Exhibit 10.1

[Astoria Financial Corporation Letterhead]

November 17, 2004

Mr. Lawrence W. Peters
194 Captains Way
West Bay Shore, New York 11706

      Re:      Director Retirement Benefits

Dear Mr. Peters:

The purpose of this letter is to set forth the agreement that has been reached
concerning the retirement benefits to which you are entitled under the Astoria
Federal Savings and Loan Association and Astoria Financial Corporation
Directors’ Retirement Plan, as amended (the “Astoria Plan”) and the Long Island
Bancorp, Inc. Non-Employee Directors Retirement Benefit Plan (the “LIB Plan”).

Astoria Financial Corporation (“Astoria Financial”) will pay you a monthly
benefit equal to Three Thousand Dollars ($3,000.00), commencing on or about
December 1, 2004 and continuing monthly thereafter until a total of 120 monthly
payments have been made. In the event of your death before all 120 payments have
been made, Astoria Financial will make any remaining monthly payments to your
designated beneficiary (or, if there is no beneficiary, to your estate). If your
designated beneficiary survives you but dies before all remaining payments due
hereunder have been made, Astoria Financial will make any remaining monthly
payments to your designated beneficiary’s beneficiary (or, if there is no
beneficiary, to his or her estate) and then to his or her designated beneficiary
(or, if there is no beneficiary, to his or her estate), and so forth, until all
120 payments have been made.

You may designate a beneficiary to receive amounts that remain payable under
this letter as of the date of your death by written notice signed by you and
actually received by Astoria Financial prior to your death. You may change or
revoke any designation so made by means of a similar signed instrument. Any
determination made by Astoria Financial as to the validity of any beneficiary
designation you make under this letter and as to whether any beneficiary so
named has survived you shall be conclusive and binding on all parties in the
absence of manifest error.

The payments made hereunder are in respect of your service as a non-employee
director and will not be subject to income tax withholding. You (or, in the
event of your death, your beneficiary) will be responsible for taking such
payments into account when computing your liability for estimated taxes.

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Mr. Lawrence W. Peters
Page 2

The payments made hereunder represent full settlement of your rights to benefits
under the Astoria Plan, the LIB Plan and any other plan, program or arrangement
under which retirement-type benefits may be paid in recognition of compensation
paid and services rendered as a director of Astoria Federal Savings and Loan
Association (“Astoria Federal”), Astoria Financial Corporation (Astoria
Financial”), the subsidiaries and affiliates of either of them, or any of their
respective predecessor entities (collectively, “Director Retirement Benefits”).

In consideration for the payments promised herein, you hereby permanently and
irrevocably waive any and all rights that you may have to claim an entitlement
to Director Retirement Benefits of a higher amount, or payable beginning at a
different time or over a longer period, than as set forth in this letter. In
turn, Astoria Federal and Astoria Financial hereby permanently and irrevocably
waive any and all rights that either of them may have to claim that your
entitlement to Director Retirement Benefits is for a lower amount, or payable
beginning at a different time or over a shorter period, than as set forth in
this letter.

If this letter accurately reflects our understanding, kindly so signify by
countersigning the enclosed copy and returning it to the attention of Alan P.
Eggleston, Esq., Executive Vice President and General Counsel, Astoria Federal
Savings and Loan Association, One Astoria Federal Plaza, Lake Success, New York.
If you have questions concerning this letter, kindly refer them to Mr. Eggleston
at 516-327-7876.

            ASTORIA FINANCIAL CORPORATION
      By:   /S/ Alan P. Eggleston         Name:   Alan P. Eggleston       
Title:   Executive Vice President, Secretary
and General Counsel        ASTORIA FEDERAL SAVINGS
AND LOAN ASSOCIATION
      By:   /S/_Alan P. Eggleston         Name:   Alan P. Eggleston       
Title:   Executive Vice President, Secretary
and General Counsel              By:   /S/ Lawrence W. Peters         Lawrence
W. Peters             

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