Document:

FY2004 10K Exhibit 10.11

Exhibit 10.11

HERITAGE COMMERCE CORP

                              NONQUALIFIED DEFERRED COMPENSATION PLAN

Effective as of January 1, 2004

HERITAGE COMMERCE CORP

NONQUALIFIED DEFERRED COMPENSATION PLAN

Effective as of January 1, 2004

TABLE OF CONTENTS

ARTICLE 1: DEFINITIONS*
1.1ACCOUNT*

1.2BENEFICIARY*

1.3CHANGE
OF CONTROL*

1.3CODE*

1.4COMPENSATION*

1.5COMPENSATION DEFERRALS*

1.6DESIGNATION DATE*

1.7DISABILITY*

1.8EFFECTIVE DATE*

1.9ELIGIBLE
EMPLOYEE*

1.10EMPLOYER*

1.11EMPLOYER DISCRETIONARY CONTRIBUTIONS*

1.12EMPLOYER MATCHING CONTRIBUTIONS*

1.13ENTRY
DATE*

1.14PARTICIPANT*

1.15PARTICIPANT ENROLLMENT AND ELECTION FORM*

1.16PLAN*

1.17PLAN
YEAR*

1.18RETIREMENT AGE*

1.19TRUST*

1.20TRUSTEE*

1.21VALUATION DATE*

1.22YEAR OF
SERVICE*

ARTICLE 2: ELIGIBILITY AND
PARTICIPATION*
2.1REQUIREMENTS*

2.2RE-
EMPLOYMENT*

2.3CHANGE
OF EMPLOYMENT CATEGORY*

ARTICLE 3: CONTRIBUTIONS AND
CREDITS*
3.1PARTICIPANT CONTRIBUTIONS AND CREDITS*

3.2EMPLOYER
MATCHING CONTRIBUTIONS AND CREDITS*

3.3EMPLOYER
DISCRETIONARY CONTRIBUTIONS AND CREDITS*

ARTICLE 4: ALLOCATION OF
FUNDS*
4.1ALLOCATION OF DEEMED EARNINGS OR LOSSES ON ACCOUNTS*

4.2ACCOUNTING FOR DISTRIBUTIONS*

4.3SEPARATE
ACCOUNTS*

4.4INTERIM
VALUATIONS*

4.5DEEMED
INVESTMENT DIRECTIONS OF PARTICIPANTS*

4.6EXPENSES
AND TAXES*

ARTICLE 5: ENTITLEMENT TO
BENEFITS*
5.1FIXED
PAYMENT DATES; TERMINATION OF EMPLOYMENT*

5.2HARDSHIP
DISTRIBUTIONS.*

5.3RE-
EMPLOYMENT OF RECIPIENT*

5.4SPECIAL
RULE RE DEDUCTIBILITY*

ARTICLE 6: DISTRIBUTION OF
BENEFITS*
6.1AMOUNT*

6.2TIMING
AND MANNER OF PAYMENT*

6.3DEATH OR
DISABILITY BENEFITS*

ARTICLE 7: BENEFICIARIES; PARTICIPANT
DATA*
7.1DESIGNATION OF BENEFICIARIES*

7.2INFORMATION TO BE FURNISHED BY PARTICIPANTS AND BENEFICIARIES; INABILITY
TO LOCATE PARTICIPANTS OR BENEFICIARIES*

ARTICLE 8:
ADMINISTRATION*
8.1ADMINISTRATIVE AUTHORITY*

8.2UNIFORMITY OF DISCRETIONARY ACTS*

8.3LITIGATION*

8.4CLAIMS
PROCEDURE*

ARTICLE 9:
AMENDMENT*
9.1RIGHT TO
AMEND*

9.2AMENDMENTS TO ENSURE PROPER CHARACTERIZATION OF PLAN*

9.3CHANGES IN
LAW AFFECTING TAXABILITY*

ARTICLE 10:
TERMINATION*
10.1EMPLOYER'S RIGHT TO TERMINATE OR SUSPEND PLAN*

10.2AUTOMATIC TERMINATION OF PLAN*

10.3SUSPENSION OF DEFERRALS*

10.4ALLOCATION AND DISTRIBUTION*

10.5SUCCESSOR TO EMPLOYER*

ARTICLE 11: THE
TRUST*
11.1ESTABLISHMENT OF TRUST.*

ARTICLE 12:
MISCELLANEOUS*
12.1LIMITATIONS ON LIABILITY OF EMPLOYER*

12.2CONSTRUCTION*

12.3SPENDTHRIFT PROVISION*

HERITAGE COMMERCE CORP

NONQUALIFIED DEFERRED COMPENSATION PLAN

Effective as of January 1, 2004

RECITALS

This Heritage Commerce Corp Nonqualified Deferred
Compensation Plan ( the "Plan") is adopted by Heritage Commerce Corp and its
wholly owned subsidiary, Heritage Bank of Commerce, for certain of its executive
employees. The purpose of the Plan is to offer those employees an opportunity to
elect to defer the receipt of compensation in order to provide termination of
employment and related benefits taxable pursuant to section 451 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Plan is intended to be a
"top-hat" plan (i.e., an unfunded deferred compensation plan maintained for a
select group of management or highly-compensated employees) under sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act
of 1974 ("ERISA").

Accordingly, the following Plan is adopted.

ARTICLE 1

DEFINITIONS

1.1ACCOUNT means the balance credited to a
Participant's or Beneficiary's Compensation Deferral Account. Employer Matching
Contribution Account and/or Employer Discretionary Contribution Account,
including contribution credits and deemed income, gains and losses credited
thereto or debited therefrom. A Participant's or Beneficiary's Account shall be
determined as of the Valuation Date.

1.2BENEFICIARY means any person or persons so
designated in accordance with the provisions of Article 7.

1.3CHANGE OF CONTROL shall mean the occurrence of
any of the following events with respect to Heritage Bank of Commerce or
Heritage Commerce Corp: (i) a change of control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or in response to any other form or report to the regulatory
agencies or governmental authorities having jurisdiction over Heritage Bank of
Commerce or Heritage Commerce Corp or any stock exchange on which Heritage
Commerce Corp's shares are listed which requires the reporting of a change in
control; (ii) any merger consolidation or reorganization of Heritage Bank of
Commerce or Heritage Commerce Corp in which Heritage Bank of Commerce or
Heritage Commerce Corp does not survive; (iii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition (in one transaction or a series
of transactions) of any assets of Heritage Bank of Commerce or Heritage Commerce
Corp having an aggregate fair market value of fifty percent (50%) of the total
value of the assets of Heritage Bank of Commerce or Heritage Commerce Corp,
reflected in the most recent balance sheet of Heritage Bank of Commerce or
Heritage Commerce Corp; (iv) a transaction whereby a "person" or "persons" (as
such term is used in the Exchange Act) or any individual, corporation,
partnership, trust or any other entity is or becomes the beneficial owner,
directly or indirectly, of securities of Heritage Bank of Commerce or Heritage
Commerce Corp representing twenty-five percent (25%) or more of the combined
voting power of Heritage Bank of Commerce's or Heritage Commerce Corp's then
outstanding securities; (v) a situation where, in any one-year period,
individuals who are at the beginning of such period constitute the Board of
Directors of Heritage Bank of Commerce or Heritage Commerce Corp cease for any
reason to constitute at least a majority of thereof, unless the election, or the
nomination for election by Heritage Bank of Commerce's or Heritage Commerce
Corp's shareholder(s), of each new director is approved by a vote of at least
three-quarters (3/4) of the directors then still in office who were directors at
the beginning of the period; or (vi) the shareholder(s) of Heritage Bank of
Commerce or Heritage Commerce Corp approve the sale or transfer of substantially
all of Heritage Bank of Commerce's or Heritage Commerce Corp's assets to parties
that are not within a "controlled group of corporations" (as the term is defined
in section 1563 of the Code) in which Heritage Bank of Commerce or Heritage
Commerce Corp is a member.

1.3CODE means the Internal Revenue Code of 1986
and the regulations thereunder, as amended from time to time.

1.4COMPENSATION means the total current cash
remuneration, including regular salary and bonus awards, paid by the Employer to
an Eligible Employee with respect to his or her service for the Employer (as
determined by the Employer, in its discretion). In addition, Compensation shall
include any commissions earned by the Eligible Employee with respect to his or
her services for the Employer (as determined by the Employer, in its
discretion).

1.5COMPENSATION DEFERRALS is defined in Section
3.1(a).

1.6DESIGNATION DATE means the date or dates as of
which a designation of deemed investment directions by an individual pursuant to
Section 4.5, or any change in a prior designation of deemed investment
directions by an individual pursuant to Section 4.5, shall become effective. The
Designation Dates in any Plan Year shall be determined by the Employer.

1.7DISABILITY will be determined to exist if the
Participant is eligible for disability benefits under the Employer's long-term
disability plan. If the Participant is not covered by the Employer's long-term
disability plan, Disability will be determined to exist if the Participant is
eligible for disability benefits under the Social Security Act.

1.8EFFECTIVE DATE means the effective date of the
Plan, which shall be January 1, 2004.

1.9ELIGIBLE EMPLOYEE means, for any Plan Year (or
applicable portion thereof), a person employed by the Employer, who is
determined by the Employer to be a member of a select group of management or
highly compensated employees of the Employer and who is designated by the
Employer's Board of Directors to be an Eligible Employee under the Plan. By each
November 1 (or before the Effective Date for the Plan's first Plan Year), the
Employer shall notify those individuals, if any, who will be Eligible Employees
for the next Plan Year. If the Employer determines that an individual first
becomes an Eligible Employee during a Plan Year, the Employer shall notify such
individual of its determination and of the date during the Plan Year on which
the individual shall first become an Eligible Employee.

1.10EMPLOYER means Heritage Commerce Corp and its
successors and assigns unless otherwise herein provided, or any other
corporation or business organization which, with the consent of Heritage
Commerce Corp, or its successors or assigns, assumes the Employer's obligations
hereunder, or any other corporation or business organization which agrees, with
the consent of Heritage Commerce Corp, to become a party to the Plan.

1.11EMPLOYER DISCRETIONARY CONTRIBUTIONS is
defined in Section 3.3(a).

1.12EMPLOYER MATCHING CONTRIBUTIONS is defined in
Section 3.2(a).

1.13ENTRY DATE with respect to an individual means
the first day of the pay period following the date on which the individual first
becomes an Eligible Employee. Notwithstanding the foregoing, for any individual
first designated as an Eligible Employee on or before the Effective Date, his or
her Entry Date shall be the Effective Date.

1.14PARTICIPANT means any person so designated in
accordance with the provisions of Article 2, including, where appropriate
according to the context of the Plan, any former employee who is or may become
(or whose Beneficiaries may become) eligible to receive a benefit under the
Plan.

1.15PARTICIPANT ENROLLMENT AND ELECTION FORM means
the form or forms on which a Participant elects to defer Compensation hereunder
and on which the Participant makes certain other designations as required
thereon.

1.16PLAN means this Heritage Commerce Corp
Nonqualified Deferred Compensation Plan, as amended from time to time.

1.17PLAN YEAR means the twelve (12) (or, in the
case of the Plan's first Plan Year, one (1)) month period ending on the December
31 of each year during which the Plan is in effect.

1.18RETIREMENT AGE means the age at which a
Participant's age plus his or her Years of Service equals or exceeds sixty
(60).

1.19TRUST means the trust, if any, established
pursuant to the agreement by and between the Employer and a qualified trustee
pursuant to Article 11.

1.20TRUSTEE means the trustee of the Trust
described in Article 11.

1.21VALUATION DATE means the last day of each Plan
Year and any other date that the Employer, in its sole discretion, designates as
a Valuation Date.

1.22YEAR OF SERVICE means the 12 consecutive month
period measured by an Eligible Employee's date of hire and anniversaries thereof
during which the Eligible Employee is employed by the Employer. 

ARTICLE 2

ELIGIBILITY AND PARTICIPATION

2.1REQUIREMENTS. Every Eligible Employee
on the Effective Date shall be eligible to become a Participant on the Effective
Date. Every other Eligible Employee shall be eligible to become a Participant on
the first Entry Date occurring on or after the date on which he or she becomes
an Eligible Employee. No individual shall become a Participant, however, if he
or she is not an Eligible Employee on the date his or her participation is to
begin.

Participation in the Plan is voluntary. In order to
participate in the Plan, an otherwise Eligible Employee must make written
application in such manner as may be required by Section 3.1 and by the Employer
and must agree to make Compensation Deferrals as provided in Article 3. In the
case of newly Eligible Employees, the applicable written application must be
submitted to the Employer within thirty (30) days of the Eligible Employee's
receipt of notification of his or her eligibility.

2.2RE-EMPLOYMENT. If a Participant whose
employment with the Employer is terminated is subsequently re-employed, he or
she shall become a Participant in accordance with the provisions of Section
2.1.

2.3CHANGE OF EMPLOYMENT CATEGORY. During any
period in which a Participant remains in the employ of the Employer, but ceases
to be an Eligible Employee, he or she shall not be eligible to make Compensation
Deferrals or receive Employer Matching Contributions and Employer Discretionary
Contributions hereunder.

ARTICLE 3

CONTRIBUTIONS AND CREDITS

3.1PARTICIPANT CONTRIBUTIONS AND
CREDITS.

(a)Compensation Deferrals. In accordance with
rules established by the Employer, a Participant may elect to defer Compensation
that is due to be earned and which would otherwise be paid to the Participant.
Participants may elect to defer up to 50% of salary and 100% of any bonuses
and/or commission. Amounts so deferred shall be considered a Participant's
"Compensation Deferrals" and shall be deducted by the Employer from the
Compensation of a deferring Participant and shall be credited to the Account of
the deferring Participant. Ordinarily, a Participant shall make such an election
with respect to the coming twelve (12) month Plan Year during the period
beginning on the November 1 and ending on the November 30 of the prior calendar
year, or during such other period as may be established by the Employer. 

Compensation Deferrals shall be made through regular payroll
salary deductions or through an election by the Participant to defer the payment
of a commission or bonus not yet payable to him or her at the time of the
election. Compensation deferrals will be limited to the extent necessary to
satisfy applicable tax withholding or benefit plan contribution requirements.
The Participant may change his or her Compensation Deferral election amount as
of, and by written notice delivered to the Plan Committee 30 days prior to the
beginning of any calendar year quarter, with such change being first effective
for Compensation to be earned in the next calendar year quarter. Once made, a
Compensation Deferral election shall continue in force only for the Plan Year
for which the election is first effective. 

(b)Compensation Deferral Account. There shall be
established and maintained by the Employer a separate Compensation Deferral
Account in the name of each Participant to which shall be credited or debited:
(a) amounts equal to the Participant's Compensation Deferrals; (and (b) amounts
equal to any deemed income, gains or losses (to the extent realized, based upon
deemed fair market value of the Compensation Deferral Account's deemed assets,
as determined by the Employer, in its discretion) attributable or allocable
thereto. 

A Participant shall at all times be 100% vested in amounts
credited to his or her Compensation Deferral Account.

3.2EMPLOYER MATCHING CONTRIBUTIONS AND CREDITS

	Employer Matching Contributions.Apart from
Compensation Deferral Contributions, the Employer shall retain the right to make
matching contributions for any Participant under this Plan at the times and in
the amount(s) designated by the Employer, in its sole discretion. Amounts so
credited will be considered a Participant's "Employer Matching Contributions."

	Employer Discretionary Contribution Account. There
shall be established and maintained by the Employer a separate Employer Matching
Contribution Account in the name of each Participant to which shall be credited
or debited: (a) amounts equal to the Participant's Employer Matching
Contributions; and (b) amounts equal to any deemed earnings or losses (to the
extent realized, based upon deemed fair market value of the Employer Matching
Contribution Account's deemed assets, as determined by the Employer, in its
discretion) attributable or allocable thereto.

	Adjustments to Employer Matching
Contributions. Once credited to a Participant's Account under this Plan,
the amounts described in Section 3.2(a) shall accrue the deemed income, gains or
losses described in Article 4 below, and shall be paid in accordance with
Article 5 and Article 6 below.

	Vesting.Amounts credited to the Employer
Matching Contribution Account shall be subject to a five (5) year vesting
period, described in Section 3.2(e), based on Years of Service. Notwithstanding
the preceding, if the Participant reaches Retirement Age or experiences Death or
Disability, he or she shall become fully (100%) vested. Any Participant that
terminates employment or service with the Employer prior to full vesting shall
irrevocably forfeit the portion not vested. Such forfeitures shall be retained
by the Employer.

	The vesting schedule for amounts credited to the Employer
Matching Contribution Account is as follows:

	
Years of Service
	
Vested Percentage

	
Less than 1
	
0%

	
I, but less than 2
	
20%

	
2, but less than 3
	
40%

	
3, but less than 4
	
60%

	
4, but less than 5
	
80%

	
5 or more
	
100%

	Forfeitures for MisconductIf a Participant
separates from service with the Employer as a result of the Participant's gross
misconduct, within the meaning of Part 6 of Title I of ERISA, regarding group
health continuation coverage, or if the Participant engages in unlawful business
competition with the Employer, the Participant shall forfeit all amounts
allocated to his or her Employer Matching Contribution Account(s) under Section
3.2(a), 3.2 (b), and 3.2(c) above. Such forfeitures shall be retained by the
Employer.

3.3EMPLOYER DISCRETIONARY CONTRIBUTIONS AND
CREDITS

	Employer Discretionary Contributions.Apart from
Compensation Deferral Contributions, the Employer shall retain the right to make
discretionary contributions for any Participant under this Plan at the times and
in the amount(s) designated by the Employer, in its sole discretion. Amounts so
credited will be considered a Participant's "Employer Discretionary
Contributions." 

	Employer Discretionary Contribution Account. There
shall be established and maintained by the Employer a separate Employer
Discretionary Contribution Account in the name of each Participant to which
shall be credited or debited: (a) amounts equal to the Participant's Employer
Discretionary Contributions; and (b) amounts equal to any deemed earnings or
losses (to the extent realized, based upon deemed fair market value of the
Employer Discretionary Contribution Account's deemed assets, as determined by
the Employer, in its discretion) attributable or allocable thereto.

	Adjustments to Employer Discretionary
Contributions. Once credited to a Participant's Account under this Plan,
the amounts described in Section 3.3(a) shall accrue the deemed income, gains or
losses described in Article 4 below, and shall be paid in accordance with
Article 5 and Article 6 below.

	Vesting.Amounts credited to the Employer
Discretionary Contribution Account shall be subject to a five (5) year vesting
period, described in Section 3.3(e), based on Years of Service. Notwithstanding
the preceding, if the Participant reaches Retirement Age or experiences Death or
Disability, he or she shall become fully (100%) vested. Any Participant that
terminates employment or service with the Employer prior to full vesting shall
irrevocably forfeit the portion not vested. Such forfeitures shall be retained
by the Employer. 

	The vesting schedule for amounts credited to the Employer
Discretionary Contribution Account is as follows:

	
Years of Service
	
Vested Percentage

	
Less than 1
	
0%

	
I, but less than 2
	
20%

	
2, but less than 3
	
40%

	
3, but less than 4
	
60%

	
4, but less than 5
	
80%

	
5 or more
	
100%

	Forfeitures for MisconductIf a Participant
separates from service with the Employer as a result of the Participant's gross
misconduct, within the meaning of Part 6 of Title I of ERISA, regarding group
health continuation coverage, or if the Participant engages in unlawful business
competition with the Employer, the Participant shall forfeit all amounts
allocated to his or her Employer Discretionary Contribution Account(s) under
Section 3.3(a), 3.3 (b), and 3.3(c) above. Such forfeitures shall be retained by
the Employer.

ARTICLE 4

ALLOCATION OF FUNDS

4.1ALLOCATION OF DEEMED EARNINGS OR LOSSES ON
ACCOUNTS. Subject to Section 4.5, each Participant shall have the right to
direct the Employer as to how amounts in his or her Plan Account shall be deemed
to be invested. Subject to such limitations as may from time to time be required
by law, imposed by the Employer or the Trustee or contained elsewhere in the
Plan, and subject to such operating rules and procedures as may be imposed from
time to time by the Employer, prior to the date on which a direction will become
effective, the Participant shall have the right to direct the Employer as to how
amounts in his or her Account shall be deemed to be invested. The Employer may,
but is not required to, invest assets held by the Employer on behalf of the
Participant pursuant to the deemed investment directions the Employer has
properly received from the Participant, and may utilize the Trust for the same
in its discretion. The value of the Participant's Account shall be equal to the
value of the deemed investments specified by the Participant as if the Employer
had so invested the Account.

As of each valuation date of the assets held under the Plan,
the Participant's Account will be credited or debited to reflect the
Participant's deemed investments. The Participant's Plan Account will be
credited or debited with the increase or decrease in the realizable net asset
value of the designated deemed investments, as follows. As of each Valuation
Date, an amount equal to the net increase or decrease in realizable net asset
value (as determined by the Employer) of each deemed investment option within
the Account since the preceding Valuation Date shall be allocated among all
Participants' Accounts deemed to be invested in that investment option in
accordance with the ratio which the portion of the Account of each Participant
which is deemed to be invested within that investment option, determined as
provided herein, bears to the aggregate of all amounts deemed to be invested
within that investment option.

4.2ACCOUNTING FOR DISTRIBUTIONS. As of the date of
any distribution hereunder, the distribution made hereunder to the Participant
or his or her Beneficiary or Beneficiaries shall be charged to such
Participant's Account. Such amounts shall be charged on a pro rata basis against
the investments of the Plan in which the Participant's Account is deemed to be
invested.

4.3SEPARATE ACCOUNTS. A separate account under the
Plan shall be established and maintained by the Employer to reflect the Account
for each Participant with sub-accounts to show separately the deemed earnings
and losses credited or debited to such Account, and the applicable deemed
investments of the Account.

4.4INTERIM VALUATIONS. If it is determined by the
Employer that the value of a Participant's Account as of any date on which
distributions are to be made differs materially from the value of the
Participant's Account on the prior Valuation Date upon which the distribution is
to be based, the Employer, in its discretion, shall have the right to designate
any date in the interim as a Valuation Date for the purpose of revaluing the
Participant's Account so that the Account will, prior to the distribution,
reflect its share of such material difference in value.

4.5DEEMED INVESTMENT DIRECTIONS OF PARTICIPANTS.
Subject to such limitations as may from time to time be required by law, imposed
by the Employer or the Trustee or contained elsewhere in the Plan, and subject
to such operating rules and procedures as may be imposed from time to time by
the Employer, prior to and effective for each Designation Date, each Participant
may communicate to the Employer a direction (in accordance with (a), below) as
to how his or her Plan Accounts should be deemed to be invested among such
categories of deemed investments as may be made available by the Employer
hereunder. Such direction shall designate the percentage (in any whole percent
multiples) of each portion of the Participant's Plan Accounts which is requested
to be deemed to be invested in such categories of deemed investments, and shall
be subject to the following rules:

(a)Any initial or subsequent deemed investment direction
shall be in writing, on a form supplied by and filed with the Employer, and/or,
as required or permitted by the Employer, shall be by oral designation and/or
electronic transmission designation. A designation shall be effective as of the
Designation Date next following the date the direction is received and accepted
by the Employer on which it would be reasonably practicable for the Employer to
effect the designation. The Participant may, if permitted by the Employer, make
a deemed investment direction for his or her existing Account balance as of the
Designation Date and a separate deemed investment direction for contribution
credits occurring after the Designation Date.

(b)All amounts credited to the Participant's Account
shall be deemed to be invested in accordance with the then effective deemed
investment direction, and as of the Designation Date with respect to any new
deemed investment direction, all or a portion of the Participant's Account at
that date shall be reallocated among the designated deemed investment funds
according to the percentages specified in the new deemed investment direction
unless and until a subsequent deemed investment direction shall be filed and
become effective. An election concerning deemed investment choices shall
continue indefinitely as provided in the Participant's most recent Participant
Enrollment and Election Form, or other form specified by the Employer.

(c)If the Employer receives an initial or revised deemed
investment direction which it deems to be incomplete, unclear or improper, the
Participant's investment direction then in effect shall remain in effect (or, in
the case of a deficiency in an initial deemed investment direction, the
Participant shall be deemed to have filed no deemed investment direction) until
the next Designation Date, unless the Employer provides for, and permits the
application of, corrective action prior thereto.

(d)If the Employer possesses (or is deemed to possess as
provided in (c), above) at any time directions as to the deemed investment of
less than all of a Participant's Account, the Participant shall be deemed to
have directed that the undesignated portion of the Account be deemed to be
uninvested. Or, in its discretion, the Employer may direct such undesignated
portion of the Account to be deemed to be invested in a money market, fixed
income or similar fund made available under the Plan as determined by the
Employer.

(e)Each Participant hereunder, as a condition to his or
her participation hereunder, agrees to indemnify and hold harmless the Employer
and its agents and representatives from any losses or damages of any kind
relating to the deemed investment of the Participant's Account hereunder.

(f)Each reference in this Section to a Participant shall
be deemed to include, where applicable, a reference to a Beneficiary.

4.6EXPENSES AND TAXES. Expenses, including Trustee
fees, associated with the administration or operation of the Plan shall be paid
by the Employer from its general assets. Any taxes allocable to an Account (or
portion thereof) maintained under the Plan which are payable prior to the
distribution of the Account (or portion thereof), as determined by the Employer,
shall be paid by the Employer.

ARTICLE 5

ENTITLEMENT TO BENEFITS

5.1FIXED PAYMENT DATES; TERMINATION OF
EMPLOYMENT. Before the beginning of each Plan Year and on his or her
Participant Enrollment and Election Form, a Participant may select a fixed
payment date for the payment of amounts (or a portion of amounts) credited to
his or her Compensation Deferral Account during the Plan Year for which the
Participant Enrollment and Election Form is effective, which will be valued and
payable according to the provisions of Article 6. Such payment dates may be
postponed to later dates so long as elections to so postpone the dates are made
by the Participant at least twelve (12) months prior to the date on which the
distribution is to be made. Such payment dates may not be accelerated.

A Participant who selects a fixed payment date for amounts
credited to his or her Compensation Deferral Account during a Plan Year shall
receive payment of such vested amounts in a lump sum. The participant will
become entitled to receive payment at the earlier of the fixed payment date (as
postponed, if applicable) or his or her termination of employment with the
Employer.

Any fixed payment date elected by a Participant as provided
above must be a date no earlier than the January 1 of the third calendar year
after the calendar year for which the election is effective. 

If a Participant does not make an election as provided above
for any particular amounts hereunder, and the Participant terminates employment
with the Employer for any reason. the Participant's vested Account at the date
of such termination shall be valued and payable at or commencing at such
termination according to the provisions of Article 6.

5.2HARDSHIP DISTRIBUTIONS. In the event of
financial hardship of the Participant, as hereinafter defined, the Participant
may apply to the Employer for the distribution of all or any part of his or her
vested Account. The Employer shall consider the circumstances of each such case,
and the best interests of the Participant and his or her family, and shall have
the right, in its sole discretion, if applicable, to allow such distribution,
or, if applicable, to direct a distribution of part of the amount requested, or
to refuse to allow any distribution. Upon a finding of financial hardship, the
Employer shall make the appropriate distribution to the Participant from amounts
held by the Employer in respect of the Participant's vested Account. In no event
shall the aggregate amount of the distribution exceed either the full value of
the Participant's vested Account or the amount determined by the Employer to be
necessary to alleviate the Participant's financial hardship (which financial
hardship may be considered to include any taxes due because of the distribution
occurring because of this Section), and which is not reasonably available from
other resources of the Participant. For purposes of this Section, the value of
the Participant's vested Account shall be determined as of the date of the
distribution. "Financial hardship" means (a) a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or of a dependent (as defined in Code section 152(a)) of the
Participant, (b) loss of the Participant's property due to casualty, or (c)
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant, each as determined to exist by
the Employer. A distribution may be made under this Section only with the
written consent of the Employer. 

5.3RE-EMPLOYMENT OF RECIPIENT. If a Participant
receiving installment distributions by virtue of an entitlement due to
termination of employment is re-employed by the Employer, the remaining
distributions due to the Participant shall be suspended until such time as the
Participant (or his or her Beneficiary) once again becomes eligible for benefits
under Section 5.1, at which time such distribution shall commence, subject to
the limitations and conditions contained in this Plan.

5.4SPECIAL RULE RE DEDUCTIBILITY. Notwithstanding
any contrary Plan provision, any payment scheduled for a particular Plan Year
shall not be made in such Plan Year to the extent necessary to avoid application
of the deductibility limitation of Code section 162(m). (For this purpose,
deductibility shall be determined by adding such payment to all other
compensation paid by the Employer to the Participant during the Plan Year). If,
pursuant to the foregoing sentences, any amounts are not paid when originally
scheduled, such amounts shall be paid in the first subsequent taxable year in
which such payments would not be subject to the deductibility limitation of Code
section 162(m). During any such delay in payment, unpaid amounts shall continue
to be credited (or debited) with deemed investment income, gains and losses
under Article 4. Notwithstanding the foregoing, distribution of a Participant's
Account shall be made without regard to the deductibility limitation of Code
section 162(m) if the time for distribution is accelerated pursuant to Section
9.3 or Section 10.4.

ARTICLE 6

DISTRIBUTION OF BENEFITS

6.1AMOUNT. A Participant (or his or her
Beneficiary) shall become entitled to receive (or commence receiving), upon his
or her termination of employment with the Employer (or earlier as provided in
Section 5.1), a distribution in an aggregate amount equal to the Participant's
vested Account. 

If the Participant has elected to receive payment of amounts
(or a portion of amounts) credited to his or her vested Account during any Plan
Year(s) before termination of employment, he or she shall become entitled to
receive the amount(s) elected in accordance with Section 5.1 on the date or the
date(s) selected by the Participant on his or her Participant Enrollment and
Election Form(s) (or earlier as provided in Article 5). The applicable portion
of the Participant's vested Account shall be valued on the Valuation Date.

6.2TIMING AND MANNER OF PAYMENT. In the case of
distributions to a Participant (or his or her Beneficiary) by virtue of an
entitlement due to termination of employment, an aggregate amount equal to the
Participant's vested Account will be paid by the Employer within 90 days of the
Participant's termination of employment, as provided in Section 6.1, in a lump
sum or in up to fifteen (15) substantially equal annual installments (adjusted
for gains and losses), as selected by the Participant on a form designated by
the Employer. Notwithstanding any provision of this Plan to the contrary, any
participant terminating employment with the Employer before reaching Retirement
Age shall receive payment of his or her vested Account in a lump sum. If payment
of the Participant's account is to be made in installments, the first
installment shall be paid to the participant within 90 days of the participant's
termination of employment, and subsequent payments shall be made on January
1st of each successive Plan Year (or as soon as administratively
feasible thereafter) after the Plan Year in which the first payment becomes
payable. Notwithstanding the foregoing, if payments hereunder are to be made in
substantially equal annual installments as elected by the Participant and are
estimated to each amount to less than one-thousand dollars ($1,000) or less by
the Employer in its sole discretion, the entire vested Account shall be paid to
the Participant (or his or her Beneficiary) in a lump sum. 

At any time no less than twelve (12) months prior to his or
her termination of employment, the Participant may, by delivering written
designation (on a form provided by the Employer) to the Employer, change the
manner of payment for such amounts he or she would become entitled to upon
termination of employment after reaching Retirement Age. The Participant's
manner of payment shall be determined by his or her most recent election of such
manner that has been on file with the Employer for no less than 12 months. If a
Participant fails to designate properly the manner of payment of his or her
benefit under the Plan, such payment will be in a lump sum. 

In the case of distributions to the Participant by virtue of
an entitlement due to the election of a Fixed Payment Date, the applicable
vested portion of the Participant's Account shall be paid in a lump sum as soon
as administratively practicable after such date. Fixed Payments shall be valued
and paid on the first day of each Plan Year, or as soon as administratively
practicable thereafter. 

If the whole or any part of a payment hereunder is to be in
installments, the total to be so paid shall continue to be deemed to be invested
pursuant to Sections 4.1 and 4.5 under such procedures as the Employer may
establish, in which case any deemed income, gain, loss or expense or tax
allocable thereto shall be reflected in the installment payments, in such
equitable manner as the Employer shall determine.

6.3DEATH OR DISABILITY BENEFITS. If a Participant
dies or experiences Disability before terminating his or her employment with the
Employer, the entire value of the Participant's Account shall be paid, at the
time(s) selected by the Participant under Article 5 and in the manner provided
in Section 6.2, to the Participant in the event of Disability and the person or
persons designated in accordance with Section 7.1 in the event of death.

Upon the death of a Participant after terminating his or her
employment with the Employer, but before he or she has received all payments to
which he or she is entitled under the Plan, the remaining benefit payments shall
be paid to the person or persons designated in accordance with Section 7.1, in
the manner in which such benefits were payable to the Participant.

ARTICLE 7

BENEFICIARIES; PARTICIPANT DATA

7.1DESIGNATION OF BENEFICIARIES. Each
Participant from time to time may designate any person or persons (who may be
named contingently or successively) to receive such benefits as may be payable
under the Plan upon or after the Participant's death, and such designation may
be changed from time to time by the Participant by filing a new designation.
Each designation will revoke all prior designations by the same Participant,
shall be in a form prescribed by the Employer, and will be effective only when
filed in writing with the Employer during the Participant's lifetime.

In the absence of a valid Beneficiary designation, or if, at
the time any benefit payment is due to a Beneficiary, there is no living
Beneficiary validly named by the Participant, the Employer shall pay any such
benefit payment to the Participant's spouse, if then living, but otherwise to
the Participant's then living descendants, if any, per stirpes, but, if none, to
the Participant's estate. In determining the existence or identity of anyone
entitled to a benefit payment, the Employer may rely conclusively upon
information supplied by the Participant's personal representative, executor or
administrator. If a question arises as to the existence or identity of anyone
entitled to receive a benefit payment as aforesaid, or if a dispute arises with
respect to any such payment, then, notwithstanding the foregoing, the Employer,
in its sole discretion, may distribute such payment to the Participant's estate
without liability for any tax or other consequences which might flow therefrom,
or may take such other action as the Employer deems to be appropriate.

7.2INFORMATION TO BE FURNISHED BY PARTICIPANTS AND
BENEFICIARIES; INABILITY TO LOCATE PARTICIPANTS OR BENEFICIARIES. Any
communication, statement or notice addressed to a Participant or to a
Beneficiary at his or her last post office address as shown on the Employer's
records shall be binding on the Participant or Beneficiary for all purposes of
the Plan. The Employer shall not be obliged to search for any Participant or
Beneficiary beyond the sending of a registered letter to such last known
address. If the Employer notifies any Participant or Beneficiary that he or she
is entitled to an amount under the Plan and the Participant or Beneficiary fails
to claim such amount or make his or her location known to the Employer within
three (3) years thereafter, then, except as otherwise required by law, if the
location of one or more of the next of kin of the Participant is known to the
Employer, the Employer may direct distribution of such amount to any one or more
or all of such next of kin, and in such proportions as the Employer determines.
If the location of none of the foregoing persons can be determined, the Employer
shall have the right to direct that the amount payable shall be deemed to be a
forfeiture, except that the dollar amount of the forfeiture, unadjusted for
deemed gains or losses in the interim, shall be paid by the Employer if a claim
for the benefit subsequently is made by the Participant or the Beneficiary to
whom it was payable. If a benefit payable to an unlocated Participant or
Beneficiary is subject to escheat pursuant to applicable state law, the Employer
shall not be liable to any person for any payment made in accordance with such
law.

ARTICLE 8

ADMINISTRATION

8.1ADMINISTRATIVE AUTHORITY. Except as
otherwise specifically provided herein, the Employer shall have the sole
responsibility for and the sole control of the operation and administration of
the Plan, and shall have the power and authority to take all action and to make
all decisions and interpretations which may be necessary or appropriate in order
to administer and operate the Plan, including, without limiting the generality
of the foregoing, the power, duty and responsibility to:

(a)Resolve and determine all disputes or questions
arising under the Plan, and to remedy any ambiguities, inconsistencies or
omissions in the Plan.

(b)Adopt such rules of procedure and regulations as in
its opinion may be necessary for the proper and efficient administration of the
Plan and as are consistent with the Plan.

(c)Implement the Plan in accordance with its terms and
the rules and regulations adopted as above.

(d)Make determinations with respect to the eligibility of
any Eligible Employee as a Participant and make determinations concerning the
crediting of Plan Accounts.

(e)Appoint any persons or firms, or otherwise act to
secure specialized advice or assistance, as it deems necessary or desirable in
connection with the administration and operation of the Plan, and the Employer
shall be entitled to rely conclusively upon, and shall be fully protected in any
action or omission taken by it in good faith reliance upon, the advice or
opinion of such firms or persons. The Employer shall have the power and
authority to delegate from time to time by written instrument all or any part of
its duties, powers or responsibilities under the Plan, both ministerial and
discretionary, as it deems appropriate, to any person or committee, and in the
same manner to revoke any such delegation of duties, powers or responsibilities.
Any action of such person or committee in the exercise of such delegated duties,
powers or responsibilities shall have the same force and effect for all purposes
hereunder as if such action had been taken by the Employer. Further, the
Employer may authorize one or more persons to execute any certificate or
document on behalf of the Employer, in which event any person notified by the
Employer of such authorization shall be entitled to accept and conclusively rely
upon any such certificate or document executed by such person as representing
action by the Employer until such notified person shall have been notified of
the revocation of such authority.

8.2UNIFORMITY OF DISCRETIONARY ACTS. Whenever in
the administration or operation of the Plan discretionary actions by the
Employer are required or permitted, such actions shall be consistently and
uniformly applied to all persons similarly situated, and no such action shall be
taken which shall discriminate in favor of any particular person or group of
persons.

8.3LITIGATION. Except as may be otherwise required
by law, in any action or judicial proceeding affecting the Plan, no Participant
or Beneficiary shall be entitled to any notice or service of process, and any
final judgment entered in such action shall be binding on all persons interested
in, or claiming under, the Plan.

8.4CLAIMS PROCEDURE. Any person claiming a benefit
under the Plan (a "Claimant") shall present the claim, in writing, to the
Employer, and the Employer shall respond in writing. If the claim is denied, the
written notice of denial shall state, in a manner calculated to be understood by
the Claimant:

(a)The specific reason or reasons for the denial, with
specific references to the Plan provisions on which the denial is based;

(b)A description of any additional material or
information necessary for the Claimant to perfect his or her claim and an
explanation of why such material or information is necessary; and

(c)An explanation of the Plan's claims review
procedure.

The written notice denying or granting the Claimant's claim
shall be provided to the Claimant within ninety (90) days after the Employer's
receipt of the claim, unless special circumstances require an extension of time
for processing the claim. If such an extension is required, written notice of
the extension shall be furnished by the Employer to the Claimant within the
initial ninety (90) day period and in no event shall such an extension exceed a
period of ninety (90) days from the end of the initial ninety (90) day period.
Any extension notice shall indicate the special circumstances requiring the
extension and the date on which the Employer expects to render a decision on the
claim. Any claim not granted or denied within the period noted above shall be
deemed to have been denied.

Any Claimant whose claim is denied, or deemed to have been
denied under the preceding sentence (or such Claimant's authorized
representative), may, within sixty (60) days after the Claimant's receipt of
notice of the denial, or after the date of the deemed denial, request a review
of the denial by notice given, in writing, to the Employer. Upon such a request
for review, the claim shall be reviewed by the Employer (or its designated
representative) which may, but shall not be required to, grant the Claimant a
hearing. In connection with the review, the Claimant may have representation,
may examine pertinent documents, and may submit issues and comments in
writing.

The decision on review normally shall be made within sixty
(60) days of the Employer's receipt of the request for review. If an extension
of time is required due to special circumstances, the Claimant shall be
notified, in writing, by the Employer, and the time limit for the decision on
review shall be extended to one hundred twenty (120) days. The decision on
review shall be in writing and shall state, in a manner calculated to be
understood by the Claimant, the specific reasons for the decision and shall
include references to the relevant Plan provisions on which the decision is
based. The written decision on review shall be given to the Claimant within the
sixty (60) day (or, if applicable, the one hundred twenty (120) day) time limit
discussed above. If the decision on review is not communicated to the Claimant
within the sixty (60) day (or, if applicable, the one hundred twenty (120) day)
period discussed above, the claim shall be deemed to have been denied upon
review. All decisions on review shall be final and binding with respect to all
concerned parties.

ARTICLE 9

AMENDMENT

9.1RIGHT TO AMEND. The Employer, by action
of its Board of Directors, shall have the right to amend the Plan, at any time
and with respect to any provisions hereof, and all parties hereto or claiming
any interest hereunder shall be bound by such amendment; provided, however, that
no such amendment shall deprive a Participant or a Beneficiary of a right
accrued hereunder prior to the date of the amendment.

9.2AMENDMENTS TO ENSURE PROPER CHARACTERIZATION OF
PLAN. Notwithstanding the provisions of Section 9.1, the Plan may be amended
by the Employer, by action of its Board of Directors, at any time, retroactively
if required, if found necessary, in the opinion of the Employer, in order to
ensure that the Plan is characterized as a "top-hat" plan of deferred
compensation maintained for a select group of management or highly compensated
employees as described under ERISA sections 201(2), 301(a)(3), and 401(a)(1),
and to conform the Plan to the provisions and requirements of any applicable law
(including ERISA and the Code). No such amendment shall be considered
prejudicial to any interest of a Participant or a Beneficiary hereunder.

9.3CHANGES IN LAW AFFECTING TAXABILITY

(a)Operation. This Section shall
become operative upon the enactment of any change in applicable statutory law or
the promulgation by the Internal Revenue Service of a final regulation or other
pronouncement having the force of law, which statutory law, as changed, or final
regulation or pronouncement, as promulgated, would cause any Participant to
include in his or her federal gross income amounts accrued by the Participant
under the Plan on a date (an "Early Taxation Event") prior to the date on which
such amounts are made available to him or her hereunder.

(b)Affected Right or Feature Nullified.
Notwithstanding any other Section of this Plan to the contrary (but subject to
subsection (c), below), as of an Early Taxation Event, the feature or features
of this Plan that would cause the Early Taxation Event shall be null and void,
to the extent, and only to the extent, required to prevent the Participant from
being required to include in his or her federal gross income amounts accrued by
the Participant under the Plan prior to the date on which such amounts are made
available to him or her hereunder. If only a portion of a Participant's Account
is impacted by the change in the law, then only such portion shall be subject to
this Section, with the remainder of the Account not so affected being subject to
such rights and features as if the law were not changed. If the law only impacts
Participants who have a certain status with respect to the Employer, then only
such Participants shall be subject to this Section.

(c)Tax Distribution. If an Early Taxation
Event is earlier than the date on which the statute, regulation or pronouncement
giving rise to the Early Taxation Event is enacted or promulgated, as applicable
(i.e., if the change in the law is retroactive), there shall be distributed to
each Participant, as soon as practicable following such date of enactment or
promulgation, the amounts that became taxable on the Early Taxation
Event.

ARTICLE 10

TERMINATION

10.1EMPLOYER'S RIGHT TO TERMINATE OR SUSPEND
PLAN. The Employer reserves the right to terminate the Plan and/or its
obligation to make further credits to Plan Accounts, by action of its Board of
Directors. The Employer also reserves the right to suspend the operation of the
Plan for a fixed or indeterminate period of time, by action of its Board of
Directors.

10.2AUTOMATIC TERMINATION OF PLAN. The Plan
automatically shall terminate upon a Change of Control if there is a failure by
the surviving corporation or business organization to adopt specifically and
agree to continue the Plan.

10.3SUSPENSION OF DEFERRALS. In the event of a
suspension of the Plan, the Employer shall continue all aspects of the Plan,
other than Compensation Deferrals. Employer Matching Contributions and Employer
Discretionary Contributions, during the period of the suspension, in which event
payments hereunder will continue to be made during the period of the suspension
in accordance with Articles 5 and 6.

10.4ALLOCATION AND DISTRIBUTION. This Section
shall become operative on a complete termination of the Plan. The provisions of
this Section also shall become operative in the event of a partial termination
of the Plan, as determined by the Employer, but only with respect to that
portion of the Plan attributable to the Participants to whom the partial
termination is applicable. Upon the effective date of any such event,
notwithstanding any other provisions of the Plan, no persons who were not
theretofore Participants shall be eligible to become Participants, the value of
the interest of all Participants and Beneficiaries shall be determined and,
after deduction of estimated expenses in liquidating and, if applicable, paying
Plan benefits, paid to them as soon as is practicable after such
termination.

10.5SUCCESSOR TO EMPLOYER. Any corporation or
other business organization which is a successor to the Employer by reason of a
Change of Control shall have the right to become a party to the Plan by adopting
the same by resolution of the entity's board of directors or other appropriate
governing body. If, within ninety (90) days from the effective date of such
consolidation, merger or sale of assets, such new entity does not become a party
hereto, as above provided, the Plan automatically shall be terminated, and the
provisions of Section 10.4 shall become operative.

ARTICLE 11

THE TRUST

11.1ESTABLISHMENT OF TRUST. The Employer,
in its sole and absolute discretion, may establish a Trust with a qualified
trustee pursuant to such terms and conditions as are set forth in a Trust
agreement to be entered into between the Employer and such trustee. Or, the
Employer may cause to be maintained one or more separate subaccounts in an
existing Trust maintained with the Trustee with respect to one or more other
plans of the Employer, which subaccount or subaccounts represent Participants'
interests in the Plan. The Employer shall have the discretion to make
contributions to such Trust that correspond to credits to Participants' Accounts
and/or to invest Trust assets in a manner that corresponds to Participants'
selected deemed investments in order to provide a source of funds with which the
Employer shall pay Plan benefits as they become due.

Any amounts held in a Trust established under this Section
shall be the sole property of the Employer and will not be held as collateral
security for fulfillment of the Employer's obligation under the Plan. Any such
Trust shall be intended to be treated as a "grantor trust" under the Code and
the establishment of the Trust or the utilization of any existing Trust for Plan
benefits, as applicable, shall not be intended to cause any Participant to
realize current income on amounts contributed thereto, and the Trust shall be so
interpreted. Any such funds will be subject to the claims of all bankruptcy or
insolvency creditors of the Employer as provided in the Trust agreement, and no
Participant or Beneficiary will have any vested interest or secured or preferred
position with respect to such funds or have any claims against the Employer
hereunder except as a general creditor.

ARTICLE 12

MISCELLANEOUS

12.1LIMITATIONS ON LIABILITY OF EMPLOYER.
Neither the establishment of the Plan nor any modification thereof, nor the
creation of any account under the Plan, nor the payment of any benefits under
the Plan shall be construed as giving to any Participant or other person any
legal or equitable right against the Employer, or any officer or employer
thereof except as provided by law or by any Plan provision. The Employer does
not in any way guarantee any Participant's Account from loss or depreciation,
whether caused by poor investment performance of a deemed investment or the
inability to realize upon an investment due to an insolvency affecting an
investment vehicle or any other reason. In no event shall the Employer, or any
successor, employee, officer, director or stockholder of the Employer, be liable
to any person on account of any claim arising by reason of the provisions of the
Plan or of any instrument or instruments implementing its provisions, or for the
failure of any Participant, Beneficiary or other person to be entitled to any
particular tax consequences with respect to the Plan, or any credit or
distribution hereunder.

12.2CONSTRUCTION. If any provision of the Plan is
held to be illegal or void, such illegality or invalidity shall not affect the
remaining provisions of the Plan, but shall be fully severable, and the Plan
shall be construed and enforced as if said illegal or invalid provision had
never been inserted herein. For all purposes of the Plan, where the context
admits, the singular shall include the plural, and the plural shall include the
singular. Headings of Articles and Sections herein are inserted only for
convenience of reference and are not to be considered in the construction of the
Plan. The laws of the state of the Employer's incorporation shall govern,
control and determine all questions of law arising with respect to the Plan and
the interpretation and validity of its respective provisions, except where those
laws are preempted by the laws of the United States. Participation under the
Plan will not give any Participant the right to be retained in the service of
the Employer nor any right or claim to any benefit under the Plan unless such
right or claim has specifically accrued hereunder.

The Plan is intended to be and at all times shall be
interpreted and administered so as to qualify as an unfunded deferred
compensation plan, and no provision of the Plan shall be interpreted so as to
give any individual any right in any assets of the Employer which right is
greater than the rights of a general unsecured creditor of the Employer.

12.3SPENDTHRIFT PROVISION. No amount payable to a
Participant or a Beneficiary under the Plan will, except as otherwise
specifically provided by law, be subject in any manner to anticipation,
alienation, attachment, garnishment, sale, transfer, assignment (either at law
or in equity), levy, execution, pledge, encumbrance, charge or any other legal
or equitable process, and any attempt to do so will be void; nor will any
benefit be in any manner liable for or subject to the debts, contracts,
liabilities, engagements or torts of the person entitled thereto. Further, (i)
the withholding of taxes from Plan benefit payments, (ii) the recovery under the
Plan of overpayments of benefits previously made to a Participant or
Beneficiary, (iii) if applicable, the transfer of benefit rights from the Plan
to another plan, or (iv) the direct deposit of benefit payments to an account in
a banking institution (if not actually part of an arrangement constituting an
assignment or alienation) shall not be construed as an assignment or
alienation.

In the event that any Participant's or Beneficiary's benefits
hereunder are garnished or attached by order of any court, the Employer or
Trustee may bring an action or a declaratory judgment in a court of competent
jurisdiction to determine the proper recipient of the benefits to be paid under
the Plan. During the pendency of said action, any benefits that become payable
shall be held as credits to the Participant's or Beneficiary's Account or, if
the Employer or Trustee prefers, paid into the court as they become payable, to
be distributed by the court to the recipient as the court deems proper at the
close of said action.

IN WITNESS WHEREOF, the Employer has caused the Plan
to be executed and its seal to be affixed hereto, effective as of the 1st day of
January 2004.

 
	
ATTEST/WITNESS:
	
HERITAGE COMMERCE
CORP

	
By: 
	
By: _________________________________

	
Print: 
	
Print:

	
Date:
	
Title:

Date:FY2004 10K Exhibit 10.12

Exhibit 10.12

HERITAGE BANK OF COMMERCE

                  DEFERRED FEE AGREEMENT

THIS AGREEMENT is made effective as of June 30, 1997 by and between HERITAGE BANK OF COMMERCE
(the "Bank"), and James R. Blair, (the "Director").

RECITALS

WHEREAS, to encourage the Director to remain a member of the Bank's Board of Directors,
the Bank desires to provide to the Director an opportunity to defer fees and obtain certain benefits
related thereto.

NOW, THEREFORE, in consideration of the services to be rendered by the Director to the Bank in
the future and for other good and valuable consideration, receipt of which is hereby acknowledged,
the parties agree as follows:

AGREEMENT

Article I. Definitions

1.1 Definitions Whenever used in this Agreement, the following words and phrases
shall have the meanings specified:

1.1.1 Change in Control The term "Change in Control" shall mean (i) when any
"person", as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended ("Exchange Act") (other than the Employer, a subsidiary thereof or an
employee benefit plan of Employer, including any trustee of such plan acting as trustee) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Employer representing fifty percent (50%) or more of the
combined voting power of the Employer's then outstanding securities, where such person's beneficial
ownership of the Employer's securities was not initiated by the Employer or approved by the
Employer's Board of Directors; or (ii) the occurrence of a transaction requiring shareholder
approval, and involving the sale of all or substantially all of the assets of the Employer or the
merger of the Employer with or into another corporation, where such merger was not initiated by the
Employer and in which Employer is not the surviving entity; or (iii) a change in the composition of
the Board of Directors of the Employer, as a result of which fewer than a majority of the directors
are Incumbent Directors (which "Incumbent Directors" shall mean directors who either (A)
are directors of the Employer as of the date hereof, or (B) are elected, or nominated for election,
to the Board of Directors of the Employer with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but shall not include an individual
whose election or nomination is in connection with an actual or threatened proxy contest relating to
the election of directors to the Employer)); or (iv) any liquidation or dissolution of the
Employer.

1.1.2 Code   The term "Code" shall mean the Internal Revenue Code of 1986, as
amended. References to a Code section shall be deemed to be to that section as it now exists and to
any successor provision.

1.1.3 Distribution Date   The term "Distribution Date" means the earlier of ten
(10) years after the date of this Agreement or upon the Director's Termination of Service as defined
below.

1.1.4. Deferral Account   The term "Deferral Account" means the account
established by the Bank on its books to record the amount of fees deferred by the Director and
interest accrued thereon.

1.1.5 Deferral Period   The term "Deferral Period" means the period of time
beginning with the date of this Agreement and ending with the earlier of the Distribution Date or
the Director's Termination of Service.

1.1.6 Benefit Period   The term "Benefit Period" means the period of time
beginning with the earlier of the Distribution Date or the Director's Termination of Service and
ending with payment in full of the Director's Deferral Account balance.

1.1.7 Election Form   The term "Election Form" means the Form attached as
Exhibit A.

1.1.8 Fees.   The term "Fees" means the total fees payable to the Director.

1.1.9 Termination of Service   The term "Termination of Service" means the
Director's ceasing to be a member of the Bank's Board of Directors for any reason whatsoever.

Article 2. Deferral Election

2.1 Initial Deferral Election The Director shall make an initial deferral election
under this Agreement by completion and delivery to the Bank of the Election Form attached hereto as
Exhibit A. The Election Form shall set forth the amount of Fees to be deferred, the form of benefit
payment and designation of beneficiary. The Election Form shall be delivered to the Bank not later
than June 30, 1997 and effective to defer only those Fees earned for services performed after June
30, 1997.

2.2 Deferred Election Changes The Director may modify the amount of Fees to be deferred
and/or form of benefit payment under Section 2.1 by filing a subsequent signed Election Form with
the Bank within twenty (20) days prior to the end of a calendar year preceding the calendar year in
which the Fees are to be deferred and/or the change in benefit payment is to apply and in each case
by obtaining written approval of the Board of Directors of the Bank. Such modified deferrals and/or
form of benefit payment shall not be effective until the calendar year following the year in which
the subsequent Election Form is received by the Bank.

Article 3. Deferral Account

3.1 Deferral Account   The Bank shall establish a Deferral Account on its books for the
Director, and shall credit to the Deferral Account the following amounts:

3.1.1 Deferrals   The Fees deferred by the Director on the first day of the month
following the month in which the Fees were earned.

3.1.2 Interest   On the last day of each calendar month during the Deferral Period only,
and immediately prior to the payment of any benefits, the Deferral Account will be credited with
interest earned during that month. The applicable interest rate shall be eight percent (8%) per
annum through December 31, 2006 and at the same rate for each year thereafter unless changed prior
to the beginning of each subsequent year by resolution of the Bank's Board of Directors, in its sole
discretion. Interest earned will be calculated by taking the applicable rate of interest multiplied
by the principal balance on the last day of each month, divided by 365 days, multiplied by the
number of days in the month. At the end of each calendar year, the interest earned during the year
will be posted to the account and only then become principal and entitled to future interest
accrual.

3.2 Statement of Accounts   The Bank shall provide to the Director at each regularly
scheduled Board of Directors meeting, a monthly statement setting forth the Deferral Account
balance.

3.3 Unsecured Creditor Status The Deferral Account is solely an accounting device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a trust fund of any
kind and the director has no rights greater than those of a general unsecured creditor of the Bank
for purposes of the payment of benefits under this Agreement. The Director's rights are not subject
in any manner to the anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by the Director or the Director's creditors or beneficiaries.

Article 4. Deferral Benefits

4.1 Termination of Service Benefit Upon the earlier of the Director's Termination
of Service or the Distribution Date, the Bank shall pay to the Director the balance in the Deferral
Account in the manner elected by the Director on the Election Form.

4.2 Change in Control Benefit Upon termination of the Director's service in connection
with and either prior to or following a Change in Control, the Bank shall pay to the Director the
balance in the Deferral Account within thirty (30) days after such occurrence.

4.3 Death During Deferral Period If the Director dies during the Deferral Period, the Bank
shall pay to the Director's beneficiary the balance in the Deferral Account and the amount which
would have been deferred by the Director for the entire ten (10) years from the date of this
Agreement, at the same time and in the same amounts that would have been paid to the Director had
the Director survived.

4.4 Death During Benefit Period If the Director dies after benefit payments have commenced
under this Agreement but before receiving all such payments, the Bank shall pay the remaining
benefits to the Director's beneficiary at the same time and in the same amounts that would have been
paid to the Director had the Director survived.

Article 5. Beneficiaries

5.1 Beneficiary Designations The Director shall designate a beneficiary by filing
a written designation with the Bank in the form attached as Exhibit B. The Director may revoke or
modify the designation at any time by filing a new designation. However, designations will only be
effective if signed by the Director and accepted by the Bank during the Director's lifetime. The
Director's beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Director, or if the Director names a spouse as beneficiary and the marriage is
subsequently dissolved. If the Director dies without a valid beneficiary designation, all payments
shall be made to the Director's surviving spouse, if any, and if none, to the Director's surviving
children and the descendants of any deceased child by right of representation, and if no children or
descendants survive, to the Director's estate.

5.2 Facility of Payment If a benefit is payable to a minor, to a person declared
incompetent, or to a person incapable of handling the disposition of his or her property, the Bank
may pay such benefit to the guardian, legal representative or person having the care or custody of
such minor, incompetent person or incapable person. The Bank may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such
distribution shall completely discharge the Bank from all liability with respect to such
benefit.

Article 6. Claims and Review Procedures

6.1 Claims Procedure The Bank shall notify the Director's beneficiary in writing,
within ninety (90) days of his or her written application for benefits, of his or her eligibility or
non-eligibility for benefits under the Agreement. If the Bank determines that the beneficiary is not
eligible for benefits or full benefits, the notice shall set forth (1) the specific reasons for such
denial, (2) a specific reference to the provisions of the Agreement on which the denial is based,
(3) a description of any additional information or material necessary for the claimant to perfect
his or her claim, and a description of why it is needed, and (5) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be taken if the
beneficiary wishes to have the claim reviewed. If the Bank determines that there are special
circumstances requiring additional time to make a decision, the Bank shall notify the beneficiary of
the special circumstances and the date by which a decision is expected to be made, and may extend
the time for up to an additional ninety (90) day period.

6.2 Review Procedure If the beneficiary is determined by the Bank not to be eligible for
benefits, or if the beneficiary believes that he or she is entitled to greater or different
benefits, the beneficiary shall have the opportunity to have such claim reviewed by the Bank by
filing a petition for review with the Bank within sixty (60) days after receipt of the notice issued
by the Bank. Such petition shall state the specific reasons which the beneficiary believes entitle
him or her to benefits or to greater or different benefits. Within sixty (60) days after receipt by
the Bank of the petition, the Bank shall afford the beneficiary (and counsel, if any) an opportunity
to present his or her position to the Bank orally or in writing, and the beneficiary (or counsel)
shall have the right to review the pertinent documents. The Bank shall notify the beneficiary of its
decision in writing within the sixty (60) day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the beneficiary and the specific
provisions of the Agreement on which the decision is based. If, because of the need for a hearing,
the sixty (60) day period is not sufficient, the decision may be deferred for up to another sixty
(60) day period at the election of the Bank, but notice of this deferral shall be given to the
beneficiary.

Article 7. Amendment and Termination

The Bank may amend or terminate this Agreement at any time prior to the Director's
Termination of Service by written notice to the Director. In no event shall this Agreement be
terminated without payment to the Director of the balance in the Deferral Account attributable to
the Director's deferrals and interest credited on such amounts.

Article 8. Miscellaneous

8.1 Binding Effect This Agreement shall be binding upon the Director and the Bank,
and their beneficiaries, survivors, executors, administrators and transferees.

8.2 No Guaranty of Employment This Agreement is not a contract for services. It does not
(i) give the Director the right to remain a director of the Bank, (ii) require the Director to
remain a director, (iii) interfere with the shareholders' rights to replace the Director, or (iv)
interfere with the Director's rights to terminate services at any time.

8.3 Non-Transferability Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.

8.4 Tax Withholding The Bank shall withhold any taxes that are required to be withheld
from the benefits provided under this Agreement.

8.5 Governing Law The Agreement and all rights hereunder shall be governed by the laws of
California, except to the extent preempted by federal law.

8.6 Unfunded Arrangement The Director and beneficiary are general unsecured creditors of
the Bank for the payment of benefits under this Agreement. The benefits represent the mere promise
by the Bank to pay such benefits. The rights to benefits are not subject to any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors or beneficiaries of the Director. Any insurance obtained by the Bank on the
Director's life in connection with this Agreement is a general asset of the Bank to which the
Director and beneficiary have no preferred or secured claim.

IN WITNESS WHEREOF, the Director and a duly authorized Bank officer have signed this Agreement as
of the above written date.

	
HERITAGE BANK OF COMMERCE

By/s/ John E. Rossell III 

 Chief Executive Officer

Name and Title

	
DIRECTOR

 /s/ James R. Blair

 James R. Blair

EXHIBIT A

TO

DEFERRED FEE AGREEMENT

Deferral Election

I elect to defer fees under my Deferred Fee Agreement with the Heritage Bank of Commerce, as
follows:

Amount of DeferralFrequency of DeferralDuration

[Initial and complete one][Initial One][Initial One]

X       I elect to deferX           Beginning of Year____ This
Year Only

100 % of Fees

____  I elect to defer______  Each fee period X      For
12/31/06

           $______ of Fees          from the date 

____  I elect not to defer Fees______  End of Year          of the
Agreement

I understand that I may change the amount, frequency and duration of my deferrals by
filing a new election form with Heritage Bank of Commerce and obtaining written approval of the
Board of Directors of the Bank; provided, however, that any subsequent election will not be
effective until the calendar year following the year in which the new election is received by the
Bank.

Form of Benefit

I elect to receive benefits under the Agreement in the following form: 

_____ Lump sum

Substantially equal monthly installments for:

_____ thirty-six (36) monthly installments with the amount of each installment determined as of
each installment date by dividing the entire amount in my Deferral Account by the number of
installments then remaining to be paid, with the final installment to be the entire remaining
balance in the Deferral Account.

X          sixty (60) monthly installments with the amount of each installment determined
as of each installment date by dividing the entire amount in my Deferral Account by the number of
installments then remaining to be paid, with the final installment to be the entire remaining
balance in the Deferral Account.

_____ one hundred twenty (120) monthly installments with the amount of each installment
determined as of each installment date by dividing the entire amount in my Deferral Account by the
number of installments then remaining to be paid, with the final installment to be the entire
remaining balance in the Deferral Account.

_____ one hundred eighty (180) monthly installments with the amount of each installment
determined as of each installment date by dividing the entire amount in my Deferral Account by the
number of installments then remaining to be paid, with the final installment to be the entire
remaining balance in the Deferral Account.

I understand that I may not change the form of benefit elected, even if I later change the amount
of my deferrals under the Agreement without written approval of the Board of Directors of Heritage
Bank of Commerce.

EXHIBIT B

TO

DEFERRED FEE AGREEMENT

Beneficiary Designation

 

I designate the following as beneficiary of benefits under the Deferred Fee Agreement payable
following my death:

Primary: Blair Family Irrevocable Deferred Trust

Contingent: ______________________________

Note: To name a trust as beneficiary, please provide the name of the trustee and the
exact date of the trust agreement.

I understand that I y these beneficiary designations by filing a new written designation with
Heritage Bank of Commerce. I further understand that the designations will be automatically revoked
if the beneficiary predeceases me, o if 11 have named my spouse as beneficiary, in the event of the
dissolution of our marriage.

Signature: /s/ James R. Blair 
James R. Blair

As of June 30, 1998

Accepted by the Heritage Bank of Commerce as June 30, 1998

HERITAGE BANK OF COMMERCE

By:/s/ John E. Rossell III

Title:   Chief Executive Officer

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