Document:

AMENDMENT NUMBER 1
                                     TO THE
                          U.S.B. HOLDING COMPANY, INC.
              EMPLOYEE STOCK OWNERSHIP PLAN WITH 401(k) PROVISIONS

      U.S.B. Holding Company, Inc and Union State Bank, a corporation organized
and operating under the laws of the state of Delaware and a banking association,
hereby adopt the following amendments to the U.S.B. Holding Company, Inc.
Employee Stock Ownership Plan with 401(k) Provisions ("Plan") as a condition to
the issuance of an IRS Favorable Determination Letter dated January 27, 1995:

      1. The third paragraph in Section 1 of the Plan is hereby deleted and
replaced with the following language:

      "The Plan, hereby adopted effective as of January 1, 1989, is a
      restatement, amendment, and consolidation of the U.S.B. Holding Company,
      Inc. Profit Sharing and Thrift Plan and the U.S.B. Holding Company, Inc.
      Employee Stock Ownership Plan, both effective January 1, 1985. The Plan is
      a stock bonus plan containing Section 401(k) features that is intended to
      qualify under Section 401(a) of the Internal Revenue Code. The Plan is
      also designed to be an employee stock ownership plan under Section 4975
      (e)(7) of the Code.

      2. The definition of "Adjusted Compensation" in Section 2 of the Plan is
hereby amended to add the following definition:

      "In addition to other applicable limitations set forth in the Plan, and
      notwithstanding any other provision of the Plan to the contrary, for Plan
      Years beginning on or after January 1, 1994, the annual Adjusted
      Compensation of each Employee taken into account under the Plan shall not
      exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
      compensation limit is $150,000, as adjusted by the Commissioner for
      increases in the cost of living in accordance with section 401(a)(17)(B)
      of the Internal Revenue Code. The cost-of-living adjustment in effect for
      a calendar year applies to any period, not exceeding 12 months, over which
      Adjusted Compensation is determined (determination period) beginning in
      such calendar year. If a determination period consists of fewer than 12
      months, the OBRA '93 annual compensation limit will be multiplied by a
      fraction, the numerator of which is the number of months in the
      determination period, and the denominator of which is 12.

                                       1
<PAGE>

            For Plan Years beginning on or after January 1, 1994, any reference
      in this Plan to the limitation under section 401(a)(17) of the Code shall
      mean the OBRA '93 annual compensation limit set forth in this provision.

            If Adjusted Compensation for any prior determination period is taken
      into account in determining an Employee's benefits accruing in the
      current Plan Year, the Adjusted Compensation for that prior determination
      period is subject to the OBRA '93 annual compensation limit in effect for
      that prior determination period. For this purpose, for determination
      periods beginning before the first day of the first Plan Year beginning on
      or after January 1, 1994, the OBRA '93 annual compensation limit is
      $150,000.."

      3. The definition of "Compensation" in Section 2 of the Plan is hereby
amended to add the following definition:

      "In addition to other applicable limitations set forth in the Plan, and
      notwithstanding any other provision of the Plan to the contrary, for Plan
      Years beginning on or after January 1, 1994, the annual Compensation of
      each Employee taken into account under the Plan shall not exceed the OBRA
      '93 annual compensation limit. The OBRA '93 annual compensation limit is
      $150,000, as adjusted by the Commissioner for increases in the cost of
      living in accordance with section 401(a)(17)(B) of the Internal Revenue
      Code. The cost-of-living adjustment in effect for a calendar year applies
      to any period, not exceeding 12 months, over which Compensation is
      determined (determination period) beginning in such calendar year. If a
      determination period consists of fewer than 12 months, the OBRA '93 annual
      compensation limit will be multiplied by a fraction, the numerator of
      which is the number of months in the determination period, and the
      denominator of which is 12.

            For Plan Years beginning on or after January 1, 1994, any reference
      in this Plan to the limitation under section 401(a)(17) of the Code shall
      mean the OBRA '93 annual compensation limit set forth in this provision.

            If Compensation for any prior determination period is taken into
      account in determining an Employee's benefits accruing in the current Plan
      Year, the Compensation for that prior determination period is subject to
      the OBRA '93 annual compensation limit in effect for that prior
      determination period. For this purpose, for determination periods
      beginning before the first day of the first Plan Year beginning on or
      after January 1, 1994, the OBRA '93 annual compensation limit is
      $150,000.."

                                       2
<PAGE>

      4. The definition of "Eligible Retirement Plan" in Section 2 of the Plan
is hereby deleted and replaced with the following language:

      "An individual retirement account described in Section 408(a) of the Code,
      an individual retirement annuity described in Section 408(b) of the Code,
      an annuity plan described in Section 403(a) of the Code, or a qualified
      trust described in Section 401(a) of the Code, that accepts the
      Distributee's Eligible Rollover Distribution. However, in the case of an
      Eligible Rollover Distribution to the surviving spouse, an Eligible
      Retirement Plan is an individual retirement account or individual
      retirement annuity."

      5. Section 22(e) of the Plan is hereby deleted and replaced with the
following language:

      "(e) For Plan Years beginning before January 1, 1994, including such years
      in which the Plan is "top-heavy", Compensation of each Employee for
      purposes of the Plan shall not take into account any amount in excess of
      $200,000, as adjusted for increases in the cost of living pursuant to
      Section 416(d)(2) of the Code. For Plan Years beginning on or after
      January 1, 1994, including such years in which the Plan is "top-heavy",
      Compensation of each Employee for purposes of the Plan shall not take
      into account any amount in excess of $150,000, as adjusted for increases
      in the cost of living pursuant to Section 416(d)(2) of the Code

      IN WITNESS WHEREOF, the undersigned, a duly authorized officer of U.S.B.
Holding Company, Inc. and Union State Bank hereby adopt this Amendment Number 1
to the Union State Bank Employee Stock Ownership Plan with 401(k) Provisions on
this 1st day of February, 1995.

                                        U.S.B. HOLDING COMPANY, INC.

                                        By /s/ James B. White
                                           -------------------------------------

                                        As Its: Executive V.P./Chief Financial
                                                Officer
                                                --------------------------------

                                        UNION STATE BANK

                                        By /s/ James B. White
                                           -------------------------------------

                                        As Its: Executive V.P./Chief Financial
                                                Officer
                                                --------------------------------

                                       3U.S.B. HOLDING CO., INC.

                        BOARD OF DIRECTORS' RESOLUTIONS
                        RELATING TO THE AMENDMENT OF THE
                    U.S.B. HOLDING CO., INC. EMPLOYEE STOCK
                     OWNERSHIP PLAN WITH 401(K) PROVISIONS

      WHEREAS, the Board of Directors of U.S.B. Holding Co., Inc. (the
"Company") has acknowledged that it is in the best interests of the Company to
provide participation in the U.S.B. Holding Co., Inc. Employee Stock Ownership
Plan with 401(k) Provisions ("KSOP") to all employees who have attained age
eighteen (18) and completed at least one thousand (1,000) hours of service per
plan year.

      WHEREAS, the KSOP currently limits an employee from participating in the
KSOP until he has attained age twenty-one (21) by providing the following
language in the first paragraph of Section 3(a) of the KSOP:

            "All current participants in the Profit Sharing Plan and Employee
      Stock Ownership Plan will continue to participate in the Plan. Thereafter,
      each Employee will become a Participant on the first January 1st or July
      1st coincident with or next following his initial date of Service (the
      date he is first credited with an Hour of Service), provided that he has
      attained age twenty-one (21) and is employed in a position requiring the
      completion of at least 1,000 Hours of Service per Plan Year.

            An Employee who fails to meet these requirements by the first
      Anniversary Date following his initial date of Service shall be eligible
      to participate in the Plan on the date he has completed at least one (1)
      full year of Service in which he has attained age twenty-one (21) and is
      credited with at least 1,000 Hours of Service. For this purpose, the
      eligibility computation period for determining the one year of Service
      shall first be the period of twelve (12) consecutive months beginning on
      the Employee's initial date of Service and thereafter shall be each Plan
      Year beginning after his initial date of Service."

      WHEREAS, Section 21 of the KSOP gives the Board of Directors of the
Company the right to amend the KSOP at any time provided that such amendment
does not reduce the vested rights of participants or permits any part of the
trust assets to be used for any purpose other than for the exclusive benefit of
the participants.

      NOW THEREFORE, BE IT RESOLVED, that the KSOP be amended to allow
participation in the KSOP by employees who have attained age eighteen (18) and
employed in a position requiring the completion of one thousand (1,000) hours of
service in a plan year.

      BE IT FURTHER RESOLVED, that to effect such amendment, the first paragraph
in Section 3(a) of the KSOP is hereby deleted and replaced with the following
language:
<PAGE>

            "All current participants in the Profit Sharing Plan and Employee
      Stock Ownership Plan will continue to participate in the Plan. Thereafter,
      each Employee will become a Participant on the first January 1st or July
      1st coincident with or next following his initial date of Service (the
      date he is first credited with an Hour of Service), provided that he has
      attained age eighteen (18) and is employed in a position requiring the
      completion of at least 1,000 Hours of Service per Plan Year.

            An Employee who fails to meet these requirements by the first
      Anniversary Date following his initial date of Service shall be eligible
      to participate in the Plan on the date he has completed at least one (1)
      full year of Service in which he has attained age eighteen (18) and is
      credited with at least 1,000 Hours of Service. For this purpose, the
      eligibility computation period for determining the one year of Service
      shall first be the period of twelve (12) consecutive months on the
      Employee's initial date of Service and thereafter shall be each Plan Year
      beginning after his initial date of Service."

      BE IT FURTHER RESOLVED, that said amendment shall be effective as of July
1, 1995;

      BE IT FURTHER RESOLVED, that the proper officers of this corporation be,
and they hereby are, authorized and directed to execute such instruments and to
perform such other acts as they, in their discretion, deem necessary or
desirable to effectuate the intent of the foregoing resolutions.

--------------------------------------------------------------------------------

                                 CERTIFICATION

      I, Michael H. Fury, hereby certify that I am the duly appointed and acting
Secretary of U.S.B. Holding Co., Inc. and that the above resolutions are a true
and correct copy of the resolutions duly adopted by U.S.B. Holding Co., Inc. at
a meeting of the Board of Directors of said Company, held on May 17, 1995, at
which meeting a quorum was at all times present and acting and that said
resolutions are still in force and effect.

Dated: May 17, 1995                     /s/ Michael H. Fury
       -------------------              ----------------------------------------
                                                      Secretary

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