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EXHIBIT 10.21

                  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, 2000 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, GERARD
C. KEEGAN, an individual residing at 89 Eleventh Street, Garden City, New York
11530 (the "Executive").

                                   WITNESSETH:

         WHEREAS, the Executive currently serves the Association in the capacity
of Vice Chairman and Chief Administrative Officer and as Vice Chairman and Chief
Administrative 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 an Employment Agreement with the
Association dated March 29, 1997, including Amendment No.1 thereto, which the
Executive and the Association wish to amend and modify; 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 amend and restate in its entirety the Employment Agreement by
and between the Association and the Executive dated as of March 29, 1997 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 Vice Chairman and Chief Administrative
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 THREE HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($375,000), 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 discretion, approve an increase therein. In addition
to salary, the Executive

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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 engage in personal business and investment
                  activities which do not materially

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                  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
                                    Executive to the office of Vice Chairman and
                                    Chief Administrative

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                                    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 Nasdaq Stock Market 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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<PAGE>   12
                           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

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                           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 Nasdaq Stock Market, 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 29
<PAGE>   14
                           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 Nasdaq Stock Market, 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
                  Trade Center, New York, New York 10048 or, if such firm is
                  unavailable

                                 Page 14 of 29
<PAGE>   15
                  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;

                  (v)      the Executive's termination of employment for any
                           reason at or after attainment of mandatory retirement
                           age under the Association's mandatory

                                 Page 15 of 29
<PAGE>   16
                           retirement policy for executive officers in effect as
                           of the date of this Agreement;

                  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;

                  (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

                                 Page 16 of 29
<PAGE>   17
                  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 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;

                                 Page 17 of 29
<PAGE>   18
                           (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)      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

                                 Page 18 of 29
<PAGE>   19
                                    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, 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

                                 Page 19 of 29
<PAGE>   20
                                    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 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

                                 Page 20 of 29
<PAGE>   21
                           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 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

                                 Page 21 of 29
<PAGE>   22
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 person acting in like
                  circumstances would expect, to have the effect of causing any
                  officer or employee of the Association, the Association or any
                  affiliate or subsidiary of either 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
                  Association 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 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 Association 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 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 Association, savings and loan
                  holding Association 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 Association,
                  or any affiliate or subsidiary of either of them to terminate
                  an existing business or commercial relationship with the
                  Association, 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

                                 Page 22 of 29
<PAGE>   23
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.

         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:

         Gerard C. Keegan
         89 Eleventh Street
         Garden City, New York 11530

         If to the Association:

         Astoria Federal Savings and Loan Association
         One Astoria Federal Plaza
         Lake Success, New York 11042-1085

         Attention: General Counsel

         with a copy to:


                                 Page 23 of 29
<PAGE>   24
         Thacher Proffitt & Wood
         Two World Trade Center
         New York, New York 10048

         Attention:    W. Edward Bright, Esq.

         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.

         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

                                 Page 24 of 29
<PAGE>   25
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 25 of 29
<PAGE>   26
         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. Section 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

                                    Page 26 of 29
<PAGE>   27
                  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.Section 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. Section 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. Section 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.Section 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

                                 Page 27 of 29
<PAGE>   28
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.   LISB Transaction.

         The Executive hereby waives any claim the Executive may have pursuant
to his or her Employment Agreements each dated March 29, 1997 with the Company
and the Association, respectively, that the acquisition by and the merger of
Long Island Bancorp, Inc. and The Long Island Savings Bank, FSB with and into
the Company and the Association, respectively, constituted a "change of control"
of the Company or the Association as defined in such Employment Contracts.

         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/ William K. Sheerin                    By:  /S/ George L. Engelke, Jr.
----------------------------------        --------------------------------------
    William K. Sheerin                    Name:    George L. Engelke, Jr.
                                          Title:   Chairman, President and Chief
                                          Executive Officer


[Seal]

                                          /S/ Gerard C. Keegan
                                          --------------------------------------
                                              GERARD C. KEEGAN


STATE OF NEW YORK )
                  )       ss.:
COUNTY OF NASSAU  )

         On this 20 day of March, 2000, before me, the undersigned, personally
appeared Gerard C.

                                 Page 28 of 29
<PAGE>   29
Keegan, 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, 2001

STATE OF NEW YORK )
                  )       ss.:
COUNTY OF NASSAU  )

         On this 20 day of March, 2000, 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, 2001

                                 Page 29 of 29