AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT
This Amendment No. 1 to the Stock Option Agreement dated as of April 25, 2000
between Hudson River Bancorp, Inc. ("Grantee") and Cohoes Bancorp, Inc. ("Issuer") is dated as
of September 28, 2000.
WITNESSETH:
WHEREAS, Grantee and Issuer entered into an Agreement and Plan of Merger on April
25, 2000 ("Merger Agreement");
WHEREAS, as a condition and an inducement to Grantee to enter into the Merger
Agreement, Issuer granted to Grantee the Option as set forth in the Stock Option Agreement
dated as of April 25, 2000 ("Stock Option Agreement");
WHEREAS, there has occurred an Initial Triggering Event as provided in Section 2 of
the Stock Option Agreement in that two other financial institutions have made public
announcements of bona fide proposals to engage in an Acquisition Transaction with Issuer;
WHEREAS, the parties desire to limit the total value of the Option so as not to unduly
prejudice any third party;
WHEREAS, Grantee and Issuer are entering into an agreement of this date terminating
the Merger Agreement;
WHEREAS, Grantee and Issuer have agreed to modify and amend the Stock Option
Agreement and the reciprocal stock option agreement held by Issuer and issued by Grantee
thereto;
WHEREAS, the Boards of Directors of Grantee and Issuer have approved this
Amendment No. 1 to the Stock Option Agreement ("Agreement");
NOW, THEREFORE, in consideration of the foregoing and the agreements set forth
herein, the parties hereto agree as follows:
1. The Stock Option Agreement is hereby amended to add Section 24 to read as set forth
below.
| 24. | (a) Notwithstanding any other provision of this Agreement, in no event
shall the Grantee's Total Profit (as hereinafter defined) exceed $3.5
million and, if it otherwise would exceed such amount, the Grantee, at its
sole election, shall either (a) reduce the number of shares of Common
Stock subject to this Option, (b) deliver to Issuer for cancellation Option
Shares previously purchased by Grantee, (c) pay cash to Issuer, or (d) any
combination thereof, so that Grantee's actually realized Total Profit shall
not exceed $3.5 million after taking into account the foregoing actions.
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| | (b) Notwithstanding any other provision of this Agreement, this Option
may not be exercised for a number of shares as would, as of the date of
exercise, result in a Notional Total Profit (as defined below) of more than
$3.5 million; provided that nothing in this sentence shall restrict any
exercise of the Option permitted hereby on any subsequent date.
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| | (c) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount received by Grantee
pursuant to Issuer's repurchase of the Option (or any portion thereof)
pursuant to Section 7, (ii) (x) the amount received by Grantee pursuant to
Issuer's repurchase of Option Shares pursuant to Section 7, less (y)
Grantee's purchase price for such Option Shares, (iii) (x) the net cash
amounts received by Grantee pursuant to the sale of Option Shares (or any
other securities into which such Option Shares are converted or
exchanged) to any unaffiliated party, less (y) the Grantee's purchase price
of such Option Shares, (iv) any amounts received by Grantee on the
transfer of the Option (or any portion thereof) to any unaffiliated party, (v)
any amount equivalent to the foregoing with respect to the Substitute
Option, and (vi) any amounts received by Grantee upon the relinquishment
of the Option to Issuer in exchange for cash pursuant to Section 15.
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| | (d) As used herein, the term "Notional Total Profit" with respect to any
number of shares as to which Grantee may propose to exercise this Option
shall be the Total Profit determined as of the date of such proposed
exercise assuming that this Option were exercised on such date for such
number of shares and assuming that such shares, together with all other
Option Shares held by Grantee and its affiliates as of such date, were sold
for cash at the closing market price for the Common Stock as of the close
of business on the preceding trading day (less customary brokerage
commissions). |
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| | (e) If Grantee transfers the Option, either in whole or in part, the Total
Profit shall apply to Grantee and all Holders in the aggregate such that the
Total Profit realized by such persons may not exceed $3.5 million in the
aggregate. All references to Grantee in this Section 24 shall include any
and all Holders.
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| | (f) The provisions of this Section 24 shall survive the occurrence of an
Exercise Termination Event.
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2. Capitalized terms used in this Agreement and not defined herein shall have the
meanings assigned thereto in the Stock Option Agreement or the Merger Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its officers thereunto duly authorized, all as of the date of this Agreement.
| ATTEST: | | HUDSON RIVER BANCORP, INC. |
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/s/ Holly Rappleyea
| | By: /s/ Carl A. Florio
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| Holly Rappleyea, Secretary | | Carl A. Florio, President |
| ATTEST: | | COHOES BANCORP, INC. |
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/s/ Richard A. Ahl
| | By: /s/ Harry L. Robinson
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| Richard A. Ahl, Secretary | | Harry L. Robinson, President |
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