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Exhibit 4.6  


Form
of Director Non-Qualified Option Agreement 


 
 

UNITY BANCORP, INC.
  GRANT AGREEMENT
  2002 STOCK OPTION PLAN
  
    NON-QUALIFIED STOCK OPTION    
    


        THIS OPTION AGREEMENT is made as of this            day
of            , 200  ,
            between UNITY BANCORP, INC. (the "Company")
and                            
(the "Optionee"). 


	1.
	Grant Option:



        Pursuant
to the provisions of the Company's 2002 Stock Option Plan (the "Plan"), the Company hereby grants to the Optionee, subject to the terms and conditions of the Plan, which terms
and conditions are incorporated by reference herein, and subject further to the terms and conditions herein set forth, the right and option to purchase from the Company all or any part of an aggregate
            shares of Common Stock (no par value per share) of the Company (the "Common Stock") at the purchase price of
$            per share (the "Option"), which purchase price is  100% of the fair market value of the Common Stock (as defined in the Plan) on
the date of grant.
 


	2.
	Terms and Conditions:



        It
is understood and agreed that the Option is subject to the following terms and conditions: 



	(a)
	Date of Grant:Any references to the "date of grant" herein shall
mean                        .



	(b)
	Expiration Date:The Option shall expire at the close of business
on                        or as otherwise specified in subparagraph
(e) of this paragraph 2.



	c)
	Exercise of Option:The Option is immediately exercisable for some or all of the shares covered hereby. The Optionee shall give written
notice to the Company, signed by the Optionee, of the exercise of the Option. Such notice shall specify the number of full shares to be purchased. The Option may be exercised only with respect to full
shares, and no fractional shares may be purchased. Such notice shall be accompanied by full payment of the exercise price, as provided in subparagraph (d) of this paragraph 2.



	(d)
	Payment of Purchase Price Upon Exercise:At the time of any exercise, the purchase price of the shares to be purchased shall be
(i) rounded up to the nearest whole cent and (ii) paid to the Company in cash or such other consideration as the Committee (as defined in the Plan) may decide.



	(e)
	Exercise Upon Death or Termination of Service:





        (i)    In
the event the Optionee's service on the Board of Directors of the Company or its subsidiary (the "Board") is terminated as a result of the death or Disability (as
defined in the Plan) of the Optionee while serving on the Board, this Option may be exercised by the Optionee or the Optionee's executor or administrator until (a) the earlier of the expiration
date specified in subparagraph (b) of this paragraph 2 or (b) the date that is twelve (12) months after the Optionee's date of death or Disability. 


        (ii)   If
the Optionee's service on the Board shall terminate because of Retirement (as defined in the Plan), the Optionee may exercise the Option to the extent permitted
hereunder until the earlier of (a) the expiration date specified in subparagraph (b) of this paragraph 2 or (b) the date that is twelve (12) months after the date of
such termination. 




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        (iii)  If
the Optionee's service on the Board shall terminate for Cause (as defined in the Plan), the Option shall immediately terminate. 


        (iv)  If
the Optionee's service on the Board shall terminate for any reason other than death, Disability, Retirement or Cause, the Optionee may exercise the Option until the
earlier of (a) the expiration date specified in subparagraph (b) of this paragraph 2 or (b) the date that is three (3) months after the date of such termination. 




In
the event that the Option shall be exercised by a person other than the Optionee in accordance with the provisions of this subparagraph (e), such person shall furnish the Company with evidence
satisfactory to it of such person's right to exercise the Option, and shall make such representations and agreements and furnish such information or execute such documents as the Board may, in its
discretion, deem necessary or desirable to evidence such exercise or assure compliance by the Company, on terms acceptable to the Company, with any requirement of this Option Agreement or the
provisions of applicable federal and state securities and other laws. 


	f.
	Non-transferability:




        This
Option shall not be transferable other than by will or by the laws of descent and distribution. During the lifetime of Optionee, this Option shall be exercisable only by the
Optionee (or by the Optionee's duly appointed guardian or legal representative). 


	g.
	Adjustments:




        (1)   In
the event of any change in the outstanding shares of Common Stock of the Company by reason of any stock dividend or split, recapitalization, combination or exchange
of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt or payment of consideration by the Company, the Board shall have the right to make such adjustments to previously granted
options, to prevent dilution or enlargement of the rights of optionee, including any or all of the following: (i) adjustments in the aggregate number or kind of shares of Common Stock which may
be awarded under the Plan; (ii) adjustments in the aggregate number or kind of shares of Common Stock covered by options already granted under the Plan; and/or (iii) adjustments in the
purchase price of outstanding options, or any limited rights attached to such options. 


No
such adjustments may, however, materially change the value of benefits available to an optionee under a previously granted option. 



        (2)   In
the event of a consolidation, reorganization, merger or sale of all or substantially all of the assets of the Company 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 Company, the Board shall have the right to take 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), or (ii) in the event of a merger under the terms of which holders of the Common Stock of the Company 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 Optionee 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. 




        No
fractional shares shall be issued on account of any adjustment required hereunder. 


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	(h)
	No Rights as Shareholder:The Optionee shall have no rights as a shareholder with respect to any shares of Common Stock subject to this
Option prior to the date of issuance to Optionee of a certificate or certificates for such shares.



	(i)
	No Right to Continued Service on the Board:This Option shall not confer upon Optionee any right with respect to continuance of service
on the Board.



	(j)
	Compliance with Laws and Regulations:This Option and the obligation of the Company to sell and deliver shares hereunder, shall be
subject to all applicable Federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.



	(k)
	Withholding Taxes:The Optionee shall pay to the Company, or make provision satisfactory to the Board for the payment of, any taxes of
any kind required by law to be withheld in respect of the Option, no later than the date of the event creating the tax liability. In the Board's sole discretion, the Optionee (other than an Optionee
subject to Section 16 of the Securities Exchange Act of 1934, as amended ("Section 16 Optionee"), 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 Optionees, upon the issuance of shares of
Common Stock in respect of an Option, such number of shares issuable shall be reduced by the number of shares necessary to satisfy such Section 16 Optionee's Federal, and where applicable,
state withholding tax obligations. The Company may, to the extent permitted by law, have the right to deduct any such tax obligations from any payment of any kind otherwise due to the Optionee.



	(l)
	Six Month Holding Period:




        Shares
of Common Stock acquired by a Section 16 Optionee may not be sold by such Optionee for at least six (6) months from the date of grant of the Option. 



	3.
	Investment Representation:



        The
Board may require the Optionee to furnish the Company, prior to the issuance of any part of this Option, an agreement (in such form as the Board may specify) in which the Optionee
represents that the shares acquired by the Optionee upon exercise are being acquired for investment and not with a view to the sale or distribution thereof. 


	4.
	Optionee Bound by Plan:



        The
Optionee hereby agrees to be bound by all terms and provisions of the Plan. 


	5.
	Notices:



        Any
notice hereunder to the Company shall be addressed to it at its office: Unity Bancorp, Inc., 64 Old Highway 22, Clinton, New Jersey, 08809; Attn: Chief Financial Officer; and
any notice hereunder to Optionee shall be addressed to the Optionee at the following address, subject to the right of either party to designate at any time hereafter in writing some other address: 



	Address of Optionee:	






	

Optionee's Social Security Number:	






	6.
	Binding Effect:


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        This
Option Agreement shall be binding upon the Company's successors and assigns, and shall be binding and inure to the benefit of the Optionee and the Optionee's heirs, executors,
administrators, guardians, trustees, attorneys-in-fact and legal and personal representatives. 


	7.
	Governing Law:



        This
Option Agreement shall be governed by, and construed in accordance with, the laws of the State of New Jersey. 


        IN WITNESS WHEREOF, the Company and the Optionee have executed this Option Agreement as of the day and year first above written. 



	 	 	 	UNITY BANCORP, INC.	 
	

 	
 	

By:	

    
 James A. Hughes, CFO	

 
	

 	
 	

Accepted by:	

    
	

 
	

 	
 	

 	

    
	
 	

, Optionee




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UNITY BANCORP, INC. GRANT AGREEMENT 2002 STOCK OPTION PLAN NON-QUALIFIED STOCK OPTION