Unassociated Document


    
      
        Exhibit
10-37

      

      Astoria
Federal Savings and Loan Association

      Amended
and Restated

      Employment
Agreement with Executive Officer

      


      This
Amended and
Restated Employment Agreement (the "Agreement") is made and entered into
as of January 1, 2009 by and between Astoria
Federal Savings and Loan Association, a savings association
organized and operating under the federal laws of the United States and having
an office at One Astoria Federal Plaza, Lake Success, New York 11042-1085 (the
"Association") and, Monte N. Redman, an individual residing at 69
Third Avenue, Garden City, New York 11530,  (the
"Executive").

      


      Witnesseth:

      


      Whereas, the Executive currently
serves the Association in the capacity of President and Chief Operating Officer
and as President and Chief Operating Officer of the Association's savings and
loan holding company, Astoria
Financial Corporation, a publicly held business corporation organized and
operating pursuant to the laws of the State of Delaware (the "Company");
and

      


      Whereas, the Association desires
to assure for itself the continued availability of the Executive's services and
the ability of the Executive to perform such services with a minimum of personal
distraction in the event of a pending or threatened Change of Control (as
hereinafter defined); and

      


      Whereas, the Executive is willing
to continue to serve the Association on the terms and conditions hereinafter set
forth; and

      


      Whereas,
the Executive currently has an employment contract with the Association entered
into on January 1, 1996 (the “Initial Effective Date”), amended and restated on
January 1, 2000, and further amended as of August 15, 2007 (such agreement, as
amended, the “Prior Agreement”); and

      


      Whereas,
the Executive and the Association wish to further amend and modify the Prior
Agreement pursuant to Section 24 thereof for the purpose, among others, of
compliance with the applicable requirements of Section 409A of the Internal
Revenue Code of 1986 (the “Code”);

      


      Now,
Therefore, in consideration of the
premises and the mutual covenants and conditions hereinafter set forth, the
Association and the Executive amend and restate in its entirety the Employment
Agreement by and between the Association and the Executive as amended through
August 15, 2007 so as to provide as follows from and after the date
hereof:

       

      
        
          
          

        

        
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      Section 1. Employment.

      


      The
Association agrees to continue to employ the Executive, and the Executive hereby
agrees to such continued employment, during the period and upon the terms and
conditions set forth in this Agreement.

      


      Section 2. Employment Period; Remaining
Unexpired Employment Period.

      


      (a) The terms and conditions of this
Agreement shall be and remain in effect during the period of employment
established under this Section 2 (the "Employment Period"). The Employment
Period shall be for an initial term of three years beginning on the Initial
Effective Date and ending on the third anniversary date of the Effective Date,
plus such extensions, if any, as are provided by the Board of Directors of the
Association (the “Board”) as provided below. Prior to the first anniversary of
the date of this Agreement and on each anniversary date thereafter (each an
"Anniversary Date) the Board shall review the terms of this Agreement and the
Executive's performance of services hereunder and may, in the absence of
objection from the Executive, approve an extension of the Employment Period. In
such event, the Employment Period shall be extended to the third anniversary of
the relevant Anniversary Date.

      


      (b) For all purposes of this
Agreement, the term "Remaining Unexpired Employment Period" as of any date shall
mean the period beginning on such date and ending on the Anniversary Date on
which the Employment Period (as extended pursuant to Section 2(a) of this
Agreement) is then scheduled to expire.

      


      (c) Nothing in this Agreement shall
be deemed to prohibit the Association from terminating the Executive's
employment at any time during the Employment Period with or without notice for
any reason; provided, however, that the relative rights and obligations of the
Association and the Executive in the event of any such termination shall be
determined pursuant to this Agreement.

      


      Section 3. Duties.

      


      The Executive shall serve as
President and Chief Operating Officer of the Association, having such power,
authority and responsibility and performing such duties as are prescribed by or
pursuant to the By-Laws of the Association and as are customarily associated
with such position. The Executive shall devote his full business time and
attention (other than during weekends, holidays, approved vacation periods, and
periods of illness or approved leaves of absence) to the business and affairs of
the Association and shall use his best efforts to advance the interests of the
Association.

      


      Section 4. Cash
Compensation.

      


      In consideration for the services to
be rendered by the Executive hereunder, the Association shall pay to him a
salary at an initial annual rate of EIGHT HUNDRED TWENTY 

       

      
        
          
          

        

        
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        FIVE THOUSAND DOLLARS ($825,000), payable in approximately
equal installments in accordance with the Association's customary payroll
practices for senior officers. At least annually during the Employment Period,
the Board shall review the Executive's annual rate of salary and may, in its
discretion, approve an increase therein. In no event shall the Executive's
annual rate of salary under this Agreement in effect at a particular time be
reduced without his or her prior written consent and any such reduction in the
absence of such consent shall be a material breach of this Agreement. In
addition to salary, the Executive may receive other cash compensation from the
Association for services hereunder at such times, in such amounts and on such
terms and conditions as the Board may determine from time to time.

         

      

      Section
5. Employee Benefit
Plans and Programs.

      


      During the Employment Period, the
Executive shall be treated as an employee of the Association and shall be
entitled to participate in and receive benefits under any and all qualified or
non-qualified retirement, pension, savings, profit-sharing or stock bonus plans,
any and all group life, health (including hospitalization, medical and major
medical), dental, accident and long term disability insurance plans, and any
other employee benefit and compensation plans (including, but not limited to,
any incentive compensation plans or programs, stock option and appreciation
rights plans and restricted stock plans) as may from time to time be maintained
by, or cover employees of, the Association, in accordance with the terms and
conditions of such employee benefit plans and programs and compensation plans
and programs and consistent with the Association's customary
practices.

      


      Section 6. Indemnification and
Insurance.

      


      (a) During the Employment Period and
for a period of six (6) years thereafter, the Association shall cause the
Executive to be covered by and named as an insured under any policy or contract
of insurance obtained by it to insure its directors and officers against
personal liability for acts or omissions in connection with service as an
officer or director of the Association or service in other capacities at the
request of the Association. The coverage provided to the Executive pursuant to
this Section 6 shall be of the same scope and on the same terms and conditions
as the coverage (if any) provided to other officers or directors of the
Association.

      


      (b) To the maximum extent permitted
under applicable law, during the Employment Period and for a period of six (6)
years thereafter, the Association shall indemnify the Executive against, and
hold him harmless from any costs, liabilities, losses and exposures for acts or
omissions in connection with service as an officer or director of the
Association or service in other capacities at the request of the Association, to
the fullest extent and on the most favorable terms and conditions that similar
indemnification is offered to any director or officer of the Association or any
subsidiary or affiliate thereof.

       

      
        
          
          

        

        
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      Section
7. Other
Activities.

      


      (a) The Executive may serve as a
member of the boards of directors of such business, community and charitable
organizations as he may disclose to and as may be approved by the Board (which
approval shall not be unreasonably withheld); provided, however, that such
service shall not materially interfere with the performance of his duties under
this Agreement. The Executive may also engage in personal business and
investment activities which do not materially interfere with the performance of
his duties hereunder; provided, however, that such activities are not prohibited
under any code of conduct or investment or securities trading policy established
by the Association and generally applicable to all similarly situated
executives.

      


      (b) The Executive may also serve as
an officer or director of the Company on such terms and conditions as the
Association and the Company may mutually agree upon, and such service shall not
be deemed to materially interfere with the Executive's performance of his duties
hereunder or otherwise result in a material breach of this
Agreement.

      


      Section 8. Working Facilities and
Expenses.

      


      The Executive's principal place of
employment shall be at the Association's executive offices at the address first
above written, or at such other location within Queens County or Nassau County,
New York at which the Association shall maintain its principal executive
offices, or at such other location as the Association and the Executive may
mutually agree upon. The Association shall provide the Executive at his
principal place of employment with a private office, secretarial services and
other support services and facilities suitable to his or her position with the
Association and necessary or appropriate in connection with the performance of
his or her assigned duties under this Agreement. The Association shall provide
to the Executive for his or her exclusive use an automobile owned or leased by
the Association and appropriate to his position, to be used in the performance
of his or her duties hereunder, including commuting to and from his personal
residence. The Association shall (i) reimburse the Executive for all expenses
associated with his or her business use of the aforementioned automobile; (ii)
reimburse the Executive for his or her ordinary and necessary business expenses
incurred in the performance of his or her duties under this Agreement (including
but not limited to travel and entertainment expenses) that are excludible from
the Executive’s gross income for federal income tax purposes; (iii) reimburse
the Executive for fees for memberships in such clubs and organizations and such
other expenses as the Executive and the Association shall mutually agree are
necessary and appropriate for business purposes, in each case upon presentation
to the Association of an itemized account of such expenses in such form as the
Association may reasonably require, each such reimbursement payment to be made
promptly following receipt of the itemized account and in any event not later
than the last day of the calendar year following the calendar year in which the
expense was incurred.  The Executive shall be responsible for the
payment of any taxes on account of his personal use of the automobile provided
by the Association and on account of any other benefit provided
herein.

       

      
        
          
          

        

        
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      Section
9. Termination of
Employment with Severance Benefits.

      


      (a) The Executive shall be entitled
to the severance benefits described herein in the event that his employment with
the Association terminates during the Employment Period under any of the
following circumstances:

      


      (i) the Executive's voluntary
resignation from employment with the Association within six (6) months
following:

      


      (A) the
failure of the Board to appoint or re-appoint or elect or re-elect the Executive
to the office of President and Chief Operating Officer (or a more senior office)
of the Association;

      


      (B) if the Executive is a member of
the Board, the failure of the stockholders of the Association to elect or
re-elect the Executive to the Board or the failure of the Board (or the
nominating committee thereof) to nominate the Executive for such election or
re-election;

      


      (C) the expiration of a thirty (30)
day period following the date on which the Executive gives written notice to the
Association of its material failure, whether by amendment of the Association's
Charter or By-laws, action of the Board or the Association's stockholders or
otherwise, to vest in the Executive the functions, duties, or responsibilities
prescribed in Section 3 of this Agreement as of the date hereof, unless, during
such thirty (30) day period, the Association cures such failure in a manner
determined by the Executive, in his or her discretion, to be
satisfactory;

      


      (D) the expiration of a thirty (30)
day period following the date on which the Executive gives written notice to the
Association of its material breach of any term, condition or covenant contained
in this Agreement (including, without limitation, any reduction of the
Executive's rate of base salary in effect from time to time and any change in
the terms and conditions of any compensation or benefit program in which the
Executive participates which, either individually or together with other
changes, has a material adverse effect on the aggregate value of his total
compensation package), unless, during such thirty (30) day period, the
Association cures such failure in a manner determined by the Executive, in his
or her discretion, to be satisfactory; or

      


      (E) the relocation of the Executive's
principal place of employment, without his or her written consent, to a location
outside of Nassau County and Queens County, New York;

      


      (ii) the termination of the
Executive's employment with the Association for any other reason not described
in Section 10(a).

       

      
        
          
          

        

        
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      In such
event and subject to Section 27 of this Agreement, the Association shall provide
the benefits and pay to the Executive the amounts described in Section
9(b).

      


      (b) Upon the termination of the
Executive's employment with the Association under circumstances described in
Section 9(a) of this Agreement, the Association shall pay and provide to the
Executive (or, in the event of the Executive's death following the Executive's
termination of employment, to his or her estate):

      


      (i) his or her earned but unpaid
compensation (including, without limitation, all items which constitute wages
under Section 190.1 of the New York Labor Law and the payment of which is not
otherwise provided for under this Section 9(b)) as of the date of the
termination of his or her employment with the Association, such payment to be
made at the time and in the manner prescribed by law applicable to the payment
of wages but in any event not later than thirty (30) days after termination of
employment;

      


      (ii) the benefits, if any, to which
he or she is entitled as a former employee under the employee benefit plans and
programs and compensation plans and pro­grams maintained for the benefit of
the Association's officers and employees, including the annual bonus (if any) to
which he or she is entitled under any cash-based annual bonus or performance
compensation plan in effect for the year in which his or her termination occurs,
to be paid at the same time and on the terms and conditions (including but not
limited to achievement of performance goals) applicable under the relevant
plan;

      


      (iii) continued group life, health
(including hospitalization, medical and major medical), dental, accident and
long term disability insurance benefits, in addition to that provided pursuant
to Section 9(b)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for the
Executive, for the Remaining Unexpired Employment Period, coverage (including
any co-payments and deductibles, but excluding any premium sharing arrangements,
it being the intention of the parties to this Agreement that the premiums for
such insurance benefits shall be the sole cost and expense of the Association)
equivalent to the coverage to which he or she would have been entitled under
such plans (as in effect on the date of his or her termination of employment,
or, if his or her termination of employment occurs after a Change of Control, on
the date of such Change of Control, whichever benefits are greater), if he or
she had continued working for the Association during the Remaining Unexpired
Employment Period at the highest annual rate of salary or compensation, as
applicable, achieved during that portion of the Employ­ment Period which is
prior to the Executive's termination of employment with the
Association;

      


      (iv) thirty (30) days following the
Executive's termination of employment with the Association, a lump sum payment
in an amount representing an estimate of the salary that the Executive would
have earned if he or she had continued working for the Association during the
Remaining Unexpired Employment Period at the 

       

      
        
          
          

        

        
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        highest annual rate of
salary achieved during that portion of the Employment Period which is prior to
the Executive's termination of employment with the Association (the "Salary
Severance Payment"). The Salary Severance Payment shall be computed using the
following formula:

         

      

      SSP    =   
 BS x NY

      


      where:

      


      "SSP" is the amount of the Salary
Severance Payment, before the deduction of applicable federal, state and local
withholding taxes;

      


      "BS" is the highest annual rate of
salary achieved during that portion of the Employment Period which is prior to
the Executive's termination of employment with the Association;

      


      "NY" is the Remaining Unexpired
Employment Period expressed as a number of years (rounded, if such period is not
a whole number, to the next highest whole number).

      


      The
Salary Severance Payment shall be paid in lieu of all other payments of salary
provided for under this Agreement in respect of the period following any such
termination.

      


      (v) a lump sum payment (the "DB
Severance Payment") in an amount equal to the excess, if any, of:

      


      (A) the present value of the
aggregate benefits to which he or she would be entitled under any and all
qualified and non-qualified defined benefit pension plans maintained by, or
covering employees of, the Association, if he or she were 100% vested thereunder
and had continued working for the Association during the Remaining Unexpired
Employment Period, such benefits to be determined as of the date of termination
of employment by adding to the service actually recognized under such plans an
additional period equal to the Remaining Unexpired Employment Period and by
adding to the compensation recognized under such plans for the most recent year
recognized all amounts payable pursuant to Sections 9(b)(i), (iv), (vii), (viii)
and (ix) of this Agreement; over

      


      (B) the present value of the benefits
to which he or she is actually entitled under such defined benefit pension plans
as of the date of his or her termination;

      


      The DB Severance Payment shall be
computed using the following formula:

       

      
        
          
          

        

        
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      DBSP  
=    SEVLS - LS

      


      where:

      


      "DBSP" is the amount of the DB
Severance Payment, before the deduction of applicable federal, state and local
withholding taxes;

      


      "SEVLS" is the sum of the present
value of the defined benefit pension benefits that have been or would be accrued
by the Executive under all qualified and non-qualified defined benefit pension
plans of which the Association or any of its affiliates or subsidiaries are a
sponsor and in which the Executive is or, but for the completion of any service
requirement that would have been completed during the Remaining Unexpired
Employment Period, would be a participant utilizing the following
assumptions:

      


      (I) the executive is 100% vested in
the plans regardless of actual service,

      


      (II) the benefit to be valued shall
be a single life annuity with monthly payments due on the first of each month
and with a guaranteed payout of not less than 120 payments,

      


      (III) the calculation shall be made
utilizing the same mortality table and interest rate as would be utilized by the
plan on the date of termination as if the calculation were being made pursuant
to Section 417(e)(3) of the Code, as amended;

      


      (IV) for purpose of calculating the
Executive's monthly or annual benefit under the defined benefit plans,
additional service equal to the Remaining Unexpired Employment Period (rounded
up to the next whole year if such period is not a whole number when expressed in
years) shall be added to the Executive's actual service to calculate the amount
of the benefit; and

      


      (V) for purpose of calculating the
Executive's monthly or annual benefit under the defined benefit plans, the
following sums shall be added to the Executive's compensation recognized under
such plans for the most recent year recognized:

      


      (1) payments made pursuant to Section
9(b)(i);

      


      (2) the Salary Severance
Payment;

      


      (3) the Bonus Severance
Payment;

       

      
        
          
          

        

        
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      (4) the Option Surrender Payment;
and

      


      (5) the RRP Surrender
Payment.

      


      "LS" is the sum of the present value
of the defined benefit pension benefits that are vested benefits actually
accrued by the Executive under all qualified and non-qualified defined benefit
pension plans maintained by, or covering employees of, the Association or any of
its affiliates or subsidiaries in which the Executive is or, but for the
completion of any service requirement, would be a participant utilizing the
following assumptions:

      


      (I) the benefit to be valued shall be
a single life annuity with monthly payments due on the first day of each month
and with a guaranteed payout of not less than 120 payments, and

      


      (II) the
calculation shall be made utilizing the same mortality table and interest rate
as would be utilized by the plan on the date of termination as if the
calculation were being made pursuant to Section 417(e)(3) of the
Code;

      


      The DB
Severance Payment shall be converted into the same form, and paid at the same
time, and in the same manner, as benefits under the corresponding non-qualified
plan.

       

      (vi) a lump sum payment (the "Defined
Contribution Severance Payment") equal to the sum of:

      


      (A) an estimate of the additional
employer contributions to which he or she would have been entitled under any and
all qualified and non-qualified defined contribution pension plans, excluding
the employee stock ownership plans, maintained by, or covering employees of, the
Association or any of its affiliates or subsidiaries as if he or she were 100%
vested thereunder and had continued work­ing for the Association during the
Remaining Unexpired Employment Period (the "401K Severance Payment");
and

      


      (B) an estimate of the value of the
additional assets which would have been allocable to him or her through debt
service or otherwise under any and all qualified and non-qualified employee
stock ownership plans, maintained by, or covering employees of, the Association
or any of its affiliates or subsidiaries as if he or she were 100% vested
thereunder and had continued work­ing for the Association during the
Remaining Unexpired Employment Period, based on the fair market value of such
assets at termination of employment (the "ESOP Severance Payment").

      


      The Defined Contribution Severance
Payment shall be calculated as follows:

      


      DCSP   
=    401KSP + ESOPSP

       

      
        
          
          

        

        
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      where:

      


      "DCSP" is the amount of the Defined
Contribution Severance Payment, before the deduction of applicable federal,
state and local withholding taxes;

      


      "401KSP" is the amount of the 401K
Severance Payment, before the deduction of applicable federal, state and local
withholding taxes; and

      


      "ESOPSP" is the amount of the ESOP
Severance Payment, before the deduction of applicable federal, state and local
withholding taxes.

      


      The
401KSP shall be calculated as follows:

      


      401KSP   
=    (401KC x NY) +UVB

      


      where:

      


      "401KC" is the sum of the Association
Contributions as defined in the Association's Incentive Savings Plan or, if made
under another defined contribution pension plan other than an employee stock
ownership plan, the comparable contribution made for the benefit of the
Executive during the one year period which shall end on the date of his or her
termination of his or her employment with the Association; and

      


      "NY" is the Remaining Unexpired
Employment Period expressed as a number of years (rounded, if such period is not
a whole number, to the next highest whole number); and

      


      “UVB” is the actual balance credited
to the Executive's account under the applicable plan at the date of his or her
termination of employment that is not vested and does not become vested as a
consequence of such termination of employment.

      


      The ESOPSP shall be calculated as
follows:

      


      ESOPSP = (((ALL x FMV) + C) x NY) +
UVB

      


      where:

      


      “ALL" is the sum of the number of
shares of the Association's common stock or, if applicable, phantom shares of
such stock by whatever term it is described allocated to the Executive's
accounts under all qualified and non-qualified employee stock ownership plans
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      of
its affiliates or subsidiaries during or for the last complete plan year in
which the Executive participated in such plans and received such an allocation
whether the allocation occurred as a result of contributions made by the
Association, the payment by the Association or any of its affiliates or
subsidiaries of any loan payments under a leveraged employee stock ownership
plan, the allocation of forfeitures under the terms of such plan or as a result
of the use of cash or earnings allocated to the Executives account during such
plan year to make loan payments that result in share allocations, provided
however, that excluded shall be any shares or phantom shares allocated to the
Executive's account under any qualified and non-qualified employee stock
ownership plans maintained by the Association or any of its affiliates or
subsidiaries solely as a result of the termination of such plans, provided
further, that if the shares allocated are not shares of the Association's common
stock or phantom shares of such stock than shares of whatever securities are so
allocated shall be utilized, and provided further, that in the event that there
shall be any shares or phantom shares allocated during the then current plan
year or the last complete plan year to the Executive's account under any
qualified and non-qualified employee stock ownership plans maintained by the
Association or any of its affiliates or subsidiaries solely as a result of the
termination of such plans, the ALL shall be reduced (but not to an amount less
than zero (0)) by an amount calculated by multiplying the number of shares or
phantom shares allocated to the Executive's account solely as a result of the
termination of such plans times the FMV utilized to calculate the ESOPSP;

       

      "C" is the sum of all cash allocated
to the Executive's accounts under all qualified and non-qualified employee stock
ownership plans maintained by the Association during or for the last complete
plan year in which the Executive participated in such plans whether the
allocation occurred as a result of contributions made by the Association, the
payment by the Company or the Association of any loan payments under a leveraged
employee stock ownership plan or the allocation of forfeitures under the terms
of such plan during such plan year;

      


      "FMV" is the closing price of the
Association's common stock on The New York Stock Exchange (“NYSE”) or on
whatever other stock exchange or market such stock is publicly traded on the
date the Executive's employment terminates or, if such day is not a day on which
such securities are traded, on the most recent preceding trading day on which a
trade occurs, provided however that if the security allocated to the Executive's
account during the last completed plan year is other than the Association's
common stock the closing price of such security on the date the Executive's
employment terminates shall be utilized.

      


      "NY" is the Remaining Unexpired
Employment Period expressed as a number of years (rounded, if such period is not
a whole number, to the next highest whole number); and

       

      
        
          
          

        

        
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      “UVB” is the actual balance credited
to the Executive's account under the applicable plan at the date of his or her
termination of employment that is not vested and does not become vested as a
consequence of such termination of employment.

      


      The
Defined Contribution Severance Payment shall be converted into the same form,
and paid at the same time, and in the same manner, as benefits under the
corresponding non-qualified plan. and, if there is no such non-qualified plan in
effect on the date of this Agreement, in a lump sum.

       

      (vii) thirty (30) days following the
Executive's termination of employment with the Association, the Association
shall make a lump sum payment to the Executive in an amount equal to the
estimated potential annual bonuses or incentive compensation that the Executive
could have earned if the Executive had continued working for the Association
during the Unexpired Employment Period at the highest annual rate of salary
achieved during that portion of the Employment Period which is prior to the
Executive's termination of employment with the Association (the "Bonus Severance
Payment"). The Bonus Severance Payment shall be computed using the following
formula:

      


      BSP =  (BS x TIO x AP x
NY)

      


      where:

      


      "BSP" is the amount of the Bonus
Severance Payment, before the deduction of applicable federal, state and local
withholding taxes;

      


      "BS" is the highest annual rate of
salary achieved during that portion of the Employment Period which is prior to
the Executive's termination of employment with the Association;

      


      "TIO" is the highest target incentive
opportunity established by the Compensation Committee of the Board for the
Executive pursuant to the Astoria Financial Corporation Executive Officer Annual
Incentive Plan during that portion of the Employment Period which is prior to
the Executive's termination of employment with the Association;

      


      "AP" is the highest award percentage
available to the Executive with respect to the financial performance of the
Association (expressed as a percentage of the TIO) established by the
Compensation Committee of the Board for the Executive pursuant to the Astoria
Financial Corporation Executive Officer Annual Incentive Plan during the period
during that portion of the Employment Period which is prior to the Executive's
termination of employment with the Association; and

       

      
        
          
          

        

        
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      "NY" is the Remaining Unexpired
Employment Period expressed as a number of years (rounded, if such period is not
a whole number, to the next highest whole number).

      


      (viii) at the election of the
Association made within thirty (30) days fol­lowing the Executive's
termination of employment with the Association, upon the surrender of options or
appreciation rights issued to the Executive under any stock option and
appreciation rights plan or program maintained by, or covering employees of, the
Association, a lump sum payment (the "Option Surrender Payment"). The Option
Surrender Payment shall be calculated as follows:

      


      OSP =  (FMV - EP) x
N

      


      where:

      


      "OSP" is the amount of the Option
Surrender Payment, before the deduction of applicable federal, state and local
withholding taxes;

      


      "FMV" is the closing price of the
Association's common stock on the NYSE, or on whatever other stock exchange or
market such stock is publicly traded, on the date the Executive's employment
terminates or, if such day is not a day on which such securities are traded, on
the preceding trading day on which a trade occurs, provided however that if the
option or stock appreciation right is for a security other than the
Association's common stock, the fair market value of a share of stock of the
same class as the stock subject to the option or appreciation right, determined
as of the date of termination of employment shall be utilized;

      


      "EP" is the exer­cise price per
share for such option or appreciation right, as specified in or under the
relevant plan or program; and

      


      "N" is the number of shares with
respect to which options or appreciation rights are being
surrendered.

      


      For
purposes of determining the Option Severance Payment and for purposes of
determining the Executive's right following his or her termination of employment
with the Association to exercise any options or appreciation rights not
surrendered pursuant hereto, the Executive shall be deemed fully vested in all
options and appreciation rights under any stock option or appreciation rights
plan or program maintained by, or covering employees of, the Association, even
if he or she is not vested under such plan or program;

      


      (ix) at the election of the
Association made within thirty (30) days following the Executive's termination
of employment with the Association, upon the surrender of any shares awarded to
the Executive under any restricted stock plan maintained by, or covering
employees of, the Association, a lump sum payment (the "RRP Surrender Payment")
The RRP Surrender Payment shall be calculated as follows:

       

      
        
          
          

        

        
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      RSP =  FMV x N

      


      where:

      


      "RSP" is the amount of the RRP
Surrender Payment, before the deduction of applicable federal, state and local
withholding taxes;

      


      "FMV" is the closing price of the
Association's common stock on the NYSE, or on whatever other stock exchange or
market such stock is publicly traded, on the date the Executive's employment
terminates or, if such day is not a day on which such securities are traded, on
the preceding trading day on which a trade occurs, provided however that if the
restricted stock is a security other than the Association's common stock, the
fair market value of a share of stock of the same class as the stock granted
under such plan, determined as of the date of termination of employment shall be
utilized; and

      


      "N" is the number of shares which are
being surrendered.

      


      For
purposes of determining the RRP Surrender Payment and for purposes of
determining the Executive's right following his or her termination of employment
with the Association to any stock not surrendered pursuant hereto, the Executive
shall be deemed fully vested in all shares awarded under any restricted stock
plan maintained by, or covering employees of, the Association, even if he or she
is not vested under such plan provided, however, that
any shares of restricted stock for which vesting is conditioned on the
attainment of one or more performance goals, with the intent that the award of
such shares should satisfy the requirements of qualified performance-based
compensation (within the meaning of Treasury Regulation section 1.162-27(e)),
shall vest only in accordance with the terms of the associated plan and award,
and the Company’s right to elect to purchase such shares pursuant to this
Section 9(b)(ix) shall not expire until thirty (30) days after such time as the
vesting of such shares is no longer conditioned on the attainment of any such
performance goal..

      


      The
Salary Severance Payment, the DB Severance Payment, the Defined Contribution
Severance Payment, the Bonus Severance Payment, the Option Surrender Payment and
the RRP Surrender Payment shall be computed at the expense of the Association by
an attorney of the firm of Thacher Proffitt & Wood, Two World Financial
Center, New York, New York 10281 or, if such firm is unavailable or unwilling to
perform such calculation, by a firm of independent certified public accountants
selected by the Executive and reasonably satisfactory to the Association (the
"Computation Advisor"). The determination of the Computation Advisor as to the
amount of such payments shall be final and binding in the absence of manifest
error.

      


      The
Association and the Executive hereby stipulate that the damages which may be
incurred by the Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated 

       

      
        
          
          

        

        
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      by
this Section 9(b) constitute reasonable damages under the circumstances and
shall be payable without any requirement of proof of actual damage and without
regard to the Executive's efforts, if any, to mitigate damages. The Association
and the Executive further agree that the Association may condition the payment
of the Salary Severance Payment, the DB Severance Payment, the Defined
Contribution Severance Payment, the Bonus Severance Payment, the Option
Surrender Payment and the RRP Surrender Payment on the receipt of the
Executive's resignation from any and all positions which he or she holds as an
officer, director or committee member with respect to the Association, the
Company or any subsidiary or affiliate of either of them; provided, however,
that such election will only be effective if the Association notifies the
Executive of its election in writing within five (5) days of the Executive's
termination of employment.

       

      Section 10. Termination without
Additional Association Liability.

      


      (a) In the event that the Executive's
employment with the Association shall terminate during the Employment Period on
account of:

      


      (i) the
discharge of the Executive for Cause, which, for purposes of this Agreement
shall mean personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease and desist order, or any material
breach of this Agreement, in each case measured against standards generally
prevailing at the relevant time in the savings and community banking
industry;

      


      (ii) the Executive's voluntary
resignation from employment with the Association for reasons other than those
specified in Section 9(a) or 11(b);

      


      (iii) the Executive's
death;

      


      (iv) a determination that the
Executive is Disabled;

      


      then the
Association, except as otherwise specifically provided herein, shall have no
further obligations under this Agreement, other than the payment to the
Executive (or, in the event of his or her death, to his or her estate) of the
amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the
“Standard Termination Entitlements”).

      


      (b) The cessation of employment of
the Executive shall not be deemed to be for Cause within the meaning of Section
10(a)(i) unless and until:

      


      (i) the Board, by the affirmative
vote of 75% of its entire membership, determines that the Executive is guilty of
the conduct described in Section 10(a)(i) above measured against standards
generally prevailing at the relevant time in the savings and community banking
industry;

       

      
        
          
          

        

        
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      (ii) prior to the vote contemplated
by Section 10(b)(i), the Board shall provide the Executive with notice of the
Association's intent to discharge the Executive for Cause, detailing with
particularity the facts and circumstances which are alleged to constitute Cause
(the "Notice of Intent to Discharge"); and

      


      (iii) after the giving of the Notice
of Intent to Discharge and before the taking of the vote contemplated by Section
10(b)(i), the Executive, together with the Executive's legal counsel, if the
Executive so desires, are afforded a reasonable opportunity to make both written
and oral presentations before the Board for the purpose of refuting the alleged
grounds for Cause for the Executive's discharge; and

      


      (iv) after the vote contemplated by
Section 10(b)(i), the Association has furnished to the Executive a notice of
termination which shall specify the effective date of the Executive's
termination of employment (which shall in no event be earlier than the date on
which such notice is deemed given) and include a copy of a resolution or
resolutions adopted by the Board, certified by its corporate secretary,
authorizing the termination of the Executive's employment with Cause and stating
with particularity the facts and circumstances found to constitute Cause for the
Executive's discharge (the "Final Discharge Notice").

      


      If the
Executive, during the ninety (90) day period commencing on the delivery by the
Association to the Executive of the Notice of Intent to Discharge specified in
Section 10(b)(ii), resigns his or her employment with the Association prior to
the delivery to the Executive by the Association of the Final Discharge Notice
specified in Section 10(b)(iv), than the cessation of employment of the
Executive shall be deemed to be for Cause.

      


      Following
the giving of a Notice of Intent to Discharge, the Bank may temporarily suspend
the Executive's duties and authority and, in such event, may also suspend the
payment of salary and other cash compensation, but not the Executive's
participation in retirement, insurance and other employee benefit plans. If the
Executive is not discharged or is discharged without Cause within forty-five
(45) days after the giving of a Notice of Intent to Discharge, payments of
salary and cash compensation shall resume, and all payments withheld during the
period of suspension shall be promptly restored. If the Executive is discharged
with Cause not later than forty-five (45) days after the giving of the Notice of
Intent to Discharge, all payments withheld during the period of suspension shall
be deemed forfeited and shall not be included in the Standard Termination
Entitlements. If a Final Discharge Notice is given later than forty-five (45)
days, but sooner than ninety (90) days, after the giving of the Notice of Intent
to Discharge, all payments made to the Executive during the period beginning
with the giving of the Notice of Intent to Discharge and ending with the
Executive's discharge with Cause shall be retained by the Executive and shall
not be applied to offset the Standard Termination Entitlements. If the Bank does
not give a Final Discharge Notice to the Executive within ninety (90) days after
giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall
be deemed withdrawn and any future action to discharge the Executive with Cause
shall require the giving of a new Notice of Intent to Discharge. If the
Executive resigns pursuant to Section 10(b), the Executive shall 

       

      
        
          
          

        

        
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      forfeit his or her right to
suspended amounts that have not been restored as of the date of the Executive's
resignation or notice of resignation, whichever is earlier.

       

      (c) The Association may terminate the
Executive's employment on the basis that the Executive is Disabled during the
Employment Period upon a determination by the Board, by the affirmative vote of
75% of its entire membership, acting in reliance on the written advice of a
medical professional acceptable to it, that the Executive is suffering from a
physical or mental impairment which, at the date of the determination, has
prevented the Executive from performing the Executive's assigned duties on a
substantially full-time basis for a period of at least one hundred and eighty
(180) days during the period of one (1) year ending with the date of the
determination or is likely to result in death or prevent the Executive from
performing the Executive's assigned duties on a substantially full-time basis
for a period of at least one hundred and eighty (180) days during the period of
one (1) year beginning with the date of the determination. In such
event:

      


      (A) The Association shall pay and
provide the benefits provided the Standard Termination Entitlements to the
Executive;

      


      (B) In addition to the Standard
Termination Entitlements, the Association shall continue to pay to the Executive
the Executive's base salary, at the annual rate in effect for the Executive
immediately prior to the termination of the Executive's employment, during a
period ending on the earliest of:

      


      (I) the expiration of one hundred and
eighty (180) days after the date of termination of the Executive's
employment;

      


      (II) the date on which long-term
disability insurance benefits are first payable to the Executive under any
long-term disability insurance plan covering the Executive; or

      


      (III) the date of the Executive's
death.

      


      A
termination of employment due to Disability under this Section shall be effected
by a notice of termination given to the Executive by the Association and shall
take effect on the later of the effective date of termination specified in such
notice or, if no such date is specified, the date on which the notice of
termination is deemed given to the Executive.

      


      Section 11. Termination Upon or
Following a Change of Control.

      


      (a) A Change of Control of the
Association ("Change of Control") shall be deemed to have occurred upon the
happening of any of the following events:

      


      (i) the consummation of a transaction
that results in the reorganization, merger or consolidation of the Association
with one or more other persons, other than a transaction following
which:

       

      
        
          
          

        

        
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      (A) at least 51% of the equity
ownership interests of the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) in
substantially the same relative proportions by persons who, immediately prior to
such transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the outstanding equity
ownership interests in the Association; and

      


      (B) at least 51% 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) in substantially the same relative
proportions by persons who, immediately prior to such transaction, beneficially
owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at
least 51 % of the
securities entitled to vote generally in the election of directors of the
Association;

      


      (ii) the acquisition of all or
substantially all of the assets of the Association or beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of the outstanding securities of the Association entitled to vote generally
in the election of directors by any person or by any persons acting in
concert;

      


      (iii) a complete liquidation or
dissolution of the Association, or approval by the stockholders of the
Association of a plan for such liquidation or dissolution;

      


      (iv) the occurrence of any event if,
immediately following such event, at least 50% of the members of the Board do
not belong to any of the following groups:

      


      (A) individuals who were members of
the Board on the Initial Effective Date; or

      


      (B) individuals who first became
members of the Board after the Initial Effective Date either:

      


      (I) upon election to serve as a
member of the Board by affirmative vote of three-quarters of the members of such
Board, or of a nominating committee thereof, in office at the time of such first
election; or

      


      (II) upon election by the
stockholders of the Association to serve as a member of the Board, but only if
nominated for election by affirmative vote of three-quarters of the members of
the Board, or of a 

       

      
        
          
          

        

        
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      nominating
committee thereof, in office at the time of such first nomination;

       

      provided,
however, that such individual's election or nomination did not result from an
actual or threatened election contest (within the meaning of Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents (within the meaning of Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) other than by or on behalf of
the Board; or

      


      (v) any event which would be
described in Section 11(a)(i), (ii), (iii) or (iv) if the term "Company" were
substituted for the term "Association" therein or the term "Board of Directors
of the Company" were substituted for the term "Board".

      


      In no
event, however, shall a Change of Control be deemed to have occurred as a result
of any acquisition of securities or assets of the Association, the Company, or
an affiliate or subsidiary of either of them, by the Association, the Company,
or a subsidiary of either of them, or by any employee benefit plan maintained by
any of them. For purposes of this Section 11 (a), the term "person" shall have
the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange
Act.

      


      (b) In the event of a Change of
Control, the Executive shall be entitled to the payments and benefits
contemplated by Section 9(b) in the event of his or her termination employment
with the Association under any of the circumstances described in Section 9(a) of
this Agreement or under any of the following circumstances:

      


      (i) resignation, voluntary or
otherwise, by the Executive at any time during the Employment Period within six
(6) months following his or her demotion, loss of title, office or significant
authority or responsibility or following any reduction in any element of his or
her package of compensation and benefits;

      


      (ii) resignation, voluntary or
otherwise, by the Executive at any time during the Employment Period within six
(6) months following any relocation of his or her principal place of employment
or any change in working conditions at such principal place of employment which
the Executive, in his or her reasonable discretion, determines to be
embarrassing, derogatory or otherwise adverse;

      


      (iii) resignation, voluntary or
otherwise, by the Executive at any time during the Employment Period within six
(6) months following the failure of any successor to the Association in the
Change of Control to include the Executive in any compensation or benefit
program maintained by it or covering any of its executive officers, unless the
Executive is already covered by a substantially similar plan of the Association
which is at least as favorable to him or her; or

       

      
        
          
          

        

        
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      (iv) resignation, voluntary or
otherwise, for any reason whatsoever during the Employment Period within six
months following the effective date of the Change of Control.

      


      Section 12. Covenant Not To
Compete.

      


      The Executive hereby covenants and
agrees that, in the event of his or her termination of employment with the
Association prior to the expiration of the Employment Period, for a period of
one (1) year following the date of his or her termination of employment with the
Association (or, if less, for the Remaining Unexpired Employment Period), the
Executive shall not, without the written consent of the Association, 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 in any city, town or county in which the Association or the
Company has an office or has filed an application for regulatory approval to
establish an office, determined as of the effective date of the Executive's
termination of employment; provided, however, that this Section 12
shall not apply if the Executive's employment is terminated for the reasons set
forth in Section 9(a); and provided, further, that if the Executive's
employment shall be terminated on account of Disability as provided in Section
10(c) of this Agreement, this Section 12 shall not prevent the Executive from
accepting any position or performing any services if:

      


      (a) he or she first offers, by
written notice, to accept a similar position with or perform similar services
for the Association on substantially the same terms and conditions
and

      


      (b) the Association declines to
accept such offer within ten (10) days after such notice is given.

      


      Section 13. Confidentiality.

      


      Unless the Executive obtains the
prior written consent of the Association, the Executive shall keep confidential
and shall refrain from using for the benefit of the Executive or any person or
entity other than the Association, any entity which is a subsidiary of the
Association or any entity which the Association is a subsidiary of, any material
document or information obtained from the Association, or from its affiliates or
subsidiaries, in the course of the Executive's 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 or her own) until the same ceases to be material (or becomes so
ascertainable or available); provided, however that nothing in this
Section 13 shall prevent the Executive, with or without the Association'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.

       

      
        
          
          

        

        
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      Section 14. Solicitation.

      


      The
Executive hereby covenants and agrees that, for a period of one (1) year
following the Executive's termination of employment with the Association, he or
she shall not, without the written consent of the Association, 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 Association, the Company or any
affiliate or subsidiary of ether of them, 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 Association, savings and loan holding company,
or other institution engaged in the business of accepting deposits and making
loans, doing business in any city, town or county in which the Association or
the Company has an office or has filed an application for regulatory approval to
establish an office;

      


      (b) provide any information, advice
or recommendation with respect to any such officer or employee 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 in any city, town or county in which
the Association or the Company has an office or has filed an application for
regulatory approval to establish an office 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 Association, the Company, or any
affiliate or subsidiary of either of them, to terminate his or her employment
and accept employment, become affiliated with or provide services for
compensation in any capacity whatsoever to any such 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; 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 Association, the Company, or any affiliate or subsidiary of
either of them to terminate an existing business or commercial relationship with
the Association, the Company, or any affiliate or subsidiary of either of
them.

      


      Section 15. No Effect on Employee
Benefit Plans or Programs.

      


      The termination of the Executive's
employment during the term of this Agreement or thereafter, whether by the
Association or by the Executive, shall have no effect on the rights and
obligations of the parties hereto under the Association's qualified or
non-qualified retirement, pension, savings, thrift, profit-sharing or stock
bonus plans, group life, health (including hospitalization, medical and major
medical), dental, accident and long term disability 

       

      
        
          
          

        

        
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      insurance plans or such other
employee benefit plans or programs, or compensation plans or programs, as may be
maintained by, or cover employees of, the Association from time to time.

       

      Section 16. Successors and
Assigns.

      


      This Agreement will inure to the
benefit of and be binding upon the Executive, his or her legal representatives
and testate or intestate distributees, and the Association and its successors
and assigns, including any successor by merger or consolidation or a statutory
receiver or any other person or firm or corporation to which all or
substantially all of the assets and business of the Association may be sold or
otherwise transferred. Failure of the Association to obtain from any successor
its express written assumption of the Association's obligations under this
Agreement at least sixty (60) days in advance of the scheduled effective date of
any such succession shall be deemed a material breach of this
Agreement.

      


      Section 17. Notices.

      


      Any communication required or
permitted to be given under this Agreement, including any notice, direction,
designation, consent, instruction, objection or waiver, shall be in writing and
shall be deemed to have been given at such time as it is delivered personally,
or five (5) days after mailing if mailed, postage prepaid, by registered or
certified mail, return receipt requested, addressed to such party at the address
listed below or at such other address as one such party may by written notice
specify to the other party:

      


      If to the
Executive:

      


      Mont N. Redman

      69 Third Street

      Garden City, New York
11530

      


      If to the
Association:

      


      Astoria Federal Savings and Loan
Association

      One Astoria Federal
Plaza

      Lake Success, New York
11042-1085

      


      Attention: General
Counsel

      


      with a
copy to:

      


      Thacher Proffitt &
Wood

      Two World Financial
Center

      New York, New York 10281

      


      Attention:  W. Edward Bright,
Esq.

       

      
        
          
          

        

        
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      Section 18. Indemnification for
Attorneys' Fees.

      


      The Association shall indemnify, hold
harmless and defend the Executive against rea­sonable costs, including legal
fees, incurred by him or her in connection with or arising out of any action,
suit or proceeding in which he or she may be involved, as a result of his or her
efforts, in good faith, to defend or enforce the terms of this Agreement;
provided, however, that in the case of any
action, suit or proceeding instituted prior to a Change of Control, the
Executive shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Association's obligations hereunder shall be
conclusive evidence of the Executive's entitlement to indemnification hereunder,
and any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise. Any payment or reimbursement to effect such
indemnification shall be made no later than the last day of the calendar year
following the calendar year in which the Executive incurs the expense or, if
later, within sixty (60) days after the settlement or resolution that gives rise
to the Executive’s right to reimbursement; provided, however, that the Executive
shall have submitted to the Company documentation supporting such expenses at
such time and in such manner as the Company may reasonably require.

       

      Section 19. Severability.

      


      A determination that any provision of
this Agreement is invalid or unenforceable shall not affect the validity or
enforceability of any other provision hereof.

      


      Section 20. Waiver.

      


      Failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant, or condition. A waiver of any provision
of this Agreement must be made in writing, designated as a waiver, and signed by
the party against whom its enforcement is sought. Any waiver or relinquishment
of any right or power hereunder at any one or more times shall not be deemed a
waiver or relinquishment of such right or power at any other time or
times.

      


      Section 21. Counterparts.

      


      This Agreement may be executed in two
(2) or more counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same Agreement.

      


      Section 22. Governing
Law.

      


      This Agreement shall be governed by
and construed and enforced in accordance with the federal laws of the United
States and, to the extent that federal law is inapplicable, in accordance with
the laws of the State of New York applicable to contracts entered into and to be
performed entirely within the State of New York.

       

      
        
          
          

        

        
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      Section 23. Headings and
Construction.

      


      The headings of sections in this
Agreement are for convenience of reference only and are not intended to qualify
the meaning of any section. Any reference to a section number shall refer to a
section of this Agreement, unless otherwise stated.

      


      Section 24. Entire Agreement:
Modifications.

      


      This instrument contains the entire
agreement of the parties relating to the subject matter hereof, and supersedes
in its entirety any and all prior agreements, understandings or
rep­resentations relating to the subject matter hereof. No modifications of
this Agreement shall be valid unless made in writing and signed by the parties
hereto; provided, however, that this Agreement shall be subject to amendment in
the future in such manner as the Association shall reasonably deem necessary or
appropriate to effect compliance with Section 409A of the Code and the
regulations thereunder, and to avoid the imposition of penalties and additional
taxes under Section 409A of the Code, it being the express intent of the parties
that any such amendment shall not diminish the economic benefit of the Agreement
to the Executive on a present value basis.

      


      Section 25. Survival.

      


      The
provisions of any sections of this Agreement which by its terms contemplates
performance after the expiration or termination of this Agreement (including,
but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 26,
27, 28, 30 and 31) shall survive the expiration of the Employment Period or
termination of this Agreement.

      


      Section 26. Equitable
Remedies.

      


      The Association and the Executive
hereby stipulate that money damages are an inadequate remedy for violations of
Sections 6(a), 12, 13 or 14 of this Agreement and agree that equitable remedies,
including, without limitations, the remedies of specific performance and
injunctive relief, shall be available with respect to the enforcement of such
provisions.

      


      Section 27. Required Regulatory
Provisions.

      


      The following provisions are included
for the purposes of complying with various laws, rules and regulations
applicable to the Association:

      


      (a) Notwithstanding anything herein
contained to the contrary, in no event shall the aggregate amount of
compensation payable to the Executive pursuant to Section 9(b) of this Agreement
(exclusive of amounts described in Section 9(b)(i), (ii), (viii) or (ix)) exceed
three times the Executive's average annual total compensation for the last five
consecutive calendar years to end prior to the Executive's termination of


       

      
        
          
          

        

        
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      employment with
the Association (or for the Executive's entire period of employment with the
Association if less than five calendar years).

       

      (b) Notwithstanding anything herein
contained to the contrary, any payments to the Executive by the Association,
whether pursuant to this Agreement or otherwise, are subject to and conditioned
upon their compliance with Section 18(k) of the Federal Deposit Insurance Act
("FDI Act"), 12 U.S.C. §1828(k), and any regulations promulgated
thereunder.

      


      (c) Notwithstanding anything herein
contained to the contrary, if the Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the affairs of the
Association pursuant to a notice served under Section 8(e)(3) or 8(g)(1) of the
FDI Act, 12 U.S.C. §1818(e)(3) or 1818(g)(1), the Association's obligations
under this Agreement shall be suspended as of the date of service of such
notice, unless stayed by appropriate proceedings.  If the charges in
such notice are dismissed, the Association, in its discretion, may (i) pay to
the Executive all or part of the compensation withheld while the Association's
obligations hereunder were suspended and (ii) reinstate, in whole or in part,
any of the obligations which were suspended.

      


      (d) Notwithstanding anything herein
contained to the contrary, if the Executive is removed and/or
permanently  prohibited from participating in the conduct of the
Association's affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the
FDI Act, 12 U.S.C. §1818(e)(4) or (g)(1), all prospective obligations of the
Association under this Agreement shall terminate as of the effective date of the
order, but vested rights and obligations of the Association and the Executive
shall not be affected.

      


      (e) Notwithstanding anything herein
contained to the contrary, if the Association is in default (within the meaning
of Section 3(x)(1) of the FDI Act, 12 U.S.C. §1813(x)(1), all prospective
obligations of the Association under this Agreement shall terminate as of the
date of default, but vested rights and obligations of the Association and the
Executive shall not be affected.

      


      (f) Notwithstanding anything herein
contained to the contrary, all prospective obligations of the Association
hereunder shall be terminated, except to the extent that a continuation of this
Agreement is necessary for the continued operation of the
Association:  (i) by the Director of the Office of Thrift Supervision
("OTS") or his or her designee or the Federal Deposit Insurance Corporation
("FDIC"), at the time the FDIC enters into an agreement to provide assistance to
or on behalf of the Association under the authority contained in Section 13(c)
of the FDI Act, 12 U.S.C. §1823(c); (ii) by the Director of the OTS or his or
her designee at the time such Director or designee approves a supervisory merger
to resolve problems related to the operation of the Association or when the
Association is determined by such Director to be in an unsafe or unsound
condition.  The vested rights and obligations of the parties shall not
be affected.

       

      
        
          
          

        

        
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      If and to
the extent that any of the foregoing provisions shall cease to be required or by
applicable law, rule or regulation, the same shall become inoperative as though
eliminated by formal amendment of this Agreement.

      


      Section 28. No Offset or Recoupment; No
Attachment.

      


      The Association's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations under this Agreement shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Association or any of its affiliates or subsidiaries may have against the
Executive. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such amounts shall
not be reduced whether or not the Executive obtains other employment. Except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation, or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to affect any such action shall be null, void, and of no
effect.

      


      Section 29. Compliance with Section 409A of the
Code.

       

      The
Executive and the Association acknowledge that each of the payments and benefits
promised to the Executive under this Agreement must either comply with the
requirements of Section 409A of the Code ("Section 409A") and the regulations
thereunder or qualify for an exception from compliance.  To that end,
the Executive and the Company agree that

       

      (a) the
insurance benefits provided in section 6(a) and the indemnification provided in
section 6(b) are intended to be excepted from compliance with Section 409A
pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and
indemnification against claims based on acts or omissions as a service
provider;

       

      (b) the
expense reimbursements described in Section 8 and legal fee reimbursements
described in Section 18 are intended to satisfy the requirements for a
"reimbursement plan" described in Treasury Regulation section
1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such
requirements;

       

      (c) the
payment described in Section 9(b)(i) is intended to be excepted from compliance
with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as
payment made pursuant to the Company’s customary payment timing
arrangement;

       

      (d) the
benefits and payments described in Section 9(b)(ii) are expected to comply with
or be excepted from compliance with Section 409A on their own
terms;

       

      
        
          
          

        

        
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      (e) the
welfare benefits provided in kind under section 9(b)(iii) are intended to be
excepted from compliance with Section 409A as welfare benefits pursuant to
Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in
gross income; and

       

      (f) the
benefits and payments on a disability described in Section 10(c) are expected to
be excepted from compliance with Section 409A as “disability pay” pursuant to
Treasury Regulation section 1.409A-1(a)(5).

       

      In the
case of a payment that is not excepted from compliance with Section 409A, and
that is not otherwise designated to be paid immediately upon a permissible
payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the
payment shall not be made prior to, and shall, if necessary, be deferred (with
interest at the annual rate of 6%, compounded monthly from the date of the
Executive’s termination of employment to the date of actual payment) to and paid
on the later of the date sixty (60) days after the Executive’s earliest
separation from service (within the meaning of Treasury Regulation Section
1.409A-1(h)) and, if the Executive is a specified employee (within the meaning
of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation
from service, the first day of the seventh month following the Executive’s
separation from service.  Each amount payable under this plan that is
required to be deferred beyond the Executive’s separation from service, shall be
deposited on the date on which, but for such deferral, the Association would
have paid such amount to the Executive, in a grantor trust which meets the
requirements of Revenue Procedure 92-65 (as amended or superseded from time to
time), the trustee of which shall be a financial institution selected by the
Association with the approval of the Executive (which approval shall not be
unreasonably withheld or delayed), pursuant to a trust agreement the terms of
which are approved by the Executive (which approval shall not be unreasonably
withheld or delayed) (the “Rabbi Trust”), and payments made shall include
earnings on the investments made with the assets of the Rabbi Trust, which
investments shall consist of short-term investment grade fixed income securities
or units of interest in mutual funds or other pooled investment vehicles
designed to invest primarily in such securities.  Furthermore, this
Agreement shall be construed and administered in such manner as shall be
necessary to effect compliance with Section  409A.

       

      Section
30. Compliance with Section
280G(e) of the Code.

       

      In the event the Company or the
Association issues any debt or equity to the United States Treasury ("UST")
pursuant to the Capital Purchase Program (the "CPP") implemented under the
Emergency Economic Stabilization Act of 2008 ("EESA"), the following provisions
shall take precedence over any contrary provisions of this Agreement or any
other compensation or benefit plan, program, agreement or arrangement in which
the Executive participates:

       

      (a) The Executive shall repay to the
Association any bonus or incentive compensation paid to the Executive while (i)
the Executive is a senior executive officer (within the meaning 31 C.F.R Part 30
("Senior Executive Officer") and (ii) the UST holds any debt or equity interest
in the Company or the Association acquired under the CPP (such Period the “CPP
Compliance Period”) if and to the extent that such bonus 

       

      
        
          
          

        

        
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      or incentive compensation was paid on the basis of a statement of
earnings, gains, or other criteria (each, a "Performance Criteria," and in the
aggregate, "Performance Criteria") that are later proven to be materially
inaccurate.  A Performance Criterion shall be proven to be materially
inaccurate if so determined by a court of competent jurisdiction or in the
written opinion of the Computation Advisor or, if the Computation Advisor is
unable to provide the determination, an independent attorney or firm of
certified public accountants selected by the Association and approved by the
Executive (which approval shall not be unreasonably withheld or delayed), which
determination shall both state the accurate Performance Criterion and that the
difference between the accurate Performance Criterion and the Performance
Criterion on which the payment was based is material (the
"Determination").  Upon receipt of a Determination, the Association
may supply to the Executive a copy of the Determination, a computation of the
bonus or other incentive compensation that would have been payable on the basis
of the accurate Performance Criterion set forth in the Determination (the
"Determination Amount") and a written demand for repayment of the amount (if
any) by which the bonus or incentive compensation actually
paid  exceeded the Determination Amount.

       

      (b) (i) If the Executive’s employment
terminates in an “applicable severance from employment” (within the meaning of
31 C.F.R.Code Part 30) while (A) the Executive is a Senior Executive Officer and
(B) the UST holds any debt or equity interest in the Company or the Association
acquired under the CPP, then payments to the Executive that are contingent on
such applicable severance from employment and are designated to be paid during
the CPP Compliance Period shall be limited, if necessary, to the maximum amount
which may be paid without causing any amount paid to be an "excess parachute
payment" within the meaning of section 280G(b)(1) of the Code, as modified by
section 280G(e) of the Code, referred to as a “golden Parachute Payment” under
31 C.F.R Part 30 (the "Maximum Payment Amount").  Any reduction in
payments required to achieve such limit shall be applied to all payments
otherwise due hereunder in the reverse chronological order of their payment
dates, and where multiple payments are due on the same date, the reduction shall
be apportioned ratably among the affected payments.  The required
reduction (if any) shall be determined in writing by the Computation Advisor or,
if the Computation Advisor is unable to provide the determination, by an
independent attorney or firm of certified public accountants selected by the
Association and approved by the Executive (which approval shall not be
unreasonably withheld or delayed).

      


      (ii) To
the extent not prohibited by law, the aggregate amount by which payments
designated to be paid during the CPP Compliance Period are reduced pursuant to
section 30(b)(i) (the "Unpaid Amount") shall be delayed to and shall be paid on
the first business day following the last day of the CPP Compliance
Period.  Pending payment, the Unpaid Amount shall be deposited in a
Rabbi Trust.  Payment of the Unpaid Amount shall include any
investment earnings on the assets of the Rabbi Trust attributable to the Unpaid
Amount.

       

      
        
          
          

        

        
          Page 28
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      This
section 30 shall be operated, administered and construed to comply with section
111(b) of EESA as implemented by guidance or regulation thereunder that has been
issued and is in effect as of the closing date of the agreement, if any, by and
between the Company, under which the UST acquires equity or debt securities of
the Company or the Association under the CPP (such date, if any, the “Closing
Date” and such implementation, the “Relevant Implementation”). If after such
Closing Date the clawback requirement of section 30(a) shall not be required by
the Relevant Implementation of Section 111(b) of EESA, such requirement shall
have no further effect. If after such Closing Date the limitation on golden
parachute payments under section 30(b)(i) shall not be required by the Relevant
Implementation of section 111(b) of EESA, such limitation shall have no further
effect and any Unpaid Amount delayed under section 30(b)(ii) shall be paid on
the earliest date on which the Association reasonably anticipates that such
amount may be paid and without violating such limitation.

      


      In Witness
Whereof, the Association has caused this Agreement to be executed and the
Executive has hereunto set his or her hand, all as of the day and year first
above written.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        ATTEST:

                                                      	 	Astoria
      Federal Savings and Loan Association
	 	 	 	 
	
                                                        /S/
      Alan P. Eggleston

                                                      	 	By:	
                                                        /S/ George L. Engelke,
  Jr.

                                                      
	
                                                        Alan
      P. Eggleston

                                                      	 	Name: 	
                                                        George
      L. Engelke, Jr.

                                                      
	
                                                        
                                                          [Seal]

                                                        

                                                      	 	Title: 	
                                                        Chairman
      and Chief Executive Officer

                                                      
	 	 	 	 
	 	 	 	 
	 	 	
                                                        /S/ Monte N. Redman

                                                      
	 	 	Monte
      N.
Redman


                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
         

        
          
            
            

          

          
            Page 29
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                  STATE
      OF NEW YORK

                	
                  )

                


        

        
          	
                   
      

                	
                  )        
      ss.:

                


        

        
          	
                  COUNTY
      OF NASSAU

                	
                  )

                


        

         

         

      

      On this 31 day of December, 2008,
before me, the undersigned, personally appeared George L. Engelke,
Jr., personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.

       

       

      
        
          	 
      	
                  /S/ Marygrace
      Farruggia                    

                
	 
      	
                  Notary
      Public

                
	 
      	 
      
	 
      	
                  Marygrace
      Farruggia

                
	 
      	
                  Notary
      Public, State of New York

                
	 
      	
                  No.
      4998931

                
	 
      	
                  Qualified
      in Suffolk County

                
	 
      	
                  Commission
      Expires 7/13/2010

                


        

      

       

       

      
        
          	
                  STATE
      OF NEW YORK

                	
                  )

                


        

        
          	
                   
      

                	
                  )       
      ss.:

                


        

        
          	
                  COUNTY
      OF NASSAU

                	
                  )

                


        

         

         

      

      On this 31 day of December, 2008,
before me, the undersigned, personally appeared Monte N. Redman, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

       

       

      
        
          	 
      	
                  /S/ Marygrace
      Farruggia                    

                
	 
      	
                  Notary
      Public

                
	 
      	 
      
	 
      	
                  Marygrace
      Farruggia

                
	 
      	
                  Notary
      Public, State of New York

                
	 
      	
                  No.
      4998931

                
	 
      	
                  Qualified
      in Suffolk County

                
	 
      	
                  Commission
      Expires 7/13/2010

                


        

      

    

     

    
      
        
        

      

      
        Page 30
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