SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or
ss.240.14a-12
UNITY BANCORP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fees 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.
1) Amount Previously Paid:
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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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UNITY BANCORP, INC.
64 OLD HIGHWAY 22
CLINTON, NEW JERSEY 08809
May 5, 2000
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 May 26,
2000 at 10:00 a.m. at the Holiday Inn Select of Clinton, 111 State Highway 173,
Clinton, New Jersey.
At the Annual Meeting, stockholders will be asked to elect two members to
the Board of Directors.
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,
/s/ ROBERT J. VAN VOLKENBURGH
------------------------------
Robert J. Van Volkenburgh
Chairman of the Board and
Chief Executive Officer
UNITY BANCORP, INC.
64 OLD HIGHWAY 22
CLINTON, NEW JERSEY 08809
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 2000
Notice is hereby given that the 2000 Annual Meeting of stockholders (the
"Annual Meeting") of Unity Bancorp, Inc. (the "Company") will be held at the
Holiday Inn Select of Clinton, 111 State Highway 173, Clinton, New Jersey, May
26, 2000 at 10:00 a.m., for the purpose of considering and voting upon the
following matters:
1. The election of the two nominees named in the accompanying Proxy
Statement to serve as directors of the Company for the term of office
specified and until their successors are duly elected and qualified.
2. 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 April 19, 2000 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
/s/ ROBERT J. VAN VOLKENBURGH
------------------------------
Robert J. Van Volkenburgh
Chairman of the Board and
Chief Executive Officer
May 5, 2000
Clinton, New Jersey
-2-
UNITY BANCORP, INC.
64 OLD HIGHWAY 22
CLINTON, NEW JERSEY 08809
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 2000
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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 to be held at the Holiday
Inn Select of Clinton, 111 State Highway 173, Clinton, New Jersey, on May 26,
2000, at 10:00 a.m. New Jersey time, and at any adjournments thereof. These
proxy materials are first being mailed on or about May 5, 2000, to holders of
record on April 19, 2000 (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. 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.
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 3,861,568 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.
-3-
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.
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.
-4-
PROPOSALS TO BE VOTED ON AT THE MEETING
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. In July, 1999, John Tremblay resigned from his positions as
President, Chief Operating Officer and director of the Company and the Bank in
order to pursue other business opportunities. Mr. Tremblay had been a director
since 1997. Jeremy S. Rosen, DDS, has been appointed by the Board to complete
Mr. Tremblay's term, subject to regulatory clearance.
Directors serve until their successors are elected and qualified. The Board
of Directors has nominated and recommends the election of the nominees listed
below for the term set forth for such nominees 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 below,
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.
INFORMATION WITH RESPECT TO THE NOMINEES AND CONTINUING DIRECTORS
The following tables set 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 and the year in which their terms
(or in the case of the nominees, their proposed terms) as director of the
Company expire.
TABLE I -- NOMINEES FOR 2000 ANNUAL MEETING
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NAME, AGE AND POSITION WITH PRINCIPAL OCCUPATION DURING PAST DIRECTOR TERM
COMPANY(1) FIVE YEARS SINCE(2) EXPIRES
- -------------------------------------------------------------------------------------------------------------
Robert J. Van Volkenburgh, Chairman of the Board and Chief 1990 2003
57, Chairman of the Board and Executive Officer of the Company;
Chief Executive Officer Chairman of the Board of the Bank;
Chief Executive Officer of Total
Packaging Corporation and Best
Packaging & Design Corp.
- -------------------------------------------------------------------------------------------------------------
Charles S. Loring, 58, Director Owner, Charles S. Loring, CPA 1990 2003
(Accountants)
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-5-
TABLE II -- DIRECTORS OF THE COMPANY WHOSE TERMS CONTINUE
BEYOND THIS ANNUAL MEETING
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NAME, AGE AND POSITION WITH PRINCIPAL OCCUPATION DURING DIRECTOR TERM
COMPANY(1) PAST FIVE YEARS SINCE(2) EXPIRES
- ---------------------------------------------------------------------------------------------------------------
Jeremy S. Rosen, 34 Dentist 2000(3) 2001
Director
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David D. Dallas, 45 Vice Chairman and Corporate 1990 2002
Vice Chairman and Secretary of the Company; Vice
Corporate Secretary Chairman of the Bank; Chief
Executive Officer of Dallas Group
of America (Chemicals)
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Peter P. De Tommaso, 74 Retired President Home Owners 1991 2002
Director Heaven, Inc. (Hardware and
Lumber Retail)
===============================================================================================================
(1) Each director of the Company is also a director of the Bank.
(2) Includes prior service on Board of Directors of Bank
(3) Pending regulatory clearance.
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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.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEE MEETINGS
During the fiscal year ended December 31, 1999, the Board of Directors of
the Company held ten (10) meetings. During the fiscal year, no director attended
fewer than 75% 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.
The Company maintains an Audit Committee of the Board of Directors which
consisted of Messrs. C. Loring, D. Dallas, and P. DeTommaso during the fiscal
year ended December 31, 1999. The Audit Committee arranges for the annual
financial statement audit through the Company's independent certified public
accountants, reviews and evaluates the recommendations of the annual audit,
receives reports of examinations of the Bank through internal audits, analyzes
such internal reports, receives reports of regulatory examinations of the
Company and the Bank by the applicable regulatory agencies, analyzes such
reports, and reports to the Board of Directors the results of this analysis. The
Audit Committee met four (4) times in 1999.
The Company does not maintain a separate Nominating Committee. The full
Board of Directors acts as a Nominating Committee.
COMPENSATION OF DIRECTORS
Directors of the Company do not receive cash compensation for their service
on the Company's Board. However, Directors of the Company are eligible to
participate in the 1994 Stock Option Plan, the 1997 Stock Bonus Plan, the 1998
Stock Option Plan and the 1999 Stock Option Plan, all as described below.
Directors receive $300 for attendance at each Bank Board of Directors
meeting and $150 for attendance at each Bank Committee meeting. During 1999, Mr.
D. Dallas received an annual retainer of $100,000 payable monthly for his
service as Vice Chairman of the Board.
In 1999, the Bank discontinued its previous practice of providing
non-employee directors of the Bank and each Committee Chairman with an annual
stipend, and now Directors only receive the per meeting fees discussed above.
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, 1999, no options
were granted to non-employee directors under the Non-Employee Plan.
The Company maintains the 1994 Stock Bonus Plan under which 25,548 shares
of Common Stock are currently reserved for issuance. The Company's officers and
other key employees of the bank and any other subsidiaries which the Company may
acquire or incorporate may participate in the Stock Bonus Plan. The Company's
Board of Directors 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. During
1999, members of the Company's Board of Directors received no grants of Common
Stock under the 1994 Bonus Plan.
-7-
The Company maintains the 1997 Stock Bonus Plan under which the Board of
Directors may authorize grants of up to 78,750 shares of Common Stock in the
form of bonuses. 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
future may be eligible to participate in the 1997 Stock Bonus Plan. The 1997
Stock Bonus Plan is administered by the Company's Board of Directors, which has
the authority to determine the participants to whom bonuses will be granted, the
amount of any bonus, and any terms and conditions which may be attached to any
shares underlying a bonus. During 1999, members of the Company's Board of
Directors received grants of 21,069 shares of Common Stock under the 1997 Bonus
Plan.
The Company maintains the 1997, the 1998 and the 1999 Stock Option Plans
under which options to purchase shares of the Company's Common Stock may be
granted to members of the Board of Directors and executive officers of the
Company, the Bank, and any subsidiaries which the Company may establish in the
future. The terms of all three plans are substantially similar. The Plans are
administered by the Board of Directors of the Company, which has the authority
to select the parties to whom stock options will be granted. Options granted
under the Plans may either be incentive stock options under the Internal Revenue
Code of 1986, as amended (the "Code") or non-qualified options. Stock Options
granted under the Plans which are incentive stock options must have an exercise
price of 100% of the fair market value of the Company's stock on the date of
grant, and non-qualified options may have an exercise price of not less than 85%
of the fair market value of the Common Stock on the date of grant, with the
actual exercise price determined by the Board of Directors. The 1997 Stock
Option Plan provides for the grant of options for up to 78,750 shares of Common
Stock, the 1998 Plan provides for the grant of options for up to 236,250 shares
of Common Stock and the 1999 Plan provides for the grant of options for up to
300,000 shares of Common Stock. In 1999, no members of the Board of Directors of
the Company received grants of options to purchase shares of Common Stock under
these Plans.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following tables set forth, as of March 31, 2000, certain information
concerning the ownership of shares of Common 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, (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
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NAME AND POSITION NUMBER OF SHARES PERCENT
WITH COMPANY BENEFICIALLY OWNED (1) OF CLASS
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David D. Dallas, Vice Chairman and Corporate Secretary 507,123(2) 12.68%
- ---------------------------------------------------------------------------------------------------
Peter P. DeTommaso, Director 190,108(3) 4.90%
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Anthony J. Feraro, Executive Vice President and
Chief Operating Officer of the Bank 15,500(4) 0.40%
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Kevin Killian, Executive Vice President, Chief
Financial Officer 32,627(5) 0.84%
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-8-
- ---------------------------------------------------------------------------------------------------
Charles S. Loring, Director 133,266(6) 3.43%
- ---------------------------------------------------------------------------------------------------
Robert J. Van Volkenburgh, Director and Chief
Executive Officer 736,739(7) 18.11%
- ---------------------------------------------------------------------------------------------------
Directors and Executive Officers of the Company as
a Group (6 persons) 1,615,363(8) 37.66%
===================================================================================================
5% Shareholders:
- ---------------------------------------------------------------------------------------------------
Robert Dallas, Director of the Bank 455,495(9) 11.47%
===================================================================================================
(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 noted, all shares are owned of record and
beneficially by the named person.
(2) Includes 60,769 shares issuable upon the exercise of immediately
exercisable options held by Mr. Dallas and 6,900 shares issuable upon the
conversion of preferred shares. Also includes 6,743 shares held by Jessica
Lynn Dallas and 6,743 shares held by David Tyler Dallas, Mr. Dallas' minor
children. Shares also disclosed as beneficially owned by Mr. Dallas include
35,147 shares held by Dallas Group of America, Inc. Employees' Profit
Sharing Trust, 101,295 shares held by Dallas Group of America, Inc.,
105,478 shares and 69,000 shares issuable upon the conversion of preferred
shares held by Dallas Financial Holdings, LLC and 28,666 shares held by
Trenton Liberty Ins. Co. These shares are also disclosed as beneficially
owned by Mr. Robert Dallas.
(3) Includes 163,210 shares owned jointly with Mr. DeTommaso's spouse. Also
includes 12,412 shares issuable upon the exercise of immediately
exercisable options and 9,660 shares issuable upon conversion of preferred
shares.
(4) Includes 100 shares held by Mr. Feraro's spouse in her own name. Also
includes 13,800 shares issuable upon conversion of preferred shares.
(5) Includes 23,925 shares issuable upon the exercise of immediately
exercisable options held by Mr. Killian and 6,900 shares issuable upon
conversion of preferred shares.
(6) Includes 9,898 shares held by Mr. Loring's spouse in her own name, 21,600
shares owned jointly with his spouse, and 12,048 shares held by The Loring
Partnership. Mr. Loring disclaims beneficial ownership of the shares held
by his spouse. Also includes 11,278 shares purchasable upon the exercise of
immediately exercisable options and 6,900 shares issuable upon conversion
of preferred shares.
(7) Includes 108,064 shares held by Mr. Van Volkenburgh's spouse in her own
name, 19,499 shares owned jointly by Mr. Van Volkenburgh and his spouse,
33,882 shares and 31, 887 shares held by
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Total Packaging Corporation and Best Packaging & Design Corp.,
respectively, corporations owned by Mr. Van Volkenburgh, and 29,531 shares
held in a brokerage account for the benefit of Mr. Van Volkenburgh. Also
includes 123,704 shares issuable upon exercise of immediately exercisable
options and 82,800 shares issuable upon conversion of preferred shares. Mr.
Van Volkenburgh disclaims beneficial ownership of the shares held by his
spouse in her own name. Also includes 6,890 shares held by RJV Capital
Management LLC, a limited liability company owned by Mr. Van Volkenburgh.
(8) Includes 232,088 shares issuable upon the exercise of immediately
exercisable options and 195,960 shares issuable upon conversion of
preferred shares.
(9) Includes 6,587 shares held by Mr. Dallas' son, 35,176 shares issuable upon
the exercise of immediately exercisable options held by Mr. Dallas and
6,900 shares issuable upon the conversion of preferred shares. Also
disclosed as beneficially owned by Mr. Dallas are 35,147 shares held by
Dallas Group of America, Inc. Employees' Profit Sharing Trust, 101,295
shares held by Dallas Group of America, Inc., 105,478 shares and 69,000
shares issuable upon the conversion of preferred shares held by Dallas
Financial Holdings, LLC and 28,666 shares held by Trenton Liberty Ins. Co.
These shares are also disclosed as beneficially owned by Mr. David Dallas.
-10-
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 $100,000 for the last fiscal year.
SUMMARY COMPENSATION TABLE
CASH AND CASH EQUIVALENT FORMS
OF REMUNERATION
=============================================================================================================================
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-----------------------------------------------------------------------------------
AWARDS
------------------------------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING
NAME AND PRINCIPAL SALARY BONUS COMPEN- STOCK OPTIONS/
POSITION YEAR ($) ($) SATION($)(1) AWARD(S) ($) SARS (#)
- -----------------------------------------------------------------------------------------------------------------------------
Robert J. Van 1999 280,000 114,718(3) 6,450 0 --
Volkenburgh, 1998 125,000(2) 124,658(4) 6,150 0 94,763
Chairman and Chief 1997 100,000(2) 60,188(5) 7,800 0 14,175
Executive Officer
- -----------------------------------------------------------------------------------------------------------------------------
David D. Dallas, 1999 100,000(6) 76,490(7) 6,300 0 --
Vice Chairman and 1998 62,500(6) 85,693(8) 6,150 0 41,475
Corporate Secretary 1997 50,000(6) 36,781(9) 8,400 0 9,450
- -----------------------------------------------------------------------------------------------------------------------------
Anthony J. Feraro,
Chief Operating 1999 33,065(10) -- -- 0 --
Officer and Executive
Vice President
- -----------------------------------------------------------------------------------------------------------------------------
Kevin J. Killian, 1999 112,121 2,440(11) -- 0 5,000
Chief Financial 1998 41,735(12) -- -- 0 8,925
Officer and Executive
Vice President
=============================================================================================================================
(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.
-11-
(3) This bonus represents the value of 10,713 shares issued to Mr. Van
Volkenburgh under the Company's 1997 Stock Bonus Plan.
(4) This bonus represents the value of 9,450 shares issued to Mr. Van
Volkenburgh under the Company's 1997 Stock Bonus Plan.
(5) This bonus represents the value of 4,500 shares issued to Mr. Van
Volkenburgh under the Company's 1997 Stock Bonus Plan.
(6) Consists of Mr. Dallas's annual retainer as Vice Chairman.
(7) This bonus represents the value of 7,143 shares issued to Mr. Dallas under
the Company's 1997 Stock Bonus Plan.
(8) This bonus represents the value of 6,496 shares issued to Mr. Dallas under
the Company's 1997 Stock Bonus Plan.
(9) This bonus represents the value of 4,331 shares issued to Mr. Dallas under
the Company's 1997 Stock Bonus Plan.
(10) Mr. Feraro was hired in as the Company's Chief Operating Officer and
Executive Vice President in November 1999. Pursuant to Mr. Feraro's
employment agreement, he is to receive an annual salary of $250,000,
subject to increase, as well as certain bonus payments. See "Employment
Agreements."
(11) This bonus represents the value of 227 shares issued to Mr. Killian under
the Company's 1994 Stock Bonus Plan.
(12) Mr. Killian was hired as the Company's Chief Financial Officer in July
1998.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mr. Van Volkenburgh
to serve as the Company's Chairman and Chief Executive Officer. Mr. Van
Volkenburgh's agreement provides for a three-year term, automatically renewable
on each anniversary date for an additional one year period unless, ninety days
prior to such anniversary date, either party provides written notice of its
intention not to renew. The employment agreement provides that Mr. Van
Volkenburgh will receive an annual base salary, to be reviewed annually by the
Board of Directors. Mr. Van Volkenburgh's initial salary under the agreement is
$280,000, plus an annual bonus as determined by the Board of Directors. The
agreement permits the Company to terminate Mr. Van Volkenburgh's employment for
"cause" at any time. The agreement defines "cause" to mean personal dishonesty,
incompetence, wilful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, wilful violation of any
law, rule or regulation (other than traffic violations or similar offenses),
final cease and desist order, or material breach of any provision of the
agreement and any of which cause a material adverse impact upon the Company. In
the event Mr. Van Volkenburgh is terminated for any reason other than cause, or
in the event Mr. Van Volkenburgh resigns his employment because
o he is reassigned to a position of lesser rank or status than Chairman
of the Board and Chief Executive Officer; or
o his place of employment is relocated by more than thirty miles from
its location as of the date of the employment agreement or his
compensation or other benefits are reduced; then
Mr. Van Volkenburgh or, in the event of death, his beneficiary will be entitled
to severance pay in an amount equal to thirty-six (36) months of Mr. Van
Volkenburgh's then current base salary. Mr. Van Volkenburgh's agreement further
provides that upon the occurrence of a change in control, as defined in the
agreement, Mr. Van Volkenburgh will be entitled to receive his then current base
salary for a period
-12-
of thirty-six (36) months, grossed-up for the tax impact. The employment
agreement also prohibits Mr. Van Volkenburgh from competing with the Company for
a period of one year following the termination of his employment.
On October 18, 1999, the Bank entered into an employment agreement with Mr.
Anthony J. Feraro to serve as Executive Vice President and Chief Operating
Officer of the Bank. Mr. Feraro's agreement provides for a two-year term,
automatically renewable on each anniversary date for an additional one-year
period unless, 90 days prior to such anniversary date, either party provides
written notice of its intention not to renew. The employment agreement provides
that Mr. Feraro will receive an annual base salary, to be reviewed annually by
the Board of Directors. Mr. Feraro's initial salary under the agreement is
$250,000, plus an override commission equal to 25 basis points of the guaranteed
portion of all small business administration loans originated by the Bank after
January 1, 2000 up to a maximum commission of $75,000 per year. Mr. Feraro shall
also be entitled to a performance bonus based upon mutually acceptable
performance criteria in the year 2000 in the amount of up to $125,000. The
agreement permits the Company to terminate Mr. Feraro's employment for cause at
any time. The agreement defines cause to mean personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any law, rule
or regulation or final cease and desist order for material breach of any
provision of this agreement. In the event that Mr. Feraro is terminated for any
reason other than cause during the first year of the agreement, Mr. Feraro shall
be entitled to receive his then-current base salary for 12 months. If such
termination occurs during the second year of his employment, Mr. Feraro shall be
entitled to receive his then-current base salary, pro rated, for a period of
nine months. Thereafter, if Mr. Feraro's employment is terminated without cause,
Mr. Feraro will be entitled to receive his then-current base salary, pro rated,
for a period of three months. Mr. Feraro has the right to terminate his
employment upon the occurrence of a change in control and shall be entitled to
receive a lump sum payment equal to his then-current base salary. The employment
agreement also prohibits Mr. Feraro from competing with the Bank for a period of
one year following the termination of his employment.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS
The Company maintains a supplemental executive retirement plan for Mr. Van
Volkenburgh. Under this plan, Mr. Van Volkenburgh will receive a retirement
benefit equal to 60% of his average final compensation determined by his last
three years of employment. In certain circumstances, such as in a change in
control, Mr. Van Volkenburgh will be paid 60% of his "final scheduled
compensation", which is calculated by taking his then current compensation and
increasing it five percent (5%) per year for each year remaining until Mr. Van
Volkenburgh reaches age 65. In this case, Mr. Van Volkenburgh will also receive
a tax allowance. Annual retirement payments are to be made for 20 years under
the supplemental executive retirement plan.
STOCK BENEFIT PLANS FOR EMPLOYEES
The Company maintains the Company's 1994 Incentive Stock Option Plan (the
"Employee Plan") under which 591 shares of common stock are currently reserved
for issuance, subject to adjustments as set forth therein. The Company's
officers and other key employees (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.
-13-
The Company maintains the 1994 Stock Bonus Plan, under which 25,548 shares
of common stock are currently reserved for issuance. The Company's officers and
other key employees of the bank and any other subsidiaries which the Company may
acquire or incorporate may participate in the Stock Bonus Plan. The Company's
Board of Directors 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.
In addition, officers and employees are eligible to participate in both the
1997, 1998 and 1999 Stock Option Plans and the 1997 Stock Bonus Plan discussed
under the heading "Compensation of Directors."
The following table provides certain information concerning option grants
in 1999:
=========================================================================================================
INDIVIDUAL GRANTS
=========================================================================================================
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS GRANTED TO EXERCISE OR PRESENT VALUE
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION OF GRANT ON
(#)(1) FISCAL YEAR ($/SH) DATE DATE ($)(2)
- ---------------------------------------------------------------------------------------------------------
Kevin Killian 5,000 3.49 10.00 2009 $36,450
- ---------------------------------------------------------------------------------------------------------
(1) These options are not exercisable until the fifth anniversary of the date
of grant.
(2) The present value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model with the following weighted
average assumptions; dividend yield of 0.0%; expected volatility of 90.0%;
risk-free interest rate of 5.75%; and expected lives of 3 years and 8
months.
-14-
The following table sets forth information concerning the fiscal year-end
value of unexercised options held by the executive officers of the Company named
in the table above. Stock options were exercised by such executive officers
during 1999:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FY-END OPTION/SAR VALUES
====================================================================================================
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS/SARS
UNEXERCISED AT FY-END ($)
OPTIONS/SARS AT (BASED ON $6.00
SHARES FY-END (#) PER SHARE)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED $ UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------
Robert J. Van Volkenburgh 0 0 123,704(E) (1)
- ----------------------------------------------------------------------------------------------------
David D. Dallas 0 0 60,769(E) (1)
- ----------------------------------------------------------------------------------------------------
Anthony Feraro 0 0 -- --
- ----------------------------------------------------------------------------------------------------
Kevin J. Killian 0 0 23,925(E)5,000(U) (1)
====================================================================================================
(1) Based upon a $6.00 year end market price, none of these options were in the
money at year end.
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 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 1999 rental
payments of $496,813. 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. 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
-15-
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.
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,
1999 were KPMG, LLP, and the Company's Board of Directors has appointed KPMG,
LLP to continue as independent auditors for the Bank and the Company for the
year ending December 31, 2000. KPMG, LLP has informed the Company that one or
more of its representatives will be in attendance at the Annual Meeting to make
a statement if they so desire and to respond to appropriate questions.
The Company's independent auditors for the fiscal years ended December 31,
1998 and December 31, 1997 were Arthur Andersen LLP. The Company dismissed
Arthur Anderson LLP as its independent auditors effective April 30, 1999. The
decision to dismiss Arthur Andersen LLP as its independent auditors was
recommended by the Board of Directors and the Audit Committee. For the Company's
fiscal years ended December 31, 1998 and 1997, there have been no disagreements
with Arthur Andersen LLP on any matters of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which, if not
resolved to the satisfaction of Arthur Andersen LLP, would have caused it to
make reference to the subject matter of the disagreement in connection with its
reports. Arthur Andersen LLP's independent auditor's report on the consolidated
financial statements for the fiscal years ended December 31, 1998 and 1997
expressed an unqualified opinion.
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.
-16-
Based solely on its review of copies of such forms received by it, or
written representation from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the fiscal year
ended December 31, 1999, all filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were met.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 2001 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 2001 Annual
Meeting must do so no later than December 15, 2000.
-17-
P UNITY BANCORP, INC.
R
O REVOCABLE PROXY FOR
X ANNUAL MEETING OF SHAREHOLDERS
Y MAY 26, 2000
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the Board of Directors of Unity Bancorp,
Inc. (the "Company"), to vote all of the shares of the Company standing in the
undersigned's name at the Annual Meeting of Shareholders of the Company, to be
held at the Holiday Inn Select of Clinton, 111 State Highway 173, Clinton, New
Jersey, on Friday, May 26, 2000 at 10:00 A.M., and at any adjournment thereof.
The undersigned hereby revokes any and all proxies heretofore given with respect
to such meeting.
SEE REVERSE
SIDE
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
(This proxy is continued from the reverse side)
Please mark your
X votes as in this
example.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW. IF NO CHOICE IS SPECIFIED, THE
PROXY WILL BE VOTED "FOR" MANAGEMENT'S NOMINEE TO THE BOARD OF DIRECTORS.
The Board of Directors recommends a vote for each of these proposals.
1. Election of the following two WITHHOLD
(2) nominees to each serve on FOR AUTHORITY
the Board of Directors for a [ ] [ ]
term of three (3) years and
until their successors are 2. In their discretion, such
elected and duly qualified: other business as may properly
Robert J. Van Volkenburgh and come before the meeting.
Charles S. Loring
Dated: __________________________, 2000.
________________________________________
Signature
________________________________________
Signature
(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.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE