Exhibit 10.1

HUDSON UNITED BANCORP
DIRECTOR SEVERANCE PLAN

In light of the extensive time and education demands on Directors and the fact
that Hudson United Bancorp and its subsidiaries have no retirement plan or
benefits for Directors, the Board hereby adopts, effective as of the date of
this meeting, the Hudson United Bancorp Directors Severance Plan (the “Plan”).

Under the Plan, a director of Hudson United Bancorp who served on the Board of
Hudson United Bancorp on or after July 1, 2005, who has served more than 12
months on the Board of Directors of Hudson United Bancorp, and who ceases to be
a director of Hudson United Bancorp for any reason whatsoever (other than a
removal for cause involving a breach of the Hudson United Bancorp Code of
Conduct) (such directors, the “Eligible Directors”), shall be entitled to be
paid, within 10 business days following termination of service, a lump sum
amount equal to the fees paid in the calendar year immediately prior to
termination. Subject to the final approval by the court of a settlement
agreement, as substantially embodied by the memorandum of understanding between
the parties in the matter of In Re Hudson United Bancorp Shareholders
Litigation, Superior Court of New Jersey, Case No. C-26805, the lump sum amount
payable above will be reduced by an amount equal to those fees paid for the
director’s attendance at board committee meetings. If the settlement agreement
is rejected by the court, an amount equal to the committee meeting fees will be
included in the lump sum payment, or subsequently paid, to directors. This Plan
may be amended or terminated at any time by the vote of two-thirds of all the
directors then in office. This Plan shall be administered by the Board of
Directors of Hudson United Bancorp.

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