Exhibit 10.5


 


Hanover
COmmunity Bank


 


2015 RESTRICTED STOCK PLAN 


 


Section 1. Purpose


 


The
Hanover Community Bank 2015 Restricted Stock Plan (the "Plan") is hereby established to foster and promote the long-term
success of Hanover Community Bank (the “Bank”), and its shareholders by providing members of management, including
employees and management officials, with an equity interest in the Bank. The Plan will assist the Bank in attracting and retaining
the highest quality of experienced persons to serve as employees and Directors and in aligning the interests of such persons more
closely with the interests of the Bank's shareholders by encouraging such parties to maintain an equity interest in the Bank.


 


Section 2. Definitions


 


Capitalized terms not
specifically defined elsewhere herein shall have the following meaning:


 


"Act" means
the Securities Exchange Act of 1934, as amended from time to time, and any rules and regulations promulgated thereunder.


 


“Award” means
a grant of shares of Common Stock pursuant to Section 6 hereof.


 


"Bank" means
Hanover Community Bank and any present or future subsidiary or parent corporations of Hanover Community Bank (as defined in Section
424 of the Code) or any successor to such corporations.


 


"Board" means
the Board of Directors of the Bank.


 


"Code" means
the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.


 


"Common Stock"
or "Stock" means the common stock of the Bank.


 


"Disability"
shall mean (i) the inability of a Participant to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not
less than twelve (12) months, or (ii) if the Participant is, by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering
employees of the Bank. The determination of whether a Disability exists will be made by the Board.


 


"Management Official"
means an employee of the Bank, a non-employee member of the Board, a member of any advisory Board or any other service provider
to the Bank.


 


"Participant"
means a Management Official selected by the Board to receive an Award under the Plan.


 


"Plan"
means the Hanover Community Bank 2015 Restricted Stock Plan.


 


“State” means
the State of New York.


 


“Unforeseeable
Emergency” shall mean a severe financial hardship to the Participant resulting from an illness or accident of the Participant,
the Participant’s spouse, or a dependent (as defined in Code section 152(a)) of the Participant, loss of the Participant’s
property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the
control of the Participant.


 






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Section 3. Administration


 


(a)        The
Plan shall be administered by the Board. Among other things, the Board shall have authority, subject to the terms of the Plan,
to grant Awards, to determine the individuals to whom and the time or times at which Awards may be granted, to determine the terms
and conditions of any Award granted hereunder, including whether to impose any vesting period, subject to the requirements of this
Plan.


 


(b)       Subject
to the other provisions of the Plan, the Board shall have authority to adopt, amend, alter and repeal such administrative rules,
guidelines and practices governing the operation of the Plan as it shall from time to time consider advisable, to interpret the
provisions of the Plan and any Award and to decide all disputes arising in connection with the Plan. The Board may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in any grant agreement in the manner and to the extent
it shall deem appropriate to carry the Plan into effect, in its sole and absolute discretion. The Board's decision and interpretations
shall be final and binding. Any action of the Board with respect to the administration of the Plan shall be taken pursuant to a
majority vote or by the unanimous written consent of its members.


 


(c)       The
Board may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may
rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent.


 


Section 4. Eligibility and Participation


 


Management Officials
of the Bank shall be eligible to participate in the Plan. The Participants under the Plan shall be selected from time to time by
the Board, in its sole discretion, from among those eligible, and the Board shall determine in its sole discretion the numbers
of shares to be covered by the Award or Awards granted to each Participant.


 


Section 5. Shares of Stock Available
for Awards


 


The maximum number of
shares of Common Stock which may be issued under the Plan is 500,000 subject to the adjustments in the event of any stock dividend,
stock split or similar change to the outstanding Common Stock. If an Award granted under this Plan expires or terminates or is
forfeited for any reason, the shares of Common Stock subject to such Award, to the extent of such termination or forfeiture, shall
again be available for subsequent Award grant under the Plan.


 


Section 6. Awards


 


6.1 – Grant
of Awards


 


(a)       Grants.
The Board may grant Awards, subject to the right of the Bank to require forfeiture of such shares from the Participant in the event
that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction
period or periods established by the Board for such Award. During the restricted period, shares constituting an Award may not be
transferred, although a Participant shall be entitled to exercise other indicia of ownership, including the right to vote such
shares and receive any dividends declared on such shares. 


 


(b)      Terms
and Conditions. Subject to Section 6.2, the Board shall determine the terms and conditions of any such Award, including the
conditions for forfeiture. 


 


(c)       Stock
Certificates. The Bank may cause shares issued as part of an Award to be issued in either book entry form or certificated form.
Shares issued in book entry form will be maintained in an account at the Bank’s transfer agent, and only released to a Participant
upon satisfaction of any required restrictions. Any stock certificates issued in respect of an Award shall be registered in the
name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power
endorsed in blank, with the Bank (or its designee). At the expiration of the applicable restriction periods, the Bank (or such
designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died,
to the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights
of the Participant in the event of the Participant’s death (the “Designated Beneficiary”). In the absence of
an effective designation by a Participant, Designated Beneficiary shall mean the Participant’s estate.


 






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6.2     Distribution
of Awards


 


(a)       Awards shall not be distributed and the restrictions pertaining to such award shall not expire earlier than –


 


(1)    upon the completion or satisfaction of the conditions specified by the Board in the Award;


 


(2)    a Participant’s separation from service;


 


(3)    the date a Participant becomes Disabled;


 


(4)    upon the death of a Participant;


 


(5)    a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets
of the Bank, as described in Section 7(c) or, if in conflict therewith, to the extent necessary, by the Secretary of Treasury under
regulations issued under Code section 409A; or


 


(6)    upon the occurrence of an unforeseeable emergency.


 


(b)       A payment of a Participant’s vested interest in an Award may, in the discretion of the Board, be made in the event
of a Participant’s Disability, upon the occurrence of a Change-in-Control (as defined in the Grant Agreement evidencing any
Award) or Unforeseeable Emergency (as defined above). Payments in settlement of a Participant’s vested interest in an Award
shall be made as soon as practicable after such occurrence or after the Participant otherwise vests in such award. For the purposes
of section 409A of the Code, the entitlement to a series of installment payments will be treated as the entitlement to a single
payment.


 


(c)       Other provisions of the Plan
notwithstanding, if, upon the written application of a Participant, the Board determines that the Participant has an Unforeseeable
Emergency, the Board may, in its sole discretion, direct the payment to the Participant of all or a portion of the balance of his
or her vested interest in an Award in a lump sum payment, provided that any such withdrawal shall be limited by the Board to the
amount reasonably necessary to meet the emergency, including amounts needed to pay any income taxes or penalties reasonably anticipated
to result from the payment. No payment may be made to the extent that such emergency is or may be relieved through reimbursement
or compensation from insurance or otherwise, by liquidation of the Participant’s assets or to the extent the liquidation
of such assets would not cause severe financial hardship.


 


(d)       The Board may not otherwise permit the acceleration of the time or schedule of any vesting of a Restricted Stock award
scheduled to be paid pursuant to the Plan, unless such acceleration of the time or schedule is (i) necessary to fulfill a domestic
relations order (as defined in section 414(p)(1)(B) of the Code) or to comply with a certificate of divestiture (as defined in
section 1043(b)(2) of the Code), (ii) de minimis in nature (as defined in regulations promulgated under section 409A of the Code),
(iii) to be used for the payment of FICA taxes on amounts deferred under the Plan, or (iv) equal to amounts included in the federal
personal taxable income of the Participant under section 409A of the Code.


 


Section 7. General Provisions Applicable
to Awards 


 


(a)       Each
Award under the Plan shall be evidenced by a writing delivered to the Participant specifying the terms and conditions thereof and
containing such other terms and conditions not inconsistent with the provisions of the Plan as the Board considers necessary or
advisable to achieve the purposes of the Plan or comply with applicable tax and regulatory laws and accounting principles.


 






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(b)       Each
Award may be granted alone, in addition to or in relation to any other Award. The terms of each Award need not be identical, and
the Board need not treat Participants uniformly. Except as otherwise provided by the Plan or a particular Award, any determination
with respect to an Award may be made by the Board at the time of grant or at any time thereafter.


 


(c)       For
purposes of the Plan, the following events shall not be deemed a termination of service of a Participant:


 


(i)       a
transfer to the employment of the Bank from a subsidiary or from the Bank to a subsidiary, or from one subsidiary to another, or


 


(ii)     an
approved leave of absence for military service or sickness, or for any other purpose approved by the Bank, if the Participant's
right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence
was granted or if the Board otherwise so provides in writing.


 


(e)       The
Board may at any time, and from time to time, amend, modify or terminate the Plan or any outstanding Award held by a Participant,
including substituting therefore another Award of the same or a different type or changing the date of realization, provided that
the Participant's consent to each action shall be required unless the Board determines that the action, taking into account any
related action, would not materially and adversely affect the Participant, and further provided that no amendment increasing the
number of shares subject to the Plan may be effectuated without the approval of the shareholders of the Bank; provided, however,
that no such amendment or modification will be effective if such amendment or modification would cause the Plan to fail to comply
with the requirements of Rule 16b-3 under the Act or any successor or replacement regulation.


 


(f)       The
Board may, in its sole discretion, terminate the Plan (in whole or in part) with respect to one or more Participants and distribute
to such affected Participants their vested interest in any Award in a lump sum as soon as reasonably practicable following such
termination, but if, and only if, (i) all nonqualified defined contribution deferred compensation plans maintained by the Bank
and its Affiliates are terminated, (ii) no payments other than payments that would be payable under the terms of the Plan if the
termination had not occurred are made within twelve (12) months of the termination of the Plan, (iii) all payments of the vested
interest in Awards are made within twenty-four (24) months of the termination of the Plan, and (iv) the Bank acknowledges to the
Participants that it will not adopt any new nonqualified defined contribution deferred compensation plans at any time within five
(5) years following the date of the termination of the Plan.


 


Section 8. Miscellaneous


 


(a)       No
person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant
the right to continued employment or service on the Bank's Board. The Bank expressly reserves the right at any time to dismiss
a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.


 


(b)       Nothing
contained in the Plan shall prevent the Bank from adopting other or additional compensation arrangements.


 


(c)       Notwithstanding
anything to the contrary expressed in this Plan, any provisions hereof that vary from or conflict with any applicable Federal or
State securities laws (including any regulations promulgated thereunder) shall be deemed to be modified to conform to and comply
with such laws.


 


(d)       No
member of the Board shall be liable for any action or determination taken or granted in good faith with respect to this Plan nor
shall any member of the Board be liable for any agreement issued pursuant to this Plan or any grants under it. Each member of the
Board shall be indemnified by the Bank against any losses incurred in such administration of the Plan, unless his action constitutes
serious and willful misconduct.


 






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(f)       This
Plan shall become effective upon its approval by the affirmative vote of a majority of the votes cast at the annual meeting. Prior
to such approval, Awards may be granted under the Plan expressly subject to such approval.


 


(g)       Awards
may not be granted under the Plan more than ten (10) years after approval of the Plan by the Bank's Shareholders, but then outstanding
Awards may extend beyond such date.


 


(h)       To
the extent that State laws shall not have been preempted by any laws of the United States, the Plan shall be construed, regulated,
interpreted and administered according to the other laws of the State of New York.


 


(i)       A
Participant in the Plan shall have no right to receive payment (in any form) with respect to his or her restricted Stock award
until legal and contractual obligations of the Bank relating to establishment of the Plan and the making of such payments shall
have been complied with in full. In addition, the Bank shall impose such restrictions on stock delivered to a Participant hereunder
and any other interest constituting a security as it may deem advisable in order to comply with the Securities Act of 1933, as
amended, the requirements of any stock exchange or automated quotation system upon which the stock is then listed or quoted, any
applicable state securities laws, any provision of the Bank’s certificate of incorporation or bylaws, or any other law, regulation,
or binding contract to which the Bank is a party.


 






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