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EXHIBIT 10.18

                          ASTORIA FINANCIAL CORPORATION
                              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 FINANCIAL
CORPORATION, a business corporation organized and operating under the laws of
the State of Delaware and having an office at One Astoria Federal Plaza, Lake
Success, New York 11042-1085 (the "Company"), and GEORGE L. ENGELKE, JR., an
individual residing at 83 Chelsea Road, Garden City, New York 11530 (the
"Executive").

                                   WITNESSETH:

         WHEREAS, the Executive currently serves the Company in the capacity of
Chairman, President and Chief Executive Officer and as Chairman, President and
Chief Executive Officer of its wholly owned subsidiary, ASTORIA FEDERAL SAVINGS
AND LOAN ASSOCIATION (the "Association"); and

         WHEREAS, the Executive currently has an Employment Agreement with the
Company dated January 1, 1996 which the Executive and the Company wish to amend
and modify; and

         WHEREAS, the Company 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 Company 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 Company and the Executive
hereby amend and restate in its entirety the Employment Agreement by and between
the Company and the Executive dated as of January 1, 1996 so as to provide as
follows from and after the date hereof:

         Section 1.        Employment.

         The Company 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, plus such
                  extensions, if any, as are provided by the Board of Directors
                  of the Company (the "Board") pursuant to Section 2(b).

         (b)      Beginning on the date of this Agreement, the Employment Period
                  shall automatically be extended for one (1) additional day
                  each day, unless either the Company or the Executive elects
                  not to extend the Agreement further by giving written notice
                  to the other party, in which case the Employment Period shall
                  end on the day before the third anniversary of the date on
                  which such written notice is given. 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:

                  (i)      if a notice of non-extension has been given in
                           accordance with this Section 2(b), the day before the
                           third anniversary of the date on which such notice is
                           given; and

                  (ii)     in all other cases, the day before the third
                           anniversary of the date as of which the Remaining
                           Unexpired Employment Period is being determined.

                  Upon termination of the Executive's employment with the
                  Company for any reason whatsoever, any daily extensions
                  provided pursuant to this Section 2(b), if not previously
                  discontinued, shall automatically cease.

         (c)      Nothing in this Agreement shall be deemed to prohibit the
                  Company 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 Company 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 Chairman, President and Chief Executive
Officer of the Company, having such power, authority and responsibility and
performing such duties as are prescribed by or pursuant to the By-Laws of the
Company 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 Company, its
affiliates and subsidiaries and shall use his


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or her best efforts to advance the interests of the Company.

         Section 4.        Cash Compensation.

         In consideration for the services to be rendered by the Executive
hereunder, the Company shall pay to him or her a salary at an initial annual
rate of EIGHT HUNDRED TEN THOUSAND DOLLARS ($810,000), payable in approximately
equal installments in accordance with the Company's customary payroll practices
for senior officers. At least annually during the Employment Period, the Board
shall review the Executive's annual rate of salary and may, in its discretion,
approve an increase therein. In no event shall the Executive's annual rate of
salary under this Agreement in effect at a particular time be reduced without
his or her prior written consent and any such reduction in the absence of such
consent shall be a material breach of this Agreement. In addition to salary, the
Executive may receive other cash compensation from the Company 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 Company 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 Company, in accordance with the terms and conditions of such employee
benefit plans and programs and compensation plans and programs and consistent
with the Company's customary practices.

         Section 6.        Indemnification and Insurance.

         (a)      During the Employment Period and for a period of six (6) years
                  thereafter, the Company 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
                  Company or service in other capacities at the request of the
                  Company. 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 Company.

         (b)      To the maximum extent permitted under applicable law, during
                  the Employment Period and for a period of six (6) years
                  thereafter, the Company shall indemnify the Executive against,
                  and hold him or her harmless from, any costs, liabilities,
                  losses


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                  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 Company or any subsidiary or
                  affiliate thereof.

         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 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 Company and generally applicable to all similarly
                  situated executives.

         (b)      The Executive may also serve as an officer or director of the
                  Association on such terms and conditions as the Company and
                  the Association 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. If
                  the Executive is discharged or suspended, or is subject to any
                  regulatory prohibition or restriction with respect to
                  participation in the affairs of the Association, he or she
                  shall (subject to the Company's powers of termination
                  hereunder) continue to perform services for the Company in
                  accordance with this Agreement but shall not directly or
                  indirectly provide services to or participate in the affairs
                  of the Association in a manner inconsistent with the terms of
                  such discharge or suspension or any applicable regulatory
                  order.

         Section 8.        Working Facilities and Expenses.

         The Executive's principal place of employment shall be at the Company'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 Company shall
maintain its principal executive offices, or at such other location as the
Company and the Executive may mutually agree upon. The Company 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 Company and necessary or appropriate in connection with
the performance of his or her assigned duties under this Agreement. The Company
shall provide to the Executive for his or her exclusive use an automobile owned
or leased by the Company 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 Company 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


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of the aforementioned automobile, fees for memberships in such clubs and
organizations as the Executive and the Company 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 Company of an
itemized account of such expenses in such form as the Company 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 Company terminates during the Employment Period under any
                  of the following circumstances:

                  (i)      the Executive's voluntary resignation from employment
                           with the Company 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 Chairman,
                                    President and Chief Executive Officer (or a
                                    more senior office) of the Company;

                           (B)      if the Executive is or becomes a member of
                                    the Board, the failure of the stockholders
                                    of the Company 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 Company of its
                                    material failure, whether by amendment of
                                    the Company's Certificate of Incorporation
                                    or By-laws, action of the Board or the
                                    Company'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 Company cures such failure in a manner
                                    determined by the Executive, in his or her
                                    discretion, to be satisfactory;

                           (D)      the expiration of a thirty (30) day period
                                    following the date on which the Executive
                                    gives written notice to the Company 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


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                                    effect on the aggregate value of his or her
                                    total compensation package), unless, during
                                    such thirty (30) day period, the Company
                                    cures such failure in a manner determined by
                                    the Executive, in his or her discretion, to
                                    be satisfactory; or

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

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

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

                  (i)      his or her earned but unpaid compensation (including,
                           without limitation, all items which constitute wages
                           under Section 190.1 of the New York Labor Law and the
                           payment of which is not otherwise provided for under
                           this Section 9(b)) as of the date of the termination
                           of his or her employment with the Company, 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 Company'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 Company) 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


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                           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 Company 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 Company;

                  (iv)     within thirty (30) days following the Executive's
                           termination of employment with the Company, 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 Company 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
                           Company (the "Salary Severance Payment"). The Salary
                           Severance Payment shall be computed using the
                           following formula:

                                    SSP       =      BS x NY

                           where:

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

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

                           "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 Company, 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


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                                    Company, if he or she were 100% vested
                                    thereunder and had continued working for the
                                    Company 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 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 Company 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


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                                            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.

                           "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 Company, 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


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                                    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 Company or
                                    any of its affiliates or subsidiaries as if
                                    he or she were 100% vested thereunder and
                                    had continued working for the Company 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 Company or any of its affiliates or
                                    subsidiaries as if he or she were 100%
                                    vested thereunder and had continued working
                                    for the Company 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

                           where:

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

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

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

                           The 401KSP shall be calculated as follows:

                                    401KSP  =        (401KC x NY) + UVB

                           where

                           "401KC" is the sum of the Company 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


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                           year period which shall end on the date of his or her
                           termination of his or her employment with the
                           Company;

                           "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
                           Company's common stock or, if applicable, phantom
                           shares of such stock by whatever term it is described
                           allocated to the Executive's accounts under all
                           qualified and non-qualified employee stock ownership
                           plans maintained by the Company 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 Company, the
                           payment by the Company 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 Executive's 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
                           Company 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


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<PAGE>   12

                           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 Company 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
                           Company, the payment by the Company or the
                           Association of any loan payments under a leveraged
                           employee stock ownership plan or the allocation of
                           forfeitures under the terms of such plan during such
                           plan year;

                           "FMV" is the closing price of the Company'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 Company's common stock the closing price of
                           such other security on the date the Executive's
                           employment terminates shall be utilized.

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

                           "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 Company, the
                           Company 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 Company 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 Company (the
                           "Bonus Severance Payment"). The Bonus Severance
                           Payment shall be computed using the following
                           formula:

                                    BSP = (BS x TIO x AP x NY)



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                           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 Company;

                           "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 Company;

                           "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 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
                           Company; 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 Company made within thirty
                           (30) days following the Executive's termination of
                           employment with the Company, 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 Company, 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;




                                 Page 13 of 31
<PAGE>   14


                           "FMV" is the closing price of the Company'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 Company'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 Company to exercise any options
                           or appreciation rights not surrendered pursuant
                           hereto, the Executive shall be deemed fully vested in
                           all options and appreciation rights under any stock
                           option or appreciation rights plan or program
                           maintained by, or covering employees of, the Company,
                           even if he or she is not vested under such plan or
                           program;

                  (ix)     at the election of the Company made within thirty
                           (30) days following the Executive's termination of
                           employment with the Company, upon the surrender of
                           any shares awarded to the Executive under any
                           restricted stock plan maintained by, or covering
                           employees of, the Company, 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 Company'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 preceding trading day
                           on which a trade occurs, provided however that if the
                           restricted stock is


                                 Page 14 of 31
<PAGE>   15

                           a security other than the Company'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 Company 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 Company,
                           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 Company 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 or unwilling to perform such calculation, by a
                  firm of independent certified public accountants selected by
                  the Executive and reasonably satisfactory to the Company (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 Company 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 Company and the Executive further
                  agree that the Company 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 Company, the Association
                  or any subsidiary or affiliate of either of them.

         Section 10. Termination without Additional Company Liability.

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




                                 Page 15 of 31
<PAGE>   16


                  (i)      the discharge of the Executive for Cause, which, for
                           purposes of this Agreement shall mean:

                           (A)      the Executive intentionally engages in
                                    dishonest conduct in connection with the
                                    Executive's performance of services for the
                                    Company resulting in the Executive's
                                    conviction of a felony;

                           (B)      the Executive is convicted of, or pleads
                                    guilty or nolo contendere to, a felony or
                                    any crime involving moral turpitude;

                           (C)      the Executive willfully fails or refuses to
                                    perform the Executive's duties under this
                                    Agreement and fails to cure such breach
                                    within sixty (60) days following written
                                    notice thereof from the Company;

                           (D)      the Executive breaches the Executive's
                                    fiduciary duties to the Company for personal
                                    profit;

                           (E)      the Executive's willful breach or violation
                                    of any law, rule or regulation (other than
                                    traffic violations or similar offenses), or
                                    final cease and desist order in connection
                                    with the Executive's performance of services
                                    for the Company; or

                           (F)      the Executive's material breach of any
                                    material provision of this Agreement which
                                    is not substantially cured within 60 days
                                    after written notice of such breach is
                                    received by the Executive from the Company.

                  (ii)     the Executive's voluntary resignation from employment
                           with the Company 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 Company's mandatory retirement policy
                           for executive officers in effect as of the date of
                           this Agreement;

                  then the Company, 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


                                 Page 16 of 31
<PAGE>   17

                  Entitlements").

         (b)      For purposes of Section 10(a)(i), no act or failure to act, on
                  the part of the Executive, shall be considered "intentional"
                  or "willful" unless it is done, or omitted to be done, by the
                  Executive in bad faith or without reasonable belief that the
                  Executive's action or omission was in the best interests of
                  the Company. Any act, or failure to act, based upon authority
                  given pursuant to a resolution duly adopted by the Board or
                  based upon the written advice of counsel for the Company shall
                  be conclusively presumed to be done, or omitted to be done, by
                  the Executive in good faith and in the best interests of the
                  Company. Except as specifically provided below, 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 Company'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
                           Company 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 90 (ninety) day period commencing
                  on the delivery by the Company to the Executive of the Notice
                  of Intent to Discharge specified in Section 10(b)(ii), resigns
                  his or her employment with the Company prior to the


                                 Page 17 of 31
<PAGE>   18

                  delivery to the Executive by the Company 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 Company 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 Company shall pay and provide the Standard
                           Termination Entitlements to the Executive;



                                 Page 18 of 31
<PAGE>   19


                  (B)      In addition to the Standard Termination Entitlements,
                           the Company 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 Company 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 Company ("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 Company of a
                           transaction that would result in the reorganization,
                           merger or consolidation of the Company 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 Company; 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 19 of 31
<PAGE>   20

                                    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 Company;

                  (ii)     the acquisition of all or substantially all of the
                           assets of the Company 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 Company 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 Company of any transaction which
                           would result in such an acquisition;

                  (iii)    a complete liquidation or dissolution of the Company,
                           or approval by the stockholders of the Company 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 Company to serve as a member of
                                            the Board, but only if nominated for
                                            election by affirmative vote of
                                            three-quarters of the members of the
                                            Board, or of a nominating committee
                                            thereof, in office at the time of
                                            such first nomination;

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


                                 Page 20 of 31
<PAGE>   21

                                    the Board; or

                  (v)      any event which would be described in Section
                           11(a)(i), (ii), (iii) or (iv) if the term
                           "Association" were substituted for the term "Company"
                           therein or the term "Board of Directors of the
                           Association" 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 Company, the Association, or an affiliate or
                  subsidiary of either of them, by the Company, 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 Company 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 Company 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 Company 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 effective date of the Change of
                           Control.



                                 Page 21 of 31
<PAGE>   22

         Section 12.       Tax Indemnification.

         (a)      This Section 12 shall apply if the Executive's employment is
                  terminated upon or following:

                  (i)      a Change of Control (as defined in Section 11 of this
                           Agreement); or

                  (ii)     a change "in the ownership or effective control" of
                           the Company or the Association or "in the ownership
                           of a substantial portion of the assets" of the
                           Company or the Association within the meaning of
                           Section 28OG of the Code.

                  If this Section 12 applies, then, if for any taxable year, the
                  Executive shall be liable for the payment of an excise tax
                  under Section 4999 of the Code with respect to any payment in
                  the nature of compensation made by the Company, the
                  Association or any direct or indirect subsidiary or affiliate
                  of the Company or the Association to (or for the benefit of)
                  the Executive, the Company shall pay to the Executive an
                  amount intended to indemnify the Executive against the
                  financial effects of the excise tax imposed on excess
                  parachute payments under Section 28OG of the Code (the "Tax
                  Indemnity Payment"). The Tax Indemnity Payment shall be
                  determined under the following formula:

                                                        E x P
                        TIP      =     ----------------------------------------

                                       1 - (( FI x ( 1 - SLI )) + SLI + E + M )


                  where:

                  "TIP" is the Tax Indemnity Payment, before the deduction of
                  applicable federal, state and local withholding taxes;

                  "E" is the percentage rate at which an excise tax is assessed
                  under Section 4999 of the Code;

                  "P" is the amount with respect to which such excise tax is
                  assessed, determined without regard to any amount payable
                  pursuant to this Section 12;

                  "FI" is the highest marginal rate of income tax applicable to
                  the Executive under the Code for the taxable year in question;

                  "SLI" is the sum of the highest marginal rates of income tax
                  applicable to the Executive under all applicable state and
                  local laws for the taxable year in question; and



                                 Page 22 of 31
<PAGE>   23

                  "M" is the highest marginal rate of Medicare tax applicable to
                  the Executive under the Code for the taxable year in question.

         (b)      The computation of the Tax Indemnity Payment shall be made at
                  the expense of the Company by the Computation Advisor and
                  shall be based on the following assumptions:

                  (i)      that a change in ownership, a change in effective
                           ownership or control or a change in the ownership of
                           a substantial portion of the assets of the
                           Association or the Company has occurred within the
                           meaning of Section 28OG of the Code (a "28OG Change
                           of Control");

                  (ii)     that all direct or indirect payments made to or
                           benefits conferred upon the Executive on account of
                           the Executive's termination of employment are
                           "parachute payments" within the meaning of Section
                           28OG of the Code; and

                  (iii)    that no portion of such payments is reasonable
                           compensation for services rendered prior to the
                           Executive's termination of employment.

         (c)      With respect to any payment that is presumed to be a parachute
                  payment for purposes of Section 28OG of the Code, the Tax
                  Indemnity Payment shall be made to the Executive on the
                  earlier of the date the Company, the Association or any direct
                  or indirect subsidiary or affiliate of the Company or the
                  Association is required to withhold such tax or the date the
                  tax is required to be paid by the Executive, unless, prior to
                  such date, the Company delivers to the Executive the written
                  opinion (the "Opinion Letter"), in form and substance
                  reasonably satisfactory to the Executive, of the Computation
                  Advisor or, if the Computation Advisor is unable to provide
                  such opinion, of an attorney or firm of independent certified
                  public accountants selected by the Company and reasonably
                  satisfactory to the Executive, to the effect that the
                  Executive has a reasonable basis on which to conclude that:

                  (i)      no 28OG Change in Control has occurred, or

                  (ii)     all or part of the payment or benefit in question is
                           not a parachute payment for purposes of Section 28OG
                           of the Code, or

                  (iii)    all or a part of such payment or benefit constitutes
                           reasonable compensation for services rendered prior
                           to the 28OG Change of Control, or

                  (iv)     for some other reason which shall be set forth in
                           detail in such letter, no excise tax is due under
                           Section 4999 of the Code with respect to such payment
                           or benefit.




                                 Page 23 of 31
<PAGE>   24

                  If the Company delivers an Opinion Letter, the Computation
                  Advisor shall re-compute, and the Company shall make, the Tax
                  Indemnity Payment, if any, in reliance on the information
                  contained in the Opinion Letter.

         (d)      In the event that the Executive's liability for the excise tax
                  under Section 4999 of the Code for a taxable year is
                  subsequently determined to be different than the amount with
                  respect to which the Tax Indemnity Payment is made, the
                  Executive or the Company, as the case may be, shall pay to the
                  other party at the time that the amount of such excise tax is
                  finally determined, an appropriate amount, plus interest, such
                  that the payment made pursuant to Sections 12(a) and 12(c),
                  when increased by the amount of the payment made to the
                  Executive pursuant to this Section 12(d), or when reduced by
                  the amount of the payment made to the Company pursuant to this
                  Section 12(d), equals the amount that should have properly
                  been paid to the Executive under Sections 12(a) and 12(c). The
                  interest paid to the Company under this Section 12(d) shall be
                  determined at the rate provided under Section 1274(b)(2)(B) of
                  the Code. The payment made to the Executive shall include such
                  amount of interest as is necessary to satisfy any interest
                  assessment made by the Internal Revenue Service and an
                  additional amount equal to any monetary penalties assessed by
                  the Internal Revenue Service on account of an underpayment of
                  the excise tax. To confirm that the proper amount, if any, was
                  paid to the Executive under this Section 12, the Executive
                  shall furnish to the Company a copy of each tax return which
                  reflects a liability for an excise tax, at least 20 days
                  before the date on which such return is required to be filed
                  with the Internal Revenue Service. Nothing in this Agreement
                  shall give the Company any right to control or otherwise
                  participate in any action, suit or proceeding to which the
                  Executive is a party as a result of positions taken on the
                  Executive's federal income tax return with respect to the
                  Executive's liability for excise taxes under Section 4999 of
                  the Code.

         (e)      The provisions of this Section 12 are designed to reflect the
                  provisions of applicable federal, state and local tax laws in
                  effect on the date of this Agreement. If, after the date
                  hereof, there shall be any change in any such laws, this
                  Section 12 shall be modified in such manner as the Executive
                  and the Company may mutually agree upon if and to the extent
                  necessary to assure that the Executive is fully indemnified
                  against the economic effects of the tax imposed under Section
                  4999 of the Code or any similar federal, state or local tax.

         Section 13.       Covenant Not To Compete.

         The Executive hereby covenants and agrees that, in the event of his or
her termination of employment with the Company 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 Company (or, if less, for the Remaining
Unexpired Employment Period), the Executive shall not, without the written
consent of the Company, become an officer, employee, consultant, director or
trustee of any savings


                                 Page 24 of 31
<PAGE>   25

bank, savings and loan association, savings and loan holding company, bank or
bank holding company, or any direct or indirect subsidiary or affiliate of any
such entity, that entails working in any city, town or county in which the
Association or the Company has an office or has filed an application for
regulatory approval to establish an office, determined as of the effective date
of the Executive's termination of employment; provided, however, that this
Section 13 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 13 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 Company on
                  substantially the same terms and conditions and

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

         Section 14.       Confidentiality.

         Unless the Executive obtains the prior written consent of the Company,
the Executive shall keep confidential and shall refrain from using for the
benefit of the Executive or any person or entity other than the Company, any
entity which is a subsidiary of the Company or any entity which the Company is a
subsidiary of, any material document or information obtained from the Company,
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 14 shall prevent the Executive, with or without the
Company's consent, from participating in or disclosing documents or information
in connection with any judicial or administrative investigation, inquiry or
proceeding to the extent that such participation or disclosure is required under
applicable law.

         Section 15.       Solicitation.

         The Executive hereby covenants and agrees that, for a period of one (1)
year following the Executive's termination of employment with the Company, he or
she shall not, without the written consent of the Company, 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 Company, the Association or any
                  affiliate or subsidiary of ether of them, to terminate his or
                  her employment and accept employment or become affiliated
                  with, or provide services for compensation in any capacity
                  whatsoever to, any savings bank, savings and loan association,
                  bank, bank holding


                                 Page 25 of 31
<PAGE>   26

                  company, savings and loan holding company, or other
                  institution engaged in the business of accepting deposits and
                  making loans, doing business in any city, town or county in
                  which the Association or the Company has an office or has
                  filed an application for regulatory approval to establish an
                  office;

         (b)      provide any information, advice or recommendation with respect
                  to any such officer or employee to any savings bank, savings
                  and loan association, bank, bank holding company, savings and
                  loan holding company, or other institution engaged in the
                  business of accepting deposits and making loans, doing
                  business in any city, town or county in which the Association
                  or the Company has an office or has filed an application for
                  regulatory approval to establish an office that is intended,
                  or that a reasonable person acting in like circumstances would
                  expect, to have the effect of causing any officer or employee
                  of the Company, the Association, or any affiliate or
                  subsidiary of either of them, to terminate his or her
                  employment and accept employment, become affiliated with or
                  provide services for compensation in any capacity whatsoever
                  to any such savings bank, savings and loan association, bank,
                  bank holding company, savings and loan holding company or
                  other institution engaged in the business of accepting
                  deposits and making loans; or

         (c)      solicit, provide any information, advice or recommendation or
                  take any other action intended, or that a reasonable person
                  acting in like circumstances would expect, to have the effect
                  of causing any customer of the Company, the Association, or
                  any affiliate or subsidiary of either of them to terminate an
                  existing business or commercial relationship with the Company,
                  the Association, or any affiliate or subsidiary of either of
                  them.

         Section 16.       No Effect on Employee Benefit Plans or Programs.

         The termination of the Executive's employment during the term of this
Agreement or thereafter, whether by the Company or by the Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Company'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 Company from time to time.

         Section 17.       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 Company 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 Company may be sold or otherwise transferred. Failure of the
Company to obtain from any successor


                                 Page 26 of 31
<PAGE>   27

its express written assumption of the Company'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 18.       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:

         George L. Engelke, Jr.
         83 Chelsea Road
         Garden City, New York 11530

         If to the Company:

         Astoria Financial Corporation
         One Astoria Federal Plaza
         Lake Success, New York 11042-1085

         Attention: General Counsel

         with a copy to:

         Thacher Proffitt & Wood
         Two World Trade Center
         New York, New York 10048

         Attention:        W. Edward Bright, Esq.

         Section 19.  Indemnification for Attorneys' Fees.

         The Company 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


                                 Page 27 of 31
<PAGE>   28

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 Company'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 20.       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 21.       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 22.       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 23.       Governing Law.

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

         Section 24.       Headings and Construction.

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

         Section 25.       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


                                 Page 28 of 31

<PAGE>   29



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 26.       Guarantee.

         The Company hereby agrees to guarantee the payment by the Association
of any benefits and compensation to which the Executive is or may be entitled to
under the terms and conditions of the Amended and Restated Employment Agreement
dated as of the lst day of January, 2000 between the Association and the
Executive.

         Section 27.       Non-duplication.

         In the event that the Executive shall perform services for the
Association or any other affiliate or subsidiary of the Company, any
compensation or benefits provided to the Executive by such other employer shall
be applied to offset the obligations of the Company hereunder, it being intended
that this Agreement set forth the aggregate compensation and benefits payable to
the Executive for all services to the Company and all of its affiliates and
subsidiaries.

         Section 28.       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, 19, 21, 26, 27, 29, 30 and 31) shall survive the expiration of the
Employment Period or termination of this Agreement.

         Section 29.       Equitable Remedies.

         The Company and the Executive hereby stipulate that money damages are
an inadequate remedy for violations of Sections 6(a), 13, 14 or 15 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 30.       Required Regulatory Provisions.

         Notwithstanding anything herein contained to the contrary, any payments
to the Executive by the Company, 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, 12 U.S.C. Section1828(k), and any
regulations promulgated thereunder.

         Section 31.       No Offset or Recoupment; No Attachment.

         The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations under this Agreement shall
not be affected by any set-off,



                                 Page 29 of 31
<PAGE>   30



counterclaim, recoupment, defense or other claim, right or action which the
Company 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 32.       LISB Transaction.

         The Executive hereby waives any claim the Executive may have pursuant
to his or her Employment Agreements each dated January 1, 1996 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 Company 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:



/S/ William K. Sheerin
William K. Sheerin


[Seal]

ASTORIA FINANCIAL CORPORATION



By: /S/ Gerard C. Keegan
Name:    Gerard C. Keegan
Title:   Vice Chairman and Chief Administrative Officer



/S/ George L. Engelke, Jr.
GEORGE L. ENGELKE, JR.



                                 Page 30 of 31
<PAGE>   31





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

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

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


                                 Page 31 of 31