Exhibit 10.7


 


FLUSHING BANK


SPECIFIED OFFICER


CHANGE IN CONTROL SEVERANCE POLICY


(AS AMENDED EFFECTIVE JANUARY 1, 2016)


		1.	Term; Policy Effectiveness.



 


(a)          This Policy shall apply to each employee
at the level of Senior Vice President or above in good standing of Flushing Bank (the “Bank”) (and to each employee
at the level of Assistant Vice President or above in good standing of the Bank who was a participant in this Policy as in effect
immediately prior to July 28, 2015) who is not party to an employment agreement with the Bank (an “Employee”) for the
period that both (i) such Employee is employed as such and (ii) this Policy is in effect in accordance with Section 1(b) below
(conjunctively, the “Term”); provided that if prior to January 1, 2009 such Employee is party to a written Special
Termination Agreement with the Company, then the term (without renewal) of such agreement shall continue in full force and effect
until terminated in accordance with the terms thereof and the Term hereof, if applicable, for such Employee shall commence immediately
upon such termination; and provided further that, notwithstanding the provisions of Section 1(b), the Term shall continue for such
Employee for a period of two years following a Change in Control (as defined in Section 2(b) below) that otherwise occurs during
the Term.


 


(b)         This Policy, as amended effective January
1, 2016, shall remain in effect through January 1, 2017, and such effectiveness shall be automatically renewed for an additional
one year period on January 1st, 2017 and on each succeeding January 1st thereafter, unless the Board of Directors or any officer
of the Bank, acting upon the authority thereof, shall resolve to not renew the Policy as of the next such January 1st; provided
that such resolution is adopted prior to such anniversary date and the participants under the Policy are notified of such non-renewal
within 60 days after such anniversary date.


 


(c)          Upon the expiration of the Term, all rights,
benefits and obligations of Flushing Bank (the “Bank”) and Flushing Financial Corporation (the “Holding Company”)
hereunder shall terminate.


 


(d)         Notwithstanding anything in this Policy
to the contrary, the amendments to this Policy that became effective July 28, 2015 shall not apply to any employee who was covered
by this Policy immediately prior to July 28, 2015 (the “Grandfathered Employees”). The rights of the Grandfathered
Employees shall continue to be governed by the terms of the Policy as in effect immediately prior to July 28, 2015, except that
the definition of Change of Control in Section 2(b) below shall be applied in lieu of the definition of Change of Control that
was in effect immediately prior to July 28, 2015.


 



     

     

    




		2.	Definitions.



 


(a)        “Cause” means the Employee’s
(i) intentional engagement in dishonest conduct or willful misconduct, (ii) breach of fiduciary duty involving personal profit,
(iii) insubordination or intentional failure to perform stated duties, (iv) willful violation of the Bank’s rules and policies
and other applicable laws, rules, or regulations, (v) conviction (including entry of a guilty or nolo contendere plea) of
a felony or any crime involving dishonesty or moral turpitude, (vi) material breach of any provision of any Bank policy or employment
agreement with the Bank, or (vii) poor performance.


 


(b)        “Change of Control”
means:


 


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


 


(ii)       the occurrence of any event
if, immediately following such event, a majority of the members of the Board of Directors of the Bank or the Holding Company, as
the case may be, or of any successor corporation shall consist of persons other than Current Members, respectively (for these purposes,
a “Current Member” shall mean any member of the Board of Directors of the Bank or the Holding Company as of the Commencement
Date 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);


 


(iii)      the acquisition of beneficial
ownership, directly or indirectly (as provided in Rule 13d-3 under the Securities Exchange Act of 1934 (the “Act”),
or any successor rule), of 25% or more of the total combined voting power of all classes of stock of the Bank or the Holding Company
by any person or group deemed a person under Section 13(d)(3) of the Act; or


 


(iv)     the consummation of a merger
or consolidation of the Bank or the Holding Company with another corporation where the stockholders of the Bank or the Holding
Company, immediately prior to the merger or consolidation, do 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.


 


(c)         “Disability” means termination
under circumstances in which the Employee would qualify for disability benefits under one or more disability programs maintained
by the Holding Company or any subsidiary (including the Bank) employing the Employee.


 


(d)        “Good Reason” means:


 



     

     

    




(i)        a reduction by the Holding Company
or any subsidiary (including the Bank) in the Employee’s annual base salary as in effect immediately prior to a Change of
Control; or


 


(ii)       the failure of the Holding Company
or any subsidiary (including the Bank) to maintain the Employee’s principal place of employment within 50 miles as in effect
immediately prior to a Change of Control.


 


		3.	Severance Benefits.



 


In the event the Employee’s employment with
the Holding Company and any of its subsidiaries (including the Bank) is terminated within two years following a Change of Control
(i) by the Holding Company or any of its subsidiaries (including the Bank) other than by reason of the death or Disability
of the Employee and other than for Cause, or (ii) by the Employee for Good Reason, the Bank shall provide and pay to the Employee
the following:


 


(a)       the Employee’s earned but
unpaid current salary as of the date of termination, plus an amount representing any accrued but unpaid vacation time, which amounts
shall be paid within thirty days of termination;


 


(b)      the benefits, if any, to which
the Employee is entitled as a former employee under the Holding Company’s and subsidiaries’ (including the Bank’s)
employee benefit plans and programs and compensation plans and programs, which shall be paid in accordance with the terms of such
plans and programs;


 


(c)       continued health and welfare
benefits (including group life, disability, medical and dental benefits), in addition to that provided in paragraph (b) above,
to the extent necessary to provide coverage for the Employee for the number of months equal to the number of months of salary payable
to the Employee pursuant to paragraph (d) below (the “Severance Period”). Such benefits shall be provided through
the purchase of insurance, and shall be equivalent to the health and welfare benefits (including cost-sharing percentages) provided
to active employees of the Bank (or any successor thereof) as from time to time in effect during the Severance Period. Where the
amount of such benefits is based on salary, they shall be provided to the Employee based on the highest annual rate of salary achieved
by the Employee during the period of the Employee’s employment with the Bank or its subsidiaries. If the Employee had dependent
coverage in effect at the time of his or her termination of employment, the Employee shall have the right to elect to continue
such dependent coverage for the Severance Period. The benefits to be provided under this paragraph (c) shall cease to the extent
that in the judgment of the Bank substantially equivalent benefits are provided to the Employee (and/or his/her dependents) by
a subsequent employer of the Employee, who shall certify a description thereof to the Bank; and


 



     

     

    




(d)       within thirty days following
the Employee’s termination of employment, a cash lump sum payment in an amount equal to one month’s salary for each
full year of continuous service completed with the Holding Company or any of its subsidiaries (including the Bank or any predecessor
of the Bank), but in no event less than 12 months’ salary or more than 18 months’ salary, such salary to be the greater
of the Employee’s salary immediately prior to the Change of Control or the Employee’s salary at the date of such termination.


 


Notwithstanding the foregoing, the benefits provided to the Employee
under this Section 3 shall be reduced if and to the extent that a nationally recognized firm of compensation consultants or auditors
designated by the Holding Company or the Bank determines that such reduction will result in a greater net after-tax benefit to
the Employee than the Employee would obtain in the absence of such reduction, taking into account any excise tax payable by the
Employee under Internal Revenue Code Section 4999.


 


		4.	No Effect on Employee Benefit Plans or Compensation Programs.



 


Except as expressly provided in this Policy, the
termination of the Employee’s employment, whether by the Holding Company or any of its subsidiaries (including the Bank)
or by the Employee, shall have no effect on the rights and obligations of the parties hereto under the employee benefit plans or
programs or compensation plans or programs (whether or not employee benefit plans or programs) that the Holding Company or any
subsidiary (including the Bank) may maintain from time to time.


 


		5.	No Right to Employment.



 


Nothing in this Policy shall be construed as giving
the Employee the right to be retained in the employment of the Holding Company or any of its subsidiaries (including the Bank),
nor shall it affect the right of the Holding Company or any of its subsidiaries (including the Bank) to terminate the Employee’s
employment with or without cause.


 


		6.	Regulatory Action.



 


(a)         Notwithstanding any other provision of
this Policy to the contrary, this Section 6 shall apply at all times, during the Term.


 


(b)         If the Employee is suspended and/or temporarily
prohibited from participating in the conduct of the affairs of the Bank by a notice served under 12 U.S.C. § 1818(e)(3)
and (g)(1), the Bank’s obligations to the Employee under this Policy shall be suspended as of the date of such service unless
stayed by appropriate proceedings. If the charges in such notice are dismissed, the Bank shall (i) pay the Employee all of
the compensation payable under this Policy that was withheld while the Bank’s obligations under this Policy were so suspended,
and (ii) reinstate in whole any of its obligations to the Employee which were suspended.


 



     

     

    




(c)          If the Employee is removed and/or permanently
prohibited from participating in the conduct of the Bank’s affairs by an order issued under 12 U.S.C. § 1818(e)(4)
or (g)(1), all obligations of the Bank to the Employee under this Policy shall terminate as of the effective date of the order,
other than vested rights of the parties accrued as of such effective date, which shall not be affected.


 


(d)         If the Bank is in default (as defined in
section 3(x)(1) of the Federal Deposit Insurance Act (the “FDIA”)), all obligations of the Bank under this Policy shall
terminate as of the date of such default, but this Section 6(d) shall not affect any vested rights of the Employee accrued as of
such date of default.


 


(e)        All obligations of the Bank under this
Policy shall be terminated, except to the extent it is determined that continuation of the Policy is necessary to the continued
operation of the Bank, (i) by the director of the Federal Deposit Insurance Corporation (the “FDIC”) or his or
her designee (“Director”) at the time the FDIC enters into an agreement to provide assistance to or on behalf of the
Bank under the authority contained in Section 13(c) of the FDIA; or (ii) by the Director at the time the Director approves
a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Director to be
in an unsafe or unsound condition; provided, however, that this Section 6(e) shall not affect any vested rights of the Employee
accrued as of such date of termination.


 


(f)         All obligations under this Policy are further
subject to such conditions, restrictions, limitations and forfeiture provisions as may separately apply pursuant to any applicable
state banking laws.


 


(g)        Notwithstanding any other provision of
this Policy to the contrary, any payments made to the Employee pursuant to this Policy or otherwise are subject to and conditioned
upon their compliance with 12 U.S.C. § 1828(k) and any regulations promulgated thereunder.


 


		7.	Miscellaneous Provisions.



 


(a)         Successors. This Policy shall inure
to the benefit of and be binding upon the Employee and his legal representatives and the Holding Company and the Bank, their successors
and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation
to which all or substantially all of the assets and business of the Holding Company or the Bank may be sold or otherwise transferred.


 


(b)         Waiver. The Waiver by any party
of a breach of any provision of this Policy shall not operate or be construed as a waiver of any subsequent breach of this Policy.


 



     

     

    




(c)         Severability. The invalidity or
unenforceability of any provision of this Policy shall not affect the validity or enforceability of any other provision of this
Policy, which shall remain in full force and effect.


 


(d)        
Headings and References. The headings of the sections of this Policy are inserted for convenience only and shall
not be deemed to constitute a part of this Policy.


 


(e)         Entire Policy. This Policy constitutes
the entire policy, agreement and understanding of the parties with respect to the matters contemplated herein, and supersedes all
prior policies, agreements, arrangements and understandings related to the subject matter hereof.


 


(f)         Amendment or Termination. The Board
of Directors of the Bank may amend or terminate this Policy at any time prior to a Change of Control. This Policy may not be amended
or terminated at any time after a Change of Control in any manner adverse to the Employee without the consent of such Employee.


 


(g)        Governing Law. This Policy shall
be governed by the laws of the State of New York, without reference to conflicts of law principles.


 


(h)        Withholding. The Employee agrees
that the Bank may withhold from any payment required to be made to the Employee pursuant to this Policy all federal, state, local
and/or other taxes which the Bank determines are required to be withheld in accordance with applicable statutes and/or regulations
in effect from time to time.


 


		8.	Guarantee.



 


The Holding Company hereby agrees to guarantee
the payment by the Bank of any benefits and compensation to which the Employee is entitled under this Policy.


 


9.        Compliance with Code Section 409A.


 


(a)        Notwithstanding the provisions of section
3, if the Employee is a specified employee within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended
(“Section 409A”), as determined by the Board in accordance with the election made by the Bank for determining specified
employees, any amounts payable under sections 3(d) (and any other payments to which the Employee may be entitled) which constitute
“deferred compensation” within the meaning of Section 409A and which are otherwise scheduled to be paid during the
first six months following the Employee’s termination of employment (other than any payments that are permitted under 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 Employee’s termination of employment (or the Employee’s death if sooner), at which time all payments
that were suspended shall be paid to the Employee (or his estate) in a lump sum, together with interest on each suspended payment
at the prime rate (as reported in the Wall Street Journal) from the date of suspension to the date of payment.


 


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


 



     

     

    




(c)         For purposes of Section 409A, each payment
under sections 3(d) will be treated as a separate payment.


 


(d)        It is intended that this Policy comply
with the provisions of Section 409A and the regulations and guidance of general applicability issued thereunder so as to not subject
the Employee to the payment of additional interest and taxes under Section 409A, and in furtherance of this intent, this Policy
shall be interpreted, operated and administered in a manner consistent with these intentions.