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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 8-K
CURRENT REPORT

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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 21, 2005

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ASTORIA FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

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Delaware 001-11967 11-3170868
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)

ONE ASTORIA FEDERAL PLAZA, LAKE SUCCESS, NEW YORK 11042-1085
(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (516) 327-3000

NOT APPLICABLE
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12(b) under the Exchange
Act (17 CFR 240.14a-12(b))

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))

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ITEMS 2 THROUGH 7 NOT APPLICABLE.

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

a) Option Vesting Acceleration

On December 21, 2005, Astoria Financial Corporation's (the "Company")
Compensation Committee and Board of Directors approved the acceleration of
vesting of all outstanding unvested stock options which were awarded to officers
of Astoria Federal Savings and Loan Association (the Association) on December
17, 2003 (the "2003 Options") and December 15, 2004 (the "2004 Options").

At the time of the acceleration, the unvested 2003 Options represented 1,402,950
shares, each with an exercise price of $24.40 per share, the fair market value
of the Company's Common Stock on the date of grant, and, absent earlier vesting
due to the death, disability or retirement of the optionee or a change of
control of the Company, would have vested on January 10, 2007. The six executive
officers of the Company hold 2003 Options which account for 786,750 shares.

At the time of the acceleration, the unvested 2004 Options represented 1,897,200
shares, each with an exercise price of $26.6267 per share, the fair market value
of the Company's Common Stock on the date of grant, and, absent earlier vesting
due to the death, disability or retirement of the optionee or a change of
control of the Company, would have vested on January 10, 2008. The six executive
officers of the Company hold 2004 Options which account for 1,063,500 shares.

The Company placed a restriction on the sale or other transfer of shares
acquired through the exercise of 2003 Options or 2004 Options, the vesting of
which was accelerated, prior to the earlier of the original vesting date or the
date the optionee terminates employment with the Company and the Association.

The acceleration was effective on December 22, 2005. The purpose of the
acceleration is to enable the Company to eliminate compensation expense
associated with these options in future periods upon adoption of FASB Statement
No.123R, Share Based Payment, in January 2006. It is anticipated that the
accelerated vesting will eliminate potential pre-tax compensation expense in
future periods of approximately $10.4 million, or approximately $.06 per share
after-tax based upon diluted weighted average shares outstanding for the quarter
ended September 30, 2005, including pre-tax compensation expense of
approximately $6.7 million in 2006 or approximately $0.04 per share after-tax
based upon diluted weighted average shares outstanding for the quarter ended
September 30, 2005. As a result of the acceleration, the Company will incur in
2005 approximately $100,000 pre-tax compensation expense. A number of the
options which were accelerated, when granted, were intended to qualify as
incentive stock options. The accelerated vesting will for most affected
optionees disqualify such options upon exercise from incentive stock option tax
treatment. The Company, upon the exercise of such disqualified options, may
realize certain tax benefits that would not have otherwise been available to it.

b) Option Grants and Restricted Stock Awards to the Executive Officers

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Pursuant to the terms of the 2005 Re-designated, Amended and Restated Stock
Incentive Plan for Officers and Employees of Astoria Financial Corporation,
which was approved by the shareholders of the Company at its Annual Meeting of
Shareholders on May 18, 2005, the Compensation Committee of the Board of
Directors on December 21, 2005 granted the following non-statutory stock options
and shares of restricted stock to the executive officers of the Company:

Name Title Options Granted Restricted Stock Awarded
- ---------------------- ---------------------------- --------------- ------------------------

George L. Engelke, Jr. Chairman, President and 345,000 30,000
Chief Executive Officer

Monte N. Redman Executive Vice President 154,700 16,575
and Chief Financial Officer

Gerard C. Keegan Vice Chairman and Chief 122,900 13,150
Administrative Officer

Arnold K. Greenberg Executive Vice President 112,700 12,075

Alan P. Eggleston Executive Vice President, 103,800 11,125
Secretary and General
Counsel

Gary T. McCann Executive Vice President 84,000 9,000

All officers, as a group 1,224,100 196,828

The options granted have an exercise price of $29.02, the fair market value of
the Company's Common Stock on the date of grant, a 7 year term and vest on
January 9, 2009 or earlier upon the optionee's death, disability, retirement at
normal retirement age, on a change of control, or, in the case of the executive
officers, pursuant to the terms of their respective employment agreements with
the Company, upon the termination of their employment by the Company prior to
the end of the term of such employment agreement without cause, as defined
therein. In other cases, the options would be forfeited upon termination of
employment prior to the vesting date.

The restricted stock will vest and be distributed effective January 9, 2009 or
earlier upon the death, disability or retirement at normal retirement age, on a
change of control, or, in the case of the executive officers, pursuant to the
terms of their respective employment agreements with the Company, upon the
termination of their employment by the Company prior to the end of the term of
such employment agreement without cause, as defined therein. In other cases, the
restricted stock award would be forfeited upon termination of employment prior
to the vesting date.

Prior to the vesting date and forfeiture, if any, of such award, the recipient
of the award will be eligible to exercise voting rights with respect to such
shares and receive cash dividends, if any, declared and paid by the Company with
respect to its Common Stock.

c) Executive Officer Employment Contract related issues.

Following meetings of the Compensation Committees of the Boards of Directors of
the Company and the Association held on December 16, 2005 and December 21, 2005,
and a meeting of the non-management directors of the Company on December 21,
2005, the Board of Directors of the Association extended the employment
agreements of the six executive officers by one year so that the term of such
contracts is three years each. The employment contracts between the six
executive officers and the Company absent notice by either party automatically
renew each day to maintain their term at three years at all times.

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In addition, the Board of Directors, following such meetings, also approved
salary increases for 2006 for the six executive officers as follows:

Name 2005 Salary 2006 Salary
- ----------------------- ----------- -----------
George L. Engelke, Jr. $ 1,050,000 $ 1,100,000
Monte N. Redman $ 570,000 $ 600,000
Gerard C. Keegan $ 502,000 $ 524,000
Arnold K. Greenberg $ 463,000 $ 483,000
Alan P. Eggleston $ 420,000 $ 445,000
Gary T. McCann $ 375,000 $ 400,000

Prior to granting the equity based compensation noted above, extending the
Association employment agreements and establishing the 2006 salaries for the
executive officers, the Compensation Committee retained the services of Watson
Wyatt to, among other things review the reasonableness of such compensation. The
Compensation Committee also considered the performance and accomplishments of
the executives and the Company during 2005, reviewed the aggregate compensation
paid to each of the executive officers over the preceding three years, the
executive's investment in the Company and compensation that would be due such
executive under a variety of termination scenarios.

d) Amendment of the Astoria Federal Savings and Loan Association and
Astoria Financial Corporation Director Retirement Plan.

On December 21, 2005, the Boards of Directors of the Company and the Association
approved amendments to the Astoria Federal Savings and Loan Association and
Astoria Financial Corporation Director Retirement Plan (the "Astoria Plan"). The
amendments among other things were designed to resolve certain ambiguities in
the Astoria Plan regarding the amount of benefit payable to an eligible director
upon retirement and the integration of the Astoria Plan with director retirement
plans provided by companies that have merged into the Company or the
Association, specifically The Greater New York Savings Bank in 1997 and Long
Island Bancorp and Long Island Savings Bank in 1998.

Eligible participants in the Astoria Plan include all current directors of the
Company except for those directors who are or ever have been an employee of the
Company, the Association or any company merged into either of them. This
excludes from participation in the Astoria Plan the following directors of the
Company: George L. Engelke, Jr. Gerard C. Keegan, John J. Conefry, Jr. and
Thomas V. Powderly. In 1999, participation in the Astoria Plan was frozen such
that any director who first joins the Board of Directors of the Company or the
Association after March 1, 1999 will not be eligible to participate in the
Astoria Plan.

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Benefits under the Astoria Plan vest at a 50% level once an eligible director
completes 10 years of service. Vesting increases by 5% each additional year of
service thereafter with 100% vesting after 20 years of service. The Astoria Plan
was amended to clarify that for purposes of the Astoria Plan service on the
Board of Directors of companies merged into the Company or the Association is
counted as eligible service under the Astoria Plan. Any benefit which a director
receives pursuant to a retirement plan for service on the Board of Directors of
a company merged into the Company or the Association pursuant to a plan
established by such merged company acts as an offset against the benefit due the
director pursuant to the Astoria Plan. The directors affected by this
clarification are Robert J. Conway and Leo J. Waters, each former Long Island
Bancorp and Long Island Savings Bank directors and Peter C. Haeffner, Jr., a
former director of The Greater New York Savings Bank.

The Plan was also amended to clarify the basic benefit payable under the plan
and in certain cases to provide benefit payment options. The basic benefit
payable under the Astoria Plan is a monthly benefit for the life of a director
commencing at retirement from the Boards of Directors of the Company and the
Association or age 65, whichever is later, which on an annual basis is equal the
sum of (i) the annual retainers paid by the Company and the Association to their
directors at the time the director retires, (ii) any annual retainers the
director was receiving from the Company and the Association for service as the
chairman of a committee of the Boards of Directors of the Company or the
Association at the time the director retires, and (iii) a sum equal to the
meeting fees paid to the director for committee meeting attendance in the year
preceding the director's retirement. Directors, prior to December 31, 2005, will
be allowed to elect alternate forms of benefit payment for their benefits under
the Astoria Plan. The alternate forms of benefit, in addition to the single life
annuity described above, are (i) a 10 year certain annuity, (ii) a joint and
survivor annuity with the director's spouse, and (iii) a lump sum payment. The
amount of the alternate forms of benefits is calculated to be actuarially
equivalent to the basic single life annuity benefit described above. For those
directors entitled to receive benefits under director retirement plans
established by companies merged into the Company or the Association, the
director must select a form of benefit payment under the Astoria Plan that is
the same as the form provided pursuant to the plan established by the company
merged into the Company or the Association, i.e. a 10 year certain annuity in
the case of Messrs. Conway and Waters and a joint and survivor annuity in the
case of Mr. Haeffner.

If an eligible director dies while in service as a director of the Company or
the Association, no benefits are due the director under the Astoria Plan.

In the event of a change of control, as defined in the Astoria Plan, eligible
directors will receive service credit through the balance of their then current
term as a director. Prior to December 31, 2005, eligible directors will be
required to elect whether, in the event of a change of control, their benefits
due pursuant to the Astoria Plan shall be paid to the director in a lump sum or
transferred into a rabbi trust to be established at that time and paid pursuant
to the original alternate form benefit election.

The directors who are eligible to participate in the Astoria Plan, at this time,
have the following vesting percentage:

Andrew M. Burger: 100%
Denis J. Connors: 75%
Robert J. Conway 100%
Thomas J. Donahue: 75%
Peter C. Haeffner, Jr. 65%
Ralph Palleschi 0%
Leo J. Waters 75%

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A copy of the Astoria Federal Savings and Loan Association and Astoria Financial
Corporation Director Retirement Plan, as amended, is attached to this Form 8-K
as Exhibit 10.1. The description set forth above is subject in its entirety to
the terms and conditions set forth in such plan.

ITEM 8.01 OTHER EVENTS

On December 21, 2005, the Board of Directors of Astoria Financial Corporation
authorized a ten million share repurchase plan. The new plan will commence upon
completion of the current repurchase program. On December 22, 2005, Astoria
Financial Corporation issued a press release announcing the new stock repurchase
plan, a copy of which is included herein under exhibit 99.1

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit 10.1 Directors' Retirement Plan

Exhibit 99.1 Press release dated December 22, 2005.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

ASTORIA FINANCIAL CORPORATION

By: /s/ Peter J. Cunningham
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Peter J. Cunningham
First Vice President and
Director of Investor Relations

Dated: December 22, 2005

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EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
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10.1 Directors' Retirement Plan

99.1 Press release dated December 22, 2005

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