Document:

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                                                                    EXHIBIT 10.4

                          HUDSON VALLEY HOLDING CORP.

                            1992 STOCK OPTION PLAN
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                          HUDSON VALLEY HOLDING CORP.
                            1992 STOCK OPTION PLAN

1.  PURPOSE OF THE PLAN.
    -------------------

    The purpose of the Hudson Valley Holding Corp. 1992 Stock Option Plan (the
"1992 Plan") is to provide a means by which Hudson Valley Holding Corp. (the
"Corporation"), through the grant of incentive stock options and nonstatutory
stock options to eligible employees, directors, consultants and advisors, may
attract and retain persons of ability and motivate these persons to exert their
best efforts on behalf of the Corporation and any Subsidiary Corporation of the
Corporation, ("Subsidiary Corporation"). For the purposes of the 1992 Plan, and
any option agreement under the 1992 Plan, the term "Subsidiary Corporation"
means a Subsidiary Corporation as defined by Section 424(f) of the Internal
Revenue Code of 1986, as amended. It is intended that options issued under the
Plan may be either incentive stock options which meet the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended, or nonstatutory
stock options.

2.  SHARES SUBJECT TO THE 1992 PLAN.
    -------------------------------

    Subject to the provisions of Section 5B(9) of the 1992 Plan, 275,000 shares
of the common stock of the Corporation (the "Common Stock") shall be reserved
and may be optioned under the 1992 Plan.  The reserved shares may be authorized
and unissued shares, treasury shares, or any combination of both. Subject to the
provisions of Section 5B(9) of the 1992 Plan, if an option granted under the
1992 Plan expires, terminates, or is canceled for any reason, the shares of
stock representing that option shall be available again under the 1992 Plan.

3.  ADMINISTRATION OF THE 1992 PLAN.
    -------------------------------
<PAGE>

    The 1992 Plan shall be administered by the Compensation Committee of the
Corporation (the "Committee"). The Committee shall have plenary authority in its
sole discretion, subject to and not inconsistent with the express provisions of
the 1992 Plan, to grant options; to determine the purchase price of the Common
Stock covered by each option, the term of each option, the employees, directors,
consultants, and advisors to whom, and the time or times at which, options shall
be granted, and the number of shares to be covered by each option; to designate
options as incentive stock options or nonstatutory stock options; to interpret
the 1992 Plan; to prescribe, amend, and rescind rules and regulations relating
to the 1992 Plan; to determine the terms and provisions of the option agreements
(which need not be identical) for options granted under the 1992 Plan; and to
make all other determinations deemed necessary or advisable for the
administration and operation of the 1992 Plan.

    The Committee shall keep minutes of its meetings. All actions of the
Committee shall be taken by a majority of its members. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon all persons who have received awards, the Corporations,
any Subsidiary Corporation, and all other interested persons.

4.  ELIGIBILITY AND GRANT OF OPTIONS UNDER THE 1992 PLAN.
    ----------------------------------------------------

    A. Incentive stock options may be granted to any employee of the Corporation
or of any Subsidiary Corporation who is a signatory to a Stock Restriction
Agreement with respect to all of his or her common stock, including all stock
presently owned, or hereinafter acquired. This Agreement will be substantially
in the form of Exhibit "A", attached hereto. No incentive stock option may be
granted to any employee who at the time of such grant owns more than 10 percent

                                      -3-
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of the total combined voting power of all classes of stock of the Corporation or
of any Subsidiary Corporation.

    B. Nonstatutory stock options may be granted to any director, consultant, or
advisor of the Corporation or of any Subsidiary Corporation who is not an
employee of either the Corporation or of any Subsidiary Corporation and who is a
signatory to a Stock Restriction Agreement with respect to all of his or her
common stock, including all stock presently owned, or hereinafter acquired. This
Agreement will be substantially in the form of Exhibit "A", attached hereto.

5.  TERMS AND CONDITIONS OF OPTIONS GRANTED UNDER THE 1992 PLAN
    -----------------------------------------------------------

    Each option granted under the 1992 Plan shall be evidenced by a written
agreement in a form determined by the Committee. Such agreement shall be subject
to the following express terms and conditions, and such other terms and
conditions as the Committee may deem appropriate.

    A.  IDENTIFICATION OF OPTION STATUS AND OPTION PERIOD.
        -------------------------------------------------

          Each option agreement shall identify the status of the option as an
incentive stock option intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended, or as a nonstatutory stock option. An
incentive stock option and a nonstatutory stock option may not be granted
subject to a tandem exercise arrangement. Each option agreement shall specify
the period for which the option thereunder is granted and shall provide that the
option shall expire at the end of such period. The period for which an option is
granted may not exceed 10 years from the date of the grant of the option.

                                      -4-
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    B.  EXERCISE OF OPTION.
        ------------------
        (1) BY AN OPTIONEE WHILE AN EMPLOYEE. DIRECTOR, CONSULTANT OR ADVISOR.
            -----------------------------------------------------------------
Subject to the provisions of this Section 5B of the 1992 Plan, each option shall
be exercisable by an optionee while an employee, director, consultant, or
advisor of the Corporation or of any Subsidiary Corporation from time to time
over a period beginning on the date of the grant of the option and ending on the
earliest of the expiration, termination, or cancellation of the option;
provided, however, that the Committee may, by the provisions of any option
agreement, limit the period of time during which the option is exercisable and
limit the number of shares purchasable in any period of time during which the
option is exercisable.

        (2) EXERCISE IN THE EVENT OF DEATH OR DISABILITY
            --------------------------------------------

            a.   DEATH - If an optionee under an incentive stock option dies
                 -----
                 while an employee of the Corporation or of any Subsidiary
                 Corporation, or if an optionee under a nonstatutory stock
                 option dies while a director, consultant or advisor of the
                 Corporation or of any Subsidiary Corporation, his or her
                 option(s) under the 1992 Plan may be exercised by the estate of
                 the deceased optionee or by any person who acquired such
                 option(s) by bequest or inheritance or by reason of the death
                 of the optionee within the twelve (12) months immediately
                 following his or her death, and to the extent that the deceased
                 optionee was entitled to exercise such option(s) on the date of
                 his or her death; provided, however, that no option may be
                 exercised after the fixed period of that option.

                                      -5-
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            b.   DISABILITY - If an optionee under an incentive stock option
                 ----------
                 ceases to be an employee of the Corporation or of any
                 Subsidiary Corporation, or if an optionee under a nonstatutory
                 stock option ceases to be a director consultant or advisor of
                 the Corporation or of any Subsidiary Corporation, because of a
                 disability as defined in Section 22(e)(3) of the Internal
                 Revenue Code of 1986, as amended, his or her right to exercise
                 the option(s) under the 1992 Plan may be exercised by him or
                 her, his or her attorney-infact or conservator, within the 12
                 months immediately following the date when he or she ceases to
                 be an employee, director, consultant or advisor to the extent
                 that the optionee was entitled to exercise such option(s) on
                 the date when his or her employment with, directorship of, or
                 engagement as a consultant or advisor by the Corporation or any
                 Subsidiary Corporation ceases; provided, however, that no
                 option may be exercised after the fixed period of that option
                 and that the exercise of any incentive stock option by an
                 attorney-infact or conservator of the optionee does not
                 disqualify that option as an incentive stock option under
                 Section 422 of the Internal Revenue Code of 1986, as amended.

    As to all employee optionees, if the disability leave does not exceed 90
days, the optionee will be deemed to be in the continuous employment of his or
her employer during the leave period. However, if the disability leave exceeds
90 days, the optionee will be deemed to have terminated his or her employment on
the 91st day of that leave, and will not, pursuant to Section

                                      -6-
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22(E) 3, continue to accrue hours of service, unless reemployment is guaranteed
by statute or contract.

            (3)  TERMINATION OF EMPLOYMENT.
                 -------------------------

                 If an optionee under an incentive stock option ceases to be an
employee of the Corporation or of any Subsidiary Corporation, for any reason
other than death or disability, his or her right to exercise eligible option(s)
as of the date of termination under the 1992 Plan may be exercised by him or her
within the 3 months immediately following the date of his or her termination of
employment, or the expiration date of any mutually agreed salary continuation
agreement, to the extent that the optionee was entitled to exercise such
option(s) at the date of his or her termination of employment; provided,
however, that no option may be exercised after the fixed period of that option;
provided further, that if an 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 of any Subsidiary Corporation as
a result of his or her willful misconduct, as determined in the sole discretion
of the Committee, all right to exercise the option(s) under the 1992 Plan shall
terminate on the date his or her employment ceases.

     Amendment (in bold lettering) approved October 16,1995

            (4) TERMINATION OF DIRECTORSHIP OR OF ENGAGEMENT AS A CONSULTANT OR
                ---------------------------------------------------------------
ADVISOR. If an optionee under a nonstatutory option ceases to be a director,
-------
consultant or advisor of the Corporation or of any Subsidiary Corporation for
any reason other than his or death or disability, his or her right to exercise
the option(s) under the

                                      -7-
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1992 Plan may be exercised within the 3 months immediately following the date
when his or directorship terminates or when his or her engagement as a
consultant or advisor terminates, to the extent that the optionee was entitled
to exercise such option(s) at the date of that termination; provided, however,
that no option may be exercised after the fixed period of that option; provided
further, that if an optionee ceases to be a director, consultant, or advisor of
the Corporation or of any Subsidiary corporation because he or she voluntarily
resigns from his or her directorship or from his or her engagement as a
consultant or advisor or because he or she is removed for cause by the
shareholders of the Corporation or of any Subsidiary Corporation, or by the
board of directors of the Corporation or of a Subsidiary Corporation in the case
of a consultant or advisor, all right to exercise the option(s) under the 1992
Plan shall terminate on the date when his or her directorship or engagement as a
consultant or advisor ceases.

            (5)  OPTION PRICE. The option price per share shall be determined
                 ------------
in good faith by the Committee at the time an option is granted and shall be not
less than 100 percent of the fair market value of a share of the Common Stock of
the Corporation on the date of the grant. Each option shall provide that the
optionee agrees that the option price per share is determined in good faith by
the Committee at the time when that option is granted as not less than 100
percent of the fair market value of a share of the Common Stock of the
Corporation on the date of the grant.

            (6)  PAYMENT OF PURCHASE PRICE UPON EXERCISE. Each option shall
                 ---------------------------------------
provide that the purchase price of the shares for which an option may be
exercised shall be paid in cash to the Corporation at the time of exercise.

                                      -8-
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            (7) NONTRANSFERABILITY. No option granted under the 1992 Plan shall
                ------------------
be transferable other than by a will of an optionee or by the laws of descent
and distribution. During his or her lifetime, an option shall be exercisable
only by an optionee or by the optionee's attorney-in-fact or conservator, unless
in the case of an incentive stock option, such exercise by the attorney-infact
or 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.

            (8) INVESTMENT REPRESENTATION. The shares of stock to be issued upon
                -------------------------
the exercise of all or any portion of any option granted under the 1992 Plan
shall be issued on the condition that the optionee represents that the purchase
of stock upon exercise of the option shall be for investment purposes and not
with a view to resale, distribution, offering, transferring, mortgaging,
pledging, hypothecating, or otherwise disposing of any such stock under
circumstances which would constitute a public offering or distribution under the
Securities Act of 1933 or the applicable securities laws of any state. No shares
of stock shall be issued upon the exercise of any 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

                                      -9-
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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.

            (9)  ADJUSTMENTS. Notwithstanding any other provision of the 1992
                 -----------
Plan, in the event of any change in the outstanding Common Stock of the
Corporation by reason of any stock dividend, recapitalization, reorganization,
merger, consolidation, split-up, combination or exchange of shares, rights
offering to purchase the Common Stock at a price substantially below fair market
value, or of any similar change affecting the Common Stock, the number and kind
of shares which thereafter may be optioned and sold under the 1992 Plan and the
number and kind of shares subject to option in outstanding option agreements and
the purchase price per share thereof shall be appropriately adjusted consistent
with such change in such manner as the Committee may deem equitable to prevent
substantial dilution or enlargement of the rights granted to, or available for
an optionee under the 1992 Plan.

            (10) NO RIGHTS AS A SHAREHOLDER. No optionee shall have any right as
                 --------------------------
a shareholder with respect to any share subject to his or her option under the
1992 Plan prior to the date of issuance to him or her of a certificate for such
share.

            (11) NO RIGHTS TO CONTINUED DIRECTORSHIP OR ENGAGEMENT AS A
                 ------------------------------------------------------
CONSULTANT OR ADVISOR. The 1992 Plan and any option granted under the 1992 Plan
---------------------
shall neither confer upon any optionee any right with respect to continuance of
any directorship or engagement as a consultant or advisor of the Corporation or

                                      -10-
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of any Subsidiary Corporation, nor shall it interfere in any way with the right
of the shareholders, or the board of directors of the Corporation or of a
Subsidiary Corporation in the case of a consultant or advisor, to remove him or
her at anytime.

            (12) NO RIGHTS TO CONTINUED EMPLOYMENT. The 1992 Plan and any option
                 ---------------------------------
granted under the 1992 Plan shall neither confer upon any 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.

            (13) REORGANIZATION. MERGER, CONSOLIDATION, DISSOLUTION,
                 --------------------------------------------------
LIQUIDATION, OR SALE OF ASSETS. Upon a reorganization in which the Corporation
------------------------------
is not the surviving Corporation, all unexercised options under the 1992 Plan
shall be canceled as of the effective date of the reorganization; provided,
however, that the Committee shall give to an optionee, or the holder of the
option(s) granted under the 1992 Plan, at least 15 days' written notice of the
reorganization and during the period beginning when the optionee, or the holder
of the option(s), shall have the right to exercise the unexercised option(s)
under the 1992 Plan without regard to employment or directorship tenure
requirements or installment exercise limitations, if any; provided further,
however, that the option(s) may not be exercised after the period provided in
either Section 5A or 5B of the 1992 Plan. For the purposes of the 1992 Plan, and
any option agreement under the 1992 Plan, the term "reorganization" shall mean
any merger, consolidation, sale of substantially all of the assets of the
Corporation, or sale

                                      -11-
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     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.

                 (14) STOCK RESTRICTION AGREEMENT.  The Corporation shall not be
                      ---------------------------
     required to or deliver any shares of Common Stock upon the exercise of any
     option granted under the 1992 Plan until the optionee, or the holder of the
     option(s) 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.

     6.  COMPLIANCE WITH LAWS AND REGULATIONS.
         ------------------------------------

        The 1992 Plan, the grant and exercise of options under the 1992 Plan,
     and the obligation of the Corporation to sell and deliver shares under such
     options, 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 or such shares under any
     federal or state law or any ruling or regulation of any governmental body
     which the Corporation shall, in its sole discretion, determine to be
     necessary or advisable.

     7.  AMENDMENT AND DISCONTINUANCE.
         ----------------------------

         The Committee may amend, suspend, or discontinue the 1992 Plan;
     provided, however, that no action of the Committee may (a) increase the
     number of shares reserved for options

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     pursuant to Section 2 or (b) permit the granting of options which expire
     beyond the period provided for in Section 5B (7). Without the written
     consent of an optionee, no amendment or suspension of the 1992 Plan shall
     alter or impair any option previously granted to him or her under the 1992
     Plan.

     8.  EFFECTIVE DATE.
         --------------

         The effective date of the 1992 Plan is July 27, 1992. The 1992 Plan was
     approved by a majority of the shareholders of the Corporation on October
     20,1992.

         On April 7, 1994, the Committee amended and restated the 1992 Plan
     pursuant to Section 7. No option shall be granted under the 1992 Plan after
     July 26, 2002.

     9.  NAME OF THE 1992 PLAN.
         ---------------------

         The Plan shall be known as the "Hudson Valley Holding Corp. 1992 Stock
     Option Plan".

     10. EFFECT OF THE PLAN ON OTHER STOCK PLANS.
         ---------------------------------------

         The adoption of the 1992 Plan shall have no effect on awards made or to
     be made pursuant to other stock plans covering directors, officers,
     employees, or advisors of the Corporation, any Subsidiary Corporation, a
     parent corporation, or any predecessors or successors thereto.

         The foregoing constitutes the entire agreement known as the Hudson
     Valley Holding Corp. Stock Option Plan of 1992 .

     Amendment (in bold lettering) approved October 16, 1995

                                     -13-
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                             SHAREHOLDER AGREEMENT

                                  EXHIBIT "A"
<PAGE>

                             SHAREHOLDER AGREEMENT

     This Agreement (the "Agreement") is made and entered into this _____ day of
________________,199 , by and among Hudson Valley Holding Corp., a New York
Corporation (the "Company"), and _______________________ ("Stockholder").

                                   RECITALS

     A. WHEREAS, Stockholder may now own or may hereinafter own shares of common
stock of the Company (the "Shares") and has received options under the Hudson
Valley Holding Corp. 1992 Stock Option Plan (the "1992 Plan"); and

     B. WHEREAS, the terms of the 1992 Plan require that all shares now, or
hereinafter acquired, either by option or otherwise be subject to the provisions
of a stock restriction agreement at the time of any grant of any option under
the 1992 Plan; and

     C.  WHEREAS, the parties hereto desire to promote, protect, and preserve
their mutual interests and the interests of the Company by showing continuity of
share ownership and corporate control, and by imposing certain restrictions and
obligations upon themselves, the Company and the Shares.
<PAGE>

                                  AGREEMENTS

     NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:

     1. Right of First Refusal. The Stockholder shall not sell, assign,
        ----------------------
transfer, or give, or in any manner, dispose of (gifts to family members
excepted, provided however, that the donee must become a signatory to the Stock
Restriction Agreement) all or any part of his or her Shares, now owned or
hereafter acquired, or any right or interest therein, whether voluntarily or by
operation of law, without first giving to the Company written notice by
Certified or Registered Mail (the "Sale Notice") of his or her receipt of an
offer from a prospective purchaser. The Sale Notice must be in writing, giving
the name and address of the prospective purchaser, the number of Shares
involved, and the terms of such purchase.

     Within ten (10) days after receipt of the Sale Notice by the Company, the
Company, by action of its Board of Directors or its designated committee, may
elect to purchase all, but not less than all, of such Shares offered for
disposition, or may elect to designate a person, including an officer, director
or employee of the Company, to purchase all but not less than all of such
Shares. The purchase price for any Shares purchased under the terms of this
Agreement shall be on the same terms and conditions as that offered by the
prospective purchaser.

     2. Termination of Restrictions. If all of the Shares of the Stockholder or
        ---------------------------
transfer desiring to make a disposition thereof are not purchased by the Company
or its designee in accordance with the provisions of Paragraph 1 hereof, then
all restrictions imposed by this
<PAGE>

Agreement upon the unsold Shares shall terminate and the Stockholder desiring to
make a disposition therefor shall be free to sell the unsold Shares to the
prospective purchaser at the price and terms set forth in the original offer, at
any time within twenty (20) days thereafter; provided, however, that at the end
of the twenty (20) day period, all restrictions shall again be applicable in the
same manner and under the same terms as set forth in this Agreement.

     3.  Terms of the Purchase.
         ---------------------

         A. Closing. The consummation of the purchase and sale of the Shares
shall be referred to as the "Closing", and should take place at a time and place
as to which the parties shall agree, but in no event shall it occur more than
twenty (20) days after the Company receives the Sale Notice pursuant to
Paragraph 1 of this Agreement.

         B. Transfer of Shares. At such time as the agreed consideration has
been paid and delivered to the selling Stockholder or his estate, the Shares
shall be transferred to the purchaser.

         C. Payment of Purchase Price. The purchase price for any shares
purchased pursuant to this Agreement shall be paid, either in cash or certified
funds.

     4.  Endorsement on Share Certificate. Each certificate representing shares
         --------------------------------
of the Company shall have endorsed conspicuously on its face a legend in
substantially the following form:

             (i)    SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
                    OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
                    PURSUANT TO

                                     -17-
<PAGE>

                    AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
                    OF 1933 ("THE ACT"), OR PURSUANT TO AN EXEMPTION FROM
                    REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO
                    BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

             (ii)   THE OFFER, SALE, TRANSFER, OR OTHER DISPOSITION OF THE
                    SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY AND
                    SUBJECT TO THE TERMS OF THAT CERTAIN SHAREHOLDER AGREEMENT
                    DATED _________ 1992, INCLUDING ANY AMENDMENTS THERETO, AND
                    NOT BE AFFECTED IN CONTRAVENTION OF THE PROVISIONS OF SUCH
                    AGREEMENT. A COPY OF SUCH MAY AGREEMENT WILL BE FURNISHED TO
                    THE HOLDER HEREOF BY THE SECRETARY OF THE COMPANY UPON
                    WRITTEN REQUEST.

     5.  Miscellaneous.
         -------------

         A.  Binding Effect. This Agreement shall be binding upon the parties to
this Agreement and upon their respective heirs, legatees, personal
representatives, successors, assigns and donees.

                                     -18-
<PAGE>

     B. No Waiver. No waiver of any breach or default under this Agreement shall
be considered valid unless in writing, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or similar nature.

     C. Amendment. This Agreement may only be amended by written instrument
executed by both parties hereto.

     D.  Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties with respect to the transaction contemplated
pursuant to this Agreement, and supersedes all prior agreements, arrangements
and understandings related to its subject matter among the parties.

     E.  Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which shall
constitute the same document.

     F.  Governing Law. The laws of the State of New York shall govern this
Agreement and the construction of its terms. If any provision is unenforceable
or invalid for any reason, the remainder of this Agreement shall continue in
effect.

     G. Enforcement. If a stockholder proposes to make a transfer of any shares
by assignment, pledge, sale, gift or other transfer in violation of the terms of
this Agreement, the Company may apply to any court for injunctive order
prohibiting such proposed transfer except in compliance with the terms of this
Agreement. The Company may institute or maintain proceedings against the
violating stockholder to compel specific performance of this Agreement. Any
attempt to transfer the Shares in violation of this Agreement shall be void.

                                     -19-
<PAGE>

     H.  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 to:

                            As to the "Company" to:

                            Chairman of the Board
                            HudsonValley Holding Corp.
                            21 Scarsdale Road
                            Yonkers, New York 10707

                            As to the"Stockholder" to:

                                    (Name)
                            --------------------- -------
                                   (Address)
                            ---------------------
                                   (Address)
                            ---------------------

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

     I.  Termination.  This Agreement shall terminate upon the unanimous written
agreement of the parties hereto.

                                     -20-
<PAGE>

     IN WITNESS WHEREOF, the Company and the Stockholder have executed this
Agreement effective as of the date first above written.

                                    HUDSON VALLEY HOLDING CORP.

                                    BY:__________________________________

                                    STOCKHOLDER:

                                    BY:__________________________________
<PAGE>

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

     On the          day of                , 199 , before me personally came
___________________ to me known, who, being by me duly sworn, did depose and say
that he resides at ____________ _____________________; that he is the
______________ 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      )
                       )  ss.:
COUNTY OF WESTCHESTER  )

     On the      day of              , 199 , before me personally came
___________________ to me known to be the individual described in and who
executed the foregoing instrument, and acknowledged that he executed the same.

                                           ______________________________<PAGE>

                                                                   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
<PAGE>

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

                                    2 of 6
<PAGE>

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

                                    3 of 6
<PAGE>

     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
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.

                                    4 of 6
<PAGE>

     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

                                        ______________________________________

                                    5 of 6
<PAGE>

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.

                                                         _____________________

                                    6 of 6

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