c50461_ex10-8.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing






EXHIBIT 10.8


ASTORIA FEDERAL SAVINGS
AND
LOAN ASSOCIATION

EMPLOYMENT
AGREEMENT
WITH EXECUTIVE OFFICER


          This EMPLOYMENT AGREEMENT (the “Agreement”)
is made and  entered into as of August 15, 2007 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 Executive currently has a Change of Control Severance Agreement with the
Association dated January 1, 2000 which the Executive and the Association wish to terminate and replace with this Agreement; 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; 


          NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Association and the Executive hereby terminate in its entirety
the Change of Control Severance Agreement by and between the Association and the Executive dated as of January 1, 2000 and replace such Change of Control Severance Agreement in all respects and manner with this Agreement so as to provide as follows
from and after the date hereof: 


          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. 


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          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 date of this Agreement and ending on the day before the third anniversary date of this Agreement. Prior to the first anniversary of
the date of this Agreement and on each anniversary date thereafter (each an “Anniversary Date) the Board of Directors of the Association (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 day before 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 day before 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 or her 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 or her 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 or her a salary at an initial annual rate of FOUR HUNDRED THOUSAND DOLLARS ($400,000), payable in approximately equal installments in accordance with the Association’s customary payroll practices
for senior officers. Prior to each Anniversary Date occurring during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its 


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discretion, approve an increase therein. 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 or her harmless
from any costs, liabilities, losses and exposures 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. This
Section 6(b) shall not be applicable where Section 18 is applicable.

	



          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 or she 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 or her
duties under this Agreement. The Executive may also

	
	 



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 engage in personal business and investment
    activities which do not materially interfere with the performance of his
    or her 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 or her 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 or her 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 or her position, to be used in the performance of his or her duties hereunder,
including commuting to and from his or her personal residence. The Association shall reimburse the Executive for his or her ordinary and necessary business expenses, including, without limitation, all expenses associated with his or her business use
of the aforementioned automobile, fees for memberships in such clubs and organizations as the Executive and the Association shall mutually agree are necessary and appropriate for business purposes, and his or her travel and entertainment expenses
incurred in connection with the performance of his or her duties under this Agreement, in each case upon presentation to the Association of an itemized account of such expenses in such form as the Association may reasonably require. 


          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 or her 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 

	
	 



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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 or becomes 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 Organization
Certificate 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;

	
	 
	 	 	 	
(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 or her total compensation package), unless, during such thirty (30) day period, the Association cures such failure; 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).

	
	 
	 	 	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): 

	
	 



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	          	          	(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;

	
	 
	 	 	
(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)     	
within 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 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: 




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“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)     	
within thirty (30) days following the Executive’s termination of employment with the Association, 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:

	
	 	 	 	 
	 	 	 	          DBSP     =     SEVLS - LS

    where:

    “DBSP” is the amount of the DB Severance
    Payment, before the deduction 

	 	 	 	 



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	          	          	          	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 day of each month and with a guaranteed payout of not less than 120 monthly 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)(A)(ii) of the Internal Revenue Code, as amended, (the “Code”);

	
	 
	 	 	 	 	
(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;

	
	 
	 	 	 	 	 	
(4)     	
the Option Surrender Payment; and

	
	 
	 	 	 	 	 	
(5)     	
the RRP Surrender Payment.

	
	 




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	 	 	 	 “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 Company 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 monthly 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)(A)(ii) of the Code;

	
	 
	          	          	
(vi)     	
within thirty (30) days following the Executive’s termination of employment with the Association, 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: 

              401SP     =     (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; 

    “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-

    
	 



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	          	          	          	qualified employee stock ownership
          plans maintained by the Association or any 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 Association 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 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

    


        
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 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
	 
	 	 	 	
“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.

	
	 
	 	 	
(vii)	
within 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 (expressed as a percentage of base salary) 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 Company (expressed as a percentage of the TIO) established by
    the Compensation Committee of the Board for the 



    
      Page 12 of 28

    




  




	          	          	          	
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

	
	 
	 	 	 	
“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 New York Stock Exchange, 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 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 

    




    
      Page 13 of 28

    




  




	          	          	          	
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:

	
	 	 	 	 
	 	 	 	          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 New York Stock Exchange, 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 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. 

    
	 
	 	 	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 



      Page 14 of 28

    




  



	 	 	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 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 Association
    or any subsidiary or affiliate of either of them. 

	 	 	 
	 	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, wilful misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, wilful 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 

	
	 




      
        Page 15 of 28

    




    




	          	 	
(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;

	
	 
	 	 	
(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), then 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

	 




      
        Page 16 of 28

    




    




	          	 	
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 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 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:
	 




      
        Page 17 of 28

    




    




	          	          	          	          	
(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)     	
approval by the stockholders of the Association of a transaction that would result in the reorganization, merger or consolidation of the Association with one or more other persons, other than a transaction
following which:

	
	 
	 	 	 	
(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

	
	 	 	 	 	 	 




      
        Page 18 of 28

    




    




	          	          	 	
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, or approval by the stockholders of the Association of any transaction which would result in such an acquisition;

	
	 
	 	 	
(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 date of this Agreement; or

	
	 
	 	 	 	
(B)     	
individuals who first became members of the Board after the date of this Agreement 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 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”.

	
	 




    
      Page 19 of 28 

    




  




	          	 	
    
      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 Association, or an affiliate or subsidiary of either of them, by the Association, the Association, 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 of 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

	
	 
	 	 	
(iv)     	
resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the expiration of a transition period of thirty (30) days beginning on the effective date of
the Change of Control (or for such longer period, not to exceed ninety (90) days beginning on the effective date of the Change of Control, as the Association or its successor may reasonably request) to facilitate a transfer of management
responsibilities.

	




               Section
        12.  Covenant Not To Compete.

               The
        Executive hereby covenants and agrees that, in the event of his or her
    termination of 

    
      Page 20 of 28

    




  







      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 Association, bank or bank holding Association,
      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 Association 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. 

               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


    
      Page 21 of 28

    




  




	          	 	
person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Association 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 Association, 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 Company, the Association, 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
Company, the Association, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Company, the Association, 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 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.

    
      Page 22 of 28

    




  





               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. 

          Section 18.    Indemnification
                for Attorneys’ Fees. 

          The Association shall indemnify, hold harmless
        and defend the Executive against reasonable 



    
      Page 23 of 28

    




  





    
      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. 

               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. 

               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. 

    
      Page 24 of 28

    




  





               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. 

               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 and 28) 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 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

	
	 




      
        Page 25 of 28

    




    




	          	 	
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.

	




    
      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 

    
      Page 26 of 28

    




  






    
      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 32.      Compliance with Section 409A of the Code.

               In the event that this Agreement is construed to be a non-qualified deferred compensation plan described in section 409A of the Code, the Agreement shall be operated, administered and construed so as
      to conform to the requirements of section 409A. 

               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 	 	 	 
	Alan P. Eggleston 	 	By:	 /S/
              George L. Engelke, Jr. 

	 	 	Name:  	George L. Engelke, Jr. 
	 	 	Title:	Chairman and Chief
        Executive Officer
	[Seal] 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	/S/ Frank E. Fusco
	 	 	FRANK E.
        FUSCO




    

      Page 27 of 28

    




  




  	STATE OF NEW YORK	)			

		)	     	ss.:	

	COUNTY OF NASSAU	)			





              On this 14th day of September, 2007, 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/ Anna Knice
	
	 	
Notary Public
	




    


    	Anna Knice 	 	 	 	 
	Notary Public, State
            of New York 	 	 	 
	       No.4980431 	 	 	 	 
	Qualified in Suffolk
            County 	 	 	 	 
	Commission Expires
            April 22, 2011 	 	 	 	 
	STATE OF NEW YORK 	)	 	 	 
	 	)	 	ss.: 	 
	COUNTY OF NASSAU 	)	 	 	 




    
          On this 14th day of September, 2007, before me, the undersigned, personally 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/ Anna Knice
	
	 	
Notary Public
	


Anna Knice 

    Notary Public, State of New York 

    No.4980431 

    Qualified in Suffolk County 

    Commission Expires April 22, 2011

    
      Page 28 of 28