EX-10.2



 






Exhibit 10.2




HUDSON VALLEY BANK RESTATED AND AMENDED




SUPPLEMENTAL RETIREMENT PLAN




EFFECTIVE AS OF

1 DECEMBER 1995




ARTICLE ONE




I. PURPOSE OF THE PLAN




     The purpose of the Supplemental Retirement plan (hereinafter call the “Plan”) is to provide
the participating executives with an added incentive in order to retain their services until
retirement.


The plan is intended to be a non-qualified, unfounded Plan which is designed to supplement
Qualified and Social Security Benefits. The Plan may, at its option purchase insurance on the
Participant’s life, payable to the Corporation to reimburse the Corporation in whole or in part for
its cost of such benefits.




     This plan replaces and supersedes any and all similar plans and/or contracts that may
be in existence with the Participants.



ARTICLE TWO




     The following words and phrases shall have the respective meaning set forth below:



     A. “Plan” shall mean the provisions of the Hudson Valley Bank
Supplemental Retirement Plan Restated as of December 1, 1995.



     B. “Bank” shall mean the Hudson Valley Bank, its successors and assigns.



     C. “Participants” shall be the following Senior Executives:





 




			
	1.	 	John A. Pratt
	 
	2.	 	William L. Weil
	 
	3.	 	John N. Finnerty
	 
	4.	 	Vincent Grippo
	 
	5.	 	Vincent Palaia
	 
	6.	 	James J. Landy
	 
	7.	 	John DeGiorgio





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     D. “Beneficiary” shall mean the person(s) entitled to the benefits as a
beneficiary of a deceased participant.



     E. “Effective Date” shall mean as the 1st Day of November 1983.



     F. “Base Annual Compensation” shall mean the regular base salary of the
Participant (before any deductions for a 401(k) Plan) actually paid to the Participant for the
services rendered during any applicable calendar year. However, it shall exclude any overtime,
fringe or supplemental compensation or any payments from prior periods of any amounts that have
been deferred at the request of the Participant.


However if the Participant shall be considered “disabled” under the Plan the Base Annual
Compensation shall be the regular basic salary at the time of disability increased by the annual
percentage in the Cost of Living (for the New York Metropolitan Area as determined by the Bureau of
Labor Statistics) limited to a maximum of 5% annually until the Normal Retirement Date.




     G. “Normal Retirement Date” shall mean the first day of the month
coinciding with or next following the date which a Participant has attained age 65 “Normal
Retirement” and has completed at least 10 years of service.



     H. “Interest Rate Offset” — The yield on a 15 Year U.S. Treasury Bond on the 1st Day of the Month
three months prior to the Participant’s Retirement. I —
Lump Sum Equivalent- The Value of the
Participant’s Qualified Plan
Account as of December 1995 increased annually by:




	 	a)	 	Any Bank Contribution into the Qualified Plan Account
	 
	 	b)	 	multiplied by the Interest Rate Offset.





     J. “Bank Pension Plan Benefit” — The annual amount payable over a 15 year
period from the Lump Sum Equivalent of any Qualified Retirement Plan of the Bank at the
Participant’s Retirement assuming the Interest Rate Offset If the Bank should Terminate its
Qualified Plan prior to the Participant’s Retirement the definition of Lump Sum shall be the Lump
Sum Equivalent at Termination Increased Annually by the Interest Rate Offset on January 1st of each
year.


(An Example of this definition is — $100,000 Lump Sum Equivalent at Retirement -
7% Interest Rate Offset — annual 15 year payment of $10,261)




ARTICLE THREE




3. ADMINISTRATION OF THE PLAN



The Compensation Committee of the Bank (hereinafter called the “Committee”) or other committee so
designated by the Bank’s Board of Directors shall administer the Plan. All questions of
interpretation and application of the Plan shall be determined by a majority of the Committee and
the determination of such majority shall be final and binding on all persons.




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February 6, 1996




4. POSTPONED RETIREMENT




     Each Participant shall be required to retire at such time as he or she attains the
Normal Retirement Age, provided said Mandatory Retirement is in conformity with the State
and/or Federal Laws applicable at that time.



     A Participant may remain in the employ of the Bank after he or she attains the Normal
Retirement Age with the permission of the Board of Directors. Such permission shall be on a year to
year basis.



     No additional benefits shall accrue for any employment subsequent to age sixty five (65), but
upon retirement or separation from employment the Participant shall receive the Normal Supplemental
Retirement Benefit he or she would have received had the Participant retired at Age 65.



ARTICLE FIVE




5. BENEFITS FORMULA




     A. Supplemental Retirement Benefit — Term — A Participant who retires from
the Bank under Normal Retirement, or under Postponed Retirement, shall receive Supplemental
Retirement Benefits for a period of fifteen (15) years, payable upon a monthly basis (180 months)
beginning on the first day of the month following his Normal or Postponed Retirement Date.



     B. Supplemental Retirement Benefit — Amount — The Normal Supplemental
Retirement Benefit shall be equal to 75% of the Participant’s highest Base Annual Compensation in
any of the last three years he or she was employed less any Bank Retirement Plan Benefits which
would be payable to the Participant.



     C. Transfer of Duties/Authorized Leave — Notwithstanding any provision to
the contrary, so long as the Participant shall continue to be in the employ of the Bank or the
Hudson Valley Holding Corp. (“Holding Corp.”) or one or more of its subsidiaries, his or her
eligibility and vesting shall not be affected by any change of duties or position. In addition, an
authorized leave of absence shall not affect the Participant’s rights. However, nothing in this
Plan or in any other agreement shall confer upon any Participant any right to continue in the
employment of the Bank, Holding Corp. or any such subsidiary, which retains the right to terminate
a Participant’s employment at any time.



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ARTICLE SIX



6. VOLUNTARY RESIGNATION, TERMINATION WITH AND WITHOUT CAUSE. PRIOR TO RETIREMENT.




     A. Voluntary Resignation. In the event the Participant voluntarily resigns
before the participant reaches age 65, the Bank’s obligations to make any payments under
this Agreement shall immediately terminate.



     B. Termination Without Cause — In the event the Participant’s employment is
terminated without cause before the Participant shall have reached the age of 65, the Bank’s
obligation to make any payments under this Agreement shall immediately terminate, except the
Participant shall be entitled to receive a percentage of the Supplemental Retirement Benefit
based upon the following formula:



	 	 	 	 	 
	Age at Termination	 	No. of Years of Service	 	Non-Forfeiture Benefit
	 	 	 
	60 but less than 61
	 	10 or more	 	50%
	61 but less than 62
	 	11 or more	 	60%
	62 but less than 63
	 	12 or more	 	70%
	63 but less than 64
	 	13 or more	 	80%
	64 but less than 65
	 	14 or more	 	90%





Such Supplemental Retirement Benefit shall be payable in accordance with Article 5b and shall
commence upon the Participant’s reaching age 65.




     C. Termination for Cause — In the event that a Participant’s employment is
terminated by the Bank, Holding Corp. or any of its subsidiaries for cause including to but not
limited to wrongful application of funds, commission of a crime, disregard of Board or Management
policy or directives, all rights hereunder may be terminated as of the date of the misconduct. If
after receive payments under this plan it shall come to the attention of the
Bank that while employed the Participant end in an act that would have caused Termination for Cause
the Participant will no longer be entitled to any benefits under this Plan



     The Compensation Committee’s determination as to what constitutes “for cause” shall be
binding and final upon all parties.



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February 6, 1996




ARTICLE SEVEN




7. TOTAL DISABILITY




                     »




     A. If while employed by the Bank prior to the Participant’s 65th Birthday,
Participant should become disabled by “Total Disability” as defined herein the
Participants rights and Bank’s Payment Obligations as described in Article Five
hereof shall remain unaffected due to such disability. If such Total Disability
shall continue through the Participant’s Normal Retirement Date, then the
Supplemental Retirement Benefit shall be payable as if the Participant had
fulfilled all of the conditions of Paragraph 5 of this Agreement.



     B. “Total Disability”, for the purposes of this Agreement, shall mean if
the Participant is deemed totally disabled under the Bank’s Long Term Disability
Policy in effect at the time of the Participant’s disability.



     C. Under no circumstances shall this Article be construed to give the
Participant any additional disability benefits other than those whxch may be
provided by the Bank under separate disability plans or policies.



ARTICLE EIGHT




     A. Death Prior to Retirement. In the event of a Participant’s death while
employed by the Bank and prior to his or her Retirement Date, the Bank agrees to pay to such
Beneficiary as Participant may have designated pursuant to Article Nine or in the absence of any
such designation, to the Participants surviving spouse, or if no surviving spouse then to
Participant’s estate, 75% of the Participant’s Base Annual Salary for a period of 15 years (the
benefit years) commencing upon the first day of the month immediately following the Participant’s
death, in equal monthly installments subject to the provisions of Paragraph B below.



     B. Eligibility for Death Benefits Prior to Retirement — In order to be
eligible for the Pre-Retirement Death Benefit under the Plan prior to retirement
the Participant must qualify for life insurance at standard rates from the
insurer designated by the Bank. If the Participant does not quality for standard
insurance he or she can qualify for the Pre-Retirement Death Benefit if the
Participant agrees to reduce their compensation from the Bank for that portion
of the life insurance premium greater than the standard premium.



An example of this paragraph is:



	 	 	 
	Standard Premium from designated insurer

	$	10,000
	Premium Offered by Insurer

	 	12,500
	Participant’s Annual Salary Reduction

	 	2,500





If the Participant was previously insured at standard rates and subsequently cannot qualify for
standard rates and does not elect salary reduction as stated above the Participant will still be




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February 6, 1996




entitled to death benefits based upon the participant’s Base Annual Compensation in the Year the
last policy was issued at standard rates.



     C. Death Benefit While Receiving Retirement Benefits — In the event of the
Participant’s death while receiving retirement payments under Articles Five and Six, Death Benefits
shall be payable to such beneficiary as Participant may have designated pursuant to Article Nine or
in the absence of any such designation’s to the participant’s surviving spouse, or if no surviving
spouse then to Participant’s estate, in the-same- manner-as—if—payable-4;o~the^J^ucticipant. Any
amounts not fully paid by reason of Participant’s death while receiving payments, if any, shall
also be payable in the same manner and under the same conditions as if payable to the Participant
under Paragraph 8A above.



ARTICLE NINE




9. DESIGNATION OF BENEFICIARY.




     A. To designate a Beneficiary or Beneficiaries to receive Death Benefits or Unpaid Retirement
Benefits under this Agreement , the Corporation shall provide the Participant Beneficiary forms to
designate the name, address and relationship and percentage benefit payable to the Beneficiary. If
the Corporation does not have an executed Beneficiary Designation of the Participant, the benefits
shall be payable to the Partxcipant’s surviving spouse or if the Participant has no surviving
spouse, the estate of the Participant. If the Beneficiary of any benefits is the surviving spouse
of the Participant, said surviving spouse shall have the right to designate a Beneficiary to
receive any unpaid benefits due at the surviving spouse’s death. If the Beneficiary is not the
surviving spouse, the Participant shall have the right to name Successor Beneficiaries.



ARTICLE TEN




10. Restrictive Covenant




     The Participant agrees that during employment or while receiving benefits, he or she shall not
accept employment or consultancy with any bank mortgage or
brokerage company or financial institution, nor solicit, directly or indirectly,
on behalf of any bank, mortgage or brokerage company or financial institution any person or entity
that is or was a customer of the Bank, the Holding Corp. or any of its subsidiaries. In order to
clarify the term “was a customer of, xt shall be construed to mean a customer at any time within
five (5) years prior to the Participant’s termination of employment.



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ARTICLE ELEVEN



11. Insurance




     It is the intention of the Corporation to purchase a life insurance contract or contracts on
the Participant’s life payable to the Corporation as a means of reimbursing itself, in whole or in
part, for the cost of the benefits provided in this Agreement. The Participant agrees to cooperate
with the Corporation in obtaining such insurance by giving necessary consents or by submitted to
any necessary physical examinations. Nothing in this Agreement, however, shall create an obligation
on the Corporation’s part to obtain life insurance or to set aside any assets or funds to meet the
obligations under this Agreement and the Corporation hereby reserves the absolute right in its sole
discretion to terminate any insurance contract it may obtain on the Participant’s life, or to
terminate in whole or in part, any other funding program it may elect to undertake in connection
with this Agreement,



ARTICLE TWELVE



12. EEORGANIZATION




     If the Bank is merged, consolidated into or with any other corporation or substantially all
the assets are transferred to another corporation, the provisions of this Agreement are binding
upon and inure to the benefit of the corporation resulting from such merger, consolidation, or
transfer.



     Notwithstanding any other provisions of this Agreement, in the event of a merger,
consolidation or sale of substantially all of the Corporation’s assets, the Participant would at
the time of said reorganization have ten (10) or more years of service and be under age 60, the
Participant for purposes of this Agreement shall be deemed to be Age 60. Even though the
Participant may be entitled to receive payments prior to Age 65 if terminated under this paragraph
the provisions in regard to Postponed Retirement under Article Four above shall only be effective
after the Participant’s chronological age of 65.



An example of this paragraph is:



Participant Age 55 — 12 Years of Service — Bank is sold .Participant is
terminated without cause


2 years after sale — Base Compensation at that time is $100,000
Participant would be entitled to $52,500 less any Qualified Plan Offset three
years hence payable for 15 Years.



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ARTICLE THIRTEEN




13. INCAPACITY OF RECIPIENT




     In the event a Participant or Beneficiary is declared incompetent or the provisions of the
Participant or Beneficiary’s Durable Power of Attorney has been satisfied, any benefits payable
under the Plan to which such Participant or Beneficiary shall be entitled may be paid to such
Guardian or Attorney-in-Fact or any other person legally charged with the care of this person or
estate. Except as provided above in this paragraph, when, the Compensation Committee in its sole
discretion determines that a Participant or Beneficiary is unable to manage its financial affairs,
the Compensation Committee may direct the payments to any persons for the benefit of the
Participant or Beneficiary.



ARTICLE FOURTEEN




14. CLAIMS BY OTHERS




     At no time shall the Participant’s estate. Participant’s spouse, or any other Beneficiary the
Participant may have designated under this Agreement be deemed to have any claims, rights, title or
any other interest in or to any life insurance contact(s) the Corporation may have obtained or any
specific fund or asset belonging to the Corporation. As to any claim for unpaid benefits under this
Agreement, the Participant, Participant’s spouse, or any other designated Beneficiary shall be an
unsecured creditor of the Corporation with no greater rights than any other creditor having a
general claim for unpaid compensation.



ARTICLE FIFTEEN




15. ENCUMBRANCES




     It is expressly agreed that neither the Participant, the Participant’s spouse, nor any other
Beneficiary shall have the right to commute, sell, pledge, assign, transfer or otherwise convey the
right to receive any payments under this Agreement, which payments and rights hereto being hereby
expressly made nonassignable and nontransferable. Such payments shall not be subject to legal
process or levy of any kind.



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ARTICLE SIXTEEN




16. RELATION TO OTHER BENEFITS




     The benefits under this Agreement shall be independent of, and in addition to, benefits
payable under any other employment agreement that may exist from time to time between the parties
hereto, or any other compensation payable by the Corporation to the Participant whether as salary,
or otherwise. This Agreement shall not be deemed to constitute a contract of employment between the
parties, nor shall any provision hereof restrict the absolute right of the Corporation to discharge
the Participant at will or restrict the absolute right of the Participant to terminate his/her
employment at will. However, it is intended that this Agreement shall remain in effect until all
benefits have been paid, except in the event of earlier termination of the Agreement as provided
under any other termination provision of this Agreement.



ARTICLE SEVENTEEN




17. LUMP SUM PAYMENT OF BENEFITS




     The Corporation shall have the right to commute any benefits after they become payable under
the program but shall be limited to utilizing the Interest Rate Offset.



     An example of this article is:


1. Annual Payment -$75,000.

2. Years Remaining -5.

3. interest Rate Offset - 7%

4. Commuted Amount -$329,040




ARTICLE EIGHTEEN




     During the Participant’s lifetime this Agreement may be terminated or amended in any
particular by the mutual written agreement of the Participant and the Corporation.



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ARTICLE NINETEEN




19. BINDING EFFECT




     This Agreement shall be binding upon the parties hereto, their heirs, executors and
administrators, conservators, attorney-in-fact and successors in interest.



ARTICLE TWENTY




20. GOVERNING LAW




     This Agreement shall be construed in accordance with the laws of the State of New York, except
to the extent (if any) preempted by Federal law.



ARTICLE TWENTY-ONE




21. ARBITRATION




     Unless otherwise provided in this Agreement, any controversy or claim arising out of or
relating to this contract, or the breach thereof, shall be settled by the American Arbitration
Association and the judgment upon the award rendered by the Arbitrators may be entered in any Court
having jurisdiction thereof.



ARTICLE TWENTY-TWO




22. SEVERABILITY




     It is agreed that the invalidity or unenforceability of any article, section, provision of
this Agreement shall not effect the validity or enforceability of any one or more of the other
articles, sections, paragraphs or provisions.



	 	 	 	 	 	 	 
	 	 	 	 	HUDSON VALLEY BANK
	 
	 	 	 	 	 	 
	 	 	 	 	by_
	 

	 	 	 	 	 	Chairman of the Board
	 
	 	 	 	 	 	 
	ATTEST:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 


	 	 	 	 	 	 
	Secretary.
	 	 	 	 	 	 






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