This employment agreement (the "Agreement") is entered into as of January 1, 1999, (the "Effective Date"), by
and between Heritage Commerce Corp ("HCC") and its wholly owned subsidiary, Heritage Bank of Commerce
("HBC") a California banking corporation and Mr. Brad L. Smith on the following terms and conditions:
Mr. Smith has been duly elected to the Board of Directors of HCC ("HCC Board") and has been duly elected to
be Chairman of the HCC Board. During the term of this Agreement, the HCC Board will continue to present Mr.
Smith on the HCC slate of individuals nominated for election by shareholders to the post of Director.
As employed hereunder, the term "Bank" is intended to mean HCC and/or any of its subsidiaries, as applicable.
The term "Management" is intended to mean the CEO of HCC and/or, as applicable, those duly appointed
management committees vested with decision-making authority. The term "Board" will, unless more narrowly
defined in the context of its immediate usage, mean any and all boards of directors with purview over the matter
It is the Bank's intention to organize a subsidiary bank, Heritage Bank South Valley ("South Valley"). Subject to
appropriate regulatory approvals and subject to the legal constitution of South Valley, Mr. Smith will be the
President and Chief Executive Officer of South Valley, and a member of South Valley's Board of Directors. In
the interim, Mr. Smith will direct the Bank's South Valley efforts.
With respect to his responsibility to direct the Bank's South Valley efforts and his future role as President and
CEO of Heritage Bank South Valley, Mr. Smith will be subject to the direction of the CEO of HCC and, by
extension, the HCC Board. Notwithstanding the foregoing reporting responsibility, Mr. Smith will also be
responsible to the Board of Directors of South Valley.
Mr. Smith will set a high standard of conduct, courtesy and concern, of professional and personal discretion,