Document:

exv10w27

Exhibit 10.27

EARN-OUT AGREEMENT 

     This EARN-OUT AGREEMENT (“Agreement”) is entered into as of May 15, 2009, by and among
Simonich Corporation, a California corporation (the “Company”), Scott Simonich, the sole
shareholder of the Company (“Simonich”), and Bank of Commerce Holdings (together with any
acquisition subsidiary that may be formed for the purposes of effecting the transactions
contemplated by this Agreement, “BOCH”).

Stock Purchase Agreement; Capitalized Terms. Purchaser, Company and Simonich are parties
to an Stock Purchase Agreement, dated May 15, 2009 (the “Stock Purchase Agreement”).
Capitalized terms used herein have the respective meanings ascribed thereto in the Stock Purchase
Agreement unless otherwise defined herein.

Earn-Out Payment. The Earn-Out Payment (“Earn-Out Payment”) shall be calculated
and paid in the manner and on the terms and conditions set forth in this Section 2.

               (a) Except as otherwise specified herein, BOCH shall make annual installment payments (each,
an “Earn-Out Installment Payment”) towards the aggregate Earn-Out Payment in the event that
BOCH has Allocations (as defined below) equal to or in excess of the amounts set forth in the
following tables. Each table represents successive levels of Earn-Out Installment Payments that
Simonich may receive depending on the future performance of the Company. Except as discussed in
Section 2(d), the Earn-Out Payment shall be the cumulative amount payable hereunder for the years
2010, 2011, and 2012.

     “Allocations” shall mean BOCH’s 51% share of the annual after tax profits of the
Company.

     (b) The maximum aggregate amount of the Earn-Out Payment is $1,000,000, payable over
the period described herein. The parties intend that Simonich will be able to earn the
$1,000,000 maximum Earn-Out Payment so long as the aggregate Allocations to BOCH over the
period 2010, 2011, and 2012 cumulate to at least $1,950,000.

     (c) Subject to the over-ride payments described in Section 2(e), there shall be three
(3) levels of potential Earn Out Payments, labeled as “Threshold,” “Target” and “Maximum”.
The Earn-Out Installment Payment associated with Threshold performance shall be $200,000 per
year, calculated in accordance with Table 1. The Earn-Out Installment Payment associated
with Target performance shall be $250,000 per year, calculated in accordance with Table 2.
The Earn-Out Installment Payment associated with Maximum performance shall be $333,333.33
per year, calculated in accordance with Table 3. The Tables are set out in Exhibit I
attached to this Agreement.

     (d) With respect to any year, Simonich shall be eligible to receive the highest level
of Earn-Out Installment Payment associated with the aggregate Allocations to BOCH in Tables
1, 2 and 3, net of any prior Earn-Out Installment Payments made to Simonich. For years
after 2012, until such time as Simonich achieves the maximum aggregate Earn-Out Payment of
$1,000,000, Simonich shall be eligible to receive an Earn-Out Installment Payment equal to
(1) up to $200,000, if the Allocation to BOCH for such year is $500,000 or more, but less
than $625,000; (2) up to $250,000, if the Allocation to BOCH for such year is $625,000 or
more, but less than $750,000; or (3) up to $333,333, if the Allocation to BOCH for such year
is $750,000 or more. Once Simonich receives the maximum aggregate Earn-Out Payment of
$1,000,000, no

 

 

additional Earn-Out Payments shall be made. In calculating the Cumulative Allocations
for 2010, any Allocations occurring during 2009 shall be included.

     (e) If Simonich exceeds the Table 3 Maximum Target in any year, there shall be an
over-ride Earn-Out Payment made to Simonich equal to 50% of each dollar by which the
Cumulative Allocations to BOCH exceed the Maximum Target; provided, however, that if
Simonich is paid an over-ride Earn-Out Payment with respect to any Cumulative Allocation, he
cannot be paid in the following year with respect to the same Cumulative Allocation amount.
An over-ride Earn-Out Payment will be available for performance exceeding the 2009 Maximum
Target. An illustration of the operation of the over-ride Earn-Out Payment is set out in
Exhibit II attached to this Agreement.

     (f) For purposes of all calculations of Allocations under this Agreement, BOCH’s Chief
Financial Officer shall prepare a statement of each such calculation promptly after the end
of each period for which Earn-Out Payments can be earned (each, an “Earn-Out
Period”), but in no event later than sixty (60) days following the end of the relevant
Earn-Out Period (subject to the completion of the audit of BOCH’s financial statements by
its outside auditor). Copies of BOCH’s computation of Allocations shall be submitted in
writing to Simonich by BOCH and, unless Simonich notifies BOCH within forty-five (45) days
after receipt of such computation that he objects to such computation of Allocations or
Cumulative Allocations, as the case may be, the computation shall be binding and conclusive
for the purposes of this Agreement. Simonich shall have access to the books and records of
BOCH during regular business hours to verify the computation of Allocations made by BOCH.

     (g) If Simonich notifies BOCH in writing within forty-five (45) days after receipt of
BOCH’s computation that it objects to the computation of Allocations set forth therein,
Simonich and BOCH shall negotiate in good faith to resolve the dispute during the fifteen
(15) day period following BOCH’s receipt of such notification. If such dispute is not
resolved within that period, it shall be submitted for resolution in accordance with terms
of the Stock Purchase Agreement.

     (h) If no notice of objection is delivered by Simonich, BOCH shall make any applicable
Earn-Out Installment Payment not later than three (3) business days after the earlier of the
expiration of the 45-day period for delivery of such notice of objection or the date
Simonich notifies BOCH that the Allocation calculation is accepted without objection. If a
notice of objection is delivered by Simonich, the Earn-Out Installment Payment will be made
three (3) business days after the date all disputed items are finally resolved.

                    (i) At Simonich’s election, the initial $100,000 of Earn-Out Installment Payments shall be
made in the form of BOCH common stock (the “Stock Payment”) which shall be issued subject
to a three-year lock up agreement pursuant to which Simonich shall not be permitted to trade such
shares. The number of shares to be issued in connection with the Stock Payment shall be
calculated, at the time that it is earned, by dividing the BOCH common stock trading price on the
last trading date of the preceding calendar year into $100,000. Any resulting fraction share shall
be rounded upward to the nearest whole share. The $100,000 of the Allocation represented by the
Stock Payment, which would be otherwise payable to Simonich as an Earn-Out Installment Payment
hereunder, shall be paid to BOCH.

Covenants. During the period when Earn-Out Payments may be earned (the “Term”), the
parties shall cause the Company to operate its business in a manner consistent with the operations
of Company prior to the formation of the Company, except as augmented by the capital additions
provided under the Stock Purchase Agreement. In addition to, and not in limitation of, the
foregoing, during the Term, the Company shall not:

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sell any of its assets outside the Ordinary Course of Business;

merge or consolidate with any other Person;

issue any shares of capital stock to any other Person;

dissolve, liquidate or otherwise end its business;

acquire any other Person, or acquire any material assets of any other Person other than in the

Ordinary Course of Business.

Termination of Employment. In the event that the employment of Simonich is terminated
prior to all Earn-Out Installment Payments being earned, Simonich shall nonetheless be entitled to
receive Earn-Out Payments, if his employment is terminated (a) by the Company without Cause or if
Simonich either resigns his employment for Good Reason (as defined in his Employment Agreement), or
(b) as the result of the Simonich’s death or disability. This Agreement, by itself, shall not be
deemed for any purposes to be an agreement to provide continued employment or to amend the terms or
any employment agreement that may exist between Simonich and the Company.

Miscellaneous. This Agreement constitutes an agreement solely among the parties hereto,
and is not intended to and shall not confer any rights, remedies, obligations or liabilities, legal
or equitable, including any right of employment, on any Person other than the parties hereto and
their respective successors, assigns and legal representatives, or otherwise constitute any Person
a third party beneficiary hereunder or by reason hereof. Neither party may assign its rights or
obligations under this Agreement without the express written consent of the other party. This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original
agreement, but all of which together shall constitute one and the same instrument. This Agreement
may only be amended or modified in writing signed by the party against whom enforcement of such
amendment or modification is sought. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of any other laws that might
otherwise govern under principles of conflicts of laws applicable thereto. Any legal proceeding to
enforce any provision of this Agreement or arising out of this Agreement must be brought in the
federal or state courts located in the State of California, County of Shasta, and each of the
parties consents to the jurisdiction of such courts and waives any objection to venue laid therein.
Process may be served on any party anywhere in the world.

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     IN WITNESS WHEREOF, the parties have caused this Earn-Out Agreement to be duly executed and
delivered as of the date first set forth above.

	 	 	 	 	 
	 

	 	COMPANY:	 	 
	 
	 	 	 	 
	 

	 	Simonich Corporation	 	 
	 
	 	 	 	 
	 

	 	/s/ Scott Simonich	 	 
	 

	 	 

By: Scott Simonich
	 	 
	 

	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 
	 

	 	SIMONICH:	 	 
	 
	 	 	 	 
	 

	 	/s/ Scott Simonich	 	 
	 

	 	 

By: Scott Simonich
	 	 
	 
	 	 	 	 
	 

	 	BOCH:	 	 
	 
	 	 	 	 
	 

	 	Bank of Commerce Holdings	 	 
	 
	 	 	 	 
	 

	 	/s/ Patrick J. Moty	 	 
	 

	 	 

By: Patrick J. Moty
	 	 
	 

	 	Title: President and Chief Executive Officer	 	 

4exv10w28

Exhibit 10.28

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of this 15th day of May 2009, by
and among Scott Simonich (“Executive”), Simonich Corporation, a California corporation (the
“Company”) and Bank of Commerce Holdings (together with any acquisition subsidiary that may be
formed for the purposes of effecting the transactions contemplated by this Agreement, “BOCH”).
Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in
the Stock Purchase Agreement (as defined below).

WITNESSETH

WHEREAS, Executive has been a principal officer of Company and has obtained valuable knowledge and
experience pertaining to Company’s business (collectively, the “Business”); and
WHEREAS, following BOCH investment in the Company, Executive shall be named as the President of the
Company and the Company shall continue the operation of the Business;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained
herein and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1. Employment. Beginning on the date hereof and continuing until December 31, 2012 ,
unless terminated earlier pursuant to Section 10 of this Agreement, the Company shall
employ Executive as President of the Company, and Executive hereby accepts such employment. The
Executive shall have the duties described in Schedule A hereto, together with such other
duties consistent with such position that are assigned to him from time to time by the Board of
Directors of the Company (the “Board”). The period of time during which Executive is employed by
the Company is referred to herein as the “Employment Period.” During the Employment Period,
Executive shall devote his full time and best efforts to the business and welfare of the Company.
Any amendments, waivers or extensions of this Agreement shall be adopted by vote of the three
director Executive Compensation Committee of the Company’s board of directors. Two of the three
directors on the Executive Compensation Committee will be from BOCH.

During the Employment Period, Executive shall be nominated to serve as a member of the Board and
Chairman of the Board of Directors of the Company.

2. Salary, Bonuses and Benefits.

     (a) Base Salary. During the Employment Period, the Company will pay Executive for his
services a base salary at the annual rate of $300,000, which salary shall be payable in accordance
with Company’s standard payroll practices. The Board, in its sole and absolute discretion, may
increase, but not decrease (unless mutually agreed by the Board and Executive), such base salary
based on an annual review of Executive’s performance.

     (b) Earn-Out Agreement. In connection with the formation of the Company, Executive
shall be entitled to participate in the Earn-Out Agreement.

     (c) Benefits. The Company shall provide Executive with the benefits of such insurance
plans, hospitalization plans, retirement plans and other employee benefits in accordance with
Company’s prior policies.

 

 

3. Noncompetition. Executive hereby agrees that, for the period commencing on the date
hereof and expiring on the third anniversary of the date BOCH acquires the Remaining Shares (as
defined in the Stock Purchase Agreement), Executive will not, anywhere in the geographic area
served by the Company at the date BOCH acquires the Remaining Shares, associate with (including,
but not limited to, association as an officer, employee, partner, director, consultant, agent or
advisor) or own directly, or indirectly, any interest in (other than publicly traded shares), any
business that is in competition with the Business (a “Competing Business”).

4. Nondisclosure. Executive agrees at all times to hold as secret and confidential any
and all knowledge, information, developments, trade secrets, know how and confidences of the
Company, or the Business of which he has knowledge as of the date hereof, or of which he may
acquire knowledge during the Employment Period, to the extent such matters have not previously been
made public, are not thereafter made public or do not otherwise become available to Executive from
a third party who is not bound by any confidentiality agreement with the Company or Company
(“Confidential Information”). Executive agrees not to use such knowledge for his own benefit or
for the benefit of others or, except as provided above, disclose any of such Confidential
Information without the prior written consent of the Company or Company, which consent shall make
express reference to this Agreement.

5. Non-Solicitation. Executive hereby agrees that, for the period commencing on the date
hereof and expiring on the third anniversary of the date BOCH acquires the Remaining Shares (as
defined in the Stock Purchase Agreement), Executive will not knowingly, either directly or
indirectly, without the prior written consent of the Company, (a) induce, or facilitate or assist a
third party to induce, any person, business or entity which is on the date hereof or was during the
twelve months prior to the date hereof a material supplier or customer of the Company, or which
otherwise is on the second anniversary of the termination of the Employment Period or was during
the twelve months prior to the date hereof a material contracting party of the Company, to
terminate any written or oral agreement with, or reduce its business with, the Company or (b)
employ or solicit to employ in a business other than that of the Company, or facilitate a third
party to so employ or solicit to employ, any employees of the Company, engaged in the conduct of
the Business.

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6. Termination.

     (a) By Executive without Good Reason. The Employment Period may be terminated by
Executive at any time without Good Reason (as defined below) upon the giving of 90 days’ advance
written notice to the Company. In the event Executive terminates this Agreement without Good
Reason, (i) the Company shall pay to Executive (A) his base salary accrued through the effective
date of such termination, (B) the value of any unused accrued vacation days, and (C) any
outstanding unpaid reimbursement expenses.

     (b) As used herein, the term “Good Reason” means only (x) a requirement that Executive
relocate his principal place of business to a location other than in Contra Costa, California,
without Executive’s consent, (y) a diminution in Executive’s position, responsibilities or
authority (other than during any period of time during which Executive is unable to perform such
responsibilities, such as during any Disability) such that the Executive’s position,
responsibilities or authority after such diminution is inconsistent with the Executive’s title or
duties set forth in Section 1 of the Agreement, or (z) any other material breach of this Agreement
by the Company which is not cured within thirty (30) days after notice thereof is given to the
Company, including, without limitation, any failure by the Company to pay to Executive the
compensation or benefits to which he is entitled hereunder.

     (c) Disability of Executive. If Executive becomes physically or mentally disabled,
whether totally or partially, such that he is unable to perform the essential services hereunder (a
“Disability”) throughout the Disability Period (as defined below), the Company may terminate this
Agreement at any time after the end of the Disability Period by written notice to Executive and,
except for the obligations of Executive set forth in Sections 3 through 5 hereof,
the payment by the Company of any earned but unpaid salary, any unused accrued vacation days
through the end of the month in which such termination becomes effective and the reimbursement of
business expenses, all rights and obligations of the Company and Executive hereunder shall
terminate. For purposes hereof, the term “Disability Period” means the six month period
following the date that the Executive’s absence from work due to Disability commences.

     (d) Death of Executive. In the event of Executive’s death, this Agreement shall be
terminated without notice by any party as of the end of the month in which Executive’s death
occurs, and, except for the payment by the Company of any earned but unpaid salary, any accrued
unused vacation days through the end of such month, the reimbursement of business expenses, and the
payment of any life insurance proceeds to which the beneficiaries of Executive may be entitled, all
rights and obligations of the Company and Executive’s heirs hereunder shall terminate.

     (e) By the Company for Cause. This Agreement may be terminated at any time by the
Company for Cause by written notice to Executive. In such event, all rights and obligations of the
parties hereunder shall immediately terminate, except for the obligations of Executive set forth in
Sections 3, 4, and 5 hereof, the payment by the Company of Executive’s earned but unpaid base
salary, unused accrued vacation days through the date on which such termination occurs, and the
reimbursement of business expenses. In the event of termination for Cause, Executive shall
automatically be deemed to have resigned from the Board and all other positions in the Company.

     As used herein, the term “Cause” means the occurrence of any of the following events: (A)
Executive’s conviction of any felony, or any crime involving moral turpitude, dishonesty or theft;
Executive’s embezzlement or misappropriation of money or other property of the Company; (B) the
Board’s determination that the Executive has willfully and continually failed to substantially
perform his material duties hereunder, which failure is not remedied by Executive within thirty
(30) days after receipt of written notice detailing such alleged failure; (C) the commission by the
Executive of any

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willful or intentional act, or the Executive’s willful or intentional failure to act, which
could reasonably be expected to injure the reputation, business or business relationships of the
Company; provided, however, that no act or failure to act on the part of the Executive shall be
deemed to be willful or intentional if it was due primarily to an error of judgment or negligence,
but shall be deemed willful or intentional if done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or omission was in the best interests of
the Company; or (D) Executive’s use of alcohol or illegal drugs, materially interfering with the
performance of the Executive’s obligations under this Agreement, continuing after written warning,
or (E) any material breach by Executive of this Agreement, or any breach of the fiduciary duties
owed by Executive to the Company.

     (f) The provisions of the Earn-Out Agreement shall govern whether Earn-Out Payments are made
to Executive following termination of employment.

7. Reformation of Agreement; Severability. The parties hereto intend this Agreement to be
enforced as written. However, in the event that any provision of this Agreement is held by a court
of competent jurisdiction to be invalid or unenforceable as against public policy or otherwise,
Executive and the Company hereby authorize and instruct such court to exercise its discretion in
reforming such provision to the end that Executive shall be subject to such restrictions and
obligations as are reasonable under the circumstances and enforceable by the Company. If any
provision of the Agreement shall be held invalid or unenforceable, such invalidity or
unenforceability shall attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other provision of this Agreement, and the Agreement shall be carried
out as if any such invalid or unenforceable provision were not contained herein.

8. Notices. Any notices or other communication required to be sent or given hereunder by
any of the parties shall in every case be in writing and shall be deemed to have been duly given
upon (a) the date such notice is delivered personally to the recipient, (b) three days after the
date mailed to the recipient by registered or certified mail, return receipt requested and postage
prepaid, (c) one day after delivery to the recipient by a recognized overnight courier service
(charges prepaid), (d) the next business day after the date of transmission if sent by electronic
mail to the recipient with a confirmation copy to follow the next day to be delivered by overnight
carrier or certified mail, or (e) the next business day after the date of transmission if sent by
telecopy to the recipient (with written confirmation of receipt) with a confirmation copy to follow
the next day to be delivered by overnight carrier or certified mail. Such notices, demands and
other communications shall be sent to the addresses identified in the Transaction Documents.

9. Assignment. The obligations imposed and the rights conferred by this Agreement shall be
binding upon and inure to the benefit of the respective heirs (including estates), successors and
permitted assigns of the parties hereto, but will not be assignable or delegable by any party
without the prior written consent of the other parties; provided that, notwithstanding the
foregoing, the Company may assign this Agreement and any or all of its rights, interest and
obligations hereunder to any affiliate of the Company without the prior written consent of
Executive, so long as such assignment does not release the Company from liability hereunder.

10. Entire Agreement. This Agreement contains the entire agreement between the parties
hereto with respect to the terms of the Executive’s employment. Any other agreement between the
parties hereto that is referenced herein, or which makes reference to this Agreement, is, and is
intended to be construed as, a separate agreement entered into by and for the benefit of the
parties thereto, and the provisions of each such agreement, including without limitation provisions
relating to governing law, jurisdiction or venue, shall relate solely to that agreement.

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11. Amendments, Waivers, Etc. This Agreement may not be changed orally, but only by an
agreement, in writing, signed by Executive and an officer of the Company specifically designated by
the Board in accordance with the terms of this Agreement to execute such amendment. The terms of
this Agreement may be waived only by a written instrument specifically referring to this Agreement,
executed by the party waiving compliance. The failure of the Company at any time or from time to
time to require performance of any of Executive’s obligations under this Agreement shall in no
manner affect the Company’s right to enforce any provisions of this Agreement at a subsequent time;
and the waiver by the Company of any right arising out of any breach shall not be construed as a
waiver of any right arising out of any subsequent breach.

12. Interpretation. The section numbers and headings contained in this Agreement are
inserted for purposes of convenience of reference only and shall not affect the meaning or
interpretation hereof. In the case of a conflict between the provisions of this Agreement and the
Purchase Agreement, the provisions of the Purchase Agreement shall govern. A reference to a
Section shall mean a Section in this Agreement, unless otherwise expressly stated. The words
“include,” “includes” and “including” when used herein shall be deemed in each case to be followed
by the words “without limitation.”

13. Capacity. Executive represents and warrants to the Company that he has full legal
power and capacity to execute, deliver and perform this Agreement.

14. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without giving effect to principles of conflicts of law.

15. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute one and the same
instrument.

[Signature Pages to Follow]

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IN WITNESS WHEREOF, the Members of the Company and Executive have executed and delivered this
Agreement on the date first written above.

	 	 	 	 	 
	 

	 	COMPANY:	 	 
	 
	 	 	 	 
	 

	 	Simonich Corporation	 	 
	 
	 	 	 	 
	 

	 	     /s/ Scott Simonich	 	 
	 

	 	 

By: Scott Simonich
	 	 
	 

	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 
	 

	 	BOCH:	 	 
	 
	 	 	 	 
	 

	 	Bank of Commerce Holdings	 	 
	 
	 	 	 	 
	 

	 	     /s/ Patrick J. Moty	 	 
	 

	 	 

By: Patrick J. Moty
	 	 
	 

	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 
	 

	 	EXECUTIVE:	 	 
	 
	 	 	 	 
	 

	 	     /s/ Scott Simonich	 	 
	 

	 	 

By: Scott Simonich
	 	 

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