Unassociated Document


    
      Exhibit
10-41

       

    

    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, Frank E. Fusco, an individual residing at 6
Philson Court, Commack, New York 11725,  (the
"Executive").

    


    Witnesseth:

    


    Whereas, the Executive currently
serves the Association in the capacity of Executive Vice President, Treasurer
and Chief Financial Officer and as Executive Vice President, Treasurer and Chief
Financial 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 August 17, 2007 (the “Initial Effective Date” and such agreement 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 Executive
Vice President, Treasurer and Chief Financial 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 FOUR HUNDRED SIXTY FIVE

    

     

    
      
        
        

      

      
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    THOUSAND
DOLLARS ($465,000), 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 Executive Vice President, Treasurer and Chief Financial 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 maintained by the Association or any


     

    
      
        
        

      

      
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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:

    


    Frank E.
Fusco

    6 Philson
Court

    Commack,
New York 11725

    


    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.

     

    
      
        
        

      

      
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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/
      Frank E. Fusco

                            
	 
      	 
      	
                              Frank
      E.
Fusco

                            


                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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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 Frank E. Fusco, 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

     

    
      
        
        

      

      
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