As filed with the Securities and Exchange Commission on
November 29, 1999
Registration No. 333-78603
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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UNITY BANCORP, INC.
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(Exact name of Registrant as Specified in Its Charter)
DELAWARE
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(State or other jurisdiction of incorporation or organization)
22-3282551
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(I.R.S. Employer Identification Number)
64 OLD HIGHWAY 22
CLINTON, NEW JERSEY 08809
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(Address, including zip code, and telephone number, including
area code, of agent for service)
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KEVIN KILLIAN, CHIEF FINANCIAL OFFICER
UNITY BANCORP, INC.
64 OLD HIGHWAY 22
CLINTON, NEW JERSEY 07416
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(Name, address, including zip code and telephone number,
including area codes, of agent for service)
WITH A COPY TO
ROBERT A. SCHWARTZ, ESQ.
JAMIESON, MOORE, PESKIN & SPICER
177 MADISON AVENUE
MORRISTOWN, NEW JERSEY 07960
Approximate date of commencement of proposed sale to the public: as soon as
practicable after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
[_]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box.
[X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
[_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
[_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
[_]
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
UNITY BANCORP INC.
UP TO 102,459 SHARES OF
COMMON STOCK
We are a New Jersey based bank holding company. Our bank, Unity Bank, is
headquartered in Clinton, New Jersey. The shares of common stock that may be
sold pursuant to this Prospectus are owned by certain selling shareholders, and
are not being sold by us.
Our common stock is listed on the NASDAQ National Market under the
symbol "UNTY." We anticipate that the selling shareholders will offer the common
stock for resale at prevailing prices on the NASDAQ National Market from
time-to-time. We will pay the expenses for registering the common stock with the
Securities and Exchange Commission. The selling shareholders will pay all
selling and other expenses incurred by the selling shareholders.
Before purchasing the common stock, you should read the Risk Factors beginning
on page 1.
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Neither the SEC nor any State Securities Commission has approved the common
stock or determined that this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
The shares of common stock are not bank deposits and are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
The date of this Prospectus is November 29, 1999.
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TABLE OF CONTENTS
RISK FACTORS.............................................................. 1
WHERE YOU CAN FIND ADDITIONAL INFORMATION................................. 8
UNITY BANCORP, INC........................................................ 9
USE OF PROCEEDS........................................................... 10
SELLING SHAREHOLDERS...................................................... 10
PLAN OF DISTRIBUTION...................................................... 10
TRANSFER AGENT ........................................................... 11
LEGAL MATTERS............................................................. 11
EXPERTS .................................................................. 11
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS.......................... 13
SIGNATURES................................................................ 16
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RISK FACTORS
You should consider the following risk factors, in addition to other
information contained or incorporated by reference in this prospectus before
deciding to purchase our common stock.
RISKS ASSOCIATED WITH THE COMPANY:
WE HAVE RECENTLY INCURRED SIGNIFICANT LOSSES WHICH COULD ADVERSELY AFFECT THE
COMPANY.
We have incurred net losses of $375 thousand and $1.7 million in the
second and third quarter of 1999, respectively. There can be no assurance that
we will be able to grow the core deposits of the bank, restructure the funding
mix and restore the company to profitability.
IT MAY BE DIFFICULT FOR US TO MANAGE OUR GROWTH AND TO RESTRUCTURE THE COMPANY'S
FUNDING MIX.
In the past twelve months, we opened ten new branches, more than
doubling our branch network. This expansion has significantly increased our
expenses contributing to the losses we incurred in 1999. In order to grow these
branches and restore the company to profitability, we must generate an
increasing level of low cost core deposits in order to restructure the company's
funding mix. Our ability to do this will be affected, at least in part, by
factors beyond our control, such as economic conditions and interest rate
trends. There can be no assurance that we will be able to increase the amount of
deposits at existing branches to the level necessary for them to contribute to
our profitability.
OUR RELIANCE ON MUNICIPAL DEPOSITS COULD ADVERSELY AFFECT OUR LIQUIDITY.
The bank presently relies on a high concentration of deposits from
municipalities. These deposits have short maturities and are historically
sensitive to competitive market rates of interest. There can be no assurance
that these deposits will remain with the bank. Withdrawal of these deposits
could cause liquidity problems for the bank.
A PERIOD OF RISING INTEREST RATES, AN ECONOMIC SLOWDOWN OR RECESSION COULD
REDUCE THE DEMAND FOR MORTGAGES AND ADVERSELY IMPACT OUR MORTGAGE BANKING
SUBSIDIARY.
Rising interest rates generally reduce the demand for consumer credit,
including mortgage loans. In a period of rising interest rates or an economic
slowdown, we will originate and sell fewer loans. Accordingly, a period of
rising interest rates, an economic slowdown or a recession would adversely
affect our business and the results of operations of our mortgage banking
subsidiary.
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OUR MORTGAGE BANKING BUSINESS MAY SUFFER IF WE CANNOT ATTRACT OR RETAIN
QUALIFIED LOAN ORIGINATORS.
We depend on our loan originators to generate customers by, among other
things, developing relationships with consumers, real estate agents and brokers,
builders, corporations and others, which we believe leads to repeat and referral
business. Accordingly, we must be able to attract, motivate and retain skilled
loan originators. The market for such persons is highly competitive and
historically has experienced a high rate of turnover. Competition for qualified
loan originators may lead to increased costs to hire and retain them. We cannot
guarantee that we will be able to attract or retain qualified loan originators.
If we cannot attract or retain a sufficient number of skilled loan originators,
or even if we can retain them but at higher costs, our business and results of
operations of our mortgage banking subsidiary could be adversely affected.
CURTAILMENT OF THE SMALL BUSINESS ADMINISTRATION LOAN PROGRAM COULD NEGATIVELY
AFFECT THE COMPANY.
The bank has generally sold the guaranteed portion and has occasionally
sold part of the unguaranteed portion of SBA loans in the secondary market.
There can be no assurance that the bank will be able to continue originating
these loans, or that a secondary market will exist for, or that the bank will
continue to realize premiums upon the sale of, the guaranteed and unguaranteed
portions of the SBA loans. The federal government presently guarantees 75% to
90% of the principal amount of each qualifying SBA loan. There can be no
assurance that the federal government will maintain the SBA program, or if it
does, that such guaranteed portion will remain at its current funding level.
Furthermore, there can be no assurance that the bank will retain its preferred
lender status, which, subject to certain limitations, allows the bank to approve
and fund SBA loans without the necessity of having the loan approved in advance
by the SBA, or that if it does, that the federal government will not reduce the
amount of such loans which can be made by the bank. In addition, the bank relies
on the expertise of a few key officers in its SBA lending. The retention of such
officers is important to the success of the SBA lending and the amount of income
the bank derives from SBA lending. The bank believes that its SBA loan portfolio
does not involve more than a normal risk of collectability. However, since the
bank has sold the guaranteed portion of substantially all of its SBA loan
portfolio, the bank incurs a pro rata credit risk on the non-guaranteed portion
of the SBA loans since the bank shares pro rata with the SBA in any recoveries.
In the event of default on a SBA loan, the bank's pursuit of remedies against a
borrower is subject to SBA approval, and where the SBA establishes that its loss
is attributable to deficiencies in the manner in which the loan application has
been prepared and submitted, the SBA may decline to honor its guarantee with
respect to the bank's SBA loans or it may seek the recovery of damages from the
bank. The SBA has never declined to honor its guarantees with respect to the
bank's SBA loans, although no assurance can be given that the SBA would not
attempt to do so in the future.
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WE DO NOT CURRENTLY HAVE AN EXPERIENCED BANKING PROFESSIONAL AS PRESIDENT.
Our President and Chief Operating Officer, who also served as the
President of our bank subsidiary, recently resigned. Mr. Robert J. Van
Volkenburgh, our Chief Executive Officer, is currently serving as interim
President of the bank. Mr. Van Volkenburgh is not an experienced banking
professional. Although we recently hired an Executive Vice President and Chief
Operating Officer, we do not currently have an experienced banking professional
as President.
WE MAY INCUR SIGNIFICANT DAMAGES AS A RESULT OF POTENTIAL LEASE OBLIGATIONS.
In August, 1999, the bank entered into leases or subleases for five (5)
potential branch locations. Under the terms of these agreements, the annual
lease obligation in the base year of the leases is $428 thousand in the
aggregate, $471,000 on a fully phased in basis beginning in the fourth year of
the lease term, and increases thereafter based on increases in the consumer
price index and the lease terms range from 12 to 18 years. Payments on the
leases were to commence on January 1, 2000. Subsequent to September 30, 1999,
the bank provided the landlord under the leases and sublease with notice to
terminate each of the leases and the sublease. Although no legal action has been
commenced, the landlord, through its counsel, has indicated that it does not
agree with the bank's right to terminate the leases. If the bank were found to
be liable for improperly terminating these agreements, the bank could incur
significant damages.
WE MAY BE SUBJECT TO HIGHER OPERATING COSTS AS A RESULT OF GOVERNMENT
REGULATION.
We are subject to extensive federal and state legislation, regulation
and supervision which is intended primarily to protect depositors and the
Federal Deposit Insurance Corporation's Bank Insurance Fund, rather than
investors. Legislative and regulatory changes may increase our costs of doing
business or otherwise adversely affect us and create competitive advantages for
non-bank competitors.
WE CANNOT PREDICT HOW CHANGES IN TECHNOLOGY WILL IMPACT OUR BUSINESS.
The financial services market, including banking services, is
increasingly affected by advances in technology, including developments in:
o telecommunications;
o data processing;
o automation;
o Internet-based banking;
o telebanking; and
o debit cards and so-called "smart cards."
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Our ability to compete successfully in the future will depend on
whether we can anticipate and respond to technological changes. To develop these
and other new technologies we will likely have to make additional capital
investments. Although we continually invest in new technology, we cannot assure
you that we will have sufficient resources or access to the necessary
proprietary technology to remain competitive in the future.
CHANGES IN LOCAL ECONOMIC CONDITIONS COULD ADVERSELY AFFECT OUR LOAN PORTFOLIO.
Our success depends to a certain extent upon the general economic
conditions of the local markets that we serve. Unlike larger banks that are more
geographically diversified, we provide banking and financial services primarily
to customers in the four counties in central New Jersey markets in which we have
branches, so any decline in the economy of New Jersey could have an adverse
impact on us.
Our loans, the ability of borrowers to repay these loans and the value
of collateral securing these loans, are impacted by economic conditions. In
addition, a large portion of our income is generated from gains on the sale of
SBA loans and from the generation and sale of mortgage loans and the related
servicing. Our financial results, the credit quality of our existing loan
portfolio, and the ability to generate new loans with acceptable yield and
credit characteristics may be adversely affected by changes in prevailing
economic conditions, including declines in real estate values, changes in
interest rates, adverse employment conditions and the monetary and fiscal
policies of the federal government. Although economic conditions in our primary
market area are strong and have aided our recent growth, we cannot assure you
that these conditions will continue to prevail. We cannot assure you that
positive trends or developments discussed in this Memorandum will continue or
that negative trends or developments will not have a significant adverse effect
on us.
FAILURE BY US OR OUR SUPPLIERS AND CUSTOMERS TO ENSURE THAT COMPUTER SYSTEMS ARE
YEAR 2000 COMPLIANT COULD HAVE AN ADVERSE EFFECT ON US.
We face significant business issues regarding how existing application
software programs and operating systems can accommodate the date value for the
year 2000. Many existing software application products, including software
application products used by us and our suppliers and customers, were designed
to accommodate only a two-digit date value, which represents the year. The
interruption to our business could be substantial if our current data processor
fails to become year 2000 compliant. In addition, failure by our suppliers and
customers to modify and convert their own computer systems could have a
significant adverse effect on the suppliers' or customers' operations and
profitability, thus inhibiting their ability to provide services or repay loans
to us.
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OUR ALLOWANCE FOR LOAN LOSSES MAY NOT BE ADEQUATE TO COVER ACTUAL LOSSES.
Like all financial institutions, we maintain an allowance for loan
losses to provide for loan defaults and nonperformance. Our allowance for loan
losses may not be adequate to cover actual losses, and future provisions for
loan losses could materially and adversely affect results of our operations.
During the quarters ended June 30, 1999 and September 30, 1999 we made
substantial additional provisions to our allowance. Risks within the loan
portfolio are analyzed on a continuous basis by management, by an independent
loan review function and by the audit committee. A risk system, consisting of
multiple grading categories, is utilized as an analytical tool to assess risk
and the appropriate level of loss reserves. Along with the risk system,
management further evaluates risk characteristics of the loan portfolio under
current and anticipated economic conditions and considers such factors as the
financial condition of the borrowers, past and expected loan loss experience,
and other factors management feels deserve recognition in establishing an
adequate reserve. This risk assessment process is performed at least quarterly,
and, as adjustments become necessary, they are realized in the periods in which
they become known. The amount of future losses is susceptible to changes in
economic, operating and other conditions, including changes in interest rates,
that may be beyond our control, and these losses may exceed current estimates.
State and federal regulatory agencies, as an integral part of their examination
process, review our loans and allowance for loan losses and have in the past
required an increase in our allowance for loan loss. Although we believe that
our allowance for loan losses is adequate to cover anticipated losses, we cannot
assure you that we will not further increase the allowance for loan losses or
that regulators will not require us to increase this allowance. Either of these
occurrences could adversely affect our earnings.
WE MAY BE UNABLE TO MANAGE INTEREST RATE RISKS THAT COULD REDUCE OUR NET
INTEREST INCOME.
Our profitability is in large part a function of the spread between the
interest rates earned on assets and the interest rates paid on deposits and
other interest-bearing liabilities. We manage this interest rate spread while
attempting to stay within risk guidelines established by our Board of Directors.
At September 30, 1999, our simulation model showed that we were not in
compliance with these guidelines, and that upon a 300 basis point increase in
interest rates over the next twelve months, our net interest income would show a
13.8% decline and our net income would decline by $1.8 million. Although we are
attempting to reorganize our balance sheet to reduce our exposure to interest
rate risk, we can give you no assurance that we will be able to reduce this risk
or that our performance will not be negatively impacted during the
restructuring.
WE ARE UNDERCAPITALIZED.
The bank is deemed "undercapitalized" under federal regulations because
our total risk based capital ratio at September 30, 1999 of 6.29% is less than
the 8% required under federal regulation. Because we are undercapitalized, the
bank is required to submit a capital plan to the FDIC by December 15. In
addition, the bank is generally prohibited from making capital distributions to
us, paying management fees to any entity that controls the bank or increasing
its
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average assets until the capital plan has been approved. The Board of Governors
of the Federal reserve System, our primary regulator, could also seek to take
regulatory action against us, including requiring a capital plan or prohibiting
us from expanding through acquisitions or otherwise, until we meet all capital
guidelines. In addition, in connection with our branch expansion the New Jersey
Department of Banking and Insurance imposed a tier 1 capital to total assets
ratio of 6%. At September 30, 1999, the bank's leverage ratio of tier 1 capital
to average assets was 4.28%, less than the 6% required by the New Jersey
Department of Banking and Insurance. The bank may not pay dividends to us until
its tier 1 capital ratio is above 6%.
RISKS ASSOCIATED WITH THE BANKING INDUSTRY:
WE ARE IN COMPETITION WITH MANY OTHER BANKS, INCLUDING LARGER COMMERCIAL BANKS
WHICH HAVE GREATER RESOURCES THAN US
The banking industry within the State of New Jersey is highly competitive.
The bank's principal market area is served by branch offices of large commercial
banks and thrift institutions. A number of these institutions have substantially
greater resources than we do to expend upon advertising and marketing, and their
substantially greater capitalization enables them to make much larger loans. Our
success depends a great deal upon our judgment that large and mid-size financial
institutions do not adequately serve small businesses in our principal market
area and our ability to compete favorably for such customers. In addition to
competition from larger institutions, we also face competition for individuals
and small businesses from recently formed banks seeking to compete as "home
town" institutions. Most of these new institutions have focused their marketing
efforts on the smaller end of the small business market we serve.
THERE IS A RISK THAT WE MAY NOT BE REPAID IN A TIMELY MANNER, OR AT ALL, FOR
LOANS WE MAKE
The risk of nonpayment (or deferred or delayed payment) of loans is
inherent in commercial banking. Such non payment, or delayed or deferred payment
of loans to the bank, if they occur, may have a material adverse effect on our
earnings and overall financial condition. Additionally, in compliance with
applicable banking laws and regulations, the bank maintains an allowance for
loan losses created through charges against earnings. As of September 30,
1999, the bank's allowance for loan losses was $2.2 million. The bank's
marketing focus on small to medium-size businesses may result in the assumption
by the bank of certain lending risks that are different from or greater than
those which would apply to loans made to larger companies. We seek to minimize
our credit risk exposure through credit controls which include evaluation of
potential borrowers, available collateral, liquidity and cash flow. However,
there can be no assurance that such procedures will actually reduce loan losses.
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THE LAWS THAT REGULATE OUR OPERATIONS ARE DESIGNED FOR THE PROTECTION OF
DEPOSITORS AND THE PUBLIC, BUT NOT OUR STOCKHOLDERS
The federal and state laws and regulations applicable to our operations
give regulatory authorities extensive discretion in connection with their
supervisory and enforcement responsibilities, and generally have been
promulgated to protect depositors and the deposit insurance funds and not for
the purpose of protecting stockholders. These laws and regulations can
materially affect our future business. Laws and regulations now affecting us may
be changed at any time, and the interpretation of such laws and regulations by
bank regulatory authorities is also subject to change. We can give no assurance
that future changes in laws and regulations or changes in their interpretation
will not adversely our the business.
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WHERE YOU CAN FIND MORE INFORMATION
We have incorporated by reference into this prospectus the following
documents we filed with the Commission under the Securities Exchange Act of
1934:
o (i) the Annual Report on Form l0-KSB for the fiscal year ended
December 31, 1998,
o (ii) the Proxy Statement for the 1999 Annual Meeting of
Shareholders,
o (iii) the description of the common stock contained in our
Registration Statement on Form 8-A filed under Section 12 of
the Exchange Act, including any amendment or report
filed under the Exchange Act for the purpose of updating that
description,
o (iv) the Quarterly Reports on Form 10-QSB for the quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999.
In addition, any documents which we file with the Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this prospectus and prior to the termination of this offering are also
incorporated by reference into this prospectus. You may read and copy any
document we file at the Commission's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0300 for further information on the public reference rooms. Our
SEC filings are also available to the public at the SEC's web site at
http://www.sec.gov.
You may obtain without charge, upon written or oral request, a copy of
any of the documents incorporated by reference into this prospectus, except for
the exhibits, unless the exhibits are specifically incorporated by reference
into this prospectus. Your request should be sent to Kevin Killian, Chief
Financial Officer, Unity Bancorp, Inc., 64 Old Highway 22, Clinton, New Jersey
08809.
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UNITY BANCORP, INC.
We are a New Jersey business corporation and a holding company for Unity
Bank, which engages in a commercial banking business in Hunterdon, Middlesex,
Morris, Somerset and Union counties, New Jersey. We direct the policies and
coordinate the financial resources of the bank.
The bank is a New Jersey state-chartered bank which commenced business
in 1991. The bank currently operates from its main office in Clinton, New Jersey
and from sixteen branch offices located in Berkeley Heights, Colonia, Cranford,
Flemington, Highland Park, Linden, North Plainfield, South Plainfield, Edison,
Springfield (2 offices), Scotch Plains, Kenilworth, East Brunswick, Union and
Whitehouse, New Jersey. The deposits of the bank are insured by the Bank
Insurance Fund of the FDIC up to applicable limits. The operations of the bank
are subject to the supervision and regulation of the New Jersey Department of
Banking and Insurance and the FDIC.
We lend funds to individuals and businesses for personal and commercial
purposes. We emphasize the origination of loans with adjustable rates of
interest tied to our Prime Rate. The interest rates on our adjustable rate loans
are repriced from time-to-time to reflect changes, up or down, in our cost of
funds. In order to be competitive with other established banking institutions in
our trade area, we charge rates which are generally comparable to those charged
by other lenders.
In addition, we have been very active in providing loans to small
businesses through the United States Small Business Administration guaranteed
loan program. Under the SBA program, loans are available to small businesses
which meet certain criteria. Up to 90% of the principal of a loan to a qualified
business may be guaranteed by the United States Government. We sell the
guaranteed portion of our SBA loans into the secondary market and derive premium
income. Our ability to offer SBA loans on an ongoing basis depends on among
other factors, appropriation of funds by the federal government to the SBA
program. We have been designated a "preferred lender" for the states of New
Jersey, Delaware, New York and Pennsylvania by the SBA. This means that we may
originate SBA guaranteed loans without prior SBA approval, although the
guaranteed portion of this loan will be 80% for loans up to $100,000 and 75% for
loans over $100,000 and up to $1,000,000.
Our commercial loans are generally secured by business assets, personal
guarantees of the principals of closely-held businesses and often by the
personal assets of such principals. The loans are made to small and mid-sized
businesses in our trade area. Federal and state law and regulations restrict how
much any bank may lend to a single customer with the restrictions stated as a
percentage of the bank's primary capital. We believe that we can attract
commercial borrowers by providing competitive rates, superior services, local
decision-making and flexibility in loan structure. The Board of Directors
believes that small and mid-sized businesses are not always of primary
importance to larger banking institutions for commercial lending purposes,
but those businesses represent the main portion of our commercial loan
business.
We grant both secured and unsecured personal loans to finance the
purchase of automobiles, durable goods of other consumer goods. The Board of
Directors believes that our competitive interest rates and superior service
(which includes, among other things, convenience,
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personal attention and prompt local decision-making) are important competitive
factors in attracting personal loans from credit-worthy consumers.
We also make residential and commercial real estate loans and, on a
limited basis, construction loans.
Our principal executive offices are located at 64 Old Route 22, Clinton,
New Jersey 08809, and our telephone number is (908) 730-7630.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by
the selling shareholders.
SELLING SHAREHOLDERS
Barry Habib, Norman Hunter and Craig Frankel are the selling
shareholders. They acquired the shares of the common stock in connection with
the sale of their company, Certified Mortgage Associates, Inc., to the Company
in February, 1999. Mr. Habib owns 90,164 shares of the common stock, Mr. Frankel
owns 10,246 shares of the common stock and Mr. Hunter owns 2,049 shares of the
common stock.
PLAN OF DISTRIBUTION
The common stock may be sold from time to time by the selling
shareholders in one or more transactions on the NASDAQ market or otherwise.
Alternatively, the selling shareholders may from time to time offer the common
stock through underwriters, dealers or agents. The distribution of the common
stock by the selling shareholders may be effected from time to time in one or
more transactions that may take place in the over-the-counter market including
ordinary broker's transactions, privately negotiated transactions, pledges, or
through sales to one or more broker/dealers for resale of such securities as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by these
holders in connection with those.
We are registering the common stock as part of an agreement between the
selling shareholders and us in which we agreed to pay all expenses incident to
the registration of the common stock. We will not pay, among other expenses,
commissions and discounts of underwriters, dealers or agents or the fees and
expenses of counsel for the selling shareholders. In some cases, the company has
agreed to indemnify the selling shareholders against certain liabilities.
There can be no assurance that any of the selling shareholders will sell
any or all of the common stock offered by them hereunder.
TRANSFER AGENT
Our transfer agent for the common stock is FCTC Transfer Services, LLP,
with an office at 111 Wood Avenue South, Suite 206, Iselin, New Jersey.
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LEGAL MATTERS
Jamieson, Moore, Peskin & Spicer, Morristown, New Jersey has passed
upon the validity of the common stock being offered.
EXPERTS
We have incorporated by reference into our 1998 Annual Report on Form
10-KSB our audited financial statements as of December 31, 1998 and 1997 and for
each of the three years in the period ended December 31, 1998 along with Arthur
Andersen LLP's audit report on these financial statements. Our 1998 Annual
Report is incorporated by reference into this registration statement on Form S-3
and prospectus. Arthur Andersen LLP issued their report as independent auditors
and as experts in auditing and accounting.
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR DOCUMENTS
TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO
SELL, OR THE SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED
HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL. THE AFFAIRS OF UNITY BANCORP, INC. OR UNITY BANK MAY CHANGE
AFTER THE DATE OF THIS PROSPECTUS. DELIVERY OF THIS DOCUMENT AND THE SALES OF
SHARES MADE HEREUNDER DOES NOT MEAN OTHERWISE.
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UNTIL THE LATER OF DECEMBER 27, 1999 OR 25 DAYS AFTER COMMENCEMENT OF THE
OFFERING, ALL DEALERS EFFECTING TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITER AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
UNITY BANCORP, INC.
Up to 102,459 Shares of
COMMON STOCK
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PROSPECTUS
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November 29, 1999
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC Registration Fee ........................... $ 289.00
Accounting Fees and Expenses ................... 5,000.00
Legal Fees and Expense ......................... 5,000.00
Transfer Agent Fees ............................ 2,000.00
Miscellaneous Expenses ......................... 7,711.00
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Total .......................................... $20,000.00
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ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Ninth of the Certificate of Incorporation of the Registrant and
Section 145 of the Delaware General Corporation Law ("DGCL") provides that the
corporation shall indemnify its present and former officers, directors,
employees, and agents and persons serving at its request ("corporate agents")
against expenses, including attorney's fees, judgments, fines or amounts paid in
settlement, incurred in connection with any pending or threatened civil or
criminal proceeding involving the corporate agent by reason of his being or
having been a corporate agent if (a) the agent acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the corporation, and (b) with respect to any criminal proceeding, the corporate
agent had no reasonable cause to believe his conduct was unlawful.
With respect to any derivative action, the Registrant is empowered to
indemnify a corporate agent against his expenses (but not his liabilities)
incurred in connection with any proceeding involving the corporate agent by
reason of his being or having been a corporate agent if the agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. However, only the court in which the proceeding
was brought can empower a corporation to indemnify a corporate agent against
expenses with respect to any claim, issue or matter as to which the agent was
adjudged liable for negligence or misconduct.
Under Section 145 of the DGCL, the Registrant may indemnify a corporate
agent in a specific case if a determination is made by any of the following that
the applicable standard of conduct was met: (i) the Board of Directors, or a
committee thereof, acting by a majority vote of a quorum consisting of
disinterested directors; (ii) by independent legal counsel, if there is not a
quorum of disinterested directors or if the disinterested quorum empowers
counsel to make the determination; or (iii) by the shareholders.
II-1
<PAGE>
Section 145 of the DGCL further provides that a corporate agent is
entitled to mandatory indemnification to the extent that the agent is successful
on the merits or otherwise in any proceeding, or in defense of any claim, issue
or matter in the proceeding. In advance of the final disposition of a
proceeding, the Registrant may pay an agent's expenses if the agent agrees to
repay the expense unless it is ultimately determined he is entitled to
indemnification. Article Ninth of the Certificate of Incorporation of the
Registrant also provides that such indemnification shall not exclude any other
rights to indemnification to which a person may otherwise be entitled, and
authorizes the corporation to purchase insurance on behalf of any of the persons
enumerated against any liability whether or not the corporation would have the
power to indemnify him under the provisions of Article Ninth.
With respect to possible indemnification of officers, directors, and
other corporate agents for liabilities arising under the Securities Act, the
Registrant has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
ITEM 16. EXHIBITS
Exhibit No. Description
----------- -----------
5 Opinion of Jamieson, Moore, Peskin & Spicer as to the legality
of the securities to be registered.*
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of Jamieson, Moore, Peskin & Spicer (Included in
Exhibit 5 hereto).*
- ----------
* Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to file, during any period
in which it offers or sells securities, a post-effective amendment to this
registration statement to include any additional or changed material information
on the plan of distribution.
The undersigned Registrant hereby undertakes, for purposes of
determining any liability under the Securities Act of 1933, to treat each post
effective amendment as a new registration statement of the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering and to file a post effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
II-2
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form S-3 and has duly caused this Amendment to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Clinton, State of New Jersey, on this 29th day of November, 1999.
UNITY BANCORP, INC.
(Registrant)
By: /s/Robert J. Van Volkenburgh
------------------------------
Robert J. Van Volkenburgh
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on this 29th day of November, 1999.
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/Robert J. Van Volkenburgh Chairman of the Board November 29, 1999
- ----------------------------- (Principal Executive Officer)
ROBERT J. VAN VOLKENBURGH
/s/David D. Dallas Director November 29, 1999
- -----------------------------
DAVID D. DALLAS
/s/Peter P. DeTommaso Director November 29, 1999
- -----------------------------
PETER P. DETOMMASO
/s/Charles S. Loring Director November 29, 1999
- -----------------------------
CHARLES S. LORING
/s/Kevin Killian Chief Financial Officer November 29, 1999
- ----------------------------- (Principal Financial and
KEVIN KILLIAN Accounting Officer)
II-4
</TABLE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference into this Registration Statement on Form S-3 of our
report dated January 22, 1999, with respect to Unity Bancorp Inc.'s (Unity's)
1998 financial statements which were previously incorporated by reference into
Unity's Form 10-KSB for the year ended December 31, 1998 and to all references
to our Firm in this Registration Statement.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
November 23, 1999
