EXHIBIT 10(w)
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                                RETIREMENT PLAN

                                      FOR

                             NON-EMPLOYEE DIRECTORS

                                       OF

                            U.S.B. HOLDING CO., INC.

                             AND CERTAIN AFFILIATES











                         Effective as of May 19,1999 and
                           Amended as of March 20,2002


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                   RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
                           OF U.S.B. HOLDING CO., INC.

The Retirement Plan for Non-Employee Directors of U.S.B. Holding Co., Inc. (the
"Plan") is hereby adopted, effective as of May 19, 1999, by U.S.B. Holding Co.,
Inc. (the "Company") for the purposes of providing modest retirement income for
Directors who have provided long service on the Company's Board of Directors,
and to encourage future Directors to provide long and valuable services.

The provisions of the Plan are as follows:

I        All Directors of the Company who are not employees of the Company or
         any affiliate shall be eligible to receive a benefit under the Plan.

2.       Every eligible Director who shall have served at least fifteen
         aggregate years on the Company's Board of Directors shall be eligible
         to receive a retirement benefit under this Plan. In the event a "Change
         of Control" (as defined below) occurs, every eligible Director
         currently serving on the Company's Board of Directors, and who shall
         not serve on the Board of Directors of the Company or surviving entity
         following a "Change of Control," shall be fully vested and entitled to
         the full retirement benefit under this Plan.

         The amount of retirement benefit shall be the sum of $2,000, payable
         each month, for a period not to exceed ten (10) years.

         The first payment shall be made on the first day of the month following
         the Director's retirement from the Board of Directors of the Company,
         and payments shall continue for a period equal to the lesser of (a) ten
         (10) years or (b) the month in which the Director shall die, subject to
         Section 3 below. Alternatively, the Director may elect, under Section 4
         of the Plan, to be paid the retirement benefit in a single lump sum.

3.       If the Director has qualified, by serving fifteen or more years on the
         Board of Directors, for a benefit under this Plan, and is married at
         the time of his retirement and at the time of his/her death while
         receiving benefits under this Plan, a benefit equal to the lesser of
         $1,000 per month, or one-half (1/2) of the pro-rated benefit payable
         due to a "Change of Control," shall be paid to the Director's spouse
         for the remainder of the ten (10) year period or until the death of the
         spouse, whichever occurs first. If the spouse does not survive the
         Director, no benefit shall be paid under the Plan following the
         Director's death.

4.       Upon joining the Board, or within 90 days following the effective date
         of the Plan (for those serving on the Board on May 19, 1999), each
         Director shall complete a Distribution Election Form provided by the
         Company. Each Director may elect to be paid his/her benefit in the form
         of a single lump sum on the first day of the month following
         retirement, or the first day of the year following retirement. The lump
         sum shall equal the


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present value of $200,000 (or, in the event of a "Change of Control," the
present value of $200,000 multiplied by a fraction, the numerator being the
aggregate number of full years the Director actually served on the Board of
Directors of the Company, and the denominator being 15), discounted based on the
average ten-year advance rate of the Federal Home Loan Bank of New York over the
thirty day period preceding the payment date, assuming interest would have
compounded and payments would have been made in equal monthly installments over
the ten year discount period. The present value calculation must be consistent
with financial accounting requirements with respect to the determination of the
expense to be recorded on the Company's Income Statement with respect to such
payment. If the Director does not elect a lump sum payment, payments shall be
made monthly, as stated above.

5.       At any time not less than twelve (12) months prior to retirement, a
         Director may file a written election with the Company changing the form
         of payment under the Plan from monthly payments to a lump sum, or from
         a lump sum to monthly payments. Such election shall not be effective
         until twelve months following its receipt by the Company.

6.       This Plan shall be administered by the Board of Directors of the
         Company. Any determination relating to the Plan regarding one or more
         individual Directors shall be made by a bare majority of the total
         number of Directors, excluding the individual(s) whose benefits or
         rights are being determined. Any decisions or interpretations made by
         the Board of Directors regarding the Plan shall be final and binding on
         all parties.

7.       The right to receive any benefit under the Plan shall not be subject in
         any manner to anticipation, alienation or assignment, nor shall such
         rights be liable for or subject to debts, contracts, torts, or an
         other liabilities of any party. Any attempt to encumber benefit rights
         under this Plan shall result in forfeiture of all such rights.

8.       This Plan is intended to be an unfunded deferred compensation
         arrangement for the specified participants. The Company may, but shall
         not be obligated to, establish a trust, account, or reserve for
         purposes of funding its obligations and liabilities hereunder, but no
         participant shall have any rights with respect to such trust, account
         or reserve, except the rights of any other general unsecured creditor
         of the Company.

9.       Participation in, or eligibility under, this Plan does not in any way
         assure that an individual shall be entitled to remain a member of the
         Company's Board of Directors. Nomination and/or election to additional
         terms on the Board are solely the prerogative of the shareholders of
         the Company, and the existence of, or participation in, this Plan shall
         not in any way affect or impinge such rights of the shareholders.

10.      The Board of Directors reserves the right to amend or terminate the
         Plan at any time. Any termination or amendment shall not deprive any
         Director, who has already become entitled to a benefit by reason of
         having completed fifteen years of Board service, of his/her benefit.


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11.      Notwithstanding any provisions of this Plan, any benefits payable
         hereunder are subject to and conditioned upon their compliance with
         Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section
         1828(k), and any regulations issued thereunder.

12.      This Plan shall be construed, administered and enforced in accordance
         with the laws of the State of New York. It is intended that this Plan
         not be subject to ERISA, and to the extent necessary for such purpose,
         the Plan shall be so interpreted.

13.      For purposes of this Plan, "Change of Control" shall mean the
         occurrence of any of the following events:

         a.     Any consolidation, merger, stock-for-stock exchange or similar
                transaction ("Transaction") which results in the shareholders
                prior to the Transaction owning less than 50% of the entity
                surviving after the Transaction;

         b.     Any person, entity, or group of persons or entities becoming the
                beneficial owner (as defined in Rule 13d-3 promulgated by the
                Securities Exchange Commission under the Exchange Act) of
                securities of the Company possessing one-third (1/3) of the
                voting power for the election of Directors of the Company, which
                were not beneficially owned by such person, entity, or group of
                persons or entities prior to the transactions resulting in such
                new beneficial ownership;

         c.     During any period of twenty-four (24) consecutive months,
                individuals who at the beginning of such period constituted a
                majority of the Board of Directors cease for any reason, other
                than death or a voluntary retirement entitling such Director to
                receive benefits under this Plan, to constitute at least a
                majority of the Board of Directors of the Company; or

         d.     Any sale, lease, exchange or other transfer, in one or more
                transactions, of all, or substantially all, of the assets of the
                Company to one or more parties which are not controlled by or
                under common control with the Company.

ATTEST:

/s/ Michael H. Fury                       /s/ Thomas E. Hales
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Michael H. Fury, Secretary                Thomas E. Hales
                                          Chairman of the Board, President and
                                          Chief Executive Officer









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