Exhibit 10.12
TIERONE BANK
FOURTH AMENDED AND RESTATED
CONSULTATION PLAN FOR DIRECTORS
FOREWORD
TierOne Bank (“Bank”) hereby approves and adopts this TierOne Bank Fourth
Amended and Restated Consultation Plan for Directors (“Plan”) effective as of
July 27, 2006 (the “Effective Date”).
This Plan is being amended and restated in order to comply with the requirements
of Section 409A of the Code (as defined below), including the guidance issued to
date by the Internal Revenue Service (the “IRS”) and the proposed regulations
issued by the IRS in the fall of 2005.
The Plan is intended to promote the interests of the Bank by providing: (i) an
added incentive to continue service to the Bank, (ii) for the continued advice
of retiring members of its Board of Directors, and (iii) eligible Directors with
retirement income.
This Plan, upon its Effective Date, hereby amends, restates and supersedes all
prior plans of the Bank purporting to grant benefits of a similar nature to its
present or retiring Directors, and specifically supersedes and replaces Board
Resolution BD 04-12-24.
SECTION 1
DEFINITIONS
As used herein, the following terms shall have the following respective
meanings, unless a different meaning is required by the context:

1.1   “Bank” means TierOne Bank, a federal savings bank or its
successor-in-interest.

1.2   “Beneficiary” means the one person designated by the Participant on the
Beneficiary designation form to receive benefits, if any, to which the
Participant was entitled at the time of the Participant’s death. If there is no
valid Beneficiary designation form on file at the time of the Participant’s
death, the participant’s Spouse shall be the Beneficiary, if living.

1.3   “Board of Directors” means the Board of Directors of the Bank or its
successor-in-interest.

1.4   “Chairman” means any member of the Board of Directors who was formally
elected and served the Board of Directors of the Bank as its Chairman for at
least three (3) years of Service.

1.5   “Change of Control” means a change in the ownership of the Bank or the
Holding Company, a change in the effective control of the Bank or the Holding
Company or a

 

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    change in the ownership of a substantial portion of the assets of the Bank
or the Holding Company as provided under Section 409A of the Code and the
regulations thereunder.   1.6   “Code” mean the Internal Revenue Code of 1986,
as amended.   1.7   “Committee” means the Committee designated by the Board of
Directors to administer the Plan pursuant to Section 5.   1.8   “Consulting
Agreement” means the consulting agreement by and between a Participant and the
Bank after such Participant ceases to be a Director, pursuant to which the
Participant agrees to provide consulting services to the Bank as, and if,
requested from time to time by the Board of Directors, not to exceed four
(4) days each month, provided that to the extent a Participant does not provide
services to the Bank under the Consulting Agreement during any month during the
term of the Consulting Agreement or provides less than four (4) days of services
during any such month, such non-provided days shall accumulate and carryover;
however, the Participant shall not be obligated in any month during the term of
the Consulting Agreement to provide more than twelve (12) days of consulting
services and any accumulated days of consulting services existing on the
termination of the Consulting Agreement shall lapse.   1.9   “Director” means a
member of the Board of Directors of the Bank.   1.10   “Disability” means a
Participant (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Bank or the Participant’s
Employer.   1.11   “Effective Date” means the date reflected in the first
sentence of this Plan.   1.12   “Holding Company” means TierOne Corporation, the
parent corporation of the Bank.   1.13   “Participant” means a Director or
former Director who participates in the Plan pursuant to Section 2.   1.14  
“Plan” means the TierOne Bank Fourth Amended and Restated Consultation Plan for
Directors as herein set forth, and as may be amended from time to time.   1.15  
“Retirement Date” means the date on which a Participant actually terminates
providing Service, including termination thereof based upon the death or
Disability of the Participant, a Change of Control, or otherwise by the action
of the Participant or the Bank, provided that such termination of service
constitutes a Separation from Service.

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1.16   “Service” means membership on the Board of Directors as a Director,
including membership on the Board of Directors as a Director prior to the
Effective Date.

1.17 “Separation from Service” means separation from service within the meaning
of Section 409A of the Code and the regulations thereunder.
1.18 “Specified Employee” means a key employee as defined in Section 416(i) of
the Code (without regard to Section 416(i)(5) of the Code) and as otherwise
defined in Section 409A of the Code and the regulations thereunder.
1.19 “Spouse” means the spouse of a Participant at the Participant’s date of
death.
Except where otherwise clearly indicated by the context, any masculine
terminology used herein shall include the feminine and vice versa and the
definition of any term herein in the singular shall include the plural and vice
versa.
SECTION 2
PARTICIPATION

2.1   Commencement of Participation.       All Directors are and shall become
Participants in the Plan. All new Directors shall become Participants
immediately upon the commencement of the individual’s Service as a Director.  
2.2   Continuation of Participation.       A Director who has become a
Participant shall continue as a Participant as long as he or she continues to be
a Director or is entitled to benefits under the Plan.

SECTION 3
RETIREMENT BENEFITS

3.1   Entitlement to Benefits.

  (a)   A Participant who:

  (i)   has ten (10) or more years of Service as of the Participant’s Retirement
Date; and     (ii)   if requested by the Board of Directors or the Bank,
executes the Consulting Agreement within 30 days after the Participant’s
Retirement Date; and     (iii)   provided a Consulting Agreement is executed by
the Participant as provided herein, continues to provide the services agreed to
in the Consulting Agreement, unless relieved of such services through the
judgment of the Board of Directors under Section 4.2 of the Plan;

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      shall have a vested right to receive retirement benefits determined under
the first sentence of Section 3.2 below.

  (b)   A Participant who:

  (i)   has five (5) or more years, but less than ten (10) years, of Service as
of the Participant’s Retirement Date; and     (ii)   if requested by the Board
of Directors or the Bank, executes the Consulting Agreement within 30 days after
the Participant’s Retirement Date; and     (iii)   provided a Consulting
Agreement is executed by the Participant as provided herein, continues to
provide the services agreed to in the Consulting Agreement, unless relieved of
such services through the judgment of the Board of Directors under Section 4.2
of the Plan;

      shall have a vested right to receive fifty percent (50%) of the retirement
benefits determined under the first sentence of Section 3.2 below.     (c)   In
the event a Participant does not satisfy any of the requirements of Sections
3.1(a) or 3.1(b) above as of the Participant’s Retirement Date and the
Participant terminates Service because of a Change of Control while actively
serving as a member of the Board of Directors, such Participant shall have a
vested right to receive fifty percent (50%) of the retirement benefits
determined under the first sentence of Section 3.2 below.     (d)  
Notwithstanding the foregoing, no benefits may be paid to a Participant if a
cease and desist order has been entered by the Office of Thrift Supervision
(“OTS”) or any other regulatory body or agency regulating the activities of the
Bank requiring the Participant to cease participating in the affairs of the
Bank.

3.2   Amount of Benefits.       The annual benefit payable under the provisions
of Sections 3.1(a) above to a Participant each year shall be equal to the
average of the annual monthly Board fees and yearly retainer, if any, paid to
the Participant for the last three (3) years of Service prior to the Retirement
Date, as reduced by the following percentage for each respective such year:

          Year   Percent Reduction
Year 1
    0 %
Year 2
    20 %
Year 3
    40 %
Year 4
    60 %
Year 5
    80 %

The annual benefit payable under the provisions of Sections 3.1(b) or 3.1(c)
above to a Participant for each such respective year shall be equal to fifty
percent (50%) of the amount determined in the first sentence of this
Section 3.2.

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3.3   Extra Chairman Benefits.       An additional benefit in the same amount as
paid to retired Participants shall be paid to any Participant who also served as
a Chairman, as defined in Section 1. This benefit is paid to a retired Chairman
in addition to the benefits paid as a retired Participant.   3.4   Duration of
Benefits.       Retirement benefits determined under Section 3.2 shall be paid
monthly, in installments of 1/12th of the annual amount for each respective
year, commencing on the Participant’s Retirement Date for a maximum of five
(5) years; provided, however, that if a Participant is a Specified Employee, the
monthly installments shall commence on the first day of the month following the
lapse of six months after the Participant’s Retirement Date, with the first
installment to equal 7/12ths of the annual amount for the first year and with
each subsequent monthly installment to equal 1/12th of the annual amount for
each respective year.   3.5   Post Retirement Date Death Benefit.       If a
Participant dies: (i) after the Participant’s Retirement Date, but while still a
Participant in this Plan and prior to receiving five (5) years of benefit
participation under the Plan, or (ii) while serving as a Director who satisfies
any of the requirements of Section 3.1 above, any remaining unpaid benefits or
benefits payable under Section 3.2 above shall be paid to the Participant’s
Beneficiary in monthly installments. If a Participant’s Beneficiary should die
prior to receiving all of the benefits to which he or she otherwise would have
been entitled under this Section 3.5, no remaining benefits shall be paid and
the Bank shall be discharged of all further obligations of any kind.   3.6  
Suspension of Benefits.       Notwithstanding the foregoing, no payments or
portions thereof shall be made under this Plan if such payment or portion
thereof would result in the Bank failing to meet its minimum capital
requirements. Any payments or portions thereof which have been suspended shall
remain suspended until such time as their payment would not result in a failure
to meet the Bank’s minimum capital requirements. Any portion of benefit payments
which have not been suspended will be paid on an equitable basis, pro rata based
upon amounts due each Participant or Beneficiary, among all eligible
Participants and Beneficiaries.   3.7   Unfunded Plan.       The Plan is
intended to constitute an “unfunded” plan for the payment of deferred
compensation. With respect to any payments not yet made to a Participant,
nothing contained herein shall give any such Participant any rights that are
greater than those of a general creditor of the Bank. In its sole discretion,
the Board of Directors may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan.

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SECTION 4
MISCELLANEOUS

4.1   Restriction Against Assignment.       It is a condition of the Plan, and
all rights of each Participant shall be subject thereto, that no right or
interest of any Participant in the Plan and no benefit payable under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any action by way of
anticipating, alienating, selling, transferring, assigning, pledging,
encumbering, or charging the same shall be void and of no effect; nor shall any
such right, interest or benefit be in any manner liable for or subject to the
debts, contracts, liabilities, engagements, or torts of the person entitled to
such right, interest or benefit, except as specifically provided in this Plan.  
4.2   Payments in the Event of Incompetence.       If any person entitled to
receive any benefits hereunder is, in the judgment of the Committee, legally,
physically, or mentally incapable of personally receiving and receipting for any
distribution, the Committee may direct that any distribution due such person,
unless claim has been made therefor by a duly appointed legal representative, be
made to his or her spouse, children or other dependents, or to a person with
whom he or she resides, and any other distribution so made shall be a complete
discharge of the liabilities of the Plan.   4.3   No Right to Continue as
Director.       The establishment of the Plan shall not be construed as
conferring any rights upon any Director for continuation of service as a
Director, nor shall it be construed as limiting in any way the right of the Bank
to treat him without regard to the effect which such treatment might have upon
him as a Participant under the Plan.   4.4   Discharge of Plan Obligations.    
  The determination of the Committee as to the identity of the proper payee of
any benefit payment and the amount properly payable shall be conclusive, and
payments in accordance with such determination shall constitute a complete
discharge of all obligations on account thereof.   4.5   Confidentiality.      
It is a condition of the Plan that each Participant shall keep confidential and
shall not disclose to any third party or use for the Participant’s own benefit
or the benefit of any third party, without the prior written consent of the
Bank, any information, data, trade secrets, know-how, processes, procedures,
methods, discoveries, or improvements of the Bank of which the Participant
learns or discovers as a result of such Participant’s (i) Service or
(ii) provision of services under such Participant’s Consulting Agreement. The
parties hereby agree and acknowledge that all documents or plans either owned or
possessed by the Bank are, and shall be and remain, the sole and exclusive
property of the Bank for all purposes and at all times. Each Participant’s and
any Beneficiary’s rights under or pursuant to the Plan shall be subject to
compliance by the Participant and the Beneficiary with the terms and provisions
hereof.

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4.6   Agreement Not to Compete       It is a condition of the Plan that no
Participant shall during the Participant’s term as a Director or during the term
of such Participant’s Consulting Agreement, without the prior express written
consent of the Bank in each instance, directly or indirectly, engage in any
business or activity competitive with or adverse to the business or welfare of
the Bank (as determined by the Committee), whether as a proprietor, partner,
member, manager, joint venturer, agent, representative, employee, consultant,
officer, shareholder or director of a corporation, limited liability company,
partnership or other entity. Each Participant’s and any Beneficiary’s rights
under or pursuant to the Plan shall be subject to compliance by the Participant
with the terms and provisions hereof.

SECTION 5
ADMINISTRATION OF THE PLAN

5.1   Administration of the Plan.       Administration of the Plan shall be the
responsibility of the Committee.   5.2   Responsibility of the Committee.      
The Committee shall be responsible for the administration, operation and
interpretation of the Plan. The Committee shall establish rules from time to
time for the transaction of its business. It shall have the exclusive right to
interpret the Plan and to decide any and all matters arising thereunder or in
connection with the administration of the Plan, and it shall endeavor to act,
whether by general rules or by particular decisions, so as not to discriminate
in favor of any person or class of person. Such decisions, actions and records
of the Committee shall be conclusive and binding upon the Bank and all persons
having or claiming to have any right or interest in or under the Plan.   5.3  
Claims Procedure.       In the event that any Participant or other payee claims
to be entitled to a benefit under the Plan, and the Committee determines that
such claim should be denied in whole or in part, the Committee shall, in
writing, notify such claimant within 90 days of receipt of such claim that his
or her claim has been denied, setting forth the specific reasons for such
denial. Such notification shall be written in a manner reasonably expected to be
understood by such Participant or other payee and shall set forth the pertinent
sections of the Plan relied on, and where appropriate, an explanation of how the
claimant can obtain review of such denial. Within 60 days after receipt of such
notice, such claimant may request, by mailing or delivery of written notice to
the Committee, a review by the Committee of the decision denying the claim. If
the claimant fails to request such a review within such 60 day period, it shall
be conclusively determined for all purposes of this Plan that the denial of such
claim by the Committee is correct. If such claimant requests a review within
such 60 day period, the Participant or other payee shall have 30 days after
filing a request for review to submit additional written material in support of
the claim. Within 60 days after the later of its receipt of the request for
review or the request to submit additional written material, the Committee shall
determine whether such denial of the claim was correct and shall notify such
claimant in writing of its

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    determination. If such determination is favorable to the claimant, it shall
be binding and conclusive. If such determination is adverse to such claimant, it
shall be binding and conclusive unless the claimant notifies the Committee
within 90 days after the mailing or delivery to him or her by the Committee of
its determination, that the claimant intends to institute legal proceedings
challenging the determination of the Committee, and actually institutes such
legal proceedings within 180 days after such mailing or delivery.   5.4  
Limitation on Liability.       The Committee shall not be liable for any act or
omission on its part, excepting only its own willful misconduct or gross
negligence or except as otherwise expressly provided by applicable law. To the
extent permitted by applicable law, and not otherwise covered by insurance, the
Bank shall indemnify and save harmless the Committee members against any and all
claims, demands, suits or proceedings in connection with the Plan that may be
brought by Participants or by any other person, corporation, entity, government
or agency thereof; provided, however that such indemnification shall not apply
with respect to acts or omissions of willful misconduct or gross negligence. The
Board of Directors, at the expense of the Bank, may settle such claim or demand
asserted, or suit or proceedings brought, against the Committee when such
settlement appears to be in the best interest of the Bank.   5.5   Agent for
Service of Process.       The Committee or such other person as may from time to
time be designated by the Committee shall be the agent for service of process
under the Plan.

SECTION 6
AMENDMENT OF THE PLAN

6.1   Plan Amendments.       This Plan may be wholly or partially amended or
otherwise modified at any time by the Board of Directors, provided, however,
that no amendment or modification shall have any retroactive effect so as to
deprive any person of any benefit already vested or accrued without the consent
of such person. In addition, notwithstanding anything in this Plan to the
contrary, the Board of Directors may amend in good faith any terms of this Plan,
including retroactively, in order to comply with Section 409A of the Code.

SECTION 7
DISCONTINUANCE OF THE PLAN

7.1   Termination of Plan.       The Plan may be terminated at any time by the
Board of Directors by written notice to the Committee at the time acting
hereunder. In the event of the termination of the Plan, Participants with a
vested right under Section 3.1 of the Plan shall continue to receive benefits as
described herein under all the terms of this Plan. No person who at the time of
the termination of this Plan does not then have a fully vested right or who is
otherwise ineligible for payment of benefits shall receive any benefit under
this Plan.

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SECTION 8
CONSTRUCTION OF THE PLAN

8.1   Construction of the Plan.       The validity of the Plan or any of the
provisions thereof shall be determined under and shall be construed according to
the laws of the State of Nebraska.   8.2   Headings.       Headings or titles to
sections or paragraphs in this document are for convenience of reference only
and are not part of the Plan for any other purposes.   8.3   Supersede Prior
Plans.       Upon the Effective Date of the Plan, all prior plans or
arrangements are hereby amended, restated and superseded by this Plan, and the
Plan specifically supersedes and replaces Board Resolution BD 04-12-24.

IN WITNESS WHEREOF, and as evidence of the adoption of the Plan by the Board of
Directors of the Bank, the Bank has caused the same to be signed by its officer
duly authorized, and its corporate seal to be affixed hereto.

                  ATTEST:       TIERONE BANK    
 
               
/s/ Eugene B. Witkowicz
      By:   /s/ Gilbert G. Lundstrom    
 
Secretary
         
 
Chairman and Chief Executive Officer    

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TIERONE BANK
FOURTH AMENDED AND RESTATED
CONSULTATION PLAN FOR DIRECTORS
DESIGNATION OF BENEFICIARY
I hereby designate the one following named beneficiary to receive from the
Fourth Amended and Restated Consultation Plan For Directors of TierOne Bank (the
“Plan”) any amounts payable pursuant to said Plan by reason of my death:
Beneficiary
                                                                                
Name
                                                                                                                                            
Address
                    Street                    City                    State

         
 
Social Security Number
 
 
Date of Birth    

Further, that it shall be the responsibility of said beneficiary to notify the
Corporate Secretary at the home office of the Bank of any change in address.
Further, unless I have a Designation of Beneficiary in effect at the time an
amount becomes payable to a Beneficiary, that amount will be paid in accordance
with Section 1.2 of the Plan.
Further, that upon the death of the Beneficiary, no remaining benefits will be
paid.

         
 
 
 
Director    
 
       
 
 
 
Social Security Number    

              Date Accepted        
 
     
 
   
 
           
By:
           
 
 
   
Title:
           
 
 
   

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