August 24, 1999

Neil W. Savage

President and Chief Executive Officer
United Financial Holdings, Inc.

Dear Neil:

When your  Salary  Continuation  Plan dated  August 25, 1994 was  terminated  on
December 5, 1997,  provisions in the agreement  were  inadvertently  terminated.
Specifically,  the terminated plan effectively compensated for the economic loss
of $36,000  resulting  from the  transfer of your Split  Dollar  Life  Insurance
agreement,  also  dated  August 25,  1994.  With the  termination  of the Salary
Continuation  Plan, this portion of the agreement was eliminated  when, in fact,
it should have remained in effect.

The purpose of this letter is to reinstate the payment provision of $36,000 from
the terminated plan subject to the following terms and conditions:

1.      PRE-RETIREMENT  DEATH.  Should you die prior to age sixty-five (65), but
        while in the employ of the Corporation, then for a period of twelve (12)
        consecutive  months,  the Corporation will pay "Benefit Income" of Three
        Thousand    Dollars    ($3.000)   each   month   to   your    designated
        beneficiary(ies),  or, if none, to your  surviving  spouse,  or, if your
        spouse does not survive you, then to your surviving child or children in
        equal shares,  or, if there is no surviving child,  then to your estate.
        Payment of Benefit  Income shall commence on the first day of the second
        calendar month following the date of your death.

        a.     In the event the  beneficiary  dies after you but while receiving
               Benefit  Income,   the  beneficiary  may  designate  a  successor
               beneficiary  to himself or herself as to any  Benefit  Income yet
               payable to him or her.  In the absence of such  designation,  the
               remaining  Benefit  Income  shall  be paid to the  estate  of the
               beneficiary upon the beneficiary's death.

        b.     Beneficiaries designated may be changed at any time.

        c.     Beneficiaries shall be designated in writing accepted by the
               Corporation and executed by you in the presence of two (2)
               witnesses.

2.   TERMINATION  OF  EMPLOYMENT  PRIOR TO AGE  SIXTY-FIVE.  In the  event  your
     employment  with  Corporation  terminates  during your  lifetime,  prior to
     reaching age sixty-five  (65), then for a period of twelve (12) consecutive
     months,  the  Corporation  will pay you "Benefit  Income" of Three Thousand
     Dollars  ($3,000) each month.  Payment of Benefit  Income shall commence on
     the  first  day  of  the  second  calendar  month  following  the  date  of
     termination.  In the event you shall die after  said  payments  of  Benefit
     Income have become due but before the  expiration  of the twelve (12) month
     period,  the payment of Benefit Income will continue  through the remainder
     of the  twelve  (12)  month  period  to  those  beneficiaries  provided  in
     paragraph 1.a. above.


<PAGE>
Neil W. Savage
Page 2

3.   CHANGE  IN  CONTROL  OF  CORPORATION.  In the  event a  change  in  control
     application  is filed with and  approved  by the Federal  Reserve  Bank and
     prior to reaching age sixty-five (65), then, whether or not you continue in
     the  employ of the  Corporation,  for a period of twelve  (12)  consecutive
     months,  the  Corporation  will pay you "Benefit  Income" of Three Thousand
     Dollars  ($3,000) each month.  Payment of Benefit  Income shall commence on
     the first day of the second  calendar month following the date of Change in
     Control.  In the event you shall die after said payments of Benefit  Income
     have become due but before expiration of the twelve (12) month period,  the
     payment of Benefit Income will continue through the remainder of the twelve
     month period to those beneficiaries provided in paragraph 1.a. above.

4.   RETIREMENT  BENEFIT.  Should you still be in the employ of the  Corporation
     when you  reach  age  sixty-five  (65),  then  upon  your  retirement  from
     employment  with the  Corporation  on or after  age  sixty-five  (65),  the
     Corporation  will pay you for a period of twelve  (12)  consecutive  months
     Three Thousand Dollars ($3,000) each month. Payment of Benefit Income shall
     commence on the first day of the second  calendar month  following the date
     of your  retirement.  In the event you shall  die after  said  payments  of
     Benefit  Income  have become due but before  expiration  of the twelve (12)
     month  period,  the  payment of Benefit  Income will  continue  through the
     remainder  of the twelve month  period to those  beneficiaries  provided in
     paragraph 1.a. above.

This issue was  presented to the  Strategic  Review  Committee  and received its
approval  at the  August  24,  1999  meeting.  The  Strategic  Review  Committee
recommended its adoption at the next regularly scheduled Board meeting of United
Financial Holdings, Inc..

If you are in agreement with the terms and conditions as outlined above,  please
indicate your  agreement  below. A copy of this letter will be maintained in the
files of the Human Resources Department.

Sincerely,

Jack B. Norrie
Chairman

United Financial Holdings, Inc.

Agreed:                                     Witness: ___________________

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Neil W. Savage