EXHIBIT 10.5HUDSON VALLEY HOLDING CORP.1992 STOCK OPTION PLAN NON-STATUTORY STOCK OPTION AGREEMENT     AGREEMENT, dated this 27th day of March, 1997, between HUDSON VALLEYHOLDING 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”) onJuly 27, 1992; and,     WHEREAS, the Plan was approved by a majority of the shareholders of the Corporation onOctober 20,1992; and,     WHEREAS, the Corporation seeks to provide a means by which the Corporation, through the grantof stock options to the Optionee, may retain the Optionee as a[Director/Consultant/Advisor] ofHudson Valley Bank and motivate the Optionee toexert his or her best efforts on behalf of the Corporation and any Subsidiary corporation.     NOW THEREFORE, in consideration of the promises contained in this Agreement and the benefitsto 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 theOptionee a right and option to purchase from the Corporation an aggregate of one or more shares ofthe common stock of the Corporation (the “Common Stock”): provided, that at the time of any suchgrant the Optionee owns not more than 10 percent of the total combined voting power of all classesof stock of the Corporation and of any Subsidiary Corporation. It is intended that each such optionshall be a nonstatutory stock option and shall not qualify as an incentive stock option underSection 422 of the Internal Revenue Code of 1986, as amended. Each such option shall be evidencedby an Option Grant Notice addressed to the Optionee from the Corporation and shall be subject tothe 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 optionevidenced by an Option Grant Notice to the Optionee is subject to the following terms andconditions:     A. EXPIRATION DATE. The option shall expire on the day before the 10thanniversary of the option grant date as provided in the Option Grant Notice.     B. EXERCISE OF OPTION DURING CONTINUOUS SERVICE:Subject to the provisions of this Agreement and the 1992 Plan, no part of the option may beexercised until the Optionee has completed 1 year of service with the Corporation and/or SubsidiaryCorporation. Thereafter, the option shall be exercisable from time to time over a period beginningon the first day of the calendar year immediately following the close of the
 

 
calendar year when the Optionee completes 1 year of service with the Corporation and/or SubsidiaryCorporation and ending on the earliest of the expiration, termination of service, or cancellationof the option. An exercise of any part of the option shall be accompanied by a written notice tothe 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 SERVICE.     (1) DEATH. If the Optionee dies while an employee of theCorporation or of any Subsidiary Corporation, the option may be exercised by the Optionee’s estateor by any person who acquired the option by bequest or inheritance or by reason of the death of theOptionee, within the 12 months immediately following his or her death and to the extent that theOptionee 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 thisAgreement.     (2) DISABILITY. If the Optionee ceases to be a [director/consultant/advisor] of the Corporation or of any Subsidiary Corporation because of his or her disability, asdefined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, the option may beexercised by him or her, his or her attorney-in-fact or conservator, as appropriate, within 12months immediately following the date that he or she ceased to be an employee and to the extentthat the Optionee was entitled to exercise the option on the date when his or her services ceased;provided, however, that the option may not be exercised after the expiration date provided inSection 2A of this Agreement.     (3) TERMINATION OF SERVICE: If the Optionee ceases to be in theservice of the Corporation or of any Subsidiary Corporation for any reason other than death ordisability, the option may be exercised by him or her within the 3 months immediately following hisor her termination of service to the extent that the Optionee was entitled to exercise the optionon the date of his or her termination; provided, however that the option may not be exercised afterthe expiration date provided in Section 2A of this Agreement; provided further, that if theOptionee ceases to be in the service of the Corporation or of any Subsidiary Corporation because heor she voluntarily terminates his or her service or because his or her service is involuntarilyterminated by the Corporation or by any Subsidiary Corporation as a result of his or her willfulmisconduct, as determined in the sole discretion of this Committee, all right to exercise theoption shall terminate on the date when his or her service ceases.     D. PAYMENT OF PURCHASE PRICE UPON EXERCISE. At the time of anyexercise, the purchase price of the shares for which the option may be exercised shall be paid incash **to the**Corporation. The Optionee agrees **that the purchase**price is determined in good faith bythe Committee at the time when the option is granted as not less than 100 percent of the fairmarket 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 otherthan by a will of the Optionee or by the laws of descent and distribution. During the lifetimeof
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the Optionee, the option shall be exercisable only by the Optionee or by his or her attorney-infact or conservator.     F. ADJUSTMENTS. In the event of any change in the Common Stock byreason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up,combination or exchange of shares, rights offering to purchase Common Stock at a pricesubstantially 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 thosesubject shares, shall be appropriately adjusted consistent with such change in a manner as theCommittee may deem equitable to prevent substantial dilution or enlargement of the rights grantedto 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 ashareholder with respect to shares of stock subject to the option prior to the date of issuance tohim or her of a certificate or certificates for such shares.     H. NO RIGHTS TO CONTINUED EMPLOYMENT. The option shall not conferupon the Optionee any right with respect to continuance of the Optionee’s current position withinthe Corporation or any Subsidiary Corporation, nor shall it interfere in any way with the right ofthe Corporation to terminate his or her service at anytime.     I. REORGANIZATION. MERGER. CONSOLIDATION. DISSOLUTION. LIQUIDATION.SALE OF ASSETS. Upon a reorganization in which the Corporation is not thesurviving or acquiring corporation, the unexercised portion of the option shall be canceled on theeffective date of the reorganization; provided, however, that the Committee shall provide theOptionee, or the holder of the Optionee’s option, with 15 days’ written notice of thereorganization, and the Optionee, or the holder of the option, shall have the right to exercise theoption, regardless of any exercise limitations provided in Section 2B of this Agreement, within theperiod beginning when the Optionee, or the holder of the option, receives the notice and ending onthe date immediately preceding the date of the reorganization; provided, further, that the optionmay not be exercised after the period provided in Section 2 of this Agreement. For the purposes ofthe 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 securities of theCorporation pursuant to which the Corporation is or becomes a wholly-owned subsidiary of anothercorporation after the effective date of the reorganization.     J. COMPLIANCE WITH LAWS AND REGULATIONS. The option and theobligation of the Corporation to sell and deliver shares hereunder, shall be subject to allapplicable federal and state laws and rules and regulations and to such approvals by any governmentor regulatory agency as may be required. The Corporation shall not be required to issue or deliverany certificates for shares of Common Stock prior to the completion of any registration orqualification of such shares under any federal or state law or any rule or regulation of anygovernmental body which the Corporation shall, in its sole discretion, determine to be necessary oradvisable
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     3. STOCK RESTRICTION AGREEMENT. The Corporation shall not be required toissue or deliver any share of Common Stock upon the exercise of any option granted under the 1992Plan until the Optionee, or the holder of the option becomes a signatory to a stock restrictionagreement with respect to all of hisn or her Common Stock, including all shares presently owned orhereinafter acquired. This Agreement will be substantially in the form of Exhibit “A” attachedhereto.     4. INVESTMENT REPRESENTATION. The Committee shall require the Optionee tofurnish to the Corporation, prior to the issuance of any share upon the exercise of all or any partof an option, an agreement (in such form as the Committee may specify) in which the Optioneerepresents that the shares acquired by him or her upon exercise of the option are being acquiredfor 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 whichwould constitute a public offering or distribution under the Securities Act of 1933 or applicablesecurities laws of any state. No shares of stock shall be issued upon the exercise of the optionunless the Corporation shall have received from the Optionee a written statement satisfactory tothe Corporation, or its counsel, containing the above representations, stating that certificatesrepresenting such shares may bear a legend restricting their transfer, and stating that theCorporation’s transfer agent or agents may be given instructions to stop transfer of anycertificate bearing such legend; provided, however, that such representation and restrictions shallnot be required if (A) an effective registration statement for such shares under the Securities Actof 1933 and any applicable state laws has been filed with the Securities and Exchange Commissionand 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 itscounsel, that registration is not required under the Securities Act of 1933 or under the applicablesecurities laws of any state.     5. OPTIONEE BOUND BY. 1992 PLAN. The Optionee hereby acknowledges receiptof a copy of the 1992 Plan and agrees to be bound by all the terms and provisions thereof. To theextent that the terms of this Agreement or of any Option Grant Notice are inconsistent with theterms of the 1992 Plan, the terms of the 1992 Plan shall govern. This Agreement shall be construedin accordance with the laws of the State of New York.     6. NOTICES. Any notice required or permitted to be given under thisAgreement shall be sufficient if in writing and if sent by Certified or Registered Mail. As to theCorporation any required notice shall be addressed to the Chairman of the Board, Hudson ValleyHolding Corp., 21 Scarsdale Road, Yonkers, New York 10707. As to the Optionee any required noticeshall 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 futurenotices shall be sent.     7. COUNTERPARTS. This Agreement has been executed in two counterpartseach of which shall constitute one and the same instrument.
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     IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its Presidentand 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                       day of                                         1997, before me personally came WilliamM. Mooney to me known, who, being by me duly sworn, did depose and say that he resides at 87Cliffield Road. Bedford, New York. 10506; and that he is the President & CEO of HUDSON VALLEYHOLDING CORP., the Corporation described in and which executed the foregoing instrument; that heknows the seal of said Corporation; that the seal affixed to said instrument is such corporateseal; that it was so affixed by order of the Board of Directors of said Corporation, and that hesigned his name thereto by like order.         STATE OF NEW YORK  )         ) s.S.:  COUNTY OF WESTCHESTER  )                   Onthe 27th day of March, 1997, before me personally came _______________to me known to be the individual described in and whoexecuted the foregoing instrument, and acknowledged that he/she executed thesame.
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