Document:

EXHIBIT 10.24
FORM OF OUTSIDE DIRECTOR STOCK OPTION GRANT LETTER

DATE OF GRANT

NAME AND ADDRESS OF OUTSIDE DIRECTOR

Dear NAME OF OUTSIDE DIRECTOR:

                 This letter sets forth the terms and conditions of the stock option granted to you by Flushing Financial
Corporation (the “Company”) on DATE OF GRANT in accordance with the provisions of its 1996 Stock Option Incentive Plan, as amended (the “Plan”).
You have been granted a nonstatutory stock option (the “Option”) to purchase NUMBER OF shares of the Company’s Common Stock (“Common Stock”) and a tandem limited stock appreciation
right (the “Limited SAR”). The Option is not intended to be an incentive stock option within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

                 The Option is subject to the terms and conditions set forth in the Plan, any rules and regulations

adopted by the Board of Directors of the Company (the “Board”), and this letter. Any
terms
used in this letter and not defined have the meanings set forth in the Plan.

                 This grant is intended to fulfill the Plan’s purpose of providing additional incentives to outside
directors such as yourself in the form of options to purchase Common Stock, thereby increasing your
personal stake in the continued success and growth of the Company and encouraging you to remain in
the service of the Company.

                 In addition to serving as a grant letter, this document constitutes part of a prospectus covering securities

that have been registered under the Securities Act of 1933. The date of this part of the prospectus

is DATE OF GRANT.

1.             Option Price

                 The price at which you may purchase the shares of Common Stock covered by the Option is $______ per share, which is the fair market value of a share of Common Stock on the date of grant of your
Option as defined in the Plan.

2.             Term of Option

                 Your Option expires in all events on DATE. However, your Option may terminate prior to such expiration date as provided in paragraphs 6 and

7 of this letter upon the occurrence of one of the events described in those paragraphs. Regardless

of the provisions of paragraphs 6 and 7, in no event can your Option be exercised after

the expiration date set forth in this paragraph 2.

3.             Exercisability of Option

	 

	                	(a)           Unless it becomes exercisable on an earlier date as provided in paragraphs 6 and 7 below,
no portion of your Option can be exercised before DATE.
		 
	                	(b)           Unless it becomes exercisable on an earlier date as provided in paragraphs 6 and 7 below,
your Option will become exercisable in installments as follows, provided that you are a director
of the Company or its subsidiaries on each such date:
		 

	        Period Beginning 	Cumulative Number of

      Shares as to Which

      Option is Exercisable
	
	

	   	   
	DATE
	NUMBER

	DATE
	NUMBER

	DATE
	NUMBER

	

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	                	(c)           To the extent your Option has become exercisable, you may exercise the Option to purchase
all or any part of such shares at any time on or before the date the Option expires or terminates.

	 
	
4.             Exercise of Option

                 You may exercise your Option by giving written notice to the Company of the number of shares of Common
Stock desired to be purchased. The notice must be hand delivered or mailed to the Company at 1979
Marcus Avenue, Suite E140, Lake Success, New York 11042; Attention: Senior Vice President/Human Resources.
The notice must be accompanied by either (i) tender in full of the option price, in cash or
Common Stock, as provided in paragraphs 5(a) and 5(b) below, or any combination thereof, or (ii) the
documents necessary to arrange for payment of the option price through the “cashless option
exercise program,” as described in paragraph 5(c) below, if the Company has such a program in
effect at the time of such exercise. A copy of the form of notice to be used in exercising your Option
(the “Option Exercise Form”) is attached. Your Option will be deemed exercised on the date
the Option Exercise Form is hand delivered or, if mailed, postmarked.

                 The shares of Common Stock you will receive upon exercise of your Option may consist of authorized

but unissued shares or treasury shares of the Company, as determined from time to time by the Company’s

Board of Directors.

5.             Satisfaction of Option Price

	 

	                	(a)           Payment of Cash. Your Option may be exercised by payment of the option price in cash (including
check, bank draft, money order, or wire transfer to the order of the Company).
		 
	                	(b)           Payment of Common Stock. You may satisfy the option price by tendering shares of Common Stock
you have owned for at least six months. The fair market value of any shares of Common Stock so tendered
shall be the mean between the highest and lowest quoted selling price, regular way, of the Common
Stock on the Nasdaq National Market (or the principal exchange upon which the Common Stock is listed)
for the day before the date of exercise or, if no such sale of Common Stock occurs on such date,
the mean between the highest and lowest quoted selling price on the nearest trading date before such
date. The certificate(s) evidencing shares tendered in payment of the option price must be duly endorsed
or accompanied by appropriate stock powers. Only stock certificates issued solely in your name may
be tendered to exercise your Option. Fractional shares may not be tendered in satisfaction of the
option price; any portion of the option price which is in excess of the aggregate fair market value
of the number of whole shares tendered must be paid in cash. If a certificate tendered in exercise
of the Option evidences more shares than are required pursuant to the immediately preceding sentence
for satisfaction of the portion of the option price being paid in Common Stock, an appropriate replacement
certificate will be issued to you for the number of excess shares.
		 
	                	(c)           Cashless Exercise. If the Company has in effect a cashless option exercise program at the
time of exercise and you elect to exercise your Option under such program, you must comply with the
procedures for satisfying the option price under such program as in effect at the time of such exercise.
Please contact the Senior Vice President/Human Resources with inquiries about the cashless option
exercise program. 

	 
	
6.             Termination of Service as
a Director

	 

	 	(a)           Termination of Service for Cause.
If the Company or a subsidiary terminates your service as an outside director for Cause, your Option
will terminate on the date of such termination of service. For purposes of this Agreement, termination
for “Cause” means termination for dishonesty or willful misconduct involving moral turpitude.
		 
	 	(b)           Termination of Service Generally.
If you resign from the Board of Directors or the board of directors of a subsidiary or do not permit
your name to be submitted to stockholders for re-election, other than upon your Retirement (as defined
below), your Option will terminate 60 days after your termination of service. If the Board of Directors
or the board of directors of a subsidiary does not submit your name to stockholders for re-election
or if your name is submitted to stockholders for re-election but you are not re-elected, your Option
will terminate six months after your termination of service. Following the termination of your service,
no additional portions of your Option will become exercisable, and your Option will be 

	

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	 	exercisable only with respect to the number of shares which you were entitled to purchase on the date
  of the termination of your service.
		 
	 	(c)           Death or Disability. If your service
terminates by reason of death or Disability, your Option will become fully exercisable upon such
termination of service and will terminate two years following such termination. For these purposes,
“Disability” means that you have been unable to perform the essential functions of your
service as an outside director due to disability or incapacity, as determined by the Board of Directors.
		 
	 	(d)           Retirement. Upon your Retirement
from the Board of Directors, your Option will become immediately exercisable in full and will terminate
two years after your Retirement. For purposes of this provision, “Retirement” means termination
of your service on the Board of Directors other than for Cause after at least five years of service
as an Outside Director.

	 
	
7.             Change of Control

	 

	 	(a)           In general, a Change of Control

will be deemed to have occurred if:
		 
	 	(i)            any person or group becomes

the owner of (or obtains the right to acquire) 25% of the voting securities of the Company or
Flushing

Savings Bank, FSB (the “Bank”);
		 
	 	(ii)           there is a change in the composition

of a majority of the Board of Directors of the Company or the Bank, which change was not approved

by a majority of such Board of Directors as previously constituted; 
		 
	 	(iii)          any entity acquires all or substantially

all of the assets of the Bank or the Company; or
		 
	 	(iv)          the Company’s or the Bank’s

shareholders approve a merger or consolidation with another company where such shareholders would

not own 50% or more of the surviving corporation. 
		 
	 	This description of a Change of Control is only a summary, and the definition contained in the Plan

is controlling.
		 
	 	(b)           Notwithstanding the provisions
of paragraph 3, upon the occurrence of a Change of Control, if you are a director of the Company
or its subsidiaries at such time, your Option and Limited SAR will become immediately exercisable
in full. Notwithstanding the provisions of paragraph 6, your Option will terminate no sooner than
one year after any termination of service following a Change of Control.

	 
	
8.             Limited Stock Appreciation Right

                 Your Limited SAR may be exercised only during the 90-day period following a Change of Control and only
to the extent your Option is then exercisable. During such 90-day period, you will be entitled to
exercise the Limited SAR in whole or in part and receive a cash payment from the Company within
30 days of such exercise in settlement of such exercise. For each share subject to your Option as
to which the Limited SAR is exercised, such payment shall equal an amount by which (a) the greater
of (i) the highest market price per share of Common Stock during the 90-day period before such exercise
or (ii) the highest price per share paid by an acquiring person during the 90-day period before the
Change of Control (or the cash equivalent of such price, as determined by the Board of Directors)
exceeds (b) the option price. The exercise, in whole or in part, of the Limited SAR will reduce the
number of shares remaining subject to the Option by the number of shares with respect to which the
Limited SAR is exercised, and vice versa.

                 You may exercise your Limited SAR by written notice to the Company of the date of grant of the Limited

SAR and the number of shares with respect to which the Limited SAR is being exercised. Such notice

should be telecopied, hand delivered or mailed to the Company, Attention: Senior Vice President/Human

Resources. A copy of the form of notice to be used in exercising your Limited SAR is attached.
Your
Limited SAR will be deemed exercised on the date telecopied, hand delivered, or postmarked.

9.             Federal Income Tax Consequences

	 

	 	(a)           General. The following description
of the federal income tax consequences of your Option and Limited SAR is based on currently applicable
provisions of the Code and related regulations, and is intended to be only a general summary. The
summary does not discuss state and local tax laws, which may 

	

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	 	differ from the federal tax law, or federal estate, gift and employment tax law. For these reasons,
you are urged to consult your own tax advisor regarding the application of the tax laws to your particular
situation.
		 
	 	(b)           Option and Limited SAR Grant.

The grant of the Option and Limited SAR will not cause you to be subject to federal income tax.
		 
	 	(c)           Option and Limited SAR Exercise.

You will recognize ordinary income for federal income tax purposes on the date you exercise your

Option or Limited SAR. The amount of income you will recognize upon exercise of the Option is equal

to the difference between the option price and the fair market value of the shares on the date
of
exercise.
		 
	 	    Upon exercise of the Limited SAR, you will recognize income in an amount equal

to the amount of cash you receive in settlement of such exercise (including amounts applied to
satisfy
applicable withholding tax liability).
		 
	 	(d)           Sale of Option Shares. Your tax

basis in the shares acquired upon exercise of your Option will be equal to the fair market value

of the shares on the exercise date.
		 
	 	    You will recognize capital gain or loss on your sale or exchange of the Option
shares to the extent of any difference between the amount realized and your tax basis in the shares.
The holding period for purposes of determining whether such gain or loss is long-term or short-term
will begin on the date of exercise.
		 
	 	(e)           Exercise Using Common Stock. If

you deliver shares of Common Stock you have owned for at least six months to exercise your Option,

the shares you deliver are valued at their fair market value on the date of exercise. The delivery

of such shares will not result in taxable gain to you, even if the shares have appreciated in value

from the time you acquired them. Instead, a portion of the shares you receive upon exercise (equal

in number to the number of shares you deliver) will have the same tax basis as, and will be deemed

to have been acquired on the date of acquisition of, the shares you deliver. You will recognize
ordinary
income equal to the fair market value of the shares you receive in excess of the number
you deliver
(less any cash delivered upon exercise). These additional shares will have a tax basis
equal to their
fair market value on the exercise date, and will be deemed to have been acquired on that date.
		 
	 	(f)            Company Deductions. As a
general rule, the Company or one of its subsidiaries will be entitled to a deduction for federal
income tax purposes at the same time and in the same amount that you recognize ordinary income, to
the extent that such income is considered reasonable compensation under the Code.
		 
	 	(g)           ERISA. The Plan is not qualified

under Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement

Income Security Act of 1974.

	 
	
10.          Administration of the Plan

                 The Plan is administered by the Board of Directors of the Company. The Board has authority to interpret

the Plan, to adopt rules for administering the Plan, to decide all questions of fact arising

under

the Plan, and generally to make all other determinations necessary or advisable for administration

of the Plan. All decisions and acts of the Board are final and binding on all affected Plan
participants.

11.          Non-transferability of Option and Limited
Stock Appreciation Right

                 Unless otherwise provided by the Board of Directors, the Option and Limited SAR granted to you by this
letter may be exercised only by you, and may not be assigned, pledged, or otherwise transferred by
you, with the exception that in the event of your death the Option and Limited SAR may be exercised
(at any time prior to its expiration or termination as provided in paragraph 2 and 6) by the executor
or administrator of your estate or by a person who acquired the right to exercise your Option and
Limited SAR by bequest or inheritance or by reason of your death. 

12.          Adjustment In Certain Events

                 In the event of specified changes in the Company’s capital structure, the Board is required to
make appropriate adjustment in the number and kind of shares authorized by the Plan, and the number,
option price and kind of shares or other property covered by outstanding awards. This letter will
continue to apply to your award as so adjusted.

	

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                 In addition, upon any reorganization, merger, or consolidation as a result of which the Company is
not the surviving corporation (or survives as a wholly-owned subsidiary of another corporation),
or upon a sale of substantially all the assets of the Company, or upon the dissolution or liquidation
of the Company, the Board may take such action as it in its discretion deems appropriate to (i) cash
out outstanding Options and Stock Appreciation Rights at or immediately prior to the date of such
event, or (ii) provide for the assumption of outstanding Options and Stock Appreciation Rights by
surviving, successor or transferee corporations.

                 The Board’s determination as to which adjustments shall be made and the extent thereof shall be

final, binding and conclusive.

13.          Amendment

                 The terms of this grant cannot be amended except for (i) amendments or updates to this letter
that describe changes in the law that apply to your Option, and (ii) any changes that may be
required by the OTS. The Plan and your Option are expressly subject to any terms and conditions that
may be required by the OTS.

                 The Plan is of unlimited duration, but may be amended, terminated or discontinued by the Board of Directors

at any time. However, no amendment, termination or discontinuance of the Plan (other than an amendment

or termination that may be required by the OTS) will unfavorably affect any options previously
granted
to you.

14.          Section 16(b) Considerations

                 Since you are a director of the Company, under Section 16(b) (“Section 16(b)”) of the
Securities Exchange Act of 1934 (the “Exchange Act”), you will be required to return to
the Company any “profit” you realize from the “purchase” and “sale,”
or “sale” and “purchase,” of Common Stock within any six month period. Under
current law the grant of an option and the receipt of shares upon exercise of an option under the
Plan are not “purchases” for purposes of Section 16(b).

                 If you exercise your Option using previously acquired Common Stock, the delivery of shares in satisfaction
of the option price will not be deemed to be a “sale”. A sale of shares in a private transaction
or on the open market after exercise or pursuant to a broker-assisted cashless option exercise program
will be a “sale” under Section 16(b). However, a sale of shares to the Company which has
been authorized in advance by the Board of Directors will not be a “sale”.

                 The receipt of cash upon exercise of a Limited SAR will not be a “sale”.

                 Reporting requirements apply with respect to the above transactions. You should consult the Company’s
Senior Vice President/Human Resources with respect to these provisions.

15.          Restrictions on Resale

                 There are no restrictions imposed by the Plan on the resale of Common Stock acquired under the Plan.
However, it is Company policy that all sales of Common Stock by directors be pre-cleared by the Senior
Vice President/ Human Resources. In addition, under the provisions of the Securities Act of 1933
(the “Securities Act”) and the rules and regulations of the Securities and Exchange Commission
(the “SEC”), resales of stock acquired under the Plan by directors of the Company, who
may be deemed to be “affiliates” of the Company, must be made pursuant to an appropriate
effective registration statement filed with the SEC, pursuant to the provisions of Rule 144 issued
under the Securities Act, or pursuant to another exemption from registration provided in the Securities
Act. At the present time, the Company does not have a currently effective registration statement
pursuant to which such resales may be made by affiliates. There are no restrictions imposed by the
SEC on the resale of stock acquired under the Plan by persons who are not affiliates of the Company.

16.          Stockholder Rights Plan 

                      
        On September 17, 1996,
        the Company adopted a Stockholder Rights Plan pursuant to which it declared
        a dividend of one Right (a “Right”) for each outstanding share
        of Common Stock. The Rights Plan provides that the Company will issue
        one Right together with each share of Common Stock issued by it in the
        future. Each Right entitles the holder to purchase from the Company a
        fraction of a share of the Company’s Series A Junior Participating
        Preferred Stock. 

	

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        The Rights are not exercisable
        at the present time. At the present time the Rights are represented by
        certificates for the Common Stock and can only be transferred together
        with the Common Stock. However, if certain events
        occur, the rights will become exercisable and at that time will be able
        to be transferred separately from the Common Stock.

                 If you exercise your Option, you will receive one Right with respect to each share of Common Stock

purchased. The exercise price of your Option is not affected by the Rights. You cannot exercise
your
Option with respect to the shares of Common Stock without the Rights, and vice versa. If the
Rights
become exercisable, you will receive more detailed information about how they affect your
awards
under the Plan.

17.          Regulatory Compliance

                 Under the Plan, the Company is not required to deliver Common Stock upon exercise of your Option if

such delivery would violate any applicable law or regulation. If required by any federal or state

securities law or regulation, the Company may impose restrictions on your ability to transfer shares

received under the Plan.

18.          Company and Plan Documents

                 You may obtain a copy of the Company’s most recent Annual Report to Stockholders and all other

communications distributed by the Company to its shareholders, without charge, by written or oral

request to the Senior Vice President/Human Resources, Flushing Financial Corporation, 1979 Marcus

Avenue, Suite E140, Lake Success, New York 11042 (telephone (718) 961-5400).

                 The following documents filed by the Company with the SEC under the Exchange Act are incorporated herein

by reference:

	 

	 	(1)           The Company’s most recent

Annual Report on Form 10-K;
		 
	 	(2)           All other reports filed by the

Company under Section 13(a) or 15(d) of the Exchange Act after the end of the period covered by
its
most recent Annual Report on Form 10-K; and
		 
	 	(3)           The description of the Common

Stock and the Rights contained in the registration statements therefor under Section 12 of
the
Exchange Act, including any amendments filed for the purpose of updating such descriptions.

	 
	
                 All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange

Act after the date of this letter and prior to the filing of a post-effective amendment which indicates

that all securities offered under the Plan have been sold or which deregisters all securities then

remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof

from the date of the filing of such documents.

                 You may obtain a copy of any or all of the documents referred to above, as well as any documents constituting
part of a prospectus covering shares offered to you under the Plan, without charge, by written or
oral request to the Senior Vice President/Human Resources, Flushing Financial Corporation, 1979 Marcus
Avenue, Suite E140, New York 11042 (telephone (718) 961-5400).

19.          Experts

                 The consolidated financial statements of the Company appearing in the Company’s Annual Report
on Form 10-K for the year ended December 31, 20XX have been audited by NAME OF AUDITING FIRM, independent auditors, as set forth in their report thereon included therein and incorporated herein

by reference. Such financial statements are, and audited financial statements to be included in
subsequently
filed documents will be, incorporated herein in reliance upon the reports of a firm
of independent
accountants, pertaining to such financial statements (to the extent covered by consents
filed with
the SEC) given upon the authority of such firm as experts in accounting and auditing.

*             *             *             *             *

                 This letter contains the formal terms and conditions of your award and accordingly should be retained

in your files for future reference.

	 

	 	Very truly yours,
		 
		

		Michael J. Hegarty
		President and Chief Executive Officer

	

      116EXHIBIT 10.25

    FORM OF EMPLOYEE RESTRICTED STOCK AWARD LETTER

	 	 
	 	DATE OF GRANT
	 	 

	EMPLOYEE NAME

EMPLOYEE ADDRESS

Dear Name:

                 This letter sets forth the terms and conditions of the shares of restricted stock granted to you by
Flushing Financial Corporation (the “Company”), in accordance with the provisions of its
1996 Restricted Stock Incentive Plan (the “Plan”). You have been granted NUMBER shares (the “Restricted Shares”) of the Company’s Common Stock (“Common Stock”).
Your Restricted Shares are subject to the terms and conditions set forth in the Plan, any rules and
regulations adopted by the Board of Directors (the “Board”), and this letter. Any terms
used in this letter and not defined have the meanings set forth in the Plan.

                 This grant is intended to fulfill the Plan’s purpose of providing additional incentives to employees
such as yourself through the award of Restricted Shares, thereby increasing your personal stake in
the continued success and growth of the Company and encouraging you to remain in the Company’s
employ.

                 In addition to serving as a grant letter, this document constitutes part of a prospectus covering securities
that have been registered under the Securities Act of 1933. The date of this part of the prospectus
is DATE.

1.             Vesting of Restricted Shares

	 

		(a)	Unless they vest on an earlier date as provided in paragraphs 4 and 5 below, none of your Restricted
Shares will vest until DATE .
			 
		(b)	Unless they vest on an earlier date as provided in paragraphs 4 and 5 below, your Restricted Shares
will vest in installments as follows, provided that you are an employee or director of the Company
or its subsidiaries on each such date:
			 

	Vesting Date	Cumulative Percentage

      of Restricted Shares Vested 
	
	

	   	   
	Date
	20%

	Date
	40%

	Date
	60%

	Date
	80%

	Date
	100%

		 	 
		(c)	You do not need to pay any purchase price to receive the Restricted Shares granted to you by this letter.

	 
	
2.             Restrictions on the Restricted

Shares

                 Until your Restricted Shares have vested, you may not sell, transfer, assign or pledge them. Stock
certificates representing your Restricted Shares will be registered in your name as of the date of
this letter, but such certificates will be held by the Company on your behalf until such shares vest.
When all or a portion of your Restricted Shares vest, a certificate representing such shares (minus
any shares retained to satisfy your tax withholding obligations, as described in paragraph 7)
will be delivered to you (or, in the event of your death, to the executor or administrator of your
estate) as soon as practicable. To the extent your Restricted Shares have vested, they shall be fully
transferable and not subject to forfeiture upon termination of employment or otherwise.

	

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3.             Dividends and Voting

                 From the date of this letter, you will receive, with respect to your Restricted Shares, payments equal

to the amount of dividends paid on Common Stock. Such payments will be paid directly to you at
the
same time dividends are paid with respect to all other shares of Common Stock. You will have
the
right to vote your Restricted Shares.

4.             Termination of Employment

	 

		(a)	General.  Special rules apply to the vesting of your Restricted Shares in the event of your death, disability,
retirement, or other termination of employment.
			 
		(b)	Death or Disability.  Notwithstanding the provisions of paragraph 1, if your employment terminates by reason
of death or Disability, all of your Restricted Shares will immediately vest. For this purpose, “Disability”
means that you have been unable to perform the essential functions of your employment (or, if you
have retired and are serving as a director, are unable to perform the essential functions of that
position) due to disability or incapacity for 270 consecutive days or such lesser period as
may be determined by the Board (upon recommendation of the Committee).
			 
		(c)	Retirement. Notwithstanding the provisions of paragraph 1, if your employment terminates by reason of Retirement,
all of your Restricted Shares will immediately vest. For purposes of this provision, “Retirement”
means termination of employment with the Company or its subsidiaries at a time when you are eligible
to retire under a retirement program of the Company or one of its subsidiaries or as otherwise determined
by the Board upon recommendation of the Committee.
			 
		(d)	Other Termination of Employment.  If your employment terminates for any reason other than death, Disability, or Retirement, any
of your Restricted Shares which have not vested prior to your termination of employment will be forfeited.
			 
		(e)	Acceleration of Vesting.  If permitted by the OTS, the Board (upon recommendation of the Committee) may, in its discretion,
exercised before or after your termination of employment, declare all or any portion of your Restricted
Shares immediately vested.
			 
		(f)	Board Determinations. The Board shall have absolute discretion to determine the date and circumstances of termination of

your employment, and its determination shall be final, conclusive and binding upon you.

	 
	
5.             Change of Control

	 

		(a)	In general, a Change of Control will be deemed to have occurred if:
			 

		(i)	any person or group becomes the owner of (or obtains the right to acquire) 25% of the voting securities

of the Company or Flushing Savings Bank, FSB (the “Bank”);
			 
		(ii)	there is a change in the composition of a majority of the Board of Directors of the Company or the

Bank which change was not approved by a majority of the Board of Directors as previously constituted;
			 
		(iii)	any entity acquires all or substantially all of the assets of the Bank or the Company; or
			 
		(iv)	the Company’s or the Bank’s shareholders approve a merger or consolidation with another company

where such shareholders would not own 50% or more of the surviving corporation.
			 

	 	This description of a Change of Control is only a summary, and the definition contained in the Plan

is controlling.
		 

		(b)	Notwithstanding the provisions of paragraph 1, upon the occurrence of a Change of Control, all of your
Restricted Shares will vest immediately if you are an employee or director of the Company or its
subsidiaries at such time.

	

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6.             Federal Income Tax Consequences

	 

		(a)	General.  The following description of the federal income tax consequences of your Restricted Shares is

based on currently applicable provisions of the Internal Revenue Code of 1986, as amended (the
“Code”)
and related regulations, and is intended to be only a general summary. The summary
does not discuss
state and local tax laws, which may differ from the federal tax law, or federal
estate, gift and
employment tax law. For these reasons, you are urged to consult your own tax advisor
regarding the
application of the tax laws to your particular situation.
			 
		(b)	Income Recognition Date.  Except as noted below, the grant of Restricted Shares is not taxable to you. As a general matter,
you will recognize ordinary compensation income on the date your Restricted Shares vest in an amount
equal to the fair market value of the Restricted Shares on that date. You may, however, elect to
recognize income with respect to some or all of your Restricted Shares as of the date of grant
of such Restricted Shares in an amount equal to the fair market value of the Restricted Shares on
that date. In order to make this election, you must file an election under Section 83(b) of the Code
with the Internal Revenue Service no later than 30 days after the date of this letter. Further
information about Section 83(b) and a copy of the election form can be obtained from the Company’s
Human Resources Department.
			 

	 	If you make a Section 83(b) election and subsequently forfeit some or all of the Restricted Shares

that were subject to the election, you will not be able to claim a deduction or capital loss with

respect to the forfeited shares.
		 
	 	As used in this letter, the “income recognition date” of your Restricted Shares is the date
the shares vest, unless you make a Section 83(b) election as described above, in which case
the income recognition date is the date of this letter.
		 

		(c)	Valuation of Shares for Tax Purposes.  For purposes of determining the amount of income to be recognized by you (and the tax basis

of the shares), the fair market value of your Restricted Shares on the income recognition date
will
be calculated as the mean between the highest and lowest quoted selling price, regular way,
of the
Company’s Common Stock on the Nasdaq National Market (or the principal exchange upon
which the
Common Stock is listed) on the day before such date or, if no such sale of Common Stock
occurs on
such date, the mean between the highest and lowest quoted selling price on the nearest
trading day
before such date.
			 
		(d)	Basis and Holding Period.  Your tax basis in the shares acquired upon the vesting of your Restricted Shares will be equal

to the fair market value of the shares on their income recognition date.
			 

	 	You will recognize capital gain or loss on your sale or exchange of the shares to the extent of any
difference between the amount realized and your tax basis in the shares. The tax treatment of such
gain or loss will depend on the length of time you have held the shares after their income recognition
date and certain other factors.
		 

		(e)	Dividends.  You will receive payments equal to the dividends on the full number of Restricted Shares granted,
regardless of whether you have made a Section 83(b) election. If you have made a Section 83(b) election,
or if your Restricted Shares have vested, such payments will be treated for tax purposes as
dividend income (in certain years eligible for the lower tax rates generally applicable to net capital
gains); otherwise, they are taxable as compensation income. In either case, such payments will be
taxable in the year received.
			 
		(f)	Company Deductions.  As a general rule, the Company or one of its subsidiaries will be entitled to a deduction for
federal income tax purposes at the same time and in the same amount that you recognize compensation
income in connection with the receipt of Restricted Shares (including your receipt of dividend
equivalents on your Restricted Stock before they vest if you have not made a Section 83(b) election),
to the extent that such income is considered reasonable compensation under the Code. However, Section
162(m) of the Code limits to $1 million the annual tax deduction that the Company and its subsidiaries
can take with respect to the compensation of each of certain officers unless the compensation is
performance based or certain 

	

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	 	other exceptions apply. The Company believes that awards of Restricted Shares will not be treated as
performance-based compensation for this purpose. Furthermore, the Company will not be entitled to
a deduction with respect to payments that constitute “excess parachute payments” pursuant
to Section 280G of the Code and that do not qualify as reasonable compensation pursuant to that
section. Such payments will also subject the recipients to a 20% excise tax.
		 

		(g)	ERISA.  The Plan is not qualified under Section 401(a) of the Code and is not subject to any of

the provisions of the Employee Retirement Income Security Act of 1974.

	 
	
7.             Income Tax Withholding

                 You must make arrangements satisfactory to the Company to satisfy any applicable federal, state, or
local withholding tax liability arising with respect to the Restricted Shares. You can either make
a cash payment to the Company of the required amount or, if you do not make a Section 83(b)
election, you can elect to satisfy your withholding obligation by having the Company retain Common
Stock having a value equal to the amount of your withholding obligation from the shares otherwise
deliverable to you upon the vesting of your Restricted Shares. If you fail to satisfy your withholding
obligation in a time and manner satisfactory to the Company, the Company shall have the right to
withhold the required amount from your salary or other amounts payable to you.

                 Any election to have shares withheld must be made on or before the vesting date of your Restricted
Shares. A copy of the withholding election form is attached.

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

8.             Administration of the Plan

                 The Plan is administered by the Board of Directors of the Company. The Board has authority to interpret

the Plan, to adopt rules for administering the Plan, to decide all questions of fact arising under

the Plan, and generally to make all other determinations necessary or advisable for administration

of the Plan. Grants of awards under the Plan will be made by the Board only upon recommendation
of
the Compensation Committee of the Board. The Board can reduce, but cannot increase, an award
from
the level recommended by the Committee. Members of the Committee, which consists of at least
two
directors, are appointed annually by the Board and may be removed by the Board. All decisions
and
acts of the Board are final and binding on all affected Plan participants.

9.             Adjustment in Certain Events

                 In the event of specified changes in the Company’s capital structure, the Board is required to
make appropriate adjustment in the number and kind of shares authorized by the Plan, and the number
and kind of shares covered by outstanding awards. This letter will continue to apply to your awards
as so adjusted.

10.          Amendment

                 The Board (upon recommendation of the Committee) may from time to time amend the terms of this award
in accordance with the terms of the Plan in effect at the time of such amendment, but no amendment
which is unfavorable to you can be made without your written consent (except for (i) amendments
or updates to this letter that describe changes in the law that apply to your Restricted Shares,
and (ii) any changes that may be required by the OTS). The Plan and your Restricted Shares are
expressly subject to any terms and conditions that may be required by the OTS.

                 The Plan is of unlimited duration, but may be amended, terminated or discontinued by the Board of Directors

at any time. However, no amendment, termination or discontinuance of the Plan (other than an amendment

or termination that may be required by the OTS) will unfavorably affect any Restricted Shares previously

granted to you.

	

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11.          Section 16(b) Considerations

                 If you are deemed to be an officer of the Company for purposes of Section 16(b) (“Section 16(b)”)
of the Securities Exchange Act of 1934 (the “Exchange Act”), you will be required to return
to the Company any “profit” you realize from the “purchase” and “sale”,
or “sale” and “purchase”, of Common Stock within any six month period. Under
current law, neither the grant nor the vesting of your Restricted Shares is a “purchase”
for purposes of Section 16(b). Accordingly, your receipt of the Restricted Shares will not affect
your ability to sell any other shares of Common Stock you may own.

                 The sale of your Restricted Shares in a private transaction or on the open market will generally be
a “sale” for purposes of Section 16(b). However, a sale of shares to the Company which
has been authorized in advance by the Board of Directors will not be a “sale

                 The withholding of shares to satisfy your tax liability in connection with the vesting of Restricted
Shares (as described in paragraph 7) will not be a “sale”.

                 Reporting requirements apply with respect to the above transactions. In most cases, such reports must
be received by the Securities and Exchange Commission (the “SEC”) by the second business
day after the date of the transaction. Beginning June 30, 2003, all such reports must be filed electronically.
If you are subject to Section 16(b), you should consult the Company’s Senior Vice President/Human
Resources with respect to these provisions.

12.          Restrictions on Resale

                 There are no restrictions imposed by the Plan on the resale of Common Stock acquired under the Plan.
However, the Company’s insider trading policy imposes certain restrictions on transactions in
securities of the Company. In addition, under the provisions of the Securities Act of 1933 (the “Securities
Act”) and the rules and regulations of the SEC, resales of stock acquired under the Plan by
certain officers and directors of the Company who may be deemed to be “affiliates” of the
Company must be made pursuant to an appropriate effective registration statement filed with the SEC,
pursuant to the provisions of Rule 144 issued under the Securities Act, or pursuant to another
exemption from registration provided in the Securities Act. At the present time, the Company does
not have a currently effective registration statement pursuant to which such resales may be made
by affiliates. There are no restrictions imposed by the SEC on the resale of stock acquired under
the Plan by persons who are not affiliates of the Company.

13.          Effect on Other Benefits

                 Income recognized by you as a result of the grant or vesting of Restricted Shares or the receipt of
dividends on your Restricted Shares will not be included in the formula for calculating benefits
under the Company’s other benefit plans.

14.          Stockholder Rights Plan

                 On September 17, 1996, the Company adopted a Stockholder Rights Plan pursuant to which it declared
a dividend of one Right (a “Right”) for each outstanding share of Common Stock. The Rights
Plan provides that the Company will issue one Right together with each share of Common Stock issued
by it in the future. Each Right entitles the holder to purchase from the Company a fraction of a
share of the Company’s Series A Junior Participating Preferred Stock. The Rights included in
your award will vest when the underlying Restricted Shares vest.

                 The Rights are not exercisable at the present time. At the present time the Rights are represented

by certificates for the Common Stock and can only be transferred together with the Common Stock.

However, if certain events occur, the Rights will become exercisable and at that time will be able

to be transferred separately from the Common Stock. If the Rights become exercisable, you will
receive
more detailed information about how they affect your awards under the Plan.

15.          Regulatory Compliance

                 Under the Plan, the Company is not required to deliver Restricted Shares or Common Stock if such delivery

would violate any applicable law or regulation. If required by any federal or state securities
law
or regulation, the Company may impose restrictions on your ability to transfer shares received
under
the Plan.

	

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16.          Company and Plan Documents

                 You may obtain a copy of the Company’s most recent Annual Report to Stockholders and all other
communications distributed by the Company to its shareholders, without charge, by written or oral
request to the Senior Vice President/Human Resources, Flushing Financial Corporation, 1979 Marcus
Avenue, Suite E140, Lake Sucess, New York 11042 (telephone (718) 961-5400).

                 The following documents filed by the Company with the SEC under the Exchange Act are incorporated herein

by reference:

	 

		(1)	The Company’s most recent Annual Report on Form 10-K;
			 
		(2)	All other reports filed by the Company under Section 13(a) or 15(d) of the Exchange Act after

the end of the period covered by its most recent Annual Report on Form 10-K; and
			 
		(3)	The description of the Common Stock and the Rights contained in the registration statements therefor
under Section 12 of the Exchange Act, included any amendments filed for the purpose of updating
such descriptions.

	 
	
                 All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange

Act after the date of this letter and prior to the filing of a post-effective amendment, which
indicates
that all securities offered under the Plan have been sold or which deregisters all securities
then
remaining unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof
from the date of the filing of such documents.

                 You may obtain a copy of any or all of the documents referred to above, as well as any documents constituting
part of a prospectus covering shares offered to you under the Plan, without charge, by written or
oral request to the Senior Vice President/Human Resources, Flushing Financial Corporation, 1979 Marcus
Avenue, Suite E140, Lake Sucess, New York 11042 (telephone (718) 961-5400).

17.          Experts

                 The consolidated financial statements of the Company appearing in the Company’s Annual Report

on Form 10-K for the year ended December 31, 20XX have been audited by NAME OF AUDITING FIRM, independent auditors, as set forth in their report thereon included therein and incorporated herein
by reference. Such financial statements are, and audited financial statements to be included in subsequently
filed documents will be, incorporated herein in reliance upon the reports of a firm of independent
accountants pertaining to such financial statements (to the extent covered by consents filed with
the SEC) given upon the authority of such firm as experts in accounting and auditing.

*             *             *             *             *

                 If you have any questions regarding your grant of Restricted Shares or would like to obtain additional
information about the Plan or its administration, please contact the Company’s Senior Vice President/Human
Resources, Flushing Financial Corporation, 1979 Marcus Avenue, Suite E140, Lake Success, New York
11042 (telephone (718) 961-5400). This letter contains the formal terms and conditions of your award
and accordingly should be retained in your files for future reference.

	 

	 	Very truly yours,
		 
	 	Anna M. Piacentini
	 	Senior Vice President and
	 	Corporate Secretary

	

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