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, 2009 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 Gary T. McCann, an individual residing at 17 Shoreham Road, Massapequa, New York 11758 (the “Executive”).

WITNESSETH:

WHEREAS , the Executive currently serves the Company in the capacity of Executive Vice President and as Executive Vice President of its wholly owned subsidiary, ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION (the “Association”); 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; and

WHEREAS , the Executive currently has an Employment Agreement with the Company entered into on December 1, 2003 (the “Initial Effective Date”), and amended as of August 15, 2007 (such agreement, as amended, the “Prior Agreement”); and

WHEREAS , the Executive and the Company wish to further amend and modify the Prior Agreement pursuant to Section 25 thereof for the purpose, among others, of compliance with the applicable requirements of Section 409A of the Internal Revenue Code of 1986 (the “Code”);

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 as amended through August 15, 2007 so as to provide as follows from and after the date hereof:

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.

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 Initial Effective Date and ending on the day before the third anniversary date of the Initial Effective Date, 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 Initial Effective Date, 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.

The Executive shall serve as Executive Vice President 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 or her best efforts to advance the interests of the Company.

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 FIVE HUNDRED

THOUSAND DOLLARS ($500,000), 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.

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.

(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 and exposures 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, 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.

(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.

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 (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Company shall mutually agree are necessary and appropriate for business purposes, in each case upon presentation to the Company of an itemized account of such expenses in such form as the Company may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was incurred.  The Executive shall be responsible for the payment of any taxes on account of his personal use of the automobile provided by the Company and on account of any other benefit provided herein.

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 Executive Vice President (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 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, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(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 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) 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) 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 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) of the Code, as amended;

(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) of the Code;

The DB Severance Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the corresponding non-qualified plan.

(vi) a lump sum payment (the “Defined Contribution Severance Payment”) equal to the sum of:

(A) an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the 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 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 Corporation's common stock or phantom shares of such stock than shares of whatever securities are so allocated shall be utilized, and provided further, that in

the event that there shall be any shares or phantom shares allocated during the then current plan year or the last complete plan year to the Executive's account under any qualified and non-qualified employee stock ownership plans maintained by the Association or any of its affiliates or subsidiaries solely as a result of the termination of such plans, the ALL shall be reduced (but not to an amount less than zero (0)) by an amount calculated by multiplying the number of shares or phantom shares allocated to the Executive's account solely as a result of the termination of such plans times the FMV utilized to calculate the ESOPSP;

“C” is the sum of all cash allocated to the Executive's accounts under all qualified and non-qualified employee stock ownership plans maintained by the 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 New York Stock Exchange (NYSE") 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.

The Defined Contribution Severance Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vii) 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)

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 calendar year of 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;

“FMV” is the closing price of the Company's common stock on the NYSE, 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 NYSE, or on whatever other stock exchange