Document:

2003 STOCK OPTION PLAN FOR OFFICERS AND EMPLOYEES
                                       OF
                          ASTORIA FINANCIAL CORPORATION

                                    ARTICLE I
                                     PURPOSE

                  SECTION  1.1      GENERAL PURPOSE OF THE PLAN.
                  The purpose of the Plan is to promote the growth and
profitability of Astoria Financial Corporation, to provide certain key officers
and employees of Astoria Financial Corporation and affiliates with an incentive
to achieve corporate objectives, to attract and retain key individuals of
outstanding competence and to provide such individuals with an equity interest
in Astoria Financial Corporation.

                                   ARTICLE II
                                   DEFINITIONS

                  The following definitions shall apply for the purposes of this
Plan, unless a different meaning is plainly indicated by the context:

                  SECTION 2.1 ASSOCIATION means Astoria Federal Savings and Loan
Association, a federally chartered savings institution, and any successor
thereto.

                  SECTION 2.2 BOARD means the board of directors of Astoria
Financial Corporation.

                  SECTION 2.3 CHANGE IN CONTROL OF THE COMPANY means any of the
following events:

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

                           (i) 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
                  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 Astoria Financial
                  Corporation; and

                           (ii) at least 51% of the securities entitled to vote
                  generally in the election of directors of the entity resulting
                  from such transaction are beneficially owned (within the
                  meaning of Rule 13d-3 promulgated under the Exchange Act) in
                  substantially the same relative proportions by persons who,
                  immediately prior to such transaction, beneficially owned
                  (within the meaning of Rule 13d-3 promulgated under the
                  Exchange Act) at least 51% of the securities entitled to vote
                  generally in the election of directors of Astoria Financial
                  Corporation;

                  (b) the acquisition of all or substantially all of the assets
         of Astoria Financial Corporation or beneficial ownership (within the
         meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
         more of the outstanding securities of Astoria Financial Corporation
         entitled to vote generally in the election of directors by any person
         or by any persons acting in concert, or

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         approval by the stockholders of Astoria Financial Corporation of any
         transaction which would result in such an acquisition;

                  (c) a complete liquidation or dissolution of Astoria Financial
         Corporation, or approval by the stockholders of Astoria Financial
         Corporation of a plan for such liquidation or dissolution;

                  (d) the occurrence of any event if, immediately following such
         event, at least 50% of the members of the Board of Directors of Astoria
         Financial Corporation do not belong to any of the following groups:

                           (i) individuals who were members of the Board of
                  Directors of Astoria Financial Corporation on the Effective
                  Date ; or

                           (ii) individuals who first became members of the
                  Board of Directors of Astoria Financial Corporation after the
                  Effective Date either:

                                    (A) upon election to serve as a member of
                           the Board of Directors of Astoria Financial
                           Corporation 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

                                    (B) upon election by the stockholders of
                           Astoria Financial Corporation to serve as a member of
                           the Board of Astoria Financial Corporation, but only
                           if nominated for election by affirmative vote of
                           three-quarters of the members of the Board of
                           Directors of Astoria Financial Corporation, or of a
                           nominating committee thereof, in office at the time
                           of such first nomination;

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

                  (e) any event which would be described in section 2.3(a), (b),
         (c) or (d) if the term "Association" were substituted for the term
         "Company" therein.

In no event, however, shall a Change in Control be deemed to have occurred as a
result of any acquisition of securities or assets of Astoria Financial
Corporation, the Association, or a subsidiary of either of them, by Astoria
Financial Corporation, 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 2.3, the term "person" shall have the meaning assigned to it under
sections 13(d)(3) or 14(d)(2) of the Exchange Act.

                  SECTION 2.4 CODE means the Internal Revenue Code of 1986, as
amended (including the corresponding provisions of any succeeding law).

                  SECTION 2.5 COMMITTEE means the Committee described in section
3.1.

                  SECTION 2.6 COMPANY means Astoria Financial Corporation, a
corporation organized and existing under the laws of the State of Delaware, and
any successor thereto, the Association and any successor thereto and, with the
prior approval of the Board, and subject to such terms and conditions as may be
imposed by the Board, any other

<PAGE>

savings bank, savings and loan association, bank, corporation, financial
institution or other business organization or institution.

                  SECTION 2.7 DISABILITY means a condition of total incapacity,
mental or physical, for further performance of duty with the Company which the
Committee shall have determined, on the basis of competent medical evidence, is
likely to be permanent.

                  SECTION 2.8 DISINTERESTED BOARD MEMBER means a member of the
Board who (a) is not a current employee of the Company, (b) is not a former
employee of the Company who receives compensation for prior services (other than
benefits under a tax-qualified retirement plan) during the taxable year, (c) has
not been an officer of the Company, and (d) does not receive remuneration from
the Company, either directly or indirectly, in any capacity other than as a
director, except for an amount for which disclosure would not be required
pursuant to Item 404(a) of the Regulation S-K of the Securities and Exchange
Commission and (e) does not possess an interest in any other transaction, and is
not engaged in a business relationship, for which disclosure would be required
pursuant to Item 404(a) or (b) of Regulation S-K of the Securities and Exchange
Commission. The term Disinterested Board Member shall be interpreted in such
manner as shall be necessary to conform to the requirements of section 162(m) of
the Code and Rule 16b-3 promulgated under the Exchange Act.

                  SECTION 2.9 EFFECTIVE DATE means the date on which the Plan is
approved by the holders of a majority of the Shares represented in person or by
proxy at a meeting of the voting stockholders of Astoria Financial Corporation
duly called and held.

                  SECTION 2.10 ELIGIBLE INDIVIDUAL means any individual whom the
Committee may determine to be a key officer or employee of the Company and
select to receive a grant of an Option pursuant to the Plan.

                  SECTION 2.11 EXCHANGE ACT means the Securities Exchange Act of
1934, AS AMENDED.

                  SECTION 2.12 EXERCISE PRICE means the price per Share at which
Shares subject to an Option may be purchased upon exercise of the Option,
determined in accordance with section 4.4.

                  SECTION 2.13 FAIR MARKET VALUE means, with respect to a Share
on a specified date:

                  (a) the final quoted sales price on the date in question (or
         if there is no reported sale on such date, on the last preceding date
         on which any reported sale occurred) as reported in the principal
         consolidated reporting system with respect to securities listed or
         admitted to trading on the principal United States securities exchange
         on which the Shares are listed or admitted to trading; or

                  (b) if the Shares are not listed or admitted to trading on any
         such exchange, the closing bid quotation with respect to a Share on
         such date on the National Association of Securities Dealers Automated
         Quotations System, or, if no such quotation is provided, on another
         similar system, selected by the Committee, then in use; or

                  (c) if sections 2.13(a) and (b) are not applicable, the fair
         market value of a Share as the Committee may determine.

                  SECTION 2.14 INCENTIVE STOCK OPTION means a right to purchase
Shares that is granted pursuant to section 4.1, that is designated by the
Committee to be an Incentive Stock Option and that is intended to satisfy the
requirements of section 422 of the Code.

                  SECTION 2.15 LIMITED STOCK APPRECIATION RIGHT means a right
granted pursuant to section 4.9.

<PAGE>

                  SECTION 2.16 NON-QUALIFIED STOCK OPTION means a right to
purchase Shares that is granted pursuant to section 4.1, that is designated by
the Committee to be a Non-Qualified Stock Option and that is not intended to
satisfy the requirements of section 422 of the Code.

                  SECTION 2.17 OPTION means either an Incentive Stock Option or
a Non-Qualified Stock Option.

                  SECTION 2.18 OPTION PERIOD means the period during which an
Option may be exercised, de termined in accordance with section 4.5.

                  SECTION 2.19 PERSON means an individual, a corporation, a
bank, a savings bank, a savings and loan association, a financial institution, a
partnership, an association, a joint-stock company, a trust, an estate, an
unincorporated organization and any other business organization or institution.

                  SECTION 2.20 PLAN means the 2003 Stock Option Plan for
Officers and Employees of Astoria Financial Corporation, as amended from time to
time.

                  SECTION 2.21 QUALIFIED DOMESTIC RELATIONS ORDER means a
Domestic Relations Order that: (a) clearly specifies (i) the name and last known
mailing address of the Option holder and of each person given rights under such
Domestic Relations Order, (ii) the amount or percentages of the Option holder's
benefits under this Plan to be paid to each person covered by such Domestic
Relations Order, (iii) the number of payments or the period to which such
Domestic Relations Order applies, and (iv) the name of this Plan; and (b) does
not require the payment of a benefit in a form or amount that is (i) not
otherwise provided for under the Plan, or (ii) inconsistent with a previous
Qualified Domestic Relations Order. For the purposes of this Plan, a "Domestic
Relations Order" means a judgment, decree or order (including the approval of a
property settlement) that is made pursuant to a state domestic relations or
community property law and relates to the provision of child support, alimony
payments, or marital property rights to a spouse, child or other dependent of an
Option holder.

                  SECTION 2.22 RETIREMENT means retirement at the normal or
early retirement date as set forth in any tax-qualified retirement/pension plan
of the Association.

                  SECTION 2.23  SHARE means a share of Common Stock, par
value $.01 per share, of Astoria Financial Corporation.

                  SECTION 2.24 TERMINATION FOR CAUSE means the termination upon
an intentional failure to perform stated duties, breach of a fiduciary duty
involving personal dishonesty, which results in material loss to the Company or
one of its affiliates or willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final case-and-desist order
which results in material loss to the Company or one of its affiliates.

                  SECTION 2.25 THREATENED CHANGE IN CONTROL means (a) the
circulation of a proxy statement by any Person other than management of Astoria
Financial Corporation seeking stockholder approval of a transaction that would
result in a Change in Control of the Company or (b) the commencement of a tender
offer (within the meaning of section 14 of the Exchange Act) which, if
consummated, would result in a Change in Control of the Company.

<PAGE>

                                   ARTICLE III
                                 ADMINISTRATION

                  SECTION 3.1       COMMITTEE.

                  The Plan shall be administered by a Committee consisting of
the members of the Compensation Committee of Astoria Financial Corporation who
are Disinterested Board Members. If fewer than three members of the Compensation
Committee are Disinterested Board Members, then the Board shall appoint to the
Committee such additional Disinterested Board Members as shall be necessary to
provide for a Committee consisting of at least three Disinterested Board
Members.

                  SECTION 3.2       COMMITTEE ACTION.

                  The Committee shall hold such meetings, and may make such
administrative rules and regulations, as it may deem proper. A majority of the
members of the Committee shall constitute a quorum, and the action of a majority
of the members of the Committee present at a meeting at which a quorum is
present, as well as actions taken pursuant to the unanimous written consent of
all of the members of the Committee without holding a meeting, shall be deemed
to be actions of the Committee. All actions of the Committee shall be final and
conclusive and shall be binding upon the Company and all other interested
parties. Any Person dealing with the Committee shall be fully protected in
relying upon any written notice, instruction, direction or other communication
signed by the secretary of the Committee and one member of the Committee, by two
members of the Committee or by a representative of the Committee authorized to
sign the same in its behalf.

                  SECTION 3.3       COMMITTEE RESPONSIBILITIES.

                  Subject to the terms and conditions of the Plan and such
limitations as may be imposed from time to time by the Board, the Committee
shall be responsible for the overall management and administration of the Plan
and shall have such authority as shall be necessary or appropriate in order to
carry out its responsibilities, including, without limitation, the authority:

                  (a) to interpret and construe the Plan, and to determine all
         questions that may arise under the Plan as to eligibility for
         participation in the Plan, the number of Shares subject to the Options,
         if any, to be granted, and the terms and conditions thereof;

                  (b) to adopt rules and regulations and to prescribe forms for
         the operation and administration of the Plan; and

                  (c) to take any other action not inconsistent with the
         provisions of the Plan that it may deem necessary or appropriate.

                                   ARTICLE IV
                                  STOCK OPTIONS

                  SECTION 4.1       IN GENERAL.

                  Subject to the limitations of the Plan, the Committee may, in
its discretion, grant to an Eligible Individual an Option to purchase Shares.
Any such Option shall be evidenced by a written agreement which shall:

                  (a) designate the Option as either an Incentive Stock Option
         or a Non-Qualified Stock Option;

                  (b) specify the number of Shares covered by the Option;

                  (c) specify the Exercise Price, determined in accordance with
         section 4.4, for the Shares subject to the Option;

<PAGE>

                  (d) specify the Option Period determined in accordance with
         section 4.5;

                  (e) set forth specifically or incorporate by reference the
         applicable provisions of the Plan; and

                  (f) contain such other terms and conditions not inconsistent
         with the Plan as the Com mittee may, in its discretion, prescribe with
         respect to an Option granted to an Eligible Individual.

                  SECTION 4.2       AVAILABLE SHARES.

                  Subject to section 5.3, the maximum aggregate number of Shares
with respect to which Options may be granted at any time shall be equal to the
excess of:

                  (a)      3,000,000 Shares; over

                  (b)      the sum of:

                           (i) the number of Shares with respect to which
                  previously granted Options may then or may in the future be
                  exercised; plus

                           (ii) the number of Shares with respect to which
                  previously granted Options have been exercised.

For purposes of this section 4.2, an Option shall not be considered as having
been exercised to the extent that such Op tion terminates by reason other than
the purchase of the related Shares.

                  SECTION 4.3       SIZE OF OPTION.

                  Subject to section 4.2 and such limitations as the Board may
from time to time impose, the number of Shares as to which an Eligible
Individual may be granted Options shall be determined by the Committee, in its
discretion. The maximum number of Shares that may be granted to any one
individual under this Plan shall be the entire number of Shares then available
under the Plan. In the case of a "covered individual" within the meaning of
section 162(m) of the Code, all Options previously granted to such individual
under the Plan , including those that expire without being exercised or are
cancelled or forfeited shall be applied to reduce the amount available for grant
to such individual.

                  SECTION 4.4       EXERCISE PRICE.

                  The price per Share at which an Option granted to an Eligible
Individual may be exercised shall be determined by the Committee, in its
discretion; PROVIDED, HOWEVER, that the Exercise Price shall not be less than
(a) the Fair Market Value of a Share on the date on which the Option is granted
and (b) in the case of an Option intended to be an Incentive Stock Option that
is granted to an Eligible Individual who, at the time the Option is granted,
owns Shares comprising more than 10% of the total combined voting power of all
classes of stock of the Company, shall not be less than 110% of the Fair Market
Value of a Share.

                  SECTION 4.5       OPTION PERIOD.

                  The Option Period during which an Option granted to an
Eligible Individual may be exercised shall commence on the date specified by the
Committee in the Option agreement and shall expire on the date specified by the
Committee in the Option agreement or, if no date is specified, on the earliest
of:

                  (a) the date specified by the Committee in the Option
         agreement;

                  (b) the last day of the three-month period commencing on the
         date of the Eligible Individual's termination of employment with the
         Company, other than on account of death or Disability, Retirement or a
         Termination for Cause;

<PAGE>

                  (c) the last day of the one-year period commencing on the date
         of the Eligible Individual's termination of employment due to death,
         Disability or Retirement;

                  (d) as of the time and on the date the Eligible Individual
         ceases to be an employee of the Company due to a Termination for Cause;

                  (e) the last day of the ten-year period commencing on the date
         on which the Option was granted; and

                  (f) for an Option intended to be an Incentive Stock Option
         that is granted to an Eligible Individual who, at the time the Option
         is granted, owns Shares comprising more than 10% of the total combined
         voting power of all classes of stock of the Company, the last day of
         the five-year period commencing on the date on which the Option was
         granted;

PROVIDED, HOWEVER, that in the event of a Threatened Change in Control or a
Change in Control of the Company while there is outstanding any Option whose
Option Period has not commenced, such Option Period shall automatically commence
on the earliest date on which the Threatened Change in Control or Change in
Control of the Company is deemed to have occurred.

                  SECTION 4.6       METHOD OF EXERCISE.

                  (a) Subject to the limitations of the Plan and the Option
         agreement, an Option holder may, at any time during the Option Period,
         exercise his right to purchase all or any part of the Shares to which
         the Option relates; PROVIDED, HOWEVER, that the minimum number of
         Shares which may be purchased shall be 100, or, if less, the total
         number of Shares relating to the Option which remain unpurchased. An
         Option holder shall exercise an Option to purchase Shares by:

                  (i) giving written notice to the Committee, in such form and
         manner as the Committee may prescribe, of his intent to exercise the
         Option;

                  (ii) delivering to the Committee full payment, consistent with
         section 4.6(b), for the Shares as to which the Option is to be
         exercised; and

                  (iii) satisfying such other conditions as may be prescribed in
         the Option agreement.

                  (b) The Exercise Price of Shares to be purchased upon exercise
         of any Option shall be paid (i) in full in cash (by certified or bank
         check or such other instrument as the Company may accept) or; (ii) if
         and to the extent permitted by the Committee, in the form of Shares
         already owned beneficially for a period of more than six months by the
         Option Holder having an aggregate Fair Market Value on the date the
         Option is exercised equal to the aggregate Exercise Price to be paid;
         or (iii) by a combination thereof. Payment for any Shares to be
         purchased upon exercise of an Option may also be made by delivering a
         properly executed exercise notice to the Company, together with a copy
         of irrevocable instructions to a broker to deliver promptly to the
         Company the amount of sale or loan proceeds to pay the purchase price.
         To facilitate the foregoing, the Company may enter into agreements for
         coordinated procedures with one or more brokerage firms.

                  (c) When the requirements of section 4.6(a) and (b) have been
         satisfied, the Committee shall take such action as is necessary to
         cause the issuance of a stock certificate evidencing the Option
         holder's ownership of such Shares. The Person exercising the Option
         shall have no right to vote or to receive dividends, nor have any other
         rights with respect to the Shares, prior to the date as of which such
         Shares are transferred to such Person on the stock transfer records of
         the Company, and no adjustments shall be made for any dividends or
         other rights for which the record date is prior to the date as of which
         such transfer is effected, except as may be required under section 5.3.

<PAGE>

                  SECTION 4.7       LIMITATIONS ON OPTIONS.

                  (a) An Option by its terms shall not be transferable by the
Option holder other than by will or the laws of descent and distribution, or
pursuant to the terms of a Qualified Domestic Relations Order, and shall be
exercisable, during the life of the Option holder, only by the Option holder or
an alternate payee designated pursuant to such a Qualified Domestic Relations
Order; PROVIDED, HOWEVER, that an Eligible Individual may, at any time at or
after the grant of a Non-Qualified Stock Option under the Plan, apply to the
Committee for approval to transfer all or any portion of such Non-Qualified
Stock Option which is then unexercised to such Eligible Individual's spouse, and
the lineal ascendents and lineal descendants of such Eligible Individual or his
spouse, or any one or more of them, or to an entity wholly owned by (including
but not limited to a trust the exclusive beneficiaries of which are) one or more
of them or wholly owned jointly by one or more of them and the Eligible
Individual. The Committee may approve or withhold approval of such transfer in
its sole and absolute discretion. If such transfer is approved, it shall be
effected by written notice to the Company given in such form and manner as the
Committee may prescribe and actually received by the Company prior to the death
of the person giving it. Thereafter, the transferee shall have with respect to
such Non- Qualified Stock Option, all of the rights, privileges and obligations
which would attach thereunder to the transferor. If a privilege of the Option
depends on the life, employment or other status of the transferor, such
privilege of the Option for the transferee shall continue to depend upon the
life, employment or other status of the transferor. The Committee shall have
full and exclusive authority to interpret and apply the provisions of the Plan
to transferees to the extent not specifically addressed herein.

                  (b) The Company's obligation to deliver Shares with respect to
an Option shall, if the Committee so requests, be conditioned upon the receipt
of a representation as to the investment intention of the Option holder to whom
such Shares are to be delivered, in such form as the Committee shall determine
to be necessary or advisable to comply with the provisions of applicable
federal, state or local law. It may be provided that any such representation
shall become inoperative upon a registration of the Shares or upon the
occurrence of any other event eliminating the necessity of such representation.
The Company shall not be required to deliver any Shares under the Plan prior to
(i) the admission of such Shares to listing on any stock exchange on which
Shares may then be listed, or (ii) the completion of such registration or other
qualification under any state or federal law, rule or regulation as the
Committee shall determine to be necessary or advisable.

                  SECTION 4.8       ADDITIONAL RESTRICTIONS ON INCENTIVE STOCK
OPTIONS.

                  In addition to the limitations of section 4.7, an Option
designated by the Committee to be an Incentive Stock Option shall be subject to
the following limitations:

                  (a) If, for any calendar year, the sum of (i) plus (ii)
         exceeds $100,000, where (i) equals the Fair Market Value (determined as
         of the date of the grant) of Shares subject to an Option intended to be
         an Incentive Stock Option which first become available for purchase
         during such calendar year, and (ii) equals the Fair Market Value
         (determined as of the date of grant) of Shares subject to any other
         options intended to be Incentive Stock Options and previously granted
         to the same Eligible Individual which first become exercisable in such
         calendar year, then that portion of the Shares granted pursuant to such
         options which cause the sum of (i) and (ii) to exceed $100,000 shall be
         deemed to be Shares granted pursuant to a Non-Qualified Stock Option or
         Non-Qualified Stock Options, with the same terms as the Option or
         Options intended to be an Incentive Stock Option;

                  (b) An Incentive Stock Option that is exercised during its
         designated Option Period but more than (i) three months after
         termination of employment with the Company (other than on account of
         death or disability as defined section 22(e)(3) of the Code); or (ii)
         one year after such individual's termination of employment with the
         Company due to disability (within the meaning of section 22(e)(3) of
         the Code) or death; may be exercised in accordance with its terms but
         shall be treated as a non-Qualified Stock Option.

<PAGE>

                  (C) Except with the prior written approval of the Committee,
         no individual shall dispose of Shares acquired pursuant to the exercise
         of an Incentive Stock Option until after the later of (i) the second
         anniversary of the date on which the Incentive Stock Option was
         granted, or (ii) the first an niversary of the date on which the Shares
         were acquired.

                  SECTION 4.9       CHANGE IN CONTROL CASH OUT.

                  (a) Each Option granted under this Plan shall be accompanied
         by a Limited Stock Appreciation Right that is exercisable at the times
         and upon the terms and conditions set forth herein. Each Limited Stock
         Appreciation Right granted hereunder shall be exercisable for a period
         commencing on the date on which a Change in Control of the Company
         occurs and ending six (6) months after such date or, if later in the
         case of any Person, thirty (30) days after the earliest date on which
         such Person may exercise the Limited Stock Appreciation Right without
         subjecting himself to liability under section 16 of the Securities
         Exchange Act of 1934, as amended. A Person in possession of a Limited
         Stock Appreciation Right granted hereunder may exercise such Limited
         Stock Appreciation Right by:

                  (i) giving written notice to the Committee, in such form and
         manner as the Committee may prescribe, of his intent to exercise the
         Limited Stock Appreciation Right; and

                  (ii) agreeing in such written notice to the cancellation of
         Options then outstanding to him for a number of Shares equal to the
         number of Shares for which the Limited Stock Appreciation Right is
         being exercised.

Except as provided in section 4.9(c), within ten (10) days after the giving of
such a notice, the Committee shall cause the Company to deliver to such Person a
monetary payment in an amount per Share equal to the amount by which the Change
in Control Consideration exceeds the Exercise Price per Share of each of the
Options being canceled.

                  (b) For purposes of section 4.9(a), the term Change in Control
         Consideration shall mean the greater of (i) the highest price per Share
         paid by any Person who initiated or sought to effect the Change in
         Control for a Share during the period of one (1) year ending on the
         date of the relevant Change in Control of the Company; and (ii) the
         average Fair Market Value of a Share over the last ten (10) trading
         days preceding the date of exercise of the Limited Stock Appreciation
         Right.

                  (c) Notwithstanding anything herein contained to the contrary,
         the Limited Stock Appreciation Rights granted hereunder shall be
         canceled immediately prior to the effective time of a Change in Control
         of the Company resulting from a transaction between the Company and
         another party pursuant to a written agreement whereby the consummation
         of the transaction is conditioned upon such cancellation; PROVIDED,
         HOWEVER, that the cancellation of such Limited Stock Appreciation
         Rights shall be subject to the following conditions:

                  (i) the transaction is, in fact, consummated; and

                  (ii) the written agreement providing for the transaction
         provides for each Person to whom a Limited Stock Appreciation Right has
         been granted the right to receive, upon the effective date of such
         transaction, property with a fair market value at least equal to the
         monetary payment that would be made upon exercise of the Limited Stock
         Appreciation Right.

<PAGE>

                                    ARTICLE V
                            AMENDMENT AND TERMINATION

                  SECTION 5.1       TERMINATION.

                  The Board may suspend or terminate the Plan in whole or in
part at any time prior to the tenth anniversary of the Effective Date by giving
written notice of such suspension or termination to the Committee. Unless sooner
terminated, the Plan shall terminate automatically on the day preceding the
tenth anniversary of the Effective Date. In the event of any suspension or
termination of the Plan, all Options theretofore granted under the Plan that are
outstanding on the date of such suspension or termination of the Plan shall
remain outstanding under the terms of the Option agreements granting such
Options.

                  SECTION 5.2       AMENDMENT.

                  (A) The Board may amend or revise the Plan in whole or in part
at any time; PROVIDED, HOWEVER, that if the amendment or revision:

                  (I) materially increases the benefits accruing under the Plan;

                  (II) materially increases the number of Shares which may be
issued under the Plan;

                  (III) modifies section 4.10 under the plan; or

                  (IV) materially modifies the requirements as to eligibility
for Options under the Plan;

or if otherwise required to preserve the treatment of Options granted as
"qualified performance-based compensation" within the meaning of section 162(m)
of the Code, such amendment or revision shall be subject to approval by the
shareholders of the Company.

                  (b) The Committee may, with the consent of the Option holder,
amend the terms of the Option agreement governing any Option granted under the
Plan to include any term it would then have the authority to attach to an Option
then being granted; provided, however, that except as authorized in section 5.3,
no such amendment shall result in a reduction of the original Exercise Price.

                  SECTION 5.3       ADJUSTMENTS IN THE EVENT OF A BUSINESS
REORGANIZATION.

                  (a) In the event of any merger, consolidation, or other
         business reorganization in which the Company is the surviving entity,
         and in the event of any stock split, stock dividend or other event
         generally affecting the number of Shares held by each Person who is
         then a holder of record of Shares, or in any other circumstance where
         the Committee determines that an adjustment to the Exercise Price or
         number of Shares subject to an Option is appropriate to avoid an
         unintended enlargement or dilution of the economic rights evidenced by
         an Option , the number of Shares covered by each outstanding Option and
         the number of Shares available pursuant to section 4.2 shall be
         adjusted to account for such event. Such adjustment shall be effected
         by multiplying such number of Shares by an amount equal to the number
         of Shares that would be owned after such event by a Person who,
         immediately prior to such event, was the holder of record of one Share,
         and the Exercise Price of the Options shall be adjusted by dividing the
         Exercise Price by such number of Shares; PROVIDED, HOWEVER, that the
         Committee may, in its discretion, establish another appropriate method
         of adjustment.

                  (b) In the event of any merger, consolidation, or other
         business reorganization in which the Company is not the surviving
         entity:

                  (i) any Options granted under the Plan which remain
         outstanding may be canceled as of the effective date of such merger,
         consolidation, business reorganization, liquidation or sale by the

<PAGE>

         Board upon 30 days' written notice to each Option holder in advance of
         the effective date of such event; and

                  (ii) any Option which is not canceled pursuant to section
         5.3(b)(i) shall be adjusted in such manner as the Committee shall deem
         appropriate to account for such merger, consolidation or other business
         reorganization.

                                   ARTICLE VI
                                  MISCELLANEOUS

                  SECTION 6.1       STATUS AS AN EMPLOYEE BENEFIT PLAN.

                  This Plan is not intended to satisfy the requirements for
qualification under section 401(a) of the Code or to satisfy the definitional
requirements for an "employee benefit plan" under section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended. It is intended to be a
non-qualified incentive compensation program that is exempt from the regulatory
requirements of the Employee Retirement Income Security Act of 1974, as amended.
The Plan shall be construed and administered so as to effectuate this intent.

                  SECTION 6.2       NO RIGHT TO CONTINUED EMPLOYMENT.

                  Neither the establishment of the Plan nor any provisions of
the Plan nor any action of the Board or the Committee with respect to the Plan
shall be held or construed to confer upon any Eligible Individual any right to a
continuation of employment by the Company. The Company reserves the right to
dismiss any Eligible Individual or otherwise deal with any Eligible Individual
to the same extent as though the Plan had not been adopted.

                  SECTION 6.3       CONSTRUCTION OF LANGUAGE.

                  Whenever appropriate in the Plan, words used in the singular
may be read in the plural, words used in the plural may be read in the singular,
and words importing the masculine gender may be read as referring equally to the
feminine or the neuter. Any reference to an Article or section number shall
refer to an Article or section of this Plan unless otherwise indicated.

                  SECTION 6.4       GOVERNING LAW.

                  The Plan shall be construed, administered and enforced
according to the laws of the State of New York without giving effect to the
conflict of laws principles thereof, except to the extent that such laws are
preempted by federal law.

                  SECTION 6.5       HEADINGS.

                  The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings and the
text of the Plan, the text shall control.

                  SECTION 6.6       NON-ALIENATION OF BENEFITS.

                  The right to receive a benefit under the Plan shall not be
subject in any manner to anticipation, alienation or assignment, nor shall such
right be liable for or subject to debts, contracts, liabilities, engagements or
torts, except as required pursuant to a Qualified Domestic Relations Order or as
otherwise permitted pursuant to section 4.7(a).

                  SECTION 6.7       TAXES.

                  The Company shall have the right to deduct from all amounts
paid by the Company in cash with respect to an Option under the Plan any taxes
required by law to be withheld with respect to such Option. Where any Person is
entitled to receive Shares pursuant to the exercise of an Option, the Company
shall have the right to require such Person to pay the Company the amount of any
tax which the Company is required to withhold with respect to such Shares, or,
in lieu thereof, to retain, or to sell without notice, a sufficient number of
Shares to cover the amount required to be withheld.

<PAGE>

                  SECTION 6.8       APPROVAL OF SHAREHOLDERS.

                  The Plan and all Options and Limited Stock Appreciation Rights
granted hereunder shall be conditioned on the approval of the Plan by the
shareholders of Astoria Financial Corporation. No Option or Limited Stock
Appreciation Rights granted under the Plan shall be effective, nor shall any
such Option or Limited Stock Appreciation Rights be exercised or any Shares
issued or purchased, prior to such approval.

                  SECTION 6.9       NOTICES.

                  Any communication required or permitted to be given under the
Plan, including any notice, direction, designation, comment, 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:

                  (a) If to the Committee:

                           Astoria Financial Corporation
                           One Astoria Federal Plaza
                           Lake Success, New York  11042-1085
                           Attention:  CORPORATE SECRETARY

                  (b)      If to an Option holder, to the Option holder's
                           address as shown in the Company's personnel records.INCENTIVE STOCK OPTION AGREEMENT
                                 PURSUANT TO THE
              2003 STOCK OPTION PLAN FOR OFFICERS AND EMPLOYEES OF
                          ASTORIA FINANCIAL CORPORATION

         STOCK OPTION AGREEMENT made as of _________________ (the "Date of
Grant"), between Astoria Financial Corporation ("AFC"), and _________________
(the "Optionee"). For purposes of this Agreement, the defined terms contained
herein shall have the same meanings as those contained in the 2003 Stock Option
Plan for Officers and Employees of Astoria Financial Corporation (the "Plan").

         Whereas, the purpose of the Plan is to promote the growth and
profitability of AFC, to provide certain key officers and employees of AFC and
its affiliates with an incentive to achieve corporate objectives, to attract and
retain key individuals of outstanding competence and to provide such individuals
with an equity interest in AFC; and

         Whereas, the Plan provides for the grant of both Incentive and
Non-qualified Stock Options to purchase shares of the Common Stock of AFC, par
value, $.01 per share ("Common Stock"); and

         Whereas the Committee determined as of the Date of Grant to grant to
the Optionee an Incentive Stock Option to purchase shares of Common Stock ( the
"Option") as provided herein.

         Now, therefore, to evidence the grant of such Option, and subject to
the terms and conditions of the Plan and this Agreement, AFC and the Optionee
hereby agree as follows:

         1. GRANT OF OPTION. AFC hereby evidences and confirms its grant to the
Optionee on the Date of Grant of an Option to purchase _________ shares of
Common Stock at the Exercise Price of $_______ per share which was the Fair
Market Value per Share of the underlying shares of Common Stock on the Date of
Grant as determined pursuant to the Plan. Pursuant to the terms of the Plan, the
Option evidenced and confirmed hereby is accompanied by a Limited Stock
Appreciation Right with respect to _____ shares of Common Stock as specified in
Section 4.9 of the Plan. In the event of a Change of Control at a time when the
Option granted hereunder is outstanding in whole or in part, the Optionee shall
have the right to exercise the Limited Stock Appreciation Right granted hereby
as provided in Section 4.9 of the Plan notwithstanding the fact that, at the
time that the exercise of such right occurs, the Option provided herein may have
otherwise expired or terminated by its terms.

         2. TERM AND EXERCISE OF OPTION. The term of the Option will be for a
period of ten years from the Date of Grant, beginning on _________________ and
ending on _________________. The Option shall also expire and be forfeited if
not exercised prior to such earlier date as is set forth in Section 4.5 of the
Plan. The Option shall vest and become exercisable during the term of the
Option, subject to the conditions set forth herein and in the Plan, on a
cumulative basis in

                                   Page 1 of 7

<PAGE>

installments as set forth in the following Option Vesting Schedule.

                             Option Vesting Schedule
                             -----------------------

Installment        Installment   Number of Shares as to which Option Vests
  Number          Vesting Date           on Installment Vesting Date
-----------        -----------   -----------------------------------------

     1             ----------                      -------

The Option shall vest and become immediately exercisable in its entirety as to
all Shares in the event of a Threatened Change of Control or a Change in Control
of the Company or in the event the Optionee terminates his employment with the
Company due to death, Disability or Retirement. The grant of the Option shall
impose no obligation upon the Optionee to exercise the Option.

         3. MANNER OF EXERCISE. The Option may be exercised from time to time,
in whole or in part, by written notice to the Committee, delivered to AFC to the
person designated in Section 11 of this Option Agreement, signed by the Optionee
or the person or persons eligible to exercise the Option under Section 6 hereof.
Such notice shall state the number of Shares with respect to which the Option is
being exercised and the Exercise Price as to such Shares, and shall include such
written covenants, agreements and representations as may from time to time be
necessary or desirable in order to ensure compliance with applicable laws,
regulations of governmental authorities and the requirements of any exchange or
stock market upon which the Common Stock is traded or listed. Such notice shall
be accompanied by payment in full of the Exercise Price for the number of Shares
as to which the Option is being exercised as provided in the Plan. As soon as
practicable after such notice and payment shall have been received, AFC shall
deliver a certificate or certificates representing the number of Shares with
respect to which the Option was exercised in the name of the person or persons
exercising the Option; provided, however, that AFC, in its sole discretion, may
permit Shares to be held in book-entry form.

         Payment of the Exercise Price shall be made in cash, or, in whole or in
part, through the surrender of Shares, which Shares shall be valued at Fair
Market Value (as defined in the Plan) on the date of exercise of the Option.

         The Optionee or other person entitled to exercise the Option shall not
be entitled to any rights as a stockholder with respect to Shares being acquired
pursuant to the exercise of the Option unless and until the acquisition of such
Shares shall have been recorded on the official stock transfer records of AFC.
No adjustments shall be made for dividends or distributions or other rights for
which the record date is prior to the recording of such acquisition except as
provided in Section 10 hereof.

         In the event the Option shall be exercised by any person other than by
the Optionee pursuant to Section 6 hereof, the notice of exercise of the Option
shall be accompanied by proof satisfactory to the Committee of the right of such
person to exercise the Option.

                                    Page 2 of 7

<PAGE>

         All Shares that shall be acquired upon the exercise of the Option as
provided herein shall be fully paid and nonassessable.

         4. SECURITIES LAWS: HOLDING PERIOD. Notwithstanding anything herein to
the contrary, AFC shall not be obligated to cause to be issued or delivered any
certificate evidencing Shares acquired pursuant to the exercise of the Option,
unless and until AFC is advised by its counsel that the issuance and delivery of
such certificates is in compliance with all applicable laws, regulations and
governmental authority and the requirements of any exchange or stock market upon
which the Common Stock is traded or listed. AFC shall in no event be obligated
to register any securities pursuant to the Securities Act of 1933 (as now in
effect or as hereafter amended) (the "Securities Act") or to take any other
affirmative action in order to cause the issuance and delivery of such
certificates to comply with any such law, regulation or requirement. In order to
ensure compliance with applicable federal, state and local law, the Committee
may at the time of exercise of the Option condition the exercise of such Option
upon receipt from the Optionee, or the person exercising the Option if other
than the Optionee, of a representation of the investment intention of the Person
to whom the Shares are to be delivered.

         Under current law, unless the Shares issuable upon exercise of Options
under the Plan are registered with the Securities and Exchange Commission
("SEC") under the Securities Act, such Shares are restricted securities subject
to the restrictions on resale as provided in Rule 144 as promulgated by the SEC
under the Securities Act. THEREFORE, UNLESS (I) THE ISSUANCE OF SHARES PURSUANT
TO THE EXERCISE OF OPTIONS UNDER THE PLAN IS REGISTERED UNDER THE SECURITIES ACT
OR (II) THE SUBSEQUENT SALE OF SHARES ACQUIRED UPON EXERCISE OF THE OPTION IS
REGISTERED UNDER THE SECURITIES ACT, OR (III) AN EXEMPTION FROM REGISTRATION IS
AVAILABLE, SUCH SHARES MUST BE HELD FOR TWO YEARS AFTER EXERCISE BEFORE THEY MAY
BE SOLD. An appropriate legend reflecting this restriction shall be placed on
the certificate evidencing the Shares when issued unless the requirements of (i)
above have previously been met. Shares for which a restrictive legend is
required may not be held in book-entry form or registered in "street" name.

         Also under applicable law, the grant of the Option and sale of the
underlying Shares may be deemed to be a purchase and sale, respectively, under
Section 16 of the Securities Exchange Act of 1934, as amended, (the "Exchange
Act") and, therefore, may result in the incursion of short swing profit recovery
under the Exchange Act and the regulations promulgated thereunder. To avoid
liability under Section 16 of the Exchange Act, a period of six months must
elapse between the Date of Grant and the sale of Common Stock received upon the
exercise of the Option.

         In addition, Shares acquired through the exercise of the Option, which
is intended to be an Incentive Stock Option, may not be disposed of, by sale or
otherwise, by the Optionee without the prior written consent of the Committee,
until the later of the second anniversary of the Date of Grant or the first
anniversary of the date on which the Option is exercised with respect to such
Shares. The Optionee acknowledges that in order to obtain the tax treatment
provided for Incentive Stock

                                    Page 3 of 7

<PAGE>

Options under Sections 421 and 422 of the Code the holding periods set forth in
the preceding sentence must be complied with. An appropriate legend reflecting
this restriction shall be placed on the certificate evidencing the Shares when
issued unless the requirement relating to the consent of the Committee has
previously been met.

         5. NON-TRANSFERABILITY. The Option may be exercised during the
Optionee's lifetime only by the Optionee (and, upon death, by the Optionee's
beneficiary as defined in Section 6). The Option and this Option Agreement shall
not be assignable or transferable by the Optionee, other than by will, by the
laws of descent and distribution, or pursuant to the terms of a Qualified
Domestic Relations Order. No such transfer of the Option or this Option
Agreement by the Optionee by will, the laws of descent and distribution, or
pursuant to the terms of a Qualified Domestic Relations Order shall be effective
to bind AFC unless the Committee shall have been furnished with written notice
thereof and such other evidence as the Committee may deem necessary or desirable
to establish the validity of the transfer and the agreement of the transferee or
transferees to be bound by the terms and conditions of this Agreement and the
Plan. The Exercise Price, upon the election of the Optionee or other person
entitled to exercise the Option, may be paid with borrowed funds the repayment
of which is secured by the Shares assigned or the proceeds thereof. Except as
provided above, the Option and this Option Agreement shall not be pledged,
hypothecated, sold, assigned, transferred or otherwise encumbered or disposed
of. Any purported pledge, hypothecation, sale, assignment, transfer or other
encumbrance or disposition of the Option or this Option Agreement contrary to
the provisions hereof shall be null and void and without effect. The levy of any
execution, attachment, or similar process upon the Option or Option Agreement
shall be null and void and without effect.

         6. DESIGNATION OF BENEFICIARY. The Optionee may designate a person or
persons to receive, in the event of death, any rights that may be available to
the Optionee pursuant to the Plan under the Option and this Option Agreement.
Such designation will be made in writing upon terms supplied by and shall be
delivered to AFC prior to the death of the person making the designation and may
be revoked by a similar writing. If the Optionee fails effectively to designate
a beneficiary, then the Optionee's estate will be deemed to be the beneficiary.
The Optionee may designate a beneficiary or beneficiaries pursuant to this
Agreement in writing by delivery of such designation to the person specified in
Section 11 to receive notices on behalf of the Committee. Following the death of
an Optionee, the designated beneficiary shall have the right to designate his
own death beneficiary.

         7. RIGHTS IN EVENT OF TERMINATION OF EMPLOYMENT. Subject to the
condition that the Option shall not be exercisable after _________________, the
Optionee may exercise the Option only while in the continuous service and employ
of the Company or within three months after the last day on which the Optionee
is employed by or in the service of the Company (unless the Optionee's service
is terminated on account of death as provided in Section 8 or Disability or
Retirement as provided in Section 9). If the Optionee's employment is terminated
under circumstances which constitute Termination for Cause, all Options and the
Limited Stock Appreciation Right awarded to Optionee shall immediately expire
upon such termination.

                                    Page 4 of 7

<PAGE>

         8. RIGHTS IN EVENT OF DEATH. Subject to the condition that the Option
shall not be exercisable after _________________, if the Optionee shall die
while in the employ or service of the Company, the beneficiary of the Optionee
(as determined pursuant to Section 6) may exercise the Option held by the
Optionee for a period of only one year from the date of the Optionee's death.

         9. RIGHTS IN EVENT OF DISABILITY OR RETIREMENT. Subject to the
condition that the Option shall not be exercisable after _________________, if
the Optionee shall terminate his employment or service to the Company as a
result of Disability or as a result of Retirement, the Optionee may exercise the
Option held by the Optionee for a period of only one year from the date of the
Optionee's termination of employment or service due to such Disability or
Retirement, provided, however, that this Option shall, to the extent of any
Shares acquired as a result of the exercise of this Option more than three month
after the Optionee's termination of employment or service as a result of
Retirement, be a Non-qualified Stock Option.

          10. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the
outstanding Shares by reason of any stock dividend or split, recapitalization,
merger, consolidation, spin-off, reorganization, combination or exchange of
shares, or other similar corporate change, proportionate and equitable
adjustments to the Option shall be made to the number of shares of Common Stock
covered by the Option and to the Exercise Price per share covered by the Option
to prevent dilution or enlargement of the rights of the Optionee under this
Agreement.

         11. NOTICE. Any notice required or permitted under this Option
Agreement or the Plan shall be deemed given when delivered in person or five
days after mailing, if mailed, postage prepaid, by registered or certified mail
with return receipt requested to the Committee addressed to One Astoria Federal
Plaza, Lake Success, New York 11042-1085, ATTN.: Corporate Secretary, and to the
Optionee or beneficiary at their last known addresses in the records of AFC.

         12. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained in the Plan or
set forth in this Option Agreement shall be held or construed to confer upon the
Optionee any right to continuation of employment by the Company or to impose
upon the Company any obligation to employ or retain the Optionee in its employ
or service for any period.

         13. MODIFICATION AND WAIVER. Neither this Option Agreement nor any
provision hereof can be changed, modified, amended, discharged, terminated or
waived orally or by any course of dealing or purported course of dealing, but
only by an agreement in writing signed by the Optionee or the Optionee's legal
representative and AFC. The waiver of or failure to enforce any breach of this
Option Agreement or the Plan shall not be deemed to be a waiver of or
acquiescence in any other breach thereof.

         14. INCORPORATION OF THE PLAN. This Option Agreement is subject in its
entirety to the terms and conditions set forth in the Plan which are
incorporated by reference herein. In the event of any conflict between the terms
and conditions set forth in this Option Agreement and those set forth in the
Plan, the terms and conditions set forth in the Plan shall control.

                                    Page 5 of 7

<PAGE>

         15. GOVERNING LAW. This Option Agreement shall be governed by and
construed in accordance with the laws of the State of New York to the extent not
preempted by federal law.

         16. OPTIONEE ACKNOWLEDGMENT. The Optionee hereby acknowledges that all
decisions, determinations and interpretations of the Committee, with respect to
the Plan and this Option Agreement, shall be final and conclusive.

         IN WITNESS WHEREOF, AFC has caused this Option Agreement to be executed
by its duly authorized officer and its corporate seal to be affixed hereto, and
said Optionee has hereunto set his hand, as of the day and year first above
written.

[CORPORATE SEAL]                ASTORIA FINANCIAL CORPORATION

---------------------           -----------------------------------------------
Assistant Secretary             Executive Vice President, Secretary and General
                                Counsel

---------------------           -----------------------------------------------
Witness                         Optionee

                                -----------------------------------------------
                                Address

                                -----------------------------------------------
                                Address

                                   Page 6 of 7

<PAGE>

         I hereby designate as my Beneficiary under the terms of this Option
Agreement the following person(s) in the designated portions:

---------------------           -------------
Name of Beneficiary                %

         --------------------------------
         Relationship to Optionee

         -----------------------------------------------
         Address of Beneficiary

---------------------           -------------
Name of Beneficiary                %

         --------------------------------
         Relationship to Optionee

         -----------------------------------------------
         Address of Beneficiary

---------------------           -------------
Name of Beneficiary                %

         --------------------------------
         Relationship to Optionee

         -----------------------------------------------
         Address of Beneficiary

Date:                             Signed:
       ---------------                     ------------------------
                                                    Optionee

------------------------
Witness

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