravene, the terms of any other agreement or policy to which the Executive
is a party or by which he is otherwise bound; (ii) that the Executive has
no information (including, without limitation, confidential information or
trade secrets) of any other person or entity which the Executive is not legally
and contractually free to disclose the Bank; and (iii) that the Executive
is not bound by any confidentiality, trade secret or similar agreement (other
than this Agreement) with any other person or entity.  2.Term.  The term of
this Agreement shall be a period of one (1) year from the Effective Date,
subject to the termination provisions of Section 6.  Upon the occurrence of the first annual
anniversary of the Effective Date, and on each anniversary date thereafter, the
term of this Agreement shall be deemed automatically extended for an additional
one (1) year term, subject to the termination provisions of Section 6.  3.Compensation.  3.1Salary.  The Executive
shall receive a salary at an annual rate of $180,000 which will be paid in
accordance with the Banks normal payroll procedures including applicable
adjustments for withholding taxes.  The
Executive shall receive such annual increases in salary, if any, as may be
determined by the Companys Board of Directors annual review of the  2


Executives compensation each year during the term of
this Agreement.  Participation in
deferred compensation, discretionary or performance bonus, retirement, stock
option and other employee benefit plans and in fringe benefits shall not reduce
the annual rate.  3.2Incentive Compensation. 
The Executive shall be entitled to receive an annual incentive
compensation payment pursuant to the terms of the Heritage Bank of Commerce
Administrative Bonus Plan in effect at the date of this Agreement and as
amended at any future date or pursuant to any successor incentive plan or
arrangement adopted by the Bank or the Company for its officers (the Incentive Plan). 
Notwithstanding any terms of the Incentive Plan to the contrary, an
annual payment under the Incentive Plan for a fiscal year shall be paid to the
Executive no later than the 15th day of the third month following the end of
the calendar year in which the annual incentive compensation payment is no
longer subject to a substantial risk of forfeiture.  Except as set forth in the Incentive Plan or
this Agreement, or in any successor incentive plan or arrangement, no incentive
compensation payments shall be prorated for a partial year during the year
Executive terminates her employment and the Executive shall not be entitled to
receive incentive compensation payments for any year during the term of this
Agreement in which Executive was not employed by the Bank or the Company for
the full fiscal year (not including her initial year of employment).  3.3Automobile Allowance. 
The Bank or the Company will pay to the Executive an automobile
allowance in the amount of $600 per month during the term of this
agreement.  The Executive shall obtain
and maintain public liability insurance and property damage insurance policies
with insurer(s) acceptable to the Bank and the Company with such coverages
in such amounts which may be acceptable to the Bank and the Company from time
to time.  3.4Other Benefits. 
The Executive shall be entitled to those benefits adopted by the Bank
and the Company for all officers of the Bank, subject to applicable
qualification requirements and regulatory approval requirements, if any.  To the extent that the level of such benefits
is based on seniority or compensation levels, the Company and the Bank shall
make appropriate and proportionate adjustments to the Executives
benefits.  The Executive shall be further
entitled to the following additional benefits which shall supplement or
replace, to the extent duplicative of any part or all of the general officer
benefits, the benefits otherwise provided to the Executive:  (a)Vacation.  The Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Bank as in effect for the Executive or
for other executives in comparable positions with the Bank; provided, however,
that the Executive shall be entitled to earn paid vacation at the rate of not
less than 22 days vacation days for each calendar year (reduced pro rata for
any partial year), of which at least 10 days (reduced pro rata for any partial
year) must be taken consecutively. 
Vacation may be accrued in accordance with the Companys policy.  The date or dates of vacation shall be
determined by the Executive and the Banks President, and will be subject to
the Banks and the Companys business requirements.  (b)Insurance.  The Bank or
the Company shall provide during the term of this Agreement group life, health
(including medical, dental, vision and hospitalization), accident and
disability insurance coverage for the Executive and her dependents through a
policy or policies  3


provided by the insurer(s) selected by the Bank
or the Company in their sole discretion on the same basis as all other
executives in comparable positions with the Bank.  (c)401(k).  The Company
maintains a 401(k) plan for its eligible employees.  Subject to the terms and conditions set forth
in the official plan documents, the Executive will be eligible to participate
in the 401(k) plan, and shall receive a matching contribution in
accordance with the terms of the 401(k) plan from the Company.  3.5Business Expenses. 
The Executive shall be entitled to incur and be reimbursed for all
reasonable business expenses.  The Bank
agrees that it will reimburse the Executive for all such expenses upon the
presentation by the Executive, from time to time, of an itemized account of
such expenditures setting forth the date, the purposes for which incurred, and
the amounts thereof, together with such receipts showing payments in conformity
with the Banks established policies. 
Reimbursement shall be made within a reasonable period after the
Executives submission of an itemized account in accordance with the Banks policies.  4.Indemnity.  The Bank and
the Company shall indemnify and hold the Executive harmless from any cost,
expense or liability arising out of or relating to any acts or decisions made
by the Executive on behalf of or in the course of performing services for the
Bank and the Company to the same extent the Bank and the Company indemnifies
and holds harmless other executive officers and directors of the Bank and the
Company and in accordance with the articles of incorporation, bylaws and
established policies of the Bank and the Company.  5.Certain Terms Defined. 
For purposes of this Agreement:  5.1Accrued Obligations
means the sum of the Executives Base Salary and accrued vacation through the
Date of Termination to the extent not theretofore paid, outstanding expense
reimbursements and any compensation previously deferred by the Executive to the
extent not theretofore paid.  5.2Base Salary
means, as of any Date of Termination of employment, the highest average salary
of the Executive for any consecutive 12 months of the last 36 months preceding
such Date of Termination.  5.3Cause shall
mean (i) the Executive willfully breaches or habitually neglects the
duties which the Executive is required to perform under this Agreement; (ii) the
Executive commits an intentional act of moral turpitude that has a material
detrimental effect on the reputation or business of the Bank or the Company; (iii) the
Executive is convicted of a felony or commits any material and actionable act
of dishonesty, fraud, or intentional material misrepresentation in the
performance of the Executives duties under this Agreement; (iv) the
Executive engages in an unauthorized disclosure or use of inside information,
trade secrets or other confidential information; or (v) the Executive
willfully breaches a fiduciary duty, or violates any law, rule or
regulation, which breach or violation results in a material adverse effect on
the Company and the Bank (taken as a whole). 
If the Bank or the Company decides to terminate the Executives
employment for Cause, the Bank or the Company will provide the Executive with
notice specifying the grounds for termination, accompanied by a brief written
statement stating the relevant facts supporting such grounds.  4


5.4Change of Control
shall mean, subject to the limitations of Section 409A of the Code, set
forth in Section 7 of this Agreement, the earliest occurrence of one of
the following events:  (a)the acquisition (or acquisition during
the 12 month period ending on the date of the most recent acquisition) by any
individual, entity, or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act) (a Person) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 40% or more of either (i) the then outstanding shares
of common stock of the Company (the Outstanding the Company
Common Stock) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (Outstanding Company Voting
Securities); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change of
Control; (i) any acquisition directly from the Company, (ii) any
acquisition by the Company that reduces the number of shares issued and
outstanding through a stock repurchase program or otherwise, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or the Bank or any corporation controlled by the
Company or the Bank or (iv) any acquisition by any corporation pursuant to
a transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 5.4; or  (b)individuals who, as of the Effective
Date, constitute the Board of Directors of the Company (the Incumbent Board) cease for any reason other than
resignation, death or disability to constitute at least a majority of the
Companys Board of Directors during any 12 month period; provided, however,
that any individual becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Companys shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Companys Board of Directors; or  (c)consummation of a reorganization, merger
or consolidation of the Company or the Bank, or sale or other disposition (in
one transaction or a series of transactions) of any assets of the Bank or the
Company having a total fair market value equal to, or more than, 40% of the
total gross fair market value of all of the assets of the Bank or the Company
immediately prior to such acquisition or acquisitions (a Business
Combination), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Common Stock
and Outstanding Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation which
as a result of such transaction owns all or substantially all of the Companys
or Banks assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Common Stock and  5


Outstanding Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or the Bank or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding shares
of common stock of the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such Business Combination
were members of the Companys Board of Directors at the time of the execution
of the initial agreement, or of the action of the Companys Board of Directors,
providing for such Business Combination; or  (d)approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company.  5.5Code means the
Internal Revenue Code of 1986, as amended and any successor provisions to such
sections.  5.6Change of Control Period
shall mean the period of time (a) commencing on the earlier of (i) 120
days before the date the Change of Control occurs, or if earlier, 120 days
before a definitive agreement is executed by the Company or the Bank for a
transaction described in Section 5.4(c) (provided, however, that in
the event of this subsection (a)(i) the Executive reasonably demonstrates
that her termination of employment should it occur was either (x) at the
request of a third party who has taken steps reasonably calculated to effect a
change in control, or (y) otherwise arose in connection with a Change in
Control), or (ii) the date the Change of Control occurs, and (b) ending
on the last day of the 24thcalendar month immediately following the month
the Change of Control occurred.  5.7Date of Termination
means (i) if the Executives employment is terminated due to the Executives
death, the Date of Termination shall be the date of death; (ii) if the
Executives employment is terminated due to Disability, the Date of Termination
is the Disability Effective Date; (iii) if the Executives employment is
terminated by the Bank or the Company for Cause, the Date of Termination is the
date on which the Bank or the Company gives notice to the Executive of such
termination; (iv) if the Executives employment is terminated by the Bank
or the Company without Cause or voluntarily by the Executive, the Date of
Termination shall be the date specified in the notice of termination; and (v) if
the Executives employment terminates for any other reason, the Date of
Termination shall be the Executives final date of employment.  5.8Disability
shall mean a physical or mental condition of the Executive which occurs and
persists and which, in the written opinion of a physician selected by the Bank
or its insurers and acceptable to the Executive or the Executives legal
representative, and, in the written opinion of such physician, the condition
will render the Executive unable to return to her duties for an indefinite
period of not less than 180 days.  5.9Highest Annual Bonus
shall mean the highest bonus or incentive compensation amount paid to (or
earned by) the Executive in any of the three (3) fiscal years (or  6


in any shorter number of years if the length of
employment of the Executive is less than three (3) years) immediately
preceding the termination.  6.Termination.  6.1This Agreement may be terminated for the
following reasons:  (a)Death.  This
Agreement shall terminate automatically upon the Executives death.  (b)Disability.  In the event
of the Executives Disability, the Bank or the Company may give the Executive a
notice of termination.  In such event,
the Executives employment with the Bank or the Company and this Agreement
shall terminate without further act of the parties effective on the 30th day
after receipt of such notice by the Executive (the Disability
Effective Date) provided, however, that within the 30 days after
such receipt, the Executive shall not have returned to full-time performance of
the Executive duties.  Unless otherwise
agreed in writing between the Executive, the Bank and the Company, the
Executive shall immediately cease performing and discharging the duties and
responsibilities of her positions and remove herself and her personal
belongings from the Banks and the Companys premises.  All rights and obligations accruing to the
Executive under this Agreement shall cease at such termination, except that
such termination shall not prejudice the Executives rights regarding
employment benefits which shall have accrued prior to such termination, and any
other remedy which the Executive may have at law, in equity or under this
Agreement, which remedy accrued prior to such termination.  (c)Cause.  The Bank or
the Company may terminate the Executives employment and this Agreement for
Cause.  Unless otherwise agreed in
writing between the Executive, the Bank and the Company, the Executive shall
immediately cease performing and discharging the duties and responsibilities of
her positions and remove herself and her personal belongings from the Banks
and the Companys premises.  All rights
and obligations accruing to the Executive under this Agreement shall cease at
such termination, except that such termination shall not prejudice the
Executives rights regarding employment benefits which shall have accrued prior
to such termination, and any other remedy which the Executive may have at law,
in equity or under this Agreement, which remedy accrued prior to such
termination.  (d)Termination by Bank or the Company
without Cause.  The Bank or the Company may, at its election
and in its sole discretion, terminate the Executives employment and this
Agreement at any time and for any reason or for no reason, upon 30 days prior
written notice to the Executive, without prejudice to any other remedy to which
the Bank or the Company may be entitled either at law, in equity or under this
Agreement.  Unless otherwise agreed in
writing between the Executive, the Bank and the Company, the Executive shall
immediately cease performing and discharging the duties and responsibilities of
her positions and remove herself and her personal belongings from the Banks
and the Companys premises.  All rights
and obligations accruing to the Executive under this Agreement shall cease at
such termination, except that such termination shall not prejudice the
Executives rights regarding employment benefits which shall have accrued prior
to such termination, including the right to receive the severance benefits
specified in Section 6.2(a) or 6.2(b) below, and any other
remedy  7


which the Executive may have at law, in equity or
under this Agreement, which remedy accrued prior to such termination.  (e)Voluntary Termination by Executive. 
The Executive may terminate her employment and this Agreement at any
time and for any reason or no reason, upon 30 days prior written notice to the
Bank and the Company.  Unless otherwise
agreed in writing between the Executive, the Bank and the Company, the
Executive shall immediately cease performing and discharging the duties and
responsibilities of her positions and remove herself and her personal belongings
from the Banks and the Companys premises All rights and obligations accruing
to the Executive under this Agreement shall cease at such termination, except
that such termination shall not prejudice the Executives rights regarding
employment benefits which shall have accrued prior to such termination and any
other remedy which the Executive may have at law, in equity or under this
Agreement, which remedy accrued prior to such termination.  6.2Certain Benefits upon Termination.  (a)Termination without Cause. 
In the event this Agreement is terminated based on Section 6.1(d) (termination
without cause), then in such case, the Executive shall receive the Accrued
Obligations on the Date of Termination, and severance benefits constituting of:  (i)cash payment in the amount equal to one
year of the Executives (A) Base Salary payable in a lump sum within 30
days of the Date of Termination, and  (ii)continuation of group insurance coverages
specified in Section 3.4(c) of this Agreement on terms at least equal
to those if the Executives employment had not been terminated, but not less
favorable than that provided to other executives in comparable positions with
the Bank or the Company, for a period of 12 months from the Date of
Termination, including, continuation of medical coverage for the Executive and
her dependents pursuant to The Consolidated Omnibus Budget Reconciliation Act
of 1985 (COBRA), or under applicable California
law pursuant to Assembly Bill No 1401 (Cal COBRA),
with one hundred percent (100%) of premiums for the insurance coverages payable
by the Bank or the Company monthly to the Executive for a period of 12 months
from the Date of Termination.  After
expiration of the 12 month period, the Executive and her dependents shall have
such rights to continue to participate under the Banks or the Companys group
insurance coverages specified in Section 3.4(c) of this Agreement at
the Executives expense to the extent available under the terms of the plan or
benefit.  The Executive agrees to notify
the Bank or the Company as soon as practicable, but not less than 10 business
days in advance of the commencement of comparable insurance coverages with
another employer.  The Banks obligation
for the 12 month period specified herein with respect to the foregoing benefits
shall be limited to the extent that the Executive obtains any such benefits
pursuant to a subsequent employers benefit plans, in which case the Bank may
reduce the coverage of any benefits it is required to provide the Executive hereunder
so long as the aggregate coverages and benefits of the combined benefit plans
of the new employer are not substantially less favorable to the Executive than
the coverages and benefits required to be provided hereunder.  Notwithstanding the foregoing or any other provision
of this Agreement, if any part or all of the severance benefits is subject to
taxation under Section 409A of the Code, as  8


determined by the Bank or
the Company, with the advice of its independent accounting firm or other tax
advisors, then the severance benefits shall be subject to modification as set
forth in Section 7 of this Agreement.  Notwithstanding the foregoing, when the Executive is
entitled to the serverence benefits provided in Section 6.2(b), then
Executive shall not be entitled to the severance benefits pursuant to this Section 6.2(a).  The Executive acknowledges and agrees that severance
benefits pursuant to this Section 6.2(a) are in lieu of all damages,
payments and liabilities on account of the early termination of this Agreement
and are the sole and exclusive remedy for the Executive for a termination
specified in Section 6.1(d).  (b)Termination and Change in Control. 
In the event of a Change in Control and at any time during the Change of
Control Period (x) the Executives employment is terminated, or (y) without
Executives written consent there occurs any material adverse change in the
nature and scope of the Executives position, responsibilities, duties, or a
change of 10 miles or more in the Executives location of employment, or any
material reduction in Executives compensation or benefits and Executive
voluntarily terminates her employment, then the Executive shall receive the
Accrued Obligations on the Date of Termination, and the severence benefits
consisting of:  (i)a cash payment in an amount equal to one
and one quarter (1.25) times the Executives (A) Base Salary and (B) Highest
Annual Bonus, payable in lump sum within 30 days following such termination;
and  (ii)continuation of group insurance coverages
specified in Section 3.4 (c) of this Agreement on terms at least
equal to those if the Executives employment had not been terminated, but not
less favorable than that provided to other executives in comparable positions
with the Bank or the Company, for a period of 12 months from the Date of
Termination, including continuation of medical coverage for the Executive and
her dependents pursuant to Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA), or under applicable California
law pursuant to Assembly Bill No. 1401 (Cal COBRA),
with one hundred percent (100%) of premiums for the insurance coverages payable
by the Bank or the Company monthly to the Executive for a period of 12 months
from the Date of Termination.  After such
expiration of the 12 month period, the Executive and her dependents shall have
such rights to continue to participate under the Banks or the Companys group
insurance coverages specified in Section 3.4(c) of this Agreement at
the Executives expense to the extent available under the terms of the plan or
benefit.  The Executive agrees to notify
the Bank or the Company as soon as practicable, but not less than 10 business
days in advance of the commencement of comparable insurance coverages with
another insurance carrier.  The Banks or
the Companys obligation for the 12 month period specified herein with respect
to the foregoing benefits shall be limited to the extent that the Executive
obtains any such benefits pursuant to a subsequent employers benefit plans, in
which case the Bank or the Company may reduce the coverage of any benefits it
is required to provide the Executive hereunder so long as the aggregate
coverages and benefits of the combined benefit plans of the new employer are
not substantially less favorable to the Executive than the coverages and
benefits required to be provided hereunder.  9


Notwithstanding the foregoing or any other provision
of this Agreement, if any part or all of the severance benefits is subject to
taxation under Section 409A of the Code, as determined by the Bank or the
Company, with the advice of its independent accounting firm or other tax
advisors, then the severance payment shall be subject to modification as set
forth hereafter in Section 7 of this Agreement.  The Executive acknowledges and agrees that severance
benefits pursuant to this Section 6.2(b) are in lieu of all damages,
payments and liabilities on account of the events described above for which
such severance benefits may be due the Executive under Section 6.2(b) 
of this Agreement.  This Section 6.2(b) shall
be binding upon and inure to the benefit of the Bank and the Company and their
respective successors and assigns.  Notwithstanding the foregoing, the Executive shall not
be entitled to receive severance benefits pursuant to this Section 6.2(b) in
the event her termination of employment results from an occurrence described in
Sections 6.1(a), 6.1(b) or 6.1(c).  (c)Death.  If the
Executives employment terminates by reason of the Executives death, this
Agreement shall terminate without further obligations to the Executives legal
representatives under this Agreement, other than for payment of Accrued
Obligations and any incentive compensation for the year in which the death
occurred prorated through the Date of Termination.  Accrued Obligations shall be paid to the Executives
estate or beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination; provided, however, that payment may be
deferred until the Executives executor or personal representative has been
appointed and qualified pursuant to the laws in effect in the Executives
jurisdiction of residence at the time of the Executives death.  The Executives estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Bank or the Company to the estate and beneficiaries of
other executives in comparable positions with the Bank or the Company under
such plans, programs, practices and policies relating to death benefits, if any
as in effect on the date of the Executives death.  (d)Disability.  If the
Executives employment terminates during the Term by reason of the Executives
Disability, this Agreement shall terminate without further obligations to the
Executive under this Agreement, other than for payment of Accrued Obligations,
and any incentive compensation for the year in which the termination occurs
prorated through the Date of Termination and any benefits under such plans,
programs, practices and policies relating to disability benefits, if any, as in
effect on the Date of Termination.  (e)Cause/Voluntary Termination. 
If the Executives employment terminates for Cause, this Agreement shall
terminate without further obligations to the Executive other than the
obligation to pay to the Executive the Accrued Obligations.  If the Executives employment terminates due
to the Executives voluntarily termination this Agreement shall terminate
without further obligations to the Executive other than the obligation to pay
to the Executive the Accrued Obligations.  (f)Single Trigger Event. 
The provisions for payments contained in this Section 6.2 may be
triggered only once during the term of this Agreement, so that, for example,
should the Executive be terminated because of a Disability and should there
thereafter be a Change of Control, then the Executive would be entitled to be
paid only under Section 6.2(d) and  10


not under Section 6.2(b), as well. In addition,
the Executive shall not be entitled to receive severance benefits of any kind
from any parent, wholly owned subsidiary or other affiliated entity of the Bank
or the Company if in connection with the same event of series of events the
payments provided for in this Section 6.2 have been triggered.  7.Section 409A Limitation. 
It is the intention of the Bank, the Company and the Executive that the
severance benefits payable to the Executive under Section 6.2 either be
exempt from, or otherwise comply with, Section 409A (Section 409A)
of the Code.  Notwithstanding any other term or provision of this
Agreement, to the extent that any provision of this Agreement is determined by
the Bank or the Company, with the advice of its independent accounting firm or
other tax advisors, to be subject to and not in compliance with Section 409A,
including, without limitation, the definition of Change in Control or the
timing of commencement and completion of severance benefits and/or other
benefit payments to the Executive hereunder, or the amount of any such
payments, such provisions shall be interpreted in the manner required to exempt
the benefit from or to comply with Section 409A.  The Company, the Bank and the Executive
acknowledge and agree that such interpretation could, among other matters, (i) limit
the circumstances or events that constitute a change in control; (ii) delay
for a period of 6 months or more, or otherwise modify the commencement of
severance and/or other benefit payments; (iii) modify the completion date
of severance and/or (iv) other benefit payments and/or reduce the amount
of the benefit otherwise provided.  The Company, Bank and the Executive further
acknowledge and agree that if, in the judgment of the Bank or the Company, with
the advice of its independent accounting firm or other tax advisors, amendment
of this Agreement is necessary to exempt the benefits from or to comply with Section 409A,
the Bank, the Company and the Executive will negotiate reasonably and in good
faith to amend the terms of this Agreement to the extent necessary so that it
exempts the benefits from or to comply with Section 409A (with the most
limited possible economic effect on the Bank, the Company and the
Executive).  For example, if this
Agreement is subject to Section 409A and Section 409A requires that
severance and/or other benefit payments must be delayed until at least 6 months
after the Executive terminates employment, then the Bank, the Company and the
Executive shall delay payments and/or promptly seek a written amendment to this
Agreement that would, if permissible under Section 409A, eliminate any
such payments otherwise payable during the first 6 months following the
Executives termination of employment and substitute therefore a lump sum
payment or an initial installment payment, as applicable, at the beginning of
the 7th month following the Executives termination of employment which, in the
case of an initial installment payment, would be equal in the aggregate to the
amount of all such payments thus eliminated. 
Notwithstanding the foregoing, (a) the Executive and her dependents
shall not be denied access to and participation in any health or medical
insurance coverage and benefits, for any period of time the Executive and her
dependants are otherwise eligible, and (b) the Executive acknowledges and
agrees that the Company or the Bank shall have the exclusive authority to
determine whether the Executive is a specified employee within the meaning of
Section 409A(a)(2)(B)(i).  8.Gross Up Of Section 280G and 409A
Tax.  If all or any portion of the amounts payable
to the Executive under this Agreement, either alone or together with other
payments or benefits which the Executive has the right to receive from the Bank
or the Company, constitute excess  11


parachute payments within the meaning of Section 280G
of the Code, that are subject to the excise tax imposed by Section 4999 of
the Code (or similar tax and/or assessment) , or any tax is imposed on the
Executive under Section 409A, the Bank or the Company (and its successor)
shall increase the amounts payable under this Agreement to the extent necessary
to afford the Executive substantially the same economic benefit under this
Agreement as the Executive would have received had no such excise tax under Section 280G
or tax under Section 409A been imposed on the payments due the Executive
under this Agreement.  The determination
of the amount of any such taxes shall be made by the independent accounting
firm employed by the Bank or the Company, immediately prior to the Change in
Control, or such other independent accounting firm or advisor as may be
mutually agreeable to the Bank or the Company (and their respective successor),
and the Executive in the exercise of their reasonable good faith judgment.  If, at a later date, it is determined
(pursuant to final regulations or published rulings of the Internal Revenue
Service, final judgment of a court of competent jurisdiction, or otherwise)
that the amount of any such taxes payable to the Executive is greater than the
amount initially so determined, then the Bank or the Company (or its successor)
shall pay to the Executive an amount equal to the sum of such additional taxes
and any interest, fines and penalties resulting from such underpayment, plus an
amount necessary to reimburse the Executive substantially for any income,
excise or other taxes payable by the Executive with respect to such
amounts.  All gross-up payments made
hereunder, shall be paid within the period specified by Treasury Regulation Section 1.409A-3(i)(1)(v) so
that the gross-up payment shall qualify as providing for payment at a specified
time or on a fixed schedule.  9.Assignment.  This
Agreement will inure to the benefit of and be binding upon the Bank and the
Company and any of their respective successors and assigns.  In view of the personal nature of the
services to be performed under this Agreement by the Executive, the Executive
will not have the right to assign or transfer any of her rights, obligations or
benefits under this Agreement.  The Bank
and the Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Bank or the Company to assume expressly and
agree to perform this Agreement in the same manner and to the same extent that
the Bank and the Company would be required to perform it if no such succession
had taken place.  As used in this
Agreement, Bank or the Company shall mean the Bank or the Company, as
applicable, as hereinbefore defined and any successor to the Companys or Banks
business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.  10.Specific Performance. 
The Executive hereby represents and agrees that the services to be
performed under the terms of this Agreement 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.  The Executive therefore
expressly agrees that the Bank and the Company, in addition to any other rights
or remedies that the Bank and the Company may possess, shall be entitled to
injunctive and other equitable relief to prevent or remedy a breach of this
Agreement by the Executive.  11.Noncompetition, No solicitation And
Nondisclosure By The Executive  (a)Definitions.The term Trade Secrets shall be given its broadest possible
interpretation and shall mean any information, including formulas, patterns,
compilations,  12


reports, records, programs, devices, methods,
know-how, negative know-how, techniques, raw material properties and
specifications, formulations, discoveries, ideas, concepts, designs, technical
information, drawings, data, customer and supplier lists, information regarding
customers, buyers and suppliers, distribution techniques, production processes,
research and development projects, marketing plans, general financial
information and financial information concerning customers, the Companys or
the Banks legal, business and financial structure and operations, and other
confidential and proprietary information or processes which (i) derive
independent economic value, actual or potential, from not being generally known
to the public or to other persons who can obtain economic value from its
disclosure or use and (ii) are the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.  The term Proprietary Information shall also be given
its broadest possible interpretation and shall mean any and all information
disclosed or made available by the Bank or the Company to the Executive
including, without limitation, any information which is not publicly known or
available and upon which the Banks or the Companys business or success
depends.  (b)The Executive shall not, during the term
of this Agreement, directly or indirectly, either as an employee, employer,
consultant, agent, principal, stockholder (except as permitted in Section 1.2of this Agreement), officer, director, or in any other
individual or representative capacity, engage or participate in any competitive
banking or financial services business without the prior written consent of the
Board of Directors of the Bank or the Company.  (c)Following termination of this Agreement
and the Executives employment hereunder, the Executive shall not use any Trade
Secret or Proprietary Information of the Bank or the Company or their
affiliates and subsidiaries to solicit, encourage or assist, directly,
indirectly or in any manner whatsoever, (i) any employees of the Bank, the
Company or their affiliates and subsidiaries (including any former employees
who voluntarily terminated employment with the Bank or the Company within a 12
month period prior to the Executives termination of employment) to resign or
to apply for or accept employment with any other competitive banking or
financial services business within the counties in California in which the Bank
or the Company has located its headquarters or branch offices; or (ii) any
customer, person or entity that has a business relationship with the Bank or
the Company or during the 12 month period prior to the Executives termination
of employment with the Bank or the Company was engaged in a business
relationship with the Bank or the Company, to terminate such business
relationship and engage in a business relationship with any other competitive
banking or financial services business within the counties in California in
which the Bank or the Company has located its headquarters or branch offices.  (d)In addition and not as any limitation on
the provisions of this Section 11, following termination of this Agreement
and the Executives employment hereunder and for 12 months thereafter, the Executive
shall not directly or indirectly, individually or as a consultant to, or as an
employee, officer, stockholder, director or other owner of or participant in
any business entity that engages in or seeks to engage in any banking or
financial services business, solicit (or assist in soliciting) any person who
is, or at any time within 1 month prior to the Executives termination of
employment was, an employee of the Company or the Bank who earned $25,000 on an
annual rate or more as an employee of the Company or the Bank to work for (as
an  13


employee, consultant or otherwise) any business,
individual, partnership, firm, corporation, or other entity whether or not
engaged in competitive business with the Bank or the Company.  12.Disclosure of Information. 
The Executive shall not, at any time or in any manner, directly or
indirectly, either before or after termination of this Agreement, without the
prior written consent of the Board of Directors of the Company or except as
required by law to comply with legal process including, without limitation, by
oral questions, interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process, use for her own
benefit or the benefit of any other person or entity, or otherwise disclose or
communicate to any person or entity including, without limitation, the media or
by way of the World Wide Web, any information concerning any Trade Secret or
Proprietary Information of the Company or the Bank.  The Executive further recognizes and
acknowledges that any Trade Secrets concerning any customers of the Bank or the
Company and their respective affiliates and subsidiaries, as it may exist from
time to time, is strictly confidential and is a valuable, special and unique
asset of the Banks and the Companys business. 
In the event the Executive is required by law to disclose Trade Secrets
or Proprietary Information, the Executive will provide the Bank and the
Company, and their counsel with immediate notice of such request so that they
may consider seeking a protective order. 
If, in the absence of a protective order or the receipt of a waiver
hereunder, the Executive is nonetheless, in the written opinion of
knowledgeable counsel, compelled to disclose Trade Secrets or Proprietary
Information to any tribunal or any other party or else stand liable for
contempt or suffer other material censure or material penalty, then the
Executive may disclose (on an as needed basis only) such information to such
tribunal or other party without liability hereunder.  Notwithstanding the foregoing, the Executive
may disclose Trade Secrets or Proprietary Information as may be required by any
regulatory agency having jurisdiction over the operations of the Bank or the
Company in connection with an examination of the Bank or the Company or other
proceeding conducted by such regulatory agency.  13.Written, Printed or Electronic Material. 
All written, printed or electronic material, notebooks and records including,
without limitation, computer disks, blackberry (or similar devices), or lap top
used by the Executive in performing duties for the Bank or the Company, other
than the Executives personal address lists, telephone lists, notes and
diaries, are and shall remain the sole property of the Bank and the
Company.  Upon termination of employment,
the Executive shall promptly return all such material (including all copies,
extracts and summaries thereof) to the Bank and the Company.  14.Miscellaneous.  14.1Notice.  For the
purpose of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or 3 days after the date of mailing by United States
mail, certified or registered, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other
addresses as either party may have furnished to the other in writing in
accordance herewith, except that notice of a change of address shall be
effective only upon actual receipt:  14


Company:
  
  HERITAGE
  COMMERCE CORP
  150
  Almaden Blvd.
  San
  Jose, CA 95113
  Attn:
  Chief Executive OfficerBank:
  
  HERITAGE
  BANK OF COMMERCE
  150
  Almaden Blvd.
  San Jose, CA 95113
  Attn: Presidentwith
  a copy to:
  
  Buchalter
  Nemer
  1000
  Wilshire Boulevard, Suite 1500
  Los Angeles, CA 90017-2457
  Attn: Mark A. Bonenfant, Esq.Executive:
  
  Margaret
  Incandela
  150
  Almaden Boulevard
  San
  Jose, CA 95113  14.2Amendments or Additions. 
No amendment, modification or additions to this Agreement shall be
binding unless in writing and signed by the parties hereto.  14.3Section Headings. 
The section headings used in this Agreement are included solely for
convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.  14.4Severability. 
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity
or enforceability of the other provisions hereof.  14.5Counterparts. 
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but both of which together will constitute one and
the same instrument.  14.6Mediation.  Prior to
engaging in any legal or equitable litigation or other dispute resolution
process, regarding any of the terms and conditions of this Agreement between
the parties, or concerning the subject matter of the Agreement between the
parties, each party specifically agrees to engage in good faith, in a mediation
process at the expense of the Bank or the Company, complying with the
procedures provided for under California Evidence Code Sections 1115 through
and including 1125, as then currently in effect.  The parties further and specifically agree to
use their best efforts to reach a mutually agreeable resolution of the
matter.  The parties understand and
specifically agree that should any party to this Agreement refuse to
participate in mediation for any reason, the other party will be entitled to
seek a court order to enforce this provision in any court of appropriate
jurisdiction requiring the dissenting party to attend, participate, and to make
a good faith effort in the mediation process to reach a mutually agreeable
resolution of the matter.  15


14.7Arbitration. 
To the extent not resolved through mediation as provided in Section 14.6,
all claims, disputes and other matters in question arising out of or relating
to this Agreement, any termination of the Executives employment, the
enforcement or interpretation of this Agreement, or because of an alleged
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, including (without limitation) any state or federal
statutory claims, shall be resolved by binding arbitration in Santa Clara
County, California, before a sole arbitrator (the Arbitrator)
mutually selected by the parties from Judicial Arbitration and Mediation
Services (JAMS) in accordance with the rules and
procedures of JAMS then in effect.  If
JAMS is no longer able to supply the arbitrator, such arbitrator shall be
mutually selected from the American Arbitration Association (AAA).  The obligation
of the parties to arbitrate pursuant to this clause shall be specifically
enforced in accordance with, and shall be conducted consistently with the
provisions of Title 9 of Part 3 of the California Code of Civil
Procedure as the exclusive remedy of such dispute; provided, however, that
provisional injunctive relief may, but need not, be sought in a court of law
while arbitration proceedings are pending, and any provisional injunctive
relief granted by such court shall remain effective until the matter is finally
determined by the Arbitrator.  Final
resolution of any dispute through arbitration may include any remedy or relief
that the Arbitrator deems just and equitable, including any and all remedies
provided by applicable state or federal statutes.  At the conclusion of the arbitration, the
Arbitrator shall issue a written decision that sets forth the essential
findings and conclusions upon which the Arbitrators award or decision is
based.  Any award or relief granted by
the Arbitrator hereunder shall be final and binding on the parties hereto and
may be enforced by any court of competent jurisdiction.  14.8Attorneys Fees. 
In the event of litigation, arbitration or any other action or
proceeding between the parties to interpret or enforce this Agreement, or any
part thereof or relating to this Agreement, the prevailing party shall be
entitled to recover its costs related to such action or proceeding and its
reasonable fees of attorneys, accountants and expert witnesses incurred by such
party in connection with any such action or proceedings.  The prevailing party shall be deemed to be
the party which obtains substantially the relief sought by final resolution,
compromise or settlement, or as may otherwise be determined by order of a court
of competent jurisdiction in the event of litigation, an award or decision of
an arbitrator in the event of arbitration.  14.9Entire Agreement. 
This Agreement supersedes any and all agreements, either oral or in
writing, between the parties with respect to the employment of the Executive by
the Bank and the Company and contains all of the covenants and agreements
between the parties with respect to the employment of the Executive by the Bank
and the Company; provided, however, that, this Agreement does not supersede or
replace the rights and benefits under any stock option agreement between the
Company and the Executive as specified in Section 3.3 of this
Agreement.  Each party to this Agreement
acknowledges that no other representations, inducements, promises, or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not set forth herein, and that no other
agreement, statement, or promise not contained in this Agreement shall be valid
or binding on either party.  14.10Waiver.  The failure
of a party to insist on strict compliance with any of the terms, provisions,
covenants, or conditions of this Agreement by another party shall not be deemed
a waiver of any term, provision, covenant, or condition, individually or in the
aggregate, unless such waiver is in writing, nor shall any waiver or
relinquishment of any right or power at any one  16


time or times be deemed a waiver or relinquishment of
that right or power for all or any other times.  14.11Severability.  If any
provision in this Agreement is held by a court of competent jurisdiction or
arbitrator to be invalid, void, or unenforceable, the remaining provisions
shall nevertheless continue in full force and effect without being impaired or
invalidated in any way.  Any provision of
this Agreement held invalid or unenforceable only in part or degree will remain
in full force and effect to the extent not held invalid or unenforceable.  14.12Interpretation.  This
Agreement shall be construed without regard to the party responsible for the
preparation of the Agreement and shall be deemed to have been prepared jointly
by the parties.  Any ambiguity or
uncertainty existing in this Agreement shall not be interpreted against any
party, but according to the application of other rules of contract
interpretation, if an ambiguity or uncertainty exists.  14.13Governing Law and Venue.  The laws of
the State of California, other than those laws denominated choice of law rules,
shall govern the validity, construction and effect of this Agreement.  Any action which in any way involves the
rights, duties and obligations of the parties hereunder and is not resolved by
binding arbitration shall be brought in the courts of the State of California
and venue for any action or proceeding shall be in Santa Clara County or in the
United States District Court for the Northern District of California, and the
parties hereby submit to the personal jurisdiction of said courts.  14.14Payments Due Deceased Executive. 
If the Executive dies prior to the expiration of the term of her
employment (except termination resulting from such death), any payments that
may be due the Executive from the Bank or the Company under this Agreement as
of the date of death shall be paid to the Executives heirs, beneficiaries,
successors, permitted assigns or transferees, executors, administrators,
trustees, or any other legal or personal representatives.  14.15Effect of Termination on Certain Provisions. 
Upon the termination of this Agreement, the obligations of the Bank, the
Company and the Executive hereunder shall cease except to the extent of the
Banks or the Companys obligation to make payments, if any, to or for the
benefit of the Executive following termination, and provided that
Sections 3.3 and 3.4(d) (and as provided in existing agreements
relating to these sections) and Sections 4, 6.2, 7, 8, 9, 10, 11, 12, 13,
14.3, 14.4, 14.6, 14.7, 14.8, 14.9, 14.10, 14.11, 14.12, 14.13, 14.14, 14.15
and 14.17 shall remain in full force and effect.  14.16Advice of Counsel and Advisors. 
The Executive acknowledges and agrees that he has read and understands
the terms and provisions of this Agreement and prior to signing this Agreement,
he has had the advice of counsel and/or such other advisors as he deemed
appropriate in connection with her review and analysis of such terms and
provisions of this Agreement.  14.17  Emergency Economic Stabilization Act of
2008.Notwithstanding anything in this Agreement to the contrary, the
obligations of the Company and the Bank under this Agreement are subject to the
limitations imposed on the Company and the Bank by the Emergency Economic
Stabilization Act of 2008, as amended by the American Recovery and Reinvestment
Act of 2009 (ARRA), and the rules and regulations of the U.S. Department
of Treasury  17


promulgated
under the ARRA. These limitations include payments and benefits under Section 6
[Certain Benefits upon Termination] and Section 8 [Gross Up of Section 280G
and 409A Tax]. This Section 14.17 shall continue in force only until such
time that the Company and the Bank are subject to the foregoing limitations.  IN WITNESS WHEREOF, each of the parties hereto has
executed this Agreement on the date first indicated above.  COMPANYHERITAGE
  COMMERCE CORP,a
  California bank holding companyBy:
  /s/
  Walter KaczmarekWalter
  Kaczmarek,Chief
  Executive OfficerBANKHERITAGE
  BANK OF COMMERCE,a
  California banking corporationBy:
  /s/
  Walter KaczmarekWalter
  Kaczmarek,PresidentEXECUTIVEBy:
  /s/
  Margaret IncandelaMargaret
  Incandela  18