[LETTERHEAD OF HUDSON UNITED BANCORP]




March __, 2000

Ms. Susan Staudmyer
c/o Hudson United Bank
1000 MacArthur Boulevard
Mahwah, New Jersey 07430

Dear Ms. Staudmyer:

Hudson  United  Bancorp,  Hudson  United Bank and you are party to the  attached
Change In Control, Severance and Employment Agreement dated August 16, 1999 (the
"Agreement").  As indicated in the Background  section of the Agreement,  one of
the  reasons  for  entering  into  the  Agreement  was to  cause  you  not to be
distracted  by the  personal  uncertainties  and risks  created by any  proposed
business  combination  with another  entity.  To further  that goal,  we wish to
clarify  certain  provisions  of the Agreement to make certain that they reflect
unambiguously the original intent of the parties to the Agreement. While we view
these matters as  clarifications of our existing  understanding,  we intend this
letter to have the force and effect of an amendment to the  Agreement.  Thus, if
and to the extent that the Agreement is inconsistent with this letter, we hereby
agree that the terms set forth in this letter shall be controlling.

We hereby  clarify the Agreement (and if and to the extent that the Agreement is
inconsistent with the following, we hereby amend the Agreement) as follows:

A. Time of Change in Control: Section 1(b)(ii)(B) of the Agreement provides that
a Change in Control of Bancorp shall be deemed to occur:

                        forty-five  (45) days prior to the date  Bancorp  enters
                        into  a  definitive  agreement  to  merge,  consolidate,
                        combine or sell the assets of Bancorp; provided however,
                        that for purposes of any  resignation  by the Executive,
                        the Change in Control shall not be deemed to occur until
                        the   consummation   of   the   merger,   consolidation,
                        combination  or sale, as the case may be, except if this
                        Agreement  is not  expressly  assumed  in writing by the
                        acquiring  company,  then the Change in Control shall be
                        deemed to occur the day  before  the  consummation;  and
                        further  provided  that if any  definitive  agreement to
                        merge, consolidate, combine or sell assets is terminated
                        without consummation of the acquisition,  then no Change
                        in Control shall have been deemed to have occurred . . .

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            The concept of looking back 45 days prior to entry into a definitive
agreement  was  intended  solely to assure the  Executive  that the  Executive's
change in control  protection  would be available if the parties  negotiating  a
merger  terminated the Executive's  employment  before  executing the definitive
merger  agreement.  Thus,  the  45  day  "look-back"  is to be  used  solely  in
determining  when the  "Contract  Period"  begins  under the  Agreement.  In the
context of the pending  Hudson-Dime  merger  (assuming it is  consummated),  the
"Contract Period" began 45 days prior to execution of the merger  agreement,  or
August 1, 1999.  However,  we also  included  language in this  subparagraph  to
assure  that the  Executive  could not  trigger  Change in Control  payments  by
resigning  before the merger was completed.  Thus, in the context of the pending
Hudson-Dime  merger,  if the Executive resigns before the merger is consummated,
the  "Contract  Period"  would be deemed never to have begun,  and the Executive
would not be entitled to payment under the Agreement.


B.  Definition  of Good Reason:  "Good Reason" is defined in Section 1(e) of the
Agreement to include the following, if taken without Executive's express written
consent:

                                    "(i)  The  assignment  to  Executive  of any
                        duties inconsistent with, or the reduction of authority,
                        powers or responsibilities  associated with, Executive's
                        position,  title,  duties,  responsibilities  and status
                        with  the  Company  immediately  prior  to a  Change  in
                        Control;  any removal of Executive  from, or any failure
                        to re-elect  Executive to, any  position(s) or office(s)
                        Executive  held  immediately  prior  to such  Change  in
                        Control.   A  change   in   position,   title,   duties,
                        responsibilities  and status or position(s) or office(s)
                        resulting  from a Change in  Control or from a merger or
                        consolidation  of the Company  into or with another bank
                        or  company  shall  not  meet the  requirements  of this
                        paragraph  if, and only if, the  Executive's  new title,
                        duties and  responsibilities  are accepted in writing by
                        the Executive, in the sole discretion of the Executive."

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            The  language,  "A change . . . shall not meet the  requirements  of
this  paragraph  if,  and  only  if  the  Executive's  new  title,   duties  and
responsibilities  are  accepted  in  writing  by  the  Executive,  in  the  sole
discretion of the Executive" was intended to assure that the Executive will have
complete  and  absolute  discretion  to waive (or not to waive) the  Executive's
rights to claim "Good Reason" based upon a particular change, or set of changes,
in  position,  title,  duties  and/or  responsibilities.  Subject to paragraph C
below,  no waiver is to occur,  or be  inferred,  from any act of the  Executive
other than delivery of a document,  signed by the Executive,  which specifically
states  that the  Executive  accepts  the  Executive's  new  title,  duties  and
responsibilities for purposes of section 1(e) of the Agreement. Without delivery
of such a document,  no continuation in the employ of the surviving  corporation
or its subsidiaries following the merger, and no other document(s) signed by the
Executive of any sort (including  without  limitation any documents relating to,
or in the  capacity of, the  Executive's  new  position,  title,  duties  and/or
responsibilities),  will waive the right to claim Good  Reason  under  paragraph
1(e) of the Agreement.


C. Resignation for Good Reason; Resignation After First 90 Days: Section 9(b) of
the  Agreement  provides  that "For the first 90 days after a Change in Control,
the Executive  may resign for Good Reason during the Contract  Period upon prior
written  notice to the  Company."  Section 9(c) of the  Agreement  provides that
"Commencing 90 calendar days after a Change in Control and continuing thereafter
during the Contract Period,  the Executive may resign for any reason  whatsoever
and need not specify the reason,  upon four weeks written  notice to the Company
and, for these purposes,  the effective date of the resignation and not the date
of the notice must be 90 calendar days after the Change in Control."

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            The  language,  "For the first 90 days  after a Change in  Control,"
means, in the context of a merger,  the first 90 days after  consummation of the
merger.  In the context of a merger,  it is  intended  by Section  9(b) that the
Executive  will have the  absolute  right to resign for Good  Reason at any time
during  the first 90 days  following  consummation  of the merger and be paid in
full under Section 9(d) of the Agreement,  so long as an event which constitutes
Good Reason has occurred and the  Executive  gives  written  notice prior to the
resignation. In the context of a merger, it is intended by Section 9(c) that the
Executive will have the absolute right to resign for any reason or for no reason
at all at any time during the Contract  Period and be paid in full under Section
9(d) of the  Agreement so long as the  resignation  is not to take effect during
the first 90 days following  consummation  of the merger and the Executive gives
written  notice  at  least  four  weeks  prior  to  the  effective  date  of the
resignation.  The language stating that the Executive may resign "for any reason
whatsoever and need not specify the reason" was intended to ensure the Executive
that her right to resign during the Contract Period and be paid out in full will
not be  diminished  or forfeited for any reason prior to the end of the Contract
Period,  including  without  limitation  the  passage of time,  or any action or
inaction by the Executive.


D. Cash Compensation: Section 4 of the Agreement provides, in part, as follows:

                        The Company shall pay to the Executive  compensation for
her services during the Contract Period as follows:

                        a. Annual  Salary.  An annual salary equal to the annual
                        salary in effect as of the Change in Control. The annual
                        salary shall be payable in  installments  in  accordance
                        with the  Company's  usual  payroll  method.  The annual
                        salary shall not be reduced during the Contract Period.

                        b.  Annual  Bonus.  An annual  cash  bonus  equal to the
                        highest of the  bonuses  paid to the  Executive  for the
                        three fiscal  years prior to the Change in Control.  The
                        bonus  shall be  payable  at the time and in the  manner
                        which the Company paid such bonuses  prior to the Change
                        in Control.

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            It is  intended  that the  references  to "Change in Control" in the
above-quoted  language shall mean the consummation of the merger.  The statement
that "annual salary shall not be reduced during the Contract Period" is intended
to mean that the Executive  will be entitled to receive  either the  Executive's
salary as in effect at the time of the  merger,  or such  greater  salary as may
become effective during the Contract Period due to an increase in salary.  Thus,
assuming that the Hudson-Dime merger closes during calendar 2000:

o           The Executive's  post-merger  Contract Period annual salary shall be
            not less than the  greater of (x) the  Executive's  salary in effect
            just prior to the  closing of the merger or (y) the  highest  annual
            salary  level  received  by the  Executive  during  the  post-merger
            Contract Period.

o           The Executive's post-merger annual cash bonus shall be not less than
            the  aggregate  amount of cash  bonuses paid to the  Executive  with
            respect to either 1997, 1998, or 1999, whichever amount is highest.


E. Payments and Benefits: Section 9(d) of the Agreement provides as follows:

                        If the Company  terminates  the  Executive's  employment
                        during  the  Contract  Period  without  Cause  or if the
                        Executive  resigns for Good Reason under  paragraph 9(b)
                        or for any reason  under  paragraph  9(c),  the  Company
                        shall,  . . . pay the  Executive  a lump sum (the  "Lump
                        Sum")  equal  to 3.0  times  the sum of (i)  the  annual
                        salary paid to the  Executive  immediately  prior to the
                        Change in Control plus (ii) the highest annual incentive
                        bonus paid to the  Executive  for any fiscal year during
                        each of the three fiscal years  immediately prior to the
                        Change in Control. . .

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            It is intended that the language,  "immediately  prior to the Change
in  Control," as used in Section 9(d) and in the context of a merger such as the
Hudson-Dime merger, means "immediately prior to the consummation of the merger."


F. Interpretation of Specific Events as "Good Reason":  "Good Reason" is defined
in Section 1(e) of the  Agreement  to include the  following,  if taken  without
Executive's express written consent:

                                    "(i)  The  assignment  to  Executive  of any
                        duties inconsistent with, or the reduction of authority,
                        powers or responsibilities  associated with, Executive's
                        position,  title,  duties,  responsibilities  and status
                        with  the  Company  immediately  prior  to a  Change  in
                        Control;  any removal of Executive  from, or any failure
                        to re-elect  Executive to, any  position(s) or office(s)
                        Executive  held  immediately  prior  to such  Change  in
                        Control.   A  change   in   position,   title,   duties,
                        responsibilities  and status or position(s) or office(s)
                        resulting  from a Change in  Control or from a merger or
                        consolidation  of the Company  into or with another bank
                        or  company  shall  not  meet the  requirements  of this
                        paragraph  if, and only if, the  Executive's  new title,
                        duties and  responsibilities  are accepted in writing by
                        the Executive,  in the sole discretion of the Executive"
                        . . .


It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            Exhibit A sets forth  certain facts which we  acknowledge  and agree
have occurred prior to the date hereof.  We further  acknowledge  and agree that
these facts constitute Good Reason under the language quoted above.


                                    * * * * *

We trust that this letter  satisfactorily  clarifies issues of concern to you in
connection  with the Agreement.  Please  countersign and deliver to us a copy of
this letter.  Upon our mutual execution and delivery of this letter, this letter
shall be binding upon each of us, our  successors and assigns as fully as if set
forth in the Agreement.

Very truly yours,

HUDSON UNITED BANCORP


By: __________________________

                                        Accepted and agreed to by the Executive
HUDSON UNITED BANK                      as of the date set forth above:


By: _________________________           ________________________________
                                        SUSAN STAUDMYER, individually