SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement [ ] Confidential. For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Unity Bancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- ------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
- ------------------------------------------------------------------------------
(5) Total fee paid:
- ------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- ------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
<PAGE>
(1) Amount Previously paid:
- ------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
UNITY BANCORP, INC.
64 OLD HIGHWAY 22
CLINTON, NEW JERSEY 08809
April 4, 1997
Dear Unity Bancorp, Inc. Stockholder:
You are cordially invited to attend the annual meeting of stockholders
(the "Annual Meeting") of Unity Bancorp, Inc. (the "Company") to be held on
April 25, 1997 at 3:30 p.m. at the main office of First Community Bank, 64 Old
Highway 22, Clinton, New Jersey 08809.
At the Annual Meeting, stockholders will be asked to: (1) elect three
members to the Board of Directors; (2) approve an amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of the
Company's common stock; (3) approve the Unity Bancorp, Inc. 1997 Stock Option
Plan; and (4) approve the Unity Bancorp 1997 Stock Bonus Plan.
The Board of Directors of the Company has determined that the matters to
be considered at the Annual Meeting are in the best interests of the Company and
its stockholders. For the reasons set forth in the Proxy Statement, the Board
unanimously recommends that you vote "FOR" each matter to be considered.
YOUR COOPERATION IS APPRECIATED SINCE A MAJORITY OF THE COMMON STOCK MUST
BE REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE
CONDUCT OF BUSINESS. WHETHER OR NOT YOU EXPECT TO ATTEND, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED SO
THAT YOUR SHARES WILL BE REPRESENTED.
On behalf of the Board of Directors and all of the employees of the
Company, I thank you for your continued interest and support.
Sincerely yours,
Robert Van Volkenburgh
Chairman of the Board and
Chief Executive Officer
<PAGE>
UNITY BANCORP, INC.
64 OLD HIGHWAY 22
CLINTON, NEW JERSEY 08809
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 1997
Notice is hereby given that the 1997 Annual Meeting of stockholders (the
"Annual Meeting") of Unity Bancorp, Inc. (the "Company") will be held at the
main office of First Community Bank, 64 Old Highway 22, Clinton, New Jersey
08809, April 25, 1997 at 3:30 p.m. for the purpose of considering and voting
upon the following matters:
1. The election of the nominees named in the accompanying Proxy
Statement to serve as directors of the Company for the terms of
office specified and until their successors are duly elected and
qualified.
2. Approval of an amendment to the Company's Certificate
of Incorporation to increase the number of authorized
shares of the Company's common stock.
3. Approval of the Unity Bancorp, Inc. 1997 Stock Option
Plan.
4. Approval of the Unity Bancorp 1997 Stock Bonus Plan.
5. Such other business as may properly come before the Annual Meeting
and at any adjournments thereof, including whether or not to adjourn
the meeting.
Stockholders of record at the close of business on March 17, 1997 are
entitled to notice of, and to vote at, the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting.
Whether or not you contemplate attending the Annual Meeting, please execute the
enclosed proxy and return it to the Company. You may revoke your proxy at any
time prior to the exercise of the proxy by delivering to the Company a
later-dated proxy or by delivering a written notice of revocation to the
Company. A return envelope, which requires no postage if mailed in the United
States, is enclosed for your convenience.
By Order of the Board of Directors
Robert Van Volkenburgh, Chairman of
the Board and Chief Executive Officer
April 4, 1997
Clinton, New Jersey
<PAGE>
UNITY BANCORP, INC.
64 OLD HIGHWAY 22
CLINTON, NEW JERSEY 08809
-----------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 1997
-----------------------------
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders are being furnished to the stockholders of Unity Bancorp, Inc. (the
"Company") in connection with the solicitation by the Board of Directors of the
Company of proxies to be used at the annual meeting of stockholders of the
Company (the "Annual Meeting") to be held at the main office of First Community
Bank, the Company's bank subsidiary (the "Bank"), 64 Old Highway 22, Clinton,
New Jersey 08809 on April 25, 1997, at 3:30 p.m. New Jersey time, and at any
adjournments thereof. These proxy materials are first being mailed on or about
April 4, 1997, to holders of record on March 17, 1997 (the "Record Date") of the
Company's common stock, no par value (the "Common Stock").
A stockholder may revoke a proxy at any time before the proxy is voted by
written notice to the Secretary of the Company, by submission of another proxy
bearing a later date, or by appearing and voting in person at the Annual
Meeting. The mere presence at the Annual Meeting of the stockholder appointing
the proxy will not revoke the appointment. If not revoked, the proxy will be
voted at the Annual Meeting in accordance with the instructions indicated on the
proxy by the stockholder, or, if no instructions are indicated, all shares
represented by valid proxies received pursuant to this solicitation (and not
revoked before they are voted) will be voted "FOR" the election of each of the
nominees for director named in this Proxy Statement and "FOR" the approval of
each of the other specific proposals presented in this Proxy Statement. As to
any other matter of business that may be brought before the Annual Meeting, all
shares represented by valid proxies will be voted in accordance with the
judgment of the person or persons voting the same.
All expenses of the Company in connection with the solicitation on behalf
of the Board of Directors will be borne by the Company. Proxies may also be
solicited personally or by mail or telephone by directors, officers and other
employees of the Company and the Bank, without additional compensation therefor.
The Company will also request persons, firms and corporations holding shares in
their names, or in the name of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners, and will reimburse such holders for their reasonable expenses in doing
so.
<PAGE>
Holders of record of Common Stock at the close of business on the Record
Date are entitled to receive notice of, and will be entitled to vote at, the
Annual Meeting. At the close of business on the Record Date, the Company had
outstanding 1,973,425 shares of Common Stock. No other class of voting security
of the Company is issued and outstanding. Each share of Common Stock entitles
the holder thereof to one vote on all matters which may come before the Annual
Meeting.
As to the election of directors, the proxy card being provided by the
Board of Directors enables a stockholder to vote "FOR" the election of the
nominees proposed by the Board of Directors, or to "WITHHOLD AUTHORITY" to vote
for one or more of the nominees being proposed. Under the Company's Bylaws,
directors are elected by a plurality of votes cast, without regard to either
broker non-votes, or proxies as to which authority to vote for one or more of
the nominees being proposed is withheld.
As to the matters being proposed for stockholder action set forth in
Proposals 2, 3 and 4, the proxy card being provided by the Board of Directors
enables a stockholder to check the appropriate box on the proxy card to (i) vote
"FOR" the item, (ii) vote "AGAINST" the item, or (iii) "ABSTAIN" from voting on
such item. Under Delaware law, the affirmative vote of a majority of the votes
cast at the Annual Meeting is required to approve Proposals 2, 3 and 4. Shares
as to which the "ABSTAIN" box has been selected will be counted as present and
will therefore have the effect of voting against Proposals 2, 3 and 4. In
contrast, broker non-votes will not be counted as present and so will have no
effect.
The Board of Directors knows of no matters, other than those disclosed in
the Notice of Annual Meeting, to be presented for consideration at the Annual
Meeting. If, however, any other matters properly come before the Annual Meeting
or any adjournments thereof, it is the intention of the persons named in the
enclosed proxy to vote such proxy in accordance with their judgment on any such
matters. The persons named in the enclosed proxy may also, if a quorum is not
present, vote such proxy to adjourn the Annual Meeting from time to time.
All persons standing for election as director were unanimously nominated
by the Board of Directors. No person being nominated as a director is being
proposed for election pursuant to any agreement or understanding between any
such person and the Company.
-2-
<PAGE>
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
In accordance with the Certificate of Incorporation and the Bylaws of the
Company, the Board of Directors has fixed the number of directors constituting
the Board at five. Directors are elected for staggered terms of three years
each, with the term of office of only one of the three classes of directors
expiring each year. Directors serve until their successors are elected and
qualified. The Board of Directors has nominated and recommends the election of
each of the nominees listed below for the term set forth for such nominee and
until their successors shall have been elected and qualified. Unless otherwise
instructed by the stockholders, the persons named in the enclosed form of proxy
will vote the shares represented by such proxy "FOR" the election of the
nominees named in this Proxy Statement, subject to the condition that if the
named nominees should be unable to serve, discretionary authority is reserved to
vote for a substitute. No circumstances are presently known which would render
the nominees named herein unable or unwilling to serve. In accordance with the
Bylaws of the Company directors are elected by a plurality of the votes of the
shares present in person or represented by proxy at the Annual Meeting.
INFORMATION WITH RESPECT TO THE NOMINEES AND CONTINUING DIRECTORS
Effective March 1, 1997, the Company's Board of Directors unanimously
voted to enlarge the size of the Board from three directors to five directors.
Messrs. DeTommaso and Hazard were appointed to fill the vacancies created.
The following table sets forth, as of the Record Date, the names of the
nominees and those directors whose terms continue beyond the Annual Meeting and
their ages, a brief description of their recent business experience, including
present occupations and employment, certain directorships held by each, the year
in which each became a director of the Company or the Bank, and the year in
which their terms (or in the case of the nominees, their proposed terms) as
director of the Company expire.
-3-
<PAGE>
TABLE I--NOMINEES FOR 1997 ANNUAL MEETING
===============================================================================
NAME, AGE AND POSITION PRINCIPAL OCCUPATION DIRECTOR TERM
WITH COMPANY(1) DURING PAST FIVE YEARS SINCE(2) EXPIRES
- -------------------------------------------------------------------------------
Robert J. Van Chairman of the Board and 1990 2000
Volkenburgh, 54, Chief Executive Officer
Chairman of the Board of the Company; Chairman
and Chief Executive of the Board of the Bank;
Officer Chief Executive Officer
of Total Packaging
Corporation and Best
Packaging & Design Corp.
- -------------------------------------------------------------------------------
Walter Hazard, 54, President, Atrion 1990 2000
Director of the Bank Corporation; Director,
Atrion Communication
Resources (Computers)
- -------------------------------------------------------------------------------
Peter P. DeTommaso, 71, Chief Executive Officer 1991 1999
Director of the Bank Home Owners Heaven, Inc.
(Hardware and Lumber
Retail)
- -------------------------------------------------------------------------------
===============================================================================
- ----------
(1) Each nominee for director of the Company is also a director of the Bank.
(2) Includes prior service on Board of Directors of Bank.
TABLE II - DIRECTORS OF THE COMPANY WHOSE TERMS CONTINUE
BEYOND THIS ANNUAL MEETING
===============================================================================
NAME, AGE AND POSITION PRINCIPAL OCCUPATION DIRECTOR TERM
WITH COMPANY(1) DURING PAST FIVE YEARS SINCE(2) EXPIRES
- -------------------------------------------------------------------------------
David D. Dallas, 42, Vice Chairman and 1990 1999
Vice Chairman and Corporate Secretary of
Corporate Secretary the Company; Vice
Chairman of the Bank;
Chief Executive Officer
of Dallas Group of
America (Chemicals)
-4-
<PAGE>
===============================================================================
NAME, AGE AND POSITION PRINCIPAL OCCUPATION DIRECTOR TERM
WITH COMPANY(1) DURING PAST FIVE YEARS SINCE(2) EXPIRES
- -------------------------------------------------------------------------------
James Hyman, 51 President - Chief 1990 1998
President, Chief Operating Officer and
Operating Officer and Director of the Company;
Director President and Chief
Executive Officer of the
Bank.
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===============================================================================
- ----------
(1) Each director of the Company is also a director of the Bank.
(2) Includes prior service on Board of Directors of Bank.
TABLE III - DIRECTORS OF THE BANK WHO DO NOT SERVE
AS DIRECTORS OF THE COMPANY
The following table sets forth the names of and certain information concerning
those members of the Board of Directors of the Bank who are not also directors
of the Company.
===============================================================================
NAME, AGE AND POSITION PRINCIPAL OCCUPATION DURING DIRECTOR
WITH BANK PAST FIVE YEARS SINCE
- -------------------------------------------------------------------------------
Robert H. Dallas, II, Vice President and Chief 1990
50, Director Operating Officer, Dallas
Group of America (Chemicals)
- -------------------------------------------------------------------------------
Jeffrey Devers, 42, President, The Palladin Group, 1997
Director L.P.
- -------------------------------------------------------------------------------
John Fallone, 43, President, The Fallone 1994
Director Organization
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Charles S. Loring, 55, Owner, Charles S. Loring, CPA 1990
Director (Accountants)
- -------------------------------------------------------------------------------
John O'Brien, 59, Owner, O'Brien Funeral Home 1994
Director
- -------------------------------------------------------------------------------
Peter G. Schoberl, 42, Executive Vice President and 1996
Director, Executive Vice Senior Lending Officer of the
President and Senior Bank since 1995. Previously,
Lending Officer of the Senior Vice President and
Bank Senior Lending Officer of
American Union Bank from 1990 to 1995.
-5-
<PAGE>
===============================================================================
NAME, AGE AND POSITION PRINCIPAL OCCUPATION DURING DIRECTOR
WITH BANK PAST FIVE YEARS SINCE
- -------------------------------------------------------------------------------
Samuel Stothoff, 64, President, Samuel Stothoff 1990
Director Company (Well Drilling)
- -------------------------------------------------------------------------------
Allen Tucker, 70, President, Tucker Enterprises 1995
Director (Real Estate Development)
- -------------------------------------------------------------------------------
Robert J. van Physician 1995
Volkenburgh, Jr., M.D.,
32, Director
- -------------------------------------------------------------------------------
===============================================================================
No director of the Company is also a director of any other company registered
pursuant to Section 12 of the Securities Exchange Act of 1934 or any company
registered as an investment company under the Investment Company Act of 1940.
Mr. Robert J. van Volkenburgh, Jr., M.D. is the son of Mr. Robert
J. Van Volkenburgh.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEE MEETINGS
During the fiscal year ended December 31, 1996, the Board of Directors of
the Company held seven (7) meetings. During the fiscal year, no director
attended fewer than 100% of the aggregate of (i) the meetings of the Board of
Directors and (ii) meetings of the Committees of the Board of Directors on which
such director served.
For the fiscal year ended December 31, 1996, the Company did not maintain
an Audit Committee. However, pursuant to the requirements of the American Stock
Exchange, effective March 1, 1997, the Company established an Audit Committee
consisting of Messrs. Dallas, Hazard and DeTommaso. The Audit Committee will
arrange for the annual financial statement audit through the Company's
independent certified public accountants, review and evaluate the
recommendations of the annual audit, receive reports of examinations of the Bank
by the Bank's internal audit department, analyze such internal reports, receive
reports of regulatory examinations of the Company and the Bank by the applicable
regulatory agencies, analyze such reports, and report to the Board of Directors
the results of this analysis.
The Company does not maintain a separate Nominating Committee. The full
Board of Directors acts as a Nominating Committee.
-6-
<PAGE>
COMPENSATION OF DIRECTORS
Directors of the Company do not receive compensation for their service on
the Company's Board.
Non-employee directors of the Bank receive an annual retainer of up to
$5,000, depending upon their years of service on the Board. Non-employee
directors who have one year of service receive a $3,000 retainer. Non-employee
directors with two years of service receive a $4,000 retainer, and non-employee
directors with three or more years of service receive the entire $5,000
retainer. Each Committee Chairman also receives a $1,000 Committee retainer.
Directors also receive $300 for attendance at each Board of Directors
meeting and $150 for attendance at each Committee meeting. In addition, during
1996, Mr. Van Volkenburgh received an annual retainer of $100,000, payable
monthly, for his services as Chairman of the Board of the Bank and Mr. D. Dallas
received an annual retainer of $50,000 payable monthly for his service as Vice
Chairman of the Board of the Bank.
The Company maintains the 1994 Stock Option Plan for Non-Employee
Directors (the "Directors Plan") which provides for options to purchase shares
of Common Stock to be issued to non-employee directors of the Company, the Bank
and any other subsidiaries which the Company may acquire or incorporate in the
future. Individual directors to whom options are granted under the Non-Employee
Plan are selected by the Board of Directors, which has the authority to
determine the terms and conditions of options granted under the Non-Employee
Plan and the exercise price therefor. For the fiscal year ended December 31,
1996, 38,125 options were granted under the Non-Employee Plan. All of such
options had an exercise price of $10.80.
The Company is presenting to stockholders for approval the Unity Bancorp,
Inc. 1997 Stock Option Plan, a stock option plan for management of the Company,
including members of the Board of Directors. See Proposal 3 for a summary of the
material terms of the Unity Bancorp, Inc. 1997 Stock Option Plan. In addition,
the Company is presenting to stockholders for approval the 1997 Stock Bonus
Plan, a stock bonus plan for management of the Company, including members of the
Board of Directors. See Proposal 4 for a summary of the material terms of the
Unity Bancorp 1997 Stock Bonus Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following tables set forth, as of February 28, 1997, certain
information concerning the ownership of shares of Common
-7-
<PAGE>
Stock by (i) each person who is known by the Company to own beneficially more
than five percent (5%) of the issued and outstanding Common Stock, (ii) each
director and nominee for director of the Company and each director of the Bank,
(iii) each named executive officer described in this Proxy Statement under the
caption "Executive Compensation," and (iv) all directors and officers of the
Company as a group.
THE COMPANY
-----------
================================================================================
Name and Position Number of Shares Percent
With Company Beneficially Owned (1) of Class
- --------------------------------------------------------------------------------
David D. Dallas
Vice Chairman and
Corporate Secretary 180,861 (2) 9.10%
- --------------------------------------------------------------------------------
Peter P. DeTommaso,
Nominee for Director of
the Company; Director of
the Bank 128,498 (3) 6.5%
- --------------------------------------------------------------------------------
Walter Hazard, Nominee
for Director of the
Company; Director of The
Bank 64,657 (4) 3.27%
- --------------------------------------------------------------------------------
James Hyman
President and Chief
Operating Officer 25,264 (5) 1.28%
- --------------------------------------------------------------------------------
Robert J. Van Volkenburgh
Chairman of the Board and
Chief Executive Officer 284,013 (6) 14.25%
- --------------------------------------------------------------------------------
Directors and Executive
Officers of the Company
as a Group (6 persons) 688,127 33.93%
================================================================================
- ----------
(1) Beneficially owned shares include shares over which the named person
exercises either sole or shared voting power or sole or shared investment
power. It also includes shares owned (i) by a spouse, minor children or
relatives sharing the same home, (ii) by entities owned or controlled by
the named person, and (iii) by other persons if the named person has the
right to acquire such shares within sixty (60) days by the exercise of any
right or option. Unless otherwise
-8-
<PAGE>
noted, all shares are owned of record and beneficially by
the named person.
(2) Includes 19,701 shares and 1,500 shares purchasable upon the exercise of
immediately exercisable warrants owned by the Dallas Group of America
Employee's Profit Sharing Plan and Trust, 61,763 shares owned by the
Dallas Group of America, Inc., and 18,201 shares held by Trenton Liberty
Insurance Company, T/A Alexander Insurance Managers. These shares are also
disclosed as beneficially owned by Robert Dallas. Also includes 15,881
shares held by Mr. Dallas' mother in own name, and 7,524 shares held by
Mr. Dallas' minor children in their own names, and 12,250 shares issuable
upon the exercise of immediately exercisable options.
(3) Includes 103,626 shares owned jointly with Mr. DeTommaso's spouse, and
20,416 shares owned jointly by Mr. DeTommaso and his brother. Also
includes 3,500 shares issuable upon the exercise of immediately
exercisable options.
(4) Includes 19,245 shares and 1,000 shares purchasable upon the exercise of
immediately exercisable warrants held by the Atrion Corporation Pension
Fund, 9,037 shares and 1,000 shares purchasable upon the exercise of
immediately exercisable warrants held by profit sharing funds controlled
by Mr. Hazard, 5,207 shares held by Atrion Corporation, and 3,853 shares
held by Mr. Hazard's spouse. Also includes 3,500 shares issuable upon the
exercise of immediately exercisable options and 1,000 shares purchasable
upon the exercise of immediately exercisable warrants.
(5) Includes 4,691 shares held by Mr. Hyman's spouse, of which Mr. Hyman
disclaims beneficial ownership, 5,211 shares held in a brokerage account
for Mr. Hyman's benefit, 827 shares held jointly with Mr. Hyman's spouse,
and 7,750 shares issuable upon the exercise of immediately exercisable
options.
(6) Includes 68,613 shares held by Mr. Van Volkenburgh's spouse in her own
name, 12,381 shares owned jointly by Mr. Van Volkenburgh and his spouse,
21,513 shares held by Total Packaging Corporation, a corporation owned by
Mr. Van Volkenburgh, and 18,750 shares held in a brokerage account for the
benefit of Mr. Van Volkenburgh. Also includes 18,375 shares issuable upon
exercise of immediately exercisable options and 1,500 immediately
exercisable warrants. Mr. Van Volkenburgh disclaims beneficial ownership
of the shares held by his spouse in her own name. Also includes 4,375
shares held by RJV Capital Management LLC, a limited liability company
owned by Mr. Van Volkenburgh.
-9-
<PAGE>
THE BANK
--------
The following table sets forth, as of February 28, 1997, certain information
concerning the ownership of shares of the Common Stock by directors of the Bank
who are not also directors of the Company.
================================================================================
Name and Position Number of Shares Percent
With Bank Beneficially Owned (1) of Class
- --------------------------------------------------------------------------------
Robert H. Dallas, II, 149,399 (2)(7) 7.55%
Director
- --------------------------------------------------------------------------------
Jeffrey Devers, Director 72,826 (9) 3.6%
- --------------------------------------------------------------------------------
John Fallone, Director 74,842 (3)(7) 3.77%
- --------------------------------------------------------------------------------
Charles S. Loring, 75,561 (4)(7) 3.82%
Director
- --------------------------------------------------------------------------------
John O'Brien, Director 72,871 (7) 3.68%
- --------------------------------------------------------------------------------
Peter G. Schoberl, 4,286 (5) .22%
Director, Executive Vice
President and Senior
Lending Officer of the
Bank
- --------------------------------------------------------------------------------
Samuel Stothoff, 49,935 (6)(7) 2.53%
Director
- --------------------------------------------------------------------------------
Allen Tucker, Director 44,075 (7)(8) 2.23%
- --------------------------------------------------------------------------------
Robert J. van 34,499 (7) 1.75%
Volkenburgh, Jr., M.D.,
Director
================================================================================
- ----------
(1) Beneficially owned shares include shares over which the named person
exercised either sole or shared voting power or sole or shared investment
power. It also includes shares owned (i) by a spouse, minor children or
relatives sharing the same home, (ii) by entities owned or controlled by
the named person, and (iii) by other persons if the named person has the
right to acquire such shares within sixty (60) days by the exercise of any
right or option. Unless otherwise noted, all shares are owned of record
and beneficially by the named person.
(2) Includes 19,701 shares and 1,500 shares purchasable upon the exercise of
immediately exercisable warrants held by the Dallas Group of America
Employee's Profit Sharing Plan and
-10-
<PAGE>
Trust and 18,201 shares held by the Trenton Liberty Insurance Company, T/A
Alexander Insurance Managers, and 61,763 shares held by the Dallas Group
of America, Inc. which 99,665 shares are also disclosed as beneficially
owned by David D. Dallas, and 3,762 shares owned by Mr. Dallas' minor
child in his own name.
(3) Includes 15,207 shares held jointly by Mr. Fallone and his spouse, 6,273
shares issuable upon the exercise of immediately exercisable warrants and
10,207 shares held by a trust of which Mr. Falcone is trustee.
(4) Includes 6,285 shares held by Mr. Loring's spouse in her own name, 13,715
shares owned jointly with his spouse, and 7,650 shares held by an Estate
for which Mr. Loring is the Executor. Mr. Loring disclaims beneficial
ownership of the shares held by his spouse. Also includes 800 shares
purchasable upon the exercise of immediately exercisable warrants.
(5) Includes 3,875 shares issuable upon the exercise of immediately
exercisable options, 18 shares held jointly with Mr. Schoberl's spouse and
196 shares held by Mr. Schoberl's spouse.
(6) Includes 34,000 shares held jointly by Mr. Stothoff and his spouse and
4,852 shares held by Mr. Stothoff's spouse in her own name. Mr. Stothoff
disclaims beneficial ownership of the shares held by his spouse. Also
includes 365 shares purchasable upon the exercise of immediately
exercisable warrants.
(7) Includes 3,500 shares issuable upon the exercise of immediately
exercisable options.
(8) Includes 11,700 shares held by Mr. Tucker's spouse and 833 shares held by
his daughter.
(9) Includes 36,363 shares and 36,363 shares purchasable upon the exercise of
immediately exercisable warrants held by The Palladin Group, L.P., of
which Mr. Devers is President.
EXECUTIVE COMPENSATION
The following table sets forth a summary for the last three fiscal years
of the cash and non-cash compensation awarded to, earned by, or paid to, the
Chief Executive Officer of the Company and each of the four most highly
compensated executive officers of the Company or the Bank whose individual
remuneration exceeded $100,000 for the last fiscal year.
-11-
<PAGE>
SUMMARY COMPENSATION TABLE
CASH AND CASH EQUIVALENT FORMS
OF REMUNERATION
---------------
<TABLE>
<CAPTION>
========================================================================================================
Annual Compensation Long-Term Compensation
-----------------------------------------------------------------
Awards
------------------------
Securities
Other Restricted Underlying
Annual Stock Options/
Name and Principal Salary Bonus Compensation Award(s) SARs
Position Year ($) ($) ($)(1) ($) (#)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Van 1996 $100,000(2) $ 0 $ 8,400 $ 0 9,375
Volkenburgh, Chairman
and Chief Executive
Officer
- --------------------------------------------------------------------------------------------------------
1995 60,000(2) 0 9,550 0 0
- --------------------------------------------------------------------------------------------------------
1994 32,000(2) 0 7,650 0 0
- --------------------------------------------------------------------------------------------------------
James Hyman, President 1996 130,000(2) 6,500 10,162 0 3,750
- --------------------------------------------------------------------------------------------------------
1995 120,000 27,900(3) 0 0 0
- --------------------------------------------------------------------------------------------------------
1994 111,300 5,000 0 0 0
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Other annual compensation includes director fees, insurance premiums and
the personal use of Bank automobiles.
(2) Consists of Mr. Van Volkenburgh's annual retainer as Chairman of the Board
of the Bank. Mr. Van Volkenburgh does not receive compensation for his
services of Chief Executive Officer of the Company.
(3) $20,000 of the 1995 annual bonus paid to James Hyman represents the value
of 3,071 shares of Common Stock issued to Mr. Hyman under the Company's
Stock Bonus Plan in February, 1995, at a value of $6.51 per share.
STOCK OPTION PLAN FOR EMPLOYEES
The Company maintains the Employee Plan under which 62,500 shares of
Common Stock have been reserved for issuance, subject to adjustments as set
forth therein. Officers and other key employees of the Company (including
officers and employees who are directors), the Bank and any other subsidiaries
which the Company may acquire or incorporate may participate in the Employee
Plan. The Board of Directors administers the Employee Plan, and has the
authority to determine the key employees who will receive options under the
Employee Plan, the terms and conditions of options granted under the Employee
Plan and the exercise price therefor.
-12-
<PAGE>
STOCK BONUS PLAN
The Company maintains a Stock Bonus Plan (the "Stock Bonus Plan"). Under
the Stock Bonus Plan, 21,929 shares of Common Stock have been reserved for
issuance. Directors, Officers and other key employees of the Company, the Bank
and any other subsidiaries which the Company may acquire or incorporate may
participate in the Stock Bonus Plan. The Board of Directors of the Company
administers and supervises the Stock Bonus Plan. The Board has the authority to
determine the key employees or directors who will receive awards under the Plan
and the number of shares awarded to each recipient.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL PRESENT
SECURITIES OPTIONS/SARS VALUE OF
UNDERLYING GRANTED TO EXERCISE OR GRANT ON
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) DATE ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert J. Van 9,375 24.59% $10.80 1/1/01 3.64
Volkenburgh
- ---------------------------------------------------------------------------------------------
James Hyman 3,750 31.06% 9.72 1/1/01 4.06
- ---------------------------------------------------------------------------------------------
=============================================================================================
</TABLE>
- ----------
(1) Options granted to Messrs. Van Volkenburgh and Hyman are immediately
exercisable.
(2) The present value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model with the following weighted
average assumptions: dividend yield of 0%; expected volatility of 47.06%;
risk-free interest rates of 5.21%; and expected lives of 2 years and 6
months.
The following table sets forth information concerning the fiscal year-end
value of unexercised options held by the executive officers of the Company named
in the table above. Stock options were exercised by such executive officers
during 1996:
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<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FY-END OPTION/SAR VALUES
================================================================================
Value of
Number of Unexercised In-
Securities the-Money
Underlying Options/SARs at
Unexercised FY-End ($)
Options/SARs at (based on
Shares Value FY-End (#) $13.50 per share)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) $ Unexercisable Unexercisable
---- ------------ -------- ----------------- -------------
- --------------------------------------------------------------------------------
Robert J. Van 0 $ 0 9,375(E) $ 12,656(E)
Volkenburgh
- --------------------------------------------------------------------------------
James Hyman 0 0 3,750(E) 14,175(E)
================================================================================
Change In Control Agreement
The Company has entered into a Change in Control Agreement (the
"Agreement") with Peter Schoberl, Director, Executive Vice President and Senior
Lending Officer of the Bank. The Agreement has a four year term from January 1,
1995 through December 31, 1998. The Agreement provides that upon the occurrence
of a change in control (as defined in the Agreement) of the Company and in the
event Mr. Schoberl is terminated for reasons other than cause (as defined in the
Agreement), he will be entitled to severance pay in amounts equal to 100%, 75%,
50% and 25% of his base salary, respectively, in each of the first four years of
the Agreement. The Agreement further provides that Mr. Schoberl will be entitled
to receive benefits under the Agreement in the event he resigns from his
employment with the Company within 18 months of a change in control and within
thirty days of the occurrence of any of the following events after such change
in control: (i) he is reassigned to a position of lesser rank or status than his
position at the time of the change in control; (ii) his place of employment is
relocated by more than thirty miles from its location prior to the change in
control; or (iii) his compensation or other benefits are reduced. Had a change
of control occurred during 1996 and had Mr. Schoberl become entitled to
severance pay, he would have received $70,875.
CERTAIN TRANSACTIONS WITH MANAGEMENT
The Bank has made in the past and, assuming continued satisfaction of
generally applicable credit standards, expects to continue to make loans to
directors, executive officers and their associates (i.e. corporations or
organizations for which they serve
-14-
<PAGE>
as officers or directors or in which they have beneficial ownership interests of
ten percent or more). These loans have all been made in the ordinary course of
the Bank's business on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectibility or
present other unfavorable features.
The Company leases both its headquarters and its Scotch Plains office from
partnerships consisting of Messrs. Van Volkenburgh, R. Dallas and D. Dallas.
Under the leases for these facilities, the partnerships received in 1996 rental
payments of $327,748. The Company believes that these rent payments reflect
market rents and that the leases reflect terms which are comparable to those
which could have been obtained in a lease with an unaffiliated third party.
Pursuant to these leases, the annual base rent during the second and third year
will increase by 6% annually. Starting in year four, the annual base rent will
increase by the higher of the Urban Consumer Price Index or 3% annually. In
addition, the Company intends to lease additional space in its headquarters
facility. The Company anticipates that the additional rental payments for this
additional space will be comparable to rents which could have been obtained in
comparable leases with unaffiliated third parties.
RECOMMENDATION AND VOTE REQUIRED
Directors will be elected by a plurality of the votes cast at the Annual
Meeting, whether in person or by proxy. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES NAMED ABOVE.
PROPOSAL 2. APPROVAL OF AMENDMENT
TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK
The Board of Directors has approved and recommends that the stockholders
adopt an amendment to Article Fourth of the Company's Certificate of
Incorporation which would increase the number of authorized shares of Common
Stock from 2,500,000 to 7,500,000 ("Authorized Stock Amendment"). The Company's
Certificate of Incorporation currently provides for an authorized capitalization
of 3,000,000 shares of capital stock, consisting of 2,500,000 shares of Common
Stock, and 500,000 shares of preferred stock. No shares of preferred stock are
outstanding. The Authorized Stock Amendment will not increase or otherwise
affect the number of authorized shares of preferred stock which may be issued by
the Company. The provisions of Article Fourth of the Company's
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<PAGE>
Certificate of Incorporation, as proposed to be amended by the Authorized Stock
Amendment, are set forth in Exhibit A to this Proxy Statement.
As of the Record Date, in addition to the 1,973,425 shares of Common Stock
issued and outstanding, an additional 62,500 shares of Common Stock were
reserved for issuance under the Employee Plan, an additional 62,500 shares of
Common Stock were reserved for issuance under the Non-Employee Plan, an
additional 21,929 shares of Common Stock were reserved for issuance under the
Stock Bonus Plan, and an additional 401,500 shares of Common Stock were reserved
for issuance upon exercise of 401,500 outstanding Common Stock purchase warrants
("Warrants"). Further, if the proposed Unity Bancorp, Inc. 1997 Stock Option
Plan and 1997 Stock Bonus Plan are adopted by stockholders at the Annual
Meeting, an additional 100,000 shares of Common Stock will be reserved for
issuance upon exercise of options which may be granted thereunder. Therefore, as
of the Record Date, there were a total of 2,512,542 shares of Common Stock (not
including the additional 100,000 shares of Common Stock which will be reserved
if the Unity Bancorp, Inc. 1997 Stock Option Plan and 1997 Stock Bonus Plan are
approved) either issued and outstanding or reserved for issuance out of a total
of 2,500,000 authorized shares of Common Stock. Therefore, in order to meet its
existing obligations, the Company must provide for additional authorized shares
of Common Stock. If the Authorized Stock Amendment is not adopted, the Company
will have no shares available for future capital raising needs, potential
acquisitions or other corporate purposes.
The Board believes that the increased number of authorized shares of
Common Stock contemplated by the proposed Authorized Stock Amendment is
desirable to make additional unreserved shares of Common Stock available for
issuance or reservation without further stockholder authorization, except as may
be required by law or by the rules of the American Stock Exchange. Authorizing
the Company to issue more shares than currently authorized by the Certificate of
Incorporation will not affect materially any substantive rights, powers or
privileges of holders of shares of Common Stock. However, the Board believes
that having such additional shares authorized and available for issuance or
reservation will allow the Company to have greater flexibility in considering
potential future actions involving the issuance of stock, including stock
dividends or splits. The Board has no current plans to effect such potential
actions. Other than with respect to the reservation of shares of Common Stock in
connection with (i) the Employee Plan; (ii) the Non-Employee Plan; (iii) the
Stock Bonus Plan; (iv) Warrants; and (v) the Unity Bancorp, Inc. 1997 Stock
Option Plan and the Unity Bancorp, inc. 1997 Stock Bonus plan if approved at the
Annual Meeting, the Company has no other plans or other existing or proposed
agreements or understandings to issue, or reserve for future issuance, any of
the additional shares
-16-
<PAGE>
of Common Stock which would be authorized by the Authorized Stock
Amendment.
The Authorized Stock Amendment is not being advanced as a result of any
known effort by any party to accumulate shares of Common Stock or to obtain
control of the Company.
In order for the Authorized Stock Amendment to be approved, the
affirmative vote of a majority of the shares of Common Stock entitled to be cast
at the Annual Meeting is required.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED
PROXY CARD, IF EXECUTED AND RETURNED, WILL BE VOTED "FOR" APPROVAL OF THE
AUTHORIZED STOCK AMENDMENT.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE AUTHORIZED STOCK
AMENDMENT.
PROPOSAL 3. APPROVAL OF THE UNITY BANCORP, INC.
1997 STOCK OPTION PLAN
The Board of Directors of the Company is presenting for stockholder
approval the 1997 Stock Option Plan (the "1997 Option Plan"), which is attached
hereto as Exhibit B. The purpose of the 1997 Option Plan is to promote the
growth and profitability of the Company and the Bank by providing an incentive
in the form of stock options to attract and retain skilled and experienced
management personnel, including directors, by encouraging their acquisition of
an equity interest in the Company, thereby more fully aligning their interests
with those of the stockholders of the Company. The following is a summary of the
material terms of the 1997 Option Plan which is qualified in its entirety by the
complete provisions of the attached 1997 Option Plan document at Exhibit B.
The 1997 Option Plan authorizes the granting of incentive stock options
("ISOs") and non-statutory options for a total of 50,000 shares of Common Stock
to certain members of management of the Company and the Bank. Participants in
the 1997 Option Plan will be chosen by the Board of Directors of the Company
from among the executive officers and directors of the Company, the Bank and any
other subsidiaries the Company may acquire or form.
The exercise price for options granted under the 1997 Option Plan will be
determined by the Board of Directors at the time of grant, but may not be less
than 85% of the fair market value of the Common Stock on the date of grant. The
exercise price for any ISOs must be 100% of the fair market value of the common
stock on the date of grant.
The 1997 Option Plan may be amended from time to time by the Board of
Directors of the Company. The rights and obligations
-17-
<PAGE>
under any option granted before an amendment shall not be altered or impaired by
any such amendment without the written consent of the optionee.
The options granted under the 1997 Option Plan may either be incentive
stock options or non-statutory options. The grant of a non-statutory option
which has no readily ascertainable fair market value at the time it is granted
is not taxable to the recipient of the option for federal income tax purposes at
the time the option is granted. The options granted under the 1997 Option Plan
should be considered as having no readily ascertainable fair market value at the
time of grant because they are neither tradeable on an established market nor
transferable by the recipient.
The recipient of a non-statutory option realizes compensation taxable as
ordinary income at the time the option is exercised or transferred. The amount
of such compensation is equal to the amount by which the fair market value of
the stock acquired upon exercise of the option exceeds the amount required to be
paid for such stock. At the time the compensation income is realized by the
recipient of the option, the Company is entitled to an income tax deduction in
the amount of the compensation income, provided applicable rules pertaining to
tax withholding are satisfied and the compensation represents an ordinary and
necessary business expense of the Company. The stock acquired upon exercise of
the option has an adjusted basis in the hands of the recipient equal to its fair
market value taken into account in determining the recipient's compensation and
a holding period commencing on the date the stock is acquired by the recipient.
At the time the stock is subsequently sold or otherwise disposed of by the
recipient, the recipient will recognize a taxable capital gain or loss measured
by the difference between the adjusted basis of the stock at the time it is
disposed of and the amount realized in connection with the transaction. The long
term or short term nature of such gain or loss will depend upon the applicable
holding period for such stock.
For federal income tax purposes, no taxable income results to the optionee
upon the grant of an Incentive Stock Option or upon the issuance of shares to
the optionee upon the exercise of the option. Correspondingly, no deduction is
allowed to the Company upon either the grant or the exercise of an Incentive
Stock Option.
If shares acquired upon the exercise of an Incentive Stock Option are not
disposed of either within the two-year period following the date the option is
granted or within the one-year period following the date the shares are issued
to the optionee pursuant to exercise of the option, the difference between the
amount realized on any disposition thereafter and the option price will be
treated as a long-term capital gain or loss to the optionee. If a disposition
occurs before the expiration of the requisite holding periods, then the lower of
(i) any excess of the fair market value of the shares at the time of exercise of
the
-18-
<PAGE>
option over the option price or (ii) the actual gain realized on disposition,
will be deemed to be compensation to the optionee and will be taxed at ordinary
income rates. In such event, the Company will be entitled to a corresponding
deduction from its income, provided the Company withholds and deducts as
required by law. Any such increase in the income of the optionee or deduction
from the income of the Company attributable to such disposition is treated as an
increase in income or a deduction from income in the taxable year in which the
disposition occurs. Any excess of the amount realized by the optionee on
disposition over the fair market value of the shares at the time of exercise
will be treated as capital gain.
Shareholder approval of the 1997 Option Plan is being sought in order to
comply with certain requirements of the American Stock Exchange.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED
PROXY CARD, IF EXECUTED AND RETURNED, WILL BE VOTED "FOR" THE APPROVAL OF THE
1997 OPTION PLAN.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE
1997 OPTION PLAN.
PROPOSAL 4. APPROVAL OF THE UNITY BANCORP, INC.
1997 STOCK BONUS PLAN
The Company is presenting for stockholder approval the Unity Bancorp, Inc.
1997 Stock Bonus Plan (the "Bonus Plan") as a method of providing directors and
executive officers of the Company, the Bank and any subsidiaries the Company may
acquire or form with a proprietary interest in the Company as an incentive
designed to encourage such persons to promote the growth and profitability of
the Company and the Bank, to remain in service with the Company and the Bank and
to reward such persons for the past performance of the Company and the Bank. The
following is a summary of the material features of the Bonus Plan which is
qualified in its entirety by the complete provision of the attached bonus plan
document, which is Exhibit C hereto.
The Bonus Plan is a non-qualified plan under ERISA. The Bonus Plan permits
the Company to pay a bonus to members of the Board of Directors and executive
officers of the Company, the Bank and any subsidiaries the Company may acquire
or form in the form of shares of Common Stock. The Bonus Plan authorizes the
granting of up to 50,000 shares of Common Stock in the form of bonuses, subject
to adjustment in the event of certain capital changes of the Company.
The Bonus Plan will be administered by the Board of Directors of the
Company. The Board of Directors will have the authority to determine the
participants to whom bonuses will be granted, the
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<PAGE>
amount of the bonus, and any terms and conditions which may be attached to any
shares underlying such bonus. In addition, the Board of Directors shall have the
authority to establish such rules and regulations as it may deem it necessary or
appropriate for the proper administration of the Bonus Plan.
In general, bonus share grants will be taxed as compensation income to the
grant recipient at the full fair market value of the Common Stock underlying the
grant on the date of the grant. The Company is entitled to an income tax
deduction for the amount of compensation paid to a participant under the Bonus
Plan.
Shareholder approval for the Bonus Plan is being sought in order to comply
with certain requirements of the American Stock Exchange.
OTHER MATTERS
At the date of this Proxy Statement, the Company has no knowledge of any
business other than that described above that will be presented at the Annual
Meeting. If any other business should come before the Annual Meeting, it is
intended that the persons named in the enclosed proxy will have discretionary
authority to vote the shares that they represent.
INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December 31,
1996 were Arthur Andersen LLP and the Company's Board of Directors has appointed
Arthur Andersen LLP to continue as independent auditors for the Bank and the
Company for the year ending December 31, 1997.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than ten percent stockholders are
required by regulation of the Securities and Exchange Commission to furnish the
Company with copies of all Section 16(a) forms they file.
The Company was not subject to the reporting requirements of Section 12(b)
of the Exchange Act during the year ended December 31, 1996, and so the
Company's officers, directors and 10% shareholders were not obligated to file
reports under Section 16(a) for the year ended December 31, 1996.
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<PAGE>
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 1998 ANNUAL MEETING
Any stockholder who wishes to submit a proposal for inclusion in the proxy
material to be distributed by the Company in connection with its 1998 Annual
Meeting must do so no later than December 1, 1997.
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<PAGE>
EXHIBIT A
Article FOURTH of Unity Bancorp, Inc.'s Certificate of Incorporation, as
amended, will read as follows:
FOURTH: (a) The total authorized capital stock of the Corporation
shall be 8,000,000 shares, consisting of 7,500,000 shares of Common Stock
and 500,000 shares of Preferred Stock which may be issued in one or more
classes or series. The shares of Common Stock shall constitute a single
class and shall be without nominal or par value. The shares of Preferred
Stock of each class or series shall be without nominal or par value,
except that the amendment authorizing the initial issuance of any class or
series, adopted by the Board of Directors as provided herein, may provide
that shares of any class or series shall have a specified par value per
share, in which event all of the shares of such class or series shall have
the par value per share so specified.
(b) The Board of Directors of the Corporation is expressly
authorized from time to time to adopt and to cause to be executed and
filed without further approval of the shareholders amendments to this
Certificate of Incorporation authorizing the issuance of one or more
classes or series of Preferred Stock for such consideration as the Board
of Directors may fix. In an amendment authorizing any class or series of
Preferred Stock, the Board of Directors is expressly authorized to
determine:
(i) The distinctive designation of the class or series and the
number of shares which will constitute the class or series, which
number may be increased or decreased (but not below the number of
shares then outstanding in that class or above the total shares
authorized herein) from time to time by action of the Board of
Directors;
(ii) The dividend rate of the shares of the class or series, whether
dividends will be cumulative, and, if so, from what date or dates;
(iii) The price or prices at which, and the terms and conditions on
which, the shares of the class or series may be redeemed at the
option of the Corporation;
(iv) Whether or not the shares of the class or series will be
entitled to the benefit of a retirement or sinking fund to be
applied to the purchase or redemption of such shares and, if so
entitled, the amount of such fund and the terms and provisions
relative to the operation thereof;
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<PAGE>
(v) Whether or not the shares of the class or series will be
convertible into, or exchangeable for, any other shares of stock of
the Corporation or other securities, and if so convertible or
exchangeable, the conversion price or prices, or the rates of
exchange, and any adjustments thereof, at which such conversion or
exchange may be made, and any other terms and conditions of such
conversion or exchange;
(vi) The rights of the shares of the class or series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the Corporation;
(vii) Whether or not the shares of the class or series will have
priority over, parity with, or be junior to the shares of any other
class or series in any respect, whether or not the shares of the
class or series will be entitled to the benefit of limitations
restricting the issuance of shares of any other class or series
having priority over or on parity with the shares of such class or
series and whether or not the shares of the class or series are
entitled to restrictions on the payment of dividends on, the making
of other distributions in respect of, and the purchase or redemption
of shares of any other class or series of Preferred Stock or Common
Stock ranking junior to the shares of the class or series;
(viii) Whether the class or series will have voting rights, in
addition to any voting rights provided by law, and if so, the terms
of such voting rights; and
(ix) Any other preferences, qualifications, privileges, options and
other relative or special rights and limitations of that class or
series.
A-2
<PAGE>
EXHIBIT B
UNITY BANCORP, INC.
1997 STOCK OPTION PLAN
SECTION 1. PURPOSE
The Unity Bancorp, Inc. 1997 Stock Option Plan (the "Plan") is hereby
established to foster and promote the long-term success of Unity Bancorp, Inc.
(the "Corporation") and its shareholders by providing directors and officers of
the Corporation with an equity interest in the Corporation. The Plan will assist
the Corporation in attracting and retaining the highest quality of experienced
persons as directors and officers and in aligning the interests of such persons
more closely with the interests of the Corporation's shareholders by encouraging
such parties to maintain an equity interest in the Corporation.
SECTION 2. DEFINITIONS
Capitalized terms not specifically defined elsewhere herein shall have the
following meaning:
"Act" means the Securities Exchange Act of 1934, as amended from time to
time, and the rules and regulations promulgated thereunder.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
"Common Stock" or "Stock" means the common stock, no par value, of the
Corporation.
"Corporation" means Unity Bancorp, Inc. and any present or future
subsidiary corporations of Unity Bancorp, Inc. (as defined in Section 424 of the
Code) or any successor to such corporations.
"Disability" shall mean permanent and total disability which if a
Participant were an employee of the Corporation would be treated as a total
disability under the terms of the Corporation's long-term disability plan for
employees as in effect from time to time; provided, however, with respect to a
Participant who has been granted an Incentive Stock Option such term shall have
the meaning set forth in Section 422(c)(6) of the Code.
"Fair Market Value" means, with respect to shares of Common Stock, the
fair market value as determined by the Board of Directors in good faith and in a
manner established by the Board
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<PAGE>
from time to time; provided, however, so long as the shares of Common Stock are
last sale reported securities, then the "fair market value" of such shares on
any date shall be the closing price reported in the consolidated reporting
system, on the business day immediately preceding the date in question, as
reported on the American Stock Exchange.
"Incentive Stock Option" means an option to purchase shares of Common
Stock granted to a Participant under the Plan which is intended to meet the
requirements of Section 422 of the Code.
"Non-Employee Director" shall have the meaning ascribed to such term under
Securities and Exchange Commission Rule 16b-3(b)(3).
"Non-Qualified Stock Option" means an option to purchase shares of Common
Stock granted to a Participant under the Plan which is not intended to be an
Incentive Stock Option.
"Option" means an Incentive Stock Option or a Non-Qualified
Stock Option.
"Participant" means a member of the Board of Directors or employee of the
Corporation selected by the Board to receive an Option under the Plan.
"Plan" means the Unity Bancorp, Inc. 1997 Stock Option Plan.
"Retirement," with regard to an employee, means termination of employment
in accordance with the retirement provisions of any retirement or pension plan
maintained by the Corporation or any of its subsidiaries. With regard to a
Non-Employee Director, "Retirement" shall mean cessation of service on the
Corporation's Board of Directors after age 60 with at least 10 years of service
as a member of the Corporation's Board of Directors. For purposes of this
provision, service on the Board of Directors of First Community Bank shall be
deemed to be service on the Board of Directors of the Corporation.
"Termination for Cause" means termination because of Participant's
intentional failure to perform stated duties, personal dishonesty, willful
violation of any law, rule regulation (other than traffic violations or similar
offenses) or final cease and desist order issued by any regulatory agency having
jurisdiction over the Participant or the Corporation.
SECTION 3. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors. Among other
things, the Board of Directors shall have authority, subject to the terms of the
Plan, to grant Options, to determine the individuals to whom and the time or
times at which Options may
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be granted, to determine whether such Options are to be Incentive Options or
Non-Qualified Stock Options (subject to the requirements of the Code), to
determine the terms and conditions of any Option granted hereunder, and the
exercise price thereof.
(b) Subject to the other provisions of the Plan, the Board of Directors
shall have authority to adopt, amend, alter and repeal such administrative
rules, guidelines and practices governing the operation of the Plan as it shall
from time to time consider advisable, to interpret the provisions of the Plan
and any Option and to decide all disputes arising in connection with the Plan.
The Board may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any option agreement in the manner and to the
extent it shall deem appropriate to carry the Plan into effect, in its sole and
absolute discretion. The Board's decision and interpretations shall be final and
binding. Any action of the Board with respect to the administration of the Plan
shall be taken pursuant to a majority vote or by the unanimous written consent
of its members.
(c) The Board of Directors may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent.
SECTION 4. ELIGIBILITY AND PARTICIPATION
Officers, employees and members of the Board of Directors of the
Corporation shall be eligible to participate in the Plan. The Participants under
the Plan shall be selected from time to time by the Board of Directors, in its
sole discretion, from among those eligible, and the Board shall determine in its
sole discretion the numbers of shares to be covered by the Option or Options
granted to each Participant. Options intended to qualify as Incentive Stock
Options shall be granted only to persons who are eligible to receive such
options under Section 422 of the Code.
SECTION 5. SHARES OF STOCK AVAILABLE FOR OPTIONS
(a) The maximum number of shares of Common Stock which may be issued and
purchased pursuant to Options granted under the Plan is 50,000, subject to the
adjustments as provided in Section 5 and Section 9, to the extent applicable. If
an Option granted under this Plan expires or terminates before exercise or is
forfeited for any reason, without a payment in the form of Common Stock being
granted to the Participant, the shares of Common Stock subject to such Option,
to the extent of such expiration, termination or forfeiture, shall again be
available for subsequent Option grant under Plan. Shares of Common Stock issued
under the Plan may consist in whole or in part of authorized but unissued shares
or treasury shares.
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(b) In the event that the Board of Directors determines, in its sole
discretion, that any stock dividend, stock split, reverse stock split or
combination, extraordinary cash dividend, creation of a class of equity
securities, recapitalization, reclassification, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Common Stock at a price substantially below Fair
Market Value, or other similar transaction affects the Common Stock such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be granted or made available under the Plan to Participants, the
Board shall have the right to proportionately and appropriately adjust equitably
any or all of (i) the maximum number and kind of shares of Common Stock in
respect of which Options may be granted under the Plan to Participants, (ii) the
number and kind of shares of Common Stock subject to outstanding Options held by
Participants, and (iii) the exercise price with respect to any Options held by
Participants, without changing the aggregate purchase price as to which such
Options remains exercisable, and if considered appropriate, the Board may make
provision for a cash payment with respect to any outstanding Options held by a
Participant, provided that no adjustment shall be made pursuant to this Section
if such adjustment would cause the Plan to fail to comply with Section 422 of
the Code with regard to any Incentive Stock Options granted hereunder. No
fractional Shares shall be issued on account of any such adjustment.
(c) Any adjustments under this Section will be made by the Board of
Directors, whose determination as to what adjustments, if any, will be made and
the extent thereof will be final, binding and conclusive.
SECTION 6. NON-QUALIFIED STOCK OPTIONS
6.1 Grant of Non-Qualified Stock Options.
The Board of Directors may, from time to time, grant Non-Qualified Stock
Options to Participants upon such terms and conditions as the Board of Directors
may determine. Non-Qualified Stock Options granted under this Plan are subject
to the following terms and conditions:
(a) Price. The purchase price per share of Common Stock deliverable upon
the exercise of each Non-Qualified Stock Option shall be determined by the Board
of Directors on the date the option is granted. Such purchase price shall not be
less than eighty-five percent (85%) of the Fair Market Value of the Common Stock
on the date of grant. Shares may be purchased only upon full payment of the
purchase price. Payment of the purchase price may be made, in whole or in part,
through the surrender of shares of the Common Stock at the Fair Market Value of
such shares on the date of surrender.
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(b) Terms of Options. The term during which each Non-Qualified Stock
Option may be exercised shall be determined by the Board of Directors, but in no
event shall a Non-Qualified Stock Option be exercisable in whole or in part more
than ten (10) years from the date of grant. No Non-Qualified Stock Option
granted under this Plan is transferable except by will or the laws of descent
and distribution.
(c) Termination of Service. Except as provided in Section 6.1(d) hereof,
unless otherwise determined by the Board of Directors, upon the termination of a
Participant's service as an employee or member of the Board of Directors for any
reason other than Disability, death or Termination for Cause, the Participant's
Non-Qualified Stock Options shall be exercisable only as to those shares which
were immediately exercisable by the Participant at the date of termination and
only for a period of three months following termination. Notwithstanding any
provision set forth herein nor contained in any Agreement relating to the award
of an Option, in the event of Termination for Cause, all rights under the
Participant's Non-Qualified Stock Options shall expire upon termination. In the
event of death or termination of service as a result of Disability of any
Participant, all Non-Qualified Stock Options held by the Participant, whether or
not exercisable at such time, shall be exercisable by the Participant or his
legal representatives or beneficiaries of the Participant for one year or such
longer period as determined by the Board following the date of the Participant's
death or termination of service due to Disability, provided that in no event
shall the period extend beyond the expiration of the Non-Qualified Stock Option
term.
(d) Exception for Retirement. Notwithstanding the general rule contained
in Section 6.1(c) above, all options are exercisable held by a Participant whose
employment with the Corporation terminates due to Retirement may be exercised
for the lesser of (i) the remaining term of the option, or (ii) twelve (12)
months.
SECTION 7. INCENTIVE STOCK OPTIONS
7.1 Grant of Incentive Stock Options.
The Board of Directors may, from time to time, grant Incentive Stock
Options to eligible employees. Incentive Stock Options granted pursuant to the
Plan shall be subject to the following terms and conditions:
(a) Price. The purchase price per share of Common Stock deliverable upon
the exercise of each Incentive Stock Option shall be not less than one hundred
percent (100%) of the Fair Market Value of the Common Stock on the date of
grant. However, if a Participant owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of Common Stock, the
purchase price per share of Common Stock deliverable upon the exercise of each
Incentive Stock Option shall not be less than one
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hundred ten percent (110%) of the Fair Market Value of the Common Stock on the
date of grant. Shares may be purchased only upon payment of the full purchase
price. Payment of the purchase price may be made, in whole or in part, through
the surrender of shares of the Common Stock at the Fair Market Value of such
shares on the date of surrender.
(b) Amounts of Options. Incentive Stock Options may be granted to any
eligible employee in such amounts as determined by the Board of Directors. In
the case of an option intended to qualify as an Incentive Stock Option, the
aggregate Fair Market Value (determined as of the time the option is granted) of
the Common Stock with respect to which Incentive Stock Options granted are
exercisable for the first time by the Participant during any calendar year shall
not exceed $100,000. The provisions of this Section 7.1(b) shall be construed
and applied in accordance with Section 422(d) of the Code and the regulations,
if any, promulgated thereunder. To the extent an award is in excess of such
limit, it shall be deemed a Non-Qualified Stock Option. The Board shall have
discretion to redesignate options granted as Incentive Stock Options as
Non-Qualified options.
(c) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Board of Directors, but in no event
shall an Incentive Stock Option be exercisable in whole or in part more than ten
(10) years from the date of grant. If at the time an Incentive Stock Option is
granted to an employee, the employee owns Common Stock representing more than
ten percent (10%) of the total combined voting power of the Corporation (or,
under Section 422(d) of the Code, is deemed to own Common Stock representing
more than ten percent (10%) of the total combined voting power of all such
classes of Common Stock, by reason of the ownership of such classes of Common
Stock, directly or indirectly, by or for any brother, sister, spouse, ancestor
or lineal descendent of such employee, or by or for any corporation,
partnership, estate or trust of which such employee is a shareholder, partner or
beneficiary), the Incentive Stock Option granted to such employee shall not be
exercisable after the expiration of five years from the date of grant. No
Incentive Stock Option granted under this Plan is transferable except by will or
the laws of descent and distribution.
(d) Termination of Employment. Except as provided in Section 7.1(e)
hereof, upon the termination of a Participant's service for any reason other
than Disability, death or Termination for Cause, the Participant's Incentive
Stock Options which are then exercisable at the date of termination may only be
exercised by the Participant for a period of three months following termination,
after which time they shall be void. Notwithstanding any provisions set forth
herein nor contained in any Agreement relating to an award of an Option, in the
event of Termination for Cause all
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rights under the Participant's Incentive Stock Options shall expire immediately
upon termination.
Unless otherwise determined by the Board of Directors, in the event of
death or termination of service as a result of Disability of any Participant,
all Incentive Stock Options held by such Participant, whether or not exercisable
at such time, shall be exercisable by the Participant or the Participant's legal
representatives or the beneficiaries of the Participant for one year following
the date of the Participant's death or termination of employment as a result of
Disability. In no event shall the exercise period extend beyond the expiration
of the Incentive Stock Option term.
(e) Exception for Retirement. Notwithstanding the general rule contained
in Section 7.1(d) above, all options held by a Participant whose employment with
the Corporation terminates due to Retirement may be exercised for the lesser of
(i) the remaining term of the option or (ii) twelve (12) months. Any Incentive
Stock Option exercised more than three (3) months after a Participant's
Retirement will be treated as a Non-Qualified Stock Option.
(f) Compliance with Code. The options granted under this Section 7 of the
Plan are intended to qualify as incentive stock options within the meaning of
Section 422 of the Code, but the Corporation makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code. A Participant shall notify the Board in writing in the
event that he disposes of Common Stock acquired upon exercise of an Incentive
Stock Option within the two-year period following the date the Incentive Stock
Option was granted or within the one-year period following the date he received
Common Stock upon the exercise of an Incentive Stock Option and shall comply
with any other requirements imposed by the Corporation in order to enable the
Corporation to secure the related income tax deduction to which it will be
entitled in such event under the Code.
SECTION 8. EXTENSION
The Board of Directors may, in its sole discretion, extend the dates
during which all or any particular Option or Options granted under the Plan may
be exercised; provided, however, that no such extension shall be permitted if it
would cause Incentive Stock Options issued under the Plan to fail to comply with
Section 422 of the Code.
SECTION 9. GENERAL PROVISIONS APPLICABLE TO OPTIONS
(a) Each Option under the Plan shall be evidenced by a writing delivered
to the Participant specifying the terms and conditions thereof and containing
such other terms and conditions not inconsistent with the provisions of the Plan
as the Board of
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Directors considers necessary or advisable to achieve the purposes of the Plan
or comply with applicable tax and regulatory laws and accounting principles.
(b) Each Option may be granted alone, in addition to or in relation to any
other Option. The terms of each Option need not be identical, and the Board of
Directors need not treat Participants uniformly. Except as otherwise provided by
the Plan or a particular Option, any determination with respect to an Option may
be made by the Board at the time of grant or at any time thereafter.
(c) In the event of a consolidation, reorganization, merger or sale of all
or substantially all of the assets of the Corporation in each case in which
outstanding shares of Common Stock are exchanged for securities, cash or other
property of any other corporation or business entity or in the event of a
liquidation of the Corporation, the Board of Directors may, in its discretion,
provide for any one or more of the following actions, as to outstanding options:
(i) provide that such options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such options substituted for Incentive Stock Options
shall meet the requirements of Section 424(a) of the Code, (ii) upon written
notice to the Participants, provide that all unexercised options will terminate
immediately prior to the consummation of such transaction unless exercised (to
the extent then exercisable) by the Participant within a specified period
following the date of such notice, (iii) in the event of a merger under the
terms of which holders of the Common Stock of the Corporation will receive upon
consummation thereof a cash payment for each share surrendered in the merger
(the "Merger Price"), make or provide for a cash payment to the Participants
equal to the difference between (A) the Merger Price times the number of shares
of Common Stock subject to such outstanding Options (to the extent then
exercisable at prices not in excess of the Merger Price) and (B) the aggregate
exercise price of all such outstanding Options in exchange for the termination
of such Options, and (iv) provide that all or any outstanding Options shall
become exercisable in full immediately prior to such event.
(d) The Participant shall pay to the Corporation, or make provision
satisfactory to the Board of Directors for payment of, any taxes required by law
to be withheld in respect of Options under the Plan no later than the date of
the event creating the tax liability. In the Board's sole discretion, a
Participant (other than a Participant subject to Section 16 of the Act (a
"Section 16 Participant"), who shall be subject to the following sentence) may
elect to have such tax obligations paid, in whole or in part, in shares of
Common Stock, including shares retained from the Option creating the tax
obligation. With respect to Section 16 Participants, upon the issuance of shares
of Common Stock in
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<PAGE>
respect of an Option, such number of shares issuable shall be reduced by the
number of shares necessary to satisfy such Section 16 Participant's federal, and
where applicable, state withholding tax obligations. For withholding tax
purposes, the value of the shares of Common Stock shall be the Fair Market Value
on the date the withholding obligation is incurred. The Corporation may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the Participant.
(e) For purposes of the Plan, the following events shall not be deemed a
termination of employment of a Participant:
(i) a transfer to the employment of the Corporation from a
subsidiary or from the Corporation to a subsidiary, or from one subsidiary
to another, or
(ii) an approved leave of absence for military service or sickness,
or for any other purpose approved by the Corporation, if the Participant's
right to reemployment is guaranteed either by a statute or by contract or
under the policy pursuant to which the leave of absence was granted or if
the Board of Directors otherwise so provides in writing.
(f) The Board of Directors may at any time, and from time to time, amend,
modify or terminate the Plan or any outstanding Option held by a Participant,
including substituting therefor another Option of the same or a different type
or changing the date of exercise or realization, provided that the Participant's
consent to each action shall be required unless the Board of Directors
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
SECTION 10. MISCELLANEOUS
(a) No person shall have any claim or right to be granted an Option, and
the grant of an Option shall not be construed as giving a Participant the right
to continued employment or service on the Corporation's Board of Directors. The
Corporation expressly reserves the right at any time to dismiss a Participant
free from any liability or claim under the Plan, except as expressly provided in
the applicable Option.
(b) Nothing contained in the Plan shall prevent the Corporation from
adopting other or additional compensation arrangements.
(c) Subject to the provisions of the applicable Option, no Participant
shall have any rights as a shareholder (including, without limitation, any
rights to receive dividends, or non cash distributions with respect to such
shares) with respect to any shares of Common Stock to be distributed under the
Plan until he or she becomes the holder thereof.
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<PAGE>
(d) Notwithstanding anything to the contrary expressed in this Plan, any
provisions hereof that vary from or conflict with any applicable Federal or
State securities laws (including any regulations promulgated thereunder) shall
be deemed to be modified to conform to and comply with such laws.
(e) No member of the Board of Directors shall be liable for any action or
determination taken or granted in good faith with respect to this Plan nor shall
any member of the Board of Directors be liable for any agreement issued pursuant
to this Plan or any grants under it. Each member of the Board of Directors shall
be indemnified by the Corporation against any losses incurred in such
administration of the Plan, unless his action constitutes serious and willful
misconduct.
(f) Subject to the approval of the shareholders of the Corporation, the
Plan shall be effective on the date of such approval. Prior to such approval,
Options may be granted under the Plan expressly subject to shareholder approval.
(g) The Board may amend, suspend or terminate the Plan or any portion
thereof at any time, provided that no amendment shall be granted without
shareholder approval if such approval is necessary to comply with any applicable
tax laws or regulatory requirement.
(h) Options may not be granted under the Plan after April 24, 2007, but
then outstanding Options may extend beyond such date.
(i) To the extent that State laws shall not have been preempted by any
laws of the United States, the Plan shall be construed, regulated, interpreted
and administered according to the other laws of the State of New Jersey.
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EXHIBIT C
UNITY BANCORP, INC.
STOCK BONUS PLAN
1. PURPOSE. The Stock Bonus Plan (the "Plan") is intended to provide
incentives which will retain highly competent key members of management of Unity
Bancorp, Inc. (the "Company"), First Community Bank (the "Bank") and any other
subsidiaries, direct or indirect, which the Company may form in the future
(collectively, the "Group") by providing them with a bonus in the form of shares
of the common stock of the Company, no par value per share ("Stock") pursuant to
awards ("Awards") described herein.
2. ADMINISTRATION. The Board of Directors of the Company (the "Board")
shall supervise and administer the Plan. Any questions of interpretation of the
Plan or of any Awards issued under it shall be determined by the Board and such
determination shall be final and binding upon all persons. The Board is
authorized to, subject to the provisions of this Plan, select Participants from
among the eligible Participants (as set forth under Section 3) to receive
Awards, to determine the number of shares of Stock subject to each Award, to
establish the terms and conditions of each such Award, to establish such rules
and regulations as the Board deems necessary for the proper administration of
the Plan and to make whatever determinations and interpretations in connection
with the Plan as it deems necessary or advisable. All the determinations and
interpretations made by the Board shall be binding and conclusive on all Plan
Participants and on their legal representatives and beneficiaries.
3. PARTICIPANTS. Participants shall consist of select key members of
management of the Company, including employees and non- employee directors of
the Group as the Board may select from time to time.
4. SHARES RESERVED UNDER THE PLAN. There is hereby reserved for issuance
as Awards under the Plan an aggregate of 50,000 shares of Stock.
5. AWARDS. Awards will consist of shares of Stock transferred to
Participants as a bonus for service rendered to the Group. Upon any such grant,
the Company shall notify the recipient of the grant and the certificate
representing the Stock will be delivered to the Participant as soon as
practicable.
6. DURATION, AMENDMENT, AND TERMINATION. No Award shall be granted more
than ten (10) years after the date of adoption of this Plan. The Board may amend
the Plan from time to time or terminate the Plan at any time. However, no action
authorized by this
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paragraph shall reduce the amount of any existing Award or change the terms and
conditions thereof.
7. NOTICE. Any and all notices, consents, offers, acceptances, or any
other communications provided for herein shall be given in writing which shall
be addressed, in the case of the Company, to its principal office, and in the
case of a Participant, to his residence, or to any other address as may be
designated by him after giving appropriate notice of such other address to the
Company.
8. BENEFIT. Except as herein otherwise provided, this Plan shall inure to
the benefit of and shall be binding upon the Company, its successors and
assigns, and a Participant, his executor or legal representative, heirs,
legatees, and successors.
9. CONSTRUCTION. This Plan has been adopted in the State of New Jersey and
shall be construed pursuant to the laws of the State of New Jersey in effect at
the time of such construction. In construing this Plan, the singular shall be
deemed to include the plural, and the masculine the feminine, and vice versa,
except where the context clearly requires otherwise.
10. TITLES. Captions and titles of articles and sections are provided for
convenience only and are not intended to affect the substance of this Plan.
11. NO EMPLOYMENT OR CONTINUED SERVICE. Participation in this Plan shall
not be deemed to be a contract between any member of the Group and any
Participant. Nothing contained herein may be deemed to give any Participant the
right to be retained in the employ of any member of the Group or to continue
service of the Board of Directors of any member of the Group.
12. NO FIDUCIARY RELATIONSHIP. Neither the establishment and maintenance
of this Plan, nor any action taken by the Company or the Board hereunder, shall
create or be deemed to create a trust or fiduciary relationship of any kind
between any member of the Group and any Participant or other person.
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<PAGE>
UNITY BANCORP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the Board of Directors or any survivor
thereof to vote all of the shares of common stock of Unity Bancorp, Inc.
("Unity") standing in the undersigned's name at the Annual Meeting of
Stockholders of Unity, to be held at the main office of First Community Bank, 64
Old Highway 22, Clinton, New Jersey 08809, on Friday, April 25, 1997, at 3:30
P.M., and at any adjournment thereof. The undersigned hereby revokes any and all
proxies heretofore given with respect to such meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW. IF NO CHOICE IS SPECIFIED,
THE PROXY WILL BE VOTED "FOR" (i) MANAGEMENT'S NOMINEES TO THE BOARD OF
DIRECTORS, (ii) APPROVAL OF THE PROPOSED AMENDMENT TO UNITY'S CERTIFICATE OF
INCORPORATION, (iii) APPROVAL OF THE PROPOSED UNITY BANCORP, INC. 1997 STOCK
OPTION PLAN, AND (iv) APPROVAL OF THE PROPOSED UNITY BANCORP, INC. 1997 STOCK
BONUS PLAN.
The Board of Directors recommends a vote "FOR" approval of (i)
management's nominees to the Board of Directors, (ii) the proposed amendment to
Unity's Certificate of Incorporation, (iii) the proposed Unity Bancorp, Inc.
1997 Stock Option Plan, and (iv) the proposed Unity Bancorp, Inc. 1997 Stock
Bonus Plan.
1. Election of the following three (3) nominees to serve as directors
of the Company: Robert J. Van Volkenburgh, Walter Hazard, and Peter
P. DeTommaso.
|_| FOR ALL NOMINEES
TO WITHHOLD AUTHORITY FOR ANY OF THE ABOVE NAMED NOMINEES, PRINT THE
NOMINEE'S NAME(S) ON THE LINES BELOW:
___________________________________________
___________________________________________
|_| WITHHOLD AUTHORITY FOR ALL NOMINEES
2. Approval of Proposal 2, the proposed amendment to Unity's
Certificate of Incorporation, as more fully described in the
accompanying Proxy Statement.
<PAGE>
|_| FOR
|_| AGAINST
|_| ABSTAIN
3. Approval of Proposal 3, adoption of the proposed Unity
Bancorp, Inc. 1997 Stock Option Plan, as more fully described
in the accompanying Proxy Statement.
|_| FOR
|_| AGAINST
|_| ABSTAIN
4. Approval of Proposal 4, the adoption of the proposed Unity
Bancorp, Inc. 1997 Stock Bonus Plan, as more fully described
in the accompanying Proxy Statement.
|_| FOR
|_| AGAINST
|_| ABSTAIN
5. In their discretion, such other business as may properly come
before the meeting.
Dated: ____________, 1997. __________________________
Signature
Print Name:
__________________________
Signature
Print Name:
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<PAGE>
(Please sign exactly as your name appears. When signing as an
executor, administrator, guardian, trustee or attorney, please
give your title as such. If signer is a corporation, please
sign the full corporate name and then an authorized officer
should sign his name and print his name and title below his
signature. If the shares are held in joint name, all joint
owners should sign.)
PLEASE DATE, SIGN AND RETURN
THIS PROXY IN THE ENCLOSED
RETURN ENVELOPE.
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