Exhibit 10.8
 
 
TIERONE BANK
AMENDED AND RESTATED EMPLOYEE SEVERANCE PLAN
 
 
ARTICLE I
ESTABLISHMENT OF THE PLAN
 
TierOne Bank (the “Bank” or the “Employer”) hereby amends and restates its
Employee Severance Plan, which was originally adopted in 2002 and previously
amended and restated effective as of July 27, 2006, effective as of December 17,
2008 (as amended and restated, the “Plan”).
 
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 final regulations
issued by the IRS in April 2007.
 
ARTICLE II
PURPOSE OF THE PLAN
 
The purpose of this Plan is to provide certain specified benefits to eligible
employees as provided herein whose employment is terminated in connection with
or subsequent to a Change in Control of either the Bank or the Bank’s parent
corporation, TierOne Corporation (the “Company”). The Bank and the Company are
hereinafter collectively referred to as the “Employers”.
 
ARTICLE III
DEFINITIONS
 
3.01     Annual Compensation. An Employee’s “Annual Compensation” for purposes
of this Plan shall be deemed to mean the aggregate base salary and cash
incentive compensation earned by or paid to the Employee by the Employers or any
subsidiary thereof during the calendar year immediately preceding the calendar
year in which the Date of Termination occurs; provided, however, for purposes of
this Plan the Employee’s Annual Compensation does not include deferred
compensation earned by the Employee in a prior year but received in the calendar
year immediately preceding the calendar year in which the Date of Termination
occurs.
 
3.02     Cause. Termination of an Employee’s employment for “Cause” shall mean
termination because of personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order.
For purposes of this paragraph, no act or failure to act on the Employee’s part
shall be considered “willful” unless done, or omitted to be done, by the
Employee not in good faith and without reasonable belief that the Employee’s
action or omission was in the best interests of the Employers.
 
3.03     Change in Control. “Change in Control” shall mean a change in the
ownership of the Bank or the Company, a change in the effective control of the
Bank or the Company or a

 
 
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change in the ownership of a substantial portion of the assets of the Bank or
the Company, in each case as provided under Section 409A of the Code and the
regulations thereunder.
 
3.04     Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.
 
3.05     Committee. “Committee” means a committee of two or more directors
appointed by the Board of Directors of the Bank pursuant to Article VII hereof.
 
3.06     Date of Termination. “Date of Termination” shall mean (i) if an
Employee’s employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if an Employee’s employment is terminated for any
other reason, the date specified in the Notice of Termination.
 
3.07     Disability. Disability” shall mean the Employee (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.
 
3.08     Employee. “Employee” shall mean any person who at the time has been
employed by the Bank for at least 12 continuous months, excluding any Employee
who has an employment or change in control agreement with either of the
Employers.
 
3.09     Good Reason. Termination by an Employee of the Employee’s employment
for “Good Reason” shall mean termination by the Employee following a Change in
Control based on the occurrence of any of the following events:
 
(i) (A) a material diminution in the Employee’s base compensation as in effect
immediately prior to the date of the Change in Control or as the same may be
increased from time to time thereafter, (B) a material diminution in the
Employee’s authority, duties or responsibilities as in effect immediately prior
to the Change in Control, or (C) a material diminution in the authority, duties
or responsibilities of the officer (as in effect immediately prior to the date
of the Change in Control) to whom the Employee is required to report immediately
prior to the Change in Control,
 
(ii) any material breach of this Plan by the Employers, or
 
(iii) any material change in the geographic location at which the Employee must
perform his services immediately prior to the Change in Control;
 
provided, however, that prior to any termination of employment for Good Reason,
the Employee must first provide written notice to the Employers within ninety
(90) days of the initial existence of the condition, describing the existence of
such condition, and the Employers shall thereafter have the right to remedy the
condition within thirty (30) days of the date the Employers received the written
notice from the Employee.  If the Employers remedy the condition within such
thirty
 
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(30) day cure period, then no Good Reason shall be deemed to exist with respect
to such condition.  If the Employers do not remedy the condition within such
thirty (30) day cure period, then the Employee may deliver a Notice of
Termination for Good Reason at any time within sixty (60) days following the
expiration of such cure period.
 
3.10     IRS.  “IRS” shall mean the Internal Revenue Service.
 
3.11     Notice of Termination. Following a Change in Control, any purported
termination of an Employee’s employment by the Employers for any reason or by an
Employee for any reason, including without limitation for Good Reason, shall be
communicated by a written “Notice of Termination” to the Employee (if from the
Employers) or to the Employers (if from the Employee). For purposes of this
Plan, a “Notice of Termination” shall mean a dated notice which (i) indicates
the specific termination provision in this Plan relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee’s employment under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than thirty (30) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of the Employers’ termination of the Employee’s employment for Cause,
which shall be effective immediately, and (iv) is given in the manner specified
in Article VIII hereof.
 
3.12     Retirement. “Retirement” shall mean voluntary termination by the
Employee in accordance with the Employers’ retirement policies, including early
retirement, generally applicable to their salaried Employees.
 
ARTICLE IV
BENEFITS
 
4.01     Payments and Benefits Upon Termination.
 
(a)        If an Employee’s employment is terminated within one year subsequent
to a Change in Control by (i) the Employers for other than Cause, Disability,
Retirement or the Employee’s death or (ii) the Employee for Good Reason, then
the Employers shall pay to the Employee a lump sum cash severance amount equal
to one twelfth (1/12th) of the Employee’s Annual Compensation for each year of
service with the Employers, subject to a minimum of one twelfth (1/12th) of
Annual Compensation and a maximum of 100% of Annual Compensation, plus any
accrued but unused vacation leave.
 
(b)        If the payments pursuant to Section 4.01(a) hereof, either alone or
together with other payments and benefits which the Employee has the right to
receive from the Employers, would constitute a “parachute payment” under Section
280G of the Code, then the payments payable by the Employers pursuant to Section
4.01(a) hereof shall be reduced by the minimum amount necessary to result in no
portion of the payments payable by the Employers under Section 4.01(a) being
non-deductible to the Employers pursuant to Section 280G of the Code and subject
to the excise tax imposed under Section 4999 of the Code. The determination of
any reduction in the payments to be made pursuant to Section 4.01(a) shall be
based upon the opinion of independent counsel selected by the Bank and paid by
the Bank. Such counsel shall promptly prepare the foregoing opinion, but in no
event later than thirty (30) days from the Date of
 
 
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c, and may use such actuaries as such counsel deems necessary or advisable for
the purpose. 
 
(c)        Nothing contained in this Section 4.01 shall result in a reduction of
any payments or benefits to which the Employee may be entitled upon termination
of employment under any circumstances other than as specified in Section 4.01(b)
set forth above, or a reduction in the payments and benefits specified in
Section 4.01(a) below zero.
 
4.02     Mitigation; Exclusivity of Benefits.
 
(a)        An Employee shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Employee as a result of employment by another employer after the Date of
Termination or otherwise.
 
(b)        The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to an Employee upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
 
4.03     Withholding. All payments required to be made by the Employers
hereunder to an Employee shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
 
4.04.    Source of Payments. It is intended by the parties hereto that all
payments provided in this Plan shall be paid in cash or check from the general
funds of the Bank. Further, the Company guarantees such payment and provision of
all amounts and benefits due hereunder to the Executive and, if such amounts and
benefits due from the Bank are not timely paid or provided by the Bank, such
amounts and benefits shall be paid or provided by the Company.
 
4.05.    No Attachment. Except as required by law, no right to receive payments
under this Plan shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void, and of no effect.
 
ARTICLE V
ASSIGNMENT
 
The Employers may assign this Plan and their rights and obligations hereunder in
whole, but not in part, to any corporation, bank or other entity with or into
which the Bank or the Company may hereafter merge or consolidate or to which the
Bank or the Company may transfer all or substantially all of its respective
assets, if in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations of the Employers
hereunder as fully as if it had been originally made a party hereto, but may not
otherwise assign this Plan or their rights and obligations hereunder. An
Employee may not assign or transfer any rights or benefits due hereunder.
 
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ARTICLE VI
DURATION AND EFFECTIVE DATE OF PLAN
 
6.01     Duration. Except in the event of a Change in Control, this Plan is
subject to change or termination, in whole or in part, at any time without
notice, in the Board’s sole discretion. In the event of a Change in Control,
this Plan may not be terminated or amended to reduce the benefits provided
hereunder for a period of 13 months following the date of the Change in Control.
 In addition, notwithstanding anything in this Plan to the contrary, the
Employers may amend in good faith any terms of this Plan, including
retroactively, in order to comply with Section 409A of the Code.
 
6.02     Effective Date. This Plan was originally effective as of October 1,
2002 and was previously amended and restated as of July 27, 2006.  This
amendment and restatement of the Plan is effective as of December 17, 2008.
 
ARTICLE VII
ADMINISTRATION
 
7.01     Duties of the Committee. This Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board of
Directors of the Bank pursuant to Section 7.02. The Committee shall have the
authority to adopt, amend and rescind such rules, regulations and procedures as,
in its opinion, may be advisable in the administration of this Plan, including,
without limitation, rules, regulations and procedures with respect to the
operation of this Plan. The interpretation and construction by the Committee of
any provisions of this Plan or any rule, regulation or procedure adopted by it
pursuant thereto shall be final and binding in the absence of action by the
Board of Directors of the Bank.
 
7.02     Appointment and Operation of the Committee. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board of
Directors of the Bank. The Board from time to time may remove members from, or
add members to, the Committee, provided the Committee shall continue to consist
of two or more members of the Board. The Committee shall act by vote or written
consent of a majority of its members. Subject to the express provisions and
limitations of this Plan, the Committee may adopt such rules, regulations and
procedures as it deems appropriate for the conduct of its affairs. It may
appoint one of its members to be chairman and any person, whether or not a
member, to be its secretary or agent. The Committee shall report its actions and
decisions to the Board at appropriate times but in no event less than one time
per calendar year.
 
7.03     Limitation on Liability. Neither the members of the Board of Directors
of the Bank nor any member of the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any rule,
regulation or procedure adopted by it pursuant thereto. If a member of the Board
or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to this Plan, the Bank shall,
subject to the requirements of applicable laws and regulations, indemnify such
member against all liabilities and expenses (including attorneys’
 
 
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fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in the best interests
of the Bank and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
 
 
ARTICLE VIII
MISCELLANEOUS
 
8.01     Notice. For the purposes of this Plan, notices and all other
communications provided for in this Plan shall be in writing and shall be deemed
to have been duly given when delivered or mailed by certified or registered
mail, return receipt requested, postage prepaid, addressed, with respect to the
Bank, Secretary, TierOne Bank, 1235 N Street, Lincoln, Nebraska 68508, and with
respect to an Employee, to the home address thereof set forth in the records of
the Bank at the date of any such notice.
 
8.02     Governing Law. The validity, interpretation, construction and
performance of this Plan shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the State of Nebraska.
 
8.03     Nature of Employment and Obligations.
 
(a)        Nothing contained herein shall be deemed to create other than a
terminable at will employment relationship between the Employers and an
Employee, and the Employers may terminate an Employee’s employment at any time,
subject to providing any payments specified herein in accordance with the terms
hereof.
 
(b)        Nothing contained herein shall create or require the Employers to
create a trust of any kind to fund any benefits which may be payable hereunder,
and to the extent that an Employee acquires a right to receive benefits from the
Employers hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Employers.
 
8.04     Headings. The section headings contained in this Plan are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Plan.
 
8.05     Validity. The invalidity or unenforceability of any provision of this
Plan shall not affect the validity or enforceability of any other provisions of
this Plan, which shall remain in full force and effect.
 
8.06     Regulatory Provisions. Notwithstanding any other provision of this Plan
to the contrary, any payments made to an Employee pursuant to this Plan, or
otherwise, are subject to and conditioned upon their compliance with (a) Section
18(k) of the Federal Deposit Insurance Act (12 U.S.C. §1828(k)) and the
regulations promulgated thereunder, including 12 C.F.R. Part 359, and (b) 12
C.F.R. §563.39. 
 
 
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