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...
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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 Xxxx Xxxxxxxx (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
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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
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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
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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
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Execution Date. PACIFIC MERCANTILE BANCORP By: /s/ Xxxxxx X. Xxxxxxxxx Name: Xxxxxx X. Xxxxxxxxx Title: Chairman of the Board PACIFIC MERCANTILE BANK By: /s/ Xxxxxx X. Xxxxxxxxx Name: Xxxxxx X. Xxxxxxxxx Title: Chairman of the Board EXECUTIVE: /s/ Xxxx Xxxxxxxx Xxxx Xxxxxxxx SMRH:4851-5903-8620.6 17
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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