Document:

EX-10.5

 

EXHIBIT 10.5

HUDSON VALLEY HOLDING CORP.

1992 STOCK OPTION PLAN NON-

STATUTORY STOCK OPTION AGREEMENT

     AGREEMENT, dated this 27th day of March, 1997, 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; and,

     WHEREAS, the 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 a
[Director/Consultant/Advisor] 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 this 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
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 be a nonstatutory stock option and shall not 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
evidenced by an 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 10th
anniversary 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 be
exercised until the Optionee has completed 1 year 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

 

 

calendar year when the Optionee completes 1 year of service with the Corporation and/or Subsidiary
Corporation and ending on the earliest of the expiration, termination of service, or cancellation
of the option. 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 SERVICE.

     (1) DEATH. If the Optionee dies while an employee of the
Corporation 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 a [director/consultant
/advisor] of the Corporation or 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 services ceased;
provided, however, that the option may not be exercised after the expiration date provided in
Section 2A of this Agreement.

     (3) TERMINATION OF SERVICE: If the Optionee ceases to be in the
service 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 service to the extent that the Optionee was entitled to exercise the option
on the date of his or her termination; provided, however that the option may not be exercised after
the expiration date provided in Section 2A of this Agreement; provided further, that if the
Optionee ceases to be in the service of the Corporation or of any Subsidiary Corporation because he
or she voluntarily terminates his or her service or because his or her service is involuntarily
terminated by the Corporation or by any Subsidiary Corporation as 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 service ceases.

     D. PAYMENT OF PURCHASE PRICE UPON EXERCISE. At the time of any
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
than by a will of the Optionee or by the laws of descent and distribution. During the lifetime
of

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the Optionee, the option shall be exercisable only by the Optionee or by his or her attorney-in
fact or conservator.

     F. ADJUSTMENTS. In the event of any change in the Common Stock by
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
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
upon the Optionee any right with respect to continuance of the Optionee’s current position within
the Corporation or any Subsidiary Corporation, nor shall it interfere in any way with the right of
the 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 the
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 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
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

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     3. STOCK RESTRICTION AGREEMENT. The Corporation shall not be required to
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
n 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
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
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
Agreement shall be sufficient if in writing and if sent by Certified or Registered Mail. As to the
Corporation 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
each 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 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                       day of                                         1997, 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 27th day of March, 1997, 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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Exhibit 10.7

April  5,  2000

PERSONAL & CONFIDENTIAL

Mr. John A. Pratt Jr.

Hudson Valley Bank 21

Scarsdale Road Yonkers,

New York 10707

Dear John:

I am writing this letter to confirm our understanding that you will continue to act as a Consultant
to the Bank through December 31, 2000, primarily in its business Retention and Business Development
programs.

     The plan is for you to make between 30 and 40 calls a month, which you will schedule at your
convenience. These calls generally will fall into two categories: (1) present VIP customers, and
(2) present Major Accounts who we believe may become VIP’s or who are fairly high income producers
in the Major category. Follow-up on the Business Development Lists will be re-assigned to others.

     We are hopeful that you can make many of these calls alone, but if you believe others
should accompany you, this will b e your call. You should prepare a monthly report, which
will be directed, to me.

     You will be operating through me as the Chairman of the Board and I hope to be providing you
with updated lists each quarter. The concentration this year should again be on the VIP’s and the
very high Majors.

 

 

	 	 	 	 	 
	Mr. John A. Pratt Jr.

	 	-2-
	 	April 5, 2000

     You will be paid a consulting fee of Fifty Thousand Dollars ($50,000) for the year 2000,
payable monthly at the beginning of the month at the rate of $4,166.66. A make-up for the first 4
months of this year will be issued sometime this month.

     If this is your understanding, please sign the enclosed copy of this letter where indicated
and return to me.

	 	 	 	 	 
	 

	 	Regards,
	 	 
	 
	 	 	 	 
	 

	 	William E. Griffin	 	 
	 

	 	Chairman of the Board	 	 
	 
	 	 	 	 

	 	 	 	 	 	 	 	 	 
	AGREED 6 ACCEPTED:	 	 
	 
	 	 	 	 	 	 	 	 
	  	 	 
	John A. Pratt Jr.	 	 
	 
	 	 	 	 	 	 	 	 
	Dated:

	 	  
	 	 	2000	 	 	 

-2-

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