Document:

March 22, 2005 Exhibit 10.2

Exhibit 10.2

HERITAGE COMMERCE CORP

RESTRICTED STOCK AGREEMENT

This RESTRICTED STOCK AGREEMENT (the "Agreement") between
HERITAGE COMMERCE CORP (the "Company") and WALTER KACZMAREK
("Executive") is effective as of March 17, 2005 (the "Effective
Date").

R E C I T A L S:

WHEREAS, the Compensation Committee of the Board of Directors of the Company has
approved and authorized the Stock Award (as hereinafter defined) and the Company's entry into this
Agreement with the Executive; and

WHEREAS, the parties desire to enter into this Agreement to set forth the terms
and conditions of the Executive's Stock Award.

A G R E E M E N T:

NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements herein contained and intending to be legally bound hereby, the Company and the Executive
hereby agree as follows:

	Definitions.

	"Affiliate" means (i) any entity that is controlled by
the Company, whether directly or indirectly, and (ii) any entity in which the Company has a
significant equity interest, as determined by the Committee.

	"Beneficiary" means any person(s) designated by the
Executive on a beneficiary designation form, or, if no form, any person(s) entitled to receive any
amounts owing to the Executive upon his death by reason of having been named in the Executive's will
or trust agreement or having qualified as a taker of the Executive's property under the laws of
intestacy.

	"Board" means the Board of Directors of Heritage Commerce
Corp.

	"Change of Control" shall mean: 

	the acquisition by any individual, entity, or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of 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
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 (the
"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 any corporation controlled by the Company 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 1(d)(i); or 

	a majority of the individuals who, as of the Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason other than resignation, death or
disability to constitute at least a majority of the Board; 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 Board; or

	consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (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 Company Common Stock and Outstanding Company 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 the Company or all or substantially all of
the Company'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
Company Common Stock and Outstanding Company 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 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 Incumbent Board at the time of the execution of this Agreement, or of the action of the Board,
providing for such Business Combination; or

	approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

	"Code" means the Internal Revenue Code of 1986, as amended
and any successor provisions to such sections.

	"Committee" means the Compensation Committee appointed by
the Board.

	"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 Company 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
Executive unable to return to his duties for an indefinite period of not less than 90
days.

	"Employment Agreement" shall mean that certain Employment
Agreement dated of even date herewith by and between the Executive and the Company.

	"Exchange Act" means the Securities Exchange Act of 1934, as
amended.

	"Fair Market Value" means the closing price of a Share on
the NASDAQ National Market as published in the Wall Street Journal; if, however, there is no trading
of Shares on the date in question, then the closing price of the Shares as so reported, on the last
preceding date on which there was trading shall instead be used to determine Fair Market Value. If
Fair Market Value for any date in question cannot be determined as provided above, Fair Market Value
shall be determined by the Committee by whatever method or means the members, in the good faith
exercise of their discretion, at that time shall deem appropriate.

	"Good Reason" shall have the meaning afforded in the
Employment Agreement.

	"Retirement" means retirement in accordance with the
policies of the Company or Affiliate which employs the Executive.

	"Shares" means shares of Common Stock, no par value, of the
Company or such other securities as may be issued pursuant to an adjustment made under
Section 2 of this Agreement.

	"Tax Withholding Date" shall mean the earliest date the
obligation to withhold tax with respect to a Stock Award arises.

	Award of Stock.  Subject to the terms and
conditions of this Agreement, the Company hereby awards the Executive fifty-one thousand (51,000)
Shares (the "Stock Award").   Subject to adjustment as provided in Section 8,
there shall be reserved for issuance fifty-one thousand (51,000) Shares for the purpose of this
Stock Award.  Receipt of this Stock Award does not confer upon Executive any rights of a shareholder
with respect to any Shares subject to the Stock Award except as provided herein.

	Vesting of Stock Award.  The unvested portion
of this Stock Award is subject to forfeiture.  Subject to the terms of this Agreement, including
without limitation, the Executive's fulfillment of the employment requirements in Section 5
below, the Stock Award will vest and become free of restrictions in accordance with the following
schedule (except in the case of the Executive's termination of employment due to his death,
Disability, without Cause or for Good Reason or an earlier Change of Control of the
Company):

	
Date
	
Percentage of Stock

                  Award That Will Vest

                  And Become Free of Restrictions

	
On the third anniversary of the Effective Date
	
25%

	
On the fourth anniversary of the Effective Date
	
25%

	
On the fifth anniversary of the Effective Date
	
25%

	
On the sixth anniversary of the Effective Date
	
25%

As soon as administratively feasible after the vesting of any portion of the
Stock Award and the Executive's payment of any applicable taxes, the Company will deliver to the
Executive (or to the Executive's designated Beneficiary if the Executive is not then living)
evidence of the Executive's ownership (by book entry or certificate), of the Shares subject to the
Stock Award that have vested and for which the Executive has paid any applicable taxes.  The
Executive will have a taxable event on the date that each tranche of the Executive's Stock Award
vests.  By accepting the Stock Award, the Executive, his Beneficiary(ies), or legal representative
shall be conclusively deemed to have indicated his or their acceptance and ratification of, and
consent to, any action taken by the Committee or the Company.

	Cancellation of Stock Award.  The Committee has
the right to cancel all or any portion of the Stock Award, whether or not vested or deferred, if the
Committee determines in good faith that the Executive has done any of the following:
(i) committed a felony; (ii) committed fraud; (iii) embezzled; (iv) disclosed
confidential information or trade secrets; (v) was terminated for Cause (as defined in the
Employment Agreement); or (vi) engaged in any activity in competition with the business of the
Company or any subsidiary or Affiliate of the Company.  The Committee Chairman shall have the power
and authority to suspend all or any portion of the Stock Award if the Committee Chairman makes in
good faith the determination described in the foregoing sentence.  Any such suspension of a Stock
Award shall remain in effect until the suspension shall be presented to and acted on by the
Committee at its next meeting.  This Section 4 shall have no application for a two year period
following a Change of Control of the Company.  A breach by the Executive, his Beneficiary(ies), or
legal representative, of any restrictions, terms or conditions contained in this Agreement, or
otherwise established by the Committee with respect to the Stock Award will, unless waived in whole
or in part by the Committee, cause a forfeiture of the Stock Award.

	Employment Requirements.  Except as provided
herein, the Executive must remain employed by the Company or one of its Affiliates until the
Executive's Stock Award (or portion thereof) has vested to retain the Stock Award (or portion
thereof, as the case may be).  If the Executive's employment ceases for any reason (other than due
to the Executive's death, Disability, without Cause or for Good Reason) before the Executive's
entire Stock Award has fully vested, including, without limitation, due to the Executive's
Retirement, the Executive will forfeit that portion of the Stock Award that has not vested as of the
date the Executive's employment ceases unless the Committee determines otherwise.  If the
Executive's employment terminates due to the Executive's death, Disability, without Cause or for
Good Reason prior to the Executive's Stock Award fully vesting, the unvested portion of the
Executive's Stock Award will vest as of the date of the Executive's termination.

	Effect of a Change of Control.  The Stock Award will vest and become
free of restrictions on the date a Change of Control of the Company occurs.

	Nontransferability.  Until it has vested, the Executive may not assign
or transfer any portion the Stock Award nor any of the Executive's rights pertaining thereto by any
means other than by will or the laws of descent and distribution.

	Voting and Dividends.  The Executive shall have
the right to vote Shares comprising any portion of the Stock Award that has not vested and to
receive any cash dividends or cash distributions that may be paid with respect thereto.  In the
event of a stock dividend, stock distribution, stock split, division of Shares or other corporate
structure change, any outstanding Stock Award shall be automatically adjusted so that the value of
the Executive's interest shall not be decreased by reason of the occurrence of such event.  Any such
adjustment which results in the issuance of additional Shares with respect to any unvested share of
the Executive's Stock Award will be subject to the same restrictions as is such unvested share of
the Stock Award.

	No Right to Continued Employment.  Nothing in this Agreement shall
confer on the Executive any right to continue in the employment of the Company or its Affiliates for
any given period or on any specified terms nor in any way affect the Company's or its Affiliates'
right to terminate the Executive's employment without prior notice at any time for any reason or for
no reason.

	Compliance with Laws and Regulations.  The Stock Award and the
obligation of the Company to deliver the Shares subject to the Stock Award are subject to compliance
with all applicable laws, rules and regulations, to receipt of any approvals by any government or
regulatory agency as may be required, and to any determinations the Company may make regarding the
application of all such laws, rules and regulations.

	Restricted Stock

	Stock Certificates.  Shares of restricted stock shall be evidenced by
issuance of a stock certificate(s), which shall be held by the Company.  Such certificate(s) shall
be registered in the Executive's name and shall bear an appropriate legend which refers to the
restrictions applicable to such Stock Award.  Alternatively, Shares may be recorded in book entry
form.

	Forfeiture; Delivery of Shares.  Except as set forth in Section 5,
upon termination of the Executive's employment prior to fully vesting, all Shares of restricted
stock shall be forfeited and reacquired by the Company.  However the Committee may waive, in whole
or in part, any or all remaining restrictions applicable to the Stock Award. Shares comprising any
Stock Award held by the Company that are no longer subject to restrictions shall be delivered to the
Executive (or his Beneficiary) promptly after the applicable restrictions lapse or are
waived.

	The Company will, if required by applicable law, withhold the minimum
statutory amount of Federal, state and/or local withholding taxes in connection with the vesting of
the Stock Award.  The Executive may satisfy any such tax withholding obligation by any of the
following means, or by a combination of such means: (i) a cash payment; (ii) by delivery to the
Company of already-owned Shares which have been held by the individual for at least six months
having a Fair Market Value, as of the Tax Withholding Date, sufficient to satisfy the amount of the
withholding tax obligation arising from an exercise or vesting of a Stock Award; (iii) by
authorizing the Company to withhold from the Shares otherwise issuable to the individual pursuant to
vesting of a Stock Award, a number of Shares having a Fair Market Value, as of  the Tax Withholding
Date, which will satisfy the amount of the withholding tax obligation; or (iv) by a combination
of such methods of payment. If the amount requested is not paid, the Company may refuse to satisfy
the Stock Award.

	Notices.  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 delivered or mailed by United States certified or registered mail, 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:

	
Company:
	
HERITAGE COMMERCE CORP

   150 Almaden Blvd

  San Jose, CA 95113

   Attn:  Corporate Secretary

	
with a copy to:
	
Buchalter, Nemer, Fields & Younger

   601 South Figueroa Street, Suite 2400

   Los Angeles, CA 90017

   Attn: Mark A. Bonenfant, Esq.

	
Executive:
	
Walter Kaczmarek

   150 Almaden Blvd.

   San Jose, CA 95113

	Force and Effect.  The various provisions of this Agreement are
severable in their entirety.  Any judicial or legal determination of invalidity or unenforceability
of any one provision shall have no effect on the continuing force and effect of the remaining
provisions.

	Successors.  This Agreement shall be binding upon and inure to the
benefit of the successors of the respective parties.

	Amendment and Termination.  The Committee may amend, modify or
terminate the Agreement, at any time, in such respects as it shall deem advisable. Any such
amendment, modification or termination shall not, without the consent of the Executive, adversely
affect his rights under the Stock Award.

	THE COMPANY AND THE EXECUTIVE HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN.  THE COMPANY AND THE EXECUTIVE REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

	Miscellaneous.  No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in writing and signed by
the Executive and such officer as may be specifically designated by the Board.  No waiver by either
party hereto at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.  

	Attorney Fees.  In the event of any action, suit or proceeding brought
under or in connection with this Agreement, the prevailing party therein shall be entitled to
recover, and the other party hereto agrees to pay, the prevailing party's costs and expenses in
connection therewith, including reasonable attorneys' fees.

	Entire Agreement.  No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.  

	Governing Law.  The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of California without
regard to its conflicts of law principles.  

IN WITNESS WHEREOF, Heritage Commerce Corp has caused this Agreement to be
executed by an appropriate officer and the Executive has executed this Agreement, both as of the
date and year first above written.

"COMPANY":

HERITAGE COMMERCE CORP

 

By:

William J. Del Biaggio, Jr.

Chairmen Of The Board

"EXECUTIVE":

Walter KaczmarekMarch 22, 2005 Exhibit 10.3

Exhibit 10.3

HERITAGE COMMERCE CORP

2004 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

Capitalized terms used
without definition in this Stock Option Agreement (the "Option
Agreement") shall have the meanings given such terms in the
Heritage Commerce Corp 2004 Stock Option Plan (the
"Plan") unless otherwise indicated.

I.

 NOTICE OF STOCK OPTION GRANT 

	
Optionee:
	
Walter Kaczmarek

	
Date of Grant:
	
March 17, 2005

	
Exercise Price per Share:
	
$18.15 ( Fair
Market Value of the Company's Common Stock on the Date of Grant)

	
Total Number of Shares Granted:
	
50,000

	
Total Exercise Price:
	
$907,500

	
Type of Option:
	
 Incentive Stock Options

	
Expiration Date:
	
Unless subject to earlier expiration or termination pursuant to the terms of
the Plan the Option shall expires 10 years from Date of Grant

	
Vesting Schedule
	
Shares will become fully vested at the rate of 1/1460th per day commencing on
the Date of Grant. 

II.

             AGREEMENT 

1.Grant of Option.  The
Company hereby grants to the Optionee (the "Optionee")
named in the Notice of Stock Option Grant set forth above (the
"Notice of Grant") an option (the
"Option") to purchase up to the Total Number of Shares
Granted as set forth in the Notice of Grant, at the Exercise Price per Share set
forth in the Notice of Grant, subject to the terms, definitions and provisions
of the Plan, which are incorporated herein by reference.

2.Exercise of Option.  

(a)Right to Exercise.
This Option shall be exercisable prior to its Expiration Date only, in
accordance with the Vesting Schedule set out in the Notice of Grant and subject
to the applicable provisions of the Plan and this Option Agreement.

(b)Method of Exercise.  This
Option shall be exercisable by written notice which shall state the election to
exercise the Option, the number of Shares with respect to which the Option is
being exercised, and such other representations and agreements as to the
Optionee's investment intent with respect to the Shares as may be required by
the Company pursuant to the provisions of the Plan.  Such notice is attached
hereto as Exhibit A.   The written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company.  The written notice shall be accompanied by payment of the
Exercise Price.  This Option shall be deemed to be exercised upon receipt by the
Company of such written notice accompanied by the Exercise Price.

(c)Compliance with Law.  No
Shares will be issued pursuant to the exercise of any Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such shares.

3.Method of Payment.
Subject to Section 8 of the Plan, payment of the Exercise Price shall be paid by
(a) cash, (b) check or (c)  any combination of those methods of payment.  In
addition, if there is a public market for the Shares, the Optionee may elect to
pay the Exercise Price through a special sale and remittance procedure under
which the Optionee provides irrevocable written instructions to a designated
brokerage firm to effect the immediate sale of a portion of the purchased Shares
and remit to the Company, out of the sale proceeds available on the settlement
date, an amount sufficient to cover the aggregate option price payable for the
purchased Shares plus all applicable Federal and State income and employment
taxes required to be withheld by the Company by reason of such purchase and/or
sale.  The Optionee must also provide such irrevocable written instructions to
the Company to deliver the certificates for the purchased Shares directly to
such brokerage firm to effect the sale transaction.  Notwithstanding the above,
the Company shall not be required to permit the Optionee to utilize the sale and
remittance procedure described above if the Company's legal counsel advises the
Company that the procedure may violate any applicable law, regulation or
regulatory guidance.

4.Optionee's
Representations.  In the event the Shares purchasable pursuant to the
exercise of this Option have not been registered under the Securities Act of
1933, as amended, at the time this Option is exercised, Optionee shall, if
required by the Company, concurrently with the exercise of all or any portion of
this Option, deliver to the Company an investment representation statement in a
form reasonably required by the Company.

5.Non-Transferability of Option;
Assignment by Company.  This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of Optionee only by Optionee. Notwithstanding the
foregoing, in the event that this Option ceases to qualify as an "incentive
stock option" within the meaning of Section 422 of the Code for any reason other
than a transfer or exercise of this Option in violation of the provisions set
forth in the first sentence of this Section 5; then this Option may be
transferred by Optionee to any member of Optionee's immediate family, to a
partnership the members of which (other than Optionee) are all members of
Optionee's immediate family, or to a family trust the beneficiaries of which
(other than Optionee) are all members of Optionee's immediate family.  The terms
of this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of Optionee.  The Company may assign any of its
rights under this Option Agreement to single or multiple assignees, and this
Option Agreement shall inure to the benefit of the successors and assigns of the
Company.

6.Restrictions on Transfer.
All certificates representing Shares purchased under this Option Agreement
may be imprinted with an appropriate legend with respect to any applicable
restriction on transfer.  The Company may issue appropriate stop-transfer
instructions to its transfer agent to ensure compliance with these transfer
restrictions.  If the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.  The Company shall
not be required to transfer on its books any Shares that have been sold or
transferred in violation of any of the provisions of the Plan or this Option
Agreement, or to treat as the owner of such Shares or to accord the right to
vote or pay dividends to any purchaser or transferee to whom such Shares has
been sold or transferred.

7.Market Stand-Off
Agreement.  Optionee hereby agrees that if so requested by the Company or
any representative of the underwriters in connection with the first registration
statement of the Company to become effective under the Securities Act which
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering, Optionee shall not sell or otherwise transfer the
Shares or any other securities of the Company during the 180-day period
following the effective date of such registration statement.  The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such 180-day period.  Optionee agrees
that the Company may assign his or her obligation hereunder to any underwriter
of the Company's initial public offering.

8.Acknowledgments of Optionee.

(a)NO RIGHT OF EMPLOYMENT.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE
COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, NOR IN THE HERITAGE COMMERCE CORP 2004 STOCK OPTION
PLAN THAT IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY
RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY,
NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT
TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE.

(b)Receipt of Plan.
Optionee acknowledges receipt of a copy of the Plan and represents that he
is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof.  Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions arising under the
Plan or this Option Agreement.  Optionee further agrees to notify the Company
upon any change in the residence address indicated above.

9.Termination.  

(a)So long as the Optionee
maintains Continuous Status as a Director, Employee or Consultant, this Option
may be exercised, in whole or in part, with respect to any vested Shares,
anytime prior to the Expiration Date.  Except as set forth below, if the
Optionee's Continuous Status as a Director, Employee or Consultant terminates
for any reason, the Optionee shall have that amount of time set forth in Section
9 of the Plan to exercise any vested Shares, after which time this Option shall
expire.

(b)If the Optionee's Continuous
Status as a Director, Employee or Consultant is terminated without Cause (as
defined in the Employment Agreement between the Company and Optionee of even
date herewith, the "Employment Agreement") or by the Optionee for Good
Reason (as defined in the Employment Agreement), such Options shall become
immediately exercisable subject to expiration or termination as set forth in the
2004 Plan.  

(c)Upon a Terminating Event (as
defined in the Plan) such Options shall become immediately exercisable subject
to terms of the 2004 Plan. 

10.Notice.  Any notice
required or permitted under this Option Agreement shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the
United States mail by certified mail, with postage and fees prepaid, addressed
to the party at its address as shown below, or to such other address as such
party may designate in writing from time to time to the other party.

11.Entire
Agreement; Governing Law.  The Plan is incorporated herein by reference.
The Plan and this Option Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Optionee
with respect to the subject matter hereof, and may not be modified adversely to
the Optionee's interest except by means of a writing signed by the Company and
Optionee.  In case of conflict between the provisions in the Plan and this
Option Agreement, the provisions in the Plan shall prevail.  This Option
Agreement is governed by California law except for that body of law pertaining
to conflict of laws.

Date:
HERITAGE COMMERCE CORP
By:

William J. Del Biaggio, Jr.

Chairman Of The Board

Walter Kaczmarek

        

Exhibit A

HERITAGE COMMERCE CORP

2004 STOCK OPTION PLAN

EXERCISE NOTICE

TO:Heritage Commerce Corp

150 Almaden Boulevard
San Jose, California 95113

ATTN: ___________________

SUBJECT:NOTICE OF EXERCISE OF STOCK
OPTION

In respect to the stock option granted
to the undersigned on _____________, to purchase an aggregate of _________
shares of the Company's Common Stock, this is official notice that the
undersigned hereby elects to exercise such option to purchase shares as
follows:

	
NUMBER OF SHARES:
	 
	
DATE OF PURCHASE:
	 
	
MODE OF PAYMENT:
	
(Certified check, cash or other [specify])

The shares should be issued as follows:

NAME:

ADDRESS:

Signed:

Dated:

Please send this notice of exercise to:

Heritage Commerce Corp

150 Almaden Boulevard

San Jose, California 95113

   Attn:  _____________, Secretary

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