<PAGE>   1
                                                                   EXHIBIT 10.18


                              CONSULTING AGREEMENT


      CONSULTING AGREEMENT, dated this ____ day of ___________ 1998, between
Tarrytowns Bank, FSB (the "Bank"), and Stephen C. Byelick (the "Consultant").


                                   WITNESSETH

      WHEREAS, the Consultant previously entered into an agreement with Tappan
Zee Financial, Inc. ("Tappan Zee") dated June 23, 1997 (the "1997 Tappan Zee
Agreement") and a separate agreement with the Bank dated June 23, 1997 (the
"1997 Bank Agreement") (collectively, the "1997 Agreements");

      WHEREAS, as of the date of this Agreement, Tappan Zee has merged with and
into U.S.B. Holding Co., Inc. (the "Corporation") and the Bank has become a
wholly owned subsidiary of the Corporation;

      WHEREAS, the Bank desires to be ensured of the Consultant's active
participation and support in the business of the Bank; and

      WHEREAS, in order to induce the Consultant to serve as a consultant and a
director emeritus of the Bank and in consideration of the Consultant's agreeing
to serve as a consultant and a director emeritus, the Bank and the Consultant
desire to enter into this Agreement regarding, among other things, the
consulting services to be provided by the Consultant to the Bank and,
concurrently therewith, to terminate the 1997 Agreements, all as hereinafter set
forth.

      NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereby agree as follows:

      1. DEFINITIONS. The following words and terms shall have the meanings set
forth below for the purposes of this Agreement:

      (a) CAUSE. Termination of the Consultant's services for "Cause" shall mean
termination because of dishonest conduct in connection with his performance of
services for the Bank resulting in his conviction of a felony, conviction of, or
plea of guilty or nolo contendere to, a felony or any crime involving moral
turpitude; willful failure or refusal to perform his duties under this Agreement
and failure to cure such breach within fifteen (15) days following written
notice thereof; breach of fiduciary duties to the Bank for personal profit; or
willful breach or violation of any law, rule or regulation (other than traffic
violations or similar offenses), or final cease and desist order in connection
with his performance of services for the Bank, in each case as measured against
standards generally prevailing at the relevant time in the savings and community
banking
<PAGE>   2
industry; provided, however, that the Consultant shall not be deemed to have 
been discharged for cause unless and until he shall have received a written
notice of termination from the Board, accompanied by a resolution duly adopted
by affirmative vote of a majority of the entire Board at a meeting called and
held for such purpose (after reasonable notice to the Consultant and a
reasonable opportunity for the Consultant to make oral and written
presentations to the members of the Board, on his own behalf, or through a
representative, who may be his legal counsel, to refute the grounds for the
proposed determination) finding that in the good faith opinion of the Board
grounds exist for discharging the Consultant for cause. For purposes of this
paragraph, no act or failure to act on the Consultant's part shall be
considered "willful" unless done, or omitted to be done, by the Consultant not
in good faith and without reasonable belief that the Consultant's action or
omission was in the best interest of the Bank.

      (b) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or any successor thereto, whether or not the Corporation is registered
under the Exchange Act; provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act, but excluding persons who
are directors or officers of the Corporation as of the date of this Agreement)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing 25% or more of the combined voting power of the Corporation's then
outstanding securities; or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Corporation cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election by
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.

      (c) CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.

      (d) CONSULTING FEE. "Consulting Fee" shall have the meaning set forth in
Section 3(a) hereof.

      (e) DATE OF TERMINATION. "Date of Termination" shall mean the date
specified in the Notice of Termination.

      (f) DISABILITY. Termination by the Bank of the Consultant's services based
on "Disability" shall mean termination because of any physical or mental
impairment which would qualify the Consultant for disability benefits under the
applicable long-term disability plan maintained by the Bank if he was an
employee or, if no such plan applies, which would qualify the Consultant for
disability benefits under the Federal Social Security System.

      (g) GOOD REASON. Termination by the Consultant of the Consultant's
services for "Good Reason" shall mean termination by the Consultant following a
Change in Control of the Corporation based on:
<PAGE>   3
            (i)   Without the Consultant's express written consent, a reduction
                  by the Bank in the Consultant's Consulting Fee as the same may
                  be increased from time to time;

            (ii)  Any purported termination of the Consultant's services for
                  Cause, Disability or Retirement which is not effected pursuant
                  to a Notice of Termination satisfying the requirements of
                  paragraph (i) below; or

            (iii) The failure by the Bank to obtain the assumption of and
                  agreement to perform this Agreement by any successor as
                  contemplated in Section 11 hereof.

      (h) IRS. IRS shall mean the Internal Revenue Service.

      (i) NOTICE OF TERMINATION. Any purported termination of the Consultant's
services by the Bank for any reason, including without limitation for Cause,
Disability or Retirement, or by the Consultant for any reason, including without
limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Consultant's services under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than twenty (20) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of the Bank's termination of the Consultant's services for Cause, which
shall be effective immediately; and (iv) is given in the manner specified in
Section 12 hereof.

      (j) RETIREMENT. "Retirement" shall mean any voluntary termination by the
Consultant of his consulting services or his services as a director emeritus
following the one-year anniversary of the date of this Agreement that would
result in the Consultant being entitled to (i) accelerated vesting under his
Incentive Stock Option Agreement with Tappan Zee dated July 11, 1996, his
Restricted Stock Award Notice with Tappan Zee dated July 11, 1996, or any other
benefit plan of Tappan Zee or the Bank which is not a qualified plan under
Section 401(a) of the Code, or (ii) the payment of any benefits under any other
benefit plan of Tappan Zee or the Bank which is not a qualified plan under
Section 401(a) of the Code, in each case for purposes of clauses (i) and (ii) as
such plans have been assumed by the Corporation and/or the Bank as of the date
of this Agreement.

      2.    TERM OF CONSULTING SERVICES.

      (a) The Bank hereby engages the Consultant, and the Consultant hereby
accepts said engagement, for the Consultant to serve as a director emeritus of
the Bank and to provide his personal advice and counsel to the Bank and its
affiliates in connection with the business of banking and financial services.
Specifically, the Consultant agrees to provide his advice and counsel to the
Bank in connection with the on-going operations of the Bank and its affiliates.
The Consultant further agrees to perform certain duties in respect to the
transition of the Bank becoming an affiliate of the Corporation. Such duties may
include, without limitation, counsel and
<PAGE>   4
advice in connection with business development and government relations in the
market areas served by the Bank. The term under this Agreement shall be for
three years, commencing on the date of this Agreement.

      (b) During the term of this Agreement, the Consultant's services shall be
rendered at such times as shall be mutually agreeable to the Bank and the
Consultant, and as shall be reasonably convenient to both the Bank and the
Consultant. Such services shall be in the nature of customer and community
relations, business development, employee relations and general advice and
assistance relating to the business of the Bank and its employees. The
Consultant shall work a minimum of 10 hours per week, but shall not be required
to work in accordance with any fixed schedule.

      (c) Subject to the reasonable requirements and convenience of the Bank, in
the performance of the services required of the Consultant hereunder, the
Consultant shall have exclusive control over the manner of the performance of
such services, including without limitation: (i) the selection of methods,
practices, procedures and strategies to be employed in the performance of such
services; and (ii) the determination of the places and dates at which such
services will be performed.

      (d) The Consultant agrees not to elect Retirement during the first 12
months following the date of this Agreement.

      3.    COMPENSATION AND BENEFITS.

      (a) The Bank shall compensate and pay the Consultant for his services
during the term of this Agreement at a minimum fee of $77,000 per year
("Consulting Fee"), which may be increased from time to time in such amounts as
may be determined by the Board of Directors of the Bank and may not be decreased
without the Consultant's express written consent.

      (b) In consideration for the Consultant entering into this Agreement and
waiving all of his rights under the 1997 Agreements, which 1997 Agreements are
hereby superseded pursuant to Section 22 hereof, the Bank agrees to pay to the
Consultant a signing bonus in a lump sum cash amount equal to $472,000
concurrently with the election and delivery of this Agreement.

      (c) The Consultant shall be entitled to participate in the Bank's
post-retirement health care and life insurance plans in accordance with the
terms of such plans.

      4.    TERMINATION.

      (a) The Bank shall have the right, at any time upon prior Notice of
Termination, to terminate the Consultant's services hereunder for any reason,
including without limitation termination for Cause or Disability, and the
Consultant shall have the right, upon prior Notice of Termination, to terminate
his services hereunder for any reason.

      (b) In the event that (i) the Consultant's services are terminated by the
Bank for Cause, or (ii) the Consultant terminates his services hereunder other
than for the reasons set forth in
<PAGE>   5
Section 4(c) below, the Consultant shall have no right pursuant to this
Agreement to consulting fees or other benefits for any period after the
applicable Date of Termination.

      (c) In the event that the Consultant's services are terminated (i) by the
Bank for other than Cause, (ii) by the Consultant (a) due to a material breach
of this Agreement by the Bank, which breach has not been cured within twenty
(20) days after a written notice of non-compliance has been given by the
Consultant to the Bank, or (b) for Good Reason, or (iii) due to the Consultant's
Retirement, Disability or death, then the Bank shall, subject to the provisions
of Section 5 hereof, if applicable,

            (A) pay to the Consultant (or, in the event of his death, to his
      estate) cash severance amount equal to the Consultant's Consulting Fee for
      the then remaining term of this Agreement, with such amount to be paid in
      equal monthly installments over the remaining term of this Agreement,
      commencing on the first business day of the first month following the Date
      of Termination,

            (B) with respect to stock options held by the Consultant as of the
      date of this Agreement to purchase common stock of the Corporation and
      which are outstanding and unvested as of the Date of Termination,
      accelerate the vesting of such stock options as of the Date of Termination
      so that they are exercisable in full for the period of time specified in
      the option agreement with the Consultant, and

            (C) with respect to restricted stock awards held by the Consultant
      as of the date of this Agreement to acquire common stock of the
      Corporation and which are outstanding and unvested as of the Date of
      Termination, accelerate the vesting of such restricted awards so that they
      are fully vested as of the Date of Termination.

      5. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments and
benefits pursuant to Section 4 hereof, either alone or together with other
payments and benefits which the Consultant has the right to receive from the
Bank, the Corporation or any affiliate of either of them, would constitute a
"parachute payment" under Section 280G of the Code, then the payments and
benefits payable by the Bank pursuant to Section 4 hereof shall be reduced, in
the manner determined by the Consultant, by the amount, if any, which is the
minimum necessary to result in no portion of the payments and benefits payable
by the Bank under Section 4 being non-deductible to the Bank pursuant to Section
280G of the Code and subject to the excise tax imposed under Section 4999 of the
Code. The parties hereto agree that the payments and benefits payable by the
Bank pursuant to this Agreement to the Consultant upon termination shall be
limited to three times the Consultant's average annual compensation (based upon
the most recent five taxable years) in accordance with OTS Regulatory Bulletin
27a. The determination of any reduction in the payments and benefits to be made
pursuant to Section 4 shall be based upon the opinion of independent tax counsel
selected by the Bank (and reasonably acceptable to the Consultant) and paid by
the Bank. Such counsel shall promptly prepare the foregoing opinion, but in no
event later than thirty (30) days from the Date of Termination; and may use such
actuaries as such counsel deems necessary or advisable for the purpose. Nothing
contained herein shall result in a reduction of any payments or benefits to
which the Consultant may be entitled upon termination of his
<PAGE>   6
consulting services under any circumstances other than as specified in this
Section 5, or a reduction in the payments and benefits specified in Section 4
below zero.

      6.    MITIGATION; EXCLUSIVITY OF BENEFITS.

      (a) The Consultant shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Consultant from other services after the Date of Termination or otherwise.

      (b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Consultant upon a
termination of his services with the Bank pursuant to benefit plans of the Bank
or otherwise.

      7. COVENANT NOT TO COMPETE. The Consultant hereby covenants and agrees
that, in the event of the termination of his services with the Bank prior to the
expiration of the term of this Agreement, then for a period equal to the greater
of (i) the then remaining unexpired term of this Agreement and (ii) two (2)
years following the Date of Termination of his services, he shall not, without
the written consent of the Bank, become an officer, employee, consultant,
director or trustee of any savings bank, savings and loan association, savings
and loan holding company, bank or bank holding company, or any direct or
indirect subsidiary or affiliate of any such entity, that entails working within
one hundred (100) miles of the headquarters of the Bank, the Corporation or any
affiliate of either of them on the Date of Termination; provided, however, that
this Section 7 shall not apply if the Consultant's services are terminated for
the reasons set forth in Section 4(c) (other than for Disability); and provided,
further, that if the Consultant's services shall be terminated on account of
Disability, this Section 7 shall not prevent the Consultant from accepting any
position or performing any services if (a) he first offers, by written notice,
to accept a similar position with, or perform similar services for, the Bank on
substantially the same terms and conditions and (b) the Bank declines to accept
such offer within ten (10) days after such notice is given.

      8. CONFIDENTIALITY. Unless he obtains the prior written consent of the
Bank, the Consultant shall keep confidential and shall refrain from using for
the benefit of himself, or any person or entity other than the Bank, the
Corporation or any affiliate of either of them, any material document or
information obtained from the Bank, the Corporation or any affiliate of either
of them, in the course of his services with any of them concerning their
properties, operations or business (unless such document or information is
readily ascertainable from public or published information or trade sources or
has otherwise been made available to the public through no fault of his own)
until the same ceases to be material (or becomes so ascertainable or available);
provided, however, that nothing in this Section 8 shall prevent the Consultant,
with or without the Bank's consent, from participating in or disclosing
documents or information in connection with any judicial or administrative
investigation, inquiry or proceeding to the extent that such participation or
disclosure is required under applicable law.

      9. SOLICITATION. The Consultant hereby covenants and agrees that, for a
period equal to the greater of (i) the then remaining unexpired term of this
Agreement and (ii) two (2) years
<PAGE>   7
following the termination of his services with the Bank, he shall not, without
the written consent of the Bank, either directly or indirectly:

      (a) solicit, offer employment to, or take any other action intended, or
that a reasonable person acting in like circumstances would expect, to have the
effect of causing any officer or employee of the Bank, the Corporation or any
affiliate of either of them, as of the date of this Agreement, to terminate his
or her employment and accept employment or become affiliated with, or provide
services for compensation in any capacity whatsoever to, any savings bank,
savings and loan association, bank, bank holding company, savings and loan
holding company, or other institution engaged in the business of accepting
deposits and making loans, doing business with one hundred (100) miles of the
headquarters of the Bank, the Corporation or any affiliate of either of them;

      (b) provide any information, advice or recommendation with respect to any
such officer or employee of any savings bank, savings and loan association,
bank, bank holding company, savings and loan holding company, or other
institution engaged in the business of accepting deposits and making loans,
doing business within one hundred (100) miles of the headquarters of the Bank,
the Corporation or any affiliate of either of them that is intended, or that a
reasonable person acting in like circumstances would expect, to have the effect
of causing any officer or employee of the Bank, the Corporation or any affiliate
of either of them to terminate his employment and accept employment or become
affiliated with, or provide services for compensation in any capacity whatsoever
to, any savings bank, savings and loan association, bank, bank holding company,
savings and loan holding company, or other institution engaged in the business
of accepting deposits and making loans, doing business within one hundred (100)
miles of the headquarters of the Bank, the Corporation or any affiliate of
either of them; or

      (c) solicit, provide any information, advice or recommendation or take any
other action intended, or that a reasonable person acting in like circumstances
would expect, to have the effect of causing any customer of the Bank to
terminate an existing business or commercial relationship with the Bank.

      10. WITHHOLDING. All payments required to be made by the Bank hereunder to
the Consultant shall be subject to the withholding of such amounts, if any,
relating to tax and other deductions as the Bank may reasonably determine should
be withheld pursuant to any applicable law or regulation.

      11. ASSIGNABILITY. The Bank may assign this Agreement and its rights and
obligations hereunder in whole, but not in part, to any bank or other entity
with or into which the Bank may hereafter merge or consolidate or to which the
Bank may transfer all or substantially all of its assets, if in any such case
said bank or other entity shall by operation of law or expressly in writing
assume all obligations of the Bank hereunder as fully as if it had been
originally made a party hereto, but may not otherwise assign this Agreement or
its rights and obligations hereunder. The Consultant may not assign or transfer
this Agreement or any rights or obligations hereunder.

      12. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given
<PAGE>   8
when delivered or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
below:

      To the Bank:
            Chairman of the Board
            Tarrytowns Bank, FSB
            75 North Broadway
            Tarrytown, New York  10591

      To the Consultant:
            Stephen C. Byelick
            31 Crest Drive
            Tarrytown, New York  10591

      13. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Consultant and such officer or officers as may be
specifically designated by the Board of Directors of the Bank to sign on its
behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

      14. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of New York.

      15. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
require the Bank to create a trust of any kind to fund any benefits which may be
payable hereunder, and to the extent that the Consultant acquires a right to
receive benefits from the Bank hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Bank.

      16. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

      17. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.

      18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

      19. REGULATORY ACTIONS. The following provisions shall be applicable to
the parties to the extent that they are required to be included in consulting
agreements between a savings institution and its consultants pursuant to Section
563.39(b) of the Regulations Applicable to all Savings Associations, 12 C.F.R.
Section 563.39(b), or any successor thereto, and shall be controlling
<PAGE>   9
in the event of a conflict with any other provision of this Agreement, including
without limitation Section 4 hereof.

      (a) If the Consultant is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank's affairs pursuant to
notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act ("FDIA")(12 U.S.C. Sections 1818(e)(3) and 1818(g)(1), the
Bank's obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Bank may, in its discretion: (i) pay the Consultant all or
part of the compensation withheld while its obligations under this Agreement
were suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.

     (b) If the Consultant is removed from office and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. Sections 1818(e)(4)
and (g)(1)), all obligations of the Bank under this Agreement shall terminate as
of the effective date of the order, but vested rights of the Consultant and the
Bank as of the date of termination shall not be affected.

      (c) If the Bank is in default, as defined in Section 3(x)(1) of the FDIA
(12 U.S.C. Section 1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the Consultant and the
Bank as of the date of termination shall not be affected.

      (d) All obligations under this Agreement shall be terminated pursuant to
12 C.F.R. Section 563.39(b)(5) (except to the extent that it is determined that
continuation of the Agreement for the continued operation of the Bank is
necessary): (i) by the Director of the OTS, or his/her designee, at the time the
Federal Deposit Insurance Corporation ("FDIC") enters into an agreement to
provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) of the FDIA (12 U.S.C. Section 1823(c)); or (ii) by the Director
of the OTS, or his/her designee, at the time the Director or his/her designee
approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Director of the OTS to be in an
unsafe or unsound condition, but vested rights of the Consultant and the Bank as
of the date of termination shall not be affected.

      20. REGULATORY PROHIBITION. Notwithstanding any provision of this
Agreement to the contrary, any payments made to the Consultant pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)) and any regulations
promulgated thereunder.

      21. GUARANTY AND PAYMENT OF ADDITIONAL BENEFITS BY THE CORPORATION UNDER
CERTAIN CIRCUMSTANCES.

      (a) By signing and adopting this Agreement, the Corporation irrevocably
and unconditionally guarantees to the Consultant the full and timely performance
by the Bank of each and every obligation of the Bank contained in this
Agreement.
<PAGE>   10
      (b) If at any time during or after the term of this Agreement the payments
and benefits payable by the Bank under this Agreement shall be reduced pursuant
to Section 5 hereof, then the Corporation shall pay to the Consultant an amount
equal to the sum of (i) the amount by which the payments and benefits that would
have otherwise been paid by the Bank to the Consultant are reduced by the
provisions of Section 5 hereof, plus (ii) an amount equal to X determined under
the following formula:

                         E x P
      X =  -----------------------------------------
                1 - [(F x (1 - S)) + S + E + M]

      where

      E  =  the rate at which the excise tax is assessed under Section 4999 of
            the Code;

      P  =  the amount with respect to which such excise tax is assessed,
            determined without regard to this Section 21;

      F  =  the highest marginal rate of income tax applicable to the
            Consultant under the Code for the taxable year in question;

      S  =  the sum of the highest marginal rates of income tax
            applicable to the Consultant under all applicable state and local
            laws for the taxable year in question; and

      M  =  the highest marginal rate of Medicare tax applicable to
            the Consultant under the Code for the taxable year in question.


With respect to any payment in the nature of compensation that is made to (or
for the benefit of) the Consultant under the terms of this Agreement, or
otherwise, and on which an excise tax under Section 4999 of the Code will be
assessed, the payment determined under this Section 21(b) shall be made to the
Consultant on the earlier of (i) the date the Corporation, the Bank or any
direct or indirect subsidiary or affiliate of the Corporation or the Bank is
required to withhold such tax, or (ii) the date the tax is required to be paid
by the Consultant.

      (c) Notwithstanding anything in this Section 21 to the contrary, in the
event that the Consultant's liability for the excise tax under Section 4999 of
the Code for a taxable year is subsequently determined to be different than the
amount determined by the formula (X + P) x E, where X, P and E have the meanings
provided in Section 21(b), then the Consultant or the Corporation, as the case
may be, shall pay to the other party at the time that the amount of such excise
tax is finally determined, an appropriate amount, plus interest, such that the
payment made under Section 21(b), when increased by the amount of the payment
made to the Consultant under this Section 21(c) by the Corporation, or when
reduced by the amount of the payment made to the Corporation under this Section
21(c) by the Consultant, equals the amount that should have properly been paid
to the Consultant under Section 21(b). The interest paid under this Section
21(c) shall be determined at the rate provided under Section 1274(b)(2)(B) of
the Code.
<PAGE>   11
To confirm that the proper amount, if any, was paid to the Consultant under this
Section 21, the Consultant shall furnish to the Corporation a copy of each tax
return which reflects a liability for an excise tax payment made by the
Corporation, at least 20 days before the earlier of the date on which such
return is required to be filed with the IRS or the actual filing date.

      22. ENTIRE AGREEMENT. This Agreement embodies the entire agreement between
the Bank and the Consultant with respect to the matters agreed to herein. All
prior agreements between the Bank and the Consultant and between Tappan Zee and
the Consultant with respect to the matters agreed to herein, including without
limitation the 1997 Agreements, are hereby superseded and shall have no force or
effect.

      IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.

Attest:                             TARRYTOWNS  BANK, FSB



_______________________________     By:___________________________________
Secretary                              Chairman of the Board


                                    CONSULTANT



                                    By:___________________________________
                                        Stephen C. Byelick

      For purposes of Section 21 of the Agreement, the Corporation has executed
and adopted this Agreement as of the date first above written.


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



_______________________________     By:___________________________________
Michael H. Fury, Secretary                Thomas E. Hales, President and
                                                  Chief Executive Officer