Exhibit 10.4


 


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 MICHAEL R. ONG, an individual (the “Executive”) dated August 12, 2008 (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 Executive’s 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 2800(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 be reduced 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/ Michael R. Ong

  
	
   

  	
  Michael R. Ong