JSB FINANCIAL, INC.

                        SUPPLEMENTAL EMPLOYMENT AGREEMENT


WHEREAS,  ("Executive") and JSB Financial,  Inc. (the "Company") desire to enter
into  this  Supplemental  Employment  Agreement  ("Supplemental  Agreement")  to
supplement the Employment  Agreement  entered into between the Executive and the
Company  on  June  27,  1990   (hereinafter   referred  to  as  the  "Employment
Agreement"); and


WHEREAS,  there is an accelerating trend of consolidation among companies within
the banking industries; and

WHEREAS,  tax law provisions  relating to "golden parachute payments" could have
the effect of reducing the benefits  otherwise  provided to Executive  under the
Employment Agreement as a result of a change in control of the Company; and


WHEREAS,  the Board of Directors of the Company ("Board") believes that it is in
the best interests of the Company and its  shareholders  that this  Supplemental
Agreement  be  entered  into in order to provide  the  benefits  intended  to be
provided under the Employment Agreement to Executive in the event of a change in
control of the Company, without any reduction because of tax code "penalties" or
excise taxes relating to a change in control; and


WHEREAS,  the  Company  and  the  Executive  also  desire  to  enter  into  this
Supplemental  Agreement  for  the  purpose  of  eliminating   conflicting  terms
contained  in  the  Employment  Agreement  and to  provide  the  Executive  with
termination benefits  substantially  similar to those provided to key executives
at other savings and loan holding companies; and


WHEREAS,  the  Company  and  the  Executive  also  desire  to  enter  into  this
Supplemental  Agreement  for the purpose of providing  further  incentive to the
Executive to achieve  successful  results in the management and the operation of
the Company.


NOW, THEREFORE,  in consideration of the mutual covenants herein contained,  and
upon the other terms and  conditions  hereinafter  provided,  the parties hereby
agree as follows:


A.  SUPPLEMENTAL BENEFITS

1. In the  event of a Change  in  Control  of the  Company  (as  defined  in the
Employment Agreement),  the Executive shall be entitled to receive,  pursuant to
this Supplemental  Agreement,  an amount, payable by the Company, in addition to
any  compensation or benefits  payable by the Company pursuant to the Employment
Agreement,  which amount shall equal the difference  between (i) the amount that
would be paid under the  Employment  Agreement  pursuant to Section  5(c) of the
Employment Agreement but for the reductions in payments required by Section 5(h)
of the Employment Agreement, and (ii) the amount that is actually paid under the
terms of the Employment  Agreement after giving consideration to Section 5(h) of
said Employment Agreement.


<PAGE>

2. In each  calendar  year that  Executive  is entitled  to receive  payments or
benefits under the provisions of the Employment  Agreement and this Supplemental
Agreement,  the Company or it's  independent  accountants  shall determine if an
excess  parachute  payment (as defined in Section 4999 of the  Internal  Revenue
Code of 1986, as amended,  and any  successor  provision  thereto,  (the "Code")
exists. Such determination  shall be made after taking any reductions  permitted
pursuant to Section 280G of the Code and the regulations thereunder.  Any amount
determined  to be an excess  parachute  payment  after  taking into account such
reductions  shall be  hereafter  referred to as the  "Initial  Excess  Parachute
Payment".  As soon as practicable after a Change in Control,  the Initial Excess
Parachute Payment shall be determined.  Upon the Date of Termination following a
Change in  Control,  the  Company  shall pay  Executive,  subject to  applicable
withholding  requirements under applicable state and federal law an amount equal
to:

(i) twenty (20) percent of the Initial Excess  Parachute  Payment (or such other
amount equal to the tax imposed under Section 4999 of the Code); and

(ii) such  additional  amount (tax  allowance) as may be necessary to compensate
Executive for the payment by Executive of city, state and federal income, excise
and employment-related taxes on the payment provided under Clause (i) and on any
payments under this Clause (ii). In computing such tax allowance, the payment to
be made under Clause (i) shall be divided by the "gross up percentage" ("GUP").
The GUP shall be determined as follows:


                  GUP = 1.00 - The Executive's Tax Rate

The  Executive's Tax Rate for purposes of computing the GUP shall be the highest
marginal federal, state and city income, excise and employment-related tax rate,
including any applicable to the Executive in the year in which the payment under
Clause (i) is made.

3.  Notwithstanding  the foregoing,  if it shall subsequently be determined in a
final judicial determination with any taxing authority or a final administrative
settlement  with any taxing  authority  to which  Executive  is a party that the
excess  parachute  payment as defined  in Section  4999 of the Code,  reduced as
described  above, is different from the Initial Excess  Parachute  Payment (such
different  amount  being  hereafter  referred  to as the  "Determinative  Excess
Parachute Payment") then the Company's  independent  accountants shall determine
the amount (the  "Adjustment  Amount") the Executive  must pay to the Company or
the Company  must pay to the  Executive  in order to put the  Executive  (or the
Company,  as the case may be ) in the same  position  as the  Executive  (or the
Company,  as the case may be) would have been if the  Initial  Excess  Parachute
Payment  had been  equal  to the  Determinative  Excess  Parachute  Payment.  In
determining the Adjustment Amount,  the independent  accountants shall take into
account any and all taxes  (including any penalties and interest) paid by or for
Executive  or refunded  to  Executive  or for  Executive's  benefit.  As soon as
practicable  after the  Adjustment  Amount has been so  determined,  the Company
shall pay the  Adjustment  Amount to Executive or the Executive  shall repay the
Adjustment Amount to the Company, as the case may be.

4. In each calendar year that Executive  receives payments or benefits under the
Employment Agreement or this Supplemental  Agreement,  Executive shall report on
his state and federal income tax returns such  information as is consistent with
the  determination  made  by  the  independent  accountants  of the  Company  as
described  above.  The Company shall indemnify and hold Executive  harmless from
any and all losses, costs and expenses (including without limitation, reasonable
attorney's  fees,  interest,  fines and penalties)  which Executive  incurs as a
result of so reporting such  information.  Executive  shall promptly  notify the
Company in writing whenever the Executive  receives notice of the institution of
a  judicial  or  administrative  proceeding,  formal or  informal,  in which the
federal  tax  treatment  under  Section  4999 of the Code of any amount  paid or
payable under this  Supplemental  Agreement is being  reviewed or is in dispute.
The Company shall assume control, at its expense,  over all legal and accounting
matters pertaining to such federal tax treatment (except to the extent necessary
or appropriate  for Executive to resolve any such proceeding with respect to any
matter unrelated to amounts paid or payable pursuant to the Employment Agreement
or this  Supplemental  Agreement) and Executive  shall  cooperate fully with the
Company  in any  such  proceeding.  The  Executive  shall  not  enter  into  any
compromise or settlement or otherwise  prejudice any rights the Company may have
in connection therewith without prior consent of the Company.

<PAGE>

B. MITIGATION

1. Upon the occurrence of an Event of Termination or Change in Control  followed
by the  subsequent  payment  of  termination  benefits  to  Executive  under the
Employment  Agreement or this  Supplemental  Agreement,  Executive shall have no
duty or  obligation  to mitigate and such  payments  shall not be reduced in the
event the Executive obtains other employment.


C. INSURANCE COVERAGE BENEFITS

1.  Notwithstanding  the  terms  contained  in  Sections  4(c)  and  5(d) of the
Employment Agreement, upon the occurrence of an Event of Termination or a Change
of Control, Executive shall receive a cash payment equal to the cost of what the
Executive  would be  required to pay for  continued  life,  medical,  dental and
disability  coverage  substantially  identical to the coverage maintained by the
Bank or the Company  prior to  severance  in lieu of  receiving  such  continued
coverage as set forth in the Employment Agreement.


D. CONFLICTING TERMS

1.  Notwithstanding  the  terms  contained  in  Sections  4(b)  and  5(c) of the
Employment Agreement, upon the occurrence of an Event of Termination or a Change
of Control,  the Company shall pay Executive,  or in the event of his subsequent
death, his beneficiary or  beneficiaries,  or his estate, as the case may be, as
severance pay or liquidated  damages, or both, a sum equal to the greater of the
payments  due for the  remaining  term of the  Agreement  or three (3) times the
average of the three (3) preceding years' Base Salary, including bonuses and any
other cash  compensation paid to the Executive during such years, and the amount
of any  contributions  made to any  employee  benefit  plans,  on  behalf of the
Executive, maintained by the Bank or the Company during such years.


IN WITNESS WHEREOF, JSB Financial,  Inc. has caused this Supplemental  Agreement
to be  executed  and its seal to be  affixed  hereunto  by its  duly  authorized
officers,  and Executive has signed this Supplemental  Agreement on the day of ,
1996.


ATTEST:  [SEAL]                           JSB FINANCIAL, INC.



Joanne Corrigan                           Edward P. Henson
--------------------------                ---------------------------
Joanne Corrigan, Secretary                Edward P. Henson, President

[SEAL]


WITNESS:



Lawrence J. Kane                          Park T. Adikes
--------------------------------          ----------------------------
Lawrence J. Kane, Sen. Vice Pres.         Park T. Adikes