Exhibit 10.28 Amended and Restated 2005
Omnibus Incentive Plan


FLUSHING FINANCIAL CORPORATION

2005 OMNIBUS INCENTIVE PLAN


(as amended and restated through February 24,
2009)


          1.         Purpose.
The purpose of this 2005 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)          “Annual
Limit” shall have the meaning specified in Section
5(b).


                       (c)          “Award”
means any Option, SAR, Restricted Stock, RSU,
Bonus Stock or Stock granted in lieu of obligations, Dividend Equivalent, Other
Stock-Based Award, Performance Award or Annual Incentive Award, together with
any related right or interest, granted to a Participant under the Plan,
including 409A Awards and Non-409A Awards.


                       (d)          “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.


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


                       (f)          “Change
in Control” and related terms shall have the
meanings 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 listing
requirements and the Company’s corporate governance documents. 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.







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


                       (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. 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 National 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)         “Full-Value
Award” means any Award relating to Stock
other than an Award under which the economic benefit to the Participant
consists solely of the appreciation in value of the number of shares underlying
the Award. The Company may designate (either on or after the date of grant) a
SAR settled in Stock as either a Non-Full-Value Award with respect to the gross
number of shares underlying the Award or as a Full-Value Award with respect to
the number of shares actually delivered to the Participant under the Award. References to a “Full-Value Award” under a
Preexisting Plan mean an award of a type that would be a Full-Value Award if
granted under this Plan.


                       (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.


                       (u)          “Pool
1” and “Pool 2” shall have
the meanings set forth in Section 4(a).


                       (v)          “Preexisting
Plans” means the Company’s 1996 Stock Option
Incentive Plan, as amended and restated, and the Company’s 1996 Restricted
Stock Incentive Plan, as amended and restated.


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


                       (x)          “Restricted
Stock Unit” or “RSU”
means a right, granted under Section 6(e), to receive Stock, other Awards, or cash,
or a combination thereof at the end of a specified deferral period.







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                       (y)          “Rule
16b-3” means Rule 16b-3 promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange Act.


                       (z)          “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).


                       (aa)        “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 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 (i) 600,000 shares, plus (ii)
the number of shares that, immediately prior to the Effective Date, remained
available for new awards under the Preexisting Plans, plus (iii) the number of
shares subject to awards under the Preexisting Plans which become available in
accordance with Section 4(b) after the Effective Date; provided, however, that the
total number of shares with respect to which ISOs may be granted shall not 







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exceed 600,000. The shares available under this Section 4(a) shall
consist of two designated “share pools,” of which one (“Pool 1”) shall be
available for Full-Value Awards and the other (“Pool 2”) shall be available for
Awards relating to Stock that are not Full-Value Awards. Pool 1 shall consist
of (i) 350,000 shares, plus (ii) the number of shares that, immediately prior to
the Effective Date, remained available for new awards under the Company’s 1996
Restricted Stock Incentive Plan, plus (iii) shares subject to Full-Value Awards
under the Preexisting Plans that become available under Section 4(b) of this
Plan after the Effective Date, and Pool 2 shall consist of all other shares
available under the Plan; provided, however, that the Committee may
increase Pool 1 above its existing limit by reducing the shares available in
Pool 2 by three shares for each share added to Pool 1 (which shall have the net
effect of reducing the total number of shares available under the Plan). The
total number of shares available under the Plan and the shares designated for
Pool 1 and Pool 2 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)          Share
Counting and Replenishment Rules. The
Committee may adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting (as, for example, in the case of tandem or
substitute awards) and make adjustments in accordance with this Section 4(b).
For purposes of Pool 1 (shares available for Full-Value Awards), shares shall
be counted against those reserved to the extent such shares have been delivered
and are no longer subject to a risk of forfeiture. Accordingly, (i) to the
extent that a Full-Value Award under the Plan or a Preexisting Plan is
canceled, expired, forfeited, settled in cash, settled by issuance of fewer
shares than the number underlying the award, 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 and Pool 1; and (ii) shares that are
withheld from a Full-Value Award or separately surrendered by a Participant in
payment of the exercise price or taxes relating to such an award shall be
deemed to constitute shares not delivered to a Participant, and will therefore
be available under the Plan and Pool 1. The Committee may determine that
Full-Value Awards may be outstanding that relate to more shares than the
aggregate number of shares remaining available under Pool 1 so long as such
Awards will not in fact result in delivery and vesting of shares in excess of
the number then available under Pool 1. For purposes of Pool 2, shares shall be
counted against those reserved to the full extent of the shares underlying the
non-Full-Value Award under the Plan or a Preexisting Plan, except that, to the
extent such a non-Full-Value Award expires or is forfeited, the shares retained
by the Company will be available again under the Plan and Pool 2.


                       (c)          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 or either
Pool. This provision shall not be deemed to increase the number of shares with
respect to which ISOs may be granted under this Plan.


          5.         Eligibility;
Per-Person Award Limitations.


                       (a)          Eligibility.
Non-employee directors shall
automatically receive Formula Awards under Section 8 of the Plan. The Committee
shall have discretion to grant Awards under the Plan only to an individual who
is (i) an employee (including an executive officer) of the Group, or
(ii) a person who has been offered employment by the Group, provided that
a prospective employee may not receive any payment or exercise any right
relating to an Award 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 the Group combines, are eligible for grants of
Awards under the Plan in assumption of or in substitution for such previously
granted awards.


                       (b)          Per-Person
Award Limitations. 


	
 

	
 


	
 

	
                           (i)          Stock-Based
Awards. In each calendar
 year during any part of which the Plan is in effect, an eligible individual
 may be granted Awards intended to qualify as “performance-based compensation”
 under Code Section 162(m) under each of Section 6(b), 6(c), 













	
 

	
 


	
 

	
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6(d), 6(e), 6(f), 6(g) and 6(h) relating to up to his or her Annual
 Limit for that type of Award. (The Annual Limit shall apply separately to the
 type of Award authorized under each of these subsections, except that the
 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.) A Participant’s Annual Limit, in any calendar year during
 any part of which the Participant is then eligible under the Plan, shall
 equal (i) 450,000 shares with respect to each of Options and SARs, and (ii)
 150,000 shares with respect to each other type of Award referred to in the first
 sentence of this paragraph, in each case plus the amount of the Participant’s
 unused Annual Limit relating to the same type of Award as of the close of the
 previous calendar year (including the unused Annual Limit from any prior
 calendar years), subject to adjustment as provided in Section 11(c).


	
 

	
 


	
 

	
                             (ii)           Cash-Based
Awards. In the case of an
 Award which is not denominated by reference to a number of shares, an
 individual’s Annual Limit shall equal $2 million plus the amount of such
 individual’s unused Annual Limit for cash Awards as of the close of the
 previous year (including the unused Annual Limit from any prior calendar
 years). The Annual Limit for cash Awards is a separate limitation which is
 not affected by the number of Awards granted which are denominated by
 reference to a number of shares, and which relates to the amount of cash
 which may be “earned.” For this purpose, an amount is “earned” when the
 performance conditions are satisfied so that an amount becomes payable,
 without regard to whether it is to be paid currently or on a deferred basis
 or continues to be subject to any service requirement or other
 non-performance condition.


	
 

	
 


	
 

	
                             (iii)         Carry-Over
of Unused Limit. For purposes
 of this Section 5(b), a Participant’s Annual Limit is deemed “used” to the
 extent a cash amount or number of shares may be potentially earned or paid
 under an Award, regardless of whether such cash or shares are in fact earned
 or paid.





          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(k)), 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(k). 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), the methods by
 which such exercise price may be paid or deemed to be paid and the form of
 such payment (subject to Sections 11(k) and 11(l)), including, without
 limitation, cash, Stock (including by withholding Stock deliverable upon
 exercise, if such withholding or withholding feature will not result in
 additional accounting expense to the Company), other Awards or awards granted
 under 













	
 

	
 


	
 

	
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other plans of the Company or the Group, or other property
(including
 through broker-assisted “cashless exercise” arrangements, to the extent
 permitted by applicable law), and the methods by or forms in which Stock will
 be delivered or deemed to be delivered in satisfaction of Options to
 Participants.


	
 

	
 


	
 

	
                             (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 (or, in the case of a “Limited
 SAR,” the Fair Market Value determined by reference to the Change in Control
 Price, as defined in Section 10(c) hereof) 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(k)), 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), the method of exercise, method of settlement, form of
 consideration payable in settlement, method by or forms in which Stock will
 be delivered or deemed to be delivered to Participants, and whether or not
 the SAR shall be free-standing or in tandem or combination with any other
 Award (subject to Section 9(a)). Limited SARs that may only be exercised in
 connection with a Change in Control or termination of service following a
 Change in Control, as specified by the Committee, may be granted on such
 terms, not inconsistent with this Section 6(c) and Section 9(a), as the Committee
 may determine.





                       (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.













	
 

	
 


	
 

	
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                             (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 a combination thereof (subject to Section 11(l)), as determined
 by the Committee at the date of grant or thereafter.


	
 

	
 


	
 

	
                             (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 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 (but only if and to the extent such
 payment is permitted under Code Section 409A), or (B) deferred as to payment,
 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 













	
 

	
 


	
 

	
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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 Section 9).


                       (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 (to
the extent permitted under Code Section 409A) or shall 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 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 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 and/or settlement of such Performance Award
shall be contingent upon achievement of a pre-established performance goal and
other terms set forth in this Section 7(b).







	
 

	
 


	
 

	
Page 9


	
 

	
 


	
 

	
                          (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.” The Committee may determine that such Performance
 Awards shall be granted, exercised 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 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, earnings before or after taxes,
 earnings before or after interest, depreciation, amortization, or
 extraordinary or special items; (3) net income or net income per common share
 (basic or diluted) or net interest income; (4) operating efficiency ratio;
 (5) return on average assets, return on investment, return on capital, or return
 on average equity; (6) cash flow, free cash flow, cash flow return on
 investment, or net cash provided by operations; (7) loan originations, loan
 production, loan growth, non-performing loans; (8) deposits or deposit
 growth; (9) net interest, net interest spread, net interest margin; (10) fee
 income; (11) economic profit or value created; (12) operating margin; (13)
 stock price or total stockholder return; and (14) 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 and information
 technology, and goals relating to acquisitions or divestitures of
 subsidiaries, affiliates 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 of either up to one year or more than one year, as
 specified by the Committee. 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.


	
 

	
 


	
 

	
                          (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 













	
 

	
 


	
 

	
Page 10


	
 

	
 


	
 

	
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
 settlement of each Award subject to this Section 7(b), the Committee shall
 certify in writing, in a manner which satisfies the requirements of Section
 162(m), that the performance objective 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).





                       (c)          Annual
Incentive Awards. The Committee
may grant an Annual Incentive Award under the Plan. If such 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 such 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).


          8.          Non-Employee
Director Awards. 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 following the Effective Date, each person then serving as a non-employee
 director shall be granted 3,600 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 after the Effective Date, such person
 shall be granted a pro rated portion of the Annual Grant consisting of 300
 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. 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 













	
 

	
 


	
 

	
Page 11


	
 

	
 


	
 

	
such anniversary date. Each Initial Award shall become vested and
 non-forfeitable with respect to one-third of the underlying shares on the
 June 1 following the date of grant, and an additional one-third of the
 underlying shares on each subsequent June 1, 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, to the extent
 permitted under Code Section 409A, Dividend Equivalents for cash dividends on
 his or her RSUs. To the extent such payment is not permitted under Code
 Section 409A, such Dividend Equivalents shall be deemed invested in
 additional RSUs and shall be paid at the time of settlement of the underlying
 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;
provided, however, that a 409A Award may not be granted in tandem with a
Non-409A 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 Sections 11(k) and (l),
the Committee may determine that, in granting a new Award, the in-the-money
value or fair value of any surrendered Award or award or the value of any other
right to payment surrendered by a Participant may be applied to reduce the
exercise price of any Option, grant price of any SAR, or purchase price of any
other Award to such Participant. Without limiting the foregoing, 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.







Page 12


                       (c)          Form
and Timing of Payment under Awards.


	
 

	
 


	
 

	
                             (i)          Committee
Discretion. Subject to the
 terms of the Plan (including Sections 11(k) and (l)) and any applicable Award
 document, 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 cash 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
 Sections 11(k) and (l). Subject to Section 11(k), the Committee may require
 installment or deferred payments (subject to Section 11(e)) or may permit a
 Participant to elect such payments 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.


	
 

	
 


	
 

	
                             (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 (within the meaning of Code Section 83), 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 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 clause (iii), up to an aggregate of 50,000 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)          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. Such authority shall include the right to determine that any cash
payment made with respect to an Award shall be based on the Change in Control
Price.







Page 13


                       (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 Savings
 Bank, FSB (the “Bank”) or the 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 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 the effective date of the conversion
 of the Bank from the mutual to capital stock form of ownership 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 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.





                       (c)          Definition
of “Change in Control Price.” The
“Change in Control Price” means an amount in cash equal to the higher of (i)
the amount of cash and fair market value of property that is the highest price
per share paid (including extraordinary dividends) in any transaction
triggering or related to the Change in Control or any liquidation of shares
following a sale of substantially all of the assets of the Company, or (ii) the
highest price per share of Stock paid in any transaction reported on any
securities exchange or market where the Stock is traded at any time during the
60-day period preceding the Change in Control.


          11.        General
Provisions.


                       (a)          Compliance
with Legal and Other Requirements.
The Company may, to the extent deemed necessary or advisable by the Committee
and subject to Section 11(k), postpone the issuance or delivery of Stock or
payment of other benefits under any Award until completion of such registration
or qualification of such Stock or other required action under any federal or
state law, rule or regulation, listing or other required action with respect to
any stock exchange or automated quotation system upon which the Stock or other
securities of the Company are listed or quoted, or 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, and regulations,
listing requirements, or other obligations. The foregoing notwithstanding, in
connection with a Change in Control, the Company shall take or cause to be
taken no action, and shall undertake or permit to arise no legal or contractual
obligation, that results or would result in any postponement of the issuance or
delivery of Stock or payment of benefits under any Award or the imposition of
any other conditions on such issuance, delivery or payment, to the extent that
such postponement or other condition would represent a greater burden on a
Participant than existed prior to such action. 


                       (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 







Page 14


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, 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 in connection with Awards granted thereafter,
 including the number of shares available in Pool 1 and Pool 2 and 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, (C) the number and kind of shares
 of Stock or other property comprising Formula Awards under Section 8(a),
 (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)         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 established under Section 7 relating thereto) (i) in
 recognition of unusual or nonrecurring events (including, without limitation,
 events described in the preceding paragraph, as well as acquisitions and
 dispositions of businesses and assets) 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 intended to qualify as “performance-based compensation” under Code
 Section 162(m) to fail to so qualify.


	
 

	
 


	
 

	
                             (iii)        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), (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 (to the extent permitted under 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 













Page 15


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 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 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 in the Award document, and
 subject to any terms and conditions imposed therein, 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 (i) 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 Award
 document 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 under the circumstances described in Code Section
 421(b), such Participant shall notify the Company of such disposition within
 ten days thereof.


	
 

	
 


	
                          (e)        Amendment
of the Plan and/or Awards The
 Board may terminate the Plan prior to the termination date specified in
 Section 11(r), 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.













Page 16


	
 

	
 


	
 

	
                          (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 unless such action results in an
 income tax penalty on the Participant, 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 in
regulations under 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, apart from the Plan, as it may deem desirable,
including incentive arrangements and awards which do not qualify under Code
Section 162(m); 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.







Page 17


                       (j)          Compliance
with Code Section 162(m). It is the
intent of the Company that the following shall qualify as “performance-based
compensation” within the meaning of Code Section 162(m): (i) all Options and
SARs unless otherwise designated, and (ii) all other Awards that are expressly
designated as intended to constitute “performance-based compensation” under
Code Section 162(m), and, accordingly, that the terms of such Awards and of the
Plan provisions governing them, shall be interpreted in a manner consistent
with Code Section 162(m). Without limiting the foregoing, 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).


                       (k)          Compliance
with Code Section 409A. 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 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. Other provisions of the Plan notwithstanding, with respect to 409A
Awards: (i) the Company shall have no authority to accelerate distributions
relating to such Awards in excess of the authority permitted under Code Section
409A, and (ii) any distribution subject to Code Section 409A(a)(2)(A)(i)
(separation from service) to a “key employee” (as defined for purposes of Code
Section 409A(a)(2)(B)(i)) shall not occur earlier than the earliest time
permitted under Section 409A(a)(2)(B)(i). The Company shall not be responsible
for failure to comply with Code Section 409A. By accepting an Award, a
Participant agrees to hold the Company, the Board, the Committee, and their
respective delegees harmless for any liability under Section 409A.


                       (l)          Certain
Limitations Relating to Accounting Treatment of
Awards. Other provisions of the Plan notwithstanding, the
Committee’s authority under the Plan (including under Sections 9(c), 11(c) and
11(d)) is limited to the extent necessary to ensure that any Option or other
Award of a type that the Committee has intended to be subject to fixed
accounting with a measurement date at the date of grant or the date performance
conditions are satisfied under APB 25 shall not become subject to “variable” accounting
solely due to the existence of such authority, unless the Committee
specifically determines that the Award shall remain outstanding despite such
“variable” accounting. This provision shall cease to be effective if and at
such time as the Company elects to no longer account for equity compensation
under APB 25.


                       (m)         Governing
Law. 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.


                       (n)          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. 


                       (o)          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 to be treated uniformly with other Participants, 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. Except as expressly provided in the Plan
or an 







Page 18


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.


                       (p)          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.


                       (q)          Plan
Effective Date; Termination of Preexisting Plans.
The Plan shall become effective on May 17, 2005 if, and only if, the
stockholders of the Company have approved it on such date. Upon such approval
of the Plan by the stockholders of the Company, no further awards shall be
granted under the Preexisting Plans, but any outstanding awards under the
Preexisting Plans shall continue in accordance with their terms.


                       (r)          Plan
Termination Date. No Awards shall be granted under the
Plan after the Company’s annual meeting of stockholders held in 2015, 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 2010 unless the material
terms of the performance goals have been reapproved by the Company’s
stockholders within the five years prior to such grant.