Document:

EX-10.2

 EXHIBIT 10.2 

PROFESSIONAL SERVICES AGREEMENT 

This PROFESSIONAL SERVICES AGREEMENT (this “Agreement”) is entered into as of August 1, 2019 (“Effective Date”), by
and between WisdomTree Investments, Inc., a Delaware corporation with principal offices at 245 Park Avenue, 35th Floor, New York, NY 10167 (the “Company”), and David Abner (the
“Service Provider”). 
 WHEREAS, the Company, through its subsidiaries and affiliates, is a global asset manager and sponsor of
exchange-traded products (“ETPs”); 
 WHEREAS, the Service Provider has extensive experience in capital markets and the
development and related execution of ETPs; and 
 WHEREAS, the Company seeks to benefit from the Service Provider’s expertise and
desires to engage the Service Provider as an independent contractor to advise, and the Service Provider is willing to advise, the Company and its subsidiaries or affiliates with respect to the Company’s product development and launch of certain
products and other matters on the terms and conditions set forth in this Agreement. 
 NOW, THEREFORE, in consideration of the premises and
of the mutual promises, representations and covenants herein contained, the parties hereto agree as follows: 

1.    Services. 

(a)    The Company hereby engages the Service Provider as an independent contractor to provide the services described in
Schedule A to this Agreement (the “Services”) on behalf of the Company (or any of its subsidiaries or affiliates as requested by the Company). Any changes or addendum to this Agreement or Schedule A and any additional services not listed
in this Agreement (including in Schedule A) must be approved in a writing signed by the parties (with any such additional services being subject to the terms and conditions of this Agreement). 

(b)    The Service Provider shall provide the Services in a diligent, competent and professional manner, in furtherance of
the best interests of the Company. The Company shall express its general expectations with respect to the Services being provided, and the Service Provider alone shall determine the method, details, manner and means of the Services, including, but
not limited to, the time and place the Service Provider performs the Services. The Company does not have the right to and will not direct or supervise the Service Provider, though the Company may determine in its own discretion whether or not to
adopt or otherwise implement the recommendations or other results of the Services. The Company will not direct or limit the Service Provider’s hours, schedule, time off or other similar activities. 

(c)    The Company acknowledges that the Service Provider is not providing (and will not be required to provide) the
Services exclusively to the Company, and that the Service Provider may provide services similar to the Services to other parties as long as the Service Provider’s provision of such services to other parties does not interfere with the Service
Provider’s performance under this Agreement; provided, however, to avoid any conflicts of interest, the Service Provider agrees that, during the term of this Agreement, he shall not perform work for any other person or entity on any project for
which the Service Provider has been engaged by the Company to provide Services, except as mutually agreed in writing by the Company and the Service Provider. In furtherance of the foregoing, to the extent there is a conflict in time committed by the
Service Provider to the Company and to that of another client, the Service Provider agrees to prioritize the Services to the Company. The Service Provider represents that, during the term of this Agreement, he will not accept any outside employment
with any party, but the Service Provider may provide consulting services, including services similar to the Services, to other parties in accordance with the terms of this Agreement. 

 2.    Term of Agreement. Unless this Agreement and the
Services are earlier terminated pursuant to Section 4 below, this Agreement shall become effective on the Effective Date and shall continue in full force and effect for a period of twelve (12) months from the Effective Date, through
July 31, 2020. Any extension of the term of this Agreement will be subject to the mutual written agreement of the parties. 

3.    Compensation; Fees. In consideration of the provision of the Services to be rendered by the Service
Provider and the rights granted to the Company under this Agreement, the Company shall pay the Service Provider as follows: 

(a)    Monthly Fee. The Company shall pay the Service Provider a fee of $27,083.33 per month, payable monthly in
arrears (and prorated for partial calendar months). Payment will be made based on monthly invoices submitted by the Service Provider to the Company and the Company will pay the Service Provider’s invoices no later than fifteen
(15) business days from its receipt of such invoices. All payments made by the Company shall be made in U.S. dollars. The Company’s aforesaid payment obligation is conditioned on its receipt from the Service Provider of a properly
completed IRS Form W-9. 
 (b)    Expense Reimbursement. The Company
shall reimburse the Service Provider for all reasonable out-of-pocket travel expenses incurred by the Service Provider in connection with his delivery of the Services
(e.g., airfare, lodging and meals while travelling, in each case in accordance with the Company’s travel and expense reimbursement guidelines). The Company shall make such reimbursements of the Service Provider’s travel-related expenses
following the completion of the applicable Service to which such travel relates, based on invoices provided by the Service Provider. No other expenses shall be reimbursed by the Company unless specifically agreed to in writing by the Company in
advance of the incurrence thereof by the Service Provider. All other expenses incurred by the Service Provider in the provision of the Services shall be borne by the Service Provider. 

(c)    Success Fee. Following completion of the delivery of the Services to the Company’s satisfaction, the
Service Provider may be eligible to receive a bonus or success fee (the “Success Fee”). However, the decision to provide any Success Fee and the amount and terms thereof shall be in the sole and absolute discretion of the Company. 

(d)    The Service Provider acknowledges that he will receive an IRS Form 1099-MISC from the Company, and that he shall be
solely responsible for all federal, state, and local taxes, as set forth in Section 5(b). 
 4.    Termination; Non-Competition. 
 (a)    This Agreement may be terminated at any time during the
term, without liability to either party, as follows: (i) upon mutual consent of the parties; (ii) by either party for any reason or no reason upon at least ninety (90) calendar days’ prior written notice to the other party, with
the date of termination to be the date specified in such notice, which date shall be at least ninety (90) calendar days after the date such notice is deemed given as provided in Section 13(b), and provided that neither party may provide
written notice of termination to the other party pursuant to this Section 4(a)(ii) prior to November 4, 2019; (iii) immediately by either party if the other party is in breach of any material term or condition of this Agreement and such
breach has not been cured, to the extent curable, within ten (10) days of the provision of written notice thereof by the aggrieved party to the breaching party; (iv) immediately by the Company, if the Service Provider is convicted of a
crime, engages in serious misconduct in connection with the performance of the Services or is accused of conduct such that the Company believes in good faith that continuing its association with the Service Provider would bring the Company into
disrepute or otherwise damage the Company’s business, brand or prospects; or 

  
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(v) immediately by either the Company or the Service Provider, if the other party: (A) terminates its business activities or becomes insolvent; (B) admits in writing of its inability to
pay its debts as they mature; (C) makes an assignment for the benefit of creditors; or (D) becomes subject to direct control of a trustee, receiver or similar authority. Notwithstanding anything herein to the contrary, if this Agreement is
terminated by the Service Provider, then to the extent requested by the Company, he shall honor all prior commitments for speaking engagements and events that have, prior to the date of such termination, been scheduled and confirmed by the Company
and the Service Provider for dates which follow the termination date, unless otherwise agreed to by the parties in writing, and, in such circumstances, the Company will pay the Service Provider his fee under this Agreement until such time as the
Service Provider has completed the foregoing Services. Sections 5 (Independent Contractor) through and including Section 13 (Miscellaneous) shall survive the expiration or termination of this Agreement. 

(b)    For a period of ninety (90) calendar days after the date of termination of this Agreement, the Service
Provider shall not engage or participate, directly or indirectly, whether as an officer, director, employee, partner, consultant, holder of an equity or debt investment, lender, or in any other manner or capacity (collectively,
“Participate”) in the affairs of any entity that engages in, or as a result of the Service Provider’s engagement or participation would engage in, activities relating to crypto-currency products or products integrating the use of
blockchain technology (“Prohibited Activity”), unless (i) such entity engages in activities other than the Prohibited Activity and (ii) the Service Provider does not Participate in the Prohibited Activity of such entity.

 5.    Independent Contractor. 

(a)    It is expressly understood and agreed that the Service Provider is an independent contractor, that the Service
Provider shall not be deemed to be the agent or employee of the Company or of any of its subsidiaries or affiliates for any purpose whatsoever, and that the Service Provider is not hereby granted any right or authority to assume or create any
obligation or liability express or implied on behalf of or in the name of the Company or to bind the Company in any manner or thing whatsoever. The Service Provider has no authority (and shall not hold himself out as having authority) to bind the
Company and shall not make any agreements or representations on the Company’s behalf without the Company’s prior written consent. Nothing in this Agreement shall be construed as creating an employer-employee relationship, or as a guarantee
of a future offer of employment, or any association, partnership, joint venture or agency relationship between the Service Provider and the Company for any purpose. 

(b)    Both parties acknowledge that the Service Provider is not an employee of the Company or any of its subsidiaries or
affiliates for state or federal tax purposes, that the Service Provider shall be solely responsible for all taxes, withholdings and other statutory, regulatory or similar obligations in respect of the payments made by the Company to the Service
Provider under this Agreement (including, but not limited to, those relating to Social Security, workers’ compensation, disability insurance, unemployment compensation coverage, income taxes, etc.). Without limiting the foregoing, neither the
Service Provider, nor anyone acting on his behalf, shall be eligible to participate in any of the Company’s employee benefit programs, fringe benefits, group insurance arrangements or similar plans offered by the Company or any of its
subsidiaries or affiliates to their respective employees. In addition, neither the Service Provider, nor anyone acting on his behalf, shall be entitled to unemployment benefits in the event this Agreement terminates, or workers’ compensation
benefits from or on behalf of the Company in the event the Service Provider or such person is injured in any manner while performing the Services hereunder, even if the Service Provider or such other person is determined to be a common law or
statutory employee of the Company or any of its subsidiaries or affiliates. Any persons engaged by the Service Provider in connection with the performance of the Services shall be the Service Provider’s employees or contractors and the Service
Provider shall be fully responsible for them and indemnify the Company against any claims made by or on behalf of any such employee or contractor. 

  
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 (c)    The Service Provider agrees to comply with all applicable
federal, state, local and foreign laws, rules, and regulations, including but not limited to laws, rules and regulations pertaining to fair and ethical business practices, insider trading, and avoiding harassment in the workplace. 

6.    Confidentiality. 

(a)    The Service Provider acknowledges that during the term of this Agreement, the Service Provider will have access to
and become acquainted with confidential, sensitive and proprietary and/or trade secret information belonging to the Company, its subsidiaries and affiliates (“Confidential Information”). The Service Provider acknowledges that information
may be Confidential Information even though not expressly stamped or identified as such, and the Service Provider shall treat all information in the general categories identified above as Confidential Information. The Service Provider further
acknowledges and agrees that Confidential Information is highly confidential, is valuable to the Company, is the sole property of the Company, and that the protection and preservation of Confidential Information by the Service Provider is absolutely
vital to the continued success of the business of the Company, its subsidiaries and affiliates. Accordingly, without the prior written consent of the Company, the Service Provider shall not disclose, reveal, or divulge to any person any Confidential
Information or trade secrets of the Company, directly or indirectly, in whole or in part, or use them in any way, except in the course of the Service Provider’s engagement under this Agreement in the performance of the Services. The Service
Provider agrees to notify the Company immediately in the event he becomes aware of any loss or unauthorized disclosure of any Confidential Information. Any Confidential Information that is developed by the Service Provider in connection with the
Services, including but not limited to any Works (as provided in Section 8), shall be subject to the terms and conditions of this Section 6. 

(b)    Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by
applicable law or regulation, or pursuant to subpoena or the valid order of a court of competent jurisdiction or an authorized government agency, provided that such disclosure does not exceed the extent of disclosure required by such subpoena, law,
regulation, or order. The Service Provider agrees to provide written notice of any such subpoena or order to an authorized officer of the Company within two (2) business days of receiving such subpoena or order, but in any event sufficiently in
advance of making any disclosure to permit the Company to contest the subpoena or order or seek confidentiality protections, as determined in the Company’s sole discretion and at its sole expense. Notwithstanding any other provision of this
Agreement, the Service Provider will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that: (i) is made: (x) in confidence to a federal, state, or local government
official, either directly or indirectly, or to an attorney; and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding,
if such filing is made under seal. 
 (c)    The Service Provider acknowledges that during the term of this Agreement,
the Service Provider may become aware of material, non-public information regarding the Company and that applicable securities laws may prohibit purchasing or selling the Company’s common stock while in
possession of such information or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. The Service Provider agrees that
Service Provider and his affiliates will not purchase or sell any securities of the Company while in possession of such information in a manner that violates applicable law. 

7.    Return of Company Property. Upon termination (for any reason) of the Service Provider’s
engagement and of this Agreement, or at any other time the Company demands, the Service Provider shall deliver promptly to the Company (or destroy upon written request from the Company in its sole discretion) all property, materials and
documentation (whether in tangible or electronic, digital, magnetic or other form) relating to or belonging to the Company, its subsidiaries and affiliates, including without limitation, all memoranda, notes, records, reports, manuals,
customer/client lists, employee lists, referral source lists, vendor 

  
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service lists, software programs, and any other documents, whether or not of a confidential nature, belonging to the Company, including all copies of such materials which the Service Provider may
then possess or have under the Service Provider’s control (collectively, “Company Property”). Such Company Property includes all deliverables provided by the Service Provider in connection with his provision of Services hereunder
(whether complete or incomplete) and any materials provided to the Service Provider by the Company. The Service Provider further agrees that upon expiration or termination (for any reason) of the Service Provider’s engagement and this
Agreement, the Service Provider shall not retain any document, data or other materials containing or pertaining to Confidential Information or Company Property, and shall permanently erase all Confidential Information and Company Property from the
Service Provider’s computer systems. Upon the request of the Company, the Service Provider will certify in writing to the Company that the requirements of this Section 7 have been complied with. 

8.    Ownership of Works. All artwork, articles, materials, memoranda, reports, research,
improvements or any other works, created or developed by the Service Provider (or on behalf of the Service Provider) pursuant to the Service Provider’s engagement by the Company, including, but not limited those listed in Schedule A (whether
alone or in conjunction with any other person, and regardless of form) (collectively, the “Works”) shall be the sole, exclusive and absolute property of the Company for any and all purposes whatsoever, and the Service Provider hereby
irrevocably assigns to the Company all of the Service Provider’s right, title and interest in and to the Works (including, without limitation, any copyright, trademark, patent or other intellectual property right therein). The Service Provider
further agrees that the Service Provider does not have, will not claim to have and will not attempt to register in his own name any right, title or interest of any kind or nature whatsoever in or to such Works. Any assignment of copyrights in the
Works under this Agreement includes all rights of paternity, integrity, disclosure, and withdrawal and any other rights that may be known as “moral rights” (collectively, “Moral Rights”). The Service Provider hereby irrevocably
waives, to the extent permitted by applicable law, any and all claims he may now or hereafter have in any jurisdiction to any Moral Rights with respect to the Works. To the extent applicable, each such Work shall be deemed a “work made for
hire” under the United States Copyright Act and other applicable copyright laws, and the Service Provider further agrees to execute any and all documents reasonably required by the Company in order to evidence or perfect the Company’s
ownership of such Works, and the copyrights, trademarks, patents or other intellectual property rights therein, in each case without additional compensation. In addition to its other rights, the Company shall have the exclusive right to register
with the United States Copyright Office, United States Patent and Trademark Office and similar agencies worldwide the copyright, patent, trademark, trade secret or similar right in all such Works in its name in accordance with the requirements of
applicable law. 
 9.    Use of the Service Provider’s Name, Likeness and
Information. The Service Provider hereby grants to the Company, its subsidiaries and affiliates, and each of their respective direct and indirect successors, licensees, and assigns, the right during the term of this Agreement to use the
Service Provider’s name, and image, likeness, biographical and professional information in the form which the Service Provider provides to the Company from
time-to-time, and any other relevant factual information about the Service Provider that is publicly available, solely in connection with the Services and deliverables
of the Service Provider hereunder. The Company and each of its wholly-owned subsidiaries (each, a “WisdomTree Entity,” and collectively, the “WisdomTree Entities”) shall be entitled to identify the Service Provider as a
“Senior Advisor.” For purposes of clarity, the grant in this Section 9 includes the right of the Company and the WisdomTree Entities, and each of their successors and assigns, during the term of this Agreement, to refer to the Service
Provider, including as a “Senior Advisor,” in information on the Company’s and any WisdomTree Entity’s website and written materials, including marketing materials (which may include references in blogs or other social media
accounts), including, without limitation, in the context of the Company’s and any WisdomTree Entity’s advisor solutions program (or successor program) provided to third-party financial advisers and/or other persons or entities. 

  
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 10.    Representations and Warranties. 

(a)    The Service Provider hereby represents and warrants to the Company that: (i) he has the right, power and
authority to enter into this Agreement, to grant the rights granted herein and to perform fully all of his obligations in this Agreement; (ii) when executed and delivered by the Service Provider, this Agreement will constitute the legal, valid
and binding obligation of the Service Provider, enforceable against the Service Provider in accordance with its terms; (iii) the Service Provider’s entering into this Agreement with the Company and his performance of the Services do not
and will not conflict with or result in any breach or default under any other agreement to which the Service Provider is subject; (iv) the Service Provider has the required skill, experience, and qualifications to perform the Services, which
shall be performed in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services (including using reasonable care to check the accuracy of the facts and statements included in materials
provided in connection with the Services) and the Service Provider shall devote sufficient time and/or resources to ensure that the Services are performed in a timely and reliable manner; (v) the Service Provider shall perform the Services in
compliance with all applicable federal, state, and local laws and regulations; (vi) the Service Provider will not transmit any harmful or malicious code, files, scripts, agents, programs or the like in connection with the Services, to the
extent any deliverables are provided electronically; (vii) the Company will receive good and valid title to all deliverables and results of the Services, including all Works, free and clear of all encumbrances and liens of any kind; and
(viii) all deliverables and results of the Services, including all Works, (x) are and shall be the Service Provider’s original work (except for material in the public domain or provided by the Company) and do not and will not violate
or infringe upon the intellectual property right or any other right whatsoever, including any copyright, trademark, patent, trade secret, right of publicity or privacy, of any person, firm, corporation, or other entity, and (y) do not contain
unlawful matter or any materials that the Service Provider is under an obligation to keep confidential. 
 (b)    The
Company hereby represents and warrants to the Service Provider that: (i) it has the requisite corporate right, power, and authority to enter into this Agreement and to perform its obligations hereunder; (ii) the execution of this Agreement
by its representative whose signature is set forth at the end hereof has been duly authorized by all necessary corporate action; and (iii) when executed and delivered by the Company, this Agreement will constitute the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms. 
 11.    Indemnification.

 (a)    The Service Provider agrees to and shall indemnify, defend, and hold harmless the Company, its subsidiaries
and affiliates, and its and their respective then-current and former officers, directors, shareholders, affiliates, employees, agents, successors and assigns, against any and all third-party costs, claims, demands, suits, actions, causes of action,
liabilities, losses, and expenses (including without limitation reasonable attorneys’ fees) (collectively, “Claims”) arising from (i) the Service Provider’s breach of any obligation or representation under this Agreement;
(ii) any gross negligence or willful misconduct of the Service Provider or his agents, contractors, or employees; and/or (iii) the Service Provider’s unapproved, unauthorized or improper use of Company Property (including any
Confidential Information). 
 (b)    The Company agrees to and shall indemnify, defend, and hold harmless the Service
Provider against any and all third-party Claims arising from (i) the Company’s breach of any obligation or representation under this Agreement; and/or (ii) the gross negligence or willful misconduct of the Company. 

12.    Equitable Relief. The Service Provider hereby acknowledges and agrees that, in the event that
the Service Provider violates any provision of Section 6 (Confidentiality), Section 7 (Return of Company Property) or Section 8 (Ownership of Works) of this Agreement, the Company will be without an adequate remedy at law and,
accordingly, will be entitled to seek to enforce such restrictions by temporary or permanent injunctive or other mandatory relief in any action or proceeding, without the necessity of posting bond, and without prejudice

  
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to any other remedies which it may have at law or in equity in such circumstances. The Service Provider further agrees that in the event of any unauthorized publication by the Service Provider of
Confidential Information, the Company shall automatically own the copyright in such publication. 

13.    Miscellaneous. 

(a)    Assignment. This Agreement is personal to the Service Provider and the Service Provider shall not assign or
otherwise transfer any of his rights, or delegate, subcontract, or otherwise transfer any of his obligations or performance, under this Agreement without the Company’s prior written consent. Any purported assignment, delegation, or transfer in
violation of the foregoing shall be deemed null and void. The Company may freely assign its rights and delegate its obligations under this Agreement at any time to (i) an entity that acquires a majority ownership interest in the Company or
substantially all of the Company’s business or assets, whether by merger, reorganization, acquisition, sale or otherwise; or (ii) any of its subsidiaries or affiliates. Subject to the limits on assignment stated above, this Agreement will
inure to the benefit of, be binding on, and be enforceable against each of the parties hereto and their respective successors and permitted assigns. 

(b)    Notices. All notices under this Agreement shall be in writing and shall be delivered (i) personally,
(ii) by certified or registered mail, (iii) by a nationally recognized overnight courier (for example and not by way of limitation: Federal Express, United Parcel Service), or (iv) by email (with confirmation of transmission), in each case
addressed to the party to receive the same at its address identified below its signature on the signature page hereto, or such other address as the party to receive the same shall have specified by written notice to the other party given in the
manner provided for in this Section 13(b). All such notices so addressed shall be deemed given (i) when delivered, if delivered personally to the intended recipient or if sent by e-mail and a
confirmation of receipt is obtained, (ii) one business day after sending, if sent by a nationally recognized courier service with signature required for delivery, or (iii) three (3) business days after being mailed, if sent by certified or
registered mail, postage prepaid, return receipt requested. Day-to-day communications made in the context of the provision and receipt of the Services in the ordinary
course shall not be deemed “notices” under this Section 13(b) and may be made by e-mail. 

(c)    Construction; Severability. Notwithstanding any rules of construction to the contrary, no terms, provisions
or conditions of this Agreement shall be construed against any party hereto by virtue of the drafting or preparing of this instrument by such party or its or his attorney. Any ambiguity or uncertainty existing herein shall not be interpreted or
construed against any party hereto. If any term or provision of this Agreement is determined to be invalid, illegal or unenforceable in any jurisdiction by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby may be consummated as
originally contemplated to the greatest extent possible. 
 (d)    No Waiver. No act, delay or omission done,
suffered or permitted by one party or its subsidiaries, affiliates, delegates or assignees shall be deemed to waive, exhaust or impair any right, remedy or power of such party hereunder, or to relieve the other party from the full performance of
this Agreement, no waiver by any party of any right or remedy under this Agreement shall be deemed to be a waiver of any other or subsequent right or remedy under this Agreement, and no waiver of any term, covenant or condition of this Agreement
shall be valid unless in writing and signed by the party waiving such term, covenant or condition. 
 (e)    Entire
Agreement; Amendment. This Agreement and Schedule A set forth the entire understanding of the parties with respect to the subject matter hereof, and no statement, representation, warranty or covenant has been made by either party except as
expressly set forth herein. This Agreement supersedes and cancels all prior and contemporaneous understandings agreements between the parties, whether written or oral, relating to the Services of the Service Provider. No amendment or alteration of
the terms of this Agreement shall be valid unless made in writing and signed by both parties. 

  
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 (f)    Governing Law; Venue. This Agreement shall be construed
and interpreted under the internal laws of the State of New York without giving effect to any choice or conflict of law principles. Each party irrevocably submits to the exclusive jurisdiction of the appropriate federal and state courts located in
the City and County of New York in any legal suit, action, or proceeding arising out of or related to this Agreement. 

(g)    Counterparts. This Agreement may be executed in multiple counterparts and by electronic (.pdf) signature,
each of which shall be deemed an original and all of which together shall constitute one instrument. 
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left blank] 

  
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 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective as of the
Effective Date. 
  

							
	WISDOMTREE INVESTMENTS, INC.	  		 	
				
	By:	 	 /s/ Peter M. Ziemba
	  		 	 /s/ David Abner

	Name:	 	Peter M. Ziemba	  		 	David Abner, individually
	Title:	 	 Executive Vice President and
 Chief
Administrative Officer
	  		 	

  
 9ex101pacificmercantileem

                         EMPLOYMENT AGREEMENT          THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of   this 29th day of July, 2019 (the “Execution Date”), by and among Brad Dinsmore (the   “Executive”), on the one hand, and Pacific Mercantile Bancorp, a California corporation (“PMB”)   and Pacific Mercantile Bank, a California banking corporation (the “Bank”), on the other hand   (Executive, PMB and the Bank collectively, the “Parties”).                                      RECITALS          WHEREAS, PMB is a bank holding company registered under the Bank Holding Company  Act of 1956, as amended, subject to the primary supervision and regulation of the Board of  Governors of the Federal Reserve System (“FRB”).          WHEREAS, the Bank is a California chartered commercial bank and wholly-owned  subsidiary of PMB, subject to the primary supervision and regulation of the California Department  of Business Oversight (“CDBO”) and the FRB by virtue of its membership in the Federal Reserve   Bank of San Francisco.          WHEREAS, it is the intention of the Parties to enter into an employment agreement for the   purposes of assuring the services of Executive as the Chief Executive Officer of PMB and the   Bank on the terms and subject to the conditions set forth in this Agreement.          NOW, THEREFORE, based on the foregoing premises and in consideration of the mutual   covenants and representations contained herein, the Parties hereto agree as follows:          1.    Term.  PMB and the Bank (collectively and individually referred to herein as the   “Employer”) hereby employ Executive, and Executive hereby accepts employment with   Employer, under the terms of this Agreement, effective as of September 3, 2019 (the “Effective   Date”).  The term of this Agreement shall be for a period of three (3) years (the “Initial Term”)   commencing as of the Effective Date, subject to the termination provisions of paragraph 4.  The   term of this Agreement, as in effect from time to time in accordance with the foregoing, shall be   referred to herein as the “Term”.  The period of time between the Effective Date and the   termination of the Executive’s employment hereunder shall be referred to herein as the   “Employment Period.”  This Agreement shall be null and void and terminated if Executive has not   commenced such employment within five business days of September 3, 2019.          2.    Employment.                (a)   Positions and Reporting.  Executive shall be employed as the Chief   Executive Officer of PMB and the Bank.  During the Employment Period, Executive shall report   directly to the boards of directors of the Bank and PMB (the “Board”), or a committee thereof,   specifically authorized to direct the Executive.  Executive shall also serve as a director of the Bank   and PMB, subject to satisfaction of applicable election requirements during the Employment   Period provided that Executive shall not be entitled to receive any additional compensation   (excluding the payment or reimbursement of any expenses incurred by Executive) for his services   as a director of the Bank, PMB or any of their subsidiaries or affiliates. Executive’s primary place  of employment shall be the Bank’s headquarters in Costa Mesa, California.    SMRH:4851-5903-8620.6                 1                                                                                                                             

 

            (b)   Authority and Duties.  Executive shall exercise such authority, perform such  executive duties and functions and discharge such responsibilities as are reasonably associated  with Executive’s position as Chief Executive Officer, commensurate with the authority vested in  Executive pursuant to this Agreement and consistent with the bylaws of the Bank and of PMB.   During the Employment Period, Executive shall devote his full business time, skill and efforts to  the business of Employer and shall not during the Employment Period engage in any other business  activities, duties, or pursuits whatsoever, or directly or indirectly render any services of a business,  commercial, or professional nature to any other person or organization, whether for compensation  or otherwise, without the prior written consent of the Board.  Notwithstanding the foregoing.   Executive may (i) serve in any capacity with any civic, educational or charitable organization, or  any trade association, without seeking or obtaining approval by the Board, provided such activities  and service do not materially interfere or conflict with the performance of his duties hereunder and  (ii) with the approval of the Board serve on the boards of directors of other corporations that are  not involved in commercial banking or similar business activities; provided, however, Executive  shall not directly or indirectly acquire, hold, or retain any beneficial interest in any business  competing with or similar in nature to the business of Employer except passive shareholder  investments in other financial institutions and their respective affiliates which do not exceed three  percent (3%) of the outstanding voting securities in the aggregate in any single financial institution  and its affiliates on a consolidated basis.               (c)   Executive hereby represents and agrees that the services to be performed  hereunder are of a special, unique, unusual, extraordinary, and intellectual character that gives  them a peculiar value, the loss of which cannot be reasonably or adequately compensated in  damages in an action at law.  Executive therefore expressly agrees that Employer, in addition to  any other rights or remedies that Employer may possess, shall be entitled to injunctive and other  equitable relief to prevent or remedy a breach of this Agreement by Executive.         3.    Compensation and Benefits.               (a)   Salary.  During the Initial Term Executive shall receive an annual base  salary of $425,000 payable in equal semimonthly payments (the “Base Salary”).  Such Base Salary  shall be subject to review in the eleventh (11th) month after the Effective Date, and at each  anniversary of the Effective Date thereafter, or during Executive’s normal officer review period,  for possible adjustment by the Board in its sole discretion based on various factors including, but  not limited to, market conditions, the consolidated results of operations of PMB and the  performance of Executive, but shall in no event be decreased from the level set forth above during  the Initial Term. The base salary as in effect from time to time shall be the “Base Salary” for all  purposes of this Agreement. All payments of Base Salary shall be subject to applicable adjustments  for withholding taxes, pro-rations for any partial payment periods and such other applicable payroll  procedures of the Bank.               (b)   Salary Continuation During Disability.  If Executive for any reason (except  as expressly provided below) becomes temporarily or permanently disabled so that he is unable to  perform the duties under this Agreement, Executive shall be paid the Base Salary otherwise  payable to Executive pursuant to subparagraph 3(a) of this Agreement, reduced by the amounts  received by Executive from state disability insurance, or worker’s compensation or other similar  insurance benefits through policies provided by Employer, for a period of six (6) months from the   SMRH:4851-5903-8620.6                 2                                                                                                                           

 

 date of disability.  For purposes of this paragraph 3(b), “disability” shall be defined as provided in  the Employer’s disability insurance program.                (c)   Incentive Payments.  Commencing with calendar year 2020, Executive shall   be eligible to receive annual incentive amounts in the form of cash and equity awards based upon  the satisfaction of performance criteria (the “Performance Goals”) that will be established by the   Board in its sole discretion and in consultation with the Executive at the beginning of each year.   The maximum target incentive payments available shall be up to 100% of Executive’s annual Base   Salary then in effect, as determined in the sole discretion of the Board. Performance Goals will   include goals consistent with the Bank’s business plan for the year, as established by the Bank’s   management and subject to the review and approval of the Board. The final determinations as to   the actual corporate and individual performance against the Performance Goals shall be made by   the Board in its sole discretion. Executive’s bonus, if any, shall be paid in one lump sum to   Executive at such time as other executive bonuses are paid, but in no event later than the 15th day   of the third month following the year for which it is earned. Executive must be continuously   employed by the Bank through the date of the bonus payment in order to receive such payment   and termination of employment for any reason before such payment date means Executive will not   be eligible to earn and receive such payment.  Any earned bonus payment shall be paid 50% in the   form of cash and 50% in the form of shares of PMB restricted stock issued under the PMB 2019   Equity Incentive Plan (the “Plan”).  Such restricted shares shall (i) vest in three equal installments   on each of the first three anniversaries of the grant date of the restricted shares subject to   Executive’s Continuous Service (as such term is defined in the Plan) with the Employer and (ii)   be evidenced and governed by the PMB restricted stock agreement that Executive must timely   execute as a condition of the restricted stock grant. All cash incentive payments shall be subject to   applicable adjustments for applicable withholding and payroll taxes. Notwithstanding any   provision of any incentive plan or arrangement, no right of continued employment or any   modification of the “at will” nature of Executive’s employment with Employer shall be conferred   upon Executive thereunder or result therefrom.                (d)   Equity Compensation.  Subject to the approval of the PMB Compensation   Committee, Executive will be granted (i) a nonqualified stock option under the Plan to acquire up   to 250,000 shares of PMB’s common stock (the “Option”) and (ii) 100,000 stock units issued under   the Plan (the “RSUs”).  The Option will (i) vest and become exercisable in five equal annual   installments on each of the first five anniversaries of the Option grant date subject to Executive’s   Continuous Service with the Employer, (ii) have a per share exercise price equal to the fair market   value of a PMB common share on the Option grant date, and (iii) be evidenced and governed by   the PMB stock option agreement that Executive must timely execute as a condition of the Option   grant. The PMB stock option agreement will provide that, upon termination of Executive’s   Continuous Service for any reason or the consummation of a Change of Control (as such term is   defined in the Plan) in which the Option is not assumed or otherwise continued or replaced in   connection with the Change of Control, before an applicable vesting date, the unvested portion of   the Option shall be forfeited without consideration.  The RSUs will (a) vest and be paid out with   25,000 PMB common shares on the first anniversary of the RSU grant date subject to Executive’s   Continuous Service with the Employer, (b) vest and be paid out with 75,000 PMB common shares   on the third anniversary of the RSU grant date subject to Executive’s Continuous Service with the   Employer, and (c) be evidenced and governed by the PMB stock unit agreement that Executive   must timely execute as a condition of the RSU grant. The PMB stock unit agreement will provide    SMRH:4851-5903-8620.6                 3                                                                                                                             

 

 that, upon termination of Executive’s Continuous Service for any reason before the applicable   vesting date, the unvested portion of the RSUs will be forfeited without consideration; provided,   however, that all unvested RSUs will vest (1) immediately prior to the consummation of a Change   of Control provided that such Change of Control is consummated on or after the date which is   eighteen (18) months after the RSU grant date and the RSUs are not assumed or otherwise   continued or replaced in connection with the Change of Control, or (2) upon the termination of   Executive’s Continuous Service pursuant to subparagraph 4(b) of this Agreement on or after the   consummation of a Change of Control provided that such Change of Control is consummated on   or after the date which is eighteen (18) months after the RSU grant date, in each case provided that   Executive executes and timely delivers to Employer a form of general release agreement   prescribed by Employer releasing the Bank and PMB from any and all claims, known and   unknown, related to Executive’s services with the Bank and PMB.  Executive may also be required   to enter into other agreements or make certain representations as a condition of any grant.  If   required by applicable law or any PMB policy with respect to transactions involving PMB equity   securities, Executive agrees that he shall use his best efforts to comply with any duty that he may   have to (x) timely report any such transactions and (y) to refrain from engaging in certain   transactions from time to time.                 (e)   Insurance Benefits.  During the Employment Period, Executive shall   receive such group life, disability, and health (including medical, dental, vision and   hospitalization), accident and disability insurance coverage and other benefits which Employer   extends, as a matter of policy, to all of its executive employees, except as otherwise provided   herein, and shall be entitled to participate in all benefit and other incentive plans of the Employer,   on the same basis as other like employees of Employer.                (f)   Vacation.  Executive shall be entitled to four (4) weeks of annual vacation   during the Employment Period at his then existing rate of Base Salary, which shall be scheduled   in Executive’s discretion, subject to and taking into account applicable banking laws and   regulations and business needs.  Vacation will accrue in accordance with the Bank’s personnel  policies.                (g)   Business Expenses.  During the Employment Period, Employer shall   promptly reimburse the Executive for all documented ordinary and necessary business expenses   incurred by Executive in the performance of his duties under this Agreement.  Executive shall also   be reimbursed for reasonable expenses incurred in activities associated with promoting the   business of Employer, including expenses for entertainment, travel, conventions, and educational   programs.  All such expenses described above will be subject to compliance with applicable   policies of Employer.  All such reimbursements shall be made upon presentation and approval of   receipts, invoices or other appropriate evidence of such expense in accordance with the policies   Employer in effect from time to time.                (h)   Professional License Expenses.  During the Employment Period, Employer   shall reimburse the Executive for all documented ordinary and necessary expenses incurred by   Executive in maintaining professional business licenses and certifications that he possesses as of   the date of this Agreement.  All such expenses described above will be subject to compliance with   applicable policies of Employer.  All such reimbursements shall be made upon presentation and     SMRH:4851-5903-8620.6                 4                                                                                                                             

 

approval of receipts, invoices or other appropriate evidence of such expense in accordance with  the policies Employer in effect from time to time.               (i)   Car Allowance.  The Bank shall provide the Executive with a monthly  automobile allowance of $800 per month during the Employment Period.  Executive shall (A)  obtain and maintain public liability insurance and property damage insurance policies with  insurer(s) acceptable to Employer and with such coverage in such amounts as may be reasonably  acceptable to Employer, and (B) provide copies of such policies, endorsements or other evidence  of insurance acceptable to Employer.               (j)   Club Membership.  Executive and Employer agree that the Executive’s  participation in the membership of a country club or similar club will assist in promoting  Employer’s business. For this reason, during Executive’s employment with Employer, the Bank  shall reimburse Executive for the initial membership cost for such membership in an amount not  to exceed $25,000 (provided such expense is incurred by Executive no later than December 31,  2019) plus the monthly dues and expenses related to such membership up to $800 per month.   Executive must submit all applicable reimbursement documentation for the initial membership  cost within 45 days of the expense being incurred, and the Bank will provide the reimbursement  within 45 days thereafter.  The particular club shall be selected by Employer in consultation with  Executive.               (k)   Relocation.  The Bank  will provide Executive with relocation  reimbursement payments in the aggregate of up to $37,500 to reimburse Executive for any  reasonable relocation-related expenses that Executive incurs in relocating to the Orange County  area, such as any temporary living allowance, the reasonable cost of moving Executive’s personal  effects and furniture, and similar costs.  Executive shall provide appropriate documentation to  support the costs incurred prior to the Bank’s reimbursement of such costs.  The Bank’s provision  of these reimbursement payments is contingent on Executive completing his relocation to the  Orange County area before March 30, 2020, and all expenses must be incurred before March 30,  2020.  Executive must submit all applicable reimbursement documentation within 45 days of the  expense being incurred, and Employer will provide the reimbursement within 45 days thereafter.   No relocation expense payments will be paid before the Effective Date.  Reimbursements under  this paragraph may be subject to income taxation and tax withholding in accordance with  applicable laws.         4.    Termination of Employment.               (a)   Termination for Cause.  The Board may terminate Executive’s employment  hereunder for “Cause” or without “Cause.”  For purposes of this Agreement termination for  “Cause” shall mean the occurrence of one or more of the following: (i) conviction of Executive of  a crime directly related to his employment hereunder, (ii) conviction of a crime involving moral  turpitude, (iii) Executive’s willful and gross mismanagement of the business and affairs of  Employer, (iv) Executive’s willful and intentional violation of any state or federal banking or  securities laws, or of the bylaws, rules, policies or resolutions of Bank, or the rules or regulations  of or any final order issued by the FRB, the CDBO, or the Federal Deposit Insurance Corporation  (the “FDIC”), (v) any violation by Executive of the Employer’s policy against harassment, equal  employment opportunity policy, drug and alcohol policy and/or the confidentiality agreement that   SMRH:4851-5903-8620.6                 5                                                                                                                           

 

 Executive shall execute at the commencement of his employment, (vi) Executive’s breach of any   material provision of this Agreement, and (vii) if Executive has not permanently relocated to the   Orange County area on or before March 30, 2020.  For purposes of this Agreement, no act, or the   failure to act, on Executive’s part shall be considered “willful” unless done, or omitted to be done,   not in good faith and without reasonable belief that the action or omission was in the best interests   of Employer.  Executive shall not be deemed to have been terminated for Cause unless and until   there shall have been delivered to him a notice of termination.  In the event employment of  Executive is terminated pursuant to this subparagraph 4(a), Employer shall have no further liability  to Executive other than for compensation accrued and for reimbursement of business expenses  incurred through the date of termination but not yet paid.         Termination under this subparagraph 4(a) shall not prejudice any remedy that the Employer  may have at law, in equity, or under this Agreement.                (b)   Termination by Employer Without Cause or by Executive for Good Reason.    Employer may terminate the employment of Executive without “Cause” (as defined in   subparagraph 4(a)) at any time during the Employment Period by giving written notice to   Executive specifying therein the effective date of termination.  Executive shall have the right at   any time to terminate his employment with the Bank for any reason or for no reason.  For purposes   of this Agreement, and subject to Employer’s opportunity to cure as provided in Section 4(c)   hereof, Executive shall have “Good Reason” to terminate his employment hereunder if such   termination shall be the result of:                      (i)   a material diminution during the Employment Period in the   Executive’s title, duties or responsibilities as set forth in Section 2 hereof without Executive’s   consent;                      (ii)  a material breach by Employer of the compensation and benefits   provisions set forth in Section 3 hereof;                      (iii) a material breach by Employer of any material terms of this   Agreement; or                      (iv)  the relocation of Executive’s principal place of employment to any   location more than 50 miles from the Bank’s headquarters at the Effective Date.                (c)   Notice and Opportunity to Cure.  Notwithstanding the foregoing, it shall be   a condition precedent to Employer’s right to terminate Executive’s employment and this   Agreement under subparagraph 4(a)(iv) and Executive’s right to terminate his employment for   “Good Reason” that (1) the party alleging a breach shall first have given the other party written  notice stating with specificity the reason for the termination (“breach”) and (2) if such breach is   susceptible of cure or remedy, a period of 30 days from and after the giving of such notice to cure   the breach.  If the breach cannot reasonably be cured or remedied within 30 days, the period for  remedy or cure shall be extended for a reasonable time (not to exceed 30 days), provided the party  against whom a breach is alleged has made and continues to make a diligent effort to effect such  remedy or cure.  In order to resign for Good Reason, Executive must terminate his employment  within 10 business days after the expiration of the foregoing cure period.     SMRH:4851-5903-8620.6                 6                                                                                                                             

 

             (d)   Termination Upon Death or Permanent Disability.  This Agreement shall   terminate automatically upon: (i) the death of Executive, and (ii) the “permanent disability” of  Executive as such term is defined in the disability insurance provided by Employer, or if such  insurance is not provided by Employer, the term shall mean that Executive has been deemed by a  medical care provider to indefinitely be unable to perform the essential functions of Executive’s   position with or without accommodation.  If the Employment Period is terminated by reason of   the permanent disability of the Executive, Employer shall give 30-days’ advance written notice to   that effect to the Executive or his representative.  Employer and Executive shall comply with any  obligations they may respectively have, under state or federal law, to interact regarding reasonable  accommodations.          5.    Consequences of Termination.  The following are the benefits to which Executive   is entitled upon termination of employment in all positions with Employer, and such payments and   benefits shall be the exclusive payments and benefits to which Executive is entitled upon such   termination.  Except in the case of termination of employment by Employer for Cause, or due to   death, the post-termination payments (other than those required by law) and benefits shall only be   provided if the Executive first enters into a form of general release agreement prescribed Employer   releasing Employer and PMB from any and all claims, known and unknown, related to the   Executive’s services with the Bank and PMB.  Such release agreement must be timely executed   by Executive and become effective by its own terms within 55 days after Executive’s termination   of employment.                (a)   Termination Without Cause or for Good Reason.  In the event of termination   of Executive’s employment (i) by Employer without “Cause” (other than upon death or permanent  disability), or (ii) by Executive for “Good Reason”, Executive shall be entitled to the following  severance pay:                      (i)   Severance Pay - a lump sum amount equal to 200% of the   Executive’s annual Base Salary.  Such severance pay shall be paid on the 60th day after termination   of Executive’s employment.                (b)   Termination Upon Disability.  In the event of termination of Executive’s   employment hereunder by Employer on account of permanent disability, Employer shall pay to   Executive the accrued Base Salary and accrued and unused vacation earned through the date of   disability.  Such payment shall be made no later than sixty (60) days after the date of disability.                (c)   Termination Upon Death.  In the event of termination of Executive’s   employment hereunder on account of Executive’s death.  Employer shall pay to Executive’s  beneficiary or beneficiaries or his estate, as the case may be, the accrued Base Salary and accrued  and unused vacation earned through the date of death.  Such payment shall be made no later than  sixty (60) days after the date of death.  In addition, Executive’s beneficiary(ies) or his estate shall  be entitled to the payment of benefits pursuant to any life insurance policy of Executive, as  provided for in Section 3(c) above.  Executive’s beneficiary or estate shall not be required to remit  to Employer any payments received pursuant to any life insurance policy purchased pursuant to  Section 3(c) above.     SMRH:4851-5903-8620.6                 7                                                                                                                             

 

             (d)   Termination for Cause or Due to End of the Term.  In the event the   employment of Executive is terminated by Employer for Cause, no severance payment or benefit   shall be provided.  In the event the employment of Executive is terminated as a result of the  expiration of the Term, Executive shall be entitled to no severance payment or benefit of any kind  notwithstanding any provision to the contrary in the Employer’s employee manual or policies then  in effect, except as to matters such as coverage under The Consolidated Omnibus Budget  Reconciliation Act of 1985 (“COBRA”) and unused vacation required by law without reference to   such manual or policies.                (e)   Accrued Rights.  Notwithstanding the foregoing provisions of this Section   5, in the event of termination of Executive’s employment hereunder for any reason or for no reason,   Executive shall be entitled to payment of any unpaid portion of his Base Salary through the   effective date of termination, payment of any unreimbursed expenses incurred pursuant to Sections  3(f) or 3(g) above, and payment of any accrued but unpaid benefits solely in accordance with the  terms of any incentive bonus or employee benefit plan or program of Employer.                (f)   Non-assignability.  Neither Executive nor any other person or entity acting   on his behalf or as his representative shall have any power or right to transfer, assign, anticipate,   hypothecate, mortgage, commute, modify, or otherwise encumber in advance any of the rights or   benefits of Executive under this Section 5, nor shall any of said rights or benefits be subject to  seizure for the payment of any debts, judgments, alimony or separate maintenance, owed by  Executive or any other person or entity, or be transferable by operation of law in the event of   bankruptcy, insolvency or otherwise.  The terms of this Section 5(f) shall not affect the   interpretation of any other provision of this Agreement.                (g)   Regulatory Restrictions.  Notwithstanding anything to the contrary   contained in this Agreement:                      (i)   If Executive is removed and/or permanently prohibited from   participating in the conduct of Employer’s affairs by an order issued under Section 8(e)(4) or  8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all   obligations of Employer under this Agreement shall terminate, as of the effective date of such   order, except for the payment of Base Salary due and owing on the effective date of said order,   reimbursement of business expenses incurred as of the effective date of termination and such   matters required by law.                      (ii)  If Executive is suspended and/or temporarily prohibited from   participating in the conduct of Employer’s affairs by a notice served under Section 8(e)(3) or  8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of Employer under this  Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings.    If the charges in the notice are dismissed, Employer shall (i) pay Executive all or part of the   compensation withheld while its contract obligations were suspended and (ii) reinstate (in whole   or in part) any of its obligations which were suspended.                     (iii) If Bank is in default (as defined in Section 3(x)(l) of the FDIA), all  obligations under this Agreement shall terminate as of the date of default, but the vested rights of   the parties shall not be affected.     SMRH:4851-5903-8620.6                 8                                                                                                                             

 

                   (iv)  All obligations under this Agreement shall be terminated, except to   the extent a determination is made that continuation of the contract is necessary for the continued   operation of Employer (i) by the director of the FDIC or his or her designee (the “Director”), at   the time the FDIC enters into an agreement to provide assistance to or on behalf of Employer under   the authority contained in 13(c) of the FDIA; or (ii) by the Director, at the time the Director   approves a supervisory merger to resolve problems related to operation of Employer when the   Employer is determined by the Director to be in an unsafe and unsound condition.  Any rights of   the Executive that have already vested, however, shall not be affected by such action.                      (v)   No payments shall be made pursuant to this paragraph 5 or any other   provision herein in violation of the requirements of Section 18(k) of the FDIA (12 U.S.C.   §1828(k)).                (h)   IRC Section 280G.  In no event shall the payment(s) described in this   paragraph 5 exceed the amount permitted by Section 280G of the Internal Revenue Code of 1986,   as amended (“Section 280G”).  Therefore, if the aggregate present value (determined as of the date   of the change of control in accordance with the provisions of Section 280G) of both any severance   payment and all other payments to Executive in the nature of compensation which are contingent   on a change in ownership or effective control of Bank or PMB or in the ownership of a substantial   portion of the assets of the Bank (the “Aggregate Payments”) would result in a “parachute   payment,” as defined under Section 280G, then the Aggregate Payments shall not be greater than   an amount equal to 2.99 multiplied by Executive’s “base amount” for the “base period,” as those  terms are defined under Section 280G.  In the event the Aggregate Payments are required to be  reduced pursuant to this subparagraph 5(h), the last payments in time shall be reduced first.                (i)   Conditions to Severance Benefits.  The Bank shall have the right to seek   repayment of the severance payments and benefits or to terminate payments or benefits provided   by this paragraph 5 (i) in the event that the Executive fails to honor, in accordance with their terms,   the provisions of paragraphs 6 or 9 hereof or (ii) to the extent such payments or benefits would   violate Section 18(k) of the FDIA (12 U.S.C. §1828(k)).            6.    Confidentiality.  Executive agrees that he will not at any time during the   Employment Period or at any time thereafter for any reason, in any fashion, form or manner, except   as required by law to comply with legal process, either directly or indirectly, divulge, disclose or   communicate to any person, firm, corporation or other business entity, in any manner whatsoever,   any financial information or trade or business secrets, including, without limiting the generality of   the foregoing, the techniques, methods or systems of its operation or management, any information   regarding its financial matters, customer lists, computer software, or any other information   concerning the business or operations of Employer, its subsidiaries, affiliates and any of its   customers, governmental relations, customer contacts, underwriting methodology, loan program   configuration and qualification strategies, marketing strategies and proposals, its manner of   operation, its plans or other material data, or any other information concerning the business of the   Employer, its subsidiaries or affiliates, and the Employer’s goodwill (the “Business”).  The   provisions of this Section 6 shall not apply to (i) information disclosed in the performance of   Executive’s duties to Employer based on his good faith belief that such a disclosure is in the best   interests of Employer; (ii) information that is, at the time of the disclosure, public knowledge; (iii)   information disseminated by Employer to third parties in the ordinary course of business; (iv)    SMRH:4851-5903-8620.6                 9                                                                                                                             

 

 information lawfully received by Executive from a third party who, based upon inquiry by   Executive, is not bound by a confidential relationship to Employer or otherwise improperly   received the information; or (v) information disclosed under a requirement of law or as directed   by applicable legal authority having jurisdiction over Executive.  In the event Executive is required   by law to disclose such information described above, Executive will provide Employer and their   counsel with immediate notice of such request so that they may consider seeking a protective order.    Notwithstanding the foregoing, Executive may disclose such information concerning the business   or operations of Employer and its subsidiaries and affiliates as may be required by the FRB,   CDBO, FDIC or other regulatory agency having jurisdiction over the operations of Employer in   connection with an examination of Bank or PMB or other proceeding conducted by such regulatory   agency.          Executive agrees that all written, printed or electronic material, notebooks and records   including, without limitation, computer disks, used and/or developed by Executive for Employer   during the Term of this Agreement, other than Executive’s personal address lists, telephone lists,  notes and diaries, are solely the property of Employer, and that Executive has no right, title or  interest therein.  Upon termination of Executive’s employment, Executive or Executive’s  representative shall promptly deliver possession of all such materials (including any copies  thereof) to the Bank.          7.    Key-man Life Insurance.  Employer shall have the right to obtain and hold a “key-  man” life insurance policy on the life of Executive with the Bank as beneficiary of the policy.    Executive agrees to provide any information required for the issuance of such policy and submit   himself to any physical examination required for such policy.          8.    Unsecured General Creditor.  Neither Executive nor any other person or entity shall   have any legal right or equitable rights interests or claims in or to any property or assets of   Employer under the provisions of this Agreement.  No assets of Employer shall be held under any   trust for the benefit of Executive or any other person or entity or held in any way as security for   the fulfilling of the obligations of Employer under this Agreement.  All of Employer’s assets shall   be and remain the general, unpledged, unrestricted assets of Employer.  Employer’s obligations  under this Agreement are unfunded and unsecured promises, and to the extent such promises  involve the payment of money, they are promises to pay money in the future.  Executive and any  person or entity claiming through him shall be unsecured general creditors with respect to any  rights or benefits hereunder.          9.    Business Protection Covenants.                (a)   Covenant Not to Compete.  Executive agrees that he will not, during the   Employment Period, voluntarily or involuntarily, directly or indirectly, (i) engage in any banking   or financial products or service business, loan origination or deposit-taking business or any other  business competitive with that of the Bank or its subsidiaries or affiliates (“Competitive Business”)   within Orange County, Los Angeles County, Riverside County, San Diego County and San   Bernardino County (the “Market Area”), (ii) directly or indirectly own any interest in (other than   less than three percent (3%) of any publicly traded company or mutual fund), manage, operate,   control, be employed by, or provide management or consulting services in any capacity to any   firm, corporation, or other entity (other than Employer or its subsidiaries or affiliates) engaged in    SMRH:4851-5903-8620.6                 10                                                                                                                            

 

 any Competitive Business in the Market Area, or (iii) directly or indirectly solicit or otherwise   intentionally cause any employee, officer, or member of the Board or any of its subsidiaries or   affiliates to engage in any action prohibited under (i) or (ii) of this paragraph 9(a).                (b)   Inducing Employees To Leave The Bank: Employment of Employees.  Any   attempt on the part of the Executive to induce others to leave Employer’s employ, or the employ  of any of its subsidiaries or affiliates, or any effort by Executive to interfere with Employer’s  relationship with its other employees would be harmful and damaging to Employer.  Executive   agrees that during the Employment Period and for a period of twelve (12) months thereafter,   Executive will not in any way, directly or indirectly: (i) induce or attempt to induce any employee   of the Employer or any of its subsidiaries of affiliates to quit employment with Employer or the   relevant subsidiary or affiliate; (ii) otherwise interfere with or disrupt the relationships between   Employer and its subsidiaries and affiliates and their respective employees; (iii) solicit or recruit   any employee of Employer or any subsidiary or affiliate or any former employee of Employer or   any subsidiary or affiliate.                (c)   Nonsolicitation of Business.  For a period of twelve (12) months from the   date of termination of employment, Executive will not, using Employer’s trade secrets or  confidential information, divert or attempt to divert from Employer or any of its subsidiaries or  affiliates, any business Employer or a relevant subsidiary or affiliate had enjoyed or solicited from  its customers, borrowers, depositors or investors during the twelve (12) months prior to termination  of his employment.                (d)   Bank’s Ownership of Inventions.  To the extent that Executive has   intellectual property rights of any kind in any pre-existing works which are subsequently  incorporated in any work or work product produced in rendering services to Bank, PMB or any  their subsidiaries or affiliates, Executive hereby grants Bank a royalty-free, irrevocable, world- wide, perpetual non-exclusive license (with the right to sublicense), to make, have made, copy,  modify, use, sell, license, disclose, publish or otherwise disseminate or transfer such subject  matter.  Similarly, Executive agrees that all inventions, discoveries, improvements, trade secrets,  original works of authorship, developments, formulae, techniques, processes, and know-how,  whether or not patentable, and whether or not reduced to practice, that are conceived, developed  or reduced to practice during Executive’s employment with Employer, either alone or jointly with  others, if on Employer’s time, using Employer’s facilities, or relating to Employer shall be owned  exclusively by the Bank, and Executive hereby assigns to the Bank all of Executive’s right, title  and interest throughout the world in all such intellectual property.  Executive agrees that the Bank  shall be the sole owner of all domestic and foreign patents or other rights pertaining thereto, and  further agrees to execute all documents that the Bank reasonably determines to be necessary or  convenient for use in applying for, prosecuting, perfecting, or enforcing patents or other  intellectual property rights, including the execution of any assignments, patent applications, or  other documents that the Bank may reasonably request.  This provision is intended to apply to the  extent permitted by applicable law and is expressly limited by Section 2870 of the California Labor  Code, which is set forth in its entirety in Exhibit A to this Agreement.  By signing this Agreement,  Executive acknowledges that this Paragraph shall constitute written notice of the provisions of  Section 2870.     SMRH:4851-5903-8620.6                 11                                                                                                                            

 

             (e)   Bank’s Ownership of Copyrights.  Executive agrees that all original works   of authorship not otherwise within the scope of paragraph 9(d) above that are conceived or   developed during Executive’s employment with Employer, either alone or jointly with others, if   on Employer’s time, using Employer facilities, or relating to Employer, or its subsidiaries or   affiliates, are “works for hire” to the greatest extent permitted by law and shall be owned  exclusively by the Bank, and Executive hereby assigns to the Bank all of Executive’s right, title,  and interest in all such original works of authorship.  Executive agrees that the Bank shall be the  sole owner of all rights pertaining thereto, and further agrees to execute all documents that the  Bank reasonably determines to be necessary or convenient for establishing in the Bank’s name the  copyright to any such original works of authorship.          10.   Resignations.  The Executive agrees that upon termination of employment, for any   reason, he will submit his resignations from all offices and directorships with the Bank and PMB   and all of their respective subsidiaries and affiliates.          11.   Other Agreements.  The Parties further agree that to the extent of any inconsistency   between this Agreement and any employee manual or policy of Employer, that the terms of this   Agreement shall supersede the terms of such employee manual or policy.          12.   Notice.  For the purposes of this Agreement, notices, demands and all other   communications provided for in this Agreement shall be in writing and shall be personally   delivered or (unless otherwise specified) mailed by United States certified or registered mail,   return receipt requested, postage prepaid, or sent by facsimile, provided that the facsimile cover   sheet contains a notation of the date and time of transmission, and shall be deemed received: (i) if   personally delivered, upon the date of delivery to the address of the person to receive such notice,   (ii) if mailed in accordance with the provisions of this Section 12, two (2) business days after the   date placed in the United States mail, (iii) if mailed other than in accordance with the provisions   of this Section 12 or mailed from outside the United States, upon the date of delivery to the address   of the person to receive such notice, or (iv) if given by facsimile, when sent.  Notices shall be   addressed as follows:             If to the Employer:    Pacific Mercantile Bank                                    949 South Coast Drive                                    Third Floor                                   Costa Mesa, California, 92626                                                                       Attn: Pacific Mercantile Bank Board of Directors                                               If to the Executive, to: Mr. Brad Dinsmore                                    __________________                                   __________________      or to such other respective addresses as the Parties hereto shall designate to the other by like notice,   provided that notice of a change of address shall be effective only upon receipt thereof.          13.   Arbitration.  Any dispute or controversy arising under or in connection with this   Agreement, the inception or termination of the Executive’s employment, or any alleged    SMRH:4851-5903-8620.6                 12                                                                                                                            

 

 discrimination or tort claim related to such employment, including issues raised regarding the   Agreement’s formation, interpretation or breach, shall be settled exclusively by binding   arbitration.  The only exception to the requirement of binding arbitration shall be for claims arising   under the National Labor Relations Act which are brought before the National Labor Relations   Board, claims for medical and disability benefits under the California Workers’ Compensation   Act, Employment Development Department claims, or as may otherwise be required by state or   federal law.  However, nothing herein shall prevent the Executive from filing and pursuing   proceedings before the California Department of Fair Employment and Housing, or the United   States Equal Employment Opportunity Commission (although if Executive chooses to pursue a   claim following the exhaustion of such administrative remedies, that claim would be subject to the   provisions of this Agreement).  In addition to any other requirements imposed by law, the arbitrator   selected shall be a retired California Superior Court Judge, or an otherwise qualified individual to   whom the parties mutually agree, and shall be subject to disqualification on the same grounds as   would apply to a judge of such court.  All rules of pleading (including the right of demurrer), all   rules of evidence, all rights to resolution of the dispute by means of motions for summary   judgment, judgment on the pleadings, and judgment under Code of Civil Procedure Section 631.8   shall apply and be observed.  The arbitrator shall have the immunity of a judicial officer from civil   liability when acting in the capacity of an arbitrator, which immunity supplements any other   existing immunity.  Likewise, all communications during or in connection with the arbitration   proceedings are privileged in accordance with Cal. Civil Code Section 47(b).  As reasonably   required to allow full use and benefit of this agreement’s modifications to the Act’s procedures,   the arbitrator shall extend the times set by the Act for the giving of notices and setting of hearings.    Awards shall include the arbitrator’s written reasoned opinion.  Resolution of all disputes shall be   based solely upon the law governing the claims and defenses pleaded, and the arbitrator may not   invoke any basis (including but not limited to, notions of “just cause”) other than such controlling   law.  By this binding arbitration provision, both Executive and Employer give up their respective   right to trial by jury of any claim one may have against the other.          14.   Waiver of Breach.  Any waiver of any breach of this Agreement shall not be   construed to be a continuing waiver or consent to any subsequent breach on the part either of the   Executive or of Employer.  No delay or omission in the exercise of any power, remedy, or right   herein provided or otherwise available to any party shall impair or affect the right of such party   thereafter to exercise the same.  Any extension of time or other indulgence granted to a party   hereunder shall not otherwise alter or affect any power, remedy or right of any other party, or the   obligations of the party to whom such extension or indulgence is granted except as specifically   waived.          15.   Non-Assignment: Successors.  Neither party hereto may assign his or its rights or   delegate his or its duties under this Agreement without the prior written consent of the other party;   provided, however, that: (i) this Agreement shall inure to the benefit of and be binding upon the   successors and assigns of Employer upon any sale of all or substantially all of Employer’s assets,  or upon any merger, consolidation or reorganization of Bank or PMB with or into any other  corporation, all as though such successors and assigns of the Bank and PMB and their respective  successors and assigns were the Bank or PMB; and (ii) this Agreement shall inure to the benefit  of and be binding upon the heirs, assigns or designees of Executive to the extent of any payments  due to them hereunder.  As used in this Agreement, the term “Bank,” “PMB,” or “Employer” shall     SMRH:4851-5903-8620.6                 13                                                                                                                            

 

 be deemed to refer to any such successor or assign of the Bank, PMB or Employer referred to in   the preceding sentence.          16.   Withholding of Taxes.  All payments required to be made by Employer or PMB to   the Executive under this Agreement shall be subject to the withholding and deduction of such   amounts, if any, relating to tax, and other payroll deductions as Employer may reasonably   determine it should withhold and/or deduct pursuant to any applicable law or regulation (including,   but not limited to, Executive’s portion of social security payments and income tax withholding)   now in effect or which may become effective any time during the term of this Agreement.    Executive shall be solely liable and responsible for any taxes imposed on Executive in connection  with this Agreement or with any payments or benefits provided to Executive by Employer or PMB.          17.   Section 409A.  If Executive determines, in good faith, that any compensation or   benefits provided by this Agreement may result in the application of Section 409A of the Internal   Revenue Code of 1986, as amended (the “Code”).  Executive shall provide written notice thereof   (describing in reasonable detail the basis therefor) to Employer, and Employer shall, in   consultation with Executive, modify this Agreement in the least restrictive manner necessary in   order to exclude such compensation from the definition of “deferred compensation” within the  meaning of such Section 409A of the Code or in order to comply with the provisions of Section  409A of the Code, other applicable provision(s) of the Code and/or any rules, regulations or other  regulatory guidance issued under such statutory provisions and without any diminution in the value  of the payments to Executive.  Any payments that, under the terms of this Agreement, qualify for  the “short-term” deferral exception under Treasury Regulations Section 1.409A- 1(b)(4), the  “separation pay” exception under Treasury Regulations Section 1.409A-l(b)(9)(iii) or another  exception under Section 409A of the Code will be paid under the applicable exceptions to the  greatest extent possible.  Each payment under this Agreement shall be treated as a separate  payment for purposes of Section 409A of the Code.  Anything in this Agreement to the contrary  notwithstanding, if at the time of Executive’s separation from service within the meaning of  Section 409A of the Code, Executive is considered a “specified employee” within the meaning of  Section 409A(a)(2)(B)(i) of the Code, and if any payment that Executive becomes entitled to under  this Agreement is considered deferred compensations subject to interest, penalties and additional  tax imposed pursuant to Section 409A of the Code as a result of the application of Section  409A(a)(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is the  earlier of (i) six months and one day Executive’s separation from service or (ii) Executive’s death.   In no event shall the date of termination of Executive’s employment be deemed to occur until  Executive experiences a “separation from service” within the meaning of Section 409A of the  Code, and notwithstanding anything contained herein to the contrary, the date on which such  separation from service takes place shall be the Date of Termination.  All reimbursements provided  under this Agreement shall be provided in accordance with the requirements of Section 409A of  the Code, including, where applicable, the requirement that (A) the amount of expenses eligible  for reimbursement during one calendar year will not affect the amount of expenses eligible for  reimbursement in any other calendar year; (B) the reimbursement of an eligible expense will be  made no later than the last day of the calendar year following the calendar year in which the  expense is incurred; and (C) the right to any reimbursement will not be subject to liquidation or  exchange for another benefit.  Notwithstanding the foregoing, Employer makes no representation  or covenant to ensure that the payments and benefits under this Agreement are exempt from, or  compliant with, Section 409A of the Code.    SMRH:4851-5903-8620.6                 14                                                                                                                            

 

      18.   Indemnification.  To the fullest extent permitted by law, regulation, and the Articles  of Incorporation and Bylaws of Bank and PMB, the Bank and/or PMB as appropriate shall pay as  and when incurred all expenses, including legal and attorney costs, incurred by, or shall satisfy as  and when entered or levied a judgment or fine rendered or levied against, Executive in an action  brought by a third party against Executive (whether or not the Bank is joined as a party defendant)  to impose a liability or penalty on Executive for an act alleged to have been committed by  Executive while an officer of the Bank and/or PMB; provided, however, that Executive was acting  in good faith, within what Executive reasonably believed to be the scope of Executive’s  employment or authority and for a purpose which the Executive reasonably believed to be in the  best interests of the Bank or the Bank’s shareholders and the best interests of PMB or PMB’s  shareholders, and in the case of a criminal proceeding, that the Executive had no reasonable cause  to believe that Executive’s conduct was unlawful.  Payments authorized hereunder include  amounts paid and expenses incurred in settling any such action or threatened action.  All rights  hereunder are limited by any applicable state or Federal laws. Anything herein to the contrary  notwithstanding, this Agreement is subject to the requirements and limitations set forth in state  and federal laws, rules, regulations or orders regarding the indemnification and prepayment of  legal expenses, including Section 18(k) of the FDIA and Part 359 of the FDIC’s Rules and  Regulations or any successor regulation thereto.  Further, and to the extent that there is any conflict  between state and federal law, federal law shall supersede and control.         19.   Severability.  To the extent any provision of this Agreement or portion thereof shall  be invalid or unenforceable, it shall be considered deleted therefrom (but only for so long as such  provision or portion thereof shall be invalid or unenforceable) and the remainder of such provision  and of this Agreement shall be unaffected and shall continue in full force and effect to the fullest  extent permitted by law if enforcement would not frustrate the overall intent of the Parties (as such  intent is manifested by all provisions of the Agreement including such invalid, void, or otherwise  unenforceable portion).         20.   Payment.  All amounts payable by the Bank to Executive under this Agreement  shall be paid promptly on the dates required for such payment in this Agreement without notice or  demand.  Any salary, benefits or other amounts paid or to be paid to Executive or provided to or  in respect of the Executive pursuant to this Agreement shall not be reduced by amounts owing  from Executive to Bank.         21.   Expenses.  Each party shall pay his or its own fees and expenses incurred by him  or it in the drafting, review and negotiation of this Agreement.         22.   Authority.  Each of the Parties hereto hereby represents that each has taken all  actions necessary in order to execute and deliver this Agreement.         23.   Counterparts.  This Agreement may be executed in one or more counterparts, each  of which shall be deemed to be an original but all of which together will constitute one and the  same instrument.         24.   Governing Law.  This Agreement shall be construed, interpreted and enforced in  accordance with the laws of the State of California, without giving effect to the choice of law  principles thereof.    SMRH:4851-5903-8620.6                 15                                                                                                                          

 

       25.   Entire Agreement: Amendments.  This Agreement and written agreements, if any,   entered into concurrently herewith constitute the entire agreement by Employer, on the one hand,   and Executive on the other hand with respect to the subject matter hereof and merges and   supersedes any and all prior discussions, negotiations, agreements or understandings between   Executive and Employer with respect to the subject matter hereof, whether written or oral.  This   Agreement may be amended or modified only by a written instrument executed by Executive and   Employer.  With regard to such amendments, alterations, or modifications, facsimile signatures   shall be effective as original signatures.  Any amendment, alteration, or modification requiring the  signature of more than one party may be signed in counterparts.          26.   Further Actions.  Each party agrees to perform any further acts and execute and   deliver any further documents reasonably necessary to carry out the provisions of this Agreement.          27.   Time of Essence.  Time is of the essence of each and every term, condition,   obligation and provision hereof.          28.   No Third Party Beneficiaries.  This Agreement and each and every provision hereof   is for the exclusive benefit of the Parties and not for the benefit of any third party.          29.   Headings.  The headings in this Agreement are inserted only as a matter of   convenience, and in no way define, limit, or extend or interpret the scope of this Agreement or of   any particular provision hereof.          30.   Regulatory Approval of this Agreement.  The Parties acknowledge and agree that   entry into this Agreement is and payment of severance under paragraph 5 may be subject to receipt   of approval from the FRB pursuant to Section 1828(k) and Part 359 of the FDIC Rules and   Regulations, the FDIC and the CDBO.  If such approval is required but not obtained or if such   approval is conditioned upon modifications specified by the FRB, the FDIC or the CDBO the   Parties agree to negotiate in good faith to amend this Agreement to provide for substantially   equivalent terms consistent with regulatory requirements.                                           [signature page follows]                                 SMRH:4851-5903-8620.6                 16                                                                                                                            

 

      IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Execution  Date.                                  PACIFIC MERCANTILE BANCORP                                                                                                                                    By:        /s/ Edward J. Carpenter                                                           Name: Edward J. Carpenter                                       Title: Chairman of the Board                                                                                                   PACIFIC MERCANTILE BANK                                                                                                                                    By:        /s/ Edward J. Carpenter                                                           Name: Edward J. Carpenter                                       Title: Chairman of the Board                                                                   EXECUTIVE:                                                                                                      /s/ Brad Dinsmore                                                                           Brad Dinsmore                                       SMRH:4851-5903-8620.6                 17                                                                                                                          

 

                                  EXHIBIT A                              California Labor Code § 2870    Employment agreements; assignment of rights    (a)  Any provision in an employment agreement which provides that an employee shall assign, or   offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an   invention that the employee developed entirely on his or her own time without using the   employer’s equipment, supplies, facilities, or trade secret information except for those inventions   that either:    (1)  Relate at the time of conception or reduction to practice of the invention to the employer’s   business, or actual or demonstrably anticipated research or development of the employer; or   (2)  Result from any work performed by the employee for the employer.   (b)  To the extent a provision in an employment agreement purports to require an employee to  assign an invention otherwise excluded from being required to be assigned under subdivision (a),  the provision is against the public policy of this state and is unenforceable.     SMRH:4851-5903-8620.6                 18

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