Letter to be  Delivered  by Mr.  Gilfillan  Pursuant  to  Section  6.11.1 of the
Agreement and Plan of Merger between Flushing Financial Corporation and Atlantic
Liberty Financial Corp.


                                                              December 20, 2005

<TABLE>
<CAPTION>

<S>                                  <C>                                     <C>
Flushing Financial Corporation     Atlantic Liberty Financial Corp.           Atlantic Liberty Savings, F.A.
1979 Marcus Avenue, Suite E140            186 Montague Street                      186 Montague Street
Lake Success, New York 11042            Brooklyn, New York 11201                Brooklyn, New York 11201
</TABLE>


Ladies and Gentlemen:

     This letter is being  delivered  to you  pursuant to section  6.11.1 of the
Agreement  and Plan of  Merger by and  between  Flushing  Financial  Corporation
("FFC") and Atlantic  Liberty  Financial  Corp.  ("ALFC")  and Atlantic  Liberty
Savings, F.A. (such agreement, the "Merger Agreement").

     1. 2005 Payment.  On or before  December 31, 2005,  ALFC will pay, or cause
Atlantic  Liberty  Savings,  F.A. to pay,  to me the sum of $525,000  (the "2005
Payment") This payment is made in  consideration of my execution and delivery of
this letter, will be subject to applicable  federal,  state and local income and
employment  withholding  taxes and will be reported as wages on the Wage and Tax
Statement  on IRS Form W-2  issued  for me for 2005.  In the event  this  letter
agreement is terminated as hereinafter provided, I understand and agree that the
Employment  Agreements  between me, ALFC and Atlantic Liberty  Savings,  F.A.are
hereby  amended to provide that any payment that may become  payable to me under
section 3(b)  (relating to  incentive  compensation  or bonuses) or section 6 of
such Employment Agreements, if any, shall, without any further action or consent
on my part,  be reduced by the amount of the 2005  Payment  until such amount is
fully offset.

     2.  Acceleration of Restricted  Stock.  ALFC will accelerate,  or cause the
acceleration, of the vesting date of all shares of restricted stock issued to me
with a  scheduled  vesting  date  that is later  than  December  31,  2005  (the
"Unvested  Restricted Stock") to be fully vested and nonforfeitable as of a date
not  earlier  than 3 business  days after the date of this  letter and not later
than December 31, 2005 (the "Accelerated  Vesting Date").  The fair market value
of the Unvested Restricted Stock on the Accelerated Vesting Date will be subject
to applicable federal,  state and local income and employment  withholding taxes
and will be  reported  as wages  on the Wage and Tax  Statement  on IRS Form W-2
issued  for me for 2005.  ALFC will take or cause to be taken all  necessary  or
appropriate  actions to permit me to satisfy the applicable minimum tax required
withholding (the "Tax  Withholding  Amount") by surrendering to ALFC that number
of whole shares of Unvested Restricted Stock with an aggregate fair market value
on the Accelerated  Vesting Date that is closest to but not in excess of the Tax
Withholding  Amount.  Any remaining portion of the Tax Withholding Amount may be
withheld  from any cash payment made to me on or after the  Accelerated  Vesting
Date.  The fair market value of the  Unvested  Restricted  Stock shall,  for all
purposes of this paragraph 2, be determined in accordance with the provisions of
the ALFC 2003 Stock Option Plan.

     3.  Acceleration of Stock Options.  ALFC will take or cause to be taken all
necessary  actions to cause each option to purchase common stock of ALFC that is

<Page>
Flushing Financial Corporation
December 20, 2005                                                       Page 2.

outstanding  to me under the Stock Benefit Plan (the ALFC Stock  Options") to be
fully  vested  and  exercisable  for a period of 10  business  days prior to the
Closing Date (as defined below).

     4. Cash Payment on the Closing  Date.  Subject to  paragraphs 8 and 9 below
and my execution of the  Termination  Agreement and Release  attached  hereto as
Exhibit B, on the Closing  Date of the  transaction  contemplated  by the Merger
Agreement (the "Closing Date"),  FFC shall pay or cause to be paid to me the sum
of $679,558  (the "Closing  Date  Payment"),  which shall be subject to federal,
state and local tax  withholding.  Once this  payment  is made,  the  Employment
Agreements shall terminate and be of no further effect..

     5. Insurance  Continuation.  Atlantic Liberty  Savings,  F.A. will preserve
through  the Closing  Date,  and  subject to  paragraph 8 below,  FFC will honor
following the Closing Date, the terms of the split dollar insurance  arrangement
in effect for me  pursuant to which a permanent  life  insurance  benefit in the
amount  of  $639,894  under  New  York  Life  Insurance  Company  policy  number
56605120/56604941  will be provided  on and after the  Closing  Date (the "Split
Dollar Benefit").

     6. Non-Competition Agreement.  Concurrently with the execution and delivery
of this  letter,  FFC and I have  executed  and  delivered  the  Non-Competition
Agreement attached hereto as Exhibit A (the "Non-Competition Agreement").

     7. No Other Payments or Benefits.  I hereby  acknowledge and agree with FFC
that,  except for vested accrued benefits to which I am or become entitled under
the Atlantic Liberty Savings, F.A. Employee Stock Ownership Plan, The Retirement
Plan of Atlantic  Liberty  Savings,  F.A.,  and/or the Atlantic Liberty Savings,
F.A. 401(k) Savings Plan (collectively, the "Qualified Plans"), the continuation
coverage or conversion  rights available at my own expense under any group life,
medical,  dental or disability plans or flexible spending accounts (the "Welfare
Plans"),  my  rights  under the  Non-Competition  Agreement,  and any  rights to
indemnification  or to errors  and  omissions  insurance  coverage,  rights as a
stockholder  of FFC and/or ALFC,  rights with  respect to my ALFC Stock  Options
and/or  under  contracts  between me and FFC that are,  in each case,  expressly
provided for in the Merger  Agreement (the  "Additional  Rights") (such payments
and benefits under the Qualified Plans, Welfare Plans, Non-Competition Agreement
and Additional  Rights,  collectively,  the "Basic  Benefits") and the payments,
benefits and other rights set forth in this letter, no other payments,  benefits
or other rights are due to me.

     8. Code Section 280G Matters. I further understand and agree that if:

          (a) The  2005  Payment  is made on or  before  December  31,  2005 and
     reported on my Wage and Tax Statement on IRS Form W-2 for 2005; and

          (b) The  Unvested  Restricted  Stock is in fact  vested  on or  before
     December 31, 2005 and the fair market value thereof reported on my Wage and
     Tax Statement on IRS Form W-2 for 2005; and

          (c) All of the ALFC Stock  Options are in fact vested and  exercisable
     for a period of at least 10 business days prior to the Closing Date; and

          (d) FFC does not take any action that would prevent, and does not fail
     to take any action which failure would prevent, the payments made under the


<page>
Flushing Financial Corporation
December 20, 2005                                                       Page 3.

     Non-Competition  Agreement,  or any portion thereof, from being regarded as
     reasonable  compensation  for service  rendered  after the Closing Date for
     purposes of section 280G of the Internal Revenue Code of 1986 (the "Code");

then the aggregate  amounts  payable to me, and any benefits  provided to me, in
respect  of all  payments  and  benefits  from or with  respect  to ALFC and its
affiliates from any source  whatsoever shall be further  limited,  if necessary,
such that none of the  payments  made or  benefits  provided  will be an "excess
parachute  payment"  within  the  meaning  of  section  280G  of the  Code . The
determination  whether  any of such  payments  and  benefits  will be an "excess
parachute  payment"  shall be made as of the  Closing  Date and as of any  other
relevant  date  thereafter  by FFC's tax  advisors  with the  concurrence  of my
personal tax advisors (which  concurrence shall not be unreasonably  withheld or
delayed).  If such  determination  results in a requirement  that my payments or
benefits  or both be further  limited,  the  reduction  shall be effected in the
following manner:

          (i) First,  to the extent that any portion of my Split Dollar  Benefit
     is regarded as an "excess  parachute  payment," FFC's obligation to provide
     this benefit at its expense  shall be waived.  Such waiver shall be applied
     on a  calendar  year  basis in  reverse  chronological  order such that the
     calendar  years  closest  to the  Closing  Date  are the  last  years to be
     affected.  FFC  shall  afford  me the  opportunity  to  maintain  the  life
     insurance  coverage  in any  affected  year by  paying  to FFC the  premium
     equivalent value of the coverage for that year.

          (ii) Second, to the extent that the required reduction cannot be fully
     effected through the Split Dollar Benefit, FFC may reduce the amount of any
     unpaid cash payment due to me by the minimum amount required to prevent the
     existence of an excess parachute payment.

          (iii) Third, to the extent that the required reduction cannot be fully
     effected as provided in paragraphs  (a) and (b) above,  I agree to repay to
     FFC, with interest  determined at the applicable AFR rate prescribed by the
     Internal Revenue Service for such payment,  the minimum amount necessary to
     prevent the existence of an excess parachute payment.

I shall have the right, by written notice to FFC, to specify an alternate method
of  satisfying  any required  reduction;  provided  that such  alternate  method
satisfies  the  requirements  of this  paragraph  8 and does not  result  in any
"excess  parachute  payment" within the meaning of sections 280G and 4999 of the
Code.

     9. Effect on other  Agreements.  To the extent  necessary to give effect to
the purposes hereof, this letter shall constitute an amendment to each and every
governing  documents  for each and every plan,  agreement or  arrangement  under
which I may have a right to payments and benefits to reflect the relevant  terms
and conditions of this letter. This letter shall take effect upon the signing of
the Merger  Agreement  and  thereafter  shall not be  revocable  except upon the
termination of the Merger  Agreement in connection  with the  abandonment of the
transactions  contemplated thereby. If the Merger Agreement is terminated,  this
letter agreement,  other than paragraphs 1 and 2 hereof,  shall be of no further
force or effect, but paragraphs 1 and 2 hereof shall remain in effect.

<Page>

Flushing Financial Corporation
December 20, 2005                                                       Page 4.



     I  acknowledge  that this  letter  will  serve as an  inducement  to FFC to
execute,  enter into and perform the Merger Agreement and that FFC is relying on
the promises that I have made herein in deciding to proceed therewith.

                                            Very truly yours,

                                            /s/ William M. Gilfillan
                                            ------------------------------
                                             William M. Gilfillan




<PAGE>

Flushing Financial Corporation
December 20, 2005                                                       Page 5.




Accepted and Agreed to:    Accepted and Agreed to:   Accepted and Agreed to:

FLUSHING FINANCIAL       ATLANTIC LIBERTY.             ATLANTIC LIBERTY
CORPORATION              FINANCIAL CORP                SAVINGS, F.A.







/s/John R. Buran           /s/ Richard T. Arkwright   /s/ Richard T. Arkwright
--------------------       -----------------------    -------------------------
Name: John R. Buran        Name: Richard T. Arkwright Name: Richard T. Arkwright
Title:President and        Title: Chairman            Title: Chairman
Chief Executive Officer