EMPLOYMENT AGREEMENT


     This  Employment  Agreement  (this  "Agreement")  is made  effective  as of
December  29, 2008 (the  "Effective  Date"),  by and between  Empire State Bank,
N.A.,  a  national  banking  association  (the  "Bank")  and  Anthony  P.  Costa
("Executive").  The Bank and Executive are  sometimes  collectively  referred to
herein  as  the  "parties."  Any  references  to the  "Company"  shall  mean  ES
Bancshares, Inc., the holding company of the Bank.

     WHEREAS,  Executive is serving as Chairman of the Board and Chief Executive
Officer of the Bank pursuant to an employment agreement by and between Executive
and the Bank dated September 23, 2004 (the "2004 Agreement"); and

     WHEREAS,  the parties  wish to supersede  and update the 2004  Agreement to
take into account  certain changes in the law under Section 409A of the Internal
Revenue Code of 1986, as amended ("Code"), and for certain other purposes; and

     WHEREAS,  the Bank wishes to assure  itself of the services of Executive as
an officer of the Bank for the period provided in this  Agreement,  and in order
to induce  Executive to remain in the employ of the Bank and to provide  further
incentive for Executive to achieve the financial and  performance  objectives of
the Bank, the parties desire to enter into this Agreement.

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

1.   POSITION AND RESPONSIBILITIES.

     During the term of this Agreement, Executive shall serve as Chairman of the
Board and Chief  Executive  Officer of the Bank.  Executive shall be responsible
for the overall management of the Bank and shall be responsible for establishing
the business objectives, policies and strategic plan of the Bank, in conjunction
with the board of directors of the Bank (the "Board"). Executive shall have such
duties,  responsibilities  and powers as are customary and  appropriate for such
offices,  including without limitation,  keeping the Board fully informed of his
activities.

2.   TERM AND DUTIES.

     (a) Three Year Contract; Annual Renewal. The term of Executive's employment
under this Agreement  shall commence as of the Effective Date and shall continue
for a period of three (3) years (the  "Employment  Period").  Commencing  on the
first anniversary date of the Effective Date, and continuing at each anniversary
date  thereafter  (the  "Anniversary  Date"),  the Agreement  shall renew for an
additional year such that the remaining term shall be three (3) years; provided,
however,  if written  notice of  nonrenewal  is provided to  Executive  at least
thirty (30) days and not more than sixty (60) days prior to an Anniversary Date,
the term of this  Agreement  shall not so  renew,  provided  further  that on an
annual basis prior to the issuance of the notice of  nonrenewal  or the deadline
for the notice period referenced above,  which ever comes first, the Board shall
conduct a performance review of Executive for purposes of determining whether to
provide  notice of  nonrenewal.  If (i) timely  notice is not  delivered  to the
Executive, or (ii) if such performance review is not conducted as required above
and  its  related


<PAGE>

findings  provided in its  entirety to the  Executive,  the  Agreement  shall be
automatically extended for an additional year.

     (b) Change in  Control.  In the event of a Change in Control (as defined in
Section  7 of  this  Agreement),  the  Employment  Period  shall  no  longer  be
applicable,  and the term of this  Agreement  shall be deemed  amended such that
Executive's  period of employment shall be  automatically  extended to the third
anniversary  of the date on which such Change in Control  occurs  (the  "Revised
Employment  Period"),  and shall be further extended  automatically  for one (1)
additional  day each  day  following  such  Change  in  Control,  unless  either
Executive or the Bank elects not to extend the Revised Employment Period further
by giving written  notice thereof to the other party,  in which case the Revised
Employment  Period shall become fixed and shall end on the third  anniversary of
such written notice.

     (c) Termination of Agreement.  Notwithstanding  anything  contained in this
Agreement  to  the  contrary,   either  Executive  or  the  Bank  may  terminate
Executive's  employment  with  the  Bank at any  time  during  the  term of this
Agreement, subject to the terms and conditions of this Agreement.

     (d) Continued  Employment  Following  Expiration  of Term.  Nothing in this
Agreement  shall mandate or prohibit a continuation  of  Executive's  employment
following  the  expiration  of the term of this  Agreement,  upon such terms and
conditions as the Bank and Executive may mutually agree.

     (e)  Duties.  During  the term of this  Agreement,  except  for  periods of
absence  occasioned by illness,  reasonable  vacation  periods,  and  reasonable
leaves of absence  approved by the Board,  Executive shall devote  substantially
all  of his  business  time,  attention,  skill,  and  efforts  to the  faithful
performance of his duties hereunder,  including  activities and services related
to the  organization,  operation and  management of the Bank, and shall take all
reasonably necessary and appropriate actions to promote,  develop and extend the
business of the Bank.

3.   COMPENSATION, BENEFITS AND REIMBURSEMENT.

     (a) Base Salary. In consideration of Executive's  performance of the duties
set forth in  Section  2, the Bank  shall  provide  Executive  the  compensation
specified  in  this  Agreement.  The  Bank  shall  pay  Executive  a  salary  of
$____________  per year ("Base  Salary").  The Base  Salary  shall be payable in
accordance  with the Bank's regular payroll  practices.  During the term of this
Agreement,  the Board may consider increasing,  but not decreasing,  Executive's
Base Salary on an annual basis, as the Board deems appropriate.  Any increase in
Base Salary shall become "Base Salary" for purposes of this Agreement.

     (b) Bonus.  Executive shall be entitled to participate in any bonus plan of
the  Bank in  which  Executive  is  eligible  to  participate.  Nothing  paid to
Executive  under  any such plan or  arrangement  will be deemed to be in lieu of
other compensation to which Executive is entitled under this Agreement.

     (c) Employee  Benefits.  The Bank shall  provide  Executive  with  employee
benefit  plans,  arrangements,  life  insurance  and  perquisites  substantially
equivalent to those in which



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<PAGE>

Executive was  participating or from which he was deriving  benefit  immediately
prior to the commencement of the term of this Agreement, and the Bank shall not,
without  Executive's  prior  written  consent,  make any  changes in such plans,
arrangements or perquisites  that would adversely affect  Executive's  rights or
benefits  thereunder,  except  as to any  changes  that  are  applicable  to all
participating  employees.  Without  limiting  the  generality  of the  foregoing
provisions of this Section 3(c),  Executive  will be entitled to  participate in
and receive benefits under any employee benefit plans including, but not limited
to,   retirement   plans,   supplemental   retirement   plans,   pension  plans,
profit-sharing plans,  health-and-accident  insurance plans, medical coverage or
any other employee benefit plan or arrangement made available by the Bank in the
future to its senior executives,  including any stock benefit plans,  subject to
and on a basis consistent with the terms,  conditions and overall administration
of such plans and arrangements (collectively, the "Benefit Plans").

     (d) Paid Time Off.  Executive  shall be entitled to paid  vacation  time of
five (5) weeks each year during the term of this Agreement (measured on a fiscal
or calendar year basis, in accordance with the Bank's usual practices),  as well
as sick leave,  holidays and other paid absences in  accordance  with the Bank's
policies and procedures for senior  executives.  Any unused paid time off during
an annual  period  shall be treated  in  accordance  with the  Bank's  personnel
policies as in effect from time to time.

     (e) Expense  Reimbursements.  Upon  submission of  appropriate  invoices or
vouchers as the Bank shall  specify,  the Bank shall pay or reimburse  Executive
for all  reasonable  expenses  incurred by Executive in the  performance  of his
duties  hereunder  in  furtherance  of the  business,  and in  keeping  with the
policies of the Bank and its  subsidiaries  and  affiliates,  provided that such
payment or  reimbursement  shall be made as soon as practicable  but in no event
later  than March 15 of the year  following  the year in which such the right to
such payment or reimbursement occurred.

4.   OUTSIDE ACTIVITIES.

     Executive  may serve as a member of the board of directors  (or a committee
thereof) of business,  civic, corporate,  community and charitable organizations
subject to the Executive  giving notice  thereof to the Board,  provided that in
each case such service shall not materially  interfere  with the  performance of
his duties  under this  Agreement  or present  any  conflict of  interest.  Such
service to and  participation  in outside  organizations  shall be presumed  for
these purposes to be for the benefit of the Bank,  and the Bank shall  reimburse
Executive his reasonable expenses associated therewith.

5.   WORKING FACILITIES AND EXPENSES.

     Executive's  principal  place of employment  shall be the Bank's  principal
executive offices.  The Bank shall provide Executive,  at his principal place of
employment,  with a private  office,  stenographic  services  and other  support
services and facilities  suitable to his position with the Bank and necessary or
appropriate  in  connection  with  the  performance  of his  duties  under  this
Agreement.  The Bank  and/or its  affiliates  shall  provide  Executive  with an
automobile suitable to the position of Chairman of the Board and Chief Executive
Officer of the Bank,  and such  automobile  may be used by Executive in carrying
out his duties under this  Agreement  and



                                     - 3 -

<PAGE>

for his personal use such as commuting  between his  residence and his principal
place  of  employment.  The  Bank  shall  reimburse  Executive  for the  cost of
maintenance,  use and  servicing of such  automobile.  The Bank shall  reimburse
Executive  for  his  ordinary  and  necessary   business  expenses  incurred  in
connection with the  performance of his duties under this Agreement,  including,
without limitation, fees for organizations that Executive and the Board mutually
agree are necessary  and  appropriate  to further the business of the Bank,  and
travel and reasonable  entertainment  expenses.  Reimbursement  of such expenses
shall be made upon  submission of  appropriate  invoices or vouchers as the Bank
shall specify.

6.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a) Upon the  occurrence  of an Event of  Termination  (as herein  defined)
during the term of this Agreement, the provisions of this Section 6 shall apply;
provided,  however,  that in the event such Event of  Termination  occurs within
eighteen  (18)  months  following  a Change in Control  (as defined in Section 7
hereof),  Section 7 shall apply instead. As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following:

          (i) the involuntary termination of Executive's employment hereunder by
     the Bank for any reason  other than  termination  governed by Section 7 (in
     connection  with or  following  a Change  in  Control),  Section  9 (due to
     Disability), or Section 10 (for Just Cause); or

          (ii)  Executive's  resignation  from the Bank's employ upon any of the
     following, unless consented to by Executive:

               (A) failure to appoint  Executive  to the  position  set forth in
          Section 1, or a material change in Executive's  function,  duties,  or
          responsibilities,  which  change would cause  Executive's  position to
          become  one of lesser  responsibility,  importance,  or scope from the
          position  and  responsibilities  described  in  Section  1,  to  which
          Executive  has not agreed in  writing  (and any such  material  change
          shall be deemed a continuing breach of this Agreement by the Bank);

               (B) a relocation of Executive's  principal place of employment to
          a location  that is more than twenty  (20) miles from the  location of
          the  Bank's  principal  executive  offices  as of  the  date  of  this
          Agreement;

               (C)  a  material  reduction  in  the  benefits  and  perquisites,
          including  Base Salary,  to Executive  from those being provided as of
          the  Effective  Date  (except  for  any  reduction  that  is part of a
          reduction in pay or benefits that is generally  applicable to officers
          or employees of the Bank);

               (D) a liquidation or dissolution of the Company or the Bank; or

               (E) a material  breach of this  Agreement  by the  Company or the
          Bank.

Upon the occurrence of any event described in clause (ii) above, Executive shall
have the right to elect to  terminate  his  employment  under this  Agreement by
resignation  for "Good Reason" upon



                                     - 4 -

<PAGE>

not less than thirty (30) days prior  written  notice  given within a reasonable
period of time (not to exceed  ninety (90) days) after the event  giving rise to
the  right  to  elect,  which  termination  by  Executive  shall  be an Event of
Termination.  The Bank shall have thirty (30) days to cure the condition  giving
rise to the  resignation for Good Reason,  provided,  that the Bank may elect to
waive said thirty (30) day period.

     (b) Upon the  occurrence  of an Event of  Termination,  the Bank  shall pay
Executive,  or, in the event of his subsequent death, his designated beneficiary
or beneficiaries,  or, if there are no designated beneficiaries,  his estate, as
the case may be, as severance  pay or  liquidated  damages,  or both, a lump sum
cash payment equal to three (3) times the sum of (i) the average  annual rate of
Base Salary paid in the last three (3) years  ending in the year of  termination
and (ii) the average annual rate of bonus awarded to Executive  during the prior
three (3)  years.  Such  payments  shall be paid  within  sixty (60) days of the
Executive's  Separation  from Service (within the meaning of Section 409A of the
Code) and shall not be reduced in the event Executive  obtains other  employment
following the Event of Termination.

     (c) Upon the  occurrence  of an Event of  Termination,  the Bank  shall pay
Executive,  or in the event of his subsequent death, his designated  beneficiary
or beneficiaries,  or, if there are no designated beneficiaries,  his estate, as
the case may be, a lump sum cash payment reasonably estimated to be equal to the
present value of the contributions  that would have been made on the Executive's
behalf  under the Bank's  Benefit  Plans (as  defined  in  Section  3(c) of this
Agreement), as if Executive had continued working for the Bank for the remaining
unexpired  Employment  Period  under  the  Agreement  following  such  Event  of
Termination,  earning  the  salary  and  credited  service  that would have been
achieved  during such  period,  where such present  values are to be  determined
using a discount  rate of six percent  (6%) and, in the case of defined  benefit
plans, the mortality tables  prescribed under Section 72 of the Code. The amount
payable hereunder shall be paid as soon as reasonably  practicable following the
occurrence of the Event of Termination  but in no event shall be paid later than
two and one-half  months  following  the end of the  calendar  year in which the
Event of Termination occurs.

     (d) Upon the occurrence of an Event of Termination,  the Bank shall provide
at the Bank's expense for the remaining  unexpired  Employment Period under this
Agreement,   life  insurance  and   non-taxable   medical  and  dental  coverage
substantially comparable, as reasonably available, to the coverage maintained by
the Bank for Executive prior to the Event of  Termination,  except to the extent
such coverage may be changed in its application to all Bank employees.

     (e) Upon the occurrence of an Event of  Termination,  Executive  shall have
the right within thirty (30) days following such Event of Termination,  upon the
surrender of stock options, stock, warrants,  stock appreciation rights, phantom
stock rights or other equity or equity  rights  (collectively,  "Stock  Rights")
issued to Executive by the Bank or its parent, subsidiaries and affiliates, to a
lump sum payment equal to the product of:



                                     - 5 -

<PAGE>

          (i) The excess of (A) the Fair Market  Value (as herein  defined) of a
     share of  stock of the same  class  as the  stock  that  constitutes  or is
     subject to the Stock Right,  determined  as of the date of  termination  of
     employment,  over (B) the exercise price per share,  if any, for such Stock
     Right, as specified in or under the relevant plan or program; multiplied by

          (ii) The number of shares with respect to which Stock Rights are being
     surrendered.

For purposes of this Section 6(e), for purposes of determining Executive's right
following an Event of Termination  to exercise any Stock Rights not  surrendered
pursuant hereto, Executive shall be deemed to be fully vested in and entitled to
exercise  all Stock  Rights  under any stock  option or rights  plan or  program
maintained by, or covering  employees of, the Bank or its subsidiaries,  even if
Executive is not so vested or entitled to then  exercise  such rights under such
plan or program.

     (f) For  purposes of this  Agreement,  "Fair  Market  Value" means the fair
market value per share of the  Company's  common  stock  ("Common  Stock").  For
purposes  hereof,  the Fair Market Value of a share of Common Stock shall be the
closing  sale  price of a share  of  Common  Stock  on the  date  the  Executive
exercises his right under Section 6(e) of this Agreement (or, if such day is not
a trading day in the U.S.  markets,  on the nearest  preceding  trading day), as
reported with respect to the principal  market (or the composite of the markets,
if more than one) or  national  quotation  system in which such  shares are then
traded, or if no such closing prices are reported, the mean between the high bid
and low asked  prices that day on the  principal  market or  national  quotation
system then in use.


     (g) For purposes of this Agreement,  a "Separation from Service" shall have
occurred if the Bank and Executive reasonably  anticipate that either no further
services  will be  performed  by the  Executive  after  the date of the Event of
Termination  (whether  as an employee or as an  independent  contractor)  or the
level of further services  performed will not exceed forty-nine percent (49%) of
the average  level of bona fide  services in the twelve (12) months  immediately
preceding the Event of Termination.  For all purposes hereunder,  the definition
of  Separation  from  Service  shall be  interpreted  consistent  with  Treasury
Regulation Section  1.409A-1(h)(ii).  If Executive is a Specified  Employee,  as
defined in Code Section 409A and any payment to be made under  paragraph  (b) or
(c) of this Section 6 shall be  determined  to be subject to Code Section  409A,
then if and to the extent  necessary  to comply with Code Section 409A and avoid
additional  tax  thereunder,  such  payment or a portion of such payment (to the
minimum extent  possible) shall be delayed and shall be paid on the first day of
the seventh month following Executive's Separation from Service.

7.   CHANGE IN CONTROL.

     (a) Any payments  made to Executive  pursuant to this Section 7 are in lieu
of any  payments  that  may  otherwise  be owed to  Executive  pursuant  to this
Agreement  under Section 6, such that Executive  shall either  receive  payments
pursuant  to  Section 6 or  pursuant  to  Section  7, but not  pursuant  to both
Sections.



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<PAGE>

     (b) For purposes of this Agreement, the term "Change in Control" shall mean
any of the following events:

          (i) any "person"  (as the term is used in Sections  13(d) and 14(d) of
     the Securities Exchange Act of 1934 (the "Exchange Act")) is or becomes the
     "beneficial  owner"  (as  defined in Rule 13d-3  under the  Exchange  Act),
     directly  or  indirectly,   of  securities  of  the  Bank  or  the  Company
     representing twenty-five percent (25%) or more of the combined voting power
     of such outstanding securities,  except for any securities purchased by any
     employee  stock  ownership  plan or  trust  established  by the Bank or the
     Company; or

          (ii)  individuals  who constitute the Board on the Effective Date (the
     "Incumbent  Board")  cease for any reason to constitute at least a majority
     thereof,  provided  that any person  becoming a director  subsequent to the
     Effective  Date  whose  election  was  approved  by  a  vote  of  at  least
     three-quarters  of the directors  comprising the Incumbent  Board, or whose
     nomination  for  election  by  stockholders  of the Bank or the Company was
     approved by the same Nominating Committee serving under an Incumbent Board,
     shall be, for purposes of this  Subsection  (B),  considered as though they
     were members of the Incumbent Board; or

          (iii) a sale of all or substantially all the assets of the Bank or the
     Company,  or a plan of reorganization,  merger,  consolidation,  or similar
     transaction occurs in which the security holders of the Bank or the Company
     immediately  prior to the  consummation  of the  transaction  do not own at
     least fifty and one tenth of one percent  (50.1%) of the  securities of the
     surviving entity to be outstanding upon consummation of the transaction; or

          (iv) a proxy statement is issued soliciting  proxies from stockholders
     of the Bank or the Company by someone other than the current  management of
     the  Bank  or the  Company,  seeking  stockholder  approval  of a  plan  of
     reorganization,  merger or  consolidation  of the Bank or the  Company,  or
     similar  transaction with one or more corporations as a result of which the
     outstanding  shares of the class of securities then subject to the plan are
     to be exchanged for or converted  into cash or property or  securities  not
     issued by the Bank or the Company; or

          (v) a tender offer is made for  twenty-five  percent  (25%) or more of
     the voting securities of the Bank or the Company,  and stockholders  owning
     beneficially  or of  record  twenty-five  percent  (25%)  or  more  of  the
     outstanding  securities of the Bank or the Company have tendered or offered
     to sell their shares pursuant to such tender offer and such tendered shares
     have been accepted by the tender offeror.

     (c) Upon the  occurrence of a Change in Control  followed  within  eighteen
(18) months by an Event of  Termination  (as  defined in Section 6 hereof),  the
Bank  shall  pay  Executive,  or in the  event  of  his  death,  his  designated
beneficiary or beneficiaries,  or, if there are no designated beneficiaries, his
estate, as the case may be, a lump sum cash payment equal to three (3) times the
sum of: (i) his current Base Salary, plus (ii) the highest rate of bonus paid to



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<PAGE>

Executive  during the three (3) year period ending in the year prior to the year
of the Change in Control.  Such payment shall be made in a lump sum within sixty
(60) days of the Event of Termination.

     (d) Upon the  occurrence of a Change in Control  followed  within  eighteen
(18) months by an Event of  Termination  (as  defined in Section 6 hereof),  the
Bank  shall  pay  Executive,  or in the  event  of  his  death,  his  designated
beneficiary or beneficiaries,  or, if there are no designated beneficiaries, his
estate, as the case may be, a lump sum cash payment  reasonably  estimated to be
equal to the  present  value of the  contributions  that would have been made on
Executive's  behalf  under  the  Company  or the  Bank's  Benefit  Plans,  as if
Executive  had  continued  working  for the  Bank  for the  remaining  unexpired
Employment  Period or Revised  Employment  Period under the Agreement  following
such Event of  Termination,  earning the salary and credited  service that would
have been  achieved  during such  period,  where such  present  values are to be
determined using a discount rate of six percent (6%) and, in the case of defined
benefit plans,  the mortality  tables  prescribed  under Section 72 of the Code.
Such  payment  shall be made to  Executive no later than two and one half months
after the end of the calendar year in which the Event of Termination occurred.

     (e) Upon the  occurrence of a Change in Control  followed  within  eighteen
(18) months by an Event of  Termination  (as  defined in Section 6 hereof),  the
Bank  (or its  successor)  shall  provide  at the  Bank's  (or its  successor's)
expense,  for the remaining  unexpired  Employment Period or Revised  Employment
Period under this Agreement,  life insurance and non-taxable  medical and dental
coverage  substantially  comparable,  as reasonably  available,  to the coverage
maintained  by the Company or the Bank for Executive  prior to his  termination,
except to the extent such coverage may be changed in its application to all Bank
employees and then the coverage provided to Executive shall be commensurate with
such changed coverage.

     (f) Except as  otherwise  provided  by  Section  18 hereof or as  otherwise
provided by then applicable law, in the event of an Event of Termination  within
eighteen  (18) months  following a Change in Control,  Executive  shall have the
right within  thirty (30) days  following  such Event of  Termination,  upon the
surrender  of stock  options,  stock,  warrants,  stock  appreciation  rights or
phantom stock rights  (collectively,  "Stock Rights") issued to Executive by the
Bank or its  subsidiaries  and  affiliates,  to a lump sum payment  equal to the
product of:

          (i) The  excess of (A) the Fair  Market  Value (as  defined in Section
     6(f) of this  Agreement)  of shares of stock of the same class as the stock
     that  constitutes  or is subject to the Stock Right,  determined  as of the
     date of the Change in Control,  over (B) the exercise  price per share,  if
     any for Stock Right, as specified in or under the relevant plan or program;
     multiplied by

          (ii) The number of shares with respect to which Stock Rights are being
     surrendered.

For purposes of this Section 7(f), for purposes of determining Executive's right
following  a Change of  Control to  exercise  any Stock  Rights not  surrendered
pursuant hereto, Executive shall be deemed to be fully vested in and entitled to
exercise  all Stock  Rights  under any stock  option



                                     - 8 -

<PAGE>

or rights plan or program  maintained by, or covering  employees of, the Bank or
its  subsidiaries,  even if  Executive  is not so  vested  or  entitled  to then
exercise such rights under such plan or program.

     (g) Notwithstanding anything to the contrary set forth in this Section 7 or
otherwise  in this  Agreement,  if at any time  Executive  is  suspended  and/or
temporarily  prohibited from  participating in the conduct of the Company or the
Bank's  affairs by notice  served  under or  pursuant  to then  applicable  law,
including  under or pursuant to the relevant  provisions of the Federal  Deposit
Insurance  Act,  as amended,  (the  "FDIA")  the Bank's  obligations  under this
Agreement  shall  be  suspended  as of the date of  service,  unless  stayed  by
appropriate  proceedings.  If the charges in the notice are dismissed,  the Bank
may, in its  discretion,  (i) pay to Executive  all or part of the  compensation
withheld while its  obligations  under this Agreement were  suspended;  and (ii)
reinstate  in whole  or in part  any of its  obligations  that  were  suspended.
Moreover,  notwithstanding  anything to the contrary set forth in this Section 7
or otherwise in this  Agreement,  if  Executive  is removed  and/or  permanently
prohibited  from  participating  in the  conduct  of the  Company  or the Bank's
affairs by an order issued under or pursuant to then applicable  law,  including
under the relevant  provisions  of the FDIA,  Executive  shall be deemed to have
been  terminated  for Just  Cause,  and all  obligations  of the Bank under this
Agreement  shall  terminate as of the  effective  date of the order,  but vested
rights of the parties shall not be affected.

     (h) If Executive is a Specified  Employee,  as defined in Code Section 409A
and any payment to be made under paragraph (c) or (d) of this Section 7 shall be
determined  to be  subject  to Code  Section  409A,  then  if and to the  extent
necessary to comply with Code Section 409A and avoid  additional tax thereunder,
such payment or a portion of such payment (to the minimum extent possible) shall
be delayed  and shall be paid on the first day of the  seventh  month  following
Executive's Separation from Service.

8.   EXCISE TAX.

     (a) If  Executive  shall be liable  for the  payment of an excise tax under
Section 4999 of the Code,  with respect to any payment of money or property made
by the Bank or its  subsidiaries,  or  compensation  provided by the Bank or its
subsidiaries,  the Bank shall,  in  addition  to every other  payment or benefit
provided under this agreement,  pay to Executive an amount  determined under the
following formula:

                 X =                  E x P
                      ------------------------------------
                      1 - [(Fl x (1 - SLI)) + SLI + E + M]



Where X = the amount to be paid to  Executive;  E = the rate at which the excise
tax is assessed  under  Section 4999 of the Code; P = the amount with respect to
which such excise tax is assessed;  F1 = the highest marginal rate of income tax
applicable to Executive  under the Code for the taxable year in question;  SLI =
the sum of the highest  marginal  rates of income tax  applicable  to  Executive
under applicable state and local laws for the taxable year in question;  and M =
the highest marginal rate of Medicare tax applicable to Executive under the Code
for the



                                     - 9 -

<PAGE>

taxable  year in  question.  With  respect to any payment that is required to be
made to  Executive  under the terms of this  Agreement  (other  than  under this
Section  8) on  which an  excise  tax  under  Section  4999 of the Code  will be
assessed  ("Parachute  Payment"),  the payment  determined  under this Section 8
shall be made to Executive no later than the date such Parachute Payment is paid
to Executive.

     (b)  Notwithstanding  anything in this  Section 8 to the  contrary,  in the
event that  Executive's  liability  for the excise tax under Section 4999 of the
Code for a taxable year is  subsequently  determined  to be  different  than the
amount determined by the formula (X + P) x E, where X, P and E have the meanings
set forth in paragraph (a) of this Section 8, Executive or the Bank, as the case
may be,  shall pay to the other party at the time that the amount of such excise
tax is finally determined,  an appropriate amount, plus interest,  such that the
payment made under paragraph (a) of this Section 8, when increased by the amount
of the payment made to Executive  under  paragraph  (b) of this Section 8 by the
Bank,  or when  reduced  by the  amount of the  payment  made to the Bank  under
paragraph  (b) of this Section 8 by  Executive,  equals the amount  that,  it is
finally  determined  should  have been  properly  been paid to  Executive  under
Section 8.1. The interest to be paid under paragraph (b) of this Section 8 shall
be determined at the rate provided under this Section 1274(b)(2)(B) of the Code.
For  purposes  of  determining  the  amount,  if any,  payable to him under this
Section 8,  Executive  shall furnish to the Bank a copy of each tax return which
reflects a liability  for an excise tax payment  under  Section 4999 of the Code
with respect to a payment made by the Bank or its subsidiaries,  at least twenty
days  before  the date on which  such  return is  required  to be filed with the
Internal Revenue Service.

9.   TERMINATION FOR DISABILITY OR DEATH.

     (a) Termination of Executive's  employment  based on "Disability"  shall be
construed  to comply with  Section  409A of the Code and shall be deemed to have
occurred  if:  (i)  Executive  is unable to  engage in any  substantial  gainful
activity by reason of any medically  determinable  physical or mental impairment
that can be expected to result in death, or last for a continuous  period of not
less than  twelve  (12)  months;  (ii) by reason of any  medically  determinable
physical or mental  impairment  that can be expected to result in death, or last
for a  continuous  period of not less than 12  months,  Executive  is  receiving
income replacement  benefits for a period of not less than three months under an
accident and health plan covering employees of the Company or the Bank; or (iii)
Executive  is  determined  to  be  totally   disabled  by  the  Social  Security
Administration.  The  provisions  of Sections  9(b) and (c) shall apply upon the
termination of the Executive's employment based on Disability.

     (b)  Executive  shall be entitled to receive  benefits  under any short- or
long-term  disability  plan maintained by the Company or the Bank. To the extent
such  benefits  are less  than  Executive's  Base  Salary,  the Bank  shall  pay
Executive  an  amount  equal to the  difference  between  such  disability  plan
benefits and the amount of  Executive's  Base Salary for one year  following the
termination of his employment due to Disability.

     (c) The Bank shall cause to be continued  life  insurance  and  non-taxable
medical and dental coverage substantially  comparable,  as reasonable available,
to the coverage maintained by the Bank for Executive prior to the termination of
his employment  based on  Disability,  except to



                                     - 10 -

<PAGE>

the extent such coverage may be changed in its application to all Bank employees
or not  available  on an  individual  basis to an employee  terminated  based on
Disability.  This  coverage  shall  cease  upon  the  earlier  of:  (i) the date
Executive  returns to the  full-time  employment of the Bank;  (ii)  Executive's
full-time employment by another employer;  (iii) the expiration of the remaining
unexpired Employment Period under this Agreement; or (iv) Executive's death.

     (d) In the event of  Executive's  death during the term of this  Agreement,
his  estate,  legal  representatives  or named  beneficiaries  (as  directed  by
Executive  in  writing)  shall be paid  Executive's  Base  Salary at the rate in
effect  at the time of  Executive's  death for a period of one (1) year from the
date of Executive's  death,  and the Bank shall continue to provide  non-taxable
medical,  dental and other insurance  benefits normally provided for Executive's
family (in accordance with its customary  co-pay  percentages)  for one (1) year
after  Executive's  death.  Such  payments  are in  addition  to any other  life
insurance or other benefits that  Executive's  beneficiaries  may be entitled to
receive under any of the Company or the Bank's  Benefit  Plans.  Notwithstanding
the  foregoing,  if Executive  incurs an Event of  Termination  under  Section 6
hereof and prior to  commencement  of continued  salary or other benefit payment
thereunder   Executive  dies,  such  payments  shall  continue  to  be  made  to
Executive's designated beneficiary,  if any, estate or legal representative,  as
the case may be.

10.  TERMINATION FOR JUST CAUSE.

     (a) The Bank may  terminate  Executive's  employment  at any time,  but any
termination  other than  termination for "Just Cause," as defined herein,  shall
not prejudice  Executive's  right to  compensation  or other benefits under this
Agreement.  Executive  shall  have no right  to  receive  compensation  or other
benefits for any period after  termination for "Just Cause" (except as expressly
provided  otherwise in this Agreement).  The phrase "Just Cause" as used herein,
shall  exist when there has been a good  faith  determination  by the Board that
there shall have  occurred one or more of the  following  events with respect to
Executive:  (i) the  conviction  of  Executive  of a  felony;  (ii) the  willful
commission  by  Executive  of a criminal  or other act that,  in the  reasonable
judgment of the Board will likely cause substantial  economic damage to the Bank
or  substantial  injury  to the  business  reputation  of the  Bank;  (iii)  the
commission by Executive of an act of fraud in the  performance  of his duties on
behalf  of the  Bank;  (iv) the  continuing  willful  and  material  failure  of
Executive  to  perform  his  duties  to the Bank  (other  than any such  failure
resulting from  Executive's  incapacity due to physical or mental illness) after
written notice thereof (specifying the particulars thereof in reasonable detail)
and a  reasonable  opportunity  to be heard and cure such  failure  are given to
Executive by the Board; or (v) an order of a federal or state regulatory  agency
or a court of competent  jurisdiction  requiring the  termination of Executive's
employment by the Bank.  Notwithstanding the foregoing,  Just Cause shall not be
deemed to exist unless there shall have been  delivered to Executive a copy of a
resolution duly adopted by the affirmative  vote of not less than  three-fourths
of the entire  membership of the Board at a meeting of the Board called and held
for the purpose (after  reasonable  notice to Executive and an  opportunity  for
Executive  and his  counsel to be heard  before the Board  prior to the time the
Board  decision is made),  finding  that in the good faith  opinion of the Board
Executive was guilty of conduct  described  above and specifying the particulars
thereof.  Prior to  holding  a  meeting  at which  the  Board is to make a final
determination  whether Just Cause exists,  if the Board determines in good faith
at a meeting of the Board, by not less than a majority of its entire membership,
that there is probable cause for it



                                     - 11 -

<PAGE>

to find  that  Executive  was  guilty  of  conduct  constituting  Just  Cause as
described above, the Board may suspend Executive from his duties hereunder for a
reasonable  period of time not to exceed  fourteen  (14) days  pending a further
meeting at which Executive shall be given the opportunity to be heard before the
Board.  Upon a finding of Just  Cause,  the Board shall  deliver to  Executive a
Notice of Termination, as more fully described in Section 11 below.

     (b) For  purposes of this  Section 10, no act or failure to act on the part
of Executive shall be considered  "willful"  unless it is done, or omitted to be
done, by Executive in bad faith or without  reasonable  belief that  Executive's
action or omission was in the best interests of the Bank. Any act, or failure to
act,  based upon the  direction of the Board or based upon the advice of counsel
for the Bank shall be  conclusively  presumed to be done, or omitted to be done,
by Executive in good faith and in the best interests of the Bank.

11.  NOTICE OF TERMINATION.

     (a)  Any  purported  termination  by the  Bank  for  Just  Cause  shall  be
communicated by Notice of Termination to Executive.  If, within thirty (30) days
after any Notice of Termination for Just Cause is given,  Executive notifies the
Bank that a  dispute  exists  concerning  the  termination,  the  parties  shall
promptly proceed to arbitration,  as provided in Section 20. Notwithstanding the
pendency of any such  dispute,  the Bank shall  discontinue  paying  Executive's
compensation  until the  dispute is finally  resolved  in  accordance  with this
Agreement.  If it is determined that Executive is entitled to  compensation  and
benefits under Section 6 or 7, the payment of such  compensation and benefits by
the  Bank  shall  commence  immediately  following  the  date of  resolution  by
arbitration, with interest due Executive on the cash amount that would have been
paid  pending  arbitration  (at the prime rate as  published  in The Wall Street
Journal from time to time).

     (b) Any other  purported  termination by the Bank or by Executive  shall be
communicated by a "Notice of  Termination"  (as defined in Section 11(c)) to the
other party.  If,  within  thirty (30) days after any Notice of  Termination  is
given,  the party receiving such Notice of Termination  notifies the other party
that a dispute  exists  concerning the  termination,  the parties shall promptly
proceed to arbitration as provided in Section 20.  Notwithstanding  the pendency
of any such dispute,  the Bank shall  continue to pay Executive his Base Salary,
and other compensation and benefits in effect when the notice giving rise to the
dispute  was given  (except as to  termination  of  Executive  for Just  Cause);
provided, however, that such payments and benefits shall not continue beyond the
date that is thirty-six  (36) months from the date the Notice of  Termination is
given. In the event the voluntary  termination by Executive of his employment is
disputed by the Bank, and if it is determined in  arbitration  that Executive is
not entitled to termination benefits pursuant to this Agreement, he shall return
all cash payments made to him pending  resolution by arbitration,  with interest
thereon at the prime rate as published  in The Wall Street  Journal from time to
time, if it is determined in arbitration that Executive's  voluntary termination
of employment was not taken in good faith and not in the reasonable  belief that
grounds  existed  for  his  voluntary  termination.  If  it is  determined  that
Executive is entitled to receive severance  benefits under this Agreement,  then
any  continuation  of Base Salary and other  compensation  and benefits  made to
Executive  under  this  Section  11 shall  offset  the  amount of any  severance
benefits that are due to Executive under this Agreement.



                                     - 12 -

<PAGE>

     (c) For purposes of this Agreement,  a "Notice of Termination" shall mean a
written  notice that shall indicate the specific  termination  provision in this
Agreement  relied  upon and shall set forth in  reasonable  detail the facts and
circumstances  claimed  to  provide  a  basis  for  termination  of  Executive's
employment under the provision so indicated.

12.  NONCOMPETITION.

     (a) All payments and benefits to Executive  under this  Agreement  shall be
subject to Executive's compliance with Sections 12(b), 12(c) and 12(d).

     (b) Executive shall, upon reasonable  notice,  furnish such information and
assistance  to the Bank as may  reasonably be required by the Bank in connection
with any litigation in which it or any of its  subsidiaries or affiliates is, or
may become,  a party other than litigation in which Executive or his family is a
party;  provided  that  such  information  and  assistance  does not  materially
interfere with the Executive's subsequent employment or self-employment.

     (c)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
business activities and plans for business activities of the Bank and affiliates
thereof,  as it may exist from time to time,  is a valuable,  special and unique
asset of the business of the Bank.  Executive will not, during or after the term
of his  employment,  disclose  any  knowledge of the past,  present,  planned or
considered  business activities of the Bank or affiliates thereof to any person,
firm, corporation,  or other entity for any reason or purpose whatsoever (except
for such  disclosure  as may be  required  to be  provided  to the Office of the
Comptroller of the Currency ("OCC"),  the Federal Deposit Insurance  Corporation
("FDIC"),  or other bank regulatory  agency with  jurisdiction  over the Bank or
Executive).  Notwithstanding the foregoing, Executive may disclose any knowledge
of banking,  financial and/or economic  principles,  concepts or ideas which are
not solely and exclusively derived from the business plans and activities of the
Bank,  and  Executive may disclose any  information  regarding the Bank which is
otherwise publicly available or which Executive is otherwise legally required to
disclose.  In the event of a breach or  threatened  breach by  Executive  of the
provisions  of this  Section  12,  the Bank will be  entitled  to an  injunction
restraining Executive from disclosing, in whole or in part, the knowledge of the
past,  present,  planned  or  considered  business  activities  of the  Bank  or
affiliates  thereof,  or  from  rendering  any  services  to any  person,  firm,
corporation,  other entity to whom such knowledge, in whole or in part, has been
disclosed or is threatened to be disclosed.  Nothing herein will be construed as
prohibiting the Bank from pursuing any other remedies  available to the Bank for
such  breach or  threatened  breach,  including  the  recovery  of damages  from
Executive.

     (d)  Subject  to  Section  12(e),   upon  any  termination  of  Executive's
employment  hereunder  pursuant to Section 6 or 7 of this  Agreement,  Executive
agrees not to compete with the Bank for a period of one (1) year  following such
termination in any city,  town or county in which the Company or the Bank has an
office or has filed an  application  for  regulatory  approval to  establish  an
office,  determined  as of the  effective  date of such  termination,  except as
agreed to pursuant to a resolution duly adopted by the Board.  Executive  agrees
that during such period and within said cities,  towns and  counties,  Executive
shall not work for or advise,  consult or  otherwise  serve  with,  directly  or
indirectly,  any entity whose business  materially competes with the depository,
lending  or  other  business   activities  of  the  Bank.  The  parties  hereto,
recognizing  that  irreparable  injury will result to the Bank, its business and
property in the event of



                                     - 13 -

<PAGE>

Executive's  breach  of this  Section  12,  agree  that in the event of any such
breach by the  Executive,  the Bank will be  entitled,  in addition to any other
remedies and damages  available,  to an  injunction  to restrain  the  violation
hereof  by  Executive,   Executive's  partners,  agents,  servants,   employers,
employees and all persons acting for or with Executive. Executive represents and
admits that Executive's  experience and capabilities are such that Executive can
obtain  employment  in a business  engaged in other lines  and/or of a different
nature than the Bank, and that the  enforcement of a remedy by way of injunction
will not prevent  Executive  from earning a livelihood.  Nothing  herein will be
construed as prohibiting the Bank from pursuing any other remedies  available to
it for such breach or threatened breach,  including the recovery of damages from
Executive.

     (e)  Notwithstanding  any other  provision of this  Agreement,  the parties
understand, acknowledge and agree that the provisions of Section 12(d) shall not
apply in the event of Executive's termination of employment if: (i) Executive is
not entitled to receive severance benefits under any circumstances or determines
within ninety (90) days of such termination to waive any such severance payments
(and repays any severance benefits he has already received),  except in the case
of  termination  for Just  Cause;  (ii)  such  termination  follows  a Change in
Control; (iii) such termination  constitutes an involuntary  termination not for
Just Cause; or (iv) such termination constitutes a resignation for Good Reason.

13.  KEYMAN LIFE INSURANCE

     The Bank shall have the right to obtain and hold a "keyman" life  insurance
policy on the life of  Executive  with the Bank as  beneficiary  of the  policy.
Executive agrees to provide any information reasonably required for the issuance
of such  policy and to submit  himself to any  physical  examination  reasonably
required for such policy.

14.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
and  supersedes  any  prior  employment   agreement  between  the  Bank  or  any
predecessor  of the Bank and  Executive,  except that this  Agreement  shall not
affect or operate to reduce any benefit or compensation  inuring to Executive of
a kind elsewhere  provided.  No provision of this Agreement shall be interpreted
to mean that  Executive  is  subject  to  receiving  fewer  benefits  than those
available to him without reference to this Agreement.

15.  NO ATTACHMENT; BINDING ON SUCCESSORS.

     (a) Except as  required  by law,  no right to receive  payments  under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to effect any such action  shall be null,
void, and of no effect.

     (b) This  Agreement  shall be binding  upon,  and inure to the  benefit of,
Executive and the Bank and their respective successors and assigns.



                                     - 14 -

<PAGE>

16.  MODIFICATION AND WAIVER.

     (a) This  Agreement may not be modified or amended  except by an instrument
in writing signed by the parties hereto.

     (b) No term or  condition  of this  Agreement  shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

17.  REGULATORY RESTRICTIONS.

     The  parties  understand  and  agree  that at the  time any  payment  would
otherwise be made or benefit provided under Section 6 or 7 under this Agreement,
depending on the facts and circumstances existing at such time, the satisfaction
of such  obligations  by the Bank may be deemed by a regulatory  authority to be
illegal,  an unsafe or unsound  banking  practice,  or for some other reason not
properly  due or payable by the Bank in  accordance  with rules and  regulations
promulgated  by the OCC,  the FDIC or  otherwise.  The Bank  agrees  that to the
extent reasonably feasible, it will in good faith seek to determine the position
of the  appropriate  regulatory  authority in advance of each payment or benefit
otherwise  due under  Section 6 or 7 hereof,  including  seeking the approval or
acquiescence of the appropriate regulatory authorities, if required. The parties
understand,  acknowledge and agree that,  notwithstanding any other provision of
this  Agreement,  the Bank shall not be obligated to make any payment or provide
any benefit  under  Section 6 or 7 of this  Agreement  where (i) an  appropriate
regulatory authority does not approve or acquiesce as required, or (ii) the Bank
has been informed by a representative  of the appropriate  regulatory  authority
that it is the position of such regulatory authority that making such payment or
providing such benefit would constitute an unsafe and unsound banking  practice,
violate a written agreement with the regulatory authority, violate an applicable
rule  or  regulation,  or  would  cause  the  representative  of the  regulatory
authority to recommend enforcement action against the Bank.

18.  SEVERABILITY.

     If, for any reason,  any  provision of this  Agreement,  or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

19.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections  and  paragraphs  herein are  included  solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.



                                     - 15 -

<PAGE>

20.  GOVERNING LAW.

     Except to the extent  preempted by federal  law,  this  Agreement  shall be
governed by and construed and enforced in accordance  with the laws of the State
of New York  applicable to contracts  entered into and to be performed  entirely
within the State of New York by parties all of whom are citizens  and  residents
of the State of New York.

21.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement shall be settled exclusively by binding arbitration, as an alternative
to civil  litigation  and  without  any trial by jury to  resolve  such  claims,
conducted  by a panel of three  arbitrators  sitting in a location  selected  by
Executive  within  fifty  (50)  miles  from  the main  office  of the  Bank,  in
accordance  with the rules of the American  Arbitration  Association's  National
Rules for the  Resolution  of  Employment  Disputes  ("National  Rules") then in
effect.  One arbitrator shall be selected by Executive,  one arbitrator shall be
selected  by the  Bank  and  the  third  arbitrator  shall  be  selected  by the
arbitrators  selected by the  parties.  If the  arbitrators  are unable to agree
within  fifteen  (15)  days upon a third  arbitrator,  the  arbitrator  shall be
appointed for them from a panel of arbitrators  selected in accordance  with the
National Rules.  Judgment may be entered on the arbitrator's  award in any court
having  jurisdiction.  The  Bank  shall  pay for the  cost of such  arbitration,
including the costs and fees of the American Arbitration  Association and/or the
selected arbitrators.

22.  PAYMENT OF LEGAL FEES.

     (a) To the extent  permitted by then  applicable law, the Bank shall, on or
after the date of a Change of  Control,  indemnify,  hold  harmless  and  defend
Executive from and against  reasonable costs,  including  reasonable legal fees,
costs and  expenses,  incurred by him in  connection  with or arising out of any
action, suit or proceeding (including arbitration pursuant to Section 20 of this
Agreement)  in which he may be  involved,  as a result of his  efforts,  in good
faith, to defend or enforce the terms of this Agreement.

     (b) In the event the Bank exercises its right to terminate the  Executive's
employment  for  "Just  Cause,"  but it is  determined  by a court of  competent
jurisdiction  or by an arbitrator  pursuant to Section 20 of this Agreement that
"Just Cause" as defined in this Agreement did not exist for such termination, or
if in any event it is determined  by any such court or arbitrator  that the Bank
has failed to make timely  payment of any amounts  owed to the  Executive  under
this  Agreement,  the  Executive  shall be  entitled  to  reimbursement  for all
reasonable  costs,  including  attorney's  fees,  incurred in  challenging  such
termination or collecting such amounts.  Such reimbursement shall be in addition
to all rights to which the Executive is otherwise entitled under this Agreement.

     (c) The  Bank  shall,  upon  execution  of this  Agreement,  reimburse  the
Executive  for his  reasonable  legal fees for review of the  Agreement  up to a
maximum of $2,000.



                                     - 16 -

<PAGE>

23.  INDEMNIFICATION.

     During  the  term  of this  Agreement  and for a  period  of six (6)  years
thereafter, the Bank shall provide Executive (including his heirs, executors and
administrators)  with coverage under a standard directors and officers liability
insurance policy at its expense,  and shall indemnify  Executive (and his heirs,
executors and  administrators)  to the fullest extent permitted under applicable
law  against  all  expenses  and  liabilities  reasonably  incurred  by  him  in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his having been a director or officer of the Company or
the Bank (whether or not he continues to be a director or officer at the time of
incurring  such  expenses or  liabilities),  such  expenses and  liabilities  to
include,  but not be limited to,  judgments,  court costs and attorneys fees and
the cost of reasonable  settlements  (such  settlements  must be approved by the
Board).  If such action,  suit or proceeding is brought against Executive in his
capacity as an officer or director  of the  Company or the Bank,  however,  such
indemnification  shall not extend to matters  as to which  Executive  is finally
adjudged to be liable for willful misconduct in the performance of his duties.

24.  SUCCESSOR TO THE BANK.

The Bank shall require any successor or assignee, whether direct or indirect, by
purchase,  merger,  consolidation or otherwise,  to all or substantially all the
business  or assets of the Bank,  expressly  and  unconditionally  to assume and
agree to perform the Bank's obligations under this Agreement, in the same manner
and to the same  extent  that the Bank would be  required  to perform if no such
succession or assignment had taken place.

25.  SOURCE OF PAYMENTS; NO DUPLICATION OF PAYMENTS.

     (a) All the  payments  provided in this  Agreement  shall be timely paid in
cash or check from the general funds of the Bank.

     (b)  Notwithstanding  any provision  herein to the contrary,  to the extent
that  payments  and  benefits,  as  provided by this  Agreement,  are paid to or
received by Executive  under the Employment  Agreement  dated as of December __,
2008 governing the terms and conditions of Executive's employment by the Company
(the "Company  Agreement"),  such compensation payments and benefits paid by the
Bank will be  subtracted  from any amount due  Executive  under this  Agreement.
Payments pursuant to this Agreement and the Company Agreement shall be allocated
in proportion to the level of activity and the time expended on such  activities
by Executive as determined by the Company and the Bank on a quarterly basis.

26.  NOTICE.

     For the purposes of this  Agreement,  notices and all other  communications
provided for in this  Agreement  shall be in writing and shall be deemed to have
been duly given when  delivered  personally or five days after mailing if mailed
by certified or registered  mail,  return receipt  requested,  postage  prepaid,
addressed to such party at the address listed below, or at such other address as
one such party may by written notice  specify to the other party:  (a) if to the
Bank:  Empire  State  Bank,  N.A.,  68 North  Plan  Road,  Newburgh,  NY  12550,
Attention:  Corporate Secretary; and (b) if to the Executive: to the most recent
address on file for him in the Bank's personnel records.



- 17 -

<PAGE>


                                   SIGNATURES

         IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed
by its duly authorized representative, and Executive has signed this Agreement,
on the date first above written.

                                       EMPIRE STATE BANK, N.A.



December 29, 2008                      By: /s/ Michael Ostrow
-------------------------------            ------------------------------------
Date                                       Michael Ostrow
                                           ------------------------------------,
                                           Director Authorized to Sign

                                       EXECUTIVE


December 29, 2008                      /s/ Anthony P. Costa
-------------------------------        -----------------------------------
Date                                   Anthony P. Costa



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