AMENDMENT NUMBER 1
                                     TO THE
                          U.S.B. HOLDING COMPANY, INC.
              EMPLOYEE STOCK OWNERSHIP PLAN WITH 401(k) PROVISIONS

      U.S.B. Holding Company, Inc and Union State Bank, a corporation organized
and operating under the laws of the state of Delaware and a banking association,
hereby adopt the following amendments to the U.S.B. Holding Company, Inc.
Employee Stock Ownership Plan with 401(k) Provisions ("Plan") as a condition to
the issuance of an IRS Favorable Determination Letter dated January 27, 1995:

      1. The third paragraph in Section 1 of the Plan is hereby deleted and
replaced with the following language:

      "The Plan, hereby adopted effective as of January 1, 1989, is a
      restatement, amendment, and consolidation of the U.S.B. Holding Company,
      Inc. Profit Sharing and Thrift Plan and the U.S.B. Holding Company, Inc.
      Employee Stock Ownership Plan, both effective January 1, 1985. The Plan is
      a stock bonus plan containing Section 401(k) features that is intended to
      qualify under Section 401(a) of the Internal Revenue Code. The Plan is
      also designed to be an employee stock ownership plan under Section 4975
      (e)(7) of the Code.

      2. The definition of "Adjusted Compensation" in Section 2 of the Plan is
hereby amended to add the following definition:

      "In addition to other applicable limitations set forth in the Plan, and
      notwithstanding any other provision of the Plan to the contrary, for Plan
      Years beginning on or after January 1, 1994, the annual Adjusted
      Compensation of each Employee taken into account under the Plan shall not
      exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
      compensation limit is $150,000, as adjusted by the Commissioner for
      increases in the cost of living in accordance with section 401(a)(17)(B)
      of the Internal Revenue Code. The cost-of-living adjustment in effect for
      a calendar year applies to any period, not exceeding 12 months, over which
      Adjusted Compensation is determined (determination period) beginning in
      such calendar year. If a determination period consists of fewer than 12
      months, the OBRA '93 annual compensation limit will be multiplied by a
      fraction, the numerator of which is the number of months in the
      determination period, and the denominator of which is 12.


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            For Plan Years beginning on or after January 1, 1994, any reference
      in this Plan to the limitation under section 401(a)(17) of the Code shall
      mean the OBRA '93 annual compensation limit set forth in this provision.

            If Adjusted Compensation for any prior determination period is taken
      into account in determining an Employee's benefits accruing in the
      current Plan Year, the Adjusted Compensation for that prior determination
      period is subject to the OBRA '93 annual compensation limit in effect for
      that prior determination period. For this purpose, for determination
      periods beginning before the first day of the first Plan Year beginning on
      or after January 1, 1994, the OBRA '93 annual compensation limit is
      $150,000.."

      3. The definition of "Compensation" in Section 2 of the Plan is hereby
amended to add the following definition:

      "In addition to other applicable limitations set forth in the Plan, and
      notwithstanding any other provision of the Plan to the contrary, for Plan
      Years beginning on or after January 1, 1994, the annual Compensation of
      each Employee taken into account under the Plan shall not exceed the OBRA
      '93 annual compensation limit. The OBRA '93 annual compensation limit is
      $150,000, as adjusted by the Commissioner for increases in the cost of
      living in accordance with section 401(a)(17)(B) of the Internal Revenue
      Code. The cost-of-living adjustment in effect for a calendar year applies
      to any period, not exceeding 12 months, over which Compensation is
      determined (determination period) beginning in such calendar year. If a
      determination period consists of fewer than 12 months, the OBRA '93 annual
      compensation limit will be multiplied by a fraction, the numerator of
      which is the number of months in the determination period, and the
      denominator of which is 12.

            For Plan Years beginning on or after January 1, 1994, any reference
      in this Plan to the limitation under section 401(a)(17) of the Code shall
      mean the OBRA '93 annual compensation limit set forth in this provision.

            If Compensation for any prior determination period is taken into
      account in determining an Employee's benefits accruing in the current Plan
      Year, the Compensation for that prior determination period is subject to
      the OBRA '93 annual compensation limit in effect for that prior
      determination period. For this purpose, for determination periods
      beginning before the first day of the first Plan Year beginning on or
      after January 1, 1994, the OBRA '93 annual compensation limit is
      $150,000.."


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<PAGE>

      4. The definition of "Eligible Retirement Plan" in Section 2 of the Plan
is hereby deleted and replaced with the following language:

      "An individual retirement account described in Section 408(a) of the Code,
      an individual retirement annuity described in Section 408(b) of the Code,
      an annuity plan described in Section 403(a) of the Code, or a qualified
      trust described in Section 401(a) of the Code, that accepts the
      Distributee's Eligible Rollover Distribution. However, in the case of an
      Eligible Rollover Distribution to the surviving spouse, an Eligible
      Retirement Plan is an individual retirement account or individual
      retirement annuity."

      5. Section 22(e) of the Plan is hereby deleted and replaced with the
following language:

      "(e) For Plan Years beginning before January 1, 1994, including such years
      in which the Plan is "top-heavy", Compensation of each Employee for
      purposes of the Plan shall not take into account any amount in excess of
      $200,000, as adjusted for increases in the cost of living pursuant to
      Section 416(d)(2) of the Code. For Plan Years beginning on or after
      January 1, 1994, including such years in which the Plan is "top-heavy",
      Compensation of each Employee for purposes of the Plan shall not take
      into account any amount in excess of $150,000, as adjusted for increases
      in the cost of living pursuant to Section 416(d)(2) of the Code

      IN WITNESS WHEREOF, the undersigned, a duly authorized officer of U.S.B.
Holding Company, Inc. and Union State Bank hereby adopt this Amendment Number 1
to the Union State Bank Employee Stock Ownership Plan with 401(k) Provisions on
this 1st day of February, 1995.

                                        U.S.B. HOLDING COMPANY, INC.

                                        By /s/ James B. White
                                           -------------------------------------

                                        As Its: Executive V.P./Chief Financial
                                                Officer
                                                --------------------------------


                                        UNION STATE BANK

                                        By /s/ James B. White
                                           -------------------------------------

                                        As Its: Executive V.P./Chief Financial
                                                Officer
                                                --------------------------------


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