**UNION
      STATE BANK**




**KEY
      EMPLOYEES’ SUPPLEMENTAL**




**INVESTMENT
      PLAN**




**Adopted
      Effective December 1, 1994**


**Restated
      and Amended Effective July 1, 1997**


**Further
      Restated and Amended Effective January 1, 2005**









**UNION
      STATE BANK**




**KEY
      EMPLOYEES’ SUPPLEMENTAL INVESTMENT PLAN**




The
      Supplemental Employees’ Investment Plan for Salaried Employees of Union State
      Bank (the “Plan”) was adopted effective December 1, 1994. The Plan was
      established and maintained by Union State Bank solely for the purpose of
      providing to a select group of highly compensated or management personnel who
      participate in the U.S.B. Holding Co., Inc. Employee Stock Ownership Plan (with
      401(k) Provisions) (“Qualified Plan”) benefits attributable to (i) contribution
      allocations which would otherwise be made under the Qualified Plan but for
      the
      compensation limitation of Internal Revenue Code of 1986 (“Code”) Section
      401(a)(17), and (ii) contributions equal to amounts in excess of the limitations
      on annual additions imposed by Code Section 415.




Union
      State Bank desires to expand the purposes of the Plan to permit certain key
      executive employees designated by its Board of Directors to defer portions
      of
      their compensation, in order to continue to attract and retain talented
      executives with a competitive compensation package. Accordingly, Union State
      Bank has adopted the Plan for its key executive employees, and has restated
      and
      amended the Plan to provide for such deferral of compensation effective as
      of
      July 1, 1997. The Plan is a non-qualified deferred compensation plan subject
      to
      the requirements of section 409A of the Code and has been further amended and
      restated effective January 1, 2005 to reflect these requirements.




It
      is the
      intention of the parties that the arrangements contemplated by the Plan be
      unfunded for tax purposes and for purposes of Title I of ERISA.




Accordingly,
      Union State Bank hereby adopts, amends and restates the Plan pursuant to the
      terms and provisions set forth below:









**TABLE
      OF CONTENTS**




**ARTICLE
      I**




**DEFINITIONS**









PageSection
                1.1
            “***Board***”
            1Section
                1.2
            “***Change
                in Control Event***”
            1Section
                1.3
            “***Code***”
            1Section
                1.4
            “***Company***”
            1Section
                1.5
            “***Deferred
                Compensation Account***”
            1Section
                1.6
            “***Matching
                Contribution***”
            1Section
                1.7
            “***Optional
                Contribution***”
            1Section
                1.8
            “***Participant***”
            1Section
                1.9
            “***Plan***”
            1Section
                1.10
            “***Plan
                Year***”
            1Section
                1.11
            “***Qualified
                Plan***”
            1Section
                1.12
            “***Salary
                Reduction Agreement***”
            2Section
                1.13
            “***Salary
                Reduction Contribution***”
            2Section
                1.14
            “***Service
                Recipient***”
            2Section
                1.15
            “***Termination
                of Employment***”
            2Section
                1.16
            ***“******USB
                Stock******”***
            2




**ARTICLE
      II**




**ELIGIBILITY**






**ARTICLE
      III**




**CONTRIBUTIONS**




Section
                3.1
            ***Salary
                Reduction Contributions***.
            2Section
                3.2
            ***Salary
                Reduction Agreement***.
            3Section
                3.3
            ***Matching
                Contributions***.
            3Section
                3.4
            ***Optional
                Contributions***.
            4Section
                3.5
            ***Limits
                on Contributions***
            4Section
                3.5
            ***Whole
                Share Price Limitation on Contributions******.***
            4




**ARTICLE
      IV**




**INVESTMENT
      OF CONTRIBUTIONS; DIVIDENDS**




Section
                4.1
            ***Investment
                of Contributions***.
            4Section
                4.2
            ***Application
                of Dividends***.
            5




i.




**ARTICLE
      V**




**DISTRIBUTIONS**


Section
                  5.1
              ***Payment
                  Elections.***
              5Section
                  5.2
              ***Mandatory
                  Cashout of Small Balances.***
              6Section
                  5.3
              ***Restrictions
                  on Payments to Specified Employees.***
              6Section
                  5.4
              ***Certain
                  One-time Elections.***
              6
  **ARTICLE
        VI**
  **ADMINISTRATION
        OF THE PLANS**
  Section
                  6.1
              ***Administration
                  by the Company.***
              6Section
                  6.2
              ***General
                  Powers of Administration.***
              6Section
                  6.3
              ***Financial
                  Accounting.***
              7
  **ARTICLE
        VII**
  **AMENDMENT
        OR TERMINATION**
  Section
                  7.1
              ***Amendment
                  or Termination.***
              7Section
                  7.2
              ***Effect
                  of Amendment or Termination.***
              7Section
                  7.3
              ***Suspension
                  of the Plan.***
              7
  **ARTICLE
        VIII**
  **GENERAL
        PROVISIONS**
  Section
                  8.1
              ***Participant’s
                  Rights Unsecured.***
              8Section
                  8.2
              ***No Guarantee
                  of Benefits***
              8Section
                  8.3
              ***No
                  Enlargement of Employee Rights***
              8Section
                  8.4
              ***Spendthrift
                  Provisions***
              8Section
                  8.5
              ***Applicable
                  Law.***
              8Section
                  8.6
              ***Incapacity
                  of Recipient.***
              8Section
                  8.7
              ***Corporate
                  Successors.***
              8Section
                  8.8
              ***Unclaimed
                  Benefit.***
              9Section
                  8.9
              ***Limitations
                  on liability.***
              9




ii.







**ARTICLE
      I**




**DEFINITIONS**




Wherever
      used herein the following terms shall have the meanings hereinafter set forth.
      Words in the masculine gender shall include the feminine and the singular shall
      include the plural, and vice versa, unless qualified by the context. Any
      headings used herein are included for ease of reference only, and are not to
      be
      construed so as to alter the terms hereof.




Section
      1.1 “ ***Board*** ”
means
      the Board of Directors of the Company.




Section
      1.2 “ ***Change
      in Control Event*** ”
means,
      with respect to a Participant: (a) a change in ownership of the Participant’s
      Service Recipient; (b) a change in effective control of the Participant’s
      Service Recipient; or (c) a change in the ownership of a substantial portion
      of
      the assets of the Participant’s Service Recipient. The existence of a Change in
      Control Event shall be determined by the Plan Administrator in accordance with
      section 409A of the Code and the regulations there under.




Section
      1.3 “ ***Code*** ”
means
      the Internal Revenue Code of 1986, as amended from time to time, and any
      regulations relating thereto.




Section
      1.4 “ ***Company*** ”
means
      Union State Bank, a New York State banking association, or, to the extent
      provided in Section 8.7 below, any successor corporation or other entity
      resulting from a merger or consolidation into or with the Company or a transfer
      or sale of substantially all of the assets of the Company.




Section
      1.5 “ ***Deferred
      Compensation Account*** ”
means
      the account maintained by the Company under the plan for a Participant that
      is
      credited with amounts contributed under Section 3.1 and 3.3 of the
      Plan.




Section
      1.6 “ ***Matching
      Contribution*** ”
means
      the Matching Contribution made by the Company for the benefit of a Participant
      under and in accordance with the terms of Section 3.3 of the Plan in any Plan
      Year.




Section
      1.7 “ ***Optional
      Contribution*** ”
means
      the Optional Contribution made by the Company for the benefit of a Participant
      under and in accordance with the terms of Section 3.4 of the Plan in any Plan
      Year.




Section
      1.8 “ ***Participant*** ”
means
      a
      salaried employee of the Company to whom or with respect to whom contributions
      may be made under the Plan.




Section
      1.9 “ ***Plan*** ”
means
      the Key Employees’ Supplemental Investment Plan.




Section
      1.10 “ ***Plan
      Year*** ”
means
      the calendar year. However, the first Plan Year was the period commencing
      December 1, 1994, and ending December 31, 1994.




Section
      1.11 “ ***Qualified
      Plan*** ”
means
      the U.S.B. Holding Co., Inc. Employee Stock Ownership Plan (with 401(k)
      Provisions), and each predecessor, successor, or replacement plan.




1.




Section
      1.12 “ ***Salary
      Reduction Agreement*** ”
means
      the written salary reduction agreement entered into by a Participant with the
      Company pursuant to the Plan.




Section
      1.13 “ ***Salary
      Reduction Contribution*** ”
means
      the salary reduction contribution made by the Company for the benefit of a
      Participant under and in accordance with the terms of Section 3.1 of the Plan
      in
      any Plan Year.




Section
      1.14 “ ***Service
      Recipient*** ”
means
      with respect to a Participant on any date: (a) the corporation for which the
      Participant is performing services on such date; (b) all corporations that
      are
      liable to the Participant for the benefits due to him under the Plan; (c) a
      corporation that is a majority shareholder of a corporation described in Section
      1.14(a) or (b); or (d) any corporation in a chain of corporations each of which
      is a majority shareholder of another corporation in the chain, ending in a
      corporation described in Section 1.14 (a) or (b).




Section
      1.15 “ ***Termination
      of Employment*** ”
means
      separation from service (as such term is defined for purposes of section 409A
      of
      the Code).




Section
      1.16 ***“*** ***USB
      Stock*** ***”*** means
      common stock of U.S.B. Holding Co., Inc.




**ARTICLE
      II**




**ELIGIBILITY**




An
      employee who is one of a select group of highly compensated or management
      personnel who is designated eligible to participate by the Board, shall be
      eligible to participate in the Plan. Notwithstanding the above, any employee
      with total compensation in excess of compensation limits for Employee Stock
      Ownership, or other qualified plans, may participate on the first day of such
      eligibility.




**ARTICLE
      III**




**CONTRIBUTIONS**




Section
      3.1 ***Salary
      Reduction Contributions*** .
      The
      Salary Reduction Contribution to be made by the Company for the benefit of
      a
      Participant for any Plan Year shall be in an amount equal to the difference
      between (a) and (b) below:




(a) Any
      portion of the Participant’s gross compensation (salary, bonus, other cash
      compensation for services) for a Plan Year




Less




(b) The
      amount of the Qualified Plan Salary Reduction Contribution actually allocated
      to
      the Qualified Plan account of the Participant for the Plan Year.




Salary
      Reduction Contributions for the benefit of the Participant shall be credited
      to
      the Deferred Compensation Account maintained under the Plan in the name of
      the
      Participant on the date the compensation would otherwise have been payable,
      but
      for the Salary Reduction Agreement.




2.




Section
      3.2 ***Salary
      Reduction Agreement*** .
      As a
      condition to the Company’s obligation to make a Salary Reduction Contribution
      for the benefit of a Participant pursuant to Section 3.1, the Participant must
      execute a Salary Reduction Agreement The Agreement for any Plan Year shall
      be
      made before the beginning of that Year and shall remain in full force and effect
      for subsequent Plan Years unless revoked by a Participant by written instrument
      delivered to the Company prior to the beginning of the Plan Year in which such
      revocation is to be effective, except that in the first year of participation,
      a
      Participant may enter the Plan by executing a Salary Reduction Agreement within
      30 days after first becoming eligible, which shall apply to compensation payable
      for services rendered after the Salary Reduction Agreement is delivered to
      the
      Company. The Participant shall always be vested in Salary Reduction
      Contributions.




Section
      3.3 ***Matching
      Contributions*** .
      The
      Matching Contribution made by the Company for the benefit of a Participant
      for
      any Plan Year shall be in an amount equal to the difference between (a) and
      (b)
      below:




(a) The
      lesser of the matching contribution that would be allocated to Participant
      at
      the matching rate as determined in accordance with the Qualified Plan provisions
      with respect to the aggregate amount of Salary Reduction Contribution actually
      made by Participant to the Qualified Plan and this Plan, or the Qualified Plan
      Company Matching Contribution which would have been allocated to the Qualified
      Plan account of the Participant for the Plan Year if the Participant had
      contributed to the Qualified Plan the maximum percentage of his gross
      compensation provided by the Qualified Plan, without giving effect to any
      reduction in the Qualified Plan Salary Reduction Contribution required by the
      limitations imposed by Code Sections 402(g) or 415 of the Code on the Qualified
      Plan.




Less




(b) The
      amount of the Qualified Plan Company Matching Contribution actually allocated
      to
      the Qualified Plan account of the Participant for the Plan Year.




Company
      Matching Contributions for each plan year shall become 100% vested on the last
      day of each Plan Year, provided that the Participant remains an employee of
      the
      Company on such date; otherwise, all Company Matching Contributions for such
      Plan Year shall be forfeited. Company Matching Contributions for the benefit
      of
      a Participant for any Plan Year shall be credited to the Deferred Compensation
      Account maintained under the Plan in the name of the Participant within fifteen
      (15) days of the last day of such Plan Year. Company Matching Contributions
      not
      made within fifteen (15) days of the last day of such Plan Year will include
      interest at the prevailing Federal Funds rate as published in the Wall Street
      Journal from the date such contribution should be made to the date actually
      paid.




3.




Section
      3.4 ***Optional
      Contributions*** .
      The
      Optional Contribution made by the Company for the benefit of a Participant
      for
      any Plan Year shall be an amount equal to the difference between (a) and (b)
      below:




(a) The
      Qualified Plan Company Optional Contribution which would have been allocated
      to
      the Qualified Plan account of the Participant for the Plan Year, considering
      the
      full amount of the Participant’s compensation, without giving effect to any
      reduction in the Qualified Plan Company Optional Contribution required by the
      limitations on compensation imposed on the Qualified Plan by Code Sections
      401(a)(17) and/or 415




Less




(b) The
      amount of the Qualified Plan Company Optional Contribution actually allocated
      to
      the Qualified Plan account of the Participant for the Plan Year.




Any
      Optional Contributions for the benefit of a Participant for any Plan Year shall
      be credited to the Deferred Compensation Account maintained under the Plan
      in
      the name of the Participant within fifteen (15) days of the last day of such
      Plan Year. Company Matching Contributions not made within fifteen (15) days
      of
      the last day of such Plan Year will include interest at the prevailing Federal
      Funds rate as published in the Wall Street Journal from the date such
      contribution should be made to the date actually paid.




(c) A
      Participant’s account balance in optional contributions will not be fully vested
      at all times. Rather, the Participant will be vested in this account to the
      same
      extent that his optional account under the U.S.B. Holding Co., Inc. Employee
      Stock Ownership Plan (with 401(k) Provisions) is vested.




Section
      3.5 ***Limits
      On Contributions*** .
      Notwithstanding the above, the total employee matching or optional contributions
      shall not exceed twenty-five percent of each Participant’s total compensation in
      any Plan Year.




Section
      3.6 ***Whole
      Share Price Limitation on Contributions*** ***.*** Notwithstanding
      the provisions of above sections 3.1, 3.2, 3.3 and 3.4, all contributions to
      this Plan shall be limited to amounts that will purchase whole shares of USB
      Stock at the market price paid for such shares on the date the contribution(s)
      are to be credited to Participants’ Deferred Compensation Accounts. Any
      additional amounts that would be contributed to the Plan but for this Section
      shall (i) be returned to the Participant or to the Company, and shall not be
      credited to Participants’ Plan accounts or applied to purchase fractional shares
      of USB Stock, or (ii) if diminimus, held for future purchase of Company Stock
      for the benefit of the Participant.




**ARTICLE
      IV**






**INVESTMENT
      OF CONTRIBUTIONS; DIVIDENDS**




Section
      4.1 ***Investment
      of Contributions*** .
      Amounts
      credited hereunder to a Participant’s Deferred Compensation Account shall be
      treated as if they were actually invested in USB Stock on the dates amounts
      are
      credited to the Deferred Compensation Account pursuant to Article III hereof.
      For purposes of reporting to Participants, each Deferred Compensation Account
      shall be credited with appreciation, depreciation, gains, and/or losses as
      if
      actually invested in USB Stock.




4.




If
      the
      Company elects to fund any of its liability hereunder through a trust or other
      funding mechanism, the company shall do so only with shares of USB Stock, and
      shall acquire, issue or release from Treasury such shares of USB Stock on the
      dates amounts are credited to Participants’ Deferred compensation Accounts
      pursuant to Article III hereof.




Section
      4.2 ***Application
      of Dividends*** .
      If the
      Company elects to fund any of its liability hereunder through a trust or other
      funding mechanism, dividends paid on USB Stock held by such trust or other
      funding vehicle shall be paid to such trust or other funding vehicle and shall
      be applied on the date received to the purchase of additional shares of USB
      Stock. The Plan administrator and/or the trustee or other funding vehicle shall
      accept only such amounts of dividends as shall equal (on the date received)
      the
      purchase price of the maximum number of whole shares of USB Stock, at the market
      price (paid for such shares) on the date dividends are paid, that can be
      purchased without any excess cash or other property remaining in the Plan,
      trust
      or other vehicle. The Plan administrator shall apply any excess amounts as
      it
      deems appropriate, provided they do not become part of the Plan’s assets at any
      time unless such amount is diminimus inasmuch as such dividend may be held
      to
      purchase Company Stock in the future for the benefit of the
      participant.




**ARTICLE
      V**




**DISTRIBUTIONS**




Section
      5.1 ***Payment
      Elections*** .
      All
      amounts credited to a Participant’s Deferred Compensation Account, including
      gains and losses credited in accordance with Article IV of the Plan, shall
      be
      distributed, to or with respect to a Participant only upon Termination of
      Employment for any reason including death or upon a Change in Control Event.
      All
      amounts distributable under the Plan shall be distributed in the manner selected
      by Participant.




Distribution
      shall be made solely in shares of USB Stock.




1. Distribution
      of a Participant’s Deferred Compensation Account in a single distribution on the
      first day of the calendar month or calendar year following the occurrence of
      the
      distribution event; or




2. Distribution
      of a Participant’s Deferred Compensation Account in substantially equal annual
      installments beginning on the first day of the calendar month or calendar year
      following the occurrence of the distribution event and continuing over a period
      not exceeding fifteen (15) years (provided that such period does not exceed
      the
      life expectancy of the Participant); or




3. Any
      combination of the foregoing.




If
      no
      such election is made, the distribution will be made in a single distribution
      on
      the first day of the calendar month following the occurrence of the distribution
      event.




5.




If
      a
      Participant should die before distribution of the full amount of the Deferred
      Compensation Account had been made to him, any remaining amounts shall be
      distributed to his beneficiary in the same manner and to the same extent as
      the
      Participant would have received distributions in accordance with the
      foregoing.




A
      Participant may, but is not required to make a separate distribution election
      that will apply to payments due following a Change in Control
      Event.




Section
      5.2 ***Mandatory
      Cashout of Small Balances*** .
      Notwithstanding anything in the Plan to the contrary, if, as of December 31
      of
      any calendar year following a Participant’s Termination of Employment, the
      balance credited to his Deferred Compensation Account is $10,000 or less, the
      entire balance credited to his Deferred Compensation Account shall be
      distributed in shares of Company stock (fractional shares paid in cash) in
      a
      single lump sum payment as soon as practicable during the immediately following
      calendar year.




Section
      5.3 ***Restrictions
      on Payments to Specified Employees*** .
      Notwithstanding anything in the Plan to the contrary, to the extent required
      under section 409A of the Code, no payment to be made to a specified employee
      (within the meaning of section 409A of the Code) on or after the date of his
      Termination of Employment shall be made sooner than six (6) months after such
      Termination of Employment.




Section
      5.4 ***Certain
      One-time Elections*** .




(a) Notwithstanding
      anything in the Plan to the contrary, each active or terminated Participant
      in
      this Plan may elect, by written notice given at any time prior to January 1,
      2006, to receive all, but not less than all, of his vested and unpaid benefits
      under this Plan in a single lump sum payment as of December 31, 2005 in full
      settlement of all of his rights under this Plan.




(b) Notwithstanding
      anything in this Plan to the contrary, each Participant may elect, by written
      notice given at any time prior to January 1, 2006 to receive all, but not less
      than all, of his vested and unpaid benefits under this Plan beginning at any
      time and payable in any form permitted under this Plan (including but not
      limited to an election that any accrued but unpaid vested benefits be paid
      in a
      lump sum as soon as practicable following a Change in Control
      Event).




**ARTICLE
      VI**






**ADMINISTRATION
      OF THE PLAN**




Section
      6.1 ***Administration
      by the Company*** .
      The
      Company shall be responsible for the general operation and administration of
      the
      Plan and for carrying out the provisions thereof.




Section
      6.2 ***General
      Powers of Administration*** .
      The
      Company shall be entitled to rely conclusively upon all tables, valuations,
      certificates, opinion and reports furnished by any actuary, accountant,
      controller, counsel or other person employed or engaged by the Company with
      respect to the Plan.




6.




Section
      6.3 ***Financial
      Accounting*** .
      The
      Company intends this Plan to qualify, under EITF Consensus dated July 23, 1998
      relating to Issue 97-14 (“EITF 97-14”), for financial accounting, in the
      Company’s financial statements, as a “Plan A” type program, under which USB
      Stock held by any trust or other funding mechanism utilized by the Company
      and
      the related deferred compensation obligation of the Company each shall be
      recorded in stockholders, Equity, in an amount equal to the original amounts
      of
      deferred compensation credited under the Plan without the need to adjust the
      USB
      Stock or the obligation to a market value level. To the extent this Plan must
      be
      interpreted at any time, it shall be interpreted to have the meaning that
      conforms to the requirements to EITF 97-14.




**ARTICLE
      VII**




**AMENDMENT
      OR TERMINATION** ****




Section
      7.1 ***Amendment
      or Termination*** .
      The
      Company intends the Plan to be permanent but reserves the right to amend or
      terminate the Plan when, in the sole opinion of the Company, such amendment
      or
      termination is advisable. Any such amendment or termination shall be made
      pursuant to a resolution of the Board and shall be effective as of the date
      of
      such resolution.




Section
      7.2 ***Effect
      of Amendment or Termination*** .
      No
      amendment or termination of the Plan shall directly or indirectly reduce the
      balance of the Deferred Compensation Account held hereunder as of the effective
      date of such amendment or termination. Upon termination of the Plan, all amounts
      credited to each participant shall fully vest, and distribution of amounts
      in
      the Deferred Compensation Account shall be made to the Participant or his
      beneficiary in the manner and at the time described in Article V of the Plan.
      No
      additional credits of Salary Reduction or Matching Contributions shall be made
      to the Deferred Compensation Account of a Participant after termination of
      the
      Plan, but the Company shall continue to credit gains to the Deferred
      Compensation Account pursuant to Article IV until the balance of the Deferred
      Compensation Account has been fully distributed to the Participant or his
      beneficiary.




Section
      7.3 ***Suspension
      of the Plan*** .
      The
      Company reserves the right, in its sole and absolute discretion, by action
      of
      the Board, to suspend the operation of the Plan, but only in the following
      circumstances:




(a) With
      respect to Salary Reduction Contributions, Mandatory Contributions to be earned
      and paid in calendar years beginning after the date of adoption of the
      resolution suspending the operation of the Plan; and




(b) At
      such
      other time and in such other circumstances as may be permitted under section
      409A of the Code.




In
      such
      event, no further compensation shall be deferred following the effective date
      of
      the suspension and Deferred Compensation Accounts in existence prior to such
      date shall continue to be maintained, and payments shall continue to be made,
      in
      accordance with the provisions of the Plan.




7.




**ARTICLE
      VIII**




**GENERAL
      PROVISIONS**




Section
      8.1 ***Participant’s
      Rights Unsecured*** .
      The
      Plan at all times shall be entirely unfunded and no provision shall at any
      time
      be made with respect to segregating any assets of the Company for payment of
      any
      distributions hereunder; provided, however, that the Company in its sole
      discretion may establish a reserve, segregate specific assets, or create a
      trust
      or other vehicle, to hold assets for purposes of administering the Plan or
      for
      its own financial purposes. The right of a Participant or his designated
      beneficiary to receive a distribution hereunder shall be an unsecured claim
      against the general assets of the Company, and neither the Participant nor
      a
      designated beneficiary shall have any rights in or against any specific assets
      of the Company, including any reserve, segregated assets, or trust assets that
      may be maintained by the Company.




Section
      8.2 ***No
      Guarantee of Benefits*** .
      Nothing
      contained in the Plan shall constitute a guaranty by the Company or any other
      person or entity that the assets of the Company will be sufficient to pay any
      benefit hereunder.




Section
      8.3 ***No
      Enlargement of Employee Rights*** .
      No
      Participant shall have any right to receive a distribution of contributions
      made
      under the Plan except in accordance with the terms of the Plan. Establishment
      of
      the Plan shall not be construed to give any Participant the right to be retained
      in the service of the Company.




Section
      8.4 ***Spendthrift
      Provisions*** .
      No
      interest of any person or entity in, or right to receive a distribution under,
      the Plan shall be subject in any manner to sale, transfer, assignment, pledge,
      attachment, garnishment, anticipation, or other alienation or encumbrance of
      any
      kind; nor may such interest or right to receive a distribution be taken, either
      voluntarily or involuntarily for the satisfaction of the debts of, or other
      obligations or claims against, such person or entity, including claims for
      alimony, support, separate maintenance, and claims in bankruptcy
      proceedings.




Section
      8.5 ***Applicable
      Law*** .
      The
      Plan shall be construed and administered under the laws of the State of New
      York.




Section
      8.6 ***Incapacity
      of Recipient*** .
      If any
      person entitled to a distribution under the Plan is deemed by the Company to
      be
      incapable of personally receiving and giving a valid receipt for such payment,
      then, unless and until claim therefore shall have been made by a duly appointed
      guardian or other legal representative of such person, the Company may provide
      for such payment or any part thereof to be made to any other person or
      institution then contributing toward or providing for the care and maintenance
      of such person. Any such payment shall be a payment for the account of such
      person and a complete discharge of any liability of the Company and the Plan
      therefor.




Section
      8.7 ***Corporate
      Successors*** .
      The
      Plan shall not be automatically terminated by a transfer or sale of assets
      of
      the Company or by the merger or consolidation of the Company into or with any
      other corporation or other entity, but the Plan shall be continued after such
      sale, merger, or consolidation only if and to the extent that the transferee,
      purchaser, or successor entity agrees to continue the Plan. In the event that
      the Plan is not continued by the transferee, purchaser, or successor entity,
      then the Plan shall terminate subject to the provisions of Section
      7.2.




8.




Section
      8.8 ***Unclaimed
      Benefit*** .
      Each
      Participant shall keep the Company informed of his current address and the
      current address of his designated beneficiary. The Company shall not be
      obligated to search for the whereabouts of any person. If the location of a
      Participant is not made known to the Company within three (3) years after the
      date on which payment of the Participant’s Deferred Compensation Accounts may
      first be made, payment may be made as though the Participant had died at the
      end
      of the three-year period. If, within one additional year after such three-year
      period has elapsed, or, within three year after the actual death of a
      Participant, the Company is unable to locate any designated beneficiary of
      the
      Participant, then the Company shall have no further obligation to pay any
      benefit hereunder to such Participant or designated beneficiary and such benefit
      shall be irrevocably forfeited.




Section
      8.9 ***Limitations
      on liability*** .
      Notwithstanding any of the preceding provisions of the Plan, neither the Company
      nor any individual acting as employee or agent of the Company shall be liable
      to
      any Participant, former Participant or other person for any claim, loss,
      liability, or expense incurred in connection with the Plan. However, the
      preceding sentence shall not apply to liability for criminal acts or willful
      misconduct.




Section
      8.10 ***Compliance
      with Section 409A of the Code*** .
      The
      Plan is intended to be a non-qualified deferred compensation plan described
      in
      section 409A of the Code. The Plan shall be operated, administered and construed
      to give effect to such intent. In addition, the Plan shall be subject to
      amendment, with or without advance notice to Participants and other interested
      parties, and on a prospective or retroactive basis, including but not limited
      to
      amendment in a manner that adversely affects the rights of participants and
      other interested parties, to the extent necessary to effect such
      compliance.




Section
      8.11 ***Accelerated
      Vesting Upon a Change in Control*** .




(a) Each
      Participant’s benefit under the Plan shall become 100% vested upon the
      occurrence of a Change in Control of the Employer while the Participant is
      an
      Employee.




(b) A
      Change
      in Control of the Employer shall be deemed to have occurred upon the happening
      of any of the following events:




(i) consummation
      of a reorganization, merger, or consolidation of U.S.B. Holding Co., Inc. with
      one or more other persons, other than a transaction following which more than
      20% of the securities entitled to vote generally in the election of directors
      of
      the entity resulting from such transaction are beneficially owned (within the
      meaning of Rule 13d-3 promulgated under the Exchange Act) by a person who,
      on
      January 1, 1994, beneficially owned (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) more than 20% of the securities entitled
      to
      vote generally in the election of directors of U.S.B. Holding Co.,
      Inc.




(ii) a
      transaction or series of transactions resulting in the acquisition of all or
      substantially all of the assets of U.S.B. Holding Co., Inc. or beneficial
      ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
      Act)
      of more than 20% of the outstanding securities of U.S.B. Holding Co., Inc.
      entitled to vote generally in the election of directors by any person or by
      any
      persons acting in concert, who do not, prior to such transaction or series
      of
      transactions already beneficially own more than 20% of such outstanding
      securities;




9.




(iii) a
      complete liquidation or dissolution of U.S.B. Holding Co., Inc., or approval
      by
      its stockholders of a plan for such liquidation or dissolution.




In
      no
      event, however, shall a Change in Control be deemed to have occurred as a result
      of any acquisition of securities or assets of U.S.B. Holding Co., Inc., an
      affiliated employer, or a subsidiary of either of them, by U.S.B. Holding Co.,
      Inc., an affiliated employer, or a subsidiary of either of them, or by any
      employee benefit plan maintained by any of them. For purposes of this section
      9.5(b), the term Aperson@ shall have the meaning assigned to it under sections
      13(d)(3) or 14(d)(2) of the Exchange Act.




**IN
      WITNESS WHEREOF,** the
      Company has formally adopted this amended and restated Plan effective as of
      January 1, 2005.




**UNION
              STATE BANK**By: 
/s/
               Thomas E. HalesThomas
              E. Hales - Chairman and CEO




10.




**UNION
      STATE BANK**


**100
      Dutch Hill Road**


**Orangeburg,
      New York 10962**




**KEY
      EMPLOYEES’ SUPPLEMENTAL INVESTMENT PLAN**




**SALARY
      REDUCTION AGREEMENT**




As
      a
      condition to receiving a Salary Reduction and Matching Contribution under the
      Key Employees’ Supplemental Investment Plan (the “Plan”) of Union State Bank
      (the “Bank”), I hereby agree that the salary, inclusive of bonuses, otherwise
      payable to me by Union State Bank for any Plan Year commencing with the Plan
      Year which begins January 1, 2006, shall be reduced by _________ percent per
      pay
      period after I have met all 401(k) qualified plan provisions under the Bank’s
      Employee Stock Ownership Plan (With 401(k) Provisions) (“KSOP”). Such amount
      shall be paid by the Bank as a salary reduction contribution for my benefit
      pursuant to the terms of the Plan.




Date
            
            Participant









**UNION
      STATE BANK KEY EMPLOYEES' SUPPLEMENTAL INVESTMENT PLAN**




**One-Time
      Election to Revoke or Change Prior Elections**





**NOTICE
                TO PARTICIPANTS**The
                Union State Bank Key Employees' Supplemental Investment Plan has
                been
                changed to comply with new federal tax law requirements. These
                requirements place substantial restrictions on the Company's future
                discretion to amend or terminate the Plan, to permit you to change
                your
                existing payment elections, or to authorize accelerated payouts.
                In light
                of these new restrictions, the law permits us to give you a one-time
                opportunity, during 2005, to change any payment schedule previously
                elected. You may make the following choices by filling out this form
                and
                returning it to Catherine Martini no later than December23,
                2005. Please complete, sign and return this form whether or not you
                choose
                to make any changes.**General**
              **Information**Name
                of
              Participant: _________________________________________________
            Soc.Sec.No.:_______-______-________**Election**
            *Choose
                1 of the following options:*□
            **NO
                CHANGE.**I
                do not want to revoke any of my prior elections under the
                Plan.□
            **IMMEDIATE
                PAYOUT OF ALL BALANCES.**I
                want to revoke all of my prior elections under the Plan and receive
                full
                payment of my entire vested benefit under the Plan in a single lump
                sum
                payment on or prior to December 31, 2005.□
            **OTHER
                CHANGE OR REVOCATION.**I
                want to revoke all of my prior elections under the Plan and receive
                full
                payment of my entire vested benefit under the Plan in the form of:
                (check
                one box in column (a) and one box in column (b); if you want part
                of your
                benefit paid under one payment schedule and part paid under a different
                payment schedule, please contact Catherine Martini):**(a)**
              **Payments
                before a**
              **Change
                in Control**
              **Event**
            **(b)**
              **Payments
                after a**
              **Change
                in**
              **Control
                Event**a
                single lump sum payment on the first day
              of
                the month following my Termination of Employment
            □
            □a
                single lump sum payment on the first day of the calendar year following
                my
                Termination of Employment
            □
            □annual
                payments beginning on the first day of the month following my Termination
                of Employment and continuing for the specified number of years (maximum
                of
                15)
            □
                _________ years
            □
                _________ yearsannual
                payments beginning on the first day of the calendar year following
                my
                Termination of Employment and continuing for the specified number
                of years
                (maximum of 15)
            □
                _________ years
            □
                _________ years**S**
              **I**
              **G**
              **N**
            **H**
              **E**
              **R**
              **E**
            I
                certify that I have received and read a copy of the full text of
                the Plan,
                including any amendments. I understand that I will not have the right
                to
                change or revoke this notice and that my right to change or revoke
                elections in the future will be subject to substantial
                restrictions.
              
              ______________________________________________________________
                _________________
              *Your
                Signature Date**Internal
                Use Only*Received
                on ___________________________
              *Date
                of Receipt*
              
              By
                ________________________________________________________
              *Authorized
                Signature*
            Comments:











**UNION
      STATE BANK**




**KEY
      EMPLOYEES’ SUPPLEMENTAL**




**DIVERSIFIED
      INVESTMENT PLAN**






**Adopted
      Effective September 1, 1998**


**Amended
      and Restated Effective January 1, 2005**










**UNION
      STATE BANK**




**KEY
      EMPLOYEES’ SUPPLEMENTAL DIVERSIFIED**


**INVESTMENT
      PLAN**




The
      Supplemental Employees’ Diversified Investment Plan for Salaried Employees of
      Union State Bank (the “Plan”) is adopted effective September 1, 1998. The Plan
      is established and maintained by Union State Bank solely for the purpose of
      providing to a select group of highly compensated or management personnel who
      participate in the U.S.B. Holding Co., Inc. Employee Stock Ownership Plan (with
      401(k) Provisions) (“Qualified Plan”) benefits attributable to (i) contribution
      allocations which would otherwise be made under the Qualified Plan but for
      the
      compensation limitation of Internal Revenue Code of 1986 (“Code”) Section
      401(a)(17), and (ii) contributions equal to amounts in excess of the limitations
      on annual additions imposed by Code Section 415.




Union
      State Bank desires to permit certain key executive employees designated by
      its
      Board of Directors to defer portions of their compensation, in order to continue
      to attract and retain talented executives with a competitive compensation
      package. Accordingly, Union State Bank has adopted the Plan for its key
      executive employees, to provide for such deferral of compensation effective
      as
      of September 1, 1998.




It
      is the
      intention of the parties that the arrangements contemplated by the Plan be
      unfunded for tax purposes and for purposes of Title I of ERISA.




The
      Plan
      is amended and restated effective January 1, 2005 to reflect the requirements
      of
      section 409A of the Code.




Accordingly,
      Union State Bank hereby adopts the Plan pursuant to the terms and provisions
      set
      forth below:









**TABLE
      OF CONTENTS**




**ARTICLE
      I**




**DEFINITIONS**


Section
                  1.1
              ***“Board”***
              1Section
                  1.2
              ***“Change
                  in Control Event”***
              1Section
                  1.3
              ***“Code”***
              1Section
                  1.4
              ***“Company”***
              1Section
                  1.5
              ***“Deferred
                  Compensation Account”***
              1Section
                  1.6
              ***“Key
                  Employees Supplemental Diversified Investment Plan
                  (KESIP)”***
              1Section
                  1.7
              ***“Matching
                  Contribution”***
              1Section
                  1.8
              ***“Optional
                  Contribution”***
              1Section
                  1.9
              ***“Participant”.***
              1Section
                  1.10
              ***“Plan”***
              1Section
                  1.11
              ***“Plan
                  Year”***
              2Section
                  1.12
              ***"Qualified
                  Plan”***
              2Section
                  1.13
              ***“Salary
                  Reduction Agreement”***
              2Section
                  1.14
              ***“Salary
                  Reduction Contribution”***
              2Section
                  1.15
              ***“Service
                  Recipient”***
              2Section
                  1.16
              ***“Termination
                  of Employment”***
              2
  **ARTICLE
        II**
  **ELIGIBILITY**
  **ARTICLE
        III**
  **CONTRIBUTIONS**
  Section
                  3.1
              ***Salary
                  Reduction Contributions.***
              2Section
                  3.2
              ***Salary
                  Reduction Agreement.***
              3Section
                  3.3
              ***Matching
                  Contributions.***
              3Section
                  3.4
              ***Optional
                  Contributions.***
              4Section
                  3.5
              ***Limits
                  On Contributions.***
              4
  **ARTICLE
        IV**
  **INVESTMENT
        OF CONTRIBUTIONS**
  **ARTICLE
        V**
  **DISTRIBUTIONS**
  Section
                  5.1
              ***Payment
                  Elections.***
              5
  i.
  **ARTICLE
        VI**
  **ADMINISTRATION
        OF THE PLANS**
  Section
                  6.1
              **_**
              6Section
                  6.2
              ***General
                  Powers of Administration.***
              6Section
                  6.3
              ***Mandatory
                  Cashout of Small Balances.***
              6Section
                  6.4
              ***Restrictions
                  on Payments to Specified Employees.***
              6Section
                  6.5
              ***Certain
                  One-time Elections.***
              6
  **ARTICLE
        VII**
  **AMENDMENT
        OR TERMINATION**
  Section
                  7.1
              ***Amendment
                  or Termination.***
              6Section
                  7.2
              ***Effect
                  of Amendment or Termination.***
              7Section
                  7.3
              ***Suspension
                  of the Plan.***
              7
  **ARTICLE
        VIII**
  **GENERAL
        PROVISIONS**
  Section
                  8.1
              ***Participant’s
                  Rights Unsecured.***
              7Section
                  8.2
              ***No
                  Guarantee of Benefits.***
              8Section
                  8.3
              ***No
                  Enlargement of Employee Rights.***
              8Section
                  8.4
              ***Spendthrift
                  Provisions.***
              8Section
                  8.5
              ***Applicable
                  Law.***
              8Section
                  8.6
              ***Incapacity
                  of Recipient.***
              8Section
                  8.7
              ***Corporate
                  Successors.***
              8Section
                  8.8
              ***Unclaimed
                  Benefit.***
              8Section
                  8.9
              ***Limitations
                  on liability***
              9Section
                  8.10
              ***Compliance
                  with Section 409A of the Code***
              9Section
                  8.11
              ***Accelerated
                  Vesting Upon a Change in Control***
              9
  ii.




**ARTICLE
      IX**




**DEFINITIONS**




Wherever
      used herein the following terms shall have the meanings hereinafter set forth.
      Words in the masculine gender shall include the feminine and the singular shall
      include the plural, and vice versa, unless qualified by the context. Any
      headings used herein are included for ease of reference only, and are not to
      be
      construed so as to alter the terms hereof.




Section
      1.1 “ ***Board*** ”
means
      the Board of Directors of the Company.




Section
      1.2 “ ***Change
      in Control Event*** ”
means,
      with respect to a Participant: (a) a change in ownership of the Participant’s
      Service Recipient; (b) a change in effective control of the Participant’s
      Service Recipient; or (c) a change in the ownership of a substantial portion
      of
      the assets of the Participant’s Service Recipient. The existence of a Change in
      Control Event shall be determined by the Plan Administrator in accordance with
      section 409A of the Code and the regulations there under.




Section
      1.3 “ ***Code*** ”
means
      the Internal Revenue Code of 1986, as amended from time to time, and any
      regulations relating thereto.




Section
      1.4 “ ***Company*** ”
means
      Union State Bank, a New York State banking association, or, to the extent
      provided in Section 8.7 below, any successor corporation or other entity
      resulting from a merger or consolidation into or with the Company or a transfer
      or sale of substantially all of the assets of the Company.




Section
      1.5 “ ***Deferred
      Compensation Account*** ”
means
      the account maintained by the Company under the plan for a Participant that
      is
      credited with amounts contributed under Section 3.1 and 3.3 of the
      Plan.




Section
      1.6 “ ***Key
      Employees Supplemental Investment Plan (KESIP)*** ”
means
      the nonqualified plan established for certain highly compensated personnel
      for
      which salary deferrals and related Company match are invested only in U.S.B.
      Holding Co., Inc. stock.




Section
      1.7 “ ***Matching
      Contribution*** ”
means
      the Matching Contribution made by the Company for the benefit of a Participant
      under and in accordance with the terms of Section 3.3 of the Plan in any Plan
      Year.




Section
      1.8 “ ***Optional
      Contribution*** ”
means
      the Optional Contribution made by the Company for the benefit of a Participant
      under and in accordance with the terms of Section 3.4 of the Plan in any Plan
      Year.




Section
      1.9 “ ***Participant*** ”
means
      a
      salaried employee of the Company to whom or with respect to whom contributions
      may be made under the Plan.




Section
      1.10 “ ***Plan*** ”
means
      the Key Employees’ Supplemental Diversified Investment Plan.




1.


Section
      1.11 “ ***Plan
      Year*** ”
means
      the calendar year. However, the first Plan Year was the period commencing
      September 1, 1998, and ending December 31, 1998.




Section
      1.12 “ ***Qualified
      Plan*** ”
means
      the U.S.B. Holding Co., Inc. Employee Stock Ownership Plan (with 401(k)
      Provisions), and each predecessor, successor, or replacement plan.




Section
      1.13 “ ***Salary
      Reduction Agreement*** ”
means
      the written salary reduction agreement entered into by a Participant with the
      Company pursuant to the Plan.




Section
      1.14 “ ***Salary
      Reduction Contribution*** ”
means
      the salary reduction contribution made by the Company for the benefit of a
      Participant under and in accordance with the terms of Section 3.1 of the Plan
      in
      any Plan Year.




Section
      1.15 “ ***Service
      Recipient*** ”
means
      with respect to a Participant on any date: (a) the corporation for which the
      Participant is performing services on such date; (b) all corporations that
      are
      liable to the Participant for the benefits due to him under the Plan; (c) a
      corporation that is a majority shareholder of a corporation described in Section
      1.15(a) or (b); or (d) any corporation in a chain of corporations each of which
      is a majority shareholder of another corporation in the chain, ending in a
      corporation described in Section 1.15(a) or (b).




Section
      1.16 “ ***Termination
      of Employment*** ”
means
      separation from service (as such term is defined for purposes of section 409A
      of
      the Code).




**ARTICLE
      X**




**ELIGIBILITY**




An
      employee who is one of a select group of highly compensated or management
      personnel who is designated eligible to participate by the Board, shall be
      eligible to participate in the Plan.




**ARTICLE
      XI**




**CONTRIBUTIONS**




Section
      3.1 ***Salary
      Reduction Contributions*** .
      The
      Salary Reduction Contribution to be made by the Company for the benefit of
      a
      Participant for any Plan Year shall be in an amount equal to the difference
      between (a) and (b) below:




(a) Any
      portion of the Participant’s gross compensation (salary, bonus, other cash
      compensation for services) for a Plan Year Less




(b) the
      sum
      of:




2.




(i) The
      amount of the Qualified Plan Salary Reduction Contribution actually allocated
      to
      the Qualified Plan account of the Participant for the Plan Year,
      and




(ii) The
      amount of the KESIP Reduction Contribution actually allocated to the KESIP
      account of the participant for the Plan Year.




Salary
      Reduction Contributions made for the benefit of the Participant shall be
      credited to the Deferred Compensation Account in the name of such Participant
      within 30 days after the date such compensation would otherwise be payable,
      but
      for the Salary Reduction Agreement.




Section
      3.2 ***Salary
      Reduction Agreement*** .
      As a
      condition to the Company’s obligation to make a Salary Reduction Contribution
      for the benefit of a Participant pursuant to Section 3.1, the Participant must
      execute a Salary Reduction Agreement in the form attached hereto. The Agreement
      for any Plan Year shall be made before the beginning of that Year and shall
      remain in full force and effect for subsequent Plan Years unless revoked by
      a
      Participant by written instrument delivered to the Company prior to the
      beginning of the Plan Year in which such revocation is to be effective, except
      that in the first year of participation, a Participant may enter the Plan by
      executing a Salary Reduction Agreement within 30 days after first becoming
      eligible, which shall apply to compensation payable for services rendered after
      the Salary Reduction Agreement is delivered to the Company. The participant
      shall always be vested in Salary Reduction Contributions.




Section
      3.3 ***Matching
      Contributions*** .
      The
      Matching Contribution made by the Company for the benefit of a Participant
      for
      any Plan Year shall be in an amount equal to the difference between (a) and
      (b)
      below:




(a) The
      lesser of the matching contribution that would be allocated to Participant
      at
      the matching rate as determined in accordance with the Qualified Plan provisions
      with respect to the aggregate amount of Salary Reduction Contribution actually
      made by Participant to the Qualified Plan, KESIP and this Plan, or the Qualified
      Plan Company Matching Contribution which would have been allocated to the
      Qualified Plan account of the Participant for the Plan Year if the Participant
      had contributed to the Qualified Plan the maximum percentage of his gross
      compensation provided by the Qualified Plan, without giving effect to any
      reduction in the Qualified Plan Salary Reduction Contribution required by the
      limitations imposed by Code Sections 402(g) or 415 of the Code on the Qualified
      Plan.




Less




(b) the
      sum
      of:




(i) The
      amount of the Qualified Plan Company Matching Contribution actually allocated
      to
      the Qualified Plan account of the Participant for the Plan Year,
      and




(ii) The
      amount of the KESIP Company Matching Contribution actually allocated to the
      KESIP account of the participant for the Plan Year.




3.




Company
      Matching Contributions for each Plan Year shall become 100% vested on the last
      day of each such Plan Year, provided that the participant remains an employee
      of
      the Company on such date; otherwise, all Company Matching Contributions for
      such
      Plan Year shall be forfeited. Company Matching Contributions for the benefit
      of
      a Participant for any Plan Year shall be credited to the Deferred Compensation
      Account maintained under the Plan in the name of the participant within fifteen
      (15) days of the last day of such Plan Year. Company Matching Contributions
      not
      made with fifteen (15) days of the last day of such Plan year will include
      interest at the prevailing Federal Funds rate as published in the Wall Street
      Journal from the date such contribution should be made to the date actually
      paid.




Section
      3.4 ***Optional
      Contributions*** .
      The
      Optional Contribution made by the Company for the benefit of a Participant
      for
      any Plan Year shall be an amount equal to the difference between (a) and (b)
      below:




(a) The
      Qualified Plan Company Optional Contribution which would have been allocated
      to
      the Qualified Plan account of the Participant for the Plan Year, considering
      the
      full amount of the Participant’s compensation, without giving effect to any
      reduction in the Qualified Plan Company Optional Contribution required by the
      limitations on compensation imposed on the Qualified Plan by Code Sections
      401(a)(17) and/or 415




Less




(b) the
      sum
      of:




(i) The
      amount of the Qualified Plan Company Optional Contribution actually allocated
      to
      the Qualified Plan account of the Participant for the Plan Year,
      and




(ii) The
      amount of KESIP Optional Contribution actually allocated to the KESIP account
      of
      the participant for the Plan Year.




Any
      Optional Contributions for the benefit of a participant for any Plan Year shall
      be credited to the Deferred Compensation Account maintained under the Plan
      in
      the name of the Participant within fifteen (15) days of the last day of such
      Plan Year. Optional contributions not made with fifteen (15) days of the last
      day of such Plan year will include interest at the prevailing Federal Funds
      rate
      as published in the Wall Street Journal from the date such contribution should
      be made to the date actually paid.




(c)
            A
                Participant’s account balance in optional contributions will not be fully
                vested at all times. Rather, the Participant will be vested in this
                account to the same extent that his optional account under the U.S.B.
                Holding Co., Inc. Employee Stock Ownership Plan (with 401(k) Provisions)
                is vested.




4.




**ARTICLE
      XII**




**INVESTMENT
      OF CONTRIBUTIONS**




If
      funded, amounts credited hereunder to the Deferred Compensation Account of
      a
      Participant shall be invested in funding vehicles selected by the Trustee or
      the
      Company. However, no investment in funding vehicles shall include an investment
      in any security issued by U.S.B. Holding Co., Inc. Each Participant’s Account
      will be credited with amounts actually earned by such funding vehicles. If
      the
      Company elects not to fund amounts credited hereunder, each Participant’s
      Account shall be credited with amounts determined by the Company.




**ARTICLE
      XIII**




**DISTRIBUTIONS**




Section
      5.1 ***Payment
      Elections*** ***.*** All
      amounts credited to a Participant’s Deferred Compensation Account, including
      gains and losses credited in accordance with Article IV of the Plan, shall
      be
      distributed, to or with respect to a Participant only upon Termination of
      Employment for any reason including death or upon a Change in Control Event.
      All
      amounts distributable under the Plan shall be distributed in the manner selected
      by Participant.




Distribution
      shall be made in cash, in kind, or in a combination of both.




The
      Participant may, in the manner provided above, choose the following alternative
      modes of distribution:




1. Distribution
      of a Participant’s Deferred Compensation Account in a single distribution on the
      first day of the calendar month or calendar year following the occurrence of
      the
      distribution event; or




2. Distribution
      of a Participant’s Deferred Compensation Account in substantially equal annual
      installments beginning on the first day of the calendar month or calendar year
      following the month in which the distribution event occurs and continuing over
      a
      period not exceeding fifteen (15) years (provided that such period does not
      exceed the life expectancy of the Participant); or




3. Any
      combination of the foregoing. If no such election is made, the distribution
      will
      be made in a single distribution on the first day of the calendar month after
      the month in which the distribution event occurs.




If
      a
      Participant should die before distribution of the full amount of the Deferred
      Compensation Account had been made to him, any remaining amounts shall be
      distributed to his beneficiary in the same manner and to the same extent as
      the
      Participant would have received distributions in accordance with the foregoing.




A
      Participant may, but is not required to make a separate distribution election
      that will apply to payments due following a Change in Control
      Event.




5.




**ARTICLE
      XIV**




**ADMINISTRATION
      OF THE PLANS**




Section
      6.1 ***Administration
      by the Company*** .
      The
      Company shall be responsible for the general operation and administration of
      the
      Plan and for carrying out the provisions thereof.




Section
      6.2 ***General
      Powers of Administration*** .
      The
      Company shall be entitled to rely conclusively upon all tables, valuations,
      certificates, opinions and reports furnished by any actuary, accountant,
      controller, counsel or other person employed or engaged by the Company with
      respect to the Plan.




Section
      6.3 ***Mandatory
      Cashout of Small Balances*** .
      Notwithstanding anything in the Plan to the contrary if, as of December 31
      of
      any calendar year following a Participant’s Termination of Employment, the
      balance credited to his Deferred Compensation Account is $10,000 or less, the
      entire balance credited to his Deferred Compensation Account shall be
      distributed in a single lump sum payment as soon as practicable during the
      immediately following calendar year.




Section
      6.4 ***Restrictions
      on Payments to Specified Employees*** .
      Notwithstanding anything in the Plan to the contrary, to the extent required
      under section 409A of the Code, no payment to be made to a specified employee
      (within the meaning of section 409A of the Code) on or after the date of his
      Termination of Employment shall be made sooner than six (6) months after such
      Termination of Employment.




Section
      6.5 ***Certain
      One-time Elections*** .




(a) Notwithstanding
      anything in the Plan to the contrary, each active or terminated Participant
      in
      this Plan may elect, by written notice at any time prior to January 1, 2006,
      to
      receive all, but not less than all, of his vested and unpaid benefits under
      this
      Plan in a single lump sum payment as of December 31, 2005 in full settlement
      of
      all of his rights under this Plan.




(b) Notwithstanding
      anything in this Plan to the contrary, each Participant may elect, by written
      notice at any time prior to January 1, 2006 to receive all, but not less than
      all, of his vested and unpaid benefits under this Plan beginning at any time
      and
      payable in any form permitted under this Plan (including but not limited to
      an
      election that any accrued but unpaid vested benefits be paid in a lump sum
      as
      soon as practicable following a Change in Control Event).




**ARTICLE
      XV**




**AMENDMENT
      OR TERMINATION**




Section
      7.1 ***Amendment
      or Termination*** .
      The
      Company intends the Plan to be permanent but reserves the right to amend or
      terminate the Plan when, in the sole opinion of the Company, such amendment
      or
      termination is advisable. Any such amendment or termination shall be made
      pursuant to a resolution of the Board and shall be effective as of the date
      of
      such resolution.




6.




Section
      7.2 ***Effect
      of Amendment or Termination*** .
      No
      amendment or termination of the Plan shall directly or indirectly reduce the
      balance of the Deferred Compensation Account held hereunder as of the effective
      date of such amendment or termination. Upon termination of the Plan, all amounts
      credited to each participant shall fully vest, and distribution of amounts
      in
      the Deferred Compensation Account shall be made to the Participant or his
      beneficiary in the manner and at the time described in Article V of the Plan.
      No
      additional credits of Salary Reduction or Matching Contributions shall be made
      to the Deferred Compensation Account of a Participant after termination of
      the
      Plan, but the Company shall continue to credit gains to the Deferred
      Compensation Account pursuant to Article IV until the balance of the Deferred
      Compensation Account has been fully distributed to the Participant or his
      beneficiary.




Section
      7.3 ***Suspension
      of the Plan*** .
      The
      Company reserves the right, in its sole and absolute discretion, by action
      of
      the Board, to suspend the operation of the Plan, but only in the following
      circumstances:




(a) With
      respect to Salary Reduction Contributions, Mandatory Contributions to be earned
      and paid in calendar years beginning after the date of adoption of the
      resolution suspending the operation of the Plan; and




(b) At
      such
      other time and in such other circumstances as may be permitted under section
      409A of the Code.




In
      such
      event, no further compensation shall be deferred following the effective date
      of
      the suspension and Deferred Compensation Accounts in existence prior to such
      date shall continue to be maintained, and payments shall continue to be made,
      in
      accordance with the provisions of the Plan.




**ARTICLE
      XVI**




**GENERAL
      PROVISIONS**




Section
      8.1 ***Participant’s
      Rights Unsecured*** .
      The
      Plan at all times shall be entirely unfunded and no provision shall at any
      time
      be made with respect to segregating any assets of the Company for payment of
      any
      distributions hereunder; provided, however, that the Company in its sole
      discretion may establish a reserve, segregate specific assets, or create a
      trust
      or other vehicle, to hold assets for purposes of administering the Plan or
      for
      its own financial purposes. The right of a Participant or his designated
      beneficiary to receive a distribution hereunder shall be an unsecured claim
      against the general assets of the Company, and neither the Participant nor
      a
      designated beneficiary shall have any rights in or against any specific assets
      of the Company, including any reserve, segregated assets, or trust assets that
      may be maintained by the Company.




7.




Section
      8.2 ***No
      Guarantee of Benefits*** .
      Nothing
      contained in the Plan shall constitute a guaranty by the Company or any other
      person or entity that the assets of the Company will be sufficient to pay any
      benefit hereunder.




Section
      8.3 ***No
      Enlargement of Employee Rights*** .
      No
      Participant shall have any right to receive a distribution of contributions
      made
      under the Plan except in accordance with the terms of the Plan. Establishment
      of
      the Plan shall not be construed to give any Participant the right to be retained
      in the service of the Company.




Section
      8.4 ***Spendthrift
      Provisions*** .
      No
      interest of any person or entity in, or right to receive a distribution under,
      the Plan shall be subject in any manner to sale, transfer, assignment, pledge,
      attachment, garnishment, anticipation, or other alienation or encumbrance of
      any
      kind; nor may such interest or right to receive a distribution be taken, either
      voluntarily or involuntarily for the satisfaction of the debts of, or other
      obligations or claims against, such person or entity, including claims for
      alimony, support, separate maintenance, and claims in bankruptcy
      proceedings.




Section
      8.5 ***Applicable
      Law*** .
      The
      Plan shall be construed and administered under the laws of the State of New
      York.




Section
      8.6 ***Incapacity
      of Recipient*** .
      If any
      person entitled to a distribution under the Plan is deemed by the Company to
      be
      incapable of personally receiving and giving a valid receipt for such payment,
      then, unless and until claim therefor shall have been made by a duly appointed
      guardian or other legal representative of such person, the Company may provide
      for such payment or any part thereof to be made to any other person or
      institution then contributing toward or providing for the care and maintenance
      of such person. Any such payment shall be a payment for the account of such
      person and a complete discharge of any liability of the Company and the Plan
      therefor.




Section
      8.7 ***Corporate
      Successors*** .
      The
      Plan shall not be automatically terminated by a transfer or sale of assets
      of
      the Company or by the merger or consolidation of the Company into or with any
      other corporation or other entity, but the Plan shall be continued after such
      sale, merger, or consolidation only if and to the extent that the transferee,
      purchaser, or successor entity agrees to continue the Plan. In the event that
      the Plan is not continued by the transferee, purchaser, or successor entity,
      then the Plan shall terminate subject to the provisions of Section
      7.2.




Section
      8.8 ***Unclaimed
      Benefit*** .
      Each
      Participant shall keep the Company informed of his current address and the
      current address of his designated beneficiary. The Company shall not be
      obligated to search for the whereabouts of any person. If the location of a
      Participant is not made known to the Company within three (3) years after the
      date on which payment of the Participant’s Deferred Compensation Accounts may
      first be made, payment may be made as though the Participant had died at the
      end
      of the three-year period. If, within one additional year after such three-year
      period has elapsed, or, within three year after the actual death of a
      Participant, the Company is unable to locate any designated beneficiary of
      the
      Participant, then the Company shall have no further obligation to pay any
      benefit hereunder to such Participant or designated beneficiary and such benefit
      shall be irrevocably forfeited.




8.




Section
      8.9 ***Limitations
      on liability*** .
      Notwithstanding any of the preceding provisions of the Plan, neither the Company
      nor any individual acting as employee or agent of the Company shall be liable
      to
      any Participant, former Participant or other person for any claim, loss,
      liability, or expense incurred in connection with the Plan. However, the
      preceding sentence shall not apply to liability for criminal acts or willful
      misconduct.




Section
      8.10 ***Compliance
      with Section 409A of the Code*** .
      The
      Plan is intended to be a non-qualified deferred compensation plan described
      in
      section 409A of the Code. The Plan shall be operated, administered and construed
      to give effect to such intent. In addition, the Plan shall be subject to
      amendment, with or without advance notice to Participants and other interested
      parties, and on a prospective or retroactive basis, including but not limited
      to
      amendment in a manner that adversely affects the rights of participants and
      other interested parties, to the extent necessary to effect such
      compliance.




Section
      8.11 ***Accelerated
      Vesting Upon a Change in Control*** .




(a) Each
      Participant’s benefit under the Plan shall become 100% vested upon the
      occurrence of a Change in Control of the Employer while the Participant is
      an
      Employee.




(b) A
      Change
      in Control of the Employer shall be deemed to have occurred upon the happening
      of any of the following events:




consummation
      of a reorganization, merger, or consolidation of U.S.B. Holding Co., Inc. with
      one or more other persons, other than a transaction following which more than
      20% of the securities entitled to vote generally in the election of directors
      of
      the entity resulting from such transaction are beneficially owned (within the
      meaning of Rule 13d-3 promulgated under the Exchange Act) by a person who,
      on
      January 1, 1994, beneficially owned (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) more than 20% of the securities entitled
      to
      vote generally in the election of directors of U.S.B. Holding Co.,
      Inc.




a
      transaction or series of transactions resulting in the acquisition of all or
      substantially all of the assets of U.S.B. Holding Co., Inc. or beneficial
      ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
      Act)
      of more than 20% of the outstanding securities of U.S.B. Holding Co., Inc.
      entitled to vote generally in the election of directors by any person or by
      any
      persons acting in concert, who do not, prior to such transaction or series
      of
      transactions already beneficially own more than 20% of such outstanding
      securities;




a
      complete liquidation or dissolution of U.S.B. Holding Co., Inc., or approval
      by
      its stockholders of a plan for such liquidation or dissolution.




In
      no
      event, however, shall a Change in Control be deemed to have occurred as a result
      of any acquisition of securities or assets of U.S.B. Holding Co., Inc., an
      affiliated employer, or a subsidiary of either of them, by U.S.B. Holding Co.,
      Inc., an affiliated employer, or a subsidiary of either of them, or by any
      employee benefit plan maintained by any of them. For purposes of this section
      9.5(b), the term Aperson@ shall have the meaning assigned to it under sections
      13(d)(3) or 14(d)(2) of the Exchange Act.




9.




**IN
      WITNESS WHEREOF** ,
      the
      Company has formally adopted this amended and restated Plan effective as of
      January 1, 2005.




**UNION
              STATE BANK**By:
               /s/  Thomas E. HalesThomas
                E. Hales - Chairman and CEO




10.


**UNION
      STATE BANK**


**100
      Dutch Hill Road**


**Orangeburg,
      New York 10962**




**KEY
      EMPLOYEES’ SUPPLEMENTAL DIVERSIFIED INVESTMENT PLAN**




**SALARY
      REDUCTION AGREEMENT**




As
      a
      condition to receiving a Salary Reduction and Matching Contribution under the
      Key Employees’ Supplemental Diversified Investment Plan (the “Plan”) of Union
      State Bank (the “Bank”), I hereby agree that the salary, inclusive of bonuses,
      otherwise payable to me by Union State Bank for any Plan Year commencing with
      the Plan Year which begins January 1, 2006, shall be reduced by _________
      percent per pay period after I have met all 401(k) qualified plan provisions
      under the Bank’s Employee Stock Ownership Plan (With 401(k) Provisions) (“KSOP”)
      and also less any amounts deferred under the Key Employees’ Supplemental
      Investment Plan. Such amount shall be paid by the Bank as a salary reduction
      contribution for my benefit pursuant to the terms of the Plan.




Date
              
              Participant









**Union
      State Bank Key Employees' Supplemental Diversified Investment
      Plan**


**One-Time
      Election to Revoke or Change Prior Elections**





**NOTICE
                TO PARTICIPANTS**The
                Union State Bank Key Employees' Supplemental Diversified Investment
                Plan
                has been changed to comply with new federal tax law requirements.
                These
                requirements place substantial restrictions on the Company's future
                discretion to amend or terminate the Plan, to permit you to change
                your
                existing payment elections, or to authorize accelerated payouts.
                In light
                of these new restrictions, the law permits us to give you a one-time
                opportunity, during 2005, to change any payment schedule previously
                elected. You may make the following choices by filling out this form
                and
                returning it to Catherine Martini no later than December 23, 2005.
                Please
                complete, sign and return this form whether or not you choose to
                make any
                changes.**General**
              **Information**Name
                of
              Participant:
                ____________________________________________
            Soc.Sec.No.:_______-______-________**Election**
            *Choose
                1 of the following options:*□
            **NO
                CHANGE.**I
                do not want to revoke any of my prior elections under the
                Plan.□
            **IMMEDIATE
                PAYOUT OF ALL BALANCES.**I
                want to revoke all of my prior elections under the Plan and receive
                full
                payment of my entire vested benefit under the Plan in a single lump
                sum
                payment on or prior to December 31, 2005.□
            **OTHER
                CHANGE OR REVOCATION.**I
                want to revoke all of my prior elections under the Plan and receive
                full
                payment of my entire vested benefit under the Plan in the form of:
                (check
                one box in column (a) and one box in column (b); if you want part
                of your
                benefit paid under one schedule and part paid under a different schedule,
                please contact Catherine Martini):**(a)**
              **Payments
                before a**
              **Change
                in Control**
              **Event**
            **(b)**
              **Payments
                after a**
              **Change
                in**
              **Control
                Event**a
                single lump sum payment on the first day
              of
                the month following my Termination of Employment
            □
            □a
                single lump sum payment on the first day of the calendar year following
                my
                Termination of Employment
            □
            □annual
                payments beginning on the first day of the month following my Termination
                of Employment and continuing for the specified number of years (maximum
                of
                15)
            □
                _______ years
            □
                _______ yearsannual
                payments beginning on the first day of the calendar year following
                my
                Termination of Employment and continuing for the specified number
                of years
                (maximum of 15)
            □
                _______ years
            □
                _______ years**S**
              **I**
              **G**
              **N**
            **H**
              **E**
              **R**
              **E**
            I
                certify that I have received and read a copy of the full text of
                the Plan,
                including any amendments. I understand that I will not have the right
                to
                change or revoke this notice and that my right to change or revoke
                elections in the future will be subject to substantial
                restrictions.
              
              ______________________________________________________________
                _________________
              *Your
                Signature Date**Internal
                Use Only*Received
                on ___________________________
              *Date
                of Receipt*
              
              By
                ________________________________________________________
              *Authorized
                Signature*
            Comments: