RESTATED CERTIFICATE OF INCORPORATION

                                       OF

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

                            Under Section 245 of the
                        Delaware General Corporation Law

      U.S.B. Holding Co., Inc., a corporation duly organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:

            1. The present name of the Corporation is U.S.B. Holding Co., Inc.,
which is the name under which the Corporation was originally incorporated; and
the date of filing the original certificate of incorporation of the Corporation
with the Secretary of State of Delaware is July 6, 1982.

            2. The provisions of the certificate of incorporation as heretofore
amended and/or supplemented are hereby restated and integrated into the single
instrument which is hereinafter set forth, and which is entitled Restated
Certificate of Incorporation of U.S.B. Holding Co., Inc., without further
amendment and without any discrepancy between the provisions of the certificate
of incorporation as heretofore amended and supplemented and the provisions of
the said single instrument hereinafter set forth.

            3. The Board of Directors of the Corporation has duly adopted this
Restated Certificate of Incorporation pursuant to the provisions of Section 245
of the General Corporation Law of the State of Delaware in the form set forth as
follows:
<PAGE>

                     "RESTATED CERTIFICATE OF INCORPORATION

                                       OF

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

                          ----------------------------

      1. Name. The name of the corporation is U.S.B. Holding Co., Inc.
(hereinafter called the "Corporation").

      2. Address Registered Agent. The address, including street, number, city
and county, of the Corporation's registered office in this State is 1209 Orange
Street, Wilmington, County of New Castle, Delaware; and its registered agent at
such address is The Corporation Trust Company.

      3. Purpose. The nature of the business and purposes to be conducted or
promoted by the Corporation are to engage in, carry on and conduct any lawful
act or activity for which corporations may be organized under the General
Corporation Law of Delaware.

      4. Number of Shares. The total number of shares of stock which the
Corporation shall have authority to issue is 7,100,000 shares, consisting of
7,000,000 shares of Common Stock having a par value of $5.00 per share and
100,000 shares of Preferred Stock without par value.

      The Board of Directors is authorized, by resolution or resolutions,
subject to limitations prescribed by law and the provisions of this Article 4,
to provide for the issuance of the Preferred Stock in one or more series, to
establish the number of shares to be included in each such series, and to fix
the designation, powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, of the shares of each such series. The
authority of the Board with respect to each series shall include, but not be
limited to, determination of the following:


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<PAGE>

            (a) The number of shares constituting that series and the
      distinctive designation of that series;

            (b) The dividend rate of the shares of that series, whether
      dividends shall be cumulative, and, if so, from which date or dates, and
      the relative rights of priority, if any, of payment of dividends on shares
      of that series;

            (c) Whether that series shall have voting rights, and, if so, the
      terms of such voting rights;

            (d) Whether or not the shares of that series shall be redeemable,
      and, if so, the terms and conditions of such redemption, including the
      date or dates upon or after which they shall be redeemable, and the amount
      per share payable in case of redemption, which amount may vary under
      different conditions and at different redemption dates;

            (e) Whether that series shall have a sinking fund for the redemption
      or purchase of shares of that series, and if so, the terms and amount of
      such sinking fund;

            (f) The rights of the shares of that series in the event of
      voluntary or involuntary liquidation, dissolution or winding up of the
      Corporation, and the relative rights of priority, if any, of payment of
      shares of that series; and

            (g) Any other powers, preferences and rights, and the
      qualifications, limitations or restrictions thereof, of that series.
      Dividends on outstanding Preferred Stock shall be declared and paid, or
      set apart for payment, before any dividends shall be declared and paid, or
      set apart for payment, on the Common Stock with respect to the same
      dividend period. No shares of Preferred Stock


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<PAGE>

      shall be convertible into shares of Common Stock or other securities of
      the Corporation.

      5. Board of Directors

            Section 1. Number, election and terms. The Board of Directors of the
      Corporation shall consist of that number of directors, to be fixed by, or
      in the manner provided in, the Bylaws, and such number of directors so
      fixed in such Bylaws may be changed only by receiving the affirmative vote
      of (i) the holders of at least 75% of all the shares of the Corporation
      then entitled to vote on such change or (ii) a majority of the directors
      in office at the time of vote. In the election of directors at the 1985
      Annual Meeting of Shareholders, the directors shall be divided into three
      classes, as nearly equal in number as possible, with the term of office of
      the first class to expire at the 1986 Annual meeting of Shareholders, the
      term of office of the second class to expire at the 1987 Annual Meeting of
      Shareholders, and the term of office of the third class to expire at the
      1988 Annual Meeting of Shareholders. At each Annual Meeting of
      Shareholders following such initial classification and election, the
      number of directors equal to the number of the class whose term expires at
      the time of such meeting shall be elected to hold office until the third
      succeeding Annual Meeting of Shareholders. Each director shall hold office
      until his successor is elected and qualified, or until his earlier
      resignation or removal.

            Section 2. Newly created directorships and vacancies. Newly created
      directorships resulting from any increase in the authorized number of
      directors and any vacancies in the Board of Directors resulting from
      death, resignation, retirement, disqualification, removal from office or
      other cause may be filled by a majority vote of the directors then in
      office, and directors so chosen shall hold office for a term expiring at
      the


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<PAGE>

      Annual Meeting of Shareholders at which the term of the class to which
      they have been elected expires.

            Section 3. Removal. At a meeting of shareholders called expressly
      for that purpose, any director, or the entire Board of Directors, may be
      removed from office at any time, without cause, but only by the
      affirmative vote of the holders of at least 80% of the shares of the
      Corporation then entitled to vote in an election of directors. At a
      meeting of stockholders called expressly for that purpose, a director may
      be removed by the stockholders for cause by the affirmative vote of the
      holders of a majority of the shares then entitled to vote in an election
      of directors.

            Section 4. Amendment, repeal etc. Notwithstanding anything contained
      in Delaware corporate law or these Articles of Incorporation to the
      contrary, the affirmative vote of the holders of at least 80% of the
      shares of the Corporation then entitled to vote in an election of
      directors shall be required to amend or repeal, or to adopt any provision
      inconsistent with, this Article 5.

      6. Adoption, Amendment and/or Repeal of By-Laws. The Board of Directors
may from time to time (after adoption by the undersigned of the original by-laws
of the Corporation) adopt, amend or appeal the by-laws of the Corporation;
provided, that any by-laws adopted, amended or repealed by the Board of
Directors may be amended repealed, and any by-laws may be adopted, amended, or
repealed by the stockholders of the Corporation.

      7. Compromise and Arrangements. Whenever a compromise or arrangement is
proposed between this Corporation and its creditors or any class of them and/or
between this Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within


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<PAGE>

the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions of
section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.

      8. Approval of Certain Business Combinations. The approval of any Business
Combination shall, in addition to any affirmative vote required by law, require
the affirmative vote of the holders of not less than eighty percent (80%) of the
common shares of the Corporation then entitled to vote generally in the election
of directors of the Corporation; provided, however, that any such Business
Combination may be approved on the affirmative vote required by law if such
Business Combination is approved by not less than sixty-six and two-thirds
percent (66-2/3%) of the entire Board of Directors of the Corporation. As used
herein the term "Business Combination" shall mean:


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<PAGE>

            (i) any merger or consolidation of the Corporation or any subsidiary
      of the Corporation with (a) any Substantial Shareholder or (b) any other
      corporation which, after such merger or consolidation, would be a
      Substantial Shareholder regardless of which entity survives;

            (ii) any sale, lease, exchange, mortgage, pledge, transfer or other
      disposition (in one transaction or a series of transactions) to or with
      any Substantial Shareholder of all or substantially all of the assets of
      the Corporation or any subsidiary of the Corporation, or both;

            (iii) the adoption of any plan or proposal for the liquidation of
      the Corporation proposed by or on behalf of a Substantial Shareholder; or

            (iv) any transaction involving the Corporation or any of its
      subsidiaries, including the issuance or transfer of any securities of, any
      reclassification of securities of, or any recapitalization of, the
      Corporation or any of its subsidiaries, or any merger or consolidation of
      the Corporation with any of its subsidiaries (whether or not involving a
      Substantial Shareholder), if the transaction would have the effect,
      directly or indirectly, of increasing the proportionate share of the
      outstanding shares of any class of equity or convertible securities of the
      Corporation or any subsidiary, of which a Substantial Shareholder is the
      Beneficial Owner.

      As used herein, the term "Substantial Shareholder" shall mean and include
any individual, corporation, partnership or other person or entity which,
together with its "Affiliates" and "Associates" (as such terms were defined as
of May 22, 1984, in Rule 12b-2 under the Securities Exchange Act of 1934), is
the "Beneficial Owner" (as determined in accordance with the criteria set forth
as of May 22, 1984 under Rule 13d-3 under the Securities Exchange Act of 1934)
in the


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<PAGE>

aggregate of more than five percent (5%) of the outstanding shares of the
Corporation entitled to vote generally in an election of directors; and any
Affiliate or Associate of any such individual, corporation, partnership or other
person or entity. Notwithstanding anything contained in Delaware corporate law
or these Articles of Incorporation to the contrary, the affirmative vote of the
holders of at least 80% of the shares of the Corporation then entitled to vote
in an election of directors shall be required to amend or repeal, or to adopt
any provision inconsistent with, this Article 8.

      9. Limitation of Director's Personal Liability. A director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, as the same exists or
hereafter may be amended, or (iv) for any transaction from which the director
derived an improper personal benefit. This Article shall not eliminate or limit
the liability of a director for or with respect to any act or omission occurring
prior to the effective date of the Amendment adding this Article to the
Certificate of Incorporation. If the Delaware General Corporation Law hereafter
is amended to authorize the further elimination or limitation of the liability
of directors, then the liability of a director of the Corporation, in addition
to the limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended Delaware General Corporation Law. Any
repeal or modification of this paragraph by the stockholders of the Corporation
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time of such
repeal or modification."


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<PAGE>

      IN WITNESS WHEREOF, this Restated Certificate has been signed on this 26th
day of March, 1997, and the signature of the undersigned shall constitute the
affirmation and acknowledgment of the undersigned, under penalties of perjury,
that the Restated Certificate is the act and deed of the Corporation and that
the facts stated herein are true.


                                           _________________________
                                           Michael H. Fury
                                           Secretary


                                       -9-
<PAGE>

                                                                       EXHIBIT A

                           DIRECTOR STOCK OPTION PLAN

      1. Purpose. The purpose of this Director Stock Option Plan (the "Plan") of
U.S.B. Holding Co., Inc. (the "Company") is to encourage ownership in the
Company by outside directors of the Company whose continued services are
considered essential to the Company's future progress and to provide them with a
further incentive to remain as directors of the Company.

      2. Administration. The Board of Directors shall supervise and administer
the Plan. Grants of stock options granted shall be automatic in accordance with
Section 5. However, all questions of interpretation of the Plan or of any
options issued under it shall be determined by the Board of Directors and such
determination shall be final and binding upon all persons having an interest in
the Plan.

      3. Participation in the Plan. Directors of the Company who are not
employees of the Company or any subsidiary of the Company shall be eligible to
participate in the Plan.

      4. Stock Subject to the Plan. (a) The maximum number of shares which may
be issued under the Plan shall be Fifty Thousand (50,000) shares of the
Company's Common Stock, par value $l0.00 per share ("Common Stock"), subject to
adjustment as provided in Section 9 of the Plan.

      (b) If any outstanding option under the Plan for any reason expires or is
terminated without having been exercised in full, the shares allocable to the
unexercised price of such option shall again become available for grant pursuant
to the Plan.

      (c) All options granted under the Plan shall be non-statutory options
entitled to special tax treatment under section 422A of the Internal Revenue
Code of 1986, as amended to date and as may be amended from time to time.

      5. Terms, Conditions and Form of Options. Each option granted under the
Plan shall be evidenced by a written agreement in such form as the Board of
Directors shall from time to time approve, which agreements shall comply with
and be subject to the following terms and conditions:

            (a) Option Grant Dates. An option shall be granted automatically to
      each eligible director at the close of business on the date the Plan is
      approved by the stockholders of the Company. Thereafter, an option shall
      be granted automatically to each eligible director effective as of the
      close of each annual meeting of stockholders of the Company (i) at which
      such individual is elected a director or (ii) following which such
      individual will continue to serve as a director as a member of a
      continuing class of directors.

            (b) Shares Subject to Option. Each option granted under the Plan
      shall be exercisable, in whole or in part, for Seven Hundred (700) shares
      of Common Stock, subject to adjustment as provided in Section 9 of the
      Plan.


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<PAGE>

            (c) Option Exercise Price. The option exercise price per share for
      each option granted under the Plan shall equal not less than l00% of the
      fair market value of the Common Stock on the date an option is granted nor
      less than the par value of the Common Stock, whichever is greater. The
      fair market value of the Common Stock on any day shall be (a) if the
      principal market for the Common Stock is a national securities exchange,
      the mean between the highest and lowest quoted selling prices of the
      Common Stock on such day (or last day of trade prior to such day if not
      traded on such day) as reported by such exchange or on a consolidated tape
      reflecting transactions on such exchange, or (b) if the principal market
      for the Common Stock is not a national securities exchange and the Common
      Stock is subject to quotation on the National Association of Securities
      Dealers Automated Quotations System, the mean between the highest
      independent bid and the lowest independent asked prices for the Common
      Stock on such day (or the last day quoted prior to such day if not quoted
      on such day) on such system, or (c) if the principal market for the Common
      Stock is not a national securities exchange and the Common Stock is not
      subject to quotation on the National Association of Securities Dealers
      Automated Quotations System, the mean between the highest bid and lowest
      asked prices for the Common Stock on such day (or the last day quoted
      prior to such day if not quoted on such day) as reported by National
      Quotation Bureau Incorporated or a similar organization, or (d) if none of
      the above is applicable, fair market value will be determined by the Board
      of Directors.

            (d) Options Non-Transferable. Each option granted under the Plan by
      its terms shall not be transferable by the optionee otherwise than by
      will, or by the laws of descent and distribution, and shall be exercised
      during the lifetime of the optionee only by him. No option or interest
      therein maybe transferred, assigned, pledged, or hypothecated by the
      optionee during his lifetime, whether by operation of law or otherwise, or
      be made subject to execution, attachment or similar process.

            (e) Exercise Period. Except as otherwise provided in this Plan, no
      option may be exercised prior to the first anniversary of the date of
      grant of such option. provided that, subject to the provisions of Section
      5 (f), no option may be exercised more than 90 days after the optionee
      ceases to serve as a director of the Company. No option shall be
      exercisable after the expiration of ten (10) years and one day from the
      date of grant.

            (f) Exercise Period Upon Death or Disability. Notwithstanding the
      provisions of Section 5 (e), any option granted under the Plan may be
      exercised in full by an optionee who becomes disabled while acting as a
      full director of the Company, or may be exercised in full upon the death
      of such optionee while a director of the Company or within three months
      after he ceases to serve as a director of the Company, by the person to
      whom it is transferred by will, by the laws of descent and distribution,
      or by written notice filed pursuant to Section 5 (h), in each case within
      the period of one year after the date of the optionee ceases to be such a
      director by reason of such death or disability: provided, that no option
      shall be exercisable after the expiration of ten (10) years and one day
      from the date of grant.

            (g) Exercise Procedure. Options may be exercised only by written
      notice to the Company at its principal office specifying the number of
      shares as to which the Option is being exercised, accompanied by payment
      in cash of the full consideration for the shares as to which they are
      exercised.


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<PAGE>

            (h) Exercise by Representative Following Death of Director. A
      director, by written notice to the Company, may designate one or more
      persons (and from time to time change such designation), including his
      legal representative, who, by reason of the director's death, shall
      acquire the right to exercise all or a portion of the option. If the
      person or persons so designated wish to exercise any portion of the
      option, they must do so within the term of the option as provided herein.
      Any exercise by a representative shall be subject to the provisions of the
      Plan.

      6. Assignments. The rights and benefits under the Plan may not be assigned
except for the designation of a beneficiary as provided in Section 5.

      7. Time for Granting Options. All options for shares subject to the Plan
shall be granted, if at all, not later than ten (10) years after the approval of
the Plan by the Company's stockholders.

      8. Limitation of Rights.

      (a) No Right to Continue as a Director. Neither the Plan, nor the granting
of an option nor any other action taken pursuant to the Plan, shall constitute
or be evidence of any agreement or understanding, express or implied, that the
Company will retain a director for any period of time.

      (b) No Stockholders' Rights for Options. An optionee shall have no rights
as a stockholder with respect to the shares covered by his options until the
date of the issuance to him of a stock certificate therefor, and no adjustment
will be made for dividends or other rights (except as provided in Section 9) for
which the record date is prior to the date such certification is issued.

      9. Changes in Common Stock. (a) If the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities, or if additional shares or new or different shares or other
securities are distributed with respect to such of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all of
the assets of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Common Stock, or other securities, an appropriate and
proportionate adjustment may be made in (i) the maximum number and kind of
shares reserved for issuance under the Plan, (ii) the number and kind of shares
or other securities subject to then outstanding options under the Plan and (iii)
the price for each share subject to any then outstanding options under the Plan,
without changing the aggregate purchase price as to which such options remain
exercisable. No fractional shares will be issued under the Plan on account of
any such adjustments.


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<PAGE>

      (b) In the event that the Company is merged or consolidated into or with
another corporation (in which consolidation or merger the stockholders of the
Company receive distributions of cash or securities of another issuer as a
result thereof), or in the event that all or substantially all of the assets of
the Company are acquired by any other person or entity, or in the event of a
reorganization or liquidation of the Company, the Board of Directors of the
Company, or the board of directors of any corporation assuming the obligations
of the Company, shall, as to outstanding options, either (i) provide that such
options shall be assumed, or equivalent options shall be substituted, by the
acquiring or successor corporation (or an affiliate thereof), or (ii) upon
written notice to the optionees, provided that all unexercised options will
terminate immediately prior to the consummation of such merger, consolidation,
acquisition, reorganization or liquidation unless exercised by the optionee
within a specified number of days following the date of such notice.

      10. Amendment of the Plan. The Board of Directors may suspend or
discontinue the Plan or review or amend it in any respect whatsoever; provided,
however, that without approval of the stockholders of the Company no revision or
amendment shall change the number of shares subject to the Plan (except as
provided in Section 9), change the designation of the class of directors
eligible to receive options, or materially increase the benefits accruing to
participants under the Plan; and provided further, however, that in no case may
the Plan be amended more than once every six months regarding which directors
may receive grants of options, the timing of the grants for all participants,
and the amount of options to be granted to individual participants.

      12. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of New York.


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