GILROY
– Heritage Commerce Corp. has weathered the tumultuous attempt
by a group of shareholders to gain control of the company.
GILROY – Heritage Commerce Corp. has weathered the tumultuous attempt by a group of shareholders to gain control of the company.
The final terms of an agreement between the two parties were announced Thursday.
Heritage Bank South Valley, with offices in Gilroy and Morgan Hill, is a subsidiary of Heritage Commerce, a San Jose-based publicly traded company. Gilroyan Brad Smith, 55, stepped down as CEO and director of Heritage Commerce earlier this week to facilitate the agreement.
The dissident shareholders filed a proxy challenge in late April to add two new members to the board of directors different from those on the slate of candidates already proposed by the board for the annual meeting May 27. Four directors were up for re-election. The group also wanted to increase the size of the board from 12 to 13.
The dissident shareholders have agreed to drop all of their actions, said Bill Del Biaggio Jr., interim CEO and chairman of the board.
“We have a very good relationship with these people,” he said. “These are all people that we started the bank with.”
Heritage agreed to the following:
• Resignation of Smith as CEO and a director of Heritage Commerce.
• Name Del Biaggio as interim CEO and search for a replacement.
• Appoint Ranson Webster, the largest shareholder in Heritage Commerce, to fill Smith’s position on the board.
• Consider director recommendations the group of shareholders may make in the future.
• Pay a consultant $2,000 plus expenses to provide consulting services to the company for three months.
• Reimburse the group of shareholders for $75,000, part of the cost of filing the preliminary proxy statement.
Heritage Commerce employs more than 200 people. Four people work at the Gilroy branch of Heritage Bank South Valley and 11 work at the branch in Morgan Hill.
