Document:

EX-10.7

 

Exhibit 10(7)

Form of Restricted Stock Agreement

LAYNE CHRISTENSEN COMPANY

2006 EQUITY INCENTIVE PLAN

Restricted Stock Agreement 

	 	 	 	 	 
	Date of Grant:
	 	 	 	 
	 
	 	 	 
	 
	Number of Restricted Shares Granted:
	 	 	(               
               
                	)
	 
	 	 	 

     This Agreement dated                                         , is made by and between Layne Christensen
Company, a Delaware corporation (the “Company”), and                                          (“Participant”).

RECITALS:

     A. Effective June 8, 2006, the Company’s stockholders approved the Layne Christensen Company
2006 Equity Incentive Plan (the “Plan”) pursuant to which the Company may, from time to time, grant
Shares of Restricted Stock to eligible Service Providers of the Company.

     B. Participant is a Service Provider of the Company or one of its Affiliates and the Company
desires to encourage him/her to own Shares and to give him/her added incentive to advance the
interests of the Company, and desires to grant Participant shares of Restricted Stock of the
Company under the terms and conditions established by the Committee.

AGREEMENT:

     In consideration of the mutual covenants contained herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

     1. Incorporation of Plan. All provisions of this Award Agreement and the rights of
Participant hereunder are subject in all respects to the provisions of the Plan and the powers of
the Committee therein provided. Capitalized terms used in this Agreement but not defined shall
have the meaning set forth in the Plan.

     2. Grant of Restricted Stock. Subject to the conditions and restrictions set forth in
this Agreement and in the Plan, the Company hereby grants to Participant that number of Shares of
Restricted Stock identified above opposite the heading “Number of Restricted Shares Granted” (the
“Restricted Shares”).

     3. Restrictions on Transfer/Vesting Date. Subject to any exceptions set forth in this
Agreement or in the Plan, the Restricted Shares or the rights relating thereto may not be sold,
transferred, gifted, bequeathed, pledged, assigned, or otherwise alienated or hypothecated,
voluntarily or involuntarily, prior to the vesting date for such Restricted Shares (the “Vesting
Date”), as identified below. On the Vesting Date, such restriction on transfer shall lapse and the
Restricted Shares, if not previously forfeited pursuant to Section 4 below, will become freely
transferable under this Agreement and the Plan, subject only to such further limitations on
transfer, if any, as may exist under applicable law or any other agreement binding upon
Participant. Subject to any exceptions listed in this Agreement or in the Plan, the Restricted
Shares shall become vested in accordance with the schedule set forth below:

 

 

	 	 	 
	Anniversary of Date of Grant

	 	Number/Percentage of Shares Vested
	 
	 	 

[Insert Vesting Schedule]

     The Committee may, in its sole discretion, accelerate the Vesting Date for any or all of the
Restricted Shares, if in its judgment the performance of Participant has warranted such
acceleration and/or such acceleration is in the best interests of the Company.

     4. Forfeiture Prior to Vesting. Unless otherwise provided below, if Participant’s
position as a Service Provider with the Company or any of its Affiliates is terminated prior to the
Vesting Date for one or more of the Restricted Shares, Participant will thereupon immediately
forfeit any and all unvested Restricted Shares, and the full ownership of such Restricted Shares
and rights will revert to the Company. Upon such forfeiture, Participant shall have no further
rights under this Agreement. For purposes of this Agreement, transfer of employment between the
Company and any of its Affiliates (or between Affiliates) does not constitute a termination of
Participant’s position as a Service Provider. If Participant’s position as a Service Provider with
the Company or any of its Affiliates is terminated by the Company or any of its Affiliates prior to
the Vesting Date due to Participant’s death or Disability, all restrictions on the Restricted
Shares will lapse and cease to be effective, as of the date of Participant’s termination as a
Service Provider.

     5. Certificates. The Restricted Shares shall be issued in the name of Participant or
a nominee of Participant as of the Date of Grant. One or more certificates representing the
Restricted Shares shall bear a legend similar to the following:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED SECURITIES AND
SUBJECT TO CERTAIN CONDITIONS UNDER THE LAYNE CHRISTENSEN COMPANY 2006
EQUITY INCENTIVE PLAN AND THE APPLICABLE RESTRICTED STOCK AGREEMENT PURSUANT
TO WHICH THE SHARES WERE ISSUED. THESE SHARES ARE SUBJECT TO A RISK OF
FORFEITURE AND CANNOT BE SOLD, DONATED, TRANSFERRED OR IN ANY OTHER MANNER
ENCUMBERED EXCEPT IN ACCORDANCE WITH THE TERMS OF SUCH PLAN AND AGREEMENT,
COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF
LAYNE CHRISTENSEN COMPANY.

     6. Dividends and Voting. Participant is entitled to (i) receive all dividends,
payable in stock, in cash or in kind, or other distributions, declared on or with respect to any
Restricted Shares as of a record date that occurs on or after the Date of Grant hereunder and
before any transfer or forfeiture of the Restricted Shares by Participant, provided that any such
dividends paid in cash are to be held in escrow by the Company and, such cash dividends and
distributions are to be subject to the same rights, restrictions on transfer and conditions
regarding vesting and forfeiture as the Restricted Shares with respect to which such dividends or
distributions are paid at the time of payment, and (ii) exercise all voting rights with respect to
the Restricted Shares, if the record date for the exercise of such voting rights occurs on or after
the Date of Grant hereunder and prior to any transfer or forfeiture of such Restricted Shares. In
the event of forfeiture by Participant of any or all of the Restricted Shares or any of the equity
securities distributed to Participant with respect thereto, Participant shall forfeit all cash
dividends held in escrow and relating to the underlying forfeited Restricted Shares and must return
to the Company any distributions previously paid to Participant with respect to such Restricted
Shares.

     7. Titles. Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

2

 

     8. Notice of I.R.C. Section 83(b) Election. If Participant makes an election under
Section 83(b) of the Code, Participant shall promptly notify the Company of such election.

     9. Amendment. This Agreement may be amended only by a writing executed by the parties
hereto which specifically states that it is amending this Agreement.

     10. Governing Law. The laws of the State of Delaware will govern the interpretation,
validity and performance of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.

     11. Binding Effect. Except as expressly stated herein to the contrary, this Agreement
will be binding upon and inure to the benefit of the respective heirs, legal representatives,
successors and assigns of the parties hereto.

     This Agreement has been executed and delivered by the parties hereto.

	 	 	 	 	 	 	 
	The Company:

	 	Participant:

	Layne
Christensen Company

	 	

	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 

	 

	 	Title:	 	 	 	Address of Participant:
	 

	 	 	 	 

	 	

 

	 
	 
	 

	 	 	 	 	 	 

3Flushing Rights Agreement

     

    
      	 

    

     

    FLUSHING
      FINANCIAL CORPORATION

     

    and

     

    COMPUTERSHARE
      TRUST COMPANY N.A.

     

    Rights
      Agent

     

    _____________________

     

    Rights
      Agreement

     

    Dated
      as
      of September 8, 2006

     

    
      	 

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    
      	
               

              Table
                of Contents

            
	
               

              Section

            	 	
               

              Page

            
	
               

              1.

            	
               

              Certain
                Definitions

            	
               

              1

            
	
               

              2.

            	
               

              Appointment
                of Rights Agent

            	
               

              5

            
	
               

              3.

            	
               

              Issue
                of Right Certificates

            	
               

              5

            
	
               

              4.

            	
               

              Form
                of Right Certificates

            	
               

              7

            
	
               

              5.

            	
               

              Countersignature
                and Registration

            	
               

              7

            
	
               

              6.

            	
               

              Transfer,
                Split Up, Combination and Exchange of Right
                Certificates; Mutilated, Destroyed, Lost or Stolen Right
                Certificates

            	
               

              8

            
	
               

              7.

            	
               

              Exercise
                of Rights; Purchase Price; Expiration Date of
                Rights

            	
               

              8

            
	
               

              8.

            	
               

              Cancellation
                and Destruction of Right
                Certificates

            	
               

              10

            
	
               

              9.

            	
               

              Reservation
                and Availability of Preferred
                Shares

            	
               

              10

            
	
               

              10.

            	
               

              Preferred
                Shares Record Date

            	
               

              12

            
	
               

              11.

            	
               

              Adjustment
                of Purchase Price, Number and Kind of Shares
                or Number of Rights

            	
               

              12

            
	
               

              12.

            	
               

              Certificate
                of Adjusted Purchase Price or Number of
                Shares

            	
               

              17

            
	
               

              13.

            	
               

              Consolidation,
                Merger or Sale or Transfer of Assets or
                Earning Power

            	
               

              18

            
	
               

              14.

            	
               

              Additional
                Covenants

            	
               

              21

            
	
               

              15.

            	
               

              Fractional
                Rights and Fractional
                Shares

            	
               

              21

            
	
               

              16.

            	
               

              Rights
                of Action

            	
               

              22

            
	
               

              17.

            	
               

              Agreement
                of Rights Holders

            	
               

              23

            
	
               

              18.

            	
               

              Right
                Certificate Holder Not Deemed a
                Stockholder

            	
               

              23

            
	
               

              19.

            	
               

              Concerning
                the Rights Agent

            	
               

              24

            
	
               

              20.

            	
               

              Merger
                or Consolidation or Change of Name of Rights
                Agent

            	
               

              24

            
	
               

              21.

            	
               

              Duties
                of Rights Agent

            	
               

              25

            

    

    

    
      
        i

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               

              Table
                of Contents

              (continued)

            
	
               

              Section

            	 	
               

              Page

            
	
               

              22.

            	
               

              Change
                of Rights Agent

            	
               

              26

            
	
               

              23.

            	
               

              Issuance
                of New Right Certificates

            	
               

              27

            
	
               

              24.

            	
               

              Redemption

            	
               

              27

            
	
               

              25.

            	
               

              Exchange

            	
               

              28

            
	
               

              26.

            	
               

              Notice
                of Certain Events

            	
               

              30

            
	
               

              27.

            	
               

              Notices

            	
               

              30

            
	
               

              28.

            	
               

              Supplements
                and Amendments

            	
               

              31

            
	
               

              29.

            	
               

              Successors

            	
               

              31

            
	
               

              30.

            	
               

              Determinations
                and Actions by the Board of Directors,
                etc.

            	
               

              32

            
	
               

              31.

            	
               

              Benefits
                of this Agreement

            	
               

              32

            
	
               

              32.

            	
               

              Severability

            	
               

              32

            
	
               

              33.

            	
               

              Governing
                Law

            	
               

              32

            
	
               

              34.

            	
               

              Counterparts

            	
               

              32

            
	
               

              35.

            	
               

              Descriptive
                Headings

            	
               

              32

            
	
               

              36.

            	
               

              Force
                Majeure

            	
               

              32

            
	
               

               

              Exhibit
                A -- Form of Certificate of
                Increase

            	
               

               

              A-1

            
	
               

              Exhibit
                B -- Form of Right Certificate

            	
               

              B-1

            
	
               

              Exhibit
                C -- Form of Summary of Rights

            	
               

              C-1

            

    

    

     

    
      
        
          

        

        ii

      

      
        
        

        
          

        

      

      
        BACK

        
          

        

      

    

    RIGHTS
      AGREEMENT

     

     

    RIGHTS
      AGREEMENT, dated as of September 8, 2006 (the “Agreement”),
      between Flushing Financial Corporation, a Delaware corporation (the
“Company”),
      and
      Computershare Trust Company N.A., a national banking association (the
“Rights
      Agent”).

     

    WHEREAS,
      on September 17, 1996, the Board of Directors of the Company (the “Board
      of Directors”)
      adopted a stockholder rights plan (the “1996
      Plan”)
      and,
      in connection therewith, the Company entered into a Rights Agreement, dated
      as
      of September 17, 1996, with a predecessor-in-interest of the Rights Agent (the
      “1996
      Agreement”);
      and

     

    WHEREAS,
      the 1996 Agreement is scheduled to expire on September 30, 2006;
      and

     

    WHEREAS,
      on September 5, 2006, the Board of Directors determined that it is desirable
      and
      in the best interests of the Company and its stockholders for the Company to
      renew the 1996 Plan and to implement such renewal by executing this
      Agreement;
      and

     

    WHEREAS,
      the Board of Directors has authorized and declared a dividend of one Right
      (as
      such term is hereinafter defined) for each share of Common Stock, par value
      $.01
      per share, of the Company (the “Common
      Shares”)
      outstanding as of the Close of Business on September 30, 2006 (the “Record
      Date”),
      and
      has authorized the issuance of one Right with respect to each Common Share
      that
      shall become outstanding between the Record Date and the earliest of the
      Distribution Date, the Redemption Date, the Exchange Date and the Final
      Expiration Date (as such terms are hereinafter defined), each Right representing
      the right to purchase one one-hundredth of a share of Series A Junior
      Participating Preferred Stock of the Company having the rights, powers and
      preferences set forth in the Certificate of Designations filed with the
      Secretary of State of the State of Delaware on September 30. 1996, as amended
      by
      the form of Certificate of Increase attached hereto as Exhibit A, upon the
      terms
      and subject to the conditions hereinafter set forth (the “Rights”).

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual agreements herein
      set
      forth, the parties hereby agree as follows:

     

    Section
      1. Certain
      Definitions.
      For
      purposes of this Agreement, the following terms have the meanings
      indicated:

     

    (a) “Acquiring
      Person”
shall
      mean any Person (as such term is hereinafter defined) who or which, together
      with all Affiliates and Associates (as such terms are hereinafter defined)
      of
      such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
      of 15% or more of the Common Shares then outstanding, but shall not include
      (i)
      the Company, (ii) any Subsidiary (as such term is hereinafter defined) of the
      Company, or (iii) any employee benefit plan of the Company or of any Subsidiary
      of the Company, any entity 

    
      
        
        

      

      
        
        

        
          

        

      

      
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    organized,
      appointed or established by the Company for or pursuant to the terms of any
      such
      plan, or the Company’s Employee Benefit Trust. Notwithstanding the foregoing,
      (i) no Person shall become an “Acquiring Person” solely as the result of an
      acquisition of Common Shares by the Company which, by reducing the number of
      shares outstanding, increases the proportionate number of shares beneficially
      owned by such Person to 15% or more of the Common Shares then outstanding;
      provided,
      however,
      that if
      a Person becomes the Beneficial Owner of 15% or more of the Common Shares then
      outstanding by reason of share acquisitions by the Company and shall, after
      such
      share acquisitions, become the Beneficial Owner of any additional Common Shares
      (other than pursuant to a stock split or stock dividend by the Company to all
      holders of Common Shares), then such Person shall be deemed to be an
“Acquiring
      Person”;
      and
      (ii) if the Board of Directors determines in good faith that a Person who
      would otherwise be an “Acquiring
      Person,”
as
      defined pursuant to the foregoing provisions of this paragraph, has become
      such
      inadvertently, and such Person divests as promptly as practicable a sufficient
      number of Common Shares so that such Person would no longer be an “Acquiring
      Person,” as defined pursuant to the foregoing provisions of this paragraph, then
      such Person shall not be deemed to have become an “Acquiring
      Person”
for
      any
      purposes of this Agreement.

     

     

    (b) “Affiliate”,
      “Associate”
and
      “control”
shall
      have the respective meanings ascribed to such terms in Rule 12b-2 of the General
      Rules and Regulations under the Securities Exchange Act of 1934, as amended
      (the
“Exchange
      Act”),
      as in
      effect on the date of this Agreement.

     

    (c) A
      Person
      shall be deemed the “Beneficial
      Owner”
of
      and
      shall be deemed to “beneficially own” any securities:

     

    (i)
      which
      such Person or any of such Person’s Affiliates or Associates beneficially owns,
      directly or indirectly, within the meaning of Rule 13d-3 or Rule 13d-5 of
      the General Rules and Regulations under the Exchange Act, as in effect on the
      date of this Agreement;

     

    (ii)
      which
      such Person or any of such Person’s Affiliates or Associates, directly or
      indirectly, has the right to acquire (whether such right is exercisable
      immediately or only after the passage of time) pursuant to any agreement,
      arrangement or understanding (other than customary agreements with and between
      underwriters and selling group members with respect to a bona fide public
      offering of securities), or upon the exercise of conversion rights, exchange
      rights, rights (other than these Rights), warrants or options, or otherwise;
      provided,
      however,
      that a
      Person shall not be deemed the “Beneficial
      Owner”
of,
      or
      to “beneficially own”, securities tendered pursuant to a tender or exchange
      offer made by or on behalf of such Person or any of such Person’s Affiliates or
      Associates until such tendered securities are accepted for purchase or
      exchange;

     

    (iii)
      which
      such Person or any of such Person’s Affiliates or Associates, directly or
      indirectly, has the right to vote or dispose of pursuant to any agreement,
      arrangement or understanding; provided,
      however,
      that a
      Person shall not be deemed the “Beneficial
      Owner”
of,
      or
      to “beneficially
      own”,
      any

    
      
        
        

      

      
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    security
      under this subparagraph (iii) as a result of an agreement, arrangement or
      understanding to vote such security if such agreement, arrangement or
      understanding (1) arises solely from a revocable proxy given to such Person
      in
      response to a public proxy or consent solicitation made pursuant to, and in
      accordance with, the applicable rules and regulations of the Exchange Act and
      (2) is not also then reportable on Schedule 13D under the Exchange Act (or
      any comparable or successor report); or

     

    (iv)
      which
      are
      beneficially owned, directly or indirectly, by any other Person (or any
      Affiliate or Associate thereof) with which such Person or any of such Person’s
      Affiliates or Associates has any agreement, arrangement or understanding (other
      than customary agreements with and between underwriters and selling group
      members with respect to a bona fide public offering of securities) for the
      purpose of acquiring, holding, voting (except pursuant to a revocable proxy
      as
      described in the proviso to subparagraph (iii) of this paragraph (c)) or
      disposing of any securities of the Company.

     

    If
      a
      Person shall be deemed to be the Beneficial Owner of any securities which are
      not outstanding, such securities shall be deemed to be outstanding for purposes
      of determining the percentage of Common Shares beneficially owned by such
      Person.

     

    (d) “Board
      of Directors”
has
      the
      meaning set forth in the recital of this Agreement.

     

    (e) “Business
      Day”
shall
      mean any day other than a Saturday, Sunday or a day on which banking
      institutions in the State of New York are authorized or obligated by law or
      executive order to close.

     

    (f) “Close
      of Business”
on
      any
      given date shall mean 5:00 P.M., New York City time, on such date; provided,
      however,
      that if
      such date is not a Business Day it shall mean 5:00 P.M., New York City time,
      on
      the next succeeding Business Day.

     

    (g) “Common
      Shares”
when
      used with reference to the Company (or without express reference to another
      Person) shall mean the shares of Common Stock, par value $.01 per share, of
      the
      Company or any other shares of capital stock of the Company into which the
      Common Shares are reclassified or changed. “Common
      Shares”
when
      used with reference to any Person other than the Company shall mean the capital
      stock or other equity securities or equity or other beneficial interests of
      such
      Person with the greatest aggregate voting power.

     

    (h) “Common
      Stock Equivalent”
shall
      mean a share, or fraction of a share, of Preferred Stock, par value $.01 per
      share (or any other authorized class of preferred stock), of the Company having
      dividend, voting, liquidation and other rights which result, in the judgment
      of
      the Board of Directors, in such share, or fraction of a share, being
      approximately equivalent in value to one Common Share as of the Event Date
      (as
      such term is hereinafter defined); provided,
      however,
      that,
      if in the judgment of the Board of Directors there are not sufficient authorized
      but unissued shares of preferred stock available for the creation of Common
      

    
      
        
        

      

      
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    Stock
      Equivalents, “Common Stock Equivalent” shall mean such cash, reduction in
      Purchase Price (as such term is hereinafter defined), other equity securities,
      debt securities, other assets or any combination of the foregoing, that the
      Board of Directors shall determine to be approximately equivalent in value
      to
      one Common Share as of the Event Date. As used herein, “Event
      Date”
shall
      mean (i) for purposes of any determination made pursuant to Section
      11(a)(iii) hereof, the date of occurrence of the event described in Section
      11(a)(ii) hereof and (ii) for purposes of any determination made pursuant
      to Section 25(c) hereof, the Exchange Date (as such term is hereinafter
      defined).

     

    (i) “Distribution
      Date”
shall
      have the meaning set forth in Section 3(a) hereof.

     

    (j) “Exchange”
shall
      have the meaning set forth in Section 25 hereof.

     

    (k) “Exchange
      Date”
shall
      have the meaning set forth in Section 7(a) hereof.

     

    (l) “Exchange
      Ratio”
shall
      have the meaning set forth in Section 25 hereof.

     

    (m) “Final
      Expiration Date”
shall
      have the meaning set forth in Section 7(a) hereof.

     

    (n) “Person”
shall
      mean any individual, firm, corporation, partnership or other entity and shall
      include any successor by merger or otherwise of such Person.

     

    (o) “Preferred
      Shares”
shall
      mean shares of Series A Junior Participating Preferred Stock, par value $.01
      per
      share, of the Company.

     

    (p) “Principal
      Party”
shall
      have the meaning set forth in Section 13(b) hereof.

     

    (q) “Purchase
      Price”
shall
      have the meaning set forth in Section 4 hereof.

     

    (r) “Record
      Date”
shall
      have the meaning set forth in the recital of this Agreement.

     

    (s) “Redemption
      Date”
shall
      have the meaning set forth in Section 7(a) hereof.

     

    (t) “Redemption
      Price”
shall
      have the meaning set forth in Section 24(a) hereof.

     

    (u) “Registered
      Common Shares”
shall
      have the meaning set forth in Section 13(b) hereof.

    
      
        
        

      

      
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    (v) “Rights
      Agent”
shall
      have the meaning set forth in the recital of this Agreement.

     

    (w) “Right
      Certificates”
shall
      have the meaning set forth in Section 3(a) hereof.

     

    (x) “Rights”
shall
      have the meaning set forth in the recital of this Agreement.

     

    (y) “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended.

     

    (z) “Share
      Acquisition Date”
shall
      mean the first date of public announcement by the Company or an Acquiring Person
      that an Acquiring Person has become such.

     

    (aa) “Subsidiary”
shall
      mean, with reference to any Person, any corporation or other entity of which
      a
      majority of the voting power of the voting equity securities or equity or other
      beneficial interests is owned, directly or indirectly, by such Person, or which
      is otherwise controlled by such Person.

     

    (bb) “Summary
      of Rights”
shall
      have the meaning set forth in Section 3(b) hereof.

     

    (cc) “Trading
      Day”
shall
      have the meaning set forth in Section 11(d) hereof.

     

    (dd) “1996
      Agreement”
shall
      have the meaning set forth in the recital of this Agreement.

     

    (ee) “1996
      Plan”
shall
      have the meaning set forth in the recital of this Agreement.

     

    Section
      2. Appointment
      of Rights Agent.
      The
      Company hereby appoints the Rights Agent to act as agent for the Company in
      accordance with the terms and conditions hereof, and the Rights Agent hereby
      accepts such appointment. The Company may from time to time appoint such
      Co-Rights Agents as it may deem necessary or desirable upon ten (10) days’ prior
      written notice to the Rights Agent. The Rights Agent shall have no duty to
      supervise, and shall in no event be liable for, the acts or omissions of any
      such Co-Rights Agent.

     

    Section
      3. Issue
      of Right Certificates.
      (a)
      Until the earlier of (i) the Close of Business on the tenth day after the Share
      Acquisition Date or (ii) the Close of Business on the tenth business day (or
      such later day as may be determined by action of the Board of Directors prior
      to
      such time as any Person becomes an Acquiring Person) after the date that a
      tender or exchange offer by any Person is first published, sent or given within
      the meaning of Rule 14d-2(a) of the General Rules and Regulations under the
      Exchange Act if, upon consummation thereof, such Person would be an Acquiring
      Person (the earlier of such dates, including any such 

    
      
        
        

      

      
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    date
      which is after the date of this Agreement and prior to the issuance of the
      Rights, being herein referred to as the “Distribution
      Date”),
      (x)
      the Rights will be evidenced (subject to the provisions of paragraph (b) of
      this
      Section 3) by the certificates for Common Shares registered in the names of
      the
      holders thereof (which certificates shall also be deemed to be certificates
      for
      Rights) and not by separate certificates, and (y) the Rights will be
      transferable only in connection with the transfer of the underlying Common
      Shares. As soon as practicable after the Distribution Date, the Rights Agent
      will send, by first-class, insured, postage prepaid mail, to each record holder
      of Common Shares as of the Close of Business on the Distribution Date, at the
      address of such holder shown on the records of the Company, one or more Right
      certificates, in substantially the form of Exhibit B hereto (the “Right
      Certificates”),
      evidencing one Right for each Common Share so held, subject to adjustment as
      provided herein. As of the Distribution Date, the Rights will be evidenced
      solely by such Right Certificates.

     

    (b) As
      promptly as practicable after the Record Date, the Company will send a copy
      of a
      Summary of Rights in substantially the form attached hereto as Exhibit C (the
      “Summary
      of Rights”),
      by
      first-class, postage prepaid mail, to each record holder of Common Shares as
      of
      the Close of Business on the Record Date, at the address of such holder shown
      on
      the records of the Company. With respect to certificates for Common Shares
      outstanding as of the Record Date, until the Distribution Date, the Rights
      will
      be evidenced by such certificates for Common Shares together with a copy of
      the
      Summary of Rights, and the registered holders of Common Shares shall also be
      the
      registered holders of the associated Rights. Until the Distribution Date (or
      the
      earliest of the Redemption Date, Exchange Date or Final Expiration Date), the
      surrender for transfer of any certificate for Common Shares outstanding on
      the
      Record Date, with or without a copy of the Summary of Rights attached thereto,
      shall also constitute the transfer of the Rights associated with the Common
      Shares represented by such certificate.

     

    (c) Rights
      shall be issued in respect of all Common Shares which become outstanding
      (including, without limitation, reacquired Common Shares referred to in the
      last
      sentence of this paragraph (c)) after the Record Date but prior to the earliest
      of the Distribution Date, the Redemption Date, the Exchange Date or the Final
      Expiration Date. Certificates representing such Common Shares shall also be
      deemed to be certificates for Rights, and shall bear the following
      legend:

     

    This
      certificate also evidences and entitles the holder hereof to certain Rights
      as
      set forth in the Rights Agreement between Flushing Financial Corporation (the
      “Company”)
      and
      Computershare Trust Company N.A., dated as of September 8, 2006 (the
“Rights
      Agreement”),
      the
      terms of which are hereby incorporated herein by reference and a copy of which
      is on file at the principal executive offices of the Company. Under certain
      circumstances, as set forth in the Rights Agreement, such Rights will be
      evidenced by separate certificates and will no longer be evidenced by this
      certificate. The Company will mail to the holder of this certificate a copy
      of
      the Rights Agreement without charge promptly after receipt of a written request
      therefor. As described in the Rights Agreement, Rights beneficially owned by
      (i)
      an Acquiring Person or any Associate or Affiliate thereof (as such terms are
      defined in the Rights Agreement), (ii) a transferee of an

    
      
        
        

      

      
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    Acquiring
      Person (or of any such Associate or Affiliate) who becomes a transferee after
      the Acquiring Person becomes such or (iii) under certain circumstances, a
      transferee of an Acquiring Person (or of any such Associate or Affiliate) who
      becomes a transferee before or concurrently with the Acquiring Person becoming
      such, shall become null and void.

     

    With
      respect to such certificates containing the foregoing legend, until the earliest
      of the Distribution Date, the Redemption Date, the Exchange Date or the Final
      Expiration Date, the Rights associated with the Common Shares represented by
      such certificates shall be evidenced by such certificates alone and the
      registered holders of Common Shares shall also be the holders of the associated
      Rights, and the surrender for transfer of any such certificates shall also
      constitute the transfer of the Rights associated with the Common Shares
      represented thereby. In the event that the Company purchases or acquires any
      Common Shares after the Record Date but prior to the Distribution Date, any
      Rights associated with such Common Shares shall be deemed cancelled and retired
      so that the Company shall not be entitled to exercise any Rights associated
      with
      the Common Shares which are no longer outstanding.

     

    Section
      4. Form
      of Right Certificates.
      The
      Right Certificates (and the forms of election to purchase shares and of
      assignment to be printed on the reverse thereof) shall be substantially in
      the
      form set forth in Exhibit B hereto and may have such marks of identification
      or
      designation and such legends, summaries or endorsements printed thereon as
      the
      Company may deem appropriate and as are not inconsistent with the provisions
      of
      this Agreement, or as may be required to comply with any applicable law or
      with
      any rule or regulation made pursuant thereto or with any rule or regulation
      of
      any stock exchange on which the Rights may from time to time be listed, or
      to
      conform to usage. Subject to the provisions of Section 11 and Section 23 hereof,
      the Right Certificates shall entitle the holders thereof to purchase such number
      of one one-hundredths of a Preferred Share as shall be set forth therein at
      the
      price per one one-hundredth of a share set forth therein (the “Purchase Price”),
      but the number of such shares and the Purchase Price shall be subject to
      adjustment as provided herein.

     

    Section
      5. Countersignature
      and Registration.

     

    (a) The
      Right
      Certificates shall be executed on behalf of the Company by its Chairman or
      Vice
      Chairman of the Board, its President or any Vice President, either manually
      or
      by facsimile signature, and shall have affixed thereto the Company’s seal or a
      facsimile thereof which shall be attested by the Secretary or an Assistant
      Secretary or the Treasurer or an Assistant Treasurer of the Company, either
      manually or by facsimile signature. The Right Certificates shall be manually
      countersigned by the Rights Agent and shall not be valid for any purpose unless
      so countersigned. In case any officer of the Company who shall have signed
      any
      of the Right Certificates shall cease to be such officer of the Company before
      countersignature by the Rights Agent and issuance and delivery by the Company,
      such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
      and issued and delivered by the Company with the same force and effect as though
      the person who signed such Right Certificates had not ceased to be such officer
      of the Company; and any Right Certificate may be signed on behalf of the Company
      by any person who, at the actual date of the execution of such 

    
      
        
        

      

      
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    Right
      Certificate, shall be a proper officer of the Company to sign such Right
      Certificate, although at the date of the execution of this Agreement any such
      person was not such an officer.

     

    (b) Following
      the Distribution Date, the Rights Agent will keep or cause to be kept, at one
      of
      its offices designated for such purpose, books for registration and transfer
      of
      the Right Certificates issued hereunder. Such books shall show the names and
      addresses of the respective holders of the Right Certificates, the number of
      Rights evidenced on its face by each of the Right Certificates, the Certificate
      Number of each such Right Certificate and the date of each of the Right
      Certificates.

     

    Section
      6. Transfer,
      Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
      Lost or Stolen Right Certificates.

     

    (a) Subject
      to the provisions of Section 7(e) and Section 15 hereof, at any time after
      the
      Close of Business on the Distribution Date, and at or prior to the Close of
      Business on the earliest of the Redemption Date, the Exchange Date or the Final
      Expiration Date, any Right Certificate or Certificates may be transferred,
      split
      up, combined or exchanged for another Right Certificate or Right Certificates,
      entitling the registered holder to purchase a like number of Preferred Shares
      as
      the Right Certificate or Right Certificates surrendered then entitled such
      holder to purchase. Any registered holder desiring to transfer, split up,
      combine or exchange any Right Certificate shall make such request in writing
      delivered to the Rights Agent, and shall surrender the Right Certificate or
      Right Certificates to be transferred, split up, combined or exchanged at the
      principal office or offices of the Rights Agent designated for such purpose.
      Neither the Rights Agent nor the Company shall be obligated to take any action
      whatsoever with respect to the transfer of any such surrendered Right
      Certificate or Right Certificates until the registered holder shall have
      properly completed and signed the certificate contained in the form of
      assignment set forth on the reverse side of each such Right Certificate and
      shall have provided such additional evidence of the identity of the Beneficial
      Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
      Company shall reasonably request. Thereupon the Rights Agent shall, subject
      to
      Section 7(e) and Section 15 hereof, countersign and deliver to the person
      entitled thereto a Right Certificate or Right Certificates, as the case may
      be,
      as so requested. The Company may require payment of a sum sufficient to cover
      any tax or governmental charge that may be imposed in connection with any
      transfer, split up, combination or exchange of Right Certificates.

     

    (b) Upon
      receipt by the Company and the Rights Agent of evidence reasonably satisfactory
      to them of the loss, theft, destruction or mutilation of a Right Certificate,
      and, in case of loss, theft or destruction, of indemnity or security reasonably
      satisfactory to them, and, at the Company’s request, reimbursement to the
      Company and the Rights Agent of all reasonable expenses incidental thereto,
      and
      upon surrender to the Rights Agent and cancellation of the Right Certificate
      if
      mutilated, the Company will execute and deliver a new Right Certificate of
      like
      tenor to the Rights Agent for delivery to the registered owner in lieu of the
      Right Certificate so lost, stolen, destroyed or mutilated.

    
      
        
        

      

      
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    Section
      7. Exercise
      of Rights; Purchase Price; Expiration Date of Rights.

     

    (a) The
      Rights shall not be exercisable prior to the Distribution Date. The registered
      holder of any Right Certificate may exercise the Rights evidenced thereby
      (except as otherwise provided herein) in whole or in part at any time after
      the
      Distribution Date upon surrender of the Right Certificate, with the form of
      election to purchase on the reverse side thereof duly executed, to the Rights
      Agent at the principal office or offices of the Rights Agent designated for
      such
      purpose, together with payment of the Purchase Price for each one one-hundredth
      of a Preferred Share as to which the Rights are exercised, at or prior to the
      earliest of (i) the Close of Business on September 30, 2016 (the “Final
      Expiration Date”),
      (ii)
      the time at which the Rights are redeemed as provided in Section 24 hereof
      (the “Redemption Date”) or (iii) the time at which the Rights are exchanged as
      provided in Section 25 hereof (the “Exchange
      Date”).

     

    (b) The
      Purchase Price for each one one-hundredth of a Preferred Share pursuant to
      the
      exercise of a Right shall initially be $65, shall be subject to adjustment
      from
      time to time as provided in Sections 11 and 13 hereof and shall be payable
      in lawful money of the United States of America in accordance with paragraph
      (c)
      below.

     

    (c) Upon
      receipt of a Right Certificate representing exercisable Rights, with the form
      of
      election to purchase duly executed, accompanied by payment of the Purchase
      Price
      for the shares to be purchased as set forth below and an amount equal to any
      applicable transfer tax required to be paid by the holder of such Right
      Certificate in accordance with Section 9(e) hereof, the Rights Agent shall,
      subject to Section 21(j) hereof, thereupon promptly
      (i) (A) requisition from any transfer agent of the Preferred Shares
      (or make available, if the Rights Agent is the transfer agent for such shares)
      certificates for the number of Preferred Shares to be purchased and the Company
      hereby irrevocably authorizes its transfer agent to comply with all such
      requests, or (B) if the Company shall have elected to deposit the Preferred
      Shares issuable upon exercise of the Rights hereunder into a depositary,
      requisition from the depositary agent depositary receipts representing such
      number of one one-hundredths of a Preferred Share as are to be purchased (in
      which case certificates for the Preferred Shares represented by such receipts
      shall be deposited by the transfer agent with the depositary agent) and the
      Company will direct the depositary agent to comply with such request, (ii)
      requisition from the Company the amount of cash, if any, to be paid in lieu
      of
      issuance of fractional shares in accordance with Section 15 hereof, (iii)
      after receipt of such certificates or depositary receipts, cause the same to
      be
      delivered to or upon the order of the registered holder of such Right
      Certificate, registered in such name or names as may be designated by such
      holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
      the order of the registered holder of such Right Certificate. The payment of
      the
      Purchase Price shall be made in cash or by certified or bank official check
      or
      money order payable to the order of the Company. In the event that the Company
      is obligated to issue other securities of the Company pursuant to Section 11(a)
      hereof, the Company will make all arrangements necessary so that such other
      securities are available for distribution by the Rights Agent, if and when
      necessary to comply with this Agreement.

     

    (d) In
      case
      the registered holder of any Right Certificate shall exercise less than all
      the
      Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
      

    
      
        
        

      

      
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    to
      the
      Rights remaining unexercised shall be issued by the Rights Agent and delivered
      to the registered holder of such Right Certificate or to his duly authorized
      assigns, subject to the provisions of Sections 6 and 15
      hereof.

     

    (e) Notwithstanding
      anything in this Agreement to the contrary, from and after the occurrence of
      the
      event described in Section 11(a)(ii) hereof, any Rights beneficially owned
      by
      (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
      (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
      who becomes a transferee after the Acquiring Person becomes such, or (iii)
      a
      transferee of an Acquiring Person (or of any such Associate or Affiliate) who
      becomes a transferee prior to or concurrently with the Acquiring Person becoming
      such and receives such Rights pursuant to either (A) a transfer (whether or
      not
      for consideration) from the Acquiring Person to holders of equity interests
      in
      such Acquiring Person or to any Person with whom the Acquiring Person has any
      continuing agreement, arrangement or understanding regarding the transferred
      Rights or (B) a transfer which a majority of the Board of Directors has
      determined is part of a plan, agreement, arrangement or understanding which
      has
      as a primary purpose or effect the avoidance of this Section 7(e), shall become
      null and void without any further action and no holder of such Rights shall
      have
      any rights whatsoever with respect to such Rights, whether under any provision
      of this Agreement or otherwise. No Right Certificate shall be issued pursuant
      to
      Section 3 hereof that represents Rights beneficially owned by an Acquiring
      Person whose Rights would be void pursuant to the preceding sentence or any
      Associate or Affiliate thereof and no Right Certificate shall be issued at
      any
      time upon the transfer of any Rights to an Acquiring Person whose Rights would
      be void pursuant to the preceding sentence or any Associate or Affiliate thereof
      or to any nominee of such Acquiring Person, Associate or Affiliate. Any Right
      Certificate delivered to the Rights Agent for transfer to any of the foregoing
      Persons, or which represents void Rights, shall be cancelled. The Company shall
      use reasonable efforts to effect compliance with the provisions of this Section
      7(e), but shall have no liability to any holder of Right Certificates or other
      Person as a result of its failure to make any determinations with respect to
      an
      Acquiring Person or its Affiliates, Associates or transferees
      hereunder.

     

    (f) Notwithstanding
      anything in this Agreement to the contrary, neither the Rights Agent nor the
      Company shall be obligated to undertake any action with respect to a registered
      holder upon the occurrence of any purported transfer as set forth in Section
      6
      hereof or exercise as set forth in this Section 7 unless such registered holder
      shall have (i) properly completed and signed the certificate contained in the
      form of assignment or election to purchase set forth on the reverse side of
      the
      Right Certificate surrendered for such assignment or exercise and (ii) provided
      such additional evidence of the identity of the Beneficial Owner (or former
      Beneficial Owner) or Affiliates or Associates thereof as the Company shall
      reasonably request.

     

    Section
      8. Cancellation
      and Destruction of Right Certificates.
      All
      Right Certificates surrendered for the purpose of exercise, transfer, split
      up,
      combination or exchange shall, if surrendered to the Company or to any of its
      agents, be delivered to the Rights Agent for cancellation or in cancelled form,
      or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
      Certificates shall be issued in lieu thereof except as expressly permitted
      by
      any of the provisions of this Agreement. The Company shall deliver to the Rights
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    cancellation
      and retirement, and the Rights Agent shall so cancel and retire, any other
      Right
      Certificate purchased or acquired by the Company otherwise than upon the
      exercise thereof. The Rights Agent shall deliver all cancelled Right
      Certificates to the Company, or shall, at the written request of the Company,
      destroy such cancelled Right Certificates, and in such case shall deliver a
      certificate of destruction thereof to the Company.

     

    Section
      9. Reservation
      and Availability of Preferred Shares.

     

    (a) The
      Company covenants and agrees that it will cause to be reserved and kept
      available out of its authorized and unissued Preferred Shares and/or any
      authorized and issued Preferred Shares held in its treasury, the number of
      Preferred Shares that will be sufficient to permit the exercise in full of
      all
      outstanding Rights.

     

    (b) The
      Company shall use its best efforts to cause, from and after such time as the
      Rights become exercisable, all Preferred Shares issued or reserved for issuance
      to be listed, upon official notice of issuance, upon the principal national
      securities exchange, if any, upon which the Common Shares are
      listed.

     

    (c) The
      Company shall use its best efforts to (i) file, as soon as practicable following
      the earliest date after the occurrence of the event described in
      Section 11(a)(ii) hereof on which the consideration to be delivered by the
      Company has been determined in accordance with Section 11(a)(ii) or 11(a)(iii)
      hereof, as the case may be, a registration statement under the Securities Act
      with respect to the securities purchasable upon exercise of the Rights on an
      appropriate form, (ii) cause such registration statement to become effective
      as
      soon as practicable after such filing, and (iii) subject to Section 25 hereof,
      cause such registration statement to remain effective (with a prospectus at
      all
      times meeting the requirements of the Securities Act) until the earlier of
      (A)
      the date as of which the Rights are no longer exercisable for such securities
      and (B) the Final Expiration Date. The Company will also take such action as
      may
      be appropriate under, or to ensure compliance with, the securities or “blue sky”
laws of the various states in connection with the exercisability of the Rights.
      The Company may temporarily suspend, for a period of time not to exceed ninety
      (90) days after the date described in clause (i) of the first sentence of this
      Section 9(c), the exercisability of the Rights in order to prepare and file
      such
      registration statement and permit it to become effective. Upon any such
      suspension, the Company shall issue a public announcement stating that the
      exercisability of the Rights has been temporarily suspended, as well as a public
      announcement at such time as the suspension is no longer in effect. In addition,
      if the Company shall determine that a registration statement is required
      following the Distribution Date but prior to the occurrence of the event
      described in Section 11(a)(ii) hereof, the Company may temporarily suspend
      the
      exercisability of the Rights until such time as a registration statement has
      been declared effective. Notwithstanding any provision of this Agreement to
      the
      contrary, the Rights shall not be exercisable in any jurisdiction if the
      requisite qualification in such jurisdiction shall not have been obtained,
      the
      exercise thereof shall not be permitted under applicable law or the requisite
      registration statement shall not have been declared effective.

     

    (d) The
      Company covenants and agrees that it will take all such action as may be
      necessary to ensure that all Preferred Shares delivered upon exercise of Rights
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    the
      time
      of delivery of the certificates for such shares (subject to payment of the
      Purchase Price), be duly and validly authorized and issued and fully paid and
      nonassessable shares.

     

    (e) The
      Company further covenants and agrees that it will pay when due and payable
      any
      and all federal and state transfer taxes and charges which may be payable in
      respect of the issuance or delivery of the Right Certificates and of any
      certificates or depositary receipts for Preferred Shares upon the exercise
      of
      Rights. The Company shall not, however, be required to pay any transfer tax
      which may be payable in respect of any transfer or delivery of Right
      Certificates to a person other than, or the issuance or delivery of certificates
      or depositary receipts for Preferred Shares in a name other than that of, the
      registered holder of the Right Certificates evidencing Rights surrendered for
      exercise or to issue or deliver any certificates or depositary receipts for
      Preferred Shares in a name other than that of the registered holder upon the
      exercise of any Rights until any such tax shall have been paid (any such tax
      being payable by the holder of such Right Certificate at the time of surrender)
      or until it has been established to the Company’s satisfaction that no such tax
      is due.

     

    Section
      10. Preferred
      Shares Record Date.
      Each
      person in whose name any certificate for Preferred Shares is issued upon the
      exercise of Rights shall for all purposes be deemed to have become the holder
      of
      record of the Preferred Shares represented thereby on, and such certificate
      shall be dated, the date upon which the Right Certificate evidencing such Rights
      was duly surrendered and payment of the Purchase Price (and all applicable
      transfer taxes) was made; provided,
      however,
      that if
      the date of such surrender and payment is a date upon which the transfer books
      of the Company with respect to the Preferred Shares are closed, such person
      shall be deemed to have become the record holder of such shares on, and such
      certificate shall be dated, the next succeeding Business Day on which the
      transfer books of the Company for the Preferred Shares are open.

     

    Section
      11. Adjustment
      of Purchase Price, Number and Kind of Shares or Number of
      Rights.
      The
      Purchase Price, the number and kind of shares covered by each Right and the
      number of Rights outstanding are subject to adjustment from time to time as
      provided in this Section 11.

     

    (a)
      (i)
      In
      the
      event the Company shall, at any time after the date of this Agreement, (A)
      declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
      subdivide the outstanding Preferred Shares into a greater number of shares,
      (C)
      combine the outstanding Preferred Shares into a smaller number of shares or
      (D)
      issue any shares of its capital stock in a reclassification of the Preferred
      Shares (including any such reclassification in connection with a consolidation
      or merger in which the Company is the continuing or surviving corporation),
      except as otherwise provided in this Section 11(a) and in Section 7(e) hereof,
      the Purchase Price in effect at the time of the record date for such dividend
      or
      of the effective date of such subdivision, combination or reclassification,
      and
      the number and kind of Preferred Shares or shares of capital stock, as the
      case
      may be, issuable on such date, shall be proportionately adjusted so that the
      holder of any Right exercised after such time shall be entitled to receive
      the
      aggregate number and kind of Preferred Shares or shares of capital

    
      
        
        

      

      
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    stock,
      as
      the case may be, which he would have owned immediately after such dividend,
      subdivision, combination or reclassification if he had exercised such Right
      immediately prior to such date and at a time when the transfer books of the
      Company for the Preferred Shares were open.

     

    
      (ii)
        Subject
        to Sections 11(a)(iii) and 25 hereof, in the event that any Person shall
        become
        an Acquiring Person, then proper provision shall be made so that each holder
        of
        a Right, except as provided in Section 7(e) hereof, shall thereafter have
        a
        right to receive, upon exercise thereof at a price equal to the then current
        Purchase Price multiplied by the number of one one-hundredths of a Preferred
        Share for which a Right is then exercisable, in accordance with the terms
        of
        this Agreement and in lieu of Preferred Shares, such number of Common Shares
        as
        shall equal the result obtained by (x) multiplying the then current Purchase
        Price by the then number of one one-hundredths of a Preferred Share for which
        a
        Right is then exercisable and (y) dividing that product by 50% of the current
        market price (determined pursuant to Section 11(d)(i) hereof) per Common
        Share
        on the date such Person became an Acquiring Person.

    

     

    (iii)
      Subject
      to Section 25 hereof, in the event that the number of Common Shares which are
      authorized by the Company’s Certificate of Incorporation but not outstanding or
      reserved for issuance for purposes other than upon exercise of the Rights are
      not sufficient to permit the exercise in full of the Rights in accordance with
      the foregoing subparagraph (ii), the Rights shall not be exercisable for Common
      Shares, but proper provision shall be made so that each holder of a Right,
      except as provided in Section 7(e) hereof, shall thereafter have a right to
      receive, upon exercise thereof in accordance with the terms of this Agreement
      at
      the price determined pursuant to the foregoing subparagraph (ii), such number
      of
      Common Stock Equivalents (or, in the judgment of the Board of Directors, such
      combination of Common Stock Equivalents and Common Shares) as shall equal the
      number of Common Shares determined pursuant to the foregoing subparagraph
      (ii).

     

    (b) In
      case
      the Company shall fix a record date for the issuance of rights, options or
      warrants to all holders of Preferred Shares entitling them to subscribe for
      or
      purchase (for a period expiring within 45 calendar days after such record date)
      Preferred Shares (or shares having the same rights, privileges and preferences
      as the Preferred Shares (“equivalent preferred shares”)) or securities
      convertible into Preferred Shares or equivalent preferred shares at a price
      per
      Preferred Share or equivalent preferred share (or having a conversion price
      per
      share, if a security convertible into Preferred Shares or equivalent preferred
      shares) less than the current market price (as determined pursuant to Section
      11(d)(ii) hereof) per Preferred Share on such record date, the Purchase Price
      to
      be in effect after such record date shall be determined by multiplying the
      Purchase Price in effect immediately prior to such record date by a fraction,
      the numerator of which shall be the number of Preferred Shares outstanding
      on
      such record date, plus the number of Preferred Shares which the aggregate
      offering price of the total number of Preferred Shares so to be offered and/or
      equivalent preferred shares so to be offered (and/or the aggregate initial
      conversion price of the convertible securities so to be offered) would purchase
      at

    
      
        
        

      

      
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    such
      current market price and the denominator of which shall be the number of
      Preferred Shares outstanding on such record date, plus the number of additional
      Preferred Shares and/or equivalent preferred shares to be offered for
      subscription or purchase (or into which the convertible securities so to be
      offered are initially convertible). In case such subscription price may be
      paid
      in a consideration part or all of which shall be in a form other than cash,
      the
      value of such consideration shall be as determined in good faith by the Board
      of
      Directors, whose determination shall be described in a statement filed with
      the
      Rights Agent and shall be conclusive for all purposes. Preferred Shares owned
      by
      or held for the account of the Company shall not be deemed outstanding for
      the
      purpose of any such computation. Such adjustment shall be made successively
      whenever such a record date is fixed; and in the event that such rights or
      warrants are not so issued, the Purchase Price shall be adjusted to be the
      Purchase Price which would then be in effect if such record date had not been
      fixed.

     

    (c) In
      case
      the Company shall fix a record date for a distribution to all holders of
      Preferred Shares (including any such distribution made in connection with a
      consolidation or merger in which the Company is the continuing or surviving
      corporation) of evidences of indebtedness, cash (other than a regular quarterly
      cash dividend), assets, stock (other than a dividend payable in Preferred
      Shares) or subscription rights, options or warrants (excluding those referred
      to
      in or excluded pursuant to Section 11(b) hereof), the Purchase Price to be
      in
      effect after such record date shall be determined by multiplying the Purchase
      Price in effect immediately prior to such record date by a fraction, the
      numerator of which shall be the current market price (as determined pursuant
      to
      Section 11(d)(ii) hereof) per one one-hundredth of a Preferred Share on such
      record date, less the fair market value (as determined in good faith by the
      Board of Directors, whose determination shall be described in a statement filed
      with the Rights Agent and shall be conclusive for all purposes) of the portion
      of the cash, assets, stock or evidences of indebtedness so to be distributed
      or
      of such subscription rights, options or warrants applicable to one one-hundredth
      of a Preferred Share and the denominator of which shall be such current market
      price (as determined pursuant to Section 11(d)(ii) hereof) per one one-hundredth
      of a Preferred Share. Such adjustments shall be made successively whenever
      such
      a record date is fixed; and in the event that such distribution is not so made,
      the Purchase Price shall again be adjusted to be the Purchase Price which would
      then be in effect if such record date had not been fixed.

     

    (d)
      (i)
      For
      the
      purposes of any computation hereunder, the “current
      market price”
per
      Common Share on any date shall be deemed to be the average of the daily closing
      prices per Common Share for the 30 consecutive Trading Days (as such term is
      hereinafter defined) immediately prior to such date; provided,
      however,
      that in
      the event that the current market price per Common Share is determined during
      a
      period following the announcement by the issuer of such Common Shares of (A)
      a
      dividend or distribution on such Common Shares payable in such Common Shares
      or
      securities convertible into such Common Shares (other than the Rights) or (B)
      any subdivision, combination or reclassification of such Common Shares and
      prior
      to the expiration of 30 Trading Days after the ex-dividend date for such
      dividend or distribution, or the record date for such subdivision, combination
      or reclassification, then, and in each such case, the “current market price”
shall be appropriately adjusted to take into 

    
      
        
        

      

      
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    account
      ex-dividend trading. The closing price for each day shall be the last sale
      price, regular way, or, in case no such sale takes place on such day, the
      average of the closing bid and asked prices, regular way, in either case as
      reported in the principal consolidated transaction reporting system with respect
      to securities listed or admitted to trading on the New York Stock Exchange
      or,
      if the Common Shares are not listed or admitted to trading on the New York
      Stock
      Exchange, as reported in the principal consolidated transaction reporting system
      with respect to securities listed on the principal national securities exchange
      on which the Common Shares are listed or admitted to trading or, if the Common
      Shares are not listed or admitted to trading on any national securities
      exchange, the last quoted price or, if not so quoted, the average of the high
      bid and low asked prices in the over-the-counter market, as reported by the
      system then in use, or, if on any such date the Common Shares are not so quoted,
      the average of the closing bid and asked prices as furnished by a professional
      market maker making a market in the Common Shares selected by the Board of
      Directors. If on any such date no market maker is making a market in the Common
      Shares, the fair value of such shares on such date as determined in good faith
      by the Board of Directors shall be used and shall be conclusive for all
      purposes. The term “Trading
      Day”
shall
      mean a day on which the principal national securities exchange on which the
      Common Shares are listed or admitted to trading is open for the transaction
      of
      business or, if the Common Shares are not listed or admitted to trading on
      any
      national securities exchange, a Business Day. If the Common Shares are not
      publicly held or not so listed or traded, “current
      market price”
per
      share shall mean the fair value per share as determined in good faith by the
      Board of Directors, whose determination shall be described in a statement filed
      with the Rights Agent and shall be conclusive for all purposes.

     

    (ii)
      For
      the
      purpose of any computation hereunder, the “current
      market price”
per
      Preferred Share shall be determined in the same manner as set forth above for
      the Common Shares in subparagraph (i) of this Section 11(d) (other than the
      last
      sentence thereof). If the current market price per Preferred Share cannot be
      determined in the manner provided above or if the Preferred Shares are not
      publicly held or listed or traded in a manner described in subparagraph (i)
      of
      this Section 11(d), the “current
      market price”
per
      Preferred Share shall be conclusively deemed to be an amount equal to 100 times
      the current market price per Common Share (as appropriately adjusted for such
      events as stock splits, stock dividends and recapitalizations with respect
      to
      the Common Shares occurring after the date of this Agreement). If neither the
      Common Shares nor the Preferred Shares are publicly held or so listed or traded,
      “current
      market price”
per
      Preferred Share shall mean the fair value per share as determined in good faith
      by the Board of Directors, whose determination shall be described in a statement
      filed with the Rights Agent and shall be conclusive for all
      purposes.

     

    (e) Anything
      herein to the contrary notwithstanding, no adjustment in the Purchase Price
      shall be required unless such adjustment would require an increase or decrease
      of at least 1% in such price; provided,
      however,
      that
      any adjustments which by reason 

    
      
        
        

      

      
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    of
      this
      Section 11(e) are not required to be made shall be carried forward and taken
      into account in any subsequent adjustment. All calculations under this Section
      11 shall be made to the nearest cent or to the nearest ten-thousandth of a
      Common Share or other share or one-millionth of a Preferred Share, as the case
      may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
      required by this Section 11 shall be made no later than the earlier of (i)
      three
      (3) years from the date of the transaction which requires such adjustment or
      (ii) the date of the expiration of the right to exercise any
      Rights.

     

    (f) If
      as a
      result of an adjustment made pursuant to Section 11(a) or Section 13(a) hereof,
      the holder of any Right thereafter exercised shall become entitled to receive
      any shares of capital stock other than Preferred Shares, thereafter the number
      of such other shares so receivable upon exercise of any Right shall be subject
      to adjustment from time to time in a manner and on terms as nearly equivalent
      as
      practicable to the provisions with respect to the Preferred Shares contained
      in
      this Section 11 and the provisions of Sections 6, 7, 9, 10, 13 and 15 with
      respect to the Preferred Shares shall apply on like terms to any such other
      shares.

     

    (g) All
      Rights originally issued by the Company subsequent to any adjustment made to
      the
      Purchase Price hereunder shall evidence the right to purchase, at the adjusted
      Purchase Price, the number of one one-hundredths of a Preferred Share
      purchasable from time to time hereunder upon exercise of the Rights, all subject
      to further adjustment as provided herein.

     

    (h) Unless
      the Company shall have exercised its election as provided in Section 11(i),
      upon
      each adjustment of the Purchase Price as a result of the calculations made
      pursuant to Sections 11(b) and (c), each Right outstanding immediately prior
      to
      the making of such adjustment shall thereafter evidence the right to purchase,
      at the adjusted Purchase Price, that number of one one-hundredths of a Preferred
      Share (calculated to the nearest one-millionth) obtained by (i) multiplying
      (x)
      the number of one one-hundredths of a share covered by a Right immediately
      prior
      to this adjustment, by (y) the Purchase Price in effect immediately prior to
      such adjustment of the Purchase Price, and (ii) dividing the product so obtained
      by the Purchase Price in effect immediately after such adjustment of the
      Purchase Price.

     

    (i) The
      Company may elect on or after the date of any adjustment of the Purchase Price
      to adjust the number of Rights, in substitution for any adjustment in the number
      of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights
      outstanding after such adjustment in the number of Rights shall be exercisable
      for the number of one one-hundredths of a Preferred Share for which a Right
      was
      exercisable immediately prior to such adjustment. Each Right held of record
      prior to such adjustment of the number of Rights shall become that number of
      Rights (calculated to the nearest one ten-thousandth) obtained by dividing
      the
      Purchase Price in effect immediately prior to adjustment of the Purchase Price
      by the Purchase Price in effect immediately after adjustment of the Purchase
      Price. The Company shall make a public announcement of its election to adjust
      the number of Rights, indicating the record date for the adjustment, and, if
      known at the time, the amount of the adjustment to be made. This record date
      may
      be the date on which the Purchase Price is adjusted or any day thereafter,
      but,
      if the Right Certificates have been issued, shall be at least ten (10) days
      later than the date of the public announcement.

    
      
        
        

      

      
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    If
      Right
      Certificates have been issued, upon each adjustment of the number of Rights
      pursuant to this Section 11(i), the Company shall, as promptly as practicable,
      cause to be distributed to holders of record of Right Certificates on such
      record date Right Certificates evidencing, subject to Section 15 hereof, the
      additional Rights to which such holders shall be entitled as a result of such
      adjustment, or, at the option of the Company, shall cause to be distributed
      to
      such holders of record in substitution and replacement for the Right
      Certificates held by such holders prior to the date of adjustment, and upon
      surrender thereof, if required by the Company, new Right Certificates evidencing
      all the Rights to which such holder shall be entitled after such adjustment.
      Right Certificates so to be distributed shall be issued, executed and
      countersigned in the manner provided for herein (and may bear, at the option
      of
      the Company, the adjusted Purchase Price) and shall be registered in the names
      of the holders of record of Right Certificates on the record date specified
      in
      the public announcement.

     

    (j) Irrespective
      of any adjustment or change in the Purchase Price or the number of one
      one-hundredths of a Preferred Share issuable upon the exercise of the Rights,
      the Right Certificates theretofore and thereafter issued may continue to express
      the Purchase Price per one one-hundredth of a share and the number of shares
      which were expressed in the initial Right Certificates issued
      hereunder.

     

    (k) Before
      taking any action that would cause an adjustment reducing the Purchase Price
      below one one-hundredth of the then par value, if any, of the Preferred Shares
      issuable upon exercise of the Rights, the Company shall take any corporate
      action which may, in the opinion of its counsel, be necessary in order that
      the
      Company may validly and legally issue fully paid and nonassessable Preferred
      Shares at such adjusted Purchase Price.

     

    (l) In
      any
      case in which this Section 11 shall require that an adjustment in the Purchase
      Price be made effective as of a record date for a specified event, the Company
      may elect to defer until the occurrence of such event the issuing to the holder
      of any Right exercised after such record date of the Preferred Shares and other
      capital stock or securities of the Company, if any, issuable upon such exercise
      over and above the Preferred Shares and other capital stock or securities of
      the
      Company, if any, issuable upon such exercise on the basis of the Purchase Price
      in effect prior to such adjustment; provided,
      however,
      that
      the Company shall deliver to such holder a due bill or other appropriate
      instrument evidencing such holder’s right to receive such additional shares upon
      the occurrence of the event requiring such adjustment.

     

    (m) Anything
      in this Section 11 to the contrary notwithstanding, the Company shall be
      entitled to make such reductions in the Purchase Price, in addition to those
      adjustments expressly required by this Section 11, as and to the extent that
      it
      in its sole discretion shall determine to be advisable in order that any
      consolidation or subdivision of the Preferred Shares, issuance wholly for cash
      of any of the Preferred Shares at less than the current market price, issuance
      wholly for cash of Preferred Shares or securities which by their terms are
      convertible into or exchangeable for Preferred Shares, stock dividends or
      issuance of rights, options or warrants referred to hereinabove in this Section
      11, hereafter made by the Company to holders of its Preferred Shares shall
      not
      be taxable to such stockholders.

    
      
        
        

      

      
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    (n) In
      the
      event that any time after the date of this Agreement and prior to the
      Distribution Date, the Company shall (i) declare or pay any dividend on the
      Common Shares payable in Common Shares or (ii) effect a subdivision, combination
      or consolidation of the Common Shares (by reclassification or otherwise than
      by
      payment of dividends in Common Shares) into a greater or lesser number of Common
      Shares, then in any such case (i) the number of one one-hundredths of a
      Preferred Share purchasable after such event upon proper exercise of each Right
      shall be determined by multiplying the number of one one-hundredths of a
      Preferred Share so purchasable immediately prior to such event by a fraction,
      the numerator of which is the number of Common Shares outstanding immediately
      before such event and the denominator of which is the number of Common Shares
      outstanding immediately after such event, and (ii) each Common Share outstanding
      immediately after such event shall have issued with respect to it that number
      of
      Rights which each Common Share outstanding immediately prior to such event
      had
      issued with respect to it. The adjustments provided for in this Section 11(n)
      shall be made successively whenever such a dividend is declared or paid or
      such
      a subdivision, combination or consolidation is effected.

     

    Section
      12. Certificate
      of Adjusted Purchase Price or Number of Shares.
      Whenever an adjustment is made as provided in Sections 11 and/or 13 hereof,
      the
      Company shall (a) promptly prepare a certificate setting forth such adjustment,
      and a brief statement of the facts accounting for such adjustment, (b) promptly
      file with the Rights Agent and with each transfer agent for the Preferred Shares
      and the Common Shares a copy of such certificate and (c) mail a brief summary
      thereof to each holder of a Right Certificate (or, if prior to the Distribution
      Date, to each holder of a certificate representing Common Shares) in accordance
      with Section 27 hereof. The Rights Agent shall be fully protected in relying
      on
      any such certificate and on any adjustment therein contained.

     

    Section
      13. Consolidation,
      Merger or Sale or Transfer of Assets or Earning Power.

     

    (a) In
      the
      event that, following the Share Acquisition Date, (x) the Company, directly
      or
      indirectly, shall consolidate with, or merge with and into, any other Person,
      and the Company shall not be the continuing or surviving corporation of such
      consolidation or merger, (y) any Person, directly or indirectly, shall
      consolidate with, or merge with and into, the Company, and the Company shall
      be
      the continuing or surviving corporation of such consolidation or merger and,
      in
      connection with such consolidation or merger, all or part of the outstanding
      Common Shares shall be changed into or exchanged for stock or other securities
      of any other Person (or of the Company) or cash or any other property, or (z)
      the Company, directly or indirectly, shall sell or otherwise transfer (or one
      or
      more of its Subsidiaries, directly or indirectly, shall sell or otherwise
      transfer), in one or more transactions, assets or earning power aggregating
      more
      than 50% of the assets or earning power of the Company and its Subsidiaries
      (taken as a whole) to any Person or Persons (other than the Company or one
      or
      more wholly owned Subsidiaries of the Company), then, and in each such case,
      proper provision shall be made so that (i) each holder of a Right (except as
      otherwise provided herein) shall thereafter have the right to receive, upon
      the
      exercise thereof at a price equal to the then current Purchase Price multiplied
      by the number of one one-hundredths of a Preferred Share for which a Right
      is
      then exercisable (without taking into account any adjustment previously made
      pursuant to Section

    
      
        
        

      

      
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    11(a)(ii)
      or 11(a)(iii) hereof), in accordance with the terms of this Agreement, such
      number of validly authorized and issued, fully paid, nonassessable and freely
      tradeable Common Shares of the Principal Party (as hereinafter defined), free
      and clear of any liens, encumbrances and other adverse claims and not subject
      to
      any rights of call or first refusal, as shall be equal to the result obtained
      by
      (1) multiplying the then current Purchase Price by the number of one
      one-hundredths of a Preferred Share for which a Right is then exercisable
      (without taking into account any adjustment previously made pursuant to Section
      11(a)(ii) or 11(a)(iii) hereof) and (2) dividing that product by 50% of the
      current market price (determined pursuant to Section 11(d)(i) hereof) per Common
      Share of the Principal Party on the date of consummation of such consolidation,
      merger, sale or transfer; (ii) such Principal Party shall thereafter be liable
      for, and shall assume, by virtue of such consolidation, merger, sale or
      transfer, all the obligations and duties of the Company pursuant to this
      Agreement; (iii) except for purposes of Section 1(f) hereof, the term “Company”
shall thereafter be deemed to refer to such Principal Party; (iv) such Principal
      Party shall take such steps (including, but not limited to, the reservation
      of a
      sufficient number of its Common Shares) in connection with the consummation
      of
      any such transaction as may be necessary to assure that the provisions hereof
      shall thereafter be applicable, as nearly as reasonably may be, in relation
      to
      its Common Shares thereafter deliverable upon the exercise of the Rights;
provided,
      however,
      that,
      upon the subsequent occurrence of any merger, consolidation, sale of all or
      substantially all of the assets, recapitalization, reclassification of shares,
      reorganization or other extraordinary transaction in respect of such Principal
      Party, each holder of a Right (except as otherwise provided herein) shall
      thereupon be entitled to receive, upon exercise of a Right and payment of the
      Purchase Price, such cash, shares, rights, warrants and other property which
      such holder would have been entitled to receive had he, at the time of such
      transaction, owned the Common Shares of the Principal Party purchasable upon
      the
      exercise of a Right (after giving effect to the foregoing provisions of this
      Section 13(a)), and such Principal Party shall take such steps (including,
      but
      not limited to, reservation of shares of stock) as may be necessary to permit
      the subsequent exercise of the Rights in accordance with the terms hereof for
      such cash, shares, rights, warrants and other property and (v) the provisions
      of
      Sections 11(a)(ii) and 11(a)(iii) hereof shall be of no effect following the
      occurrence of any event described in clauses (x), (y) and (z) of this Section
      13(a).

     

    (b) “Principal
      Party”
shall
      mean

     

    (i)
      in
      the
      case of any merger described in clause (x) or (y) of Section 13(a), any Person
      that is the issuer of any securities into which Common Shares of the Company
      are
      converted in such merger, and if no securities are so issued, any Person that
      is
      a party to such merger that survives the merger;

     

    (ii)
      in
      the
      case of any consolidation described in clause (x) or (y) of Section 13(a),
      any
      Person that directly controls, alone or with other Persons, a corporation that
      is consolidating with the Company; and

     

    (iii)
      in
      the
      case of any transaction or transactions described in clause (z) of Section
      13(a), any Person that receives any assets or earning power transferred pursuant
      to such transaction or transactions;

    
      
        
        

      

      
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    provided,
      however,
      that
      with respect to such Person (or, if there is more than one such Person, with
      respect to each such Person), (1) if the Common Shares of such Person are not
      at
      such time and have not been continuously over the preceding twelve (12) month
      period registered under Section 12 of the Exchange Act (“Registered
      Common Shares”),
      or
      such Common Shares are deregistered as a consequence of any merger described
      in
      Section 13(a) hereof, or such Person is not a corporation, and such Person
      is
      (or, upon consummation of any merger described in Section 13(a) hereof, becomes)
      a direct or indirect Subsidiary of another Person which has Registered Common
      Shares outstanding, “Principal
      Party”
shall
      refer to such other Person; (2) if the Common Shares of such Person are not
      Registered Common Shares, or such Common Shares are deregistered as a
      consequence of any merger described in Section 13(a) hereof, or such Person
      is
      not a corporation, and such Person is (or, upon consummation of any merger
      described in Section 13(a) hereof, becomes) a direct or indirect Subsidiary
      of
      another Person but is not a direct or indirect Subsidiary of another Person
      which has Registered Common Shares outstanding, “Principal
      Party”
shall
      refer to the ultimate parent entity of such first-mentioned Person; (3) if
      the
      Common Shares of such Person are not Registered Common Shares, or such Common
      Shares are deregistered as a consequence of any merger described in Section
      13(a) hereof, or such Person is not a corporation, and such Person is (or,
      upon
      consummation of any merger described in Section 13(a) hereof, becomes) directly
      or indirectly controlled by more than one Person, and one or more of such latter
      Persons have Registered Common Shares outstanding, “Principal
      Party”
shall
      refer to whichever of such latter Persons is the issuer of outstanding
      Registered Common Shares having the greatest aggregate current market value
      (determined pursuant to Section 11(d)(i) hereof); or (4) if the Common Shares
      of
      such Person are not Registered Common Shares, or such Common Shares are
      deregistered as a consequence of any merger described in Section 13(a) hereof,
      or such Person is not a corporation, and such Person is (or, upon consummation
      of any merger described in Section 13(a) hereof, becomes) directly or indirectly
      controlled by more than one Person, and none of such latter Persons have
      Registered Common Shares outstanding, “Principal
      Party”
shall
      refer to whichever ultimate parent entity is the entity having the greatest
      net
      assets; 

     

    provided,
      further,
      however,
      that if
      under the foregoing provisions of this Section 13(b) there shall for any reason
      be more than one Principal Party, “Principal
      Party”
shall
      refer to whichever of such Persons is the issuer of outstanding Registered
      Common Shares having the greatest aggregate current market value (determined
      pursuant to Section 11(d)(i) hereof) or, if none of such Persons has Registered
      Common Shares outstanding, whichever of such Persons is the entity having the
      greatest net assets.

     

    (c) Notwithstanding
      anything herein to the contrary, if the Principal Party as determined pursuant
      to paragraph (b) above is not a corporation, proper provision shall be made
      so
      that such Principal Party shall create or otherwise make available for purposes
      of the exercise of the Rights in accordance with the terms of this Agreement,
      a
      type or types of securities having a fair market value (as determined by a
      nationally recognized investment banking firm selected by the Board of
      Directors) equal to at least the value of the Common Shares which each holder
      of
      a Right would have been entitled to receive if such Principal Party had been
      a
      corporation.

    
      
        
        

      

      
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    (d) The
      Company shall not consummate any such consolidation, merger, sale or transfer
      unless (1) at the time of and after such consummation the Principal Party shall
      have a sufficient number of authorized Common Shares which have not been issued
      or reserved for issuance to permit the exercise in full of the Rights in
      accordance with this Section 13 and (2) prior to such consummation the Company
      and such Principal Party shall have executed and delivered to the Rights Agent
      a
      supplemental agreement providing for the terms set forth in this Section 13
      and
      further providing that, as soon as practicable after the date of any
      consolidation, merger or sale or transfer of assets mentioned in paragraph
      (a)
      of this Section 13, the Principal Party will

     

    (i)
      prepare
      and file a registration statement under the Securities Act with respect to
      the
      Rights and the securities purchasable upon exercise of the Rights on an
      appropriate form, and will use its best efforts to cause such registration
      statement to (A) become effective as soon as practicable after such filing
      and
      (B) remain effective (with a prospectus at all times meeting the requirements
      of
      the Securities Act) until the Final Expiration Date, and similarly comply with
      applicable state securities or “blue sky” laws; and

     

    (ii)
      deliver
      to holders of the Rights historical financial statements for the Principal
      Party
      and each of its Affiliates which comply in all respects with the requirements
      for registration on Form 10 under the Exchange Act.

     

    Section
      14. Additional
      Covenants.

     

    (a) Except
      as
      expressly provided herein, no adjustment to the Purchase Price, the number
      of
      Preferred Shares or other securities for which a Right is exercisable or the
      number of Rights outstanding (except as permitted by Section 24 or Section
      25
      hereof) or any similar adjustment shall be made or be effective if such
      adjustment would have the effect of reducing or limiting the benefits the
      holders of the Rights would have had absent such adjustment, including, without
      limitation, the benefits under Section 11(a)(ii) and Section 13 hereof, unless
      the terms of this Agreement are amended so as to preserve such
      benefits.

     

    (b) The
      Company covenants and agrees that, following the Share Acquisition Date, except
      as permitted by Section 25 hereof, it shall not, directly or indirectly, take
      any action the purpose or effect of which is to eliminate or otherwise diminish
      in any material respect the benefits intended to be afforded by the
      Rights.

     

    (c) The
      Company covenants and agrees that, following the Share Acquisition Date, it
      shall not consummate any of the transactions described in clauses (x), (y)
      and
      (z) of Section 13(a) hereof if (i) at the time of or after such consummation
      there are or would be any charter or by-law provisions or any rights, warrants
      or other instruments or securities outstanding or agreements in effect (whether
      of the Company or any other Person) or any other action taken (whether by the
      Company or any other Person) the purpose or effect of which is to eliminate
      or
      otherwise diminish in any material respect the benefits intended to be afforded
      by the Rights or (ii) the stockholders of the Principal Party shall have
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    simultaneously
      with, or after the consummation of such transaction, a distribution of Rights
      previously owned by the Principal Party or any of its Affiliates and
      Associates.

     

    (d) The
      Company further covenants and agrees that, following the Share Acquisition
      Date,
      it shall not consummate any of the transactions described in clauses (x), (y)
      and (z) of Section 13(a) hereof unless prior thereto the Company and the
      Principal Party shall have executed and delivered to the Rights Agent a
      supplemental agreement evidencing compliance with paragraph (c) above and
      further providing that the Principal Party covenants and agrees that it shall
      not, directly or indirectly, take any action the purpose or effect of which
      is
      to eliminate or otherwise diminish in any material respect the benefits intended
      to be afforded by the Rights. The provisions of this paragraph (d) and paragraph
      (c) above shall similarly apply to successive mergers, consolidations, sales
      or
      other transfers.

     

    Section
      15. Fractional
      Rights and Fractional Shares.
      (a) The
      Company shall not be required to issue fractions of Rights or to distribute
      Right Certificates which evidence fractional Rights. In lieu of such fractional
      Rights, there shall be paid to the registered holders of the Right Certificates
      with regard to which such fractional Rights would otherwise be issuable, an
      amount in cash equal to the same fraction of the current market value of a
      whole
      Right. For the purposes of this Section 15(a), the current market value of
      a
      whole Right shall be the closing price of the Rights for the Trading Day
      immediately prior to the date on which such fractional Rights would have been
      otherwise issuable. The closing price of the Rights for any day shall be the
      last sale price, regular way, or, in case no such sale takes place on such
      day,
      the average of the closing bid and asked prices, regular way, in either case
      as
      reported in the principal consolidated transaction reporting system with respect
      to securities listed or admitted to trading on the New York Stock Exchange
      or,
      if the Rights are not listed or admitted to trading on the New York Stock
      Exchange, as reported in the principal consolidated transaction reporting system
      with respect to securities listed on the principal national securities exchange
      on which the Rights are listed or admitted to trading or, if the Rights are
      not
      listed or admitted to trading on any national securities exchange, the last
      quoted price or, if not so quoted, the average of the high bid and low asked
      prices in the over-the-counter market, as reported by the system then in use
      or,
      if on any such date the Rights are not so quoted, the average of the closing
      bid
      and asked prices as furnished by a professional market maker making a market
      in
      the Rights selected by the Board of Directors. If on any such date no such
      market maker is making a market in the Rights the fair value of the Rights
      on
      such date as determined in good faith by the Board of Directors shall be used
      and shall be conclusive for all purposes.

     

    (b) The
      Company shall not be required to issue fractions of Preferred Shares (other
      than
      fractions which are integral multiples of one one-hundredth of a Preferred
      Share) upon exercise of the Rights or to distribute certificates which evidence
      fractional Preferred Shares (other than fractions which are integral multiples
      of one one-hundredth of a Preferred Share). Fractions of Preferred Shares in
      integral multiples of one one-hundredth of a Preferred Share may, at the
      election of the Company, be evidenced by depositary receipts, pursuant to an
      appropriate agreement between the Company and a depositary selected by it,
      provided that such agreement shall provide that the holders of such depositary
      receipts shall have all the rights, privileges and preferences to which they
      are
      entitled as beneficial owners of the Preferred Shares represented by such
      depositary receipts. In lieu of fractional Preferred Shares 

    
      
        
        

      

      
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    that
      are
      not integral multiples of one one-hundredth of a Preferred Share, the Company
      may pay to the registered holders of Right Certificates at the time such Rights
      are exercised as herein provided an amount in cash equal to the same fraction
      of
      the current market value of one one-hundredth of a Preferred Share. For purposes
      of this Section 15(b), the current market value of one one-hundredth of a
      Preferred Share shall be one one-hundredth of the closing price of a Preferred
      Share (as determined pursuant to Section 11(d)(ii) hereof) for the Trading
      Day
      immediately prior to the date of such exercise.

     

    (c) The
      holder of a Right by the acceptance of the Right expressly waives his right
      to
      receive any fractional Rights or any fractional shares upon exercise of a Right,
      except as permitted by this Section 15.

     

    Section
      16. Rights
      of Action.
      All
      rights of action in respect of this Agreement are vested in the respective
      registered holders of the Right Certificates (and, prior to the Distribution
      Date, the registered holders of the Common Shares); and any registered holder
      of
      any Right Certificate (or, prior to the Distribution Date, of any of the Common
      Shares), without the consent of the Rights Agent or of the holder of any other
      Right Certificate (or, prior to the Distribution Date, of any of the Common
      Shares), may, in his own behalf and for his own benefit, enforce, and may
      institute and maintain any suit, action or proceeding against the Company to
      enforce, or otherwise act in respect of, his right to exercise the Rights
      evidenced by such Right Certificate in the manner provided in such Right
      Certificate and in this Agreement. Without limiting the foregoing or any
      remedies available to the holders of Rights, it is specifically acknowledged
      that the holders of Rights would not have an adequate remedy at law for any
      breach of this Agreement and will be entitled to specific performance of the
      obligations under, and injunctive relief against actual or threatened violations
      of the obligations of any Person subject to, this Agreement.

     

    Section
      17. Agreement
      of Rights Holders.
      Every
      holder of a Right by accepting the same consents and agrees with the Company
      and
      the Rights Agent and with every other holder of a Right that:

     

    (a) prior
      to
      the Distribution Date, the Rights will be transferable only in connection with
      the transfer of the Common Shares;

     

    (b) after
      the
      Distribution Date, the Right Certificates will be transferable only on the
      registry books of the Rights Agent if surrendered at the office or offices
      of
      the Rights Agent designated for such purposes, duly endorsed or accompanied
      by a
      proper instrument of transfer;

     

    (c) subject
      to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem
      and
      treat the Person in whose name the Right Certificate (or, prior to the
      Distribution Date, the associated Common Shares certificate) is registered
      as
      the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
      any notations of ownership or writing on the Right Certificate or the associated
      Common Shares certificate made by anyone other than the Company or the Rights
      Agent) for all purposes whatsoever, and neither the 

    
      
        
        

      

      
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    Company
      nor the Rights Agent, subject to the last sentence of Section 7(e) hereof,
      shall
      be required to be affected by any notice to the contrary; and

     

    (d) notwithstanding
      anything in this Agreement to the contrary, neither the Company nor the Rights
      Agent shall have any liability to any holder of a Right or other Person as
      a
      result of its inability to perform any of its obligations under this Agreement
      by reason of any preliminary or permanent injunction or other order, decree
      or
      ruling issued by a court of competent jurisdiction or by a governmental,
      regulatory or administrative agency or commission, or any statute, rule,
      regulation or executive order promulgated or enacted by any governmental
      authority, prohibiting or otherwise restraining performance of such obligation;
      provided,
      however,
      the
      Company must use its best efforts to have any such order, decree or ruling
      lifted or otherwise overturned as soon as possible.

     

    Section
      18. Right
      Certificate Holder Not Deemed a Stockholder.
      No
      holder, as such, of any Right Certificate shall be entitled to vote, receive
      dividends or be deemed for any purpose the holder of the Preferred Shares or
      any
      other securities of the Company which may at any time be issuable on the
      exercise of the Rights represented thereby, nor shall anything contained herein
      or in any Right Certificate be construed to confer upon the holder of any Right
      Certificate, as such, any of the rights of a stockholder of the Company or
      any
      right to vote for the election of directors or upon any matter submitted to
      stockholders at any meeting thereof, or to give or withhold consent to any
      corporate action, or to receive notice of meetings or other actions affecting
      stockholders (except as provided in Section 26 hereof), or to receive dividends
      or subscription rights, or otherwise, until the Right or Rights evidenced by
      such Right Certificate shall have been exercised in accordance with the
      provisions hereof.

     

    Section
      19. Concerning
      the Rights Agent.
      (a) The
      Company agrees to pay to the Rights Agent reasonable compensation for all
      services rendered by it hereunder and, from time to time, on demand of the
      Rights Agent, its reasonable expenses and counsel fees and other disbursements
      incurred in the administration and execution of this Agreement and the exercise
      and performance of its duties hereunder. The Company also agrees to indemnify
      the Rights Agent for, and to hold it harmless against, any loss, liability,
      or
      expense, incurred without gross negligence, bad faith or willful misconduct
      on
      the part of the Rights Agent, for anything done or omitted by the Rights Agent
      in connection with the acceptance and administration of this Agreement,
      including the costs and expenses of defending against any claim of liability
      hereunder. In no case will the Rights Agent be liable for special, indirect,
      incidental or consequential loss or damages of any kind whatsoever (including,
      but not limited to, lost profits), even if the Rights Agent has been advised
      of
      the possibility of such damages. The indemnity provided under this Section
      19
      shall survive the termination of this Agreement and the exercise or expiration
      of the Rights.

     

    (b) The
      Rights Agent shall be protected and shall incur no liability for or in respect
      of any action taken, suffered or omitted by it in connection with its
      administration of this Agreement in reliance upon any Right Certificate or
      certificate for any of the Common Shares or for other securities of the Company,
      instrument of assignment or transfer, power of attorney, endorsement, affidavit,
      letter, notice, direction, instruction, consent, certificate, 

    
      
        
        

      

      
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    statement,
      or other paper or document believed by it to be genuine and to be signed,
      executed and, where necessary, verified or acknowledged, by the proper person
      or
      persons.

     

    Section
      20. Merger
      or Consolidation or Change of Name of Rights Agent.
      (a)  Any Person into which the Rights Agent or any successor Rights
      Agent may be merged with or with which it may be consolidated, or any
      corporation resulting from any merger or consolidation to which the Rights
      Agent
      or any successor Rights Agent shall be a party, or any Person succeeding to
      the
      corporate trust or stock transfer business of the Rights Agent or any successor
      Rights Agent, shall be the successor to the Rights Agent under this Agreement
      without the execution or filing of any paper or any further act on the part
      of
      any of the parties hereto, provided that such Person would be eligible for
      appointment as a successor Rights Agent under the provisions of Section 22
      hereof. In case at the time such successor Rights Agent shall succeed to the
      agency created by this Agreement, any of the Right Certificates shall have
      been
      countersigned but not delivered, any such successor Rights Agent may adopt
      the
      countersignature of the predecessor Rights Agent and deliver such Right
      Certificates so countersigned; and in case at such time any of the Right
      Certificates shall not have been countersigned, any successor Rights Agent
      may
      countersign such Right Certificates either in the name of the predecessor Rights
      Agent or in the name of the successor Rights Agent; and in all such cases such
      Right Certificates shall have the full force provided in the Right Certificates
      and in this Agreement.

     

    (b) In
      case
      at any time the name of the Rights Agent shall be changed and at such time
      any
      of the Right Certificates shall have been countersigned but not delivered,
      the
      Rights Agent may adopt the countersignature under its prior name and deliver
      Right Certificates so countersigned; and in case at such time any of the Right
      Certificates shall not have been countersigned, the Rights Agent may countersign
      such Right Certificates either in its prior name or in its changed name; and
      in
      all such cases such Right Certificates shall have the full force provided in
      the
      Right Certificates and in this Agreement.

     

    Section
      21. Duties
      of Rights Agent.
      The
      Rights Agent undertakes the duties and obligations imposed by this Agreement
      upon the following terms and conditions, by all of which the Company and the
      holders of Right Certificates, by their acceptance thereof, shall be
      bound:

     

    (a) The
      Rights Agent may consult with legal counsel (who may be legal counsel for the
      Company), and the opinion of such counsel shall be full and complete
      authorization and protection to the Rights Agent as to any action taken or
      omitted by it in good faith and in accordance with such opinion.

     

    (b) Whenever
      in the performance of its duties under this Agreement the Rights Agent shall
      deem it necessary or desirable that any fact or matter be proved or established
      by the Company prior to taking or suffering any action hereunder, such fact
      or
      matter (unless other evidence in respect thereof be herein specifically
      prescribed) may be deemed to be conclusively proved and established by a
      certificate signed by any one of the Chairman or Vice Chairman of the Board,
      the
      President, a Vice President, the Treasurer or the Secretary of the Company
      and
      delivered to the Rights Agent; and such certificate shall be full authorization
      to the 

    
      
        
        

      

      
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    Rights
      Agent for any action taken or suffered in good faith by it under the provisions
      of this Agreement in reliance upon such certificate.

     

    (c) The
      Rights Agent shall be liable hereunder only for its own gross negligence, bad
      faith or willful misconduct.

     

    (d) The
      Rights Agent shall not be liable for or by reason of any of the statements
      of
      fact or recitals contained in this Agreement or in the Right Certificates or
      be
      required to verify the same (except as to its countersignature thereof), but
      all
      such statements and recitals are and shall be deemed to have been made by the
      Company only.

     

    (e) The
      Rights Agent shall not be under any responsibility in respect of the validity
      of
      this Agreement or the execution and delivery hereof (except the due execution
      hereof by the Rights Agent) or in respect of the validity or execution of any
      Right Certificate (except its countersignature thereof); nor shall it be
      responsible for any breach by the Company of any covenant or condition contained
      in this Agreement or in any Right Certificate; nor shall it be responsible
      for
      any adjustment required under the provisions of Sections 11 or 13 hereof or
      responsible for the manner, method or amount of any such adjustment or the
      ascertaining of the existence of facts that would require any such adjustment
      (except with respect to the exercise of Rights evidenced by Right Certificates
      after actual notice of any such adjustment); nor shall it by any act hereunder
      be deemed to make any representation or warranty as to the authorization or
      reservation of any Common Shares or Preferred Shares to be issued pursuant
      to
      this Agreement or any Right Certificate or as to whether any Common Shares
      or
      Preferred Shares will, when so issued, be validly authorized and issued, fully
      paid and nonassessable.

     

    (f) The
      Company agrees that it will perform, execute, acknowledge and deliver or cause
      to be performed, executed, acknowledged and delivered all such further and
      other
      acts, instruments and assurances as may reasonably be required by the Rights
      Agent for the carrying out or performing by the Rights Agent of the provisions
      of this Agreement.

     

    (g) The
      Rights Agent is hereby authorized and directed to accept instructions with
      respect to the performance of its duties hereunder from any one of the Chairman
      or Vice Chairman of the Board, the President, a Vice President, the Secretary
      or
      the Treasurer of the Company, and to apply to such officers for advice or
      instructions in connection with its duties, and it shall not be liable for
      any
      action taken or suffered to be taken by it in good faith in accordance with
      instructions of any such officer.

     

    (h) The
      Rights Agent and any stockholder, director, officer or employee of the Rights
      Agent may buy, sell or deal in any of the Rights or other securities of the
      Company or become pecuniarily interested in any transaction in which the Company
      may be interested, or contract with or lend money to the Company or otherwise
      act as fully and freely as though it were not Rights Agent under this Agreement.
      Nothing herein shall preclude the Rights Agent from acting in any other capacity
      for the Company or for any other Person.

     

    (i) The
      Rights Agent may execute and exercise any of the rights or powers hereby vested
      in it or perform any duty hereunder either itself or by or through its

    
      
        
        

      

      
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    attorneys
      or agents, and the Rights Agent shall not be answerable or accountable for
      any
      act, default, neglect or misconduct of any such attorneys or agents for any
      loss
      to the Company resulting from any such act, default, neglect or misconduct,
      provided reasonable care was exercised in the selection and continued employment
      thereof.

     

    (j) If,
      with
      respect to any Right Certificate surrendered to the Rights Agent for exercise
      or
      transfer, the certificate attached to the form of assignment or form of election
      to purchase, as the case may be, has either not been completed or indicates
      an
      affirmative response to any item therein, the Rights Agent shall not take any
      further action with respect to such requested exercise or transfer without
      first
      consulting with the Company.

     

    Section
      22. Change
      of Rights Agent.
      The
      Rights Agent or any successor Rights Agent may resign and be discharged from
      its
      duties under this Agreement upon thirty (30) days’ notice in writing mailed to
      the Company and, if instructed by the Company, to each transfer agent of the
      Common Shares and Preferred Shares by registered or certified mail, and, at
      the
      expense of the Company, to the holders of the Right Certificates by first-class
      mail. In the event the transfer agency relationship in effect between the
      Company and the Rights Agent terminates, the Rights Agent will be deemed to
      resign automatically on the effective date of such termination; and any required
      notice will be sent by the Company. The Company may remove the Rights Agent
      or
      any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to
      the Rights Agent or successor Rights Agent, as the case may be, and to each
      transfer agent of the Common Shares and Preferred Shares by registered or
      certified mail, and to the holders of the Right Certificates by first-class
      mail. If the Rights Agent shall resign or be removed or shall otherwise become
      incapable of acting, the Company shall appoint a successor to the Rights Agent.
      If the Company shall fail to make such appointment within a period of thirty
      (30) days after giving notice of such removal or after it has been notified
      in
      writing of such resignation or incapacity by the resigning or incapacitated
      Rights Agent or by the holder of a Right Certificate (who shall, with such
      notice, submit his Right Certificate for inspection by the Company), then the
      registered holder of any Right Certificate may apply to any court of competent
      jurisdiction for the appointment of a new Rights Agent. Any successor Rights
      Agent, whether appointed by the Company or by such a court, shall be a Person
      organized and doing business under the laws of the United States or any State
      of
      the United States, in good standing, having a principal office in the State
      of
      New York, which is authorized under such laws to exercise corporate trust or
      stock transfer powers and is subject to supervision or examination by federal
      or
      state authority and which has (or whose Affiliate has) at the time of such
      Person’s appointment as Rights Agent a combined capital and surplus of at least
      $100 million. After appointment, the successor Rights Agent shall be vested
      with
      the same powers, rights, duties and responsibilities as if it had been
      originally named as Rights Agent without further act or deed; but the
      predecessor Rights Agent shall deliver and transfer to the successor Rights
      Agent any property at the time held by it hereunder, and execute and deliver
      any
      further assurance or conveyance, and perform any other act or deed, necessary
      for the purpose. Not later than the effective date of any such appointment
      the
      Company shall file notice thereof in writing with the predecessor Rights Agent
      and each transfer agent of the Common Shares and the Preferred Shares, and
      mail
      a notice thereof in writing to the registered holders of the Right Certificates.
      Failure to give any notice provided for in this Section 22, however, or any
      defect therein, shall not affect the legality or validity of the

    
      
        
        

      

      
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    resignation
      or removal of the Rights Agent or the appointment of the successor Rights Agent,
      as the case may be.

     

    Section
      23. Issuance
      of New Right Certificates.
      Notwithstanding any of the provisions of this Agreement or of the Rights to
      the
      contrary, the Company may, at its option, issue new Right Certificates
      evidencing Rights in such form as may be approved by its Board of Directors
      to
      reflect any adjustment or change in the Purchase Price and/or the number or
      kind
      or class of shares or other securities or property purchasable under the Right
      Certificates made in accordance with the provisions of this Agreement. In
      addition, in connection with the issuance or sale of Common Shares following
      the
      Distribution Date and prior to the earliest of the Redemption Date, the Exchange
      Date and the Final Expiration Date, the Company (a) shall, with respect to
      Common Shares so issued or sold pursuant to the exercise of stock options or
      stock appreciation rights or the vesting of restricted stock units, or pursuant
      to the terms of other awards under any employee or director benefit plan or
      arrangement, outstanding, granted or awarded as of the Distribution Date, or
      upon the exercise, conversion or exchange of securities issued by the Company
      prior to such date, and (b) may, in any other case, if deemed necessary or
      appropriate by a majority of the Board of Directors, issue Right Certificates
      representing the appropriate number of Rights in connection with such issuance
      or sale; provided,
      however,
      that
      (i) no such Right Certificate shall be issued if, and to the extent that, the
      Company shall be advised by counsel that such issuance would create a
      significant risk of material adverse tax consequences to the Company or the
      Person to whom such Right Certificates would be issued and (ii) no such Right
      Certificate shall be issued if, and to the extent that, appropriate adjustment
      shall otherwise have been made in lieu of the issuance thereof.

     

    Section
      24. Redemption.
      (a) The
      Board of Directors may, at its option, at any time prior to such time as any
      Person becomes an Acquiring Person, redeem all but not less than all the then
      outstanding Rights at a redemption price of $.01 per Right, appropriately
      adjusted to reflect any stock split, stock dividend, reclassification or similar
      transaction occurring after the date hereof (such redemption price being
      hereinafter referred to as the “Redemption
      Price”).
      The
      redemption of the Rights may be made effective at such time, on such basis
      and
      with such conditions as the Board of Directors in its sole discretion may
      establish. Without limiting the generality of the foregoing, the Company may,
      at
      its option, pay the Redemption Price in cash, Common Shares (based on the
“current
      market price,”
as
      defined in Section 11(d)(i) hereof, of the Common Shares at the time of
      redemption) or any other form of consideration deemed appropriate by the Board
      of Directors.

     

    (b) Immediately
      upon the action of the Board of Directors ordering the redemption of the Rights
      (or at such later time as the Board of Directors may establish for the
      effectiveness of such redemption), and without any further action and without
      any notice, the right to exercise the Rights will terminate and the only right
      thereafter of the holders of Rights shall be to receive the Redemption Price.
      The Company shall promptly give public notice of any such redemption;
provided,
      however,
      that
      the failure to give or any defect in such notice shall not affect the validity
      of such redemption. Within ten (10) days after the action of the Board of
      Directors ordering the redemption of the Rights, the Company shall give notice
      of such redemption to the Rights Agent and the holders of the then outstanding
      Rights by mailing such notice to the Rights Agent and to all such holders at
      their last address as it appears upon the 

    
      
        
        

      

      
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    registry
      books of the Rights Agent or, prior to the Distribution Date, on the registry
      books of the transfer agent for the Common Shares. Any notice which is mailed
      in
      the manner herein provided shall be deemed given, whether or not the holder
      receives the notice. Each such notice of redemption will state the method by
      which the payment of the Redemption Price will be made.

     

    (c) Neither
      the Company nor any of its Subsidiaries may redeem, acquire or purchase for
      value any Rights at any time in any manner except (i) pursuant to a redemption
      in accordance with this Section 24 or an exchange pursuant to Section 25 hereof
      or (ii) in connection with the purchase or other acquisition of Common Shares
      prior to the Distribution Date.

     

    (d) In
      connection with a redemption of Rights pursuant to this Section 24, as an
      antidilution adjustment to outstanding awards (and without limitation of the
      other terms of such award), the Company shall (i) pay to the holder of each
      restricted stock unit outstanding at the time of redemption, upon the vesting
      thereof, an amount equal to the Redemption Price per Right multiplied by the
      number of Common Shares underlying such restricted stock unit and (ii) pay
      to
      the holder of each stock option or stock appreciation right outstanding at
      the
      time of redemption, upon the exercise thereof, an amount equal to the Redemption
      Price per Right multiplied by the number of Common Shares underlying such stock
      option or stock appreciation right. The Redemption Price paid pursuant to this
      paragraph (d) shall be paid in the same form paid to holders of Rights pursuant
      to the other paragraphs of this Section 24.

     

    Section
      25. Exchange.
      (a)
      Subject to paragraph (c) of this Section 25, the Board of Directors may, at
      its
      option, at any time following such time as any Person becomes an Acquiring
      Person, exchange all but not less than all of the then outstanding and
      exercisable Rights (which shall not include Rights that have become void
      pursuant to the provisions of Section 7(e) hereof) for Common Shares at an
      exchange ratio of one Common Share per Right, appropriately adjusted to reflect
      any stock split, stock dividend, reclassification or similar transaction
      occurring after the date hereof (such exchange being hereinafter referred to
      as
      the “Exchange”
and
      such exchange ratio being hereinafter referred to as the “Exchange
      Ratio”).
      Notwithstanding the foregoing, the Board of Directors shall not be empowered
      to
      effect the Exchange at any time after any Person (other than the Company, any
      Subsidiary of the Company, any employee benefit plan of the Company or any
      such
      Subsidiary, or any entity organized, appointed or established by the Company
      for
      or pursuant to the terms of any such plan), together with all Affiliates and
      Associates of such Person, becomes the Beneficial Owner of Common Shares
      aggregating 50% or more of the Common Shares then outstanding.

     

    (b) Immediately
      upon the action of the Board of Directors authorizing the Exchange, and without
      any further action and without any notice, the right to exercise the Rights
      shall terminate and the only right thereafter of a holder of Rights included
      in
      the Exchange shall be to receive that number of Common Shares equal to the
      number of Rights held by such holder multiplied by the Exchange Ratio. The
      Company shall promptly give public notice of the Exchange; provided,
      however,
      that
      the failure to give or any defect in such notice shall not affect the validity
      of the Exchange. Within ten (10) days after the effectiveness of the Exchange
      pursuant to the first sentence of this Section 25(b), the Company shall
      mail a notice of Exchange to the Rights Agent and the holders of such Rights
      at
      their last addresses as they appear upon the

    
      
        
        

      

      
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    registry
      books of the Rights Agent. Any notice which is mailed in the manner herein
      provided shall be deemed given whether or not the holder receives the notice.
      Each such notice of Exchange will state the method by which the Exchange will
      be
      effected.

     

    (c) In
      the
      event that the number of Common Shares which are authorized by the Company’s
      Certificate of Incorporation but not outstanding or reserved for issuance for
      purposes other than upon exercise of the Rights are not sufficient to permit
      the
      Exchange, the Exchange Ratio shall equal one Common Stock Equivalent (in lieu
      of
      one Common Share) per Right. Alternatively, the Board of Directors may, at
      its
      option, determine that the Company shall (i) issue Common Shares in the
      Exchange to the extent Common Shares are available and (ii) utilize Common
      Stock Equivalents in the Exchange as provided above to the extent Common Shares
      are not available, in which case such Common Shares shall be allocated on such
      basis as the Board of Directors determines pursuant to Section 30
      hereof.

     

    (d) The
      Company shall not be required to issue fractions of Common Shares or to
      distribute certificates which evidence fractional Common Shares. In lieu of
      such
      fractional shares, there shall be paid to the registered holders of the Right
      Certificates with regard to which such fractional shares would otherwise be
      issuable, an amount in cash equal to the same fraction of the current market
      value of one Common Share. For the purposes of this paragraph (d), the current
      market value of one Common Share shall be the closing price of a Common Share
      (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
      immediately prior to the Exchange Date.

     

    (e) In
      connection with an Exchange of Rights pursuant to this Section 25, as an
      antidilution adjustment to outstanding awards (and without limitation of the
      other terms of such award), the Company shall (i) pay to the holder of each
      restricted stock unit outstanding at the time of the Exchange, upon the vesting
      thereof, an amount equal to the payment made to a holder of a Right in the
      Exchange multiplied by the number of Common Shares underlying such restricted
      stock unit and (ii) pay to the holder of each stock option or stock appreciation
      right outstanding at the time of the Exchange, upon the exercise thereof, an
      amount equal to the payment made to a holder of a Right in the Exchange
      multiplied by the number of Common Shares underlying such stock option or stock
      appreciation right. Payment pursuant to this paragraph (e) shall be made in
      the
      same form paid to holders of Rights pursuant to the other paragraphs of this
      Section 25 (or, in the discretion of the Board of Directors, a cash payment
      shall be made in lieu thereof reflecting the value of the Common Shares at
      the
      time of the Exchange).

     

    Section
      26. Notice
      of Certain Events.
      (a) In
      case the Company shall propose, at any time after the Distribution Date, (i)
      to
      pay any dividend payable in stock of any class to the holders of Preferred
      Shares or to make any other distribution to the holders of Preferred Shares
      (other than a regular quarterly cash dividend), (ii) to offer to the holders
      of
      Preferred Shares rights, options or warrants to subscribe for or to purchase
      any
      additional Preferred Shares at less than the current market price of the
      Preferred Shares, or shares of stock of any class or any other securities,
      rights or options, (iii) to effect any reclassification of its Preferred
      Shares (other than a reclassification involving only the subdivision of
      outstanding Preferred Shares), (iv) to effect any consolidation or merger into
      or with, or to effect any sale or other transfer (or to permit one
      or

    
      
        
        

      

      
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    more
      of
      its Subsidiaries to effect any sale or other transfer), in one or more
      transactions, of more than 50% of the assets or earning power of the Company
      and
      its Subsidiaries (taken as a whole) to, any other Person or Persons, or
      (v) to effect the liquidation, dissolution or winding up of the Company,
      then, in each such case, the Company shall give to each holder of a Right
      Certificate, in accordance with Section 27 hereof, a notice of such
      proposed action, which shall specify the record date for the purposes of such
      stock dividend, or distribution of rights, options or warrants, or the date
      on
      which such reclassification, consolidation, merger, sale, transfer, liquidation,
      dissolution, or winding up is to take place and the date of participation
      therein by the holders of the Preferred Shares, if any such date is to be fixed,
      and such notice shall be so given in the case of any action covered by
      clause (i) or (ii) above at least twenty (20) days prior to the record date
      for determining holders of the Preferred Shares for purposes of such action,
      and
      in the case of any such other action, at least twenty (20) days prior to the
      date of the taking of such proposed action or the date of participation therein
      by the holders of the Preferred Shares, whichever shall be the
      earlier.

     

    (b) In
      case
      the event set forth in Section 11(a)(ii) of this Agreement shall occur, then
      (i)
      the Company shall as soon as practicable thereafter give to each holder of
      a
      Right Certificate, in accordance with Section 27 hereof, a notice of the
      occurrence of such event, which shall specify the event and the consequences
      of
      the event to holders of Rights under Section 11(a)(ii) hereof and (ii) all
      references in the preceding paragraph to Preferred Shares shall thereafter
      be
      deemed to refer to Common Shares or, if appropriate, to Common Stock
      Equivalents.

     

    Section
      27. Notices.
      Notices
      or demands authorized by this Agreement to be given or made by the Rights Agent
      or by the holder of any Right Certificate to or on the Company shall be
      sufficiently given or made if sent by first-class mail, postage prepaid, or
      by
      facsimile transmission, addressed as follows (until another address or facsimile
      number is filed in writing with the Rights Agent):

     

    Flushing
      Financial Corporation

    1979
      Marcus Avenue, Suite E140

    Lake
      Success, NY 11042

    Attention:
      Secretary

    Facsimile
      No.: 516-358-4385

     

    Subject
      to the provisions of Section 22 hereof, any notice or demand authorized by
      this
      Agreement to be given or made by the Company or by the holder of any Right
      Certificate to or on the Rights Agent shall be sufficiently given or made if
      sent by first-class mail, postage prepaid, or by facsimile transmission,
      addressed as follows (until another address or facsimile number is filed in
      writing with the Company): 

     

    Computershare
      Trust Company N.A.

    PO
      Box
      43010 

    Providence,
      RI 02940-3010

    Attention:
      Doug Ives, Relationship Management

    Facsimile
      No.: 781-575-4812

    
      
        
        

      

      
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    Notices
      or demands authorized by this Agreement to be given or made by the Company
      or
      the Rights Agent to the holder of any Right Certificate shall be sufficiently
      given or made if sent by first-class mail, postage prepaid, addressed to such
      holder at the address of such holder as shown on the registry books of the
      Company.

     

    Section
      28. Supplements
      and Amendments.
      Prior
      to the Share Acquisition Date, and subject to the last sentence of this Section
      28, the Company and the Rights Agent shall, if the Company so directs,
      supplement or amend any provision of this Agreement, whether or not adverse
      to
      the holders of Rights, without any approval of the holders of Rights. From
      and
      after the Share Acquisition Date, and subject to the last sentence of this
      Section 28, the Company and the Rights Agent may from time to time supplement
      or
      amend this Agreement without any approval of the holders of Rights in order
      (i)
      to cure any ambiguity, (ii) to correct or supplement any provision contained
      herein which may be defective or inconsistent with any other provisions herein,
      or (iii) to change or supplement the provisions herein to effectuate the
      purposes of this Agreement, or to make any other provisions with respect to
      the
      Rights, which, in either such case, shall not materially adversely affect the
      interests of the holders of Rights (other than Acquiring Persons and Affiliates
      or Associates thereof). Upon the delivery of a certificate from an appropriate
      officer of the Company which states that the proposed supplement or amendment
      is
      in compliance with the terms of this Section 28, the Rights Agent shall execute
      such supplement or amendment; provided,
      however,
      that
      the Rights Agent may, but shall not be obligated to, enter into any such
      supplement or amendment which affects the Rights Agent’s own rights, duties,
      liabilities or obligations under this Agreement. Notwithstanding anything
      contained in this Agreement to the contrary, no supplement or amendment shall
      be
      made which decreases the Redemption Price.

     

    Section
      29. Successors.
      All the
      covenants and provisions of this Agreement by or for the benefit of the Company
      or the Rights Agent shall bind and inure to the benefit of their respective
      successors and assigns hereunder.

     

    Section
      30. Determinations
      and Actions by the Board of Directors, etc.
      The
      Board of Directors shall have the exclusive power and authority to administer
      this Agreement and to exercise all rights and powers specifically granted to
      the
      Board of Directors or to the Company, or as may be necessary or advisable in
      the
      administration of this Agreement, including, without limitation, the right
      and
      power to (i) interpret the provisions of this Agreement, and (ii) make all
      determinations deemed necessary or advisable for the administration of this
      Agreement (including a determination to redeem or not to redeem the Rights
      pursuant to Section 24 hereof, to exchange or not to exchange the Rights
      pursuant to Section 25 hereof or to supplement or amend this Agreement). All
      such actions, calculations, interpretations and determinations (including,
      for
      purpose of clause (y) below, all omissions with respect to the foregoing) which
      are done or made by the Board of Directors in good faith, shall (x) be final,
      conclusive and binding on the Company, the Rights Agent, the holders of the
      Rights and all other parties, and (y) not subject the Board of Directors to
      any
      liability to the holders of the Rights.

    
      
        
        

      

      
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    Section
      31. Benefits
      of this Agreement.
      Nothing
      in this Agreement shall be construed to give to any Person other than the
      Company, the Rights Agent and the registered holders of the Right Certificates
      (and, prior to the Distribution Date, the Common Shares) any legal or equitable
      right, remedy or claim under this Agreement; but this Agreement shall be for
      the
      sole and exclusive benefit of the Company, the Rights Agent and the registered
      holders of the Right Certificates (and, prior to the Distribution Date, the
      Common Shares).

     

    Section
      32. Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction or other authority to be invalid, void or unenforceable,
      the remainder of the terms, provisions, covenants and restrictions of this
      Agreement shall remain in full force and effect and shall in no way be affected,
      impaired or invalidated.

     

    Section
      33. Governing
      Law.
      This
      Agreement and each Right Certificate issued hereunder shall be deemed to be
      a
      contract made under the laws of the State of Delaware and for all purposes
      shall
      be governed by and construed in accordance with the laws of such State
      applicable to contracts to be made and performed entirely within such
      State.

     

    Section
      34. Counterparts.
      This
      Agreement may be executed in any number of counterparts and each of such
      counterparts shall for all purposes be deemed to be an original, and all such
      counterparts shall together constitute but one and the same
      instrument.

     

    Section
      35. Descriptive
      Headings.
      Descriptive headings of the several Sections of this Agreement are inserted
      for
      convenience only and shall not control or affect the meaning or construction
      of
      any of the provisions hereof.

     

    Section
      36. Force
      Majeure.
      Notwithstanding
      anything to the contrary contained herein, the Rights Agent shall not be liable
      for any delays or failures in performance resulting from acts beyond its
      reasonable control including, without limitation, acts of God, terrorist acts,
      shortage of supply, breakdowns or malfunctions, interruptions or malfunction
      of
      computer facilities, or loss of data due to power failures or mechanical
      difficulties with information storage or retrieval systems, labor difficulties,
      war, or civil unrest.

     

    

    [Signature
      page follows.]

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed as of the date and year first above written.

    

    
      	
               

              FLUSHING
                FINANCIAL CORPORATION

            
	
               

              By:

            	
               

              /s/
                John R. Buran

            
	
              Name:

            	
              John
                R. Buran

            
	
              Title:

            	
              President
                and Chief Executive Officer

            
	
               

              COMPUTERSHARE
                TRUST COMPANY N.A.

            
	
               

              By:

            	
               

              /s/
                Michael Connor

            
	
              Name:

            	
              Michael
                Connor

            
	
              Title:

            	
              Managing
                Director

            

    

    

     

    

    
      
        
        

      

      
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    EXHIBIT
      A TO RIGHTS AGREEMENT

    

     

    CERTIFICATE
      OF INCREASE

     

    OF

     

    SHARES
      DESIGNATED AS 

     

    SERIES
      A JUNIOR PARTICIPATING PREFERRED STOCK

     

    

    Flushing
      Financial Corporation, a corporation organized and existing under the General
      Corporation Law of the State of Delaware (the “Corporation”),

    

    DOES
      HEREBY CERTIFY:

    

    That
      a Certificate of Designations of Series A Junior Participating Preferred Stock,
      par value $.01 per share (the “Series
      A Preferred”),
      was filed in the office of the Secretary of State of the State of Delaware
      on
      September 30, 1996.

    

    That
      the Board of Directors of the Corporation, at a meeting held on September 5,
      2006, duly adopted a resolution authorizing and directing an increase in the
      number of shares designated as Series A Preferred, from 100,000 shares to
      250,000 shares, in accordance with the provisions of Section 151 of The General
      Corporation Law of the State of Delaware.

    

    IN
      WITNESS WHEREOF, the Corporation has caused this certificate to be signed by
      ______________________, its ________________, this _____ day of September,
      2006.

    
      	
               

              FLUSHING
                FINANCIAL CORPORATION

            
	
               

              By

            	
               

               

            
	 	
              Name:

            
	 	
              Title:

            

    

    

    

    

    
      
        
          

        

        
        

      

      
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    EXHIBIT
      B TO RIGHTS AGREEMENT

     

    [Form
      of
      Right Certificate]

     

    
      
        	Certificate No. R- 	
                ____________
                  Rights 

              

      

    

     

    NOT
      EXERCISABLE AFTER SEPTEMBER 30, 2016 OR EARLIER IF REDEMPTION OR EXCHANGE
      OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY AT
      $.01 PER RIGHT, AND TO EXCHANGE AT THE OPTION OF THE COMPANY, ON THE TERMS
      SET
      FORTH IN THE RIGHTS AGREEMENT. AS DESCRIBED IN THE RIGHTS AGREEMENT, RIGHTS
      BENEFICIALLY OWNED BY (1) AN ACQUIRING PERSON OR ANY ASSOCIATE OR AFFILIATE
      THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), (2) A TRANSFEREE
      OF
      AN ACQUIRING PERSON (OR OF ANY SUCH ASSOCIATE OR AFFILIATE) WHO BECOMES A
      TRANSFEREE AFTER THE ACQUIRING PERSON BECOMES SUCH OR (3) UNDER CERTAIN
      CIRCUMSTANCES, A TRANSFEREE OF AN ACQUIRING PERSON (OR OF ANY SUCH ASSOCIATE
      OR
      AFFILIATE) WHO BECOMES A TRANSFEREE BEFORE OR CONCURRENTLY WITH THE ACQUIRING
      PERSON BECOMING SUCH, SHALL BECOME NULL AND VOID.

    
      
        
        

      

      
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    Right
      Certificate

     

    FLUSHING
      FINANCIAL CORPORATION

     

     

    This
      certifies that ____________________________________________, or registered
      assigns, is the registered owner of the number of Rights set forth above, each
      of which entitles the owner thereof, subject to the terms, provisions and
      conditions of the Rights Agreement, dated as of September 8, 2006 (the
“Rights
      Agreement”),
      between Flushing Financial Inc., a Delaware corporation (the “Company”),
      and
      Computershare Trust Company N.A. (the “Rights
      Agent”),
      to
      purchase from the Company at any time after the Distribution Date (as such
      term
      is defined in the Rights Agreement) and prior to 5:00 P.M. (New York City
      time) on September 30, 2016 at the office or offices of the Rights Agent
      designated for such purpose, or its successors as Rights Agent, one
      one-hundredth of a fully paid, non-assessable share of Series A Junior
      Participating Preferred Stock (the “Preferred
      Shares”)
      of the
      Company, at a purchase price of $65 per one one-hundredth of a share (the
“Purchase
      Price”),
      upon
      presentation and surrender of this Right Certificate with the Form of Election
      to Purchase duly executed. The number of Rights evidenced by this Right
      Certificate (and the number of shares which may be purchased upon exercise
      thereof) set forth above, and the Purchase Price per share set forth above,
      are
      the number and Purchase Price as of September 30, 2006, based on the Preferred
      Shares as constituted at such date.

     

    From
      and
      after the occurrence of the event described in Section 11(a)(ii) of the Rights
      Agreement, if the Rights evidenced by this Right Certificate are beneficially
      owned by (i) an Acquiring Person or any Associate or Affiliate thereof (as
      such terms are defined in the Rights Agreement), (ii) a transferee of an
      Acquiring Person (or of any such Associate or Affiliate) who becomes a
      transferee after the Acquiring Person becomes such or (iii) under certain
      circumstances, a transferee of an Acquiring Person (or of any such Associate
      or
      Affiliate) who becomes a transferee before or concurrently with the Acquiring
      Person becoming such, such Rights shall become null and void and no holder
      hereof shall have any rights with respect to such Rights.

     

    As
      provided in the Rights Agreement, the Purchase Price and the number and kind
      of
      Preferred Shares or other securities that may be purchased upon the exercise
      of
      the Rights evidenced by this Right Certificate are subject to modification
      and
      adjustment upon the happening of certain events.

     

    This
      Right Certificate is subject to all of the terms, provisions and conditions
      of
      the Rights Agreement, which terms, provisions and conditions are hereby
      incorporated herein by reference and made a part hereof and to which Rights
      Agreement reference is hereby made for a full description of the rights,
      limitations of rights, obligations, duties and immunities hereunder of the
      Rights Agent, the Company and the holders of the Right Certificates. Copies
      of
      the Rights Agreement are on file at the principal executive office of the
      Company and are also available upon written request to the
      Company.

    
      
        
        

      

      
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    This
      Right Certificate, with or without other Right Certificates, upon surrender
      at
      the principal office or offices of the Rights Agent designated for such purpose,
      may be exchanged for another Right Certificate or Right Certificates of like
      tenor and date evidencing Rights entitling the holder to purchase a like
      aggregate number of Preferred Shares as the Rights evidenced by the Right
      Certificate or Right Certificates surrendered shall have entitled such holder
      to
      purchase. If this Right Certificate shall be exercised in part, the holder
      shall
      be entitled to receive upon surrender hereof another Right Certificate or Right
      Certificates for the number of whole Rights not exercised.

     

    Subject
      to the provisions of the Rights Agreement, the Rights evidenced by this
      Certificate (i) may be redeemed by the Company at its option at a redemption
      price of $.01 per Right or (ii) may be exchanged by the Company at its option
      for Common Shares (or, in certain circumstances, Common Stock Equivalents (as
      such term is defined in the Rights Agreement)).

     

    No
      fractional Preferred Shares will be issued upon the exercise of any Right or
      Rights evidenced hereby (other than fractions which are integral multiples
      of
      one-hundredth of a Preferred Share, which may, at the election of the Company,
      be evidenced by depositary receipts), but in lieu thereof a cash payment will
      be
      made, as provided in the Rights Agreement.

     

    No
      holder
      of this Right Certificate shall be entitled to vote or receive dividends or
      be
      deemed for any purpose the holder of Preferred Shares or of any other securities
      of the Company which may at any time be issuable on the exercise hereof, nor
      shall anything contained in the Rights Agreement or herein be construed to
      confer upon the holder hereof, as such, any of the rights of a stockholder
      of
      the Company or any right to vote for the election of directors or upon any
      matter submitted to stockholders at any meeting thereof, or to give or withhold
      consent to any corporate action, or, to receive notice of meetings or other
      actions affecting stockholders (except as provided in the Rights Agreement),
      or
      to receive dividends or subscription rights, or otherwise, until the Right
      or
      Rights evidenced by this Right Certificate shall have been exercised as provided
      in the Rights Agreement.

     

    This
      Right Certificate shall not be valid or obligatory for any purpose until it
      shall have been countersigned by the Rights Agent.

    
      
        
        

      

      
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    WITNESS
      the facsimile signature of the proper officers of the Company and its corporate
      seal.

     

    Dated
      as
      of _______________, ____

    

    
      	
               

              ATTEST:

            	
               

              FLUSHING
                FINANCIAL CORPORATION

            
	
               

               

               

            	 	
               

               

              By:

            	
               

               

            
	
              Secretary

            	 	 	
              Title:

            

    

    

    

    

    
      	
               

              Countersigned:

            	 	
               

               

            
	
               

              COMPUTERSHARE
                TRUST COMPANY N.A.

            	 	 
	
               

              By:

            	
               

               

            	 	 
	 	
              Authorized
                Signature

            	 	 

    

    

    
      
        
        

      

      
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    [Form
      of
      Reverse Side of Right Certificate]

     

    FORM
      OF ASSIGNMENT

     

    (To
      be
      executed by the registered holder if such

    holder
      desires to transfer the Right Certificate.)

     

    FOR
      VALUE
      RECEIVED
      ________________________________________________________________________________________________________________________

    hereby
      sells, assigns and transfers unto
      ____________________________________________________________________________________________________________

    ___________________________________________________________________________________________________________________________________________

    (Please
      print name and address of transferee)

    
      ___________________________________________________________________________________________________________________________________________

    

    this
      Right Certificate, together with all right, title and interest therein, and
      does
      hereby irrevocably constitute and appoint __________________ Attorney, to
      transfer the within Right Certificate on the books of the within-named Company,
      with full power of substitution.

     

    Dated
      as
      of _______________, ____

     

    
      	
               

               

            
	
              Signature

            

    

     

    Signature
      Guaranteed:

    
      
        
        

      

      
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    Certificate

     

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1) the
      Rights evidenced by this Right Certificate [  ] are [  ] are
      not being sold, assigned and transferred by or on behalf of a Person who is
      or
      was an Acquiring Person or an Affiliate or Associate of an Acquiring Person
      (as
      such terms are defined in the Rights Agreement);

     

    (2) after
      due
      inquiry and to the best knowledge of the undersigned, the Rights evidenced
      by
      this Right Certificate [  ] are [  ] are not being sold,
      assigned and transferred to a Person who is an Acquiring Person, an Affiliate
      or
      Associate of an Acquiring Person or a nominee of any such Acquiring Person,
      Associate or Affiliate;

     

    (3) after
      due
      inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
      acquire the Rights evidenced by this Right Certificate from any Person who
      is,
      was or subsequently became an Acquiring Person or an Affiliate or Associate
      of
      an Acquiring Person.

     

    Dated
      as
      of _______________, ____

    
       

      
        	
                 

                 

              
	
                Signature

              

      

       
 

    

    
      
        
        

      

      
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    NOTICE

     

     

    The
      signatures to the foregoing Assignment and Certificate must correspond to the
      name as written upon the face of this Right Certificate in every particular,
      without alteration or enlargement or any change whatsoever.

    

    

     

    
      
        
          

        

        
        

      

      
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    FORM
      OF ELECTION TO PURCHASE

     

     

    (To
      be
      executed if holder desires to exercise Rights represented by the Right
      Certificate.)

     

    To
      FLUSHING FINANCIAL CORPORATION:

     

    The
      undersigned hereby irrevocably elects to exercise _________ Rights
      represented by this Right Certificate to purchase the Preferred Shares issuable
      upon the exercise of the Rights (or such other securities of the Company or
      of
      any other person which may be issuable upon the exercise of the Rights) and
      requests that certificates for such shares be issued in the name
      of:

     

    Please
      insert social security

    or
      other
      identifying number

     

    
      

    

    (Please
      print name and address)

    
    

     

    
      

    

     

    If
      such
      number of Rights shall not be all the Rights evidenced by this Right
      Certificate, a new Right Certificate for the balance of such Rights shall be
      registered in the name and delivered to:

     

    Please
      insert social security

    or
      other
      identifying number

     

    
      

    

    (Please
      print name and address)

    
    

     

    
      

    

     

      
        

      

    

     

    Dated
      as
      of _______________, ____

    
      
         

        
          	
                   

                   

                
	
                  Signature

                

        

         

      

    

    Signature
      Guaranteed:

    
      
        
        

      

      
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    Certificate

     

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1) the
      Rights evidenced by this Right Certificate [  ] are [  ] are
      not being exercised by or on behalf of a Person who is or was an Acquiring
      Person or an Affiliate or Associate of an Acquiring Person (as such terms are
      defined in the Rights Agreement);

     

    (2) after
      due
      inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
      acquire the Rights evidenced by this Right Certificate from any Person who
      is,
      was or subsequently became an Acquiring Person or an Affiliate or Associate
      of
      an Acquiring Person.

     

    Dated
      as
      of _______________, ____

    
      
         

        
          	
                   

                   

                
	
                  Signature

                

        

         
 

        
          
            
            

          

          
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            BACK

          

        

    

    NOTICE

     

     

    The
      signatures to the foregoing Election to Purchase and Certificate must correspond
      to the name as written upon the face of this Right Certificate in every
      particular, without alteration or enlargement or any change
      whatsoever.

    

    

    

    
      
        
          

        

        
        

      

      
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    EXHIBIT
      C TO RIGHTS AGREEMENT

     

    SUMMARY
      OF RIGHTS TO PURCHASE

    PREFERRED
      STOCK

     

     

    On
      September 5, 2006, the Board of Directors of Flushing Financial Corporation
      (the “Company”)
      renewed the Company’s Stockholder Rights Plan (which was originally adopted in
      and has been in place since September 1996 and which is scheduled to expire
      on
      September 30, 2006) by declaring a dividend distribution of one Right for each
      outstanding share of Common Stock, par value $.01 per share, of the Company
      (the
“Common
      Shares”)
      to
      stockholders of record on September 30, 2006 (the “Record
      Date”).
      Each
      Right entitles the registered holder to purchase from the Company a unit
      (“Unit”)
      consisting of one one-hundredth of a share of Series A Junior Participating
      Preferred Stock, par value $.01 per share, of the Company (the “Preferred
      Shares”),
      at a
      price of $65 per Unit (the “Purchase
      Price”),
      subject to adjustment. The description and terms of the Rights are set forth
      in
      a Rights Agreement (the “Rights
      Agreement”)
      between the Company and Computershare Trust Company N.A., as Rights
      Agent.

     

    Initially,
      the Rights will be attached to all Common Share certificates representing Common
      Shares then outstanding, and no separate Right certificates will be distributed.
      Until the earlier to occur of (i) 10 days following a public announcement that
      a
      person or group of affiliated or associated persons has acquired, or obtained
      the right to acquire, beneficial ownership of 15% or more of the outstanding
      Common Shares (an “Acquiring
      Person”),
      or
      (ii) 10 business days (or such later day as may be determined by action of
      the Board of Directors prior to such time as any person or group becomes an
      Acquiring Person) following the commencement of a tender offer or exchange
      offer
      if, upon consummation thereof, any person or group would be an Acquiring Person
      (the earlier of such dates being called the “Distribution
      Date”),
      the
      Rights will be evidenced, with respect to any of the Common Share certificates
      outstanding as of the Record Date, by such certificate together with a copy
      of
      this Summary of Rights. The date of announcement of the existence of an
      Acquiring Person referred to in clause (i) above is hereinafter referred to
      as
      the “Share
      Acquisition Date.”

     

    The
      Rights Agreement provides that, until the Distribution Date, the Rights will
      be
      transferred with and only with the Common Share certificates. Until the
      Distribution Date (or earlier redemption, exchange or expiration of the Rights),
      new Common Share certificates issued after the Record Date upon transfer or
      new
      issuance of Common Shares will contain a notation incorporating the Rights
      Agreement by reference. Until the Distribution Date (or earlier redemption,
      exchange or expiration of the Rights), the surrender for transfer of any
      certificates for Common Shares outstanding as of the Record Date, with or
      without a copy of this Summary of Rights attached thereto, will also constitute
      the transfer of the Rights associated with the Common Shares represented by
      such
      certificate. As soon as practicable following the Distribution Date, separate
      certificates evidencing the Rights (“Right
      Certificates”)
      will
      be 

    
      
        
        

      

      
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    mailed
      to
      holders of record of Common Shares on the Distribution Date and, thereafter,
      such separate Right Certificates alone will evidence the Rights.

     

    The
      Rights are not exercisable until the Distribution Date and will expire at the
      close of business on September 30, 2016, unless earlier redeemed or
      exchanged by the Company as described below.

     

    In
      the
      event that any person or group of affiliated or associated persons becomes
      an
      Acquiring Person, the Rights Agreement provides that proper provision shall
      be
      made so that each holder of a Right, except as provided below, shall thereafter
      have the right to receive, upon exercise, Common Shares (or, in certain
      circumstances, Common Stock Equivalents (as such term is defined in the Rights
      Agreement)) having a value equal to two (2) times the exercise price of the
      Right. Upon the occurrence of any event described in the preceding sentence,
      any
      Rights beneficially owned by (i) an Acquiring Person or an Associate or
      Affiliate (as such terms are defined in the Rights Agreement) of an Acquiring
      Person, (ii) a transferee of an Acquiring Person (or of any such Associate
      or
      Affiliate) who becomes a transferee after the Acquiring Person becomes such,
      or
      (iii) a transferee of an Acquiring Person (or of any such Associate or
      Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
      Person becoming such and receives such Rights pursuant to either (A) a transfer
      (whether or not for consideration) from the Acquiring Person to holders of
      equity interests in such Acquiring Person or to any person with whom the
      Acquiring Person has any continuing agreement, arrangement or understanding
      regarding the transferred Rights or (B) a transfer which the Board of
      Directors of the Company has determined is part of a plan, agreement,
      arrangement or understanding which has as a primary purpose or effect the
      avoidance of the Rights Agreement, shall become null and void without any
      further action and no holder of such Rights shall have any rights whatsoever
      with respect to such Rights, whether under any provision of the Rights Agreement
      or otherwise.

     

    At
      any
      time after the occurrence of the event described in the first sentence of the
      preceding paragraph (and prior to the acquisition by any person or group of
      affiliated or associated persons of 50% or more of the outstanding Common
      Shares), the Board of Directors of the Company may exchange the Rights (except
      Rights which previously have been voided as described above), in whole, but
      not
      in part, at an exchange ratio of one Common Share (or, in certain circumstances,
      one Common Stock Equivalent) per Right.

     

    In
      the
      event that, at any time after any person or group of affiliated or associated
      persons becomes an Acquiring Person, (i) the Company engages in a merger or
      other business combination transaction in which the Company is not the surviving
      corporation, (ii) the Company engages in a merger or other business combination
      transaction with another person in which the Company is the surviving
      corporation, but in which its Common Shares are changed or exchanged, or (iii)
      more than 50% of the Company’s assets or earning power is sold or transferred,
      the Rights Agreement provides that proper provision shall be made so that each
      holder of a Right (except Rights which previously have been voided as described
      above) shall thereafter have the right to receive, upon the exercise thereof
      at
      the then current exercise price of the Right, common stock of the acquiring
      company having a value equal to two (2) times the exercise price of the Right.
      

    

      
        
          
          

        

        
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    The
      Purchase Price payable, and the number of Units of Preferred Shares or other
      securities issuable, upon exercise of the Rights are subject to adjustment
      from
      time to time to prevent dilution (i) in the event of a stock dividend on, or
      a
      subdivision, combination or reclassification of, the Preferred Shares, (ii)
      upon
      the grant to holders of the Preferred Shares of certain rights, options or
      warrants to subscribe for Preferred Shares or convertible securities at less
      than the current market price of the Preferred Shares, or (iii) upon the
      distribution to holders of the Preferred Shares of evidences of indebtedness,
      stock (other than a dividend payable in Preferred Shares), assets or cash
      (excluding regular quarterly cash dividends) or of subscription rights, options
      or warrants (other than those referred to above). Such terms are also subject
      to
      adjustment in the event of a stock split of the Common Shares or a stock
      dividend on the Common Shares payable in Common Shares or subdivisions,
      consolidations or combinations of the Common Shares occurring, in any such
      case,
      prior to the Distribution Date.

     

    With
      certain exceptions, no adjustment in the Purchase Price will be required until
      cumulative adjustments require an adjustment of at least 1% in such Purchase
      Price. No fractional Units will be issued and, in lieu thereof, an adjustment
      in
      cash will be made as provided in the Rights Agreement.

     

    At
      any
      time prior to such time as any person or group of affiliated or associated
      persons becomes an Acquiring Person, the Board of Directors may redeem the
      Rights in whole, but not in part, at a price of $.01 per Right, subject to
      adjustment (the “Redemption
      Price”).
      Immediately upon the action of the Board of Directors of the Company ordering
      the redemption of the Rights (or at such later time as the Board of Directors
      may establish for the effectiveness of such redemption), the Rights will
      terminate and the only right of the holders of Rights will be to receive the
      Redemption Price. Until a Right is exercised, the holder thereof, as such,
      will
      have no rights as a stockholder of the Company, including, without limitation,
      the right to vote or to receive dividends.

     

    The
      terms
      of the Rights may be amended by the Company and the Rights Agent, provided
      that
      following the Share Acquisition Date the amendment does not materially adversely
      affect the interests of holders of Rights (other than an Acquiring Person)
      and
      provided that no amendment shall be made which decreases the Redemption
      Price.

     

    A
      copy of
      the Rights Agreement is being filed with the Securities and Exchange Commission
      as an Exhibit to a Current Report on Form 8-K. A copy of the Rights Agreement
      will be available free of charge from the Company. This summary description
      of
      the Rights does not purport to be complete and is qualified in its entirety
      by
      reference to the Rights Agreement, which is incorporated herein by
      reference.

     

     

    
      3

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