DEFERRED COMPENSATION PLAN FOR DIRECTORS

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

Section 1.1 Administrator   means the Compensation Committee of the Board.

Section 1.2 Association   means Astoria Federal Savings and Loan Association.

Section 1.3 Board   means the Board of Directors of the Holding Company.

Section 1.4 Change of Control   has the meaning set forth in section 5.1.

Section 1.5 Code   means the Internal Revenue Code of 1986 (including the corresponding provisions of any succeeding law).

Section 1.6 Director   means any member of the Board of Directors of any Participating Company who is not an employee of any Participating Company. The term "Director" shall not include any individual to the extent that his service is as a director emeritus or a member of an advisory board.

Section 1.7 Exchange Act   means the Securities Exchange Act of 1934, as amended (including the corresponding provisions of any succeeding law).

Section 1.8 Fees   means, with respect to any Director, compensation payable for services as a member of the Board of Directors of a Participating Company, including annual retainers, fees for attendance at meetings, and special compensation as a chairman and/or a member of a committee of Directors.

Section 1.9 Holding Company   means Astoria Financial Corporation.

Section 1.10 Memorandum Account   means, with respect to a Participant, an account maintained by the Holding Company to which is credited the amount of the Participant's deferred Fees together with interest thereon pursuant to section 3.2, and against which are charged any distributions of amounts credited to the Memorandum Account.

Section 1.11 Participant   means a Director who has a Memorandum Account under the Plan.

Section 1.12 Participating Company   means the Holding Company, the Association, and any other company which, with the prior approval of the Administrator, may adopt this Plan.

Section 1.13 Plan   means this Deferred Compensation Plan for Directors. The Plan may be referred to as the "Deferred Compensation Plan for Directors of Astoria Financial Corporation.

Any Director may elect to become a Participant in the Plan by submitting to the Administrator a written election to defer receipt of all or a specified part of his Fees. Such election shall be made on or before the last day of any calendar year and shall be effective for the calendar year following the calendar year in which such election is made; provided, however, that in the case of initial elections made during 1994 or during the thirty (30) days after a person is first elected or appointed to serve as a Director, such election may be effective for Fees earned on or after an earlier date designated by the Director that is after the last day of the calendar month in which such election is filed with the Administrator. Once an election is made, it shall continue in effect for all succeeding calendar years until changed or revoked pursuant to section 2.2.

An election by a Director pursuant to section 2.1 shall continue in effect until termination of service as a Director; provided, however, that the Director may, by written election filed with the Administrator, increase or decrease the portion of his Fees to be deferred or discontinue such deferral altogether. Such election shall be effective with respect to Fees earned after the calendar year in which such election is filed with the Administrator. In the event that a Participant ceases to be a Director or in the event that a Director ceases to defer receipt of his Fees, the balance in his Memorandum Account shall continue to be credited with interest in accordance with Article V. A Director who has filed a written election to cease deferring receipt of his Fees may thereafter again file an election to defer receipt of all or any portion of his Fees pursuant to section 2.1, effective for the calendar year subsequent to the calendar year in which he files the new election.

The Administrator shall maintain a separate Memorandum Account for each Participant. The amount of a Participant's Fees deferred pursuant to section 2.1 shall be credited to his Memorandum Account as of the date on which such Fees would have been paid if an

election to defer were not in effect. Neither the Association nor any Participating Company shall fund its liability for the balances credited to a Memorandum Account, but each shall reflect its liability for such balances on its books. The Holding Company may, on such terms and conditions as it may, in its discretion, establish and agree to assume the liability for the payment of deferred Fees and interest thereon attributable to service for the Association or other Participating Companies.

A Participant's Memorandum Account shall be credited with interest as of the last day of each calendar quarter. Such interest credit shall be equal to the product of:

(a)           the average daily balance in the Memorandum Account during the quarter then ended; multiplied by

(b)           twenty-five percent (25%) of the lower of:

(i)           the average (on a consolidated basis) of (A) the Holding Company's yield (expressed as an annual percentage rate) on its average investments for the preceding quarter and (B) the Holding Company's cost of funds (expressed as an annual percentage rate) on its average interest-bearing liabilities for the quarter preceding the quarter then ended; and

(ii)           the Holding Company's yield on a consolidated basis (expressed as an annual percentage rate) on its average investments for the quarter preceding the quarter then ended.

Each such interest credit shall be added to the balance of a Participant's Memorandum Account as of the first day of the succeeding quarter for purposes of determining future interest credits.

All deferred fees and interest credited to the Memorandum Account shall be 100% vested at all times.

(a)           The balance in a Participant's Memorandum Account shall be paid to the Participant according to the payment schedule determined under section 4.1(b) as of the earlier of:

(i)           the first business day of the calendar quarter following the calendar quarter in which the Participant ceases to be a Director of any and all

Participating Companies for any reason, including death or retirement at mandatory retirement age; or

(ii)           the first business day of the calendar quarter following the calendar quarter in which the Participant becomes permanently and totally disabled within the meaning of section 22(e)(3) of the Code.

Payment (or the first in a series of payments) shall be made as soon as practicable after the date determined under this section 4.1(a).

(b)           Subject to section 4.1(c), payments made pursuant to section 4.1(a) shall be made according to whichever of the following payment schedules the Participant shall designate in his initial election to defer receipt of Fees (or in a subsequent election made and approved pursuant to section 4.2):

(i)           in a single lump sum, in which case the amount of the payment shall be equal to the entire balance credited to the Participant's Memorandum Account as of the last day of the calendar quarter before the quarter in which the payment is to be made;

(ii)           in such number of quarterly installment payments (not to exceed one-hundred (100) quarterly payments) as the Participant shall specify in his written election to defer receipt of Fees, in which case the amount of the quarterly installment payments to be made in each calendar year shall be equal to the lesser of the total balance in the Participant's Memorandum Account as of the date of payment and the amount determined under the following formula:

where:

(A)           "QP" is the amount of the quarterly payment;

(B)           "AB" is the balance credited to the Participant's Memorandum Account as of (I) for the first calendar year in which payments are made, the first day of the first calendar quarter for which a payment is made, and (II) for succeeding calendar years, January 1st of the year for which the payment is being made;

(C)           "N" is the number of payments remaining to be paid as of (I) in the case of the first calendar year in which payments are made, the first day of the first calendar quarter for which a payment is due, and (II) in the case of succeeding calendar years, January 1st of the year for which the payment is made.

The amount of the quarterly installments payable shall