Document:

CHANGE IN CONTROL,
                       SEVERANCE AND EMPLOYMENT AGREEMENT
                             FOR WILLIAM A. HOULIHAN
                            (Double Trigger; Cutback)

                  THIS CHANGE IN CONTROL,  SEVERANCE  AND  EMPLOYMENT  AGREEMENT
(the "Agreement"), is made this 17th day of January, 2001, between Hudson United
Bancorp  and Hudson  United  Bank  (collectively  the  "Company"),  a New Jersey
corporation  which maintains its principal office at 1000 MacArthur  Boulevard.,
Mahwah, New Jersey and William A. Houlihan (the "Executive").

                  BACKGROUND WHEREAS, the Executive is presently employed by the
Company as Executive Vice President and Chief Financial Officer, and;

                  WHEREAS,  the Board of Directors of the Company  believes that
the future  services of the Executive are of great value to the Company and that
it is important for the growth and development of the Company that the Executive
continue in his position, and;

                  WHEREAS,  if the Company  receives any  proposal  from a third
person  concerning a possible  business  combination  with,  or  acquisition  of
equities securities of, the Company,  the Board of Directors of the Company (the
"Board")  believes  it is  imperative  that the Company and the Board be able to
rely upon the  Executive to continue in his  position,  and that they be able to
receive and rely upon his advice,  if they request it, as to the best  interests
of the Company and its shareholders, without concern that the Executive might be
distracted by the personal  uncertainties  and risks created by such a proposal,
and; WHEREAS, to achieve that goal, and to retain the Executive's services prior
to any such  activity,  the Board of Directors and the Executive  have agreed to
enter into this Agreement to provide the Executive with continued  employment or
certain termination benefits in the event of a Change in Control, as hereinafter
defined;

                  NOW,  THEREFORE,  to assure the Company  that it will have the
continued  dedication of the Executive  and the  availability  of his advice and
counsel  notwithstanding the possibility,  threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable  consideration,  the Company and
the Executive, each intending to be legally bound hereby agree as follows:

<PAGE>

                  1. Definitions

                           a. Cause. For purposes of this Agreement "Cause" with
respect to the termination by the Company of Executive's  employment  shall mean
(i) willful and continued  failure by the  Executive to  materially  perform his
duties  for the  Company  under  this  Agreement  after at least one  warning in
writing from the Company's Board of Directors identifying  specifically any such
material  failure and offering a reasonable  opportunity  to cure such  failure;
(ii) the willful  engaging by the Executive in material  misconduct which causes
material injury to the Company as specified in a written notice to the Executive
from the  Board of  Directors;  or (iii)  conviction  of a crime  (other  than a
traffic violation),  habitual drunkenness,  drug abuse, or excessive absenteeism
other  than for  illness,  after a  warning  (with  respect  to  drunkenness  or
absenteeism  only) in writing  from the Board of  Directors to refrain from such
behavior.  No act or  failure  to act on the  part  of the  Executive  shall  be
considered  willful  unless done, or omitted to be done, by the Executive not in
good faith and without  reasonable belief that the action or omission was in the
best interest of the Company. The Company shall have the burden of proving cause
by clear and convincing evidence.

                           b. Change in Control.

                                (i) Definition.  For purposes of this Agreement,
                           a "Change in Control"  shall mean the  occurrence  of
                           any of the  following  events with  respect to Hudson
                           United Bancorp:

                                     (A)  The   acquisition  of  the  beneficial
                                ownership, as defined under the Exchange Act, of
                                25% or more of Hudson  United  Bancorp's  voting
                                securities  or all or  substantially  all of the
                                assets  of  Hudson  United  Bancorp  by a single
                                person or entity or group of affiliated  persons
                                or entities;

                                     (B)   The    merger,    consolidation    or
                                combination  of Hudson  United  Bancorp  with an
                                unaffiliated  corporation in which the directors
                                of   Hudson   United   Bancorp   as   applicable
                                immediately prior to such merger,  consolidation
                                or combination  constitute  less than a majority
                                of the board of directors of the surviving,  new
                                or combined  entity unless one-half of the board
                                of directors of the  surviving,  new or combined
                                entity were  directors of Hudson United  Bancorp
                                immediately prior to such transaction and Hudson
                                United   Bancorp's   chief   executive   officer
                                immediately prior to such transaction  continues
                                as the chief executive officer of the surviving,
                                new or combined entity; or

<PAGE>

                                     (C) During  any  period of two  consecutive
                                calendar years, individuals who at the beginning
                                of such period constitute the Board of Directors
                                of Hudson United Bancorp cease for any reason to
                                constitute at least two-thirds  thereof,  unless
                                the election or  nomination  for the election by
                                Hudson United Bancorp's stockholders of each new
                                director  was  approved  by a vote  of at  least
                                two-thirds of the directors then still in office
                                who  were  directors  at  the  beginning  of the
                                period; or

                                     (D) The  transfer  of all or  substantially
                                all of Hudson United  Bancorp's assets or all or
                                substantially  all of the assets of its  primary
                                subsidiaries.

                                (ii) Time of Change in Control.  For purposes of
                           this Agreement,  a Change in Control of Hudson United
                           Bancorp shall be deemed to occur on the earlier of:

                                     (A) The first date on which a single person
                                or  entity  or group of  affiliated  persons  or
                                entities acquire the beneficial ownership of 25%
                                or  more  of  Hudson  United   Bancorp's  voting
                                securities; or

<PAGE>

                                     (B) Forty-five  (45) days prior to the date
                                Hudson United  Bancorp  enters into a definitive
                                agreement to merge, consolidate, combine or sell
                                the assets of Hudson  United  Bancorp;  provided
                                however, that for purposes of any resignation by
                                the  Executive,  the Change in Control shall not
                                be deemed to occur until the consummation of the
                                merger,  consolidation,  combination or sale, as
                                the case may be, except if this Agreement is not
                                expressly  assumed in  writing by the  acquiring
                                company,  then the  Change in  Control  shall be
                                deemed to occur the day before the consummation;
                                and  further  provided  that  if any  definitive
                                agreement to merge, consolidate, combine or sell
                                assets is terminated without consummation of the
                                acquisition,  then no  Change in  Control  shall
                                have been deemed to have occurred; or

                                     (C) The date  upon  which the  election  of
                                directors   occurs   qualifying   under  Section
                                b(i)(C) above.

                           c. Contract Period.  "Contract Period" shall mean the
period  commencing the day immediately  preceding a Change in Control and ending
on the  earlier of (i) three years after the  consummation  of any event  giving
rise to the Change in Control or (ii) the date the  Executive  would  attain age
65.

                           d. Exchange Act.  "Exchange Act" means the Securities
Exchange Act of 1934, as amended.

                           e.  Good  Reason.  When  used  with  reference  to  a
voluntary  termination  by Executive of his employment  with the Company,  "Good
Reason" shall mean any of the following,  if taken without  Executive's  express
written consent:

<PAGE>

                                (i) The  assignment  to  Executive of any duties
                           inconsistent  with,  or the  reduction of  authority,
                           powers   or    responsibilities    associated   with,
                           Executive's position, title, duties, responsibilities
                           and status  with the Company  immediately  prior to a
                           Change in Control;  any removal of Executive from, or
                           any failure to re-elect Executive to, any position(s)
                           or office(s) Executive held immediately prior to such
                           Change  in  Control.  A change  in  position,  title,
                           duties, responsibilities and status or position(s) or
                           office(s)  resulting from a Change in Control or from
                           a merger or consolidation of the Company into or with
                           another   bank  or   company   shall   not  meet  the
                           requirements  of this  paragraph if, and only if, the
                           Executive's  new title,  duties and  responsibilities
                           are accepted in writing by the Executive, in the sole
                           discretion of the Executive.

                                (ii) A reduction  by the Company in  Executive's
                           annual  base  compensation  as in effect  immediately
                           prior to a Change in Control or the  failure to award
                           Executive   any  annual   increases   in   accordance
                           herewith;

                                (iii) A failure by the Company to  continue  any
                           bonus   plan   in   which   Executive    participated
                           immediately  prior  to the  Change  in  Control  or a
                           failure by the  Company to  continue  Executive  as a
                           participant  in such plan on at least the same  basis
                           as Executive  participated  in such plan prior to the
                           Change in  Control  unless the  elimination  of bonus
                           programs  is  applied  consistently   throughout  the
                           Surviving Company following a Change in Control;

                                (iv) The  Company's  transfer of  Executive to a
                           geographic   location   other   than  the   corporate
                           headquarters of the Company or the main office of the
                           Bank or more than 25 miles  from his  present  office
                           location,  except for  required  travel on  Company's
                           business to an extent  substantially  consistent with
                           Executive's  business travel obligations  immediately
                           prior to such Change in Control;

<PAGE>

                                (v) The  failure by the  Company to  continue in
                           effect  any  employee   benefit   plan,   program  or
                           arrangement   (including,   without   limitation  the
                           Company's  401(k) plan,  the Company's  pension plan,
                           life  insurance  plan,   health  and  accident  plan,
                           disability  plan,  or  stock  option  plan)  in which
                           Executive  is  participating  immediately  prior to a
                           Change in  Control,  unless the  elimination  of such
                           programs  is  applied  consistently   throughout  the
                           Surviving  Company  following  a Change  in  Control,
                           (except  that the Company may  institute  or continue
                           plans,  programs or arrangements  providing Executive
                           with substantially  similar benefits);  the taking of
                           any  action  by the  Company  which  would  adversely
                           affect  Executive's  participation  in or  materially
                           reduce Executive's benefits under, any of such plans,
                           programs or arrangements; the failure to continue, or
                           the  taking  of  any  action   which  would   deprive
                           Executive,  of any material fringe benefit enjoyed by
                           Executive   immediately   prior  to  such  Change  in
                           Control;  or the  failure  by the  Company to provide
                           Executive  with the number of paid  vacation  days to
                           which  Executive  was entitled  immediately  prior to
                           such Change in Control;

                                (vi) The  failure  by the  Company  to obtain an
                           assumption  in  writing  of  the  obligations  of the
                           Company to perform this Agreement by any successor to
                           the Company  and to provide  such  assumption  to the
                           Executive prior to any Change in Control; or

                                (vii) Any purported  termination  of Executive's
                           employment  by the  Company  during  the term of this
                           Agreement  which is not  effected  pursuant to all of
                           the requirements of this Agreement; and, for purposes
                           of  this  Agreement,  no such  purported  termination
                           shall be effective.

                           f.  Voting  Securities.   "Voting  securities"  means
Hudson United Bancorp's common stock, together with any preferred stock entitled
to vote generally in elections for directors or other  matters.  With respect to
preferred stock, in determining the percentage of beneficial ownership of voting
securities,  the number of votes to which the holder is entitled in the election
of directors with the common holders, and not the number of shares, shall be the
basis of the calculation.

<PAGE>

                  2. Employment.  During the Contract Period, the Company hereby
agrees to employ the Executive, and the Executive hereby accepts employment upon
the terms and conditions set forth herein.

                  3. Position.  During the Contract Period and prior to a Change
in Control the Executive  shall be employed as an Executive  Vice  President and
Chief  Financial  Officer.  Upon a Change  in  Control  as herein  defined,  the
Executive's position shall be governed by his title,  position,  status,  duties
and  authority  as in effect  immediately  prior to the Change in  Control.  The
Executive  shall  devote  his full time and  attention  to the  business  of the
Company,  and shall not  during  the  Contract  Period be  engaged  in any other
business  activity.  This  paragraph  shall not be construed as  preventing  the
Executive  from  managing  any  investments  of his  which  do not  require  any
substantial service on his part in the operation of such investments.

                  4. Cash  Compensation.  The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:

                           a.  Annual  Salary.  An  annual  salary  equal to the
annual salary in effect as of the Change in Control.  The annual salary shall be
payable in  installments  in accordance with the Company's usual payroll method.
The annual salary shall not be reduced during the Contract Period.

                           b. Annual Bonus. An annual cash bonus equal to higher
of a) the highest  bonus paid to the  Executive  during the three  fiscal  years
prior to the Change in Control  or b) the  highest  full year bonus to which the
Executive  would have been  entitled  during the three fiscal years prior to the
Change in  Control.  The bonus  shall be  payable  at the time and in the manner
which the Company paid such bonuses prior to the Change in Control.

<PAGE>

                           c. Annual  Review.  The Company  during the  Contract
Period shall review  annually,  or at more frequent  intervals which the Company
determines is  appropriate,  the  Executive's  compensation  and shall award his
additional compensation to reflect the Executive's performance,  the performance
of the Company and  competitive  compensation  levels,  all as determined in the
discretion of the Company.

                  5. Expenses and Fringe Benefits.

                           a.  Expenses.   During  the  Contract   Period,   the
Executive shall be entitled to reimbursement  for all business expenses incurred
by him with respect to the business of the Company in the same manner and to the
same extent as such expenses were previously reimbursed to him immediately prior
to the Change in Control.

                           b. Club Membership and  Automobile.  If, prior to the
Change in Control,  the  Executive  was entitled to membership in a country club
and/or the use of an  automobile,  he shall be entitled  to the same  membership
and/or use of an automobile at least  comparable to the  automobile  provided to
him prior to the Change in Control during the Contract Period.

<PAGE>

                           c.  Other  Benefits.  The  Executive  also  shall  be
entitled to  vacations  and sick days,  in  accordance  with the  practices  and
procedures of the Company,  as such existed  immediately  prior to the Change in
Control.  During the Contract  Period,  the Executive  also shall be entitled to
hospital,  health,  medical and life insurance,  and any other benefits enjoyed,
from  time to time,  by  senior  officers  of the  Company,  all  upon  terms as
favorable  as  those   enjoyed  by  other   senior   officers  of  the  Company.
Notwithstanding  anything in this paragraph 5(c) to the contrary, if the Company
adopts any change in the benefits  provided for senior  officers of the Company,
and such policy is  uniformly  applied to all  officers of the Company  (and any
successor or acquirer of the Company,  if any),  including  the chief  executive
officer of such entities,  then no such change shall be deemed to be contrary to
this paragraph.

                  6.  Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the termination
which  notice shall  specify the reasons for the  termination  and  provide,  if
practical,  an opportunity for the Executive to cure such Cause. In the event of
a valid termination for Cause the Executive shall not be entitled to any further
benefits under this Agreement.

                  7.  Disability.  During the Contract  Period if the  Executive
becomes permanently disabled, or is unable to perform his duties hereunder for 4
consecutive  months  in any 12 month  period,  the  Company  may  terminate  the
employment of the Executive.  In such event,  the Executive shall be entitled to
the payments and benefits  provided  under  Section 9 hereof as if the Executive
had been terminated hereunder without Cause upon such date.

                  8.  Death  Benefits.  Upon the  Executive's  death  during the
Contract Period,  the Executive shall be deemed to terminate without cause as of
the date of death and his estate  shall be entitled to the payments and benefits
provided under Section 9 hereof as if the Executive had been terminated  without
cause upon such date.

                  9. Termination Without Cause or Resignation.

                           a.   Termination   Without  Cause.  The  Company  may
terminate  the  Executive  Without  Cause during the Contract  Period by written
notice to the Executive.

                           b.  Resignation  for Good Reason.  The  Executive may
resign for Good Reason during the Contract  Period upon prior written  notice to
the Company.

<PAGE>

                           c. Payments and Benefits.  If the Company  terminates
the  Executive's  employment  during the Contract Period Without Cause or if the
Executive  resigns for Good Reason under  paragraph  9(b), the Company shall, as
promptly as  practical  but in no event  later than 10  business  days after the
termination of employment pay the Executive a lump sum (the "Lump Sum") equal to
3.0 times the sum of (i) the annual salary of the Executive immediately prior to
the Change in Control  and the higher  of,  (ii) the  highest  bonus paid to the
Executive during the three fiscal years prior to the Change in Control or, (iii)
the  highest  full year bonus to which the  Executive  would have been  entitled
during  the  three  fiscal  years  prior to the  Change  in  Control.  For these
purposes,  any deferral of salary by the Executive  under the  Company's  401(k)
plan or otherwise  shall be included in salary.  The Company also shall continue
to provide the  Executive,  his spouse and eligible  dependents  for a period of
three  years   following   the   termination   of   employment,   with   health,
hospitalization  and  medical  insurance,  as were  provided  at the time of the
Change in Control,  at the Company's cost, subject only to the responsibility of
the Executive to continue to pay a portion of the premium, as well as co-pays or
deductibles  in  such  amounts  as  were  paid  by the  Executive  prior  to the
termination.  The Lump Sum and the benefits provided  hereunder shall be subject
to Section 10 hereof.

                           d. No Duty to Mitigate.  The Executive shall not have
a  duty  to  mitigate  the  damages  suffered  by  him in  connection  with  the
termination by the Company of his employment  without Cause under paragraph 9(a)
or a resignation  under paragraph 9(b) during the Contract  Period.  The Company
shall not be entitled to offset from the payment due to the Executive  hereunder
any amounts due from or claims against the Executive.

<PAGE>

                           e. Legal Fees and  Expenses.  If the Company fails to
pay the  Executive  the Lump Sum due him under this  Agreement or to provide him
with the health,  hospitalization  and medical insurance benefits due under this
Agreement,  the  Executive,  after giving 10 days' written notice to the Company
identifying  the  Company's  failure,  shall be  entitled  to  recover  from the
Company,  monthly upon demand,  any and all of his legal fees and other expenses
incurred in connection with his enforcement  against the Company of the terms of
this Agreement.

<PAGE>

                  10. Certain Reduction of Payments and Benefits.

                           a.  Reduction.  Anything  in  this  Agreement  to the
contrary  notwithstanding,  prior to the payment of the Lump Sum or the benefits
payable hereunder in connection with the Executive's  termination of employment,
the certified public  accountants for the Company  immediately prior to a Change
in Control (the "Certified Public Accountants"),  shall determine as promptly as
practical and in any event within 20 business days following the  termination of
employment of Executive whether any payment or distribution by the Company to or
for the benefit of the  Executive  (whether  paid or payable or  distributed  or
distributable  pursuant  to  the  terms  of  this  Agreement  or  otherwise)  (a
"Payment")  would more  likely  than not be  nondeductible  by the  Company  for
Federal income purposes  because of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"),  and if it is then the aggregate present value of
amounts payable or distributable to or for the benefit of the Executive pursuant
to this Agreement in connection with the  Executive's  termination of employment
(such  payments or  distributions  pursuant to this  Agreement  are  hereinafter
referred to as  "Agreement  Payments")  shall be reduced (but not below zero) to
the Reduced Amount.  For purposes of this paragraph,  the "Reduced Amount" shall
be an amount  expressed in present value which  maximizes the aggregate  present
value of Agreement  Payments  without causing any Payment to be nondeductible by
the Company because of said Section 280G of the Code.

                           b.  Executive  Selection  of  Reductions.   If  under
paragraph (a) of this section the Certified  Public  Accountants  determine that
any payment would more likely than not be  nondeductible  by the Company because
of Section  280G of the Code,  the Company  shall  promptly  give the  Executive
notice to that effect and a copy of the detailed  calculation thereof and of the
Reduced Amount, and the Executive may then elect, in his sole discretion,  which
and how much of the Agreement  Payments  shall be eliminated or reduced (as long
as after such  election the aggregate  present  value of the Agreement  Payments
equals the  Reduced  Amount),  and shall  advise  the  Company in writing of his
election within 5 business days of his receipt of notice. If no such election is
made by the Executive within such 5-day period,  the Company may elect which and
how much of the  Agreement  Payments  shall be eliminated or reduced (as long as
after such election the aggregate present value of the Agreement Payments equals
the Reduced  Amount) and shall notify the Executive  promptly of such  election.
For purposes of this paragraph,  present value shall be determined in accordance
with Section  280G(d)(4) of the Code. All  determinations  made by the Certified
Public Accountants shall be binding upon the Company and the Executive and shall
be  made  as  promptly  as  practical  but in any  event  within  20  days  of a
termination of employment of the Executive. The Company may suspend for a period
of up to 30 days after termination of employment the payment of the Lump Sum and
any other benefits due to the Executive under this Agreement until the Certified
Public  Accountants  finish the determination and the Executive (or the Company,
as the case may be) elect how to reduce the Agreement Payments, if necessary. As
promptly  as  practicable   following  such   determination  and  the  elections
hereunder,  the Company  shall pay to or distribute to or for the benefit of the
Executive such amounts as are then due to the Executive under this Agreement and
shall  promptly  pay to or  distribute  for the benefit of the  Executive in the
future such amounts as they become due to the Executive under this Agreement.

                           c. Overpayments and Underpayments. As a result of the
uncertainty in the  application of Section 280G of the Code, it is possible that
Agreement  Payments may have been made by the Company which should not have been
made  ("Overpayment") or that additional  Agreement Payments which will have not
been made by the Company  could have been made  ("Underpayment"),  in each case,
consistent  with the calculation of the Reduced Amount  hereunder.  In the event
that the Certified Public Accountants,  based upon the assertion of a deficiency
by the Internal  Revenue  Service  against the Company or  Executive  which said
Certified  Public  Accountants  believe  has  a  high  probability  of  success,
determines  that an  Overpayment  has been made, any such  Overpayment  shall be
treated for all purposes as a loan to Executive  which  Executive shall repay to
the Company  together with interest at the applicable  Federal rate provided for
in Section 7872(f)(2)(A) of the Code; provided, however, that no amount shall be
payable by Executive to the Company in and to the extent such payment  would not
reduce the amount which is subject to taxation  under  Section 4999 of the Code.
In the event that the  Certified  Public  Accountants,  based  upon  controlling
precedent,  determine that an Underpayment has occurred,  any such  Underpayment
shall be promptly  paid by the  Company to or for the  benefit of the  Executive
together  with interest at the  applicable  Federal rate provided for in Section
7872(f)(2)(A) of the Code.

<PAGE>

                  11. Non-Disclosure of Confidential Information.

                           a. Non-Disclosure of Confidential Information. Except
in the  course of his  employment  with the  Company  and in the  pursuit of the
business of the Company or any of its subsidiaries or affiliates,  the Executive
shall not, at any time during or following the Contract Period, disclose or use,
any  confidential  information or proprietary  data of the Company or any of its
subsidiaries  or  affiliates.  The  Executive  agrees that,  among other things,
information  concerning  the identity of and the  Company's  relations  with its
customers is confidential information.

                           b. Specific  Performance.  Executive  agrees that the
Company  does not have an adequate  remedy at law for the breach of this section
and agrees that he shall be subject to injunctive relief and equitable  remedies
as a result of the breach of this section. The invalidity or unenforceability of
any  provision  of this  Agreement  shall not affect the force and effect of the
remaining  valid  portions.  No violation  of this Section 11 shall  entitle the
Company to withhold any payment or benefit due the Executive hereunder.

                           c.   Survival.   This  section   shall   survive  the
termination of the Executive's  employment  hereunder and the expiration of this
Agreement.

<PAGE>

                  12. Term and Effect Prior to Change in Control.

                           a. Term. Except as otherwise  provided for hereunder,
this Agreement  shall commence on the date hereof and shall remain in effect for
a period of one (1) year from the date hereof (the "Initial  Term") or until the
end of the  Contract  Period,  whichever  is later.  The  Initial  Term shall be
automatically extended for an additional one year period on the anniversary date
hereof (so that the  Initial  Term is always  one (1) year)  unless on or before
such  date the Board of  Directors  of the  Company  by  resolution  passed by a
majority vote of the Directors  then in office,  votes not to extend the Initial
Term any further.  The Company shall promptly advise the Executive in writing of
the  passage  of such  resolution  and if it fails to do so the  passage of such
resolution shall be ineffective.

                           b. No Effect  Prior to Change in Control.  Prior to a
Change in Control,  this Agreement shall not affect any rights of the Company to
terminate the Executive or the benefits payable to the Executive. The rights and
liabilities  provided  hereunder  shall only become  effective  upon a Change in
Control.  If the  employment  of the  Executive  by the Company is ended for any
reason whatsoever prior to a Change in Control,  this Agreement shall thereafter
be of no further force and effect.

                  13.  Compensation  and Benefits  Provided Not in Derogation of
Other Benefits.  Anything to the contrary herein contained notwithstanding,  the
payment or obligation to pay any monies, or granting of any benefits,  rights or
privileges  to Executive as provided in this  Agreement  shall not be in lieu or
derogation of the rights and privileges  that the Executive now has or will have
under any plans or programs of or agreements  with the Company,  except that the
Executive  shall not be entitled to the benefits of any other plan or program of
the Company or agreement with the Company  expressly  providing for severance or
termination  pay or  post-employment  medical  benefits.  In  furtherance of the
foregoing,  this Agreement is not in derogation of, but rather  supplemental to,
the rights and benefits of the  Executive,  if any, under any stock option plan,
restricted stock plan, pension plan, 401(k) plan and SERP.

<PAGE>

                  14.  Notice.   During  the  Contract  Period,  any  notice  of
termination  of  the  employment  of the  Executive  by  the  Company  or by the
Executive to the Company shall be  communicated by written Notice of Termination
to the other  party  hereto.  For  purposes  of this  Agreement,  a  "Notice  of
Termination"  shall mean a dated  notice  which shall (i)  indicate the specific
termination  provision  in this  Agreement  relied  upon;  (ii)  set  forth,  if
necessary, in reasonable detail the facts and circumstances claimed to provide a
basis for  termination  of the  employment  of the Executive or from the Company
under the provision so indicated;  (iii)  specify a date of  termination,  which
shall be not less than four weeks nor more than six weeks  after such  Notice of
Termination  is given,  except in the case of  termination  of employment by the
Company of the Executive for Cause  pursuant to Section 6 hereof,  in which case
the Notice of Termination  may specify a date of termination as of the date such
Notice of  Termination is given;  and (iv) be given by personal  delivery or, if
the individual is not personally available,  by certified mail to the last known
address  of the  individual.  Upon the  death of the  Executive,  no  Notice  of
Termination need be given.

                  15. Payroll and Withholding  Taxes. All payments to be made or
benefits to be provided  hereunder by the Company shall be subject to applicable
federal and state payroll or withholding taxes.

<PAGE>

                  16.  Miscellaneous.  The  terms  of this  Agreement  shall  be
governed by, and interpreted  and construed in accordance  with, the laws of New
Jersey.  This Agreement  supersedes all prior agreements and understandings with
respect to the matters  covered  hereby.  The amendment or  termination  of this
Agreement  may be  made  only  in a  writing  executed  by the  Company  and the
Executive,  and no amendment or termination of this Agreement shall be effective
unless and until made in such a writing.  This  Agreement  shall be binding upon
any successor (whether direct or indirect, by purchase,  merger,  consolidation,
liquidation  or  otherwise)  to all or  substantially  all of the  assets of the
Company.  This  Agreement is personal to the Executive and the Executive may not
assign  any of his  rights  or  duties  hereunder  but this  Agreement  shall be
enforceable   by   the   Executive's   legal   representatives,   executors   or
administrators. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an  original,  and it shall not be  necessary in making
proof  of  this  Agreement  to  produce  or  account  for  more  than  one  such
counterpart.

                  IN WITNESS  WHEREOF,  the Company has caused this Agreement to
be signed by its duly  authorized  representatives  pursuant to the authority of
their  Board of  Directors,  and the  Executive  has  personally  executed  this
Agreement, all as of the day and year first written above.

ATTEST:                                         HUDSON UNITED BANCORP  AND
                                                HUDSON UNITED BANK

By:_____________________________                By: ____________________________
D. Lynn Van Borkulo-Nuzzo, Esq.                     Kenneth T. Neilson,
Corporate Secretary                                 Chairman, President and
                                                    Chief Executive Officer

WITNESS:

--------------------------------                --------------------------------
                                                      William A. Houlihan[LETTERHEAD OF HUDSON UNITED BANCORP]

March __, 2000

Mr. Thomas R. Nelson
c/o Hudson United Bank
1000 MacArthur Boulevard
Mahwah, New Jersey 07430

Dear Mr. Nelson:

Hudson  United  Bancorp,  Hudson  United Bank and you are party to the  attached
Change In Control,  Severance and Employment  Agreement  dated January ___, 1998
(the "Agreement").  As indicated in the Background section of the Agreement, one
of the  reasons  for  entering  into the  Agreement  was to cause  you not to be
distracted  by the  personal  uncertainties  and risks  created by any  proposed
business  combination  with another  entity.  To further  that goal,  we wish to
clarify  certain  provisions  of the Agreement to make certain that they reflect
unambiguously the original intent of the parties to the Agreement. While we view
these matters as  clarifications of our existing  understanding,  we intend this
letter to have the force and effect of an amendment to the  Agreement.  Thus, if
and to the extent that the Agreement is inconsistent with this letter, we hereby
agree that the terms set forth in this letter shall be controlling.

We hereby  clarify the Agreement (and if and to the extent that the Agreement is
inconsistent with the following, we hereby amend the Agreement) as follows:

A. Time of Change in Control: Section 1(b)(ii)(B) of the Agreement provides that
a Change in Control of HUBCO shall be deemed to occur:

                        forty-five (45) days prior to the date HUBCO enters into
                        a definitive agreement to merge, consolidate, combine or
                        sell the  assets of HUBCO;  provided  however,  that for
                        purposes of any resignation by the Executive, the Change
                        in  Control  shall  not be  deemed  to occur  until  the
                        consummation of the merger,  consolidation,  combination
                        or sale, as the case may be, except if this Agreement is
                        not  expressly  assumed  in  writing  by  the  acquiring
                        company,  then the Change in Control  shall be deemed to
                        occur  the day  before  the  consummation;  and  further
                        provided  that if any  definitive  agreement  to  merge,
                        consolidate,   combine  or  sell  assets  is  terminated
                        without consummation of the acquisition,  then no Change
                        in Control shall have been deemed to have occurred . . .

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            The concept of looking back 45 days prior to entry into a definitive
agreement  was  intended  solely to assure the  Executive  that the  Executive's
change in control  protection  would be available if the parties  negotiating  a
merger  terminated the Executive's  employment  before  executing the definitive
merger  agreement.  Thus,  the  45  day  "look-back"  is to be  used  solely  in
determining  when the  "Contract  Period"  begins  under the  Agreement.  In the
context of the pending  Hudson-Dime  merger  (assuming it is  consummated),  the
"Contract Period" began 45 days prior to execution of the merger  agreement,  or
August 1, 1999.  However,  we also  included  language in this  subparagraph  to
assure  that the  Executive  could not  trigger  Change in Control  payments  by
resigning  before the merger was completed.  Thus, in the context of the pending
Hudson-Dime  merger,  if the Executive resigns before the merger is consummated,
the  "Contract  Period"  would be deemed never to have begun,  and the Executive
would not be entitled to payment under the Agreement.

B.  Definition  of Good Reason:  "Good Reason" is defined in Section 1(e) of the
Agreement to include the following, if taken without Executive's express written
consent:

                                    "(i)  The  assignment  to  Executive  of any
                        duties inconsistent with, or the reduction of authority,
                        powers or responsibilities  associated with, Executive's
                        position,  title,  duties,  responsibilities  and status
                        with  the  Company  immediately  prior  to a  Change  in
                        Control;  any removal of Executive  from, or any failure
                        to re-elect  Executive to, any  position(s) or office(s)
                        Executive  held  immediately  prior  to such  Change  in
                        Control.   A  change   in   position,   title,   duties,
                        responsibilities  and status or position(s) or office(s)
                        resulting  from a Change in  Control or from a merger or
                        consolidation  of the Company  into or with another bank
                        or  company  shall  not  meet the  requirements  of this
                        paragraph  if, and only if, the  Executive's  new title,
                        duties and  responsibilities  are accepted in writing by
                        the Executive, in the sole discretion of the Executive."

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            The  language,  "A change . . . shall not meet the  requirements  of
this  paragraph  if,  and  only  if  the  Executive's  new  title,   duties  and
responsibilities  are  accepted  in  writing  by  the  Executive,  in  the  sole
discretion of the Executive" was intended to assure that the Executive will have
complete  and  absolute  discretion  to waive (or not to waive) the  Executive's
rights to claim "Good Reason" based upon a particular change, or set of changes,
in  position,  title,  duties  and/or  responsibilities.  Subject to paragraph C
below,  no waiver is to occur,  or be  inferred,  from any act of the  Executive
other than delivery of a document,  signed by the Executive,  which specifically
states  that the  Executive  accepts  the  Executive's  new  title,  duties  and
responsibilities for purposes of section 1(e) of the Agreement. Without delivery
of such a document,  no continuation in the employ of the surviving  corporation
or its subsidiaries following the merger, and no other document(s) signed by the
Executive of any sort (including  without  limitation any documents relating to,
or in the  capacity of, the  Executive's  new  position,  title,  duties  and/or
responsibilities),  will waive the right to claim Good  Reason  under  paragraph
1(e) of the Agreement.

C. Resignation for Good Reason: Section 9(b) of the Agreement provides that "The
Executive  may resign for Good  Reason  during the  Contract  Period  upon prior
written notice to the Company."

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            It is intended that the language, "the Executive may resign for Good
Reason during the Contract  Period" will give the Executive a reasonable  period
of time to resign for Good  Reason  following  an event which  constitutes  Good
Reason.  We  acknowledge  and agree that nine months  constitutes  a  reasonable
period of time for this purpose.  Thus,  the  Executive  shall have the absolute
right to resign for Good Reason so long as the  Executive  gives  notice of such
resignation  at any time within the nine month period  following the event which
constitutes  Good Reason.  In no event shall the  Executive  have less than nine
months from the date of consummation of the merger in which to validly give such
notice. If the Executive does not give notice of resignation prior to expiration
of nine months  following an event  constituting  Good Reason (or if Good Reason
occurs prior to consummation of the merger,  nine months following  consummation
of the merger),  the Executive will be deemed to have waived the right to resign
for that particular Good Reason.

D. Cash Compensation: Section 4 of the Agreement provides, in part, as follows:

                        The Company shall pay to the Executive  compensation for
his services during the Contract Period as follows:

                        a. Annual  Salary.  An annual salary equal to the annual
                        salary in effect as of the Change in Control. The annual
                        salary shall be payable in  installments  in  accordance
                        with the  Company's  usual  payroll  method.  The annual
                        salary shall not be reduced during the Contract Period.

                        b. Annual Bonus. An annual cash bonus equal to higher of
                        a) the highest  bonus paid to the  Executive  during the
                        three  fiscal years prior to the Change in Control or b)
                        the highest full year bonus to which the Executive would
                        have been  entitled  during the three fiscal years prior
                        to the Change in Control.  The bonus shall be payable at
                        the time and in the manner  which the Company  paid such
                        bonuses prior to the Change in Control.

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            It is  intended  that the  references  to "Change in Control" in the
above-quoted  language shall mean the consummation of the merger.  The statement
that "annual salary shall not be reduced during the Contract Period" is intended
to mean that the Executive  will be entitled to receive  either the  Executive's
salary as in effect at the time of the  merger,  or such  greater  salary as may
become effective during the Contract Period due to an increase in salary.  Thus,
assuming that the Hudson-Dime merger closes during calendar 2000:

o           The Executive's  post-merger  Contract Period annual salary shall be
            not less than the  greater of (x) the  Executive's  salary in effect
            just prior to the  closing of the merger or (y) the  highest  annual
            salary  level  received  by the  Executive  during  the  post-merger
            Contract Period.

o           The Executive's post-merger annual cash bonus shall be not less than
            the  aggregate  amount of cash  bonuses paid to the  Executive  with
            respect to either 1997, 1998, or 1999, whichever amount is highest.

E.  Payments and Benefits:  Section 9(c) of the Agreement provides as follows:

                        If the Company  terminates  the  Executive's  employment
                        during  the  Contract  Period  without  Cause  or if the
                        Executive  resigns for Good Reason under paragraph 9(b),
                        the Company  shall,  . . . pay the  Executive a lump sum
                        (the "Lump  Sum")  equal to 2.0 times the sum of (i) the
                        annual salary of the Executive  immediately prior to the
                        Change in Control  and the higher of,  (ii) the  highest
                        bonus  paid to the  Executive  during  the three  fiscal
                        years  prior to the  Change  in  Control  or,  (iii) the
                        highest  full year  bonus to which the  Executive  would
                        have been  entitled  during the three fiscal years prior
                        to the Change in Control. . .

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            It is intended that the language,  "immediately  prior to the Change
in  Control," as used in Section 9(c) and in the context of a merger such as the
Hudson-Dime merger, means "immediately prior to the consummation of the merger."

F. Interpretation of Specific Events as "Good Reason":  "Good Reason" is defined
in Section 1(e) of the  Agreement  to include the  following,  if taken  without
Executive's express written consent:

                                    "(i)  The  assignment  to  Executive  of any
                        duties inconsistent with, or the reduction of authority,
                        powers or responsibilities  associated with, Executive's
                        position,  title,  duties,  responsibilities  and status
                        with  the  Company  immediately  prior  to a  Change  in
                        Control;  any removal of Executive  from, or any failure
                        to re-elect  Executive to, any  position(s) or office(s)
                        Executive  held  immediately  prior  to such  Change  in
                        Control.   A  change   in   position,   title,   duties,
                        responsibilities  and status or position(s) or office(s)
                        resulting  from a Change in  Control or from a merger or
                        consolidation  of the Company  into or with another bank
                        or  company  shall  not  meet the  requirements  of this
                        paragraph  if, and only if, the  Executive's  new title,
                        duties and  responsibilities  are accepted in writing by
                        the Executive,  in the sole discretion of the Executive"
                        . . .

It is our mutual  intention  with  respect to the  foregoing  language,  and the
foregoing language shall be so construed, as follows (or such language is hereby
amended  if  and to  the  extent  necessary  to  make  it  consistent  with  the
following):

            Exhibit A sets forth  certain facts which we  acknowledge  and agree
have occurred prior to the date hereof.  We further  acknowledge  and agree that
these facts constitute Good Reason under the language quoted above.

                                    * * * * *

We trust that this letter  satisfactorily  clarifies issues of concern to you in
connection  with the Agreement.  Please  countersign and deliver to us a copy of
this letter.  Upon our mutual execution and delivery of this letter, this letter
shall be binding upon each of us, our  successors and assigns as fully as if set
forth in the Agreement.

Very truly yours,

HUDSON UNITED BANCORP

By: __________________________

                                        Accepted and agreed to by the Executive
HUDSON UNITED BANK                      as of the date set forth above:

By: _________________________           ________________________________
                                        THOMAS R. NELSON, individually

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