Document:

Exhibit 10(vii)

 

SETTLEMENT AGREEMENT AND GENERAL RELEASE

 

Settlement Agreement and General Release (“Agreement”) dated as of
December 31, 2003, by and among Unity Bank, Unity Bancorp., Inc. each
having an address at 64 Old Highway 22, Clinton, New Jersey 08809 (collectively
“Unity”), and Anthony J. Feraro, residing at 10 Winterberry Court, Whitehouse
Station, New Jersey 08889, (referred to throughout this Agreement as “Feraro”).

 

WHEREAS, Unity and Feraro are parties to an Employment Agreement dated
as of February 26, 2002 (the “Employment Agreement”); and

 

WHEREAS, Feraro has been employed by Unity and is a Director and
Officer of Unity Bank, Unity Bancorp, Inc., and various subsidiaries thereof;
and

 

WHEREAS, Unity and Feraro have agreed that Feraro’s relationship with
Unity Bank will cease effective December 31, 2003.

 

NOW THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties agree as follows:

 

1.                                       Last Day
of Employment.  Feraro’s
last day of employment with Unity was December 31, 2003.

 

2.                                       Payment.  Unity Bank shall  pay to Feraro: (i) One Hundred Thousand Dollars
($100,000.00)  within two (2) business
days after receipt of a letter from Feraro in the form attached hereto as
Exhibit A; and (ii) thereafter, during 2004, Two Hundred Twenty Thousand
Dollars ($220,000.00)  payable in
twenty-six bi-weekly installments of Eight Thousand, Four Hundred Sixty-One
Dollars and Fifty-Four Cents ($8,461.54) which shall be paid as part of and
with Unity Bank’s regular payroll through December 31, 2004 (the
“Severance Period”). Feraro, his heirs and executors, shall have the right
to  receive all such payments regardless
of the employment or death of Feraro during or after the Severance Period.

 

3.                                       No Other
Payments.  Feraro
acknowledges and agrees that, except as set forth in this Agreement, Feraro is
not eligible for nor does Unity owe Feraro any bonus, commission or any other
payment of any nature, including without limitation, any payment under the
Employment Agreement.

 

4.                                       Medical
Benefits and Life Insurance.

 

(A) Feraro
shall  continue to be covered under
Unity’s standard family medical benefit program, the costs thereof to be paid
by Unity subject to Feraro’s contribution of the employee portion thereof,
during the Severance Period, which employee contributions shall be deducted by
Unity from the regular payroll payments to be made to Feraro during 2004 under
Paragraph 2(ii), above. Such coverage shall continue for all of 2004 regardless
of the death of Feraro during

 

 

2004. Feraro’s coverage under such medical
benefit program shall cease upon the earlier of (i) termination of the
Severance Period or (ii) Feraro’s obtaining new employment with an employer
that provides medical coverage to Feraro under a plan regularly maintained by
such employer for its employees.  Upon
termination of such medical insurance, Feraro shall  be offered continuation of medical insurance coverage under COBRA.

 

(B) Unity shall take all necessary steps to
insure that the $500,000 life insurance policy insuring Feraro’s life shall
remain in full force and effect through April 30, 2004, and that at least
sixty (60) days prior to the due date for the renewal premium due on such
policy, Unity shall take all necessary steps to transfer ownership of such
policy to Feraro (or his designee), and to insure that Feraro (or his designee)
has the right to continue such policy in full force and effect by continuing to
paying the premiums due for such policy.

 

5.                                      Stock
Options.

 

(A) Unity and
Feraro hereby stipulate and agree that:

 

(i) As of December 31, 2003, Feraro has
the following vested stock options (the “Options) to acquire 50,750 shares of
the common stock, no par value, of Unity Bancorp, Inc. (the “Common Stock”),
with the following exercise prices, under the following Stock Option Grants:
Options for 35,000 shares of Common Stock, with an exercise price of $ 3.45 per
share, under the January 25, 2001 Stock Option Grant, 17,500 of such
Options vested on January 25, 2002, and 17,500 of such Options on
January 25, 2003; Options for 7,000 shares of Common Stock with an
exercise price of $ 4.05 per share, under the July 18, 2001 Stock Option
Grant, 3,500 of such Options vested on July 18, 2002, and 3,500 of such
Options vested on July 18, 2003; and Options for 8,750 shares of common
stock with an exercise price of $ 6.44 per share, under the October 17,
2002 Stock Option Grant, all of which Options vested on October 17, 2003;
and,

 

(ii) The post-termination exercise of such
Options shall be controlled by Paragraph 2(e)(iv) of the Stock Option Grants
specified above.

 

(B) Such
Options shall be exercisable, and may be exercised, by Feraro within
three (3) months after December 31, 2003, but in no event earlier than
Unity’s receipt of a letter in the form attached hereto as Exhibit A; and,

 

(C) Such right to exercise such Options shall
include the right to elect to exercise such Options pursuant to a “cashless
exercise” of such Options on the same basis and in the same manner that Unity
has previously permitted, facilitated and arranged for the “cashless exercise”
of options during the period of Feraro’s employment with Unity.

 

(D) Feraro acknowledges and agrees that he
has no right or option to purchase any other shares of Unity Common Stock
except for the vested Options that he has as of the date hereof and, except as
set forth above, waives any rights he may have under any stock option grants
for the purchase of any additional shares of Unity Common Stock all of which,
except as aforesaid, shall be deemed terminated as of December 31, 2003.

 

2

 

6.                                       Return of
Property.  On or
before  the Effective Date (as
hereinafter defined), Feraro shall return to Unity all of Unity’s property
including, without limitation, all proprietary information (whether in
computerized format or otherwise), cell phone, American Express card, keys to
64 Old Highway 22, Clinton, New Jersey, keys to Feraro’s office, and the  2002
Volvo automobile currently utilized by Feraro.

 

7.                                       Withholding.  Any and all payments encompassed in this
Agreement will be subject to such federal, state and local tax treatment as
applies, and to such deductions for withholding, if any, as may be required
under applicable tax laws.

 

8.                                       Proprietary
Information.  Feraro
acknowledges and agrees that, during his employment by Unity he has received,
developed or learned of confidential and proprietary information of Unity.  Feraro further agrees that, without prior
written consent of Unity, Feraro shall not at any time, from and after the date
hereof, disclose to any person, firm, corporation or other entity, any
proprietary or confidential information of Unity, including customer lists,
financial records and data, and results of operations, or in any manner use such
proprietary or confidential information, unless such information has been made
publicly known other than as a result of Feraro’s action, except in performance
under the Agreement.

 

9.                                       Non-Competition.  For a period of one full year from the date
of this Agreement, Feraro will not, directly or indirectly, whether as a
shareholder, partner, member, proprietor, employee, associate, independent
contractor, consultant, trustee, agent, representative or otherwise, and
whether for or on behalf of himself or for or on behalf of any other person or
entity:

 

(i)                                     In
the counties of Hunterdon, Mercer, Warren, Essex, Bergen, Hudson, Union,
Middlesex, Somerset, Sussex and Morris, New Jersey engage or invest in, own,
manage, operate, control or participate in the ownership, management, operation
or control of, be employed by or on behalf of, be associated or in any manner
connected with, or render services or advice to, any business, trade or
occupation which (A) has a place of business in any of the aforementioned counties
and offers products or services in competition with any product or service
offered by Unity, or (B) plans or intends to engage, or is investigating the
feasibility of engaging in, any business, with a place of business in any of
the aforementioned counties, in competition with any product or service offered
by Unity or any subsidiary affiliate thereof; provided, that Feraro may
invest in up to (but not more than) five percent of any class of securities of
an entity (but without otherwise participating in the activities of such
entity) if such securities are registered under section 12 of the
Securities Exchange Act of 1934, as amended, or if such person is otherwise
subject to the reporting obligations of section 15(d) of the Securities
Exchange Act of 1934, as amended;

 

(ii)                                  Without
limiting the generality of Section 9(i), assist any other person residing
in or having a place of business in any of the aforementioned counties, in any
aspect of any business in competition with any product or service offered by
Unity;

 

(iii)                               Employ,
solicit or otherwise seek to employ or engage as an employee, independent
contractor, consultant, agent, sub-agent, or representative, whether full or
part time,

 

3

 

any person who had a place of business in or was employed in any of the
counties listed in Paragraph 9(i) and is (or during the eighteen (18) month
period prior to December 31, 2003 was) an employee, independent
contractor, consultant, agent, sub-agent, distributor or representative of
Unity or any subsidiary or affiliate thereof, or in any manner induce or
attempt to induce any employee, associate, independent contractor, consultant,
agent, sub-agent, distributor or representative of Unity to terminate such
person’s employment or other relationship with Unity or any subsidiary or
affiliate thereof.

 

10.                                 Resignation.  Concurrently herewith Feraro shall execute
and deliver a resignation (in the form annexed hereto as Exhibit “B”) of any
and all positions he may hold as an officer and/or director of Unity and any
subsidiary or affiliate thereof.  Feraro
covenants that he will take all reasonable steps to cooperate in executing
documentation requested by Unity or required as a result of his no longer being
affiliated with Unity, either as an officer, director or employee.

 

11.                                 Future Employment.  Feraro covenants that in the future he shall
not seek employment with Unity.

 

12.                                 Non-Disparagement.

 

(A) Feraro covenants that he shall  not make, publish, distribute or permit to
be made, published or distributed, any remarks or statements, whether orally,
in writing or electronically, that disparages Unity or any current or former
officer, director or employee thereof, 
except as shall be required by law.

 

(B) Unity (for itself and on behalf of its
officers and directors) covenant that they shall not make , publish, distribute
or permit to be made, published or distributed, any remarks or statements,
whether orally, in writing or electronically, that disparages Feraro except as
shall be required by law.

 

13.                                 Confidentiality.  Feraro shall not disclose the  substance or terms of this Agreement except
(i) to its or his tax advisors, accountants or attorneys that have a reason to
be so informed; or (ii) as shall  be
required by law. Notwithstanding the foregoing, if Feraro is asked to furnish
information regarding the substance or terms of this Agreement he may direct
the inquirer to any filing with a governmental authority which makes reference
hereto.

 

14.                                 Press Release.               Upon execution of
this Agreement, Unity shall  issue a
press release in the form attached hereto as Exhibit C.

 

15.                                 Sufficient Consideration.  Feraro acknowledges and agrees that
benefits and amounts payable hereunder is sufficient consideration for Feraro’s
entering into the Agreement.

 

16.                                 Release by Feraro.  In consideration for Unity’s commitment to
the various arrangements described in this Agreement, in lieu of any other
benefits, as a full and final overall mutual settlement, Feraro hereby releases
and discharges Unity, its divisions, directors, officers, employees, former
directors, former officers and former employees, parents and subsidiaries, and
their successors and assigns (the “Company”) from any and all further claims,
demands, lawsuits,

 

4

 

causes of action, or other matters arising
out of or related to Feraro’s employment or separation from employment
including, but no limited to any claims arising under the Employment Agreement
or as a result of any alleged violation of the National Labor Relations Act;
Title VII of the Civil Rights Act of 1964, as amended; Sections 1981 through
1988 of Title 42 of the United States Code, as amended; the Employee Retirement
Income Security Act of 1974, as amended; the Sarbanes-Oxley Act of 2002, as
amended; the Immigration Reform Control Act; the Americans with Disabilities
Act of 1990, as amended and any regulations thereunder; the securities laws of
New Jersey or any other State, and the regulations thereunder; and federal or
state laws relating to banking, banking institutions or bank holding companies,
and the regulations thereunder; the Age Discrimination in Employment Act of
1967, as amended; the Fair Labor Standards Act; the Occupational Safety and
Health Act; the Family Leave Act; the New Jersey Law Against Discrimination;
the New Jersey Conscientious Employee Protection Act; the New Jersey Worker and
Community Right to Know Act; the New Jersey Developmentally Disabled Rights
Act; the New Jersey Handicapped, Blind or Deaf Persons Civil Rights Law; the
New Jersey Alcohol Treatment and Rehabilitation Act; and any other federal,
state or local civil, human rights or anti-discrimination law, whistleblower
law, or any other alleged violation of any federal, state or local law,
regulation or ordinance, and/or public policy, and any claims for severance
pay, vacation pay, race national original, sex, handicap or age discrimination,
breach of implied or express contacts and breach of promises by the Company
that Feraro, his heirs, executors, administrators, successors and assigns now
have, ever had, or may hereafter have, whether known or unknown, suspected or
unsuspected, concerning events up to and including the date the Agreement is
executed.

 

IT
IS FURTHER AGREED THAT FERARO WILL NOT INSTITUTE ANY COMPLAINT, LAWSUIT,
PROCEEDING OR ACTION AT LAW OR OTHERWISE AGAINST THE COMPANY, WHETHER
INDIVIDUALLY OR DERIVATIVELY, AND SHALL HOLD THE COMPANY HARMLESS AGAINST SUCH
ACTIONS (EXCEPT, OF COURSE, FOR THE RIGHT TO THE VARIOUS PAYMENTS AND THE RIGHT
TO ENFORCE THE OBLIGATIONS SPECIFIED IN THIS AGREEMENT WHICH DESCRIBES THE
COMPLETE ARRANGEMENTS TO WHICH FERARO AND UNITY AGREE).  FURTHER, FERARO EXPRESSLY WAIVES ANY
STATUTORY PROVISION THE BENEFITS OF WHICH FERARO WOULD OTHERWISE BE ENTITLED.

 

17.                                 Consequence of Breach By Feraro.
If Feraro breaches any of the 
provisions of this Agreement, he shall forfeit the right to receive any
payments under this Agreement remaining unpaid and shall be liable for any
damages that Unity incurs as a proximate result of such breach.  Feraro further agrees that, in the event of
any breach of this Agreement, Unity shall be entitled to such remedies as may
be available in law or equity.

 

18.                                 Release by Unity.  In consideration of Feraro’s covenants under
this Agreement Unity hereby releases and discharges Feraro from any and all
further claims, demands, lawsuits, causes of action, or other matters arising
out of or related to Feraro’s employment or separation from employment
including, but no limited to any claims arising under the Employment Agreement
or as a result of any alleged violation of the National Labor Relations Act;
Title VII of the Civil Rights Act of 1964, as amended; Sections 1981 through
1988 of Title 42 of the

 

5

 

United States Code, as amended; the Employee
Retirement Income Security Act of 1974, as amended; the Securities Act of 1933,
as amended, and any regulations thereunder; the Securities Exchange Act of
1934, as amended, and any regulations thereunder; the Sarbanes-Oxley Act of
2002, as amended, and any regulations thereunder; the securities laws of new
jersey or any other State, and the regulations thereunder; and federal or state
laws relating to banking, banking institutions or bank holding companies, and
the regulations thereunder; the Immigration Reform Control Act; the Americans
with Disabilities Act of 1990, as amended; the Age Discrimination in Employment
Act of 1967, as amended; the Fair Labor Standards Act; the Occupational Safety
and Health Act; the Family Leave Act; the New Jersey Law Against
Discrimination; the New Jersey Conscientious Employee Protection Act; the New
Jersey Worker and Community Right to Know Act; the New Jersey Developmentally
Disabled Rights Act; the New Jersey Handicapped, Blind or Deaf Persons Civil
Rights Law; the New Jersey Alcohol Treatment and Rehabilitation Act; and any
other federal, state or local civil, human rights or anti-discrimination law,
whistleblower law, or any other alleged violation of any federal, state or
local law, regulation or ordinance, and/or public policy, and any claims for
severance pay, vacation pay, race national original, sex, handicap or age
discrimination, breach of implied or express contacts and breach of promises by
Feraro that Unity  now has, ever had, or
may hereafter have, whether known or unknown, suspected or unsuspected,
concerning events up to and including the date the Agreement is executed.

 

IT
IS FURTHER AGREED THAT UNITY WILL NOT INSTITUTE ANY COMPLAINT, LAWSUIT, PROCEEDING
OR ACTION AT LAW OR OTHERWISE AGAINST FERARO, AND SHALL HOLD FERARO HARMLESS
AGAINST SUCH ACTIONS (EXCEPT, OF COURSE, FOR THE RIGHT TO ENFORCE THE
OBLIGATIONS SPECIFIED IN THIS AGREEMENT WHICH DESCRIBES THE COMPLETE
ARRANGEMENTS TO WHICH UNITY AND FERARO AGREE). 
FURTHER, UNITY EXPRESSLY WAIVES ANY STATUTORY PROVISION THE BENEFITS OF
WHICH UNITY WOULD OTHERWISE BE ENTITLED.

 

19.                                 Consequence of Breach by Unity.
If Unity breaches any of the provisions of this Agreement, it shall be
liable for any damages that Feraro incurs as a proximate result of such
breach.  Unity further agrees that, in
the event of any breach of this Agreement, Feraro shall be entitled to such
remedies as may be available in law or equity.

 

20.                                 Governing Law/Arbitration.  This Agreement shall be deemed to have been
made and entered into in the State of New Jersey and shall in all respects be
interpreted, enforced and governed by and under the laws of the State of New
Jersey.  Any dispute regarding any
aspect of this Agreement, any act which allegedly has or would violate any
provision of this Agreement, Feraro’s employment with Unity or the termination
thereof shall be submitted to binding arbitration in Newark, New Jersey before
an experienced arbitrator licensed to practice law and selected in accordance
with the rules of the American Arbitration Association which shall be the
exclusive forum to seek a remedy for any such claim or dispute.  The arbitrator shall have the authority to
award preliminary or permanent injunctive relief and interest on any
award.  The prevailing party in any such
arbitration or in any litigation related to this Agreement shall be entitled to
recover his or its attorneys’ fees and costs, including without limitation,
arbitration filing fees and costs, arbitrator’s fees and costs and arbitration
proceeding costs.  For purposes

 

6

 

hereof, any party who succeeds in obtaining a
stay or dismissal of any litigation pending arbitration shall be deemed to be a
“prevailing party.”

 

21.                                 Entire Agreement.  This Agreement is the entire agreement
between Feraro and Unity, there are no oral agreements between Feraro and Unity
not reflected in the Agreement, and no modifications shall be effective unless
in writing and signed by the party against which it is sought to be enforced.

 

22.                                 No Admission of Liability.  Neither the execution of this Agreement
nor any payment or providing any benefit to Feraro shall be deemed or construed
as admission of liability or wrongdoing by Unity or Feraro.

 

23.                                 Revocation.  FERARO MAY REVOKE THIS AGREEMENT DURING
THE PERIOD OF SEVEN (7) DAYS FOLLOWING THE DAY HE SIGNS THE AGREEMENT (THE
“REVOCATION PERIOD”).  ANY REVOCATION
WITHIN THIS PERIOD MUST BE SUBMITTED IN WRITING TO UNITY AND STATE, “I HEREBY
REVOKE MY ACCEPTANCE OF OUR AGREEMENT DATED AS OF DECEMBER 31, 2003.”  THE REVOCATION MUST BE PERSONALLY DELIVERED
TO MR. DAVID D. DALLAS AND POSTMARKED WITHIN SEVEN (7) DAYS OF THE SIGNING OF
THIS AGREEMENT. THE AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL
THE REVOCATION PERIOD HAS EXPIRED.  IF
THE LAST DAY OF THE REVOCATION PERIOD IS A SATURDAY, SUNDAY OR LEGAL HOLIDAY IN
NEW JERSEY, THEN THE REVOCATION PERIOD SHALL NOT EXPIRE UNTIL THE NEXT FOLLOWING
DAY WHICH IS NOT A SATURDAY, SUNDAY OR LEGAL HOLIDAY.  NO PAYMENT WILL BE MADE UNDER THIS AGREEMENT UNTIL THE EXPIRATION
OF THE REVOCATION PERIOD.  FAILURE OF
UNITY TO RECEIVE SUCH REVOCATION WITHIN THE PERIOD SPECIFIED SHALL BE DEEMED
CONCLUSIVE PROOF THAT FERARO HAS NOT EXERCISED HIS RIGHT TO REVOKE HIS
ACCEPTANCE OF THIS AGREEMENT.

 

PROVIDED THERE IS NO REVOCATION OF THIS
AGREEMENT AS PROVIDED FOR HEREIN, THE DAY AFTER THE LAST DAY OF THE REVOCATION
PERIOD SHALL BE DEEMED THE “EFFECTIVE DATE” OF THIS AGREEMENT.

 

FERARO HAS BEEN ADVISED THAT HE HAS AT LEAST TWENTY-ONE (21) DAYS TO
CONSIDER THE MEANING AND PRECLUSIVE EFFECT OF THIS AGREEMENT AND THE GENERAL
RELEASE CONTAINED IN THIS AGREEMENT AND FERARO IS HEREBY ADVISED IN WRITING TO
CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THE AGREEMENT AND INDEED FERARO
ACKNOWLEDGES CONSULTING WITH ROGER KAPLAN, ESQ. OF THE FIRM OF WILENTZ, GOLDMAN
& SPITZER.  HAVING ELECTED TO
EXECUTE THE AGREEMENT AND THE GENERAL RELEASE CONTAINED IN THE AGREEMENT, TO
FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THEREBY THE SUMS AND
BENEFITS SET FORTH IN THE AGREEMENT, FERARO FREELY AND KNOWINGLY, AND AFTER DUE
CONSIDERATION, ENTERS INTO THE AGREEMENT AND GENERAL RELEASE INTENDING TO
WAIVE, SETTLE AND RELEASE ALL

 

7

 

CLAIMS HE HAS OR MIGHT HAVE, WHETHER KNOWN OR UNKNOWN, AGAINST THE
COMPANY.

 

FERARO ACKNOWLEDGES THAT HE HAS CAREFULLY READ THE AGREEMENT, FULLY
UNDERSTANDS ALL OF ITS TERMS INCLUDING THE FULL AND FINAL RELEASE OF CLAIMS SET
FORTH IN PARAGRAPH 16.  FERARO FURTHER
ACKNOWLEDGES THAT HE HAS VOLUNTARILY ENTERED INTO THE AGREEMENT, THAT HE HAS
NOT RELIED UPON ANY REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH
IN THE AGREEMENT, AND HE HAS BEEN GIVEN THE OPPORTUNITY AND ENCOURAGED BY UNITY
TO CONSULT WITH AN ATTORNEY OF HIS CHOOSING REGARDING THE TERMS OF THIS
AGREEMENT AND THE EFFECT THEREOF.

 

(SIGNATURES ON NEXT PAGE)

 

8

 

	
  ATTEST

  	
  UNITY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
  /s/David D. Dallas

  	
   

  
	
   

  	
  David D. Dallas

  
	
   

  	
  Chairman of the Board

  
	
   

  	
  And Chief Executive Officer

  
	
   

  	
   

  
	
  ATTEST:

  	
  UNITY BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
  /s/David D. Dallas

  	
   

  
	
   

  	
  David D. Dallas

  
	
   

  	
  Chairman of the Board

  
	
   

  	
  And Chief Executive Officer

  
	
   

  	
   

  
	
  WITNESS:

  	
   

  
	
   

  	
   

  	
  /s/Anthony Feraro

  	
   

  
	
   

  	
  ANTHONY FERARO

  

 

9

 

ANTHONY J. FERARO

10 Winterberry Lane

Whitehouse Station, NJ  08889

 

 

	
   

  	
  Dated: 
  January        ,2004

  

 

Mr. David D. Dallas

Unity Bancorp, Inc.

Unity Bank

64 Old Highway 22

Clinton, New Jersey  08809

 

Dear Mr. Dallas:

 

Reference is made to the Agreement dated December 31, 2003
previously entered into among Unity Bank and me (the “Agreement”).  The Agreement provided that I had the right
to cancel the Agreement within seven (7) days following the day I signed the
Agreement.  More than seven (7) days
have elapsed since I signed the Agreement and I certify that I have not
cancelled the Agreement and have no intention of so doing.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Anthony J. Feraro

  

 

EXHIBIT A

 

10

 

ANTHONY J. FERARO

10 Winterberry Lane

Whitehouse Station, NJ  08889

 

 

	
   

  	
  Dated: December 31, 2003

  

Unity Bancorp, Inc.

Unity Bank

64 Old Highway 22

Clinton, New Jersey  08809

 

Dear Sirs:

 

Effective as of the date hereof, I hereby resign from any and all
positions I may have held as an officer, director or employee of Unity Bancorp,
Inc., Unity Bank and any subsidiary or affiliate thereof.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Anthony J. Feraro

  

 

EXHIBIT B

 

11

 

EXHIBIT C

	
   

  	
   

  	
  Unity Bancorp, Inc.

  
	
  PRESS RELEASE`

  	
   

  	
  64 Old Highway 22

  
	
   

  	
   

  	
  Clinton, NJ 08809

  
	
   

  	
   

  	
  800 618-BANK

  
	
  [Letterhead of Unity Bancorp, Inc.]

  	
   

  	
  www.unitybank.com

  

 

NewsNewsNewsNews

 

For Immediate
Release:

 

December 31, 2003

 

News Media & Financial Analyst Contact:

Alan Bedner

Chief Financial Officer

(908) 713-4308

 

Unity
Bancorp Reports Management Succession

 

Clinton, NJ — Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of
Unity Bank, announced that, effective immediately, Anthony J. Feraro has resigned
from his position as President and Chief Executive Officer of Unity Bank and
Unity Bancorp, Inc.  It was also
announced that the Company’s Board of Directors has promoted James A. Hughes,
the Company’s present Chief Financial Officer, to the position of President of
Unity Bank and Unity Bancorp, and Alan Bedner, presently Senior Vice President
and Controller of the Company, to the position of Chief Financial Officer.
David D. Dallas, Chairman of the Board, will continue in his role as Chief
Executive Officer of the Company.

 

“Since joining Unity in December 2000, Mr. Hughes has done an
outstanding job and has been instrumental in implementing the Company’s
strategic plans. I am confident that Mr. Hughes and I will continue to improve
on what Unity has already achieved” said Mr. Dallas. “The Board wishes to thank
Mr. Feraro for his years of service and to wish him well in his future
endeavors.”

 

Unity Bancorp, Inc. is a financial service organization headquartered
in Clinton, New Jersey, with $460 million in assets and $400 million in
deposits. Unity Bank provides financial services to retail, corporate &
small business customers through its 13 retail service centers located in
Hunterdon, Middlesex, Somerset and Union counties in New Jersey.  For additional information about Unity visit
our website at www.unitybank.com or call 800 618-BANK.

 

This news release
contains certain forward-looking statements, either expressed or implied, which
are provided to assist the reader in understanding anticipated future financial
performance.  These statements involve
certain risks, uncertainties, estimates and assumptions made by management,
which are subject to factors beyond the company’s control and could impede its
ability to achieve these goals.  These
factors include general economic conditions, trends in interest rates, the
ability of our borrowers to repay their loans, and results of regulatory exams,
among other factors.

 

12Exhibit 10(viii)

 

RETENTION
AGREEMENT

 

RETENTION AGREEMENT
(this “Agreement”) made as of this 23rd day of March, 2004 by and
between UNITY
BANK, a New Jersey state bank with its principal place of business
located at 64 Old Highway 22, Clinton, New Jersey 08809 (the “Bank”), UNITY
BANCORP, INC. a New Jersey corporation with its principal place of
business located at 64 Old Highway 22, Clinton, New Jersey 08809 (“Unity”)
(Bank and Unity collectively, “Employer”), and MICHAEL T. BONO, an
individual residing at 860 Ray Avenue, Union, New Jersey 07083 (the
“Executive”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS,
Executive is presently employed by Employer as an executive officer of the Bank
in the position of Executive Vice President and Chief Retail Officer; and

 

WHEREAS,
Employer wishes to ensure that it will continue to retain Executive in its
employ and to receive Executive’s undivided effort and attention;

 

NOW, THEREFORE,
in consideration of the mutual promises and undertakings herein contained, the
parties hereto, intending to be legally bound, agree as follows:

 

1.             Termination.
Executive may be terminated at any time, without prejudice to Executive’s right
to compensation or benefits as provided herein or pursuant to any other benefit
plan or policy of Employer. Executive’s rights upon a termination shall be as
follows:

 

(a)           Cause.
Employer may terminate Executive for “cause”. Upon such a termination,
Executive shall be entitled to no further compensation or employment related
benefits from and after the date of such termination, except for the payment of
accrued and unpaid compensation through the date of such termination and except
for the provision of any statutorily required benefits. As used in this
Agreement, the term “cause” shall mean the Executive’s personal dishonesty,
willful misconduct, inappropriate or unprofessional behavior (as determined by
the Employer), breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar minor offenses which do
not adversely effect Employer’s reputation or standing in the community) or a
material breach of any provision of this Agreement.

 

(b)           Termination
Without Cause. Upon a termination of Executive’s employment by
Employer without “cause”, Executive shall be entitled to receive a payment
equal to nine (9) months of his then current Base Salary (as defined
below).  For purposes of this Agreement,
Executive’s “Base Salary” at any time shall be the Executive’s annual salary
most recently approved by the Board of Directors of Employer or any committee
thereof. Such amount shall, at the option of the Executive, be paid in
either:  (i) periodic payments, over
nine (9) months, in the same manner in which the Executive’s Base Salary was
paid through the time of such termination; or (ii) in a single lump payment
within thirty (30) days of such termination. 
In addition, Employer shall, solely in the event the Executive determines
to receive the amount due under this paragraph (b) in periodic payments,
continue to provide the Executive with the

 

 

hospital, health, medical and
life insurance benefits which the Executive is receiving at the time of such
termination for the period that the Executive continues to receive such
periodic payments.  Executive shall also
be entitled to payments for periods or partial periods that occurred prior to
the date of termination and for which the Executive has not yet been paid.

 

The Executive shall have no duty to mitigate damages in connection with
his termination by Employer without “cause”. However, it is understood and
agreed that, upon receiving a lump sum payment of any amounts which may become
due under this paragraph (b), no further amounts shall be owed to the Executive
and the Employer shall have no further obligation to provide any further
benefits to the Executive. It is also understood and agreed that,
notwithstanding any provisions of this paragraph (b) and in the event the
Executive obtains new employment during any period that the Employer is
obligated to provide hospital, health, medical and life insurance benefits
hereunder and such new employment provides for hospital, health, medical and
life insurance benefits in a manner substantially similar to the benefits to be
provided by Employer hereunder, Employer may permanently terminate the
duplicative benefits it is obligated to provide hereunder.

 

(c)           Resignation
With Cause. Executive shall have the right to resign his employment
with Employer at any time hereunder, providing notice as required by the
Employer’s employment related policies then in effect. In the event such a
resignation is for “good cause” (as defined below), such resignation shall be
deemed a termination without “cause” under paragraph (b) hereof, and Executive
shall, solely in the event the Executive delivers a written resignation for
“good cause” to the Employer within 15 days of the occurrence of either of the
events described in sub-paragraphs (i) and (ii) of this paragraph (c), be
entitled to receive all such amounts and benefits as are provided for under
such paragraph (b) above.

 

For purposes of this provision, the term “good cause” shall mean any of
the following:

 

(i)            A material reduction in Executive’s duties,
responsibilities, title or employment status from its level as of the date
hereof; or

 

(ii)           Any reduction in Executive’s Base Salary.

 

2.             Change
in Control; Significant Acquisition.

 

(a)           For
purposes of this Agreement, a “Change in Control” shall mean:

 

(i)            a reorganization, merger, consolidation or
sale of all or substantially all of the assets of Unity or a similar
transaction in which Unity is not the resulting entity; or

 

(ii)           individuals who constitute the Incumbent
Board (as herein defined) of Unity cease for any reason to constitute a
majority thereof; or

 

(iii)          the occurrence of an event of a nature that
would be required to be reported in response to Item 1 of the Current Report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (the “Exchange Act”); or

 

2

 

(iv)          Without limitation, a “change in control”
shall be deemed to have occurred at such time as (i) any “person” (as the term
is used in Section 13(d) and 14(d) of the Exchange Act) other than Unity or the
trustees or any administrator of any employee stock ownership plan and trust,
or any other employee benefit plans, established by Employer from time-to-time
is or becomes a “beneficial owner” (as defined in Rule 13-d under the Exchange
Act) directly or indirectly, of securities of Unity representing 25% or more of
Unity’s outstanding securities ordinarily having the right to vote at the
election of directors; or

 

(v)           A proxy statement soliciting proxies from stockholders
of Unity is disseminated by someone other than the current management of Unity,
seeking stockholder approval of a plan of reorganization, merger or
consolidation of Unity or similar transaction with one or more corporations as
a result of which the outstanding shares of the class of securities then
subject to the plan or transaction are exchanged or converted into cash or
property or securities not issued by Unity; or

 

(vi)          A tender offer is made for 25% or more of the
voting securities of Unity and shareholders owning beneficially or of record
25% or more of the outstanding securities of Unity have tendered or offered to
sell their shares pursuant to such tender and such tendered shares have been
accepted by the tender offeror.

 

For these purposes, “Incumbent Board” means the Board of Directors of
Unity on the date hereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board, or whose
nomination for election by members or stockholders was approved by the same
nominating committee serving under an Incumbent Board, shall be considered as
if he were a member of the Incumbent Board.

 

(b)           Upon
the occurrence of a Change in Control, and, in connection with such Change in
Control, Executive’s employment with Employer and/or its successors is
terminated within eighteen (18) months of such Change in Control, regardless of
whether such termination is by Employer or its successor, through Executive’s
resignation of employment with Employer or its successor, or Executive’s
failure to accept an offer of employment with any successor to Employer,
Executive shall be entitled to receive a payment equal to the greater of : (i)
eighteen (18) months of Executive’s Base Salary; or (ii) 18 months of the
Executive’s Base Salary plus any cash bonus received by the Executive for the
Employer’s preceding fiscal year. The payment shall, at the option of the
Executive, be made to Executive, in either: (a) periodic payments, over
eighteen (18) months, in the same manner in which the Executive’s Base Salary
was paid through the termination of Executive’s employment; or (b) a single
lump sum payment to be made within thirty (30) days of the termination of
Executive’s employment. In addition to the foregoing and solely in the event
Executive determines to receive the amount due under this paragraph (b) in
periodic payments, Executive shall, during the period he is still receiving
such periodic payments, be entitled to receive from Employer or its successor,
hospital, health, medical and life insurance benefits on the terms and at the
same cost to Executive as Executive was receiving such benefits upon the date
of termination of Executive’s employment.

 

3

 

Notwithstanding the preceding
sentence, in the event the Executive obtains new employment during any period
that the Employer is obligated to provide hospital, health, medical and life
insurance benefits hereunder and such new employment provides for hospital,
health, medical and life insurance benefits in a manner substantially similar
to the benefits to be provided by Employer hereunder, Employer may permanently
terminate the duplicative benefits it is obligated to provide hereunder. It is
hereby understood and agreed that payments that may become due to the Executive
under this sub-paragraph (b) shall be in lieu of, and not in addition to, any
payments the Executive may be entitled to under Section 1(b) or (c) hereof.

 

(c)           Upon
the occurrence of a Change in Control, the vesting period for any unvested
stock options or unvested awards of Unity common stock previously granted to
Executive shall accelerate and become fully vested on the date of the Change in
Control.

 

(d)           For
purposes of this Agreement, a “Significant Acquisition” shall mean an
acquisition of another entity by Unity (either by way of merger, purchase of
substantially all assets of such other entity or purchase of all outstanding
shares of securities of such other entity) pursuant to which: (i) Unity shall,
as all or part of the consideration for such acquisition, issue to the
shareholders of such other entity, such number of voting securities as shall
equal 25% or more of the then outstanding voting Unity securities (measured
prior to the consummated Significant Acquisition); and (ii) in the case of a
merger, Unity shall be the surviving entity.

 

(e)           If
Executive’s employment with Employer is terminated within eighteen (18) months
of the consummation of a Significant Acquisition, regardless of whether such
termination is by Employer or through Executive’s resignation of employment
with Employer, Executive shall be entitled to receive a payment equal to the
greater of: (i) eighteen (18) months of Executive’s Base Salary; or (ii) 18
months of the Executive’s Base Salary plus any cash bonus received by the
Executive for the Employer’s preceding fiscal year. The payment shall, at the
option of the Executive, be made to the Executive, in either: (a) periodic
payments, in the same manner in which the Executive’s Base Salary was paid
through the time of such termination; or (b) a lump sum payment to be made
within thirty (30) days of the termination of Executive’s employment. In
addition to the foregoing and solely in the event Executive determines to
receive the amount due under this paragraph (e) in periodic payments, Executive
shall, during the period he is receiving such periodic payments, be entitled to
receive from Employer, hospital, health, medical and life insurance benefits on
the terms and at the same cost to Executive as Executive was receiving such
benefits upon the date of termination of Executive’s employment.  Notwithstanding the preceding sentence, in
the event the Executive obtains new employment during any period that the
Employer is obligated to provide hospital, health, medical and life insurance
benefits hereunder and such new employment provides for hospital, health,
medical and life insurance benefits in a manner substantially similar to the
benefits to be provided by Employer hereunder, Employer may permanently
terminate the duplicate benefits it is obligated to provide hereunder. In the
event Executive becomes entitled to receive the amount due under this paragraph
(e), the unvested stock options or unvested awards of Unity common stock
previously granted to Executive shall accelerate and become fully vested on the
date of Executive’s termination of employment. It is hereby understood and
agreed that payments that may become due to the Executive under this
sub-paragraph (e) shall be in lieu of, and not in addition to, any payments the
Executive may be entitled to under Section 1(b) or (c) hereof.

 

4

 

(f)            Notwithstanding
anything contained in this Section 2 above, in the event all compensation to be
provided to Executive conditioned upon the occurrence of a Change in Control,
whether under this Agreement or in connection with any other agreement or
benefit plan of the Employer to which Executive is a party or in which he
participates, exceeds 2.99 times the Executive’s Base Amount, as that term is
defined under Section 280G of the Internal Revenue Code and regulations of the
Internal Revenue Service promulgated thereunder, the total compensation to be
paid to the Executive shall be reduced to an amount that is $1.00 less than
2.99 times the Executive’s Base Amount. Executive shall have the right to
determine which benefits to which he would otherwise be entitled shall be
reduced.

 

3.             No
Guaranty of Employment. Nothing in this Agreement shall be construed as
guarantying the employment of the Executive. Executive shall remain an
“employee at will” of Employer at all times during the term of this Agreement.

 

4.             Notices.
Any and all notices, demands or requests required or permitted to be given
under this Agreement shall be given in writing and sent, (i) by registered or
certified U.S. mail, return receipt requested, (ii) by hand, (iii) by overnight
courier or (iv) by telecopier addressed to the parties hereto at their
addresses set forth above or such other addresses as they may from time-to-time
designate by written notice, given in accordance with the terms of this
Section, together with copies thereof as follows:

 

In the case of the Executive, to the address
set forth on the first page hereof or to such other address as Executive shall
provide in writing to the Employer for the provisions of notice hereunder.

 

In the case of Employer, to the address set
forth on the first page hereof, with a copy to:

 

McCarter & English, LLP

Four Gateway Center

100 Mulberry Street

Newark, New Jersey 07102

Telecopier No. 973-624-7070

Attention: Robert Wexler

 

Notice given as provided in this Section shall be deemed effective: (i)
on the date hand delivered, (ii) on the first business day following the
sending thereof by overnight courier, (iii) on the seventh calendar day (or, if
it is not a business day, then the next succeeding business day thereafter)
after the depositing thereof into the exclusive custody of the U.S. Postal
Service or (iv) on the date telecopied.

 

5.             Term.
This Agreement shall have a term of three years from the date hereof; provided,
however, that in the event the term of this Agreement would terminate at any
time after the Employer has engaged in substantive negotiations regarding a
transaction which would lead to a Change in Control, this Agreement shall
continue to remain in full force in effect until the earlier to occur of (i)
the effectuation of such transaction leading to a Change in Control or (ii) the
termination of the negotiations for the proposed transaction which would have
resulted in the

 

5

 

Change in Control.  Notwithstanding the preceding sentence or
any other provision of this Agreement, the term of this Agreement shall
immediately end upon:  (a) Unity or the
Bank entering into a Memorandum of Understanding with the FDIC or the New
Jersey Department of Banking and Insurance; (b) a Cease-and-Desist Order being
issued with respect to the Bank or Unity by the FDIC or the New Jersey
Department of Banking and Insurance; or (c) receipt by either the Bank or Unity
of a notice under Federal or State law which in any way restricts the payment
of any amounts or benefits which may become due under this Agreement.  It is hereby understood and agreed that,
upon the occurrence of any of the events described in the foregoing clauses
(a), (b) or (c), this Agreement shall be deemed terminated and the Employer
shall have no further obligation to pay any amounts to the Executive or provide
any further benefits to the Executive.

 

6.             Assignability.
Neither this Agreement nor the rights or obligations of Executive hereunder may
be assigned, whether by operation of law or otherwise.  This Agreement shall be binding upon, and
inure to the benefit of, Employer and its Successors and assigns. This
Agreement shall inure to the benefit of the Executive’s heirs, executors,
administrators and other legal representatives.

 

7.             Waiver.
The waiver by Employer or the Executive of a breach of any provision of this
Agreement by the other shall not operate or be construed as a waiver of any
subsequent or other breach hereof.

 

8.             Applicable
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey without giving effect to principles of
conflict of laws.

 

9.             Entire
Agreement; Termination of Change in Control Agreement. This Agreement
contains the entire agreement of the parties hereto with respect to the subject
matter hereof and may not be amended, waived, changed, modified or discharged,
except by an agreement in writing signed by the parties hereto. Upon the
execution of this Agreement, the Change in Control Agreement dated February 26,
2002 between the Employer and the Executive shall be deemed terminated and
voided and the rights of the parties hereto shall be determined by reference to
this Agreement.

 

10.           Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which taken together shall constitute one and
the same instrument.

 

11.           Amendment.
This Agreement may be modified or amended only by an amendment in writing
signed by both parties.

 

12.           Severability.
If any provision of this Agreement shall be held invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision, only to the
extent it is invalid or unenforceable, and shall not in any manner affect or
render invalid or unenforceable any other severable provision of this
Agreement, and this Agreement shall be carried out as if any such invalid or
unenforceable provision were not contained herein.

 

6

 

13.           Section
Headings. The headings contained in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.

 

14.           Fees
and Expenses. If any party to this Agreement institutes any action or
proceeding to enforce this Agreement, the prevailing party in such action or
proceeding shall be entitled to recover from the non-prevailing party all legal
costs and expenses incurred by the prevailing party in such action, including,
but not limited to, reasonable attorney’s fees and other reasonable legal costs
and expenses.

 

15.           Legal
Representation. The Executive hereby acknowledges that this Agreement has
been prepared by Messrs. McCarter & English, LLP as legal counsel for Unity
and the Bank and that the Executive was given the opportunity to consult with
independent legal counsel regarding this Agreement prior to his/her execution
of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under their respective hands and seals as of the day and year first
above written.

 

 

	
  ATTEST:

  	
   

  	
  UNITY BANK

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ David D.
  Dallas

  	
   

  
	
   

  	
   

  	
   

  	
  David D.
  Dallas, Chief Executive Officer

  and Chairman of the Board

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  UNITY BANCORP, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ David D.
  Dallas

  	
   

  
	
   

  	
   

  	
   

  	
  David D.
  Dallas, Chief Executive Officer

  and Chairman of the Board

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Michael
  T. Bono

  	
   

  
	
   

  	
   

  	
  Michael T.
  Bono

  Executive Vice President and

  Chief Retail Officer

  
						

 

7

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