Exhibit 10.3


 


AMENDMENT NO. 1


 


TO


 


AMENDED AND RESTATED EMPLOYMENT AGREEMENT


 


This Amendment No. 1 to the Amended and
Restated Employment Agreement by and between HERITAGE COMMERCE CORP, a
California bank holding company (the “Company”),
HERITAGE BANK OF COMMERCE, a California banking corporation (the “Bank”), and RAYMOND PARKER, an individual (the “Executive”) dated October 17, 2007 (the “Agreement”), is entered into on December 29, 2008 for
the purposes stated hereinafter.


 


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 Amendment to the
Agreement with the Executive; and


 


WHEREAS, the Company, Bank and Executive believe it
to be in their respective best interests to amend the Agreement as set forth
hereinafter to reflect compliance with the Emergency Economic Stabilization Act
of 2008 (the “EESA”) and/or the Troubled Asset Relief Program established by
the EESA as long as it applies to the Company, Bank and Executive.


 


NOW, THEREFORE, the Company, Bank and Executive
agree to add as the final paragraph of the Agreement the following:


 


14.17       Parachute
Payment Cutback.  As long as the U.S.
Treasury owns any stock or assets of the Bank or the Company pursuant to the
Emergency Economic Stabilization Act of 2008 (the “EESA”) and/or the Troubled
Asset Relief Program established by the EESA, in the event that any payment or
benefit received or to be received by Executive pursuant to the terms of this
Agreement or otherwise in connection with the Executives termination of
employment or contingent upon a change in ownership or control pursuant to any
plan or arrangement or other agreement with the Bank or the Company (or any
affiliate) would constitute a “parachute payment” within the meaning of Section 280G(b)(2) of
the Internal Revenue Code of 1986, as amended, including application of Section 2800(e) as
added by the EESA and any other applicable restrictions under the EESA for the
Bank and the Company to comply with the Troubled Asset Relief Program
established by the EESA, then the payments and benefits received or to be
received by the Executive shall by the minimum extent necessary so that such
payments and benefits do not constitute “parachute payments”.  This paragraph 14.17 shall no longer be in
effect 


 

















 


after such time as the
United States Treasury does not own any equity or debt interest in the Company.


 


IN WITNESS WHEREOF, the Executive and the Employer
have executed this Amendment No. 1 to the Agreement effective as of the
date first above written.


 


	
   

  	
  “COMPANY”  

  
	
   

  	
   

  	
   

  
	
   

  	
  HERITAGE COMMERCE CORP,

  a California bank holding company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Walter Kaczmarek

  
	
   

  	
   

  	
  Walter
  Kaczmarek,

  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “BANK”  

  
	
   

  	
   

  	
   

  
	
   

  	
  HERITAGE BANK OF
  COMMERCE,

  a California banking company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Walter Kaczmarek

  
	
   

  	
   

  	
  Walter
  Kaczmarek,

  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Raymond Parker

  
	
   

  	
   

  	
  Raymond
  Parker