Exhibit 10.26

 
FORM OF EMPLOYEE RESTRICTED STOCK UNIT AWARD LETTER
 

 
This award letter sets forth the terms and conditions of the restricted stock
units (“RSUs”) which have been granted to you by Flushing Financial Corporation
(the “Company”), in accordance with the provisions of its 2005 Omnibus Incentive
Plan (the “Plan”).  Your award is subject to the terms and conditions set forth
in the Plan, any rules and regulations adopted by the Committee (as defined in
the Plan), and this award letter.
 
1.             Grant of RSUs
 
You have been granted the number of RSUs set forth in the grant header
information for this grant on the Wealthviews online equity platform.  Each RSU
represents the right to receive one share of the Company’s Common Stock (“Common
Stock”) on the applicable settlement date for the RSU.  You have also been
awarded Dividend Equivalents on your RSUs, as described more fully below.  You
do not need to pay any purchase price to receive the RSUs granted to you by this
award letter.
 
2.             Vesting of RSUs
 
(a)         
General Vesting Schedule.  Unless they vest on an earlier date as provided in
sub-paragraph (b), (c) or (d) below, your RSUs will vest in installments as set
forth in the grant header information for this grant on the Wealthviews online
equity platform, provided that you are an employee of the Company or one of its
subsidiaries on each such date.

 
(b)         
Death or Disability.  If your employment terminates by reason of death or
Disability, all of your RSUs will immediately vest upon your termination of
employment.  For this purpose, “Disability” means that you have been unable to
perform the essential functions of your employment due to disability or
incapacity for 270 consecutive days or such lesser period as may be determined
by the Committee.

 
(c)         
Retirement.  If your employment terminates by reason of Retirement, all of your
RSUs will immediately vest.  For purposes of this provision, “Retirement” means
termination of employment with the Company and its subsidiaries either (i) after
your attainment of age 65 with 5 years of service, or (ii) when your termination
is preceded by at least 5 continuous years of service and the sum of your age
plus years of service equals or exceeds 75 years.  For purposes of this
definition, “years of service” refers to “vested service” with the Company or
its subsidiaries as determined under the Retirement Plan of Flushing Savings
Bank, FSB.

 
(d)         
Change in Control.  All of your RSUs will immediately vest upon the occurrence
of a Change in Control (as defined in the Plan), if you are an employee of the
Company or its subsidiaries at the time of such Change in Control.

 
 
(e)         
Forfeiture upon other Termination of Employment.  If your employment terminates
for any reason other than death, Disability, or Retirement, any of your RSUs
which have not vested prior to the termination of your employment will be
forfeited.

 
 
(f)         
Committee Determinations.  The Committee shall have absolute discretion to
determine the date and circumstances of termination of your employment, and its
determination shall be final, conclusive and binding upon you.

 
 
 

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3.            Grant of Dividend Equivalents
 
 
(a)         
Award of Dividend Equivalents.  You have been awarded Dividend Equivalents with
respect to each of your RSUs covered by this award letter.

 
(b)         
Cash Dividends.  The Dividend Equivalents that you have been awarded entitle you
to receive, at each time cash dividends are paid on the Common Stock, a cash
payment for each of your then outstanding RSUs (whether or not vested) equal to
the amount of the dividend paid on a share of Common Stock.

 
(c)         
Stock Dividends.  In the event the Company pays a dividend in Common Stock or
other property, your Dividend Equivalents will entitle you to receive, for each
of your then outstanding RSUs (whether or not vested), the amount of Common
Stock or other property paid as a dividend on a share of Common Stock.  Such
Common Stock or other property will be paid to you at the time of settlement of
the underlying RSU and will be subject to the same restrictions, risk of
forfeiture, and vesting and delivery provisions as the underlying RSU with
respect to which it was paid.

 
4.            Settlement of RSUs; Delivery of Shares.
 
(a)         
Your RSUs that vest under paragraph 2 above will be settled on their vesting
dates, except as follows.   If you both (1) are or will become eligible for
Retirement prior to the last scheduled vesting date, and (2) are a specified
employee within the meaning of Section 409A of the Internal Revenue Code of 1986
(“Section 409A”), as determined by the Board of Directors in accordance with the
election made by the Company for determining specified employees (a “Specified
Employee”), your RSUs will be settled as provided in paragraphs 4(b), 4(c) and
4(e) below.  If you are or will become eligible for Retirement prior to the last
scheduled vesting date, whether or not you are a Specified Employee, your RSUs
will be settled as provided in paragraphs 4(d) and 4(e) below.  As soon as
practicable after the settlement date of an RSU, the Company will deliver to you
one share of Common Stock for each of your RSUs being settled on such date.  The
Common Stock delivered upon the settlement of your RSUs will be fully
transferable (subject to any applicable securities law restrictions) and not
subject to forfeiture.  The shares of Common Stock delivered upon the settlement
of your RSUs will have full voting and dividend rights and will entitle the
holder to all other rights of a stockholder of the Company.

 
(b)         
If your RSUs vest on account of your Retirement and you are a Specified
Employee, the settlement of your RSUs will be delayed until, and will occur on,
the six month anniversary of your Retirement (or the date of your death if
sooner).

 
(c)         
If your RSUs vest on account of a Disability that does not qualify as  the date
you become disabled under Section 409A and you are a Specified Employee,
settlement of your RSUs will be delayed until, and will occur on, the six month
anniversary of your termination of employment (or the date of your death if
sooner).

 
(d)         
If your RSUs vest on account of a Change of Control that does not qualify as a
“change of control” under Section 409A, settlement of your RSUs will be delayed
until, and will occur on, the earliest of: (i) the scheduled vesting date under
paragraph 2(a) above; (ii) the date of your termination of employment (or the
six month anniversary of your termination of employment if you are a Specified
Employee); (iii) the date of your death; or (iv) the occurrence of a Change of
Control which qualifies as a “change of control” under Section 409A.

 
(e)         
Notwithstanding paragraphs 4(b), 4(c) and 4(d) above, settlement upon your
termination of employment shall not occur unless your termination of employment
is also a “separation from service” (within the meaning of Code Section 409A.

 
 
 

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5.            Income Tax Withholding
 
(a)         
You must make arrangements satisfactory to the Company to satisfy any applicable
federal, state, or local withholding tax liability arising with respect to your
RSUs.  You can either make a cash payment to the Company of the required amount
or you can elect to satisfy your withholding obligation by having the Company
retain Common Stock having a value equal to the amount of your withholding
obligation from the shares otherwise deliverable to you upon the settlement of
such RSUs.  If you fail to satisfy your withholding obligation in a time and
manner satisfactory to the Company, the Company shall have the right to withhold
the required amount from your salary or other amounts payable to you.

 
(b)         
You must make your election regarding the manner in which your withholding
obligation will be satisfied on the Wealthviews online equity platform.  To make
the election, go to the Restricted Elections screen and select the Tax Election
column.  If no election is made, the Company will withhold shares to satisfy the
withholding election.

 
(c)         
All cash payments of Dividend Equivalents will be net of any required
withholding.

 
(d)         
The amount of withholding tax retained by the Company or paid by you to the
Company will be paid to the appropriate federal, state and local tax authorities
in satisfaction of the withholding obligations under the tax laws.  The total
amount of income you recognize and tax withheld with respect to your RSUs and
Dividend Equivalents will be reported on your Form W-2 in the year in which you
recognize the income with respect to that portion of the award.  Whether you owe
additional tax will depend on your overall taxable income for the applicable
year and the total tax remitted for that year through withholding or by
estimated payments.

 
6.            Other Provisions of RSUs

 

(a)         
Voting. You will have no voting rights or other rights as a stockholder with
respect to your RSUs.

 
(b)         
Transfer Restrictions. You may not sell, transfer, assign or pledge your RSUs or
any rights under this award. Any attempt to do so will be null and void.

 
(c)         
Death.  In the event of your death, any shares of Common Stock and other amounts
you are entitled to receive under the Plan will instead be delivered to the
legal representative of your estate.

 
7.            Administration of the Plan
 
The Plan is administered by the Committee.  The Committee has authority to
interpret the Plan and this award letter, to adopt rules for administering the
Plan, to decide all questions of fact arising under the Plan, and generally to
make all other determinations necessary or advisable for administration of the
Plan.  All decisions and acts of the Committee with respect to the
administration and interpretation of the Plan are final and binding on all
affected Plan participants.
 
It is intended that this award letter comply with the provisions of Section 409A
and the regulations and guidance of general applicability issued thereunder so
as to not subject you to the payment of additional interest and taxes under
Section 409A, and in furtherance of this intent, this award letter shall be
interpreted, operated and administered in accordance with these intentions.
 
8.            Amendments and Adjustments to your Award
 
The Plan authorizes the Committee to make amendments and adjustments to
outstanding awards, including the RSUs and Dividend Equivalents granted by this
letter, in specified circumstances.  Details are provided in the Plan.
 
 
 

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These circumstances include the Committee’s right, in its sole discretion, to
amend the Plan and/or outstanding awards, including this grant of RSUs and
Dividend Equivalents, without your consent, to the extent the Committee
determines that such amendment is necessary or appropriate to comply with
Section 409A.
 
9.             Effect on Other Benefits
 
Income recognized by you as a result of the grant, vesting, or settlement of
RSUs or the receipt of Dividend Equivalents will not be included in the formula
for calculating benefits under the Company’s other benefit plans.
 
10.           Regulatory Compliance
 
Under the Plan, the Company is not required to deliver Common Stock (including
upon the settlement of RSUs) if such delivery would violate any applicable law
or regulation or stock exchange requirement.  If required by any federal or
state securities law or regulation, the Company may impose restrictions on your
ability to transfer shares received under the Plan.
 
11.           Data Privacy
 
By accepting this award you expressly consent to the collection, use and
transfer, in electronic or other form, of your personal data by and among the
Company, its subsidiaries and any broker or third party assisting the Company in
administering the Plan or providing recordkeeping services for the Plan, for the
purpose of implementing, administering and managing your participation in the
Plan.  By accepting this award you waive any data privacy rights you may have
with respect to such information.  You may revoke the consent and waiver
described in this paragraph by written notice to the Company’s Senior Vice
President/Human Resources; however any such revocation may adversely affect your
ability to participate in the Plan.
 

 
*           *           *           *           *
 
Please click “I ACCEPT this grant” below to acknowledge your acceptance of this
award.  This letter and the related grant header information contains the formal
terms and conditions of your award and accordingly they should be printed and
retained in your files for future reference.
 
Very truly yours,
 

 
Maria A. Grasso
Executive Vice President & COO
and Corporate Secretary