<PAGE>   1
                                                                   EXHIBIT 10.19


                              EMPLOYMENT AGREEMENT


      EMPLOYMENT AGREEMENT, dated this ____ day of ___________ 1998, between
Tarrytowns Bank, FSB (the "Bank" or "Employer"), and Harry G. Murphy (the
"Executive").


                                   WITNESSETH

      WHEREAS, the Executive 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 Executive's active
participation and support in the business of the Bank; and

      WHEREAS, in order to induce the Executive to remain in the employ of the
Bank and in consideration of the Executive's agreeing to remain in its employ,
the Bank and the Executive desire to enter into this Agreement regarding, among
other things, the employment of the Executive by 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) BASE SALARY. "Base Salary" shall have the meaning set forth in Section
3(a) hereof.

      (b) CAUSE. Termination of the Executive's employment 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
<PAGE>   2
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 industry; provided, however,
that the Executive 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 Executive and a reasonable opportunity for the Executive 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 Executive for cause. For purposes of
this paragraph, no act or failure to act on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive's action or omission
was in the best interest of the Bank.

      (c) 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.

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

      (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 Executive's employment
based on "Disability" shall mean termination because of any physical or mental
impairment which qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employer or, if no such
plan applies, which would qualify the Executive for disability benefits under
the Federal Social Security System.

      (g) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following a
Change in Control of the Corporation based on:
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            (i)   Without the Executive's express written consent, a reduction
                  by the Employer in the Executive's Base Salary as the same may
                  be increased from time to time or, except to the extent
                  permitted by Section 3(b) hereof, a reduction in the package
                  of fringe benefits provided to the Executive, taken as a
                  whole;

            (ii)  Any purported termination of the Executive's employment 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 Executive's
employment by the Bank for any reason, including without limitation for Cause,
Disability or Retirement, or by the Executive 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 Executive's employment 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 Executive's employment for Cause,
which shall be effective immediately; and (iv) is given in the manner specified
in Section 12 hereof.

      2.    TERM OF EMPLOYMENT.

      (a) The Bank hereby employs the Executive as Executive Vice President and
Secretary and the Executive hereby accepts said employment and agrees to render
such services to the Bank on the terms and conditions set forth in this
Agreement. The term of employment under this Agreement shall be for three years,
commencing on the date of this Agreement.

      (b) During the term of this Agreement, the Executive shall perform such
executive services for the Bank as may be consistent with his titles and from
time to time reasonably assigned to him by the Bank's Board of Directors,
consistent with his position.

      3.    COMPENSATION AND BENEFITS.

      (a) The Employer shall compensate and pay the Executive for his services
during the term of this Agreement at a minimum base salary of $165,000 per year
("Base Salary"), which may be increased from time to time in such amounts as may
be determined by the Board of Directors of the Employer and may not be decreased
without the Executive's express written consent. In addition to his Base Salary,
the Executive shall be entitled to receive during the term
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of this Agreement such bonus payments as may be determined by the Board of
Directors of the Employer.

      (b) During the term of this Agreement, the Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing plan, stock option plan, employee stock ownership
plan, or other plans, benefits and privileges given to employees and executives
of the Employer, to the extent commensurate with his then duties and
responsibilities, as fixed by the Board of Directors of the Employer. The Bank
shall not make any changes in such plans, benefits or privileges which would
adversely affect the Executive's rights or benefits thereunder, unless such
change occurs pursuant to a program applicable to all executive officers of the
Bank and does not result in a proportionately greater adverse change in the
rights of or benefits to the Executive as compared with any other executive
officer of the Bank. Nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in
lieu of the salary payable to the Executive pursuant to Section 3(a) hereof.

      (c) During the term of this Agreement, the Executive shall be entitled to
paid annual vacation in accordance with the policies as established from time to
time by the Board of Directors of the Employer. The Executive shall not be
entitled to receive any additional compensation from the Employer for failure to
take a vacation, nor shall the Executive be able to accumulate unused vacation
time from one year to the next, except to the extent authorized by the Board of
Directors of the Employer.

      (d) In consideration for the Executive 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 Employer agrees to pay to
the Executive a signing bonus in a lump sum cash amount equal to $336,000
concurrently with the execution and delivery of this Agreement.

      4.    TERMINATION.

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

      (b) In the event that (i) the Executive's employment is terminated by the
Bank for Cause, or (ii) the Executive terminates his employment hereunder other
than for the reasons set forth in Section 4(c) below, the Executive shall have
no right pursuant to this Agreement to compensation or other benefits for any
period after the applicable Date of Termination.

      (c) In the event that the Executive's employment is terminated (i) by the
Bank for other than Cause, (ii) by the Executive (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 Executive to
the Employer, or (b) for Good Reason, or (iii) due to the Executive's Disability
or death, then the Bank shall, subject to the provisions of Section 5 hereof, if
applicable,
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            (A) pay to the Executive (or, in the event of his death, to his
      estate) a cash severance amount equal to the Executive's Base Salary for
      the then remaining term of this Agreement, with such amount to be paid in
      equal monthly installments over the then 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 Executive 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 Executive, and

            (C) with respect to restricted stock awards held by the Executive 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 Executive 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 Executive, 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 Executive upon termination shall be
limited to three times the Executive'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 Executive) 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 Executive may be entitled upon termination of employment 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 Executive 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
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
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      (b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employer pursuant to employee benefit plans
of the Employer or otherwise.

      7. COVENANT NOT TO COMPETE. The Executive hereby covenants and agrees
that, in the event of his termination of employment 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 employment, 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 Executive's employment is terminated for
the reasons set forth in Section 4(c) (other than for Disability); and provided,
further, that if the Executive's employment shall be terminated on account of
Disability, this Section 7 shall not prevent the Executive 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 Executive 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 employment 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 Executive,
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 Executive hereby covenants and agrees that, for a
period equal to the greater of (i) the remaining unexpired term of this
Agreement and (ii) two (2) years following his termination of employment 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
<PAGE>   7
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 Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll 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 Executive 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 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 Executive:
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            Harry G. Murphy
            40 Summit Avenue
            White Plains, New York 10606

      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 Executive 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 Executive 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 employment
agreements between a savings institution and its employees 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 in the
event of a conflict with any other provision of this Agreement, including
without limitation Section 4 hereof.

      (a) If the Executive 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 Executive all or
part of the compensation withheld while
<PAGE>   9
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 Executive 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 Executive 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 Executive 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 Employer 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 Executive 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 Executive 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 Executive the full and timely performance
by the Bank of each and every obligation of the Bank contained in this
Agreement.

      (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 Executive 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 Executive 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]
<PAGE>   10
      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
            Executive under the Code for the taxable year in question;

      S  =  the sum of the highest marginal rates of income tax applicable to
            the Executive 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
            Executive 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 Executive 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
Executive 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
Executive.

      (c) Notwithstanding anything in this Section 21 to the contrary, in the
event that the Executive's liability for the excise tax under Section 4999 of
the Code for a taxable year is subsequently determined to be different than the
amount determined by the formula (X + P) x E, where X, P and E have the meanings
provided in Section 21(b), then the Executive 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 Executive 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 Executive, equals the amount that should have properly been paid to
the Executive 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. To confirm that the proper amount, if any, was paid to the Executive under
this Section 21, the Executive 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 Executive with respect to the matters agreed to herein. All
prior agreements between the Bank and the Executive and between Tappan Zee and
the Executive with respect to the matters agreed to herein, including without
limitation the 1997 Agreements, are hereby superseded and shall have no force or
effect.
<PAGE>   11
      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



                                    EXECUTIVE



                                    By:________________________________
                                         Harry G. Murphy


      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