HUDSON VALLEY HOLDING CORP.
2002 STOCK OPTION PLAN
The
purpose of the Hudson Valley Holding Corp. 2002 Stock Option Plan
(the “2002 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 2002 Plan, and any
option agreement under the 2002 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 2002 PLAN
Subject
to the provisions of Section 5B(8) of the 2002 Plan, 1,535,000
shares of the common stock of the Corporation (the “Common
Stock”) shall be reserved and may be optioned under the 2002
Plan. The reserved shares may be authorized and unissued shares,
treasury shares, or any combination of both. Subject to the
provisions of Section 5B(8) of the 2002 Plan, if an option
granted under the 2002 Plan expires, terminates, or is canceled for
any reason, the shares of stock representing that option shall be
available again under the 2002 Plan.
3. ADMINISTRATION
OF THE 2002 PLAN
The
2002 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 2002 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 2002 Plan;
to prescribe, amend, and rescind rules and regulations relating to
the 2002 Plan; to determine the terms and provisions of the option
agreements (which need not be identical) for options granted under
the 2002 Plan; and to make all other determinations deemed
necessary or advisable for the administration and operation of the
2002 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 2002 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 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 employee,
director, consultant, or advisor of 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.
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5. TERMS AND
CONDITIONS OF OPTIONS GRANTED UNDER THE 2002 PLAN
Each
option granted under the 2002 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.
(1) By
an optionee while an Employee, Director, Consultant or Advisor.
Subject to the provisions of this Section 5B of the 2002 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 an
employee, director, consultant or advisor of the Corporation or of
any Subsidiary Corporation, his or her option(s) under the 2002
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.
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 an
employee, 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 options(s) under the 2002
Plan may be exercised by him or her, his or her attorney-in-fact or
conservator, within the 12 months immediately following the
date when he or she ceases to be an employee, director,
consultant
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