Exhibit 10.1

 

FLUSHING FINANCIAL CORPORATION

 

2014 OMNIBUS INCENTIVE PLAN

 

(Incorporating amendments through May 31, 2017)

 

1. Purpose.    The purpose of this 2014 Omnibus Incentive Plan (the “Plan”) is
to aid Flushing Financial Corporation, a Delaware corporation (together with its
successors and assigns, the “Company”), in attracting, retaining, motivating and
rewarding employees and non-employee directors of the Company and its
subsidiaries and affiliates, to provide for equitable and competitive
compensation opportunities, to recognize individual contributions and reward
achievement of Company goals, and promote the creation of long-term value for
stockholders by closely aligning the interests of Participants with those of
stockholders. The Plan authorizes stock-based and cash-based incentives for
Participants.

 

2. Definitions.    In addition to the terms defined in Section 1 and elsewhere
in the Plan, the following capitalized terms used in the Plan have the
respective meanings set forth in this Section:

 

(a) “Annual Incentive Award” means a type of Performance Award granted to a
Participant under Section 7(c) representing a conditional right to receive cash,
Stock or other Awards or payments, as determined by the Committee, based on
performance in a performance period of one fiscal year or a portion thereof.

 

(b) “Award” means any Option, SAR, Restricted Stock, RSU, Bonus Stock, award
granted in lieu of obligations, Dividend Equivalent, Other Stock-Based Award,
Performance Award or Annual Incentive Award granted to a Participant under the
Plan, and may be a 409A Award or a Non-409A Award.

 

(c) “Beneficiary” means the legal representatives of a Participant’s estate
entitled by will or the laws of descent and distribution to receive the benefits
under the Participant’s Award(s) upon the Participant’s death.

 

(d) “Board” means the Company’s Board of Directors.

 

(e) “Bonus Stock” means Stock granted under Section 6(f).

 

(f) “Change in Control” has the meaning specified in Section 10.

 

(g) “Code” means the Internal Revenue Code of 1986, as amended. Reference to any
Code provision includes any regulation thereunder and any successor provisions
and regulations, and reference to regulations includes any applicable guidance
or pronouncement of the Department of the Treasury and/or Internal Revenue
Service.

 

(h) “Committee” means the Compensation Committee of the Board, the composition
and governance of which is subject to applicable NASDAQ “independence” and other
listing requirements and the Company’s corporate governance documents. Each
member of the Compensation Committee shall also meet the definition of “outside
director” under the provisions of Section 162(m) of the Code and the definition
of “non-employee director” under the provisions of the Exchange Act. No
Committee action shall be void or deemed to be without authority due to the
failure of any member, at the time the action was taken, to meet any applicable
qualification standard. Until such time as determined by the Board (in its sole
discretion), reference in this Plan to action by the Committee shall require
approval by both the Compensation Committee and the Board.

 

(i) “Dividend Equivalent” means a right, granted under this Plan, to receive
cash, Stock, other Awards or other property equal in value to all or a specified
portion of the dividends paid with respect to a specified number of shares of
Stock.

 

(j) “Effective Date” means the effective date specified in Section 11(o).

 

(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
References to any provision of the Exchange Act or rule thereunder shall include
any successor provisions and rules.

 

(l) “Fair Market Value” means the fair market value of Stock, Awards, or other
property as determined in good faith by the Committee or under procedures
established by the Committee, subject to any restrictions imposed by Code
Section 409A. Unless otherwise determined by the Committee, the Fair Market
Value of Stock as of any given date shall be the mean between the highest and
lowest quoted selling price, regular way, of the Stock on the NASDAQ Stock
Market (or the principal exchange or market on which the Stock is listed or
traded) on the day before such date, (or, if no such sale of Stock occurs on
such day, the mean between the highest and lowest quoted selling price on the
nearest trading day before such day).

 

(m) “409A Award” means an Award that constitutes a deferral of compensation
under Code Section 409A. “Non-409A Award” means an Award other than a 409A
Award.

 

(n) “Formula Award” means an Award granted to non-employee directors under
Section 8.

 

(o) “Group” means the Company and its subsidiaries and affiliates, or any
members of the Group, as the context requires.

 

(p) “Incentive Stock Option” or “ISO” means an Option which both is designated
as an incentive stock option and qualifies as an incentive stock option within
the meaning of Code Section 422.

 

(q) “Option” means a right, granted under Section 6(b), to purchase Stock.

 

(r) “Other Stock-Based Award” means an Award granted under Section 6(h).

 

(s) “Participant” means a person who has been granted an Award under the Plan
which remains outstanding, including a person who is no longer an employee of
the Group or a director of the Company.

 

(t) “Performance Award” means a conditional right, granted under Sections 6(i)
and 7, to receive cash, Stock or other Awards or payments. A Performance Award
may, but need not, qualify as “performance-based compensation” for purposes of
Code Section 162(m).

 

(u) “Restricted Stock” means Stock granted under Section 6(d) which is subject
to certain restrictions and to a risk of forfeiture.

 

(v) “Restricted Stock Unit” or “RSU” means a right, granted under Section 6(e),
to receive Stock (or the Fair Market Value thereof) at the end of a specified
deferral period.

 

(w) “Stock” means the Company’s common stock, par value $.01 per share, and any
other equity securities of the Company that may be substituted or resubstituted
for Stock pursuant to Section 11(c).

 

(x) “Stock Appreciation Right” or “SAR” means a right granted under
Section 6(c).

 

3. Administration.

 

(a) Authority of the Committee.    The Plan shall be administered by the
Committee, which shall have full authority and discretion, in each case subject
to and consistent with the provisions of the Plan, to select the persons to whom
Awards will be granted from among those eligible; to grant Awards; to determine
the type and number of Awards; to determine the terms and conditions of Awards,
including the dates on which Awards may be exercised and/or on which the risk of
forfeiture or deferral period relating to Awards shall lapse or terminate, the
acceleration of any such dates (to the extent such acceleration is either
outside the scope of or permitted by Code Section 409A), the expiration date of
any Award, and whether, to what extent, and under what circumstances an Award
may be settled, or the exercise price of an Award may be paid, in cash, Stock,
other Awards, or other property, and all other matters relating to Awards; to
prescribe Award documents evidencing or setting terms of Awards (which Award
documents need not be identical for each Participant), amendments thereto, and
rules and regulations for the administration of the Plan and amendments thereto;
to construe and interpret the Plan, related administrative rules and Award
documents, and to correct defects, supply omissions or reconcile inconsistencies
therein; and to make all other decisions and determinations as the Committee may
deem necessary or advisable for the administration of the Plan. Decisions of the
Committee with respect to the administration and interpretation of the Plan
shall be final, conclusive, and binding upon all persons interested in the Plan,
including stockholders of the Company, Participants, Beneficiaries, permitted
transferees of Awards and any other persons claiming rights from or through a
Participant.

 

(b) Manner of Exercise of Committee Authority.    The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or employees of the Group, or committees
thereof, the authority, subject to such terms as the Committee shall determine,
to perform such functions, including administrative functions, as the Committee
may determine, to the extent consistent with Rule 16b-3 under the Exchange Act
and Code Section 162(m), where applicable, and permitted by the Delaware General
Corporation Law.

 

(c) Limitation of Liability.    The Board and Committee and each member thereof,
and any person acting pursuant to authority delegated by the Board or Committee,
shall be entitled, in good faith, to rely or act upon any report or other
information furnished by any officer or employee of the Group, or the Company’s
independent auditors, consultants or any other agents assisting in the
administration of the Plan. Board and Committee members, any person acting
pursuant to authority delegated by the Board or Committee, and any officer or
employee of the Group acting at the direction or on behalf of the Board or
Committee or a delegee shall not be personally liable for any action or
determination taken or made in good faith with respect to the Plan, and shall,
to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action or determination.

 

4. Stock Subject To Plan.

 

(a) Overall Number of Shares Available for Delivery.    The total number of
shares of Stock reserved and available for delivery in connection with Awards
under the Plan shall be 1,772,000 shares and shall not include any additional
shares that are or become available for awards under the any pre-existing plans.
No more than 250,000 shares of Stock may be issued with respect to ISOs. The
total number of shares available under the Plan and the number of shares
available for ISOs are subject to adjustment as provided in Section 11(c). Any
shares of Stock delivered under the Plan may consist of authorized and unissued
shares or treasury shares.

 

(b) Replenishment Rules.    To the extent that an Award under the Plan is
canceled, expired, forfeited, settled in cash, or otherwise terminated without
delivery of shares to a Participant, the shares retained by or returned to the
Company shall be available under the Plan. Shares that are withheld from an
Award or separately surrendered by a Participant in payment of taxes relating to
a full-value award shall be deemed to constitute shares not delivered to a
Participant, and will therefore be available under the Plan. Notwithstanding the
foregoing, in the case of Options and SARs, any shares that are withheld from an
award or separately surrendered by a Participant in payment of the exercise
price or taxes relating to such award, any unissued shares resulting from the
net settlement of such award and any shares purchased by the Company in the open
market using the proceeds from exercise of an Option will not become available
under the Plan.

 

(c) Reinvested Dividends.    The number of shares available for issuance under
the Plan shall not be reduced to reflect any dividends or dividend equivalents
that are reinvested into additional shares or credited as additional Restricted
Stock, RSUs, or other Awards.

 

(d) Substitute Awards for Acquired Business.    Shares issued or issuable in
connection with any Award granted in assumption of or in substitution for an
award of a company or business acquired by the Company or the Group, or with
which the Company or the Group combines, shall not be counted against the number
of shares reserved under the Plan.

 

5. Eligibility; Per-Person Award Limitations.

 

(a) Eligibility.    Non-employee directors shall automatically receive Formula
Awards under Section 8 of the Plan, unless the Committee in its discretion
determines otherwise. The Committee shall have discretion to grant Awards under
the Plan only to an individual who is (i) a director or an employee (including
an executive officer) of the Group, or (ii) a person who has been offered
employment by the Group, provided that any grant to a prospective employee shall
not be effective until such person has commenced employment with the Group. An
employee on leave of absence may be considered as still in the employ of the
Group for purposes of eligibility for participation in the Plan. In addition to
the persons referred to in the first sentence of this Section 5(a), holders of
awards granted by a company or business acquired by the Company or the Group, or
with which the Company or Group combines, are eligible for grants of Awards
under the Plan in assumption of or substitution for such previously granted
awards.

 

(b) Per-Person Award Limitations.

 

(i) Stock-Based Awards.    In the case of Awards that are intended to qualify as
“performance-based compensation” under Code Section 162(m) and that are
denominated by reference to a number of shares, the maximum number of shares
with respect to which such Awards may be granted to an eligible employee in any
calendar year is 250,000 shares (subject to adjustment as provided in
Section 11(c)). This limitation shall apply to Dividend Equivalents under
Section 6(g) only if such Dividend Equivalents are granted separately from, and
not as a feature of, another Award. Awards that are not intended to qualify as
“performance-based compensation” under Code Section 162(m) are not subject to
annual limits under this Section.

 

(ii) Cash-Based Awards.    In the case of Awards that are intended to qualify as
“performance-based compensation” under Code Section 162(m) and that are not
denominated by reference to a number of shares, (i) the maximum amount or value
which may be granted as an Annual Incentive Award to an eligible employee in any
calendar year is $2 million, and (ii) the maximum amount or value which may be
granted as a Performance Unit Award or other long-term cash-based Award to an
eligible employee in any calendar year is $6 million. The annual limit for
grants of cash-based Awards under this paragraph is a separate limitation which
is not affected by the number of Awards granted which are denominated by
reference to a number of shares. The maximum amount or value under this
paragraph is measured as the maximum amount or value that the employee would be
eligible to receive under the Award upon satisfaction of the performance
conditions, without regard to whether such amount is to be paid at the end of
the performance period or on a deferred basis or continues to be subject to any
service requirement or other non-performance condition. As such, the maximum
amount does not include any amounts which may be credited as dividends, dividend
equivalents, or earnings on such Award either during or after the performance
period.

 

(iii) Non-Employee Director Awards.    In the case of Awards to non-employee
directors that are denominated by reference to a number of shares, the maximum
number of shares with respect to such Awards granted to a director in any
calendar year is 10,000 shares (subject to adjustment as provided in
Section 11(c)). This limit does not affect the amount of cash directors’ fees
that may be paid to non-employee directors.

 

6. Specific Terms Of Awards.

 

(a) General.    Awards may be granted on the terms and conditions set forth in
this Section 6, subject to any additional requirements set forth in Section 9.
In addition, the Committee may impose on any Award or the exercise thereof, at
the date of grant or thereafter (subject to Sections 11(e) and 11(j)), such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine. The Committee shall retain full power
and discretion with respect to any term or condition of an Award that is not
mandatory under the Plan, subject to Section 11(j). The Committee shall require
the payment of lawful consideration for an Award to the extent necessary to
satisfy the requirements of the Delaware General Corporation Law, and may
otherwise require payment of consideration for an Award except as limited by the
Plan.

 

(b) Options.    The Committee is authorized to grant Options under the Plan on
the following terms and conditions:

 

(i) Exercise Price.    The exercise price per share of Stock purchasable under
an Option (including both ISOs and non-qualified Options) shall be determined by
the Committee, provided that such exercise price shall be not less than the Fair
Market Value of a share of Stock on the date of grant of such Option, except as
provided in Section 9(a).

 

(ii) Option Term; Time and Method of Exercise.    The Committee shall determine
the term of each Option, provided that in no event shall the term of any Option
exceed a period of ten years from the date of grant. The Committee shall
determine the time or times at which or the circumstances under which an Option
may be exercised in whole or in part (including based on achievement of
performance goals and/or future service requirements, subject to the
requirements of Section 9(d)); the methods by which such exercise price may be
paid or deemed to be paid and the form of such payment (subject to any
limitations imposed by Code Section 409A or other applicable law), including,
without limitation, cash, Stock, withholding of Stock deliverable upon exercise
(i.e., “net exercise”), through broker-assisted “cashless exercise”
arrangements, by delivery of other Awards or awards granted under other plans of
the Company or the Group, or other property, or by any other method determined
by the Committee; and the methods by or forms in which Stock will be delivered
or deemed to be delivered to Participants upon Option exercise.

 

(iii) ISOs.    The terms of any ISO granted under the Plan shall satisfy the
requirements of Code Section 422. Any Option designated as an ISO which fails to
satisfy all the requirements of Code Section 422 shall be treated as a
non-qualified Option.

 

(c) Stock Appreciation Rights.    The Committee is authorized to grant SARs
under the Plan on the following terms and conditions:

 

(i) Right to Payment.    An SAR shall confer on the Participant to whom it is
granted a right to receive, upon exercise or settlement thereof, an amount
payable in shares or cash equal to the excess of (A) the Fair Market Value of
one share of Stock on the date of exercise over (B) the grant price of the SAR
as determined by the Committee, provided that such grant price shall not be
lower than the Fair Market Value of the Company’s Stock on the grant date
(except as provided in Section 9(a)).

 

(ii) Other Terms.    The Committee shall determine the term of each SAR,
provided that in no event shall the term of an SAR exceed a period of ten years
from the date of grant. The Committee shall determine, at the date of grant or
thereafter (subject to Sections 11(e) and 11(j)), the time or times at which and
the circumstances under which a SAR may be exercised in whole or in part
(including based on achievement of performance goals and/or future service
requirements, subject to the requirements of Section 9(d)), the method of
exercise, the time and method of settlement, the form of consideration payable
in settlement (which may include cash, Stock, other property, or a combination
thereof), and the method by or forms in which Stock will be delivered or deemed
to be delivered to Participants.

 

(d) Restricted Stock.    The Committee is authorized to grant Restricted Stock
under the Plan on the following terms and conditions:

 

(i) Grant and Restrictions.    Restricted Stock shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if
any, as the Committee may impose (subject to the requirements of Section 9(d)),
which restrictions may lapse separately or in combination at such times, under
such circumstances (including based on achievement of performance goals and/or
future service requirements), in such installments or otherwise and under such
other circumstances as the Committee may determine at the date of grant or
thereafter. Except to the extent restricted under the terms of the Award
document, a Participant granted Restricted Stock shall have all of the rights of
a stockholder, including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any vesting, mandatory reinvestment or
other requirement imposed by the Committee).

 

(ii) Forfeiture.    Except as otherwise determined by the Committee, upon
termination of employment or service during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be forfeited
and reacquired by the Company; provided that the Committee may provide, by rule
or regulation or in any Award document, or may determine in any individual case,
that restrictions or forfeiture conditions relating to Restricted Stock will
lapse in whole or in part, including in the event of terminations resulting from
specified causes.

 

(iii) Certificates for Stock.    Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of a Participant, the
Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock; that the Company retain physical possession of the
certificates; and that the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock.

 

(iv) Dividends and Splits.    The Committee may require that any dividends paid
on a share of Restricted Stock shall be either (A) paid at the dividend payment
date in cash, in kind, or in a number of shares of unrestricted Stock having a
Fair Market Value equal to the amount of such dividends, or (B) automatically
reinvested in additional Restricted Stock or held in kind, in either case
subject to the same terms as applied to the original Restricted Stock to which
it relates, or (C) deferred as to payment, either as a cash deferral or with the
amount or value thereof automatically deemed reinvested in RSUs, other Awards or
other investment vehicles (including cash equivalents bearing a fixed or formula
rate of interest as determined by the Committee), subject to such terms as the
Committee shall determine or permit a Participant to elect. Unless otherwise
determined by the Committee, Stock distributed in connection with a Stock split
or Stock dividend, and other property distributed as a dividend, shall be
subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property has been
distributed.

 

(e) Restricted Stock Units.    An RSU entitles the Participant to receive one
share of Stock (or the Fair Market Value of a share) at a specified time. The
Committee is authorized to grant RSUs under the Plan on the following terms and
conditions:

 

(i) Award and Restrictions.    Issuance of Stock or payment of the cash or other
property to which the Participant is entitled under the RSU Award will occur
upon expiration of the deferral period specified for such Award by the Committee
(or, if permitted by the Committee, as elected by the Participant). RSUs shall
be subject to such restrictions on transferability, risk of forfeiture and other
restrictions, if any, as the Committee may impose (subject to the requirements
of Section 9(d)), which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including based on achievement of
performance goals and/or future service requirements), separately or in
combination, in installments or otherwise, and under such other circumstances as
the Committee may determine at the date of grant or thereafter. RSUs may be
satisfied by delivery of Stock, cash, other Awards, or other property, or a
combination thereof, as determined by the Committee at the date of grant or
thereafter. The time and/or circumstances of such delivery shall be determined
by the Committee subject to any limitations imposed by Code Section 409A.

 

(ii) Forfeiture.    Upon termination of employment or service during the portion
of the deferral period to which forfeiture conditions apply (as provided in the
Award document evidencing the RSUs), all RSUs that are at that time subject to
such forfeiture conditions shall be forfeited; provided that the Committee may
provide, by rule or regulation or in an Award document, or may determine in any
individual case, that restrictions or forfeiture conditions relating to RSUs
will lapse in whole or in part, including in the event of terminations resulting
from specified causes. Notwithstanding the foregoing, the Committee shall have
no authority to shorten or lengthen the deferral period specified for an RSU
Award except as permitted under Code Section 409A.

 

(iii) Dividend Equivalents.    The Committee may determine whether or not an
Award of RSUs shall entitle the Participant to receive Dividend Equivalents, and
may require that Dividend Equivalents on the number of shares of Stock covered
by an Award of RSUs shall be either (A) paid at the dividend payment date in
cash or in shares of unrestricted Stock having a Fair Market Value equal to the
amount of such dividends, or (B) deferred as to payment for such period as
specified by the Committee, either as a cash deferral or with the amount or
value thereof automatically deemed reinvested in additional RSUs, other Awards,
or other investment vehicles (including cash equivalents bearing a fixed or
formula rate of interest as determined by the Committee). Unless otherwise
determined by the Committee, in the case of a dividend payable in Stock, the
Dividend Equivalent on such dividend shall be credited as additional RSUs, which
shall be subject to restrictions and a risk of forfeiture to the same extent as
the RSUs with respect to which it was distributed and shall have the same
deferral period as such RSUs.

 

(f) Bonus Stock and Awards in Lieu of Obligations.    The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of obligations of the Company or Group to pay cash or deliver other property
under the Plan or under other plans or compensatory arrangements. All Awards
under this Section 6(f) shall be subject to such terms as shall be determined by
the Committee (subject to Sections 9(c) and (d)).

 

(g) Dividend Equivalents.    The Committee is authorized to grant Dividend
Equivalents under the Plan which may be awarded on a free-standing basis or in
connection with another Award. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or on a deferred basis (in
each case subject to any limitations imposed by Code Section 409A). Deferred
amounts may be deferred as a fixed dollar amount or may be deemed to have been
reinvested in additional Stock, Awards, or other investment vehicles (including
cash equivalents bearing a fixed or formula rate of interest as designated by
the Committee), and shall be subject to restrictions on transferability, risks
of forfeiture and such other terms as the Committee may specify.

 

(h) Other Stock-Based Awards.    The Committee is authorized, subject to
limitations under applicable law, to grant such other Awards that may be
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Stock or factors that may influence the value
of Stock, including, without limitation, convertible or exchangeable debt
securities; other rights convertible or exchangeable into Stock; purchase rights
for Stock; performance units or performance shares; Awards with value and
payment contingent upon performance of the Company or business units thereof or
any other factors designated by the Committee; and Awards valued by reference to
the book value of Stock or the value of securities of (or the performance of)
specified subsidiaries or affiliates or other business units. The Committee
shall determine the terms and conditions of such Awards (subject to Section 9).
Stock delivered pursuant to an Award in the nature of a purchase right granted
under this Section 6(h) shall be purchased for such consideration, paid for at
such times, by such methods, and in such forms, including, without limitation,
cash, Stock, other Awards, notes, or other property, as the Committee shall
determine.

 

(i) Performance Awards.    Performance Awards, denominated in cash or in Stock
or other Awards, may be granted by the Committee in accordance with Section 7.

 

7. Performance Awards, including Annual Incentive Awards.

 

(a) Performance Awards Generally.    Performance Awards may be denominated as a
cash amount or a number of shares of Stock which will be earned, and/or a
specified number of Awards which will be granted, upon achievement or
satisfaction of performance conditions specified by the Committee. In addition,
the Committee may constitute any other Award as a Performance Award by
conditioning the right of a Participant to exercise the Award or have it
settled, and/or the vesting or timing thereof, upon achievement or satisfaction
of such performance conditions as may be specified by the Committee. The
Committee may use such business criteria and other measures of performance as it
may deem appropriate in establishing any performance conditions (including, but
not limited to, the criteria set forth in Section 7(b)(ii)), and may exercise
its discretion to reduce or increase the amounts payable under any Award subject
to performance conditions. Notwithstanding the foregoing, any Award intended to
qualify as “performance-based compensation” under Code Section 162(m) (other
than Options and SARs) shall be subject to the additional limitations set forth
in Section 7(b).

 

(b) Code Section 162(m) Awards.    If the Committee determines that a
Performance Award (other than an Option or SAR) is intended to qualify as
“performance-based compensation” for purposes of Code Section 162(m), the grant,
exercise, vesting, and/or settlement of such Performance Award shall be
contingent upon achievement of a pre-established performance goal and such Award
shall comply with the other requirements set forth in this Section 7(b).

 

(i) Performance Goal Generally.    The performance goal for such Performance
Awards shall consist of one or more business criteria and a targeted level or
levels of performance with respect to each of such criteria, as specified by the
Committee consistent with this Section 7(b). The performance goal shall be
objective and shall otherwise meet the requirements of Code Section 162(m),
including the requirement that the level or levels of performance targeted by
the Committee result in the achievement of performance goals being
“substantially uncertain” within the meaning of Code Section 162(m). The
Committee may determine that such Performance Awards shall be granted,
exercised, vested, and/or settled upon achievement of any one performance goal,
or any one of several performance goals, or that two or more of the performance
goals must be achieved as a condition to grant, exercise, vesting, and/or
settlement of such Performance Awards. Performance goals may differ for
Performance Awards granted to any one Participant or to different Participants.

 

(ii) Business Criteria.    One or more of the following business criteria for
the Company, on a consolidated basis, and/or for specified subsidiaries or
affiliates or other business units of the Company shall be used by the Committee
in establishing performance goals for Performance Awards granted under this
Section 7(b): (1) sales or other sales or revenue measures; (2) operating
income, earnings from operations, core operating earnings, or earnings or core
operating earnings before or after one or more of interest, taxes, depreciation,
amortization, or extraordinary items; (3) net income, net income or core
operating earnings per common share (basic or diluted), or net interest income;
(4) earnings before provision for taxes; (5) operating efficiency ratio;
(6) return on average assets, return on investment, return on capital, return on
average equity, or core operating return on average equity; (7) tangible book
value per share; (8) Tier-1 common equity; (9) cash flow, free cash flow, cash
flow return on investment, or net cash provided by operations; (10) loan
originations, loan production, loan growth, non-performing loans; (11) asset
quality measures; (12) deposits or deposit growth; (13) net interest, net
interest spread, net interest margin; (14) fee income; (15) economic profit or
value created; (16) operating margin; (17) stock price or total stockholder
return; and (18) strategic business criteria, consisting of one or more
objectives based on meeting specified market penetration or geographic business
expansion goals, cost targets, customer satisfaction, employee satisfaction,
management of employment practices and employee benefits, supervision of
litigation, goals with respect to information technology, implementation or
completion of critical projects, and goals relating to acquisitions or
divestitures of subsidiaries, affiliates, branches, or joint ventures. The
targeted level or levels of performance with respect to such business criteria
may be established at such levels and in such terms as the Committee may
determine, in its discretion, including in absolute terms, in relation to one
another, as a goal relative to performance in prior periods, or as a goal
compared to the performance of one or more comparable companies or an index
covering multiple companies.

 

(iii) Performance Period; Timing for Establishing Performance
Goals.    Achievement of performance goals in respect of such Performance Awards
shall be measured over a performance period specified by the Committee, which
may be one year, or less or more than one year. A performance goal shall be
established not later than the earlier of (A) 90 days after the beginning of any
performance period applicable to such Performance Award or (B) the time 25% of
such performance period has elapsed. At the time of establishing the performance
goals, the Committee may specify the circumstances in which such Performance
Awards shall be paid in the event of termination of the Participant’s employment
prior to the end of the performance period, which may differ depending on the
circumstances of the termination; provided that, to the extent required by Code
Section 162(m), payment shall not exceed the amount the Participant would have
received had he or she remained in employment through the end of the performance
period.

 

(iv) Performance Award Pool.    The Committee may establish a Performance Award
pool, which shall be an unfunded pool, for purposes of measuring performance of
the Company in connection with Performance Awards. The amount of such
Performance Award pool shall be based upon the achievement of a performance goal
or goals based on one or more of the business criteria set forth in
Section 7(b)(ii) during the given performance period, as specified by the
Committee in accordance with Section 7(b)(iii). The Committee may specify the
amount of the Performance Award pool as a percentage of any of such business
criteria, a percentage thereof in excess of a threshold amount, or as another
amount which need not bear a strictly mathematical relationship to such business
criteria. In addition, (i) the maximum amount payable from such pool to any
Participant whose Award is intended to qualify as “performance-based” under Code
Section 162(m) must be stated in terms of a percentage of the pool, (ii) the sum
of all individual percentages of the pool is not permitted to exceed 100
percent, and (iii) no Participant may receive in excess of his or her stated
percentage.

 

(v) Written Determinations.    Prior to payment or settlement of each Award
subject to this Section 7(b), the Committee shall certify in writing, in a
manner which satisfies the requirements of Code Section 162(m), that the
performance objective(s) relating to the Performance Award and other material
terms of the Award upon which payment or settlement of the Award was conditioned
have been satisfied.

 

(vi) Settlement of Performance Awards.    Settlement of Performance Awards may
be in cash, Stock, other Awards or other property, as determined by the
Committee during the time period specified in Section 7(b)(iii). The Committee
may, in its discretion, reduce (but not increase) the amount payable in respect
of a Performance Award subject to this Section 7(b). Any settlement which
changes the form of payment from that originally specified shall be implemented
in a manner such that the Performance Award and other related Awards do not,
solely for that reason, fail to qualify as “performance-based compensation” for
purposes of Code Section 162(m).

 

(vii) Limitation on Committee Discretion.    No provision of the Plan giving the
Committee discretion to modify the terms of an Award shall be deemed to confer
upon the Committee or any other person discretion to increase the amount of
compensation payable in connection with an Award that is intended to constitute
“performance-based compensation” under Code Section 162(m) or to otherwise
modify the terms of such Award in a manner that does not satisfy Code
Section 162(m).

 

(c) Annual Incentive Awards.    The Committee may grant Annual Incentive Awards
under the Plan. If an Annual Incentive Award is not intended to qualify as
“performance-based compensation” for purposes of Code Section 162(m), such Award
shall comply with the provisions of Section 7(a). If an Annual Incentive Award
is intended to qualify as “performance-based compensation” for purposes of Code
Section 162(m), such Award shall comply with the provisions of Section 7(b).

 

(d) Adjustments to Performance Goals.    The Committee is authorized to make
adjustments in the terms and conditions of, and the criteria included in, Awards
(including the performance goals and amounts payable under Performance Awards
and the amount of any unfunded Performance Award pool relating thereto) (i) in
recognition of unusual or nonrecurring events (including, without limitation,
events described in Section 11(c), acquisitions and dispositions of businesses
and assets, litigation or claim judgments or settlements, extraordinary items,
and specified non-recurring charges or credits) affecting the Company, any
subsidiary or affiliate or other business unit, and/or (ii) in response to
changes in applicable laws, regulations, accounting principles, or tax rates;
provided that no such adjustment shall be authorized or made that would cause
any Award to a covered employee (within the meaning of Code Section 162(m))
intended to qualify as “performance-based compensation” under Code
Section 162(m) to fail to so qualify.

 

8. Non-Employee Director Awards.    Unless the Committee determines to grant
Awards to non-employee directors in other forms or amounts, each non-employee
director shall automatically receive Formula Awards as provided in Section 8(a),
having the terms and conditions provided in Section 8(b).

 

(a) Time and Amount of Formula Awards.     Formula Awards shall be made as
follows:

 

(i) Annual Grants.    As of January 30 of each year, each person then serving as
a non-employee director shall be granted 4,800 RSUs, subject to adjustment as
provided in Section 11(c). Prior to such grant, the Committee may determine to
substitute Restricted Stock for such RSUs.

 

(ii) Initial Grants.    Effective as of the date of a person’s initial election
or appointment as a non-employee director or change to non-employee director
status, such person shall be granted a pro rated portion of the Annual Grant
consisting of 400 shares of Restricted Stock for each full or partial month from
the date of such director’s election or appointment or change in status to the
following January 30 (subject to adjustment as provided in Section 11(c)). Prior
to such grant, the Committee may determine to substitute RSUs for such
Restricted Stock.

 

(b) Terms and Conditions of Formula Awards.    Unless the Committee determines
otherwise, Formula Awards of Restricted Stock and/or RSUs granted under
Section 8(a) shall be subject to the following terms and conditions and such
other terms and conditions as may be determined by the Committee that are not
inconsistent therewith.

 

(i) No Payment by Director.    A non-employee director shall not be required to
make any payment to the Company in consideration of the Restricted Stock or RSU
Awards received by such director.

 

(ii) General Vesting and Forfeiture.    Each Annual Award shall become vested
and non-forfeitable with respect to one-third of the underlying shares on the
first anniversary of the date of grant, and an additional one-third of the
underlying shares on each subsequent anniversary thereof, provided that the
Participant is a director of the Company on each such anniversary date. Each
Initial Award shall become vested and non-forfeitable with respect to one-third
of the underlying shares on the January 30 following the date of grant, and an
additional one-third of the underlying shares on each subsequent January 30,
provided that the Participant is a director of the Company on each such date. In
the event the Participant ceases to be a director of the Company before the
Restricted Stock or RSU Award has fully vested, the unvested portion of the
Award shall be forfeited.

 

(iii) Accelerated Vesting on Specified Events.    Notwithstanding the vesting
schedule set forth in paragraph (ii), all of a Participant’s Formula Awards
under Section 8(a) shall become fully vested and non-forfeitable (a) upon a
Change in Control if the Participant is a director of the Company at the time of
such Change in Control, and (b) upon the termination of the Participant’s
service as a director due to death, disability (as determined by the Committee)
or, in the case of RSUs (but not Restricted Stock), retirement (which for this
purpose shall mean termination of service after at least five years of service
as a non-employee director if the Participant’s age plus years of service as a
non-employee director equals or exceeds 55).

 

(iv) Dividends and Dividend Equivalents.    A Participant shall be entitled to
receive, on the dividend payment date, cash dividends on his or her unvested
Restricted Stock and Dividend Equivalents for cash dividends on his or her RSUs.
In the event the Company pays a dividend in Stock or other property, such
dividend (or Dividend Equivalent in the case of RSUs) shall be subject to the
same restrictions, risk of forfeiture, and deferral period as the Award with
respect to which it was paid.

 

(v) Settlement of Award.    All RSUs granted as Formula Awards shall be settled
in Stock unless the Committee expressly determines otherwise. Notwithstanding
the vesting provisions of an Award, if the Award is subject to Code
Section 409A, payment of such Award shall be subject to the requirements of Code
Section 409A.

 

(vi) Awards Nontransferable.    Restricted Stock and RSUs shall not be
transferable by the Participant until such time as the Award has vested and
delivery of the shares (or, if the Committee so determines, cash) payable
pursuant to the Award has been made.

 

9. Certain General Provisions Applicable To Awards.

 

(a) Stand-Alone, Additional, Tandem, and Substitute Awards.    Awards granted
under the Plan may, in the Committee’s discretion, be granted either alone or in
addition to, in tandem with, or in substitution or exchange for, any other Award
or any award granted under another plan of the Company or Group or any business
entity to be acquired by the Company or Group, or any other right of a
Participant to receive payment from the Company or Group, subject to any
restrictions imposed by Code Section 409A or 162(m). If two Awards are granted
in tandem, a Participant may receive the benefit of one Award only to the extent
he or she relinquishes the tandem Award. Awards granted in addition to or in
tandem with other Awards or awards may be granted either at the same time as or
at a different time from the grant of such other Awards or awards. Subject to
any restrictions imposed by Code Section 409A, the Committee may grant
substitute Awards in assumption of or in substitution for an outstanding award
granted by a company or business acquired by the Company or Group, or with which
the Company or Group combines, with an exercise price or grant price per share
of Stock below Fair Market Value as it determines appropriate to preserve the
economic value of any such outstanding assumed or substituted awards.

 

(b) Term of Awards.    The term of each Award shall be for such period as may be
determined by the Committee, except that no Option or SAR shall have a term
exceeding ten years.

 

(c) Form and Timing of Payment under Awards.

 

(i) Committee Discretion.    Subject to the terms of the Plan and any applicable
Award document and to the extent permitted under Code Section 409A, payments to
be made by the Company upon the exercise or settlement of an Award may be made
in such forms as the Committee shall determine, including, without limitation,
cash, Stock, other Awards or other property, and may be made in a single payment
or transfer, in installments, or on a deferred basis. The settlement of any
Award may be accelerated, and/or cash may be paid in lieu of Stock in connection
with such settlement, in the discretion of the Committee or upon occurrence of
one or more specified events, subject to Section 11(j). Subject to
Section 11(j), the Committee may require installment or deferred payments
(subject to Section 11(e)) or may permit a Participant to elect such payments
(including extension of a deferral period) on terms and conditions established
by the Committee. Payments may include, without limitation, provisions for the
payment or crediting of reasonable interest on installment or deferred payments
or the grant or crediting of Dividend Equivalents or other amounts in respect of
installment or deferred payments denominated in Stock (subject to the
requirements of Code Section 162(m) in the case of Performance Awards intended
to qualify as “performance-based compensation” under such Section).

 

(ii) Distribution upon Unforeseeable Emergency.    The Committee may provide in
the Award document (but not after the date of the Award unless permitted under
Code Section 409A) that in the event such Award is vested under the terms of the
Award and no longer subject to a substantial risk of forfeiture, such Award
shall be distributed to the Participant, upon application of the Participant, if
the Participant has had an unforeseeable emergency within the meaning of Code
Section 409A, subject to any restrictions on the timing or making of such
distribution as may be imposed by the Committee in the Award document or by
Section 409A.

 

(d) Limitation on Vesting of Certain Awards.    All Option, SAR, Restricted
Stock, RSU, and Other Stock-Based Awards to employees shall vest over a minimum
period of three years, except that the Committee may provide, at the time of
grant or thereafter, for earlier vesting in the event of a Participant’s
disability or retirement (as such terms are defined by the Committee) or death,
or in the event of a Change in Control, sale of a subsidiary or business unit,
or other special circumstances. The foregoing notwithstanding, (i) the Committee
may provide that Awards as to which either the grant or vesting is based on,
among other things, the achievement of one or more performance conditions will
vest over a minimum period of one year, with earlier vesting in the
circumstances referred to in the preceding sentence; (ii) cash dividends and
Dividend Equivalents paid with respect to other Awards need not be subject to
minimum vesting requirements; (iii) all shares issued to satisfy a prior
obligation to pay cash need not be subject to minimum vesting requirements; and
(iv) in addition to the shares referred to in clauses (i), (ii) or (iii), up to
an aggregate of 100,000 shares (subject to adjustment as provided in
Section 11(c)) may be granted as Bonus Stock, Restricted Stock or RSUs without
any minimum vesting requirements. For purposes of this Section 9(d), (i) a
performance period that precedes the grant of an Award will be treated as part
of the vesting period for such Award if the Participant has been notified
promptly after the commencement of the performance period that he or she has the
opportunity to earn the Award, and (ii) vesting over a three-year period or
one-year period will include periodic vesting over such period if the rate of
such vesting is proportional (or less rapid) throughout such period.

 

(e) Limitation on Payment of Dividends and Dividend Equivalents.    The
Committee may provide for the payment of dividends or Dividend Equivalents with
respect to Awards when accrued or on a deferred basis, provided that no
dividends or Dividend Equivalents shall be payable on Performance Awards for
which the performance goals have not been satisfied.

 

(f) Payment of Cash Awards.    Unless the Committee provides otherwise, where an
Award is payable in cash, such Award shall be paid by the subsidiary or
affiliate that employs the Participant, with the payment obligation guaranteed
by the Company.

 

10. Change in Control.

 

(a) Committee Authority.    The Committee shall have the authority to determine
the treatment of Awards in the event of a Change in Control.

 

(b) Definition of “Change in Control.”    A “Change in Control” shall be deemed
to have occurred upon:

 

(i) the acquisition of all or substantially all of the assets of Flushing Bank
(the “Bank”) or the Company by any person or entity, or by any persons or
entities acting in concert; or

 

(ii) the occurrence of any event if, immediately following such event, a
majority of the members of the Board or the board of directors of the Bank or of
any successor corporation or entity shall consist of persons other than Current
Members (for these purposes, a “Current Member” shall mean any member of the
Board or the board of directors of the Bank as of January 1, 2014 and any
successor of a Current Member whose nomination or election has been approved by
a majority of the Current Members then on the respective board of directors); or

 

(iii) the acquisition of the beneficial ownership, directly or indirectly (as
provided in Rule 13d-3 under the Exchange Act), of 25% or more of the total
combined voting power of all classes of stock of the Bank or the Company by any
person or group deemed a person under Section 13(d)(3) of the Exchange Act; or

 

(iv) consummation of the merger or consolidation of the Bank or the Company with
another corporation or entity where stockholders of the Bank or the Company,
immediately prior to the merger or consolidation, would not beneficially own,
directly or indirectly, immediately after the merger or consolidation, shares
entitling such stockholders to 50% or more of the total combined voting power of
all classes of stock of the surviving corporation or entity.

 

11. General Provisions.

 

(a) Compliance with Legal and Other Requirements.    The Company may, to the
extent deemed necessary or advisable by the Committee, postpone the issuance or
delivery of Stock or payment of other benefits under any Award until completion
of such (i) registration or qualification of such Stock or other required action
under federal or state law, rule or regulation, (ii) listing or other required
action with respect to any stock exchange or other market upon which the Stock
or other securities of the Company are listed or quoted, or (iii) compliance
with any other obligation of the Company, as the Committee may consider
appropriate, and may require any Participant to make such representations,
furnish such information, and comply with or be subject to such other conditions
as it may consider appropriate in connection with the issuance or delivery of
Stock or payment of other benefits in compliance with applicable laws, rules,
regulations, listing requirements, or other obligations. The application of this
Section shall not extend the term of any Option or other Award. The Company
shall have no obligation to effect any registration or qualification of the
Stock under federal or state laws or to compensate the Award holder for any loss
caused by the implementation of this Section 11(a).

 

(b) Limits on Transferability.    No Award or other right or interest of a
Participant under the Plan shall be pledged, hypothecated or otherwise
encumbered or subject to any lien, obligation or liability of such Participant
to any party (other than the Company or a subsidiary or affiliate thereof), or
assigned or transferred by such Participant otherwise than by will or the laws
of descent and distribution upon the death of a Participant, and such Awards or
rights that may be exercisable shall be exercised during the lifetime of a
Participant only by the Participant or his or her guardian or legal
representative. Notwithstanding the foregoing, if and to the extent permitted by
the Committee (after taking into account applicable securities laws), Awards and
other rights (other than ISOs and SARs in tandem therewith) may be transferred
by a Participant to one or more transferees during the lifetime of the
Participant, and may be exercised by such transferees in accordance with the
terms of such Award, subject to any terms and conditions which the Committee may
impose in connection with such transfer (including limitations on the
permissible categories of transferees). A Beneficiary, transferee, or other
person claiming any rights under the Plan from or through a Participant shall be
subject to all terms and conditions of the Plan and any applicable Award
document, except as otherwise determined by the Committee, and to any additional
terms and conditions deemed necessary or appropriate by the Committee which are
imposed by the Committee in connection with or as a condition to such transfer.

 

(c) Adjustments.    The Committee is authorized to make the following
adjustments to outstanding Awards and/or limitations on future Awards:

 

(i) In the event that any large, special and non-recurring dividend or other
distribution (whether in the form of cash or property other than Stock),
recapitalization, forward or reverse split, Stock dividend, reorganization,
merger, consolidation, spin-off, combination, repurchase, share exchange, sale
of substantially all assets, liquidation, dissolution or other change in
corporate structure or corporate transaction or event affects the Stock such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of benefits under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (A) the
aggregate number and kind of shares of Stock or other property which may be
delivered under the Plan, including the number of shares with respect to which
ISOs may be granted, (B) the number and kind of shares of Stock or other
property by which annual per-person Award limitations are measured under
Section 5(b), (C) the number and kind of shares of Stock or other property
comprising Formula Awards under Section 8, (D) the number and kind of shares of
Stock or other property which may be granted without minimum vesting
requirements under Section 9(d), (E) the number and kind of shares of Stock or
other property subject to or deliverable in respect of outstanding Awards, and
(F) the exercise price, grant price or purchase price relating to any Award.

 

(ii) Upon (A) any reorganization, merger or consolidation as a result of which
the Company is not the surviving corporation (or survives as a wholly-owned
subsidiary of another corporation or entity), (B) a sale of substantially all
the assets of the Company, (C) the dissolution or liquidation of the Company, or
(D) the disposition of a subsidiary, affiliate or business unit of the Company,
the Committee may take such action as it in its discretion deems appropriate to
(1) accelerate the time when awards vest, may be exercised and/or may be paid
(subject to any limitations imposed by Code Section 409A); (2) cash out
outstanding Awards through a payment of the in-the-money-value, if any, of the
vested portion of such Awards (payable in cash, shares, or other property) at or
immediately prior to the date of such event; (3) provide for the assumption of
outstanding Options, SARs, and other Awards (as adjusted to reflect the
transaction) by surviving, successor or transferee corporations; (4) provide
that in lieu of Stock, Participants shall be entitled to receive the
consideration they would have received in the transaction in exchange for such
Stock (or the fair market value of such consideration in cash); and/or
(5) provide that Options and SARs shall be exercisable for a period of at least
ten business days from the date of receipt by Participants of a notice from the
Company of such proposed event, following the expiration of which period any
unexercised Options and SARs shall terminate.

 

(d) Tax Provisions.

 

(i) Tax Withholding.    Whenever the value of an Award first becomes includible
in an employee’s gross income for applicable tax purposes, the Company shall
have the right to require the employee to remit to the Company, or make
arrangements satisfactory to the Committee regarding payment of, an amount
sufficient to satisfy any federal, state or local withholding tax liability
prior to the delivery of any certificate for such shares or the time of such
income inclusion. Whenever under the Plan payments by the Company are to be made
in cash, such payments shall be net of an amount sufficient to satisfy any
federal, state or local withholding tax liability.

 

(ii) Use of Stock to Satisfy Tax Withholding Obligations.    To the extent
permitted by the Committee (in the Award document or otherwise), and subject to
any terms and conditions imposed by the Committee, an employee entitled to
receive Stock under the Plan may elect to have the employer’s minimum statutory
withholding obligation for federal, state, and local taxes, including payroll
taxes, with respect to such Stock satisfied by having the Company withhold from
the shares otherwise deliverable to the employee shares of Stock having a value
equal to the amount of such withholding obligation with respect to the Stock or
(ii) by delivering to the Company shares of unrestricted Stock. Alternatively,
the Committee (in the Award document or subsequently) may require that a portion
of the shares of Stock otherwise deliverable be withheld and applied to satisfy
the statutory withholding obligations with respect to the Award.

 

(iii) Required Consent to and Notification of Code Section 83(b) Election.    No
election under Code Section 83(b) (to include in gross income in the year of
transfer the amounts specified in Code Section 83(b)) or under a similar
provision of the laws of a jurisdiction outside the United States may be made
unless expressly permitted by the terms of the Award document or by action of
the Committee in writing prior to the making of such election. In any case in
which a Participant is permitted to make such an election in connection with an
Award, the Participant shall notify the Company of such election within ten days
of filing notice of the election with the Internal Revenue Service or other
governmental authority, in addition to any filing and notification required
pursuant to Code Section 83(b) or other applicable provision.

 

(iv) Requirement of Notification Upon Disqualifying Disposition of ISO.    If
any Participant makes any disposition of shares of Stock delivered pursuant to
the exercise of an ISO in a disqualifying disposition within the meaning of Code
Section 421(b), such Participant shall notify the Company of such disposition
within ten days thereof.

 

(v) Disclaimer of Tax Treatment.    Although the Company may endeavor to qualify
an Award for favorable tax treatment (e.g. incentive stock options under Code
Section 422) or to avoid adverse tax treatment (e.g. under Code Section 409A),
the Company makes no representation that the desired tax treatment will be
available and expressly disclaims any liability for the failure to maintain
favorable or avoid unfavorable tax treatment. By accepting an Award, a
Participant agrees to hold the Company, the Board, the Committee, and their
respective delegees harmless for any liability under Code Section 409A.

 

(e) Amendment of the Plan and/or Awards.    The Board may terminate the Plan
prior to the termination date specified in Section 11(p), and may from time to
time amend or suspend the Plan or the Committee’s authority to grant Awards
under the Plan, and the Committee may amend outstanding Awards, in each case
without the consent of stockholders or Participants, subject to the following
limitations:

 

(i) Any amendment to the Plan that would materially increase the number of
shares reserved for issuance or for which stockholder approval is required by
applicable law or any stock exchange or market on which the Stock is listed or
traded shall be subject to approval by the Company’s stockholders not later than
the earliest annual meeting for which the record date is at or after the date of
Board approval of such amendment.

 

(ii) No amendment or termination of the Plan or any Award may materially and
adversely affect the rights of a Participant without the consent of the affected
Participant. For the purposes of the preceding sentence, (A) actions that alter
the timing of income or other taxation of a Participant will not be deemed
material, and (B) adjustments of Awards permitted under Section 11(c) will not
be considered amendments of such Awards.

 

(iii) Without stockholder approval, the Committee will not amend or replace
previously granted Options or SARs in a transaction that constitutes a
“repricing,” as such term is used in Section 303A.08 of the Listed Company
Manual of the New York Stock Exchange.

 

(iv) The Committee shall have no authority to waive or modify any provision of
an Award after the Award has been granted to the extent the waived or modified
provision would be mandatory under the Plan for any Award newly granted at the
date of the waiver or modification.

 

Notwithstanding the foregoing provisions of this Section 11(e), the Committee
shall have the right, in its sole discretion, to amend the Plan and all
outstanding Awards without the consent of stockholders or Participants to the
extent the Committee determines that such amendment is necessary or appropriate
to comply with Code Section 409A.

 

Notwithstanding any other provision of the Plan or of any Award, the Committee
shall have the right, in its sole discretion, to terminate (or provide for the
termination of) the Plan and/or all or selected Awards, and distribute (or
provide for the distribution of) the compensation deferred thereunder, within 12
months following the occurrence of a “Change in Control Event” as defined for
purposes of Code Section 409A.

 

(f) Right of Setoff.    To the extent permitted by applicable law, the Company
(or Group) shall have the right to offset amounts payable under this Plan or
under any Award against any amounts owed to the Company (or Group) by the
Participant. By accepting any Award granted hereunder, a Participant agrees to
any deduction or setoff under this Section 11(f).

 

(g) Unfunded Status of Awards; Creation of Trusts.    The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or obligation to deliver
Stock or cash pursuant to an Award, nothing contained in the Plan or any Award
shall give any such Participant any rights that are greater than those of a
general creditor of the Company. The Committee may authorize the creation of
trusts and deposit therein cash, Stock, or other property, or make other
arrangements to meet the Company’s obligations under the Plan, consistent with
the “unfunded” status of the Plan.

 

(h) Nonexclusivity of the Plan.    Neither the adoption of the Plan by the Board
nor its submission to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board or a committee
thereof to adopt such other compensatory plans or incentive arrangements as it
may deem desirable, including incentive arrangements and awards which do not
qualify under Code Section 162(m), and arrangements providing for the issuance
of Stock; and such other arrangements may be either applicable generally or only
in specific cases.

 

(i) Payments in the Event of Forfeitures; Fractional Shares.    Unless otherwise
determined by the Committee, in the event of a forfeiture of an Award with
respect to which a Participant paid cash consideration, the Participant shall be
repaid the amount of such cash consideration or, in the discretion of the
Committee, the lesser of such cash consideration or the then value of the Award.
No fractional shares of Stock shall be issued or delivered pursuant to the Plan
or any Award. The Committee shall determine whether cash, other Awards or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.

 

(j) Compliance with Code Section 409A.

 

(i) For purposes of this Plan, references to an Award provision or an event
(including any authority or right of the Company or a Participant) being
“permitted” under Code Section 409A or being subject to this Section 11(j) mean
(i) for a 409A Award, that the provision or event will not cause a Participant
to be liable for payment of interest or a tax penalty under Code Section 409A,
and (ii) for a Non-409A Award, that the provision or event will not cause the
Award to be treated as subject to Code Section 409A.

 

(ii) Notwithstanding any other provision of the Plan, the Company and the
Committee shall have no authority to accelerate distributions with respect to
409A Awards in excess of the authority permitted under Code Section 409A.

 

(iii) Notwithstanding any provision of the Plan or any Award to the contrary,
any amounts payable under the Plan on account of termination of employment to an
Award holder who is a “specified employee” within the meaning of Code
Section 409A which constitute “deferred compensation” within the meaning of Code
Section 409A and which are otherwise scheduled to be paid during the first six
months following the Award holder’s termination of employment (other than any
payments that are permitted under Code Section 409A to be paid within six months
following termination of employment of a specified employee) shall be suspended
until the six-month anniversary of the Award holder’s termination of employment
(or until the Award holder’s death, if earlier), at which time all payments that
were suspended shall be paid to the Award holder in a lump sum. The “specified
employees” of the Company shall be determined in such manner as may be specified
by resolution of the Committee in accordance with Code Section 409A.

 

 

(iv) A termination of employment shall not be deemed to have occurred for
purposes of any 409A Award under this Plan providing for the payment of any
amounts upon or following a termination of employment unless such termination is
also a “separation from service” within the meaning of Section 409A.

 

(k) Governing Law; Consent to Jurisdiction.    The Plan, any rules and
regulations relating to the Plan, and any Award document under the Plan shall be
construed in accordance with the laws of the State of New York (without giving
effect to principles of conflicts of laws) and applicable provisions of federal
law. Any dispute arising out of any award granted under the Plan may be resolved
in any state or federal court located within the State of Delaware. Any Award
granted under the Plan is granted on condition that the Award holder accepts
such venue and submits to the personal jurisdiction of any such court.

 

(l) Awards to Participants Outside the United States.    The Committee may, in
its sole discretion, modify the terms of any Award under the Plan made to or
held by a Participant who is then resident or primarily employed outside of the
United States in any manner deemed by the Committee to be necessary or
appropriate in order that such Award shall conform to laws, regulations, and
customs of the country in which the Participant is then resident or primarily
employed, or so that the value and other benefits of the Award to the
Participant, as affected by foreign tax laws and other restrictions applicable
as a result of the Participant’s residence or employment abroad, shall be
comparable to the value of such an Award to a Participant who is resident or
primarily employed in the United States.

 

(m) Limitation on Rights Conferred under Plan.    Neither the Plan nor any
action taken hereunder shall be construed as (i) giving any Participant the
right to continue as a Participant or in the employ or service of the Company or
Group, (ii) interfering in any way with the right of the Company or Group to
terminate any Participant’s employment or service at any time (subject to the
terms and provisions of any separate written agreements), (iii) giving any
person a claim to be granted any Award under the Plan, or (iv) conferring on a
Participant any of the rights of a stockholder of the Company unless and until
shares of Stock are duly issued or transferred to the Participant in accordance
with the terms of an Award. Determinations by the Committee under the Plan
relating to the form, amount, and terms and conditions of Awards need not be
uniform, and may be made selectively among persons who receive or are eligible
to receive Awards under the Plan, whether or not such persons are similarly
situated. Except as expressly provided in the Plan or an Award document, neither
the Plan nor any Award document shall confer on any person other than the
Company (or Group) and the Participant any rights or remedies thereunder.

 

(n) Invalidity of Provision.    If any provision of the Plan or an Award
document is finally held to be invalid, illegal, or unenforceable, the Committee
shall have the right to modify the terms of affected Awards in such manner as it
deems equitable in order to prevent unintended enrichment or dilution of
benefits in light of the invalid, illegal or unenforceable provision.

 

(o) Plan Effective Date; Termination of Preexisting Plans.    The Plan became
effective on May 20, 2014. Upon such approval of the Plan by the stockholders of
the Company, no further awards shall be granted under the Company’s 2005 Omnibus
Incentive Plan, 1996 Stock Option Incentive Plan, and 1996 Restricted Stock
Incentive Plan, but any outstanding awards under such plans shall continue in
accordance with their terms.

 

(p) Plan Termination Date.    No Awards shall be granted under the Plan after
the Company’s annual meeting of stockholders held in 2024, but outstanding
Awards granted prior to such date shall continue in accordance with their terms.
No Award intended to qualify as “performance-based compensation” within the
meaning of Code Section 162(m) (other than Options and SARs) shall be granted
after the Company’s annual meeting held in 2019 unless the material terms of the
performance goals have been reapproved by the Company’s stockholders within the
five years prior to such grant.

 

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