Document:

UNION
      STATE BANK

     

    KEY
      EMPLOYEES’ SUPPLEMENTAL

     

    INVESTMENT
      PLAN

     

    Adopted
      Effective December 1, 1994

    Restated
      and Amended Effective July 1, 1997

    Further
      Restated and Amended Effective January 1, 2005

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    UNION
      STATE BANK

     

    KEY
      EMPLOYEES’ SUPPLEMENTAL INVESTMENT PLAN

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    ARTICLE
      I

     

    DEFINITIONS

     

     

    

    
      	 	 	
              Page

            
	 	 	
               

            
	
              Section
                1.1

            	
              “Board”

            	
              1

            
	
              Section
                1.2

            	
              “Change
                in Control Event”

            	
              1

            
	
              Section
                1.3

            	
              “Code”

            	
              1

            
	
              Section
                1.4

            	
              “Company”

            	
              1

            
	
              Section
                1.5

            	
              “Deferred
                Compensation Account”

            	
              1

            
	
              Section
                1.6

            	
              “Matching
                Contribution”

            	
              1

            
	
              Section
                1.7

            	
              “Optional
                Contribution”

            	
              1

            
	
              Section
                1.8

            	
              “Participant”

            	
              1

            
	
              Section
                1.9

            	
              “Plan”

            	
              1

            
	
              Section
                1.10

            	
              “Plan
                Year”

            	
              1

            
	
              Section
                1.11

            	
              “Qualified
                Plan”

            	
              1

            
	
              Section
                1.12

            	
              “Salary
                Reduction Agreement”

            	
              2

            
	
              Section
                1.13

            	
              “Salary
                Reduction Contribution”

            	
              2

            
	
              Section
                1.14

            	
              “Service
                Recipient”

            	
              2

            
	
              Section
                1.15

            	
              “Termination
                of Employment”

            	
              2

            
	
              Section
                1.16

            	
              “USB
                Stock”

            	
              2

            

    

     

    ARTICLE
      II

     

    ELIGIBILITY

     

     

    ARTICLE
      III

     

    CONTRIBUTIONS

     

    
      	
              Section
                3.1

            	
              Salary
                Reduction Contributions.

            	
              2

            
	
              Section
                3.2

            	
              Salary
                Reduction Agreement.

            	
              3

            
	
              Section
                3.3

            	
              Matching
                Contributions.

            	
              3

            
	
              Section
                3.4

            	
              Optional
                Contributions.

            	
              4

            
	
              Section
                3.5

            	
              Limits
                on Contributions

            	
              4

            
	
              Section
                3.5

            	
              Whole
                Share Price Limitation on Contributions.

            	
              4

            

    

     

    ARTICLE
      IV

     

    INVESTMENT
      OF CONTRIBUTIONS; DIVIDENDS

     

    
      	
              Section
                4.1

            	
              Investment
                of Contributions.

            	
              4

            
	
              Section
                4.2

            	
              Application
                of Dividends.

            	
              5

            

    

     

    
      
        
        

      

      
        i.

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

     

    DISTRIBUTIONS

    
       

      
        	
                Section
                  5.1

              	
                Payment
                  Elections.

              	
                5

              
	
                Section
                  5.2

              	
                Mandatory
                  Cashout of Small Balances.

              	
                 6

              
	
                Section
                  5.3

              	
                Restrictions
                  on Payments to Specified Employees.

              	
                 6

              
	
                Section
                  5.4

              	
                Certain
                  One-time Elections.

              	
                 6

              

      

       

      ARTICLE
        VI

       

      ADMINISTRATION
        OF THE PLANS

       

      
        	
                Section
                  6.1

              	
                Administration
                  by the Company.

              	
                 6

              
	
                Section
                  6.2

              	
                General
                  Powers of Administration.

              	
                 6

              
	
                Section
                  6.3

              	
                Financial
                  Accounting.

              	
                 7

              

      

       

      ARTICLE
        VII

       

      AMENDMENT
        OR TERMINATION

       

      
        	
                Section
                  7.1

              	
                Amendment
                  or Termination.

              	
                 7

              
	
                Section
                  7.2

              	
                Effect
                  of Amendment or Termination.

              	
                 7

              
	
                Section
                  7.3

              	
                Suspension
                  of the Plan.

              	
                 7

              

      

       

      ARTICLE
        VIII

       

      GENERAL
        PROVISIONS

       

      
        	
                Section
                  8.1

              	
                Participant’s
                  Rights Unsecured. 

              	 8
	
                Section
                  8.2 

              	
                No Guarantee
                  of Benefits 

              	 8
	
                Section
                  8.3 

              	
                No
                  Enlargement of Employee Rights 

              	 8
	
                Section
                  8.4 

              	
                Spendthrift
                  Provisions 

              	 8
	
                Section
                  8.5

              	
                Applicable
                  Law.

              	 8
	
                Section
                  8.6

              	
                Incapacity
                  of Recipient.

              	 8
	
                Section
                  8.7

              	
                Corporate
                  Successors.

              	 8
	
                Section
                  8.8

              	
                Unclaimed
                  Benefit.

              	 9
	
                Section
                  8.9

              	
                Limitations
                  on liability.

              	 9

      

    

     

    
      
        
        

      

      
        ii.

        
          

        

      

      
        
        

      

    

     

    
       

    

    ARTICLE
      I

     

    DEFINITIONS

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        1.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
      II

     

    ELIGIBILITY

     

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

     

    ARTICLE
      III

     

    CONTRIBUTIONS

     

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

     

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

     

    Less

     

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

     

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

     

    
      
        
        

      

      
        2.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Less

     

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

     

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

     

    
      
        
        

      

      
        3.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Less

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
      IV

     

     

    INVESTMENT
      OF CONTRIBUTIONS; DIVIDENDS

     

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

     

    
      
        
        

      

      
        4.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    ARTICLE
      V

     

    DISTRIBUTIONS

     

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

     

    Distribution
      shall be made solely in shares of USB Stock.

     

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

     

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

     

    3.    Any
      combination of the foregoing. 

     

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

     

    
      
        
        

      

      
        5.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    Section
      5.4    Certain
      One-time Elections. 

     

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

     

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

     

    ARTICLE
      VI

     

     

    ADMINISTRATION
      OF THE PLAN

     

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

     

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

     

    
      
        
        

      

      
        6.

        
          

        

      

      
        
        

      

    

     

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

     

    ARTICLE
      VII

     

    AMENDMENT
      OR TERMINATION 

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        7.

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VIII

     

    GENERAL
      PROVISIONS

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        8.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Section
      8.11    Accelerated
      Vesting Upon a Change in Control. 

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        9.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

    

     

    
      
        
        

      

      
        10.

        
          

        

      

      
        
        

      

    

     

    UNION
      STATE BANK

    100
      Dutch Hill Road

    Orangeburg,
      New York 10962

     

    KEY
      EMPLOYEES’ SUPPLEMENTAL INVESTMENT PLAN

     

    SALARY
      REDUCTION AGREEMENT

     

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

     

    
      	 	 	 
	 
 	 
            
              	 
 
	Date	  	Participant

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    UNION
      STATE BANK KEY EMPLOYEES' SUPPLEMENTAL INVESTMENT PLAN

     

    One-Time
      Election to Revoke or Change Prior Elections

    

    
      	
              NOTICE
                TO PARTICIPANTS

            
	
              The
                Union State Bank Key Employees' Supplemental Investment Plan has
                been
                changed to comply with new federal tax law requirements. These
                requirements place substantial restrictions on the Company's future
                discretion to amend or terminate the Plan, to permit you to change
                your
                existing payment elections, or to authorize accelerated payouts.
                In light
                of these new restrictions, the law permits us to give you a one-time
                opportunity, during 2005, to change any payment schedule previously
                elected. You may make the following choices by filling out this form
                and
                returning it to Catherine Martini no later than December 23,
                2005. Please complete, sign and return this form whether or not you
                choose
                to make any changes.

            
	
              General

              Information

            	 
	
              Name
                of

              Participant: _________________________________________________   

            	
               

              Soc.Sec.No.:_______-______-________

            
	
              Election

            	
              Choose
                1 of the following options:

            
	
              □

            	
              NO
                CHANGE. I
                do not want to revoke any of my prior elections under the
                Plan.

            
	
              □

            	
              IMMEDIATE
                PAYOUT OF ALL BALANCES. I
                want to revoke all of my prior elections under the Plan and receive
                full
                payment of my entire vested benefit under the Plan in a single lump
                sum
                payment on or prior to December 31, 2005. 

            
	
              □

            	
              OTHER
                CHANGE OR REVOCATION. I
                want to revoke all of my prior elections under the Plan and receive
                full
                payment of my entire vested benefit under the Plan in the form of:
                (check
                one box in column (a) and one box in column (b); if you want part
                of your
                benefit paid under one payment schedule and part paid under a different
                payment schedule, please contact Catherine Martini):

            
	 	 	
              (a)

              Payments
                before a

              Change
                in Control

              Event

            	
              (b)

              Payments
                after a

              Change
                in

              Control
                Event

            
	
              a
                single lump sum payment on the first day

              of
                the month following my Termination of Employment

            	
              □

            	
              □

            
	
              a
                single lump sum payment on the first day of the calendar year following
                my
                Termination of Employment

            	
              □

            	
              □

            
	
              annual
                payments beginning on the first day of the month following my Termination
                of Employment and continuing for the specified number of years (maximum
                of
                15)

            	
              □
                _________ years

            	
              □
                _________ years

            
	
              annual
                payments beginning on the first day of the calendar year following
                my
                Termination of Employment and continuing for the specified number
                of years
                (maximum of 15)

            	
              □
                _________ years

            	
              □
                _________ years

            
	
              S

              I

              G

              N

            	
              H

              E

              R

              E

            	
              I
                certify that I have received and read a copy of the full text of
                the Plan,
                including any amendments. I understand that I will not have the right
                to
                change or revoke this notice and that my right to change or revoke
                elections in the future will be subject to substantial
                restrictions.

               

              ______________________________________________________________
                _________________

              Your
                Signature Date

            
	
              Internal
                Use Only

            
	
              Received
                on ___________________________

               Date
                of Receipt

               

              By
                ________________________________________________________

              Authorized
                Signature

            	
              Comments:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    UNION
      STATE BANK

     

    KEY
      EMPLOYEES’ SUPPLEMENTAL

     

    DIVERSIFIED
      INVESTMENT PLAN

     

     

    Adopted
      Effective September 1, 1998

    Amended
      and Restated Effective January 1, 2005

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    UNION
      STATE BANK

     

    KEY
      EMPLOYEES’ SUPPLEMENTAL DIVERSIFIED

    INVESTMENT
      PLAN

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    ARTICLE
      I

     

    DEFINITIONS

    

      
        	
                Section
                  1.1

              	
                “Board”

              	1 
	
                Section
                  1.2

              	
                “Change
                  in Control Event”

              	1
	
                Section
                  1.3

              	
                “Code”

              	1
	
                Section
                  1.4

              	
                “Company”

              	1 
	
                Section
                  1.5

              	
                “Deferred
                  Compensation Account”

              	1
	
                Section
                  1.6

              	
                “Key
                  Employees Supplemental Diversified Investment Plan
                  (KESIP)”

              	1
	
                Section
                  1.7

              	
                “Matching
                  Contribution”

              	1
	
                Section
                  1.8

              	
                “Optional
                  Contribution”

              	1
	
                Section
                  1.9

              	
                “Participant”.

              	1
	
                Section
                  1.10

              	
                “Plan”

              	1
	
                Section
                  1.11

              	
                “Plan
                  Year”

              	2
	
                Section
                  1.12

              	
                "Qualified
                  Plan”

              	2
	
                Section
                  1.13

              	
                “Salary
                  Reduction Agreement”

              	2
	
                Section
                  1.14

              	
                “Salary
                  Reduction Contribution”

              	2
	
                Section
                  1.15

              	
                “Service
                  Recipient”

              	2
	
                Section
                  1.16

              	
                “Termination
                  of Employment”

              	2

      

       

      ARTICLE
        II

       

      ELIGIBILITY

       

      ARTICLE
        III

       

      CONTRIBUTIONS

       

      
        	
                Section
                  3.1

              	
                Salary
                  Reduction Contributions.

              	2 
	
                Section
                  3.2

              	
                Salary
                  Reduction Agreement.

              	3
	
                Section
                  3.3

              	
                Matching
                  Contributions.

              	3
	
                Section
                  3.4

              	
                Optional
                  Contributions.

              	4
	
                Section
                  3.5

              	
                Limits
                  On Contributions.

              	
                4

              

      

       

      ARTICLE
        IV

       

      INVESTMENT
        OF CONTRIBUTIONS 

       

      ARTICLE
        V

       

      DISTRIBUTIONS

       

      
        	
                Section
                  5.1

              	
                Payment
                  Elections.

              	5 

      

       

      
        
          
          

        

        
          i.

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        VI

       

      ADMINISTRATION
        OF THE PLANS

       

      
        	
                Section
                  6.1

              	
                _

              	6
	
                Section
                  6.2

              	
                General
                  Powers of Administration.

              	 6
	
                Section
                  6.3

              	
                Mandatory
                  Cashout of Small Balances.

              	 6
	
                Section
                  6.4

              	
                Restrictions
                  on Payments to Specified Employees.

              	 6
	
                Section
                  6.5

              	
                Certain
                  One-time Elections.

              	 6

      

       

      ARTICLE
        VII

       

      AMENDMENT
        OR TERMINATION

       

      
        	
                Section
                  7.1

              	
                Amendment
                  or Termination.

              	6 
	
                Section
                  7.2

              	
                Effect
                  of Amendment or Termination.

              	7
	
                Section
                  7.3

              	
                Suspension
                  of the Plan.

              	7

      

       

      ARTICLE
        VIII

       

      GENERAL
        PROVISIONS

       

      
        	
                Section
                  8.1

              	
                Participant’s
                  Rights Unsecured.

              	7
	
                Section
                  8.2

              	
                No
                  Guarantee of Benefits.

              	8
	
                Section
                  8.3

              	
                No
                  Enlargement of Employee Rights.

              	8
	
                Section
                  8.4

              	
                Spendthrift
                  Provisions.

              	8
	
                Section
                  8.5

              	
                Applicable
                  Law.

              	8
	
                Section
                  8.6

              	
                Incapacity
                  of Recipient.

              	8
	
                Section
                  8.7

              	
                Corporate
                  Successors.

              	8
	
                Section
                  8.8

              	
                Unclaimed
                  Benefit.

              	8
	
                Section
                  8.9

              	
                Limitations
                  on liability

              	9
	
                Section
                  8.10

              	
                Compliance
                  with Section 409A of the Code

              	
                9

              
	
                Section
                  8.11

              	
                Accelerated
                  Vesting Upon a Change in Control

              	
                9

              

      

       

      
        
          
          

        

        
          ii.

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
      IX

     

    DEFINITIONS

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        1.

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
      X

     

    ELIGIBILITY

     

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

     

    ARTICLE
      XI

     

    CONTRIBUTIONS

     

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

     

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

     

    (b)    the
      sum
      of:

     

    
      
        
        

      

      
        2.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    Less

     

    (b)    the
      sum
      of:

     

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

     

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

     

    
      
        
        

      

      
        3.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Less

     

    (b)    the
      sum
      of:

     

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

     

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

     

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

     

    
      	 	
              (c)

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

            

    

     

    
      
        
        

      

      
        4.

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      XII

     

    INVESTMENT
      OF CONTRIBUTIONS

     

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

     

    ARTICLE
      XIII

     

    DISTRIBUTIONS

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        5.

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      XIV

     

    ADMINISTRATION
      OF THE PLANS

     

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

     

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

     

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

     

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

     

    Section
      6.5    Certain
      One-time Elections. 

     

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

     

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

     

    ARTICLE
      XV

     

    AMENDMENT
      OR TERMINATION

     

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

     

    
      
        
        

      

      
        6.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
      XVI

     

    GENERAL
      PROVISIONS

     

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

     

    
      
        
        

      

      
        7.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        8.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Section
      8.11    Accelerated
      Vesting Upon a Change in Control. 

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        9.

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	 	 
	 	UNION
              STATE BANK
	 
 	 
 	 
 
	 	 	By:
               /s/  Thomas E. Hales
	 	
              

              Thomas
                E. Hales - Chairman and CEO

            
	 	 

    

     

    
      
        
        

      

      
        10.

        
          

        

      

      
        
        

      

    

    UNION
      STATE BANK

    100
      Dutch Hill Road

    Orangeburg,
      New York 10962

     

    KEY
      EMPLOYEES’ SUPPLEMENTAL DIVERSIFIED INVESTMENT PLAN

     

    SALARY
      REDUCTION AGREEMENT

     

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

     

    
       

      
        	 	 	 
	 
 	 
            
                	 
 
	Date	  	Participant

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Union
      State Bank Key Employees' Supplemental Diversified Investment
      Plan

    One-Time
      Election to Revoke or Change Prior Elections

    

    
      	
              NOTICE
                TO PARTICIPANTS

            
	
              The
                Union State Bank Key Employees' Supplemental Diversified Investment
                Plan
                has been changed to comply with new federal tax law requirements.
                These
                requirements place substantial restrictions on the Company's future
                discretion to amend or terminate the Plan, to permit you to change
                your
                existing payment elections, or to authorize accelerated payouts.
                In light
                of these new restrictions, the law permits us to give you a one-time
                opportunity, during 2005, to change any payment schedule previously
                elected. You may make the following choices by filling out this form
                and
                returning it to Catherine Martini no later than December 23, 2005.
                Please
                complete, sign and return this form whether or not you choose to
                make any
                changes.

            
	
              General

              Information

            	 
	
              Name
                of

              Participant:
                ____________________________________________

            	
               

              Soc.Sec.No.:_______-______-________

            
	
              Election

            	
              Choose
                1 of the following options:

            
	
              □

            	
              NO
                CHANGE. I
                do not want to revoke any of my prior elections under the
                Plan.

            
	
              □

            	
              IMMEDIATE
                PAYOUT OF ALL BALANCES. I
                want to revoke all of my prior elections under the Plan and receive
                full
                payment of my entire vested benefit under the Plan in a single lump
                sum
                payment on or prior to December 31, 2005. 

            
	
              □

            	
              OTHER
                CHANGE OR REVOCATION. I
                want to revoke all of my prior elections under the Plan and receive
                full
                payment of my entire vested benefit under the Plan in the form of:
                (check
                one box in column (a) and one box in column (b); if you want part
                of your
                benefit paid under one schedule and part paid under a different schedule,
                please contact Catherine Martini):

            
	 	 	
              (a)

              Payments
                before a

              Change
                in Control

              Event

            	
              (b)

              Payments
                after a

              Change
                in

              Control
                Event

            
	
              a
                single lump sum payment on the first day

              of
                the month following my Termination of Employment

            	
              □

            	
              □

            
	
              a
                single lump sum payment on the first day of the calendar year following
                my
                Termination of Employment

            	
              □

            	
              □

            
	
              annual
                payments beginning on the first day of the month following my Termination
                of Employment and continuing for the specified number of years (maximum
                of
                15)

            	
              □
                _______ years

            	
              □
                _______ years

            
	
              annual
                payments beginning on the first day of the calendar year following
                my
                Termination of Employment and continuing for the specified number
                of years
                (maximum of 15)

            	
              □
                _______ years

            	
              □
                _______ years

            
	
              S

              I

              G

              N

            	
              H

              E

              R

              E

            	
              I
                certify that I have received and read a copy of the full text of
                the Plan,
                including any amendments. I understand that I will not have the right
                to
                change or revoke this notice and that my right to change or revoke
                elections in the future will be subject to substantial
                restrictions.

               

              ______________________________________________________________
                _________________

              Your
                Signature Date

            
	
              Internal
                Use Only

            
	
              Received
                on ___________________________

               Date
                of Receipt

               

              By
                ________________________________________________________

              Authorized
                Signature

            	
              Comments:RETIREMENT
                    PLAN

                   

                  FOR

                   

                  NON-EMPLOYEE
                    DIRECTORS

                   

                  OF

                   

                  U.S.B.
                    HOLDING CO., INC.

                   

                  AND
                    CERTAIN AFFILIATES

                   

                   

                   

                   

                   

                  
                    Effective
                      as of May 19, 1999

                    Amended
                      as of March 20, 2002

                    Further
                      Amended as of January 1, 2005

                  

                	 

        

      

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Retirement
      Plan for Non-Employee Directors 

    of
      U.S.B. Holding Co., Inc. 

     

    The
      Retirement Plan for Non-Employee Directors of U.S.B. Holding Co., Inc. (the
      “Plan”) is hereby adopted, effective as of May 19, 1999, by U.S.B. Holding Co.,
      Inc. (the “Company”) for the purposes of providing modest retirement income for
      Directors who have provided long service on the Company’s Board of Directors,
      and to encourage future Directors to provide long and valuable services.

     

    The
      provisions of the Plan are as follows: 

     

    
      	
              1.

            	
              All
                Directors of the Company who are not employees of the Company or
                any
                affiliate shall be eligible to receive a benefit under the
                Plan.

            

    

     

    
      	
              2.

            	
              Every
                eligible Director who shall have served at least fifteen (15) aggregate
                years on the Company’s Board of Directors shall be eligible to receive a
                retirement benefit under this Plan. In the event a “Change of Control” (as
                defined below) occurs, every eligible Director currently serving
                on the
                Company’s Board of Directors shall be fully vested and entitled to the
                full retirement benefit under this Plan.

            

    

     

    The
      amount of retirement benefit shall be the sum of $2,000, payable each month,
      for
      a period not to exceed ten (10) years. 

     

    The
      first
      payment shall be made on the first day of the month following the Director’s
      Separation from Service, and payments shall continue for a period ending with
      the earlier of (a) the month in which the 120th monthly payment is made or
      (b)
      the month in which the Director shall die, subject to Section 3 below.
      Alternatively, the Director may elect, under Section 4 of the Plan, to be paid
      the retirement benefit in a single lump sum. 

     

    
      	
              3.

            	
              If
                the Director is married at the time of his retirement and at the
                time of
                his/her death while receiving benefits under this Plan, a benefit
                equal to
                $1,000 per month if the Director has qualified, by serving fifteen
                or more
                years on the Board of Director’s, for a benefit under this Plan, and
                one-half (1/2) of the pro-rated benefit payable due to a “Change of
                Control” (if the Director is eligible for a benefit only as a result of a
                "Change in Control") shall be paid to the Director’s spouse for the
                remainder of the 120 month period or until the death of the spouse,
                whichever occurs first. If the spouse does not survive the Director,
                no
                benefit shall be paid under the Plan following the Director’s death.
                

            

    

     

    
      	
              4.

            	
              Upon
                joining the Board, or within 90 days following the effective date
                of the
                Plan (for those serving on the Board on May 19, 1999), each Director
                shall
                complete a Distribution Election Form provided by the Company. Each
                Director may elect to be paid his/her benefit in the form of a single
                lump
                sum on the first day of the calendar month following Separation from
                Service, or the first day of the calendar year following Separation
                from
                Service; provided, however, that if the Director is a Specified Employee
                immediately prior to Separation from Service, the payment of his/her
                benefit shall be paid or commence on the first day of the seventh
                calendar
                month following Separation from Service.
                The Director may elect a different permitted form of payment for
                payments
                due after the occurrence of a Change in Control Event. The lump sum
                shall
                equal the present value of $200,000, discounted based on the average
                ten-year advance rate of the Federal Home Loan Bank of New York over
                the
                thirty day period preceding the payment date, assuming interest would
                have
                compounded and payments would have been made in equal monthly installments
                over the ten year discount period. The present value calculation
                must be
                consistent with financial accounting requirements with respect to
                the
                determination of the expense to be recorded on the Company’s Income
                Statement with respect to such payment. If the Director does not
                elect a
                lump sum payment, payments shall be made monthly, as stated
                above.

            

    

     

    
      
        
        

      

      
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        	5. 	(a) At
                any time not less than twelve (12) months prior to retirement, a
                Director
                may file a written election with the Company changing the form of
                payment
                under the Plan from monthly payments to a lump sum, or from a lump
                sum to
                monthly payments. Such election shall not be effective until twelve
                months
                following its receipt by the Company. This election is only available
                prior to January 1, 2005.

      

      
        	 	 

      

      
        	 	(b) At
                any time after December 31, 2004 and prior to January 1, 2006, a
                Director
                may file a written election with the Company changing the form of
                payment
                under the Plan from monthly payments to a lump sum, or from a lump
                sum to
                monthly payments. During this period, a Director may also elect a
                different permitted form of payment for payments due after a Change
                in
                Control Event.

      

      
        	 	 

      

      
        	
                6.

              	
                This
                  Plan shall be administered by the Board of Directors of the Company.
                  Any
                  determination relating to the Plan regarding one or more individual
                  Directors shall be made by a bare majority of the total number
                  of
                  Directors, excluding the individual(s) whose benefits or rights
                  are being
                  determined. Any decisions or interpretations made by the Board
                  of
                  Directors regarding the Plan shall be final and binding on all
                  parties.
                  

              

      

    

     

    
      	
              7.

            	
              The
                right to receive any benefit under the Plan shall not be subject
                in any
                manner to anticipation, alienation or assignment, nor shall such
                rights be
                liable for or subject to debts, contracts, torts, or any other liabilities
                of any party. Any attempt to encumber benefit rights under this Plan
                shall
                result in forfeiture of all such rights.

            

    

     

    
      	
              8.

            	
              This
                Plan is intended to be an unfunded deferred compensation arrangement
                for
                the specified participants. The Company may, but shall not be obligated
                to, establish a trust, account, or reserve for purposes of funding
                its
                obligations and liabilities hereunder, but no participant shall have
                any
                rights with respect to such trust, account or reserve, except the
                rights
                of any other general unsecured creditor of the Company.
                

            

    

     

    
      	9.	
              Participation
                in, or eligibility under, this Plan does not in any way assure that
                an
                individual shall be entitled to remain a member of the Company’s Board of
                Directors. Nomination and/or election to additional terms on the
                Board are
                solely the prerogative of the shareholders of the Company, and the
                existence of, or participation in, this Plan shall not in any way
                affect
                or impinge such rights of the shareholders.

            

    

     

    
      
        
        

      

      
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              10.

            	
              The
                Board of Directors reserves the right to amend or terminate the Plan
                at
                any time. Any termination or amendment shall not deprive any Director,
                who
                has already become entitled to a benefit by reason of having completed
                fifteen years of Board service, of his/her benefit. In no event shall
                any
                amendment cause the Plan to fail to comply with the requirements
                of
                section 409A of the Internal Revenue Code and the regulations thereunder.
                In the event the Plan is terminated, benefits payable to Directors
                who
                have already become entitled to a benefit by reason of having completed
                fifteen years of Board service shall continue to be payable at the
                time
                and in the manner provided under the Plan; provided, however, that:
                (a) to
                the extent permitted under section 409A of the Internal Revenue Code
                and
                the regulations thereunder, the Board may direct that all benefits
                payable
                following the Plan's termination shall be paid in a single lump sum
                in
                lieu of all other benefits, and (b) in such event, the lump sum payment
                made to each recipient shall be in an amount no less than the present
                value of the remaining payment due to him or her, calculated on the
                basis
                of the interest rate assumption specified in paragraph 4 above, such
                interest rate assumption shall be adjusted to reflect the remaining
                term
                of benefit payments, if currently in pay status over a ten year
                period.

            

    

     

    
      	
              11.

            	
              Notwithstanding
                any provisions of this Plan, any benefits payable hereunder are subject
                to
                and conditioned upon their compliance with Section 18(k) of the Federal
                Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any regulations
                issued thereunder. 

            

    

     

    
      	
              12.

            	
              This
                Plan shall be construed, administered and enforced in accordance
                with the
                laws of the State of New York. It is intended that this Plan not
                be
                subject to ERISA, and to the extent necessary for such purpose, the
                Plan
                shall be so interpreted. 

            

    

     

    
      	
              13.

            	
              For
                purposes of this Plan, “Change of Control” shall mean the occurrence of
                any of the following events: 

            

    

     

    
      	 	
              a.

            	
              Any
                consolidation, merger, stock-for-stock exchange or similar transaction
                (“Transaction”) which results in the shareholders prior to the Transaction
                owning less than 50% of the entity surviving after the Transaction;
                

            

    

     

    
      	 	
              b.

            	
              Any
                person, entity, or group of persons or entities becoming the beneficial
                owner (as defined in Rule 13d-3 promulgated by the Securities Exchange
                Commission under the Exchange Act) of securities of the Company possessing
                one-third (1/3) of the voting power for the election of Directors
                of the
                Company, which were not beneficially owned by such person, entity,
                or
                group of persons or entities prior to the transactions resulting
                in such
                new beneficial ownership; 

            

    

     

    
      	 	
              c.

            	
              During
                any period of twenty-four (24) consecutive months, individuals who
                at the
                beginning of such period constituted a majority of the Board of Directors
                cease for any reason, other than death or a voluntary retirement
                entitling
                such Director to receive benefits under this Plan, to constitute
                at least
                a majority of the Board of Directors of the Company; or
                

            

    

     

    
      
        
        

      

      
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              d.

            	
              Any
                sale, lease, exchange or other transfer, in one or more transactions,
                of
                all, or substantially all, of the assets of the Company to one or
                more
                parties which are not controlled by or under common control with
                the
                Company. 

            

    

     

    For
      purposes of this Plan, "Change in Control Event" shall mean with respect to
      a
      Director (a) a change in ownership of the Director's Service Recipient; (b)
      a
      change in effective control of the Director’s Service Recipient; or (c) a change
      in the ownership of a substantial portion of the assets of the Director's
      Service Recipient. The existence of a Change in Control Event shall be
      determined by the Company in accordance with section 409A of the Internal
      Revenue Code of 1986 and the regulations thereunder.

     

    For
      purposes of this Plan, "Service Recipient" shall mean with respect to a Director
      on any date: (a) the corporation for which the Director is performing services
      on such date; (b) all corporations that are liable to the Participant for the
      benefits due to him under the Plan; (c) a corporation that is a majority
      shareholder of a corporation described in (a) or (b) above; or (d) any
      corporation in a chain of corporations each of which is a majority shareholder
      of another corporation in the chain, ending in a corporation described in (a)
      or
      (b) above.

     

    For
      purposes of this Plan, "Separation from Service" shall have the meaning assigned
      to such term under section 409A of the Internal Revenue Code of 1986 and the
      regulations thereunder.

     

    For
      purposes of this Plan, “Specified Employee” shall mean a person who, as of the
      most recent December 31st
      that is
      at least four months prior to the Separation from Service or at any time during
      the 12-month period ending on such date, was a key employee within the meaning
      of section 416(i) of the Internal Revenue Code of 1986, without regard to
      section 416(i)(5).

     

    
      	
              14.

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

            

    

     

    
      
        
        

      

      
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    In
      Witness Whereof, this amended and restated Plan has been executed on behalf
      of
      the Company as of January 1, 2005 by an officer thereunto duly authorized by
      resolution of the Company's Board of Directors adopted on December 13, 2005.
      

     

    
      
        	 	 	 /s/ 
                Thomas E. Hales	 
	 	
                
                  
 Thomas
                  E. Hales 

                Chairman
                  of the Board and 

                Chief
                  Executive Officer

              	 
	ATTEST:
 	 
 	 
 	 
	 /s/ 
                Raymond J. Crotty	 	 	 
	
                
                  
Raymond
                  J. Crotty,
                  Secretary

              	
              	 
	 	 	 

      

    

     

    
      
        
        

      

      
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