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EXHIBIT B
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HUDSON VALLEY HOLDING CORP.
1992 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
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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.
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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.
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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.
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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.
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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 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
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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.
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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.
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B. EXERCISE OF OPTION.
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(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
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a. DEATH - If an optionee under an incentive stock option dies while an
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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.
b. DISABILITY - If an optionee under an incentive stock option ceases to be an
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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.
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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 22(E) 3, continue
to accrue hours of service, unless reemployment is guaranteed by statute or
contract.
(3) TERMINATION OF EMPLOYMENT.
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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
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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 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.
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(5) OPTION PRICE. The option price per share shall be determined in good faith
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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
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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.
(7) NONTRANSFERABILITY. No option granted under the 1992 Plan shall be
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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
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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 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
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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
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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
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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
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ADVISOR. The 1992 Plan and any option granted under the 1992 Plan shall
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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 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
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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
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ASSETS. Upon a reorganization in which the Corporation is not the surviving
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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 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.
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(14) STOCK RESTRICTION AGREEMENT. The Corporation shall not be required to issue
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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.
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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.
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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 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.
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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.
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The Plan shall be known as the "Hudson Valley Holding Corp. 1992 Stock
Option Plan".
10. EFFECT OF THE PLAN ON OTHER STOCK PLANS.
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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.
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Amendment (in bold lettering) approved October 16, 1995
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