Exhibit 10.1
 
CONSULTING AGREEMENT

CONSULTING AGREEMENT (the “Agreement”), entered into on October 6, 2014, by and
between HUDSON VALLEY BANK, N.A. (the “Bank”), and JAMES J. LANDY (the
“Consultant”).

WHEREAS, the Consultant is transitioning to the role of nonexecutive Chairman of
the Bank and Hudson Valley Holding Company (the “Company”) on January 1, 2015;

WHEREAS, the Consultant has experience beneficial to the Bank’s operations,
management and business development; and

WHEREAS, the Bank desires to continue to further benefit from the Consultant’s
knowledge of the business and affairs of the Bank by having the Consultant act
as a consultant to the Bank in accordance with the provisions hereof.

NOW, THEREFORE, in order to effect the foregoing, the Bank and the Consultant
wish to enter into a consulting agreement upon the terms and subject to the
conditions set forth below. Accordingly, in consideration of the premises and
the respective covenants and agreements of the parties contained herein, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:

1.             Engagement. The Bank hereby agrees to engage the Consultant, and
the Consultant hereby agrees to perform services for the Bank, on the terms and
conditions set forth herein.

2.             Term; Termination.  The initial term of this Agreement shall be
for the period beginning on January 1, 2015 (the “Effective Date”) and
continuing for a 60-month period thereafter (the “Term”), subject, however, to
earlier termination in the manner provided in this Agreement. Commencing as of
the first anniversary of the Effective Date and continuing as of each
anniversary of the Effective Date thereafter, the term of the Agreement shall be
extended automatically for an additional year, so that the remaining term of the
Agreement again becomes sixty (60) full months from the applicable anniversary
of the Effective Date, unless the Bank or the Consultant elects not to extend
the term of this Agreement by giving written notice at least thirty (30) days
prior to the applicable anniversary date. “Term” as used herein shall refer to
the initial term and all extensions of the Term pursuant to this Section 2(a).
 
 
 

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(b)            This Agreement may be terminated:

(i)            by the Consultant, at any time upon thirty (30) days prior
written notice to the Bank, and upon such termination, the Consultant and the
Bank shall have no further obligations under this Agreement;

(ii)           by the Bank, without “Cause” (as defined herein) upon thirty (30)
days prior written notice to the Consultant, and upon such termination, the Bank
shall continue to make the payments required by Section 6(a) hereof through the
expiration of the then current term of the Agreement; or

(iii)           by the Bank with “Cause” immediately upon written notice to the
Consultant, and upon such termination, the Bank shall have no further obligation
to the Consultant under this Agreement; or

(iv)          upon the death of Consultant, in which event the Bank shall
continue to make the payments required by Section 6(a) hereof to the
Consultant’s estate or representative, as the case may be, through the
expiration of the then current term of the Agreement; or

(v)           Upon Consultant’s Disability (as defined herein), in which event,
the Bank shall continue to make the payments required by Section 6(a) through
the expiration of the then current term of the Agreement.

(vi)          by the Consultant, during the 90-day period following the
occurrence of a Change in Control (as defined herein), and upon such
termination, Consultant shall receive an unreduced lump sum payment equal to the
payments otherwise payable to the Consultant under Section 6(a) through the
expiration of the then current term of the Agreement.

(c)            For purposes of this Section 2(b), the following definitions
shall apply:

“Cause” shall mean the Consultant’s conviction of a felony, breach of a
fiduciary duty involving personal profit to the Consultant or intentional
failure to perform stated duties reasonably associated with the Consultant’s
position; provided, however, an intentional failure to perform stated duties
shall not constitute Cause unless and until the Bank provides the Consultant
with written notice setting forth the specific duties that, in the Bank’s view,
the Consultant has failed to perform and the Consultant is provided a period of
thirty (30) days to cure such specific failure(s) to the reasonable satisfaction
of the Bank.
 
 
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“Change in Control” shall mean the occurrence of any of the following events:

(i)            Any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) becomes the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that, for purposes of this definition, the following
acquisitions shall not constitute a Change in Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, or (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any affiliated company. or (iv) any acquisition
pursuant to a transaction that complies with (iii)(A), (iii)(B) and (iii)(C)
outlined below;

(ii)            Individuals who, as of the date hereof, constitute the Board of
the Company (the “Incumbent Board”) cease for any reason to constitute at least
a majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual was a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;

(iii)           Consummation of a reorganization, merger, statutory share
exchange or consolidation or similar transaction involving the Company or any of
its subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Company, or the acquisition of assets or securities of another
entity by the Company or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (A) all
or substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of
common stock (or, for a non-corporate entity, equivalent securities) and the
combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors (or, for a non-corporate entity,
equivalent governing body), as the case may be, of the entity resulting from
such Business Combination (including, without limitation, an entity that, as a
result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (B) no Person (excluding any
entity resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then-outstanding shares of common stock (or, for a
non-corporate entity, equivalent securities) of the entity resulting from such
Business Combination or the combined voting power of the then-outstanding voting
securities of such entity, except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors (or, for a non-corporate entity, equivalent governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board providing for such Business Combination;
 
 
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(iv)           Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or

(v)            Any event that would be described in this definition of Change in
Control if the term “Bank” were substituted for the term “Company” therein.

“Disability” shall mean any physical or mental injury or disease of a permanent
nature which renders the Consultant incapable of meeting the requirements of the
consulting services performed immediately before the commencement of such
disability

3.              Duties.   During the Term, the Consultant shall provide advice
with respect to the business, operations and opportunities of the Bank within
his areas of expertise.  Without limiting the foregoing, it is anticipated that
the Consultant, in consultation with the Chief Executive Officer of the Bank,
will focus on the enhancement of existing customer relationships, the
development of new customer relationships, and the resolution of customer issues
or concerns.  In addition, where appropriate, the Consultant will participate in
periodic community events such as golf outings, fundraising dinners and other
similar events. It is anticipated that the Consultant will spend approximately
fifty (50) hours per month (a minimum of 300 customer calls per annum) in
performance of the consulting services for the Bank.

4.              Place of Performance. The Consultant shall perform his duties at
the location of his choosing; provided, however, that the Consultant shall be
furnished with an executive-level office at the Bank’s principal office in
Yonkers, New York and access to administrative support.

5.              Independent Contractor.

(a)           The Consultant shall be an independent contractor in respect of
his performance of the Services. It is intended by both the Consultant and the
Bank that the Services to be performed by the Consultant shall not result in an
employer/employee relationship and, except as otherwise provided in respect of
the benefits described in Section 6(b) hereof, the Consultant shall not be
entitled to the benefits provided by the Bank to its employees.

(b)           Neither Federal, state or local income taxes nor payroll taxes of
any kind shall be withheld or paid by the Bank on behalf of the Consultant. The
Consultant shall be responsible for payment of all taxes for remuneration
received under this Agreement, including Federal, state and local income tax,
Social Security tax, unemployment insurance tax, and any other taxes or business
license fees as required.

6.              Terms of Payment; Business Expenses.

 
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(a)            Subject to the provisions of Section 2(b) hereof, during the
Term, the Bank shall pay the Consultant, as compensation for the Services to be
performed hereunder and in consideration of the Consultant’s adherence to the
restrictive covenants contained in Section 7 hereof, a consulting fee of
$16,667.67 per month, payable on the first business day of each month. In
addition, an Executive style office at the Bank’s Yonkers Headquarters along
with an Administrative Assistant shall be provided to the Consultant.

(b)            Subject to the provisions of Section 2(b) hereof, during the
Term, the Bank shall cause the Consultant to participate in and be covered by
the Bank’s health, medical and life insurance plans on the same terms applicable
to executive-level employees of the Bank.

(c)            The Bank, promptly following receipt of appropriate documentation
in accordance with applicable Bank policies, shall reimburse the Consultant for
the reasonable business and customer entertainment expenses incurred in
connection with rendering services under this Agreement.

(d)            In furtherance of his performance of the services contemplated by
this Agreement, the Bank shall provide the Consultant with the following
perquisites: (i) use of a bank-owned vehicle with replacement on every thirty
six (36) months; and (ii) a full membership at Leewood Golf Club. The value of
such perquisites shall be subject to federal, state and tax reporting
requirements to the extent required by applicable law.  The Consultant may,
after twenty four (24) months of use, purchase the bank-owned vehicle provided
for his use at the Bank’s the current book value.

7.               Confidentiality; Non-Competition; Non-Solicitation.

(a)            The Consultant acknowledges that: (i) the Consultant’s service to
the Bank will require that the Consultant have access to and knowledge of
confidential information of the Bank relating to the Business, including, but
not limited to, the identity of the Bank’s employees, clients, customers, the
kinds of services provided by the Bank, the manner in which such services are
performed or offered to be performed, the service needs of actual or prospective
clients and customers, pricing information and other contractual terms,
information concerning the creation, acquisition or disposition of products and
services, creative ideas and concepts, and other trade secrets, in each case
other than as and to the extent such information is generally known or publicly
available through no violation of this Section 7 by the Consultant or such
information is readily discernible (the “Confidential Information”); and
(ii) the disclosure of any such Confidential Information may place the Bank at a
competitive disadvantage and may do damage, monetary or otherwise, to the Bank’s
business. Accordingly, the Bank and the Consultant agree as follows:

(i)             During the Term and thereafter, the Consultant shall not,
directly or indirectly, whether individually, as a director, stockholder, owner,
partner, employee, principal or agent of any business, or in any other capacity,
disclose, furnish, make available or utilize any of the Confidential
Information, other than in the proper performance of the services contemplated
herein, or as expressly permitted herein, or as required by a court of competent
jurisdiction or other administrative or legislative body, provided that the
Consultant shall promptly notify the Bank so that the Bank may seek a protective
order or other appropriate remedy. The Consultant agrees to return all documents
or other materials containing Confidential Information, including all
photocopies, extracts and summaries thereof, and any such information stored
electronically on tapes, computer disks or in any other manner to the Bank at
any time upon request by the Bank and immediately upon the termination of his
service to the Bank for any reason, unless Confidential Information was provided
to him in his capacity as a member of the Board of Directors of the Company and
the Bank and he continues his service on such Boards following the termination
of this Agreement.
 
 
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(ii)            During the Term, and for a period of one (1) year thereafter,
the Consultant shall not engage in Competition (as defined herein) with the Bank
or its affiliates in the Territory (as defined herein) unless agreed upon by the
parties in writing. For purposes of this Agreement, “Competition” by the
Consultant shall mean the Consultant’s engaging in any activities relating to or
otherwise being employed by or acting as a consultant to, or being a director,
employee, agent, equity holder or partner of any entity engaged in the business
of banking as conducted by the Bank (the “Business”), and “Territory” means any
state in which the Bank has a branch or office location; provided, however, that
it will not be a violation of this covenant for the Consultant to become the
registered or beneficial owner of less than five percent (5%) of any class of
the capital stock of any one or more corporations registered under the
Securities Exchange Act of 1934, as amended.
 
(b)            During the Term, and for a period of one (1) year thereafter, the
Consultant agrees that he will not:

(i)             directly solicit, or direct individuals within his control to
solicit, from any person or entity who is a then-existing client or customer of
the Bank (or who the Consultant knows from the use of Confidential Information
is a prospective client or customer of the Bank) any business of the same or of
a similar nature to the Business; or

(ii)            directly recruit or solicit the employment or services of any
person who is employed by the Bank at the time of such recruitment or
solicitation.

(c)            The Consultant and the Bank hereby acknowledge that the
restrictive covenants contained in this Section 7 are reasonable and necessary,
in view of the nature of the Bank, its business and his knowledge thereof, in
order to protect the legitimate interests of the Bank.

8               Notices. All notices and other communications provided for
herein shall be in writing and shall be made by hand delivery, by United States
first class mail (registered, return receipt requested, postage prepaid),
telecopier or overnight courier guaranteeing next day delivery, addressed as
follows:

                 
if to the Consultant:         
Mr. James J. Landy
   
25 Constant Avenue
   
Yonkers, New York 10701
       
if to the Bank:
Hudson Valley Bank, N.A.
   
21 Scarsdale Road
   
Yonkers, New York 10707
   
Attn: Office of the President & CEO

 
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or to such other address as either such party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.

9.             Exculpation; Indemnification.

(a)            No party or any of its affiliates, partners, directors, officers,
employees, equity holders, representatives or agents shall be liable to any
other party hereto or to its affiliates, partners, directors, officers,
employees, equity holders, representatives or agents for monetary damages for
any losses, claims, demands, suits, liabilities or damages (collectively,
“Damages”) arising from any act performed or omitted by such party or its
affiliates, partners, directors, officers, employees, equity holders,
representatives or agents arising out of or in connection with the performance
of this Agreement, except to the extent that any such Damages are determined to
be attributable to such person’s gross negligence, willful misconduct or fraud.

(b)           Notwithstanding anything in Section 9(a) hereof to the contrary,
the Bank shall, to the fullest extent permitted by applicable law, indemnify,
defend and hold harmless Consultant against any Damages to which Consultant may
become subject in connection with any matter arising out of or in connection
with the performance of this Agreement or Consultant’s provision of Services
hereunder, except to the extent any such Damages are determined to be
attributable to the gross negligence, willful misconduct or fraud of Consultant.
If Consultant becomes involved in any capacity in any action, proceeding or
investigation in connection with any matter arising out of or in connection with
the performance of this Agreement, the Bank shall advance to Consultant his
reasonable legal and other expenses (including the costs of any investigation
and preparation) as they are incurred in connection therewith; provided that
Consultant shall promptly repay to the Bank the amount of any such advanced
expenses paid to it or on its behalf if it shall be finally determined that
Consultant was not entitled to be indemnified by the Bank in connection with
such action, proceeding or investigation.

(c)           Notwithstanding anything to the contrary contained herein, this
Section 9 shall survive the termination of this Agreement.

10.            Miscellaneous.

(a)            Modification; Waiver. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Consultant and the Bank.  No waiver by any
party hereto at any time of any breach by another party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

(b)            Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
 
 
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(c)            Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties whether oral or written, by any
officer, employee or representative of any party hereto, and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated (including without limitation the Severance Agreement). No
agreements or representations, oral or otherwise, expressed or implied, with
respect to the subject matter hereof have been made by any party that are not
set forth expressly in this Agreement.

(d)            Assignment. This Agreement is a personal contract and the rights
and interests of the Consultant hereunder may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him, except as otherwise
expressly permitted by the provisions of this Agreement. This Agreement shall
inure to the benefit of and be enforceable by the Consultant and his personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Consultant should die while any
amount would still be payable to him hereunder had the Consultant continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to his devisee, legatee or other
designee or, if there is no such designee, to his estate.

(e)            Headings. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

(f)            Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the state of New
York without regard to principles of conflicts of laws.

(g)            Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

(h)            Costs of Enforcement. If the Consultant retains legal counsel to
enforce any or all of his rights under this Agreement and he substantially
prevails in enforcing those rights, the Consultant shall be entitled to recover
from the Bank the Consultant’s reasonable attorneys’ fees, costs and expenses in
connection with the enforcement of his rights.

(i)            Section 409A of the Code. This Agreement and the payments
hereunder are intended to be exempt from or to satisfy the requirements of
Section 409A of the Code, including published guidance and regulations
interpreting such Section, and should be interpreted accordingly. Each payment
under this Agreement or otherwise (including any installment payments) shall be
treated as a separate payment for purposes of Section 409A of the Code.  In the
event that any provision of this Agreement is inconsistent with Section 409A of
the Code or such guidance, then the applicable provisions of Section 409A of the
Code shall supersede such inconsistent provision.

[signature page follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.

 
HUDSON VALLEY BANK, N.A.
             
By:
  /s/ Craig S. Thompson
       
Name:
Craig S. Thompson
 
Its:
Director & Compensation
   
Committee Chair
                   
  /s/ James J. Landy
 
James J. Landy

 
 
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