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                                                                   EXHIBIT 10.6

                          HUDSON VALLEY HOLDING CORP
                            1992 STOCK OPTION PLAN
                     INCENTIVE STOCK OPTION AGREEMENT

     AGREEMENT, dated this 23 day of July, 1996, between HUDSON VALLEY HOLDING
CORP. (the "Corporation"), a New York Corporation, and _____________________
(the "Optionee").

     WHEREAS, the Compensation Committee of the Board of Directors of the
Corporation (the "Committee") approved the Hudson Valley Holding Corp. 1992
Stock Option Plan (the "Plan") on July 27,1992;

     WHEREAS, the 1992 plan was approved by a majority of the shareholders of
the Corporation on October 20,1992; and

     WHEREAS, the Corporation seeks to provide a means by which the Corporation,
through the grant of stock options to the Optionee, may retain the Optionee as
an employee of Hudson Valley Bank and motivate the Optionee to exert his or her
best efforts on behalf of the Corporation and any Subsidiary Corporation.

     NOW THEREFORE, in consideration of the promises contained in the Agreement
and the benefits to be derived from those promises, the Corporation and the
Optionee agree as follows.

     1.   GRANT OF OPTION. From time to time, the Committee may grant to the
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Optionee a right and option to purchase from the Corporation an aggregate of one
or more shares of the common stock of the Corporation (the "Common Stock"):
provided, that at the time of any such grant the Optionee owns not more than 10
percent of the total combined voting power of all classes of stock of the
Corporation and of any Subsidiary Corporation. It is intended that each such
option shall qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended. Each such option shall be evidenced
by an Option Grant Notice addressed to the Optionee from the Corporation and
shall be subject to the terms and conditions of the 1992 Plan, of this Agreement
and of the Option Grant Notice.

     2.   TERMS AND CONDITIONS. It is understood and agreed that any option
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evidenced by a Option Grant Notice to the Optionee is subject to the following
terms and conditions:

          A.   EXPIRATION DATE. The option shall expire on the day before the
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10th anniversary of the option grant date as provided in the Option Grant
Notice.

          B.   EXERCISE OF OPTION DURING CONTINUOUS EMPLOYMENT. Subject to the
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provisions of this Agreement and the 1992 Plan, no part of the option may be
exercised until the Optionee has completed 5 years of service with the
Corporation and/or Subsidiary Corporation. Thereafter, the option shall be
exercisable from time to time over a period beginning on the first day of the
calendar year immediately following the close of the

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calendar year when the Optionee completes 5 years of service with the
Corporation and/or Subsidiary Corporation and ending on the earliest of the
expiration, termination, or cancellation of the option. For the purposes of this
Agreement, the term "year of service" shall mean a calendar year during which
the Optionee completes at least 1000 hours for which he or she is paid for the
performance of duties for the Corporation and/or Subsidiary Corporation. An
exercise of any part of the option shall be accompanied by a written notice to
the Corporation specifying the number of shares as to which the option is being
exercised.

          C.    EXERCISE IN THE EVENT OF DEATH, DISABILITY OR TERMINATION OF
                ------------------------------------------------------------
EMPLOYMENT.
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          (1)   DEATH. If the Optionee dies while an employee of the Corporation
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or of any Subsidiary Corporation, the option may be exercised by the
Optionee's estate or by any person who acquired the option by bequest or
inheritance or by reason of the death of the Optionee, within the 12 months
immediately following his or her death and to the extent that the Optionee was
entitled to exercise the option at the date of his or her death; provided,
however, that the option may not be exercised after the expiration date provided
in Section 2A of this Agreement.

          (2)   DISABILITY. If the Optionee ceases to be an employee of the
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Corporation of any Subsidiary Corporation because of his or her disability, as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended,
the option may be exercised by him or her, his or her attorney-in-fact or
conservator, as appropriate, within 12 months immediately following the date
that he or she ceased to be an employee and to the extent that the Optionee was
entitled to exercise the option on the date when his or her employment ceased;
provided, however, that the option may not be exercised after the expiration
date provided in Section of this Agreement and that such exercise by the
attorney-in-fact or by the conservator of the Optionee does not disqualify the
option as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended.

     If the disability leave does not exceed ninety (90) days, the Optionee will
be deemed to be in continuous employment of his or her employer during the leave
period. However, if the disability leave exceeds ninety (90) days, the Optionee
will be deemed to have terminated his or her employment on the ninety-first
(91st) day of that leave, and will not, pursuant to Section 22 (e)(3), continue
to accrue hours of service unless reemployment is guaranteed by statute or
contract.

          (3)   TERMINATION OF EMPLOYMENT. If the Optionee ceases to be an
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employee of the Corporation or of any Subsidiary Corporation for any reason
other than death or disability, the option may be exercised by him or her within
the 3 months immediately following his or her termination of employment to the
extent that the Optionee was entitled to exercise the option on the date of his
or her termination of employment; provided, however that the option may not be
exercised after the expiration date provided in Section of this Agreement;
provided further, that if the Optionee ceases to be an employee of the
Corporation or of any Subsidiary Corporation because he or she voluntarily
terminates his or her employment or because his or her employment is
involuntarily terminated by the Corporation or by any Subsidiary Corporation as

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a result of his or her willful misconduct, as determined in the sole discretion
of this Committee, all right to exercise the option shall terminate on the date
when his or her employment ceases.

          D.   PAYMENT OF PURCHASE PRICE UPON EXERCISE. At the time of any
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exercise, the purchase price of the shares for which the option may be exercised
shall be paid in cash to the Corporation. The Optionee agrees that the purchase
price is determined in good faith by the Committee at the time when the option
is granted as not less than 100 percent of the fair market value of a share of
the Common Stock on the date of the grant of the option.

          E.   NONTRANSFERABILITY. The option shall not be transferable other
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than by a will of the Optionee or by the laws of descent and distribution.
During the lifetime of the Optionee, the option shall be exercisable only by the
Optionee or by his or her attorney-in-fact or conservator, unless such exercise
by the attorney-in-fact or by the conservator of the Optionee would disqualify
the option as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended.

          F.   ADJUSTMENTS. In the event of any change in the Common Stock by
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reason of any stock dividend, recapitalization, reorganization merger,
consolidation, split-up, combination or exchange of shares, rights offering to
purchase Common Stock at a price substantially below fair market value, or of
any similar change affecting the Common Stock, then, the number and kind of
shares subject to the option and the purchase price per share of those subject
shares, shall be appropriately adjusted consistent with such change in a manner
as the Committee may deem equitable to prevent substantial dilution or
enlargement of the rights granted to the Optionee hereunder. Any adjustment so
made shall be final and binding upon the Optionee.

          G.   NO RIGHTS AS A SHAREHOLDER. The Optionee shall have no right as a
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shareholder with respect to shares of stock subject to the option prior to the
date of issuance to him or her of a certificate or certificates for such shares.

          H.   NO RIGHTS TO CONTINUED EMPLOYMENT. The option shall not confer
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upon the Optionee any right with respect to continuance of employment by the
Corporation or by any Subsidiary Corporation, nor shall it interfere in any way
with the right of his or her employer to terminate his or her employment at any
time.

          I.   REORGANIZATION, MERGER, CONSOLIDATION, DISSOLUTION, LIQUIDATION,
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OR SALE OF ASSETS. Upon a reorganization in which the Corporation is not the
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surviving or acquiring corporation, the unexercised portion of the option shall
be canceled on the effective date of the reorganization; provided, however, that
the Committee shall provide the Optionee, or the holder of the Optionee's
option, with 15 days' written notice of the reorganization, and the Optionee, or
the holder of the option, shall have the right to exercise the option,
regardless of any exercise limitations provided in Section 2B of this Agreement,
within the period beginning when the Optionee, or the holder of the option,
receives the notice and ending on the date immediately preceding the date of the
reorganization; provided, further, that the option may not be exercised after
the period provided in Section 2 of this Agreement. For the purposes of the 1992
Plan and this Agreement, the term "reorganization" shall mean any merger,
consolidation, sale of substantially all of the assets of the Corporation, or
sale of the

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securities of the Corporation pursuant to which the Corporation is or becomes a
wholly-owned subsidiary of another corporation after the effective date of the
reorganization.

          J.    COMPLIANCE WITH LAWS AND REGULATIONS. The option and the
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obligation of the Corporation to sell and deliver shares hereunder, shall be
subject to all applicable federal and state laws and rules and regulations and
to such approvals by any government or regulatory agency as may be required. The
Corporation shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of such shares under any federal or state law or any rule or
regulation of any governmental body which the Corporation shall, in its sole
discretion, determine to be necessary or advisable.

     3.   STOCK RESTRICTION AGREEMENT. The Corporation shall not be required to
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issue or deliver any share of Common Stock upon the exercise of any option
granted under the 1992 Plan until the Optionee, or the holder of the option
becomes a signatory to a stock restriction agreement with respect to all of his
or her Common Stock, including all shares presently owned or hereinafter
acquired. This Agreement will be substantially in the form of Exhibit "A"
attached hereto.

     4.   INVESTMENT REPRESENTATION. The Committee shall require the Optionee to
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furnish to the Corporation, prior to the issuance of any share upon the exercise
of all or any part of an option, an agreement (in such form as the Committee may
specify) in which the Optionee represents that the shares acquired by him or her
upon exercise of the option are being acquired for investment and not with a
view to the resale, distribution, offering, transferring, mortgaging, pledging,
hypothecating, or otherwise disposing of any such stock under the circumstances
which would constitute a public offering or distribution under the Securities
Act of 1933 or applicable securities laws of any state.  No shares of stock
shall be issued upon the exercise of the option unless the Corporation shall
have received from the Optionee a written statement satisfactory to the
Corporation, or its counsel, containing the above representations, stating that
certificates representing such shares may bear a legend restricting their
transfer, and stating that the Corporation's transfer agent or agents may be
given instructions to stop transfer of any certificate bearing such legend;
provided, however, that such representation and restrictions shall not be
required if (A) an effective registration statement for such shares under the
Securities Act of 1933 and any applicable state laws has been filed with the
Securities and Exchange Commission and with the appropriate agency or commission
of any state whose laws apply to the transaction, or (B) the Corporation has
received an opinion of counsel satisfactory to the Corporation, or its counsel,
that registration is not required under the Securities Act of 1933 or under the
applicable securities laws of any state.

     5.   OPTIONEE BOUND BY 1992 PLAN. The Optionee hereby acknowledges receipt
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of a copy of the 1992 Plan and agrees to be bound by all the terms and
provisions thereof. To the extent that the terms of this Agreement or of any
Option Grant Notice are inconsistent with the terms of the 1992 Plan, the terms
of the 1992 Plan shall govern. This Agreement shall be construed in accordance
with the laws of the State of New York.

     6.   NOTICES. Any notice required or permitted to be given under this
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Agreement shall be sufficient if in writing and if sent by Certified or
Registered Mail. As to the Corporation

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any required notice shall be addressed to the Chairman of the Board, Hudson
Valley Holding Corp., 21 Scarsdale Road, Yonkers, New York 10707. As to the
Optionee any required notice shall be addressed to him or her at his or her last
address on file with Hudson Valley Bank.

    Any party, by notice given as provided above, may change the address to
which its future notices shall be sent.

     7.   COUNTERPARTS.  This Agreement has been executed in two counterparts
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each of which shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its President and the Optionee has executed this Agreement, both as
of the day and year first above written.

                                            HUDSON VALLEY HOLDING CORP.

                                            By:_______________________________

                                            William M. Mooney, President & CEO



                                           Attest:____________________________

                                           OPTIONEE

                                           ___________________________________

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STATE OF NEW YORK    )
                     ) s.s.:
COUNTY OF WESTCHESTER)


     On the 31st day of July 1996, before me personally came William M. Mooney
to me known, who, being by me duly sworn, did depose and say that he resides at
87 Cliffield Road, Bedford, New York, 10506; and that he is the President & CEO
of HUDSON VALLEY HOLDING CORP., the Corporation described in and which executed
the foregoing instrument; that he knows the seal of said Corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by order of the Board of Directors of said Corporation, and that he signed his
name thereto by like order.


                                            ____________________________________




STATE OF NEW YORK    )
                     ) s.s.:
COUNTY OF WESTCHESTER)


     On the of 19th day of August 1996, before me personally came
____________________ to me known to be the individual described in and who
executed the foregoing instrument, and acknowledged that he/she executed the
same.



                                             ___________________________________

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